Exhibit 10.23
February 12, 1999
Xx. X. Xxxxxxx Stoughton
Chief Executive Officer
Careside, Inc.
0000 Xxxxxxx Xxxxxxx
Xxxxxx Xxxx, XX 00000
Re: Distribution and Supply Agreement by and between Exigent
Diagnostics Inc. and SmithKline Xxxxxxx Clinical Laboratories, Inc.
dated November 7, 1996 (the "Agreement")
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Dear Xx. Xxxxxxxxx:
Please be advised that SBCL has agreed to amend the Agreement as set
forth below:
For purposes of Section 5.02 of the Agreement, the term "FDA APPROVAL"
shall mean "the date on which EXIGENT (i) completes development of the PRODUCT
and all of the tests specified on Exhibit A attached hereto and incorporated
herein, and (ii) receives the grant of a license by the federal Food and Drug
Administration for commercial sale and promotion of the PRODUCT in the United
States, including all of the tests specified on Exhibit A with labelling
acceptable to SBCL, based on an application for such license filed by EXIGENT
for such PRODUCT."
The definition of "FDA APPROVAL" set forth above shall apply to Section
5.02 of the Agreement, and for the remainder of the Agreement, the term "FDA
APPROVAL" shall have the meaning set forth in Section 1.10 of the Agreement. The
terms "EXIGENT," "PRODUCT," and "SBCL" as used in this letter shall have the
same meaning as set forth in the Agreement.
If you are in agreement with the content of this letter, please indicate
so by signing and dating both copies of this letter and returning one to me.
Very truly yours,
SMITHKLINE XXXXXXX SMITHKLINE XXXXXXX CLINICAL
HEALTHCARE SERVICES LABORATORIES, INC.
/S/ Xxxxx Xxxxxx /S/ Xxxx X. Okhesse, Jr.
--------------------- ----------------------------
Agreed to and Accepted by:
CARESIDE, Inc. f/k/a
EXIGENT DIAGNOSTICS INC.
By: /S/ X. Xxxxxxx Stoughton
-----------------------------
Title: CEO
Name: X. Xxxxxxx Stoughton
Exhibit A
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Glucose
Uric Acid
HDL-Cholesterol
Cholesterol
Cholesterol/HDL-Cholesterol Calculated
LDL-Cholesterol Calculated
Total Bilirubin
Triglycerides
ALT
AST
ALT/AST ratio
Alkaline Phosphates
Osmolality calculated
Creatine Kinase
Creatine Kinase MB
GGT
LDH
Aroylase
Sodium
Potassium
Chloride
Calcium
PT
aPTT
Urea Nitrogen (BUN)
Creatinine Bun/CR ratio
Total protein
Albumin
Globulin + A/G ratio calculated
Total Carbon Dioxide
DISTRIBUTION AND SUPPLY AGREEMENT
---------------------------------
This DISTRIBUTION AND SUPPLY AGREEMENT (the "Agreement"), made as of
the seventh day of November, 1996, by and between EXIGENT DIAGNOSTICS INC., a
Delaware corporation having a place of business at 000 Xxxxxxxxx Xxxx, Xxxx xx
Xxxxxxx, Xxxxxxxxxxxx ("EXIGENT") and SMITHKLINE XXXXXXX CLINICAL LABORATORIES,
INC., a Delaware corporation having a place of business at 0000 Xxxxx
Xxxxxxxxxxxx Xxxxxx, Xxxxxxxxxxxx, Xxxxxxxxxxxx ("SBCL").
BACKGROUND
----------
1. EXIGENT is the owner of device and reagent technology,
information and know-how relating to Point-of-Care Testing and Products, as
defined herein.
2. SBCL possesses resources of a financial, technical and commercial
nature and has expertise in commercializing clinical diagnostic testing services
such as those being developed by EXIGENT for the INDEPENDENT COMMERCIAL
LABORATORY INDUSTRY and other potential markets.
3. SBCL desires to obtain certain exclusive distribution rights for
the INDEPENDENT COMMERCIAL LABORATORY INDUSTRY from EXIGENT in the TERRITORY for
the PRODUCT.
4. EXIGENT wishes to appoint SBCL as distributor of PRODUCT in the
TERRITORY, subject to EXIGENT's rights outlined below, and to set forth terms
relating to EXIGENT's supply of PRODUCTS to SBCL, all upon the terms and
conditions set forth in this Agreement.
