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EXHIBIT 10.17
SUB-LICENSE AGREEMENT
THIS SUB-LICENSE AGREEMENT, made and entered into as of this 21st day
of February, 1995, by and among Saliva Diagnostic Systems (Singapore) Pte.
Ltd., a corporation organized under the laws of Singapore and having its
principal place of business at 00, Xxxxxxx Xxxx Xxxxx, #00-00, Xxx Xxxxxx,
Xxxxxxxxx Science Park, Singapore 0511 (hereinafter referred to as "SDS
Singapore"); Saliva Diagnostic Systems Inc., a corporation organized under the
laws of the State of Delaware, USA, and having its principal place of business
at 00000 XX 00xx Xxxxxx, Xxxxxxxxx, Xxxxxxxxxx 00000 XXX (hereinafter referred
to as "SDS Inc"); and Fremont Novo Sciences. L.L.C., a limited liability
company organized under the laws of the State of Illinois, USA and having its
principal place of business at 000 Xxxxx Xxxxxxxx Xxxxxx, Xxxxx 000, Xxxxxxx,
Xxxxxxxx 00000 XXX (hereinafter referred to as "FNS");
WHEREAS, SDS Inc. has developed and is continuing to develop certain
diagnostic products and procedures for the non-invasive or minimally-invasive
collection and testing of saliva and blood to detect the presence of contagious
diseases, including but not limited to HIV 1 & 2, Hepatitis B & C and TB
(hereinafter included in the term "Products"); and
WHEREAS, SDS Inc. has granted, by that certain License Agreement dated
August 16, 1994 (hereinafter referred to as the "License Agreement"), the
exclusive right to manufacture and distribute the Products in a territory which
includes India; and
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WHEREAS, SDS Singapore desires to grant to FNS the (i) exclusive
sub-license to distribute the Products within India, and (ii) exclusive right
to manufacture the Products in India for distribution in India; and
WHEREAS, SDS Inc. desires to consent to SDS Singapore's grant to FNS
of the (i) exclusive sub-license to distribute the Products within India, and
(ii) exclusive right to manufacture the Products in India for distribution in
India;
NOW THEREFORE, in consideration of the premises, and the mutual
covenants, conditions, agreements and promises contained herein, the parties
hereto hereby agree as follows:
1. DEFINITIONS. For purposes of this Sub-license Agreement, the
following terms shall, unless the context otherwise requires, have the
following definitions and meanings:
a. "License Agreement" shall mean that certain agreement dated
August 16, 1994, by and between SDS Singapore and SDS Inc.
wherein SDS Inc. grants to SDS Singapore the exclusive rights
to manufacture and distribute diagnostic devices and other
products invented, improved and/or developed by SDS Inc. in a
territory encompassing Asia and Oceana, including India.
b. "Products" shall include diagnostic products and procedures
for the non-invasive or minimally-invasive collection and
testing of saliva and blood to detect the presence of
contagious diseases, including but not limited to, HIV 1 & 2,
Hepatitis B & C, and TB; "Omni-XXX"; "SDS Sero-Strip"; and
"SDS Hema-Strip"; as well as all products and/or procedures
which fall within the meaning of the
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following terms as those terms are defined in the License
Agreement: "Invention", "Improvements", "Know-How", "Licensed
Marks", "Licensed Products", and "Other Licensed Products".
c. "Omni-XXX" shall mean that certain saliva collection device
which is the subject matter of United States Patent Number
5,260,031, dated November 9, 1993, and any enhancements or
improvements to the same, whether such enhancements or
improvements are or are not covered by other patents.
d. "SDS Sero-Strip" shall mean a dry rapid assay strip for HIV 1
& 2 which uses serum or plasma separated by centrifugation of
whole blood obtained by phlebotomy, The actual test is
accomplished by a proprietary method developed and owned by
SDS Inc. that permits visual confirmation of the results.
e. "SDS Hema-Strip" shall mean a dry rapid assay strip for HIV I
& 2 to which whole blood obtained via finger prick is used;
the separation of the serum occurs on the strip itself. The
actual test is accomplished by a proprietary method developed
and owned by SDS Inc. that permits visual confirmation of the
results.
2. WARRANTIES. SDS Singapore and SDS Inc. hereby represent and warrant
that SDS Singapore is the exclusive licensee for India and that there
are no other licensees or sublicensees under the License Agreement for
India. SDS Singapore and SDS Inc. also hereby represent and warrant
that SDS Singapore and/or SDS Inc. has(ve) the exclusive right to
manufacture and distribute the SDS Sero-Strip and SDS Hema-Strip in
India. SDS Singapore and SDS Inc.
