RESEARCH AND LICENSE AGREEMENT
Published on November 20, 2002
RESEARCH AND LICENSE AGREEMENT BETWEEN
NEOGENOMICS, INC. AND
CIPHERGEN BIOSYSTEMS, INC.
THIS AGREEMENT (THIS "AGREEMENT") is effective as of _____________, 2002
("EFFECTIVE DATE") by and between NEOGENOMICS, INC., a _________________ having
its principal place of business at _________________________ ("NEOGENOMICS"),
and CIPHERGEN BIOSYSTEMS, INC., a Delaware corporation having its principal
place of business at 6611 Dumbarton Circle, Fremont, California 94555
("CIPHERGEN," and together with NEOGENOMICS, the "PARTIES").
RECITALS
WHEREAS, NEOGENOMICS has research objectives related to producing the
technology (the "TECHNOLOGY") described at Appendix A ("Technology");
WHEREAS, NEOGENOMICS desires to further its research pertaining to the
TECHNOLOGY by collaborating with CIPHERGEN, who has developed a surface enhanced
laser desorption/ionization system ("SELDI," a technology described in United
States Patent Application 08/068,896 and all patents and applications claiming
priority thereto, including but not limited to, U.S. Patent No. 5,719,060 and
U.S. Patent 6,225,047) and certain related know-how and capacities that are
uniquely enabling in the investigation of biomarkers;
WHEREAS, CIPHERGEN is willing to collaborate with NEOGENOMICS to further
the research pertaining to the TECHNOLOGY in exchange for the necessary
ownership and/or licenses to commercially develop, manufacture, use, sell and
distribute products that incorporate the resulting TECHNOLOGY throughout the
world; and
WHEREAS, in consideration of NEOGENOMICS research pertaining to the
TECHNOLOGY and in consideration of CIPHERGEN's contribution to the development
of the TECHNOLOGY, each of NEOGENOMICS and CIPHERGEN desire to grant to each
other the necessary ownership and/or licenses for each to commercially develop,
manufacture, use, sell and distribute products that incorporate the resulting
TECHNOLOGY throughout the world, subject to certain royalty payments described
herein;
NOW THEREFORE, in consideration of the foregoing premises and of the
faithful performance of the covenants herein contained, the PARTIES agree as
follows:
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ARTICLE 1. DEFINITIONS
1.1 "ACCOUNTING PERIOD" means the periods for which royalty payments are
due as provided for in Article 7 ("Royalties Payable").
1.2 "ACTIVE FUNCTIONAL ELEMENT" means any material or process optimized
for the detection of a specific biomarker or pattern of biomarkers
using a CONSUMABLE PRODUCT. Materials or processes used for the
detection of biomolecules, in general, with a CONSUMABLE PRODUCT, such
as buffers, controls, standards, software, protein chip surface
chemistries and the like that are used in multiple kits, are not
ACTIVE FUNCTIONAL ELEMENTS.
1.3 "AFFILIATE" means any company or other legal entity other than a PARTY
hereto, whether formed in the U.S. or abroad, that controls or is
controlled by such PARTY. The term "control" means direct or indirect
ownership of at least fifty percent of voting stock, with the powers
to direct or cause the direction of the management and policies of a
entity, whether through the ownership or voting securities, by
contract or otherwise.
1.4 "AGREEMENT" shall have the meaning set forth in the heading first
written above.
1.5 "AGREEMENT YEAR" shall mean the twelve (12) month period beginning on
the EFFECTIVE DATE and each succeeding twelve (12) month period
thereafter for the term of the AGREEMENT, which includes the term of
the licenses granted hereunder. If not otherwise specified, terms
involving time periods shall be applied pro rata according to any time
frame in which less than the full specified period is involved.
1.6 "CIPHERGEN PATENT-BASED PROCESS" means any process or improvement
thereof that is conducted by CIPHERGEN and covered by any claim among
the PATENT RIGHTS hereunder.
1.7 "CIPHERGEN PATENT-BASED PRODUCT" means any machine, manufacture,
composition of matter, or improvement thereof that is produced by
CIPHERGEN and covered by any claim among the PATENT RIGHTS hereunder.
This term does not include computer databases or non-consumable
instrument platforms.
1.8 "CIPHERGEN PATENT-BASED SERVICE" means the use of any CIPHERGEN
PATENT-BASED PRODUCT or CIPHERGEN PATENT-BASED PROCESS by CIPHERGEN,
its CIPHERGEN AFFILIATES, SUBLICENSEES or customers to generate
materials or information for a customer for a fee. This includes,
without limitation, providing clinical diagnostic services, providing
material screening services such as in drug discovery, and providing
information services.
1.9 "COLLABORATIVE RESEARCH" shall have the meaning set forth in Section
2.1 ("Research Work Plans") which is: scientific research, as enabled
by CIPHERGEN's SELDI system and related know-how and capacities, in
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the development of the TECHNOLOGY, performed by the PARTIES under this
AGREEMENT.
1.10 "CONFIDENTIAL INFORMATION" shall have the meaning set forth in Section
4.1 ("Definition of "CONFIDENTIAL INFORMATION").
1.11 "CONSUMABLE PRODUCT" means a product used in a biomarker detection
assay that undergoes physical alteration or transformation in the
course of such assay and is permanently disposed of after one use or
after a limited number of uses.
1.12 "FIELD OF RESEARCH" shall have the meaning set forth in Section 2.1
("Research Work Plans"), which is: scientific research, as enabled by
CIPHERGEN's SELDI system and related know-how and capacities, in the
development of the TECHNOLOGY.
1.13 "FIRST COMMERCIAL SALE" means in each country the first sale of any
PATENT-BASED PRODUCT or PATENT-BASED SERVICE by LICENSEE PARTY, its
AFFILIATES or SUBLICENSEES, following approval of its marketing by the
appropriate governmental agency for the country in which the sale is
to be made and, when governmental approval is not required, the first
sale in that country.
1.14 "INVENTION" means any new and useful process, machine, manufacture,
composition of matter, or improvement thereof that is created in
connection with the Collaborative Research hereunder and that may be
patentable or otherwise protected under title 35, United States Code,
or any novel variety plant that is or may be protected under the Plant
Variety Protection Act (7 U.S.C. 2321 et seq.).
1.15 "LICENSE" shall mean a grant by one PARTY as the "LICENSOR PARTY" to
the other PARTY as the "LICENSEE PARTY" to a non-exclusive worldwide
license, including the right to sublicense, under PATENT RIGHTS, to
make, use, offer to sell, sell or import, or to have done any of the
foregoing, any INVENTION in the FIELD OF RESEARCH, within the terms of
this AGREEMENT, to the extent LICENSOR PARTY is permitted to do so by
law, by its policies and procedures.
1.16 "LICENSOR PARTY" shall mean the PARTY who is or is to grant a license
to PATENT RIGHTS hereunder.
1.17 "LICENSEE PARTY" shall mean the PARTY who is to receive a license to
PATENT RIGHTS hereunder.
1.18 "NEOGENOMICS PATENT-BASED PROCESS" means any process or improvement
thereof that is conducted by NEOGENOMICS and covered by any claim
among the PATENT RIGHTS hereunder.
1.19 "NEOGENOMICS PATENT-BASED PRODUCT" means any drug, manufacture,
composition of matter, or improvement thereof that is produced by
NEOGENOMICS and covered by any claim among the PATENT RIGHTS
hereunder.
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1.20 "NEOGENOMICS PATENT-BASED SERVICE" means the use of any NEOGENOMICS
PATENT-BASED PRODUCT or NEOGENOMICS PATENT-BASED PROCESS by
NEOGENOMICS, its NEOGENOMICS AFFILIATES, SUBLICENSEES or customers to
generate materials or information for a customer for a fee. This
includes, without limitation, providing clinical diagnostic services,
providing material screening services such as in drug discovery, and
providing information services.
1.21 "NEOGENOMICS MATERIALS" shall have the meaning set forth in Section
3.1 ("Transfer of NEOGENOMICS MATERIALS").
1.22 "NET SALES" shall have the meaning set forth below:
(a) Scope of Revenues Included. Subject to the exclusions and
exceptions set forth herein, NET SALES means the gross revenue
collected by ROYALTY-PAYING PARTY, its AFFILIATE, or SUBLICENSEE
for the sale or distribution of any ROYALTY-PAYING PARTY LICENSED
PRODUCT(S) or ROYALTY-PAYING PARTY LICENSED SERVICE(S), less the
following amounts paid out by ROYALTY-PAYING PARTY, its AFFILIATE
or SUBLICENSEE or credited against the amounts received by them
from the sale or distribution of ROYALTY-PAYING PARTY LICENSED
PRODUCT(S) or ROYALTY-PAYING PARTY LICENSED SERVICE(S):
(i) discounts allowed;
(ii) returns;
(iii) transportation and insurance charges or allowances;
(iv) customs, duties and similar charges; and
(v) sales, transfer and other excise or use taxes, or other
governmental charges levied on or measured by the sales but not
franchise or income taxes of any kind whatsoever.