NOW, THEREFORE, in consideration of the covenants and obligations
expressed herein and intending to be legally bound, and otherwise to be bound by
proper and reasonable conduct, the parties agree as follows:
SECTION 1. DEFINITIONS
-----------
1.01. "AFFILIATES" shall mean any corporation, firm, partnership or other
entity, whether de jure or de facto, which directly or indirectly owns, is owned
by or is under common ownership with a party to this Agreement to the extent of
at least fifty percent (50%) of the equity (or such lesser percentage which is
the maximum allowed to be owned by a foreign corporation in a particular
jurisdiction) having the power to vote on or direct the affairs of the entity
and any person, firm, partnership, corporation or other entity actually
controlled by, controlling or under common control with a party to this
Agreement.
1.02. "AGENCY" shall mean any governmental regulatory authority in any
country of the TERRITORY responsible for granting approvals for the sale of the
PRODUCT.
1.03. "CO-PROMOTION" shall mean those activities normally undertaken by a
company's sales force to implement product marketing plans and strategies aimed
at encouraging the appropriate use of a particular product, in accordance with
governmental approvals. When used as a verb, "CO-PROMOTE" shall mean to engage
in such activities.
1.04. "DISTRIBUTOR FEE" shall mean the payments by SBCL to EXIGENT as
described in Section 3.01.
1.05. "EFFECTIVE DATE" shall mean the date upon which this Agreement is
effective and shall be the date of this Agreement first written above.
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1.06. "EXIGENT" shall mean Exigent Diagnostics Inc.
1.07. "EXIGENT CONFIDENTIAL INFORMATION" shall mean all information about
any elements of the EXIGENT TECHNOLOGY or any technology of a PARTY licensed for
use with respect to PRODUCT to the extent that such information as of the date
of disclosure to SBCL is not (i) known to SBCL other than by virtue of a prior
confidential disclosure to SBCL by EXIGENT or an authorized PARTY licensee- or
(ii) disclosed in published literature, or otherwise generally known to the
public through no fault or omission of SBCL; or (iii) obtained from a THIRD
PARTY free from any obligation of confidentiality to EXIGENT.
1.08. "EXIGENT TECHNOLOGY" shall mean all of EXIGENT's proprietary
technology and information, present and future, including, without Stations
technical assistance, know-how, trademarks, and PATENTS, that relate to the
PRODUCT and shall include, without Stations all present and future information
developed by or for EXIGENT, alone or with THIRD PARTIES,
1.09. "EXIGENT TRADEMARKS" shall mean those trademarks and service marks
owned or licensed by EXIGENT by which the PRODUCTS and any related services are
known.
1.10. "FDA APPROVAL" shall mean the date upon which (i) EXIGENT completes
development of the PRODUCT and of at least 25 of the tests specified by an
asterisk in Appendix A, attached hereto and incorporated herein, or, if EXIGENT
fails to complete development of the PRODUCT and at least 25 of the tests
specified by an asterisk in Appendix A, the date upon which SBCL waives the
requirement that EXIGENT complete all the tests specified in Appendix A in
accordance with Section 3.02- and (ii) the grant of a license by the federal
Food and Drug Administration for commercial sale and promotion of the PRODUCT in
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the United States, including all of the tests specified in Appendix A or those
tests agreed to by SBCL, with labeling acceptable to SBCL, based on an
application for such license filed by EXIGENT for such PRODUCT. The parties
understand that an FDA license is required prior to commercialization and
marketing of any PRODUCT in the United States, and EXIGENT will seek and obtain
an FDA license for all PRODUCTS.
1.11. "INDEPENDENT COMMERCIAL LABORATORY INDUSTRY" shall mean with respect
to the United States of America, the Republic of Mexico and Great Britain, any
laboratory that provides testing services to any PARTIES that are not members of
their direct delivery system. Laboratories that are owned by healthcare
providers and provider systems are included in this definition.
1.12. "LAUNCH" shall mean, with respect to a country within the TERRITORY,
the date of first commercial shipment of the PRODUCT by SBCL to customers in
that country after the receipt by EXIGENT or SBCL of marketing approval by the
relevant AGENCY in that country.
