EXHIBIT 10.7
PRODUCT DEVELOPMENT AND MANUFACTURING AGREEMENT
THIS AGREEMENT IS ENTERED INTO THIS 12 DAY OF SEPTEMBER, 1994, BY AND
BETWEEN REAADS(R) MEDICAL PRODUCTS, INC., A CORPORATION ORGANIZED AND EXISTING
UNDER THE LAWS OF THE STATE OF DELAWARE, U.S.A. AND HAVING ITS PRINCIPAL PLACE
OF BUSINESS AT 00000 XXXXX XXXXXX, XXXXX 000, XXXXXXXXXXX, XXXXXXXX, X.X.X.
(HEREINAFTER REFERRED TO AS "REAADS"), AND HELENA LABORATORIES CORPORATION, A
CORPORATION ORGANIZED AND EXISTING UNDER THE LAWS OF THE STATE OF TEXAS, U.S.A.
AND HAVING ITS PRINCIPAL PLACE OF BUSINESS AT 0000 XXXXXXXXX XXXXX, XXXXXXXX,
XXXXX, X.X.X. (HEREINAFTER REFERRED TO AS "HELENA").
RECITALS
WHEREAS, REAADS is the owner of all rights, title and interest in and
to the REAADS Technology (as hereinafter defined) including Patent Rights (as
hereinafter defined) and Know-How (as hereinafter defined) relating thereto; and
WHEREAS, Helena is engaged in the business of selling and distributing
diagnostic tests and related products worldwide, and desires to participate with
REAADS in the joint development of selected diagnostic tests ("Joint Products")
(as hereinafter defined) using the REAADS Technology and to obtain from REAADS
the license rights to purchase, manufacture, sell and distribute these products
under Helena's own label and trademark in the Territory defined below, subject
to the terms and conditions set forth herein; and
Whereas, REAADS desires to participate with Helena in the joint
development of Joint Products and is willing to grant to Helena the rights to
purchase, manufacture, sell and distribute such Joint Products in the territory,
subject to the terms and conditions set forth herein, and desires retain the
rights to manufacture, sell and distribute the Joint Products under labels and
trademarks specified by REAADS in the Territory defined below, subject to the
terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the above recitals, and in
consideration of the mutual covenants and agreements hereinafter set forth,
REAADS and Helena do hereby agree as follows:
AGREEMENT
ARTICLE 1. DEFINITIONS
1.1 "Technology" means the Patent Rights (defined below) and Know-How
(defined below) collectively.
1.1.1 "Patent Rights" means any and all claims made by and all
patent applications and issued patents held by REAADS in
the Territory in connection with the REAADS enzyme
immunoassay technology; and
1.1.2 "Know-How" shall mean the accumulation of skills,
processes and experience, including formulas and
specifications, heretofore developed by REAADS
pertaining to the REAADS enzyme immunoassay technology,
including, but not limited to, any and all technical
information, trade secrets, test results, studies and
analysis, approved vendor list for any raw materials,
preclinical and clinical
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data, manufacturing data, formulation or production
technology, engineering or assembly methods and other
information necessary or useful in the manufacture, sale
and use of the Joint Products.
1.2 "Joint Products" means and includes any product or group of
products developed by REAADS under the terms of this Agreement. Appendix A
attached hereto contains an initial list of the Joint Products to be developed
by REAADS. The list of Joint Products set forth in Appendix A may be amended
from time to time by mutual agreement of the parties.
1.3 "Territory" shall mean and include the following.
1.3.1 For Joint Products configured in Conventional Format
(defined below), which are sold and distributed in Japan
by REAADS, and which are sold and distributed by Helena,
the Territory shall be all the countries of the world,
except Japan.
1.3.2 For Joint Products configured in Conventional Format
(defined below), which are not sold and distributed in
Japan by REAADS, and which are sold and distributed by
Helena, the Territory shall be all the countries of the
world.
1.3.3 For Joint Products configured in Proprietary Format
(defined below) and sold and distributed by Helena, the
Territory shall be all the countries of the world.
1.4 "Conventional Format" shall mean Joint Products configured in a
standard microplate format intended for use with standard microplate equipment
generally available from more than one instrument manufacturer, including, but
not limited to, plate washers and readers.
"Proprietary Format" shall mean Joint Products configured in a
format intended for use with equipment custom designed for or by Helena, and not
available from any other manufacturer.
1.5 "Affiliate" shall mean and include any individual, corporation,
partnership, limited liability company, joint venture, business association or
entity that controls, is controlled by, or is under common control with the
specified party. For purposes of this definition, "Control" shall mean direct or
indirect beneficial ownership of more than fifty percent (50%) of the voting
stock or other equity ownership interest of, or fifty percent (50%) or more
interest in the income of, such entity.
1.6 "Effective Date" shall mean the date this Agreement becomes
effective as set forth on the first page hereof.
1.7 "Transfer Price" for each Joint Product shall mean REAADS' fully
burdened standard manufacturing cost (the "Standard Cost") calculated in
accordance with REAADS' standard cost accounting practice, consistently applied,
based on the standard cost of materials, direct labor and allocable
manufacturing overhead, plus forty percent (40%).
