EXHIBIT 6.1
EXCLUSIVE LICENSE AGREEMENT
AGREEMENT, dated April 10, 2000 (the "Effective Date"), between THE
TRUSTEES OF COLUMBIA UNIVERSITY IN THE CITY OF NEW YORK, a New York corporation
("Columbia"), and SENTIGEN CORP. a Delaware corporation ("Company") and a
wholly-owned subsidiary of Prime Cellular Inc. ("PCI").
1. Definitions.
(a) "Affiliate" shall mean any corporation or other business entity
that directly or indirectly controls, is controlled by, or is under common
control with the Company. Control means ownership of more than 50% of the voting
stock or other voting interest of a corporation or other business entity.
(b) "First Anniversary Date" shall mean the date occurring one year
after the Effective Date of this Agreement, and each annual anniversary
thereafter shall be referred to as the Second Anniversary Date, Third
Anniversary Date, etc.
(c) "Licensed Patents" shall mean the United States patents and/or
patent applications listed in EXHIBIT A, which is attached hereto and
incorporated as a part hereof; United States patents issued from the
applications listed in EXHIBIT A, from any divisionals and continuations of
these applications and any reissues of such United States patents; claims of
continuation-in-part applications and patents directed to subject matter
specifically described in the applications listed in EXHIBIT A; and claims of
all foreign patent applications and/or patents or related patent documents which
are directed to subject matter specifically described in the United States
patents and/or patent applications listed in EXHIBIT A, including any
provisionals, substitutions, renewals, reissues, extensions, confirmations,
reexaminations or registrations thereof.
(d) "Licensed Product/Services" shall mean (i) any product or
service the development, manufacture, use, sale, distribution, rental or lease
of which is covered by a claim of a Licensed Patent that has neither expired nor
has been declared invalid by a court from which no appeal has been or can be
taken, and/or (ii) any product or service that involves the use of or
incorporation, in whole or in part, of Licensed Technical Information.
(e) "Licensed Technical Information" shall mean knowhow,
confidential information, and physical materials (including certain cells,
proteins, etc.) existing as of the Effective Date
and conveyed by Columbia to the Company relating to the Licensed Patents,
including, without limitation, that which is set forth and listed in EXHIBIT B,
which is attached hereto and incorporated herein;provided, however, that any
such knowhow, information and materials shall cease to be Licensed Technical
Information when the Company's obligations of confidentiality expire under
Section 9(b) hereof.
(f) "Net Sales" shall mean the total of all fees, payments, and
other consideration received by the Company and any Affiliate for the
manufacture, use, sale, rental or lease of Licensed Products/Services, less
returns and customary trade discounts actually taken, outbound freight, value
added, sales or use taxes, custom duties and similar charges. In the case of
transfers of Licensed Products/Services by the Company to an Affiliate for sale,
rental, or lease of such Licensed Products/Services by such Affiliate to third
parties, net sales shall be based upon the greater of (i) the total fees,
payments, and other consideration charged by the Company to the Affiliate and
(ii) the total fees, payments and other consideration charged by the Affiliate
to third parties. With respect to a system or combination product comprised of
components constituting Licensed Products/Services and components not
constituting Licensed Products/Services, such fees, payments and other
consideration shall be based upon the value of the component that constitutes
Licensed Products/Services only. In the event such component is not sold
individually, Net Sales shall be based upon an allocation to be mutually agreed
to in good faith by Columbia and the Company, based upon the proportion of the
value of such system or combination product reasonably attributable to the
Licensed Products/Services. Notwithstanding anything herein to the contrary, Net
Sales shall not include any fees, payments or other consideration which
constitutes "Sublicensee's Net Sales."
(g) "Sublicensee" shall mean any third party to whom the Company has
granted a sublicense pursuant to this Agreement.
(h) "Sublicensee's Net Sales" shall mean the total of all fees,
payments and other consideration received by a Sublicensee for the manufacture,
use, sale, rental or lease of Licensed Products/Services, less returns and
customary trade discounts actually taken, outbound freight, value added, sales
or use taxes, custom duties and similar charges. With respect to a system or
combination product comprised of components constituting Licensed
Products/Services and components not constituting Licensed Products/Services,
such fees, payments and other consideration shall be based upon the value of the
component that constitutes Licensed Products/Services only. In the event that
such component is not sold individually, Sublicensee's Net Sales shall be based
upon an allocation to be mutually agreed to in good faith by Columbia and the
Company, based upon the proportion of the value of such system or combination
product reasonably attributable to the Licensed Products/Services.
2
(i) "Territory" shall mean the entire world.
2. License Grant.
(a) Columbia grants to the Company, upon and subject to all the
terms and conditions of this Agreement:
(i) an exclusive license under the Licensed Patents to
develop, manufacture, have made, import, use, sell, have sold, distribute,
rent or lease Licensed Products/Services throughout the Territory, together
with a right to grant sublicenses in accordance with subsection (b) below,
Section 3(c) and the terms of this Agreement;
(ii) an exclusive license to use Licensed Technical
Information to develop, manufacture, have made, import, use, sell, have sold,
distribute, rent or lease Licensed Products/Services throughout the
Territory, together with a right to grant sublicenses in accordance with
subsection (b) below, Section 3(b) and the terms of this Agreement.
