SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of Earliest Event Reported): January 28, 2000
LEXON, INC.
(Exact name of registrant as specified in its charter)
Oklahoma 0-26915 73-1533326
(State of incorporation) (SEC File Number) (IRS Employer ID No.)
8908 South Yale Avenue, Suite 409
Tulsa, Oklahoma 74137
918-492-4125
(Address and telephone number of
principal executive office)
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Item 2. Acquisition or Disposition of Assets
On January 29, 2000, Lexon purchased 100% of the common stock of Cancer
Diagnostic, Inc. ("CDI"), a Florida corporation, according to the terms of a
Stock Purchase Agreement, attached as Exhibit 10.1. CDI owns the exclusive
worldwide license to the Telomerase Assay, a patent-pending blood test for lung
cancer being developed at the University of Maryland, Baltimore ("UMB"). A copy
of the license agreement is attached as Exhibit 10.2. CDI is party to a two-year
sponsored research agreement, attached as Exhibit 10.3, to fund the development
and commercialization of the Telomerase Assay for the ELISA format at the
University of Maryland, Baltimore.
Lexon purchased all of the outstanding common stock of CDI from CDI's
sole shareholder UTEK Corporation ("UTEK") for a total of $200,000. Lexon paid
$50,000 in cash and gave UTEK a secured promissory note for $150,000, attached
as Exhibit 10.4. The secured promissory note bears interest at 10% per year and
is payable in three monthly installments of $50,000 each, due on April 30, May
31 and June 30, 2000. The interest rate will increase to 12% per year on any
unpaid principal balance after June 30, 2000. To secure the promissory note,
Lexon pledged all of the shares of common stock of CDI pursuant to the Pledge
and Security Agreement, attached as Exhibit 10.5. The shares were place in
escrow and will be released upon payment in full of Lexon's obligation to UTEK.
CDI was formed by UTEK for the purpose of transferring the Telomerase
Assay technology from the University of Maryland, Baltimore to the private
sector. CDI has had no operations during the period of its existence. Therefore,
no proforma financial information of CDI has been presented.
UTEK, a Florida corporation, is a technology merchant that specializes
in the transfer of technology from universities and government research
facilities to the private sector. UTEK has relationships with major universities
and government research facilities in the U.S. and in Europe. UTEK owns
approximately 1,000,000 shares (or about 14.7% of the outstanding shares) of
Lexon Common Stock.
By reason of the stock purchase, CDI is a wholly-owned subsidiary of
Lexon. CDI owns the exclusive worldwide license to the Telomerase Assay. Under
the terms of the sponsored research agreement, CDI must pay $124,537 to UMB on
or before January 1, 2001. CDI is also obligated under the terms of the license
agreement to pay a royalty of 4% of Net Sales of products sold by Lexon. The
license agreement provides for minimum annual royalties for the life of the
agreement, which coincides with the life of the last to expire patent covering
the licensed technology. The minimum annual royalties range from $2,500 per year
beginning in 2002 to a maximum of $4,000 per year beginning in 2006 and
continuing each year thereafter for the life of the Agreement. In addition, the
Agreement provides for royalties of 2% of Net Sales of products sold by
sublicensees and 50% of all consideration received by CDI for up-front,
milestone or other payments from sublicensees.
The Agreement and Plan of Merger between Lexon and CDI was cancelled by
agreement of the parties. The consulting agreement between Lexon and UTEK
whereby Lexon agreed to pay UTEK $132,000 was also cancelled by agreement of the
parties.
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ITEM 6 EXHIBITS AND REPORTS ON FORM 8-K
Exhibit Description
10.1 Stock Purchase Agreement between Registrant and Cancer
Diagnostics, Inc. Dated January 28, 2000
10.2 License Agreement between Cancer Diagnostics, Inc. and
University of Maryland, Baltimore dated August 27, 1999
10.3 Sponsored Research Agreement Cancer Diagnostics, Inc. and
University of Maryland, Baltimore dated August 27, 1999 and
amended September 23, 1999
10.4 Secured Promissory Note dated January 28, 2000
10.5 Pledge and Security Agreement dated January 28, 2000
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SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
LEXON, INC.
/s/ GIFFORD M. MABIE
President
Date: February 14, 2000
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STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement ("Agreement") is entered into this 28th
day of January, 2000 by and between LEXON, INC., an Oklahoma corporation
("LEXON"), and UTEK Corporation, a Florida corporation ("UTEK") with respect to
CANCER DIAGNOSTICS, INC., a Florida corporation ("CDI"),
WHEREAS, UTEK is the sole shareholder of CDI; and
WHEREAS, Dr. Jeffrey Strovel and Dr. Judith Stamberg are the inventors
of and Dr. Ed Highsmith, PhD, is the project leader of a team of researchers at
the University of Maryland, Baltimore ("UM") that is developing a new
proprietary blood screen test, technology and related processes for the
identification of Telomerase Assay as a marker for lung and perhaps other forms
of cancer ("Invention") covered by US Provisional Patent Application Nos.
60/074,793; 09/250,336 and 99/03302, each of which is dated February 16,1999
("Patent Applications"), the ownership thereof having been assigned to the UM as
described more precisely in Schedule 2.01(i); and
WHEREAS, CDI and UM have entered into an Exclusive License Agreement
("License") which will grants CDI the exclusive worldwide right to manufacture,
market and commercialize products covered by the Invention attached hereto as
Schedule 2.01(e)(5) hereto and which is full force and effect; and
WHEREAS, CDI and UM have enter into a Sponsored Research Agreement
("Research Agreement") which provides for the funding of certain continued
research, development and completion of an ELISA based blood screening test
which will detect and measure to presence of the Telomerase Assay and related
research which is attached hereto as Schedule 2.01(e)(6) and which is full force
and effect; and
WHEREAS, UTEK desires to sell and LEXON desires to purchase all the
issued and outstanding shares of equity securities of CDI in accordance with the
terms of this Agreement.
NOW, THEREFORE, in consideration of the premises and for other good and
valuable consideration, the receipt, adequacy and sufficiency of which are
hereby acknowledged, the parties agree as follows:
ARTICLE I
PURCHASE AND SALE OF SHARES
1.01. Purchase and Sale of the Shares. Upon execution of this
Agreement, LEXON purchases and UTEK sells, transfers, conveys and delivers to
LEXON certificates representing all of the issued and outstanding shares of
equity securities of CDI, duly endorsed for transfer to LEXON in exchange for
the Purchase Price. The certificates representing the Shares shall be executed
for transfer to LEXON or in blank and delivered
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to the Escrow Agent in accordance with the terms and conditions of the Pledge
Agreemend as defined in Paragraph 1.02 below.
1.02. Purchase Price. The purchase price for the Shares is $200,000,
payable $50,000 in cash upon execution of this Agreement and $150,000 in 3 equal
principal installments of $50,000 each, payable on or before April 30, 2000, May
31, 2000 and June 30, 2000 in accordance with the terms of the Promissory Note
(" Note") which is attached hereto as Schedule 1.02(a) and delivered by LEXON
upon the execution of this Agreement. The Note is secured by a Pledge of the
Shares pursuant to the Pledge and Security Agreement ("Pledge Agreement") which
is attached hereto as Schedule 1.02(b) and pursuant to which the Shares will be
held in escrow by Sam Reiber, Esquire, as Escrow Agent, and delivered to LEXON
upon full payment of the Purchase Price. LEXON shall be entitled to all rights
as a shareholder of CDI while the Shares are pledged and the Note is not in
default in accordance with the Pledge Agreement.
1.03. Directors and Officers of CDI. Effective upon execution of this
Agreement, all the officers and directors of CDI shall be deemed to have
resigned; Gifford Mabie, Thomas Coughlin, and Rhonda Vincent shall be elected
directors of CDI ; and Gifford Mabie shall be elected President of CDI, Thomas
Coughlin shall be elected Vice President of CDI, Rhonda Vincent shall be elected
Vice President, Treasurer and Secretaryof CDI, and Frederick K. Slicker shall be
elected Vice President and Assistant Secretary of CDI.
1.04. Cancellation of Merger Agreement. Each of the parties
acknowledges and agrees that the execution of this Agreement and the closing of
the purchase and sale of the Shares of CDI hereunder terminates the rights,
duties, liabilities and obligations of the parties under that certain Agreement
and Plan of Merger dated August 5, 1999 ("Merger Agreement") for all purposes
and that this Merger Agreement shall be null and void. LEXON agrees to execute
the Release attached hereto as Schedule 1.04.
1.05 Cancellation of the UTEK Consulting Agreement. Each of the parties
acknowledges and agrees that the execution of this Agreement and the closing of
the purchase and sale of the Shares of CDI hereunder terminates the rights,
duties, liabilities and obligations of the parties under that certain Consulting
Agreement dated August 4, 1999 ("UTEK Consulting Agreement").
1.06 Indemnification. LEXON and CDI each agrees to indemnify UTEK and
all its directors, officers and representatives to the full extent of the law
for actions taken and omitted by CDI from and after the execution of this
Agreement reason of their good faith efforts for and on behalf of CDI, including
but not limited to all payments, duties and liabilities of CDI under the
Research Agreement and the License as set forth therein.
1.04. Closing. The Closing will take place upon execution of this
Agreement.
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ARTICLE II
REPRESENTATIONS AND WARRANTIES
2.01. General Representations and Warranties of UTEK. UTEK represents
and warrants to LEXON that the facts set forth below are true and correct:
(a) Organization. CDI is a corporation duly organized, validly existing
and in good standing under the laws of the State of Florida, is qualified to do
business as a foreign corporation in each other jurisdiction in which the
conduct of its business or the ownership of its properties require such
qualification, and has all requisite power and authority to conduct CDI's
business and operate properties.
(b) Authorization. The execution of this Agreement and the consummation
of the other transactions contemplated hereby have been duly authorized by the
Board of Directors and Shareholders of UTEK; no other corporate action on its
part is necessary in order to execute, deliver, consummate and perform its
obligations hereunder; and UTEK has all requisite corporate and other authority
to execute and deliver this Agreement and consummate the transactions
contemplated hereby.
(c) Capitalization. The authorized capital of CDI consists of 1,000
shares of common stock, no par value per share; at the date hereof and at the
Closing 1,000 shares of its common stock are issued and outstanding and owned by
UTEK, and no shares are held in CDI's treasury. All issued and outstanding
shares of common stock of CDI have been duly and validly issued, are fully paid
and non-assessable shares and have not been issued in violation of any
preemptive or other rights of any other person or any applicable laws. There are
no outstanding options, warrants, commitments, calls or other rights or
agreements requiring it to issue any shares of CDI common stock or securities
convertible into shares of the common stock of CDI to anyone for any reason
whatsoever.
(d) Ownership of the Shares. The Shares are owned of record and
beneficially by UTEK, free and clear of all liens, claims, encumbrances, and
rights of any other person or entity of any kind, character or description.
(e) Binding Effect. The execution, delivery, performance and
consummation of the transactions contemplated hereby does not violate any
obligation of UTEK; and this Agreement constitutes a legal, valid and binding
obligation of UTEK, enforceable in accordance with its terms, except as the
enforcement may be limited by bankruptcy, insolvency, moratorium, or similar
laws affecting creditor's rights generally and by the availability of injunctive
relief, specific performance or other equitable remedies.
(e) Litigation Relating to this Agreement. There are no suits, actions
or proceedings pending against CDI or UTEK or, to the knowledge of UTEK,
threatened which seek to enjoin the transactions contemplated by this Agreement
or which, if adversely
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decided, would have a materially adverse effect on the business, results of
operations, assets, prospects of CDI or upon the Patents, the Patent
Applications, the License, or the Research Agreement.
(f) No Conflicting Agreements. Neither the execution and delivery of
this Agreement nor the fulfillment of or compliance by UTEK with the terms or
provisions hereof will result in a breach of the terms, conditions or provisions
of, or constitute a default under, or result in a violation of, the corporate
charter or bylaws of CDI, the Patent Applications, the License, the Research
Agreement, or any agreement, contract, instrument, order, judgment or decree to
which either UTEK or CDI is a party or by which UTEK or CDI or any of their
respective assets are bound, or violate any provision of any applicable law,
rule or regulation or any order, decree, writ or injunction of any court or
governmental entity which materially affects the Shares or the assets or
business or business of CDI.
(g) Consents. No consent from or approval of any court, governmental
entity or any other person is necessary in connection with execution and
delivery of this Agreement by UTEK or CDI or performance of the obligations of
UTEK hereunder or under any other agreement to which either CDI or UTEK is a
party; and the consummation of the transactions contemplated by this Agreement
will not require the approval of any entity or person or result in the
modification, cancellation, termination or other change in the Patent
Applications, the License, the Research Agreement or any other material right,
privilege, license or agreement relating to CDI or its assets or business.
(h) Title to Assets. CDI has good and marketable title to its assets
(tangible and intangible), free and clear of all liens, claims, charges,
mortgages, options, restrictions, security agreements and other encumbrances of
every kind or nature whatsoever, including the duly executed and delivered
License and Research Agreement.
(e) The Patent Applications, the License and the Research Agreement.
(1) To the best knowledge of UTEK, the Patent Applications
listed in Schedule 2.01(i) are pending and are being
prosecuted in good faith with diligence; and
(2) To the best knowledge of UTEK, without having made an
independent inquiry, the Invention does not and will
not infringe the intellectual or other rights of
another. This representation is not a representation
that there are no infringing intellectual rights of any
other but is a representation only that UTEK has no
knowledge thereof; and LEXON acknowledges that neither
UTEK nor CDI has conducted an independent investigation
to determine whether the Invention infringes the rights
of any other party or that the Invention itself is
useful or marketable; and
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(3) The Invention is owned by UM, and UM has all right,
power, authority, ownership and entitlement to file,
prosecute and maintain in effect the Patents and Patent
Applications with respect to the Invention listed in
Schedule 2.01(i) hereto and to grant the License to
CDI; and
(4) Dr. Jeffrey Strovel and Dr. Judith Stamburg are the
only Inventors of the Invention; and each has assigned
all of his and her rights, titles and interests in the
Invention to UM; and
(5) The License is in full force and effect and is legal,
valid, binding and enforceable in accordance with its
terms; and
(6) The Research Agreement is in full force and effect and
is legal, valid, binding and enforceable in accordance
with its terms.
(j) Liabilities of CDI. CDI has no assets, no liabilities of any kind,
character or description except those created by the License or the Research
Agreement. LEXON will not have any liabilities be reason of it ownership of the
Shares, except for the liabilities of LEXON to UTEK hereunder and under the
License and the Research Agreement.
(k) Condition of Tangible Assets. All of the tangible assets of CDI
have been operated in accordance with customary operating practices generally
acceptable in its industry to which and have been maintained and are in good
working order and repair in the ordinary course of business, subject only to
reasonable and ordinary wear and tear.
(l) Financial Statements. The unaudited financial statements of CDI
attached as Schedule 2.01(l) present fairly its financial position and the
results of its operations on the dates and for the periods shown therein. There
are no outstanding obligations or liabilities of CDI, except as specifically set
forth in the CDI financial statements, the License and the Research Agreement.
