Exhibit 10.1
LICENSE AGREEMENT
This License
Agreement (“ Agreement ”) is entered into as of
January 30, 2009 (the “ Effective Date ”) by and
between Health Discovery Corporation , a Georgia corporation
having its principal place of business at 2 East Bryan Street,
Suite #601, Savannah, GA 31401 (“ HDC ”), and
Abbott Molecular Inc. , a Delaware corporation having its
principal place of business at 1300 East Touhy Avenue, Des Plaines,
IL 60018 and its Affiliates (as defined below) (collectively
“ Abbott ”).
WHEREAS, HDC
and Abbott each desires to establish a collaboration and license
relationship between them.
NOW, THEREFORE,
the parties agree as follows:
The following
capitalized terms shall have the following meanings:
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“ Affiliate ” of a party
shall mean a corporation or other business entity controlled by,
controlling or under common control with, such
party. For this purpose, control of a corporation or
other business entity shall mean direct or indirect beneficial
ownership of more than fifty percent (50%) of the voting interest
in, or a greater than fifty percent (50%) interest in the equity
of, such corporation or other business entity.
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“ Analyte Specific Reagent ”
or " ASR " shall mean the finished, packaged and labeled
assembly of a Licensed Product in the form of assay components,
purchased by commercial laboratories to test for the detection
and/or quantification of an analyte under the United States Code of
Federal Regulations, Title 21, Paragraphs 809.10, 809.30, 864.4010
and 864.4020.
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“ Change of Control ” means
(a) the acquisition of a party by another entity by means of
any transaction or series of related transactions (including,
without limitation, any reorganization, merger or consolidation)
that results in the transfer of fifty percent (50%) or more of the
voting securities of such party, (b) a sale of all or
substantially all of the assets of a party, or (c) the acquisition
by any person or other entity (other than a party and its
Affiliates or employee benefit plans), including any person or
group as defined in Paragraphs 3(a)(9) and 13(d), 14(d) and Rule
13d-5 of the Exchange Act of more than fifty percent (50%) of the
voting securities of such party; provided, however, that no Change
in Control shall occur by reason of (i) an initial public offering,
or (ii) a reorganization, merger, consolidation or sale, the sole
purpose of which is to change the state of a party’s
incorporation or to create a holding company that will be owned in
substantially the same proportions by the persons who held such
party’s securities immediately before such
transaction.
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Confidential treatment has been
requested pursuant to Rule 24b-2 promulgated under the Securities
Exchange Act of 1934.
This exhibit has been provided to
the Securities and Exchange Commission in unredacted
form.
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" Collaboration " shall mean that term as
it is defined in Paragraph 2.1.
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" Collaboration Term " means the time
period commencing upon the Effective Date and continuing until the
first to occur of the date three (3) years after such date or
completion of the research contemplated by the FDA Submission
Plan.
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“ Confidential Information ”
shall mean the terms and conditions of this Agreement, and all
information developed by the parties pursuant to the Collaboration
and all other disclosed by one party to the other in writing and
clearly marked “Confidential” or, if communicated
orally, specified as confidential at the time of disclosure and
confirmed in writing within thirty (30) days after such oral
communication and clearly marked “Confidential”;
provided, however, that Confidential Information shall not include
information that:
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1.6.1 is
already in the public domain, or on or after the Effective Date
comes into the public domain other than as a result of the wrongful
disclosure by either party to this Agreement;
1.6.2 is
already known to the recipient as evidenced by prior-dated written
documents already in the recipient’s possession, which
documents were not furnished by the other party to this
Agreement;
1.6.3 is
disclosed to the other party by any third party having the right to
make that disclosure;
1.6.4 is
required by law to be disclosed in connection with the registration
or filing with, or approval or certification from any governmental
agency or body including, without limitation, the United States
Food and Drug Administration, provided that the information is not
the inventive subject matter of an unpublished patent application,
or is required to be disclosed to comply with the terms of
contractual relationships and provided that each party undertakes
to use its best endeavors to maintain to the maximum extent
possible and to make any third parties to whom such information is
disclosed aware of the confidentiality of such information;
or
1.6.5 can
be proven to have been independently developed by the party
receiving the information under this Agreement without the aid,
application or use in any way of Confidential Information received
from the disclosing party.