(b) Columbia grants to the Company the right to grant sublicenses of
the above-granted rights to third parties, provided that: (i) the Sublicensee
agrees to abide by all the terms and provisions of this Agreement applicable to
it; (ii) the Company remains fully liable for the performance of its and its
Sublicensee's obligations hereunder; (iii) the Company notifies Columbia of any
grant of a sublicense and provides to Columbia upon Columbia's request a copy of
any sublicense agreement; and (iv) no such sublicense shall relieve the Company
of its obligations to pay to Columbia any license fees, royalties and other
payments under Section 3 of the Agreement. Any such sublicense shall satisfy the
Company's obligations under Section 6 hereof to exercise its own commercially
reasonable efforts to develop and market Licensed Products/Services, if and to
the extent such sublicense provides for the Sublicensee to use its commercially
reasonable efforts to market the product that is the subject thereof; provided,
however, that the Company shall not be relieved of its obligation under Section
6 to exercise its own commercially reasonable efforts to develop and market
Licensed Products/Services, to the extent its Sublicensee fails to do so.
(c) All rights granted by Columbia to the Company under this
Agreement are subject to, and shall be construed in accordance with, the
requirements of 35 U.S.C. Sections 200 et seq., as amended, and its implementing
regulations and policies. Without limitation of the foregoing, the Company
agrees that, to the extent required under applicable law, any Licensed
Products/Services used, sold,
3
distributed, rented or leased by the Company, and Affiliate or a Sublicensee in
the United States will be manufactured substantially in the United States.
(d) All rights not specifically granted herein are reserved to
Columbia,
3. Royalties and Payment.
(a) In consideration of the licenses granted under Section 2(a)(i)
and (ii) of this Agreement, the Company shall pay to Columbia a royalty of 1% of
Net Sales in accordance with Section 4 hereof and shall deliver to Columbia,
simultaneously with the execution of this Agreement, 75,000 shares of the Common
Stock of PCI ("Shares"). The Company represents and warrants to Columbia that
the Shares have been duly authorized and are legally and validly issued, fully
paid and non-assessable.
(b) "Piggy-Back" Registration.
(i) Grant of Right. PCI shall include the Shares as part of
any registration statement filed by PCI (other than in connection with a
transaction contemplated by Rule 145(a) promulgated under the Securities Act
or pursuant to Form S-4 and Form S-8 or any equivalent form), provided,
however, that if, in the written opinion of PCI's managing underwriter or
underwriters, if any, for such offering, the inclusion of the Shares, when
added to the securities being registered by PCI or the selling
stockholder(s), will exceed the maximum amount of PCI's securities that can
be marketed (i) at a price reasonably related to their then current market
value, or (ii) without materially and adversely affecting the entire
offering, PCI shall nevertheless register all or any portion of the Shares
required to be so registered but such Shares shall not be sold by Columbia
until 90 days after the registration statement for such offering has become
effective and provided further that, if any securities are registered for
sale on behalf of other stockholders in such offering and such stockholders
have not agreed to defer such sale until the expiration of such 90 day
period, the number of securities to be sold by all stockholders in such
public offering during such 90 day period shall be apportioned pro rata among
all such selling stockholders, according to the total amount of securities of
PCI owned by said selling stockholders.
(ii) Terms. PCI shall bear all fees and expenses attendant to
registering the Shares, but Columbia shall pay any and all commissions on the
sale of the Shares and the expenses of any legal counsel selected by Columbia
to represent them in connection with the sale of the Shares. PCI's obligation
to include the Shares on such registration statement shall continue to be
given for each registration statement filed by PCI until the earlier of (i)
such time as all of the
4
Shares have been sold by Columbia, or (ii) the Second Anniversary Date, or
(iii) such time as Columbia could sell all of such Shares during a
three-month period under Rule 144, PCI shall give Columbia notice that
Columbia has been included in such registration statement on the date of
filing of such registration statement. Columbia may withdraw any or all of
its shares from any such registration prior to such registration being
declared effective by the Securities and Exchange Commission. Notwithstanding
the provisions of this Section 3(b), PCI shall have the right at any time
after it shall have given written notice of its intention to file a
registration statement (irrespective of whether a written request for
inclusion of any Shares shall have been made) to elect not to file any such
proposed registration statement, or to withdraw the same after the filing but
prior to the effective date thereof.
(c) Sublicense Royalties/Fees. In consideration of the Company's
right to sublicense third parties granted under Section 2(b) of this Agreement,
the Company shall make additional payments to Columbia as follows:
(i) 1 % of Sublicensee's Net Sales; and
(ii) 3% of all other gross revenues, fees, payments and
consideration (including any debt and/or equity securities or instruments),
or any part thereof, received by the Company from such Sublicensee as full or
partial consideration for the grant of any sublicense by the Company pursuant
to Section 2(b) of this Agreement.
