EXHIBIT 10.1
LICENSE AGREEMENT
This Agreement is made this 1st day of September, 1993 between Temple
University Of The Commonwealth System of Higher Education, a corporation
organized and existing under the laws of the Commonwealth of Pennsylvania,
having a principal place of business at Xxxxx Xxxxxx xxx Xxxxxxxxxx Xxxxxx,
Xxxxxxxxxxxx, Xxxxxxxxxxxx and Sierra Diagnostics, a corporation organized and
existing under the laws of the State of California, having a principal place of
business at 00000 Xxxxx Xxx Xxxxx, Xxxxxx, Xxxxxxxxxx 00000.
WHEREAS, Temple University - Of The Commonwealth System of Higher Education
is the assignee of the entire interest in United States Patent Number 4,446,230
issued May 1, 1984 entitled "Test Method for the Laboratory Diagnosis of
Gonorrhea and Test Strain of Neisseria Gonorrhoeae"; and
WHEREAS, Sierra Diagnostics desires to obtain an exclusive worldwide
license under the aforementioned patent and know-how related thereto.
NOW, THEREFORE, in consideration of the premises and of the covenants and
obligations hereinafter set forth, the parties, intending to be legally bound,
agree as follows:
1. DEFINITIONS
The following definitions will apply throughout this Agreement:
1.1 "COMPANY" shall mean Sierra Diagnostics and its AFFILIATES.
1.2 "TEMPLE" shall mean Temple University Of The Commonwealth System of
Higher Education.
1.3 "AFFILIATES" shall mean each and every business entity controlled by or
under common control with COMPANY for the purposes of manufacture and
distribution of LICENSED PRODUCT. For purposes of this definition "control"
shall mean ownership, directly or indirectly, of at least fifty percent (51%) of
the voting stock.
1.4 "CONFIDENTIAL INFORMATION" shall mean all information disclosed or
samples supplied by either party to the other party pursuant to this Agreement.
However, CONFIDENTIAL INFORMATION shall not include information which: (i)
was known to the receiving party prior to the date of disclosure by the other
party or is developed independently of information received from the disclosing
party by those who have not had access to this information; or (ii) is lawfully
received in good faith at any time by the receiving party from a third party
lawfully in possession of the same and having the right to disclose the same;
or (iii) is, as of the date of receipt in the public domain or subsequently
enters the public domain other than by reason of acts or omissions of the
receiving party; or (iv) is required to be disclosed by law, rule of court or
regulation.
1.5 "LICENSED PATENT" shall mean United States Patent Number 4,446,230
issued May 1, 1984 entitled "Test Method for the Laboratory Diagnosis of
Gonorrhea and Test Strain of Neisseria Gonorrhoeae".
1.6 "LICENSED PRODUCT" shall mean any product, process or use thereof
covered by LICENSED PATENT.
1.7 "TECHNICAL INFORMATION" shall mean any confidential technical
information relating to LICENSED PRODUCT, which information is the possession of
TEMPLE as of the effective date of this Agreement, and which is necessary or
useful to COMPANY in furtherance of the development, manufacture or marketing of
LICENSED PRODUCT.
1.8 " NET SALES" shall mean the gross receipts from sales by COMPANY or by
its sublicensees of LICENSED PRODUCT sold and subject to royalty under this
Agreement less deductions for: (i) transportation charges, including insurance,
sales and excise taxes and duties paid; (ii) normal and customary trade,
quantity and cash discounts allowed; (iii) sales commissions; and (iv)
allowances on account of rejection or return by customers of products subject to
royalty under this Agreement.
2. DISCLOSURE OF INFORMATION
2.1 "CONFIDENTIAL INFORMATION" disclosed in documentary form shall be
marked "Confidential." Oral discussions of CONFIDENTIAL INFORMATION shall be
reduced to writing by the disclosing party and a copy marked "Confidential"
provided to the receiving party within thirty (30) days of the date of the
disclosure.
2.2 The receiving party shall, for a period of five (5) years from the date
of disclosure of CONFIDENTIAL INFORMATION, hold said CONFIDENTIAL INFORMATION in
strict confidence; not use said CONFIDENTIAL INFORMATION except as provided in
this Agreement; and not disclose, directly or indirectly, said CONFIDENTIAL
INFORMATION to any third party except with the prior written consent of the
disclosing party.
