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EXHIBIT 10.13
TABLE OF CONTENTS
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PAGE
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BACKGROUND.....................................................................1
Section 1 DEFINITIONS.......................................................1
Section 2 GRANT.............................................................3
Section 3 ACKNOWLEDGMENT AND AGREEMENT ON DIAGNOSTIC PRODUCTS...............5
Section 4 ROYALTIES, RECORDS AND REPORTS....................................5
Section 5 PERFORMANCE OF LICENSED SERVICES..................................6
Section 6 TECHNOLOGY NOTIFICATION...........................................6
Section 7 DILIGENCE.........................................................7
Section 8 TERM AND TERMINATION..............................................7
Section 9 CONFIDENTIALITY-PUBLICITY.........................................8
Section 10 COMPLIANCE.......................................................10
Section 11 ASSIGNMENT.......................................................10
Section 12 NATION OF WARRANTIES AND INDEMNITY...............................10
Section 13 GENERAL..........................................................11
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ATTACHMENTS:
Attachment I COMBINATION SERVICES
Attachment II Summary Royalty Report form
Rider
Appendix A to Rider
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PCR DIAGNOSTIC SERVICES AGREEMENT
This Agreement is made by and between Roche Molecular Systems, Inc.
("RMS"), having an office at 4300 Hacienda Drive, Pleasanton, California 94588
and Exact Laboratories, Inc. ("ELI"), Maynard, Massachusetts, hereafter
collectively referred to as "The Parties".
BACKGROUND
A. RMS owns and has the right to grant immunities from suit to practice under
certain United States Patents describing and claiming, INTER ALIA, a nucleic
acid amplification process known as the polymerise chain reaction ("PCR")
technology.
B. ELI has attained substantial expertise in validating, documenting and
performing sophisticated diagnostic procedures.
C. ELI desires to obtain an immunity from suit from RMS to practice PCR
TECHNOLOGY to perform human IN VITRO clinical laboratory services, and RMS is
willing to grant such an immunity, on the terms and subject to the conditions
provided exclusively in this Agreement.
NOW, THEREFORE, for and in consideration of the mutual covenants
contained herein, RMS and ELI agree as follows:
1. DEFINITIONS
For the purpose of this Agreement, and solely for that purpose, the
terms set forth hereinafter shall be defined as follows:
1.1 The term "AFFILIATE" of a designated Party to this Agreement
shall mean:
a) an organization of which fifty percent (50%) or more of the
voting stock is controlled or owned directly or indirectly
by either Party to this Agreement;
b) an organization which directly or indirectly owns or
controls fifty percent (50%) or more of the voting stock of
either Party to this Agreement;
c) an organization, the majority ownership of which is
directly or indirectly common to the majority ownership of
either Party to this Agreement; and
d) an organization under (a), (b), or (c) above in which the
amount of said ownership is less than fifty percent (50%)
and that amount is
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the maximum amount permitted pursuant to the law governing
the ownership of said organization.
It is understood and agreed, however, that the term "AFFILIATE" shall
not include Genentech Inc., a Delaware Corporation.
1.2 "COMBINATION SERVICES" shall mean a LICENSED SERVICE
offered in combination with another non-PCR diagnostic assay(s) or together
with a non-testing service(s) such as a specialized interpretive service or a
consultative service (e.g., genetic counseling) as part of a package, where
the LICENSED SERVICE is not separately billed.
1.3 "DIAGNOSTIC PRODUCT" shall mean an assemblage of reagents,
including but not limited to reagents packaged in the form of a kit, useful in
performing a Licensed Service.
1.4 "EFFECTIVE DATE" shall mean the date on which the last
signatory to this Agreement signs the Agreement.
1.5 "LICENSED FIELD" shall mean the field of human IN VITRO
diagnostics solely for the detection of genetic diseases, genetic predisposition
to disease, agents associated with infectious diseases, cancer; and for tissue
transplant typing, including testing performed on animal tissue intended for use
in xenotransplantation; PARENTAGE DETERMINATION; disease management; and
clinical trials.
1.6 "LICENSED SERVICES" shall mean the performance by ELI of
an IN VITRO diagnostic procedure utilizing PCR TECHNOLOGY to detect' the
presence, absence or quantity of a nucleic acid sequence associated with a human
disease or condition within the LICENSED FIELD. LICENSED SERVICES include but
are not limited to, any combination of the steps of collecting a sample for
analysis, isolating nucleic acid sequences therein, amplifying one or more
desired sequences, analyzing the amplified material and reporting the results.