(m) Taxes. All returns, reports, statements and other similar filings
required to be filed by CDI with respect to any federal, state, local or foreign
taxes, assessments, interests, penalties, deficiencies, fees and other
governmental charges or impositions have been timely filed with the appropriate
governmental agencies in all jurisdictions in which such tax returns are
required to be filed; all such tax returns properly reflect all liabilities of
CDI for taxes for the periods, property or events covered thereby; and all
taxes, whether or not reflected on those tax returns, and all taxes claimed to
be due from CDI by any taxing authority, have been properly paid, except to the
extent contested in good faith by appropriate proceedings and reserves have been
established in its financial statements to the full extent if the contest is
adversely decided against it. CDI has not received any notice of
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assessment or proposed assessment in connection with any tax returns, CDI has
not extended or waived the application of any statute of limitations of any
jurisdiction regarding the assessment or collection of any taxes. There are no
tax liens (other than any lien which arises by operation of law for current
taxes not yet due and payable) on any of its assets. There is no basis for any
additional assessment of taxes, interest or penalties. CDI has made all deposits
required by law to be made with respect to employees' withholding and other
employment taxes, including without limitation the portion of such deposits
relating to taxes imposed upon CDI.
(n) Absence of Certain Changes or Events. Since August 4, 1999, CDI
has not:
(i) Sold, encumbered, assigned or transferred any of its
material assets or its interest in the Patents, the Patent
Applications, the Research Agreement, the License or any
other material asset; or
(ii) Amended or terminated the License or the Research Agreement,
except for the amendment dated September 25, 1999 and as
otherwise specifically disclosed to LEXON: or
(iii) Suffered any material damage, destruction or loss; or
(iv) Received notice or has knowledge of any material adverse
effect on the Patents, the Patent Applications, the Research
Agreement or the License or any other material asset or
liability of CDI; or
(v) Made any commitments or agreements for capital expenditures
by CDI; or
(vi) Entered into any transaction or made any commitment of CDI
not disclosed to LEXON; or
(vii)Agreed to take any of the actions set forth in this
paragraph.
(o) Material Contracts. A complete and accurate copy of all material
agreements, contracts and commitments of CDI has been provided to LEXON and such
agreements as amended are in full force and effect. In addition:
(i) There are no outstanding unpaid promissory notes, mortgages,
indentures, deeds of trust, security agreements and other
agreements and instruments relating to the borrowing of
money by or any extension of credit to CDI; and
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(ii) There are no outstanding operating agreements, lease
agreements or similar agreements by which CDI is bound; and
(iii)The complete and executed License and the Research
Agreement and the Patent Applications with all schedules,
exhibits and amendments related thereto and all material
correspondence with the patent authorities relating thereto
have been provided to LEXON; and
(iv) There are no outstanding licenses to or from others of any
intellectual property and trade names; and
(v) There are no outstanding contracts or commitments to sell,
lease or otherwise dispose of any of the property of CDI.
(p) Compliance with Laws. CDI is in compliance with all applicable
laws, rules, regulations and orders promulgated by any federal, state or local
governmental body or agency relating to its business and operations.
(q) Litigation. There is no suit or action or any arbitration,
administrative, legal or other proceeding of any kind or character, pending or
threatened against CDI or the Patents, the Patent Applications, the License or
the Research Agreement affecting CDI's assets or business, and there is no
factual basis therefor.
(r) Employees. CDI has no employees. CDI is not a party to or bound by
any employment agreement or any collective bargaining agreement with respect to
any of the employees.
(s) Employee Benefit Plans. There are no employee benefit plans in
effect, and there are no outstanding or unfunded liabilities to employees of
CDI.
(t) Books and Records. The books and records of CDI are complete and
accurate in all material respects, present fairly its business and operations,
have been maintained in accordance with good business practices, and accurately
reflect in all material respects its business, financial condition and
liabilities.
(u) No Broker's Fees. Neither CDI nor UTEK has not incurred any
finder's, broker's, investment banking, financial, advisory or other similar
fees or obligations for which LEXON shall be liable.
(v) Full Disclosure. All representations or warranties of UTEK are
true, correct and complete in all material respects. No statement made by UTEK
herein or in the exhibits and schedules hereto or any document delivered by UTEK
or on its behalf to LEXON pursuant to this Agreement contains an untrue
statement of material fact or omits to state all
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material facts necessary to make the statements therein not misleading in any
material respect.
Except as specifically set forth in this Agreement, UTEK and CDI make
no representations and extend no warranties of any kind, either expressed or
implied, including but not limited to warranties of merchantability, fitness for
a particular purpose, non-infringement and validity of UM's Patent Rights as set
forth in the documents referenced herein.
2.02. General Representations and Warranties of LEXON. LEXON represents
and warrants to UTEK that the facts set forth are true and correct:
(a) Organization. LEXON is a corporation duly organized, validly
existing and in good standing under the laws of the State of Oklahoma, is
qualified to do business as a foreign corporation in each other jurisdiction in
which the conduct of its business or the ownership of its properties require
such qualification, and has all requisite power and authority to conduct its
business and operate properties.
(b) Authorization. The execution of this Agreement, the Note, and the
Pledge Agreement and the consummation of the transactions contemplated hereby
have been duly authorized by the Board of Directors and Shareholders of LEXON;
no other corporate action on its part is necessary in order to execute, deliver,
consummate and perform its obligations hereunder; and it has all requisite
corporate and other authority to execute and deliver this Agreement and
consummate the transactions contemplated hereby.
(c) Binding Effect. The execution, delivery, performance and
consummation of the transactions contemplated hereby will not violate any
obligation to which LEXON is a party and will not create a default hereunder;
and this Agreement constitutes a legal, valid and binding obligation of LEXON,
enforceable in accordance with its terms, except as the enforcement may be
limited by bankruptcy, insolvency, moratorium, or similar laws affecting
creditor's rights generally and by the availability of injunctive relief,
specific performance or other equitable remedies.
(d) Litigation Relating to this Agreement. There are no suits, actions
or proceedings pending or to its knowledge threatened which seek to enjoin the
transactions contemplated by this Agreement or which, if adversely decided,
would have a materially adverse effect on its business, results of operations,
assets, prospects or the results of its operations of LEXON.
(e) No Conflicting Agreements. Neither the execution and delivery of
this Agreement nor the fulfillment of or compliance by LEXON with the terms or
provisions hereof will result in a breach of the terms, conditions or provisions
of, or constitute a default under, or result in a violation of, its corporate
charter or bylaws, or any agreement, contract, instrument, order, judgment or
decree to which it is a party or by which it or any of the assets
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is bound, or violate any provision of any applicable law, rule or regulation or
any order, decree, writ or injunction of any court or governmental entity which
materially affects its assets or business.
(f) Consents. No consent from or approval of any court, governmental
entity or any other person is necessary in connection with its execution and
delivery of this Agreement and performance of the obligations of LEXON hereunder
or under any other agreement to which LEXON is a party; and the consummation of
the transactions contemplated by this Agreement will not require the approval of
any entity or person in order to prevent the termination of any material right,
privilege, license or agreement relating to LEXON or its assets or business.
(g) Compliance with Laws. LEXON is in compliance with all applicable
laws, rules, regulations and orders promulgated by any federal, state or local
governmental body or agency relating to its business and operations. LEXON owns
all franchises, licenses, permits, easements, rights, applications, filings,
registration and other authorizations which are necessary for it to conduct
business, all of which are valid and in full force and effect, and it is in full
compliance therewith.
(h) No Broker or Other Fees. LEXON has incurred no finder's, broker's,
investment banking, financial, advisory or other similar fees in connection with
this Agreement.
(i) Full Disclosure. All representations or warranties of LEXON are
true, correct and complete in all material respects. No statement made by LEXON
herein or in the exhibits and schedules hereto or any document delivered by it
or on its behalf to UTEK pursuant to this Agreement contains an untrue statement
of material fact or omits to state all material facts necessary to make the
statements therein not misleading in any material respect.
2.03. Investment Representations of LEXON. LEXON represents and
warrants to UTEK that it has such knowledge and experience in financial and
business matters as to be capable of evaluating the risks and merits of an
investment in the Shares. It is able to bear the economic risk of the investment
in the Shares, including the risk of a total loss of the investment in the
Shares. The acquisition of the Shares is for its own account and is for
investment. Except as permitted by law, it has a no present intention of
selling, transferring or otherwise disposing in any way of all or any portion of
the Shares. All information that it has supplied to UTEK in connection with this
Agreement is true and correct in all material respects. It acknowledges that an
investment in the Shares involves a very high degree of risk. It has conducted
all investigations and due diligence concerning CDI which it deems appropriate,
and it has found all such information obtained fully acceptable. It is
knowledgeable about the prospects, business, financial condition, operations and
possible acquisitions of CDI. It has had an opportunity to ask questions of the
officers and directors of CDI and UTEK concerning the Shares and the business
and financial condition of and prospects for CDI, and the officers and directors
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of CDI and UTEK have adequately answered all questions asked and made all
relevant information requested available to it. It understands and agrees that
the following restrictions and limitations are applicable to the purchase,
resale and distribution of the Shares pursuant to applicable securities laws.
ARTICLE III
ARBITRATION
In the event a dispute arises with respect to the
interpretation or effect of this Agreement or concerning the rights or
obligations of the parties hereto, the parties agree to negotiate in good faith
with reasonable diligence in an effort to resolve the dispute in a mutually
acceptable manner. Failing to reach a resolution thereof, either party shall
have the right to submit the dispute to be settled by arbitration under the
Commercial Rules of Arbitration of the American Arbitration Association. The
parties agree that all arbitrations shall be conducted in Tampa, Florida, unless
the parties mutually agree to the contrary. The cost of arbitration shall be
borne by the party against whom the award is rendered or, if in the interest of
fairness, as allocated in accordance with the judgment of the arbitrators. All
awards in arbitration made in good faith and not infected with fraud or other
misconduct shall be final and binding.
ARTICLE IV
MISCELLANEOUS
No party may assign this Agreement or any right or obligation
of it hereunder without the prior written consent of the other parties hereto.
No permitted assignment shall relieve a party of its obligations under this
Agreement without the separate written consent of the other parties. This
Agreement shall be binding upon and enure to the benefit of the parties and
their respective permitted successors and assigns. Each party agrees that it
will comply with all applicable laws, rules and regulations in the execution and
performance of its obligations under this Agreement. This Agreement shall be
governed by and construed in accordance with the laws of the State of Florida.
This document constitutes a complete and entire agreement among the parties with
reference to the subject matters set forth herein. No statement or agreement,
oral or written, made prior to or at the execution hereof and no prior course of
dealing or practice by either party shall vary or modify the terms set forth
herein without the prior consent of the other parties hereto. This Agreement may
be amended only by a written document signed by the parties. Notices or other
communications required to be made in connection with this Agreement shall be
delivered to the parties at the address set forth below or at such other address
as may be changed from time to time by giving written notice to the other
parties. This Agreement may be executed in multiple counterparts, each of which
shall constitute one and a single Agreement.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed by a duly authorized officer this 28th day of January, 2000.
LEXON, INC. UTEK CORPORATION
By /s/ GIFFORD MABIE By /s/ CLIFFORD GROSS
Gifford Mabie, President Clifford Gross, Chairman and CEO
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EXHIBIT 10.2
MASTER LICENSE AGREEMENT
effective August 23, 1999
between
University of Maryland, Baltimore
And
Cancer Diagnostics, Inc.
Table of Contents
Article 1 Background p. 2
Article 2 Definitions p. 2
Article 3 Grant of License p. 4
Article 4 CDI Responsibilities p. 6
Article 5 Consideration p. 7
Article 6 Data p. 9
Article 7 Patent Prosecution and Publication p. 9
Article 8 Confidentiality p. 11
Article 9 Reports and Accounting p. 12
Article 10 Infringement p. 13
Article 11 Term and Termination p. 14
Article 12 Assignability p. 15
Article 13 Applicable Law; Waiver p. 16
Article 14 Integration and Interpretation p. 16
Article 15 Representations and Warranties p. 16
Article 16 Claims, Indemnification and Insurance p. 17
Article 17 Consent Required for Advertising p. 18
Article 18 Dispute Resolution p. 18
Article 19 Miscellaneous p. 20
Signatures p. 20
Exhibit A-1 p. 21
Exhibit A-2 p. 22
Exhibit B p. 23
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LICENSE AGREEMENT
for "Telomerase Assay of Body Fluids for Cancer Screening and Assessment of
Disease Stage and Prognosis" (and other Patents)
This License Agreement ("Agreement") effective August 23, 1999 ("Effective
Date") is made by and between the University of Maryland, Baltimore ("UM"), a
constituent institution of the University System of Maryland, an agency of the
State of Maryland, having an address at 520 West Lombard Street, Baltimore,
Maryland 21201, and Cancer Diagnostics, Inc. ("CDI"), a corporation of Florida,
with its principal place of business at 202 Wheeler Street, Plant City, Florida
33566.
ARTICLE I - BACKGROUND
1.01 As a public research and education institution, UM is interested in
licensing Patent Rights (as defined below) to benefit the public by development
and marketing of new and useful products and methods.
1.02 Valuable inventions, comprised of the Patent Rights identified in
Exhibit A-1, and generally known as "Telomerase Assay of Body Fluids for Cancer
Screening and Assessment of Disease Stage and Prognosis""("Inventions") have
been made by UM Personnel (as defined below).
1.03 Subject to certain rights retained by the federal government in
federally sponsored research, under UM policy UM owns all right, title, and
interest in and to said Patent Rights, which has been or will be confirmed by
the execution of an assignment from the Inventors to UM.
1.04 CDI desires to license the Patent Rights as set forth in this
Agreement.
ARTICLE 2 - DEFINITIONS
In this Agreement, the following terms have the meanings set forth in this
Article.
2.01 "Affiliate": Any entity which directly or indirectly controls, is
controlled by, or is under common control with CDI. "Control" means the right to
exercise more than 50% of the voting rights of a controlled corporation, limited
liability company, or partnership, or the power to direct or cause the direction
of the management or policies of any other controlled entity.
2.02 "CDI Data": Information arising out of or resulting from use of the
Patent Rights made by one or more employees of, or owned by, CDI or CDI's
Affiliates, and includes, without limitation, documents, drawings, models,
designs, data, memoranda, tapes, records, formulae and algorithms, in hard copy
form or in electronic form.
2.03 "CDI Improvement": Any invention or discovery arising out of or
resulting from use of the Patent Rights which is or may be patentable or
otherwise protected under law, made by one or more employees of, or owned by,
CDI or CDI's Affiliates.
2.04 "Combination Product": A product in a form containing one or more
Licensed Products and one or more active component(s) that is not a Licensed
Product.
2.05 "Confidential Information": Information relating to the subject matter
of the Patent Rights which has not been made public and includes, without
limitation, any documents, drawings, sketches, models, designs, data, memoranda,
tapes, records, formulae and algorithms, given orally, in
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hard copy form, or in electronic form, which CDI receives from UM or UM
Personnel, or UM or UM Personnel receives from CDI.
2.06 "CP Net Sales": That part of Net Sales attributable to sales of a
Combination Product.
