EFFECTIVE DATE: 16 December 1997
PARTIES:
Quantech, Ltd. ("Quantech")
a Minnesota corporation
0000 Xxxxxx Xxxx Xxxxx
Xxxxx Xxxx, Xxxxxxxxx 00000
The Xxxxxx Xxxxx Corporation ("PE")
a New York corporation
000 Xxxx Xxxxxx
Xxxxxxx, Xxxxxxxxxxx 00000-0000
RECITALS:
A. Quantech is the successor in interest of Spectrum Diagnostics,
S.p.A. ("Spectrum") under a certain License, Sublicense and Purchase
Agreement between Spectrum and the Serono Companies (defined below) dated 7
November 1991, as amended by an Amendment to License Agreement dated 31
October 1997 (collectively, the "Serono Agreement", a copy of which is
attached hereto as Exhibit A).
B. Quantech desires PE's technical assistance in conducting research
and development of products utilizing SPR Technology (defined below) and
wishes to xxxxx XX a license under the Serono Technology and Quantech
Intellectual Property (defined below).
C. PE desires to acquire such a license from Quantech to enable it
to make, use and sell devices incorporating SPR Technology.
The Parties therefore agree as follows:
1. DEFINITIONS
As used herein, the following words shall have the designated
meanings:
1.1. "Affiliate" means a Person who, directly or indirectly, controls,
is controlled by, or is under common control with the specified
entity.
1.2. "Calendar Quarter" means each three-month period ending March 31,
June 30, September 30 and December 31.
1.3. "Consumable" means parts incorporating or designed to utilize SPR
Technology on which chemical analysis is conducted. It is to be
understood that Consumables shall not include any Instrument
necessary for conducting the chemical analysis.
1.4. "Instrument" means read-out instruments incorporating or designed
to utilize SPR Technology which are used to conduct chemical
analysis.
1.5. "Joint Invention" means any invention made jointly by at least
one employee or Assignor of each party. Assignors are defined as
non-employees who are required to assign inventions to a party.
1.6. "Licensed Products" means any Licensed Consumable or Licensed
Instrument
1.7. "Licensed Consumable" means any Consumable which (i) but for the
license granted herein, the manufacture, use or sale of which
would infringe any Patent Rights; or (ii) is produced through the
use of or otherwise incorporates Quantech Intellectual Property
which has been disclosed to PE.
1.8. "Licensed Instrument" means any Instrument which (i) but for the
license granted herein, the manufacture, use or sale of which
would infringe any Patent Rights; or (ii) is produced through the
use of or otherwise incorporates Quantech Intellectual Property
which has been disclosed to PE.
1.9. "Medical Diagnostics" means those fields, applications and
products which: (i) under current laws and regulations as of the
Effective Date, require United States Food and Drug
Administration approval for sale or distribution or would require
such approval if the application or product incorporating the
application or field were to be sold in the United States; and/or
(ii) are useful in veterinary medicine for the treatment of
animals.
1.10. "Net Sales" means PE's gross receipts from sales of Licensed
Products, less actual transportation costs, taxes, and credits
for returns.
1.11. "Nucleic Acid Diagnostics" means Medical Diagnostics which
involve the identification and/or quantification of nucleic
acids.
1.12. "Patent Rights" means those patents and patent applications
listed on Exhibit B, together with any continuations,
continuations-in-part, divisions, reissues and/or extensions
thereof and any foreign counterparts to such patents and
applications.
1.13. "PE Intellectual Property" means PE's proprietary information
(including, but not limited to, data, substances, processes,
materials, formulae, know-how, trade secrets, computer programs,
software, firmware, inventions other than Joint Inventions, and
patents) relating to SPR Technology which PE develops or in which
PE acquires an interest during the term of this Agreement, but
excluding any information which PE is prevented from disclosing
to Quantech under an obligation of confidentiality to a third
party.
1.14. "PE License" means those licenses granted by Quantech to PE in
Section 2 below.
1.15. "PE Sublicensee" means a third party to which PE has granted a
sublicense under Section 2 to manufacture Licensed Products and
to sell such manufactured Licensed Products to a party other than
PE.
1.16. "PE Sublicensee Royalties" means all monies received by PE from
a PE Sublicensee under an agreement sublicensing the rights
granted to PE in this Agreement, less any monies received from
the PE Sublicensee solely to compensate PE for research or
consulting services.
1.17. "Person" shall mean any natural person, corporation,
partnership, trust, joint venture or other entity.