(d) Notwithstanding the above, Columbia shall not be entitled to
arty amounts under subsection (c)(ii) hereinabove, to the extent such amounts
received by the Company from its Sublicensees constitute bona fide research and
development funding related to potential Licensed Products/Services.
(e) With respect to revenues obtained by the Company in foreign
countries, the Company shall make royalty payments to Columbia in the United
States in United States dollars. Royalty payments for transactions outside the
United States shall first be determined in the currency of the country in which
they are earned, and then converted to United States dollars using the interbank
commercial rate of exchange as published by Citibank on the day prior to the
closing of such transaction.
5
4. Reports and Payments.
(a) On or before the fifteenth business day after the end of each
calendar quarter during the term of this Agreement, the Company shall submit to
Columbia a written report with respect to the preceding calendar quarter (the
"Payment Report") stating:
(i) Net Sales by the Company and any Affiliate during such
quarter;
(ii) In the case of transfers of Licensed Products/Services by
the Company to an Affiliate for sale, rental or lease of such Licensed
Products/Services by the Affiliate to third parties, Net Sales by the Company
to the Affiliate and Net Sales by the Affiliate to third parties during such
quarter;
(iii) Amounts accruing to, and received by, the Company from
its Sublicensees during such quarter;
(iv) Sublicensee's Net Sales during such quarter; and
(v) A calculation under Section 3 of the amounts due to
Columbia, making reference to the application of each subsection hereof.
(b) Simultaneously with the submission of each Payment Report, the
Company shall make payments to Columbia of the amounts due for the calendar
quarter covered by the Payment Report. Payment shall be by check payable to The
Trustees of Columbia University in the City of New York and sent to the
following address:
Columbia Innovation Enterprise
General Post Office
X.X. Xxx 00000
Xxx Xxxx, Xxx Xxxx 00000-0000
or to such other address as Columbia may specify by notice hereunder.
(c) The Company shall maintain at its principal office usual books
of account and records showing its actions under this Agreement. Upon reasonable
notice, such books and records shall be open to inspection and copying, during
usual business hours, by an independent certified public accountant to whom the
Company has no reasonable objection, for three years after the calendar quarter
to which they pertain, for purposes of verifying the accuracy of the amounts
paid by the Company under this Agreement. In the event that such review reveals
that any payment to Columbia was understated by more than 10%, the
6
Company shall pay, within ten days after demand by Columbia, the reasonable cost
of such review, unless a bonafide dispute exists as to the amount of payment or
of the review.
5. Reservation of Rights for Research Purposes; Freedom of Publication.
(a) Columbia reserves for itself and the Xxxxxx Xxxxxx Medical
Institute ("HHMI"), the right to use the Licensed Patents and Licensed Technical
Information for their noncommercial research purposes. In addition, Columbia
reserves the right to permit other non-profit or governmental entities or
individuals employed by non-profit or governmental entities to use such Licensed
Patents and Licensed Technical Information solely for noncommercial research
purposes provided that such entities and/or individuals execute an agreement
substantially in the form of the sample Materials Transfer Agreement ("MTA"),
annexed hereto as EXHIBIT C.
(b) The Company acknowledges that Columbia is dedicated to free
scholarly exchange and to public dissemination of the results of its scholarly
activities. Columbia, HHMI and their faculty and employees shall have the right
to publish, disseminate or otherwise disclose the results of its research with
respect to the Licensed Patents or Licensed Technical Information.
6. Diligence.
(a) The Company shall use its commercially reasonable efforts to
research, develop and market Licensed Products/Services for commercial sale and
distribution throughout the Territory, and to such end, no later than the First
Anniversary Date of this Agreement, PCI shall have contributed to the Company an
aggregate of at least $1.0 million (or, alternatively, the Company shall raise
such amount through the issuance and sale of its securities); and
(b) In addition to subsection (a) above, for each six (6) month
period ("Semiannual Period") commencing on the Second Anniversary Date of this
Agreement, and continuing for each Semiannual Period up to the Fourth
Anniversary Date of this Agreement, the Company shall be required to demonstrate
to the reasonable satisfaction of Columbia that it has expended no less than:
(i) $50,000 during each such Semiannual Period for the bona fide research and
development of Licensed Products/Services; or (ii) an aggregate of $100,000
during two consecutive Semiannual Periods for the bona fide research and
development of Licensed Products/Services; or (iii) has been involved in active
negotiations to conclude a financing transaction, joint venture, strategic
alliance, or other similar agreement, which will provide the Company with at
least $ 1,000,000 in additional funding directly related to the research,
development and/or commercialization of Licensed Products/Services (hereafter
"New Funding Transaction"). The Company
7
will be deemed to have consummated a New Funding Transaction if PCI
contributes an additional $1,000,000 to it (i.e., over and above the $ 1,000,000
referred to in Section 6(a) above). In the event that the Company completes a
New Funding Transaction, this Section 6(b) shall be deemed satisfied for the
Semi-Annual Period in which it is consummated and all Semi-Annual Periods
thereafter.
