License Agreement - Organon Teknika BV and Life Sciences Inc.
LICENSE AGREEMENT
This License Agreement is entered into this 9th day of July 1998, by and between
ORGANON TEKNIKA B.V. (hereinafter referred to as "Teknika"), a corporation of
the Netherlands having its principal place of business at Boseind 15, 5281 RM
Boxtel, the Netherlands,
And
LIFE SCIENCES, INC., (hereinafter referred to as "LICENSEE"), a corporation of
the U.S.A., having its registered offices at 2900 72nd Street North, St.
Petersburg, Florida 33710, U.S.A.
WHEREAS, Teknika is the equitable owner of all the right, title and interest in
and to certain Patent Rights (as Hereinafter defined) owned by its ultimate
holding company Akzo Nobel N.V. (a corporation organized under the laws of the
Netherlands) including, but not limited to, the exclusive right to grant
licenses under such Patent Rights, and Teknika further is the beneficial owner
of, and has the right to grant licenses under, Accusphere Technology as defined
hereinafter,
WHEREAS, LICEENSEE desires to obtain a license from Teknika under the Patent
Rights and the Accusphere Technology, for the purposes stated herein below.
NOW THEREFORE, the parties agree as follows:
1. Definitions
1.1 The term "NASBA" means isothermal transcription based enzymatic nucleic
acid amplification procedure, method or system.
1.2 The term "NASBA" Technology" means a technology employing NASBA
principal, including, but not limited to, the information contained in
the patents and/or the claims of the patents and/or patent applications
included in the Patent Rights.
1.3 The term "Accusphere Technology" means a proprietary processing method
which conveys thermal protective characteristics to enzymes and other
biologically active molecules when stored at temperatures above 00C and
as set out in more detail in Annex A.
1.4 The term "Licensed Products" shall mean any in vitro diagnostic test,
assay, method or kit, the development, manufacture, use, or sale of
which make use of the NASBA Technology and/or are covered by one or
more claims of the Patent Rights and/or which make use of the
Accusphere Technology and includes services for providing test results
or other services which utilize such product(s)
<PAGE> 2
1.5 The term "Net Sales" means the gross amount actually charged by
LICENSEE, on sales, or other dispositions for value, of Licensed
Products, less value added taxes, and less a lump sum to cover all
usual deductions such as discounts, sales, use and similar taxes
allowances or credits for returned products actually allowed and taken,
custom duties, transportation, shipping and handling charges, etc.
which shall be 5% of the invoice amount for the Licensed Products.
Sales or other transfers of Licensed Products to Affiliated Companies
or between Affiliated Companies and resold to third parties, shall not
constitute Net Sales of Licensed Products until the Licensed Products
are sold to parties who are not Affiliated Companies.
1.6 The term "Research Market" shall mean customers utilizing Licensed
Products for non-commercial, research purposes only. For the avoidance
of doubt, such customers shall not resell the Licensed Products,
neither commercialize results obtained with the Licensed Products, nor
shall reimbursement under a health care plan be applicable on the
Licensed Products so sold.
1.7 The term "Water Testing Market" shall mean the market for testing water
which is destined to be used as drinking water and/or for aquaculture,
for the presence of pathogenic waterborne organisms.
1.8 The term "Air Testing Market" shall mean the market for testing the
environment for the presence of airborne pathogens.
1.9 The term "Territory" shall mean all countries of the world.
1.10 The term "Affiliated Company" means any company which, by means of
ownership of 50% or more of shares or at least 50% interest in income
or otherwise, directly or indirectly controls, is controlled by or is
under common control with either party.
2. Licensing of Patent Rights and Proprietary Technology
Teknika hereby grants to LICENSEE a non-transferable, non-exclusive
license, without the right to sublicense, to use the NASBA Technology
and/or the Accusphere Technology and the Patent Rights for the sole
purpose of manufacturing, using, selling and/or having sold by
resellers Licensed Products under its own label in the Research Market,
Water Testing Market and the Air Testing Market in the Territory for
the life of this Agreement. Commencing with the execution and delivery
of this Agreement, Teknika shall use its best efforts to transfer to
LICENSEE any relevant know-how, including, but not limited to, the
Accusphere Technology, in order that LICENSEE may successfully utilize
the technology licensed to it under this Agreement.
<PAGE> 3
3. Royalties, Records and Accounting
3.1 In consideration of the rights granted under Article 2, LICENSEE shall
pay Teknika according to the terms set out in Annex C of this Agreement
a non-refundable, non deductible payment of USD $105,000,- which
payment shall not act as prepaid royalties creditable toward any
running royalties due under this Paragraph as and when such royalties
are due and payable.