1.18. "Quantech Intellectual Property" means Quantech's proprietary
information (including, but not limited to, data, substances,
processes, materials, formulae, know how, trade secrets, computer
programs, software, firmware, and inventions) relating to SPR
Technology which exists as of the Effective Date of this
Agreement or which Quantech develops or in which Quantech
acquires an interest during the term of this Agreement.
1.19. "Quantech License" means that license granted by PE to Quantech
in Section 3 below.
1.20. "Royalty Year" means a calendar year except that the first
Royalty Year shall be that period of time between the Effective
Date of this Agreement and 31 December 1998.
1.21. "Royalty-Bearing Instrument" means any Licensed Instrument which
does not utilize a new Consumable for each sample. In the case of
an instrument that combines licensed and unlicensed technologies,
the royalty shall apply uniquely to the SPR detector portion of
the instrument. The detector includes a grating-coupled SPR,
optics, and a sample holder.
1.22. "Serono Companies" means, collectively, Laboratoires Serono
S.A., the successor in interest of Serono Diagnostic S.A., and
Applied Research Systems ARS Holding N.V.
1.23. "Serono Royalties" means 15% of the Total Royalties.
1.24. Serono Technology means the products and intellectual property
that are the subject of the Serono Agreement.
1.25. "SPR" means surface plasmon resonance.
1.26. "SPR Technology" means the use of thin conductive films on a
surface or surfaces of a grating or other diffracting substrate
to conduct chemical analysis.
1.27. "Territory" means the world.
1.28. "Total Royalties" means the sum of the Consumable Royalties,
Instrument Royalties and Sublicense Royalties defined in Section
5.2 of this Agreement.
2. LICENSE TO PE
2.1. EXCLUSIVE PE LICENSE. Subject to the terms and conditions of
this Agreement, Quantech hereby grants to PE an exclusive license
(the "Exclusive PE License") under the Serono Technology and
Quantech Intellectual Property upon the terms and conditions of
this Agreement to make, have made for it, use, and sell Licensed
Products throughout the Territory for all fields, but excluding
1) Medical Diagnostics 2)any confidential information of a third
party which Quantech is prevented from disclosing to PE under an
obligation of confidentiality to a third party or 3) any license
(other than the Serono Agreement) Quantech obtains under a third
party's technology unless that license permits Quantech to
sublicense to PE the third party's technology.
2.2. NON-EXCLUSIVE PE LICENSE. Subject to the terms and conditions of
this Agreement, Quantech hereby grants to PE a non-exclusive
license (the "Non-exclusive PE License") under the Serono
Technology and Quantech Intellectual Property upon the terms and
conditions of this Agreement to make, have made for it, use, and
sell Licensed Products throughout the Territory for Nucleic Acid
Diagnostics, but excluding 1)any confidential information of a
third party which Quantech is prevented from disclosing to PE
under an obligation of confidentiality to a third party or 2) any
license (other than the Serono Agreement) Quantech obtains under
a third party's technology unless that license permits Quantech
to sublicense to PE the third party's technology.
2.3. PE'S RIGHT TO SUBLICENSE. PE shall have the right to sublicense
its rights under the Exclusive PE License and the Non-exclusive
PE License (collectively, the "PE License"), provided that no
such sublicense shall be granted unless Quantech has first
approved the terms of the sublicense agreement, which approval
shall not be withheld unreasonably.
3. LICENSE TO QUANTECH
3.1. QUANTECH LICENSE. Subject to the terms and conditions of this
Agreement, PE hereby grants to Quantech a non-terminable,
royalty-free exclusive license (the "Quantech License") under any
PE Intellectual Property which arises from a joint development
effort with Quantech to make, have made for it, use, and sell
Licensed Products throughout the Territory for Medical
Diagnostics. Quantech and PE agree to negotiate in good faith a
license of commensurate scope for any PE Intellectual Property
which does not arise from a joint development effort with
Quantech and any other proprietary technology under which
Quantech would need to be licensed to exploit the Quantech
License and under which PE has the right to grant a license or
sublicense.
3.2. QUANTECH'S RIGHT TO SUBLICENSE. Quantech shall have the right to
sublicense its rights under the Quantech License, provided that
no such sublicense shall be granted unless PE has first approved
the terms of the
sublicense agreement, which approval shall not be withheld
unreasonably.