(c) In the event that Company fails to fulfill its obligations set
forth in subsection (b), the Company shall pay Columbia the sum of $25,000.00
with respect to that Semiannual Period(s) to which it failed to meet any of its
obligations thereunder; which sum shall be creditable against any royalties or
fees due Columbia pursuant to Section 3(a) or 3(c) of this Agreement. Failure to
make the $25,000 payment due under this subsection (c) within thirty (30) days
after written notice from Columbia shall result in Columbia having the option of
terminating all of the exclusive licenses granted under Section 2 in accordance
with Section 16 of this Agreement, or converting any or all of such exclusive
licenses to nonexclusive licenses.
(d) Notwithstanding any other provision of this Agreement: (X) the
Company not fulfilling its obligations under Sections 6(a) or 2(c), or, (Y)
failure, prior to the Fourth Anniversary Date of this Agreement, to enter into
and conclude a definitive agreement for a New Funding Transaction, or, in the
alternative, failure to make at least $150,000 in aggregate expenditures over
three (3) consecutive Semiannual Periods (as provided in Section 6(b)) for the
bona fide research and development of Licensed Products/Services, shall result
in Columbia having the option of terminating all of the exclusive licenses
granted under Section 2 in accordance with Section 16 of this Agreement, or
converting any or all of such exclusive licenses to nonexclusive licenses within
thirty (30) days after written notice from Columbia.
(e) Upon Columbia's request made no more often than every six (6)
months after the Effective Date of this Agreement, the Company shall report in
writing to Columbia on progress made toward the diligence objectives set forth
above, including updated business plans, together with the amount of research
and development monies related to Licensed Products/Services and expended during
that time period, unless such reports are available to the Company on a
quarterly basis and in such case they will be provided to Columbia on a
quarterly basis.
7. Patent Prosecution and Maintenance.
(a) Columbia, by counsel it selects to whom the Company has no
reasonable objection, in cooperation and consultation with counsel appointed by
the Company, will prepare, file, prosecute and maintain all Licensed Patents in
Columbia's name and in countries designated by the Company. Company will
reimburse Columbia for any such expenses incurred after the Effective Date for
8
filing, prosecuting and maintaining such Licensed Patents, including reasonable
attorneys' fees, the costs of any interference proceedings, reexaminations, or
any other exparte or inter partes administrative proceeding before patent
offices, taxes, annuities, issue fees, working fees, maintenance fees and
renewal charges.
(b) Expenses under this Section 7 shall be invoiced by and
reimbursed to Columbia by the Company on a semiannual basis.
(c) If, following the Effective Date of this Agreement, the Company
does not wish to have a patent application filed or prosecution of a Licensed
Patent continued in a particular country or countries, the Company shall notify
Columbia and, thereafter, Columbia may file such application or continue such
prosecution only at its own expense, and the Company will have no further rights
under the involved application or patents (including the right to make, have
made, use or sell, have sold, rent, distribute and/or lease Licensed
Products/Services) in such country or countries. In such event, Columbia will be
free to grant a license under the involved application, or patents for such
country or countries to any other person or persons on any terms, provided that
such license will be limited to development, use, sale and distribution within
such country or countries and will require any products produced under such
license to be labeled accordingly. The Company will be deemed not to want to
file or continue prosecution of the involved application or patents in a
particular country or countries if it fails to respond within thirty (30) days
to a written inquiry from Columbia concerning such filing or continued
prosecution.
(d) If, following the Effective Date of this Agreement, Columbia
does not wish to have a patent application filed or prosecution or maintenance
of a Licensed Patent continued in a particular country or countries or to file a
patent relating to or based on the Licensed Technical Information, the Company
may file, in the name of Columbia, such application or continue such prosecution
or maintenance at its own expense, unless Columbia asserts a reasonable
objection to such patent filing, prosecution or maintenance, and Columbia will
execute all documents and instruments and provide such information as necessary
or appropriate to file such patent application or continue such prosecution, and
any such similar rights shall be subject to this Agreement.
8. Infringement.
(a) If Columbia, in its sole discretion, decides to protect its
Licensed Patents from infringement and prosecute an infringer at its own
expense, any recovery by Columbia in such proceedings shall first be used to
reimburse Columbia for its reasonable costs and legal fees incurred to conduct
such proceedings and the balance of the recovery shall be distributed 80% to the
Company, and 20% to Columbia.
9
(b) If the Company shall have supplied Columbia with written
evidence demonstrating infringement of a claim of a Licensed Patent by a third
party selling products in competition with the Company or any of its Affiliates
or Sublicensees, the Company may by notice request that Columbia take steps to
assert the Licensed Patent. Unless Columbia shall within three months of the
receipt of such notice either (i) cause such infringement to terminate or (ii)
initiate legal proceedings against the infringer, the Company, upon notice to
Columbia, may initiate legal proceedings against the infringer at the Company's
expense. Columbia agrees to be joined as a party to any such proceeding if
required pursuant to the procedural rules of the jurisdiction in which such
proceeding is prosecuted and to take any action required to be so joined. The
Company may deduct from payments due hereunder to Columbia 50% of the reasonable
costs and legal fees incurred to conduct such proceedings, but in no event shall
any payment due for any calendar quarter be reduced by more than 50% of the
amount otherwise due to Columbia hereunder. Any recovery by the Company in such
proceedings shall first be used to reimburse the Company for its reasonable
costs and legal fees incurred to conduct such proceedings and next to pay to
Columbia an amount equal to all amounts withheld from Columbia by the Company
under this Section 8 during the pendency of the proceedings. The balance of the
recovery shall be distributed 80% to the Company, and 20% to Columbia.
