EXHIBIT 10.53
MANUFACTURING AND DISTRIBUTION AGREEMENT
BETWEEN
BIOCIRCUITS CORPORATION
AND
BECTON XXXXXXXXX AND COMPANY
THROUGH ITS
BECTON XXXXXXXXX MICROBIOLOGY SYSTEMS DIVISION
TABLE OF CONTENTS
PAGE
ARTICLE 1. DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.1 "Affiliate" . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.2 "Accessories" . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.3 "Biocircuits Patent Rights" . . . . . . . . . . . . . . . . . . 2
1.4 "Biocircuits Technology". . . . . . . . . . . . . . . . . . . . 2
1.5 "Cartridge" . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.6 "Control" . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.7 "Confidential Information". . . . . . . . . . . . . . . . . . . 2
1.8 "Distributor Price" . . . . . . . . . . . . . . . . . . . . . . 2
1.9 "Existing Cartridges" . . . . . . . . . . . . . . . . . . . . . 2
1.10 "510K filing" . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.11 "FDA" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.12 "FD & C Act". . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.13 "Good Manufacturing Practices". . . . . . . . . . . . . . . . . 3
1.14 "Instrument". . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.15 "Manufacture Date". . . . . . . . . . . . . . . . . . . . . . . 3
1.16 "Manufacturing Specifications". . . . . . . . . . . . . . . . . 3
1.17 "Material Supply Breach". . . . . . . . . . . . . . . . . . . . 3
1.18 "New Cartridge" . . . . . . . . . . . . . . . . . . . . . . . . 3
1.19 "Net Sales" . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.20 "Producer Price Index". . . . . . . . . . . . . . . . . . . . . 4
1.21 "Products". . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.22 "Product Specification" . . . . . . . . . . . . . . . . . . . . 4
1.23 "Regulatory Approval" . . . . . . . . . . . . . . . . . . . . . 4
1.24 "Sell", "Sale" or "Sold". . . . . . . . . . . . . . . . . . . . 4
1.25 "Tooling" . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
ARTICLE 2. APPOINTMENT OF BECTON AS DISTRIBUTOR; CARTRIDGES.. . . . . . . . 4
2.1 Grant of Becton Rights. . . . . . . . . . . . . . . . . . . . . 4
2.2 Referral of Inquiries.. . . . . . . . . . . . . . . . . . . . . 4
2.3 Sale of Competing Products by Becton. . . . . . . . . . . . . . 5
2.4 Notification of Offers to Acquire Biocircuits.. . . . . . . . . 5
2.5 Development of Cartridges.. . . . . . . . . . . . . . . . . . . 5
2.6 Discount Against Purchases. . . . . . . . . . . . . . . . . . . 6
2.7 Change in Products. . . . . . . . . . . . . . . . . . . . . . . 6
2.8 Regulatory Approvals. . . . . . . . . . . . . . . . . . . . . . 7
2.9 Back-Up Manufacturing License.. . . . . . . . . . . . . . . . . 7
2.10 Technology Escrow.. . . . . . . . . . . . . . . . . . . . . . . 8
2.11 Facilities Approval.. . . . . . . . . . . . . . . . . . . . . . 8
2.12 Access. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
i.
TABLE OF CONTENTS
(CONTINUED)
PAGE
2.13 Product Dating. . . . . . . . . . . . . . . . . . . . . . . . . 8
ARTICLE 3. FORECASTS; ORDERING; DELIVERY AND ACCEPTANCE . . . . . . . . . . 9
3.1 Cartridge and Accessories Forecasts and Orders. . . . . . . . . 9
3.2 Instrument Forecasts and Orders.. . . . . . . . . . . . . . . . 9
3.3 Order Acceptance; Changes.. . . . . . . . . . . . . . . . . . . 9
3.4 Delivery. . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.5 Inspection and Rejection. . . . . . . . . . . . . . . . . . . . 10
ARTICLE 4. SIGNING FEE; PRICES; ROYALTIES; PAYMENT TERMS; STOCK PURCHASE. . 11
4.1 Signing Fee.. . . . . . . . . . . . . . . . . . . . . . . . . . 11
4.2 Price.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
4.3 Royalties.. . . . . . . . . . . . . . . . . . . . . . . . . . . 11
4.4 Payment Terms.. . . . . . . . . . . . . . . . . . . . . . . . . 12
4.5 Exchange Rate.. . . . . . . . . . . . . . . . . . . . . . . . . 12
4.6 Blocked Currency. . . . . . . . . . . . . . . . . . . . . . . . 12
4.7 Withholding Taxes.. . . . . . . . . . . . . . . . . . . . . . . 12
4.8 Other Taxes; Transportation; Insurance. . . . . . . . . . . . . 12
4.9 Overdue Payments. . . . . . . . . . . . . . . . . . . . . . . . 12
4.10 Records; Audit of Sales and Expenses. . . . . . . . . . . . . . 13
4.11 Stock Purchase. . . . . . . . . . . . . . . . . . . . . . . . . 13
4.12 Valuation.. . . . . . . . . . . . . . . . . . . . . . . . . . . 13
ARTICLE 5. MARKETING. . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
5.1 Promotion and Marketing.. . . . . . . . . . . . . . . . . . . . 13
5.1.4 Packaging.. . . . . . . . . . . . . . . . . . . . . . . . . . . 14
5.2 Trademarks. . . . . . . . . . . . . . . . . . . . . . . . . . . 16
5.3 Customer Support. . . . . . . . . . . . . . . . . . . . . . . . 16
ARTICLE 6. BIOCIRCUITS PRODUCT WARRANTY . . . . . . . . . . . . . . . . . . 16
6.1 Product Warranty. . . . . . . . . . . . . . . . . . . . . . . . 16
6.2 Exclusions. . . . . . . . . . . . . . . . . . . . . . . . . . . 17
6.3 Disclaimer. . . . . . . . . . . . . . . . . . . . . . . . . . . 17
6.4 No Warranty Pass Through. . . . . . . . . . . . . . . . . . . . 17
ARTICLE 7. REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . . . 17
7.1 Mutual Representations and Warranties.. . . . . . . . . . . . . 17
7.2 Patents. Biocircuits . . . . . . . . . . . . . . . . . . . . . 17
7.3 Trademarks. . . . . . . . . . . . . . . . . . . . . . . . . . . 18
ii.
TABLE OF CONTENTS
(CONTINUED)
PAGE
ARTICLE 8. INDEMNIFICATION. . . . . . . . . . . . . . . . . . . . . . . . . 18
8.1 Indemnification by Biocircuits. . . . . . . . . . . . . . . . . 18
8.2 Indemnification by Becton.. . . . . . . . . . . . . . . . . . . 18
8.3 Limitation Of Liability.. . . . . . . . . . . . . . . . . . . . 19
8.4 Indemnification Procedure.. . . . . . . . . . . . . . . . . . . 19
8.5 Intellectual Property.. . . . . . . . . . . . . . . . . . . . . 19
ARTICLE 9. MANUFACTURE OF INSTRUMENTS BY BECTON . . . . . . . . . . . . . . 20
9.1 License Grant.. . . . . . . . . . . . . . . . . . . . . . . . . 20
9.2 Production and Manufacturing Standards. . . . . . . . . . . . . 20
9.3 Delivery of Tooling and Test Equipment. . . . . . . . . . . . . 20
9.4 Delivery of Manufacturing Information.. . . . . . . . . . . . . 20
9.5 Labels and Packaging Materials. . . . . . . . . . . . . . . . . 20
9.6 Testing and Documentation.. . . . . . . . . . . . . . . . . . . 20
9.7 Facilities Approval.. . . . . . . . . . . . . . . . . . . . . . 21
9.8 Access. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
9.9 Approval for Manufacturing Changes. . . . . . . . . . . . . . . 21
9.10 Becton Warranties Regarding Manufacture of Instruments. . . . . 21
ARTICLE 10. PRODUCT RECALLS; ADVERSE EVENTS . . . . . . . . . . . . . . . . 22
10.1 Product Recall. . . . . . . . . . . . . . . . . . . . . . . . . 22
10.2 Adverse Events. . . . . . . . . . . . . . . . . . . . . . . . . 22
ARTICLE 11. INTELLECTUAL PROPERTY . . . . . . . . . . . . . . . . . . . . . 22
11.1 Ownership of Proprietary Rights.. . . . . . . . . . . . . . . . 22
11.2 Infringement of Biocircuits Patent Rights by Third Parties. . . 23
ARTICLE 12. CONFIDENTIAL INFORMATION. . . . . . . . . . . . . . . . . . . . 23
12.1 Nondisclosure Obligations.. . . . . . . . . . . . . . . . . . . 23
12.2 Exceptions. . . . . . . . . . . . . . . . . . . . . . . . . . . 23
12.3 Authorized Disclosure.. . . . . . . . . . . . . . . . . . . . . 24
12.4 Prior Confidentiality Agreement.. . . . . . . . . . . . . . . . 24
ARTICLE 13. COMPLIANCE WITH LAWS. . . . . . . . . . . . . . . . . . . . . . 25
13.1 Compliance with Laws. . . . . . . . . . . . . . . . . . . . . . 25
ARTICLE 14. TERM, TERMINATION, AND EFFECT OF TERMINATION. . . . . . . . . . 25
14.1 Term. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
14.2 Early Termination by Either Party.. . . . . . . . . . . . . . . 26
14.3 Early Termination by Biocircuits. . . . . . . . . . . . . . . . 26
14.4 Surviving Obligations.. . . . . . . . . . . . . . . . . . . . . 26
iii.
TABLE OF CONTENTS
(CONTINUED)
PAGE
14.5 Effect of Termination.. . . . . . . . . . . . . . . . . . . . . 26
14.6 No Liability for Termination. . . . . . . . . . . . . . . . . . 27
14.7 Accrued Obligations.. . . . . . . . . . . . . . . . . . . . . . 27
14.8 Additional Purchases Upon Expiration or Termination.. . . . . . 27
ARTICLE 15. DISPUTE RESOLUTION; GOVERNING LAW; VENUE; OFFICIAL LANGUAGE . . 28
15.1 Dispute Resolution. . . . . . . . . . . . . . . . . . . . . . . 28
15.2 Governing Law; Venue. . . . . . . . . . . . . . . . . . . . . . 29
15.3 English Language. . . . . . . . . . . . . . . . . . . . . . . . 29
ARTICLE 16. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . 29
16.1 No Agency; No Joint Venture; Independent Contractor.. . . . . . 29
16.2 Assignment. . . . . . . . . . . . . . . . . . . . . . . . . . . 29
16.3 Entire Agreement; Amendment.. . . . . . . . . . . . . . . . . . 29
16.4 Severability. . . . . . . . . . . . . . . . . . . . . . . . . . 30
16.5 Benefits of this Agreement. . . . . . . . . . . . . . . . . . . 30
16.6 Waiver. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
16.7 Notices.. . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
16.8 Force Majeure.. . . . . . . . . . . . . . . . . . . . . . . . . 31
16.9 Patent Marking. . . . . . . . . . . . . . . . . . . . . . . . . 31
16.10 Counterparts. . . . . . . . . . . . . . . . . . . . . . . . . . 31
16.11 Headings. . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
16.12 Publicity.. . . . . . . . . . . . . . . . . . . . . . . . . . . 31
iv.
MANUFACTURING AND DISTRIBUTION AGREEMENT
THIS MANUFACTURING AND DISTRIBUTION AGREEMENT (the "Agreement") is
effective as of the 24th day of October, 1997 (the "Effective Date"), by and
between BIOCIRCUITS CORPORATION, a Delaware corporation ("Biocircuits") with
its principal place of business at 0000 Xxxxxxxxxx Xxxxxxx, Xxxxxxxxx,
Xxxxxxxxxx 00000 and BECTON, XXXXXXXXX AND COMPANY, a New Jersey corporation
("Becton") through its BECTON XXXXXXXXX MICROBIOLOGY SYSTEMS DIVISION, with
its principal place of business at 0 Xxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxx 00000.