4. TECHNICAL ASSISTANCE
4.1. TECHNICAL ASSISTANCE TO PE. Within thirty days after the
effective date of this Agreement, Quantech shall deliver to PE
such documentation as is reasonably available reflecting the
Quantech Intellectual Property. Quantech shall provide technical
assistance to PE upon PE's reasonable request to enable PE to
manufacture the Licensed Products, but excluding 1)any
confidential information of a third party which Quantech is
prevented from disclosing to PE under an obligation of
confidentiality to a third party or 2) any license (other than
the Serono Agreement) Quantech obtains under a third party's
technology unless that license permits Quantech to sublicense to
PE the third party's technology.
While Quantech will strive to provide such technical assistance
promptly, there may be occasions when Quantech does not have
available to it suitably qualified and/or experienced personnel
capable of providing such technical assistance or when such
personnel cannot reasonably be spared from their regular duties,
and PE acknowledges that Quantech cannot and does not warrant
that it will be able to provide such technical assistance at the
particular times requested by PE.
4.2. TECHNICAL ASSISTANCE TO QUANTECH. PE will keep Quantech apprised
of the development of any PE Intellectual Property under which
Quantech is licensed in the Quantech License.
4.3. OWNERSHIP OF INVENTIONS. Each party shall own an undivided one-
half interest in Joint Inventions. Each inventor shall assign
all rights in a Joint Invention to Quantech and Quantech shall
assign (and hereby does assign) an undivided one-half interest in
each such Joint Invention to PE. If either party deems it
appropriate, the parties shall retain mutually acceptable patent
counsel to render an opinion as to the patentability of a Joint
Invention and to prepare, file, and prosecute such patent
applications as may reasonably be required to provide protection
for such Joint Inventions. With respect to Joint Inventions, PE
shall not grant any license under its rights therein to any third
party to make, have made, use or sell Medical Diagnostics and
Quantech shall not grant any license under its rights therein to
any third party to make, have made, use or sell products which
are not Medical Diagnostics. Should either party choose to bring
suit for infringement by a third party of any patent in a Joint
Invention, the party bringing suit shall have the right to join
the other party as a party to the suit to the extent required by
law, provided the party bringing suit must indemnify, defend and
hold the other party harmless against any costs, fees, damages,
liabilities or other expenses relating thereto. The parties
agree to execute and exchange upon request such
documents as may be necessary or desirable to carry out the
provisions of this Section 4.3.
5. ROYALTIES AND REPORTS
5.1. QUANTECH DEVELOPMENT PHASES. Exhibit C defines four phases of
Quantech product development, designated Phase I, Phase II, Phase
III and Phase IV, and, for each such Phase, the areas of PE
expertise with respect to which Quantech seeks PE's assistance.
Quantech will notify PE upon completion of each Phase. Royalties
provided in section 5.2 will be reduced upon completion of a
Phase if the Phase is completed with PE's assistance. If
Quantech completes a Phase due to its incorporation of any PE
Intellectual Property into its products or by relying on the PE
expertise for that phase, then either of these events will
conclusively determine that PE's assistance enabled Quantech to
complete that Phase.
5.2. ROYALTIES. PE shall pay Total Royalties on sales of Licensed
Products as follows:
a) PE shall pay Consumable Royalties of 12% of PE's Net Sales
of Licensed Consumables. If Quantech completes Phase I (as
determined under Section 5.1), such Consumable Royalties
shall be decreased to 10%. If Quantech completes Phase II
(as determined under Section 5.1), such Consumable
Royaltiess shall be decreased to 8%. If Quantech completes
Phase III (as determined under Section 5.1), such Consumable
Royalties shall be decreased to 7%. If Quantech completes
Phase IV (as determined under Section 5.1), such Consumable
Royalties shall be decreased to 6%. PE shall also have the
option to reduce the Consumable Royalties to a minimum of 6%
of PE's Net Sales of Licensed Consumables by paying a
Royalty Reduction Fee of $750,000 for each percentage point
of reduction, with the reduced royalty rate taking effect
from the first day of the Calendar Quarter following the
Calendar Quarter in which PE pays the Royalty Reduction Fee.
b) PE shall pay Instrument Royalties on PE's Net Sales of
Royalty-Bearing Instruments at a rate equal to one half the
percentage applied in determining the Consumable Royalties
under Section 5.2 a).
c) PE shall pay Sublicense Royalties of 15% of all PE
Sublicensee Royalties.