2.3 The receiving party shall, upon request by the other party, promptly
return all written materials or samples of tangible property received hereunder,
as well as all summaries thereof and notes pertaining thereto, with the
exception that one copy of said written materials may be retained by the
receiving party solely for archival purposes.
2.4 Notwithstanding any other provision of this Agreement, it is recognized
by COMPANY that TEMPLE shall have the right to publish the results of any
research concerning LICENSED PRODUCT. However, TEMPLE agree to notify COMPANY in
writing of any such proposed publication thirty (30) days before submission.
COMPANY may request deletion of
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sensitive information from the proposed publication, and TEMPLE agrees to give
good faith consideration to such a request.
3. GRANT OF LICENSE
3.1 Beginning on the effective date of this Agreement, TEMPLE grants to
COMPANY a non-exclusive license under the LICENSED PATENT, with the right to
grant sub-licenses, to make, have made, use and sell LICENSED PRODUCT in the
United States, which license shall become exclusive beginning January 1, 1994.
3.2 Beginning on the effective date of this Agreement, TEMPLE grants to
COMPANY a non-exclusive worldwide license under the TECHNICAL INFORMATION, with
the right to grant sub-licenses, to make, have made, use and sell LICENSED
PRODUCT, which license shall become exclusive beginning January 1, 1994.
3.3 Notwithstanding the preceding license grant, TEMPLE shall retain the
right to practice LICENSED PATENT and TECHNICAL INFORMATION royalty-free for its
own internal, non-commercial purposes.
4. PAYMENTS
4.1 In consideration of the license granted to COMPANY under the LICENSED
PATENT by TEMPLE pursuant to Paragraph 3.1, COMPANY shall pay to TEMPLE a
royalty on NET SALES of LICENSED PRODUCT manufactured or sold in the United
States during the term of this Agreement, said royalty to be equal to:
(i) four percent (4%) of such NET SALES up to and including two million
dollars ($2,000,000.00) in each calendar year; plus
(ii) three percent (3%) of such NET SALES in excess of two million dollars
($2,000,000.00) but not in excess of four million dollars
($4,000,000.00) in each calendar year; plus
(iii) two percent (2%) of such NET SALES in excess of four million dollars
($4,000,000.00) in each calendar year.
4.2 In consideration of the license granted to COMPANY under the TECHNICAL
INFORMATION by TEMPLE pursuant Paragraph 3.2, COMPANY shall pay to TEMPLE an
additional royalty on NET SALES of LICENSED PRODUCT manufactured or sold
anywhere in the world during the term of this Agreement said royalty to be equal
to:
(i) three percent (3%) of such NET SALES up to and including two million
dollars ($2,000,000.00) in each calendar year; plus
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(ii) two percent (2%) of such NET SALES in excess of two million dollars
($2,000,000.00) but not in excess of four million dollars
($4,000,000.00) in each calendar year; plus
(iii) one percent (1%) of such NET SALES in excess of four million dollars
($4,000,000.00) in each calendar year.
4.3 The royalty payments due pursuant to Paragraph 4.1 will end coincident
with the expiration date of LICENSED PATENT.
4.4 The royalty payments due pursuant to Paragraph 4.2 will end seven (7)
years from the effective date of this Agreement.
4.5 COMPANY shall make minimum annual royalty payments to TEMPLE in the
amount of ten thousand dollars ($10,000.00), regardless of or irrespective of
actual NET SALES of LICENSED PRODUCT, beginning on the third anniversary of the
execution of this Agreement and continuing on each anniversary thereafter.
5. STATEMENTS AND REMITTANCES
5.1 COMPANY shall keep and shall require its sub-licensees to keep complete
and adequate records relating to the manufacture and sale of LICENSED PRODUCT.
