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OPTION AGREEMENT
THIS AGREEMENT (the "Agreement"), is made and effective this 18th day
of January, 2001, by and between Quantech Ltd., a Minnesota Corporation having
its principal office at 000 Xxxxxxxxx Xxxxxxx, Xxxxx 000 Xxxxx, Xxxxxxxxx, the
United States of America ("Quantech") and Mitsubishi Chemical Corporation, a
Japanese corporation having its principal office at 0-0, Xxxxxxxxxx 0-xxxxx,
Xxxxxxx-xx, Xxxxx, Xxxxx ("MCC").
RECITALS:
WHEREAS, Quantech is engaged in the manufacture and sale of the
Quantech Products (as defined in Paragraph 1.10 hereof);
WHEREAS, Quantech is developing a Four Port Instrument (as defined in
Paragraph 1.5 hereof) and wishes to have MCC exclusively distribute Quantech
Products in Japan; and
WHEREAS, MCC wishes to have an option to distribute and resell
Quantech Products exclusively in Japan after successful development of the Four
Port Instrument.
NOW, THEREFORE, in consideration of these premises, and the mutual
covenants and agreements hereinafter set forth and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties agree as follows:
1. DEFINITIONS
For the purposes of interpreting this Agreement, the following
definitions will apply and whenever appropriate, terms used in the singular will
also include the plural and vice versa:
1.1. Cartridge means an assembly that holds reagents and other
chemistries, receives a human sample (i.e. blood, urine,
etc.) and delivers and/or mixes, such sample and/or
reagents and/or chemistries, to or in an area that, allows
the Four Port Instrument to read a human diagnostic test,
which cartridge may contain a Flow Cell.
1.2. Effective Date means January 18, 2001.
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1.3. Exercise Date means the date that MCC notifies Quantech in
writing to exercise MCC's option granted from Quantech
pursuant to Paragraph 2, in accordance with the successful
evaluation by MCC of the Four Port Instrument which is
delivered from Quantech to MCC pursuant to Paragraph 3.
The performance requirements for the Four Port Instruments
is listed in Schedule A
1.4. Flow Cell means a device which (i) allows liquids to flow
through it and comprises a base piece which contains a
grating pursuant to the Grating SPR Technology; (ii) is
coated with a conductive surface; and (iii) has an
optically clear cover slip which is attached to the base
piece by a means that allows for fluid flow.
1.5. Four Port Instrument means a device that reads the events
that occur in a Cartridge or Flow Cell and can accommodate
reading sumultatenously for such cartridges or Flow cells
contains four ports for use in the Field of Medical
Diagnostics.
1.6. Grating SPR Technology means the use of thin conductive
films on a surface or surfaces of a grating or other
diffracting substrate to conduct chemical analysis.
1.7. Medical Diagnostics Field means those fields, the
applications and products which under current laws and
regulations of the United States would require approval of
the United States Food and Drug Administration if the
application or product incorporating the application were
sold for clinical use in the United States.
1.8. Peripheral Equipment means those devices that are sold in
conjunction with the Four Port Instrument and/or
Cartridges, including, but not limited to, wireless
communication devices that are able to transfer
information between the Four Port Instrument and the
communication devices.
1.9. Quantech Patents means; (i) those patents that Quantech
has exclusively licensed or sublicensed from The Serono
Companies, with right to sublicense, and are listed in
Schedule B of this Agreement; and (ii) those patents, all
right, title and interest of which are owned by Quantech
and which are listed in Schedule C of this Agreement.
Those patents to be granted on the Quantech Technology
(defined in Paragraph 1.12) shall be added in Schedule B
of this Agreement and shall be included in the Quantech
Patents.
1.10. Quantech Products means Four Port Instruments, Cartridges,
Flow Cells and Peripheral Equipment for Human Diagnostics
developed or to be developed by Quantech using Grating SPR
Technology covered by one or more valid claims of the
Quantech Patents.