1.7 "NET SERVICE REVENUES" shall mean gross invoice price for
the LICENSED SERVICES performed by ELI (or the fair market value for any
nonmonetary consideration which ELI agrees to receive in exchange for LICENSED
SERVICES), less the following deductions where they are factually applicable and
are not already reflected in the gross invoice price:
a) discounts allowed and taken, in amounts customary in
the trade (which shall include the difference between
the dollar amount charged by ELI for a LICENSED SERVICE
and the Medicare and/or Medicaid Limits of Allowance
and/or reimbursement limitations of a THIRD PARTY
insurance program); and
b) government imposed sales taxes and other taxes to the
extent they are separately identified on the invoice;
and
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c) actual bad debt, up to 2% of gross invoice price for
LICENSED SERVICES, which bad debt ELI can prove and
document that it was reasonable and diligent in its
efforts to collect payment.
No allowance or deduction shall be made for commissions or collections,
by whatever name known.
It is hereby understood and agreed that, to the extent feasible,
LICENSED SERVICES and COMBINATION SERVICES shall at all times be invoiced,
listed and billed by ELI as a separate item in ELI's invoices, bills and reports
to customers. NET SERVICE REVENUES for determining royalties on a LICENSED
SERVICE which is part of a COMBINATION SERVICES shall be determined by
[CONFIDENTIAL TREATMENT REQUESTED]/*/ in Attachment I hereto. The [CONFIDENTIAL
TREATMENT REQUESTED]/*/ specified in Attachment I for a particular LICENSED
SERVICE shall be set by RMS after consultation with ELI, [CONFIDENTIAL TREATMENT
REQUESTED]/*/ by the LICENSED SERVICE to the [CONFIDENTIAL TREATMENT
REQUESTED]/*/ of the COMBINATION SERVICES as offered by ELI. Attachment I hereto
shall be modified as new COMBINATION SERVICES are identified and new
royalty-bearing fractions set.
The NET SERVICE REVENUES of the LICENSED SERVICES that are performed by
ELI for any person, firm or corporation controlling, controlled by, or under
common control with ELI, or enjoying a special course of dealing with ELI, shall
be determined based on the average selling price to all THIRD PARTIES during the
period on a test by test basis.
1.8 "PARENTAGE DETERMINATION" shall mean analysis of human
genetic material to ascertain whether two or more individuals are biologically
related, but specifically excludes analysis of forensic evidence for a sexual
assault investigation.
1.9 "PCR TECHNOLOGY" shall mean polymerase chain reaction
technology covered by United States Patent Nos. B1 4,683,195 and B1 4,683,202
and any reissue or reexamination patents thereof.
1.10 "THIRD PARTY" shall mean a party other than an AFFILIATE
of The Parties to this Agreement.
2. GRANT
2.1 Upon the terms and subject to the conditions of this Agreement,
RMS hereby grants to ELI, and ELI hereby accepts from RMS, a royalty-bearing,
nonexclusive immunity from suit under PCR TECHNOLOGY solely to perform LICENSED
SERVICES within the United States and its possessions and the Commonwealth of
Puerto Rico. The Parties understand and agree that no rights are hereby
granted, expressly or by implication, under U.S. Patent No. 4,965,188 (the
'188 patent) covering the performance of nucleic acid amplification using a
thermostable polymerase. An immunity from suit under the '188 patent may be
obtained by purchase of RMS-manufactured polymerase or by contacting the
Director of Licensing, Roche Molecular Systems, Inc., 1145 Atlantic Avenue,
Alameda, CA 94501.
2.2 The PCR TECHNOLOGY hereunder may be practiced solely for the
performance of LICENSED SERVICES and for no other purpose whatsoever, and no
other right, immunity or license is granted expressly, impliedly or by estoppel.
/*/ [CONFIDENTIAL TREATMENT REQUESTED] INDICATES MATERIAL THAT HAS BEEN OMITTED
AND FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED
MATERIAL HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO
RULE 406 PROMULGATED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.
