LICENSE AGREEMENT
Exhibit
10.1
THIS
AGREEMENT
(the
“Agreement”),
effective this 31st
day of
July,
2007 (the “Effective
Date”),
between
Health Discovery Corporation, a corporation of the State of Georgia, U.S.A.,
with its principal place of business at 0 Xxxx Xxxxx Xxxxxx, Xxxxx # 000,
Xxxxxxxx, Xxxxxxx, hereinafter referred to as “HDC”,
and
CLARIENT,
INC., a corporation of
the
State of
Delaware, U.S.A., with its principal place of business at 00
Xxxxxxxx,
Xxxxx Xxxxx, XX 00000,
hereinafter referred to as “CLARIENT.”
W
I T N E
S S E T H, That:
WHEREAS,
HDC has certain patent rights and technology covering genomic biomarkers related
to prostate cancer; and
WHEREAS,
CLARIENT desires to obtain the right to use such patent rights and technology
on
the terms set forth hereinbelow.
NOW,
THEREFORE, in consideration of the promises and the mutual covenants herein
contained, and other good and valuable consideration, the receipt and
sufficiency of
which
are hereby
acknowledged
by the parties,
and
intending to be legally bound,
the
parties agree as follows:
ARTICLE
I. DEFINITIONS
As
used
in this Agreement the following terms, whether singular or plural, shall have
the following meanings:
A. “Affiliate”
shall mean any corporation
or other entity
that
controls, is controlled by or is under common control with a party. A
corporation or other entity shall be regarded as in control of another
corporation or entity if it owns or directly controls more than fifty percent
(50%) of the voting stock or other ownership interests
of the
other corporation or entity, or if it possesses
the
power to direct or cause the direction of the management and policies of the
corporation or other entity or the power to elect or appoint more than fifty
percent (50%) of the members of the governing body of the corporation or other
entity.
B. “CLARIENT
Net Proceeds” shall mean the reimbursement received by CLARIENT or Affiliates of
CLARIENT from a third party customer pursuant to the sale, use or other transfer
of a Licensed Product
which
generates a reported result (each, a “Test”).
C. "Field
of
Use" shall mean diagnostic tests using gene biomarkers for differentiating
clinically significant prostate cancer from other prostate conditions using
biopsied prostate tissue.
D. “HDC
Net
Proceeds” shall mean the gross receipts received by HDC or Affiliates of HDC
from a third party licensee pursuant to a Test of a Licensed Product which
generates a reported result, less the following actual and customary deductions:
(i) cost of goods sold; (ii) cash, trade or quantity discounts; (iii) sales,
use, tariff, import/export duties or other excise taxes imposed on particular
sales; (iv) transportation charges or allowances; (v) or credits to customers
because of rejections or returns.
E. "License"
shall mean the license granted pursuant to Article II of this
Agreement.
F. “Licensed
Technology” shall mean, collectively, Licensed Know-How, Licensed Patents, and
Licensed Products.
G. "Licensed
Patents" shall mean the
patents
and
pending
patent
applications in existence as of the Effective Date and listed in Attachment
A,
and any divisions, continuations and continuations-in-part or reissues
or reexaminations of any patent or pending patent application identified herein
(the “Existing
Patents”),
and
any patents issuing from the Existing Patents and their
foreign
equivalents and
any
of the patent or patent applications to which any of the Existing Patents
directly or indirectly claims priority, or forms a basis for priority, to the
extent that such patents or patent applications not listed in Attachment A
have
claims that cover the Field of Use.
H. “Licensed
Product” shall mean a product, including
Licensed Know-How, diagnostic kits, research reagents, proprietary compositions,
substances, methods, documentation,
services
or a part thereof, the manufacture, use, sale, offer to sell, importation,
distribution, or transfer of which
1. is
covered in whole or in part by one or more valid and unexpired claims of a
granted Licensed Patent in the country in which the Licensed Product is made,
used, imported, distributed or sold; or
2. is
covered in whole or in part by any un-cancelled claim being prosecuted in a
pending application for a Licensed Patent in the country in which the Licensed
Product is made, used, distributed or sold.
Licensed
Product is covered by a valid and unexpired claim of a Licensed Patent if in
the
course of manufacture, use, importation, distribution or sale, it would, in
the
absence of this Agreement, infringe one or more claims of the Licensed Patent
which is not cancelled and has not been held invalid by a court from which
no
appeal can be taken or has been taken in the time permitted for
appeal.
I. “Licensed
Know-How” shall mean the four (4) biomarkers identified in Attachment B and an
algorithm developed by HDC that produces predictive results based upon measured
gene expression for the four (4) biomarkers.
J. “Licensed
Territory” shall mean worldwide.
K. "Effective
Date" shall mean the date indicated above as the effective date of this
Agreement.
ARTICLE
II. GRANT
OF LICENSE
X. Xxxxx
of License.
1. As
of the
Effective Date of this Agreement, HDC hereby grants to CLARIENT an exclusive
license, subject
to Article II. A.3., with the right to grant sublicenses to Affiliates, and,
upon prior approval by HDC, to third parties under the Licensed Technology
to
import, make, have made, use and sell any Licensed Product in the Field of
Use
within the Licensed
Territory.
For
purposes of clarity, the above grant shall include the right for Clarient to
incorporate the output and results from the Licensed Product into other tests
or
algorithms.