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1.7
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" FDA Submission Plan " shall mean the
plan for the Collaboration attached hereto as Exhibit C.
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“ Field ” shall mean the use
of a molecular diagnostic assay using the Licensed Prostate Markers
in in vitro diagnostics relating to prostate cancer,
including the detection of the presence or risk of prostate cancer,
or the selection of therapy, or in a Research Application related
to prostate cancer.
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“ First Commercial Sale ” or
“ FCS ” shall mean the first time, except in the
context of a clinical trial, Abbott transfers title of Licensed
Product to an independent third party for monetary consideration or
provides a Diagnostic Test Service using Licensed Product to an
independent third party for monetary consideration.
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“ IVD ” shall mean an assay
which claims an intended use, and is approved by a governmental
regulatory body for sale, as an in vitro diagnostic kit, and
which is not an ASR or labeled for “Research Use Only”,
including an assay that is CE Marked.
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" Joint Inventions " shall mean all new
inventions jointly made, by the parties as part of the
Collaboration.
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“Joint Patent Rights” shall mean all
patents and/or patent applications for Joint Inventions.
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“ Know-How ” shall mean,
without limitation, all trade secrets and technology, as well as
non-patented, non-public inventions, improvements, discoveries,
formulae, processes, data, and reagents discovered or developed by
HDC, and owned or legally acquired by or licensed to HDC without
restriction on dissemination and licensing, before or during the
Collaboration Term, whether patentable or not, and which relate to
the Field and the use of Licensed Prostate Markers in the
Field.
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“ Laboratory Developed Test ”
shall mean the provision of test results from use of a Licensed
Product or Licensed Products to assay a patient urine or prostate
biopsy sample, to be entered into the medical history record of the
patient providing the urine or prostate biopsy sample.
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“ Licensed Product(s) ” shall
mean finished products consisting of one or more nucleic acid
detection reagents for the assay of one or more Prostate Marker(s)
for use in the Field, the manufacture, use, sale or importation of
which, but for the rights granted herein, would infringe a Valid
Claim within Patent Rights.
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“ Net Sales ” shall
mean:
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1.16.1 The
amount charged for Licensed Product to a non-Affiliated third
party, less a lump sum of five percent (5%) to cover all usual
deductions, such as cash discounts allowed and taken; amounts for
transportation, insurance or shipping; amounts repaid, credited or
rebated for rejections or returns of Licensed Product; and taxes
and duties. Net Sales shall not include Licensed
Products used for clinical trials, research, evaluation of customer
acceptance, charitable or humanitarian donations, commercial
samples or other noncommercial uses as long as Abbott receives no
financial compensation for such use or donation.
1.16.2 If
the price of Licensed Product sold by Abbott or its Affiliates is
increased to include an amount to cover the amortized cost of an
instrument system or other equipment or the cost of supplying
maintenance for such system or equipment under a Reagent Agreement
Plan, Reagent Rental Plan or other successor similar plan
(collectively referred to as “ RAP ”), the Net
Sales for such Licensed Product shall be reduced an additional ten
percent (10%).
1.16.3 In
the event that Abbott or its Affiliates sells Licensed Product to a
third party together with one or more other products (each a
“ Combination Product ”), the Net Sales with
respect to such Combination Product shall mean the price of such
Combination Product billed to customers, less the allowances and
adjustments above, multiplied by a percentage equal to the fraction
A/(A+B), where A is the stand-alone market value of the Licensed
Product and B is the stand-alone market value of the other
product(s).