3.2 Furthermore LICENSEE shall pay Teknika as from the effective day
hereof, a running royalty of 10% of the Net Sales to end-users of
Licensed Products utilizing NASBA Technology but not Accusphere
Technology and #% of the Net Sales of Licensed Products utilizing
Accusphere Technology but not NASBA Technology and 13% of Licensed
Products utilizing both Accusphere Technology and NASBA Technology. The
LICENSEE shall pay Teknika a running royalty of 13% of the Net Sales to
resellers of Licensed Products utilizing NASBA Technology but not
Accusphere Technology and 5% of the Net Sales of Licensed Products
utilizing Accusphere Technology but not NASBA Technology and 18% of
Licensed Products utilizing both Accusphere Technology and NASBA
Technology.
3.3 LICENSEE agrees to keep or cause to be kept accurate records and books
of account in accordance with good accounting practice, showing the
information required to permit calculation of Net Sales and the
royalties under this Article. These books and records shall be
preserved for at least six (6) years from the date of the royalty
payments to which they pertain.
3.4 On or before the 45th day of each calendar quarter during the term
hereof, LICENSEE shall prepare and send to Teknika royalty reports for
the previous quarter. Said reports shall indicate total sales and Net
Sales per country under this Agreement for the previous calendar
quarter, per Licensed Product, and shall show the amount of royalty due
with sufficient information to enable confirmation by Teknika, and
LICENSEE shall include payment of the amount of royalties shown to be
due with such report.
3.5 Periodically (i.e. each calendar quarter), LICENSEE shall provide to
Teknika customer lists, which shall only be used for enabling Teknika
to closely follow-up and keep track of which customers are being served
by LICENSEE.
3.6 Upon ten (10) days written notice and not more than once per calendar
year, LICENSEE agrees to permit one or more Certified Public
Accountant(s) appointed by Teknika (except one to whom LICENSEE has a
reasonable objection), to enter upon the premises of LICENSEE during
all usual business hours of LICENSEE at any time following the 60th day
of any calendar quarter in order to inspect files and records
pertaining to Net Sales and royalties under this Agreement, and to make
on LICENSEE's premises and retain copies of any and all parts of the
records and accounts kept by LICENSEE pursuant to this
<PAGE> 4
Article, including invoices which are relevant to any report required
to be rendered by LICENSEE. Said copies shall be provided to the
Certified Public Accountant(s) at no expense to Teknika. Said Certified
Public Accountant(s) shall keep all information received from LICENSEE
confidential; however, it will provide Teknika with the Net Sales, per
country, for each type of Licensed Product, specifying the sales and
the application of the appropriate royalty rate so that royalties due
Teknika May be calculated. The information obtained by the Certified
Public Accountant(s) shall be retained for a period of seven (7) year.
In the event any audit results in a change upward in an annual royalty
payment of as much as five percent (5%) for any annual period, LICENSEE
shall pay the costs of such audit for such annual period, otherwise
such audit shall be a Teknika's expenses.
3.7 Payment of all royalties hereunder shall be made at Teknika's option in
Dutch Guilders or Euro at the mean rate of exchange existing on ;the
last day of the quarter to which the payment applies as published in
the Wall Street Journal (European Edition).
4. Duration
4.1 This Agreement shall become effective as of August 1, 1998, and shall
remain in effect until the last to expire of the Patent Rights;
provided, however, that LICENSEE's rights to use the Accusphere
Technology shall continue for an additional 25 years, subject to the
payment of the related royalty for this technology.
4.2 In the event either party breaches this Agreement, in addition to all
other rights and remedies which either party may have, the party not in
default may terminate this Agreement by written notice. Such
termination shall become effective on the date set forth in the notice
of termination, but in no event shall it be earlier than sixty (60)
days from the date of mailing thereof and shall have no effect if the
breach has been cured within the said period of notice.
4.3 The termination of this Agreement shall not relieve LICENSEE from its
obligation to pay Teknika all royalties that shall have accrued up to
the effective date of termination.
5. Assignment
Teknika shall have the right to assign this Agreement to, or delegate
its obligations hereunder to be performed by any successor of
Affiliated Company of Teknika, provided that Teknika warrants that the
terms and conditions for LICENSEE remain unchanged. This Agreement is
not assignable by LICENSEE without the prior written consent of
Teknika.
<PAGE> 5
6. Entirety Clause
As of the date hereof, this Agreement supersedes all previous oral and
written agreements between the parties, and constitutes the only and
entire understanding to exist between the parties with respect to the
subject matter of this Agreement, and no amendment shall be implied or
proven form or evidence by negotiations between the parties heretofore
or hereinafter conducted or agreements of the parties heretofore or
hereafter executed, unless in writing and signed by the parties hereto.
7. Warranty
7.1 Teknika represents and warrants to LICENSEE that it has the full right
and power to grant the license to LICENSEE as set forth in this
Agreement.