1.8 "Net Sales" shall mean the gross amount invoiced by Helena for the
sale or other disposition of a particular Joint Product, less (a) discounts
actually allowed, (b) credits or price reductions for claims, allowances,
recalls or returns, or for spoiled, damaged or outdated goods, (c)
transportation and insurance charges separately set forth on the invoice for
shipping the Joint Product to the customer, (d) customs duties and similar
governmental charges, and (e) any sales, excise or other taxes or governmental
charges levied on the sale or disposition of the Joint Product.
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1.9 "Japanese Transfer Fee" for each Joint Product shall mean fifty
percent (50%) of the price at which REAADS sells the Joint Product to a Japanese
distributor less REAADS' fully burdened standard manufacturing cost (the
"Standard Cost") calculated in accordance with REAADS' standard cost accounting
practice, consistently applied, based on the standard cost of materials, direct
labor and allocable manufacturing overhead.
ARTICLE 2. DEVELOPMENT OF JOINT PRODUCTS
2.1 SELECTION OF JOINT PRODUCTS. Subject to the terms and conditions
herein set forth, the parties agree to routinely review market opportunities in
order to identify potential projects for joint development.
2.2 EXCHANGE OF GENERAL INFORMATION. Following selection of a project
and written designation as a potential Joint Product, the parties agree to
exchange key information and know-how about the Joint Product to be developed,
including, but not limited to: market expectations, competitor identification,
competitor test kit features and benefits, sources of antibodies, antigens,
standard material and other critical components, sources for clinical samples
and clinical trials, literature references, and names of key contacts and
consultants.
2.3 DEVELOPMENT OF PROJECT SPECIFICATIONS. For each Joint Product to
be developed, REAADS will prepare and submit to Helena for approval written
product specifications including design criteria, cost and time estimates with
milestones, proposed clinical testing requirements, critical component
requirements and regulatory issues. Helena will review the specifications and
either (a) provide written acceptance of the proposed specifications to REAADS,
or (b) promptly notify REAADS in writing of any items in the specifications
which Helena requests changing. In case of disagreement, the two parties will
negotiate in good faith any differences.
2.4 DEVELOPMENT OF JOINT PRODUCT. REAADS shall develop each Joint
Product according to the project specifications. Product development shall occur
in REAADS' R&D laboratories or at other sites designated by REAADS management.
2.5 PROGRESS REPORTS. REAADS will provide written progress reports to
Helena on a routine basis. These reports will include technical updates, any
changes to published milestones, and an revised estimate of total development
expenses to be incurred in the development of the Joint Product.
2.6 APPROVAL OF PROTOTYPE. At the conclusion of product development,
REAADS will provide prototype of the Joint Product to Helena for evaluation and
approval. Helena will analyze the prototype product and either (a) provide
written acceptance of the prototype, or (b) promptly notify REAADS in writing of
details in which, in the opinion of Helena, the prototype fails to meet the
specifications established in Article 2.3. In case of disagreement, the two
parties will negotiate in good faith any differences.
2.7 PAYMENT FOR PROJECT EXPENSES. For each Joint Product to be
developed, each party will contribute fifty percent (50%) of the total cost of
development.
2.7.1 Upon written approval of the project specifications,
Helena will pay to REAADS twenty five percent (25%) of
the REAADS' total estimated development costs.
2.7.2 Upon completion of the development of a Joint Product
and submission by REAADS to the US Food and Drug
Administration (FDA) for approval,
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REAADS will provide to Helena a detailed accounting of
development expenses incurred by REAADS with a statement
of the remaining payment due by Helena for its 50% share
of REAADS' development costs. Helena will review the
expense accounting and either (a) remit payment to
REAADS of the remaining balance due less fifty percent
(50%) of expenses incurred by Helena in the development
of the Joint Product as specified in Article 2.7.3, or
(b) promptly notify REAADS in writing of details in
which, in the opinion of Helena, the final expenses are
incorrect or inappropriate. In case of disagreement, the
two parties will negotiate in good faith any
differences.
2.7.3 For each Joint Product, Helena shall keep a detailed
accounting of R&D expenses incurred by Helena as part of
the development. Upon submission of REAADS final payment
request, Helena shall deduct fifty percent (50%) of
those expenses incurred by Helena from the amount
requested by REAADS. In addition, Helena shall submit a
detailed accounting of its development expenses. REAADS
will review the expense accounting and promptly notify
Helena in writing of details in which, in the opinion of
REAADS, the expenses are incorrect or inappropriate. In
case of disagreement, the two parties will negotiate in
good faith any differences.
2.7.4 Audit. Both parties shall keep sufficient records of its
R&D expenses and shall permit its books and records to
be examined periodically during reasonable business
hours by an independent certified public accountant
selected and compensated by the other party to verify
the calculation of expenses and to otherwise ensure
compliance with the terms of this Agreement.
2.8 REVISION OF TOTAL EXPENSE ESTIMATES. REAADS shall promptly notify
Helena in writing if, during the development of a Joint Product, REAADS
estimates that after completion of the development project, the total
development expense for the Joint Product will exceed by ten percent (10%) the
original total development expense projection as specified in Article 2.3.