2. Upon
relevant
approval
or
clearance by
the
FDA of the diagnostic test for prostate cancer,
the
foregoing license shall become an exclusive license within the Field of Use
in
the Licensed Territory with respect to the commercial reference laboratory
field
and a nonexclusive license with respect to the academic and research
fields.
3. Notwithstanding
anything herein to the contrary, in the event HDC elects to own and/or operate
one or more laboratories (each, an “HDC Lab”), then such HDC Lab shall be able
to utilize, or have a license under, the Licensed Technology to import, make,
have made, use and sell Licensed Product, in the Licensed
Territory.
B. Non-Assert
Provision. During
the term of this Agreement and so long as CLARIENT is not in default with
respect to any payment due to HDC hereunder,
1. HDC
will
not assert any Licensed Patent or
Licensed Know-How to
prevent CLARIENT
or any
Affiliate
of CLARIENT
from
importing, using or selling any quantity of Licensed Product in the Field
of
Use within the Licensed Territory
which is
subject to CLARIENT
Fees (as defined below);
and
2. HDC
will
not assert any other patent or patent application now or hereafter controlled
(in the sense of having the right to grant licenses or sublicenses) by HDC
corresponding in subject matter to the Licensed Technology to prevent
CLARIENT
or any
Affiliate
of CLARIENT
from
importing, using or selling any Licensed Product in the Field
of
Use within the Licensed Territory
which is
subject to CLARIENT
Fees.
C. Right
of First Refusal
If
at any
time HDC develops and desires to sell, transfer, assign, or license to one
or
more third parties, any additional biomarkers, HDC shall first offer such rights
to CLARIENT by delivering a written notice to CLARIENT. CLARIENT shall have
the
right, within thirty (30) days following receipt of such written notice, to
negotiate with HDC commercially reasonable terms to add such biomarkers to
this
Agreement. If the parties are unable to come to terms within said thirty
(30)-day period, HDC shall have the right to offer such additional biomarkers
to
third parties. In the event a third-party expresses a willingness to accept
HDC’s terms (license fee, royalty rate, minimum volume), HDC shall then notify
CLARIENT of such terms and offer them to CLARIENT. CLARIENT shall then have
fourteen (14) days to accept the terms in writing. Following delivery of such
written acceptance to HDC, the additional biomarkers shall be deemed added
to
Attachment B hereto and included as part of the Licensed Products pursuant
to
such terms.
ARTICLE
III. WARRANTIES
AND INDEMNITY
A. Limitations
on Liability;
Indemnity.
While
it
is expected that information set forth in the Licensed Patents will enable
CLARIENT to manufacture commercially acceptable Licensed Products
on a
commercial scale, HDC does not warrant or guarantee that such results will
be
obtained, and HDC shall not be liable to CLARIENT or any customer of CLARIENT
because of any failure in the operations of CLARIENT or any customer.
Moreover, while it is believed that the ordinary and anticipated use of
the
Licensed
Technology, or products made therefrom, will not result in safety or health
hazards to workers or to purchasers of such products, HDC does not warrant
or
guarantee against health or safety hazards.
Consistent
with the foregoing, each
party shall indemnify,
defend
and hold
the
other
party harmless from any loss
and
expenses
(including reasonable attorneys’ fees, settlements and judgments) resulting from
illness, injury or death to persons (including employees of HDC and CLARIENT)
or
loss or damage to property (including property of HDC and CLARIENT and its
customers) or the environment incurred by HDC or a third party and resulting
in
any way whatever the cause may be arising out of or pertaining to the subject
matter of this Agreement unless the same is proven
to have
been caused directly by
bad
faith, gross negligence or willful misconduct on the part of HDC or CLARIENT,
as
the case may be.
Each
party shall promptly notify the other party in writing of any suits, claims,
actions, demands, complaints, lawsuits or other proceedings (each a “Claim”)
that are brought by any third party which are subject to indemnification under
this Agreement. The indemnifying party under this Agreement shall have the
sole
authority to settle any indemnified Claim without the consent of the other
party, provided, however, that an indemnifying party shall not, without the
written consent of the other party, as part of any settlement or compromise
(i)
admit to liability on the part of the other party; (ii) agree to an injunction
against the other party; or (iii) settle any matter in a manner that separately
apportions fault to the other party. As part of the settlement of any Claim,
an
indemnifying party shall obtain a full, complete and unconditional release
from
the claimant on utilizing attorneys of its choice, at its own
expense.
NEITHER
PARTY SHALL IN ANY EVENT BE LIABLE FOR ANY LOSS OF PROFITS, OR FOR BUSINESS
INTERRUPTION OR FOR ANY SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES ARISING
OUT
OF OR IN CONNECTION WITH THIS AGREEMENT. NOTWITHSTANDING THE ABOVE, THIS
PARAGRAPH SHALL NOT APPLY TO ANY LIABILITY FOR DAMAGES ARISING FROM (A) GROSS
NEGLIGENCE OR WILLFUL MISCONDUCT; (B) BREACH OF THE OBLIGATIONS OF
CONFIDENTIALITY UNDER ARTICLE IX OF THIS AGREEMENT; OR (C) LIABILITY FOR
INDEMNIFICATION AGAINST THIRD-PARTY CLAIMS AS SET FORTH IN THIS ARTICLE
III.A.
