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EXHIBIT 10.5.1
ADVANCE ROYALTY AGREEMENT
THIS ROYALTY ADVANCE AGREEMENT (the "Agreement") is made this 9th day of
January, 1997, by and between Boehringer Mannheim GmbH ("BM"), a German
corporation, having a principal place of business at Xxxxxxxxx Xxxxxxx 000,
X-0000 Xxxxxxxx 00, Xxxxxxx Xxxxxxxx of Germany, and IGEN International
Incorporated ("IGEN"), a Delaware corporation, having a principal place of
business at 00000 Xxxxxxxxxx Xxxxx, Xxxxxxxxxxxx, Xxxxxxxx 00000, with reference
to the following facts:
A. IGEN and BM are parties to a License and Technology Development Agreement
dated as of September 23, 1992 (the "License Agreement"), pursuant to which,
among other things, IGEN granted to BM certain licenses to make, use and sell
certain instruments and assays based upon the ECL Technology, as such term is
defined in the License Agreement.
B. IGEN and BM now desire to enter into an agreement whereby BM will
advance to IGEN royalties that will become due under the License Agreement.
THEREFORE, in consideration of the foregoing premises and the mutual
covenants herein set forth, IGEN and BM do hereby agree as follows:
1. DEFINITIONS
As used herein, capitalized terms shall have the respective meanings set
forth below. All capitalized terms used herein and not defined in this
Section 1 shall have the meaning given them in the License Agreement.
1.1 "Advance Royalty Account" means an account on IGEN's books that
reflects the amount, as it may increase as a result of interest
accrual and decrease as a result of Royalties earned by IGEN, to be
credited to BM pursuant to Section 2 hereof.
1.2 "Collateral" means IGEN's rights under the License Agreement to
receive Royalties from BM, all IGEN accounts receivable from BM with
respect to Royalties earned under the License Agreement, the monies
due and to become due under the License Agreement, and in all
proceeds of such accounts.
1.3 "Default" means the occurrence of any one or more of the following
events (including the passage of time, if any, specified therefor):
(i) IGEN shall become insolvent, fail to pay its debts generally as
they become due, voluntarily seek, consent to, or acquiesce in the
benefit or benefits of any IGEN Relief Law, or become a party to ( or
be made the subject of) any proceeding provided for by any IGEN
Relief Law, other than as a creditor or claimant, that could suspend
or otherwise adversely affect the rights of BM hereunder (unless, in
the event such proceeding is involuntary, the petition instituting
same is dismissed within 60 days of the filing of same); (ii) the
failure to have discharged within a period of 30 days after the
commencement thereof any attachment, sequestration, or similar
proceeding against any of the assets of IGEN; (iii) IGEN fails to pay
any money judgment against it at least ten days prior to the date on
which any of the assets of IGEN may be lawfully sold to satisfy such
judgment; or (iv) the acceleration by the holder thereof of the
maturity of any indebtedness owned by IGEN.
1.4 "Debtor Relief Law" means the Bankruptcy Code of the United States of
America and all other applicable liquidation, conservatorship,
Bankruptcy, moratorium, rearrangement, receivership, insolvency,
reorganization, suspension of payments, or similar IGEN relief laws
from time to time in effect affecting the rights of creditors
generally.
1.5 "Interest Rate" means the sum of (i) [ ] as reported in the
Wall Street Journal, Midwest Edition, on the morning of January 13,
1997; plus (ii) [ ].
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1.6 "Royalties" means the royalty payments due IGEN from BM pursuant to
Section 6.2 and 6.3 of the License Agreement.
1.7 "Sales Report" means the quarterly accounting of Net Sales of
Products by BM and its Affiliate Sublicensees provided by IGEN by BM
pursuant to Section 7.1 of the License Agreement.
1.8 "Security Interest" means the security interest granted and the
pledge and assignment made under Section 3.
2. ADVANCE ROYALTY
2.1 ADVANCE ROYALTY. BM hereby agrees to pay to IGEN, on or before
January 13, 1997, the sum of Six Million United States Dollars
($6,000,000). Such sum shall be paid by wire transfer of immediately
available funds to:
Bank: [ ]
Account Number: [ ]
Account Name:
ABA Number: [ ]
Reference: "For further credit to IGEN, Inc."
IGEN agrees to immediately reflect such sum as a credit to BM in the Advance
Royalty Account.