1.13. "PATENTS" shall mean all patents and patent applications which are
or become owned by EXIGENT, or to which EXIGENT otherwise has, now or in the
future, the right to grant licenses, which generically or specifically claim the
PRODUCT, a process for manufacturing the PRODUCT, an intermediate used in such
process or a use of the PRODUCT. Included within the definition of PATENTS are
all continuations, continuations-in-part, divisions, patents of addition,
reissues, renewals or extensions thereof and all SPC'S. Also included within
the definition of PATENTS are any patents or patent applications which
generically or specifically claim any improvements on the PRODUCT or
intermediates or
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manufacturing processes required or useful for production of the PRODUCT which
are developed by EXIGENT, or to which EXIGENT otherwise has the right to grant
licenses, now or in the future, during the term of this Agreement. The current
Est of patent applications and patents encompassed within PATENTS is set forth
in Appendix B attached hereto and incorporated herein.
1.14. "POINT OF CARE TESTING or POCT" shall mean human diagnostic testing
performed in the immediate vicinity of a patient by means of a portable device
at the time or shortly- after the time a test sample is obtained from the
patient and which produces rapid test results of equivalent quality to tests
performed in a traditional clinical laboratory. POCT shall exclude any
diagnostic testing which is performed at a central fixed laboratory within
hospitals, other health care facilities or commercial laboratories.
1.15. "PRODUCT" shall mean any and all diagnostic instruments or systems
developed by EXIGENT for use in POCT, prior to or during the TERM OF THIS
AGREEMENT. The PRODUCT shall include, without limitation, the instrument,
system, cartridges and reagents, products and software thereof developed by
E)AGENT or its agents for POCT, including but not limited to chemistry,
immunochemistry, coagulation, and hematology tests, test cartridges for
separating and metering blood, urine or other specimens, the specific tests
identified in Appendix A, an analyzer for such tests which includes computerized
data management components and software.
1.16. "PRODUCT INFORMATION" shall mean information to be supplied by
EXIGENT, and information that EXIGENT has caused or will cause to be supplied to
SBCL, relevant to the scientific or legal aspects of, or manufacturing and
development of, PRODUCT.
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PRODUCT INFORMATION shall also include information relating to the scientific or
legal aspects of, or manufacturing and development of PRODUCT generated or
otherwise in the possession of any THIRD PARTY to whom EXIGENT has granted
rights.
1.17. "SBCL" shall mean SmithKline Xxxxxxx Clinical Laboratories, Inc. and
its AFFILIATES.
1.18. "SBCL CONFIDENTIAL INFORMATION" shall mean all information about
SBCL, its business and operations, to the extent that such information as of the
date of disclosure to EXIGENT is not (i) known to EXIGENT other than by virtue
of a prior confidential disclosure to EXIGENT by SBCL; or (ii) disclosed in
published literature, or otherwise legally known to the public through no fault
or emission of EXIGENT; or (iii) obtained from a PARTY free from
any obligation of confidentiality to SBCL. SBCL CONFIDENTIAL INFORMATION does
not include EXIGENT CONFIDENTIAL INFORMATION.
1.19. "SPC'S" shall mean a right based upon a PATENT to exclude others
from making, using or selling PRODUCT, such as a Supplementary Protection
Certificate.
1.20. "TERM OF THIS AGREEMENT" shall mean the term as defined in Section
14.
1.21. "TERRITORY" shall mean the United States of America, Great Britain,
the Republic of Mexico, Spain, South Africa, Singapore, Malaysia, Indonesia,
Australia, Chile, Argentina, France and Germany to the extent that and for so
long as SBCL owns, operates or manages a clinical laboratory therein on or
before December 31, 2000; provided, however, that prior to March 1, 1997 SBCL
shall delete three countries of its choice from the definition of the TERRITORY
by written notice to EXIGENT. With respect to countries outside the United
States of America, the Republic of Mexico, and Great Britain, when either SBCL
established a
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clinical laboratory or EXIGENT establishes an infrastructure in a country in the
TERRITORY, both parties agree to negotiate a mutually acceptable definition of
the INDEPENDENT COMMERCIAL LABORATORY INDUSTRY for that country.
1.22. "THIRD PARTY(IES)" shall mean any party other than SBCL and EXIGENT.
1.23. "TRADEMARK LICENSE" shall mean the license granted by EXIGENT to
SBCL pursuant to Section 10.01.