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2.3 ELI expressly acknowledges and agrees that the immunity from suit
pursuant to this Agreement is personal to ELI alone and ELI shall have no right
to sublicense, assign or otherwise transfer or share its rights under the
foregoing immunity from suit. ELI further agrees that LICENSED SERVICES will be
performed, offered, marketed and sold only by ELI except as provided in Section
2.3(a) and ELI shall not authorize any other party, including AFFILIATES, to
practice the PCR TECHNOLOGY, nor shall it practice the PCR TECHNOLOGY in
conjunction with any other party. The foregoing notwithstanding, it is
understood that ELI may market services through its authorized sales
representatives.
a) ELI may offer, market and sell LICENSED SERVICES that are
performed by other laboratories subject to the following
conditions:
i) Each laboratory performing LICENSED SERVICES for ELI must be
separately licensed under RMS's diagnostic services program.
ii) ELI's report forms must list all LICENSED SERVICES marketed
and sold by ELI which are performed by another laboratory even
though ELI will not be obligated to pay royalties on those
LICENSED SERVICES.
iii) ELI must contact RMS to verify that a new laboratory to which
it seeks to send samples for performance of LICENSED SERVICES
is properly licensed by RMS before sending samples to that
laboratory.
iv) Each laboratory performing LICENSED SERVICES for ELI must
report and pay royalties on LICENSED SERVICES performed for
ELI.
2.4 For each COMBINATION SERVICES that ELI offers pursuant to this
immunity from suit, ELI agrees that it will notify RMS at least sixty (60) days
before it commences offering said COMBINATION SERVICES. COMBINATION SERVICES
claimed by ELI on royalty reports which have not met the sixty (60) day notice
requirement and for which RMS has not set an appropriate royalty bearing
fraction, shall be royalty bearing at 100% of the package price, less applicable
deductions. As to all other LICENSED SERVICES offered by ELI which are not part
of a COMBINATION SERVICES, ELI agrees to inform RMS of the availability from ELI
of each such LICENSED SERVICE within thirty (30) days after ELI commences
offering the Licensed Service.
2.5 RMS hereby grants to ELI the right and ELI accepts and agrees to
credit RMS as the source of PCR TECHNOLOGY rights in ELI's, promotional
materials and any other materials intended for distribution to THIRD PARTIES as
follows:
"This test is performed pursuant to a license agreement with Roche Molecular
Systems, Inc."
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3. ACKNOWLEDGMENT AND AGREEMENT ON DIAGNOSTIC PRODUCTS
ELI acknowledges and agrees that the immunity from suit granted
hereunder is for the performance of LICENSED SERVICES only and does not include
any right to make, have made, import, offer or sell any products, including
devices, PCR reagents, kits or DIAGNOSTIC PRODUCTS. ELI further acknowledges and
agrees that RMS Affiliates are in the business of providing clinical laboratory
testing services and the commercial sale of diagnostic testing systems and
therefore may compete directly with ELI's business.
4. ROYALTIES, RECORDS AND REPORTS
4.1 ROYALTIES. For the rights and privileges granted under this
Agreement, ELI shall pay to RMS earned royalties equal to [CONFIDENTIAL
TREATMENT REQUESTED]/*/ percent [CONFIDENTIAL TREATMENT REQUESTED]/*/ of ELI's
NET SERVICE REVENUES for each LICENSED SERVICE performed.
4.2 ELI shall keep full, true and accurate books of account
containing all particulars which may be necessary for the purpose of showing the
amount payable to RMS by way of royalty or by way of any other provision. under
this Agreement. Such books and the supporting data shall be open at all
reasonable times, for three (3) years following the end of the calendar year to
which they pertain (and access shall not be denied thereafter, if reasonably
available), to the inspection of RMS or an independent certified public
accountant retained by RMS for the purpose of verifying ELI's royalty statements
or ELI's compliance in other respects with this Agreement. It is understood that
RMS's inspection of ELI's records does not require access to actual patient
results. If in dispute, such records shall be kept until the dispute is settled.
The inspection of records shall be at RMS's sole cost and expense, unless the
inspector concludes that royalties reported by ELI for the period being audited
are understated by five percent (5%) or more from actual royalties, in which
case the costs and expenses of such inspection shall be paid by ELI.
4.3 ELI shall within sixty (60) days after the first day of January
and July of each year deliver to RMS a true and accurate royalty report. Such
report shall cover the preceding six (6) calendar months; and shall be submitted
either i) on the "Summary Royalty Report", a copy of which is attached hereto as
Attachment II, or ii) on a form generated by ELI which duplicates the format of
the Summary Royalty Report; and shall include at least the following:
a) the name of each LICENSED SERVICE and COMBINATION SERVICES
and the number performed during those six (6) months;
b) compilation of billings thereon and the allowable deductions
therefrom;
c) NET SERVICE REVENUES and the calculation of total royalties
thereon; and
/*/ [CONFIDENTIAL TREATMENT REQUESTED] INDICATES MATERIAL THAT HAS BEEN
OMITTED AND FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED. ALL
SUCH OMITTED MATERIAL HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 406 PROMULGATED UNDER THE SECURITIES ACT OF
1933, AS AMENDED.