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jointly and severally agree to hold harmless and fully indemnify FNS
from any losses, damages or other adverse consequences that may be
suffered by FNS for any breach of the representations and warranties
contained herein.
3. GRANT OF SUB-LICENSE. In consideration of FNS' promise to pay certain
fees as set forth in paragraph 6 hereinafter, SDS Singapore grants to
FNS a complete assignment and transfer (hereinafter referred to the
"Sub-License") of all of its rights under the License Agreement for
the marketing, sale and distribution of the Products within India,
except as provided in paragraph 5 hereinafter, for the term of this
Sub-License Agreement and any extensions hereof. SDS Inc.,
recognizing that the Sub-License will further the purposes of SDS Inc.
under the License Agreement, hereby consents to the grant of the
Sub-License.
4. GRANT OF MANUFACTURING RIGHTS. In the event that FNS demonstrates
that FNS can manufacture SDS Inc. Products of equal quality as those
of SDS Singapore as determined by SDS Inc. (or any one of the
Products) in India at a cost equal to or less than the price
(including freight) ,charged by SDS Singapore to FNS for such Products
(or one of the Products, as the case may be), then, in consideration
of FNS' promise to pay a certain royalty as set forth in paragraph 6f
hereinafter, SDS Singapore shall grant to FNS a complete assignment
and transfer of its rights to manufacture in India under the License
Agreement (hereinafter referred to as the "Manufacturing Rights") the
Products for distribution and sale within India for the term of this
Agreement and any extensions
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hereof, SDS Inc., recognizing that a grant hereunder of Manufacturing
Rights will further the purposes of SDS Inc. under the License
Agreement, hereby consents to such grant of the Manufacturing Rights,
SDS Inc. shall have the right to establish, maintain and monitor
quality control manufacturing standards (equal to those applicable to
SDS Singapore) which FNS shall adhere to in its manufacturing
operations.
SDS Singapore shall have the right to purchase Products manufactured
by FNS in India for distribution and sale by SDS Singapore in the
territory, excluding India, covered by the License Agreement, provided
that FNS may allocate a portion or all of its manufacturing capacity
and production to satisfy its own distribution and sale needs within
India.
5. TRANSACTIONS EXCLUDED FROM THE SUB-LICENSE. The parties hereto hereby
agree that all sales of Products by SDS Singapore directly to WHO,
USAID, UNICEF and UNDP without assistance from FNS shall be excluded
from the SubLicense.
6. FEES. In consideration for the grant of the Sub-License and
Manufacturing Rights and other undertakings, agreements, and consents
herein contained of SDS Singapore and SDS Inc., FNS agrees to pay SDS
Singapore the following:
a. Prior to March 1, 1995, provided that the five hundred (500)
SDS Sero-Strips have been delivered as set forth in paragraph
7.a.l. hereinafter, FNS shall remit to SDS Singapore, via wire
transfer, the sum
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of US $25,000.
b. Prior to March 1, 1995, FNS shall remit to SDS Singapore, via
wire transfer, the sum of US $10,000 for the rights to
distribute in India the Omni-XXX collection device.
c. Within 5 days of the receipt of acceptable evaluation of the
five hundred (500) SDS Sero-Strips, as set forth in paragraph
7.a.l. hereinafter, FNS shall remit to SDS Singapore, via wire
-transfer, the sum of US $25,000.
d. Within 5 days of receiving five hundred (500) SDS Hema-Strips,
as set forth in paragraph 7.a.2. hereinafter, FNS shall remit
to SDS Singapore, via wire transfer, the sum of US $25,000.
e. Within 5 days of the receipt of acceptable evaluation of five
hundred (500) SDS Hema-Strips, as set forth in paragraph
7.a.2. hereinafter FNS shall remit to SDS Singapore, via wire
transfer, the sum of US $25,000.
f. In consideration for the grant by SDS Singapore of the
Manufacturing Rights to FNS, FNS shall pay to SDS Singapore a
royalty which shall be equal to 8% of FNS' sale price of the
Products; provided, however, that this royalty shall not apply
to any sales made by FNS to SDS Singapore or SDS Inc.
7. PURCHASE OF PRODUCTS.
a. INITIAL PURCHASES.