SECTION 2. APPOINTMENT
-----------
2.01. Subject to the terms and conditions hereof, EXIGENT hereby appoints
SBCL as distributor and marketer of PRODUCT in the TERRITORY, subject to
EXIGENT's right pursuant to Section 2.02 to CO-PROMOTE the PRODUCT itself or
through AFFILIATES or PARTIES in the TERRITORY, in accordance with Section 2.03.
Pursuant to this appointment, SBCL shall have the right to use, market and
distribute the PRODUCT in the TERRITORY: (i) on an exclusive basis within the
INDEPENDENT COMMERCIAL LABORATORY INDUSTRY; and (H) for those countries in which
SBCL has the exclusive rights described in subparagraph (i) above, on a
nonexclusive basis, to hospitals and healthcare systems, other healthcare
providers, managed care organizations and insurers, subject to the terms and
conditions of this Agreement. For those countries in which SBCL does not have
the exclusive rights described in subparagraph (i) above, SBCL shall have only
such rights - exclusive or non-exclusive - as may be negotiated by the parties.
2.02. EXIGENT shall give SBCL prompt written notice at the time that
marketing approval for the PRODUCT has first been granted by the relevant AGENCY
in a country within
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the TERRITORY. In order to exercise the right granted by EXIGENT to SBCL in
Section 2.01(i) above, within 120 days after receipt of such written notice SBCL
shall provide an initial purchase order and rolling forecast for PRODUCTS for
such country. If SBCL does not provide such purchase order and forecast, SBCL
shall have no rights under Section 2.01 for that country and shall have only
such nonexclusive distribution rights as the parties shall agree after good
faith negotiation. During the TERM OF THIS AGREEMENT, EXIGENT shall have the
right to market and sell the PRODUCT itself or through AFFILIATES or THIRD
PARTIES, in accordance with Section 2.03 and@ have the right to sign exclusive
agreements with a PARTY if SBCL has not submitted an initial purchase
order and forecast within such 120 day period.
2.03. From the EFFECTIVE DATE, EXIGENT and its AFFILIATES shall not,
directly or indirectly, license, distribute, market or sell the PRODUCT in the
TERRITORY to the INDEPENDENT COMMERCIAL LABORATORY INDUSTRY. EXIGENT shall use
its reasonable best efforts to ensure that its customers do not market or sell
PRODUCT to the INDEPENDENT COMMERCIAL LABORATORY INDUSTRY. To the extent that
such best efforts do not eliminate such marketing or sale the DISTRIBUTOR FEE
shall be reduced by $10,000 per (country; provided that the aggregate reduction
shall not exceed the amount of the DISTRIBUTOR FEE.
2.04. Nothing within this Agreement or otherwise shall restrict the
ability of SBCL to enter into similar commercial licensing, supply and
distribution arrangements such as this Agreement with POCT diagnostic and
manufacturing companies other than EXIGENT.
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2.05. Nothing within this Agreement or otherwise shall restrict the
ability of SBCL, in its sole discretion, to determine whether to exercise its
rights pursuant to this AGREEMENT or to commercial and market PRODUCT in any
country of the TERRITORY.
2.06. Nothing in this Agreement or otherwise shall prevent EXIGENT from
selling PRODUCT to hospitals and healthcare systems, physicians and physician
groups, other healthcare providers, managed care organizations and insurers to
the extent such persons or entities are performing laboratory services for their
own patients or insureds, or patients within their provider organizations or
healthcare systems or networks. Nor shall anything in this Agreement prevent
EXIGENT from selling PRODUCT to physicians or physician groups, and to others
who provide similar d,- minimis levels of laboratory services, in a manner not
intending significant commercial growth in laboratory services as a source of
revenue.
2.07. As between EXIGENT and SBCL, SBCL shall have the exclusive rights to
retain and use all data and information derived from the PRODUCTS purchased and
placed by SBCL.
SECTION 3. DISTRIBUTOR FEES
----------------
3.01. Commencing on the date of FDA APPROVAL, SBCL shall pay EXIGENT an
annual DISTRIBUTOR FEE in the amount of $100,000 (subject to adjustment as
provided in Sections 3.02 and 3.03), which DISTRIBUTOR FEE shall be non-
refundable to SBCL except as provided in Section 3.03.