5.3. MINIMUM ROYALTIES. PE does not need to make any minimum payments
to Quantech for any of the first three Royalty Years. At the
beginning of the fourth Royalty year, and for every Royalty Year
thereafter, the Minimum Royalty shall be $500,000 for a given
year. If the cumulative
Total Royalties payable under Section 5.2 during the term of this
Agreement, including any Deficiency Payment (defined below), are
less than the cumulative Minimum Royalty at the end of any Royalty
Year, PE shall pay, with the payment for the last Calendar Quarter
for such Royalty Year, a non-refundable Deficiency Payment in an
amount sufficient to bring the total payments to Quantech up to the
cumulative Minimum Royalty. If PE shall not make a sufficient and
timely Deficiency Payment, Quantech may notify PE of its failure to
reach the cumulative Minimum Royalty . If PE shall fail to pay a
sufficient Deficiency Payment within two months of Quantech's notice,
PE's license rights granted in Section 2 shall immediately terminate.
PE shall not have any right to a refund of any payments made under
this Section 5.3 upon termination of this Agreement.
5.4. STATUS REPORTS. If PE shall not have begun selling Licensed
Products within one year of the Effective Date of this Agreement,
at the end of each Calendar Quarter thereafter PE shall deliver
to Quantech a Statement of Intent signed by a duly authorized
employee of PE (initially Xxxxxx Xxxxxxx) stating that PE is
continuing to pursue commercialization of Licensed Products. The
obligation to provide such quarterly Statements of Intent shall
terminate upon the earlier of the first royalty payment under
Section 5.2 or the payment of the Deficiency Payment under
Section 5.3. If PE shall fail to timely deliver a Statement of
Intent, Quantech may notify PE of this failure. If PE fails to
deliver the Statement of Intent within two months of Quantech's
notice, PE's license rights granted in Section 2 shall
immediately terminate.
5.5. REPORTS AND PAYMENTS. Within thirty (30) days after the end of
each Calendar Quarter, PE shall provide Quantech with a written
report itemizing the number of Licensed Consumables and the
number of Licensed Instruments sold, the Net Sales price of each
Licensed Product and a calculation of the Royalty for such
Calendar Quarter. Quantech shall respond in writing to confirm
agreement with reported sales and proposed payments which will
cause PE to pay to the Serono Companies the Serono Royalty and
pay to Quantech the balance of the Total Royalties then due,
until such time as Quantech notifies PE in writing that its
royalty obligations to the Serono Companies has ended, after
which time PE shall pay the entire Total Royalties directly to
Quantech. If PE elects to pay any Royalty Reduction Fee under
Section 5.2 or any Deficiency Payment under Section 5.3, PE shall
pay to the Serono Companies the Serono Royalty on such payments
and pay to Quantech the balance of any such payments, unless
Quantech has previously notified PE in writing that its royalty
obligations to the Serono Companies has ended.
5.6. RECORDS. PE agrees to keep accurate written records sufficient
in detail to enable the royalties payable under this Agreement by
PE to be determined and verified. Such records for a particular
calendar year shall
be retained by PE for a period consistent with its then corporate
record retention policy.
5.7. AUDIT OF RECORDS. Upon reasonable notice and during regular
business hours, PE shall make available such records for audit by
an independent accountant selected by Quantech to verify the
accuracy of the reports provided to Quantech. Such audits shall
be at the expense of Quantech, provided, however, that if any
such audit reveals underpayment of royalties by the greater of
$50,000 or 10% then PE shall pay the cost of such audit.
6. STOCK WARRANT AND FUTURE PURCHASES
6.1. STOCK WARRANT. PE will be granted a stock purchase warrant (the
"Warrant Agreement") in the form attached hereto as Exhibit D
upon execution of this Agreement for a number of shares of
Quantech's Common Stock equal to that reflected in Section 7 of
the Letter of Intent between PE and Quantech dated 30 October
1997.
6.2. FUTURE PURCHASES. PE agrees not to purchase any Quantech stock
in addition to that provided in the stock warrant of Section 6.1
unless it has received prior permission from Quantech's board.
7. TERM AND TERMINATION
7.1. TERM. Unless license rights are otherwise terminated under
provisions of this Article 5, royalties owed pursuant to this
Agreement shall continue until the expiration of all Patent
Rights, after which the PE License shall be deemed fully paid-up.
