Joint Representation Agreement - ABAXIS Inc. and SA Scientific Inc.
AGREEMENT
This Agreement is entered into this 8th day of May, 2002 by and between
Abaxis, Inc. ("Abaxis") and S.A. Scientific, Inc. ("SAS").
RECITALS
WHEREAS, SAS and Abaxis have previously entered into an Agreement styled
"Terms of Agreement Between Abaxis, Inc. and SA Scientific," in November, 2001,
and
WHEREAS, Idexx Laboratories, Inc. ("Idexx") has instituted a lawsuit
against Abaxis and SAS in the United States District Court for the District of
Maine, Civil Number 02-69-PH ("the Litigation") in which Idexx has alleged
infringement by Abaxis and SAS of U.S. Patents Nos. 4,939,096 and 4,965,187
("the Idexx Patents In Suit") by reason of the manufacture and sale of certain
canine heartworm antigen tests ("the Accused Products"); and
WHEREAS, SAS sells the Accused Products to Abaxis, who then re-sells them;
and
WHEREAS, Abaxis and SAS have previously retained separate and independent
counsel to represent them in the Litigation; and
WHEREAS, Abaxis and SAS recognize that there could be potential conflicts
of interest arising out of joint representation in connection with the
Litigation or their relationship to date but that neither has any intent to sue
the other and indeed desire to form a lasting business relationship which may
include SAS manufacturing other products in the future for Abaxis; and
WHEREAS, Abaxis and SAS wish to minimize the cost of the Litigation by
jointly retaining outside counsel to represent them in the Litigation and to
resolve conflicts between them as they relate to the Litigation;
NOW, THEREFORE, in consideration of the mutual agreements and
understandings set forth herein, SAS and Abaxis agree as follows:
1. Release of Known Existing Claims SAS and Abaxis, and each of them,
and their officers, directors, successors, agents and assigns and those in
privity with them, hereby release, acquit and discharge each other and their
affiliates, attorneys, agents, assigns and those in privity with them of and
from any and all presently existing and known claims, demands and/or causes of
action growing out of their relationship with each other, including but not
limited to their contractual relationship arising out of the November, 2001
Agreement. This release does not release any accounts receivable or amount owing
for goods sold by the parties to each other prior to the date of this Agreement.
2. Covenant Not to Sue On Claims Arising Out of the Patents In Suit
SAS and Abaxis agree that if Idexx is successful in pursuing claims arising out
of the Patents in Suit in the Litigation, and such result is reduced to a final
judgment from which not appeal will lie, each will pay one half of whatever
judgment may be entered in the Litigation insofar as it relates to damages for
infringement of the Patents in Suit. The parties further agree that neither will
assert any claim against the other for indemnity or contribution, so long as
the other party pays its one half share of any such judgment. In the event one
or the other of the parties does not pay its one
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half share of any such damage award and the other party is required to pay all
or any part of the other party's half of the judgment, the party paying more
than one half of the total judgment shall have a claim against the other for the
amount paid in excess of one half of the judgment, and shall also be entitled to
attorneys fees and costs incurred in collecting said amount from the other
party. If claims other than those related to the Patents In suit are asserted by
Idexx in the Litigation, the parties shall consult in good faith as to whether
this Agreement shall be amended to include such disputes but neither party shall
be required to amend this Agreement for such purpose. The provisions of this
paragraph shall apply only to judgments arising out of liability for
infringement of the Patents In Suit. The provisions of this paragraph shall not
apply to damages for willful infringement or punitive damages.
3. Joint Representation Effective May 20, 2002, Abaxis and SAS agree
that they shall hereafter jointly direct who shall act as counsel of record for
Abaxis and SAS. After May 20, 2002, unless and until otherwise jointly directed
by Abaxis and SAS, the law firm of Workman, Nydegger & Seeley (Brent Lorimer,
Tom Vuksinick, and David Seeley) of Salt Lake City, Utah are jointly authorized
and requested by SAS and Abaxis to become lead counsel for both parties in said
Lawsuit. Until May 20, 2002, WNS will continue to separately represent Abaxis
and will not represent SAS, and Langley & Banack will continue to separately
represent SAS and will not represent Abaxis.
4. Payment for Joint Representation after the Effective Date Beginning
May 20, 2002, the parties agree to split the cost of joint representation and
related costs in the Litigation (including, but not limited to, expert witness
fees), on a 50-50 basis. WNS and LB shall submit invoices for joint services to
both Abaxis and SAS on a monthly basis, with each to pay one half of the total
invoice. In the event SAS or Abaxis fails to pay its one half of invoices for
joint work submitted by WNS or LB within 45 days of submission of such invoices,
the entire amount of the invoice shall become the joint and several obligation
of both SAS and Abaxis, and the affected law firm shall be entitled to collect
the entire amount from either party. The party paying more than its one half
share of such invoices shall have the right to bring an action against the other
party for collection of the amount paid in excess of its one half share, as well
as the attorneys' fees and costs associated with such collection efforts.
