EXHIBIT 00.XX
THIS AGREEMENT, made this 1 st day of July, 2000, by and between: HYDROMER,
INC., a New Jersey Corporation with its office located at 00 Xxxxxxxx Xxxx,
Xxxxxxxxxx, Xxx Xxxxxx 00000 ("HYDROMER");
and
Becton, Xxxxxxxxx and Company, Inc. with its corporate headquarters at 0
Xxxxxx Xxxxx, Xxxxxxxx Xxxxx, XX 00000-0000 and AFFILIATES jointly and separably
referred to as ("LICENSEE").
WHEREAS, HYDROMER owns patent rights relating to the production of articles
based on the art taught in certain patents; and
WHEREAS, LICENSEE desires to obtain a license from HYDROMER under those
patent rights to avoid any controversy regarding the commercialization of
LICENSEE'S Hydrocath Assure product.\
NOW, THEREFORE, in consideration of the premises and the performance of the
mutual covenants herein contained, the parties hereto agree as follows:
1.0 DEFINITIONS. For the purpose of this AGREEMENT, the following shall
apply:
1.1 "AFFILIATES" shall mean all corporations, partnerships, sole
proprietors and other forms of business organizations, the business of which is
controlled by Becton, Xxxxxxxxx and Company, any corporation in which Becton,
Xxxxxxxxx and Company owns at least 50% of the stock entitled to vote for
directors, and any corporation, firm, partnership, proprietorship or other form
of business in which Becton, Xxxxxxxxx and Company has the maximum amount of
ownership interest permitted by local law.
With respect to AFFILIATES, Becton, Xxxxxxxxx and Company upon
request will provide HYDROMER with the names, locations, addresses and interests
of such AFFILIATES. Becton, Xxxxxxxxx and Company hereby guarantees the
obligations of its' AFFILIATES with respect to the terms of this Agreement as if
the obligations are its own.
NON-EXCLUSIVE LICENSE AGREEMENT with HYDROMER, INC Page-2
================================================================================
1.2 "PRODUCTS"
1.3 "PATENT RIGHTS" means United States Patent No. 4,769,013 and
foreign patents and patent applications based thereon or claiming priority from
U.S. patent application # 416,906 filed 9/13/82 and further including but not
limited to Canadian Patent No. 1,212,321, German Patent No. 3,379,573.8-08/EP,
European Patent No. 119,248 and Japanese Patent No. 1,810,017 and any division,
continuation, continuation-in-part, patent of addition, extension, substitution,
confirmation, reexamination or reissue of said patents and applications.
1.4 "NET SALES PRICE" shall mean the gross invoice price at which
PRODUCTS are shipped to THIRD PARTIES, less discounts allowed to distributors,
discounts allowed dealers, refunds, replacements or credits allowed to
purchasers for return of PRODUCT or as reimbursement for damaged PRODUCT,
freight, postage, insurance and other shipping charges, sales and use taxes,
value added taxes, customs duties and any other governmental charges imposed on
the production, importation, use or sale of PRODUCT except income taxes. Should
LICENSEE sell PRODUCT in combination with other components or products, then the
net sales price computation shall be based on the average net sales price
charged during the applicable quarter by LICENSEE for the PRODUCT when
separately invoiced or priced. In the event the PRODUCT has not been separately
invoiced or priced during the applicable quarterly period, the applicable
royalty rate shall be applied to the portion of the NET SALE PRICE of the kit or
package in which PRODUCT is shipped that is equal to the portion of the cost of
the kit or package attributable to the cost of PRODUCT. Thus, where the cost of
PRODUCT is x% of the total cost of the kit or package, the applicable royalty
rate shall be
NON-EXCLUSIVE LICENSE AGREEMENT with HYDROMER, INC Page-3
================================================================================
applied to x% of the NET SALES PRICE of the kit or package. Pursuant to section
4.0 and in accordance with the obligations stated therein, LICENSEE shall
maintain the cost records used to ascertain x%.
1.5 "TERRITORY" means worldwide.
1.6 "THIRD PARTIES" means any person or entity other then
LICENSEE.
1.7 "VALID CLAIM" shall mean a claim of an issued or granted
patent within the PATENT RIGHTS so long as such claim shall not have been
disclaimed by HYDROMER or shall not have been held invalid or not enforceable or
not infringed by LICENSEE by a tribunal of competent jurisdiction from whose
judgement no appeal is taken or allowed.