WHEREAS, Biocircuits desires to establish a worldwide marketing
relationship for the Instrument, the Cartridges and the Accessories (each as
defined below) and desires to contract with a third party to manufacture the
Instruments after January 1, 1998;
WHEREAS, Becton sells a broad range of medical supplies and devices for
use by health care professionals and desires to add to its product line for
point-of-care diagnostics;
WHEREAS, Becton and Biocircuits have previously entered into a Letter of
Intent dated June 27, 1997 (the "LOI"), setting forth certain terms for an
agreement pursuant to which Becton would purchase the Instruments, Cartridges
and Accessories from Biocircuits, and on an exclusive basis re-sell them to
third-party distributors and end-users through a network of Becton sales
representatives;
WHEREAS, after the Manufacture Date (as defined below), Becton will
continue to re-sell the Cartridges and Accessories on an exclusive basis and
will undertake to manufacture or have manufactured the Instruments subject to
the terms and conditions set forth herein and thereafter continue to re-sell
the Instruments also on exclusive basis;
WHEREAS, Becton and Biocircuits desire to enter into a definitive
agreement to the foregoing effect;
NOW, THEREFORE, in consideration of the foregoing premises and other good
and valuable consideration, the parties hereby agree as follows:
AGREEMENT
ARTICLE 1
DEFINITIONS. As used herein, the following terms shall have the following
meanings:
1.1 "AFFILIATE" shall mean any company or entity controlled by,
controlling or under common control with a party, specifically, any company
fifty percent (50%) or more of whose voting stock or participating profit
interest is owned or controlled, directly or indirectly, by a
1.
party and any company which owns or controls, directly or indirectly, fifty
percent (50%) or more of the voting stock of a party.
1.2 "ACCESSORIES" shall mean the Products set forth on Exhibit A which
may be amended from time to time by Biocircuits.
1.3 "BIOCIRCUITS PATENT RIGHTS" shall mean those United States and
foreign patents and patent applications which are listed on Exhibit B hereto
and incorporated herein, including any and all substitutions, divisionals,
continuations, continuations-in-part, reissues, reexaminations, extensions,
supplementary protection certificates and foreign counterparts of the
foregoing.
1.4 "BIOCIRCUITS TECHNOLOGY" shall mean all know-how, technology, trade
secrets, processes, data, methods, manufacturing processes and any physical,
chemical or biological material or other information which Biocircuits owns,
Controls or acquires or has or acquires a license to (with the right to
sublicense) necessary or useful for (i) manufacture, marketing, sale, offer
for sale, importation and distribution of the Instrument (ii) marketing,
sale, offer for sale, importation and distribution of the Cartridges or (iii)
marketing, sale, offer for sale, importation and distribution of the
Accessories.
1.5 "CARTRIDGE" shall mean, collectively, Existing Cartridges, New
Cartridges or any other Biocircuits' cartridge, excluding cartridges used to
perform quality control or quality assurance testing, manufactured for use
with the Instrument, all as set forth on Exhibits C and D attached hereto
which may be amended from time to time.
1.6 "CONTROL" shall mean possession of the ability to grant a license or
sublicense as provided for herein without violating the terms of any
agreement or other arrangement with any third party.
1.7 "CONFIDENTIAL INFORMATION" shall mean, subject to the exceptions set
forth in Section 12.2, any information received by one party from the other
party pertaining to the Biocircuits Technology, the Biocircuits Patent
Rights, all know-how, data, processes or techniques relating to the Products
and any research project, work in process, future development, scientific,
engineering, manufacturing, marketing, business plan, financial or personnel
matter relating to either party, its present or future products, sales,
suppliers, customers, employees, investors or business, whether in oral,
written, graphic or electronic form and whether received pursuant to this
Agreement or pursuant to the Confidentiality Agreement as defined in Section
12.4.
1.8 "DISTRIBUTOR PRICE" shall mean the purchase price paid by an entity
that sells a Product to the ultimate end user of such Product.
1.9 "EXISTING CARTRIDGES" shall mean those Cartridges identified as
Existing Cartridges on Exhibit C.
2.
1.10 "510K FILING" shall mean a pre-market notification submitted to the
FDA for regulatory clearance of a new medical device prior to introduction in
the United States market and its foreign equivalent as applicable.
1.11 "FDA" shall mean the United States Food and Drug Administration, and
any successor thereto, and its foreign equivalents.
1.12 "FD & C ACT" shall mean the United States Federal Food, Drug and
Cosmetic Act, as amended, and applicable regulations promulgated thereunder,
as amended from time to time.
1.13 "GOOD MANUFACTURING PRACTICES" or "GMP" shall mean the good
manufacturing practice regulations promulgated from time-to-time by the FDA
for the manufacture of medical devices in the United States and other
countries. "cGMP" or "current GMP" shall mean the GMP practices in effect at
a particular time, including in the United States the requirements set forth
in the FDA's current Quality System Regulation, as it may be amended from
time to time.
1.14 "INSTRUMENT" shall mean Biocircuits' IOS-Registered
Trademark-Instrument as described in functional specifications J517-0001,
Revision F.
1.15 "MANUFACTURE DATE" shall mean January 1, 1998.
1.16 "MANUFACTURING SPECIFICATIONS" shall mean the specifications for the
manufacture of the Instruments which shall initially be agreed to by the
parties and which may thereafter be amended from time to time by the parties
pursuant to Section 9.9.
1.17 "MATERIAL SUPPLY BREACH" shall mean a failure of Biocircuits to
supply, for reasons other than force majeure, any Instruments, Cartridges
and/or Accessories to Becton, pursuant to purchase orders accepted by
Biocircuits, for a period of at least [**] days from the date
specified for delivery of such Instruments, Cartridges and/or Accessories in
such accepted Becton purchase orders.
1.18 "NEW CARTRIDGE" shall mean those Cartridges identified as New
Cartridges on Exhibit D.
1.19 "NET SALES" shall mean the actual gross amount charged on account of
the Sale of Products Sold by or on behalf of Becton or its Affiliates less
the following amounts to the extent actually incurred or allowed on account
of the Sale of such Products: (i) credits or rebates on returns, (ii) cash
discounts in amounts customary in the trade, and (iii) promotional allowances
actually granted to distributors. No deduction shall be made for commissions
paid to individuals, whether they be with independent sales agencies or
regularly employed by Becton, and on its payroll, or for the cost of
collections. Amounts received by Becton or its Affiliates for the sale of
the Products among Becton or its Affiliates for resale or other disposition
shall not be included in the computation of Net Sales hereunder; PROVIDED,
HOWEVER, that the subsequent resale or other disposition of such Products to
third parties, whether made directly by Becton or indirectly
[**] Confidential Treatment Requested
3.
through an Affiliate, is included in the computation of Net Sales hereunder.
The Net Sales amount for Instruments leased or otherwise installed (and not
sold) shall be the average Net Sales amount for Instruments sold (and not
leased) during the calendar quarter in which the relevant Installation
occurred.
1.20 "PRODUCER PRICE INDEX" shall mean the United States Bureau of Labor
Statistics Producer Price Index for the net output of major industry groups,
total manufacturing industries, for the most recent twelve (12) month period
preceding the date of such Index for which data is publicly available.
1.21 "PRODUCTS" shall mean, collectively, the Instrument, the Cartridges
and the Accessories.
1.22 "PRODUCT SPECIFICATION" shall mean the specifications for Products
which shall be initially agreed to by the parties and which may thereafter be
amended from time to time by the parties. The current Product Specification
is contained in the documents listed on Appendix A to this Agreement, copies
of which have been delivered to Becton.
1.23 "REGULATORY APPROVAL" shall mean, with respect to a country, all
approvals, licenses, registrations, clearances or authorizations of the FDA
or any other federal, state or local regulatory agency, department, bureau or
other government entity, necessary for the use, manufacture, storage, import,
transport and sale of a Product in such country.
1.24 "SELL", "SALE" OR "SOLD" shall mean to sell, lease, distribute,
market, install or otherwise dispose of and to use in connection with those
activities.
1.25 "TOOLING" shall mean the computers used for equipment testing,
production dies, molds, fixtures and other tooling, owned by Biocircuits,
used in production of the Instrument or its component parts.
ARTICLE 2
APPOINTMENT OF BECTON AS DISTRIBUTOR; CARTRIDGES.
2.1 GRANT OF BECTON RIGHTS. Biocircuits hereby appoints Becton, and
Becton hereby accepts such appointment, as the sole distributor for the
Products worldwide and Biocircuits grants to Becton an exclusive license,
with no right of sublicense, under the Biocircuits Technology and the
Biocircuits Patent Rights to market, sell and distribute the Products
worldwide for the term of this Agreement. Biocircuits shall not appoint any
other distributor for the Products and shall not itself Sell the Products
except to Becton pursuant to this Agreement. Becton will not, without the
prior written consent of Biocircuits, sell, market or distribute any version
of any Products other than the versions Biocircuits designates as its current
versions.
2.2 REFERRAL OF INQUIRIES. Biocircuits agrees to refer all bona fide
inquiries regarding the Sale of the Products received by it to Becton.
Becton shall refer to Biocircuits any inquiry
4.
which Becton may receive for the purchase of any Biocircuits products not
covered by this Agreement.
2.3 SALE OF COMPETING PRODUCTS BY BECTON. In consideration for the
rights granted to Becton pursuant to Section 2.1 above, Becton agrees that
during the term of this Agreement, it will not (a) manufacture, sell,
license, lease or otherwise distribute any product that is directly
competitive with the Products for the less than five (5) physician group
practice office laboratory market, or (b) utilize any of the Biocircuits
Patent Rights or Biocircuits Technology for any purpose whatsoever, including
but not limited to the conduct of development work on any product other than
the Product, other than to manufacture, market, sell or distribute the
Products. A "product that is directly competitive" with any of the Products
shall mean an instrument-based system performing only immunoassay tests,
either quantitative or qualitative, targeted for the less than five (5)
physician group practice office laboratory market.
2.4 NOTIFICATION OF OFFERS TO ACQUIRE BIOCIRCUITS. During the term of
this Agreement, if Biocircuits receives an unsolicited, bona fide, good
faith, written offer from a third party for the acquisition of Biocircuits on
terms that are acceptable to Biocircuits (the "Third Party Offer"), or if the
Board of Directors of Biocircuits solicits offers from third parties for the
acquisition of Biocircuits (the "Solicited Offer"), prior to signing a
definitive acquisition agreement providing for the acquisition of Biocircuits
by the party who has made such a Third Party Offer or the party who has
responded to the Solicited Offer with a bona fide, good faith, written offer
for the acquisition of Biocircuits on terms that are acceptable to
Biocircuits (the "Solicited Response"), Biocircuits shall provide to Becton
written notice of the receipt of such Third Party Offer or Solicited Response
(the "Offer Notice"). The Offer Notice shall contain all of the terms and
conditions of the Third Party Offer or Solicited Response, as applicable.
Becton shall have twenty (20) business days to respond to the Offer Notice,
during which time Biocircuits will not accept the Third Party Offer or the
Solicited Response. Notwithstanding anything to the contrary contained in
this Section 2.4 or elsewhere in this Agreement, (a) Biocircuits shall have
no obligation to disclose the identity of the party making such Third Party
Offer, any party to which the Solicited Offer is made or any party making a
Solicited Response; and (b) Biocircuits shall have no obligation at all under
this Section 2.4 to the extent that the Board of Directors of Biocircuits
determines, after consultation with counsel, that compliance with any
obligation under this Section 2.4 would constitute a violation of any law,
rule or regulation applicable to Biocircuits. Other than the requirement to
provide the Offer Notice to Becton, Biocircuits is under no other obligation
to Becton under this Section 2.4, including without limitation, any
obligation to negotiate with Becton or otherwise pursue a transaction with
Becton regarding the acquisition of Biocircuits.
2.5 DEVELOPMENT OF CARTRIDGES.
2.5.1 During the term of this Agreement, Biocircuits will
manufacture Existing Cartridges and Accessories for sale to Becton and will
continue development of New Cartridges as set forth in Section 2.5.2 for
distribution by Becton. Biocircuits shall consult with Becton in advance
regarding the development of additional Cartridges other than Existing and
New
5.
Cartridges, if any, but shall not be obligated to undertake such development.
All Cartridges shall be delivered to Becton fully packaged pursuant to
Section 5.1.4 and ready for resale.