(b) Exclusion of AFFILIATE Sales. Transfer of ROYALTY-PAYING
PARTY LICENSED PRODUCT(S) or ROYALTY-PAYING PARTY LICENSED
SERVICE(S) to an AFFILIATE for sale by the AFFILIATE shall not be
considered a sale; in the case of such a transfer the net sales
price shall be based on the gross billing price of the
ROYALTY-PAYING PARTY LICENSED PRODUCT(S) or ROYALTY-PAYING PARTY
LICENSED SERVICE by the AFFILIATE as invoiced to its customer.
(c) Non-Invoiced Exceptions and Exclusions. Every commercial use or
disposition of any ROYALTY-PAYING PARTY LICENSED PRODUCT or ROYALTY-PAYING
PARTY LICENSED SERVICE excluding any use for:
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(i) assuring product testing or control; or
(ii) promotional distribution to potential users ; or
(iii) distribution to researchers by or on behalf of ROYALTY-PAYING
PARTY or any of its ROYALTY-PAYING PARTY AFFILIATES or SUBLICENSEES;
or
(iv) obtaining regulatory approvals,
in addition to a bona fide sale to a bona fide customer (not to be
construed as including ROYALTY-PAYING PARTY or any such AFFILIATE or
SUBLICENSEE), shall be considered a sale of such ROYALTY-PAYING PARTY
LICENSED PRODUCT or ROYALTY-PAYING PARTY LICENSED SERVICE at the net
sales price then payable in an arm's length transaction.
(d) Additional Terms Related to Royalties Payable by CIPHERGEN.
(i) Proportionality of IP for Revenue Definition. In the event any
CIPHERGEN PATENT-BASED PRODUCT contains an ACTIVE FUNCTIONAL
ELEMENT covered by a patent claim other than a claim included among
the PATENT RIGHTS described hereunder, or any CIPHERGEN PATENT-BASED
SERVICE employs such an ACTIVE FUNCTIONAL ELEMENT covered by a patent
claim other than a claim included among the PATENT RIGHTS described
hereunder, NET SALES for such CIPHERGEN PATENT-BASED PRODUCT or
CIPHERGEN PATENT-BASED SERVICE shall be calculated by multiplying the
net sales price of such CIPHERGEN PATENT-BASED PRODUCT or CIPHERGEN
PATENT-BASED SERVICE by the fraction A over A+B where "A" is the
number of ACTIVE FUNCTIONAL ELEMENTS covered by a PATENT RIGHT
hereunder and "B" is the number of ACTIVE FUNCTIONAL ELEMENTS covered
by a patent which is not part of PATENT RIGHTS hereunder.
(ii) Reagent Rental Plan Exclusion. NET SALES shall not include the
full price of CONSUMABLE PRODUCTS sold under a REAGENT
RENTAL PLAN (as defined below). Instead, the value of NET SALES in
such circumstances shall be adjusted to reflect the reasonable price
of such CONSUMABLE PRODUCTS less the amortized cost of any CIPHERGEN
products bundled with such products as part of the REAGENT RENTAL
PLAN.
1.23 "PATENT-BASED PROCESS" means either or both a CIPHERGEN PATENT-BASED
PROCESS and a NEOGENOMICS PATENT-BASED PROCESS, depending on context.
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1.24 "PATENT-BASED PRODUCT" means either or both a CIPHERGEN PATENT-BASED
PRODUCT and a NEOGENOMICS PATENT-BASED PRODUCT, depending on context.
1.25 "PATENT-BASED SERVICE" means either or both a CIPHERGEN PATENT-BASED
SERVICE and a NEOGENOMICS PATENT-BASED SERVICE, depending on context.
1.26 "PATENT RIGHT" means any United States patent application (including
any division, continuation, or continuation-in-part thereof), any
foreign patent, application or equivalent corresponding thereto, and
any Letters Patent or the equivalent thereof issuing thereon or
reissue or extension thereof, that contains one or more claims to any
INVENTION.
1.27 "REAGENT RENTAL PLAN" means a method of payment for a CIPHERGEN
product such as computer hardware or software wherein the up front or
initial cost of such product to the customer is zero or de minimis and
the actual cost of the product is recovered by CIPHERGEN from the
customer by means of an increased price for CONSUMABLE PRODUCTS used
with or in connection with such product. Thus, in essence, the cost of
such product to the customer is amortized over the term of the plan
and captured by CIPHERGEN in the increased charge paid by the customer
for CONSUMABLE PRODUCTS. The amount of revenue attributed to the
CONSUMABLE PRODUCT and to the amount of CIPHERGEN equipment products
amortized over the CONSUMABLE PRODUCT revenues shall reflect the
prices of these products when sold independently.
1.28 "RESEARCH RESULTS" shall have the meaning set forth in Section 3.1
("Transfer of NEOGENOMICS MATERIALS").
1.29 "RESEARCH WORK PLANS" shall have the meaning set forth in Section 2.1
("Research Work Plans").
1.30 "ROYALTY-PAYING PARTY" shall mean the PARTY who is obligated to pay
royalties hereunder.
1.31 "ROYALTY-RECEIVING PARTY" shall mean the PARTY who is entitled to
receive royalties hereunder.
1.32 "SELDI" shall have the meaning set forth in the Recitals.
1.33 "SUBLICENSEE" means any non-AFFILIATE third party who is licensed by a
PARTY hereto to make, have made, use or sell any PATENT-BASED PRODUCT,
PATENT-BASED SERVICE, or use any PATENT-BASED PROCESS.
1.34 "TECHNOLOGY" shall have the meaning set forth in the Recitals above.
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1.35 "VALID CLAIM" means a claim of any patent issuing on a PATENT RIGHT,
which claim has not been declared invalid or unenforceable by a patent
office or by a court of competent jurisdiction in any un-appealed and
un-appealable decision.
1.36 Use of Plural and Gender. The use herein of the plural shall include
the singular, and the use of the masculine shall include the feminine.
ARTICLE 2. COLLABORATIVE RESEARCH
2.1 Research Work Plans. From time to time for the duration of the term of
Article 2 ("COLLABORATIVE RESEARCH") in accordance with Section 10.1
("Term of COLLABORATIVE RESEARCH"), NEOGENOMICS and CIPHERGEN may
agree to engage together in scientific research, as enabled by
CIPHERGEN's SELDI system and related know-how and capacities, in the
development of the TECHNOLOGY (research in the development of the
TECHNOLOGY, the "FIELD OF RESEARCH"; and all such scientific research
performed by the PARTIES under this AGREEMENT, the "COLLABORATIVE
RESEARCH"). In connection with any such COLLABORATIVE RESEARCH, the
PARTIES shall work together to produce a mutually agreeable work plan
that describes in detail the objectives, scope, nature, timeline,
milestones, procedures, equipment, materials, personnel, and, when
applicable, the estimated market value of CIPHERGEN services, that are
involved in the research to be conducted. Each such work plan that is
duly executed by both the PARTIES (a "RESEARCH WORK PLAN") shall be
attached to this AGREEMENT at Appendix B ("Research Work Plans") and
shall be considered to be part of this AGREEMENT. Subject to the
terms of this AGREEMENT, each of the PARTIES agrees to use reasonable
efforts to carry out their respective responsibilities in each RESEARCH
WORK PLAN at its own cost and expense and without charge to the other PARTY
unless otherwise specifically set forth in such RESEARCH WORK PLAN.
The PARTIES shall also cooperate and render research assistance to
each other, including making their respective personnel available at
reasonable times, in order to carry out the RESEARCH WORK PLANS
efficiently and to avoid any unnecessary duplication of efforts.
2.2 Modifications. RESEARCH WORK PLANS may be modified only upon mutual
written agreement of the PARTIES, and any such mutual written
agreement shall be attached to, and considered part of, this
Agreement.
2.3 Representatives and Meetings. Each of the PARTIES shall designate a
representative (a "Representative") as set forth at Appendix C
("Representatives") to coordinate the COLLABORATIVE RESEARCH
hereunder. Such Representatives shall meet regularly and as necessary
to discuss the progress of the COLLABORATIVE RESEARCH and to report
any research data, formulas, process or other information relating to
the development of TECHNOLOGY and produced during the course of the
COLLABORATIVE RESEARCH ("RESEARCH RESULTS").
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2.4 CIPHERGEN Activities in the FIELD OF RESEARCH. NEOGENOMICS hereby
acknowledges and accepts CIPHERGEN's current and potential future
relationships with third parties ("Third Party Researchers") in
conducting research that is in, or substantially similar to, the FIELD
OF RESEARCH. CIPHERGEN shall endeavor to disclose to NEOGENOMICS any
such relationship with any third parties as they arise. While
CIPHERGEN is already subject to obligations of confidentiality to
NEOGENOMICS pursuant to Article 4 ("Confidentiality and Publication
Rights") and the other related provisions hereunder, CIPHERGEN hereby
covenants to take such actions, mutually agreeable to both PARTIES,
that prevent any conflict of interest during the term of Article 2
("COLLABORATIVE RESEARCH") hereunder.