2.07 "First Commercial Sale": The initial transfer of a Licensed Product
for compensation by CDI, an Affiliate or a Sublicensee to a Third Party.
Transfer of a Licensed Product for clinical testing occurring prior to the
issuance of any required regulatory approval for sale does not constitute First
Commercial Sale.
2.08 "Inventor(s)": Dr. Jeffrey Strovel, Dr. Judith Stamberg, Dr. Lynne
Abruzzo, and Dr. William E. Highsmith, Jr.
2.09 "Joint Data": Information arising out of or resulting from use of the
Patent Rights made by one or more employees of, or owned by, CDI of CDI's
Affiliates, and by one or more UM Personnel, or owned by, UM, including, without
limitation, documents, drawings, sketches, models, design, data, memoranda,
tapes, records, formulae and algorithms, in hard copy or electronic form.
2.10 "Joint Improvement": Any invention or discovery arising out of or
resulting from use of the Patent Rights which is or may be patentable or
otherwise protected under law, made by one or more employees of, or owned by,
CDI or CDI's Affiliates, and made by one or more employees of, or owned by, UM.
2.11 "Licensed Field": The use of Patent Rights for cancer diagnostics in
all fields.
2.12 "Licensed Product": Any product, including by not limited to a
Combination Product, which is covered by any claims in the Patents Rights or is
made using any Tangible Research Property.
2.13 "Net Sales": The gross sales revenues and fees billed by CDI, an
Affiliate or a Sublicensee, for the sale of Licensed Products, less the sum of
the following:
(1) customary trade, quantity and cash discounts actually
allowed and taken;
(2) sales of use taxes, excise taxes and customs duties and
other governmental charges included in the invoiced amount;
(3) outbound transportation, shipping and insurance, prepaid or
allowed, if separately itemized on the invoice to the customer;
(4) amounts actually allowed or credited on returns or rejections
of Licensed Products or billing errors; Net sales does not include any resales
of a Licensed Product after its sale by CDI, an Affiliate or a Sublicensee to a
Third Party purchaser. In computing Net Sales, (1) no deductions from gross
revenues and fees will be made for commissions paid to individuals, whether they
be with independent sales agencies or regularly employed on the payroll by CDI,
its Affiliate(s) or Sublicensee(s), or for cost of collections, and (2) Licensed
Products will be considered sold when billed out or invoiced, whichever is
first.
2.14 "Patent Expenses": All fees and charges of outside patent counsel
(whether or not paid by UM or reimbursed to UM) as well as all costs (including
fees, charges, and costs incurred before the Effective Date) in connection with
the preparation, filing, prosecution, issuance, reissuance, reexamination,
interference, and maintenance of all applications for patent or equivalent
protection for the Patent Rights, UM Improvements, and/or Joint Improvements.
2.15 "Patent Rights":
(a) U.S. and foreign patent applications and patents listed in
Exhibit A-1;
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(b) U.S. and foreign patents issuing from the applications listed
in Exhibit A-1, and from all divisions and continuations of these applications;
(c) Claims of U.S. and foreign continuation-in-part applications,
and of the resulting patents, which are directed to subject matter specifically
described in the U.S. and foreign applications listed in Exhibit A-1;
(d) Claims of all foreign patent applications, and of the
resulting patents, which are directed to subject matter specifically described
in the U.S. patents and patent applications described in (a), (b), or (c),
above; and
(e) Any reissues, reexaminations and extensions, or the foreign
equivalent of these, of U.S. and foreign patents described in (a), (b), (c), or
(d) above.
2.16 "Progeny": An unmodified descendant from biological material
identified in Exhibit B such as virus from virus, cell from cell, or organism
from organism.
2.17 "Research Agreement": The research agreement executed between UM and
CDI with an effective date of August 27, 1999.
2.18 "Sublicensee": A person or entity, including an Affiliate, to which
CDI transfers all or some of the Patent Rights.
2.19 "Tangible Research Property": Biological material, devices, software,
and other physical embodiments of Patent Rights listed in Exhibit B, and Progeny
and Unmodified Derivatives.
2.20 "Third Party": Any entity or person other than UM, CDI, an Affiliate
or a Sublicensee.
2.21 "UM Data": Information, including, without limitation, documents,
drawings, models, designs, data, memoranda, tapes, records, formulae and
algorithms, in hard copy form or in electronic form, made prior to the Effective
Date which is directly related to Patent Rights in the Licensed Field and
reasonably necessary for the practice of the Patent Rights by CDI or an
Affiliate under this Agreement.
2.22 "UM Improvement": An invention or discovery directly related to the
Patent Rights in the Licensed Field, reasonably necessary for the practice of
the Patent Rights by CDI or an Affiliate under this Agreement, which is or may
be patentable or otherwise protected under law, made by one or more UM
Personnel, or owned by UM.
2.23 "UM Personnel": Inventors employed by UM, and students, trainees, and
other persons using UM resources and subject to the UM patent policy.
2.24 "UM Rights in Improvements": UM Improvements and UM's joint interest
in Joint Improvements.
2.25 "Unmodified Derivatives": Substances created by CDI, its Affiliates or
Sublicensees which constitute unmodified functional subunits or products
expressed by biological material identified in Exhibit B, e.g., subclones of
unmodified cell lines, purified or fractionated subsets of biological material,
proteins express by DNA/RNA supplied by UM, or monoclonal antibodies secreted by
a hybridoma cell line.
ARTICLE 3 - GRANT OF LICENSE; OPTION
3.01 "Subject to rights of the United States under grants to UM and
pursuant to 35 U.S.C. Section 201 et seq. and all implementing regulations, and
subject to Section 3.02, UM grants to CDI, and CDI accepts, an exclusive
worldwide license under Patent Rights to make, have made, use,
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lease, offer to sell, sell and import the Licensed Products within the Licensed
Field for the term of this Agreement. This license includes the right to grant
sublicenses constituent with this Agreement.
3.02 UM specifically reserves the rights:
(a) to practice under the Patent Rights to make and use the
Licensed Products on a royalty-free basis solely for research and education;
(b) to provide information and material covered by the Patent
Rights to universities, colleges and other research or educational institutions,
but only for research and educational purposes and uses and not for any
commercial purposes or uses;
(c) to disseminate and publish the general scientific findings
from research related to Patent Rights, provided that CDI has had the
opportunity to review copies of all drafts relative to the use of Patent Rights
within the Licensed Field prior to submission for publications, as set forth in
Section 7.05 below; and
(d) to license the Patent Rights for applications outside the
Licensed Field.
3.03 CDI may transfer its rights to an Affiliate consistent with this
Agreement, provided CDI is responsible for the obligations of its Affiliate
relevant to this Agreement, including the payment of royalties, whether or not
paid to CDI by its Affiliate.
3.04 CDI may grant sublicenses consistent with this Agreement, provided CDI
is responsible for the obligations of its Sublicensees relevant to this
Agreement as if the operations were carried out by CDI, including the payment of
royalties, whether or not paid to CDI by its Affiliate.
3.05 CDI will identify its Affiliates and its Sublicensees under this
Agreement to UM by name, address and field of sublicense(both as to geography
and subject matter), and will promptly provide to UM a copy of each sublicense
and a copy of each agreement or document designating or establishing an
Affiliate having the right to use the Patent Rights.
3.06 The licenses granted under this Agreement do not confer any rights
upon CDI by implication, estoppel, or otherwise as to any technology not
specifically encompassed by Patent Rights, or any rights to use Patent Rights
outside the Licensed Field. Joint Improvements and UM Improvements are not
considered part of Patent Rights unless added to Exhibit A-1 by proper amendment
of this Agreement.
3.07 IF CDI intends to accept from Affiliates or Sublicensees anything of
value in lieu of cash in consideration for any sublicense or other transfer of
Patent Rights, CDI must first obtain UM's written approval.
3.08 (a) UM Improvements are owned by UM. Joint Improvements are owned
jointly by CDI and UM. CDI Improvements are owned by CDI, but CDI hereby grants
to Um a non-exclusive, non-transferable, irrevocable, and royalty-free license
to practice CDI Improvements in any field of use for research and education but
not for commercial purposes.
(b) Subject to rights of other parties sponsoring research at UM,
CDI has a first option to enter into a license agreement with UM for UM Rights
in Improvements, within the Licensed Field, so long as (i) this Agreement is in
effect, (ii) CDI pays Patent Expenses for UM Rights in Improvements, and (iii)
CDI has not notified UM that CDI declines to exercise its option. During the
term of this option, UM Rights in Improvements will be subject to the same
patent prosecution terms and conditions applicable to Patent Rights under
Article 7 of this Agreement. CDI is responsible for the filing, prosecution, and
maintenance of patent applications for CDI Improvements unless CDI and UM Agree
otherwise in writing.
(c) CDI may exercise its option to UM Rights in Improvements by giving
written notice to UM within 60 days after CDI receives written notice from UM of
a UM Improvement or Joint Improvement in accordance with Section 3.08(e) below,
or within 60 days after CDI gives
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written notice to UM of a Joint Improvement in accordance with Section 3.08(e)
below. CDI's exercise of the option initiates a negotiation period of 120 days.
If the negotiation period ends and CDI and UM have not executed a license
agreement or an amendment to Exhibit A-1 adding to Patent Rights all or a
portion of UM Rights in Improvements, UM will be free to license to others all
or the portion of UM Rights in Improvements that were not licensed to CDI.
(d) The terms of any license to CDI for UM Rights in Improvements will
include a reservation of a nonexclusive, non-transferable, irrevocable and
royalty-free license to UM to practice UM Rights in Improvements in any field of
use for research and education but not for commercial purposes.
(e) UM will report promptly to CDI in writing each UM Improvement or
Joint Improvement. CDI will report promptly to UM in writing each CDI
Improvement or Joint Improvement. These reports will be in sufficient detail to
determine inventorship. These reports will be treated as Confidential
Information. Inventorship will be determined in accordance with the patent laws
of the United States.
3.09 (a) Subject to rights of the United States under grants to UM and
pursuant to 35 U.S.C. Section 201 et seq. and all implementing regulations, and
subject to the reservations of rights set forth in Section 3.02 as applied to
Tangible Research Property, UM grants to CDI, and CDI accepts, an exclusive
worldwide license to use Tangible Research Property to make, have made, use,
lease, offer to sell, sell and import the Licensed Products within the Licensed
Field for the term of this Agreement. This license includes the right to grant
sublicenses consistent with this Agreement.
(b) Promptly after signing this Agreement UM will make available to
CDI the Tangible Research Property listed in Exhibit B. CDI, its Affiliates and
Sublicensees may use the Tangible Research Property to develop and commercialize
Licensed products but cannot use if for any other purpose, including, but not
limited to research related to matters other than development of Licensed
Products. UM retains title to all Tangible Research Property. CDI will protect
the Tangible Research Property at least as well as it protects its own tangible
research property and will take measures to protect the Tangible Research
Property
ARTICLE 4 - CDI RESPONSIBILITIES
4.01 (a) CDI will use its best efforts to bring one or more Licensed
Products to market in each country in which Licensed Products are licensed
through a businesslike program for exploitation of the Patent Rights within the
Licensed Field. CDI's efforts must satisfy the following milestones:
(b) CDI has delivered to Um prior to execution of this Agreement a
proposed research and development plan (the "R&D Plan") reasonably acceptable to
UM, showing the amount of money and time budgeted and planned for technical
development of the Patent Rights. At a mutually agreed time but no later than 90
days prior to the expiration of the Research Agreement, CDI will deliver to UM a
business plan (the "Business Plan") showing the amount of money, number and kind
of personnel, and time budgeted and planned for each phase of development,
clinical studies, marketing, manufacturing, and sublicensing of Licensed
Products.
(c) CDI will provide quarterly written reports for the first 3 years
after the Effective Date, and annual written reports thereafter, to UM on
progress against the R&D Plan, including detailed technical information on the
research and development activities related to the Licensed Products. After the
Business Plan is submitted to UM, CDI will provide to UM semiannual written
reports on progress against the Business Plan, including detailed information on
commercialization efforts and marketing analyses.
(d) CDI will notify UM of any changes in the R&D Plan or Business Plan
within 30 days after the occurrence of, or recognition of the need for, the
changes, whichever first occurs.
(e) To the extent that the CDI's responsibility for any aspect of the
R&D Plan or Business Plan is made the responsibility of an Affiliate or
Sublicensee, CDI retains its obligations to UM as to this Article as if CDI is
solely responsible for that aspect.
4.02 CDI agrees that any CDI products embodying the Patent Rights or
produced by CDI through the use of the Patent Rights for use or sale in the
United States will be manufactured substantially in the United States.
4.03 The use and disclosure of technical information acquired pursuant to
this Agreement and the exercise of Patent Rights granted by this Agreement are
subject to the export, assets, and financial control regulations of the United
States of America, including, but not limiting, restrictions under regulations
of the United States that may be applicable to direct or indirect re-exportation
of such technical information or of equipment, products, or services directly
produced by use of such technical information. CDI is responsible for taking any
steps necessary to comply with such regulations.
4.04 CDI will ensure that "Patent Pending" or the Patent Rights patent
number of both appears on all Licensed Products, their labels or their
packaging.
ARTICLE 5 - CONSIDERATION
In consideration of the license granted to CDI:
5.01 Subject to Sections 5.04, 5.05, and 5.06, CDI and its Affiliates will
pay to UM a running royalty on Net Sales of Licensed Products covered by Patent
Rights as described in Exhibit A-2. Running royalty payments are due within 30
days after the close of each calendar quarter, along with a statement as set
forth in Section 9.02. If no running royalty is due for any quarter, CDI will
send a statement to such effect to UM. With respect to sales of Licensed
Products between CDI and its Affiliates or Sublicensees for subsequent resale,
no royalty will be due on the sales to Affiliates or Sublicensees, but royalty
will be calculated and paid on the resale of the Licensed Product.
5.02 Beginning 24 months after the Effective Date of this Agreement, CDI
will pay UM minimum annual royalties at the end of each 1 year period after the
Effective date ("Royalty Year") if the aggregate of all running royalties due
for the Royalty Year is less than the minimum annual royalty amounts set forth
below:
First and second Royalty Years: $0
At the end of the third Royalty Year: $2,500
At the end of the fourth Royalty Year: $2,750
At the end of the fifth Royalty Year: $3,025
At the end of the sixth Royalty Year: $3,330
At the end of the seventh Royalty Year: $3,660
At the end of the eighth and each subsequent Royalty Year: $4,000
CDI will pay the minimum annual royalties to UM within 60 days after
the end of each Royalty Year. CDI may credit any running royalties due and paid
for sales made in that year against the minimum annual royalty due for that
year.
5.03 (a) CDI and its Affiliates will pay running royalties on a country by
country basis as provided in Section 5.01, or as applicable Section 5.06, for
Net Sales in each country of Licensed Products covered under Patent Rights in
that country, until disallowance, expiration or invalidation of all claims in
the Patent Rights of that country that cover the Licensed Products.