3.02. If EXIGENT fails to complete development of the PRODUCT and obtain
FDA APPROVAL for at least 25 of the tests specified by an asterisk in Appendix A
by December 31,
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2000, SBCL, in its discretion, shall have the option to terminate this Agreement
pursuant to Section 14.03(a) or to waive the requirement that EXIGENT obtain FDA
APPROVAL for all the tests specified in Appendix A by December 31, 2000 and,
upon such waiver, to reduce the DISTRIBUTOR FEE by $4,000 (to a maximum
aggregate reduction of $100,000 for each test not completed and cleared by the
FDA by December 31, 2000 and the minimum requirements in Section 5.02 will be as
mutually agreed by the parties. In the event that EXIGENT obtains FDA APPROVAL
for at least 36 of the tests specified in Appendix A (including at least 25
tests specified by an asterisk) the annual DISTRIBUTOR FEE shall be increased to
$125,000 with the $25,000 increase prorated for the year in which this target is
attained. In the event that, upon request from SBCL, EXIGENT grants exclusive
distribution rights to SBCL. in a country outside the TERRITORY, the annual
DISTRIBUTOR FEE shall be increased by $25,000 for each such country. In the
event that EXIGENT develops a hematology diagnostic,, instrument or system for
POCT, SBCL shall have a right of first negotiation with respect to distribution
of such an instrument in the TERRITORY. Any fees paid for any such hematology
diagnostic instrument or system shall be in addition to those otherwise payable
under this AGREE
3.03. In the event that any person or party initiates any legal or
administrative proceeding challenging the validity, scope or enforceability of a
PATENT in the United States, such as by opposing the grant of the PATENT, or
challenging SBCL's ability to market such PRODUCT in the United States, and the
claims in the PATENT which cover PRODUCT are held to be invalid or otherwise
unenforceable by a court or other legal or administrative tribunal from which no
appeal is or can be taken or SBCL is prohibited from or ordered to cease
marketing the PRODUCT in the United States, then EXIGENT shall return in full
the DISTRIBUTOR FEE
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paid by SBCL to EXIGENT for that year, prorated during the time of prohibition,
and the annual DISTRIBUTOR FEE for periods following such prohibition shall be
reduced to zero except for amounts, if any, with respect to any hematology
instrument or system. SBCL shall have the right to offset any such amounts due
SBCL from EXIGENT under this Section against any DISTRIBUTOR FEES due to
EXIGENT.
SECTION 4. COMPULSORY LICENSES AND THIRD PARTY LICENSES
--------------------------------------------
4.01. In the event that a governmental Agency in any country or territory,
grants or compels EXIGENT to grant a license to any PARTY for PRODUCT, SBCL
shall have the benefit in such country or territory of the terms granted to such
THIRD PARTY to the extent that such terms are more favorable to the PARTY than
those granted to SBCL under this Agreement.
4.02. If, during the term of this Agreement, EXIGENT is either compelled
by a court of competent jurisdiction to seek a license from any THIRD PARTY, or
if EXIGENT, in its sole discretion, deems it necessary to seek a license from
any THIRD PARTY in order- to avoid infringement during the exercise of its
fights herein granted, EXIGENT shall pay any royalties or other fees paid to
such THIRD PARTY under such license. In the event that in fight of such court
order or patent infringement EXIGENT elects to withdraw the PRODUCT from
distribution in any such country EXIGENT shall have the right to do so on the
following terms. In the event of withdrawal from a country in the TERRITORY in
which LAUNCH has not yet occurred, EXIGENT shall not have any obligation to pay
any amount to SBCL by reason of such withdrawal. If the withdrawal is from a
country in the TERRITORY in which LAUNCH has occurred, then EXIGENT shall
reimburse SBCL for SBCL's full purchase price for any
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PRODUCT returned to SBCL or EXIGENT by SBCL's customers in such country as a
consequence of such withdrawal. Upon such reimbursement, title to the PRODUCT
shall revest in EXIGENT or its designee.
