EXHIBIT 10.1
XXXXXXXX LICENSE AGREEMENT
--------------------------
This License Agreement (the "Agreement") is entered into and
made effective this 1st day of April, 1998, (the "EFFECTIVE
DATE") between Becton, Xxxxxxxxx and Company, a New Jersey
corporation, whose principal place of business is at 0 Xxxxxx
Xxxxx, Xxxxxxxx Xxxxx, Xxx Xxxxxx, 00000 (hereinafter referred to
as "BECTON") and Selfcare, Inc., having a principal place of
business at 000 Xxxxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxxxxxxx, 00000
(hereinafter referred to as "SELFCARE").
For and in consideration of the mutual promises and
covenants set forth below, BECTON and SELFCARE agree as follows:
1.0 DEFINITIONS.
1.1 "AFFILIATE" shall mean any corporation or other
business entity controlled by, controlling or under common
control with the recited entity. For this purpose "control"
shall mean direct or indirect beneficial ownership of at least
fifty-one percent (51%) of the voting stock of, or at least a
fifty-one percent (51%) interest in the income of such
corporation or other business entity.
1.2 "LICENSED PATENT(S)" shall mean United States Letters
Patent No. 4,703,017 and any continuation, division, re-
examination, or reissue thereof.
1.3 "PRODUCT" shall mean immunodiagnostic assays made,
used, imported, offered for sale and/or sold by SELFCARE and
which are listed in Appendix A. As of the EFFECTIVE DATE of this
Agreement, Appendix A contains the complete list of
immunodiagnostic assays which are PRODUCTS hereunder. Subsequent
to the EFFECTIVE DATE, immunodiagnostic assays which differ from
those originally listed in Appendix A in format, structure,
function or use can be added to Appendix A as PRODUCTS by a
supplemental list on written notice by SELFCARE or BECTON, which
written notice shall specify details of the immunodiagnostic
assays and request the addition of this supplemental list to
Appendix A of this Agreement. Only those supplemental
immunodiagnostic assays which both BECTON and SELFCARE agree in
writing shall be PRODUCTS hereunder shall be accepted as part of
Appendix A, and the decisions of each party with respect to such
acceptance shall be entirely within the discretion of such party.
1.4 (a) "NET SALES" shall mean the sum of all amounts
invoiced on account of sale of PRODUCTS by SELFCARE or its
AFFILIATES to non-affiliated third party purchasers of PRODUCTS,
less (i) cash discounts to purchasers allowed and taken, (ii)
amounts for transportation or shipping charges to purchasers
shown on the invoice, (iii) taxes and duties levied on the sale
of PRODUCTS actually paid, and (iv) refunds, rebates, and
allowances for returned or rejected goods.
(b) In the instance where a PRODUCT is sold by
SELFCARE or its AFFILIATES to a purchaser with which the seller
does not deal at arms length, the NET SALES for the purposes of
determining the royalties shall be the average price for current
NET SALES for the same or similar items sold at arms length under
similar market conditions.
(c) In the instance where a PRODUCT is not sold, but
is OTHERWISE DISPOSED OF (as defined in Paragraph 1.5 below), the
NET SALES for the purposes of determining the royalties shall be
the average price for current NET SALES at which PRODUCTS of the
same or similar kind and quality, and in substantially similar
quantities, are sold or offered for sale.
1.5 "OTHERWISE DISPOSED OF" shall mean and include:
(i) the delivery of any amount of PRODUCT, other than
nominal quantities of free samples or free replacements, by
SELFCARE to others in any transaction other than a sale,
regardless of the basis of consideration, if any; or
(ii) the placing into use of any PRODUCT by SELFCARE
for any purpose, other than its internal routine testing,
provided that the scrapping or destruction (except if
consideration is received therefor) of any PRODUCT shall not fall
within the definition of "OTHERWISE DISPOSED OF" and no value in
respect thereof shall be included in calculating NET SALES. A
PRODUCT shall be considered OTHERWISE DISPOSED OF when used or
shipped by, or on behalf of, SELFCARE.