(b) Except as provided in Section 11.01, on a country by country
basis, if a claim of any patent comprising the Patent Rights is invalidated by a
court of competent jurisdiction from which no appeal is taken, or from which no
further appeal can be taken, UM agrees that it will not terminate this Agreement
but will terminate on the future obligations of CDI pursuant to Article 5
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with respect to Licensed Products made under the invalidated claim(s) and not
covered by other claim(s) of the Patent Rights.
5.04 For Licensed Products sold by a Sublicensee that is not an Affiliate,
CDI will pay to UM:
(a) 2% running royalty on Sublicensee's Net Sales of Licensed
Products;
(b) 50% of all licensing, up-front, milestone or other payments
received by CDI from the Sublicensee and in consideration of its rights as
Sublicensee; and
(c) 50% of the fair market value of noncash consideration received by
CDI under the Sublicensee's license agreement. Noncash consideration may be
accepted by CDI only with UM's prior written approval. If a Sublicense Agreement
provides fair market value in cash or non-cash consideration for the
Sublicensee's use of Patent Rights and, in addition, provides that CDI will
receive other funds for separate consideration (e.g., payment for CDI research,
or for the purchase of CDI stock at market price), no royalty is due with
respect to the Sublicensee's payment of such other funds.
5.05 In the event that CDI or an Affiliate or Sublicensee is required to
license one or more technologies of a Third party in order to make, have made,
use, lease, offer to sell, sell or import Licensed Products or to practice of
otherwise make use of the Patent Rights, and is required to pay a royalty to one
or more Third Parties, CDI or its Affiliate may deduct from royalties due to UM
50% of the royalty paid to the Third Party (ies), but in no event may the
royalties due to UM be reduced by more than 50% as a result of licenses from
Third Parties.
5.06 (a) Royalty upon CP Net Sales is payable by CDI and its Affiliates and
Sublicensees as stated in this Section 5.06.
(i) If a Combination Product is sold by CDI or its Affiliates, CDP Net
Sales will be excluded from Net Sales for purposes of determining the running
royalty payable under Section 5.01. The royalty rate on CP Net Sales by CDI or
its Affiliates will be determined by multiplying the royalty rate under Section
5.01 of this Agreement:
(ii) by the fraction A/[A+B] where A is the invoiced sales price of
the Licensed Product(s) in the Combination Product if the Licensed Product(s) is
sold separately, and B is the total invoiced sales price of any other active
component(s) in the Combination Product, if such active component(s) is sold
separately; or
(iii) if, on a country by country basis, the Licensed Product(s) in
the Combination Product and the other active component(s) in the Combination
Product are not sold separately in a country, by the fraction C/[C+D] where C is
the CDI's total actual cost of the Licensed Product(s) at the point of
formulation into the Combination Product and D is the CDI's actual total cost of
the other active component(s) in the Combination Product at the point of
formulation into the Combination Product.
5.07 (a) No multiple fees are payable because any Licensed Product, its
manufacture, use, sale, or lease is or will be covered by more than one patent
application or patent licensed under this Agreement as part of Patent Rights.
(b) The aggregate reduction of royalties on Net Sales as a result of
applicability of Sections 5.04, 5.05, and 5.06 will not exceed 50% of royalties
as calculated with no reduction of royalties on Net Sales as permitted by these
Sections.
5.08 (a) Royalties are payable from the country in which they are earned
and are subject to foreign exchange regulations then prevailing in the country.
Royalty payments much be paid to UM in United States Dollars by check(s) drawn
to the order of UM or by electronic funds transfers to an account designated by
UM. To the extent sales may have been made by CDI, its Affiliates or
Sublicensees in a foreign country, those royalties will be determined first in
the currency of the country in which the royalties are earned, or in the euro if
royalties are earned in a country using that currency, and then converted to
their equivalent in United States Dollars. The buying rates of exchange for
converting the currencies involved into the currency of the United States quoted
by the Morgan Guaranty Trust Company of New York, New York, averaged on the last
business day of each of 3 consecutive calendar months constituting the calendar
quarter in which the royalties were earned, will be used to determine any such
conversion. CDI will bear any loss of exchange or value or pay any expenses
incurred in the transfer or conversion to U.S. dollars.
(b) To the extent that statues, laws, codes, or government
regulations( including currency exchange regulations) prevent or limit royalty
payments by CDI, its Affiliates, or its Sublicensees with respect to Net Sales
received in any country, CDI will render to UM annual reports of sales of
Licensed Products in such country. All monies due and owing UM as provided in
the annual reports at UM's option (1) will be deposited promptly by CDI, its
Affiliates or its Sublicensees, as the case may be, in a local bank in such
country in an account to be designated by UM in writing, or (2) will be paid
promptly to UM or deposited in its account, as directed in writing by UM in any
other country where the payment or deposit is lawful under the currency
restrictions.
5.09 With respect to sales of Licensed Products by CDI to Sublicensees or
Affiliates or sales made I other than an arm's length transaction, the selling
price of Licensed Products is deemed to be the selling price that would have
been received in an arm's length transaction, based on sales of products of
similar quantity and quality on or about the time of such transaction, or, in
the absence of such sales, based upon reasonable practices in CDI's industry.
5.10 Interest is due on any payments to Um required by an Section of this
agreement that are more than 30 days late. The interest rate is 10% simple
interest per annum.
5.11 If Joint Improvements and/or Um Improvements are added to patent
Rights by amendment of Exhibit A01, the amendment will specify whether and how
the terms of Sections 5.01 to 5.06 are applied to the Patent Rights. There is no
presumption that Joint Improvements or UM Improvements will be licensed upon the
terms and conditions originally provided in those Sections.
ARTICLE 6 - DATA
6.01 CDI Data is owned by CDI. Joint Data is owned jointly by CDI and UM.
UM Data is owned by UM.
6.02 To the extent permitted by law, UM will keep CDI Data and Joint Data
confidential in accordance with Article 8, and CDI will keep UM Data and Joint
Data confidential in accordance with Article 8. Any information that would
identify human research subjects or patients will be maintained confidentially
by UM and CDI to the extent permitted by law.
6.03 While this Agreement is in effect and CDI is pursuing
commercialization efforts, CDI will have the right to use UM Data and Joint Data
in and for regulatory filings on behalf of CDI or its Affiliates, and UM will
have the right to use CDI Data and Joint Data for research purposes. If this
Agreement is terminated or if CDI abandons its commercialization efforts, UM
will have the exclusive right to use UM Data and Joint Data for research
purposes, and for regulatory filings related to Patent Rights, and to authorize
others to do so.
ARTICLE 7 - PATENT PROSECUTION AND PUBLICATIONS
7.01 (a) UM is responsible for filing any patent applications for the
Patent Rights, UM Improvements, and Joint Improvements. The scope of coverage
within Patent Rights, UM Improvements, or Joint Improvements will not be
significantly modified by UM without prior review by CDI, but any modification
will not require the approval of CDI, and CDI will not control the prosecution
of applications for patents for Patent Rights UM Improvements, and Joint
Improvements.
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(b) CDI may approve outside patent counsel chosen by UM, which
approval must not be withheld or delayed unreasonably.
7.02 (a) CDI will pay $7,000 to UM on the Effective Date to reimburse UM
for Patent Expenses incurred prior to the Effective Date. UM will invoice CDI
for Patent Expenses incurred by UM after the Effective Date with respect to U.S.
patents and patent applications. CDI will pay the invoice in full to UM within
30 days after the date of UM's invoice. CDI's failure to pay an invoice on time
will result in interest charges in accordance with Section 5.10. With respect to
the filing and prosecution of foreign patent applications specified by CDI in
accordance with Section 7.04, CDI will pre-pay or directly pay such foreign
Patent Expenses, at UM's option.
(b) If CDI does not license UM Improvements or UM's rights in Joint
Improvements, CDI will have no obligation to pay Patent Expenses related to the
UM Improvements or Joint Improvement incurred by UM for patent filing and
prosecution activities occurring more than 60 days after CDI's option is
terminated or expires as provided in Section 3.08. UM will act in good faith to
minimize the Patent Expenses incurred between receipt of notice and the end of
the 60 day period.
(c) If this Agreement is terminated for any reason other than
expiration in accordance with Section 11.01, CDI will have no obligation to pay
Patent Expenses related to Patent Rights or UM Rights in Improvements incurred
by UM for patent filing and prosecution activities occurring more than 60 days
after termination. UM will act in good faith to minimize the Patent Expenses
incurred between receipt of notice of termination and the end of the 60 day
period.
7.03 CDI and UM will cooperate to limit the Patent Expenses while ensuring
that the Patent Rights cover all items of commercial interest and importance. UM
is solely responsible for making decisions regarding scope and content of U.S.
and foreign applications to be filed under Patent Rights and prosecution of the
applications. UM will give CDI reasonable opportunity to advise UM. CDI will
cooperate with UM in the prosecution, filing, and maintenance of any patent
applications. UM will advise CDI promptly as to all material developments with
respect to the applications. Copies of all papers received and filed in
connection with prosecution of applications will be provided promptly to CDI and
enable it to advise UM thereon, but only as to those countries designated by CDI
pursuant to Section 7.04.
7.04 (a) UM has filed or will file patent applications for Inventions and
UM Rights in Improvements in Japan, Canada, and the European Community, and
additional countries specified by CDI in accordance with this section. CDI will
specify in writing to UM the additional foreign countries in which patent
applications are to be filed and prosecuted. UM will cause foreign filings to be
made by UM's patent counsel, subject to CDI's payment of Patent Expenses as set
forth in Section 7.02. Upon not less than 60 days notice to UM, CDI may elect to
discontinue support for Patent Expenses in any country other than the United
State, Japan, Canada and the European Community. CDI will be responsible for
reasonable Patent Expenses incurred in that 60 day period with respect to the
country or countries where CDI is ceasing support. From and after UM's receipt
of CDI's notice, CDI's rights in Patent Rights and UM's Rights in Improvements
will terminate with respect to the country or countries where CDI is ceasing
support, and CDI will execute such documents as reasonably may be requested by
UM to confirm termination of CDI's rights.
(b) UM may elect to file and prosecute patent applications, solely at
its own expense, in foreign countries not listed in Section 7.04(a) or not
specified by CDI. If UM so elects, CDI will have no right to approve UM's patent
counsel, no license tights with respect to patent Rights, and no option rights
with respect to UM Rights in Improvements in those countries.
7.05 In order to safeguard Patent Rights and UM Rights in Improvements, UM
will not disseminate or publish any results or otherwise publicly disclose the
results of research performed by Inventor(s) relating to the Patent Rights with
the Licensed Field and subject to the license(s) or option granted to CDI under
this Agreement unless any materials containing those results are first
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submitted to CDI for review, comment, and consideration of appropriate patent
action. UM will submit such materials relating to a planned written publication
or other public disclosure to CDI for review at least 30 days prior to the date
of the planned submission for written publication. CDI will advise UM within 30
days after receipt of the materials whether patent applications should be filed
in connection with obtaining or maintaining Patent Rights related to the
materials submitted by UM. Written publication or public disclosure by UM will
be deferred up to a maximum of 90 days after the date CDI received the materials
to enable UM to file, at CDI's expense, any patent applications recommended by
CDI.
ARTICLE 8 - CONFIDENTIALITY
8.01 (a) It may be necessary for either party to disclose to the other
certain Confidential Information. Disclosures by UM are deemed to refer to
disclosures by any UM Personnel. Disclosures by CDI are deemed to refer to
disclosures by CDI officers, directors, employees or agents. Confidential
Information may be disclosed only in accordance with the following provisions:
(b) Except as hereafter specifically authorized in writing by the
disclosing party, the receiving party will not, for a period of 5 years after
the date of receipt of Confidential Information, disclose or use the
Confidential Information.
(c)(1) These obligations of non-disclosure and nonuse do not apply to
any Confidential Information with the receiving party can demonstrate by
reliable written evidence:
(i) was generally available to the public at the time of
disclosure to the receiving party; or
(ii) was already in the possession of the receiving party at the
time of the disclosure, other than pursuant to a
confidential disclosure agreement between the parties and
not due to any unauthorized act by the receiving party; or
(iii)was developed by the receiving party prior to the
disclosure; or
(iv) the receiving party is required by law to disclose.
(c)(2) These obligations of non-disclosure and nonuse will not
continue to apply to any Confidential Information which the receiving party can
demonstrate by reliable written evidence:
(i) has become generally available to the public other than
through a breach of this Agreement by the receiving party
after disclosure;
(ii) has been acquired by the receiving party on a
nonconfidential basis from any third party having a lawful
right to disclose it to the receiving party; or
(iii)corresponds to information developed by the receiving party
independent of and with no reliance upon the disclosing
party's Confidential Information.
(d) Each party will use that level of care to prevent the use or
disclosure of the other party's Confidential Information as it exercised in
protecting it own Confidential Information.
(e) All Confidential Information will be clearly marked as
confidential by the disclosing party and, if not in written or tangible form
when disclosed, will be indicated as confidential upon disclosure and the
summarized in writing and so marked as confidential within 30 days after
disclosure to the receiving party.
(f) Notwithstanding the foregoing, CDI, it Affiliates and its
Sublicensees are permitted to disclose and use the Confidential Information tot
he extent reasonably necessary to exercise CDI's license to sublicenses
hereunder, provided that any disclosure is made subject to confidentiality
restrictions consistent with those accepted by CDI in this Agreement.
(g) UM is an educational institution with standards and practices for
protection of Confidential Information which differ from CDI's standards and
practices. By this Agreement UM undertakes to use reasonable efforts to protect
the confidentiality of CDI's Confidential Information. CDI agrees that, provided
such efforts are made, it will not seek to hold UM or UM Personnel liable in the
event of disclosure of CDI's Confidential Information.
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(h) The records of UM are subject to the Maryland Access to Public
Records Act. CDI asserts that any Confidential Information of CDI provided to UM
under this Agreement is confidential, proprietary, and trade secret information,
not subject to disclosure under Maryland's Access to Public Records Lay. UM
agrees to assert this position in response to any request for public information
applicable to CDI's Confidential Information, and to promptly notify CDI upon
receipt of requests for this information. The Maryland Access to Public Records
Act is at Title 10, Subtitle 6, Part III, State Government Article, Annotated
Code of Maryland.
(i) Upon termination of this Agreement for any reason other than those
set forth in Section 11.01 or a material breach by UM, CDI will return to UM all
material provided to CDI which is Confidential Information of UM, together with
all copies and other forms of reproduction, except that a single archive copy
may be kept in CDI's legal files. Each party agrees that termination of this
Agreement does not alter the 5 year obligation of confidentiality set forth in
Section 8.01(b).
(j) This Agreement is a public record of UM. Reports to UM as provided
in Article 9 are public records of UM.
ARTICLE 9 - REPORTS AND ACCOUNTING
9.01 During the term of this Agreement and for 5 years after its
termination, CDI will keep, and require each Affiliate and Sublicensee to keep,
complete, true, and accurate records containing all the particulars that may be
necessary to enable royalties payable to UM to be determined, and permit these
records to be inspected at any time during regular business hours, upon
reasonable notice, by an independent auditor appointed by UM for this purpose
and acceptable to CDI who will report to UM only the amount of royalty payable
under this Agreement. This audit will be at UM's expense unless the audit show
an underpayment in amounts due to UM in relation to amounts paid to UM by 5% or
more for any quarter (as defined in Section 9.02) subject to audit, in which
case the audit expense will be borne by CDI.