(c) In the event one party shall initiate or carry on legal
proceedings to enforce any Licensed Patent against an alleged infringer, the
other party shall use its best efforts to reasonably cooperate fully with and
shall supply all assistance reasonably requested by the party initiating or
carrying on such proceedings. The party that institutes any proceeding to
protect or enforce a Licensed Patent shall have sole control of that proceeding
and shall be responsible for the reasonable expenses incurred by said other
party in providing such assistance and cooperation as is requested pursuant to
this paragraph.
9. Confidentiality.
(a) Except to the extent required to develop, manufacture, use,
sell, have sold, distribute, rent, lease or sublicense Licensed
Products/Services or to the extent required by law, statute or regulation or
order of any court or by rule or order of any governmental agency or body, the
Company will not disclose or distribute the Licensed Patents or Licensed
Technical Information to any third party, without Columbia's written permission.
Notwithstanding the foregoing, the Company can disclose the Licensed Patents and
Licensed Technical Information in reports filed with the Securities and Exchange
Commission and other governmental agencies.
(b) The obligations of confidentiality under this Section 9 do not
apply to any Licensed Patents or Licensed Technical Information which:
10
(i) was known to the Company prior to receipt thereof from
Columbia;
(ii) was or becomes a matter of public information or publicly
available through no act or failure to act on the part of the Company;
(iii) is acquired by the Company from a third party entitled
to disclose it to the Company; or
(iv) the Company develops independently.
10. Disclaimer of Warranty; Limitations of Liability.
(a) Columbia hereby represents and warrants to the Company that, to
its knowledge, Columbia owns the Licensed Patents and Licensed Technical
Information and has the right to license such Licensed Patents and Licensed
Technical Information to the Company hereunder. Except as set forth in the
preceding sentence, nothing in this Agreement shall be construed as a warranty
or representation by either party as to the validity of any Licensed Patent.
Nothing in this Agreement shall be construed as a warranty or representation by
either party that anything developed, manufactured, used, sold, rented, leased,
or otherwise disposed of under any license granted under this Agreement is or
will be free from infringement of domestic or foreign patens or other
proprietary interests (including copyright) of other parties. COLUMBIA IS
LICENSING THE LICENSED PATENTS, LICENSED TECHNICAL INFORMATION, AND THE SUBJECT
OF ANY OTHER LICENSE HEREUNDER TO THE COMPANY, ON AN "AS IS" BASIS. EXCEPT AS
SET FORTH IN THE FIRST SENTENCE OF THIS SUBSECTION, COLUMBIA MAKES NO WARRANTIES
EITHER EXPRESS OR IMPLIED OF ANY KIND, AND HEREBY EXPRESSLY DISCLAIMS ANY
WARRANTIES, REPRESENTATIONS OR GUARANTEES OF ANY KIND AS TO THE LICENSED
PATENTS, LICENSED TECHNICAL INFORMATION, THE SUBJECT OF ANY LICENSE HEREUNDER
AND/OR LICENSED PRODUCTS/SERVICES, INCLUDING BUT NOT LIMITED TO, ANY WARRANTIES
OF MERCHANTABILITY, FITNESS, ADEQUACY OR SUITABILITY FOR A PARTICULAR PURPOSE,
USE OR RESULT, AND ANY WARRANTIES OF FREEDOM OR INFRINGEMENT OF ANY PATENTS,
COPYRIGHTS, TRADE SECRETS OR OTHER PROPRIETARY RIGHTS. NEITHER COLUMBIA, NOR ANY
EMPLOYEE OR AGENT OF COLUMBIA, SHALL HAVE ANY LIABILITY TO THE COMPANY, ITS
AFFILIATES OR ANY OTHER PERSON ARISING OUT OF THE USE OF LICENSED PATENTS,
LICENSED TECHNICAL INFORMATION, THE SUBJECT OF ANY LICENSE HEREUNDER OR LICENSED
PRODUCTS/SERVICES BY THE COMPANY, ITS AFFILIATES, OR ANY OTHER PARTY FOR ANY
REASON, INCLUDING BUT NOT LIMITED TO, THE UNMERCHANTABILITY, INADEQUACY OR
11
UNSUITABILITY OF THE LICENSED PATENTS, LICENSED TECHNICAL INFORMATION, THE
SUBJECT OF ANY LICENSE HEREUNDER OR LICENSED PRODUCTS/SERVICES FOR ANY
PARTICULAR PURPOSE OR TO PRODUCE ANY PARTICULAR RESULT, OR FOR ANY LATENT
DEFECTS THEREIN.