2.5.2 The parties agree that the New Cartridges set forth below
will be available for sale according to the following schedule:
CARTRIDGE TYPE AVAILABILITY SCHEDULE
-------------- ---------------------
FTI 12/31/97
TSH 12/31/97
T4/TSH 12/31/97
Quantitative hCG 12/31/97
Digoxin [**]
Free T4 [**]
PSA [**]
[**] [**]
The parties acknowledge that unforeseen circumstances or other
unanticipated events may delay or otherwise affect the development of the New
Cartridges pursuant to the above schedule. In the event of such unforeseen
circumstances, the parties agree to discuss such circumstances and
appropriate ways to address them.
2.6 DISCOUNT AGAINST PURCHASES. For each month of delay in the
availability of the [**] Cartridges beyond [**], Biocircuits shall credit the
sum of [**] dollars ([**]) per month, up to a maximum cumulative sum of [**]
dollars ([**]), against Becton's purchases of Products from Biocircuits
hereunder. The monthly discount shall accrue on [**] and on the second day
of each month thereafter until the maximum discount is accrued or the [**]
Cartridges become available for sale by Becton, whether pursuant to purchase
from Biocircuits or pursuant to Section 2.9. Becton's rights under this
Section 2.6 shall be in addition to any rights it may have under Section
5.1.2(d).
2.7 CHANGE IN PRODUCTS.
2.7.1 Biocircuits may, at any time, either add to or change any
of the Products pursuant to any updating, obsolescence, or other change in
Products occurring within the ordinary course of Biocircuits' business.
[**] Confidential Treatment Requested
6.
2.7.2 Biocircuits will notify Becton in writing at least thirty
(30) days in advance of any proposed changes to Product Specifications or
changes to a Product. The parties agree to discuss in good faith the
circumstances giving rise to such changes and appropriate actions, if any, to
be taken in response to such changes. In the case of changes that would
compromise (i) the performance of a Product; (ii) the compatibility of a
Cartridge with the Instrument; or (iii) the ability of an end user to use the
Product, no such changes shall be implemented unless mutually agreed upon in
writing by both parties hereto.
2.7.3 In the event that technical, regulatory or other reasons
or events beyond Biocircuits' reasonable control prevent Biocircuits from
producing a Product, Biocircuits will be under no obligation to continue
producing such Product. Biocircuits shall seek the consent of Becton, such
consent not to be unreasonably withheld, before ceasing to produce Products
during the term of this Agreement for any reason other than the reasons set
forth in the preceding sentence.
2.8 REGULATORY APPROVALS. Biocircuits will be solely responsible for
obtaining, filing and maintaining all Regulatory Approvals relating to the
Products; PROVIDED, HOWEVER, that after the Manufacture Date, Becton will be
solely responsible for obtaining Regulatory Approvals pertaining to the
manufacturing site for the production of Instruments. All Regulatory
Approvals, except those pertaining to the site for manufacturing Instruments
after the Manufacture Date, will be owned by and filed in the name of
Biocircuits. Becton will cooperate with Biocircuits in such manner as
Biocircuits may reasonably request to assist in obtaining such Regulatory
Approvals.
2.9 BACK-UP MANUFACTURING LICENSE. In the event Biocircuits commits a
Material Supply Breach, Becton shall give Biocircuits written notice of such
event promptly thereafter. If such Material Supply Breach remains uncured
[**] days after such written notice to Biocircuits, or if a force majeure
prevents Biocircuits from supplying for a period in excess of [**] any
Instruments, Cartridges or Accessories to Becton pursuant to purchase orders
accepted by Biocircuits, Becton may exercise (but without the obligation to
exercise) the back-up manufacturing rights (the "Back-Up Rights") to
manufacture, or compel Biocircuits to sublicense a third party to manufacture
for Becton, the Cartridges and Accessories as provided below, by giving
Biocircuits written notice promptly after (i) such opportunity to cure has
expired without cure of the Material Supply Breach or (ii) Biocircuits has
failed to supply the relevant Product for a period in excess of [**] due
to a force majeure, as applicable. Immediately upon Becton providing
Biocircuits proper notice that it elects to exercise the Back-Up Rights
provided in this Section 2.9, Becton and its Affiliates shall have the right
to exercise the non-exclusive right and license, under the Biocircuits
Patents and the Biocircuits Technology, solely to make Cartridges and
Accessories (the "Back-Up Manufacturing License"). In the event that Becton
requires that a third party manufacture the Cartridges and Accessories on its
behalf, Biocircuits agrees to grant a sublicense, equivalent to the Back-Up
Manufacturing License rights, to one competent manufacturer and one back-up
manufacturer solely for the purpose of manufacturing the Cartridges and
Accessories for Becton and its Affiliates for their sale. In the event
Becton exercises the Back-Up Rights and manufactures or has manufactured the
Cartridges pursuant to this Section 2.9, Becton shall thereafter pay to
Biocircuits, under the
[**] Confidential Treatment Requested
7.
terms set forth in Article 4 below, royalties on Net Sales of Cartridges
manufactured by Becton or for Becton by a third party manufacturer at a rate
of [**] of Net Sales of Cartridges.
2.10 TECHNOLOGY ESCROW. To permit Becton to exercise its Back-Up
Manufacturing License rights pursuant to Section 2.9, within sixty (60) days
of the Effective Date (i) the parties will select a mutually agreed upon
person or entity to serve as the holder of a technology escrow (the
"Technology Escrow Holder"); (ii) Biocircuits will establish a technology
escrow account with the Technology Escrow Holder; and (iii) the parties will
negotiate and execute a mutually agreed upon escrow agreement which will
provide for the release of the escrow contents by the Technology Escrow
Holder upon occurrence of the conditions triggering Becton's Back-Up
Manufacturing License rights. Upon execution of the escrow agreement,
Biocircuits will place in the technology escrow account the information and
data necessary to manufacture the Cartridges, Accessories and Instruments.
During the term of this Agreement, Biocircuits shall update the escrow
contents every six (6) months to include the then-current information and
data necessary to manufacture the Cartridges, Accessories and Instruments.
2.11 FACILITIES APPROVAL. Biocircuits shall be responsible for obtaining
and maintaining all necessary plant inspection standards, plant licenses
registrations or permits to enable the sale of the Cartridges and Accessories
worldwide.
2.12 ACCESS. Becton and Becton's designees shall have reasonable access
to observe and inspect Biocircuits' facilities and procedures including
manufacturing operations, at reasonable intervals and upon reasonable notice
to Biocircuits. Biocircuits shall maintain proper and accurate records of
all manufacturing steps, processes, quality assurance and quality control
procedures and will provide reasonable access thereto to Becton from time to
time at reasonable intervals and upon Becton's reasonable request. Upon
reasonable advance notice to Biocircuits and at reasonable intervals, Becton
shall have the right to send authorized representatives to any facilities
where Cartridges and Accessories are manufactured by or on behalf of
Biocircuits, to audit any manufacturing records and formulation and testing
operations and documentation as is necessary to confirm that production of
each batch of Cartridges and Accessories is in compliance with the cGMP
regulations, and to confirm that Biocircuits is taking reasonable measures to
protect the manufacturing facility and their premises. Upon the request of
Becton, Biocircuits agrees to notify Becton of the schedules of production
runs of Cartridges and Accessories and to provide Becton with its monthly
production lot run reports on a six month basis. However, notwithstanding the
foregoing Biocircuits shall not be obligated to disclose any information
regarding Biocircuits Technology to Becton. Employees of Becton and Becton's
designees who visit Biocircuits' facilities shall at all times comply with
Biocircuits' rules and regulations and shall be subject to all
confidentiality obligations of Becton under this Agreement.
2.13 PRODUCT DATING. Unless otherwise agreed between the parties with
respect to a particular shipment or Cartridge menu item, each Cartridge
shipped by Biocircuits to Becton will have seventy-five (75%) of its labeled
shelf-life remaining and unexpired on the date of shipment. Becton
acknowledges that Cartridges newly or recently launched may initially have no
more than [**] labeled shelf-life.
[**] Confidential Treatment Requested
8.
ARTICLE 3
FORECASTS; ORDERING; DELIVERY AND ACCEPTANCE.
3.1 CARTRIDGE AND ACCESSORIES FORECASTS AND ORDERS. Becton shall
provide a 12-month rolling forecast of its good faith projected purchase
orders for Cartridges and Accessories, to be updated quarterly. The first
three (3) months of projections of each forecast shall represent a firm
commitment to order the amounts forecasted to be ordered during such three
(3) month period and shall be accompanied by Becton's standard purchase
order, PROVIDED HOWEVER, that such purchase order shall reference this
Agreement and the terms and conditions of this Agreement will supersede any
different or additional terms of such purchase order. Projections for months
4-12 shall represent estimates of future purchase orders. Becton shall
provide its first 12-month forecast within thirty (30) days following the
Effective Date, and each subsequent update will be provided fifteen (15) days
prior to the beginning of the next quarterly period.
3.2 INSTRUMENT FORECASTS AND ORDERS. Becton shall provide a forecast of
its projected purchase orders for Instruments until the Manufacture Date.
The first three (3) months projections of such forecast shall represent a
firm commitment and shall be accompanied by Becton's standard purchase order,
PROVIDED HOWEVER, that such purchase order shall reference this Agreement and
the terms and conditions of this Agreement will supersede any different or
additional terms of such purchase order. Projections for the remaining
months until the Manufacture Date represent estimates of future purchase
orders. Becton shall provide its first 3-month forecast within thirty (30)
days following the Effective Date, and each subsequent update will be
provided fifteen (15) days prior to the beginning of the next quarterly
period.
3.3 ORDER ACCEPTANCE; CHANGES. Orders must be made in writing or, if
made verbally, must be confirmed in writing. No orders shall be binding upon
Biocircuits unless and until accepted in writing by Biocircuits. Biocircuits
shall accept or reject all orders within fourteen (14) days of the receipt
thereof. If Biocircuits fails to so respond to an order within such time
frame, such order shall be deemed to be accepted. No written purchase order
may be canceled by Becton, except with Biocircuits' prior written consent.
Biocircuits may reject an order only (i) if such purchase order sets forth
terms and conditions which are inconsistent with this Agreement; or (ii) if
the request is unreasonable in terms of the delivery requirements based on
lead times to be agreed upon by each party; or (iii) if the total amount in
such order and all previous orders submitted in such calendar quarter exceeds
the amount in the forecast for such calendar quarter by twenty five percent
(25%) or more.
3.4 DELIVERY. Deliveries shall be made F.O.B. Biocircuits' plant
(applicable site), freight collect. Title and all risk of loss pertaining to
the Products shall pass to Becton upon delivery. A normal delivery time for
consumable Products (Cartridges and Accessories) will be approximately four
(4) weeks from date of order or release against a blanket order but in no
event shall be more than eight (8) weeks from such date. A normal delivery
time for the Instruments will be approximately three (3) weeks from date of
order or release against a blanket order but in no event shall be more than
six (6) weeks from such date. Biocircuits shall use commercially reasonable
efforts to fill orders and deliver products on the dates specified in the
orders accepted
9.
from Becton. In addition to any other remedies Becton may have, Becton shall
be relieved of any liability for the failure to make the period commitment
purchase, to the extent such failure results from Biocircuits' failure to
deliver by such dates. Such relief of liability of Becton shall be limited
solely to the specific quantity of Products in question. Biocircuits shall
notify Becton immediately of any event preventing delivery of Products within
the time specified in the accepted order and shall use commercially
reasonable efforts to achieve delivery as soon as practicable and to overcome
the event preventing delivery.
3.5 INSPECTION AND REJECTION. All Products delivered by Biocircuits are
subject to quality control and test inspection by Becton to verify their
compliance with the Product Specifications and conformity to the order.
Biocircuits will supply a final testing certificate for each Product (or lot)
showing performance data which complies with the Product Specifications.
These certificates shall be shipped separately from the Products and shall be
addressed to the Quality Control Supervisor of Becton. Becton shall have the
right, but not the obligation, to examine some or all of the Products and
verify their conformity to the order. If Becton determines that the Products
do not conform to the applicable Product Specifications or there are other
delivery errors, then Becton shall notify Biocircuits in writing of all
shortages or nonconformities which existed at the time of delivery. Such
notification shall be made upon discovery of the nonconformity, but not later
than thirty (30) days after delivery of the Product. Any notice of
rejection shall be in writing and shall specify the reasons for rejection.
