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Confidential treatment requested for portions of this document,
portions for which confidential treatment is requested are noted.
LICENSE AGREEMENT
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AGREEMENT made and effective by and between YALE UNIVERSITY, a corporation
organized and existing under and by virtue of a charter granted by the general
assembly of the Colony and State of Connecticut and located in New Haven,
Connecticut ("YALE"), and IG LABORATORIES, INC. a corporation organized and
existing under the laws of the State of Delaware and with its principal office
located at Xxx Xxxxxxxx Xxxx, Xxxxxxxxxx, Xxxxxxxxxxxxx ("IG" or "LICENSEE").
W I T N E S S E T H:
WHEREAS, in the course of research conducted under YALE auspices, Dr. Xxxxx
Xxxx, Xxxxx Xxxxxxx, Xxxxxx Xxxxxx and Xxxxx Xxxxxxxxxx of the YALE School of
Medicine (the "Inventors"), have discovered new methods for the delineation of
individual human chromosomes in metaphase and interphase cells by IN SITU
suppression hybridization and have filed a patent application of like title
thereon at IG's expense (the "Invention"); and
WHEREAS, pursuant to an assignment by the Inventors to YALE of all their
rights, title and interest in and to the Invention and any patents resulting
therefrom. YALE is the owner of all rights in the Invention, subject to rights
reserved by the U.S. Government; and
WHEREAS, IG desires to obtain a license to the Invention and any patents
resulting therefrom, and YALE is willing to grant such a license to IG subject
to the terms and conditions hereof:
NOW, THEREFORE, in consideration of the mutual covenants herein contained
the parties agree as follows:
ARTICLE 1 DEFINITIONS
As used in this AGREEMENT, the following terms shall be defined as set
forth below:
1.1 The "INVENTION" shall mean methods, processes and related
reagents described in U.S. Patent Application Serial Number 271.609.
1.2 "KNOW-HOW" shall mean and include copies and reports of all
research studies and related laboratory work performed or to be performed by the
Inventors while at YALE during the term of this AGREEMENT and directly and
reasonably relating to the INVENTION but excluding probes useful in carrying out
the INVENTION.
1.3 "LICENSED PATENTS" shall mean any United States or foreign
patent application(s) or patent(s) owned, in whole or in part, by YALE during
the term of this AGREEMENT in which one or more of the Inventors are named and
covering, in whole or in part, the INVENTION, together with any continuations,
continuations-in-part, divisional or substitute patents, any reissues or
re-examinations of any such applications or patents, and any extension of any
such patents together with all foreign counterpart applications and patents of
the foregoing.
1.4 "LICENSED PRODUCTS OR SERVICES" shall mean any process, method
or reagent or other product or service covered within the scope of a valid claim
of the LICENSED PATENTS and any product produced or manufactured using any such
process, method or reagent and any service performed using any such process,
method or reagent.
1.5 "NET SALES PRICE" shall mean the price for LICENSED PRODUCTS
OR SERVICES invoiced by LICENSEE or its sublicensee(s) for sale to third party
customers less (i) sales or excise or use taxes separately stated on the face of
the invoice, (ii) separately stated and itemized transportation charges, and
(iii) all regular trade and discount allowances actually given. In the event
that LICENSEE or a sublicensee shall sell LICENSED PRODUCTS OR SERVICES to a
company owned or controlled by, or affiliated with, LICENSEE or the sublicensee,
then the NET SALES PRICE for such sales shall be the constructive NET SALES
PRICE as if sold to unrelated third parties.
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1.6 "NET SALES" shall mean the total NET SALES PRICE for all
LICENSED PRODUCTS OR SERVICES of LICENSEE to third parties, less the amount of
any credits actually given for LICENSED PRODUCTS OR SERVICES sold and returned,
or determined to be defective. LICENSED PRODUCTS OR SERVICES shall be deemed to
have been sold when delivered or shipped, invoiced, or when paid for, whichever
is earliest.
1.7 "EARNED ROYALTIES" shall mean royalties paid or payable by
LICENSEE to YALE determined with respect to NET SALES and sublicensing income.
1.8 "ROYALTY YEAR" shall mean each calendar year during the term of
a license granted pursuant to this AGREEMENT.
1.9 "QUARTER YEAR" shall mean the three (3) month periods ending
March 31, June 30, September 30 and December 31 of each ROYALTY YEAR.
1.10 "EFFECTIVE DATE" shall mean the date upon which the last of
both parties shall have affixed its authorized signature hereto.
ARTICLE II GRANT OF LICENSE
2.1 YALE hereby grants to LICENSEE, subject to all the terms and
conditions of this AGREEMENT, an EXCLUSIVE LICENSE under the LICENSED PATENTS
for the terms defined by Articles 3.1 and 3.2 to make, have made, use, sell and
practice the INVENTION in the countries where the LICENSED PATENTS are effective
or applications are pending, subject to rights required to be granted to the
U.S. Government. Notwithstanding the preceding, YALE shall retain the right to
make, use and practice the INVENTION for itself for research purposes only.
2.2 YALE grants to LICESEE a NON-EXCLUSIVE LICENSE to make,
practice and use the KNOW-HOW worldwide for the term defined by Article 3.3.
2.3 YALE grants to LICENSEE the right to grant sublicenses to third
parties under terms and conditions at least equal to those contained herein
provided that the
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terms of this AGREEMENT are included wherever applicable in such sublicenses.