B. HDC
Warranties.
HDC
represents and warrants that
HDC
has the exclusive right to license the Licensed Technology on the terms and
conditions of this Agreement.
1. To
the
best of HDC’s knowledge, Licensed Technology made, used, sold or otherwise
disposed of pursuant to this License Agreement, is free from infringement of
patents or any other intellectual property rights of others. Should HDC
receive notice of any third party claim of infringement, it shall immediately
notify CLARIENT in writing.
2. HDC
has
full power and authority and has obtained all third party consents, approvals,
assignments and/or other authorizations required to enter into this Agreement
and to carry out its obligations hereunder.
3. Subject
to the liens listed in ATTACHMENT C, the Licensed Patents are free and clear
of
all liens, claims, mortgages, security interests, or other encumbrances, and
restrictions of others, HDC owns all right, title and interest to the Licensed
Patents, including, without limitations, all right, title and interest to xxx
for infringement of the Licensed Patents.
4. Subject
to Article VIII.A., HDC shall undertake all actions necessary for prosecution
and maintenance of the Licensed Patents, including, but not limited to, payment
of maintenance, annuity and renewal fees as required by the respective national
patent offices that issued the patents, and payment of all attorney fees and
costs for prosecution, maintenance, and grant of any pending patent
applications.
5. HDC
has
obtained and properly recorded previously executed assignments for the Licensed
Patents as necessary to fully perfect its rights and title therein in accordance
with governing law and regulations in each respective jurisdiction.
6. There
are
no existing contracts, agreements, commitments, proposals, offers, or rights
with, to, or in any person to acquire any of the rights under the Licensed
Technology which would prevent, alter or hinder the performance of the
obligations hereunder.
7. Subject
to Article II.A. hereof, no licenses or other rights under the Licensed
Technology have been granted or retained by HDC, or any third party, including
but not limited to any prior owners, or inventors as to the Field of
Use.
8. Subject
to Article II.A. hereof, CLARIENT will not be subject to any covenant not to
xxx
or similar restrictions in its enforcement or enjoyment of the Licensed
Technology.
9. None
of
the Licensed Patents has ever been found invalid, unpatentable, or unenforceable
for any reason in any administrative, arbitration, judicial or other proceeding,
and HDC does not know of and has not received any notice or information of
any
kind from any source suggesting that the Licensed Patents may be invalid,
unpatentable, or unenforceable.
10. To
the
extent “small entity” fees were paid to the United States Patent and Trademark
Office with respect to any Licensed Patent, such reduced fees were then
appropriate because the payor qualified to pay “small entity” fees and
specifically had not licensed rights in the Licensed Patent to an entity that
was not a “small entity.”
11. To
the
best of its knowledge, neither HDC nor its agents or representatives have
engaged in any conduct, or omitted to perform any necessary act, the result
of
which would invalidate any of the Licensed Technology or hinder their
enforcement, including, without limitation, misrepresenting HDC’s patent rights
to a standard-setting organization.
12. None
of
the Licensed Patents has been or is currently involved in any reexamination,
reissue, interference proceeding, or any similar proceeding, and no such
proceedings are pending or threatened.
13. There
are
no actions, claims or proceedings threatened, pending, or in progress related
to
the Licensed Technology.
14. Subject
to the liens listed in ATTACHMENT C, the Licensed Technology is free and clear
of all liens, claims, mortgages, security interests, or other encumbrances,
and
restrictions of others.
15. Subject
to notices listed in Attachment D, HDC has not put a third party on notice
of
actual or potential infringement of any of the Licensed Patents. HDC has
not initiated any enforcement action with respect to any of the Licensed
Patents.
16. HDC
had
not and will not collaborate with any third-party in an attempt to invalidate
CLARIENT’s intellectual property rights or construct any non-infringement
defense
C. CLARIENT
Warranties.
CLARIENT
represents and warrants:
1. CLARIENT
will not collaborate with any third party in an attempt to invalidate Licensed
Patents or construct any non-infringement defense.
2. To
the
extent CLARIENT is permitted , CLARIENT will notify HDC prior to or upon the
sale, transfer or other disposition of all or substantially all of the assets
of
CLARIENT, or upon the acquisition of the outstanding capital stock of CLARIENT,
such that any one shareholder owns in excess of 90% of the outstanding economic
or voting interest of CLARIENT’s outstanding capital stock.
ARTICLE
IV. PAYMENTS
AND REPORTS
A. Fees
Payable.
1. CLARIENT
shall
pay
to HDC, in
accordance with the payment terms set forth in Section IV.B below,
thirty
percent (30%) of the
CLARIENT Net Proceeds received by CLARIENT or an Affiliate of CLARIENT with
respect to all Tests of Licensed Products during the term of this Agreement
(the
“CLARIENT
Fees”).
2. HDC
shall
pay to CLARIENT, in accordance with the payment terms set forth in Section
IV.B
below, fifteen percent (15%) of HDC Net Proceeds received by HDC or an Affiliate
of HDC with respect to all Tests of Licensed Products during the term of this
Agreement (the “HDC
Fees”).
B. Reports
and Remittances.
1. During
the term of this Agreement,
CLARIENT shall report in writing to HDC within thirty (30) days after the end
of
each calendar quarter the quantities of each Licensed Product subject to
the
CLARIENT Fees
hereunder that were used or sold by CLARIENT (or
an
Affiliate of CLARIENT) during
said quarter and the calculation of the CLARIENT
Fees thereon (each, a “CLARIENT
Report”).