1.6 "QUARTER" shall mean any period of three consecutive
calendar months beginning January 1, April 1, July 1, and October
1, occurring during the term of this Agreement.
2.0 LICENSE GRANT.
2.1 Subject to the terms and conditions herein, BECTON
hereby grants to SELFCARE, who accepts the same, a non-exclusive,
non-transferable (except to its AFFILIATES) right and license
under the LICENSED PATENTS, without the right to sublicense, to
make, have made for its own use and sale, use, offer for sale,
sell, and import PRODUCT and to practice the methods claimed in
the LICENSED PATENTS in connection with such PRODUCT, and to
extend to its customers purchasing PRODUCT the right to use and
sell the PRODUCT purchased and to practice the methods claimed in
the LICENSED PATENTS in connection with such PRODUCT, all of the
foregoing limited expressly to the field of human IN VITRO
manually formatted immunodiagnostic assays.
In the event that SELFCARE sells PRODUCT(S) to a third party
that has a non-exclusive, non-transferable right and license
under the LICENSED PATENT(S), the royalty obligation of SELFCARE
under this license shall not extend to such sales, provided
however, SELFCARE shall be permitted to make PRODUCTS for any
third party licensee having the right and license under the
LICENSED PATENT(S) to have such PRODUCTS made for it, and to sell
those PRODUCTS to such licensee without any obligation to pay
royalties to BECTON thereon since the third party (without
waiving any right of BECTON to collect royalties from SELFCARE in
the event the third party licensee fails to account for and pay
royalties to BECTON on its sales of such PRODUCTS) licensee has
the obligation, under its license with BECTON, to pay royalties
on the sales of PRODUCTS made for it. BECTON agrees to provide
SELFCARE with the names of such third party licensees which have
the right and license to have PRODUCTS made for it.
2.2 BECTON further hereby releases SELFCARE from any
liability for infringement of the LICENSED PATENTS arising from
the manufacture, use, or sale of PRODUCTS by SELFCARE which
occurred prior to the EFFECTIVE DATE, provided that these events
are reported in accordance with Article 4.3 and royalties are
paid in accordance with Article 4.1(a) hereof. There is no
release for any infringement for which a report is not made under
Article 4.3 and/or royalties are not paid under Article 4.1(a).
3.0 TERM.
3.1 This Agreement shall become effective as of the
EFFECTIVE DATE hereof and shall continue in effect until the last
to expire of the LICENSED PATENTS in each country or region
(referred to collectively as "country") or until this Agreement
has been terminated under Paragraph 7.0.
4.0 PAYMENT.
4.1 In consideration for the license and release granted
hereunder, SELFCARE shall pay to BECTON the following:
(a) As of the EFFECTIVE DATE, a royalty of six percent
(6%) until December 31, 1998, and then a royalty of six and one-
quarter percent (6.25%) beginning January 1, 1999, on the first
$108,667,100.00 of NET SALES of all PRODUCTS sold or OTHERWISE
DISPOSED OF.
(b) Thereafter, a royalty of five and one-quarter
percent (5.25%) of the NET SALES of all PRODUCTS sold or OTHERWISE
DISPOSED OF.
4.2 SELFCARE's obligation to pay royalties under paragraph
4.1 on PRODUCT shall terminate, on a country by country basis,
upon expiration of the last of the LICENSED PATENTS in the
country of sale or manufacture, as applicable. Further, this
obligation shall cease in the event that a court of competent
jurisdiction in the country in question renders a final decision
from which no appeal is or can be taken, that the LICENSED
PATENTS are invalid and/or unenforceable. If in such decision
one or more claims of the LICENSED PATENTS are not declared
invalid or unenforceable, the obligation of SELFCARE to pay with
respect to PRODUCTS covered by the remaining claims shall not be
affected.
4.3 SELFCARE shall provide to BECTON a written report
stating the analyte name and NET SALES of all PRODUCTS sold or
OTHERWISE DISPOSED OF prior to the EFFECTIVE DATE, and this
report shall accompany the payment to BECTON of all royalties due
in connection herewith in accordance with Section 4.1(a) and, if
none, the report shall so state.