2.0 GRANT.
2.1 HYDROMER hereby grants LICENSEE a non-exclusive license to
make, have made, use, sell, offer for sale and import PRODUCTS in the TERRITORY
under the PATENT RIGHTS.
3.0 ROYALTIES.
3.1. As consideration for this grant of rights, LICENSEE will
pay to HYDROMER the non-refundable sum of $25,000 representing royalties due and
owing from the beginning of time until close of business on the day before this
Agreement becomes effective, said amount being due in full upon execution of
this AGREEMENT. Said sum will not become a credit against any royalties payable
on or after the effective date of this Agreement.
3.2 In addition to the payment provided in Paragraph 3.1 hereof ,
a running royalty payable quarterly will accrue from LICENSEE to HYDROMER for
each PRODUCT shipped to THIRD PARTIES or for each quarter this License is in
effect
NON-EXCLUSIVE LICENSE AGREEMENT with HYDROMER, INC Page-4
================================================================================
(whichever is greater), as set forth in Schedule A.
The obligation to pay royalties to HYDROMER is imposed only once with respect to
the same unit of PRODUCTS regardless of the number of licensed patents covering
the same. There shall be no obligation to pay HYDROMER under this Article on
sales of PRODUCTS between LICENSEE and its AFFILIATES or between AFFILIATES but
in such instances the obligation to pay royalties shall arise upon the sale by
LICENSEE or AFFILIATES of PRODUCTS to THIRD PARTIES. Royalties due under this
Article shall be deemed to accrue when PRODUCT is shipped to THIRD PARTIES
and/or at the end of each quarter if the unit royalty is less then the quarterly
royalty.
4.0 ACCOUNTING. For accounting purposes, quarters will start on the first
day of each January, April, July, and October, following the date of execution
of this AGREEMENT and end on the last day of the next succeeding March, June,
September, and December, respectively. Within forty-five (45) days after the
close of each quarter hereof, LICENSEE shall render to HYDROMER a written report
with respect to all royalty payments due hereunder, and with such report, pay in
full in United States dollars all amounts due in respect of such quarter. To the
extent sales may be made in a foreign country the rate of exchange to be used in
computing the equivalent United States Dollars due to HYDROMER as royalty shall
be the rate recited in the report entitled "Rates of Exchange" issued monthly by
LICENSEE's International Financial Department which LICENSEE represents and
warrants provides spot exchange rates for each foreign country where sales were
made, on the last business day of the quarter when sales occurred, provided that
payments based on sales in any foreign country shall be payable only after
deducting for exchange and all other charges due foreign governments, including
withholding taxes, arising from the origin and transmittal of such royalties,
and further provided that the foregoing is subject to the right to make payment
in any country
NON-EXCLUSIVE LICENSE AGREEMENT with HYDROMER, INC Page-5
================================================================================
where currency is blocked and where legal conversion of the currency billed
cannot be made into United States Dollars by depositing such payments in
HYDROMER's name in a bank designated by HYDROMER within such country. Such
report shall indicate for such quarter the number of units, the NET SALES PRICE,
and the amount of sales by LICENSEE, product code of PRODUCTS shipped by
LICENSEE with respect to which royalty payments are due. LICENSEE shall keep
accurate records in sufficient detail in accordance with its own document
retention policy (which shall be provided to HYDROMER upon request) to enable
the aforesaid payments to be determined, provided however all such records shall
be maintained for a period of three years. At HYDROMER's request, LICENSEE,
shall permit an independent certified public accountant acceptable to LICENSEE
to have access once in each calendar year, during regular business hours and
upon reasonable notice to LICENSEE, to such of the records of LICENSEE as may be
necessary to verify the accuracy of the reports required under this AGREEMENT
and received from LICENSEE by HYDROMER in the previous three calendar years;
provided, however said accountant shall keep all information of LICENSEE
confidential and shall disclose to HYDROMER and LICENSEE only the amount of any
deficiency or overpayment found. In the event the deficiency exceeds 3% of
royalty payments audited, LICENSEE shall bear the full costs of the audit. In
the event of an overpayment or underpayment, HYDROMER or LICENSEE as the case
may be shall repay such overpayment within 10 days of receiving the accountant's
report which shall be deemed final and not subject to any challenge except for
fraud. The failure of HYDROMER to request verification of any report during a
three year calendar period starting on the January 1st, next occurring shall be
considered acceptance of the accuracy of such report and LICENSEE shall have no
obligation to maintain any records thereafter.