2.5 Outside Activities and Funding. Both NEOGENOMICS and CIPHERGEN shall
be free at any time, without restrictions of any kind:
(a) to engage in research outside of the FIELD OF RESEARCH and seek
funding for such research from any source, including without
limitation, any commercial collaborator; and
(b) to seek additional funding for the COLLABORATIVE RESEARCH
hereunder from any state or federal agency or any private or public
foundation (except for any foundation that is owned or operated in
whole or in part by a commercial entity other than either of the
PARTIES), provided that the terms and conditions of such additional
funding are not in conflict with the terms and conditions of this
AGREEMENT, including but not limited to, either PARTY's rights in and
to the COLLABORATIVE RESEARCH and the RESEARCH RESULTS thereof.
ARTICLE 3. TRANSFER OF NEOGENOMICS MATERIALS
3.1 Transfer of NEOGENOMICS MATERIALS. In connection with the
COLLABORATIVE RESEARCH conducted hereunder, NEOGENOMICS shall promptly
supply to CIPHERGEN, in accordance with the terms of the Research Work
Plans, certain biological or chemical materials or substances,
including data derived therefrom, in which NEOGENOMICS has full
ownership or licensable rights (the "NEOGENOMICS MATERIALS"). The
NEOGENOMICS MATERIALS that transferred hereunder are anticipated by
the PARTIES to include, without limitation, those materials
specifically set forth at Appendix D ("Anticipated Materials").
3.2 Terms of Transfer.
(a) Arrangements and Costs. NEOGENOMICS is responsible for all
arrangements and covering all costs related to the transfer of
NEOGENOMICS MATERIALS to CIPHERGEN.
(b) Representations and Warranties. NEOGENOMICS hereby represents and
warrants that:
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(i) NEOGENOMICS MATERIALS transferred hereunder are obtained by
NEOGENOMICS in accordance with all applicable laws, regulations or
ethical standards;
(ii) NEOGENOMICS has all necessary rights to transfer and dispose of
NEOGENOMICS MATERIALS as contemplated hereunder;
(iii) NEOGENOMICS MATERIALS transferred herewith are free of highly
contagious diseases, including without limitation: HIV, Hepatitis B
and Hepatitis C;
(iv) NEOGENOMICS is transferring NEOGENOMICS MATERIALS to CIPHERGEN in
a manner and by a means that assures the biological or chemical
integrity of NEOGENOMICS MATERIALS and the safety of CIPHERGEN
employees and agents; and
(v) NEOGENOMICS shall deliver, together with NEOGENOMICS MATERIALS,
complete and accurate information regarding the nature and contents of
NEOGENOMICS MATERIALS, including without limitation, all health and
safety information and instructions required for the safe and
appropriate handling of NEOGENOMICS MATERIALS.
(c) Indemnification. NEOGENOMICS agrees to defend, indemnify and hold
harmless CIPHERGEN, its officers, directors, employees and agents
against any claims, actions or demands resulting from NEOGENOMICS's
breach of the foregoing representations and warranties concerning
NEOGENOMICS MATERIALS.
(d) Acknowledgement. NEOGENOMICS understands and acknowledges that any
and all parts of NEOGENOMICS MATERIALS may be consumed or otherwise
rendered unusable in the course of the activities to be undertaken by
CIPHERGEN in performance of the COLLABORATIVE RESEARCH and that
CIPHERGEN may not be able to return to NEOGENOMICS any or all of
NEOGENOMICS MATERIALS after the completion of COLLABORATIVE RESEARCH.
CIPHERGEN shall not be liable for any damage to, or consumption of,
NEOGENOMICS MATERIALS.
3.3 Access to Facilities. For the purpose of facilitating the
COLLABORATIVE RESEARCH, each PARTY (the "HOST PARTY"), at such HOST
PARTY's reasonable convenience, shall permit the duly authorized
employees or representatives of the other PARTY (the "VISITING PARTY")
to visit the HOST PARTY's laboratories or other facilities where any
COLLABORATIVE RESEARCH is conducted.
3.4 CIPHERGEN's Rights to Use and Transfer NEOGENOMICS MATERIALS.
NEOGENOMICS hereby grants to CIPHERGEN all necessary rights and
licenses required for CIPHERGEN to analyze, use or consume NEOGENOMICS
MATERIALS and any intellectual property embodied therein in any manner
necessary to perform the COLLABORATIVE RESEARCH. NEOGENOMICS also
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prohibits CIPHERGEN from transferring NEOGENOMICS MATERIALS to third
parties, except that CIPHERGEN may transfer NEOGENOMICS MATERIALS to
third parties:
(a) without any required consent from NEOGENOMICS, if solely for the
purpose of obtaining chemical, physical or biological analysis or
characterization of such NEOGENOMICS MATERIALS in connection with the
COLLABORATIVE RESEARCH, provided that such third parties agree in
writing: (i) to use such NEOGENOMICS MATERIALS only for the purpose of
the agreed upon analysis or characterization, and (ii) not to transfer
or grant access to such NEOGENOMICS MATERIALS, or any non-public
information regarding such NEOGENOMICS MATERIALS, to any other person
or entity, and
(b) provided that CIPHERGEN has obtained the written consent of
NEOGENOMICS, in the following cases: (i) where a journal requires
dissemination of NEOGENOMICS MATERIALS or related non-public
information as a condition of publication regarding such materials,
and (ii) where CIPHERGEN is placing any NEOGENOMICS MATERIALS in any
depository in support of any patent application to be filed pursuant
to this AGREEMENT.
3.5 Patentability of NEOGENOMICS MATERIALS. Prior to any CIPHERGEN
transfer of any NEOGENOMICS MATERIALS to any third party pursuant to
this Article 3 ("Transfer of NEOGENOMICS MATERIALS"), CIPHERGEN shall
use reasonable efforts to consider the patentability of such
NEOGENOMICS MATERIALS, and CIPHERGEN shall cooperate, when
appropriate, prior to CIPHERGEN's transfer of any NEOGENOMICS
MATERIALS to any third party, with NEOGENOMICS in NEOGENOMICS's
efforts to file patents protecting such NEOGENOMICS MATERIALS.
3.6 Restrictions on NEOGENOMICS Transfer of NEOGENOMICS MATERIALS. For the
duration of the term of Article 2 ("COLLABORATIVE RESEARCH") in
accordance with Section 10.1 ("Term of COLLABORATIVE RESEARCH"),
NEOGENOMICS shall not distribute, or knowingly allow to be
distributed, NEOGENOMICS MATERIALS to for-profit entities, or persons
known to be employed thereby or consulting or performing research
therefore, in a field pertaining to COLLABORATIVE RESEARCH, except
that NEOGENOMICS may distribute NEOGENOMICS MATERIALS to third
parties:
(a) without any required consent from CIPHERGEN, solely for the
purpose of obtaining chemical, physical or biological analysis or
characterization of such NEOGENOMICS MATERIALS in connection with the
COLLABORATIVE RESEARCH, provided that such third parties agree in
writing: (i) not to transfer or grant access to such NEOGENOMICS
MATERIALS or any non-public information regarding such NEOGENOMICS
MATERIALS to any other person or entity and (ii) to use such
NEOGENOMICS MATERIALS only for the purpose of the agreed upon analysis
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or characterization and not to disclose such analysis or
characterization to any third party; and
(b) provided that NEOGENOMICS has obtained the written consent of
CIPHERGEN, in the following cases: (i) where a journal requires
dissemination of NEOGENOMICS MATERIALS or related non-public
information as a condition of publication regarding such materials,
and (ii) where NEOGENOMICS is placing any NEOGENOMICS MATERIALS in any
depository in support of any patent application on RESEARCH RESULTS to
be filed pursuant to this AGREEMENT.
ARTICLE 4. CONFIDENTIALITY AND PUBLICATION RIGHTS
4.1 Definition of "CONFIDENTIAL INFORMATION." Subject to the limitations
set forth in this Article 4 ("Confidentiality and Publication
Rights"), information disclosed by either PARTY shall be deemed to be
"CONFIDENTIAL INFORMATION" only if such information (a) in written or
other tangible form, is marked or labeled as "CONFIDENTIAL" or
includes a similar legend sufficient to notify the receiving Party
that such information is subject to the terms of this AGREEMENT,
and/or (b) as disclosed other than in writing, is identified as
confidential by the disclosing PARTY at the time of disclosure and is
confirmed in writing as confidential within thirty (30) days after
such disclosure. Each PARTY's designated REPRESENTATIVES shall
coordinate the process of identifying each such PARTY's CONFIDENTIAL
INFORMATION. Notwithstanding the foregoing, all information embodied
in, or connected to, the NEOGENOMICS MATERIALS and the RESEARCH
RESULTS shall be automatically considered to be CONFIDENTIAL
INFORMATION by both PARTIES, unless otherwise set forth in this
AGREEMENT or the PARTIES otherwise agree in writing. CONFIDENTIAL
INFORMATION may include, without limitation, any information, process,
technique, algorithm, program, design, drawing, formula or test data
relating to any research project, work in process, future development,
engineering, manufacturing, marketing, servicing, financing or
personnel matter relating to either PARTY, either PARTY's present or
future products, sales, suppliers, customers, employees, investors, or
business, whether in oral, written, graphic or electronic form.