2.2 INTEREST. The sum in the Advance Royalty Account shall accrue
interest at the Interest Rate, compounded annually. Such interest
shall be treated as a further credit to BM.
2.3 CURRENT BALANCE OF ACCOUNT. Within fifteen (15) days after receiving
BM's quarterly Sales Report, IGEN shall advise BM in writing of the
balance of the Advance Royalty Account as of the end of such quarter.
2.4 PAYMENT OF ROYALTIES. BM's payment to IGEN and the establishment of
the Advance Royalty Account in accordance with Section 2.1 hereof
constitute a pre-payment of Royalties which otherwise would have
become due and payable to IGEN from BM pursuant to Section 6.2 and
6.3 of the License Agreement. So long as there is a balance of
greater than zero in the Advance Royalty Account, all such Royalties
reflected in each Sales Report delivered by BM to IGEN shall
automatically be deducted from and reduce the balance of the Advance
Royalty Account as of the sixtieth day following the end of the
quarter which was the subject of the Sales Report. In the event that
the amount of Royalties due from BM to IGEN as reflected in a Sales
Report exceeds the balance of the Advance Royalty Account, BM shall
remit to IGEN with such Sales Report a payment reflecting the
difference between the balance of the Advance Royalty Account as of
the due date for such Sales Report and the amount of Royalties due as
reflected in such Sales Report.
3. SECURITY INTEREST
3.1 GRANT OF SECURITY INTEREST. As security for IGEN's obligation to
credit BM for Royalties due, IGEN here grants to BM a security
interest in the Collateral.
3.2 COVENANT OF IGEN. So long as the balance of the Advance Royalty
Account is greater than zero, IGEN agrees that:
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(a) it will not, without the prior written consent of BM, pledge or
grant any security interest in the Collateral to anyone except
BM, or permit any lien or encumbrance to attach to the
Collateral, or any levy to be made on the Collateral, or any
financing statement(except BM's statement) to be on file with
respect to the Collateral;
(b) it will not relocate IGEN's principal place of business, chief
executive office, or place where IGEN's books and records
related to accounts are kept, unless prior thereto IGEN
(i) gives BM 30 days prior written notice of such proposed
relocation (such notice to include, without limitation, the
name of the county or parish and state into which such
relocation is to be made) and (ii) (unless the relocation is to
a jurisdiction in which existing financing statements or other
required filings have previously been made to perfect the
Security Interest in such Collateral) executes and delivers all
such additional acts as BM in its sole discretion may request
in order to continue or maintain the existence and priority of
the Security Interest in such Collateral.
(c) it will, from time to time, promptly execute and deliver to BM
all such other assignments, certificates, supplemental
documents, and financing statements, and do all other acts or
things as BM may reasonably request in order to more fully
create, evidence, perfect, continue, and preserve the priority
of the Security Interest.
3.3 REMEDIES. Should a Default occur and be continuing, BM may, at its
election, exercise any and all rights and remedies available to a BM
under the Uniform Commercial Code, in addition to any and all other
rights available to BM at law, in equity, or otherwise, including,
without limitation, (a) reduce any claim to judgment; (b) exercise
the rights of offset against the interest of IGEN in and all amounts
due IGEN from BM to the extent of the full amount of the Advance
Royalty Account; (c) foreclose the Security Interest and any other
Liens BM may have or otherwise realize upon any and all of the rights
BM may have in and to the Collateral, or any part thereof; or (d)
applying by appropriate judicial proceedings for appointment of a
receiver for all or part of the Collateral (and IGEN hereby consents
to any such appointment).
4. MISCELLANEOUS
4.1 TERM. At such time as the balance of the Advance Royalty Account is
reduced to zero, this agreement shall thereafter terminate upon
receipt by BM of IGEN's written notice of such termination.