Following such determination and notice, the two parties shall negotiate in good
faith a resolution of the problem.
ARTICLE 3. MANUFACTURING OF JOINT PRODUCTS
3.1 REAADS MANUFACTURING RIGHTS. Subject to the terms and conditions
hereinafter set forth, REAADS shall have the exclusive right to make, use and
sell the Joint Products in Conventional Format throughout the world. REAADS
shall only manufacture Joint Products in Proprietary Format at the written
request of Helena. REAADS shall be entitled to sublicense the rights conferred
upon it under this Article 3, but only to the extent necessary to allow third
parties to manufacture Joint Products for and on behalf of REAADS or an
Affiliate, and provided that (i) REAADS shall give Helena thirty (30) days
written notice before any such sublicense shall become effective; (ii) any such
sublicense shall be subject in all respects to the restrictions, exceptions and
provisions contained in this Agreement; (iii) no such sublicense shall relieve
REAADS of its obligations hereunder; and (iv) REAADS and each such sublicensee
shall execute documents to the foregoing effect reasonably acceptable to Helena,
a copy thereof furnished to Helena promptly after execution and delivery.
3.2 QUALITY ASSURANCE. REAADS shall strictly adhere to the quality
control procedures and specifications for the manufacture and performance of
Joint Products as may be necessary to meet applicable governmental
specifications for the manufacture of the Joint Products. Prior to any shipment
of Joint Products by REAADS to Helena, REAADS shall certify to Helena with
respect to each shipment that all such procedures and specifications have to its
knowledge been met and complied with, and shall
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furnish Helena with copies of the test results and other finite data supporting
its certification if so requested in writing.
3.3 REAADS TECHNOLOGY LICENSE. Subject to the terms of this Agreement,
REAADS hereby grants to Helena a perpetual, worldwide (except as limited below),
transferable (subject to Articles 3.5 hereof), non-exclusive, royalty-bearing
license under the Patent Rights and Know-How to make, use and sell the Joint
Products, subject to the following conditions:
3.3.1 Joint Products configured in Conventional Format may be
sold and distributed by Helena as follows:
3.3.1.1. Under one label, worldwide except for Japan.
3.3.1.2. Under one label in Japan should REAADS elect
not to market the Joint Products in Japan.
3.3.2 Joint Products configured in Proprietary Format may be
sold and distributed by Helena worldwide with no
limitation to the number of labels.
3.3.3 Within six (6) months after FDA approval of a Joint
Product, REAADS shall inform Helena in writing of its
intention to market or not to market the Joint Product
in Japan.
3.3.4 Should Helena not be permitted to market a Joint Product
in Conventional Format in Japan, REAADS shall pay to
Helena a Japanese Transfer Fee.
3.3.4.1. All fees shall be payable by REAADS within
thirty (30) days after the end of the calendar quarter
in which the sale giving rise to such fees occurred.
With each payment, or at the time such payment is due,
REAADS shall provide Helena with a report in reasonable
detail itemizing the sales of the Joint Products on
which payments are due. REAADS shall keep accurate books
and records showing sales of Joint Products in
sufficient detail to enable fees payable hereunder to be
determined. REAADS shall permit its books and records to
be examined periodically during reasonable business
hours by an independent certified public accountant
selected and compensated by Helena to verify the
payments under this Agreement and to otherwise ensure
compliance with the terms of this Agreement.
3.3.4.2. All fees due to Helena shall be payable in
United States Dollars.
3.4 TECHNICAL ASSISTANCE. REAADS shall assist Helena in establishing
its own manufacturing operations for the production of the Joint Products.
REAADS shall promptly transfer to Helena the Know-How necessary to produce Joint
Products and provide all reasonable technical assistance requested by Helena to
facilitate the transmission of such Know-How to Helena and to solve such
production problems as may arise in connection with Helena's production of Joint
Products. Such assistance shall include, at Helena's request and on reasonable
notice, the presence of REAADS personnel at Helena's facilities. Helena shall
reimburse REAADS for reasonable travel, meal and lodging expenses incurred by
REAADS and its personnel visiting the facilities of Helena pursuant to this
Article 3.4.
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3.5 RIGHT TO SUBLICENSE. Helena shall be entitled to sublicense the
rights conferred upon it under this Article 3, but only to the extent necessary
to allow third parties to manufacture Joint Products for and on behalf of Helena
or an Affiliate, and provided that (i) Helena shall give REAADS thirty (30) days
written notice before any such sublicense shall become effective; (ii) any such
sublicense shall be subject in all respects to the restrictions, exceptions and
provisions contained in this Agreement; (iii) no such sublicense shall relieve
Helena of its obligations hereunder; and (iv) Helena and each such sublicensee
shall execute documents to the foregoing effect reasonably acceptable to REAADS,
a copy thereof furnished to REAADS promptly after execution and delivery.