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d) the calculation of the net royalty payable to RMS. If no
royalties are due, it shall be so reported.
The correctness and completeness of each such report shall be attested
to in writing by a responsible financial officer of ELI's organization or by
ELI's external auditor or by the chair or other head of ELI's internal audit
committee.
Simultaneously with the delivery of each such report, ELI shall pay to
RMS the royalty due under this Agreement for the period covered by such report.
All payments due RMS hereunder shall be payable in United States currency and
sent together with the royalty report by the due date to the following address:
Roche Molecular Systems, Inc.
P.O. Box 18139
Newark, NJ 07191
or to any address that RMS may advise in writing.
4.4 Licensed Clinical Services performed by ELI prior to
execution of this Agreement shall be royalty bearing and reported to RMS
together with the first royalty report due hereunder.
4.5 ELI's obligation to pay royalties pursuant to this
Agreement shall terminate upon a final holding of invalidity or unenforceability
of all of the patents identified in Section 1.9, SUPRA, by a court of appellate
jurisdiction or by a trial court from which no appeal is or can be taken.
4.6 If ELI shall fail to pay any amount specified under this
Agreement after the due date thereof, the amount owed shall bear interest at the
Citibank NA base lending rate ("prime rate") plus [CONFIDENTIAL TREATMENT
REQUESTED]/*/% from the due date until paid, provided, however, that if this
interest rate is held to be unenforceable for any reason, the interest rate
shall be the maximum rate allowed by law at the time the payment is due.
5. PERFORMANCE OF LICENSED SERVICES
The Parties agree that quality assurance is of utmost importance in
the performance of LICENSED SERVICES. To that end, ELI agrees that it will
participate in at least one independent proficiency testing program for each
LICENSED SERVICE when such program(s) becomes available.
6. TECHNOLOGY NOTIFICATION
6.1 With respect to any invention, improvement or discovery
(hereinafter referred to as "Discoveries" in this Article) of ELI made after
entering into this Agreement, resulting from work conducted under this Agreement
and being applicable to PCR, if ELI
/*/ [CONFIDENTIAL TREATMENT REQUESTED] INDICATES MATERIAL THAT HAS BEEN OMITTED
AND FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED
MATERIAL HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO
RULE 406 PROMULGATED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.
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decides to license said Discoveries to THIRD PARTIES, then ELI agrees to provide
to RMS, unless not possible due to ELI's preexisting commitments to THIRD
PARTIES relating to said Discoveries, a reasonable opportunity to negotiate a
license to use said Discoveries in PCR-based DIAGNOSTIC PRODUCTS and services.
Such Discoveries include, but are not limited to, improvements of the PCR
process or in the performance of LICENSED SERVICES, modifications to or new
methods of performing the LICENSED SERVICES, including the automation of the PCR
process or of the LICENSED SERVICES.
6.2 Any agreement reached between The Parties as a result of ELI's
notification to RMS of a Discovery pursuant to Section 6.1 hereto shall be upon
terms and conditions negotiated in good faith by The Parties.
7. DILIGENCE
ELI shall exercise reasonable diligence in developing, testing,
validating, documenting, promoting and selling the LICENSED SERVICES. In the
course of such diligence, ELI shall take appropriate steps including, upon
reasonable written request of RMS, furnishing RMS with representative copies of
all promotional material relating to the LICENSED SERVICES.
8. TERM AND TERMINATION
8.1 The immunity from suit granted to ELI herein shall commence on
the EFFECTIVE DATE and terminate on the date of expiration of the last to expire
of the patents included within the PCR TECHNOLOGY, which patent contains at
least one claim covering the performance of LICENSED SERVICES.
8.2 If in the course of performing and offering LICENSED SERVICES,
ELI fails to comply with the quality assurance provision of Article 5, ELI shall
so notify RMS immediately upon such failure and shall have thirty (30) days from
receipt of such notice to cure all defects of which it is notified. If ELI does
not cure all such defects within the designated thirty (30) days, RMS may then
in its sole discretion terminate this Agreement in its entirety, or any portion
thereof immediately. For the purposes of this Section and this Agreement, ELI's
failure to provide an accurate and correct test result when participating in an
independent proficiency testing program pursuant to Article 5, on two
consecutive evaluations, shall automatically be deemed a failure to comply with
Article 5 and shall be a material breach of this Agreement.
8.3 Notwithstanding any other Section of this Agreement, ELI may
terminate this Agreement for any reason on thirty (30) days' written notice to
RMS.