4.4 For all sales and royalty-bearing transfers and uses
occurring on or subsequent to the EFFECTIVE DATE, SELFCARE shall
provide written reports to BECTON within sixty (60) days after
the end of each QUARTER, stating in each report the analyte name
and the NET SALES of each PRODUCT sold or OTHERWISE DISPOSED OF
during such QUARTER and upon which royalties are payable as
provided in this Article.
4.5 For all sales and other dispositions of PRODUCTS
occurring on or subsequent to the EFFECTIVE DATE that SELFCARE
makes to a third party licensee of BECTON, SELFCARE shall provide
separate written reports to BECTON within sixty (60) days after
the end of each QUARTER, stating in each report the analyte name
and the NET SALES of each PRODUCT sold or OTHERWISE DISPOSED OF
during such QUARTER and upon which royalties are not payable as
provided in this Article, consistent with the provisions of
Paragraph 2.1, above.
4.6 (a) Concurrently with the making of each report
SELFCARE shall pay to BECTON all royalties due in the amount
specified in Section 4.1 on the NET SALES of all PRODUCTS
included in the report.
(b) Any late payment shall bear interest at the rate
of one percent (1%) per month.
4.7 All payments shall be made hereunder in United States
Dollars; provided, however, that if the proceeds of the sales
upon which such royalty payments are based are received by
SELFCARE in a foreign currency or other form that is not
convertible or exportable in Dollars, and SELFCARE does not have
ongoing business operations or bank accounts in the country in
which the currency is not convertible or exportable, SELFCARE
shall pay such royalties in the currency of the country in which
such sales were made by depositing such royalties in BECTON's
name in a bank designated by BECTON in such country. Royalties
in Dollars shall be computed by converting the royalty in the
currency of the country in which the sales were made at the
exchange rate for Dollars prevailing at the close of the last
business day of the QUARTER for which royalties are being
calculated as published the following day in the Wall Street
Journal (or a comparable publication agreed upon from time to
time by the parties), and with respect to those countries for
which rates are not published, the exchange rate fixed for such
date by the appropriate United States governmental agency.
4.8 In the event that any taxes, withholding or otherwise,
are levied by any taxing authority in connection with accrual or
payment of any royalties payable to BECTON under this Agreement,
SELFCARE shall have the right to pay such taxes to the local tax
authorities on behalf of BECTON and the payment to BECTON of the
net amount due, after reduction by the amount of such taxes,
shall fully satisfy SELFCARE's royalty obligations under this
Agreement, so long as appropriate documentation of such tax
payment is provided to BECTON.
4.9 All payments made hereunder shall be made to BECTON at
the address set forth in Article 6 of this Agreement or at such
changed address as BECTON shall specify by written notice.
4.10 SELFCARE shall keep detailed records of all PRODUCT
sold or OTHERWISE DISPOSED OF to permit verification of the
reports and payments made to BECTON. At BECTON's expense and
request and upon reasonable notice, SELFCARE shall permit such
records to be examined by independent public accountants
designated by BECTON and reasonably acceptable to SELFCARE. Such
examination shall take place not more than once each year.
4.11 In the event that an examination by BECTON of
SELFCARE's records and books of account reveals an underpayment
to BECTON, SELFCARE shall immediately pay BECTON the deficiency,
plus interest at a rate of one percent (1%) per month from the
date the underpayment occurred. In the event that such
underpayment amounts to ten percent (10%) or more of the total
amount payable for the period examined, SELFCARE shall also
reimburse BECTON for all out-of-pocket expense of the
examination.
5.0 TRANSFERABILITY OF RIGHTS AND OBLIGATIONS.
5.1 This Agreement and the license granted under it may not
be assigned or sold by SELFCARE without the express written
consent of BECTON, except to an entity acquiring substantially
all of SELFCARE's business relating to human IN VITRO
immunodiagnostic assay technology. If SELFCARE is permitted to
assign this Agreement, the assignee shall first agree, in
writing, to assume all obligations of SELFCARE created by this
Agreement.
5.2 BECTON may freely assign this Agreement in whole or in
part and any or all of the LICENSED PATENTS.