3.6 ROYALTIES. For all Joint Products, in either Conventional Format
or Proprietary Format, manufactured by Helena or by another party for Helena as
a sublicensee of Helena, Helena shall pay to REAADS a royalty equal to 2.5% of
Net Sales commencing upon the date of first sale of such Joint Products and
continuing until the payment by Helena in the aggregate of $2,000,000 in
royalties under this Article 3.6.
3.6.1 Statements. All royalty payments shall be payable by
Helena within thirty (30) days after the end of the
calendar quarter in which the sale giving rise to such
payments occurred. With each royalty payment, or at the
time such royalty payment is due, Helena shall provide
REAADS with a report in reasonable detail itemizing the
sales of the Joint Products on which royalties are due
and the calculation of royalties. Helena shall keep
accurate books and records showing sales of Joint
Products in sufficient detail to enable royalties
payable hereunder to be determined. Helena shall permit
its books and records to be examined periodically during
reasonable business hours by an independent certified
public accountant selected and compensated by REAADS to
verify the payments of royalties under this Agreement
and to otherwise ensure compliance with the terms of
this Agreement.
3.6.2 All royalties payable to REAADS hereunder by Helena
shall be payable in United States Dollars. In the case
of sales invoiced by Helena in a currency other than
United States Dollars, royalties shall first be
calculated in such a currency and then converted into
United States Dollars as follows:
(i) At the conversion rate into United States Dollars
established by the exchange control authorities of the
country of which such currency is the national currency
for the last business day of the calendar quarter in
which the pertinent sale was made; or
(ii) If there is no applicable rate so established, at
the selling rate for United States Dollars as published
by leading commercial banks in the major city of the
country of which such currency is the national currency
for the last business day of the calendar quarter in
which the sales was made; or
(iii) If there is no selling rate so published, at the
buying rate for such foreign currency as published by
Citibank, N.A. in New York City for the last business
day of the calendar quarter in which the sale was made.
ARTICLE 4. TERMS AND CONDITIONS OF SALE
4.1 PURCHASE ORDERS. REAADS's Distribution Sales Policy set forth in
Appendix B and other provisions of this Agreement will apply to all purchases of
Joint Products by Helena,
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notwithstanding any variation as may appear on any purchase order submitted by
Helena. All purchase orders and amendments thereto must be in writing and should
contain (i) all technical information necessary for REAADS to accurately supply
the Joint Products, (ii) quantity, (iii) date of requested delivery, and (iv)
preferred shipping instructions. All such orders shall be deemed accepted by
REAADS unless REAADS rejects such purchase order by notice in writing to Helena
within 7 days after receipt of purchase order, stating reasonable grounds for
such rejection.
4.2 PACKAGING. REAADS shall provide the finished product as described
in Appendix A. Each product component shall be unlabeled and must be assembled
into kits by Helena before shipping. Helena shall be responsible for the product
insert and labels for each component and outer box, the outer box and box
insert.
4.3 QC DOCUMENTATION. REAADS shall supply the necessary QC data for
each shipment to support the performance characteristics of the Joint Product.
4.4 CONTRACT OF SALE. A contract of sale shall exist between REAADS and
Helena only upon receipt and acceptance of Helena's purchase order by REAADS as
stated above in Article 4.1. No condition on any purchase order inconsistent
with the terms and conditions of the Agreement shall be deemed valid unless in
writing and properly executed by authorized officers of REAADS and Helena.
ARTICLE 5. PRICE
5.1 TRANSFER PRICE. The Transfer Prices for Joint Products purchased
hereunder shall be the prices according to attached Appendix C. An annual review
of transfer prices will be conducted and prices adjusted as necessary due to
changes in the Standard Cost before December 1 each year, beginning the first
December 1 following completion of the development of each Joint Product. The
maximum price increase per year shall be seven percent (7%). Helena shall
establish its own resale price for each Joint Product. Should the parties be
unable to agree on prices for the following calendar year by December 1 of the
year before, the price of the year before shall be applied also for the first
six months of the following calendar year. If mutually acceptable terms can not
be reached by June 30, Article 16 may be applied.
5.2 AUDIT. REAADS shall keep sufficient records of its Standard Cost
to allow such cost and expenses to be determined. REAADS shall permit its books
and records to be examined periodically during reasonable business hours by an
independent certified public accountant selected and compensated by Helena to
verify the calculation of Standard Cost and to otherwise ensure compliance with
the terms of this Agreement.
ARTICLE 6. CONFIDENTIALITY
6.1 CONFIDENTIALITY OF HELENA. Helena acknowledges that during the
course of this Agreement it will become privy to confidential information of
REAADS concerning REAADS itself, REAADS Technology, REAADS's business strategy,
and other technical, business and financial matters. Helena accordingly agrees
to hold all such information so designated by REAADS in strictest confidence and
not to disclose any such information to a third party except as expressly
permitted by REAADS in writing, or use such information for any purpose other
than the purposes hereof, unless such information was already in the possession
of Helena at the time of receipt from REAADS or such information is or becomes
public knowledge through no fault of Helena or is provided in good faith to
Helena by any independent third party who has the right to disclose such
information. This Article shall survive any termination of this Agreement for a
period of 5 (five) years.