8.4 The decision of a Court or Administrative body finding RMS
liable or culpable due to ELI's performance of LICENSED SERVICES shall give RMS
the right to terminate this Agreement immediately upon notification to RMS of
said decision.
8.5 The immunity from suit granted hereunder to ELI shall
automatically terminate upon (a) an adjudication of ELI as bankrupt or
insolvent, or ELI's admission in writing of its inability to pay its obligations
as they mature; or (b) an assignment by ELI for the benefit
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of creditors; or (c) ELI's applying for or consenting to the appointment of a
receiver, trustee or similar officer for any substantial part of its property;
or such receiver, trustee or similar officer's appointment without the
application or consent of ELI, if such appointment shall continue undischarged
for a period of ninety (90) days; or (d) ELI's instituting (by petition,
application, answer, consent or otherwise) any bankruptcy, insolvency
arrangement, or similar proceeding relating to ELI under the laws of any
jurisdiction; or (e) the institution of any such proceeding (by petition,
application or otherwise) against ELI, if such proceeding shall remain
undismissed for a period of ninety (90) days or the issuance or levy of any
judgment, writ, warrant of attachment or execution or similar process against a
substantial part of the property of ELI, if such judgment, writ, or similar
process shall not be released, vacated or fully bonded within ninety (90) days
after its issue or levy; or (f) loss of ELI's federal or state licenses permits
or accreditation necessary for operation of ELI as a health care institution.
8.6 RMS shall have the right to terminate this Agreement by
written notice to ELI upon any change in the ownership or control of ELI or of
its assets. Termination under this Section shall be effective immediately upon
receipt by ELI of RMS's notice of termination. For such purposes, a "change in
ownership or control" shall mean that 30% or more of the voting stock of ELI
become subject to the control of a person or entity, or any related group of
persons or entities acting in concert, which person(s) or entity(ies) did not
control such proportion of voting stock as of the EFFECTIVE DATE of the
Agreement. Analogously, RMS shall have the right to terminate this Agreement
upon any transfer or sale of 30% or more of the assets of ELI to another panty.
8.7 BREACH. Upon any breach of or default of a material term
under this Agreement by ELI, RMS may terminate this Agreement upon thirty (30)
days' written notice to ELI. Said notice shall become effective at the end of
the thirty-day period, unless during said period ELI fully cures such breach or
default and notifies RMS of such a cure.
8.8 Upon termination of this Agreement as provided herein, all
immunities and rights granted to ELI hereunder shall revert to or be retained by
RMS.
8.9 ELI's obligations to report to RMS and to pay royalties to
RMS as to the LICENSED SERVICES performed under the Agreement prior to
termination or expiration of the Agreement shall survive such termination or
expiration.
9. CONFIDENTIALITY-PUBLICITY
9.1 Except as otherwise specifically provided in Section 2.5, ELI
agrees to obtain RMS's approval before distributing any written information,
such as Press Releases, to THIRD PARTIES which contains references to RMS or
this Agreement. RMS's approval shall not be unreasonably withheld or delayed
and, in any event, RMS's decision shall be rendered within three (3) weeks of
receipt of the written information. Once approved, such materials, or abstracts
of such materials, which do not materially alter the context of the material
originally approved may be reprinted during the term of the Agreement without
further approval by RMS unless RMS has notified ELI in writing of its decision
to withdraw permission for such use.
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9.2 Each Party agrees that any financial, legal or business
information or any technical information disclosed to it (the "Receiving Party")
by the other (the "Disclosing Party") in connection with this Agreement shall be
considered confidential and proprietary and the Receiving Party shall not
disclose same to any THIRD PARTY and shall hold it in confidence for a period of
five (5) years and will not use it other than as permitted under this Agreement
provided, however, that any information, know-how or data which is orally
disclosed to the Receiving Party shall not be considered confidential and
proprietary unless such oral disclosure is reduced to writing and given to the
Receiving Party in written form within thirty (30) days after oral disclosure
thereof. Such confidential and proprietary information shall include, without
limitation, marketing and sales information, commercialization plans and
strategies, research and development work plans, and technical information such
as patent applications, inventions, trade secrets, systems, methods, apparatus,
designs, tangible material, organisms and products and derivatives thereof.
9.3 The above obligations of confidentiality shall not be applicable
to the extent:
a) such information is general public knowledge or, after
disclosure hereunder, becomes general or public knowledge
through no fault of the Receiving Party; or
b) such information can be shown by the Receiving Party by its
written records to have been in its possession prior to
receipt thereof hereunder; or
c) such information is received by the Receiving Party from any
THIRD PARTY for use or disclosure by the Receiving Party
without any obligation to the Disclosing Party provided,
however, that information received by the Receiving Party
from any THIRD PARTY funded by the Disclosing Party (e.g.
consultants, subcontractors, etc.) shall not be released from
confidentiality under this exception; or
d) the disclosure of such information is required or desirable
to comply with or fulfill governmental requirements,
submissions to governmental bodies, or the securing of
regulatory approvals.