No later than thirty (30) days following the date of each such CLARIENT
Report,
CLARIENT
shall pay to HDC the total amount of the CLARIENT
Fees indicated in such CLARIENT Report.
If no Licensed Product subject to fee hereunder has been used or sold by
CLARIENT during any such period, CLARIENT shall so report in writing to HDC
within thirty (30) days after the end of such period. Reports, notices and
other communications to HDC hereunder shall be sent to:
Xx.
Xxxxxxx X. Xxxxxxxx
Chairman
& CEO
Health
Discovery Corporation
0
Xxxx
Xxxxx Xxxxxx, Xxxxx # 000
Xxxxxxxx,
XX 00000
Payments
by CLARIENT to HDC shall be made
by
wire
transfer of immediately available funds to:
_____________________________________.
During
the term of this Agreement, HDC shall report in writing to CLARIENT within
thirty (30) days after the end of each calendar quarter the quantities of each
Licensed Product subject to the HDC Fees hereunder that were used or sold by
HDC
(or an Affiliate of HDC) or any third party who effects a Test of a Licensed
Product under a license from HDC during said quarter and the calculation of
the
HDC Fees thereon (each, a “HDC
Report”).
No later than thirty (30) days following the date of each such HDC Report,
HDC
shall pay to CLARIENT the total amount of the HDC Fees indicated in such HDC
Report. If no Licensed Product subject to fee hereunder has been used or
sold by HDC during any such period, HDC shall so report in writing to CLARIENT
within thirty (30) days after the end of such period. Reports, notices and
other communications to CLARIENT hereunder shall be sent to:
Clarient,
Inc.
Attention:
Corporate Controller
00
Xxxxxxxx
Xxxxx
Xxxxx, XX 00000
Payments
by HDC to CLARIENT shall be made by wire transfer of immediately available
funds
to the following account:
_________________________.
C. Taxes.
1. Insofar
as any CLARIENT
Fees
due to
HDC hereunder are subject to taxation by any country under the provisions of
the
tax laws of that country, then HDC shall bear such taxes and HDC hereby
authorizes CLARIENT to withhold such taxes from the payments of
CLARIENT Fees
payable
to HDC in accordance with this Agreement if CLARIENT is either required to
do so
under such country’s tax laws or directed to do so by any agency of such
country’s government. Whenever CLARIENT deducts such tax from any payments
due to HDC, then CLARIENT shall furnish HDC with a tax certificate showing
the
payment of such tax to the government of such country. In the event such
taxes are assessed against CLARIENT by reason of its failure to withhold such
taxes from any payments which have been paid to HDC in accordance with this
Agreement, then HDC shall reimburse CLARIENT for such tax assessment, but not
for any fine, penalty, fee or interest related to CLARIENT’s failure to
withhold, pay or make
timely
payment of such taxes.
2. Insofar
as any HDC Fees due to CLARIENT hereunder are subject to taxation by any country
under the provisions of the tax laws of that country, then CLARIENT shall bear
such taxes and HDC hereby authorizes CLARIENT to withhold such taxes from the
payments of HDC Fees payable to CLARIENT in accordance with this Agreement
if
HDC is either required to do so under such country’s tax laws or directed to do
so by any agency of such country’s government. Whenever HDC deducts such
tax from any payments due to CLARIENT, then HDC shall furnish CLARIENT with
a
tax certificate showing the payment of such tax to the government of such
country. In the event such taxes are assessed against HDC by reason of its
failure to withhold such taxes from any payments which have been paid to
CLARIENT in accordance with this Agreement, then CLARIENT shall reimburse HDC
for such tax assessment, but not for any fine, penalty, fee or interest related
to HDC’s failure to withhold, pay or make timely payment of such
taxes.
D. Late
Payment.
If
any
undisputed
sum
of
money owed to a
party
hereunder is not paid when due, and
remains unpaid for a period of fifteen (15) days following receipt of written
notice of such failure to pay, the unpaid undisputed
amount
shall bear interest at the
rate
of one and one-half percent (1 ½%), monthly, commencing
on the
day payment was due, until paid.
ARTICLE
V. COOPERATION
HDC
shall
assist CLARIENT and provide all necessary information requested by CLARIENT
to
obtain, at CLARIENT's expense, relevant approval or clearance from the Federal
Food and Drug Administration or any other applicable federal or state regulatory
agency whose approval is required to commercialize the Licensed
Products..
ARTICLE
VI. RECORDS
Each
party
shall
keep adequate records in sufficient detail to enable the CLARIENT
Fees
and
the HDC Fees
to be
determined
and
permit said records
to be inspected upon
reasonable notice and
during
regular business hours by an independent auditor appointed by the
party
requesting the audit
for this
purpose, which
auditor
shall
report to the
parties
only the
amount of CLARIENT
Fees or HDC Fees (as applicable)
due
hereunder.
ARTICLE
VII. CURRENCY
CONVERSION CLAUSE
Fees
shall be paid in U.S.A. dollars. For converting into U.S.A. dollars any
fee that accrued in another currency, there shall be used the closing buying
rate of The Savannah Bank of Savannah, GA applicable to royalty or fee
transactions under exchange regulations for the particular currency on the
last
business day for the accounting period for which payment is due.