(b) In no event will Columbia, HHMI, or their respective trustees,
officers, agents, employees be liable to the Company or to any other party, for
any loss or damages, consequential, incidental, indirect or otherwise,
including, but not limited to time, money, or good will, arising from the use,
operation or application of the Licensed Patents, Licensed Technical
Information, the subject of any license hereunder or Licensed Products/Services
by the Company or its Affiliates. In no event shall Columbia's liability to the
Company exceed the payments made to Columbia by Company under this Agreement.
11. Prohibition Against Use of Columbia's Name.
Except as required by law, statute or regulation or order of any
court or by rule or order of any governmental agency or body, the Company will
not use the name, insignia, or symbols of Columbia, HHMI, their respective
faculties or departments, or any variation or combination thereof, or the name
of any trustee, faculty member, other employee, or student of Columbia or HHMI,
for any purpose whatsoever without Columbia's and/or HHMI's, as the case may be,
prior written consent. Notwithstanding the foregoing, the Company shall be
permitted to identify Columbia, HHMI and Dr. Xxxxxxx Xxxx as the holder and
inventor of the Licensed Patents and Licensed Technical Information when
required to identify such persons in the context of bona fide commercial
negotiation entered into in connection with the exploitation of Licensed
Products/Services or if required to do so in connection with the Company's or
its Affiliates' disclosure obligations under applicable securities laws, rules
or regulations.
12. Compliance with Government Obligations.
(a) Each of the Company and Columbia shall comply upon reasonable
notice from the other party with all governmental requests directed to either
Columbia or the Company and provide all information and assistance necessary to
comply with the governmental requests.
(b) The Company shall use commercially reasonable efforts to insure
that research, development, manufacturing and marketing under this Agreement
complies with all government regulations in force and effect including, but no
limited to, Federal, state and municipal legislation.
12
13, Indemnity: Assumption of Defense and Insurance.
(a) The Company will indemnify and hold Columbia harmless against
any and all actions, suits, claims, demands, prosecutions, liabilities, costs,
expenses, damages, deficiencies, loss or obligations (including reasonable
attorneys' fees) (hereinafter "Damages") based on or arising out of (i) the
development, manufacture, packaging, use, sale, rental or lease by the Company
or Sublicensee of Licensed Products/Services, even if altered for use for a
purpose not intended, (ii) the use of Licensed Patents or Licensed Technical
Information by the Company, its Affiliates, its Sublicensees or its (or their)
customers and (iii) the breach of any representation made or warranty given by
the Company, its Affiliates or Sublicensees with respect to Licensed
Products/Services, Licensed Patents or Licensed Technical Information; provided,
however, that the indemnification provided by this Section 13 shall not inure to
the benefit of Columbia with respect to any Damages that are determined with
finality by a court of last resort to result from the gross negligence or
willful misconduct of Columbia or HHMI.
(b) HHMI, and its trustees, officers, employees, and agents
(collectively, "HHMI Indemnitees"), will be indemnified, defended by counsel
acceptable to HHMI, and held harmless by the Company from and against any claim,
liability, cost, expense, damage, deficiency, loss, or obligation, of any kind
or nature (including, without limitation, reasonable attorneys' fees and other
costs and expenses of defense) (collectively, "Claims"), based upon, arising out
of, or otherwise relating to this Agreement, including without limitation any
cause of action relating to product liability. The previous sentence will not
apply to any Claim that is determined with finality by a court of competent
jurisdiction to result solely from the gross negligence or willful misconduct of
an HHMI Indemnitee.
(c) If any action is brought against Columbia or HHMI in respect of
which indemnity may be sought against the Company pursuant to Sections 13(a) or
13(b), Columbia or HHMI, as the case may be, shall promptly notify the Company
in writing of the institution of such action and the Company shall assume the
defense of such action, including the engagement and fees of counsel, who shall
be the same counsel representing the Company, except as set forth in this
Section 13. Columbia and HHMI shall have the right to employ its or their own
counsel in any such case, but the fees and expenses of such counsel shall be at
the expense of Columbia or HHMI unless (i) the engagement of such counsel shall
have been authorized in writing by the Company, or (ii) the Company shall not
have timely engaged counsel to handle the defense of such action, or (iii) there
are defenses available to Columbia or HHMI which are different from or
additional to those available to the Company and there is a conflict of interest
in having the Company's counsel represent Columbia or HHMI as well (in which
case the Company shall not have the right to direct the defense of such action
on behalf of Columbia or HHMI), in any of which events the fees
13
and expenses of not more than one additional firm of attorneys selected by
Columbia or HHMI shall be borne by the Company. Notwithstanding anything to the
contrary contained herein, even if Columbia or HHMI shall assume the defense of
such action as provided above, the Company shall have the right to approve the
terms of any settlement of such action, which approval shall not be unreasonably
withheld.
(d) The Company shall maintain, during the term of this Agreement,
commercial general liability insurance, including product liability insurance,
with reputable and financially secure insurance carriers reasonably acceptable
to Columbia to cover the activities of the Company, its Affiliates and its
Sublicensees, for minimum limits of $2,000,000 combined single limit for bodily
injury and property damage per occurrence and in the aggregate. Such insurance
shall include Columbia, HHMI, their respective trustees, directors, officers,
employees and agents as additional insureds. The Company shall furnish a
certificate of insurance evidencing such coverage, with thirty days' written
notice to Columbia and HHMI of cancellation or material change.