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6.2 CONFIDENTIALITY OF REAADS. REAADS acknowledges that during the
course of this Agreement it will become privy to confidential information of
Helena concerning Helena itself, Helena's business strategy, and other
technical, business and financial matters. REAADS accordingly agrees to hold all
such information so designated by Helena in strictest confidence and not to
disclose any such information to a third party except as expressly permitted by
Helena in writing, or use such information for any purpose other than the
purposes hereof, unless such information was already in the possession of REAADS
at the time of receipt from Helena or such information is or becomes public
knowledge through no fault of REAADS or is provided in good faith to REAADS by
any independent third party who has the right to disclose such information. This
Article shall survive any termination of this Agreement for a period of 5 (five)
years.
ARTICLE 7. OTHER DUTIES OF HELENA
7.1 PRODUCT CLAIMS. At all times during the term of this Agreement,
Helena will not make any claims or representations concerning the Joint Products
other than those representations set forth in the product insert approved by
REAADS.
7.2 REPORTS. Helena agrees to provide REAADS with an initial six
month forecast of Joint Products to be manufactured by REAADS and purchased by
Helena. Further, Helena will provide REAADS with volume forecast requirements
before May 31 and November 30 each year, covering the following 12 month period.
Forecasts referred to shall not be binding and are for planning purposes only.
7.3 LICENSES AND PERMITS. Helena shall be responsible for obtaining
all licenses and permits required by any governmental authority in order to
import a Joint Product into any country in the Territory, as well as the cost of
such licenses and permits.
7.3.1 Authorization. Helena agrees to comply with all
applicable laws regulations and orders governing the sale, disposition,
shipment, import or export of the Joint Products and maintain in effect all
licenses, permits and authorizations from all government agencies as may be
necessary to perform its obligations hereunder.
7.4 REGULATORY DOCUMENTS. To the extent on hand or obtainable without
unreasonable burden or cost, REAADS shall provide at no cost to Helena all
documentation reasonably requested by Helena to obtain the required regulatory
approvals as referred in Article 7.3.
7.5 DEFECTIVE PRODUCT NOTICE. Helena shall immediately notify REAADS
in writing should it become aware of any defect or condition that may render a
Joint Product in violation of the law of any jurisdiction where the Joint
Products are sold, or if the Joint Products deviate in any way from the
specifications or the warranties set forth herein. The parties shall share with
each other all relevant data on Joint Product defects and Joint Product
complaints including, but not limited to, complaints or information regarding
performance and/or allegations or reports of any negative effect from the use or
misuse of the Joint Products as soon as such data is available. Upon receipt of
any such notice, REAADS may at its option obtain samples of the Joint Products
in question from Helena for analysis. REAADS shall at its option either promptly
deliver a new shipment of Joint Products to replace the defective Joint
Products, or credit Helena on the next purchase of Joint Products.
ARTICLE 8. OTHER DUTIES OF REAADS
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8.1 TECHNICAL ASSISTANCE AND TRAINING. REAADS shall to the extent
necessary provide training and technical assistance to Helena's personnel
necessary for the marketing of the Joint Products. Such technical assistance and
training shall be provided at REAADS's facility in Westminster, Colorado, or, if
agreed by the parties, at Helena's premises. Such technical assistance and
training shall be provided by REAADS at no charge to Helena, except that if the
training is performed at Helena's premises, REAADS's personnel shall be entitled
to receive their reasonable expenses of travel, meals, and lodging. If training
is provided at REAADS's facility in Westminster, Colorado, Helena's personnel
shall bear their own expenses of travel, meals and lodging.
8.2 GMP AUDIT. REAADS agrees to receive ualified Helena personnel to
perform an audit of REAADS' GMP process at a convenient time mutually agreed
upon. Other than disclosures otherwise permitted by this Agreement, this audit
will not include the disclosure of trade secrets, know-how, or any other
confidential information not necessary to perform the audit.
8.3 MANUALS. REAADS shall provide Helena on a current basis with
instructions and manuals relating to the Joint Products.
8.4 CONDITIONS TO DELIVERY. REAADS' obligation is to fill and execute
orders within +/- 20% of forecast of annual order supplied by Helena. In the
event that force majeure causes a delay of more than two (2) months, either
party shall have the right to cancel the order by giving written notice to the
other. The parties expressly agree that for the purpose of this Agreement, the
term force majeure shall be deemed to include strike, lockout, flood, fire,
rebellion, war, regulations, requirements or acts of civil or military
authorities, unavailability of materials and allocations or priorities with
respect thereto, civil disorder, acts of God, delays of carriers, and, in
general, any causes beyond REAADS' control.
8.5 DELIVERIES. REAADS shall use reasonable efforts to ship Joint
Products ordered by Helena as specified by the order from Helena. REAADS will
ship the Joint Products within 30 days of receipt of the order. All deliveries
shall be made F.O.B. REAADS' plant in Westminster, Colorado. Freight and
insurance charges shall be borne by Helena. REAADS shall select the delivery
method and the carrier as instructed by Helena. Unless otherwise specified on
Helena's purchase order, insurance shall be provided by the insurer selected by
REAADS to cover risk of loss or damage in the amount of the invoice to Helena.