LICENSEE'S right to sublicense hereunder shall be exclusive to it and such
sublicenses shall be coterminable with this AGREEMENT and the license granted
to LICENSEE hereunder.
ARTICLE III TERM OF LICENSE
3.1 The term of the EXCLUSIVE LICENSE granted with respect to U.S.
LICENSED PATENTS under this AGREEMENT shall be for the life of the last to
expire of the LICENSED PATENTS issued in the United States.
3.2 The term of an EXCLUSIVE LICENSE granted with respect to
foreign LICENSED PATENTS under this AGREEMENT shall extend for the life of the
applicable foreign patent.
3.3 The term of the license granted with respect to KNOW-HOW shall
be for twenty (20) years from the date hereof.
ARTICLE IV ROYALTIES
As consideration for the rights granted hereunder, LICENSEE shall make the
following payments to YALE:
4.1. LICENSEE shall pay to YALE Fifty Thousand Dollars ($50,000) in
consideration of the execution of this AGREEMENT by both parties. Such payment
shall be separate from and not credited against any EARNED ROYALTIES and shall
be paid according to the following schedule:
i. Twenty Thousand Dollars ($20,000) within thirty (30) days
after execution of this AGREEMENT:
ii. Twenty Thousand Dollars ($20,000) within thirty (30) days
after the first anniversary of the execution of this
AGREEMENT: and
iii. Ten Thousand Dollars ($10,000) within thirty (30) days
after the second anniversary of the execution of this
AGREEMENT.
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4.2 Subject to Article 4.6, during each ROYALTY YEAR of the term of the
EXCLUSIVE LICENSE granted with respect to U.S. or foreign LICENSED PATENTS,
LICENSEE shall pay to YALE EARNED ROYALTIES on NET SALES of LICENSED PRODUCTS OR
SERVICES, by LICENSEE or LICENSEE'S sublicensees which LICENSEE knows, or has
reason to know, are manufactured, sold or used in countries in which the
EXCLUSIVE LICENSE is in effect according to the schedule set forth below:
On NET SALES of LICENSED PRODUCTS: * percent (*%): and
On NET SALES of LICENSED SERVICES: * percent (*%).
Such EARNED ROYALTIES may be reduced by an amount equal to one-half (1/2) of any
royalties which LICENSEE is required to pay to third parties for additional
licenses to enable LICENSEE to manufacture, use or sell LICENSED PRODUCTS OR
SERVICES provided, however, that in no event shall such EARNED ROYALTY be
reduced by more than fifty percent (50%).
4.3 In the event the EXCLUSIVE LICENSE granted under Article 2.1 shall
become a NON-EXCLUSIVE LICENSE, LICENSEE shall pay to YALE an EARNED ROYALTY of
fifty percent (50%) of the amounts due under Article 4.2 and no minimum
royalties shall be due and owing under Article 4.4.
4.4 During the period when such license granted under Article 2.1 is
exclusive, and in order to maintain such exclusivity but subject to Article 4.6,
commencing three (3) years after the EFFECTIVE DATE hereof and continuing during
the term of the EXCLUSIVE LICENSE of U.S. LICENSED PATENTS, LICENSEE agrees to
pay to YALE annual Minimum Royalty Payments, irrespective of whether any sales
of LICENSED PRODUCTS OR SERVICES have been made or whether any LICENSED PATENTS
have issued in the amounts as set forth below:
YEAR MINIMUM
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3 $ *
4 $ *
5 $ *
6 $ *
7 $ *
8 $ *
9 $ *
10 and hereafter $ *
* Confidential treatment requested, material omitted has been filed
separately with the Securities and Exchange Commission.
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4.5 In addition to EARNED ROYALTIES payable under Article 4.2, LICENSEE
shall pay to YALE twenty percent (20%) of all additional non-royalty income paid
to LICENSEE from any sublicenses granted hereunder. All payments made to YALE
under Article 4.2 on account of EARNED ROYALTIES on sales by LICENSEE and under
this Article 4.5 shall be fully creditable against MINIMUM ROYALTIES due under
Article 4.4.
4.6 If after five (5) years from the EFFECTIVE DATE of this AGREEMENT
no LICENSED PATENT has been issued (i) in the country of manufacture or sale
with respect to LICENSED PRODUCTS, or (ii) in the country of sale with respect
to LICENSED SERVICES then in lieu of EARNED ROYALTIES payable under Articles 4.2
or 4.3 and until such patent issues, LICENSEE shall pay to YALE in consideration
of the KNOW-HOW license, an EARNED ROYALTY of one-half of one percent (0.5%) of
NET SALES of LICENSED PRODUCTS OR SERVICES, such royalties to be paid hereunder
for the longer of a) ten (10) years from the EFFECTIVE DATE hereof, or b) five
(5) years from the first commercial sale of the respective LICENSED PRODUCT OR
LICENSED SERVICE. Thereafter LICENSEE shall have a fully paid-up license to such
KNOW-HOW. During such period when reduced EARNED ROYALTIES are payable as set
forth under this Article 4.6, no minimum royalties shall be due and owing under
Article 4.4 provided, however, that within six (6) months after issuance of a
LICENSED PATENT and resumption of payment of non-reduced EARNED ROYALTIES,
LICENSEE shall pay to YALE all minimum royalties which were otherwise due under
Article 4.4 but whose payment was suspended by operation of this Article 4.6.