4.2 Exceptions. CONFIDENTIAL INFORMATION shall not include information
that receiving PARTY can demonstrate by competent written proof: (i)
is now, or hereafter becomes, through no act or failure to act on the
part of such receiving PARTY, generally known or available; (ii) is
known by the receiving PARTY at the time of receiving such
information; (iii) is hereafter furnished to the receiving PARTY by a
third party, as a matter of right and without restriction on
disclosure; (iv) is independently developed by the receiving PARTY
without any breach of this AGREEMENT; or (v) is the subject of a
written permission to disclose provided by the disclosing PARTY.
4.3 Confidentiality Obligations. Each PARTY shall maintain in trust and
confidence and not disclose to any third party or use for any
unauthorized purpose any CONFIDENTIAL INFORMATION received from the
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other PARTY. Both PARTIES may use such CONFIDENTIAL INFORMATION only
to the extent required to accomplish the purposes of this AGREEMENT.
Neither PARTY shall use CONFIDENTIAL INFORMATION received from the
other PARTY for any purpose or in any manner, which would constitute a
violation of any laws or regulations of the United States.
CONFIDENTIAL INFORMATION supplied hereunder shall not be reproduced in
any form except as required to accomplish the intent of this
AGREEMENT.
4.4 Standard of Care. Each PARTY represents and warrants that it shall
protect CONFIDENTIAL INFORMATION received from the other PARTY with
the same degree of care that it uses to protect its own CONFIDENTIAL
INFORMATION from unauthorized use or disclosure, but in no case, with
less then a commercially reasonable standard of care. Each PARTY shall
advise its employees or agents who might have access to the other
PARTY's CONFIDENTIAL INFORMATION of the confidential nature thereof
and shall obtain from each of such employees and agents an agreement
to abide by confidentiality terms less stringent than this AGREEMENT.
Neither PARTY shall disclose any of the other PARTY's CONFIDENTIAL
INFORMATION to any officer, employee or agent who does not have a need
for such information.
4.5 Return of CONFIDENTIAL INFORMATION. All CONFIDENTIAL INFORMATION
(including all copies thereof) shall remain the property of the
disclosing PARTY, except to the extent such CONFIDENTIAL INFORMATION
constitutes an INVENTION owned in part by the recipient PARTY pursuant
to Section 5.2 ("Ownership"). In any case, CONFIDENTIAL INFORMATION
shall be returned to disclosing PARTY after the receiving PARTY's need
for it has expired, or upon request of disclosing PARTY, and in any
event, upon completion or termination of all the COLLABORATIVE
RESEARCH conducted under this AGREEMENT, except for one copy of each
disclosure that may be retained in the archives of the receiving PARTY
solely for the purposes of compliance with, or fulfillment of, this
AGREEMENT.
4.6 Authorized Disclosures. Notwithstanding any other provision of this
AGREEMENT, disclosure of CONFIDENTIAL INFORMATION shall not be
precluded if such disclosure:
(a) is in response to a valid order of a court or other governmental body
of the United States or any political subdivision thereof, provided
that the responding PARTY shall first have given notice to the other
PARTY hereto and shall have made a reasonable effort to obtain a
protective order requiring that the CONFIDENTIAL INFORMATION so
disclosed be used only for the purposes for which the order was
issued;
(b) is otherwise required by law; or
12
(c) is otherwise required to establish rights or enforce obligations
under this AGREEMENT, but only to the extent that any such disclosure
is necessary.
4.7 Publication Procedures.
(a) Submission for Review. Each PARTY (the "Publishing PARTY") agrees
to submit to the other PARTY (the "Reviewing PARTY") for review, an
early draft of each:
(i) Article or manuscript first disclosing or describing any
NEOGENOMICS MATERIALS or RESEARCH RESULTS at least thirty
(30) days prior to Publishing PARTY's planned submission for
publication; and
(ii) Abstract, oral presentation or poster disclosing or
describing any NEOGENOMICS MATERIALS or RESEARCH RESULTS at
least seven (7) days prior to Publishing PARTY's planned
submission for publication (each such thirty (30) day or
seven (7) day period, a "Review Period" and each such early
draft, a "Prospective Publication").
(b) Review. The Reviewing PARTY shall have the right to review each
such Prospective Publication during the applicable Review Period
and advise the Publishing PARTY as to the patentability of any
INVENTIONS disclosed therein. The PARTIES agree to cooperate with
each other to carry out the appropriate actions required to file
PATENT RIGHTS claiming such INVENTIONS in accordance with the
terms of this AGREEMENT. After each applicable Review Period, the
Publishing PARTY shall have the right to submit its Prospective
Publication for publication, unless in the Reviewing PARTY's sole
opinion, any INVENTION or commercially important know-how,
whether patentable or unpatentable, is revealed in such
Prospective Publication, in which case the Publishing PARTY
agrees to work together in good faith with the Reviewing PARTY to
resolve Reviewing PARTY's concerns and to delay publication for
up to ninety (90) days from the end of the applicable Review
Period in order to do so.
(c) Filings Required by the Government. This Section 4.7
("Publication Procedures") shall not be applicable to the filing
by either PARTY of any report required by any governmental
authority pertaining to the COLLABORATIVE RESEARCH.
ARTICLE 5. PATENTS
5.1 INVENTION Disclosure. In accordance with CIPHERGEN patent policies and
procedures, each employee of CIPHERGEN who during the course of, or
otherwise in connection with, the COLLABORATIVE RESEARCH, with or without
13
the involvement of NEOGENOMICS creates or discovers an INVENTION shall
report such INVENTION to CIPHERGEN and shall assign all of such employee's
rights, title and interest in such INVENTION to CIPHERGEN. In accordance
with NEOGENOMICS patent policies and procedures, each NEOGENOMICS employee
who during the course of, or otherwise in connection with, the
COLLABORATIVE RESEARCH shall make an INVENTION, with or without the
involvement of CIPHERGEN or any of CIPHERGEN's employees, shall promptly
report such INVENTION to NEOGENOMICS and shall assign all of such
NEOGENOMICS employee's rights, title and interest in such INVENTION to
NEOGENOMICS.
5.2 Ownership. INVENTIONS made solely by NEOGENOMICS employees shall be owned
solely by NEOGENOMICS, and NEOGENOMICS shall solely own any related PATENT
RIGHTS. INVENTIONS made solely by CIPHERGEN and CIPHERGEN employees shall
be owned solely by CIPHERGEN, and CIPHERGEN shall solely own any related
PATENT RIGHTS. INVENTIONS made jointly by any NEOGENOMICS employee(s) and
CIPHERGEN employee(s) shall be jointly owned by CIPHERGEN and NEOGENOMICS.
The PARTIES agree that for each INVENTION jointly owned by them, each PARTY
shall own a one-half (1/2) undivided interest in such INVENTION and each
related PATENT RIGHT. Each of NEOGENOMICS and CIPHERGEN shall each be
allowed to sell, license or otherwise transfer its respective PATENT RIGHTS
without the consent of the other; provided however, that each PARTY's
rights in this respect are subject to the terms and conditions of this
AGREEMENT, including without limitation, each of the PARTY's rights to
licenses in PATENT RIGHTS hereunder in subsequent Articles.
5.3 Patent Applications. Each PARTY shall promptly advise the other in writing
of each INVENTION disclosed to such PARTY. Representatives of each PARTY
shall then discuss with each other whether, and in what countries, a patent
application or applications pertaining to such INVENTION should be filed.
In consultation with CIPHERGEN, NEOGENOMICS shall have the first right to
prepare, file, prosecute and maintain, in the United States and countries
throughout the world, patent applications and patents concerning INVENTIONS
that are owned solely by NEOGENOMICS. In consultation with NEOGENOMICS,
CIPHERGEN shall have the first right to prepare, file, prosecute and
maintain, in the United States and countries throughout the world, patent
applications and patents concerning INVENTIONS that are either solely by
CIPHERGEN or jointly owned by NEOGENOMICS and CIPHERGEN. In the case of
such INVENTIONS owned jointly by NEOGENOMICS and CIPHERGEN, CIPHERGEN shall
prosecute such patent applications on behalf of and in the name of both
PARTIES. The titles, serial numbers and other identifying data of any
patent applications claiming an INVENTION filed pursuant to this Agreement
shall be listed in Appendix E ("PATENT RIGHTS"), as updated by the PARTIES
from time to time.