9.4 Each Party shall, to the extent reasonably practicable,
maintain the confidentiality of the provisions of this Agreement and shall
refrain from making any public announcement or disclosure of the terms of
this Agreement without the prior consent of the other Party, except to the
extent a Party concludes in good faith that such disclosure is required under
applicable law or regulations, in which case the other Party shall be
notified in advance.
10. COMPLIANCE
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In exercising any and all rights and in performing its obligations
hereunder, ELI shall comply fully with any and All applicable laws, regulations
and ordinances and shall obtain and keep in effect licenses, permits and other
governmental approvals, whether at the federal, state or local levels, necessary
or appropriate to carry on its activities hereunder. ELI further agrees to
refrain from any activities that would have an adverse effect on the business
reputation of RMS. RMS will advise ELI of any such activities and ELI will have
thirty (30) days to correct such activity.
11. ASSIGNMENT
This Agreement shall not be assigned or transferred by ELI (including
without limitation any purported assignment or transfer that would arise from a
sale or transfer of ELI's business) without the express written consent of RMS.
RMS may assign all or any part of its rights and obligations under this
Agreement at any time without the consent of ELI. ELI agrees to execute such
further acknowledgments or other instruments as RMS may reasonably request in
connection with such assignment.
12. NEGATION OF WARRANTIES AND INDEMNITY
12.1 Nothing in this Agreement shall be construed as:
a) a warranty or representation by RMS as to the validity or
scope of any patent included within PCR TECHNOLOGY;
b) a warranty or representation that the practice of the PCR
TECHNOLOGY and/or the performance of LICENSED SERVICES are
or will be free from infringement of patents of THIRD
PARTIES;
c) an obligation to bring or prosecute actions or suits
against THIRD PARTIES for infringement;
d) except as expressly set forth herein, conferring the right
to use in advertising, publicity or otherwise any
trademark, trade name, or names, or any contraction,
abbreviation, simulation or adaptation thereof, of RMS;
e) conferring by implication, estoppel or otherwise any
license, right or immunity under any patents or patent
applications of RMS other than those specified in PCR
TECHNOLOGY, regardless of whether such other patents and
patent applications are dominant or subordinate to those in
PCR TECHNOLOGY;
f) an obligation to furnish any know-how not provided in PCR
TECHNOLOGY; or
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g) creating any agency, partnership, joint venture or similar
relationship between RMS and ELI.
12.2 RMS MAKES NO EXPRESS OR IMPLIED WARRANTIES OF MERCHANTABILITY OR
FITNESS FOR A PARTICULAR PURPOSE.
12.3 ELI shall assume full responsibility for its use of the PCR
TECHNOLOGY and shall defend, indemnify and hold RMS harmless from and against
all liability, demands, damages, expenses (including attorneys' fees) and losses
for death, personal injury, illness, property damage or any other injury or
damage, including any damages or expenses arising in connection with state or
federal regulatory action (collectively "Damages"), resulting from the use by
ELI, including its officers, directors, agents and employees, of the PCR
TECHNOLOGY except, and to the extent that such Damages are caused by the
negligence or willful misconduct of RMS.
13. GENERAL
13.1 This Agreement constitutes the entire agreement between The
Parties as to the subject matter hereof, and all prior negotiations,
representations, agreements and understandings are merged into, extinguished by
and completely expressed by it. This Agreement may be modified or amended only
by a writing executed by authorized officers of each of The Parties.
13.2 Any notice required or permitted to be given by this Agreement
shall be given by postpaid, first class, registered or certified mail, or by
courier, properly addressed to the other Party at the respective address as
shown below:
If to RMS: Roche Molecular Systems, Inc.
1145 Atlantic Avenue
Alameda, California 94501
Attn: General Counsel
If to ELI: Exact Laboratories, Inc.
63 Great Road
Maynard, Massachusetts 01754
Attn: President
Either Party may change its address by providing notice to the other
Party. Unless otherwise specified herein, any notice given in accordance with
the foregoing shall be deemed given within four (4) full business days after the
day of mailing, or one full day after the date of delivery to the courier, as
the case will be.