If Becton does not reject a shipment of Products within thirty (30) days
following receipt, such shipment will be deemed to have been accepted. Once
Becton accepts a shipment of Products, Becton shall have no recourse against
Biocircuits if any Product in the shipment is subsequently deemed unsuitable
for use for any reason, except as set forth in Section 6.1. After notice of
rejection is received by Biocircuits, Becton shall cooperate with Biocircuits
in determining whether rejection is necessary or justified. Biocircuits shall
notify Becton as promptly as reasonably possible whether it accepts Becton's
basis for any rejection. If Biocircuits agrees with Becton's determination
that certain Products do not meet the applicable Product Specifications,
Biocircuits shall (1) replace such rejected Cartridges and Accessories, or
(2) reimburse Becton for the repair of such rejected Instruments pursuant to
Section 5.1.7, as applicable. If Biocircuits disagrees with Becton's
determination that certain Cartridges or Accessories do not meet the
applicable Product Specifications, Biocircuits shall use reasonable and
timely efforts to replace such rejected Cartridges or Accessories. The
rejected Cartridges or Accessories, as appropriate, shall be submitted to a
mutually acceptable third party laboratory, which shall determine whether
such Cartridges or Accessories meet the specifications. The parties agree
that such laboratory's determination shall be final and determinative. The
party against whom the third party tester rules shall bear the reasonable
costs of the third party testing. If the third-party tester rules that the
Cartridges or Accessories meet specifications, Becton shall purchase those
Cartridges or Accessories at the agreed-upon price, irrespective of whether
Biocircuits has already replaced it. If the third-party tester rules that
the batch does not meet specifications and the batch was not replaced,
Biocircuits shall credit Becton's account in an amount equal to the purchase
price of the rejected Cartridges or Accessories, or refund that sum to
Becton, as appropriate.
10.
ARTICLE 4
SIGNING FEE; PRICES; ROYALTIES; PAYMENT TERMS; STOCK PURCHASE
4.1 SIGNING FEE. On the Effective Date, Becton shall pay to Biocircuits
a nonrefundable, noncreditable signing fee of Seven Hundred Fifty Thousand
Dollars ($750,000) for the marketing rights for the Products and the right to
manufacture, or have manufactured, the Instruments on and after the
Manufacture Date.
4.2 PRICE.
4.2.1 INSTRUMENTS. Becton agrees to pay Biocircuits U.S. [**]
per new Instrument and U.S. [**] per refurbished Instrument, fully packaged
and ready for sale, for Instruments furnished by Biocircuits to Becton prior
to the Manufacture Date.
4.2.2 CARTRIDGES.
(a) The Cartridge transfer prices for Existing and New
Cartridges are set forth on Exhibits C and D, respectively. Biocircuits may,
upon mutual agreement of the parties, increase the transfer prices for
Cartridges, provided that only one (1) price increase may be made per twelve
(12) month period. Such price increase shall not exceed the increase in the
Producer Price Index for such period.
(b) The transfer price of any additional Cartridges developed
by Biocircuits during the term of the Agreement pursuant to Section 2.5.1
will be subject to good faith negotiation between the parties PROVIDED,
HOWEVER, that in no event will such price exceed [**] of the Distributor
Price or be less than [**].
4.2.3 ACCESSORIES. The transfer prices for Accessories are set
forth on Exhibit A. Biocircuits may, upon mutual agreement of the parties,
increase the transfer prices for Accessories, provided that only one (1)
price increase may be made per twelve (12) month period. Such price increase
shall not exceed the increase in the Producer Price Index for such period.
4.3 ROYALTIES.
4.3.1 RUNNING ROYALTY. The parties mutually agree that Becton
shall assume the manufacture of the Instrument pursuant to Article 9 herein.
Becton shall thereafter pay to Biocircuits royalties on Net Sales of
Instruments by Becton at a rate of [**] of Net Sales of Instruments, with a
guaranteed annual minimum Instrument royalty payment of [**], commencing in
calendar year 1999.
4.3.2 ACCRUAL OF ROYALTIES. Royalty payments under this
Agreement shall accrue to Biocircuits on a calendar quarter basis and payment
shall be made by Becton within
[**] Confidential Treatment Requested
11.
[**] following the end of each calendar quarter. Each royalty payment shall
be accompanied by a report summarizing the Net Sales made and the royalty
payable thereon, including a description of any offsets or credits deducted
therefrom, on a product-by-product and country-by-country basis during the
relevant three-month period.
4.4 PAYMENT TERMS. [**] Biocircuits shall notify Becton of the actual
date of each shipment of Products at least five (5) days in advance of such
shipment. All amounts payable to Biocircuits under this Agreement shall be
paid in U.S. dollars.
4.5 EXCHANGE RATE. The rate of exchange to be used in computing the
amount of currency equivalent in U.S. dollars due Biocircuits shall be made
using the spot purchase rate published in the Wall Street Journal (Eastern
Edition) for the last day of the relevant calendar quarter.
4.6 BLOCKED CURRENCY. In each country where the local currency is
blocked and cannot be removed from the country, at the election of Becton,
royalties accrued in that country may be paid to Biocircuits in the country
in local currency by deposit in a local bank designated by Biocircuits.
4.7 WITHHOLDING TAXES. Payments hereunder shall be made without
deduction other than such amount (if any) Becton is required by law to deduct
or withhold. Payments subject to such deductions or other withholdings shall
be increased by an amount which shall equal, as nearly as possible, the
amount required to be deducted or withheld, less any tax benefits realizable
by Biocircuits. Becton shall obtain a receipt from the relevant taxing
authorities for all withholding taxes paid and forward such receipts to
Biocircuits to enable Biocircuits to claim any and all tax credits for which
it may be eligible. Becton shall reasonably assist Biocircuits in claiming
exemption from such deductions or withholdings under any double taxation or
similar agreement or treaty from time to time in force.
4.8 OTHER TAXES; TRANSPORTATION; INSURANCE. Becton will pay all
non-U.S. export charges, import duties, any and all sales, use, excise, value
added or other taxes or assessments imposed by any governmental authority
upon or applicable to any sale to Becton under this Agreement, and all costs
and charges for transportation, brokerage, handling and insurance of the
Products from the point of shipment.
4.9 OVERDUE PAYMENTS. Payments due Biocircuits under this Agreement
shall, if not paid when due under the terms of this Agreement, bear simple
interest at the lower of 1.5 % per month or the highest rate permitted by
applicable law, calculated on the basis of a 360-day year for the number of
days actually elapsed, beginning on the due date and ending on the day prior
to the day on which payment is made in full. Interest accruing under this
Section shall be due to Biocircuits on demand. The accrual or receipt by
Biocircuits of interest under this Section shall not constitute a waiver by
Biocircuits of any right it may otherwise have to declare a default under
this Agreement or to terminate this Agreement.
[**] Confidential Treatment Requested
12.
4.10 RECORDS; AUDIT OF SALES AND EXPENSES. Becton will maintain complete
and accurate records which are relevant to sales, expenses and payments under
this Agreement. Such records shall be made available by Becton upon
reasonable advance notice during reasonable business hours for a period of
three (3) years from creation of the individual records for examination at
Biocircuits' expense and not more often than once each year by a certified
public accountant selected by Biocircuits and acceptable to Becton, which
acceptance will not be unreasonably withheld, for the sole purpose of
verifying for Biocircuits the correctness of calculations of sales, costs,
expenses or payments under this Agreement. In the absence of material
discrepancies (in excess of five percent (5%)) in any request for
reimbursement resulting from such audit, the accounting expense shall be paid
by Biocircuits. If material discrepancies do result, Becton shall bear the
accounting expense, such expense not to exceed [**]. Any records or
accounting information received from Becton shall be Confidential Information
for purposes of Article 12. The terms of this Section 4.10 shall survive any
termination or expiration of this Agreement for a period of five (5) years.
4.11 STOCK PURCHASE. Becton agrees not to purchase common stock of
Biocircuits in the open market or from third parties in private transactions
which, in the aggregate, would exceed [**] without first obtaining the
written consent of Biocircuits.
4.12 VALUATION. During the first two quarters of the calendar year 0000,
Xxxxxx may obtain, at its cost, a fair and independent valuation of
Biocircuits by an appraiser or other qualified person or entity of Becton's
choice. Biocircuits will exercise reasonable commercial efforts consistent
with the regular conduct of its business to cooperate with such valuation
process. Becton may make an offer to acquire Biocircuits based on the
valuation obtained.
ARTICLE 5
MARKETING.
5.1 PROMOTION AND MARKETING.
5.1.1 DILIGENCE. Becton agrees to promote the sale, marketing
and distribution of the Products in a manner consistent with generally
accepted business practices.
5.1.2 MINIMUM SALES.
(a) Becton's internal forecast for the term of the Agreement
for U.S. Instrument installations ("Installations") and non-U.S. sales is as
follows:
Calendar year [**]: [**]
Calendar year [**]: [**]
Calendar years [**]: [**]
[**] Confidential Treatment Requested
13.
(b) In the event that Becton's actual Installations of
Instruments are less than, on a cumulative basis up to the end of each
calendar quarter, [**] of Becton's internal forecast of Installations for the
applicable calendar quarter (the "Minimum Sales Benchmark"), Becton shall
have one (1) calendar quarter in which to increase its Installations so as to
meet or exceed the Minimum Sales Benchmark.
(c) If Becton's Installations fall below the Minimum Sales
Benchmark and such Installations do not meet or exceed the Minimum Sales
Benchmark by the end of the next succeeding calendar quarter for any reason
other than those set forth in Section 5.1.2 (e) below, Biocircuits may, at
its election and in its sole discretion, terminate this Agreement.
(d) If a menu item in Section 2.5.2 is not available for the
entire month, in addition to the discount set forth in Section 2.6 (if
applicable), the forecast volume will be adjusted to the actual volume
achieved by Becton, not to exceed the original forecast volume.
(e) If Becton's Installations fall below the Minimum Sales
Benchmark because of a material interruption in the supply of Products to
Becton, or because of a force majeure, Biocircuits and Becton will discuss an
appropriate and mutually agreeable reduction of the applicable Installations
consistent with the circumstances. If the parties are unable to reach
agreement on the fact or amount of such a reduction, the dispute resolution
procedures set forth in Section 15.1 shall apply.
5.1.3 BUSINESS MEETINGS. Biocircuits and Becton will meet each
calendar quarter during the term of the Agreement to discuss relevant issues.
5.1.4 PACKAGING. From the Effective Date until the Manufacture
Date, Biocircuits will provide Instruments, Cartridges and Accessories fully
packaged in accordance with Biocircuits' standard practices and in accordance
with the Product Specifications. Becton will notify Biocircuits of any
special packaging requirements necessary to market any of the Products (which
shall be made at Becton's expense). Commencing with the Manufacture Date,
Becton will be responsible for packaging the Instruments for sale, including,
without limitation, designing and producing all packaging materials and
product inserts all in forms which shall be approved in writing by
Biocircuits prior to first use of such materials by Becton. All packaging
materials and product inserts used by Becton shall bear the Biocircuits'
Trademarks (as hereinafter defined in Section 5.2). After the Manufacture
Date, Biocircuits shall continue to provide to Becton Cartridges and
Accessories fully packaged in accordance with Biocircuits' standard practices
and labeled with the Becton trademark in compliance with Section 5.2.
5.1.5 PROMOTIONAL LITERATURE. Upon request, Biocircuits will
furnish Becton, at Becton's expense, with a reasonable supply of its sales
literature, books, catalogues and the like in English in order to aid Becton
in effectively carrying out its activities under this Agreement. Becton
shall possess the right to design and produce promotional literature.
[**] Confidential Treatment Requested
14.
5.1.6 INVENTORY. Becton will maintain an inventory of Products
reasonably sufficient to provide, where appropriate, replacement Products to
its customers for any defective Product.
5.1.7 REPLACEMENT OR SERVICE OF DEFECTIVE PRODUCTS.
(a) INSTRUMENTS. Prior to the Manufacture Date, Becton will
replace all defective Instruments returned to it by its customers, and return
all such defective and irreparable Instruments to Biocircuits. Biocircuits
shall supply Instruments, without charge to Becton, in an amount sufficient
to replace the Instruments returned to Becton or give credit to Becton
against outstanding receivables due from Becton against the price of
Instruments to be delivered to Becton in the future, in amounts equal to the
price paid by Becton to Biocircuits for Instruments so returned plus all
transportation costs incurred by Becton in respect of such returned
Instruments. After the Manufacture Date, Becton shall replace all defective
Instruments at its own expense. All Instrument repair during the term of
this Agreement shall be performed by Becton. For those Instruments returned
to Becton for repair that were sold by Biocircuits and that remain under the
Biocircuits product warranty set forth in Section 6.1.1, Biocircuits will
transfer to Becton, within five (5) business days of the Effective Date, a
one-time payment of [**] to cover the costs of such repair of all such
Instruments (the "Repair Reserve"). If the costs of such repair exceed 125%
of the Repair Reserve, Becton may notify Biocircuits of the total amount of
the repair costs and, upon written verification of such repair costs,
Biocircuits will reimburse Becton for such repair costs in excess of [**].