7.2. TERMINATION. If either party breaches any of the material terms,
conditions or agreements of this Agreement, then the other party
may terminate this Agreement, at its option and without prejudice
to any of its other legal and equitable rights and remedies, by
giving the breaching party thirty (30) days notice in writing,
particularly specifying the breach. Such notice of termination
shall not be effective if the other party cures the specified
breach within such thirty (30) day period, or, in the case of
breaches not reasonably curable within such thirty (30) days, if
such party commences the cure thereof within such thirty (30)
days and diligently thereafter prosecutes such cure.
7.3. SURVIVAL. Without limitation, termination of this Agreement
shall not relieve PE from its obligation to make all royalty
payments and reports, including a terminal report, provided for
herein. Quantech shall have the right to make a final audit
within 60 days after receiving PE's terminal report.
7.4. SALE OF INVENTORY. Upon termination of the Licenses pursuant to
Section 7.2, PE shall cease production of Licensed Products. PE
shall be permitted to sell its inventory of Licensed Products,
and shall provide
Quantech with a terminal royalty report within 30 days after the
last such sale of Licensed Products.
7.5. SUBLICENSES. Termination of this Agreement shall cause
sublicenses granted hereunder to revert to Quantech.
7.6. END-USER LICENSES. - Any license to end users will remain in
effect upon termination of this agreement and at no additional
payment by the end user.
8. CONFIDENTIALITY
8.1. INTELLECTUAL PROPERTY. The parties acknowledge that the Quantech
Intellectual Property licensed by Quantech to PE, and the PE
Intellectual Property is proprietary and confidential. The
parties respectively agree, therefore, to make all commercially
reasonable efforts to preserve the confidentiality of such
information. Notwithstanding the foregoing, a party may disclose
such information as follows:
a) If that party can show the particular item of information is
generally available to the public or becomes generally
available to the public through no act or failure to act of
such party;
b) If disclosure is required by any applicable government
agency, regulation, or statute;
c) If prior written consent is obtained from the other party;
or
d) If that party can show it possessed such information prior
to disclosure thereof to such party by the other.
8.2. DISCLOSURE OF AGREEMENT. Neither party may make any public
announcement regarding this Agreement or otherwise disclose the
terms of this Agreement without the prior approval of the other
party except as required by law.
9. PE'S REPRESENTATIONS AND WARRANTIES
9.1. RIGHT TO GRANT LICENSE. PE represents and warrants to Quantech
that it has the full and unrestricted right to enter into this
Agreement and to grant the license set forth in Section 3.
9.2. PRODUCT LIABILITY. PE hereby agrees to indemnify, defend and
hold Quantech harmless from and against any and all claims,
actions, liabilities, damages, losses, costs and expenses,
including reasonable attorneys' fees, in connection with any
product liability claims arising in connection with this License
Agreement or any Licensed Products it manufactures, has
manufactured, uses or sells hereunder.
9.3. LIMITATION OF REPRESENTATIONS. Nothing in this Agreement shall
be construed as (i) a warranty or representation by PE that any
Licensed
Product or any process practiced under the Quantech License does
not infringe any patents of third persons; or (ii) a requirement
that PE file any patent application, secure any patent, maintain
any patent in force, or bring or prosecute actions or suits against
third parties for infringement of any patent; or (iii) granting by
implication, estoppel, or otherwise any license other than that
specifically granted herein.
9.4. DISCLAIMER OF WARRANTIES. THE WARRANTY SET FORTH ABOVE IS
PROVIDED ONLY TO QUANTECH AND IS IN LIEU OF ALL OTHER WARRANTIES,
EXPRESS OR IMPLIED, WHICH ARE HEREBY DISCLAIMED AND EXCLUDED BY
PE WITH RESPECT TO THE LICENSED PRODUCTS, INCLUDING WITHOUT
LIMITATION, ANY WARRANTY OF MERCHANTABILITY, FITNESS FOR A
PARTICULAR PURPOSE, NON-INFRINGEMENT AND WARRANTIES ARISING FROM
COURSE OF DEALING OR USAGE OF TRADE. NO AGENT, EMPLOYEE OR
REPRESENTATIVE OF PE HAS ANY AUTHORITY TO BIND PE TO ANY
AFFIRMATION, REPRESENTATION OR WARRANTY EXCEPT AS STATED IN THIS
WRITTEN WARRANTY POLICY.
10. QUANTECH'S REPRESENTATIONS AND WARRANTIES
10.1. RIGHT TO GRANT LICENSE. Quantech represents and warrants to PE
that, aside from the restrictions on it set forth in the Serono
Agreement, it has the full and unrestricted right to enter into
this Agreement and to grant the licenses set forth in Section 2.