9.02 Within 30 days after each quarter ending March 31, June 30, September
30 and December 31,CDI will deliver to UM a true and accurate report giving
particulars of the business conducted by CDI, its Affiliates and its
Sublicensees, if any, in the preceding quarter that are pertinent to any
accounting for royalty or other payments under this Agreement. These reports
will be certified as correct by an authorized officer of CDI and will include at
lease the following information for the quarter.
(a) number of Licensed Products manufactured and sold by CDI and by
each Affiliate and each Sublicensee;
(b) total billings for Licensed Products sold by CDI and by each
Affiliate and by each Sublicensee;
(c) accounting for all License Products used or sold;
(d) deductions as provided in Section 2.13; and
(e) names and addressed of all Affiliates and Sublicensees of CDI.
9.03 With each report submitted in accordance with Section 9.02, CDI must
pay to UM the royalties due and payable under this Agreement for the royalty
period covered by the report. If no royalties are due, CDI will so report.
9.04 UM is a unit of the government of the State of Maryland. Where CDI, an
Affiliate or a Sublicensee is required to report and withhold for taxation
revenues paid to UM as licensor, CDI, the Affiliate or the Sublicensee will
assert that UM is exempt from the tax by virtue of its governmental status. If
the CDI, Affiliate, or Sublicensee nevertheless is required to withholder tax,
any tax required to be withheld will be paid promptly by CDI or its Affiliates
and its Sublicensees for and on behalf of UM to the appropriate governmental
authority, and CDI will furnish UM with proof of payment of the tax together
with official or other appropriate evidence issued by the competent governmental
authority sufficient to enable UM to support a clam for tax credit or
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refund with respect to any sum so withheld. Any tax required to be withheld on
payments by CDI to UM will be an expense of and be borne solely by UM, and CDI's
royalty payment(s) to UM following the withholding of the tax will be decreased
by the amount of such tax withholding. CDI will cooperate with UM in the event
UM elects to seek, at its own expense, administrative or judicial determination
of tax exemption.
9.05 During the implementation of the R&D Plan and Business Plan described
in Section 4.01, CDI will furnish copies of all correspondence to and from any
pertinent U.S. regulatory agency and any foreign equivalent promptly upon
receipt thereof.
9.06 CDI will report to UM the date of the First Commercial Sale within 30
days after occurrence.
ARTICLE 10 - INFRINGEMENT
10.01 UM and CDI agree to notify each other promptly of each infringement
or possible infringement of the Patent Rights of which either party becomes
aware.
10.02 CDI may (a) bring suit in its own name, at its own expense, and on
its own behalf for infringement of presumably valid claims in the Patent Rights
licensed to CDI; (b) in any such suit, enjoin infringement and collect for its
use damages, profits, and awards of whatever nature recoverable for such
infringement; and (c) settle any claim or suit for infringement of the Patent
Rights. CDI may not compel UM to initiate or join in any such suit for patent
infringement. CDI may request UM to initiate or join in any such suit if
necessary to avoid dismissal of the suit. If UM is made a party to any such
suit, CDI will reimburse and indemnify UM for any costs, expenses, or fees which
UM incurs as a result of UM's joinder. In all cases, CDI agrees to keep UM
reasonably apprised of the status and progress of any litigation.
10.03 If a declaratory judgment action alleging invalidity or
non-infringement of any of the Patent Rights is brought against CDI or raised by
way of counterclaim or affirmative defense in an infringement suit brought by
CDI under Section 10.02, CDI may (a) defend the suit in its own name, at its own
expense, and on its own behalf for presumably valid claims in the Patent Rights;
(b) in any such suit, ultimately enjoin infringement and collect for its use,
damages, profits, and awards of whatever nature recoverable for such
infringement; and (c) settle any claim or suit for declaratory judgment
involving the Patent Rights. CDI may not compel UM to initiate or join in any
such suit for patent infringement. CDI may request UM to initiate or join in any
such suit if necessary to avoid dismissal of the suit. If UM is made a party to
any such suit, CDI will reimburse and indemnify UM for any costs, expenses, or
fees which UM incurs as a result of UM's joinder. In all cases, CDI agrees to
keep UM reasonably apprised of the status and progress of any litigation.
10.04 CDI will not settle any action described in Section 10.02 or 10.03
without first obtaining the consent of UM, which consent will not be withheld or
delayed unreasonably. In any action under Sections 10.02 or 10.03, the expenses
of CDI and UM, including costs, fees, attorney fees, and disbursement, will be
paid by CDI. Up to 50% of such expenses may be credited against the running
royalties payable to UM under Article 5 under the Patent Rights in the country
in which such suit is filed. If 50% of such expenses exceed the amount of
running royalties payable by CDI in any royalty year, the expenses in excess may
be carried over as a credit on the same basis in succeeding royalty years. Any
recovery of compensatory damages made by CDI, through court judgment or
settlement, will be treated as Net Sales and royalties will be paid by CDI to UM
in accordance with Article 5. Any other recovery made by CDI, through court
judgment or settlement, first will be applied to reimburse UM for running
royalties withheld as a credit against litigation expenses and then to reimburse
CDI for its litigation expense. Any remaining recoveries will be shared equally
by CDI and UM.
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10.05 UM will cooperate fully with CDI in connection with any action under
Sections 10.02 or 10.03. UM agrees to provide prompt access to all necessary
documents and to render reasonable assistance in response to requests by CDI.
10.06 UM has a continuing right to intervene in a suit initiated by CDI
under Section 10.02 or in a declaratory judgment action involving the Patent
Rights brought against CDI under Section 10.03. In either case, if UM chooses to
intervene, UM will be responsible for its litigation expenses and will be
entitled to all recoveries which it obtains for itself as a result of its
intervention.
10.07 If CDI desires to initiate a suit for patent infringement under
Section 10.02, CDI will notify UM in writing within 90 days after giving or
receiving notice of infringement under Section 10.01. If CDI fails to notify UM
of its intent to initiate suit within the 90 day period or if CDI notifies UM
that it does not intend to initiate suit, UM may initiate suit at its own
expense. In such case, UM is entitled to all recoveries from such action.
10.08 If a declaratory judgment action alleging invalidity or
non-infringement of any of the Patent Rights is brought against CDI or raised by
way of counterclaim or affirmative defense in an infringement suit brought by
CDI as described in Section 10.02, CDI will notify UM whether CDI intends to
respond in opposition to such legal action within 10 days after CDI's receipt of
notice of the filing of such action. If CDI fails to notify UM of its intent to
respond in opposition to such legal action within the 10 day period, or if CDI
notifies UM that it does not intend to oppose the action, UM may respond to the
legal action at UM's expense. In such case, UM is entitled to all recoveries
from such action.
10.09 CDI will cooperate fully with UM in connection with any action
described in Sections 10.07 or 10.08. CDI agrees to provide prompt access to all
necessary documents and to render reasonable assistance in response to requests
by UM.
ARTICLE 11 - TERM AND TERMINATION
11.01 Unless sooner terminated in accordance with any of the succeeding
provisions of this Article 11, this Agreement will continue in full force and
effect until the disallowance, expiration, or invalidation of the last patent
right anywhere which is licensed under this Agreement.
11.02 Should CDI fail to pay UM any sum due and payable under this
Agreement, UM may terminate this Agreement on 30 days written notice, unless CDI
pays UM within the 30 day period all delinquent sums together with interest due
and unpaid. Upon expiration of the 30 day period, if CDI has not paid all sums
and interest due and payable, the rights, privileges, and licenses granted under
this Agreement terminate.
11.03 Prior to the First Commercial Sale of a Licensed Product to a Third
Party, CDI is considered diligent with regard to development of a Licensed
Product as long so as CDI updates and reports progress against the R&D Plan and
Business Plan described in Section 4.01 and as long as CDI: continues to provide
the necessary financial and other resources which are required to maintain
progress in accomplishing the R&D Plan, as it relates to Licensed Products; and,
conducts or enables others to conduct the activities required to maintain
scheduled progress in accomplishing the Business Plan, as it relates to Licensed
Products.
11.04 If UM declares CDI not diligent in development or sales of Licensed
Product based upon the criteria set forth in Section 11.03, then UM may
terminate this Agreement upon 30 days written notice. The withholding by a
regulatory agency of marketing approval in spite of CDI's diligent effort to
obtain such approval may not be the basis for UM to declare CDI not diligent.
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11.05 Except as set forth in Sections 11.02 and 11.04, in the event that
any provision of this Agreement is breached by CDI, any Affiliate or any
Sublicense, UM may terminate this Agreement and any sublicenses granted
hereunder upon 90 days written notice to CDI. However, if the breach is
corrected within the 90 day period and UM is reimbursed for all damages directly
resulting from the breach, this Agreement and any sublicenses will continue in
full force and effect and UM will so notify CDI in writing.
11.06 If CDI fails to pay UM any sum due and payable under the Research
Agreement (as defined in Section 2.17), UM may terminate this Agreement upon 10
days written notice to CDI, unless CDI pays all delinquent sums (including
interest) to UM within the 10 day period. If CDI otherwise breaches the terms
and conditions of the Research Agreement, UM may terminate this Agreement and
any sublicenses granted hereunder upon 60 days written notice to CDI. However,
if CDI corrects the breach within the 60 day period and UM is reimbursed for all
damages directly resulting from the breach, this Agreement and any sublicenses
will continue in full force and effect and UM will so notify CDI in writing. If
CDI terminates the Research Agreement early for any reason other than a breach
by UM, UM may terminate this Agreement and any sublicenses granted hereunder
upon 60 days written notice to CDI.
11.07 CDI may terminate this Agreement at any time by giving UM 90 days
written notice of termination, and upon payment to UM of all payments maturing
through the effective date of the termination.
11.08 Termination does not relieve either party of any obligation for
payment and reporting which arises before termination including obligations
under Articles 5 and 9. Article 8 and Section 9.01 will survive termination and
terminate in accordance with their terms. Articles 5, 10, 15, 16, 17, and 18 and
Sections 11.09, 11.10, 11.11, 11.12, 11.13, and 19.02 will survive termination.
Other sections of this Agreement will be effective after termination where that
intent is clear from the content of those sections.
11.09 Upon termination of this Agreement for any reason, any Sublicensee
not in default may seek a license from UM.
11.10 Upon and effective as of the date of termination of this Agreement,
CDI, upon UM's request, will transfer to UM a non-exclusive, non-transferrable,
irrevocable and royalty-free license with the right to sublicense others with
respect to CDI's interest in CDI Improvements and Joint Improvements to practice
the CDI Improvements and Joint Improvements in any field of use for research and
education but not for commercial purposes.
11.11 Upon and effective as of the date of the termination of this
Agreement for any reason, CDI, upon UM's request, will grant to UM any and all
rights to trademarks and tradenames associated only with Licensed Products. Any
written document(s) necessary to accomplish a transfer of these rights will be
executed by CDI and delivered to UM within 30 days after CDI's receipt of UM's
request.
11.12 Upon termination of this Agreement for any reason, at UM's request,
CDI will provide UM with a copy of CDI Data and Joint Data.
11.13 Upon the termination of all or part of the Patent Rights and at UM's
request, CDI will execute a document acknowledging the rights that have
terminated.
ARTICLE 12 - ASSIGNABILITY
12.01 CDI may assign this Agreement to an Affiliate or to a successor to
all or substantially all of CDI's assets or business to which this Agreement
relates. CDI may not otherwise assign or
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transfer this Agreement without the prior written consent of UM, which will not
be unreasonably withheld.
12.02 UM may assign this Agreement to a successor-in-interest but UM may
not otherwise assign or transfer this Agreement without the prior written
consent of CDI, which will not be unreasonably withheld.
ARTICLE 13 - APPLICABLE LAW; WAIVER
13.01 This Agreement is made and construed in accordance with the laws of
the State of Maryland without regard to choice of law issues, except that all
questions concerning the construction or effects of patents will be decided in
accordance with the laws of the country in which the particular patent concerned
has been granted.
13.02 CDI submits itself to the jurisdiction of the State courts of the
State of Maryland and Federal courts within the State of Maryland for purposes
of any suit relating to this Agreement, and further agrees that any action
against UM relating to this Agreement will be initiated by CDI only in a court
of competent jurisdiction in Baltimore City or Baltimore County, Maryland.
13.03 UM and CDI waiver their rights to trial by jury as to any litigation
relating to this Agreement.
ARTICLE 14 - INTEGRATION AND INTERPRETATION
14.01 This Agreement, together with any Exhibits, specifically referenced
and attached, embodies the entire understanding between CDI and UM. There are no
contracts, understandings, conditions, warranties or representations, oral or
written, express or implied, with reference to the subject matter hereof which
are not merged herein.
14.02 This Agreement is negotiated as an arm's-length business transaction.
Draftsmanship will not be taken into account in construing the Agreement.
14.03 If any condition or provision in any Article of this Agreement is
held to be invalid or illegal or contrary to public policy by a court of
competent jurisdiction from which there is no appeal, this Agreement will be
construed as though the provision or condition did not appear. The remaining
provisions of this Agreement will continue in full force and effect.
ARTICLE 15 - REPRESENTATIONS AND WARRANTIES
15.01 UM hereby represents that to the knowledge of the executing UM
officer, as of the date of execution by the officer, (a) as confirmed by
assignments from UM Personnel who are known to be Inventors, UM has full right,
title and interest in and to the Patent Rights identified in Exhibit A-1
(subject to any rights of the United States under grants to UM and pursuant to
35 U.S.C. Section 201 et seq. and all implementing regulations); (b) the Patent
Rights identified in Exhibit A-1 are not the subject matter of any currently
pending litigation involving UM, and UM has not been informed of any related
litigation contemplated either by UM or any Third Party; and (c) UM is unaware
that any person disputes inventorship or ownership of Patent Rights as described
in this Agreement. UM warrants that the officer of UM executing this Agreement
is authorized to do so on behalf of UM. UM EXPRESSLY DISCLAIMS ALL OTHER
WARRANTIES, EXPRESS OR IMPLIED, INCLUDING WITHOUT LIMITATION WARRANTIES OF
MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT, AND PATENT
VALIDITY, WITH RESPECT TO PATENT RIGHTS AND TANGIBLE RESEARCH PROPERTY.
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15.02 CDI hereby represents and warrants to UM that: (a) CDI has full legal
right, power and authority to execute, deliver and perform its obligations under
this Agreement; (b) the execution, delivery and performance by CDI of this
Agreement do not contravene or constitute a default under any provision or
applicable law or of any agreement, judgment, injunction, order, decree, or
other instrument binding upon CDI.
ARTICLE 16 - CLAIMS, INDEMNIFICATION AND INSURANCE
16.01 UM and its officers and employees acting within the scope of their
employment by UM are subject to the Maryland Tort Claims Act ("the Act"), Title
12, Subtitle 1, State Government Article, Annotated Code of Maryland, which
permits claims in tort against the State of Maryland under certain
circumstances. In order to file a claim under the Act, CDI must submit a written
claim to the Treasurer of the State of Maryland or a designee of that office
within one year after the injury to the person or property that is the basis of
the claim.