ARTICLE V PAYMENTS AND REPORT
5.1 Within sixty (60) days after the end of each QUARTER YEAR, LICENSEE
shall furnish to YALE a written report setting forth separately as to LICENSEE
and each of its sublicensees, the NET SALES by country of manufacture (and if
made in a country in which there are no LICENSED PATENTS, by country in which
sold) and the EARNED ROYALTIES payable thereon.
5.2 Minimum Royalty Payments due for the year as specified in Article
4.4 shall be paid in equal quarterly installments and shall accompany the report
specified in
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Article 5.1 The Minimum Royalty Payment due for any QUARTER YEAR shall he
reduced by the amount of EARNED ROYALTIES otherwise due and paid in such QUARTER
YEAR and, except the xxxxx QUARTER YEAR shall be further reduced by the amount
by which the EARNED ROYALTIES of the prior QUARTER YEAR exceed the Minimum
Royalty Payment due in the QUARTER YEAR in question.
5.3 The reports required by this Article V shall be signed and
attested to by an officer or his designee of LICENSEE or its subsidiary to be
correct to the best of LICENSEE'S knowledge and information. Each report shall
be accompanied by LICENSEE'S payment of the full amount due, less any taxes
required by a governmental agency to be withheld therefrom; provided, however,
that YALE shall have the right to contest any such taxes and LICENSEE shall
provide reasonable assistance with respect thereto. All royalties shall be paid
to YALE in U.S Dollars. In the event that conversion from a foreign currency is
required in calculating a royalty payment hereunder, the exchange rate used
shall be the rate in effect at the end of the last business day of the
applicable QUARTER YEAR as published in The Wall Street Journal, or if
conversion cannot legally be made, the EARNED ROYALTIES shall be deposited in a
bank accepting such currency for which conversion is blocked, in an account
naming YALE as the owner.
5.4 If this AGREEMENT should be terminated at any time other than at
the end of a QUARTER YEAR or ROYALTY YEAR, the last report and payment shall be
made within sixty (60) days after the effective date of such termination, and
shall include any EARNED ROYALTIES and any Minimum Royalty Payments prorated to
the date of termination. If the amount of LICENSEE'S existing inventory of
LICENSED PRODUCTS OR SERVICES which had been manufactured but not sold up to the
date of termination exceeds a sixty (60) day supply. LICENSEE shall provide YALE
with a report setting forth the amount of such inventory at the date of
termination, and may elect to continue to render QUARTER YEAR reports on the
sales of such existing inventory and to make payments as though the AGREEMENT
were still in effect: provided, however, that in any event, LICENSEE shall
complete payment of EARNED ROYALTIES thereon within one (1) year from the
effective date of termination and LICENSEE shall destroy any such remaining
inventory and certify such destruction to YALE.
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ARTICLE VI BOOKS AND RECORDS
LICENSEE and its sublicensees shall keep and maintain complete and
accurate records and books of account in sufficient detail and form so as to
enable determination and verification of EARNED ROYALTIES payable by LICENSEE
hereunder. Such records and books of account shall be maintained for a period of
no less than three (3) years following the QUARTER YEAR to which they pertain.
LICENSEE shall permit such records and books of account to be examined, solely
to the extent necessary for YALE to verify the amount of royalties payable
hereunder, by YALE's duly appointed agent, a certified public accountant, under
suitable confidentiality to LICENSEE, at YALE's expense, during normal business
hours, and upon ten (10) days prior written notice by YALE to LICENSEE but nor
more than once per year.
ARTICLE VII PATENT PROTECTION
7.1 LICENSEE, at its expense, has prepared and filed and YALE, at
LICENSEE'S expense, and during the term of the EXCLUSIVE LICENSE hereunder shall
reasonably cause to be prosecuted to issuance, grant or final disposition, one
or more appropriate applications for U.S. patent covering the INVENTION. Any and
all such patents and applications resulting therefrom shall be and remain the
sole property of YALE. Subject to Article 7.4, any taxes, annuities, working
fees, maintenance fees, renewal and extension charges with respect to each of
the U.S. LICENSED PATENTS further including all reasonable costs incurred in the
prosecution thereof shall be paid by LICENSEE.
7.2 YALE, at LICENSEE'S expense, shall prepare and file foreign
patent applications covering the INVENTION in such foreign countries as are
determined by LICENSEE and agreed to by YALE. Determination of which foreign
countries in which patent applications shall be filed shall be made prior to any
statutory bar to international filing of any such applications. Any and all such
applications or patents shall remain the property of YALE. For so long as
LICENSEE enjoys or wishes to enjoy an exclusive license under Article 2.1, and
subject to Article 7.4, any taxes, annuities, working fees, maintenance fees,
reasonable prosecution costs, renewal and extension charges with respect to each
such foreign patent application and patents shall be punctually paid by LICENSEE
on behalf of both parties. If LICENSEE does not agree to bear the expanse
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of filing patent applications in any foreign countries in which YALE wishes to
obtain patent protection, or if LICENSEE decides to discontinue paying charges
associated with any particular patent application or patent in a country or
countries, then YALE may file, prosecute and otherwise pay for such applications
or patents at its own expense and the EXCLUSIVE LICENSE granted under Article
2.1 to such patent application or patents shall be reduced to a NON-EXCLUSIVE
LICENSE in such foreign country or countries, and further provided that such
NON-EXCLUSIVE LICENSE may be completely divested from LICENSEE if YALE or a
third party fully reimburses LICENSEE for all charges paid by LICENSEE with
respect to such patent application or patent in the country or countries in
question.