10.2. PRODUCT LIABILITY. Quantech hereby agrees to indemnify, defend
and hold PE harmless from and against any and all claims,
actions, liabilities, damages, losses, costs and expenses,
including reasonable attorneys' fees, in connection with any
product liability claims arising in connection with this License
Agreement or any Licensed Products it manufactures, has
manufactured, uses or sells hereunder.
10.3. LIMITATION OF REPRESENTATIONS. Nothing in this Agreement shall
be construed as (i) a warranty or representation by Quantech as
to the validity or scope of any Patent Rights or that any
Licensed Product or any process practiced under the PE License
does not infringe any patents of third persons; or (ii) a
requirement that Quantech file any patent application, secure any
patent, maintain any patent in force, or bring or prosecute
actions or suits against third parties for infringement of any
patent; or (iii) granting by implication, estoppel, or otherwise
any license other than that specifically granted herein.
10.4. DISCLAIMER OF WARRANTIES. THE WARRANTY SET FORTH ABOVE IS
PROVIDED ONLY TO PE AND IS IN LIEU OF ALL OTHER WARRANTIES,
EXPRESS OR IMPLIED, WHICH ARE HEREBY DISCLAIMED AND EXCLUDED BY
QUANTECH, WITH RESPECT TO THE PATENT RIGHTS, QUANTECH KNOW-HOW OR
ANY LICENSED PRODUCTS, INCLUDING WITHOUT LIMITATION, ANY WARRANTY
OF
MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE,
NON-INFRINGEMENT AND WARRANTIES ARISING FROM COURSE OF DEALING OR
USAGE OF TRADE. NO AGENT, EMPLOYEE OR REPRESENTATIVE OF QUANTECH
HAS ANY AUTHORITY TO BIND QUANTECH TO ANY AFFIRMATION,
REPRESENTATION OR WARRANTY EXCEPT AS STATED IN THIS WRITTEN
WARRANTY POLICY.
11. LITIGATION
11.1. CHARGES OF PE INFRINGEMENT. If notice is received by either
party charging that any Licensed Product(s) made by, made for,
used by or sold by PE infringes any patent, copyright, trade
secret, intellectual property, or other proprietary right of such
third party, the party receiving such notice will promptly notify
the other party to this Agreement. PE and Quantech agree to
enter into discussions, and where necessary, to work out, if
possible, a mutually acceptable change in such Licensed
Product(s) to avoid such alleged infringement. If no such
mutually satisfactory change can be worked out, PE and Quantech
agree to collaborate and enter into discussions with such third
party for the purpose of negotiating a settlement. If no
settlement can be agreed upon, PE shall have the right but not
the obligation to defend any suit for infringement brought
against it by the third party. If PE shall elect not to defend
such an infringement suit, PE shall promptly notify Quantech to
that effect and Quantech shall thereafter have the right but not
the obligation to defend the suit.
11.2. CHARGES OF THIRD PARTY INFRINGEMENT. If either party knows or
has reason to believe that any rights in any Joint Invention or
any rights under the Patent Rights, Quantech Intellectual
Property or PE Intellectual Property licensed hereunder is being
infringed directly, by inducement, or contributorily by a third
party, the party possessing such knowledge or belief shall
promptly notify the other party thereof. Except for infringement
of any Serono Technology, Quantech shall have the first right to
commence judicial proceedings for its own benefit to attempt to
stop such infringement but shall not be obligated to do so. If,
within one hundred eighty (180) days after first obtaining such
knowledge or belief concerning infringement, Quantech has failed
either to stop such infringement or to initiate judicial
proceedings, or if Quantech in writing so authorizes PE, PE shall
have the right to initiate for its own benefit such judicial
proceedings in its own name provided, however, that PE shall
indemnify, defend and hold Quantech harmless against any costs,
fees, damages, liabilities or other expenses relating thereto.
The party initiating judicial proceedings shall be entitled to
retain any award resulting therefrom.