13.3 GOVERNING LAW AND VENUE. This Agreement and its effect
are subject to and shall be construed and enforced in accordance with the law of
the State of California, U.S.A., except as to any issue which by the law of
California depends upon the validity, scope or
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enforceability of any patent within the PCR TECHNOLOGY, which issue shall be
determined in accordance with the applicable patent laws of the United States.
The Parties agree that the exclusive jurisdiction and venue for any dispute or
controversy arising from this Agreement shall be in the United States District
Court for the Northern District of California if federal jurisdiction exists,
and if no federal jurisdiction exists, then in the Superior Court of the County
of Alameda, California.
13.4 ARBITRATION. Notwithstanding the provisions of Section
13.3 above, any dispute concerning solely the determination of facts such as,
but not limited to, (a) the value of a COMBINATION SERVICES and a LICENSED
SERVICE pursuant to Section 1.7; (b) a determination of royalty rate payments
owed pursuant to Section 4.1; (c) compliance with quality assurance pursuant to
Article 5; or (d) good faith compliance with Section 6.1; and which dispute does
not involve a question of law, shall be settled by final and binding arbitration
at a mutually convenient location in the State of California pursuant to the
commercial arbitration rules of the American Arbitration Association, in
accordance with the following procedural process:
i) The arbitration tribunal shall consist of three
arbitrators. In the request for arbitration and the
answer thereto, each Party shall nominate one
arbitrator and the two arbitrators so named will then
jointly appoint the third arbitrator as chairman of the
arbitration tribunal.
ii) The decision of the arbitration tribunal shall be final
and judgment upon such decision may be entered in any
competent court for juridical acceptance of such an
award and order of enforcement. Each Party hereby
submits itself to the jurisdiction of the courts of the
place of arbitration, but only for the entry of
judgment with respect to the decision of the
arbitrators hereunder.
13.5 Nothing in this Agreement shall be construed so as to
require the commission of any act contrary to law, and wherever there is any
conflict between any provision of this Agreement or concerning the legal right
of The Parties to enter into this contract and any statute, law, ordinance or
treaty, the latter shall prevail, but in such event the affected provisions of
the Agreement shall be curtailed and limited only to the extent necessary to
bring it within the applicable legal requirements.
13.6 If any provision of this Agreement is held to be
unenforceable for any reason, it shall be adjusted rather than voided, if
possible, in order to achieve the intent of RMS's to the extent possible. In any
event, all other provisions of this Agreement shall be deemed valid and
enforceable to the full extent possible.
IN WITNESS WHEREOF, The Parties hereto have set their hands and seals
and duly executed this Agreement on the date(s) indicated below, to be effective
on Effective Date as defined herein.
-12-
<PAGE>
ROCHE MOLECULAR SYSTEMS, INC. EXACT LABORATORIES, INC.
By: /s/ Thomas White By: /s/ Donna K. Hazard
------------------------------ --------------------------
Thomas White, Ph.D Donna K. Hazard
Title: Vice President, R&D Title: Vice President, Business
Development
Date: May 6, 1999 Date: June 3, 1999
---------------------------- -------------------------
-13-
<PAGE>
ATTACHMENT I
COMBINATION SERVICES
PERCENT OF NET SERVICE
REVENUES FOR COMBINATION
SERVICES WHICH IS
ATTRIBUTABLE TO LICENSED
LICENSED SERVICES SERVICES
[TO BE DETERMINED]
<PAGE>
ATTACHMENT II
SUMMARY ROYALTY REPORT
for the Period _______ to _______
Licensee: Exact Laboratories, Inc. Field of Use: In Vitro Human Diagnostic
Effective Date: Services
Royalty Rate: [CONFIDENTIAL TREATMENT
REQUESTED]/*/%
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------------------------
LICENSED SERVICE AMOUNT NUMBER OF COMPILATION DEDUCTIONS COMBINATION
BILLED PER LIC. SERVICE OF ALLOWED* SERVICE %
LIC. SERVICE PERFORMED BILLINGS (FROM ATT.I)
-----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
-----------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------
Royalty Payment Due
-----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
-------------------------------
NET SERVICE EARNED
REVENUE ROYALTY
-------------------------------
<S> <C>
-------------------------------
-------------------------------
-------------------------------
-------------------------------
-------------------------------
-------------------------------
-------------------------------
</TABLE>
* PLEASE ATTACH, TO THIS FORM, DOCUMENTATION OR SUPPLEMENTAL DATA FOR
"DEDUCTIONS ALLOWED".
** COMBINATION SERVICES %'S MUST BE PREVIOUSLY AGREED UPON. TO CONFIRM THAT A
COMBINATION SERVICES % HAS BEEN ESTABLISHED OR TO PROPOSE THIS STATUS,
PLEASE CONTACT RMS LICENSING DEPT. @(510)814-2984.