ARTICLE
VIII. PATENT
MAINTENANCE AND PATENT INFRINGEMENT
A. Patent
Maintenance.
1. HDC
shall
maintain the Licensed Patents, which maintenance shall include retaining one
or
more patent attorneys to prosecute and/or direct prosecution of a pending
application, payment of attorney’s fees and costs for the prosecution of pending
patent applications, payment of maintenance fees, and any other actions required
to maintain the rights in the Licensed Patents.
a. In
the
event that HDC is unable or unwilling to maintain any one or more of the
Licensed Patents, CLARIENT may pay the fees for maintaining the indicated
patents within Licensed Patent(s) and deduct such payment from any CLARIENT
Fees
due under this License Agreement. HDC shall thereupon assign the indicated
patents to CLARIENT. If HDC is unable or unwilling to maintain all or
substantially all of the Licensed Patents, CLARIENT may at its option, (i)
maintain the Licensed Patent(s) and deduct such payment from CLARIENT Fees
due
under this Agreement; or (ii) terminate the License Agreement upon thirty (30)
days’ notice to HDC.
b. HDC
shall
notify CLARIENT before any rights in a Licensed Patent terminate with sufficient
time to permit CLARIENT to take action to maintain the patent, if it so
chooses.
B. Patent
Infringement.
1. If
either
party learns of a substantial infringement of any of the Licensed Patents in
the
Field of Use, in the Licensed
Territory, such party shall promptly provide written notice of the infringement
to the other party with reasonable evidence of infringement. Neither party
will notify a third party of infringement of any of the Licensed Patents without
first obtaining consent of the other party, which consent will not be
unreasonably withheld, if the infringement is within the Field of Use.
Otherwise, HDC may act unilaterally.
a. HDC
will
have the primary responsibility to enforce the Licensed Patents, including
undertaking litigation or other enforcement action against a third party for
infringement of the Licensed Patents.
i. In
the
event HDC undertakes litigation or other enforcement action against a third
party infringer, CLARIENT shall at HDC’s expense, for CLARIENT’s reasonable
out-of-pocket costs, cooperate with HDC as may be required to support HDC’s
assertions against the third party infringer in the Field of Use.
ii. Any
proceeds from litigation or other enforcement action will first be applied
to
reimburse HDC for expenses incurred in the action. HDC may deduct an
additional amount equal to twenty percent (20%) of the total expenses incurred
in the action as compensation for lost time, business opportunities and other
difficult-to-quantify losses resulting from HDC’s prosecution of the
action. If the infringement is in the Field of Use, remaining proceeds, if
any, will be treated as HDC Net Proceeds and subject to the HDC Fees.
b. If
HDC
declines to undertake litigation or other enforcement action against a third
party for infringement in the Field of Use, CLARIENT may at its option elect
to:
(i) enforce the Licensed Patent(s) at its own expense, and deduct such expense
from any CLARIENT Fees due under this License Agreement; or (ii) terminate
the
License Agreement upon thirty (30) days’ notice to HDC.
i. In
the
event CLARIENT undertakes litigation or other enforcement action against a
third
party infringer, HDC shall at CLARIENT’s expense, for HDC’s reasonable
out-of-pocket costs, cooperate with CLARIENT as may be required to support
CLARIENT’s assertions against the third party infringer.
ii. Any
proceeds from litigation or other enforcement action will first be applied
to
reimburse CLARIENT for expenses incurred in the action. CLARIENT may
deduct an additional amount equal to twenty percent (20%) of the total expenses
incurred in the action as compensation for lost time, business opportunities
and
other difficult-to-quantify losses resulting from CLARIENT’s prosecution of the
action. Remaining proceeds, if any, will be treated as CLARIENT Net
Proceeds received by CLARIENT and subject to the CLARIENT Fees.
ARTICLE
IX. CONFIDENTIALITY
The
parties have entered into a Mutual Nondisclosure Agreement as of _________,
200__ (the “NDA“)
pursuant to which each of the parties agreed to preserve the confidentiality
of
the other party’s proprietary information. The terms of the NDA shall
continue to govern the parties throughout the term of this
Agreement.
ARTICLE
X. TERMINATION
A. Term.
Unless
terminated earlier as hereinafter provided, and subject to the provisions of
paragraph (B) of this Article, this Agreement shall terminate on the
latest
to
occur of (i) the fifteenth
(15th) anniversary of its Effective Date;
or
(ii)
upon the
expiration of the last of the Licensed
Patents.
B. Surviving
Obligations.
The
termination or
expiration of
this
Agreement shall not relieve either
party of:
1. any
liability under
Article IX of this Agreement
for
damages resulting
from a breach of the NDA;
or
2. its
obligations to
i. make
payment of CLARIENT
Fees and/or HDC Fees (as applicable)
pursuant
to Article IV;
ii. maintain
adequate records under Article VI;
iii. furnish
written reports as provided in Article IV;
and
iv. make
payment of CLARIENT
Fees and/or HDC Fees (as applicable)
on any
quantity of Licensed Product that is made prior to the Effective
Date
of said
termination and sold thereafter.
The
termination of this Agreement shall not terminate either
party’s
rights
under Articles III
and IX
hereof.
C. Termination
by CLARIENT.
