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Exhibit 10.9
LICENSE
AGREEMENT
between
Arizona Technology Enterprises,
The Brickyard—Suite 601
699 S. Mill Avenue
Room 691AA
Tempe, AZ 85281
(hereinafter referred to as
"AZTE")
and
HELICOS BIOSCIENCES
CORPORATION, One Kendall Square, Building 200, Cambridge, MA 02139,
USA
(hereinafter referred to as
"HELICOS")
PREAMBLE
AZTE is the
sole and exclusive licensee of the patent and patent applications
listed in the attached Appendix A. HELICOS desires to license
such patent and patent applications and AZTE desires to grant a
license to HELICOS. Accordingly, AZTE and HELICOS agree as
follows:
1. Definitions
In this Agreement, unless the context otherwise
requires:
- 1.1
- "Field" shall mean nucleic acid
sequencing-by-synthesis utilizing detection of optically-labelled
nucleotides.
- 1.2
- "HELICOS Affiliate" shall mean any corporation,
partnership or other business organization that directly or
indirectly through one or more intermediaries controls, or is under
common control with, or is controlled by, HELICOS. "Control" shall
mean (a) in the case of corporate entities, direct or indirect
ownership of at least fifty percent (50%) of the stock or
participating shares entitled to vote for the election of
directors; and (b) in the case of non-corporate entities,
direct or indirect ownership of at least fifty percent (50%) of the
equity interest or the power to direct the management and policies
of such entity.
- 1.3
- "Licensed Patents" shall mean the patents and
patent applications listed in Appendix A as well as any
continuation, continuation-in-part, division, extension, reissue,
re-examination or substitution thereof and any patent issuing on
any of the foregoing, and any and all foreign patents and patent
applications claiming priority thereto.
- 1.4
- "Licensed Process" shall mean any process that
would, in the absence of the licenses granted herein, infringe one
or more Valid and Enforceable Claim of any of the Licensed
Patents.
- 1.5
- "Licensed Product" shall mean any product that
would, in the absence of the licenses granted herein, infringe one
or more Valid and Enforceable Claim of any of the Licensed Patents,
or, that when used, would constitute practice of a Licensed
Process.
1
- 1.6
- "Net Sales" shall mean the gross dollar amount
received by HELICOS and HELICOS Affiliates from sales, license,
use, or lease of a Licensed Product less deductions for returns
(including withdrawals and recalls), sales rebates (price
reductions), volume (quantity) discounts, sales taxes and other
taxes directly linked to the sales, and customary duties and
transportation costs incurred by HELICOS. Notwithstanding the
foregoing, any deductions described above shall only be credited
toward then due or future royalties payable by HELICOS, and shall
not result in a refund of any amounts previously paid on Net Sales
by HELICOS hereunder to AZTE.
- 1.7
- "Second Licensed Patent" shall mean the first
United States patent to issue based upon Appendix A or any of
the applications filed pursuant to Section 5.1 below.
- 1.8
- "Third Licensed Patent" shall mean the second
United States patent to issue based upon Appendix A or any of
the applications filed pursuant to Section 5.1 below.
- 1.9
- "Territory" shall mean the world.
- 1.10
- "Effective Date" shall mean March 16,
2005.
- 1.11
- "Valid and Enforceable Claim" shall mean a claim
of an issued patent in the Licensed Patents that has not been held
to be invalid or unenforceable by a court or other governmental
agency of competent jurisdiction over such issued patent in a
proceeding from which no appeal can be or has been taken.
- 1.12
- "Parent Applications" shall mean the patent
applications listed in Appendix A.
2. Grant
- 2.1
- AZTE hereby grants to HELICOS and HELICOS
Affiliates and HELICOS hereby accepts an irrevocable exclusive (as
to all parties including AZTE) license, with the right to
sublicense, under the Licensed Patents to make, have made, use,
have used, offer for sale, have offered for sale, sell, have sold,
import and have imported, license, have licensed, lease or have
leased Licensed Products, and practice or have practiced Licensed
Processes in the Territory for the life of the Licensed Patents, in
the Field.
- 2.2
- HELICOS shall provide AZTE with the material
financial terms of any sublicense granted under this Agreement.
HELICOS shall remain responsible to AZTE for payments due under any
sublicense under this Agreement.