7.3 YALE shall provide to LICENSEE for its review and comment prior
to filing, copies of all patent applications and substantive parent prosecution
documents, provided there is reasonable time to do so. LICENSEE shall provide
its comments within thirty (30) days of receipt thereof and such comments shall
be advisory in nature and not binding on YALE or its patent counsel.
7.4 In the event LICENSEE determines, as evidenced by an opinion of
counsel, that patent rights or protection cannot reasonably be anticipated to be
obtained on a Unitd States or foregin patent application due to prior patent
rights of third parties or for any other reason, or that further appeal of an
adverse decision by a court or agency having jurisdiction is not possible, or
that further patent prosecution could be unduly expensive with little likelihood
of success, LICENSEE shall be entitled, upon written notice to YALE, to cease to
bear the expense of further prosecution of such application. In such event, YALE
shall have the right to assume, undertake and direct such further prosecution at
its own expense and the EXCLUSIVE LICENSE granted under Article 2.1 to such
patent application or patents shall be reduced to a NON-EXCLUSIVE LICENSE in
such country or countries, and further provided that such NON-EXCLUSIVE LICENSE
may be completely divested from LICENSEE if YALE or a third party fully
reimburses LICENSEE for all charges paid by LICENSEE with respect to such patent
application or patent in the country or countries in question.
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7.5 LICENSEE and its sublicensees shall apply the patent marking
notices required by the law of any country where LICENSED PRODUCTS are made,
sold or used, in the extent feasible and practical, and in accordance with the
applicable patent laws of the country.
ARTICLE VII KNOW-HOW
8.1 Promptly following execution of this AGREEMENT, YALE shall
disclose to LICENSEE the KNOW-HOW by furnishing copies and documentation
thereof.
8.2 The KNOW-HOW and all parts thereof, shall be and remain the
sole and exclusive property of YALE and shall be used by LICENSEE only in
connection with and for the term of this AGREEMENT. Except as otherwise
agreed to or approved in advance in writing by YALE, LICENSEE or its
sublicensee shall disclose the KNOW-HOW or any part thereof only to those of
its employees to whom it shall be absolutely necessary in order to facilitate
LICENSEE'S operations hereunder, and LICENSEE shall take all reasonable
measures to prevent its employees and others from divulging the same. Such
obligations shall not apply to KNOW-HOW which was already in the public
domain or known to LICENSEE prior to its disclosure or which LICENCSEE
becomes part of the public domain subsequently through no fault of LICENSEE
or which LICENSEE is required by law to disclose, or which LICENSEE acquires
from a third party having the right to disclose same to LICENSEE.
8.3 Notwithstanding the foregoing, YALE reserves, on behalf of the
Inventors, the right to publish all or any portion of the KNOW-HOW, but not
any proprietary information of LICENSEE, in academic journals and by
dissemination at professional meetings subsequent to the filing of one or
more U.S patent applications by YALE.
ARTICLE IX DUE DILIGENCE IN COMMERCIALIZATION
Because the INVENTION and the making thereof was partially funded by
government funds, and because LICENSEE has represented the need to have an
EXCLUSIVE LICENSE thereto in order to warrant further development thereof which
will benefit the public, LICENSEE and YALE acknowledge a duty to act diligently
and purposefully to bring the benefits of the INVENTION to the public. In
connection
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therewith, LICENSEE shall plan and implement appropriate research and
development testing, and production efforts which shall be directed toward
prompt commercialization of the LICENSED PRODUCTS and SERVICES in the field of
human genetic testing and shall further undertake such efforts or commision
others to undertake such efforts or seek LICENSEES to undertake such efforts in
the field of infectious diseases. LICENSEE shall provide YALE semi-annual
reports indicating the progress toward commercialization which has been made and
setting forth future plans. In the event that LICENSEE identifies fields of
activity in which it does not plan to utilize the INVENTION or in which it
abandons the marketing or intent to market LICENSED PRODUCTS OR SERVICES,
LICENSEE shall so notify YALE and shall return, without cost to YALE, such field
limited rights to YALE and shall negotiate in good faith the conditions under
which it shall provide to YALE LICENSEE's rights in LICENSEE developed and
jointly developed information and data which is useful therewith.
If at any time LICENSEE suspends its marketing or its intent to market
the LICENSED PRODUCTS OR SERVICES in all fields for a period exceeding ninety
(90) days, LICENSEE shall immediately notify YALE giving reasons therefor and a
statement of its intended actions which shall include plans for recommencement
of marketing and development within a reasonable time and if there are no plans
for recommencement, LICENSEE shall so notify YALE and shall return all license
rights to YALE and shall negotiate in good faith the conditions under which it
shall provide to YALE LICENSEE's rights in LICENSEE developed and jointly
developed information and data which is useful therewith.
ARTICLE X INFRINGEMENT AND LITIGATION
10.1 LICENSEE shall have the first right to defend the LICENSED
PATENTS against infringement or interference by other parties in any country in
which an EXCLUSIVE LICENSE is in effect hereunder, including by bringing any
legal action for infringement or defending any counterclaim of invalidity or
action of a third party for declaratory judgment of non-infringement or
interference which LICENSEE, in its sole discretion, decides is reasonable and
neccessary for it to undertake. LICENSEE shall bring or defend, or subject to
YALE's reasonable approval, may settle any such actions
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soley at its own expense and through counsel of its selection; provided, however
that YALE shall be entitled in each instance to participate through counsel of
its selection and at its own expense. YALE shall have no responsibility or
financial obligation with respect to any such infringement action or
interference except to provide reasonable assistance to LICENSEE as requested to
allow LICENSEE to bring such legal action in YALE's name, and LICENSEE shall
reimburse YALE for YALE's out-of-pocket expenses in connection with any such
assistance.