5.3 This Agreement, and each and every one of the terms and
conditions thereof, shall inure to the benefit of and be binding
upon the permitted successors and assignees of both parties.
6.0 NOTICE.
6.1 Any notice, payment, report, or other correspondence
(hereinafter collectively referred to as "correspondence")
required or permitted to be given hereunder shall be mailed by
certified mail or delivery by hand or overnight courier to the
party to whom such correspondence is required or permitted to be
given hereunder If mailed, any such notice shall be deemed to
have been given when received by the party to whom such
correspondence is given, as evidenced by written and dated
receipt of the receiving party.
6.2 Alternatively, correspondence provided for in this
Agreement shall be deemed sufficiently given by the party sending
the correspondence when sent by facsimile to the party to whom
the correspondence is addressed. A confirmation copy of the
correspondence will be sent by Certified or Registered Mail. The
date of the facsimile transmission will constitute the date of
receipt of the correspondence.
All correspondence to SELFCARE shall be addressed as
follows:
Selfcare, Inc.
000 Xxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxx, Ph.D.
Vice President
All correspondence to BECTON, except for royalty
payments, shall be addressed as follows:
Becton, Xxxxxxxxx and Company
0 Xxxxxx Xxxxx
Xxxxxxxx Xxxxx, Xxx Xxxxxx 00000
Attention: Chief Patent and Licensing Counsel
All royalty payments to BECTON shall be addressed as
follows:
Becton Xxxxxxxxx Microbiology Systems
0 Xxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxx 00000-0000
Attention: Manager, Financial Reporting
Either party may change the address to which correspondence to it
is to be addressed by notification as provided for herein.
7.0 TERMINATION.
7.1 BECTON shall have the right to terminate this Agreement
if SELFCARE commits a material breach of an obligation under this
Agreement, including the failure to make timely royalty payments
hereunder, and continues in default for more than thirty (30)
days after receiving written notice from BECTON of such default,
such termination to be effective immediately upon further written
notice to SELFCARE after such thirty (30) day period.
7.2 In the event that SELFCARE shall be adjudicated
bankrupt, go into liquidation, receivership or trusteeship, make
a composition with its creditors or enter into any similar
proceeding of the same nature, then BECTON shall have the right
without liability therefor to terminate this Agreement forthwith
by notice in writing to SELFCARE.
7.3 SELFCARE shall have the right to terminate its license
by giving thirty (30) days advance written notice. SELFCARE
shall be obligated for royalty payments under Paragraph 4.1 for
NET SALES during such thirty (30) day notice period.
8.0 GOVERNING LAW.
8.1 This Agreement shall be governed by, interpreted in
accordance with and enforced under the laws of the State of North
Carolina, U.S.A. (regardless of its or any other jurisdiction's
choice of law principles), or, as necessary, the laws of the
United States of America. The Federal District Court of the
Eastern District of North Carolina shall have exclusive
jurisdiction in all matters arising under this Agreement, and the
parties hereto expressly consent and submit to such jurisdiction.
9.0 REPRESENTATIONS, WARRANTIES AND LIMITATIONS.
9.1 Nothing in this Agreement shall be construed as:
(a) An acknowledgment of any kind by SELFCARE as to
the infringement or non-infringement of the LICENSED PATENTS; or
(b) An acknowledgement of any kind by SELFCARE as to
the validity or invalidy of the LICENSED PATENTS; or
(c) An acknowledgement of any kind by SELFCARE as to
the enforceability or non-enforceability of the LICENSED PATENTS;
or
(d) A warranty or representation by BECTON as to the
validity or enforceability of any LICENSED PATENTS; or
(e) A warranty or representation by BECTON that
anything made, used, sold or OTHERWISE DISPOSED OF under the
license granted in this Agreement, is or will be free from
infringement of patents or other rights of third parties; or
(f) A requirement that BECTON shall file any patent
application or secure any patent; or
(g) An obligation of either party to bring or
prosecute actions or suits against third parties for infringement
of any patents; or
(h) Conferring a right to use in advertising,
publicity, or the like any name, tradename, or trademark of
SELFCARE or BECTON; or
(i) Granting by implication, estoppel or otherwise any
licenses or rights under any letters patents and applications for
letters patents other than under the LICENSED PATENTS; or
(j) An obligation by BECTON to furnish know-how or any
other technical information not disclosed in the LICENSED
PATENTS.