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1.11. Quantech Technology means any technology owned by Quantech
as of the Effective Date and to be developed during the
term of this Agreement that (i) is useful for the
development of MCC Products and/or Quantech Products for
the Medical Diagnostics Field; and (ii) Quantech is not
restricted from licensing or sublicensing the technology
by an agreement which Quantech may have with a third
party. The Grating SPR Technology shall be included in the
Quantech Technology.
1.12. The Serono Companies means Applied Research Systems Ars
Holding N.V., a Netherlands Antilles corporation and
Serono Diagnostic S.A.
2. DISTRIBUTORSHIP OPTION TO MCC BY QUANTECH TO DISTRIBUTE QUANTECH PRODUCTS.
Quantech hereby grants to MCC an exclusive option to become the sole
and exclusive distributor to market, sell and distribute Quantech Products for
the Medical Diagnostics Field in Japan. MCC is entitled to fulfill such rights
to distribute the Four Port Instrument and Quantech Products through any of its
wholly owned subsidiaries.
3. NOTIFICATION TO MCC
3.1 Development of Four Port Instrument: If and when the Four
Port Instrument is successfully developed by Quantech,
Quantech shall promptly notify MCC of such fact (expected
to be on or about April 1, 2001) with sufficient
information and data, thereof MCC shall send to Quantech,
within 30 days of notice by Quantech, MCC persons to
evaluate within 10 days of arrival at Quantech the
performance of the Four Port Instrument pursuant to the
specifications of Schedule A and such Four Port Instrument
will be delivered to MCC after such evaluation of
performance. After such 10 days evaluation, if the Four
Port Instrument meets the specifications of Schedule A,
MCC shall notify in writing whether MCC will exercise
MCC's option or not, within five (5) days after the end of
the 10 days evaluation period (`'Notification Period"). In
case MCC will not notify in writing MCC will not exercise
MCC's option during Notification Period, Exercise Date
shall be deemed on the next day of the end of Notification
Period.
4. PAYMENTS
In consideration of the exercise of option by MCC , MCC shall pay
Quantech three hundreds and fifty thousands US Dollars (US$350,000-) within
forty-five (45) days from the Exercise Date.
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5. EXECUTION OF DISTRIBUTION AGREEMENT
If the option exercised hereunder, Quantech and MCC shall enter into
distribution agreement attached hereto as Schedule D.
6. TERM AND TERMINATION
6.1 Term of Agreement This Agreement shall commence on the
Effective Date and continue, unless earlier terminated
pursuant to Paragraphs 6.2, 6.3 or 6.4 of this Agreement,
until (i) the expiration of two (2) years from the
Effective Date; or (ii) the date of the payment pursuant
to Paragraph 4 above, whichever comes earlier. It is
hereby acknowledged that during the term of this
Agreement, Quantech may provide notice of availability of
evaluation of the Four Port Instrument and more than one
evaluation may occur during the term of this Agreement.
6.2 Termination by Quantech. If MCC is in material default of
any of its obligations under this Agreement, Quantech
shall have the right to terminate this Agreement by giving
thirty (30) days' written notice of termination specifying
the reason for termination, provided that such notice will
be of no effect and termination will not occur if the
specified default is cured prior to the expiration of said
thirty (30) day notice period.
6.3 Termination by MCC. If Quantech is in material default of
any of its obligations under this Agreement, MCC shall
have the right to terminate this Agreement by giving
thirty (30) days' written notice of termination specifying
the reason for termination, provided that such notice will
be of no effect and termination will not occur if the
specified default is cured prior to the expiration of said
thirty (30) day notice period.
6.4 Termination Resulting from Government Action. Either party
may, immediately upon notice, terminate this Agreement in
its entirety or with respect to any patent license granted
under the Agreement if: (1) such termination is necessary
to comply with an order or official request of the
government of the terminating party; or (2) normal conduct
of the business of the other party as a private enterprise
ceases or is substantially altered as a consequence of
action taken by governmental or other authority.