(e) The Company's insurance shall be primary coverage; any insurance
Columbia and/or HHMI may purchase shall be excess or noncontributory, Such
insurance shall be written to cover claims incurred, discovered, manifested, or
made during or after the expiration of this Agreement.
(f) The Company shall at all times comply with all statutory
workers' compensation and employers' liability requirements covering its
employees with respect to activities performed under this Agreement.
14. Marking. Prior to the issuance of patents, the Company will xxxx
Licensed Products/Services made, sold, or otherwise disposed of by it under the
license granted in this Agreement with the words "Patent Pending," and following
the issuance of one or more patents, with the numbers of such patents.
15. Export Control Laws. This Agreement is made subject to any
restrictions concerning the export of products or technical information from the
United States of America which may be imposed from time to time by the
government of the United States of America. Furthermore, each party hereto
agrees that it will not export, directly or indirectly, any technical
information acquired from the other under this Agreement or any products using
such technical information to any country for which the United States government
or any agency thereof at the time of export requires an export license or other
governmental approval, without first obtaining the written consent to do so from
the Department of Commerce or other agency of the United States government when
required by an applicable statute or regulation.
14
16. Breach and Cure.
(a) In addition to applicable legal standards, subject to subsection
(b) below, the Company shall be considered to be in material breach of this
Agreement for: (i) failure to pay fully amounts due pursuant to Section 3 and
payable pursuant to Section 4, unless a bona fide dispute exists as to the
amount payable hereunder (it being understood that a determination in accordance
with Section 4(c) of this Agreement that any payment was understated shall not
constitute a material breach of this Agreement); (ii) material and substantial
failure of the Company to meet its obligations under Section 6 of this
Agreement; (iii) material and substantial failure to reimburse Columbia for or
pay fully and promptly the costs of prosecuting and maintaining Licensed Patents
pursuant to Section 7 within fifteen (15) business days following a written
request from Columbia; or (iv) material and substantial failure to comply with
governmental requests directed to Columbia or the Company pursuant to Section
12(b) within fifteen (15) business days following a written request from
Columbia.
(b) Either party shall have the right to cure its material breaches
under this Agreement. The cure shall be effected within a reasonable period of
time but in no event later than ninety (90) days after notice of any breach
given by the non-breaching party.
17. Representations of Columbia with Respect to Securities Matters.
Columbia warrants and represents to the Company and PCI as follows:
(a) Columbia acknowledges and is aware that there is no assurance as
to the future performance of PCI and has received no representation or warranty
from PCI or any of their respective officers, directors, employees or agents in
respect of its investment in PCI.
(b) Columbia is purchasing the Shares for its own account for
investment and not with a view to or for sale in connection with the
distribution of the Shares, nor with any present intention of selling or
otherwise disposing of all or any part of the Shares. Columbia acknowledges that
(i) the purchase of the Shares is a long-term investment, (ii) Columbia may have
to bear the economic risk of investment for an indefinite period of time because
the Shares have not been registered under the Securities Act of 1933 and,
notwithstanding the registration rights granted herein, the Shares may never be
registered and cannot be resold, pledged, assigned, or otherwise disposed of
unless they are subsequently registered under said Securities Act and under
applicable securities laws of certain states or an exemption from such
registration is available. Columbia understands that PCI is under no obligation
to register the Shares except
15
as set forth herein. Columbia authorizes PCI to place a legend on the common
stock denoting the restrictions on the Shares.
(c) Columbia has been given access to full and complete information
regarding PCI and has utilized such access to its satisfaction for the purpose
of obtaining information, and it has either met with or been given reasonable
opportunity to meet with officers of PCI for the purpose of asking questions of,
and receiving answers from, such officers the business and operations of PCI and
to obtain any additional information, to the extent reasonably available.
(d) Columbia has such knowledge and experience in financial and
business matters as to be capable of evaluating the merits and risks of an
investment in the Shares and have obtained, in its judgment, sufficient
information from PCI to evaluate the merits and risks of an investment in PCI.
(e) Columbia has relied solely upon its own investigation in making
a decision to invest in PCI.
18. Term of Agreement.
(a) This Agreement shall be effective as of the date first set forth
above and shall continue in full force and effect until its expiration or
termination in accordance with this Section 18.
(b) Unless terminated earlier under any provisions of this
Agreement, the term of the licenses granted hereunder shall extend, on a country
by country basis and Licensed Product/Service by Licensed Product/Service basis,
until the later of (i) the date of expiration of the last to expire of the
Licensed Patents relating to such Licensed Product/Service, or (ii) the date ten
(10) years from the first sale of such Licensed Product/Service. Thereafter, the
Company shall receive a fully paid up license with respect to such Licensed
Product/Service.
(c) The license granted under this Agreement may be terminated by
Columbia: (i) upon ninety (90) days written notice to the Company if Columbia
elects to terminate in accordance with Section 6(c) and/or 6(d), as applicable;
or (ii) upon written notice to the Company for the Company's material breach of
the Agreement and the Company's failure to cure such material breach in
accordance with Section 16(b); or should the Company file a petition under any
bankruptcy or insolvency act or have any such petition filed against it and such
petition not be dismissed or withdrawn within sixty (60) days from the date of
filing.