All Instruments manufactured by Becton during the term of this Agreement
shall be repaired by Becton at Becton's cost.
(b) CARTRIDGES. Becton will replace all defective Cartridges
returned to it by its customers and, upon request by Biocircuits, provide all
documentation related to such returned defective Cartridges to Biocircuits.
During the term of this Agreement, in any given calendar quarter, Biocircuits
will provide to Becton up to [**] of all Cartridges purchased by Becton from
Biocircuits during the preceding calendar quarter as replacements for
defective Cartridges, or, at Biocircuits election, Biocircuits will credit
the equivalent amount against amounts due Biocircuits for Cartridges to be
delivered to Becton in the future. Whether Biocircuits elects to replace the
defective Cartridges or credit Becton's account, Biocircuits will also credit
Becton's account for transportation costs incurred by Becton in respect of
such returned Cartridges.
5.1.8 RECORDS. Becton shall at all times maintain complete and
accurate sales data on the Products, including price lists, catalogs,
technical bulletin files and the location of each Instrument, by serial
number, sold by Becton. No less than once each quarter, Becton shall supply
Biocircuits with a written report detailing any commonly experienced
component failures or service problems ("Incidents"). Becton shall maintain
records of Incidents by serial number of the involved Instrument. Upon
reasonable notice from Biocircuits, records of Incidents shall be made
available by Becton for Biocircuits' inspection.
5.1.9 EXPENSES. All expenses incurred by Becton in connection
with the performance of its obligations hereunder will be borne solely by
Becton. Becton will be
[**] Confidential Treatment Requested
15.
responsible for appointing its own employees, agents and representatives, who
will be compensated by Becton.
5.1.10 SALES REPRESENTATIVES. Becton agrees to evaluate
Biocircuits' sales representatives as of the Effective Date and may, but shall
not be obligated to, make offers of employment to those who meet Becton's
employment criteria.
5.2 TRADEMARKS. To the extent reasonably required by Becton to perform
its obligations pursuant to this Agreement, Biocircuits grants to Becton a
non-transferable, non-sublicensable, non-exclusive, royalty-free license to
use during the term of this Agreement the trademarks and trade names listed
in Exhibit E hereto (collectively, the "Biocircuits Trademarks") with respect
to the Products, solely in connection with Becton's marketing and
distribution of the Products under this Agreement. Becton will not at any
time do, fail to do or permit any act to be done which in any way impairs
Biocircuits' rights in the Biocircuits Trademarks. Becton may use its own
brand name and logo on the Products in addition to the Biocircuits'
Trademarks in any manner approved by Biocircuits pursuant to Section 5.1.4,
such approval not to be unreasonably withheld. In order to comply with
Biocircuits' quality control standards, Becton shall (i) use the Biocircuits
Trademarks in compliance with all relevant laws and regulations and (ii) not
modify any of the Biocircuits Trademarks in any way and not use any of the
Biocircuits Trademarks on or in connection with any goods or services other
than the Products.
5.3 CUSTOMER SUPPORT. Becton will provide all customer support to end
users of the Products during the term of this Agreement. Upon the reasonable
request of Becton and at Biocircuits' sole expense, Biocircuits agrees to
provide assistance to Becton , in the form of advisory consultation with
Becton's customer support personnel, in delivering such customer support to
end users of Products.
ARTICLE 6
BIOCIRCUITS PRODUCT WARRANTY.
6.1 PRODUCT WARRANTY.
6.1.1 INSTRUMENTS. Biocircuits warrants to Becton that the
Instruments provided to Becton by Biocircuits in accordance with the terms
hereof shall be (i) in compliance with the Product Specifications; (ii)
manufactured, packaged, labeled and stored in compliance with the FD&C, cGMP
and other applicable laws, rules and regulations and (iii) free from defects
in material and workmanship for a period of [**] from the date on which the
applicable Instrument is delivered to Becton.
6.1.2 CARTRIDGES AND ACCESSORIES. Biocircuits warrants to Becton
that the Cartridges and Accessories provided to Becton by Biocircuits in
accordance with the terms hereof shall be (i) in compliance with the Product
Specifications; (ii) manufactured, packaged, labeled and stored in compliance
with the FD&C, cGMP and other applicable laws, rules and
[**] Confidential Treatment Requested
16.
regulations and (iii) free from defects in material and workmanship until the
expiration date, if any, on such Products.
6.1.3 REPAIR AND REPLACEMENT. Subject to the terms of Section
5.1.7 above, defective Products may be returned to Biocircuits for repair or
replacement. In the case of Instruments, prior to any such return, Becton
must first obtain a return of materials authorization (RMA) number from
Biocircuits. Any returned Instruments must be in their original packaging and
must be accompanied by the RMA number assigned to such return. Repair or
replacement of the defective Product at Biocircuits' discretion shall be
Becton's sole and exclusive remedy and Biocircuits' sole and exclusive
obligation for any breach of the foregoing warranty.
6.2 EXCLUSIONS. The above warranties shall not apply to any Product
which (a) has been altered, (b) has not been operated, repaired or maintained
in accordance with any handling, maintenance or operating instructions
supplied by Biocircuits or (c) has been subjected to unusual physical or
electrical stress, misuse, abuse, negligence or accident.
6.3 DISCLAIMER. EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT,
BIOCIRCUITS MAKES NO OTHER WARRANTIES, EXPRESS OR IMPLIED, WITH RESPECT TO
THE PRODUCTS, AND BIOCIRCUITS EXPRESSLY DISCLAIMS ANY IMPLIED WARRANTY OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.
6.4 NO WARRANTY PASS THROUGH. Becton shall not be entitled to pass
through any of the foregoing warranties to any third parties. Becton shall
be responsible for all warranties made to customers and for all customer
support.
ARTICLE 7
REPRESENTATIONS AND WARRANTIES.
7.1 MUTUAL REPRESENTATIONS AND WARRANTIES. Each party hereby represents
and warrants to the other party that (i) it has the right and lawful
authority to enter into this Agreement; (ii) this Agreement is legal and
valid and the obligations binding upon such party are enforceable in
accordance with their terms except insofar as the enforceability hereof may
be limited by applicable bankruptcy, insolvency, receivership, moratorium and
other similar laws affecting the rights of the creditors generally, or
general principles of equity regardless of whether asserted in a proceeding
in equity or at law; and (iii) the execution, delivery and performance of
this Agreement does not conflict with any agreement, instrument or
understanding, oral or written, to which such party may be bound, nor violate
any law or regulation of any court, governmental body or administrative or
other agency having jurisdiction over it.
7.2 PATENTS. BIOCIRCUITS warrants to Becton that (a) it is the owner of
the entire right, title and interest in the Biocircuits Patent Rights and
Biocircuits Technology and has all authority necessary to grant the licenses
in and to the Biocircuits Patent Rights and Biocircuits Technology herein;
and (b) the Biocircuits Patent Rights and Biocircuits Technology represent
all of the
17.
intellectual property owned or controlled by Biocircuits which is necessary
for the manufacture, use, offer for sale, sale and importation of the
Instrument, Cartridges and Accessories; and (c) manufacture, use, offer for
sale, sale and importation of the Instrument, Cartridges and Accessories has
not been found to infringe, and to the best of Biocircuits' knowledge without
undertaking inquiry, is not now infringing, and has not been the subject of
any notice or allegation, received by Biocircuits as of the Effective Date,
of infringement of any intellectual property right of a third party.
7.3 TRADEMARKS. Biocircuits warrants to Becton that (a) it is the owner
of the entire right, title and interest in the Biocircuits Trademarks and has
all authority necessary to grant the licenses in and to the Biocircuits
Trademarks herein; and (b) the use of the Biocircuits Trademarks has not been
found to infringe, and to the best of Biocircuits' knowledge without
undertaking inquiry, is not now infringing, and has not been the subject of
any notice or allegation, received by Biocircuits as of the Effective Date,
of infringement of any intellectual property right of a third party.
ARTICLE 8
INDEMNIFICATION.
8.1 INDEMNIFICATION BY BIOCIRCUITS. Biocircuits agrees to indemnify,
defend and hold Becton harmless from and against all claims, damages, losses,
costs and expenses, including reasonable attorney's fees and court costs
(collectively "Claims"), which Becton may incur to the extent such Claims
arise out of (i) a Product's infringement of any United States federal or
state intellectual property right of a third party (subject to Section 8.5
below), or (ii) the death or injury of any person or damage to property
resulting from (a) Biocircuits' breach of its representations, warranties and
covenants contained in this Agreement (b) Biocircuits' design or manufacture
of the Products to the extent not caused by fault attributable to Becton, or
(c) the negligence, recklessness or willful misconduct of Biocircuits or its
officers, employees or agents.
8.2 INDEMNIFICATION BY BECTON. Becton agrees to indemnify, defend and
hold Biocircuits harmless from and against all claims, damages, losses, costs
and expenses, including reasonable attorney's fees and court costs (collectively
"Claims"), which Biocircuits may incur to the extent that such Claims arise out
of or result from (i) Becton's breach of its representations, warranties and
covenants contained in this Agreement, (ii) any Instrument manufactured by
Becton after the Manufacture Date which results in injury, illness or death of
any person or damage to property, to the extent not caused by fault attributable
to Biocircuits, (iii) the sale, promotion or other distribution of Products by
Becton otherwise than a manner consistent with the Agreement, (iv) any
representation or warranty given by Becton with respect to the Products (other
than product warranty given by Biocircuits in Article 6 hereto and other than
the labeling for Products as cleared by the FDA), (v) the manufacture, use or
sale of any product which is not supplied by Biocircuits and which is sold or
combined by Becton with the Products, (vi) repairs or services rendered by
Becton or (vii) injury, illness or death of any person, including without
limitation, Becton's employees or contractors engaged in the manufacture of the
Instrument, or to the extent such injury, illness or death to other persons
18.
arises out of or results from the negligence, recklessness or willful
misconduct of Becton or Becton's officers, employees or agents.
8.3 LIMITATION OF LIABILITY. IN NO EVENT SHALL EITHER PARTY BE LIABLE
TO THE OTHER FOR ANY INDIRECT OR CONSEQUENTIAL DAMAGES (INCLUDING WITHOUT
LIMITATION, LOST PROFITS), EVEN IF SUCH PARTY HAS BEEN ADVISED OF THE
POSSIBILITY THEREOF. Each party acknowledges that the foregoing limitations
are an essential element of the Agreement between the parties and that in the
absence of such limitations the pricing and other terms set forth in this
Agreement would be substantially different.
8.4 INDEMNIFICATION PROCEDURE. The party seeking indemnification under
this Article 8 (the "Indemnified Party") shall (i) give the other party (the
"Indemnifying Party") notice of the relevant claim and the related facts with
reasonable promptness after becoming aware of same, (ii) reasonably cooperate
with the Indemnifying Party, at the Indemnifying Party's expense, in the
defense of such claim, and (iii) give the Indemnifying Party the right to
control the defense and settlement of any such claim, except that (subject to
Section 8.5 below) the Indemnifying Party shall not enter into any settlement
that affects the Indemnified Party's rights or interest without the
Indemnifying Party's prior written approval. The Indemnified Party shall
have no authority to settle any claim on behalf of the Indemnifying Party.