CLARIENT
may terminate this Agreement at any time by giving HDC at least sixty (60)
days’
prior
written
notice.
D. Termination
by HDC.
1. In
the
event that any stipulation or provision of this Agreement is breached by
CLARIENT, HDC may terminate this Agreement upon sixty (60) days’ written notice
to CLARIENT. However, if such breach is corrected within the sixty
(60) day
period, and there are no unreimbursed damages resulting from the breach, this
Agreement and sublicenses shall continue in force.
2. HDC
may
terminate the license granted to CLARIENT in its entirety at any time in the
event CLARIENT alleges in any action, directly or indirectly, that any of the
patents within Licensed Patents is invalid.
3. HDC
may
terminate the license granted to CLARIENT in its entirety in the event CLARIENT
introduces a product competing with Licensed Product into the market place.
4. HDC
may
terminate the license granted to CLARIENT in its entirety in the event CLARIENT
does not exercise reasonable efforts in the sales and marketing of Licensed
Product evidenced by the fact that Clarient cannot demonstrate any tangible
evidence of such efforts.
5. HDC
may
terminate the license granted to CLARIENT in its entirety in the event CLARIENT
ceases entirely to have the ability to carry out the Test due to Clarient’s sole
fault.
HDC’s
right to terminate CLARIENT’s license pursuant to Articles X. D. 1,3,4 and 5
shall be subject to Article XIV.
Subject
to negotiations by the parties, the termination of CLARIENT’s license pursuant
to Articles X. X0, 0, 0, xxx 0 xxxxx xx deemed to be a conversion of the
exclusive license to a nonexclusive license; provided, however, that in the
event a prospective third-party licensee under Licensed Technology reasonably
requires an exclusive license and after dispute resolution as described in
Article XIV, then CLARIENT’s license shall be terminated.
E. Insolvency.
Should
either
party
(1)
become insolvent or unable to pay its debts as they mature, or (2) make an
assignment for the benefit of creditors, or (3) permit or procure the
appointment of a receiver for its assets, or (4) become the subject of any
bankruptcy, insolvency or similar proceeding, then the
other
party
may at
any time thereafter upon
written
notice to such
party, and
effective concurrent
with the date of such notice,
cancel
this Agreement.
F. Effect
of Termination and Return of Technical Information.
Upon termination or expiration of this Agreement, the parties shall return
or
destroy, at the discretion of the disclosing party, all copies of confidential
information disclosed or provided by the other party.
G. Reversion
of Intellectual Property Rights. Except as otherwise specified in this
Agreement, upon termination of this Agreement, all rights in the Licensed
Technology and any other rights granted under this License Agreement, and any
sublicense agreements granted by CLARIENT, including any right to sublicense
fees, shall revert to HDC.
H. Disposition
of Licensed Products on Hand at Termination. Upon termination of this
Agreement, CLARIENT shall cease its use of Licensed Technology, or any component
thereof, provided, however, that CLARIENT shall be permitted to sell Tests
of
Licensed Products already made pursuant to this Agreement and pay the CLARIENT
Fees.
ARTICLE
XI. ASSIGNABILITY
A. Neither
this
Agreement nor the rights or licenses herein granted shall
be
assignable or otherwise transferable by either
party
without
the prior written consent of the
other
party; provided, however, that either party may assign this Agreement in
connection with the transfer or sale of its business or all or substantially
all
of its assets or stocks or in the event of a merger, consolidation, change
in
control or similar corporate transaction, without such consent.
It is
understood by the parties that CLARIENT may not and shall not utilize this
License Agreement or any of its rights or obligations hereunder as a collateral
in any financial transaction.
B. In
the
event an assignee of either party does not perform all of the obligations of
such assigning party hereunder, (i) the assigning party shall remain responsible
and liable for all unperformed obligations and (ii) the non-assigning party
shall have the right to terminate this Agreement.
ARTICLE
XII. APPLICABLE
LAW
This
Agreement is acknowledged to have been made in and shall be construed in
accordance with the laws of the State of Delaware without regard to the
principles thereof relating to the conflict of laws, provided that all questions
concerning the construction or effect of patent applications and patents shall
be decided in accordance with the laws of the country in which the particular
patent application or patent concerned has been filed or granted, as the case
may be. Subject to Article XIV, each party hereby subjects itself to the
jurisdiction the state and federal courts in the State of Delaware.
ARTICLE
XIII. FORCE
MAJEURE
Neither
party shall be responsible to the other for delay or failure in performance
of
any of the obligations imposed by this Agreement, provided such delay or failure
shall be occasioned by a cause beyond the control of and without the fault
or
negligence of such party, including
fire, flood, explosion, lightning, windstorm, earthquake, subsidence of soil,
failure of machinery or equipment or supply of materials, discontinuity in
the
supply of power, court order or governmental interference, civil commotion,
riot, war, terrorism or terroristic threats, strikes, labor disturbances,
transportation difficulties or labor shortage. Notwithstanding the
aforesaid, if either party fails to a substantial extent for at least
sixty
(60) days in fulfilling
any of
its obligations under this Agreement, the other party may terminate the
Agreement.
ARTICLE
XIV. DISPUTE
RESOLUTION
In
the
event that a dispute arises between the parties, the following procedures shall
be followed:
A. Negotiations.
In
the
event that any dispute may arise, the parties shall first seek to resolve any
disputes by negotiation among senior executives who have authority to settle
the
controversy, as follows:
1. Notification.
When
a
party believes there is a dispute relating to the Agreement, the party will
give
the other party written notice of the dispute.