Failure by either party to pay its one half share within 45 days of submission
for two consecutive billing cycles shall entitle the affected law firm to
terminate representation of that party. Such party consents in advance to
withdrawal from representation by the affected law firm. Neither party shall be
required to pay for services rendered to the other that are not part of the
joint effort to defend the Litigation.
5. Payment for Services Prior to the Effective Date Within 90 days
from the date of this Agreement, SAS and Abaxis shall each present to each other
copies of the invoices from their respective counsel representing the time and
costs incurred in the defense of the Litigation prior to the Effective Date. SAS
and Abaxis will, within 30 days of the submission of such invoices, review the
same and to the extent one party incurred costs or attorneys' fees which were
beneficial to both parties, SAS and Abaxis will adjust their account between
them so as to result in a 50-50 bearing of expenses associated with the defense
of the Litigation. This Agreement, however, shall have no affect on the
obligation of the party who originally retained counsel prior to the Effective
Date to pay for services rendered and costs incurred prior to the Effective
Date.
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6. Actual and Potential Conflicts of Interest In the event that actual
or potential conflicts of interest arise which would render it inappropriate for
one law firm to jointly represent both parties, and the conflict is waivable or
could be resolved by withdrawing from representation of one of the parties, SAS
agrees that WNS may continue to separately represent Abaxis, and Abaxis agrees
that LB may continue to separately represent SAS. SAS and Abaxis hereby
acknowledge that the potential and actual conflicts arising out of joint
representation have been explained to them, that they understand such conflicts,
and that to the extent such conflicts are waivable, they are waived, at least
insofar as necessary to allow WNS to continue to separately represent Abaxis,
and LB to continue to separately represent SAS vis-a-vis Idexx in the
Litigation.
7. Termination of Joint Representation Nothing herein shall be
construed to prevent any party hereto, WNS or LB from withdrawing from the
joint representation contemplated by this Agreement, upon the giving of written
notice to the other and to joint counsel. The withdrawing party shall still
remain responsible to pay one half of the fees and costs incurred prior to the
date of notice. If WNS or LB withdraws from joint representation, SAS agrees
that WNS may, in its sole discretion, continue to represent Abaxis vis-a-vis
Idexx. Similarly, Abaxis agrees that in such event LB may, in its sole
discretion, continue to represent SAS vis-a-vis Idexx.
8. Arbitration of Disputes Any dispute that may hereafter arise
relating to the meaning, scope, or enforcement of this Agreement shall be
subject to mediation by a mediator jointly selected by the parties. If
mediation is not successful, any disputes arising hereunder shall be subject to
binding arbitration by a single arbitrator jointly selected by the parties.
Such arbitration shall not be undertaken under the more formal and more
expensive guidelines of the American Arbitration Association. If the parties
are unable to agree to an arbitrator, such arbitrator shall be selected by
Brent Lorimer and Peter Kilpatrick. Such arbitration shall be conducted at a
neutral location and shall be conducted as expeditiously as possible, with the
costs of arbitration to be split equally between the parties. The arbitrator
shall at the earliest convenient time set a meeting to discuss the logistics of
the arbitration and shall render a decision not more than 30 days following the
hearing of the matter.
9. Benefit of Counsel Each party acknowledges that it has had the
benefit of counsel in reviewing and approving this Agreement, and that neither
party shall be construed as the sole draftsman of the Agreement.
10. Prior November, 2001 Agreement Notwithstanding the foregoing,
unless clearly stated to the contrary and until a new business agreement is
executed, nothing in this Agreement shall supercede the provisions of the
November 2001 Agreement.
11. Binding Effect This Agreement shall be binding upon and inure to
the benefit of the parties hereto.
12. Waiver The waiver, express or implied, by either party of any
right hereunder or of any future to perform or breach hereof by the other party
shall not constitute or be deemed a waiver of any other right hereunder or of
any other failure to perform or breach hereof by the other party, whether of a
similar or dissimilar nature.
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13. Severability If any part of this Agreement shall be determined to
be illegal, invalid or unenforceable, that part shall be severed from the
Agreement and the remaining parts shall be valid and enforceable, so long as the
remaining parts continue to fulfill the original intent of the parties.
14. Consideration The parties hereto acknowledge that this Agreement
is supported by adequate consideration and that such consideration has been
received.
15. Counterparts This Agreement may be executed in counterparts, each
of which shall be considered an original.
Dated and signed this 8th day of May, 2002.
ABAXIS, INC. SA SCIENTIFIC
/s/ CLINT SEVERSON /s/ HARBI SHADFAN
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Clint Severson Harbi Shadfan
President President
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