16.02 CDI warrants and represents that it maintains comprehensive liability
and property damage insurance coverage for itself, its officers, employees and
agents, in the following minimum amounts per policy period:
(a) Comprehensive liability (bodily injury and loss of life):
$1,000,000 per claim; $2,000,000 aggregate;
(b) Property damage: $50,000 per claim; $2,000,000 aggregate.
CDI warrants that its liability insurance covers contractually assumed
liabilities referred to in Section 16.03, and agree to maintain such coverage
throughout the term of this Agreement. A certificate evidencing required
insurance coverage will be delivered to UM at or before execution of this
Agreement. CDI also warrants that its comprehensive liability insurance is an
occurrence policy, or if it is a claims made policy, CDI will purchase extended
reporting insurance.
CDI warrants that it will put in place a product liability policy, having
liability limits of at least $1,000,000 per claim and $2,000,000 aggregate,
prior to the introduction of commercial product in the marketplace.
16.03 CDI will defend, indemnify, and hold harmless UM Personnel and UM,
the University System of Maryland, the State of Maryland, and their regents,
officers, employees, students, and agents (each individually a "UM Party" and
all, collectively "UM Parties") against any and all claims, costs or
liabilities, including attorney's fees and court costs at trial and appellate
levels, for any loss, damage, personal injury, or loss of life, (a) caused by
the actions of CDI, its Affiliates or Sublicensees, or their officers, servants,
or agents, or Third Parties acting on behalf of or under authorization from CDI,
its Affiliates or Sublicensees in the performance of this Agreement; (b) arising
out of use by CDI, its Affiliates or Sublicensees or their officers, servants,
or agents, or by any Third Party acting on behalf of or under authorization from
CDI, its Affiliates or Sublicensees, of products or processes (including
licensed Patent Rights) pursuant to this Agreement; or (c) arising out of use,
by UM or its employees or students, of products, processes, or protocols
developed by CDI, its Affiliates or Sublicensees or their officers, servants, or
agents, or by Third Parties acting on behalf of or under authorization from CDI,
its affiliates or Sublicensees. CDI's agreement to defend, indemnify and hold
harmless the UM Parties is conditioned upon (a) UM promptly notifying CDI in
writing after UM receives notice of any claim, and (b) UM and any UM Party
seeking indemnification fully cooperating with CDI in the defense of any such
claim. CDI's agreement to defend, indemnify and hold harmless a UM Party will
not apply to any claim, cost, or liability attributable solely to the negligent
act or willful misconduct of that UM Party.
16.04 UM and CDI further agree that nothing in this Agreement will be
interpreted as: (a) a denial to either party of any remedy or defense available
to it under the laws of the State of Maryland; (b) the consent of the State of
Maryland or its agents and agencies to be sued; or (c) a
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waiver of sovereign immunity or any other governmental immunity of the State of
Maryland and UM beyond the extent of any waiver provided by law.
ARTICLE 17 - CONSENT REQUIRED FOR ADVERTISING
17.01 Neither party will use the name of the other or any of its employees
or personnel, or any adaptation thereof, in any advertising, promotional, or
sales literature without prior written consent obtained from the other party.
Either party may publicize the fact that the parties have made this Agreement.
ARTICLE 18 - DISPUTE RESOLUTION
18.01 If a dispute between the parties related to this Agreement arises,
either party, by notice to the other party, may have the dispute referred to the
parties' respective officers designated below, or their successors, for
attempted resolution by good faith negotiations within 30 days after the notice
is received. The designated officers are as follows:
For CDI: President
For UM: Vice President, Academic Affairs
In the event the designated officers are not able to resolve the dispute
within this 30-day period, or any agreed extension, they will confer in good
faith with respect to the possibility of resolving the matter through mediation
with a mutually acceptable Third Party or a national mediation organization. The
parties agree that they will participate in any mediation sessions in good faith
in an effort to resolve the dispute in an informal and inexpensive manner. All
expenses of the mediator will be shared equally by the parties. Any applicable
statute of limitations will be tolled during the pendency of the dispute
resolution process initiated under this Agreement. Evidence of anything said or
any admission made in the course of any mediation will not be admissible in
evidence in any civil action between the parties. In addition, no documents
prepared for the purpose of, or in the course of, or pursuant to, the mediation,
or copy thereof, will be admissible in evidence in any civil action between the
parties. However, the admissibility of evidence will not be limited if all
parties who participated in the mediation consent to disclosure of the evidence.
ARTICLE 19 - MISCELLANEOUS
19.01 No license or right is granted by implication or otherwise with
respect to any patent application or patent owned by either party, unless
specifically set forth in this Agreement.
19.02 CDI will not knowingly employ or compensate, directly or indirectly,
any person working in the Licensed Field, or involved in negotiating this
Agreement on behalf of UM, while the person is employed by UM or for 2 years
thereafter, unless UM provides CDI with prior written consent of the UM
President to the employment or compensation by CDI. "Compensation" includes but
is not limited to: stock option or stock purchase agreements, consulting
agreements, any other form of agreement executed between a UM employee and CDI,
and cash payments. "Employment" includes both uncompensated and compensated
service to CDI. The Maryland Public Ethics Law, Title 15, State Government
Article, Annotated Code of Maryland, may apply to a decision by the UM President
in regard to such matter.
19.03 CDI will provide written notice to UM prior to the filing of a
petition in bankruptcy if CDI intends to file a voluntary petition, or, if known
by CDI through statements or letters from a creditor or otherwise, if a Third
Party intends to file an involuntary petition in bankruptcy against CDI. Notice
will be given 90 days before the planned filing or, if such notice is not
feasible, as soon as CDI is aware of the planned filing. CDI's failure to
perform this obligation is deemed to be a material pre-petition incurable
default and breach under this Agreement.
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19.04 CDI, at CDI's expense and with the consent of UM, will offer to use
UM or the University of Maryland Medical System as a beta test site for any
clinical trials undertaken in the Licensed Field during the term of this
Agreement, subject to agreement on terms and conditions, including compensation,
negotiated in good faith.
19.05 Neither party is liable for failure or delay in performing any of its
obligations under this Agreement if the failure or delay is required in order to
comply with any governmental regulation, request or order, or necessitated by
other circumstances beyond the reasonable control of the party so failing or
delaying, including but not limited to acts of God, war (declared or
undeclared), insurrection, fire, flood, accident, labor strikes, work stoppage
or slowdown (whether or not such labor event is within the reasonable control of
the parties), or inability to obtain raw materials, supplies, power or equipment
necessary to enable a part to perform its obligations. Each party will: (a)
promptly notify the other party in writing of an event of force majeure, the
expected duration of the event and its anticipated effect on the ability of the
party to perform its obligations; and (b) make reasonable efforts to remedy the
event of force majeure.
19.06 All notices, consent and other communications required or allowed
under this Agreement must be in writing and are effective upon receipt: (a) when
delivered by hand; or (b) when received by the addressee after being mailed by
registered or certified mail (air mail if mailed overseas), return receipt
requested; or (c) when received by the addressee, by delivery service (return
receipt requested), in each case addressed to the part at its address set forth
below (or to another address that a party may later designate by notice to the
other party);
If to UM: Executive Director
Office of Research and Development
University of Maryland, Baltimore
515 West Lombard Street, Suite 500
Baltimore, Maryland 21201-1602
Copy to: University Counsel
University of Maryland, Baltimore
520 West Lombard Street, Second Floor
Baltimore, Maryland 21201-1627
If to CDI: President
Cancer Diagnostics, Inc.
202 South Wheeler Street
Plant City, Florida 33566
19.07 This Agreement, including Exhibits, may not be amended, nor may any
rights or remedy of either party be waived, unless the amendment or waiver is in
writing and signed by a duly authorized representative of each party.
19.08 A failure or delay by a party in exercising any of its rights or
remedies under this Agreement does not constitute a waiver of the rights or
remedies, nor does any single or partial exercise of any right or remedy
preclude any other or further exercise thereof of the exercise of any other
right or remedy. The rights and remedies of the parties provided in this
Agreement are cumulative and not exclusive of any rights or remedies provided by
law.
19.09 UM and CDI are not (and nothing in this Agreement may be construed to
constitute them as) partners, joint venturers, agents, representatives or
employees of the other, nor is there any status or relationship between them
other than that of independent contractors. Neither party has any responsibility
for the actions of the other party except as specifically provided in this
19
<PAGE>
Agreement. Neither party has any right or authority to bind or obligate the
other party in any manner or make any representation or warranty on behalf of
the other party.
19.10 Unless otherwise provided, all costs and expenses incurred in
connection with this Agreement will be paid by the party which incurs the cost
or expense, and the other party has no liability for such cost or expense.
19.11 This Agreement is signed in duplicate originals. The headings used in
this Agreement are for convenience of reference only and do not affect the
meaning or construction of this Agreement.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
by their duly authorized representatives.
UNIVERSITY OF MARYLAND,
BALTIMORE
BY: /s/ JOANNA BOUGHMAN WITNESS: /s/ MARJORIE FORSTER
For David Ramsay
David J. Ramsay, D.M., D.Phil.
President
Date: August 31, 1999
CANCER DIAGNOSTICS, INC.
BY: /s/ UWE REISCHL ATTEST: /s/ Clifford Gross
Uwe Reischl, Ph.D., M.D.
President
Date: August 23, 1999
20
EXHIBIT 10.3
SPONSORED RESEARCH AGREEMENT, AS AMENDED, BETWEEN CDI AND UMB
Amendment To Research Agreement Dated August 27, 1999
Between Cancer Diagnostics, Inc. and University of Maryland, Baltimore
Upon signature by both parties, Article 2 subsection 2.1 - RESEARCH WORK will
now read:
ARTICLE 2 - RESEARCH WORK
2.1 University will commence the performance of the Project Work on January
4, 2000, and will undertake to perform such Project Work substantially
in accordance with the terms and conditions of this Agreement. Sponsor
and University may at any time enter into written agreements to make
changes to and amend the Project Work by mutual agreement of Sponsor
and University.
This agreed to by the following parties:
CANCER DIAGNOSTICS, INC.
By: /s/ UWE REISCHL
Uwe Reischl, Ph.D., M.D.
Date: Sept. 23, 1999
UNIVERSITY OF MARYLAND, BALTIMORE
By: /s/ MARJORIE FORSTER
Marjorie Forster, Executive Director
Office of Research and Development
Date: 9/28/99
<PAGE>
RESEARCH AGREEMENT
THIS RESEARCH AGREEMENT ("Agreement") effective this 27th day of
August, 1999, ("Effective Date") by and between Cancer Diagnostics, Inc.
("Sponsor"), a corporation organized under the laws of the State of Florida, and
the University of Maryland, Baltimore ("University"), a constituent institution
of the University System of Maryland, an agency of the State of Maryland.
WITNESSETH
WHEREAS, Sponsor desires the research assistance of certain technically
qualified persons employed by the University who have access to University and
equipment;
WHEREAS, Sponsor desires to fund said research entitled: "Development
of an Immunoassay for Telomerase in Human Plasma" and described in the protocol
attached hereto as Appendix A;
WHEREAS, University is willing to cooperate with and assist Sponsor by
furnishing the services of its personnel as described in Appendix A;
WHEREAS, the research activities to be conducted by UM under this
Agreement are in furtherance of the scientific or educational activities of UM;
and
WHEREAS, University and Sponsor acknowledge that they are executing the
License Agreement (see Section 1.4) Agreement and that the funding under this
Agreement is given by Sponsor to UM solely in consideration of the Project Work
(see Section 1.6) and not in consideration of the License Agreement.
NOW THEREFORE, in consideration of the promises and mutual covenants
herein contained, University and Sponsor agree as follows:
ARTICLE 1 - DEFINITIONS
As used herein, the following terms will have the following meanings:
1.1 "Confidential Information" means any knowledge, know-how, practice,
process or other information which has not been made public and which
Sponsor receives from UM or UM Personnel, or UM or UM Personnel
receives from Sponsor. Confidential Information includes, without
limitation, any documents, drawings, sketches, models, designs, data,
memoranda, tapes, records, formulae and algorithms, given orally, in
hard copy form, or in electronic form.
1.2 "Contract Period" is January 4, 2000 through January 3, 2002 during
which the University will perform the Project Work.
1.3 "Intellectual Property" means individually and collectively all
inventions, improvements and/or discoveries - patentable or
unpatentable, copyrightable or uncopyrightable - including but not
limited to software and biological materials, which are conceived
and/or made in performance of the Project Work. For the purposes of
this Section, the "making" of inventions will be governed in accordance
with 35 USC Section 101 et seq. "University Intellectual Property"
means Intellectual Property made solely by one or more employees of
University. "Joint Intellectual Property" means Intellectual Property
made jointly by one or more employees of University and one or more
employees of Sponsor. "Sponsor
<PAGE>
Intellectual Property" means Intellectual Property made solely by one
or more employees of Sponsor.
1.4 "License Agreement" means the license agreement executed between UM and
CDI, with an effective date of August 23, 1999, concerning the
invention entitled "Telomerase Assay of Body Fluids for Cancer
Screening and Assessment of Disease Stage and Prognosis".
1.5 "Project Description" means the description of the project in Appendix
A, authored by Dr. W. Edward Highsmith, an employee of the University.
1.6 "Project Work" means the scope of work as described in Appendix A to be
undertaken by University, or by University and Sponsor, under this
Agreement.
1.7 "Research Data" means information including, without limitation,
documents, drawings, models, designs, data, memoranda, tapes, records,
formulae and algorithms, in hard copy form, or in electronic form
resulting from the Project Work.
1.8 "UM Personnel" means employees, students, trainees, and other persons
using UM resources and subject to the UM patent policy.
ARTICLE 2 - RESEARCH WORK
2.1 University will commence the performance of the Project Work promptly
after the Effective Date of this Agreement, and will undertake to
perform such Project Work substantially in accordance with the terms
and conditions of this Agreement. Sponsor and University may at any
time enter into written agreements to make changes to and amend the
Project Work by mutual agreement of Sponsor and University.
2.2 The University's Principal Investigator for the Project Work is Dr. W.
Edward Highsmith. If the Principal Investigator should be unable to
continue for any reason, the University may terminate this Agreement if
a substitute Principal Investigator is not identified by the University
within a reasonable time. Sponsor may not reject a substitute Principal
Investigator without reasonable cause.
ARTICLE 3 - REPORTS AND CONFERENCES
3.1 Quarterly written progress/program reports will be provided by
University to Sponsor and a final report will be submitted by
University within sixty (60) days after the conclusion of the Contract
Period (as defined above or as amended by the parties), or within sixty
(60) days following termination of this Agreement before conclusion of
the Project Work.
3.2 If necessary during the term of this Agreement, representatives of
University will meet the representatives of Sponsor at times and places
mutually agreed upon to discuss the progress and results, as well as
ongoing plans, or changes therein, of the Project Work to be performed
hereunder. Sponsor will reimburse University for travel costs
associated with these meetings if such costs have not been included in
the approved budget.