5.2 Within sixty (60) days after the close of each calendar quarter,
COMPANY shall remit to TEMPLE a statement of sales by COMPANY and by its
sub-licensees on account for the quarter. The financial statements of COMPANY
and of its sub-licensees will be audited annually by an independent certified
public accountant. TEMPLE shall have the right to employ, at its own expense, a
qualified accountant of its own selection to whom COMPANY shall have no
unreasonable objection, to examine the books and records of COMPANY and its
sub-licensees relating to sales of LICENSED PRODUCT for the purpose of verifying
the amount of royalty payments due. Such examination of books and records of
COMPANY and its sub-licensees shall take place during regular business hours
during the term of this Agreement and for two (2) years after its termination,
provided however, that such an examination shall not take place more than once a
year and shall not cover records for more than the preceding three (3) years,
and provided that such accountant shall report to TEMPLE only as to the accuracy
of the royalty statements and payments. If such accountant shall find an
underpayment to TEMPLE, presentation of a written statement substantiating the
underpayment will be provided to COMPANY. If COMPANY is not in agreement with
the findings of the qualified accountant selected by TEMPLE, then COMPANY shall
so notify TEMPLE in writing within thirty (30) days of receipt by COMPANY of
said findings, in which case the parties will jointly appoint, within a further
period of thirty (30) days, an independent qualified accountant to validate, at
COMPANY's expense, TEMPLE's accountant's findings, and the decision of said
independent accountant shall be final. If said independent accountant verifies
that an underpayment has occurred, the amount due and interest (accruing at the
prevailing Prime Rate from the date payment was due through the date of actual
payment to TEMPLE) shall be paid to TEMPLE within thirty (30) days. Should such
underpayment represent more than five percent (5%) of the
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royalties due TEMPLE, COMPANY shall reimburse TEMPLE for the cost of the
examination by TEMPLE's accountant which disclosed such underpayment.
5.3 All payments by COMPANY to TEMPLE under this Agreement shall be made in
United States dollars. TEMPLE shall have the right, upon giving written notice
to COMPANY, to request and receive royalty payments within a particular country
or territory of the LICENSED TERRITORY in the local currency if permitted by
law.
5.4 All payments due TEMPLE, pursuant to Paragraphs 4.1 and 4.2, on account
of NET SALES of LICENSED PRODUCT made by COMPANY and by its sub-licensees during
each calendar quarter and, pursuant to Paragraph 9.2, on account of all amounts
of money received by COMPANY from its sub-licensees during each calendar
quarter, shall be paid by COMPANY to TEMPLE within sixty (60) days of the close
of said calendar quarter.
5.5 If COMPANY fails to make any payment due TEMPLE within the time
prescribed by the terms of this Agreement, a penalty equal to five percent (5%)
of the unpaid amount shall added to the amount due.
6. REPRESENTATIONS
6.1 TEMPLE represents that it has the right to enter into this Agreement
and to grant the licenses under the LICENSED PATENT and TECHNICAL INFORMATION.
6.2 A holding of invalidity or unenforceability of LICENSED PATENT shall
not affect the royalty obligation of COMPANY under TECHNICAL INFORMATION.
7. PATENT PROSECUTION AND LITIGATION
7.1 TEMPLE agrees to maintain LICENSED PATENT, at its own expense, during
the term of this Agreement.
7.2 COMPANY, at its option, may defend any claim, made by others, of patent
infringement resulting from the manufacture, use, sale or other disposition of
LICENSED PRODUCT, whether such claim shall be made against TFEMPLE or COMPANY,
and if COMPANY defends such claim, COMPANY shall bear all costs and expenses,
including reasonable attorneys' fees, incurred in connection with any such
claim. These costs will be a credit against fifty percent (50%) of royalty
payments due to TEMPLE each year during the term of this Agreement until fully
offset. Each party of this Agreement agrees that it shall notify the other party
in writing in the event any claim of infringement is made against that party.