1.16.4 The
amount charged for Laboratory Developed Test to a non-Affiliated
third party, less (i) any shortfall in the reimbursement amount
from the amount charged, and (ii) a lump sum of five percent (5%)
to cover all usual deductions, such as cash discounts allowed and
taken; amounts for transportation, insurance or shipping; amounts
repaid, credited or rebated for rejections or returns of Licensed
Product; and taxes and duties. Net Sales shall not
include Laboratory Developed Tests used for clinical trials,
research, evaluation of customer acceptance, charitable or
humanitarian donations, commercial samples or other noncommercial
uses as long as Abbott receives no direct financial compensation
for such use or donation.
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“ Patent Rights ” shall
mean:
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1.17.1 all
patent(s) and/or patent applications listed in Exhibit A hereto
that are owned or controlled by HDC as of the Effective Date that
are applicable to the use of the Licensed Prostate Markers in the
Field;
1.17.2 any
additional patent and/or patent application(s) which, after the
Effective Date and during the Collaboration Term, are solely owned
or controlled by HDC and are free to be licensed and/or sublicensed
by HDC and that are applicable to the Field (for the avoidance of
doubt, such additional patent and/or patent application(s),
including, without limitation, (a) patents and applications
acquired or licensed by HDC from third parties that are applicable
to the Field, and (b) such patents and applications covering New
Inventions owned solely by HDC that are applicable to the Field;
and
1.17.3 any
and all divisions, continuations, continuations-in-part, renewals,
reissues, extensions and supplemental protection certificates of
any of the patent applications and patents described in the
foregoing clauses of this Paragraph 1.17.
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“Licensed Prostate Markers”
shall mean one or more of the nucleic acid detection targets
identified in Exhibit B that are present in a urine or prostate
biopsy sample useful for the diagnostic identification,
classification, therapeutic response prediction or monitoring of
prostate cancer.
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" Research Application " shall mean use
of a Licensed Product or component thereof for research and
clinical research applications. For purposes herein, the
performance of a clinical trial using a Licensed Product during the
Collaboration shall be deemed a Research Application.
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" FDA Submission Plan " shall mean the
plan for the Collaboration attached hereto as Exhibit C.
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“ RUO ” shall mean "research
use only", as defined in United States Code of Federal Regulations,
Title 21, Paragraph 809.10(c)(2)(i).
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“ Territory ” shall mean all
the countries in the world.
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“ Utility ” means the
application for a Licensed Product, being (a) RUO, (b) an ASR, or
(c) an IVD for any medical utility.
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“ Valid Claim ” shall mean
any claim of an issued and unexpired patent within Patent Rights or
Joint Patent Rights exclusively licensed to Abbott, which claim has
not been held invalid or unenforceable by a non-appealable decision
of a court or governmental agency having competent
jurisdiction.
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Article 2 -
The Collaboration, Materials and Data
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Collaboration . During the Collaboration Term and
pursuant to the FDA Submission Plan, Abbott and HDC agree to
collaborate on the performance of the necessary validation studies
and clinical trial(s), and the preparation of and submission to the
U.S. Food and Drug Administration (“FDA’) of either a
510(k) or PMA application seeking the necessary authorization from
the FDA for the U.S. marketing, use and sale with associated claims
of medical utility of a prostate cancer diagnostic assay (the
“Collaboration”). For purposes of the
Collaboration, the parties acknowledge and agree that:
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2.1.1 The
FDA Submission Plan specifies the responsibilities of the parties
for the clinical trial activities, and may be modified only by a
writing executed by both parties; and
2.1.2 Initially,
Abbott will be solely responsible for the preparation and
submission of the 510(k) or PMA application to the
FDA. Abbott will provide a draft of the submission to
HDC for its comment at least thirty (30) days before the actual
filing with the FDA. However, the parties may agree in writing to a
change in the allocation of responsibility. In this
event, any such writing will modify the FDA Submission Plan to
establish each party’s responsibilities and whether any
additional time or funding is required.
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During the
Collaboration Term, HDC agrees to exclusively collaborate with
Abbott on the performance of the clinical trials and submission to
the FDA.