5.4 Costs of Patent Prosecution. Each PARTY shall pay for all costs and
expenses incurred in connection with the filing, prosecution and
maintenance of PATENT RIGHTS concerning INVENTIONS that are owned solely by
14
such PARTY hereunder. For costs and expenses incurred with respect to
filing, prosecution and maintenance of PATENT RIGHTS concerning INVENTIONS
that jointly owned by the PARTIES hereunder, NEOGENOMICS shall reimburse
CIPHERGEN for one-half (1/2) all such costs and expenses. Such
reimbursement from NEOGENOMICS shall be paid to CIPHERGEN on a reasonable
periodic basis to be determined by the PARTIES.
5.5 Patent Counsel. In connection with CIPHERGEN's preparation, filing,
prosecution and maintenance of patent applications for INVENTIONS owned
jointly by NEOGENOMICS and CIPHERGEN, CIPHERGEN shall choose patent counsel
who is reasonably acceptable to NEOGENOMICS. CIPHERGEN agrees to send
NEOGENOMICS, in a timely manner, copies of all correspondence with such
patent counsel and shall give NEOGENOMICS an opportunity to comment thereon
before filing with any patent office. Whenever possible, such solicited
NEOGENOMICS comments will be acted upon in the prosecution and maintenance
of the patent applications and patents.
5.6 NEOGENOMICS Prosecution of Patents. In the event that NEOGENOMICS is not
satisfied with CIPHERGEN's prosecution of a patent application for
INVENTIONS owned jointly by NEOGENOMICS and CIPHERGEN, and CIPHERGEN is not
willing to make changes to satisfy NEOGENOMICS on such issues, NEOGENOMICS
may file a patent continuation at its own expense. In any country where
CIPHERGEN elects not to file a patent application or to pay expenses
associated with filing, prosecuting, or maintaining a patent application or
patent for INVENTIONS owned solely by NEOGENOMICS or jointly by NEOGENOMICS
and CIPHERGEN, NEOGENOMICS may file, prosecute, and/or maintain a patent
application or patent at its own expense. In the event that CIPHERGEN
decides not to pursue the preparation, filing, prosecution and/or
maintenance of any patent or patent application in a particular country for
INVENTIONS owned jointly by NEOGENOMICS and CIPHERGEN, CIPHERGEN agrees to
assign all of its right and interest in such patentable INVENTION to
NEOGENOMICS and NEOGENOMICS may pursue such patent solely in its name at
its sole expense. Any such patent prosecuted by NEOGENOMICS under this
Section 5.6 ("NEOGENOMICS Prosecution of Patents") shall not constitute a
PATENT RIGHT hereunder and thereby, shall not be PATENT-BASED to CIPHERGEN
under Article 6 ("CIPHERGEN License Options/ Grants") hereunder.
5.7 Representatives. Correspondence related to INVENTIONS, PATENT RIGHTS, and
any other patent applications and patents issues shall be directed to the
following individuals:
For NEOGENOMICS:
15
For CIPHERGEN:
John Storella, Esq.
Vice President for Intellectual Property
Ciphergen Biosystems, Inc.
6611 Dumbarton Circle
Fremont, CA 94555
5.8 Extensions. NEOGENOMICS and CIPHERGEN will cooperate in applying for an
extension of the term of any patent included within PATENT RIGHTS, if
appropriate, under the Drug Price Competition and Patent Term Restoration
Act of 1984. CIPHERGEN will prepare all such documents, and NEOGENOMICS
will execute such documents and will take such additional action as
CIPHERGEN may reasonably request in connection therewith.
5.9 Patent Marking. CIPHERGEN will mark all CIPHERGEN PATENT-BASED PRODUCTS
made, used, or sold under the terms of this AGREEMENT, or their containers,
in accordance with the applicable patent marking laws, and NEOGENOMICS will
mark all NEOGENOMICS PATENT-BASED PRODUCTS made, used, or sold under the
terms of this AGREEMENT, or their containers, in accordance with the
applicable patent marking laws.
ARTICLE 6. LICENSE GRANTS
6.1 Cross-License Grants. As to each PATENT RIGHT that is owned in whole or in
part by a PARTY or in which a PARTY has a licensable right, such PARTY (as
the "LICENSOR PARTY") hereby grants to the other PARTY hereto and any
AFFILIATE of such other PARTY designated in writing by such other PARTY
(such other PARTY, as the "LICENSEE PARTY") any and all non-exclusive
worldwide rights and LICENSES under the relevant PATENT RIGHTS so as to
allow the LICENSEE PARTY full freedom to operate with respect to any PATENT
RIGHTS described hereunder.
6.2 No Conflict. Notwithstanding any other provision of the license grants made
pursuant to this AGREEMENT or the AGREEMENT, each PARTY represents that to
the best of its knowledge, as of the EFFECTIVE DATE, there is no agreement
in effect between each such PARTY and any third party (not including the
government of the United States of America) that prohibits such PARTY from
granting to other PARTY the LICENSES set forth in Section 6.1
("Cross-License Grant"). Each PARTY also agrees not to enter into any
future agreement with a third party under terms that will prevent each
PARTY from granting LICENSES under PATENT RIGHTS in accordance with Section
6.1 ("Cross-License Grants").
16
6.3 Mutual Covenant Not to License Any Third Parties. Each of the PARTIES
hereby covenants not to grant LICENSES under PATENT RIGHTS to any third
parties at any time without the express written consent of the other PARTY.
6.4 Clarification of Intent. The PARTIES acknowledge that the intent of this
Article 6 ("License Grants") is to allow each PARTY to fully practice any
of the PATENT RIGHTS anywhere in the world without interference from the
other PARTY and to assure that only the PARTIES and no third parties have
any right, license or interest in or to the PATENT RIGHTS unless both
PARTIES shall agree in writing otherwise.
ARTICLE 7. ROYALTIES PAYABLE
7.1 Royalty Rates. The PARTIES shall pay each other royalties as follows:
(a) For each NEOGENOMICS PATENT-BASED PRODUCT, NEOGENOMICS shall pay
to CIPHERGEN a royalty of four percent (4%) of NET SALES on such
NEOGENOMICS PATENT-BASED PRODUCT;
(b) For each NEOGENOMICS PATENT-BASED SERVICE, NEOGENOMICS shall pay
to CIPHERGEN a royalty of four percent (4%) of NET SALES on such
NEOGENOMICS PATENT-BASED SERVICES;
(c) For each CIPHERGEN PATENT-BASED PRODUCT, CIPHERGEN shall pay to
NEOGENOMICS, a royalty of four percent (4%) of NET SALES on such
CIPHERGEN PATENT-BASED PRODUCT; and
(d) For each CIPHERGEN PATENT-BASED SERVICE, CIPHERGEN shall pay to
NEOGENOMICS, a royalty of four percent (4%) of NET SALES on such
CIPHERGEN PATENT-BASED SERVICE.
Each of CIPHERGEN and NEOGENOMICS referred to as the "ROYALTY-PAYING
PARTY" or the "ROYALTY-RECEIVING PARTY" hereunder in accordance with
the foregoing.
7.2 Anti-Stacking Provision. If either PARTY is required to pay a royalty or
royalties to any third party for technology in connection with the
manufacture, use, sale or marketing of a PATENT-BASED PRODUCT and/or a
PATENT-BASED SERVICE hereunder, the royalty rate payable hereunder shall be
reduced by one half (1/2) of the aggregate rate of such third party
royalties, but in no event shall the royalty rate be reduced more than
fifty percent (50%) under this paragraph. This paragraph shall specifically
exclude (that is, shall not be applied to) royalties paid to any party for
a claim covering an ACTIVE FUNCTIONAL ELEMENT.
7.3 Market Condition Provision. In the event that the royalties paid in
accordance with the forgoing is such a significant factor in the return
realized by the ROYALTY-PAYING PARTY as to diminish such party's capability
17
to respond to competitive pressures in the market, the other PARTY agrees
to consider a reasonable reduction in the royalty as to each PATENT-BASED
PRODUCT and/or PATENT-BASED SERVICE for the period during which such market
condition exists. Factors determining the size of the reduction will
include profit margin on PATENT-BASED PRODUCTS and/or PATENT-BASED SERVICES
development.
7.4 Record Keeping. Each of the PARTIES shall keep, and shall cause each of its
AFFILIATES and SUBLICENSEES, if any, to keep, full and accurate books of
account containing all particulars that may be necessary for the purpose of
calculating all royalties payable to the ROYALTY-RECEIVING PARTY. Such
books of account shall be kept at their principal place of business and,
with all necessary supporting data shall, during all reasonable times for
the three (3) years next following the end of the calendar year to which
each shall pertain, be open for inspection at reasonable times by
ROYALTY-PAYING PARTY or its designee at ROYALTY-PAYING PARTY's expense for
the sole purpose of verifying royalty statements or compliance with this
AGREEMENT.