4.2 ACTIONS NOT RELEASES. The Security Interest and IGEN's obligations
and BM's rights hereunder shall not be released, diminished,
impaired, or adversely affected by the occurrence of any one or more
of the following events: (i) the taking or accepting of any other
security or assurance for any or all of IGEN's obligation under the
License Agreement or hereunder; (ii) any release, surrender,
exchange, subordination, or loss of any security or assurance at any
time existing in connection with any or all of IGEN's obligations
under the License Agreement or hereunder; (iii) the insolvency,
bankruptcy, or lack of corporate or trust power of any party at any
time liable for the performance of any or all of IGEN's obligations
under the License Agreement or hereunder, whether now existing or
hereafter occurring; (iv) any neglect, delay, omission, failure, or
refusal of BM to take or prosecute any action in connection with any
other agreement, document, guaranty, or instrument evidencing,
securing, or assuring the performance of all or any of IGEN's
obligations under the License Agreement or hereunder; (v) any failure
of BM to notify IGEN of any renewal, extension, or assignment of
IGEN's obligations under the License Agreement or Hereunder or any
part thereof, or the release of any security, or of any other action
taken or refrained from being taken by BM against IGEN or any new
agreement between BM and IGEN; (vi) the illegality, invalidity, or
unenforceability of all or any part of IGEN's obligations under the
License Agreement or hereunder against any party obligated with
respect thereto by reason of the fact that the act of creating IGEN's
obligations under the License Agreement or hereunder, or any
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part thereof, is ultra xxxxx, or the officers creating same acted in
excess of their authority, or for any other reason; or (vii) if any
payment by any party obligated with respect thereto is held to
constitute a preference under applicable laws or for any other
reason BM is required to refund such payment or pay the amount
thereof to someone else.
4.3 Captions: Arrangements. The headings, captions, and arrangements used
herein are, unless specified otherwise, for convenience only and
shall not be deemed to limit, amplify, or modify the terms hereof nor
affect the meaning thereof. Whenever herein the singular number is
used, the same shall include the plural where appropriate, and vice
versa; and words of any gender herein shall include each other gender
where appropriate. The words "herein," "hereof," and "hereunder," and
other words of similar import refer to this agreement as a whole and
not to any particular part or subdivision hereof.
4.4 NOTICES. Any notice or other communication required or permitted to
be given to either party hereto shall be in writing and shall be
deemed to have been properly given to be effective on the date of
delivery if delivered in person or by facsimile or five days after
mailing by registered or certified mail, postage paid, to the other
party at the address specified for notice to such party in the
License Agreement.
4.5 GOVERNING LAW. This agreement is being executed and delivered, and
is intended to be performed, in the state of Maryland, and the laws
of such state and of the United States of America shall govern the
rights and duties of the parties hereto and the validity,
construction, enforcement, and interpretation hereof.
4.6 INVALID PROVISIONS. If any provision hereof is held to be illegal,
invalid, or unenforceable under present or future laws effective
during the term hereof, such provision shall be fully severable; this
agreement shall be constructed and enforced as if such illegal,
invalid, or unenforceable provision had never comprised a part
hereof; and the remaining provision hereof shall remain in full force
and effect and shall not be affected by the illegal, invalid, or
unenforceable provision or by its severance here from. Furthermore,
in lieu of such illegal, invalid, or unenforceable provision there
shall be added automatically as a part hereof a provision as similar
in terms to such illegal, invalid, or unenforceable provision as may
be possible and be legal, valid, and enforceable.
4.7 ENTIRETY AND AMENDMENTS. This instrument and the License Agreement
embody the entire agreement between the parties, supersede all
prior agreements and understandings, if any, relating to the subject
matter hereof, and may be amended only by an instrument in writing
executed jointly by an authorized officer of each party hereto and
supplemented only by documents delivered or to be delivered in
accordance with the express terms hereof.
4.8 MULTIPLE COUNTERPARTS. This agreement may be executed in a number
of identical counterparts, each of which shall be deemed an original
for all purposes and all of which constitute, collectively, one
agreement; but in making proof of this agreement, it shall not be
necessary to produce or account for more than one such counterpart.
4.9 PARTIES BOUND; ASSIGNMENT. This agreement shall be binding on IGEN
and IGEN's successors, and assigns and shall inure to the benefit of
BM and BM's successors and assigns. Neither party may, without the
prior written consent of the other, assign any of its rights, duties
or obligations hereunder, and any such attempted assignment shall be
void.
(next page is signature page)
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IN WITNESS WHERE OF, the parties have executed this Agreement to be effective as
of the date first written above.
BOEHRINGER MANNHEIM GMBH IGEN INTERNATIONAL INCORPORATED
ppa.
/ /
/ /
/s/ Xxxxxx Xxxx /s/ Xxxxxx Xxxxxxxx
------------------------------- -------------------------------
Title: Senior Vice President Title: Chief Financial Officer
Accounting and Finance
ppa.
/s/ Xxxxx Xxxxx
-------------------------------
Title: Senior Vice President Legal
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