10.2 YALE shall have the first right to defend the LICENSED PATENTS
against infringement in any country in which the NON-EXCLUSIVE LICENSE is in
effect or in the event LICENSEE declines to excercise its right to defend the
LICENSED PATENTS under Article 10.1 and shall file and prosecute, defend or
settle, such infringement and declaratory judgement actions at its own expense,
through counsel of its selection and with sole discretion as to whether to bring
or defend or settle any such action; provided, however, that in the event that
YALE shall fail to bring or defend such an action or otherwise resolve the claim
including by grant of a royalty-bearing (at a minimum royalty at least equal to
the comparable royalty herein) license, within six (6) months following notice
of the infringement. LICENSEE, at its discretion, may terminate this AGREEMENT
with respect to the country or countries involved or meet with YALE and both
parties shall in good faith negotiate a reduced royalty reflecting LICENSEE's
diminished competitive edge.
10.3 Each party shall promptly notify the other in writing in the
event that a third party shall bring a claim of infringement by the LICENSED
PRODUCT OR SERVICES against YALE or LICENSEE, either in the United States or in
any foreign country. If the alleged infringement is so substantial as to
threaten the competitive position of LICENSEE and/or LICENSEE is enjoined from
excercise of its license hereunder, and if YALE elects not to defend against
such claim and not to obtain a license to permit LICENSEE to excercise its
license free of such claim, then LICENSEE may, in its own name and at its sole
expense, defend such claim, and may compromise, settle or otherwise obtain such
license, in such manner and on such terms as LICENSEE shall see fit or terminate
this AGREEMENT as to such country or countries. At all times, LICENSEE shall
have the right to immediately cease sales of LICENSED PRODUCTS OR SERVICES
pending the outcome of such claim of infringement or if it elects to continue
sales and to apply against the cost of defending such claim up to fifty
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percent (50%) of any amounts payable to YALE under Article IV of this AGREEMENT,
YALE, at its own expense and through counsel of its selection, may become a
party to such defense and/or settlement and compromise. In any event, YALE shall
have the right to defend, at its own expense, any third party claim or action
brought against YALE and to settle or compromise the same in such manner as it
shall see fit provided that LICENSEE is not prejudiced thereby with respect to
any claim brought against LICENSEE or with respect to LICENSEE's sale,
manufacture or use of LICENSED PRODUCTS OR SERVICES. LICENSEE may participate in
such litigation or claim in its own behalf at its own expense.
ARTICLE XI USE OF YALE'S NAME
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LICENSEE shall not use the name "Yale" or 'Yale University" for any
purpose without the prior written consent obtained from YALE in each instance,
which consent shall not be unreasonably withheld, and except that prior
permission need not be given, if the disclosure is general in nature and soley
for the purposes of statisfying LICENSEE'S SEC disclosure obligations.
ARTICLE XII OWNERSHIP OF IMPROVMENTS
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Ownership of the KNOW-HOW and all inventions mady by YALE or its
employees and covered by the LICENSED PATENTS shall remain with YALE.
Ownership of all inventions which are made soley by LICENSEE, its employees or
agents and ownership of any corresponding domestic and foreign patent
applications and patents, shall remain with LICENSEE. Notwithstanding the
preceeding, YALE reserves the right to negotiate with any bona fide licensees
including, but not limited to, LICENSEE, licenses to YALE inventions related to
the field of art and not otherwise covered by INVENTION or LICENSED PATENTS
or conceived or reduced to practice in Dr. Xxxxx Xxxx'x laboratory at YALE.
ARTICLE XIII TERMINATION
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13.1 YALE may terminate the AGREEMENT following thirty (30)days
written notice to LICENSEE in the event LICENSEE: (i) fails to make, within the
thirty (30) day period set by the notice, any payment which is due and payable
pursuant to this
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AGREEMENT other than under Article 4.4 and has been in arrears for more
than one (1) month; or (ii) commits a material breach of any other obligation of
this AGREEMENT which is not cured within the thirty (30) day period set by the
notice; or (iii) becomes insolvent or a petition in bankruptcy is filed against
LICENSEE and is consented to, acquiesced in or remains undismissed for ninety
(90) days; or makes a general assignment for the benefit of creditors, or a
receiver is appointed for LICENSEE, and LICENSEE does not return to solvency
before the expiration of said thirty (30) day period set by the notice; or
(iv) fails to excercise diligence in bringing the LICENSED PRODUCTS to market
in accordance with Article 9.2.
13.2 After the first anniversary of the EFFECTIVE DATE of this
AGREEMENT and upon ninety (90) days written notice to YALE, LICENSEE shall be
entitled to terminate this AGREEMENT in its entirety or for a particular country
(i) at its discretion, or (ii) in the event of YALE's material breach of any of
the provisions of this AGREEMENT, which breach is not cured within the thirty
(30) day period set by the notice, or (iii) pursuant to the terms of Article
10.2 or 10.3, or (iv) if LICENSEE elects not to bear the expense of further
prosecution of an application pursuant to Articles 7.2 or 7.4.