ARTICLE 9. REGULATORY COMPLIANCE
9.1 U.S. REGULATORY APPROVALS. REAADS shall exercise reasonable
business efforts with respect to each Joint Product, to diligently prepare, file
and prosecute all necessary applications as soon as reasonably possible to
obtain approval from the FDA for the commercial manufacture, use and sale by
REAADS of each such Joint Product in the United States. Helena will be
responsible with respect to each Joint Product, to diligently prepare, file and
prosecute all necessary applications to obtain approval from the FDA for the
commercial manufacture, use and sale of each such Joint Product by Helena in the
United States.
9.2 EXCHANGE AND CONFIDENTIALITY OF DOCUMENTATION. Subject to the
confidentiality provisions of Article 6, Helena shall be given access to all
such underlying data, reports and summaries upon which any such applications to
the FDA by REAADS have been based. REAADS shall provide Helena with a copy of
its annual reports filed with the FDA regarding any Joint Product registrations
and shall otherwise keep Helena generally advised as to the status thereof.
Subject to the confidentiality provisions of Article 6, REAADS shall be given
access to all such underlying data, reports and summaries upon which any such
applications to the FDA by Helena have been based. Helena shall
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provide REAADS with a copy of its annual reports filed with the FDA regarding
any Joint Product registrations and shall otherwise keep REAADS generally
advised as to the status thereof.
9.3 FOREIGN REGULATORY APPROVALS. Each party shall be responsible
for, and shall bear the expense of, filing and prosecuting any application to
obtain the required governmental approvals or consents necessary to manufacture,
test and market Joint Products worldwide, except with respect to the United
States. REAADS shall, however, provide Helena, at no additional cost to Helena,
with all technical and regulatory documentation and information (including,
without limitation, all clinical data) in REAADS' possession or under its
control, or obtainable without unreasonable burden to REAADS.
9.4 CUSTOMER COMPLAINTS. Each party shall immediately notify the
other party in writing should it become aware, through customer complaint or
otherwise, of any defect or condition which may render any Joint Product in
violation of law or FDA and/or any foreign equivalent regulations, or which may
in any way deviate from the approved product specifications.
ARTICLE 10. INTELLECTUAL PROPERTY
10.1 REAADS TECHNOLOGY. Helena shall have no interest in the existing
REAADS Technology used in Joint Products other than the License rights granted
in Article 3.3.
10.2 THIRD PARTY INFRINGEMENT. REAADS and Helena shall each promptly
notify the other party upon learning that a third party is making, using or
selling a product or component of a product which is within the scope of a valid
licensed claim of a patent included within the Patent Rights. REAADS shall have
the right to bring, maintain and settle any suit, action or proceeding involving
any such infringement of the Patent Rights, and shall pay all expenses incurred
in connection therewith. Any amount recovered in any such suit, action or
proceeding whether by judgment or settlement shall be paid to or retained by
REAADS. If within three (3) months of notice of any such infringement, REAADS
shall have failed to either terminate such infringement or to initiate legal
proceedings against the infringer (or in the event that REAADS earlier advises
Helena that it does not intend to take action), Helena shall have the right, at
its own expense, to bring and maintain any suit, action or proceeding involving
any such infringement, which infringement could reasonably be expected to
adversely affect the rights granted to Helena hereunder. If Helena lacks
standing to bring such suit, action or proceeding, then REAADS shall, at the
request of Helena, do so upon Helena's undertaking to indemnify and hold REAADS
harmless (to the extent permitted by law) from all consequent liability and to
promptly reimburse REAADS for all its reasonable expenses (including attorneys'
fees) resulting therefrom. Any amount recovered in any such action, suit or
proceeding brought at Helena's expense, whether by judgment or settlement, shall
be paid to or retained by Helena.
10.3 NEW TECHNOLOGY. All new inventions, whether patentable or not,
utilized in the Joint Products and discovered during the course of development
of the Joint Products shall be owned jointly by REAADS and Helena, with each
owning an undivided one-half interest therein.
10.4 NEGLIGENT PRODUCT HANDLINg. Except for actual third party claims
covered by Article 11 below, neither party shall be responsible to the other
party or the other party's agents for the other party or the other party's
agents negligence in handling of the Joint Product which causes a breach of
warranty.
ARTICLE 11. INDEMNIFICATION
11.1 INDEMNIFICATION BY HELENA. Helena hereby agrees to defend,
indemnify and hold REAADS, its employees, agents and Affiliates harmless against
any and all claims, liabilities, losses,
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damages or expenses, (including, without limitation, attorneys fees), to the
extent resulting from, arising out of, or connected with any inaccuracy, breach
of, or nonfulfillment of any covenant, representation, warranty or agreement
made by or any other obligation of Helena contained in this Agreement.
Notwithstanding the foregoing, REAADS, its employees, agents and Affiliates
shall not be entitled to indemnification for any claim, liability, loss, cost,
damage or expense to the extent caused by its or their own fraud,
misrepresentation, negligence or malfeasance.