2
3. Payment
- 3.1
- As full consideration for the rights and
licenses granted in Article 2 above, HELICOS shall pay to
AZTE:
- a)
- a license issuance fee of three-hundred and
fifty-thousand dollars ($350,000) due within thirty (30) days
of the Effective Date of this Agreement;
- b)
- an annual license fee (the "Annual License Fee")
of fifty-thousand dollars ($50,000) within thirty (30) days of
each calendar anniversary of the Effective Date. Upon issuance of
the Second Licensed Patent, the Annual License Fee shall be
one-hundred-thousand dollars ($100,000) beginning with the payment
due on the calendar anniversary of the Effective Date that follows
the issue date of the Second Licensed Patent. In either case, any
Annual License Fee due shall be credited against any royalty paid
under Article 3.1(c) below; and
- c)
- a royalty of [***] of HELICOS' and HELICOS
Affiliates' Net Sales of Licensed Products.
- d)
- In addition to any other amounts payable by
HELICOS under this Agreement, HELICOS shall pay to AZTE [***] by
HELICOS from sublicensees in consideration for rights to the
Licensed Patents, including, without limitation, any royalties paid
by sublicensees on sales of Licensed Products, license issuance
fees, stand-still fees, or maintenance fees.
- 3.2
- Transfers between HELICOS and HELICOS Affiliates
shall not be subject to any royalty obligation, but in such cases,
the royalty shall be calculated upon HELICOS' or HELICOS
Affiliates' Net Sales of Licensed Products to an independent third
party.
- 3.3
- HELICOS shall pay AZTE a license maintenance fee
of fifty-thousand dollars ($50,000) on the anniversary of the
Effective Date for three years beginning on the first anniversary
of the Effective Date.
PORTIONS OF THIS EXHIBIT WERE OMITTED AND HAVE
BEEN FILED SEPARATELY WITH THE SECRETARY OF THE COMMISSION PURSUANT
TO AN APPLICATION FOR CONFIDENTIAL TREATMENT UNDER RULE 406 OF
THE SECURITIES ACT; [***] DENOTES OMISSIONS.
3
- 3.4
- As further consideration for the license granted
hereunder, within thirty (30) days of the Effective Date of
this Agreement, HELICOS shall issue to AZTE 400,000 unvested shares
of HELICOS common stock, par value $0.001 per share, subject to the
terms and conditions set forth in this Section 3.4. All
"unvested shares" shall be held in escrow by HELICOS in accordance
with the terms hereof unless and until they become "vested shares."
The unvested shares shall become vested shares (or shall "
vest ") as follows: (i) 200,000 shares immediately upon
issuance of the Second Licensed Patent and (ii) 200,000
immediately upon issuance of the Third Licensed Patent. In the
event that this Agreement is terminated, other than due to HELICOS'
breach, AZTE shall sell to HELICOS (or HELICOS' assignee) all
"unvested shares" in accordance with the procedures set forth
below. AZTE may not sell, assign, transfer, pledge, encumber or
dispose of (" Transfer ") all or any unvested shares (except
to HELICOS pursuant to this Section 3.4 or pursuant to
Section 9.3 below), and may Transfer vested shares only in
accordance with the transfer restrictions provided elsewhere in
this Agreement. AZTE may not at any time transfer any shares to any
individual, corporation, partnership or other entity that engages
in any business activity that is in competition, directly or
indirectly, with the products or services being developed,
manufactured or sold by HELICOS. The purchase price (the "
Repurchase Price ") of such unvested shares (the "
Repurchased Shares ") shall be $0.001 per share. The sale of
the Repurchased Shares, as described above, shall take place
automatically upon termination of this Agreement, other than due to
Helicos' breach; and AZTE hereby grants HELICOS an irrevocable
power of attorney coupled with an interest to take any and all
actions required to effect such sale. Such sale shall be effected
by HELICOS' mailing of a check for the Repurchase Price to AZTE,
upon which HELICOS shall become the legal and beneficial owner of
the Repurchased Shares and all rights and interests therein or
relating thereto, and HELICOS shall have the right to retain and
transfer to its own name or cancel the Repurchased Shares being
repurchased by it. With respect to any unvested shares that become
vested shares, HELICOS, upon the written request of AZTE, shall
promptly issue a new certificate for the number of shares which
have become vested shares and shall deliver such certificate to
AZTE and shall hold in escrow a new certificate for the remaining
unvested shares in exchange for the certificate then being held in
escrow. Subject to the terms hereof, AZTE shall have all the rights
of a stockholder with respect to the unvested shares while they are
held in escrow, including without limitation, the right to vote the
unvested shares and receive any cash dividends declared thereon.
If, from time to time while HELICOS is holding unvested shares in
escrow, there is any stock dividend, stock split or other change in
or respecting such shares, any and all new, substituted or
additional securities to which AZTE is entitled by reason of its
ownership of the unvested shares shall be immediately subject to
this escrow, deposited in escrow and included thereafter as
"unvested shares" for purposes of this Agreement and the repurchase
rights of HELICOS. HELICOS represents and warrants that the 400,000
shares of common stock described in this Section 3.4
represents % of the
fully diluted, fully converted equity of HELICOS on the date
hereof. With respect to all common stock issued to AZTE hereunder,
AZTE shall be granted any and all rights, existing today, or that
may be granted in the future, to common stockholders of HELICOS as
a class, including, without limitation, any registration rights,
co-sale rights or participation rights in future equity/debt
offerings.