11.3. VALIDITY AND CONSTRUCTION. If a judgment or decree is entered
in any proceeding in which the validity or infringement of any
claim of any Patent Rights is in issue, which judgment or decree
is not appealed or further appealable (such judgment or decree
being hereinafter referred to as an
"Irrevocable Judgment"), the validity of and/or construction placed
upon any such claim by the Irrevocable Judgment shall thereafter be
followed. If there are two or more conflicting Irrevocable Judgments
with respect to the same claim, the decision of the higher court
shall be followed, If an Irrevocable Judgment holds one or more
of the Patent Rights or any claims thereof to be invalid or
unenforceable, PE hereby agrees, in consideration of its freedom
to make, use and sell Licensed Products prior to such Irrevocable
Judgment without fear of suit by Quantech, and of Quantech's
refraining from bringing suit against PE for infringement, and
regardless of whatever action PE might take subsequent to such
Irrevocable Judgment, that it shall not be entitled to the retention
or return of any royalties, Deficiency Payment or Minimum Royalty
Payment payable or paid by PE to Quantech hereunder prior to the
date of such Irrevocable Judgment.
12. MISCELLANEOUS PROVISIONS
12.1. TRADEMARKS. Nothing in this Agreement shall be deemed to grant
either party any right to use any trademark owned by the other
party in connection with the sales of the party's products.
12.2. MARKING. PE shall use all commercially reasonable efforts to
see to it that all Licensed products sold shall be appropriately
marked with the applicable patent number(s) of the Patent Rights,
in conformity with applicable law.
12.3. LIMITATION OF REMEDIES. QUANTECH SHALL HAVE NO LIABILITY TO ANY
PERSON FOR INDIRECT, INCIDENTAL, CONSEQUENTIAL OR SPECIAL DAMAGES
OF ANY DESCRIPTION, WHETHER ARISING OUT OF WARRANTY OR CONTRACT,
NEGLIGENCE OR OTHER TORT, OR OTHERWISE, INCLUDING, WITHOUT
LIMITATION, ANY DAMAGES RESULTING FROM LOST PROFITS OR LOST
BUSINESS OPPORTUNITY.
12.4. SURVIVAL. All of the representations, warranties, and
indemnifications made in this Agreement and all terms and
provisions hereof intended to be observed and performed by the
parties after the termination hereof, including the obligations
of confidentiality, shall survive such termination and continue
thereafter in full force and effect.
12.5. COMPLETE AGREEMENT. This Agreement constitutes the entire
agreement of the parties with respect to the subject matter
described in this Agreement and shall supersede all previous
negotiations, commitments or writings regarding such subject
matter.
12.6. WAIVER, DISCHARGE, ETC. This Agreement may not be released,
discharged, abandoned, changed or modified in any manner, except
by an instrument in writing signed on behalf of each of the
parties to this Agreement by their duly authorized
representatives. The failure of either party to enforce at any
time any of the provisions of this Agreement shall
in no way be construed to be a waiver of any such provision, nor
in any way to affect the validity of this Agreement or any part of
it or the right of either party after any such failure to enforce
each and every such provision. No waiver of any breach of this
Agreement shall be held to be a waiver of any other or subsequent
breach.
12.7. APPLICABLE LAW. This Agreement shall be governed by, and
interpreted in accordance with the laws of the State of New York.
12.8. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon
and inure to the benefit of the parties to this Agreement and
their successors or assigns, provided that, except as otherwise
provided herein, the rights and obligations of either party under
this Agreement may not be assigned without the written consent of
the other party. Either party, however, may assign its rights and
obligations to an entity succeeding to substantially all of its
assets and business or business unit.
12.9. EXECUTION IN COUNTERPARTS. This Agreement may be executed in
one or more counterparts, all of which shall be considered one
and the same agreement, and shall become a binding agreement when
one or more counterparts have been signed by each party and
delivered to the other party.
12.10. TITLES AND HEADINGS; CONSTRUCTION. The titles and headings to
Sections herein are inserted for the convenience of reference
only and are not intended to be a part of or to affect the
meaning or interpretation of this Agreement. This Agreement
shall be construed without regard to any presumption or other
rule requiring construction hereof against the party causing this
Agreement to be drafted.
12.11. BENEFIT. Nothing in this Agreement, expressed or implied, is
intended to confer on any person other than the parties to this
Agreement or their respective successors or assigns, any rights,
remedies, obligations or liabilities under or by reason of this
Agreement.
12.12. NOTICES. Any notice or other communication required or
permitted under this Agreement shall be in writing and shall be
deemed to have been given, when received, if personally delivered
or delivered by telegram, telex or facsimile, or, when deposited,
if placed in the U.S. Mails for delivery by registered or
certified mail, return receipt requested, postage prepaid and
addressed to the appropriate party at the addresses set forth on
the first page of this Agreement. Addresses may be changed by
written notice given pursuant to the provisions of this
paragraph; however, any such notice shall not be effective, if
mailed, until five (5) working days after depositing in the U.S.