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7. INDEMNIFICATION
Quantech shall defend, indemnify and hold MCC and its shareholders,
directors, officers, agents, representatives, successors and assigns harmless
from and against any and all claims, damages, costs (including reasonable
attorneys' fees), judgments, fines, penalties, losses, diminution in value and
liabilities of and kind or nature: (a) arising out of the breach by Quantech of
any of its warranties, representations and covenants under this Agreement.
8. REPRESENTATIONS AND WARRANTIES
8.1 Quantech hereby warrants and represents to MCC as follows:
(a) Quantech is a corporation duly organized, validly
existing and in good standing under the laws of the
State of Minnesota.
(b) This Agreement has been duly authorized, executed and
delivered by Quantech and constitutes a valid and
binding obligation of Quantech, enforceable in
accordance with its terms, except as rights to
indemnification thereunder may be limited by applicable
law and except as and to the extent that the enforcement
thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws
relating to or affecting creditors' rights generally or
by general equitable principles. The execution, delivery
and performance of this Agreement and the consummation
of the transactions contemplated thereby have been
authorized by all necessary corporate action and do not
and will not conflict with or result in any material
breach of any of the provisions of, or constitute a
material default under, or result in a material
violation of, or require any authorization, consent or
approval, under the provisions of any organizational
charter, articles, by-laws, member control, operating or
other agreement, contract or instrument to which
Quantech is bound or affected, or any law, statute,
rule, regulation, judgment order or decree to which
Quantech is subject.
(c) Quantech is the sole and exclusive licensee, sublicensee
or owner, as the case may be, of all the rights of
Quantech Patents listed in Schedules B and C, and has
full right, power and authority to grant the option
under this Agreement.
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(d) All Quantech Patents listed in Schedule B are in force
having paid all necessary maintenance fees. Quantech has
no knowledge of information that would render any of the
listed patents invalid or unenforceable.
(e) Quantech has good and marketable title to the Quantech
Patents free and clear of any and all liens, pledges,
claims, licenses, assignments, conditional sales
contracts, agreements or encumbrances of any kind that
would impair Quantech's ability to grant the licenses
under this Agreement.
8.2 MCC hereby warrants and represents to Quantech as follows:
(a) MCC is a corporation duly organized, validly existing
and in good standing under the laws of Japan.
(b) This Agreement has been duly authorized executed and
delivered by MCC and constitutes a valid and binding
obligation of MCC, enforceable in accordance with its
terms, except as rights to indemnification thereunder
may be limited by applicable law and except as the
enforcement thereof may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar
laws relating to or affecting creditors' rights
generally or by general equitable principles. The
execution, delivery and performance of this Agreement
and the consummation of the transactions contemplated
thereby do not and will not conflict with or result in
any material breach of any of the provisions of, or
constitute a material default under, or result in a
material violation of, or require any authorization,
consent or approval, under the provisions of the Laws of
Japan or articles of incorporation of MCC or other
agreement, contract or instrument to which MCC is bound
or affected, or any law, statute, rule, regulation,
judgment order or decree to which MCC is subject.
9. MISCELLANEOUS
9.1 Assignment. Neither party may assign or otherwise transfer
its rights and obligations under this Agreement without
the prior written consent of the other party, to any third
party; provided, however, that either party may assign
this Agreement and/or any of the rights granted hereunder
without such
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consent (i) to its wholly owned subsidiary, and (ii) the
successor in interest (by merger, share exchange,
combination or consolidation of any type, operation of
Law, purchase or otherwise), if such assignee or successor
agrees to be bound by the terms hereof.
9.2 Entire Agreement. This Agreement, together with the
Schedules, constitutes the entire agreement of the parties
with respect to the subject matter hereof and supersedes
all previous proposals or agreements, oral or written, and
all negotiations, conversations or discussions heretofore
had between the parties related to the subject matter of
this Agreement. No modification of this Agreement or
waiver of any of its terms shall be binding upon the
parties unless said modification or waiver is in writing,
signed by both parties, and states that it is an amendment
to this Agreement.