13.3 Upon termination of this AGREEMENT and except as otherwise
expressly provided herein, all licenses granted to LICENSEE and to YALE under
the terms of this AGREEMENT shall terminate, and sublicenses granted by
LICENSEE hereunder shall terminate simultaneously unless otherwise specified
by YALE: provided, however, that LICENSEE shall have the right for one (1)
year thereafter to dispose of all LICENSED PRODUCTS OR SERVICES or
substantially completed LICENSED PRODUCT OR SERVICES, then in its inventory
or laboratory, and shall pay EARNED ROYALTIES thereon as though this
AGREEMENT had not terminated, in accordance with the provisions of Article V.
13.4 Termination of this AGREEMENT shall not affect any rights or
obligations accrued prior to the EFFECTIVE DATE of such termination and
specifically LICENSEE'S obligation to pay the full amount of the payments
required by Article 4.1 and all EARNED ROYALTIES and minimum payments specified
by Article IV.
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13.5 The rights provided in this Article XIII shall be in addition
and without prejudice to any other rights which the parties may have with
respect to any breach or violations of the provisions of this AGREEMENT.
13.6 Waiver by either party of a single default or breach or of a
succession of defaults or breaches shall not deprive such party of any right to
terminate this AGREEMENT pursuant to the terms hereof upon the occasion of any
subsequent default or breach.
ARTICLE XIV NO WARRANTIES; INDEMNIFICATION; INSURANCE
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14.1 YALE makes no representations or warranties that any LICENSED
PATENT is valid, or that the KNOW-HOW or the manufacture, use, sale or other
disposal of the LICENSED PRODUCT and SERVICES does not infringe upon any patent
or other rights not vested in YALE.
14.2 YALE MAKES NO WARRANTIES WHATSOEVER, EITHER EXPRESS OR IMPLIED,
AS TO THE THE MERCHANTABILITY OR FITNESS OF THE LICENSED PRODUCT OR SERVICES FOR
A PARTICULAR PURPOSE and LICENSEE and its sublicensees shall make no statements,
representation or warranties whatsoever to any third parties which are
inconsistent with such disclaimer by YALE.
14.3 LICENSEE shall defend, indemnify and hold harmless YALE, its
fellows, officers, employees, and agents, from and against any and all claims,
demands, damages, losses and expenses of any nature (including reasonable
attorney's fees), included, but not limited to death, personal injury, ilness,
property damage or products liability arising from or in connection with any of
the following: (i) the use by LICENSEE or other sublicensees of any method or
process related to the LICENSED PATENTS; or (ii) any use, sale or other
disposition of any of the LICENSED PRODUCTS OR SERVICES by LICENSEE or its
sublicensees and/or other transferees or any statements, representation or
warranty of LICENSEE of its sublicensees or other transferees with respect
thereto; or (iii) the use of the LICENSED PRODUCTS OR SERVICES obtained from the
LICENSEE or its sublicensees by any person.
14.4 LICENSEE shall purchase and maintain in effect a policy of
products liability insurance covering all claims with respect to any LICENSED
PRODUCTS OR SERVICES manufactured or sold within the terms or any license
granted hereunder.
15
which policy shall (i) be in such form, include such amount of coverage and be
written by such company as YALE shall reasonably approve and which is
consistent with the practice in the biomedical technology industry, (ii)
provide that such policy is primary and not excess or contributory with regard
to other insurance YALE may have, (iii) provide at least thirty (30) days notice
to YALE of cancellation and (iv) include YALE and YALES's directors, officers,
and employees as additional named insureds. LICENSEE shall furnish a certificate
of such insurance to YALE on or before the date of first sale or commercial use
of any LICENSED PRODUCT OR SERVICES.
ARTICLE XV NOTICES
Any notice required by this AGREEMENT shall be sent by Registered or
Certified U.S. Mail, or by fascimile, telex or cable and shall be deemed
delivered three (3) days after posting or on the day of facsimile, telex or hand
delivery if sent to the following addresses of the respective parties or such
other address as is furnished by proper notice to the other party:
FOR YALE: YALE UNIVERSITY
Director
Office of Cooperative Research
000 Xxxxxx Xxxxxx, Xxxxx 000
Xxx Xxxxx, XX 00000
FOR LICENSEE: IG LABORATORIES, INC.
Xxx Xxxxxxxx Xxxx
Xxxxxxxxxx, XX 00000
ATTN: President
Royalty reports and payment shall be sent in first class mail, postage
prepaid, deposited in the U.S. postal system no later than the last day provided
and deemed delivered if sent to YALE at the above specified address.
ARTICLE XVI LAWS AND REGULATION
LICENSEE and its sublicensees shall comply with all foreign and United
States federal, state, and local regluations, rules, and orders applicable to
the license granted hereunder and to the testing, production, transportation,
export, packaging,
16
labeling, sale and use of the LICENSED PRODUCT OF SERVICES or otherwise
applicable to LICENSEE'S and sublicensee's activities hereunder.
ARTICLE XVII MISCELLANEOUS
--------------------------
17.1 In the event that any further lawful perfomance of this
AGREEMENT or any part thereof by any party hereto shall be rendered impossible
by or as a consequence of, any law or administrative ruling of any government or
political subdivision thereof having jurisdiction over such party any failure
to perform occasioned thereby shall not constitue a material breach unless the
application of such law or such ruling is the result of failure to comply with
laws or regulations as required by Article XVI.