2. Meeting
Among Senior Executives.
The
senior executives shall meet at a mutually acceptable time and place within
thirty (30) days after the date of the notice to exchange relevant information
and to attempt to resolve the dispute.
3. Confidentiality.
All
negotiations are confidential and shall be treated as compromise and settlement
negotiations under the United States Federal Rules of Evidence.
B. Mediation.
If
the
dispute has not been resolved within thirty (30) days after the date of the
notice of a dispute, or if the party receiving such notice fails or refuses
to
meet within such time period, either party may initiate mediation of the dispute
by sending the other party a written request that the dispute be mediated.
The party receiving such a written request will promptly respond to the
requesting party so that all parties can jointly select a neutral and impartial
mediator and schedule the mediation session. The parties shall mediate the
dispute before a neutral, third-party mediator within thirty (30) days after
the
date of the written request for mediation.
C. Litigation.
Any
controversy or claim arising out of or relating to this Agreement, or the breach
thereof, and not settled as described in Article XIV (A) or (B), may be settled
by litigation in the courts of the State of Delaware.
D. Miscellaneous.
Each
party shall bear its own costs related to any proceeding described in this
Article XIV. Nothing provided herein shall prevent a party from seeking
equitable or injunctive relief.
ARTICLE
XV. ADJUDICATION
OF LICENSED PATENTS
Should
any Licensed Patents be declared invalid or limited in scope by a final decision
(from which no appeal is or can be taken) of a court or other tribunal of
competent jurisdiction in the country in which said patent was granted in an
action or proceeding initiated by a third party, then the construction placed
upon the patent by said court or other tribunal shall be followed by the parties
hereto from and after the date of entry of the decree of said court or tribunal
and fees shall thereafter be payable to HDC only in accordance with such
construction.
ARTICLE
XVI. MISCELLANEOUS
PROVISIONS
A. Nothing
herein shall be construed to indicate that this Agreement is an employment,
partnership or other joint venture agreement, it being fully understood that
each party is acting as an independent contractor as its own agent and assumes
full responsibility for its own account and for all of its actions
hereunder. Further, each of HDC and CLARIENT acknowledges that this
Agreement does not constitute HDC as the agent or legal representative of
CLARIENT, or constitute CLARIENT as the agent or legal representative of
HDC. Each of HDC and CLARIENT further acknowledges that neither party is
authorized to create any obligation on behalf of the other.
B. Each
of
HDC
and
CLARIENT
has all
necessary corporate power to enter into and perform its obligations under this
Agreement and has taken all necessary corporate action under its respective
certificates of incorporation and by-laws to authorize the execution and
consummation of this Agreement.
C. HDC
shall
not be required to grant any additional right with respect to the Licensed
Technology or furnish information as to which HDC will incur financial or other
liability to a third party, and no information shall be required to be furnished
over governmental prohibition or objection.
D. The
use
and disclosure of technical information acquired pursuant to this Agreement
and
the exercise of the rights granted by this Agreement shall be subject to the
export, assets and financial control regulations of the United States of America
including restrictions under regulations of the United States that may be
applicable to direct or indirect reexportation of such technical information
or
of equipment, Licensed Products or services directly produced by use of such
technical information.
E. No
license or right is granted by implication or otherwise with respect to any
patent application, patent, trademark or copyright except as specifically set
forth herein. No right is granted by either
party to this
Agreement to use any registered or unregistered trademark or trade name of
the
other
party.
F. The
rights and remedies provided in this Agreement are cumulative and not exclusive
of any rights or remedies provided by law or in equity.
G. This
Agreement embodies the entire understanding of the parties and shall supersede
all previous communications, representations, undertakings or agreements,
between them, either verbal or written, relating to the subject matter
hereof.
This Agreement may be amended, or any term hereof modified, only by a written
instrument duly executed by each of the parties hereto.
H. This
Agreement shall be binding upon and inure to the benefit of the successors,
permitted assignees and personal representatives of the parties.
I. The
waiver by either party of a default or breach of any provision of this Agreement
by the other party shall not operate or be construed as a continuous waiver
of
any subsequent default or breach.
J. If
any
portion of this Agreement shall be found to be illegal or unenforceable, such
provision shall be changed and interpreted by limiting and reducing its effect
so as to be enforceable to the full extent compatible with respect to applicable
law. The illegality or unenforceability of any one clause shall in no way
impair the legality or enforceability of any other clause in this
Agreement.
K. The
captions to the several Articles and Sections hereof are not part of the
Agreement but merely guides or labels to assist in locating and reading the
several Articles and Sections hereof. Any reference in this Agreement to
an Article, Exhibit, Schedule, Attachment or Section shall, unless specifically
provided, be to an Article, Exhibit, Schedule, Attachment or Section of this
Agreement.
L. This
Agreement may be executed in two or more counterparts, each of which shall
be
deemed an original, but all of which together shall constitute one and the
same
instrument.
M. Except
as
specifically set forth herein, none of the provisions of this Agreement shall
be
for the benefit of or enforceable by any third party, including, without
limitation, any creditor of either party hereto.