1. SDS Sero-Strips. FNS shall purchase from SDS
Singapore five hundred (500) SDS Sero-Strips
at a price of US $1.80 each. SDS Singapore
shall deliver these SDS Sero-Strips to FNS at
its
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principal place of business in Chicago, Illinois not
later than February 17, 1995. FNS shall have these
SDS Sero-Strips evaluated by an independent testing
service in India under local conditions. Minimum
acceptable results of such evaluation shall consist
of sensitivity and specificity of greater than 98%
when compared to a reference method. Results and
other data collected during such evaluation shall be
shared With SDS Singapore. All costs associated with
the evaluation, including confirmatory costs, shall
be borne by FNS.
2. SDS Hema-Strips. FNS shall purchase from SDS
Singapore five hundred (500) SDS Hema-Strips at a
price of US $ 1.80 each. FNS shall have these SDS
Hema-Strips evaluated by an independent testing
service in India under local conditions. Minimum
acceptable results of such evaluation shall consist
of sensitivity and specificity of greater than 98%
when compared to a reference method. Results and
other data collected during such evaluation shall be
shared with SDS Singapore. All costs associated with
the evaluation, including confirmatory costs, shall
be borne by FNS.
b. PRICES. Under the Sub-License FNS shall be entitled to
purchase all Products from SDS Singapore at prices (FOB
Singapore) not exceeding those prices for the Products sold by
SDS Singapore to third parties within the "Territory" under
the License Agreement. FNS shall be entitled to any and all
volume or other discounts, rebates, promotions or
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any other incentives as are offered by SDS Singapore to
third parties.
c. QUANTITIES. FNS agrees to purchase from SDS Singapore minimum
quantities or minimum monetary values of the Products as set
forth in Exhibit A to this Sub-License Agreement, and made a
part hereof.
d. QUALITY. SDS Singapore agrees to maintain the quality of the
Products as the same exists at the time this Sub-License
Agreement is executed, and agrees to use its best efforts to
improve or enhance the Products during the term of this
Sub-License Agreement and any extensions thereto.
8. TERM. This Sub-License Agreement shall be effective as of the date
set forth on the first page hereof, and shall remain in full force and
effect for a period of five (5) years thereafter, following which FNS
shall have the option of extending this Sub-License Agreement on the
same terms and conditions contained herein including this paragraph 8
for subsequent periods of five (5) years each, provided that FNS has
made the minimum purchases set forth in Exhibit A hereto, by giving
written notice to the other parties hereto not later than thirty (30)
days prior to the applicable expiration date. In the event the
License Agreement is terminated, this SubLicense Agreement shall
terminate simultaneously, unless the termination of the License
Agreement is caused by action or omission of SDS Singapore, in which
case, FNS shall have the option to continue as a direct licensee of
SDS Inc. on the same terms and conditions as this SubLicense Agreement
provides, and in that event for purposes of this Sub-License
Agreement, SDS Inc. shall be
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substituted in place of SDS Singapore. Said option shall be exercised
by written notice given to SDS Inc. not later than ninety (90) days
after termination of the License Agreement.
9. CONFIDENTIAL INFORMATION. Each of the parties acknowledge that each
has imparted to the other parties and may from time to time impart to
the other parties information of a confidential nature and each party
undertakes and agrees that it will use such confidential information
solely for purposes of this sub-License Agreement and that it shall
not disclose directly or indirectly to any other person or entity such
confidential information other than as may be required to fulfill the
purposes of this Sub-License Agreement, without the express prior
written consent of the other parties to this Sub-License Agreement.
Where such disclosure is made to any other person or entity as
aforesaid, the party making such disclosure shall ensure that such
other person or entity complies with the provisions of this paragraph.
10. ASSIGNMENT. Except as provided hereinafter, no party to this
Sub-License Agreement shall be entitled to assign or transfer any of
its rights or obligations hereunder without the express prior written
consent of the other parties hereto, which consent shall not be
unreasonably withheld; notwithstanding anything to the contrary
hereinbefore provided, any party may without the consent of the other
parties hereto transfer or assign its rights and/or obligations under
this Sub-License Agreement to any "related entity". For purposes of
this paragraph 10
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a "related entity" shall be deemed to be any juridical entity at least
20% of the ownership of which (i) is owned by a party hereto, or (ii)
is owned by the owners of at least 20% of a party hereto. Notice of
any assignment or transfer hereunder shall be given to the other
parties hereto in writing and shall designate the assignee or
transferee and shall specify the rights and/or obligations so assigned
or transferred.