CHECK HERE IF THERE WERE NO LICENSED SERVICES PERFORMED FOR THIS REPORT
PERIOD: _____
I hereby certify the information set forth above is correct and complete with
respect to the amounts due under the applicable license agreement.
By:_____________________________ Title:______________ Date:__________________
(authorized signature)
Name (please print):_________________________________________
-------------------------------------------------------------------------------
MAIL REPORT WITH ANY ROYALTY PAYMENT DUE TO: ROCHE MOLECULAR SYSTEMS, INC., P.O.
BOX 18139, NEWARK, NEW JERSEY 07191
/*/ [CONFIDENTIAL TREATMENT REQUESTED] INDICATES MATERIAL THAT HAS BEEN OMITTED
AND FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED. ALL SUCH OMITTED
MATERIAL HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO
RULE 406 PROMULGATED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.
<PAGE>
RIDER CONCERNING SUPPLEMENTAL PATENT RIGHTS TO
PCR DIAGNOSTIC SERVICES AGREEMENT
The purpose of this rider is to set forth the agreement of Exact Laboratories,
Inc. ("ELI") and Roche Molecular Systems, Inc. ("RMS") concerning the
supplemental rights to additional patents relating to PCR TECHNOLOGY which RMS
offers and The Parties agree to add to the rights granted to ELI by the
Agreement between The Parties, executed on even date herewith (the "PCR
Diagnostic Services Agreement").
1. It is understood by The Parties that RMS may, from time to time, come
into possession or control of additional patents or claims of patents
relating to PCR TECHNOLOGY rights to which RMS may decide to offer to
add to the PCR Diagnostic Services Agreement and which ELI may desire
to accept. Accordingly, appended hereto as APPENDIX A is a list of such
additional patents or claims of patents as RMS is currently offering to
which ELI, by its authorized representative, has indicated its
acceptance thereof in accordance with the rights of use and all other
pertinent obligations, restrictions and limitations as set forth in the
PCR Diagnostic Services Agreement.
2. APPENDIX A may be amended by mutual agreement of The Parties in writing
so as to add additional patent rights being offered by RMS.
Accordingly, a new APPENDIX A signed and dated by both parties shall
supersede any prior APPENDIX A and shall become a part of this rider.
3. It is expressly understood and agreed by The Parties that the grant of
additional patent rights herein does not in any way otherwise modify
the PCR Diagnostic Services Agreement and that all provisions of that
Agreement shall remain in full force and effect as originally set forth
therein. The term of the PCR Diagnostic Services Agreement shall
control the enjoyment of rights hereunder and is not extended by the
rights granted hereby nor shall there be any additional royalty
obligation to RMS beyond that set forth in said Agreement.
4. In consideration of the further rights being granted it hereunder, ELI
agrees to remain in good faith compliance with the applicable terms of
the PCR Diagnostic Services Agreement, including reporting and payment
of royalties and the limitation on use of PCR TECHNOLOGY strictly for
the performance of LICENSED SERVICES and not to make products.
5. In the event that ELI's obligation to pay royalties under the PCR
Diagnostic Services Agreement for its rights to use the PCR TECHNOLOGY
shall cease for any reason, whether by termination, expiry,
invalidation or otherwise, then The Parties agree that this rider shall
become null and void and the rights granted hereunder terminated
without notice and The Parties shall be free to negotiate a new
agreement with respect to the patent rights listed on APPENDIX A.
<PAGE>
Accepted and Agreed
Roche Molecular Systems, Inc. Exact Laboratories, Inc.
By: /s/ Thomas White By: /s/ Donna K. Hazard
------------------------------ -----------------------------
Thomas White Donna Hazard
Title: Vice President, R&D Title: Vice President, Business
Development
Date: May 6, 1999 Date: June 3, 1999
---------------------------- ---------------------------
<PAGE>
APPENDIX A TO RIDER
ADDITIONAL PATENTS
U.S. Patent Number 5,008,182
U.S. Patent Number 5,176,995
U.S. Patent Number 5,219,727
U.S. Patent Number 5,110,920
ROCHE MOLECULAR SYSTEMS, INC. EXACT LABORATORIES, INC.
By: /s/ Thomas White By: /s/ Donna K. Hazard
------------------------- --------------------------
Thomas White, Ph.D Donna Hazard
Title: Vice President, R&D Title: Vice President, Business
Development
Date: May 6, 1999 Date: June 3, 1999
--------------------------- ------------------------