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Exchange of Materials . During the Collaboration Term, HDC
will provide materials (“HDC Materials”), including,
without limitation, test reagent samples and clinical samples, to
Abbott, and Abbott will provide materials, including, without
limitation, test reagents and clinical samples necessary to
complete the Collaboration (collectively, “Abbott
Materials”) to HDC for the purposes described in the FDA
Submission Plan. Each shall do so at its sole cost and
expense. The parties shall comply with all applicable
laws, rules and regulations in the packaging and shipment of the
HDC Materials and Abbott Materials, as applicable (collectively,
“Materials”). Abbott Materials are and shall
remain the sole property of Abbott. HDC Materials are
and shall remain the sole property of HDC. Each party shall
use Materials of the other party solely for the Collaboration and
shall not provide them to any third party for any purpose without
the other party’s prior written consent. Materials
shall not be used for purposes of reporting of patient results,
except in the course of a clinical trial whose protocol expressly
provides for such reporting.
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Additional and New Prostate Markers
. Abbott and HDC may each
separately bring additional prostate markers (“Additional
Prostate Markers”) into the Collaboration for investigation
in combination with one or more of the Licensed Prostate Markers
identified in Exhibit B. The parties may also decide to
collaborate on discovery of new prostate markers (“New
Prostate Markers”), with either Abbott or HDC providing urine
or tissue samples that may exhibit such New Prostate
Markers. Any such New Prostate Markers discovered in the
Collaboration will be jointly owned by Abbott and HDC and subject
to the provisions of Paragraphs 8.5 and 8.6 hereof.
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Disclosure of Data . All data and other relevant
information generated by a party pursuant to the Collaboration
shall be promptly and fully disclosed to the other party, and shall
be freely usable for internal use and any regulatory submission by
the other party subject to the confidentiality provisions of
Article 7 and intellectual property provisions of Article
8.
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Reporting . At regular intervals to be
determined and documented by the parties, each party shall submit
progress and other written status reports as reasonably requested
by the other party. Additionally, the parties shall hold
regular meetings, alternating between their respective
headquarters, at least quarterly, to review and discuss such
progress.
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Signing Fee . Promptly after execution of this Agreement by
both parties, Abbott shall pay to HDC a one-time Signing Fee of
One-Hundred-Thousand U.S. Dollars ($100,000.00). This
Signing Fee shall be non-refundable and non-creditable towards
royalties.
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Phase 1 and 2 Completion Milestone
Fee .
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3.2.1 Upon
completion of both Phases 1 and 2 described in the FDA
Submission Plan, Abbott shall pay to HDC a one-time Phase 1 and 2
Completion Milestone Fee of Two-Hundred-Fifty-Thousand U.S. Dollars
($250,000.00). This Phase 1 and 2 Completion Milestone
Fee shall be non-refundable and non-creditable towards
royalties.
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3.3
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Phase 3 and 4 Completion Milestone
Fee . Upon
completion of both Phases 3 and 4 described in the FDA
Submission Plan, Abbott shall pay to HDC a one-time Phase 3 and 4
Completion Milestone Fee of Two-Hundred-Fifty-Thousand U.S. Dollars
($250,000.00). This Phase 3 and 4 Completion Milestone
Fee shall be non-refundable and non-creditable towards
royalties.
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3.4
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FDA Submission Milestone Fee
. Promptly after the
filing by Abbott with the FDA of either a 510(k) or PMA submission,
Abbott shall pay to HDC a one-time FDA Submission Fee of
Five-Hundred-Thousand U.S. Dollars ($500,000.00). This
Fee shall also be irrevocable and non-creditable against any
royalty obligation.
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3.5
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FDA Approval Fee . Promptly after the receipt by
Abbott of a written notification from the FDA of the approval of
the applicable 510(k) or PMA submission, Abbott shall pay to HDC a
one-time FDA Approval Fee of Five-Hundred-Thousand U.S. Dollars
($500,000.00). This Fee shall also be irrevocable and
non-creditable against any royalty obligation.
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Article 4 -
License Terms and Royalty.
