1 TERM SHEET LICENSING ARRANGEMENT BETWEEN ONCOR, INC. AND ONCORMED, INC.
1
TERM SHEET
LICENSING ARRANGEMENT
BETWEEN
ONCOR, INC.
AND
ONCORMED, INC.
THIS TERM SHEET CONSTITUTES A BINDING OBLIGATION OF EACH OF ONCOR, INC., A
MARYLAND CORPORATION ("ONCOR"), AND ONCORMED, INC., A DELAWARE CORPORATION
("ONCORMED"). ONCOR AND ONCORMED AGREE TO NEGOTIATE IN GOOD FAITH TO AMEND AND
RESTATE THE EXISTING AGREEMENT (AS DEFINED BELOW). SUCH AMENDED AND RESTATED
AGREEMENT SHALL BE REFERRED TO HEREIN AS THE "NEW AGREEMENT." IN THE EVENT
THAT ANY TERM OR CONDITION OF THE EXISTING AGREEMENT CONFLICTS WITH THE AGREED
UPON TERMS AND CONDITIONS SET FORTH HEREIN, THE TERMS AND CONDITIONS SET FORTH
HEREIN SHALL GOVERN AND CONTROL AND SHALL BE INCORPORATED INTO THE NEW
AGREEMENT AND SUPERSEDE ANY CONFLICTING TERMS AND CONDITIONS OF THE EXISTING
AGREEMENT. THE NEW AGREEMENT, IF AND WHEN EXECUTED, SHALL SUPERSEDE THE
EXISTING AGREEMENT AND THIS TERM SHEET.
AMENDED AND RESTATED TECHNOLOGY LICENSE AGREEMENT
CURRENT ARRANGEMENT Restated Technology License
Agreement, dated as of June 6,
1994 (the "Existing Agreement").
PARTIES Oncor and OncorMed (collectively,
the "Parties").
DEFINED TERMS Capitalized terms used but not
defined herein shall have the
meanings ascribed to such terms
in the Existing Agreement.
IMPROVEMENTS TO ONCOR TECHNOLOGY; In consideration for the
ONCORMED TECHNOLOGY; amendments to the Existing
ASSIGNMENT Agreement set forth herein and
in the New Agreement, OncorMed
agrees that any existing and
future Improvements, whether
discovered, invented, developed
or acquired by OncorMed, to Oncor
Technology or Additional Oncor
Technology shall automatically be
assigned to Oncor without any
further consideration. Oncor
Technology and existing
Improvements to Oncor Technology,
discovered, invented, developed
or acquired by OncorMed, are set
forth on Schedule A hereto.
In consideration for the
amendments to the Existing
Agreement set forth herein and in
the New Agreement, OncorMed shall
be assigned ownership rights to
all existing and future OncorMed
Technology (except Improvements,
whether discovered, invented,
developed or acquired by
OncorMed, to Oncor Technology or
Additional Oncor Technology which
shall automatically be assigned
to Oncor without any further
consideration). Existing
OncorMed Technology is set forth
on Schedule A hereto.
2
The Parties will take all steps
necessary to promptly perfect the
assignment and transfer of (i)
the Improvements to the Oncor
Technology and (ii) the OncorMed
Technology without any further
consideration.
LICENSE In addition to an exclusive
license set forth in the Existing
Agreement in the OncorMed Defined
Field, the New Agreement shall
provide that Oncor shall license
to OncorMed, on a non-exclusive
basis, the Oncor Technology and
the existing and future
Improvements to Oncor Technology
assigned to it for use in the
"New Defined Field," which shall
be defined as: "The provision by
OncorMed of services direct to
third parties other than the
services that are included in the
OncorMed Defined Field." The
exclusive and non-exclusive
license described in the
immediately preceding sentence
shall be referred to herein as
the "License." OncorMed shall
not have the right to grant
sublicenses of any rights
exclusively licensed to it by
Oncor within the OncorMed Defined
Field pursuant to the terms of
the Existing Agreement or the New
Agreement, except with the prior
written approval of Oncor, which
approval shall not be
unreasonably withheld. OncorMed
shall not have the right to grant
sublicenses of any rights
non-exclusively licensed to it by
Oncor within the New Defined
Field pursuant to the terms of
the Existing Agreement or the New
Agreement, except with the prior
written approval of Oncor, which
approval may be withheld at
Oncor's sole discretion.