7.2 Except as specifically set forth in paragraph 7.1 herein, Teknika makes
no representations or warranties, either express or implied, arising by
law or otherwise, including, but not limited to, implied warranties of
merchantability or fitness for a particular purpose. In no event will
Teknika have any obligation or liability arising from tort, or for loss
of revenue or profit, or for incidental or consequential damages.
In particular, with no limitation, nothing in this Agreement will be
construed as:
(i) A warranty or representation that anything made, used,
sold or otherwise disposed of under the license granted in this
Agreement is or will be free from infringement of patents of third
parties;
(ii) Conferring the right to use in advertising, publicity,
or otherwise any trademark, trade name, or any contraction,
abbreviation, simulation, or adaptation thereof, of Teknika; or
(iii) Conferring by implication, estoppel, or otherwise any
license or rights under any patents of Teknika other than the Patent
Rights, regardless of whether the patents are dominant or subordinate
to Patent Rights.
7.3 In the event LICENSEE becomes aware of infringement of the Patent
Rights or the Accusphere Technology by a third party, it will
immediately notify ;Teknika thereof. Teknika intends to use such
reasonable efforts, as it in its sole discretion determine, to pursue
infringers and enforce its rights under the Patent Rights. LICENSEE, at
Teknika's request, shall render all reasonable assistance and
cooperation in that regard. Any recoveries resulting from such action
by Teknika shall be Teknika's property.
8. Applicable Law; Severability
8.1 This Agreement shall be deemed to have been made in and shall be
construed in accordance with the laws of the Kingdom of the Netherland,
for all matters other than scope and
<PAGE> 6
validity of the Patent Rights, as to which the laws of the particular
country where the Patent Rights are in dispute shall supply.
8.2 Any dispute, controversy or claim arising under, out of or relating to
this contract and any subsequent amendments of this contract,
including, without limitation, its formation, validity, binding effect,
interpretation, performance, breach or termination, as well as
non-contractual claims, shall be submitted to mediation in accordance
with the WIPO Mediation Rules. The place of mediation shall be Geneva,
Switzerland. The language to be used in the mediation shall be English.
If, and to the extent that, any such dispute, controversy or claim has
not been settled pursuant to the mediation without 60 days of the
commencement of the mediation, it shall, upon the filing of a Request
for Arbitration by either party, be referred to and finally determined
by arbitration in accordance with the WIPO Arbitration Rules.
Alternatively, if, before the expiration of the said period of 60 days,
either party fails to participate or to continue to participate in the
mediation, the dispute, controversy or claim shall, upon the filing of
a Request for Arbitration by the other party, be referred to and
finally determined by arbitration in accordance with the WIPO
Arbitration Rules. The arbital tribunal shall consist of a sole
arbitrator. The place of arbitration shall be Geneva, Switzerland. The
language to be used in the arbital proceedings shall be English. The
arbitration shall be in lieu of any other remedy and the award shall be
final, binding and enforceable by any court having jurisdiction for
that purpose.
9. Miscellaneous Provisions
9.1 All notices which shall or may be given hereunder shall be in writing
in English and shall be prepaid registered mail addressed to the
recipient at the addresses herein stated, or at such other address as a
party may from time to time designate:
Organon Teknika B.V.
Boseind 15
5281 RM Boxtel
The Netherlands
Attn: President
and
Life Sciences, Inc.
2900 72nd Street North
St. Petersburg
Florida 33710
W.S.A.
Attn: President
<PAGE> 7
9.2 Payment of lumpsum fees and royalties, due under this Agreement, are to
be made to Organon Teknika B.B., Boxtel. the Netherlands, to its
account with ABN Amro Bank, Nijmegen, the Netherlands, account no.
45.30.40.152
9.3 Confidentiality
Each party to this Agreement agrees that any information
obtained by it from the other party pursuant to this Agreement shall be
kept in the strictest confidence and shall only be used for the proper
performance of this Agreement, except that this obligation shall not
apply to:
(a) information which is in or becomes part of the public
domain otherwise than by breach of this Agreement; or
(b) information which the recipient can show was in its
possession at the date of signing of this Agreement; or
(c) information which was received by the recipient or its
affiliated companies without the benefit of any disclosure by the
disclosing party; or
(d) is ;independently developed by the recipient or its
affiliated companies without the benefit of any disclosure by the
disclosing party; or
(e) is required to be disclosed by court order or other
process of law. The foregoing obligation shall cease five (5) years
after termination or expiration of this Agreement.
As agreed at Boxtel, As agreed at St. Petersburg,
ORGANON TEKNIKA B.V. LIFE SCIENCES, INC.
/s/ J. Dopper /s/ Alex A. Burns
------------------------ ----------------------------
R. Salsmans Alex Burns
p.o. J. Dopper Vice President
Executive Vice President
/s/ A.J.F Stap
------------------------
A.J.F. Stap
Executive Vice President
Strategic Affairs