4.1.1
Exclusive License: HDC
hereby grants Abbott an exclusive, worldwide, royalty-bearing
license and right to make, have made, use, sell and import Licensed
Products, with the right to sublicense, under Patent Rights, under
HDC’s interest in Joint Patent Rights and
Know-How. The exclusive license granted herein shall be
exclusive even as to HDC with respect to the making, have made,
sale and import of Licensed Products.
4.1.2
Co-Exclusive
License: HDC hereby grants Abbott a, co-exclusive,
worldwide, royalty-bearing license for the performance of
Laboratory Developed Tests, including the right to make and have
made and import Licensed Products used in the performance of
Laboratory Developed Tests, which co-exclusive license will be
shared with the co-licensees identified in Exhibit D
hereto. For as long as this Agreement
remains in effect, apart from the identified co-licensees, HDC
shall not retain nor have any right to grant further
sublicenses.
4.2.1 For
each Licensed Product that is sold by Abbott, Abbott shall pay HDC
a running royalty equal to:
(a) For Licensed Products
with medical utility claims solely for use on prostate tissue
samples, ten percent (10%) of Abbott’s Net Sales of such
Licensed Product; and
(b) For Licensed Products
with medical utility claims solely for use on urine samples, five
percent (5%) of Abbott’s Net Sales of such Licensed
Product
4.2.2 For
each Laboratory Developed Test that is sold by Abbott, Abbott shall
pay HDC:
(a) a running royalty
equal to ten percent (10%) of Abbott’s Net Sales of such
Laboratory Developed Test performed on a prostate tissue;
or
(b) a running royalty
equal to five percent (5.0%) of Abbott’s Net Sales of such
Laboratory Developed Test performed on a urine sample.
4.2.3
Abbott shall make
all such payments in respect of running royalties within forty-five
(45) days after the end of each calendar quarter following the
FCS.
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Sales Milestones . Upon the sale by Abbott of the
specified number of Licensed Products with a medical utility claim
for use on a urine sample, Abbott agrees to pay HDC, promptly after
reaching each Sales Milestone:
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(a)
1 st Sales Milestone: After the sale of Fifty-thousand
(50,000) tests in a calendar year, a one-time 1st Sales Milestone
Fee of Two-Hundred-Thousand U.S. Dollars ($200,000.00);
(b)
2
nd Sales Milestone: After the sale of
Two-hundred-thousand (200,000) tests in a calendar year, a one-time
2 nd
Sales Milestone Fee of
Seven-Hundred-Fifty-Thousand U.S. Dollars ($750,000.00);
and
(c)
3
rd Sales Milestone: After the sale of
Five-hundred-thousand (500,000) tests in a calendar year, a
one-time 3 rd Sales Milestone Fee of
One-Million-Five-Hundred-Thousand U.S. Dollars
($1,500,000.00);
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The fees
payable under Paragraph 4.3 shall not be creditable against the
running royalty obligation of Paragraph 4.2. Abbott
shall make all such payments under Paragraph 4.2.3 within
forty-five (45) days after the end of each calendar quarter in
which the Sales Milestone is reached.
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Required Third Party Licenses
. In the event one or
more third party licenses are required, in Abbott’s
reasonable judgment, for Abbott to commercialize a Licensed Product
or Laboratory Developed Test, then Abbott may reduce the running
royalty otherwise payable to HDC for such Licensed Product under
Paragraph 4.2.1 and 4.2.2 by the percentage amount of any running
royalty payable by Abbott under such third-party license; provided,
that such reduction may not be more than fifty percent (50%) of the
rates specified in Paragraphs 4.2.1 and 4.2.2.