11.2 INDEMNIFICATION BY REAADS. REAADS hereby agrees to defend,
indemnify and hold Helena, its employees, agents and Affiliates harmless against
any and all claims, liabilities, losses, damages or expenses, (including,
without limitation, attorneys fees), to the extent resulting from, arising out
of, or connected with (i) any inaccuracy, breach of, or nonfulfillment of any
covenant, representation, warranty or agreement made by or other obligation of
REAADS contained in this Agreement, or (ii) any claim that the use by or on
behalf of Helena of the Patent Rights or Know-How pursuant to this Agreement
infringes upon or violates the patent or other proprietary rights of any third
party. Helena, its employees, agents and Affiliates shall not be entitled to
indemnification for any claim, liability, loss, cost, damage or expense to the
extent caused by its or their own fraud, misrepresentation, negligence or
malfeasance
11.3 DEFENSE, SETTLEMENT. The indemnified party shall give the
indemnifying party reasonably prompt notice of any claims of third parties as to
which it proposes to demand indemnification hereunder. The indemnifying party
shall have the right to assume the good faith defense, compromise or settlement
of any such claim (without prejudice to the right of the indemnified party to
participate in such defense) at its own expense through attorneys reasonably
acceptable to the indemnified party, but may not, without the prior written
consent of the indemnified party agree to (i) any injunctive relief or
restrictions affecting the indemnified party, or (ii) any settlement which would
adversely affect the business or operations of the indemnified party. If the
indemnifying party does not elect to defend such claim or suit within ten (10)
days after having received notice thereof or fails to prosecute its defense
diligently, the indemnified party may at its sole discretion defend against such
claim or suit at the indemnifying party's expense. The indemnified party may
thereafter elect to settle such claim or suit or otherwise enter into a
compromise with the claimant.
11.4 DAMAGES, COSTS. If damages and/or costs are awarded against the
indemnified party in any such claim or suit, whether or not REAADS and/or Helena
conduct the defense of such claim or suit, the indemnifying party shall
indemnify and hold harmless the indemnified party for all such damages and/or
costs. All other costs and/or fees which result from the assertion of any such
claim or suit, including but not limited to attorneys fees, incurred by the
indemnified party in defense of any such claim or suit shall be reimbursed to
the indemnified party by the indemnifying party.
ARTICLE 12. LIMITED WARRANTY
12.1 SHELF LIFE WARRANTY. REAADS warrants that the Joint Products
manufactured by REAADS for Helena shall have a shelf life of no less than 80% of
the total expected shelf life from the date of REAADS' shipment provided that
the Joint Products are stored under conditions set forth by REAADS. REAADS shall
not be liable for any failure to satisfy the shelf life requirement to the
extent such variance is caused by conditions or events occurring after shipment
and/or over which REAADS has no control.
12.2 NOTICE. Should Helena discover any Joint Product manufactured by
REAADS for Helena which fails to satisfy the shelf life warranty contained in
Article 12.1, Helena shall notify REAADS in writing within ten (10) business
days after such discovery. REAADS shall, at its election, either refund the
portion of the purchase price to Helena, allocable to the Joint Product which
gives rise
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to the claim, or correct such defect by suitable replacement at its own expense.
REAADS' obligation under this section with respect to such defective Joint
Product shall be conclusively waived by Helena if REAADS does not receive
written notification of any defect within ten (10) business days after its
discovery.
12.3 THIRD PARTY CLAIMS. The provisions of these Articles 12.1 and
12.2 are not applicable to any third party claims.
12.4 WARRANTIES. The written warranties of REAADS in Article 12 are
the sole exclusive warranties provided to Helena and to consumers and are in
lieu of all other warranties, whether written or oral, implied or statutory.
REAADS warrants the Joint Products against defects in material and workmanship
under the normal use and service for which they were designed, for a period of
90 days after date of shipment, REAADS' obligation under this warranty being
limited, at its option, however, to the replacement or repair of a part or parts
determined by it to be defective, necessary packing and transportation costs for
return of the Joint Products to be paid by Helena. All replacement or repaired
Joint Products will be shipped F.O.B., Westminster, Colorado. REAADS shall under
no circumstances be liable for any special, indirect or consequential damages
owing to failure of the Joint Products.
12.5 CANCELLATION AND RESCHEDULE CHARGES. If for any reason Helena
cancels all or any part of the order or requests a rescheduling of a scheduled
shipment of Joint Products, Helena agrees to pay REAADS, upon verification of
costs incurred, the verified costs but no more than 20% of the total purchase
price if the cancellation/reschedule notice is received more than 60 days of the
scheduled shipment; or no more than 30% of the total purchase price if the
cancellation/reschedule notice is received less than 60 days of the scheduled
shipment.
ARTICLE 13. EFFECTIVE DATE AND TERM
This Agreement shall become effective upon execution by both parties
and shall be deemed effective as of the date first set forth above. This
Agreement shall continue to be in effect unless terminated by either party as
provided in Article 14 hereof.