3
PAYMENTS In lieu of the royalty payment
(the "Existing Royalty Payment")
set forth in the Existing
Agreement, the New Agreement
shall provide that OncorMed shall
make payments to Oncor (the "New
Payments") equal to the
percentage set forth below of (1)
OncorMed's annual Net Sales (as
reported in OncorMed's quarterly
and annual reports filed from
time to time with the Securities
and Exchange Commission) less (2)
any such Net Sales as shall be
mutually agreed from time to time
by the Parties ((1) less (2)
shall be referred to as the "Base
Revenue"). The payments due
shall be calculated as follows:
(i) for aggregate annual Base
Revenues of up to (****), the
payment due shall be four percent
(4%) of such Base Revenues, (ii)
for aggregate annual Base
Revenues of between (****) and
(****), the payment due shall be
three percent (3%) of such Base
Revenues, and (iii) for aggregate
annual Base Revenues in excess of
(****), the payment due shall be
two percent (2%) of such Base
Revenues. The payments due shall
be calculated and paid quarterly
in arrears within forty-five (45)
days of the end of the previous
quarter. "Net Sales" shall be
defined as: "gross revenues and
fees due to OncorMed and its
sublicensees (which have been
approved by Oncor) from the sale
of any service less (i) any
allowances actually made and
taken for returns, refunds or
recalls; trade discounts actually
allowed in amounts and for
purposes customary in the trade;
an allowance for actual bad
debts, not to exceed six percent
(6%) of gross revenues and fees;
sales, use, value-added and
similar taxes and duties and
similar governmental assessments;
transportation, packing and
shipping insurance actually paid;
and the direct costs (as
determined in accordance with
generally accepted accounting
principles) to OncorMed and its
sublicensees (which sublicensees
have been approved by Oncor) of
any reagents, chemicals, supplies
and materials used in providing
the service." During the first
year the New Agreement is in
effect, OncorMed shall be
obligated to pay at least a
minimum payment equal to $50,000
per quarter. During the second
year the New Agreement is in
effect, OncorMed shall be
obligated to pay at least a
minimum payment equal to $25,000
per quarter. Thereafter,
OncorMed shall not be obligated
to pay Oncor a minimum payment.
Upon the execution of the New
Agreement, OncorMed shall have no
further obligation to pay the
Existing Royalty Payment Amounts.
The New Payments will go into
effect on April 1, 1997.
**** Denotes language for
which the Company has
requested confidential
treatment pursuant to
the rules and
regulations of the
Securities Exchange Act
of 1934, as amended.
4
OWNERSHIP RIGHTS Oncor shall own all proprietary
rights, interest in and title to
all (a) Oncor Technology it has
discovered, invented, developed
or acquired, and (b) Additional
Oncor Technology, and that Oncor
alone shall have a direct license
with the licensor of those parts
of the Oncor Technology and
Additional Oncor Technology which
are licensed to Oncor by third
parties. OncorMed shall own all
proprietary rights, interest in
and title to all OncorMed
Technology and that OncorMed
alone shall have a direct license
with the licensor of those parts
of the OncorMed Technology which
are licensed to OncorMed by third
parties. Oncor shall own all
Improvements, whether discovered,
invented, developed or acquired
by OncorMed, to Oncor Technology
and Additional Oncor Technology.
RIGHT OF FIRST OFFER Except for Improvements to Oncor
Technology or Additional Oncor
Technology either discovered,
invented, developed or acquired
by OncorMed and assigned to Oncor
pursuant to the terms set forth
herein, and subject to certain
contractual provisions in which
third parties limit the
transferability of licensed,
assigned or otherwise transferred
technology, prior to the license
or disposition (whether by
assignment or license) to a third
party of Oncor Technology,
Additional Oncor Technology, or
OncorMed Technology (in each case
"Transferable Technology"), the
offering party shall offer the
other party terms for a license
or assignment, and the other
party shall have a thirty (30)
day period in which to license or
acquire the Transferable
Technology on the offered terms.