7.5 Quarterly Delivery of Records. Each ROYALTY-PAYING PARTY shall deliver to
the ROYALTY-RECEIVING PARTY a full and accurate accounting to include at
least the following information:
(a) Quantity of each PATENT-BASED PRODUCTS and/ or PATENT-BASED SERVICES
sold or leased (by country) by such ROYALTY-PAYING PARTY, and its
AFFILIATES or SUBLICENSEES;
(b) Total receipts for each PATENT-BASED PRODUCT and/or PATENT-BASED
SERVICE (by country);
(c) Quantities of each PATENT-BASED PRODUCT and/or PATENT-BASED SERVICE:
1. used by ROYALTY-PAYING PARTY and its AFFILIATES or
SUBLICENSEES; or
2. sold to the United States Government for which the
government requires a reduction in the net sales price as a
result of its license under 35 U.S.C.ss.204.
7.6 Payment of Royalties. In each year the amount of royalty due shall be
calculated semiannually as of June 30 and December 31 ("ACCOUNTING PERIOD")
and shall be paid semiannually within the sixty (60) days next following
such date, every such payment shall be supported by the accounting
prescribed in Section 7.5 ("Quarterly Delivery of Records") and shall be
made in United States currency. Whenever for the purpose of calculating
royalties conversion from any foreign currency shall be required, such
conversion shall be at the rate of exchange thereafter published in the
Wall Street Journal for the business day closest to the applicable June 30
or December 31, as the case may be.
18
7.7 One Royalty Per PATENT-BASED PRODUCT or PATENT-BASED SERVICE. Only one
royalty shall be due and payable for any PATENT-BASED PRODUCT or
PATENT-BASED SERVICE subject to royalty under this AGREEMENT regardless of
the number of PATENT RIGHTS covering such PATENT-BASED PRODUCT or
PATENT-BASED SERVICE, its manufacture and use.
7.8 Currency. If the transfer of or the conversion into United States Dollar
Equivalents of any such remittance in any such instance is not lawful or
possible, the payment of such part of the royalties as is necessary shall
be made by the deposit thereof, in the currency of the country where the
sale was made on which the royalty was based, to the credit and account of
the ROYALTY-RECEIVING PARTY or its nominee, in any commercial bank or trust
company located in that country, prompt notice of which shall be given by
the ROYALTY-PAYING PARTY.
7.9 Taxes. Any tax required to be withheld by the ROYALTY-PAYING PARTY under
the laws of any foreign country for the account of the ROYALTY-RECEIVING
PARTY, shall be promptly paid by the ROYALTY-PAYING PARTY for and on behalf
of the ROYALTY-RECEIVING PARTY to the appropriate governmental authority,
and the ROYALTY-PAYING PARTY shall use its best efforts to furnish the
ROYALTY-RECEIVING PARTY with proof of payment of such tax. Any such tax
actually paid on the ROYALTY-RECEIVING PARTY's behalf shall be deducted
from royalty payments due the ROYALTY-RECEIVING PARTY.
7.10 Interest on Late Payments. The royalty payments due under the AGREEMENT
shall, if overdue, bear interest until payment at a per annum rate equal to
one percent (1%) above the prime rate in effect at Citibank on the due
date, not to exceed the maximum permitted by law. The payments of such
interest shall not preclude the ROYALTY-RECEIVING PARTY from exercising any
other rights it may have as a consequence of the lateness of any royalty
payment.
ARTICLE 8. INFRINGEMENT
8.1 Obligation to Notify. Each PARTY shall notify the other promptly in writing
when any infringement of the PATENT RIGHTS by another is uncovered or
suspected.
8.2 Control of Suit Concerning PATENT RIGHTS. NEOGENOMICS hereby grants
CIPHERGEN the right to bring suit under its own name to enforce any PATENT
RIGHT for which CIPHERGEN is the sole or partial owner hereunder. CIPHERGEN
shall have the first right to enforce the PATENT RIGHTS against any
infringement or alleged infringement thereof, and shall at all times keep
NEOGENOMICS informed as to the status thereof. CIPHERGEN may, in its sole
judgment and at its own expense, institute suit against any such infringer
or alleged infringer and control, settle, and defend such suit in a manner
consistent with the terms and provisions hereof and recover, for its
account, any damages, awards or settlements resulting there from, subject
to Section 8.4 ("Cooperation") below. This right to sue for infringement
shall not be used in an arbitrary or capricious manner. NEOGENOMICS shall
19
reasonably cooperate in any such litigation at CIPHERGEN's expense.
NEOGENOMICS shall join such suit as a named party at CIPHERGEN's request.
If CIPHERGEN elects not to enforce the PATENT RIGHTS in a specific
instance, then it shall so notify NEOGENOMICS in writing within six (6)
months of receiving notice that an infringement exists, and NEOGENOMICS
may, in its sole judgment and at its own expense, take steps to enforce any
such patent and control, settle, and defend such suit in a manner
consistent with the terms and provisions hereof, and recover, for its own
account, any damages, awards or settlements resulting there from, subject
to Section 8.4 ("Cooperation") below.
8.3 Control of Suit Concerning PATENT RIGHTS. CIPHERGEN hereby grants
NEOGENOMICS the right to bring suit under its own name to enforce any
PATENT RIGHT for which NEOGENOMICS is the sole owner hereunder. NEOGENOMICS
shall have the first right to enforce the PATENT RIGHTS against any
infringement or alleged infringement thereof, and shall at all times keep
CIPHERGEN informed as to the status thereof. NEOGENOMICS may, in its sole
judgment and at its own expense, institute suit against any such infringer
or alleged infringer and control, settle, and defend such suit in a manner
consistent with the terms and provisions hereof and recover, for its
account, any damages, awards or settlements resulting therefrom, subject to
Section 8.4 ("Cooperation") below. This right to sue for infringement shall
not be used in an arbitrary or capricious manner.
CIPHERGEN shall reasonably cooperate in any such litigation at
NEOGENOMICS's expense. CIPHERGEN shall join such suit as a named party at
NEOGENOMICS's request. If NEOGENOMICS elects not to enforce the PATENT
RIGHTS in a specific instance, then it shall so notify CIPHERGEN in writing
within six (6) months of receiving notice that an infringement exists, and
CIPHERGEN may, in its sole judgment and at its own expense, take steps to
enforce any such patent and control, settle, and defend such suit in a
manner consistent with the terms and provisions hereof, and recover, for
its own account, any damages, awards or settlements resulting there from,
subject to Section 8.4 ("Cooperation") below.
8.4 Cooperation. In the event one PARTY shall initiate or carry on legal
proceedings to enforce any PATENT RIGHTS against any alleged infringer, the
other PARTY shall fully cooperate with and supply all assistance reasonably
requested by the PARTY initiating or carrying on such proceedings. The
PARTY who institutes any suit to protect or enforce any PATENT RIGHTS shall
have sole control of that suit and shall bear the reasonable expenses
(excluding legal fees) incurred by said other PARTY in providing such
assistance and cooperation as is requested pursuant to this paragraph. The
PARTY initiating or carrying on such legal proceedings shall keep the other
PARTY informed of the progress of such proceedings and said other PARTY
shall be entitled to counsel in such proceedings but at its own expense.
Any award paid by third PARTIES as the result of such proceedings (whether
by way of settlement or otherwise) shall first be applied to reimbursement
of the out of pocket legal fees and expenses incurred by either PARTY (with
the initiating PARTY's fees paid first), and then the remainder shall go to
the initiating PARTY unless the nature of the infringement is such that the
20
infringer has diluted the sales base for both PARTIES, in which case the
remainder shall be shared between the PARTIES in proportion with each
PARTY's losses.
ARTICLE 9. INDEMNIFICATION, INSURANCE,
AND DISCLAIMER OF WARRANTIES
9.1 Indemnification.
(a) Each PARTY as the "LICENSEE PARTY" shall indemnify, defend and hold
harmless the other PARTY as the "LICENSOR PARTY" and its directors,
trustees, officers, medical and professional staff, employees, and
agents and their respective successors, heirs and assigns (the
"Indemnitees"), against any liability, damage, loss or expense
(including reasonable attorney's fees and expenses of litigation)
incurred by or imposed upon the Indemnitees or any one of them in
connection with any claims, suits, actions, demands or judgments
arising out of any theory of product liability (including, but not
limited to, actions in the form of tort warranty, or strict liability)
concerning any PATENT-BASED PRODUCT, PATENT-BASED PROCESS, or
PATENT-BASED SERVICE made, used or sold pursuant to any right or
license granted to such LICENSEE PARTY by such LICENSOR PARTY under
this AGREEMENT or rising out of any other activities to be carried out
pursuant to this AGREEMENT.
(b) The LICENSEE PARTY's indemnification under subsection (a) above shall
not apply to any liability, damage, loss or expense to the extent that
it is attributable to the negligent activities, reckless misconduct or
intentional misconduct of the Indemnitees.
(c) The LICENSEE PARTY agrees, at its own expense, to provide attorneys
reasonably acceptable to the LICENSOR PARTY to defend against any
actions that are brought or filed against any Indemnitee and that are
within the scope of LICENSEE PARTY's indemnification obligation,
whether or not such actions are rightfully brought.