ARTICLE 14. TERMINATION
Either party will have the right to terminate this Agreement if the
other party: (a) assigns this Agreement or any of its rights hereunder in
violation of the provisions of this Agreement; (b) becomes bankrupt or
insolvent; (c) makes an assignment for the benefit of creditors, or a receiver,
trustee in bankruptcy or similar officer is appointed to take charge of all or
part of its property; (d) materially breaches its obligations under this
Agreement, and such breach has not been cured within thirty (30) days of notice
thereof by the non-breaching party. Information referring to the above events
should be given to the other party within 14 days, and this party should
communicate its intentions to the other party within 30 days. For purposes of
this Article, a material breach on the part of either party includes, but is not
limited to, failure to adhere to the confidentiality provisions and restrictions
on use of information set forth in Articles 6.1 and 6.2, and any failure to pay
royalties or make any payment required hereunder within 30 days of the date due.
ARTICLE 15. RIGHTS AND OBLIGATIONS UPON TERMINATION
15.1 EFFECT OF TERMINATION. Termination, cancellation or abandonment
of this Agreement through any means and for any reason shall not relieve the
parties of any obligation accruing prior
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thereto and shall be without prejudice to the rights and remedies of either
party with respect to any antecedent breach of any of the provisions of this
Agreement.
15.2 SURVIVAL. In the event of termination of this Agreement, the
license rights of Article 3.3, royalty provisions of Article 3.6,
confidentiality provisions of Article 6, indemnification provisions of Article
11, and representations and warranties set forth in Article 12, shall survive,
provided that the license rights of Article 3.3 shall terminate if Helena either
(a) fails to make any royalty payment within 30 days of the date due or (b)
otherwise commits a material breach of this Agreement.
ARTICLE 16. ARBITRATION
Any controversy or claim arising under or in relation to this Agreement,
except as otherwise expressly provided below, shall be settled exclusively by
arbitration in accordance with the International Arbitration Rules of the
American Arbitration Association (AAA). Arbitration shall take place in Denver,
Colorado, U.S.A. before one arbitrator selected by the parties jointly or
failing their agreement, selected pursuant to the rules of the AAA. The
arbitration shall be conducted in English and shall use the U.S. Federal rules
of evidence and the U.S. Federal rules of civil procedure. The substantially
prevailing party shall be entitled to recover its costs and attorneys' fees. The
decision of the arbitrators shall be final and binding on the parties, and
judgment upon the award rendered by the arbitrators may be entered by any court
having jurisdiction thereof. Helena specifically consents to the jurisdiction of
the courts of the State of Colorado, U.S.A., and any other place where it is
located or can be found for purposes of enforcing an award.
ARTICLE 17. GENERAL PROVISIONS
17.1 ENTIRE AGREEMENT. This Agreement, including the Appendices,
constitutes the entire agreement between the parties with respect to the subject
matter hereof, and may not be modified (unless expressly provided otherwise
herein) except in writing duly signed by both parties. The terms and conditions
of this Agreement shall prevail notwithstanding any other terms and conditions
on any order submitted by Helena.
17.2 ASSIGNMENT, WAIVER, SEVERABILITY. Neither party may assign this
Agreement without the prior written consent of the other party. All rights and
remedies conferred under this Agreement or by any other instrument or law shall
be cumulative and may be exercised singularly or concurrently. Failure by either
party to enforce any term hereof shall not be deemed a waiver of future
enforcement of that or any other term. If any provision of this Agreement is
declared void or unenforceable by any judicial, administrative or arbitration
authority, such action will not nullify the remaining provision of this
Agreement.
17.3 GOVERNING LAW. The validity and interpretation of this Agreement
shall be governed and construed according to the laws of the State of Colorado,
U.S.A.
17.4 RELATIONSHIP CREATED. Nothing in this Agreement shall be construed
as establishing an agency, joint venture or partnership between the parties.
Helena is an independent contractor, and shall have sole responsibility for its
employees, even while such employees are receiving training at REAADS' facility.
17.5 COMPLIANCE WITH LAWS. Both parties agree to comply at all times
with all applicable laws.
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17.6 AUTHORITY. Each party hereby represents and warrants that it has
full power and authority to enter into and perform this Agreement, without any
governmental approvals, and that its entering into and performance of this
Agreement will not conflict with any other agreement to which it is party or by
which it is bound.
17.7 NOTICES. All notices, payments, demands, requests, instructions or
other communication required or permitted to be given by any of the provisions
of this Agreement must be in writing and shall be deemed to have been
sufficiently given only if (i) delivered by hand against receipt therefor, (ii)
sent by Federal Express or similar overnight delivery service, or (iii) mailed
by certified or registered mail, postage prepaid, return receipt requested as
follows:
If to REAADS, to it at:
00000 Xxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxxxx XX 00000
Attn: President
If to Helena, to it at:
0000 Xxxxxxxxx Xxxxx
Xxxxxxxx XX 00000
Attn: President
IN CONSIDERATION OF the foregoing terms and conditions, Helena and
REAADS have executed this Agreement on the day and year first written above.
REAADS Medical Products, Inc.
By /S/ NOT LEGIBLE
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Its
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Helena Laboratories Corporation
By /S/ NOT LEGIBLE
-------------------------------------
Its
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