17.2 Any delays in or failure by either party in performance of any
obligations hereunder shall be excused if and to the extent caused by such
occurences beyond such party's reasonable control, including but not limited to
such occurences as acts of God, strikes or other labor disturbances, war and
other causes which cannot resonably be controlled by the party who failed to
perform.
17.3 This AGREEMENT may not be amended except by written agreement
signed by both of the parties, and shall not be assigned by LICENSEE except upon
the advance written consent of YALE and except that it may be assigned to a
party acquiring all or substantially all the assets to which this AGREEMENT
pertains. This AGREEMENT comprises the entire understanding of the parties with
respect to the subject matter hereof and there are no other written or oral
promises to be relied upon. In particular, both parties acknowledge the presence
of risk with respect to the development of products or services hereunder and
that such products or services may be unsuccessful in the marketplace.
17.4 This AGREEMENT shall be governed by and in accordance with the
laws of the State of Connecticut except where the federal laws of the United
States and of foreign countries are applicable and have precedence.
17
17.5 If any part of this AGREEMENT is rendered void, invalid, or
unenforcable, such shall not affect the validity, enforcability or
substaintially impair the value of the entire AGREEMENT as to either party.
IN WITNESS WHEREOF, the parties hereto have cause to this AGREEMENT to
be executed in duplicate orignals by their duty authorized representatives.
YALE UNIVERSITY IG LABORATORIES, INC
BY: (SIGNATURE) BY: (SIGNATURE)
--------------------------- ---------------------------
TITLE: Associate Vice President TITLE: President
for Finance ---------------------------
--------------------------
DATE: 3/19/90 DATE: 3/20/90
--------------------------- ---------------------------
18
Confidential treatment requested for portions of this document,
portions for which confidential treatment is requested are noted.
This Agreement on Consent to Assignment and Amendment of License Agreement
(the "Agreement") is entered into by and between Yale University, a corporation
organized and existing under and by virtue of a charter granted by the general
assembly of the Colony and State of Connecticut and located in New Haven,
Connecticut ("Yale") and Vysis, Inc., a corporation organized under the laws of
the state of Delaware and located in Downers Grove, Illinois, ("Vysis") and is
effective February 2, 2000 (the "Effective Date").
Whereas, Yale has entered into a License Agreement (the "License")
effective March 21, 1990, with IG Laboratories, Inc. (now named "Genzyme
Genetics"), under patent applications and patents ("Xxxx Patents") concerning
methods of IN SITU suppression hybridization ("FISH"); and
Whereas, Vysis wishes to obtain an assignment of the License from Genzyme
Genetics and Yale's consent to the assignment of the License; and
Whereas, Vysis also wishes to amend the License as set out below; and
Whereas, Yale is willing to consent to the assignment of the License and to
the amendment of the License set out below; and
Whereas, the University of California has filed an opposition to a European
patent, one of the Xxxx Patents licensed under the License and Vysis has funded
and is funding the opposition by the University of California; and
Whereas, Yale and Vysis wish to settle the European patent opposition to
the Xxxx Patents; and
Whereas, Yale wishes Vysis to carry out licensing negotiations with
Molecular Staging, Inc. ("MSI"), an exclusive licensee of other Yale technology,
concerning multiparametric FISH ("mFISH") technology and Vysis is willing to
conduct such negotiations.
Therefore, in consideration of the above and the terms and conditions
below, Yale and Vysis agree as follows:
(1) Yale hereby consents to the assignment of the License to Vysis by Genzyme
Genetics, effective February 2, 2000.
(2) Vysis shall obtain from the University of California an abandonment of the
University of California's opposition to the European Xxxx patent, and
shall deliver the University of California's written abandonment of the
opposition to Yale by no later than February 4, 2000. Yale shall be
responsible for filing the abandonment in the European Patent Office.
(3) In consideration of Yale's consent to this assignment and execution of this
Agreement, Vysis agrees to carry out a royalty-bearing sublicensing program
for
19
the Xxxx Patents and to hold reviews at six month intervals with Yale on
its sublicensing activities under the License, unless and until both
parties agree that such reviews are no longer necessary.
(a) In consideration of Yale's consent to this assignment and execution of
this Agreement, Vysis agrees that it shall conduct good faith negotiations
with Molecular Staging, Inc., over licensing of FISH technology relating to
mFISH assays and that it shall carry out an annual review with Yale of its
sublicensing activities under the License.
(b) Yale acknowledges that (i) Vysis at its discretion may conduct this
sublicensing program in conjunction with its sublicensing activities of
other Vysis FISH technology rights, and (ii) Vysis may grant royalty-free
licenses to researchers for their manufacture and non-commercial research
use of FISH probes without royalty obligation to Yale for any such grant.
(c) If within twelve (12) months of the effective date of the assignment to
Vysis, Vysis has not (i) either granted at least one sublicense of the Xxxx
Patents to at least one entity that is both unaffiliated with Vysis and
that demonstrably has FISH products available for commercialization for the
European market, or (ii) has not engaged in serious negotiations to
sublicense the FISH technology in Europe to such an entity, then Yale at
Yale's sole option shall have the right exercisable upon written notice to
Vysis to convert the exclusive license granted to Vysis to a non-exclusive
license with the right to sublicense.