If the offer is declined or is
not accepted during such period,
the offering party may license or
dispose (whether by assignment,
transfer or license) of the
Transferable Technology to a
third party on terms no more
favorable to the third party than
the terms offered by such
offering party to the other party
to the New Agreement. If the
offer is accepted, the Parties
agree to negotiate in good faith
the terms and conditions of any
such license or acquisition
agreement; provided, however,
that if the Parties are unable to
agree upon the terms and
conditions of any such license or
acquisition agreement within
thirty (30) days of the
acceptance of the offer, the
offering party may license or
dispose (whether by assignment,
transfer or license) of the
Transferable Technology to a
third party on terms no more
favorable to the third party than
the terms offered by such
offering party to the other party
to the New Agreement.
5
(****) TECHNOLOGY Notwithstanding the right of
first offer referenced above,
(****), OncorMed shall offer
Oncor terms for a license or
assignment of such technology,
and the Parties shall enter into
good faith negotiations for a
license or assignment agreement
on terms and conditions mutually
acceptable to both Parties. In
the event that the Parties are
not able to reach agreement
within ninety (90) days from the
date Oncor first receives such
offer, then OncorMed shall be
entitled to license or assign
such technology to third parties
on terms that are no more
favorable to the third party than
the final terms offered by
OncorMed to Oncor during such
ninety (90) day period (the
"Consideration Period").
(****) TECHNOLOGY At any time prior to the end of
the Consideration Period, Oncor
can exercise a right to enter
into a sublicense for any (****)
technology licensed, acquired or
developed by OncorMed in which
(i) (****) and (ii) (****).
PROPRIETARY RIGHTS Oncor will retain the right and
discretion to apply for,
prosecute, maintain and defend
all Proprietary Rights in the
Oncor Technology, the Additional
Oncor Technology and the
Improvements thereto discovered,
invented, developed or acquired
by OncorMed. OncorMed will
retain the right and discretion
to apply for, prosecute, maintain
and defend all Proprietary Rights
in the OncorMed Technology (other
than Improvements, whether
discovered, invented, developed
or acquired by OncorMed, to Oncor
Technology and Additional Oncor
Technology).
PUBLICATIONS OncorMed shall be entitled at its
sole discretion to make any
publication, public announcement,
press release or other disclosure
which incorporates or makes
reference to OncorMed Technology
(other than Improvements, whether
discovered, invented, developed
or acquired by OncorMed, to Oncor
Technology and Additional Oncor
Technology). OncorMed shall have
no obligation to inform Oncor of
any such publication, public
announcement, press release or
other disclosure.
**** Denotes language for
which the Company has
requested confidential
treatment pursuant to
the rules and
regulations of the
Securities Exchange Act
of 1934, as amended.
6
ENFORCEMENT Oncor shall have the sole right
to enforce any Proprietary Right
to the Oncor Technology, the
Additional Oncor Technology and
the Improvements thereto
discovered, invented, developed
or acquired by OncorMed.
OncorMed shall have the sole
right to enforce any Proprietary
Right to the OncorMed Technology
(other than Improvements, whether
discovered, invented, developed
or acquired by OncorMed, to Oncor
Technology and Additional Oncor
Technology).
CHANGE IN CONTROL (****)
CONFIDENTIALITY Section 12(c) of the Existing
Agreement shall be amended to
read as follows: "Upon any
termination of this Agreement,
each party will promptly return
or destroy any Proprietary
Information of the other and any
copies, extracts and derivatives
thereof, except as otherwise set
forth in this Agreement;
provided, however, that each
party shall be entitled to retain
one copy of such Proprietary
Information for its corporate
files solely for use in any
litigation or dispute involving
such Proprietary Information.
**** Denotes language for
which the Company has
requested confidential
treatment pursuant to
the rules and
regulations of the
Securities Exchange Act
of 1934, as amended.
7
IN WITNESS WHEREOF, the parties hereto have executed this Term
Sheet as of the 24th day of February, 1997.
ACCEPTED AND AGREED:
ONCOR, INC.
By: /s/ Xxxxx Xxxx
---------------------------------------
Name: Xxxxx Xxxx
-------------------------------------
Title: President and COO
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ONCORMED, INC.
By: /s/ Xxxx Xxxxxxxx
---------------------------------------
Name: Xxxx Xxxxxxxx
-------------------------------------
Title: President
------------------------------------
8
SCHEDULE A
I. (****)
II. (****)
III. (****)
**** Denotes language for which the Company has requested confidential
treatment pursuant to the rules and regulations of the Securities
Exchange Act of 1934, as amended.