ARTICLE 4 - COST, BILLINGS, AND OTHER SUPPORT
4.1 It is agreed to and understood by the parties hereto that, subject to
changes in the Project Work pursuant to ARTICLE 2, total costs to
Sponsor hereunder will not exceed the sum of Two Hundred and Forty-Nine
Thousand, Four-Hundred and Fifty Eight Dollars
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<PAGE>
($249,458). These costs will be allocated as set forth in Appendix B
attached hereto for use in the Project Work. A payment by Sponsor of
$124,921 will be made within thirty (30) days of execution of this
Agreement. Final payment of $124,537 will be made one year from the
Effective Date of this Agreement.
Payment should be made to: University of Maryland
and sent to: University of Maryland
P.O. Box 41428
Baltimore, Maryland 21203-6428
4.2 Anything herein to the contrary notwithstanding, should this Agreement
be subject to early termination pursuant to ARTICLE 9 hereof, Sponsor
will pay all costs accrued by University as of the date of
termination, or thereafter as a result of termination. In addition,
Sponsor will reimburse University for non-cancelable obligations,
which will include all non-cancelable contracts and fellowships,
postdoctoral or faculty appointments called for in the Project
Description, Appendix A, incurred prior to the effective date of
termination.
ARTICLE 5 - PUBLICITY
5.1 Neither Sponsor nor UM will use the name of the other or the name of
any employee of the other, or any adaptation of such names, in any
advertising, promotional, or sales literature without obtaining the
prior written consent from the other party. Either party may publicize
the fact that the parties have made this Agreement and the general
nature of the Project Work.
5.2 Either party may take this Agreement available for public inspection on
the condition that Confidential Information will remain confidential in
accordance with Article 12.
ARTICLE 6 - RESEARCH DATA AND PUBLICATIONS
6.1 Research Data is owned by UM subject to Sponsor's right to use it in
accordance with the terms of this Agreement. If the Project Work
involves any collaborative effort between UM and sponsor, any Research
Data generated by employees of Sponsor may be obtained and used by UM
at any time for research and educational purposes.
6.2 Sponsor recognizes that under University academic policy, the results
of a University research project must be publishable and agrees that
University Personnel engaged in the Project Work will be permitted to
present at symposia and national or regional professional meetings, and
to publish in journals, theses, dissertation, or otherwise of their own
choosing, the method and results of the Project Work and the Research
Data.
6.3 UM will submit materials relating to a planned written publication or
other public disclosure to Sponsor for review at least 30 days prior to
the date of the planned submission for written publication. Sponsor
will advise UM within 30 days after receipt of the materials whether
patent applications should be filed related to the materials submitted
by UM. Written publication or public disclosure by UM will be deferred
up to a maximum of 90 days after the date Sponsor receives the
materials to enable UM to file any patent applications recommended by
Sponsor. Any such proposed patent applications will be filed in
accordance with the terms of the License Agreement.
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<PAGE>
ARTICLE 7 - INTELLECTUAL PROPERTY
7.1 UM Intellectual Property is owned by UM. Joint Intellectual Property is
owned jointly by Sponsor and UM. Sponsor Intellectual Property is owned
by Sponsor.
7.2 UM and Sponsor agree that UM Intellectual Property, Sponsor
Intellectual Property and Joint Intellectual Property will be subject
to the terms and conditions of the License Agreement. Sponsor will have
no rights in any UM Intellectual Property that does not meet the
definition of "UM Improvement" as defined in the License Agreement, and
Sponsor will have no rights in UM's rights in any Joint Intellectual
Property that does not meet the definition of "Joint Improvements" as
defined in the License Agreement.
ARTICLE 9 - TERM AND TERMINATION
9.1 This Agreement will become effective upon the Effective Date and will
continue in effect for the full duration of the Contract Period unless
sooner terminated in accordance with the provisions of this ARTICLE 9.
The parties hereto may, however, extend the term of this Agreement for
additional periods as desired under mutually agreeable terms and
conditions, which the parties reduce to writing and sign. Either party
may terminate this Agreement upon sixty (60) days prior written notice
to the other.
9.2 In the event that either party hereto will commit any breach of or
default in any of the terms or condition of this Agreement, and also
will fail to remedy such default or breach within sixty (60) days after
receipt of written notice thereof from the other party hereto, the
party giving notice may, at its option and in addition to any other
remedies which it may have at law or in equity, terminate this
Agreement by sending notice of termination in writing to the other
party to such effect, and such termination will be effective as of the
date of the receipt of such notice. Notwithstanding the foregoing
provision, University may terminate this Agreement upon ten (10) days
notice if any payment due from Sponsor is not received before or upon
the date specified in this Agreement or in Appendix A, or within ten
(10) day notice period.
9.3 Termination of this Agreement by either party for any reason will not
affect the rights and obligations of the parties accrued prior to the
effective date of termination of this Agreement. No termination of this
Agreement, however effectuated, will affect the parties' rights and
duties with respect to Intellectual Property, or release the parties
hereto from their rights and obligations under ARTICLES 4, 5, 6, 7, 10,
11, 12, 17 and 19.
ARTICLE 10 - INDEPENDENT CONTRACTOR
10.1 In the performance of all services hereunder:
10.1.1 University will be deemed to be and will be an independent
contractor and as such neither University or its personnel
will be entitled to any benefits applicable to employees of
Sponsor;
10.1.2 University will comply with all governmental laws and
regulations, such as EPA, OSHA and like regulations, which are
applicable to University in its performance of
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the Project Work hereunder;
10.1.3 Neither party is authorized or empowered to act as agent for
the other for any purpose. Neither party will enter into any
contract, warranty or representation as to any matter on
behalf of the other party. Neither party will be bound by the
acts or conduct of the other party.
ARTICLE 11 - CLAIMS, INDEMNIFICATION, AND INSURANCE
11.1 UM and its officers and employees acting within the scope of their
employment by UM are subject to the Maryland Tort Claims Act ("the
Act"), Title 12, Subtitle 1, State Government Article, Annotated Code
of Maryland, which permits claims in tort against the State of Maryland
under certain circumstances. In order to file a claim under the Act,
Sponsor must submit a written claim to the Treasurer of the State of
Maryland or a designee of that office within one year after the injury
to the person or property that is the basis of the claim.
11.2 Sponsor warrants and represents that it maintains comprehensive
liability and property damage insurance coverage for itself, its
officers, employees and agents, in the following minimum amounts per
policy period:
(a) Comprehensive liability: (bodily injury and loss of life)
$1,000,000 per claim; $2,000,000 aggregate;
(b) Property damage: $50,000 per claim; $2,000,000 aggregate.
Sponsor warrants that its comprehensive liability insurance covers
contractually assumed liabilities referred to in Section 11.3, and
agrees to maintain such coverage throughout the term of this Agreement.
A certificate evidencing required insurance coverage will be delivered
to UM at or before execution of this Agreement. Sponsor also warrants
that its comprehensive liability insurance is an occurrence policy, or
if it is a claim made policy, Sponsor will purchase extended reporting
insurance.
11.3 Sponsor will defend, indemnify, and hold harmless UM, the University
System of Maryland, and the State of Maryland, and regents, officers,
employees, students, and agents of UM (each individually a "UM Party"
and all, collectively, "UM Parties") against any and all claims, costs
or liabilities, including attorney's fees and court costs at both trial
and appellate levels, for any loss, damage, personal injury, or loss of
life, (a) caused by the actions of Sponsor or its officers, servants,
or agents, or third parties acting on behalf of or under authorization
from Sponsor in the performance of this Agreement; (b) arising out of
use by Sponsor, its officers, servants, or agents, or by any third
party acting on behalf of or under authorization from Sponsor of
products, processes, or protocols (including licensed University
Intellectual Property or Joint Intellectual Property) developed by
Sponsor, its officers, servants, or agents, or by third parties acting
on behalf of or under authorization from Sponsor; or (c) arising out of
use, by UM or its employees or students, of products, processes, or
protocols developed by Sponsor, its officers, servants, or agents, or
by third parties acting on behalf of or under authorization from
Sponsor. Sponsor's agreement to defend, indemnify and hold harmless the
UM Parties is conditioned upon (a) UM promptly notifying Sponsor in
writing after UM receives notice of any claim, and (b) UM and any
involved UM Party fully cooperating with Sponsor in the defense of any
such claim. Sponsor's agreement to defend, indemnify and hold harmless
the UM Parties will not apply to any claim, cost, or liability
attributable solely to
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<PAGE>
the negligence or willful misconduct of an UM Party.
11.4 UM and Sponsor further agree that nothing in this Agreement will be
interpreted as: (a) a denial to either party of any remedy or defense
available to it under the laws of the State of Maryland; (b) the
consent of the State of Maryland or its agents and agencies to be sued;
or (c) a waiver of sovereign immunity or any other governmental
immunity of the State of Maryland and the UM beyond the extent of any
waiver provided by law.
ARTICLE 12 - CONFIDENTIALITY
12.1 (a) It may be necessary for either party to disclose to the other
certain Confidential Information. Disclosures by UM are deemed to refer
to disclosures by any UM Personnel. Disclosures by Sponsor are deemed
to refer to disclosures by Sponsor officers, directors, employees or
agents. Confidential Information may be disclosed only in accordance
with the following provisions:
Except as hereafter specifically authorized in writing by the
disclosing party, the receiving party will not, for a period of 5 years
after the date of receipt of Confidential Information, disclose or use
the Confidential Information.
(b)(1) These obligations of non-disclosure and nonuse do not apply to
any Confidential Information, which the receiving party can
demonstrate by reliable written evidence:
(i) was generally available to the public at the time of
disclosure to the receiving party; or
(ii) was already in the possession of the receiving party at the
time of the disclosure, other than pursuant to a
confidential disclosure agreement between the parties and
not due to any unauthorized act by the receiving party; or
(iii)was developed by the receiving party prior to the
disclosure; or
(iv) the receiving party is required by law to disclose.
(b)(2) These obligations of non-disclosure and nonuse will not
continue to apply to any Confidential Information, which the receiving
party can demonstrate by reliable written evidence:
(i) has become generally available to the public other than
through a breach of this Agreement by the receiving party
after disclosure;
(ii) has been acquired by the receiving party on a
nonconfidential basis from any third party having a lawful
right to disclose it to the receiving party; or
(iii)corresponds to information developed by the receiving party
independent of and with no reliance upon the disclosing
party's Confidential Information.
(c) Each party will use that level of care to prevent the use or
disclosure of the other party's Confidential Information as it
exercises in protecting its own Confidential Information.
(d) All Confidential Information will be clearly marked as
confidential by the disclosing party and if not in written or tangible
form when disclosed, will be so indicated on disclosure as
confidential and then summarized in writing and so marked as
confidential within 30 days after disclosure to the receiving party.
(e) Notwithstanding the foregoing, Sponsor is permitted to disclose
and use the Confidential Information to the extent reasonably
necessary to enable Sponsor to exercise its option under this License
Agreement, provided that any disclosure is made subject to
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confidentiality restrictions consistent with those accepted by Sponsor
in this Agreement.
(f) Sponsor recognizes that UM is an educational institution with
standards and practices for protection of Confidential Information
which differ from Sponsor's standards and practices. By this Agreement
UM undertakes to use reasonable efforts to protect the confidentiality
of Sponsor's Confidential Information. Sponsor agrees that, provided
such efforts are made, it will not seek to hold UM or UM Personnel
liable in the event of disclosure of Sponsor's Confidential
Information.
(g) Sponsor recognizes that the records of UM are subject to the
Maryland Access to Public Records Law. Sponsor asserts that any
Confidential Information of Sponsor is confidential, proprietary, and
trade secret information, not subject to disclosure under Maryland's
Access to Public Records Law. UM agrees to assert this position in
response to any request for public information applicable to Sponsor's
Confidential Information or annual sales reports, and to promptly
notify Sponsor upon receipt of requests for its Confidential
Information. The Maryland Access to Public Records Law is at Title 10,
Subtitle 6, Part III, State Government Article, Annotated Code of
Maryland.
(h) Upon termination of this Agreement for any reason, Sponsor will
return to UM all material provided to Sponsor which is Confidential
Information, together with all copies and other forms of reproduction,
except that a single archive copy may be kept in Sponsor's legal
files. Each party agrees that termination of this Agreement does not
alter the 5 year obligation of confidentiality set forth in Section
12.1(a).
ARTICLE 13 - GOVERNING LAW
13.1 This Agreement will be governed and construed in accordance with the
laws of the State of Maryland.
ARTICLE 14 - ASSIGNMENT
14.1 This Agreement will not be assigned by either party without the prior
written consent of the other party.
ARTICLE 15 - AGREEMENT MODIFICATION
15.1 Any agreement changing the terms of this Agreement in any way will be
valid only if the change is made in writing and the writing is executed
by authorized representatives of the parties hereto.
ARTICLE 16 - NOTICES
16.1 Notices, invoices, communications, and payments hereunder will be made
by first class postage prepaid, and addressed to the party to receive
such notice, invoice, or communication at the address given below, or
such other address as may hereafter be designated by notice in writing:
If to Sponsor: Dr. Uwe Reischl
Cancer Diagnostics, Inc.
202 South Wheeler Street
Plant City, Florida 33566
If to University: Marjorie Forster, Executive Director
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University of Maryland
Office of Research and Development
515 West Lombard Street, 5th Floor
Baltimore, Maryland 21201
With a copy to: Dr. W. Edward Highsmith
Department of Pathology
University of Maryland, Baltimore
685 West Baltimore Street, Room 7-22
Baltimore, Maryland 21201
ARTICLE 17 - GOVERNMENT FUNDING
17.1 The Parties recognize that Background Intellectual Property may have
been funded in whole or in part by agencies of the federal government
of the United States. The parties hereto acknowledge that the federal
government may have certain rights to such Background Intellectual
Property pursuant to the provision of Public Laws 95-517 and 98-620 as
amended, or any future federal laws or regulations concerning the
federal government's interest.
ARTICLE 18 - FORCE MAJEURE
18.1 No party will be liable to the other parties for its failure to perform
any of its obligations hereunder during any period in which such
performance is delayed by circumstances beyond its reasonable control
including, but not limited to, acts of God, acts or omissions of any
government or any agency thereof, unavailability of essential personnel
due to disability or death, compliance with request, recommendations,
rules, regulations or orders of any governmental authority or any
department, agency or instrumentality thereof, fire, storm, flood,
earthquake, accident, acts of the public enemy, war, rebellion,
insurrection, riots, sabotages, invasion, quarantine, restrictions,
strikes, lockouts, disputes or differences with workers, transportation
embargoes or failure or delay in transportation arising from any of the
foregoing causes. The party effected by force majeure will notify the
other party promptly should such circumstances arise, giving an
indication of the likely extent and duration thereof, and will use all
commercially reasonable efforts to resume performance of its
obligations as soon as practical.
ARTICLE 19 - EXPORT CONTROLS
19.1 The use and disclosure of technical information generated in the United
State pursuant to this Agreement and the exercise of licenses granted
pursuant to the Option and License Agreement will be subject to the
export, assets, and financial control regulations of the United States
of America, including, but without limitation, restrictions under
regulations of the United States that may be applicable to direct or
indirect re-exportation of such technical information or of equipment,
products or services directly produced by use of such technical
information.