NON-EXCLUSIVE LICENSE AGREEMENT with HYDROMER, INC Page-6
================================================================================
5.0 WARRANTY.
5.1 HYDROMER warrants that it is the owner of all right, title and
interest in and to the PATENT RIGHTS and has the unrestricted power and
authority to grant the licenses as provided herein. HYDROMER represents that as
of the date of this AGREEMENT it has no knowledge of any pending or threatened
litigation against HYDROMER which might impair the rights licensed hereunder.
5.2 HYDROMER shall indemnify, defend and hold harmless LICENSEE, its
directors, officers, employees and agents from any and all loss, damage,
demands, actions and causes of action, assessments, liabilities, costs and
expenses which they may incur because of HYDROMER's breach of any representation
or warranty
5.3 Except for the warranty in section 5.1, the PATENT RIGHTS granted
are granted AS IS. Except for claims under section 5.1 LICENSEE shall indemnify,
defend and hold harmless HYDROMER, its directors, officers, employees and agents
from any and all loss, damage, demands, actions and causes of action,
assessments, liabilities, costs and expenses which they may incur associated
directly or indirectly with the PRODUCTS, including but not limited to product
liability, liability under the laws or regulations of any sovereignty with
respect to medical devices or any export/import laws or regulations, provided
however, LICENSEE shall have no duty to indemnify HYDROMER, if a court of
competent jurisdiction finds that the claims are substantially due to any
chemical products supplied by HYDROMER AND USED WITHOUT MODIFICATION by
LICENSEE. LICENSEE recognizes that such chemical products supplied by HYDROMER
may contain certain solvents which must be removed by proper processing and
curing. Such processing and curing is the sole and exclusive responsibility and
liability of LICENSEE.
5.4 LICENSEE represents that the art taught by the PATENT RIGHTS has
not
NON-EXCLUSIVE LICENSE AGREEMENT with HYDROMER, INC Page-7
================================================================================
been used on any product that LICENSEE makes, uses, sells, offers for sale or
imports other then the PRODUCT.
6.0 EFFECTIVE DATE AND TERM.
6.1 This AGREEMENT will become effective on the day and year first
written above and expire upon the expiration of the last to expire of the PATENT
RIGHTS, except that after expiration of the U.S. PATENT RIGHTS, royalties will
continue to be paid only on sales of PRODUCTS in countries in which unexpired
patents are in effect. After such expiration of this AGREEMENT, LICENSEE shall
have the right to make, have made, use, sell, offer for sale or import PRODUCT
without the further payment of royalty or otherwise accounting to HYDROMER.
6.2 If either party hereto shall commit any breach of the provisions
of this AGREEMENT, and shall not, within thirty (30) days' written notice of
such breach by the other party hereto, correct such breach then such other party
may, by written notice to the breaching party, immediately terminate this
AGREEMENT. The right of either party to take such action shall not be affected
in any way by its failure to take any action with respect to any previous
breach.
6.3 LICENSEE shall have the right to terminate this AGREEMENT on
sixty (60) days advance written notice to HYDROMER provided LICENSEE is then not
in material breach of any provisions herein.
6.4 If either party should exercise its right to terminate this
AGREEMENT, under any applicable provision of this AGREEMENT, then LICENSEE's
rights and licenses under Sections 2 shall immediately terminate. Termination of
this AGREEMENT shall not relieve either party of obligations incurred prior to
termination.
7.0 INFRINGEMENT.
7.1 Should any patent infringement action be brought against
NON-EXCLUSIVE LICENSE AGREEMENT with HYDROMER, INC Page-8
================================================================================
LICENSEE in any country of the TERRITORY as a result of LICENSEE's exercising of
rights granted to it hereunder, then in respect of such country, LICENSEE shall
have the right to suspend payment of royalties due to HYDROMER in that country
until such time as the action is resolved, although such royalties shall
continue to accrue. If the action is resolved favorably to LICENSEE, all accrued
royalties shall immediately be paid to HYDROMER. If the action is resolved
unfavorably to LICENSEE, then accrued and future royalties shall by extinguished
in that country. The foregoing shall be HYDROMER's sole and exclusive liability
to LICENSEE in the event of such an infringement suit.