9.3 Survival. Paragraphs 7, 8 and 9 shall survive termination
or expiration of this Agreement for any reason and
continue thereafter in full force and effect.
9.4 Discharge. This Agreement may not be released, discharged,
abandoned, changed or modified in any manner, except by an
instrument in writing signed on behalf of each of the
parties to this Agreement by their duly authorized
representatives.
9.5 Waiver. The failure of either party to enforce at any time
any of the provisions of this Agreement shall in no way be
construed to be a waiver of any such provision, nor in any
way to affect the validity of this Agreement or any part
of it or the right of either party after any such failure
to enforce each and every such provision. No waiver of any
breach of this Agreement shall be held to be a waiver of
any other or subsequent breach.
9.6 Force Majeure. Neither party shall be responsible for any
delay or failure in the performance of any obligation
hereunder due to strikes, lockouts, fires, floods, acts of
God, embargoes, wars, riots, or act or order of any
government or governmental agency.
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9.7 Execution in Counterparts. This 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.
9.8 Titles and Headings. The titles and headings to Sections
herein are inserted for the convenience of reference only
and are not intended to be a part of or to affect the
meaning or interpretation of this Agreement.
9.9 Construction. The parties agree that the restrictions,
covenants, agreements and obligations contained in this
Agreement are reasonable and necessary to protect the
legitimate interests of the parties. This Agreement shall
be construed without regard to any presumption or other
rule requiring construction hereof against the party
causing this Agreement to be drafted.
9.10 Benefit. Nothing in this Agreement, expressed or implied,
is intended to confer on any person other than the parties
to this Agreement or their respective permitted successors
or assigns, any rights, remedies, obligations or
liabilities under or by reason of this Agreement.
9.11 Notices. All notices, statements, reports, requests or
other communications to a party required or permitted
hereunder shall be in writing and shall be deemed
effective and properly given when sent by registered or
certified mail, or by confirmed facsimile transmission to
the person as indicated below or such other person as may
be designated by MCC or Quantech by such notice;
if to MCC, to:
Mitsubishi Chemical Corporation.
0-0, Xxxxxxxxxx 0-xxxxx,
Xxxxxxx-xx, Xxxxx 000-0000 Xxxxx
Attention: General Manager, Life Science Business
Initiatives Department
Facsimile number: (00) 0000-0000
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and, if to Quantech, to:
Quantech Ltd.,
000 Xxxxxxxxx Xxxxxxx, Xxxxx 000
Xxxxx, Xxxxxxxxx 00000 U.S.A
Attention: President
Facsimile number: (000) 000-0000
MCC and Quantech may change their respective
above-specified recipient and/or mailing address by notice
to the other party given in the manner herein prescribed.
All notices shall be deemed given on the day when actually
delivered as provided above (if delivered by facsimile) or
on the day shown on the return receipt (if delivered by
mail).
9.12 Severability. If any provision of this Agreement is held
invalid by a court of competent jurisdiction, the
remaining provisions shall nonetheless be enforceable
according to their terms. Further, if any provision is
held to be overbroad as written, such provision shall be
deemed amended to narrow its application to the extent
necessary to make the provision enforceable according to
applicable law and shall be enforced as amended.
9.13 Governing Law. This Agreement shall be construed in
accordance with the laws of the State of New York,
excluding its choice of law provisions. The parties
further agree to submit themselves to the non-exclusive
jurisdiction of the state and federal courts of the State
of New York in the event that any dispute arises under
this Agreement.
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IN WITNESS WHEREOF, each of the parties has caused this Agreement to
be executed in the manner appropriate to each as of the Effective Date.
MITSUBISHI CHEMICAL CORPORATION
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By: Xxxxxxx Xxxxxxxx
Its: General Manager, Life Science
Business Initiatives Department
QUANTECH LTD.
-----------------------------------------
By: Xxxxxx Xxxx
Its: Chief Executive Officer