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Article 5-
Warranties and Representations
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HDC . HDC warrants and represents to
Abbott that:
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5.1.1 to
the best of its knowledge, it has the full legal right to grant
Abbott the licenses to Patent Rights provided herein;
5.1.2 during
the Collaboration Term, HDC will not collaborate with any third
party with respect to any portion of the Collaboration or the
development of any IVD assay covered by Patent Rights;
5.1.3 to
the best of its knowledge, no third party is challenging in any
jurisdiction the validity of any of the Patent Rights;
5.1.4
Exhibit A lists all patent(s) and/or patent applications
owned or controlled by HDC as of the Effective Date that are
applicable to the Field;
5.1.5 it
has not received any written or oral communication asserting that
the HDC 4-gene expression assay for prostate cancer to be tested in
Phase 1 of the Validity Studies of the FDA Submission Plan,
infringes any intellectual property right, including any patent
right, owned or controlled by any third party;
5.1.6 it
has the corporate power and authority to enter into this Agreement
and the person executing this Agreement on behalf of HDC has been
authorized to do so;
5.1.7 the
terms of this Agreement do not conflict with or violate any
contract binding upon HDC; and
5.1.8
it has not granted and will not grant to any third party,
including the co-exclusive licensees listed in Exhibit D, any
rights under Patent Rights to make, have made, import or
sell Licensed Products.
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Abbott . Abbott warrants and represents to
HDC that it has the corporate power and authority to enter into
this Agreement, that the person executing this Agreement on behalf
of Abbott has been authorized to do so, and that the terms of this
Agreement do not conflict with or violate any contract binding upon
Abbott.
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Limitation of Liability . IN NO EVENT WILL EITHER PARTY BE
LIABLE TO THE OTHER UNDER ANY CIRCUMSTANCES FOR ANY INDIRECT,
CONSEQUENTIAL, INCIDENTAL OR SPECIAL DAMAGES, INCLUDING LOST
PROFITS, RESULTING FROM THE PARTY’S PERFORMANCE OR FAILURE TO
PERFORM UNDER THIS AGREEMENT.
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Article 6 -
Term and Termination
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Term . This Agreement shall become
effective on the Effective Date and shall terminate upon the
expiration of the last to expire of Patent Rights licensed
hereunder, unless sooner terminated as provided herein.
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Termination for Cause . Either HDC or Abbott may
unilaterally terminate this Agreement upon thirty (30) days written
notice to the other in the event of:
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6.2.1 the
non-terminating party’s insolvency; or
6.2.2 a
material breach of the Agreement by a party, which breach is not
cured within thirty (30) days of notice of such breach by the other
party.
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Abbott’s Termination Right
. Abbott may unilaterally
and without cause terminate this Agreement upon ninety (90) days
notice to HDC. .
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Survival . Paragraph 5.3, Articles 7, 8, 9
(subject to Paragraph 9.4) and 10 shall survive termination of this
Agreement.
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Article 7 -
Confidential Information
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Confidential Treatment . A party receiving the Confidential
Information (“Receiving Party”) of the other party
(“Disclosing Party”) agrees to hold that Confidential
Information in trust and confidence for Disclosing
Party. A Receiving Party will not use Confidential
Information other than for the purposes of this
Agreement. Each party shall, to the extent applicable
hereunder, provide the other party with patient information as
allowed by law and the Receiving Party shall maintain the
confidentiality of all such patient information as required by
law.
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Limitation of Dissemination
. A Receiving Party will
only disclose Confidential Information received hereunder, whether
oral or in writing, in tangible, intangible or electronic format,
to those persons within the Receiving Party’s organization or
its agents (a) who have a need to know the Confidential Information
in order to perform the Receiving Party’s obligations under
this Agreement, (b) who have been informed of the confidential
nature of the Confidential Information, and (c) who are obligated
to maintain the confidentiality of the Confidential Information
consistent with the terms of this Agreement.
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Standard of Care . A Receiving Party will treat the
Confidential Information of the Disclosing Party with the same care
as the Receiving Party’s own proprietary information of like
kind.
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Handling of Information . A Receiving Party shall not (a)
reverse engineer or otherwise exploit the Confidential Information
in violation of this Agreement, and (b) remove or export from the
United States or re-export any of such Confidential Information or
any direct product thereof except in c
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