7.2 HYDROMER shall take reasonable steps to xxxxx any third party
infringement of PATENT RIGHTS with respect to products which compete with
PRODUCTS. If HYDROMER does not take steps reasonably calculated to xxxxx such
third party infringement or require such third party to pay a royalty to
HYDROMER under a license to PATENT RIGHTS, then LICENSEE shall have no
obligation to pay any royalties to HYDROMER, and such royalties shall be
forgiven, but only to the extent forgiven to such third party, for the
manufacture, use, importation, sale, offer for sale of PRODUCTS until such time
as the third party infringement stops or such third party accepts a license from
HYDROMER under PATENT RIGHTS for products that compete with PRODUCTS.
8.0 MOST FAVORED LICENSEE
8.1 If HYDROMER grants to any THIRD PARTY manufacturer of products
which compete with PRODUCTS, a license under PATENT RIGHTS which permits such
third party to make, have made, use, offer to sell, sell or import such PRODUCT
at royalty rates which, calculated on an equivalent basis, are lower then those
provided in this Agreement, then HYDROMER will notify LICENSEE in writing within
ten 10 days after the execution by HYDROMER of such license and reduce the
royalty hereunder, effective on
NON-EXCLUSIVE LICENSE AGREEMENT with HYDROMER, INC Page-9
================================================================================
the date on which they become effective in such license.
9.0 RELEASE
9.1 HYDROMER irrevocably releases LICENSEE and all purchasers and
users of PRODUCT acquired mediately or immediately, from LICENSEE from all
claims, demands and rights of action which HYDROMER may have on account of any
infringements or alleged infringement of any PATENT RIGHTS by the manufacture,
use, importation, sale, offer for sale or other disposition of PRODUCT which,
prior to the Effective Date, were manufactured, used, imported, sold, shipped or
offered for sale by LICENSEE.
10.0 CONFIDENTIALITY.
10.1 During the term of this LICENSE, LICENSEE may request the support
of Hydromer's technical personnel for the purpose of evaluating the processes
used by LICENSEE. Both parties recognize and agree that such processes are
initially the proprietary property of LICENSEE. In the case of any improvement
by HYDROMER such improvement is proprietary to HYDROMER and shall be included in
this LICENSE.
10.2 In addition HYDROMER and LICENSEE would like to engage in
technical discussions concerning LICENSEE's PRODUCTS and processes for coating
those PRODUCTS which existed prior to the date of this License with respect to
HYDROMER"s chemical products relating to hydrophilic lubricous coatings using
coating techniques and curing processes to graft such products to the PRODUCTS
(hereinafter referred to as "CONFIDENTIAL INFORMATION" of each party as the
context indicates) for the purpose of enabling the parties to evaluate
LICENSEE"s use of HYDROMER"s coatings on LICENSEE"s PRODUCTS.
These discussions between HYDROMER and LICENSEE may involve the exchange of
CONFIDENTIAL INFORMATION from one party to the other, the parties agree that any
NON-EXCLUSIVE LICENSE AGREEMENT with HYDROMER, INC Page-10
================================================================================
disclosure of CONFIDENTIAL INFORMATION to the other shall be made, under the
following terms and conditions:
(a) In the event that one party finds it desirable or necessary in any
discussion to disclose to the other party its CONFIDENTIAL INFORMATION, the
recipient agrees that, for a period of five (5) years after the expiration
or termination of this Agreement, it shall not use for its own benefit or
disclose any information it receives from the discloser that is marked
confidential or otherwise indicated as confidential to anyone not employed
by the recipient or its affiliated companies and having a need to know such
information without the discloser's consent, and shall take the same degree
of precautions in accordance with procedures which it follows with respect
to its own confidential information to avoid disclosure of such information
and shall use such CONFIDENTIAL INFORMATION only for the purpose of this
Agreement.
(b) Both parties hereto agree that information received from the discloser
shall not be deemed confidential, and the recipient shall have no
obligation with respect to any such information, which: is already
known to the recipient as established by the recipient's written
records; or is or becomes generally known in the trade or business
pertaining to such information or otherwise becomes publicly known,
through no wrongful act of the recipient; or is rightfully received
from a third party without restriction and without breach of this
Agreement; or is approved for release by written authorization by the
discloser; or is developed independently of any disclosure made
hereunder as established by the recipient's written records.
NON-EXCLUSIVE LICENSE AGREEMENT with HYDROMER, INC Page-11
================================================================================
(c) Subject to the various provisions hereof, all written information
delivered by the discloser to the recipient pursuant to this Agreement
shall be and remain the discloser's property, and all such written
information, and copies thereof, shall be promptly returned to the
discloser upon written request of the discloser. However, the
recipient shall be entitled to retain one (1) archival copy of all
such information strictly for legal purposes.