(d) Notwithstanding the foregoing, Company shall have the right, on
a country-by-country basis, to terminate, upon ninety (90) days written notice
to Columbia, the license rights granted
16
under Section 2 of this Agreement with respect to any Licensed Patent(s) and/or
Licensed Technical Information. In such event, such license rights granted to
Company under Section 2 of this Agreement, with respect to such Licensed
Patent(s), Licensed Technical Information and/or specific country in the
Territory shall terminate, and Columbia shall be free, in the exercise of its
sole discretion, to license or otherwise transfer such right(s) to any party as
it deems appropriate. In the event of such termination by Company under his
subsection (d), all other terms and conditions of this Agreement shall remain in
full force an effect.
(e) Upon any termination of this Agreement pursuant to Section
18(c)(i) or (ii), all sublicenses granted by the Company under it shall be
assigned to Columbia.
(f) Sections 4, 9, 10, 11, 12, 13, 18(f), 19 and 23 wi11 survive any
termination or expiration of this Agreement.
19. Notices. All notices, requests, demands and consents and other
communications to be given, delivered or otherwise made hereunder to any party
shall be deemed to be sufficient if contained in a written instrument delivered
in person, by overnight courier, or duly sent by first class registered or
certified mail, postage prepaid, addressed to such party at the address set
forth below or such other address as may hereafter be designated in writing by
the addressee to the address or listing all parties:
if to Columbia, to: Executive Director
Columbia Innovation Enterprise
Columbia University
Engineering Terrace -- Xxxxx 000
000 Xxxx 000xx Xxxxxx, Mail Code 0000
Xxx Xxxx, Xxx Xxxx 00000
copy to: General Counsel
Columbia University
000 Xxx Xxxxxxxx Xxxxxxx
000 Xxxx 000xx Xxxxxx, Mail Code 0000
Xxx Xxxx, Xxx Xxxx 00000
if to HHMI - (for purpose Xxxxxx Xxxxxx Medical Institute
of Section 13(b)only): Office of the General Counsel
0000 Xxxxx Xxxxxx Xxxx
Xxxxx Xxxxx, Xxxxxxxx 00000
if to the Company, to: Xxxxxx X. Xxxxxx
Sentigen Corp.
000 Xxxx Xxxxxx Xxxxxx, Xxxxx 000
Xxxxx, Xxxxxxxx 00000
17
copies to: Xxxxxx X. Xxxxxx
Prime Cellular, Inc.
000 Xxxxxxxx Xxxxxx
Xxxxxxxxxxxx, Xxx Xxxxxx 00000
Xxxxx X. Xxxxxx, Esq.
Xxxxxxxx Mollen & Xxxxxx
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
or to such other address as a party may specify by notice hereunder.
20. Assignment. This Agreement and the rights and obligations
hereunder may not be assigned by either party without the written consent of the
other party; except that Columbia shall not unreasonably withhold its consent
that such rights and obligations hereunder may be transferred to a successor to
the Company's business, whether by merger, or sale of all or substantially all
of the Company's assets, and that failure by Columbia to object to any purported
assignment, merger or asset sale by the Company within twenty (20) days of
receipt of notice requesting consent thereto shall be deemed to be Columbia's
consent thereto. Any attempt to assign without compliance with this provision
shall be void.
21. Waiver. The failure of any party to insist upon strict adherence
to any term of this Agreement on any occasion shall not be considered a waiver
or deprive that party thereafter of the right to insist upon strict adherence to
that term or any other term of this Agreement. All waivers must be in writing
and signed by an authorized representative of the party against which such
waiver is being sought.
22. Entire Agreement; Amendment. This Agreement contains the entire
agreement among the parties with respect to the subject matter hereof and
supersede prior and contemporaneous agreements or understandings with respect
thereto. This Agreement may be amended only by written agreement duly executed
by the parties.
23. Third-Party Beneficiary. HHMI is not a party to this Agreement
and has no liability to any licensee, sublicensee, or user of anything covered
by this Agreement, but HHMI is an intended third-party beneficiary of this
Agreement, and certain of its provisions are for the benefit of HHMI and are
enforceable by HHMI in its own name.
24. Governing Law. This Agreement shall be governed by and construed
in accordance with the law of the State of New York without regard to its
conflicts of laws provisions.
NEXT PAGE IS THE SIGNATURE PAGE
18
IN WITNESS WHEREOF, Columbia and the Company have caused this
Agreement to be executed by their duly authorized representatives as of the day
and year first above written.
THE TRUSTEES OF COLUMBIA UNIVERSITY
IN THE CITY OF NEW YORK
By: /s/ Xxxx X. Xxxxxxxxx
--------------------------------
Xxxx X. Xxxxxxxxx, Executive Director,
Columbia Innovation Enterprise
SENTIGEN CORP.
By: /s/ Xxxxxx X. Xxxxxx
--------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Chief Executive Officer
19