ARTICLE 20 - MATERIAL TRANSFER
20.1 The transfer of biological material related to the Project Work will be
governed by a separate written agreement in the format of Appendix C.
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ARTICLE 21 - ENTIRE AGREEMENT
21.1 This Agreement, including its Appendices, represents the entire
understanding between the parties, and supersedes and merges all other
agreements, express or implied, discussions or understandings between
the parties with respect to the subject matter hereof. This Agreement
may be executed in counterparts, all of which will be deemed original
for all purposes.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed in duplicate as of the date and year first above written.
CANCER DIAGNOSTICS, INC. UNIVERSITY OF MARYLAND, BALTIMORE
By: /s/ UWE REISCHL By: /s/ MARJORIE FORSTER
Uwe Reischl, Ph.D., M.D. Marjorie Forster, Executive Director
President Office of Research and Development
Date: Aug. 30, 1999 Date: 8/27/99
READ AND AGREED:
/s/ W. EDWARD HIGHSMITH 8/27/99
W. Edward Highsmith, Ph.D.
Principal Investigator
EXHIBIT 10.4
Schedule 1.02(a)
to
Stock Purchase Agreement
LEXON, INC.
PROMISSORY NOTE
$150,000 Tulsa, Oklahoma
January 28, 2000
FOR VALUE RECEIVED, LEXON, INC. hereby promises to pay to the order of
UTEK CORPORATION ("UTEK") the principal amount of One Hundred and Fifty Thousand
and no/100 Dollars ($150,000) plus interest as provided herein.
1. Maturity. This Note and all accrued but unpaid interest shall be
paid in 3 equal consecutive monthly principal payments of $50,000 each beginning
on or before April 30, 2000 and continuing on or before May 31, 2000, and on or
before June 30, 2000, respectively.
2. Interest Rate. This Note shall bear interest until maturity at the
rate of 10% per annum and thereafter the unpaid principal balance of this Note
shall bear interest at the rate of 12% per annum.
3. Maximum Interest Rate. Notwithstanding any provision herein, UTEK
shall never be entitled to receive, collect or apply as interest on any amount
owed hereunder any amount in excess of the maximum lawful rate of interest
permitted to be charged by any applicable law. In the event UTEK shall ever
receive, collect or apply as interest any amount in excess of any amount
permitted to be received under applicable law, all such excess amounts shall be
applied as of the date received to the reduction of the principal amount of
indebtedness hereunder. After payment of the indebtedness in full, all remaining
excess amounts paid shall forthwith be returned within five (5) days to LEXON.
4. Permissive Prepayment. This Note and all indebtedness arising in
connection herewith may be prepaid at any time and from time to time in whole or
in part by LEXON without premium, penalty or other charges or fees whatsoever.
5. Application of Payments. All payments against the indebtedness
arising under this Note shall be applied first to costs of collection, second to
accrued but unpaid interest and the balance to unpaid principal.
6. Collateral. The indebtedness evidenced by this Note is secured by
that certain Pledge and Security Agreement ("Pledge Agreement") given by LEXON
in favor of UTEK of even date herewith. This Note is non-recourse except as it
relates to the Collateral and the Pledged Shares under the Pledge Agreement.
7. Events of Default. At the option of UTEK , this Note shall become
immediately due and payable upon the occurrence and during the continuation of
the following events of default:
(a) LEXON fails to pay principal or interest within 15 business
days after LEXON receives written notice of such payment default;
(b) LEXON shall:
(1) Be adjudicated a bankrupt or insolvent; or
<PAGE>
(2) Admit in writing its inability to pay LEXON's debts
generally as they become due; or
(3) Apply for or consent to the appointment of a receiver,
trustee, or liquidator of LEXON or of all or
substantially all of LEXON's assets; or
(4) File a voluntary petition in bankruptcy or a petition
or an answer seeking reorganization or an arrangement
with creditors or take advantage of or seek any other
relief under any bankruptcy, reorganization,
rearrangement, debtor's relief, or other insolvency law
now or hereafter existing; or
(5) File an answer admitting the material allegations of,
or consenting to, or failure to answer timely a
petition filed against LEXON in any bankruptcy,
reorganization, rearrangement, debtor's relief, or
other insolvency proceedings; or
(6) Institute or voluntarily be or become a party to any
other judicial proceedings intended to effect a
discharge of all or substantially all of LEXON's debts,
in whole or in part, or a postponement of the maturity
or the collection thereof, or a suspension of any of
the rights or powers granted hereby; or
(c) An order, judgment, or decree shall be entered by any court
of competent jurisdiction approving a petition seeking reorganization of LEXON
or appointing a receiver, trustee, or liquidator of LEXON or of all or
substantially all of its assets, and such order, judgment, or decree is not
permanently stayed or reversed within sixty (60) days after entry thereof; or
(d) A petition is filed against LEXON seeking reorganization, an
arrangement with creditors, or any other relief under any bankruptcy,
reorganization, rearrangement, debtor's relief, or other insolvency law now or
hereafter existing, and such petition is not discharged within sixty (60) days
after the filing thereof.
If one or more events of default shall occur and be continuing, after
the expiration of any grace or curative period provided herein, UTEK may, at its
option, declare the entire indebtedness arising hereunder due and payable and
may proceed to protect and enforce any and all rights to enforce payment of all
indebtedness arising hereunder at law or in equity. All rights, remedies and
powers conferred upon UTEK herein shall be cumulative and not exclusive of any
other rights, remedies or powers. No delay or omission to exercise any right,
remedy or power shall impair any such right, remedy or power or shall be
construed to be a waiver of any event of default or any acquiescence or
forbearance with respect thereto. Any right, remedy or power granted hereunder
or applicable under law or in equity may be exercised from time to time,
independently or concurrently. No waiver of any event of default shall extend
any other subsequent event of default. No single or partial exercise of any
right, remedy or power shall preclude the exercise of any other right, remedy or
power or the further exercise thereof.
8. Governing Law. This Note has been executed and delivered in
Hillsborough County, Florida and shall be governed by and construed in
accordance with the laws of the State of Florida. UTEK expressly agrees that the
courts of Florida shall have jurisdiction over all proceedings in connection
herewith, and LEXON agrees that for purposes of enforcement of UTEK 's rights
and
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remedies hereunder, venue and personal jurisdiction are proper in the courts
situated in Hillsborough County, Florida. LEXON waives any right to a jury
trial.
9. Severability. In the event any provision of this Note shall be
declared by a court of competent jurisdiction to be unenforceable or invalid for
any reason whatsoever, the remaining provisions of this Note shall not be
affected thereby and all such remaining provisions shall be enforced to the
maximum extent permitted by law.
10. Costs of Collection. If this Note or any portion hereof is not paid
when due, after expiration of all curative periods, LEXON promises to pay all
reasonable costs of collection, including but not limited to, all reasonable
attorneys' fees, court costs and reasonable expenses incurred in good faith by
UTEK in order to obtain prompt, punctual and proper payment of all amounts of
indebtedness arising hereunder.
11. Waiver. LEXON and all other parties now or hereafter liable for the
payment of the indebtedness arising hereunder, whether as endorser, guarantor,
surety or otherwise, waive demand, presentment, diligence in collecting and
consent to all extensions which from time to time may be granted.
12. Binding Effect. This Note and all the covenants, promises,
obligations and agreements of LEXON and all rights, powers, privileges and
entitlements of UTEK shall be binding upon and inure to the benefit of their
respective successors, legal representatives, and permitted assigns.
13. Currency and Place of Payment. All payments of principal and
interest arising in connection with this Note shall be made in lawful currency
of the United States of America and shall be paid to UTEK at 202 Wheeler Street,
Plant City, Florida 33566 or such other place as UTEK shall instruct LEXON in
writing.
LEXON, INC.
By /s/ GIFFORD MABIE
Gifford Mabie, President
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EXHIBIT 10.5
Schedule 1.02(b)
to
Stock Purchase Agreement
PLEDGE AND SECURITY AGREEMENT
Secured Party Name and Address Debtor's Name and Address
UTEK CORPORATION LEXON, INC.
202 Wheeler Street 8908 South Yale, Suite 409
Plant City, Florida 33566 Tulsa, Oklahoma 74137-3545
("Secured Party") ("Debtor")
As of the date indicated above, the undersigned Debtor and the
undersigned Secured Party, with addresses as they appear herein, agree as
follows:
1. Grant of Security Interest. For value received, Debtor, LEXON, INC.,
an Oklahoma corporation, grants to UTEK CORPORATION, Secured Party, a first
prior security interest in the pledged shares and the collateral described in
Paragraph 2 ("Collateral") to secure the obligations of Debtor to Secured Party,
pursuant to that certain Secured Promissory Note ("Note") dated of even date
herewith.
2. Collateral. The Collateral consists of 1,000 shares ("Pledged
Shares") of Common Stock of Cancer Diagnostics, Inc. ("CDI") which represents
all the issued and outstanding shares of CDI common stock. The Collateral also
includes all proceeds from the sale of such Collateral. The Pledged Shares shall
be issued in the name of Debtor or duly endorsed for transfer to Debtor or
endorsed in blank.
3. Escrow of The Pledged Shares. The Pledged Shares shall be delivered
to Sam Reiber, Esquire, in escrow ("Escrow Agent"), who hereby agrees to hold
the Pledged Shares for the benefit of Debtor and either surrender possession
thereof upon full payment of the Note or return the Pledged Shares to Secured
Party upon the demand of Secured Party during an event of default under the
Note, after the giving of all notices required in the Note and hereunder and the
expiration of all grace periods hereunder and under the Note.
4. Dividends and Voting Pledged Shares. While the Note remains unpaid
and not in default, Debtor shall be entitled to receive all dividends with
respect to and to vote all the Pledged Shares. So long as this Agreement and the
Note are not in default, Debtor shall be entitled to attend all meetings, to
vote the Pledged Shares and consent to shareholder actions in their sole
discretion and to enjoy and exercise all the rights of ownership of the
Collateral, except that the Pledged Shares shall not be sold by Debtor until the
Note is paid in full.
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5. Negative Covenant of Debtor. While the Note remains not paid in
full, neither Debtor nor CDI will make any distributions of money or property to
its principal founding shareholders, directors, or officers, whether as loans,
cash dividends, repayment of loans or otherwise, other than the payment of
reasonable compensation for services rendered.
6. Release of Pledged Shares. Upon payment in full of the Note and all
interest and other obligations payable by Debtor under the Note, the security
interest hereby created shall ve released automatically and all certificates
representing the Pledged Shares and all other rights, titles and interests in
and to the Pledged Shares shall return and deliver to Debtor.
7. No Transfer of Pledged Shares. While the Note remains unpaid, Debtor
shall not have the right, power or authority to sell, assign, pledge or convey
the Pledged Shares or any interest in the Pledged Shares without Secured Party's
prior written consent, so long as the security interest hereby created remains
in effect.
8. Representations and Warranties with regard to the Pledged Shares.
Debtor represent and warrant to Secured Party that Debtor has full legal power
to grant to Secured Party the security interest hereby granted in the Pledged
Shares as herein provided.
9. Events of Default. Debtor shall be in default under this Agreement
upon the happening of any of the following events or conditions, herein called
"Events of Default":
(a) Default in the payment of any liability of Debtor to Secured
Party under the Note; or
(b) Any event which results in the acceleration of the maturity of
the Note; or
(c) Any Event of Default under the Note.
10. Remedies with Respect to Pledged Shares. During the continuation of
any Event of Default:
(a) Secured Party may, with 15 days' written notice to Debtor,
declare all obligations of Debtor under the Note to be
immediately due and payable; and
(b) Secured Party shall be entitled to proceed on its security
interest in the Pledged Shares in accordance with the Uniform
Commercial Code then in effect in Florida, by giving Debtor at
least 15 days' prior notice thereof; provided however, Debtor
shall cooperate and use all reasonable efforts to assist Secured
Party in foreclosing upon its security interest in the
Collateral, including without limitation, consenting to the
appointment of a receiver.
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(c) Secured Party will be entitled to recover all costs plus
reasonable attorneys' fees and expenses and the fees and
expenses of a receiver, if one is appointed, incurred in
holding the Pledged Shares and enforcing its rights hereunder
before applying the balance of any proceeds from the
disposition of the Pledged Shares to the satisfaction of
Debtor's obligations under the Note.
(d) Secured Party will have the right to transfer any or all of
the Pledged Shares into the name or the name of their
nominees, and shall be under a duty, to exercise such rights
and privileges as required by law.
11. Governing Law. The law governing this secured transaction is the
State of Florida. For words or phrases defined in the Florida Uniform Commercial
Code, the Code definition will control their meaning. A determination that any
provision contained herein is not enforceable will have no effect on the
validity of the remaining provision.
12. Obligations of Debtor Secured by this Agreement. The security
interest herein granted is given to secure all of the obligations of Debtor to
Secured Party under the Note and all extensions and renewals of liabilities for
any term or terms, all interest due or to become due on the liabilities of
Debtor to Secured Party under the Note, and all costs, attorneys' fees, and
other expenditures of Secured Party in the collection and/or enforcement of any
obligation or liability of Debtor to Secured Party thereunder.
13. Expenditures of Secured Party. Debtor is liable for and agrees to
pay Secured Party all expenditures of Secured Party for taxes of Collateral, and
all costs, attorneys' fees and other expenditures of Secured Party in the
enforcement or collection of the Note. All rights and remedies of Secured Party
hereunder are cumulative of all other rights or remedies provided by law, and
may be exercised singularly or concurrently; and the exercise of any one or more
of them will not be a waiver of any other. No waiver, change, modification or
discharge of any of Secured Party's rights or Debtor's duties as so specified or
allowed will be effective unless contained in a written instrument signed by
Secured Party.
14. Waivers. No act, delay, omission, or course of action by Debtor or
Secured Party, including Secured Party's waiver of remedy because of any default
hereunder, will constitute a waiver of any of Secured Party's rights and
remedies under this Agreement or any other agreement between the parties, or
under the documents evidencing the liabilities secured hereby. Waiver by Secured
Party of any rights or remedies under the terms of this Agreement or with
respect to any of Debtor's liabilities to Secured Party will not be a bar to the
exercise of any right or remedy on any subsequent occasion. All rights and
remedies of Secured Party are cumulative and may be exercised singularly or
concurrently, and the exercise of any one or more of them will not be a waiver
of any other. No waiver, change, modification or discharge of any of Secured
Party's rights of Debtor's duties as so specified or allowed will be effective
unless in writing and signed by Secured Party.
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<PAGE>
15. Agreement Binding on Successors and Assigns. This Agreement shall
be binding upon the heirs, executors, administrators, successors and assigns of
the parties hereto.
SECURED PARTY DEBTOR
UTEK CORPORATION LEXON, INC.
By: /s/ DR. CLIFFORD GROSS By /s/ GIFFORD MABIE
Dr. Clifford Gross Gifford Mabie, President
Chairman and Chief Executive Officer
ESCROW AGENT:
/s/ SAM REIBER
Sam Reiber, Escrow Agent
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