11. WAIVER. Failure for any reason by one party to this Sub-License
Agreement to enforce at any time any provisions of this Sub-License
Agreement shall not be construed nor deemed to be a waiver of any
rights of such party nor in any manner affect the validity of the
whole or any part of this Sub-License Agreement nor prejudice the
rights of such party to subsequently take any action permitted it
under this Sub-License Agreement.
12. NOTICES. Any notice required or permitted under this Sub-License
Agreement or required by statute, regulation or court order shall be
in writing and shall be delivered in person, mailed by certified or
registered mail postage prepaid, or transmitted by facsimile to the
respective parties as follows:
SDS Singapore: Saliva Diagnostics Systems
(Singapore) Pte. Ltd.
Attention: Duke van Kalken
00, Xxxxxxx Xxxx Xxxxx, #00-00
Xxx Xxxxxx, Xxxxxxxxx Science Park
Singapore
Facsimile: 00-000-0000
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SDS Inc. Saliva Diagnostics Systems Inc.
Attention: Xxxxxx X. Xxxxxx
00000 X.X. 00xx Xxxxxx
Xxxxxxxxx, Xxxxxxxxxx 00000 XXX
Facsimile: 000-000-0000
FNS: Fremont Novo Sciences, L.L.C.
Attention: Xxxxx X. Xxxx
000 Xxxxx Xxxxxxxx Xxxxxx
Xxxxx 000
Xxxxxxx, Xxxxxxxx 00000 XXX
Facsimile: 312-263-2549
or to such other address or facsimile number as may from time to time
be designated by notice hereunder. Any notice hereunder shall be
deemed given upon delivery, posting, or facsimile transmission, as the
case may be.
13. INVALIDITY AND SEVERABILITY. If any provision of this Sub-License
Agreement shall be found by any court or administrative body of
competent jurisdiction to be invalid or unenforceable, the invalidity
or unenforceability of such provision shall not affect the other
provisions of this Sub-License Agreement, and to the extent of such
invalidity or unenforceability, such provisions shall be deleted. All
provisions not affected by such invalidity or unenforceability shall
remain in full force and affect. The parties shall attempt to
substitute for any invalid or unenforceable provision a valid or
enforceable provision which achieves to the greatest extent possible
the economic, legal and commercial objectives of the invalid or
unenforceable
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provision. If by virtue of any subsequent change in the applicable
law, any of the provisions of this Sub-License Agreement becomes void,
voidable or otherwise unenforceable, the parties agree to negotiate in
good faith to amend or modify such provision to such extent as may be
necessary to gave the same within the spirit and general intent of
this Sub-License Agreement.
14. ENTIRE AGREEMENT. This Sub-License Agreement supersedes any
arrangements, undertakings, promises or agreements made or existing
between the parties hereto prior to or simultaneously with this
Sub-License Agreement and constitutes the entire understanding between
the parties hereto. No addition, amendment to, or modification of
this Sub-License Agreement shall be effective unless it is in writing
and signed by and on behalf of all parties hereto.
15. GOVERNING LAW AND ARBITRATION. This Sub-License Agreement shall be
construed in accordance with and governed by the laws of the State of
Illinois, U.S.A. Any dispute arising out of or in connection with this
Sub-License Agreement, including any question regarding its existence,
validity or termination, shall be referred to and finally resolved by
arbitration in Chicago, Illinois, U.S.A. in accordance with the
Arbitration Rules of the American Arbitration Association then
currently in force, which rules are deemed to be incorporated by
reference into this paragraph.
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IN WITNESS WHEREOF, the parties hereto have caused this Sub-License
Agreement to be executed in triplicate as of the day and year first above
written.
Saliva Diagnostic Systems Saliva Diagnostic Systems Inc.
(Singapore) Pte. Ltd.
By /s/ Duke van Kalken By /s/ Xxxxxx X. Xxxxxx
Title Managing Director Title President
Fremont Novo Sciences, L.L.C.
By /s/ Xxxxx X. Xxxx
Title Managing Director
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EXHIBIT A
FNS agrees to purchase during the specified period the following Products from
SDS Singapore in either the minimum quantity or minimum monetary amount
(whichever is applicable) set opposite each individual product:
Period Quantity US $
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1. Omni-XXX First 15 months 100,000
of the Agreement units
2. SDS Sero-Strip To be mutually agreed by the parties within thirty (30) days of the date hereof.
3. WS Hema-Strip To be mutually agreed by the parties within thirty (30) days of the date hereof.
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