9.2 BECTON represents to SELFCARE that BECTON is the owner
of the LICENSED PATENTS and has the right to grant the license
hereunder.
9.3 Each party represents and warrants that it has full
authority to enter into and become bound by the terms and
conditions of this Agreement and that its execution of this
Agreement will not violate, contravene or be in conflict with any
law, rule, by-law, article of incorporation, order, regulation or
other agreement.
9.4 BECTON covenants not to xxx SELFCARE for patent
infringement on any of the PRODUCTS during the term of this
Agreement, provided that SELFCARE is in compliance with all of
the provisions and obligations under this Agreement.
10.0 DISCLAIMER AND HOLD HARMLESS PROVISION.
10.1 It is understood and agreed by and between the parties
hereto that nothing contained in this Agreement shall constitute
or be construed to constitute any undertaking, representation,
suggestion, inducement, warranty, assurance or guarantee
whatsoever by either party in connection with PRODUCTS or any
component, product, material, service, process or apparatus with
respect to safety, quality, yield, production, cost, profit,
saleability, licensability, demand, utility, performance,
availability of raw materials, accident or injury to person or
property.
10.2 SELFCARE expressly indemnifies and holds BECTON, its
AFFILIATES, successors, and assigns and its officers, directors
and employees harmless from and against any and all claims,
liabilities, damages, costs, expenses, and/or actions
(collectively, the "Losses" and each individually a "Loss") of
any kind whatsoever which BECTON actually incurs arising from any
claims or allegations by a third party for personal injury or
damage resulting from the manufacturing, use, sale, lease or
distribution of the PRODUCTS by SELFCARE, provided, however, that
in no event shall this section be construed as an obligation of
SELFCARE to indemnify BECTON for any loss relating to or arising
from the invalidity or unenforceability of the LICENSED PATENTS
or BECTON's rights therein.
10.3 Neither of the parties hereto shall be liable in
damages or have the right to cancel for any delay or default in
performing hereunder (other than delay or default in the payment
of money) if such delay or default is caused by conditions beyond
its control, including but not limited to Acts of God,
governmental restrictions, continuing domestic or international
problems such as war or insurrections, strikes, fires, flood,
work stoppages, embargoes and/or other casualty or cause;
provided, however, that any party hereto shall have the right to
terminate this Agreement upon thirty (30) days prior written
notice if either party is unable to fulfill its obligations under
this Agreement due to any of the above-mentioned causes and such
inability continues for a period of six (6) months.
11.0 CAPTIONS.
11.1 The captions and paragraph headings of this Agreement
are solely for the convenience of reference and shall not affect
its interpretation.
12.0 SEVERABILITY.
12.1 Should any part or provision of this Agreement be held
unenforceable or in conflict with the applicable laws or
regulations of any jurisdiction, the invalid or unenforceable
part or provision shall be replaced with a provision which
accomplishes, to the extent possible, the original business
purpose of such part or provision in a valid and enforceable
manner, and the remainder of this Agreement shall remain binding
upon the parties hereto.
13.0 WAIVER.
13.1 No failure or delay on the part of a party in
exercising any right hereunder shall operate as a waiver of, or
impair, any such right. No single or partial exercise of any
such right shall preclude any other or further exercise thereof
or the exercise of any other right. No waiver of any such right
shall be deemed a waiver of any other right hereunder.
14.0 SURVIVAL.
14.1 The provisions of Section 8, 9 and 10 shall survive the
termination or expiration of this Agreement and shall remain in
full force and effect. Furthermore, termination or expiration
shall not affect, inter alia;
(a) SELFCARE's obligation to supply reports as
specified in Article 4 of this Agreement;
(b) BECTON's right to receive or recover and
SELFCARE's obligation to pay royalties accrued or accruable for
payment at the time of any termination;
(c) SELFCARE's obligation to maintain records and
BECTON's right to conduct one final examination of SELFCARE's
books and records relating to events prior to and right up to the
date of termination in accordance with Paragraph 4.9 of this
Agreement; and
(d) Licenses and releases running in favor of
customers or transferees of either party in respect to PRODUCT
sold or OTHERWISE DISPOSED OF prior to termination of this
Agreement.