8.5 INTELLECTUAL PROPERTY. Biocircuits' obligation to indemnify Becton
for Claims (as defined in Section 8.1) relating to infringement of any
intellectual property right of a third party shall be limited to [**]
in the aggregate and shall be Becton's sole remedy against Biocircuits for
such Claims. Biocircuits may, in its sole discretion, (i) obtain for Becton
the right to continue to manufacture (if applicable), market, sell and
distribute the relevant Product in the United States (a "Third Party
License") (ii) replace or modify the relevant Product so as to make the
Product non-infringing, or (iii) if (i) and (ii) are not commercially and
technically reasonable, terminate Becton's rights to distribute (and
manufacture, if applicable) the relevant Product in the United States and
Becton will remove all such Products from the United States market and will
cease distributing (and manufacturing, if applicable) the relevant Product in
the United States. If Biocircuits elects to obtain for Becton a Third Party
License, Biocircuits shall not increase the applicable transfer prices set
forth in Section 4.2 or royalties set forth in Section 4.3 except by mutual
agreement of the parties. If the parties do not agree on such an increase,
Biocircuits may elect to proceed under (iii) above. Biocircuits may, in its
sole discretion, enter into a settlement with the third party, including but
not limited to obtaining the rights described in (i) above. Biocircuits shall
not be obligated to indemnify Becton for Claims arising out of a Product's
infringement of any intellectual property right of a third party resulting
from Becton's combination of such Product with technology other than the
Biocircuits Patents or Biocircuits Technology, Becton's misuse or mishandling
of such Product or Becton's unauthorized modification of such Product.
[**] Confidential Treatment Requested
19.
ARTICLE 9
MANUFACTURE OF INSTRUMENTS BY BECTON.
9.1 LICENSE GRANT. Subject to the terms and conditions of this
Agreement, Biocircuits hereby grants to Becton and Becton hereby accepts an
exclusive (even as to Biocircuits) license, with the right to sublicense,
under the Biocircuits Technology, to manufacture the Instruments effective
upon the Manufacture Date for the remainder of the term of this Agreement.
Upon the Manufacture Date and thereafter during the term of this Agreement,
Becton agrees to manufacture, or have manufactured, the Instruments on behalf
of Biocircuits.
9.2 PRODUCTION AND MANUFACTURING STANDARDS. Becton agrees to
manufacture, package, label and store Instruments (i) which meet the
Manufacturing Specifications for Instruments; (ii) in a manner that is in
accordance with cGMP requirements and all other applicable FDA requirements
and applicable requirements of any foreign regulatory authority having
jurisdiction over the manufacture or sale of the Instruments; and (iii) in a
manner that is in accordance with any other procedures and documents
subsequently issued and agreed to by the parties in accordance with the terms
hereof. Becton shall provide such facilities, equipment and services as may
be required.
9.3 DELIVERY OF TOOLING AND TEST EQUIPMENT. At least thirty (30) days
prior to the Manufacture Date, Biocircuits shall deliver the Tooling, at its
expense and risk, to Becton's designated facility, or if mutually agreed to
by the parties, access to such Tooling shall be otherwise made available to
Becton. Biocircuits shall lease the Tooling to Becton under the terms and
conditions set forth on Exhibit F. Promptly upon execution of this
Agreement, the parties shall negotiate in good faith an Equipment Lease
Agreement which contains the terms set forth in Exhibit F and such other
terms and conditions as are customary in such agreements.
9.4 DELIVERY OF MANUFACTURING INFORMATION. Upon request by Becton,
Biocircuits shall provide Becton access to all information, documentation,
drawings, schematics, data, know-how and show-how necessary to manufacture
the Instruments. All information and materials provided to Becton under this
Section shall be Confidential Information of Biocircuits.
9.5 LABELS AND PACKAGING MATERIALS. Becton shall xxxx and label all
packaging and containers for the shipment and storage of the Instruments in
accordance with Biocircuits' instructions, at Becton's expense. Such
packaging, labels and containers shall be in accordance with the relevant
requirements of all applicable laws and regulations, as they may be amended
from time to time. Such labels and packaging shall, as appropriate, include
Biocircuits' trademark and trade names.
9.6 TESTING AND DOCUMENTATION. Becton shall certify to Biocircuits'
reasonable satisfaction that each Instrument was manufactured, packaged, labeled
and stored in accordance with the Manufacturing Specifications for Instruments
and in compliance with cGMP requirements and other applicable U.S. and foreign
regulatory requirements and in accordance with procedures agreed between Becton
and Biocircuits. Copies of all documentation and test results as are necessary
to demonstrate Becton's compliance under this Section, including
20.
records that must be maintained pursuant to applicable cGMP regulations,
shall be provided or made available to Biocircuits upon reasonable notice
from Biocircuits.
9.7 FACILITIES APPROVAL. Becton shall be responsible for obtaining and
maintaining all necessary plant inspection standards, plant licenses,
registrations or permits to enable the sale of the Instruments worldwide.
Becton shall provide on a continuing basis, access upon reasonable prior
notice by Biocircuits and/or, upon the request of Biocircuits, Biocircuits'
designee, to all of its protocols, standard operating procedures, equipment
specifications and manufacturing records, including records that must be
maintained pursuant to applicable cGMP regulations, useful or necessary for
the manufacture of the Instruments, and other non-privileged documentation or
materials prepared by Becton which may be useful in obtaining or maintaining
registrations, clearances and approvals of the Instruments.
9.8 ACCESS. Biocircuits and Biocircuits' designees shall have
reasonable access to observe and inspect Becton's facilities and procedures
including manufacturing operations, including all analytical and
manufacturing documentation related to the Instruments, at reasonable
intervals and upon reasonable notice to Becton. Employees of Biocircuits and
Biocircuits' designees who visit Becton's facilities shall at all times
comply with Becton's rules and regulations and shall be subject to all
confidentiality obligations of Biocircuits under this Agreement.
9.9 APPROVAL FOR MANUFACTURING CHANGES. Becton agrees that no changes
will be made to any materials, specifications, equipment or methods of
production or testing for the Instrument without Biocircuits' prior written
approval. Subsequent to the prior written approval of Biocircuits, such
approval not to be unreasonably withheld, Becton may then make those changes
in manufacturing procedures permitted by applicable regulations. In the
event that government regulations or regulatory authorities enacted after the
Effective Date require a change in the manufacturing procedures for the
Instrument, the parties will meet promptly to discuss a mutually agreeable
way to implement such change.
9.10 BECTON WARRANTIES REGARDING MANUFACTURE OF INSTRUMENTS. Becton
warrants during the period in which it manufactures Instruments:
9.10.1 that it will comply with all manufacturing instructions
and the Manufacturing Specifications, including any quality control standards
agreed to by the parties hereto;
9.10.2 that the Instruments will be manufactured, packaged,
labeled, stored and serviced in accordance with Biocircuits' instructions and
specifications and in compliance with cGMP and other applicable laws, rules
and regulations;
9.10.3 that, upon delivery of Instruments to a carrier on behalf
of Biocircuits or Becton, the Instruments will be in conformity with the
Manufacturing Specifications and with the FD & C Act or its foreign
equivalent, and with all other applicable laws and regulations then in
effect; and
21.
9.10.4 that it shall not knowingly ship Instruments that are
defective in any way, or are adulterated, misbranded or otherwise unsuitable,
or that have been misused, contaminated, tampered with or otherwise altered,
mishandled or subjected to negligence.
ARTICLE 10
PRODUCT RECALLS; ADVERSE EVENTS.
10.1 PRODUCT RECALL. Becton shall have the right to control the
arrangement of any Product recall, and the parties will cooperate with each
other in implementing such recall. Specifically, the parties shall cooperate
in the event of a Product recall with respect to the reshipment, storage or
disposal of recalled Products; the preparation and maintenance of relevant
records and reports; and notification to any recipients or users. In the
event that any governmental agency or authority issues a recall or takes
similar action in connection with the Products, or in the event either party
determines that an event, incident or circumstance has occurred which may
result in the need for a recall or market withdrawal, the party with such
information shall, within twenty-four (24) hours, advise the other party of
the circumstances by telephone or facsimile. The party primarily responsible
for the event precipitating the Product recall shall be responsible for the
expenses arising from such recall. In the event of a recall of Cartridges
and Accessories for a defect that is primarily related to the manufacture of
such Cartridges and Accessories, Biocircuits shall bear the expenses arising
from such recall. In the event of a recall of Cartridges and Accessories for
a defect from the use, including but not limited to the manner of storage, of
such Cartridges and Accessories after such Cartridges and Accessories have
passed to Becton pursuant to Section 3.4 above, Becton shall bear the
expenses arising from such recall.
10.2 ADVERSE EVENTS. Each party shall advise the other party, by
telephone or facsimile, within such time as is required by the FDA or foreign
equivalent (with respect to the severity of an adverse event) after it
becomes aware of any complaints, adverse event reports or safety issues
potentially caused by use of the Products or to which the use of the Products
may have contributed as well as any product malfunction or any other
reportable events under 21 CFR 803-804 or similar laws and regulations in
other countries. Such advising party shall provide the other party with a
written report delivered by confirmed facsimile of any such reports, stating
the full facts known to it, including but not limited to, customer name,
address, telephone number and serial number, if any, of the Products involved.
ARTICLE 11
INTELLECTUAL PROPERTY.
11.1 OWNERSHIP OF PROPRIETARY RIGHTS. Biocircuits will retain all of its
rights, title and interest in and ownership of all Biocircuits Technology,
Biocircuits Patent Rights, copyrights, trademarks, trade secrets, and all other
industrial and intellectual property embodied in the Products. Except as
otherwise expressly provided in this Agreement, Becton will have no right, title
or interest in any industrial or intellectual property relating to the Products,
marketing
22.
and promotional materials and reports and all marketing data and all
intellectual property relating thereto; PROVIDED, HOWEVER, that any marketing
materials developed by or for Becton pursuant to Section 5.1.5 shall be the
property solely of Becton.
11.2 INFRINGEMENT OF BIOCIRCUITS PATENT RIGHTS BY THIRD PARTIES.
11.2.1 NOTIFICATION. Each Party shall promptly notify the other
in writing of any alleged or threatened infringement of the Biocircuits
Patent Rights of which it becomes aware.
11.2.2 ENFORCEMENT RIGHTS. Biocircuits shall retain the right to
bring, at Biocircuits' expense, an appropriate action against any person or
entity infringing a Biocircuits Patent Right directly or contributorily and
shall be entitled to retain all amounts recovered in connection with such
action. In the event that Biocircuits is unable or unwilling to commence an
action against the alleged infringer within one hundred twenty (120) days of
the date of notice of such infringement, Becton may, but shall not be
obligated to, prosecute the alleged infringement or threatened infringement
and shall be entitled to retain all amounts recovered in connection with such
action. In such event, Becton shall act in its own name and at its own
expense. In the event that either party brings an action under this Section
11.2.2, the other party shall, at the expense of the party bringing the
action, cooperate fully with the party bringing the action, including if
required to bring such an action, the furnishing of a power of attorney.
ARTICLE 12
CONFIDENTIAL INFORMATION.
12.1 NONDISCLOSURE OBLIGATIONS. During the term of this Agreement, and
for a period of five (5) years after termination hereof, each party will
maintain all Confidential Information in trust and confidence and will not
disclose any Confidential Information to any third party or use any
Confidential Information for any unauthorized purpose. Each party may use
such Confidential Information only to the extent required to accomplish the
purposes of this Agreement. Confidential Information shall not be used for
any purpose or in any manner that would constitute a violation of any laws or
regulations, including without limitation the export control laws of the
United States. Confidential Information shall not be reproduced in any form
except as required to accomplish the intent of this Agreement. Each party
will use at least the same standard of care as it uses to protect proprietary
or confidential information of its own, which shall at minimum be a
reasonable standard of care. Each party will promptly notify the other upon
discovery of any unauthorized use or disclosure of the Confidential
Information. All information that is to be held confidential shall be given
only to individuals who are made aware of the confidential nature of the
information and who have signed a confidentiality agreement or who have a
fiduciary responsibility to Becton and who have a need to know.
12.2 EXCEPTIONS. Confidential Information shall not include any
information which:
12.2.1 is now, or hereafter becomes, through no act or failure to
act on the part of the receiving party, generally known or available;
23.
12.2.2 is known by the receiving party at the time of receiving
such information, as evidenced by its written records;
12.2.3 is hereafter furnished to the receiving party by a third
party, as a matter of right and without restriction on disclosure;
12.2.4 is independently developed by the receiving party without
any breach of Section 12.1;
12.2.5 is the subject of a written permission to disclose
provided by the disclosing party; or
12.2.6 is of such inconsequential nature as to render it valueless.