(d) If within twenty-four (24) months of the effective date of the
assignment to Vysis, Vysis has not granted at least one sublicense of the
Xxxx Patents to at least one entity in for the European market that is both
unaffiliated with Vysis and that demonstrably has FISH products available
for commercialization, then Yale at Yale's sole option shall have the right
exercisable upon written notice to Vysis to terminate Vysis' right to
sublicense in Europe.
(4) In consideration of Vysis' obtaining the abandonment of the European
opposition and the amendment to the License set out herein, Yale releases
Vysis of any claim for breach of the License that arose before the
Effective Date, including any claim for sales of products before the
Effective Date by Vysis, and agrees that all obligations of the Licensee
under the License are current as of the Effective Date.
(5) Vysis acknowledges that the License grants no rights under U.S. Patent Nos.
6,007,994 and 5,759,781 (Xxxx mFISH patents) or any patents deriving from
the U.S. patent application No. 08/577,622 filed on December 22, 1995.
(6) Yale and Vysis agree to the following amendments to the License:
- In Article 4.1, payments due to Yale shall be considered to have already
been paid by Genzyme Genetics.
20
- In Article 4.2, On fourth line delete "or LICENSEE'S sublicensees."
- In Article 4.2, EARNED ROYALTIES, delete the existing royalty rate for
sales of LICENSED PRODUCTS:
"On NET SALES of LICENSED PRODUCTS: * percent (*%)"
Replace it with:
"(i) On NET SALES of LICENSED PRODUCTS in the United States: * percent
(*%); and
"(ii) On NET SALES of LICENSED PRODUCTS outside the United States:
* percent (*%);
"however, after U.S. Patent No. 5,447,841 (the "841 Patent")
(entitled, Methods for Chromosome-specific Staining) expires or
September 6, 2012, whichever is earlier, LICENSEE shall pay YALE
on NET SALES of LICENSED PRODUCTS where LICENSED PATENTS are
effective or applications are pending: percent ( %); "and
further, should LICENSEE negotiate a reduction in its obligations
to pay royalties due on the '841 Patent, then LICENSEE shall no
later than twenty-four (24) months after such royalty reduction
is effected increase the royalty rate payable to YALE under this
Agreement by percentage points equal to half of that reduction.
(So, for example, should the royalty rate on the '841 Patent
decrease from 4% to 2%, then the royalty rate to YALE on NET
SALES of LICENSED PRODUCTS covered by the reduction would
increase by * of the * percentage point difference to *
following the aforementioned 24 month hiatus.)"
Retained is
"and On NET SALES of LICENSED SERVICES: * percent (*%)."
- In Article 4.2, the last paragraph beginning "Such EARNED ROYALTIES
.." is deleted in its entirety.
- In Article 4.5 Delete all. Replace with
- "In addition to EARNED ROYALTIES payable under Article 4.2, LICENSEE
shall pay YALE EARNED ROYALTIES consisting of either
- a) forty percent (40%) of total sublicense income, or
- b) * percent (*%) of sublicensee NET SALES in the U.S. and * percent
(*%) of sublicensee NET SALES outside the U.S. plus twenty percent
(20%) of all additional non-royalty income, whichever, (a) or (b), is
larger, paid to LICENSEE from any sublicenses granted hereunder. If
for any reason the royalty rate payable by LICENSEE to YALE under
Article 4.2 shall increase, the royalty rate under this Article 4.5 b)
shall also increase to the same rate. All payments made to YALE under
Article 4.2 on account of EARNED ROYALTIES on sales by LICENSEE and
under this Article 4.5 shall be fully creditable against MINIMUM
ROYALTIES due under Article 4.4."
* Confidential treatment requested, material omitted has been filed
with the Securities and Exchange Commission.
21
- Article 4.4 is deleted in its entirety and is replaced with:
"4.4 On or by December 31 of each calendar year commencing after
the Effective Date, LICENSEE agrees to pay YALE an annual Minimum
Royalty Payment, irrespective of whether any sales of LICENSED
PRODUCTS OR SERVICES have been made or whether any LICENSED PATENTS
have issued, in the amount of $*
- In Article 5.1, add at the end: "LICENSEE agrees to deliver to Yale an
annual report, by no later than March 1 of each calendar year,
describing LICENSEE's commercialization efforts, including any
sub-licensing activity."
- Article 9 Due Diligence
Add the following paragraph:
"Should LICENSEE sublicense the rights granted under this AGREEMENT
that are exclusive in any field of use, then the sublicense shall
contain due diligence requirements of the sublicensee that are no less
demanding than those required of the LICENSEE in this Article 9."
- Add a new Article 13.5:
"13.5 Notwithstanding Article 13.3, termination of this Agreement shall not
automatically terminate any sublicenses granted by LICENSEE after the
Effective Date, unless such a sublicense does not specify that upon
termination of this Agreement, the sublicense will be assigned to YALE.
Licensee agrees that it shall not grant any sublicense hereunder which is
exclusive in any field, without including reasonable due diligence
provisions on the performance of the exclusive sublicensee.
No other changes are made, and as amended the License continues in full
force and effect.
Accepted and agreed to:
YALE UNIVERSITY VYSIS, INC.
/s/ [SIGNATURE] /s/ [SIGNATURE]
Its: Managing Director Its: Vice President, General Counsel
--------------------- ---------------------------------
Office of Cooperative Research and Secretary
Date: 2/2/00 Date: 2/7/00
----------------- -------------------------
* Confidential treatment requested, material omitted has been filed
with the Securities and Exchange Commission.
22