7.3 In the event either party becomes aware of any actual or threatened
infringement of LICENSED PATENT, that party shall promptly notify the other
party in writing. COMPAN-Y shall have the first right to bring an infringement
action against any third party and to use TEMPLE's name if legally required in
connection therewith. If COMPANY does not proceed with a particular patent
infringement action or attempt to sub-license such third party within ninety
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(90) days of notification, TEMPLE, after notifying COMPANY in writing, shall be
entitled to proceed against such infringement at its own expense, through
counsel of its choosing. The party conducting such suit shall have full control
over its conduct. In any event, TEMPLE and COMPANY shall assist one another and
cooperate in any such litigation. TEMPLE and COMPANY may also jointly
participate in any infringement action if both parties agree to do so in writing
in advance, and set forth the basis for sharing of expenses.
7.4 Any recovery by either party as a result of any litigation or
settlement thereof shall first satisfy the attorney's fees and costs incurred by
the enforcing party in such litigation. Any excess of recoveries over attorney's
fees and costs of the enforcing party shall first satisfy royalty payments due
to TFEMPLE, with any remaining balance to the enforcing party. Each party shall
always have the right to be represented by counsel of its own selection and at
its own expense in any suit instituted by another for infringement. If the
parties have agreed to participate jointly in an infringement action, any
recovery in excess of satisfying the parties' attorney fees, costs of the
litigation and payment of the royalty due to TEMPLE on account of the
infringement, shall be allocated to the parties in the same proportion as the
sharing of the litigation expenses.
8. INDEMNITY
8.1 COMPANY agrees to indemnify, hold harmless, and defend TEMPLE, its
trustees, officers, employees and agents against any and all claims, excluding
claims, stemming from TEMPLE's use of LICENSED PRODUCT as outlined in Paragraphs
3.1 and 3.2, including legal fees and costs arising out of the exercise of any
rights under this Agreement, without limiting the generality of the foregoing,
against any damages, losses or liabilities whatsoever including but not limited
to death or injury to person or damage to property arising from the commercial
sale and clinical research of LICENSED PRODUCT by COMPANY, its sub-licensees or
any customers of any of them in any manner whatsoever. TEMPLE shall give COMPANY
written notice of any claim(s) related to LICENSED PRODUCT within thirty (30)
days, and TEMPLE shall reasonably cooperate with COMPANY and its insurance
carrier in the defense of any such claim(s).
8.2 In addition to the foregoing, COMPANY shall maintain, during the period
that any LICENSED PRODUCT is sold pursuant to this Agreement, Comprehensive
Liability Insurance, including Products Liability Insurance, with a reputable
and financially secure insurance carrier(s) to cover the activities of COMPANY
and its sublicensees, if any, contemplated by this Agreement for minimum limits
of two million dollars ($2,000,000.00) per occurrence. Such insurance shall name
TEMPLE, its trustees, officers, employees, and agents as additional insureds.
COMPANY shall furnish a Certificate of Insurance, upon request, evidencing
coverage of two million dollars ($2,000,000.00) with thirty (30) days written
notice of cancellation or material change to TEMPLE. COMPANY's insurance shall
be written to cover claims incurred, discovered, manifested, or made during the
term, or after the expiration, of this Agreement. COMPANY shall at all times
comply, through insurance or self-insurance, with all statutory workers'
compensation and employers' liability requirements covering any and all
employees with respect to activities performed under this Agreement.
9. SUB-LICENSES
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9.1 COMPANY shall have the right to enter into sub-license agreements,
provided that all applicable material terms of this Agreement are incorporated
into such sublicense agreements to provide for the protection of TEMPLE,
trustees, officers, employees and agents, and provided further that COMPANY
remains primarily liable for its obligations under this Agreement. A copy of any
sub-license agreement shall be provided to TEMPLE for its review prior to
execution.
9.2 COMPANY agrees to pay to TEMPLE twenty five percent (25%) of all sums
of money, other than royalties on account of NET SALES of LICENSED PRODUCT,
which COMPANY receives from its sub-licensees, including but not limited to all
sublicense fees and minimum royalties paid by sub-licensees to COMPANY.
10. ASSIGNMENT
10.1 Neither party may assign this Agreement, in whole or in part, without
the Written consent of the other, except if such assignment occurs in connection
with the sale of all or substantially all of the business and assets of TEMPLE
or COMPANY. Both parties agree that such consent to an assignment of this
Agreement shall not be unreasonably withheld.