Mails or when actually received, whichever occurs first.
12.13. SEVERABILITY. If any provision of this Agreement is held
invalid by a court of competent jurisdiction, the remaining
provisions shall nonetheless be enforceable according to their
terms. Further, if any provision is held to be overbroad as
written, such provision shall be deemed amended to narrow its
application to the extent necessary to make the provision
enforceable according to applicable law and shall be enforced as
amended.
12.14. EXECUTION OF FURTHER DOCUMENTS. Each party agrees to execute
and deliver without further consideration any further
applications, licenses, assignments or other documents, and to
perform such other lawful acts as the other party may reasonably
require to fully secure and/or evidence the rights or interests
herein.
ADDITIONAL REPRESENTATIONS AND WARRANTIES OF QUANTECH
1. ADDITIONAL REPRESENTATIONS AND WARRANTIES. Quantech represents and
warrants to PE as follows:
a) ORGANIZATION. Quantech is a corporation duly organized, validly
existing and in good standing under the laws of the State of
Minnesota and has all requisite power and authority to carry on its
business as now conducted and to enter into, perform and carry out
the terms of the Warrant Agreement.
b) DUE AUTHORIZATION. The execution, delivery and performance by
Quantech of this Agreement and the Warrant Agreement have been duly
authorized by all requisite corporate action, and this Agreement
and the Warrant Agreement are the valid and binding obligations of
Quantech enforceable in accordance with their respective terms,
except to the extent that enforceability may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar
laws affecting the enforcement of creditor's rights generally and
by general principles of equity (regardless of whether such
enforcement is considered in a proceeding in equity or at law).
The execution, delivery and performance of this Agreement and the
Warrant Agreement, the consummation of the transactions
contemplated hereby and thereby, and the performance by Quantech of
its obligations hereunder and thereunder, do not and will not (a)
conflict with or violate any provision of the Articles of
Incorporation or By-laws of Quantech, (b) violate or conflict with
any law, ordinance, rule, or regulation, or any judgment, order,
writ, injunction, decree, or similar command of any court,
administrative, or governmental agency or other body, (c) violate
or conflict with the terms of, or result in the acceleration of any
indebtedness or obligation of Quantech under, or result in a breach
of, or constitute a default under, any indenture, mortgage, deed of
trust, agreement, or instrument to which Quantech is a party or by
which Quantech or any of its assets or properties is bound or
affected, (d) result in the creation or imposition of any
lien of any nature upon any of the assets or properties of Quantech,
or (e) constitute an event permitting the termination of any agreement,
license or other right of Quantech.
c) NO CONSENT OR APPROVAL. No consent of any person and no approval
or authorization of, or declaration or filing with, any
governmental or regulatory authority is required for the valid
authorization, execution and delivery by Quantech of, or the
performance by Quantech of its obligations under, this Agreement
and the Warrant Agreement.
d) CAPITALIZATION. The aggregate number of shares that Quantech has
the authority to issue shall be 250 million, which have a par value
of $0.01 per share solely for the purpose of a statute or
regulation imposing a tax or fee based upon the capitalization of
Quantech, and which consist of 200 million common shares and 50
million undesignated shares. The Quantech Board of Directors are
authorized to establish from the undesignated shares one or more
classes or series of shares, to designate each such class or series
and to fix the relative rights and preferences of each such class
or series. As of the date of this Agreement, Quantech has no
outstanding preferred stock or rights to obtain preferred stock and
the number of shares of Common Stock outstanding or issuable upon
exercise of options or warrants, conversion of debt instruments or
pursuant to any other agreement of any character or nature under
which Quantech is, or may become, obligated to issue or to transfer
any shares of its capital stock of any kind, does not exceed 92
million shares.
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XXXXXX XXXXX/QUANTECH LICENSE AGREEMENT
IN WITNESS WHEREOF, each of the parties has caused this Agreement to be
executed in the manner appropriate to each, effective as of the date first
above written.
Quantech Ltd. The Xxxxxx-Xxxxx Corporation
/s/ Xxxx Xxxxxxx /s/ Xxxx X. Xxxxxx
By:------------------------- By:------------------------------
Xxxx Xxxxxxx Xxxx X. Xxxxxx
Name:----------------------- Name:-------------------------
COO and CFO Senior Vice President
Title:---------------------- Title:------------------------
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