The parties agree that the material financial terms of this Agreement
will be considered the Confidential Information of both parties. However,
each party shall have the right to disclose the material financial terms of
this Agreement to any potential acquirer, merger partner, or other bona fide
potential financial partner, subject to a requirement to secure confidential
treatment of such information consistent with the Agreement or if it is
prudent or proper to make such disclosure to comply with applicable
government regulations; provided that the disclosing party shall utilize
reasonable efforts to not publicly disclose such information to the extent
legally permitted and practicable.
12.3 AUTHORIZED DISCLOSURE. Notwithstanding any other provision of this
Agreement, each party may disclose Confidential Information if such
disclosure:
12.3.1 is in response to a valid order of a court or other
governmental body of the United States or any political subdivision thereof;
PROVIDED, HOWEVER that the responding party shall first have given notice to
the other party hereto and shall have made a reasonable effort to obtain a
protective order requiring that the Confidential Information so disclosed be
used only for the purposes for which the order was issued;
12.3.2 is otherwise required by law; or
12.3.3 is otherwise necessary to conduct financings, file or
prosecute patent applications, prosecute or defend litigation or comply with
applicable governmental regulations, including regulatory filings, or
otherwise establish rights or enforce obligations under this Agreement, but
only to the extent that any such disclosure is necessary.
12.4 PRIOR CONFIDENTIALITY AGREEMENT. The terms of this Article 12 shall
supersede that certain Confidentiality Agreement between the parties dated
July 14, 1997 (the "Confidentiality Agreement") and the Confidentiality
Agreement shall terminate concurrent with the execution of this Agreement.
24.
ARTICLE 13
COMPLIANCE WITH LAWS.
13.1 COMPLIANCE WITH LAWS.
13.1.1 MANUFACTURING AND SHIPPING. Becton and Biocircuits each
shall be responsible for complying with all applicable legal and regulatory
requirements of the United States and any other national, supranational
(e.g., European Union), state or local regulatory agency, department, bureau,
commission, council or other governmental entity regarding the manufacture
and shipment obligations hereunder. Becton and Biocircuits each shall give
the other party prompt notice of any impending inspections by a governmental
agency of the facility used for or processes involved in the manufacture of
the Cartridges, Accessories and Instruments hereunder, and shall provide the
other party an opportunity to observe such inspection. Becton and
Biocircuits each shall provide the other party with copies of inspection
reports, correspondence and other documents relating to government
inspections. Each party shall promptly notify the other of new instructions,
regulations or specifications of which it becomes aware which are relevant to
the manufacture of the Instruments under this Agreement and which are
required by the FDA, equivalent foreign regulatory agencies, or other
applicable laws or governmental regulations and shall confer with each other
with respect to the best means to comply with such requirements. Each party
shall assist the other in obtaining and maintaining all approvals and
authorizations of any governmental agencies necessary for the manufacture,
import, export or distribution of Instruments, and will promptly notify the
other party of any comments, responses or notices that a party receives from
any governmental authorities which relate to the regulatory status of the
Instrument.
13.1.2 MARKETING AND SALES. Becton shall comply with all
applicable laws, regulations and orders of any governments or government
agencies worldwide and with all other governmental requirements applicable to
its promotion, marketing and sales activities with respect to the Products,
including obtaining import approvals or other permits, customs clearances, or
authorizations for the shipment and sale of Products. In connection with
Becton's compliance with this paragraph, Becton will provide Biocircuits with
all information it shall reasonably request, including but not limited to
distribution records, copies of any filings made in connection therewith and
any promotional literature, sales literature, books, catalogues and the like
prepared in connection with the Products. Biocircuits will, at Becton's
expense, furnish Becton with such assistance and cooperation as may
reasonably be requested in connection with compliance with such governmental
requirements.
ARTICLE 14
TERM, TERMINATION, AND EFFECT OF TERMINATION.
14.1 TERM. Except as provided in Sections 14.2 and 14.3, this Agreement
and the licenses and rights granted hereunder will be effective for a term of
four (4) years.
25.
14.2 EARLY TERMINATION BY EITHER PARTY. Either party may terminate this
Agreement upon written notice to the other party if (i) the other party
commits any material breach of this Agreement which the other party fails to
cure within [**] following written notice from the non-breaching party
specifying such breach; (ii) the other party permanently ceases to conduct
business; or (iii) the other party (a) becomes insolvent, (b) makes an
assignment for the benefit of creditors, (c) commences any dissolution,
liquidation or winding up, (d) has a receiver, trustee, conservator or
liquidator appointed for all or a substantial part of its assets, or (e) has
a petition filed by or against it under the Bankruptcy Code of 1978, as
amended, 11 U.S.C. Section 101 et seq., or under any state insolvency laws
providing for the relief of debtors, and such petition is not dismissed
within [**] of its filing.
14.3 EARLY TERMINATION BY BIOCIRCUITS. Biocircuits may, at its election
and in its sole discretion, terminate this Agreement if Becton fails to meet
the minimum sales requirement set forth in Section 5.1.2.
14.4 SURVIVING OBLIGATIONS. Termination or expiration of this Agreement
will not (i) affect any other rights of either party which may have accrued up
to the date of such termination or expiration, (ii) relieve either party of its
obligations under Article 8 (Indemnity) or Article 12 (Confidential
Information), or (iii) relieve Becton of its obligation to pay to Biocircuits
sums due prior to termination or expiration of this Agreement.
14.5 EFFECT OF TERMINATION. Upon the termination of this Agreement for
whatever reason:
14.5.1 the right of Becton to act as a sales representative and
distributor of the Products will cease and, if the Agreement terminates after
the Manufacture Date, Becton will cease manufacture of the Instruments. In
addition, Becton will immediately discontinue all use of Biocircuits' trade
names and trademarks in connection with the Products. Becton will return to
Biocircuits all price lists, catalogs, sales literature, operating and
service manuals, advertising literature and other materials relating to the
Products originally provided by Biocircuits to Becton. However, for
materials produced by Becton, Becton will destroy such materials which relate
solely to the Product. Notwithstanding the foregoing, Becton will have the
right, for a period not to exceed [**] to sell any Products remaining in
inventory to the extent the same are not repurchased by Biocircuits pursuant
to subsection 14.5.3 below or, in the event that this Agreement is terminated
by Becton pursuant to Section 14.2 for an additional [**] solely with respect
to the fulfillment of firm standing orders as proven by documentation
presented to Biocircuits.
14.5.2 Becton shall provide to Biocircuits:
(a) all manufacturing documentation and drawings related to
the manufacture of the Instruments and the technical data package related
thereto; and
(b) upon the effective date of termination, the following
information: (i) the location of all Instruments sold by Becton during the
term of this Agreement; (ii) the complaint and incident files related to the
Instruments; and (iii) a copy of Becton's customer list
[**] Confidential Treatment Requested
26.
for the Products compiled during the term of this Agreement, including names,
addresses, telephone numbers and purchase history.
14.5.3 in the event the Agreement either terminates at the end of
four (4) years or is terminated by Biocircuits pursuant to Section 14.3, if
desired by Biocircuits, Biocircuits may repurchase from Becton all of the
Products (to the extent that the same are in new and original condition) then
in Becton's inventory, F.O.B. Becton's facilities, and Biocircuits will repay
to Becton the actual price paid by Becton to Biocircuits for such returned
products less any and all amounts then owing and uncontested, for whatever
reason, from Becton to Biocircuits;
14.5.4 except to the extent of selling its remaining inventory of
Instruments as permitted by subsection 14.5.1 above, after termination Becton
will not represent or hold itself out as being an authorized distributor or
sales representative for the Products or engage in any practices which might
make it appear that Becton is still such an authorized distributor or sales
representative;
14.5.5 Becton will promptly assign or cause to be assigned to
Biocircuits, or its designee, every government approval, clearance,
registration or permit relating to the Products obtained by Becton. In the
event such assignment is not permitted by law, Becton will cooperate in the
cancellation of such government approval, clearance, registration or permit
standing in its name and the reissuance of such government approval,
clearance, registration or permit to Biocircuits or its nominee;
14.5.6 Becton will transfer to Biocircuits at Becton's cost any
rights it may have to any trademarks or trade names of Biocircuits; and
14.5.7 In the event the Agreement is terminated, the Equipment
Lease Agreement attached hereto as Exhibit F will terminate concurrently
therewith.
14.6 NO LIABILITY FOR TERMINATION. Neither party will have any
obligation to the other by reason of the terminating party's termination
permitted by this Agreement. Each party hereby agrees not to assert any
claim by reason of such termination of this Agreement. Neither party, by
reason of the termination of this Agreement, will be liable to the other
because of any damages, expenditure, loss of profits, or prospective profits
of any kind or nature, sustained or arising out of such termination or for
any investments related to the performance of this Agreement or the goodwill
created in the course of the performance under this Agreement.
14.7 ACCRUED OBLIGATIONS. No termination of this Agreement will in any
manner whatsoever release, or be construed as releasing, any party from any
liability to the other arising out of or in connection with a party's breach
of, or failure to perform any covenant, agreement duty or obligation
contained in this Agreement. Neither party will be relieved from any
obligations vested prior to the date of termination of this Agreement.
14.8 ADDITIONAL PURCHASES UPON EXPIRATION OR TERMINATION. Upon
expiration of this Agreement, Becton may purchase from Biocircuits, at the
transfer prices set forth under Section 4.2.2, [**] during the calendar
[**] Confidential Treatment Requested
27.
quarter immediately preceding the calendar quarter in which the Agreement
expires. In the event the Agreement is terminated by Biocircuits pursuant to
Sections 14.2(ii), 14.2(iii) or 14.3, Becton may purchase from Biocircuits,
at the transfer prices set forth under Section 4.2.2, [**] purchased by
Becton during the calendar quarter immediately preceding the calendar quarter
in which the effective date of termination falls.
ARTICLE 15
DISPUTE RESOLUTION; GOVERNING LAW; VENUE; OFFICIAL LANGUAGE.
15.1 DISPUTE RESOLUTION.
15.1.1 In the event of any dispute between the parties arising
under or related to this Agreement (a "Dispute"), the presidents (or a direct
assignee of each of the presidents reporting to the president) of the parties
hereto will negotiate in good faith in an effort to resolve such Dispute for
a period of sixty (60) days following written notification from the other
party describing in reasonable detail the matter in dispute. Upon the
expiration of the sixty (60) day period with the Dispute remaining unsolved,
either party may proceed under Section 15.1.2 below.
15.1.2 If a matter has not been resolved under the procedures set
forth in Section 15.1.1 above, then within ten (10) days thereafter, either
party may, but shall not be obligated to, initiate nonbinding mediation of
the controversy or claim under the then-current Center for Public Resources
Model ADR procedures for Mediation of Business Disputes (the "CPR
Procedures"). Once the mediation is initiated by one party, the other party
agrees to participate in and conduct mediation in accordance with the CPR
Procedures in good faith and not to pursue other remedies while such
mediation is proceeding. If neither party initiates mediation within such
ten (10) day period, or if the dispute has not been resolved by such
mediation within sixty (60) days following initiation of mediation, either
party may pursue all available remedies.
15.1.3 All applicable statutes of limitations and defenses based
upon the passage of time shall be tolled while the negotiation and mediation
procedures set forth in this Section 15.1 are pending. The parties will take
such action, if any, as may reasonably be required to effectuate such tolling.
15.1.4 Notwithstanding the foregoing, the remedy at law for any
breach of the provisions of this Agreement or such other agreements may be
inadequate, and, accordingly, an aggrieved party seeking equitable relief or
remedies for such a breach shall have the right and is hereby granted the
privilege, in addition to all other remedies at law or in equity, to proceed
directly in a court of competent jurisdiction to seek temporary or
preliminary equitable relief.
15.1.5 Each party shall pay its own costs incurred in attempting to
resolve a dispute pursuant to the consultation and mediation procedures set
forth in this Section 15.1
[**] Confidential Treatment Requested
28.
without the right to recover such costs from the other party and shall share
equally the cost of mediation.
15.2 GOVERNING LAW; VENUE. This Agreement is made in accordance with and
shall be governed and construed under the laws of the State of California, as
applied to agreements executed and performed entirely in California by
California residents and in no event shall this Agreement be governed by the
United Nations Convention on Contracts for the International Sale of Goods. Any
claim or controversy arising out of or related to this Agreement or any breach
hereof not otherwise resolved pursuant to Section 15.1 hereof shall be submitted
to a federal court in the State of California having jurisdiction over the
matter, and the parties hereby consent to the jurisdiction and venue of such
court.