9.2 Insurance.
(a) Beginning at the time that a PATENT-BASED PRODUCT, PATENT-BASED
PROCESS or PATENT-BASED SERVICE is being commercially distributed or
sold (other than for the purpose of obtaining regulatory approvals) by
LICENSEE PARTY or by a SUBLICENSEE, AFFILIATE or agent of LICENSEE
PARTY, LICENSEE PARTY shall at its sole cost and expense, procure and
maintain policies of comprehensive general liability insurance in
amounts not less than two million US dollars ($2,000,000) per incident
and two million US dollars ($2,000,000) annual aggregate and naming
LICENSOR PARTY as an additional insured. Such comprehensive general
liability insurance shall provide:
21
(i) product liability coverage; and
(ii) broad form contractual liability coverage for LICENSEE PARTY
indemnification under Section 9.1 ("Indemnification") of
this AGREEMENT. If LICENSEE PARTY elects to self-insure all
or part of the limits described above (including deductibles
or retentions which are in excess of two hundred fifty
thousand US dollars ($250,000 ) annual aggregate) such
self-insurance programs shall be acceptable to LICENSOR
PARTY. The minimum amounts of insurance coverage required
herein shall not be construed to create a limit on LICENSEE
PARTY's liability with respect to its indemnification
obligations under Section 9.1 ("Indemnification") of this
AGREEMENT.
(b) LICENSEE PARTY shall provide LICENSOR PARTY with written evidence
of the insurance required hereunder upon request of LICENSOR
PARTY. LICENSEE PARTY shall provide LICENSOR PARTY with written
notice at least fifteen (15) days prior to the cancellation,
non-renewal or material change in such insurance.
(c) LICENSEE PARTY shall maintain the comprehensive general liability
insurance required herein during the period that any LICENSEE
PARTY PATENT-BASED PRODUCT, LICENSEE PARTY PATENT-BASED PROCESS,
or LICENSEE PARTY PATENT-BASED SERVICE, relating to, or developed
pursuant to, this AGREEMENT is being commercially distributed or
sold (other than for the purpose of obtaining regulatory
approvals) by LICENSEE PARTY or by a SUBLICENSEE, AFFILIATE, or
agent of LICENSEE PARTY.
9.3 Authority to Enter Agreement. CIPHERGEN and NEOGENOMICS each represent and
warrant that they have the authority to enter into this AGREEMENT.
9.4 Disclaimers. OTHER THAN AS EXPRESSLY SET FORTH HEREIN, CIPHERGEN and
NEOGENOMICS MAKE TO EACH OTHER NO REPRESENTATIONS AND EXTEND NO WARRANTIES
OF ANY KIND, EITHER EXPRESS OR IMPLIED, INCLUDING WITHOUT LIMITATION, ANY
WARRANTIES REGARDING THE SUCCESS OR QUALITY OF THE COLLABORATIVE RESEARCH
CONDUCTED HEREUNDER AND ANY WARRANTIES OF MERCHANTABILITY, FITNESS FOR A
PARTICULAR PURPOSE, OR NON-INFRINGEMENT WITH RESPECT TO THE RESEARCH
COLLABORATION AS CONDUCTED HEREUNDER OR THE INFORMATION RESULTING
THEREFROM.
9.5 Acknowledgement of Litigation. Notwithstanding any other provision of this
AGREEMENT, including Section 9.1 ("Indemnification"), NEOGENOMICS and
CIPHERGEN acknowledge that CIPHERGEN is engaged in litigation with
Molecular Analytical Systems, Inc., LumiCyte, Inc., T. William Hutchens and
certain unnamed defendants. The subject matter of that litigation is a
22
dispute over the scope of CIPHERGEN's rights to SELDI technology. Both
PARTIES acknowledge that litigation is uncertain and, accordingly, the
PARTIES agree that CIPHERGEN shall have no liability to NEOGENOMICS in the
event a court of competent jurisdiction determines that CIPHERGEN does not
possess the rights necessary to fully implement this AGREEMENT. In the
event a court makes such a final determination, CIPHERGEN may, without
liability to NEOGENOMICS, immediately discontinue any or all aspects of its
participation in this AGREEMENT; provided, however, that CIPHERGEN shall
take any reasonably necessary steps within its power to minimize disruption
to NEOGENOMICS business and research activities.
ARTICLE 10. TERMINATION
10.1 Term of Collaborative Research. Subject to Section 10.3 ("Default on
COLLABORATIVE RESEARCH") below, the obligation of the PARTIES to
participate in COLLABORATIVE RESEARCH under Article 2 ("COLLABORATIVE
RESEARCH") will have an initial term of two (2) years, and will
automatically extend for additional terms of one (1) year each, unless
terminated by either PARTY by written notice to the other PARTY at least
three (3) months prior to the end of the then current term. Notwithstanding
the foregoing, either PARTY may choose to terminate the obligation of the
PARTIES to participate in COLLABORATIVE RESEARCH under Article 2
("COLLABORATIVE RESEARCH") at any time after the first AGREEMENT YEAR for
any reason; provided that such PARTY gives NEOGENOMICS six (6) months
notice prior to the desired date of termination.
10.2 Default on COLLABORATIVE RESEARCH. If either PARTY shall materially default
in performing any of its COLLABORATIVE RESEARCH obligations under any
RESEARCH WORK PLAN or any other provision of this AGREEMENT, the
non-defaulting PARTY may give notice of the default to the defaulting
PARTY. Unless such default is corrected within sixty (60) days after such
notice, the notifying PARTY may terminate Article 2 ("COLLABORATIVE
RESEARCH") of this AGREEMENT upon thirty (30) days prior written notice,
unless the breach is disputed by the PARTY notified of default, in which
case the issue is to be settled in accordance with Section 11.3 ("Choice of
Law; Arbitration"). Any termination of Article 2 ("COLLABORATIVE RESEARCH")
shall not affect the continuance of rights and obligations of the PARTIES
under any other provision of this AGREEMENT.
10.3 Return of Materials. Pursuant to Section 4.5 ("Return of CONFIDENTIAL
INFORMATION"), upon any termination of the COLLABORATIVE RESEARCH
hereunder, each PARTY as the "LICENSOR PARTY" shall promptly return
CONFIDENTIAL INFORMATION of such other PARTY as the "LICENSEE PARTY".
23
10.4 Terms of Patent Licenses. Unless otherwise terminated pursuant to Section
10.5 ("LICENSEE PARTY Termination of Licenses") or Section 10.6 ("LICENSOR
PARTY Termination of Licenses"), the licenses to PATENT RIGHTS granted
hereunder will continue on a country-by-country basis until the date of
expiration of the last to expire patent included within PATENT RIGHTS in
each such country.
10.5 LICENSEE PARTY Termination of Licenses. The LICENSEE PARTY may at any time
terminate any or all licenses granted pursuant to this AGREEMENT on a
patent-by-patent and country-by-country basis upon thirty (30) days prior
written notice to the LICENSOR PARTY. Any such termination shall not
relieve such PARTY of the obligation to fulfill any RESEARCH WORK PLAN
hereunder.
10.6 LICENSOR PARTY Termination of Licenses. Unless sooner terminated, LICENSOR
PARTY shall have the right to terminate the licenses and rights granted to
LICENSEE PARTY in any country under this AGREEMENT in the event that after
the FIRST COMMERCIAL SALE of LICENSEE PARTY PATENT-BASED PRODUCTS AND/OR
LICENSEE PARTY PATENT-BASED SERVICES in such country there is a continuous
two (2) year period in which no LICENSEE PARTY PATENT-BASED PRODUCTS AND/OR
LICENSEE PARTY PATENT-BASED SERVICES are sold in such country, provided
that such sale is not prevented by force majeure, government regulation or
intervention, or institution of a lawsuit by a third party.
10.7 Default on Licensing Obligations. If either PARTY shall materially default
in performing any of its obligations concerning licenses under this
AGREEMENT, the non-defaulting PARTY may give notice of the default to the
defaulting PARTY. Unless such default is corrected within sixty (60) days
after such notice, the notifying PARTY may terminate the pertinent article
or sections of this AGREEMENT upon thirty (30) days prior written notice,
unless the breach is disputed by the PARTY notified of default, in which
case the issue is to be settled in accordance with Section 11.3 ("Choice of
Law; Arbitration"). Any termination of the pertinent articles or sections
shall not affect the continuance of rights and obligations of the PARTIES
under any other provision of this AGREEMENT.
10.8 LICENSEE PARTY Right to Sell Inventory. For a period of one (1) year after
any termination of any license hereunder, LICENSEE PARTY shall be entitled
to finish any work-in-progress and to sell any completed inventory of
LICENSEE PARTY PATENT-BASED PRODUCTS AND/OR LICENSEE PARTY PATENT-BASED
SERVICES covered by this AGREEMENT so long as LICENSEE PARTY complies with
the applicable terms and conditions as set forth in this AGREEMENT.