N. Any
written notice required under this Agreement shall be sent to the respective
addresses for the parties set forth in the introductory paragraphs of this
Agreement via first class mail and shall be deemed effective five (5) business
days after the mailing date thereof. Any written notice provided by
certified mail, courier, facsimile or overnight delivery service with tracking
capabilities shall be deemed effective when acknowledged by an official receipt
or express acknowledgement of receipt.
O. Neither
party shall make any public disclosure of, or otherwise disclose to any person
(other than its officers, employees, accountants, attorneys and agents whose
duties require them to have access to such information), including but not
limited to press releases, the existence or terms of this Agreement without
the
other party’s prior written consent, unless such disclosure is required by law
(including securities laws, rules and regulations as well as the rules of any
exchange on which either of the parties is publicly traded). In the event
such disclosure is required by law, the parties shall agree on the language
of
such disclosure. Any disclosure by a party to its officers, employees,
accountants, attorneys, and/or agents shall be subject to the confidentiality
restrictions of this Agreement.
P. Notwithstanding
anything contained in this Agreement to the contrary, the obligations of the
parties with respect to the consummation of the transactions contemplated by
this Agreement, shall be subject to all laws of any government having
jurisdiction over the parties and this transaction, and to orders, regulations,
directions or requests of any such government.
IN
WITNESS WHEREOF, the parties have caused
this
Agreement to
be
executed by their duly authorized representatives as of
the
Effective Date.
|
HEALTH
DISCOVERY CORPORATION
|
|
|
By:
/s/
Xxxxxxx X. Xxxxxxxx, M.D.
Name:
Xxxxxxx
X. Xxxxxxxx, M.D.
Title: Chairman
& CEO
Date:
July
31, 2007
|
|
|
CLARIENT,
INC.
|
|
|
By:
/s/
Xxx Xxxxxxx
Name:
Xxx
Xxxxxxx
Title: President
& CEO
Date:
July
30, 2007
|
ATTACHMENT
A
Licensed
Patents
|
Country/
Region
|
Patent/Publication/
Application No.
|
Description
|
|
U.S.
|
7,117,188
|
Method
of Identifying Patterns in
Biological
Systems and Uses Thereof
|
|
U.S.
|
2007/0092917
|
Biomarkers
for Screening, Predicting, and
Monitoring
Prostate Disease
|
|
U.S.
|
60/880,070
|
Biomarkers
for Screening, Predicting, and
Monitoring
Prostate Cancer
|
|
Australia
|
2002253879
|
Biomarkers
for Screening, Predicting, and
Monitoring
Prostate Disease
|
|
Canada
|
2,435,254
|
Biomarkers
for Screening, Predicting, and
Monitoring
Prostate Disease
|
|
Europe
|
1459235
|
Biomarkers
for Screening, Predicting, and
Monitoring
Prostate Disease
|
|
Japan
|
2002-560076
|
Biomarkers
for Screening, Predicting, and
Monitoring
Prostate Disease
|
ATTACHMENT
B
Licensed
Biomarkers
|
Num
|
Archival
Unigene ID
|
Current
Unigene ID
|
Symbol
|
Affy
probe
|
Pathway
|
Target
Description
|
|
12337
|
Hs.7780
|
Hs.480311
|
DKFZp564
|
212412_at
|
Unknown
|
Consensus
includes gb:AV715767 /FEA=
EST
/DB_XREF=gi:10797284 /DB_XREF=est:AV715767 /CLONE=
DCBATH02
/UG=Hs.7780 Homo sapiens mRNA; cDNA DKFZp564A072 (from clone
DKFZp564A072)
|
|
9373
|
Hs.21293
|
Hs.492859
|
UAP1/AGX-1
|
209340_at
|
Aminosugar
metabolism
|
gb:S73498.1
/DEF=Homo sapiens AgX-1 antigen mRNA; complete cds. /FEA=
mRNA
/PROD=AgX-1 antigen /DB_XREF=
gi:688010
/UG=Hs.21293 UDP-N-acteylglucosamine pyrophosphorylase 1 /FL=gb:AB011004.1
gb:NM_003115.1 gb:S73498.1
|
|
876
|
Hs.79037
|
Hs.476231
|
HSPD1
|
200807_s_at
|
Mitochondrial
control of apoptosis
|
gb:NM_002156.1
/DEF=Homo sapiens heat shock 60kD protein 1 (chaperonin) (HSPD1);
mRNA.
/FEA=
mRNA
/GEN=HSPD1 /PROD=heat shock 60kD protein 1 (chaperonin)
/DB_XREF=gi:4504520 /UG=Hs.79037 heat shock 60kD protein 1 (chaperonin)
/FL=gb:BC002676.1 gb:BC003030.1 gb:M34664.1 gb:M22382.1
gb:NM_002156.1
|
|
1961
|
Hs.75432
|
IMPDH2
|
000000_x_xx
|
xx
xxxx xxxxxxx nucleotide biosynthesis
|
gb:NM_000884.1
/DEF=Homo sapiens IMP (inosine monophosphate) dehydrogenase 2 (IMPDH2);
mRNA. /FEA=mRNA /GEN=IMPDH2 /PROD=IMP (inosine monophosphate)
dehydrogenase 2 /DB_XREF=gi:4504688 /UG=Hs.75432 IMP (inosine
monophosphate) dehydrogenase 2 /FL=gb:J04208.1 gb:NM_000884.1
|
