License Agreement - Organon Teknika BV and Life Sciences Inc.
LICENSE AGREEMENT
This License Agreement is entered into this March 31, 1999, by and between
ORGANON TEKNIKA B.V. (hereinafter referred to as "Teknika"), acorporation 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.
WHEREAS, LICENSEE desires to obtain a license from Teknika under the Patent
Rights 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 the NASBA
principle, 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 "Boom Technology" means a technology employing the Boom
principle, 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.
1.4 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, the Boom Technology and / or
the NASBA and Boom Technology and are covered by one or more claims of
the Patent rights.
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1.5 The term "Patent Rights" shall mean the patents and patent applications
described in the attached ANNEX A and B hereto and any patents
subsequently granted as well as any substitutions, divisions,
continuations, continuations in part, renewals, reissues, confirmations
or registrations, foreign counterparts and extensions of the foregoing.
1.6 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.
1.7 The term "Field of Use" shall mean clinical diagnostic tests for
detection of pathogens for HIV, Hepatitis and other sexually
transmitted diseases in human subjects.
1.8 The term "Territory" shall mean the Peoples Republic of China and other
territories under the administrative control of Central Chinese
Governmental Authorities, together with the Republic of China {Taiwan}.
With the mutual consent of the parties to this agreement the geographic
limits of the "Territory" may from time to time be extended to
accommodate the sale of the same tests as sold in the "Territory" in
other areas as well as the sale of specific additional NASBA based
tests to be sold in named geographic locales other than the
"Territory". The parties shall agree on the terms and conditions for
such possible extension in good faith negotiations.
1.9 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
2.10 Teknika hereby grants to LICENSEE a non-transferable, non-exclusive
license, without the right to sublicense, to use the NASBA Technology
and / or the Boom Technology and / or the Patent Rights for the sole
purpose of manufacturing, using, selling and/or having sold by
independent resellers Licensed Products under its own label or the
label of an Affiliated Company in the Clinical Diagnostic Testing in
the Field of Use in the Territory for the life of this Agreement.
Commencing with the execution
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and delivery of this Agreement, Teknika shall use its reasonable
efforts to transfer to LICENSEE any relevant know-how, including, but
not limited to, the NASBA and Boom Technologies in order that LICENSEE
may successfully utilize the technology contemplated to be licensed to
it under this Agreement.
3. Royalties, Records and Accounting
3.1 In consideration of the rights granted under Article 2, LICENSEE shall
pay Teknika according to the schedule set out in Annex C of this
Agreement a non-refundable, non deductible payment of USD 300,000 {US
Dollars three hundred thousand}, 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 Date
hereof, a running royalty of 8% of the Net Sales to end-users of
Licensed Products utilizing NASBA Technology. The LICENSEE shall pay
Teknika a running royalty of 10% of the Net Sales to resellers for
utilizing NASBA Technology. The LICENSEE shall pay Teknika a running
royalty of 3% of the Net Sales for Licensed Products utilizing Boom
Technology whether such sales are to end-users or to independent
resellers. Royalties due on sales of Licensed Products made during the
periods prior to the LICENSEE achieving annual sales of USD 5 million
of the Licensed Products may be offset by license fees payable to the
LICENSEE by Teknika for Teknika's access to trade secrets or other
intellectual property developed by the LICENSEE and its affiliates. The
election to license such trade secrets or intellectual property is to
be made at Teknika's sole discretion. The LICENSEE's anticipated
integrated NASBA cassette shall be excluded from the technologies made
available to Teknika via this construction.
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.
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3.5 Periodically {i.e., each calendar quarter}, LICENSEE shall provide to
Teknika customer lists, 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 Account
{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 Article, including invoices
which are relevant to any reports required to be rendered by LICENSEE.
3.7 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} years.
In the event any audit results in a change upward in any 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 at 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 June 1, 1999, {Effective
Date} and shall remain in effect until the last to expire of the Patent
Rights.
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
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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 or
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.
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 from or evidenced 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:
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(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 Licensed
Patents by a third party, it will immediately notify Teknika thereof.
Teknika intends to use such reasonable efforts, as it in its sole
discretion determines, to pursue infringers and enforce its rights
under the Licensed Patents. 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
Netherlands, for all matters other than scope and validity of the
Patent Rights, as to which the laws of the particular country where the
Patent Rights are in dispute shall apply.
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 language to be used in the mediation
shall be English.
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If, and to the extent that, any such dispute, controversy or claim has
not been settled pursuant to the mediation within 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 arbitral tribunal shall consist of a sole
arbitrator. The place of arbitration shall be Geneva, Switzerland. The
language to be used in the arbitral 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, U.S.A.
Attn: President
9.2 Payment of Lump sum fees and royalties, due under this agreement, are
to be made to Organon Teknika B. V., Boxtel, The Netherlands, to its
account with ABN Amro Bank, Amsterdam, the Netherlands, account no.
45.30.40.152.
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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 on a
non-confidential basis from a third party having the legal right to
transmit the same; 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 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