10.9 Effect of Termination on Sublicenses. In the event that the licenses
granted hereunder are terminated, any related sublicenses granted by
LICENSEE PARTY shall remain in full force and effect, provided that the
SUBLICENSEE is not then in breach of its sublicense agreement and the
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SUBLICENSEE agrees to be bound to LICENSOR PARTY as the licensor under the
terms and conditions of the sublicense agreement.
ARTICLE 11. MISCELLANEOUS
11.1 Entire AGREEMENT. This AGREEMENT constitutes the entire understanding
between the PARTIES with respect to the subject matter hereof, and
supersedes and replaces all prior agreements, understandings, writing, and
discussions between the PARTIES relating to such subject matter.
11.2 Representatives. In order to facilitate implementation of this AGREEMENT,
NEOGENOMICS and CIPHERGEN designate certain individuals to act on their
behalf with respect to this AGREEMENT for specific matters in accordance
with Appendix C ("Representatives").
11.3 Choice of Law; Arbitration.
(a) This AGREEMENT shall be governed by and construed and interpreted in
accordance with the laws of California and the United States of
America.
(b) For any and all claims, disputes, or controversies arising under, out
of, or in connection with this AGREEMENT, including any dispute
relating to patent validity or infringement, which the PARTIES shall
be unable to resolve within sixty (60) days, the PARTY raising such
dispute shall promptly advise the other PARTY of such claim, dispute
or controversy in a writing that describes in reasonable detail the
nature of such dispute. By not later than ten (10) business days after
the recipient has received such notice of dispute, each PARTY shall
have selected for itself a representative who shall have the authority
to bind each such PARTY and shall additionally have advised the other
PARTY in writing of the name and title of such representative. By not
later than twenty (20) business days after the date of such notice of
dispute, such representatives shall schedule a date for engaging in an
alternative dispute resolution ("ADR") process. Thereafter, the
representatives of the PARTIES shall engage in good faith in an ADR
process. If the representatives of the PARTIES have not been able to
resolve the dispute within thirty (30) business days after the
termination of the ADR, the PARTIES shall have the right to pursue any
other remedies legally available to resolve such dispute in either the
Courts of California or in the United States District Courts for
California, to whose jurisdiction for such purposes NEOGENOMICS and
CIPHERGEN each irrevocably consents and submits. Notwithstanding the
foregoing, nothing in this Section 11.3 ("Choice of Law; Arbitration")
shall be construed to waive any rights or timely performance of any
obligations existing under this AGREEMENT.
11.4 Waiver. This AGREEMENT may be amended and any of its terms and conditions
may be waived only by a written instrument executed by both PARTIES or, in
the case of a waiver, by the PARTY waiving compliance. No waiver by either
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PARTY of any condition or term shall constitute a continuing waiver of such
condition or term or a waiver of any other condition or term.
11.5 Successors. This AGREEMENT shall be binding upon and inure to the benefit
of and be enforceable by the PARTIES hereto and their respective successors
and permitted assigns.
11.6 Force Majeure. Any delays in or failures of performance by either PARTY
under this AGREEMENT shall not be considered a breach of this AGREEMENT if
and to the extent caused by occurrences beyond the reasonable control of
the PARTY affected, including but not limited to: Acts of God; acts,
regulations or laws of any government; strikes or other concerted acts of
workers; fires; floods; explosions; riots; wars; rebellion; terrorist acts;
and sabotage; and any time for performance hereunder shall be extended by
the actual time of delay caused by such occurrence.
11.7 Publicity. Neither PARTY shall use the name of the other or of any staff
member, employee or student or any adaptation thereof in any advertising,
promotional or sales literature or publicity without the prior written
approval of; for NEOGENOMICS, _______________________; and for CIPHERGEN,
Vice President of Business Development.
11.8 Assignment. This AGREEMENT shall not be assignable by either PARTY without
the other PARTY's written consent, except that each PARTY without approval
by the other PARTY, may assign or transfer its interest or any part thereof
under this AGREEMENT to a wholly-owned subsidiary or partnership of which
such PARTY is the general partner or any assignee or purchaser of the
portion of such PARTY's business associated with the licenses and rights
granted under this AGREEMENT. In the event of any such transfer, the
transferee shall assume and be bound by the provisions of this AGREEMENT.
11.9 Severability of Provisions. If any provision of this AGREEMENT is or
becomes invalid, is ruled illegal by any court of competent jurisdiction or
is deemed unenforceable under then current applicable law from time to time
in effect during the term hereof, the remainder of this AGREEMENT shall not
be affected thereby provided that neither PARTY's rights under this
AGREEMENT are materially affected. Furthermore, in lieu of each such
provision that is invalid, illegal, or unenforceable, the PARTIES shall
amend this AGREEMENT to substitute or add a valid, legal and enforceable
provision that shall be as similar as possible in economic and business
objectives as intended by the PARTIES to such invalid, illegal or
enforceable provision.
11.10 Notices. Any notice or communication required by this AGREEMENT shall be
deemed made if mailed first class postage prepaid to the individuals so
designated, except for notices pertaining to breach or termination, which
shall be made by prepaid, first class, certified mail, return receipt
requested.
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IN WITNESS WHEREOF, NEOGENOMICS AND CIPHERGEN have each caused this instrument
to be executed.
NEOGENOMICS, INC.
By: __________________________ Date:_________________________
Name:
Title:
CIPHERGEN BIOSYSTEMS, INC.
By: ___________________________ Date: _________________________
Name: Robert Maurer
Title: Vice President of Business Development
27
APPENDIX A
TECHNOLOGY
The discovery, validation, and characterization of novel biomarkers for
diagnostic or therapeutic uses in the treatment of preeclampsia/ toxemia.
28
APPENDIX B
RESEARCH WORK PLANS
29
WORKPLAN #1
Type of Study: Study of Preeclampsia/ Toxemia
Details of Study: This workplan describes the initial discovery phase
of a biomarker discovery project. Biomarker validation and assay
development (such as a diagnostic) are dependent on the results
of the initial discovery phase and therefore are beyond the scope
of this workplan. The initial discovery phase of the biomarker
discovery project will encompass the acquisition by Neogenomics
of clinical specimens (serum), both disease and control, as
determined by the principal investigators of the project. The
specimens will be processed using standard serum fractionation
protocols and additional protocols if indicated. These procedures
will be performed on a robot. Ciphergen will provide up to one
week of on-site technical assistance performing the profiling
protocols and using the robot for said purpose. Data will be
acquired using the ProteinChip(R)system. Ciphergen will provide
oversight of the data analysis and, at its discretion, utilize
multiple analytical tools to determine the optimal set of
biomarkers leading to classification of pre-eclampsia. The
principal investigators of this study will determine whether to
pursue these biomarkers into the next phases of development. If
such a decision is made, additional workplans covering those
tasks will be drawn up.
Estimated Term of Work: 4 to 6 months
Contributions: CIPHERGEN shall provide technical assistance and
data analysis assistance and will provide $100,000 to
NEOGENOMICS in the purchase of CIPHERGEN's
ProteinChip(R)arrays and related consumables at then-current
user pricing. NEOGENOMICS covenants to purchase a full
$100,000 on CIPHERGEN's ProteinChip(R)arrays and related
consumables within 6 months of the EFFECTIVE DATE of the
AGREEMENT.
NEOGENOMICS will supply samples, clinical information,
laboratory personnel, and laboratory equipment (including a
30
Biomarker system and robotics system purchased previously
from CIPHERGEN) for the performance of these studies.
IN WITNESS WHEREOF, NEOGENOMICS AND CIPHERGEN have each caused this instrument
to be executed.
NEOGENOMICS, INC.
By: __________________________ Date:_________________________
Name:
Title:
CIPHERGEN BIOSYSTEMS, INC.
By: ___________________________ Date: _________________________
Name: Robert Maurer
Title: Vice President of Business Development
31
APPENDIX C
REPRESENTATIVES
The PARTIES' respective representatives with respect to certain matters shall be
as follows:
(a) With respect to the identification of CONFIDENTIAL INFORMATION, for
NEOGENOMICS, __________________________________ and for CIPHERGEN,
__________________________________.
(b) With respect to matters concerning the conduct of COLLABORATIVE
RESEARCH, budgets, manuscripts for publication, written transmittal of
RESEARCH RESULTS and MATERIALS: for NEOGENOMICS
______________________; for CIPHERGEN, Vice President for Research and
Development.
(c) With respect to any RESEARCH WORK PLAN appended hereto, all royalty
payments, the form of any Confidentiality AGREEMENT to be signed: for
NEOGENOMICS, Vice President for Administration and Finance; for
CIPHERGEN, Vice President of Business Development.
(d) With respect to any amendment of or waiver under this AGREEMENT, any
written notice or other communication pertaining to the AGREEMENT: for
NEOGENOMICS, Vice President for Administration and Finance; for
CIPHERGEN, Vice President of Business Development.
The foregoing designations may be superseded from time to time by
alternative designations made by: for NEOGENOMICS, President; for
CIPHERGEN, Chief Executive Officer.
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APPENDIX D
ANTICIPATED MATERIALS
33
APPENDIX E
PATENT RIGHTS
34