PORTIONS OF THIS EXHIBIT WERE OMITTED AND HAVE
BEEN FILED SEPARATELY WITH THE SECRETARY OF THE COMMISSION PURSUANT
TO AN APPLICATION FOR CONFIDENTIAL TREATMENT UNDER RULE 406 OF
THE SECURITIES ACT; [***] DENOTES OMISSIONS.
4
4. Reports—Times of
Payment and Taxes
- 4.1
- HELICOS shall, within sixty (60) days after
each semi-annual period (ending July 30 and January 31
st ) during the Term of this Agreement, provide AZTE
with an accounting of Net Sales of Licensed Products (described by
volume sold, product type and unit price) in each country of the
Territory in which Net Sales have occurred during such semiannual
period, and the royalty due with respect to such Net Sales. At the
same time HELICOS shall pay the royalty due, if any. If no royalty
is due, then HELICOS shall pay 1 / 2 of
the applicable Annual License fee provided in Article 3.1(b)
above. If the royalty due is less than 1 /
2 of the applicable Annual License fee for the
period covered by such report, then HELICOS shall pay the royalty
due and the difference between 1 / 2 of
the Annual License fee and the royalty paid. All payments shall be
paid in US dollars to an account designated by AZTE in writing.
- 4.2
- On an annual basis, beginning one year after the
Effective Date, HELICOS shall provide to AZTE a report that
reasonably summarizes certain commercial milestones that may have
occurred during the preceding year. Such report shall be limited to
the placement of instruments, contracts for the provision of
services (excluding maintenance contracts and the like), and
commercial sales.
- 4.3
- Taxes, if any, levied on AZTE by a government of
any country on payments made by HELICOS to AZTE hereunder shall be
borne by AZTE. There shall be no deduction from amounts payable
under this Agreement for any amount of withholding tax owed by
HELICOS for which HELICOS is entitled to a rebate.
- 4.4
- HELICOS shall keep or have kept on its behalf
complete and accurate records of the sales of Licensed Products, in
accordance with generally accepted accounting principles. AZTE
shall have the right, at its expense, through an independent
certified public accountant selected by AZTE and reasonably
acceptable to HELICOS (provided that any one of the big "four"
accounting firms shall be deemed acceptable), to examine such
records during normal business hours, and upon reasonable advance
notice, within three (3) years after the end of the royalty
period to which such records relate, for the sole purpose of
verifying Net Sales of Licensed Products and any royalty or other
amounts due; provided, however, that such examination shall not
take place more than once annually. Any information obtained as a
result of such accountant's examination shall be maintained in
confidence, except that such accountant may disclose to AZTE the
amount of any discrepancy between royalties due and payable under
this Agreement and payments actually made by HELICOS hereunder to
the extent necessary to enable AZTE to collect any underpayment.
The inspection of records shall be at AZTE's sole cost and expense,
unless such examination reveals that reported royalties have been
understated by more than five percent (5%) from royalties due, in
which case the costs and expenses of such inspection shall be paid
by HELICOS.
- 4.5
- If HELICOS should fail to pay any amount
specified under this Agreement at the due date thereof, the amount
owed shall bear interest at one percent (1%) per month, but in no
event more than an amount legally allowed from the due date until
paid.
5
5. Patent
Prosecution
- 5.1
- Upon execution of this Agreement, HELICOS shall
prosecute the Licensed Patents, in the name of The Arizona Board of
Regents on behalf of Arizona State University ("ASU"). HELICOS
shall be responsible for prosecution and maintenance of such
applications and any issued patents resulting therefrom using legal
counsel of its choice. HELICOS shall pay all costs and fees
associated with prosecution and maintenance of such applications
and patents. HELICOS shall keep AZTE informed of the filing and
progress of the prosecution of such applications, shall copy AZTE
on all drafts and filings, and shall give AZTE the opportunity to
comment on all proposed prosecution actions, including, but not
limited to, claims filed, patent filings, arguments and comments
made in the course of prosecution, and prosecution strategy.
- 5.2
- If, during prosecution of a patent application
referred to in Section 5.1 above, the United States Patent
Office declares an interference with a third party, HELICOS shall
pursue in a separate patent application any claims not designated
as corresponding to the interference count.
- 5.3
- In the event that AZTE disagrees with claims
that HELICOS submits or proposes to submit in any of the Licensed
Patents, the parties shall attempt in good faith to resolve such
disagreement. If the parties cannot res
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