15.3 ENGLISH LANGUAGE. The official text of this Agreement and any Exhibit
or any notice given or accounts or statements required by this Agreement shall
be in English. In the event of any dispute concerning the construction or
meaning of this Agreement, reference shall be made only to this Agreement as
written in English and not to any other translation into any other language.
ARTICLE 16
MISCELLANEOUS.
16.1 NO AGENCY; NO JOINT VENTURE; INDEPENDENT CONTRACTOR. Becton will act
as independent contractor under the terms of this Agreement. Becton is not, and
will not be deemed to be, employee, agent, co-venturer or legal representative
of Biocircuits for any purpose. Becton will not be entitled to enter into any
contracts in the name of, or on behalf of Biocircuits, nor will Becton be
entitled to pledge the credit of Biocircuits in any way or hold itself out as
having authority to do so.
16.2 ASSIGNMENT. Neither party may assign, in whole or in part, this
Agreement nor any right or obligation arising under it without the prior written
consent of the other, such consent not to be unreasonably withheld; PROVIDED,
HOWEVER, that either party may assign or transfer its rights and obligations
arising under this Agreement to a purchaser of all or substantially all of the
stock or assets of such party or to an entity into which such party is merged,
or to a wholly-owned subsidiary of such party, without the consent of the other
party.
16.3 ENTIRE AGREEMENT; AMENDMENT. This Agreement and the Exhibits hereto,
set forth and constitute the final, complete and entire agreement between the
parties hereto with respect to the subject matter hereof, supersede any and all
prior agreements, understandings, promises and representations made by either
party to the other concerning the subject matter hereof and the terms applicable
hereto and are intended as a complete and exclusive statement of the terms of
the agreement between the parties. This Agreement may not be released,
discharged, amended or modified in any manner except by an instrument in writing
signed by duly authorized officers of both parties.
29.
16.4 SEVERABILITY. If any provision of this Agreement is or becomes or
is deemed invalid, illegal or unenforceable in any jurisdiction, such
provision will be construed or deemed amended to conform to applicable laws
so as to be valid, legal and enforceable and to conform to the maximum extent
possible to the intention of the parties including, without limitation, by
deleting such provision.
16.5 BENEFITS OF THIS AGREEMENT. Except as expressly provided for
herein, nothing in this Agreement will be construed to give to any person or
entity other than Becton and Biocircuits any legal or equitable right, remedy
or claim under this Agreement. This Agreement will be for the sole and
exclusive benefit of Becton and Biocircuits and shall be binding upon and
inure to the benefit of their respective successors and permitted assigns.
16.6 WAIVER. No waiver of any right under this Agreement will be deemed
effective unless contained in a writing signed by the party charged with such
waiver, and no waiver of any right arising from any breach or failure to
perform will be deemed to be a waiver of any future such right or of any
other right arising under this Agreement.
16.7 NOTICES. Notices, consents and the like required or permitted
hereunder will be in writing and will be sent to the addresses set forth
below or to such other addresses as the parties may hereafter specify, and
will be deemed given on the earlier of:
16.7.1 physical delivery (or refusal to accept same) to a party,
including confirmed delivery by facsimile or telex;
16.7.2 upon delivery (or refusal to accept same) after sending by
expedited courier; or
16.7.3 upon delivery (or refusal to accept same) by certified
mail, return receipt requested.
Copies of notices will be sent to the appropriate address as set forth
below:
To Biocircuits: Biocircuits Incorporated
0000 Xxxxxxxxxx Xxxxxxx
Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxx X. Xxxxxx
With a copy to: Xxxxxx Godward LLP
Five Xxxx Xxxx Xxxxxx, Xxxxx 000
Xxxx Xxxx, Xxxxxxxxxx 00000
Attention: Xxxx X. Xxxxxxx, Esq.
30.
To Becton: Becton Xxxxxxxxx Microbiology Systems
0 Xxxxxxx Xxxxxx
X.X. Xxx 0000
Xxxxxx, Xxxxxxxx 00000-0000
Attention: President
With a copy to: Becton Xxxxxxxxx and Company
0 Xxxxxx Xxxxx
Xxxxxxxx Xxxxx, Xxx Xxxxxx 00000-0000
Attn: General Counsel
16.8 FORCE MAJEURE. Each of the parties hereto will not be liable for
any failure or delay in performance hereunder where such failure or delay is
due, in whole or in part, to any cause beyond its reasonable control,
including but not limited to Acts of God, fire, flood, warfare, labor
disputes or other similar catastrophic events. If a force majeure prevents
Biocircuits from supplying, for a period in excess of [**], Instruments,
Cartridges or Accessories to Becton pursuant to a purchase order accepted by
Biocircuits, Becton shall have the rights set forth in Section 2.9. If a
force majeure prevents Becton from selling, for the [**] period after a force
majeure, Cartridges and Accessories in amounts equivalent to its average
sales of Cartridges and Accessories during the two calendar quarters
immediately preceding the force majeure, Biocircuits may terminate Becton's
right to distribute Cartridges and Accessories.
16.9 PATENT MARKING. Becton agrees to include on the Products and on all
packaging materials and Product labeling patent marking as reasonably
requested by Biocircuits.
16.10 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which will be an original and all of which will
constitute together but one and the same document.
16.11 HEADINGS. The headings of the several Articles and Sections
herein are inserted for convenience of reference only and are not intended to
be part of or to affect the meaning or interpretation of this Agreement.
16.12 PUBLICITY. All public announcements and press releases
regarding the subject matter of this Agreement shall be made only after
mutual agreement by the parties as to the content and timing thereof. Any
such announcements or communications shall be made only with the prior
approval of the other party hereto, which shall not be unreasonably withheld,
except as otherwise required by applicable law or legal process. The parties
agree that the public announcement of this Agreement shall be made pursuant
to a press release in the form attached as Exhibit G.
[SIGNATURES BEGIN ON NEXT PAGE]
[**] Confidential Treatment Requested
31.
IN WITNESS WHEREOF, the parties have executed this Agreement on the date
first above mentioned.
BIOCIRCUITS CORPORATION BECTON XXXXXXXXX AND COMPANY THROUGH
ITS BECTON XXXXXXXXX MICROBIOLOGY
SYSTEMS DIVISION
By: By: [signature]
-------------------------------- ----------------------------------
Printed Name: Printed Name: Xxxxxxx X. Forlenze
---------------------- ------------------------
Title: Title: President
----------------------------- -------------------------------
IN WITNESS WHEREOF, the parties have executed this Agreement on the date
first above mentioned.
BIOCIRCUITS CORPORATION BECTON XXXXXXXXX AND COMPANY THROUGH
ITS BECTON XXXXXXXXX MICROBIOLOGY
SYSTEMS DIVISION
By: [signature] By:
-------------------------------- ----------------------------------
Printed Name: Xxxx Xxxxxx Printed Name:
---------------------- ------------------------
Title: President & CEO Title:
----------------------------- -------------------------------
EXHIBIT A
ACCESSORIES LIST AND TRANSFER PRICES
ITEM CATALOG # TRANSFER
PRICE
------------------------------------------------------------------------------
IOS Controls Kit 1110-0002 [**]
IOS Buffer Kit (3 pack) 1110-0005 [**]
IOS Printer Paper (3 pack) 1552-0003 [**]
IOS Waste Kit 1110-0011 [**]
Pipette-Grey-T4/TU 33ul (1) 1210-0003 [**]
Pipette-White-TSH 150ul (1) 1210-0008 [**]
IOSQC Cartridge (1) 1210-0002 [**]
IOS Software Card (1) 1510-0023 [**]
Pipette Tips (96 racked) 1353-0001 [**]
IOS Cleaning Cartridge 1210-0050 [**]
IOS Users Manual 1551-0001 [**]
IOS Instructional Video 1552-0007 [**]
[**] Confidential Treatment Requested
EXHIBIT B
BIOCIRCUITS PATENT RIGHTS
BIOC# TITLE SERIAL # PATENT # FILED ISSUED
----------------------------------------------------------------------------------------------------------------
[**] [**] [**] [**] [**] [**]
[**] [**] [**] [**] [**] [**]
[**] [**] [**] [**] [**] [**]
[**] [**] [**] [**] [**] [**]
[**] [**] [**] [**] [**] [**]
[**] [**] [**] [**] [**] [**]
[**] [**] [**] [**] [**] [**]
[**] [**] [**] [**] [**] [**]
[**] [**] [**] [**] [**] [**]
[**] [**] [**] [**] [**] [**]
[**] [**] [**] [**] [**] [**]
[**] [**] [**] [**] [**] [**]
[**] [**] [**] [**] [**] [**]
[**] [**] [**] [**] [**] [**]
[**] Confidential Treatment Requested
EXHIBIT C
EXISTING CARTRIDGES AND TRANSFER PRICES
FTI (T4/T Uptake) [**]
TSH [**]
T4/TSH [**]
Quant. HCG [**]
[**] Confidential Treatment Requested
EXHIBIT D
NEW CARTRIDGES AND TRANSFER PRICES
Digoxin [**]
PSA [**]
Free T4 [**]
[**] Confidential Treatment Requested
EXHIBIT E
BIOCIRCUITS TRADEMARKS
XXXX COUNTRY APPLICATION CLASS, GOODS, SERVICES COUNTRY STATUS NEXT ACTION
REGISTRATION
NO.
BIOCIRCUITS Registration Int'l Class 10: Medical diagnostic Registered 00/0/00 Xxxx Xxxxxxxxxxx xx
Xxxxxx Xxxxxx No. 2,004,582 test systems consisting essentially (First Use of Xxxx Use between
of optical detection apparatus, for 3/1/96) 10/1/2001-
detecting the presence of 10/1/2002; Renew
antigens, antibodies, probes, and registration by
receptors 10/1/2006
IOS Registration Int'l Class 10: Medical Registered File Declaration of
United States No. 2,008,814 diagnostic immunoassay device 10/15/96 (First Use Use between
for testing bodily fluids and of Xxxx 3/1/96) 10/15/2001-
tissue, and reagent cartridges 10/15/2002; Renew
therefor registration by
10/15/2006
EXHIBIT F
EQUIPMENT LEASE TERMS
1. Rent is [**]
2. Rent is payable upon the Manufacturing Date and the first day of the month
thereafter during the term of the agreement. When the agreement terminates
under Article 14, the obligations of this lease also terminate.
3. Upon termination of the lease, BD will provide to Biocircuits the tools and
fixtures or provide access to such tooling and fixtures.
4. Biocircuits retains title to the tooling.
5. BD shall incur the cost of maintaining and repair of such tooling during
the term of the agreement.
6. Biocircuits shall maintain adequate insurance for the tooling.
7. Following is a list of tooling
TOOLING ITEMS
---------------------
Case Tooling
Plastic Pump
Text Fixtures
Computers
Tooling (Keypad)
Keypad
Frame (501-0019)
CPU PCB (F500-0011)
Stage Carriage (511-0022)
MTR/DRVR PCB (F500-0012)
MTR/DRVR PCB Assy (507-0089)
Barcode Preamp (F500-0013)
Optics Carrage (511-0030)
Fluidics Interconnect (F500-0016)
Ref Amp (F500-0015)
Ref/Interconnect (F500-0015)
UV Lamp (F500-0017)
[**] Confidential Treatment Requested
APPENDIX A
PRODUCT SPECIFICATION DOCUMENTS
PRODUCT DOCUMENT NO.
IOS-Registered Trademark- Instrument J517-0001, Revision F
IOS Controls Kit 1110-0002-D
IOS Buffer Kit (3 pack) 1110-0005-C
IOS Printer Paper (3 pack) 1552-0003-A
IOS Waste Kit 1110-0011-B
Pipette-Grey-T4/TU 33ul (1) 1210-0003-B
Pipette-White-TSH 150ul (1) 1210-0008-B
IOSQC Cartridge (1) 1210-0002-E
IOS Software Card (1) 1510-0023-D
Pipette Tips (96 racked) 1353-0001-C
Cleaning Cartridge 1210-0050-A
Video 1552-0007-A
User Manual 1552-0001-D
T4/T Uptake J210-0001-C
TSH J210-0006-C
hCG (quantitative) J210-0017-C
hCG (serum) J210-0018-B