(d) Each party hereto represents and warrants to the other party that it
is under no obligation to any third party that would interfere with
its ability to reveal the details of its information to the other
party hereto.
11.0 GENERAL.
11.1 ASSIGNMENT. This AGREEMENT and all rights and obligations
hereunder shall be binding upon and shall inure to the benefit of the respective
successors of HYDROMER and LICENSEE. Neither LICENSEE nor HYDROMER shall have
the right to assign any or all of its rights and delegate its obligations under
this AGREEMENT without the prior written consent of the other party which
consent could be subject to certain reasonable conditions including but not
limited to further assurances to perform the obligations herein, guarantees of
performances and/or guarantees of royalty payments by an assignee.
11.2 ENTIRE AGREEMENT. This AGREEMENT contains the entire agreement
between the parties hereto in respect of the subject matter hereof. This
AGREEMENT may not be released, discharged, abandoned, changed or modified in any
manner except by an instrument in writing signed by a duly authorized officer or
representative of each of the parties hereto.
NON-EXCLUSIVE LICENSE AGREEMENT with HYDROMER, INC Page-12
================================================================================
11.3 WAIVER AND SEVERABILITY. The waiver by either of the parties of
any breach of any provision hereof by the other party shall not be construed to
be a waiver of any succeeding breach of such provision of a waiver of the
provision itself.
11.4 COLLECTION. In the event Hydromer must employ or retain a
collection agency and/or an attorney to aid in the collection of royalties to
the extent LICENSEE is in breach of the provisions of this LICENSE in respect to
the payment thereof, LICENSEE agrees to compensate HYDROMER for any fees/costs
paid to such party.
11.5 GOVERNING LAW. This AGREEMENT shall be construed and interpreted
in accordance with the laws of the State of New Jersey and the courts of the
State of New Jersey shall have jurisdiction over the parties including
AFFILIATES and all matters arising hereunder. LICENSEE agrees that service on
Becton, Xxxxxxxxx and Company, Inc., 0 Xxxxxx Xxxxx, Xxxxxxxx Xxxxx, XX
00000-0000 shall constitute service on Becton, Xxxxxxxxx and Company and all
AFFILIATES simultaneously.
11.6 INVALIDITY. If any of the provisions of this AGREEMENT, or part
thereof, is held to be invalid or unenforceable, such invalidity or
unenforceability shall not affect any other provision of this AGREEMENT. 11.7
NOTICE. Any notice required or to be given hereunder shall be considered
delivered when deposited, postage prepaid, in the United States mail, registered
mail, to the address of the other party as specified below or as subsequently
modified in writing by the parties.
IF TO HYDROMER:
Hydromer, Inc.
00 Xxxxxxxx Xxxx
Xxxxxxxxxx, Xxx Xxxxxx 00000
Attn: Xxxxxxx X. Xxxx, President
NON-EXCLUSIVE LICENSE AGREEMENT with HYDROMER, INC Page-13
================================================================================
IF TO LICENSEE:
Becton, Xxxxxxxxx and Company
0 Xxxxxx Xxxxx
Xxxxxxxx Xxxxx, X.X. 00000-0000
Att: Chief Intellectual Property Counsel
11.8 NO ADMISSION, RESTORATION. By entering into this Agreement,
LICENSEE is not admitting that its Hydrocath Assure product falls within the
claims of PATENT RIGHTS. Instead, LICENSEE expressly reserves the right, and
HYDROMER expressly recognizes LICENSEE's right, to terminate this Agreement
pursuant to section 6.3.
IN WITNESS WHEREOF, the parties hereto have caused this AGREEMENT to be executed
themselves and as agents for and guarantors of, AFFILIATES, effective the day
and year set forth above.
Becton Xxxxxxxxx and Company and all AFFILIATES
By:
-------------------------------------------
Title:
--------------------------------
Date:
------------------------
HYDROMER, Inc.
By:
-------------------------------------------
Title:
--------------------------------
Date:
------------------------
NON-EXCLUSIVE LICENSE AGREEMENT with HYDROMER, INC Page-14
================================================================================
Schedule A:
Licensee shall be obligated to pay a royalty computed as the greater of the
Royalty calculated based on a percent or a fixed amount.
Quarter Royalty % Fixed amount
1 st quarter 2.5 $ 5,000
beginning
July 1, 2000)
and each quarter 2.5 $ 5,000
thereafter