14.2 The provisions of this Agreement which do not survive
termination or expiration hereof (as the case may be) shall,
nonetheless, be controlling on, and shall be used in construing
and interpreting, the rights and obligations of the parties
hereto with regard to any dispute, controversy or claim which may
arise under, out of, in connection with, or relating to this
Agreement.
15.0 MOST FAVORED LICENSEE.
15.1 In the event that after the EFFECTIVE DATE of this
Agreement BECTON enters into a license agreement with a third
party, in which such third party is licensed to make, use and
sell any PRODUCTS at a royalty rate which is different from the
royalty rate set forth in this Agreement, BECTON shall within
thirty (30) days after the signing of such license agreement,
disclose to SELFCARE the royalty rate in the third party
agreement. BECTON will provide such information to SELFCARE's
attorneys who will maintain the information in confidence and may
disclose it to others within SELFCARE only on a confidential,
need-to-know basis.
15.2 Concurrent with the above report, BECTON will extend to
SELFCARE the option of substituting the royalty rate in the third
party agreement for the royalty rate in this Agreement, subject
to the following provision:
(a) The different royalty rate shall become effective as of
the date of its written acceptance by SELFCARE and shall apply
only to sales occurring thereafter. In no event shall SELFCARE
be entitled to a refund or credit of any monies paid or payable
to BECTON prior to the acceptance of the different royalty rate.
15.3 In the event that SELFCARE does not accept the
different royalty rate relative to Paragraph 15.2 within thirty
(30) days after SELFCARE receives notice from BECTON, SELFCARE's
option to substitute the different royalty rate shall be deemed
forever waived.
16.0 ENTIRE AGREEMENT.
16.1 This Agreement constitutes the entire agreement between
the parties hereto respecting the subject matter hereof, and
supersedes and terminates all prior agreements respecting the
subject matter hereof, whether written or oral, and may be
amended only by an instrument in writing executed by both parties
hereto.
17.0 DISPUTE RESOLUTION.
17.1 The parties shall attempt in good faith to resolve any
dispute arising out of or relating to this Agreement promptly by
negotiations between executives who have authority to settle such
dispute. Any party may give the other party(ies)written notice
of any dispute hereunder not resolved in the normal course of
business. Within twenty (20) days following delivery of such
notice, executives of both parties shall discuss by telephone or
meet at a mutually acceptable time and place, and thereafter as
often as they reasonably deem necessary, to exchange relevant
information and to attempt to resolve such dispute. If the
matter has not been resolved within sixty (60) days following the
disputing party's notice, or if the parties fail to discuss or
meet within twenty (20) days, either party may initiate mediation
of the controversy or claim under the then-current Center for
Public Resources Procedure for Mediation of Business Disputes in
New York. No party shall institute any court proceedings until
the expiration of one hundred and twenty (120) days from the
initiation of negotiations. At the conclusion of this period,
absent any resolution of the dispute or further agreement between
the parties to extend this period, either party may file suit for
the subject matter of the dispute only.
17.2 If a negotiator intends to be accompanied at a
telephone conference or a meeting by an attorney, the other
negotiator shall be given at least three (3) business days'
notice of such intention and may also be accompanied by an
attorney. All negotiations pursuant to this clause are
confidential and shall be treated as compromise and settlement
negotiations for purposes of the Federal Rules of Evidence and
any state rules of evidence.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their respective officers thereunto
duly authorized to be effective as of the EFFECTIVE DATE.
BECTON, XXXXXXXXX AND COMPANY SELFCARE, INC.
By: By:
---------------------- ------------------------
Date: Date:
APPENDIX A
PRODUCTS
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Rapid Manual Tests for hCG and LH analytes