11. TERMINATION
11.1 COMPANY may terminate this Agreement for any reason whatsoever, in
COMPANY's sole discretion, by giving TEMPLE three (3) months prior written
notification.
11.2 Any expiration or early termination of this Agreement shall be without
prejudice to the rights of either party against the other for recovery of monies
accrued or accruing under this Agreement prior to termination.
11.3 Either party may terminate this Agreement by giving the other party
sixty (60) days prior written notice upon material breach of any material
provision of this Agreement by the other party, unless such breach is cured
within the period of such notice, or an extension of this period is agreed to in
writing by both parties. However, the notice period shall be only thirty (30)
days for any breach by COMPANY for nonpayment of monies due TEMPLE under this
Agreement.
11.4 This Agreement shall immediately terminate if either party is
adjudicated bankrupt, files a voluntary petition in bankruptcy, makes or
executes an assignment for the benefit of creditors, is liquidated or dissolved,
or a receiver, trustee, liquidator, sequestrator or other judicial
representative is appointed for either party or its property. In such event,
that party shall execute any documents that are necessary to reassign or
transfer the interest granted hereunder.
12. RIGHTS AND DUTIES ON TERMINATION
12.1 Upon termination of this Agreement all provisions regarding
confidentiality shall continue in full force and effect until five (5) years
from the date of termination.
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12.2 Upon termination of this Agreement, TEMPLE shall have the right to
retain any amounts already paid to it by COMPANY under this Agreement and
COMPANY shall pay to TEMPLE all amounts accrued which are then due and which
become due based on sales of LICENSED PRODUCT, manufactured or produced prior to
the effective date of termination.
13. GOVERNING LAW
13.1 This Agreement shall be construed and the respective rights of the
parties hereto determined according to the substantive laws of the Commonwealth
of Pennsylvania, notwithstanding the provisions governing conflict of laws under
such Pennsylvania law to the contrary.
14. SEVERANCE
14.1 If any provision of this Agreement is held to be invalid or
unenforceable under the laws of any jurisdiction of the parties, all other
provisions shall, nevertheless continue in full force and effect.
15. AMENDMENTS
15.1 This Agreement constitutes the entire agreement between the parties
and supersedes all previous arrangements, whether written or oral. Any amendment
or modification to this Agreement shall be made in writing signed by both
parties.
16. PATENT MARKING
16.1 COMPANY agrees to xxxx or have marked all LICENSED PRODUCT sold by
CONTANY or by its sub-licensees under this Agreement in accordance with the
statutes of the United States and countries and territories relating to the
marketing of patented articles in which any LICENSED PRODUCT covered by a
granted patent is marketed.
17. NOTICES
17.1 Notices and payments to TEMPLE shall be addressed to:
Office of Technology Transfer
Temple University (083-45)
000 Xxxxxxxxxx Xxxxxxxx Xxxxxxxx
Xxxxx & Oxford Streets
Philadelphia, Pennsylvania 19122
Notices to COMPANY shall be addressed to:
Sierra Diagnostics
00000 Xxxxx Xxx Xxxxx
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Xxxxxx, Xxxxxxxxxx 00000
Either party may change its address for notice by giving notice to the other
party in the manner herein provided. Any notice required or provided for by the
terms of this Agreement shall be in writing and sent by registered or certified
mail, return receipt requested, postage prepaid and properly addressed in
accordance with the paragraph above. The effective date of notice shall be the
actual date of receipt by TEMPLE or COMPANY.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
by their duly authorized representatives as of the date first above written.
FOR TEMPLE UNIVERSITY OF THE COMMONWEALTH SYSTEM OF HIGHER EDUCATION
BY /s/ Xxxxxxx X. Xxxxxxxxx DATE 9/21/93
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Name: Xxxxxxx X. Xxxxxxxxx
Title: Vice President, Chief Financial Officer and Treasurer
FOR SIERRA DIAGNOSTICS
BY /s/ Xxxx X. Xxxxx DATE 10/27/93
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Name: Xxxx X. Xxxxx
Title: President
ATTEST /s/ Xxxxxx X. Xxxxx DATE 10/27/93
---------------------------------
Name: Xxxxxx X. Xxxxx
Title: Secretary
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