AMENDMENT TO LICENSE AGREEMENT
This Amendment to License Agreement, dated as of 31st October 1997, is by
and among Applied Research Systems ARS Holding N.V. ("ARS"); Laboratoires Serono
S.A. ("LSA"), the successor in interest to Serono Diagnostic S.A. ("Diagnostic")
(ARS, LSA and any successor thereof being collectively referred to as the
"Serono Companies") and Quantech Ltd. ("Quantech"), the successor in interest to
Spectrum Diagnostics, S.p.A. ("Spectrum").
RECITALS:
A. The Serono Companies and Quantech are parties to the License,
Sublicense and Purchase Agreement dated November 7th, 1991, attached
as Exhibit A (the "License Agreement").
B. Section 2 (a) (i) of the License Agreement reserves from the scope of
the license granted to Spectrum thereunder, among other reservations, a
right to develop and commercialize the SPR technology for the
development of products to be marketed in the name of the Serono
Companies and/or Serono Affiliates (the "SPR License Reservation").
C. Section 2 (d) of the License Agreement sets forth a series of
benchmarks of aggregate payments (the "Minimum Royalties") and Section
4(b) of the License Agreement sets forth sublicense, assignment and
transfer royalties (the "Transfer Royalties").
D. Section 2 (e) of the License Agreement grants the Serono Companies and
Serono Affiliates the right to demand a royalty-free right to use any
technology Spectrum has developed with respect to SPR (the "Grant Back
License"), subject to certain reservations.
E. Upon an Event of Default, Section 10 of the License Agreement (the
"Default Provision") provides that the license rights granted to
Spectrum shall terminate and revert back to the Serono Companies.
F. The Serono Companies and Quantech wish to amend and restate the License
Agreement as it concerns the SPR License Reservation, the Minimum
Royalties, the Transfer Royalties, the Grant Back License, and the
Default Provision.
In consideration of the agreements contained herein and other good and valuable
consideration, the sufficiency of which is hereby acknowledged, the parties
agree as follows:
1. Definitions. All of the defined terms in the License Agreement shall
have the same meanings in this Amendment to License Agreement.
2. SPR License Reservation. Upon Payment to the Serono Companies pursuant
to Section 2(d) of the License Agreement of Minimum Royalties of at
least $1,000,000 in the aggregate by December 31, 1997, the Serono
Companies, on behalf of themselves and the Serono Affiliates, shall
waive all of their rights under the SPR License Reservation.
3. Minimum Royalties. Section 2 (d) of the License Agreement shall be
amended to read as follows:
(d) Minimum Royalty: Notwithstanding anything stated in this
Agreement to the contrary, in the event that the royalty payments
actually paid to the Serono Companies by Spectrum and/or any Third
Party Transferee pursuant to Section 4 of this Agreement do not equal
the following amounts: (a) at least $500,000 in the aggregate by
December 31, 1993; (b) at least $850,000 in the aggregate by December
31,1995; (c) at least $1,000,000 in the aggregate by December 31, 1997;
(d) at least $1,150,000 in the aggregate by December 31, 1998; and (e)
at least $1,300,000 in the aggregate by December 31, 1999, then each
time one of the first three of such benchmarks is not met, the
cumulative royalties to be paid to the Serono Companies pursuant to
Section 4(d) hereof shall be increased by two million ($2,000,000)
dollars so that if all three initial benchmarks are not met, the
cumulative royalties payable to the Serono Companies pursuant to
Section 4(d) hereof shall be increased from eighteen million
($18,000,000) dollars to twenty-four million ($24,000,000) dollars.
Also if any one of the first three of such benchmarks is not met the
restrictions on the Serono Companies pursuant to Section 2(a)(i) hereof
that provide only the Serono Companies and/or Serono Affiliates shall
be allowed to market products developed pursuant to the retention of
the right to develop and commercialize SPR shall lapse. If Spectrum
shall receive any lump sum payment from any Third Party Transferee
under a Transfer Agreement prior to December 31, 1999, then Spectrum
shall accelerate payment of the minimum royalties set forth in this
Section 2(d) by paying up to twenty percent (20%) of such lump sum
payment to the Serono Companies. It is expressly understood that such
lump sum payments do not give rise to any additional royalty
obligations than would otherwise be payable to the Serono Companies
under Section 4(b) and shall not increase any aggregate minimum
royalties payable under this Section 2(d).
4. Section 4(b)(B) of the License Agreement shall be restated to read as
follows:
(B) Commencing on July 2, 1996, each Third Party Transferee
shall pay Third Party Royalties to Diagnostic equal to the 15%
Royalties. The obligation of Spectrum and any subsequent Third Party
Transferees to pay Third Party Royalties to the Serono Companies shall
terminate only in accordance with subparagraph 4(d) below.
5. Grant Back License. Section 2 (e) of the License Agreement shall be
amended to read as follows:
(e) Spectrum Obligation to provide technology: Upon
termination of this Agreement under Section 10 below, the Serono
Companies shall be entitled to a royalty-free license to make, use and
sell whatever technology Spectrum has developed with respect to SPR,
provided that such license shall be subject to the terms and conditions
of any Preferred Transfer Agreement (as that term is defined in Section
6 of the Amendment to License Agreement) which is in force and effect
at the time of such termination of this Agreement. This royalty-free
license shall not extend to any technology and/or data and/or patents
which Spectrum developed with a third party and with respect to which
the third party retained a proprietary right.
6. Default Provision. Upon an Event of Default under the Default
Provision, any sublicense granted by Quantech to a Preferred Third
Party Transferee under a Preferred Transfer Agreement prior to the
Event of Default shall survive termination of the license and
sublicense rights in the Licensed SPR Technology granted to Spectrum
and reversion of such license and sublicense rights to the Serono
Companies under the Default Provision, and such Preferred Transfer
Agreement shall continue in full force and effect under its own
terms and conditions. For purposes of this Section 6, a "Preferred
Third Party Transferee" shall be any third party which had assets
of $100 million or more at the end of the third party's fiscal year
immediately preceding the execution of such Transfer Agreement.
For purposes of this Section 6, a "Preferred Transfer Agreement"
shall be any Transfer Agreement with a Preferred Third Party Transferee
which is approved by LSA, which approval will not be unreasonably
withheld.
7. Execution in Counterparts. This Amendment to License Agreement may be
executed in one or more counterparts, all of which shall be considered
one and the same agreement, and shall become a binding agreement when
one or more counterparts have been signed by each party and delivered
to the other party.
IN WITNESS WHEREOF, the parties hereto have duly executed and delivered this
Amendment to License Agreement as of the date first above written.
APPLIED RESEARCH SYSTEMS LABORATOIRES SERONO S.A.
ARS HOLDING N.V.
/s/ Xxxxxxxx Xxxxxxxxxx
/s/ X. Xxxxxxxx-Soedhoe
/s/ T.P. Verhassee
By Xxxxxxxx Xxxxxxxxxx/ By T.P. Verhassee
S. Antonius-Soedhoe
Its Managing Directors Its Senior Vice President of Operations
QUANTECH LTD.
/s/ Jacques Theurillat
By Jacques Theurillat
Its Director
/s/ Xxxxxxx X. Xxxxxxx
By Xxxxxxx X. Xxxxxxx
Its COO and CFO