SECTION 5. SUPPLY OF PRODUCT
-----------------
5.01. Until the earlier of (i) December 31, 2000 or (ii) earlier
termination of this Agreement, SBCL shall supply EXIGENT with clinical samples
to be reasonably agreed to by the parties to enable EXIGENT to validate tests
for its POCT research and development of PRODUCT. SBCL shall supply such
samples to EXIGENT and EXIGENT shall reimburse SBCL for SBCL's internal costs,
if any, for retrieving such samples. EXIGENT shall bear all costs of
transporting such samples from SBCL's facilities to EXIGENT's facilities and all
associated liabilities for transport of such samples. EXIGENT also shall bear
all cost and liability associated with such validation studies. (EXIGENT does
not hereby assume liability properly assessed against any third party.)
5.02. Within 90 days after FDA APPROVAL, or when otherwise agreed upon by
the parties, SBCL and EXIGENT shall agree upon terms (including price per each
unit of PRODUCT) for supply of PRODUCTS by EXIGENT to SBCL. EXIGENT shall
supply SBCL with all of its requirements of PRODUCT as reasonably requested by
SBCL and shall ship such PRODUCTS from EXIGENT's facility to the facility
specified by SBCL. EXIGENT shall have the fight and obligation to supply SBCL
with all of SBCL's requirements for PRODUCT (including packaging). SBCL shall
pay EXIGENT an amount equal to EXIGENT's production costs plus XXX [Omitted
pursuant to a request for confidential treatment. The material has been filed
separately with the Securities and Exchange Commission.] for the instruments and
the,, cartridges and reagents comprising the PRODUCTS.
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For purposes of this Section 5.02, EXIGENT's production costs will be all direct
and indirect manufacturing costs, overheads, packaging and labeling related to
the manufacture of POCT PRODUCTS. Costs not related to the manufacture of POCT
PRODUCTS, including without limitation research and development, administration,
sales and marketing, distribution and other miscellaneous non-manufacturing
costs, shall not be included in production costs. Warranty costs shall be
included in production costs but shall not be subject to the XXX [Omitted
pursuant to a request for confidential treatment. The material has been filed
separately with the Securities and Exchange Commission.] markup. Upon
FDA APPROVAL, SBCL shall purchase a minimum of XXXXXXXX [Omitted
pursuant to a request for confidential treatment. The material has been filed
separately with the Securities and Exchange Commission.] instruments during the
first three month period commencing with FDA APPROVAL, XXXXXXXXXXXXX [Omitted
pursuant to a request for confidential treatment. The material has been filed
separately with the Securities and Exchange Commission.] instruments
during the second three month period and thereafter XXXXXXXXXXXXXXXX [Omitted
pursuant to a request for confidential treatment. The material has been filed
separately with the Securities and Exchange Commission.] instruments
during each subsequent three month period for the TERM OF THIS AGREEMENT. Upon
FDA APPROVAL during the five one-year periods following such FDA APPROVAL, SBCL
shall purchase minimum quantities of cartridges as follows:
Year 1 XXXXXXX [Omitted pursuant to a request for
confidential treatment. The material
has been filed separately with the
Securities and Exchange Commission.]
cartridges
Year 2 XXXXXXXXX [Omitted pursuant to a request for
confidential treatment. The material
has been filed separately with the
Securities and Exchange Commission.]
cartridges
Year 3 XXXXXXXXX [Omitted pursuant to a request for
confidential treatment. The material
has been filed separately with the
Securities and Exchange Commission.]
cartridges
Year 4 XXXXXXXXX [Omitted pursuant to a request for
confidential treatment. The material
has been filed separately with the
Securities and Exchange Commission.]
cartridges
Year 5 XXXXXXXXX [Omitted pursuant to a request for
confidential treatment. The material
has been filed separately with the
Securities and Exchange Commission.]
cartridges
SBCL shall have the right to audit EXIGENT's books and records with respect to
documentation of EXIGENT's costs.
5.03. SBCL shall submit rolling forecasts with six month projections for
the PRODUCT to EXIGENT on a quarterly country by country basis. SBCL shall
place firm purchase orders with EXIGENT that are consistent with the current
three month projection in such forecasts and that contain a delivery date that
reflects quantities of instruments and cartridges that are consistent with the
amounts projected in the current forecast.
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5.04. XXXXX [Omitted pursuant to a request for confidential treatment. The
material has been filed separately with the Securities and Exchange
Commission.]
5.05. To the extent of the quantities specified in SBCL's rolling
forecast, SBCL shall have priority with respect to EXIGENT's manufacturing
output vis a vis other customers.
5.06. Payment for PRODUCT shipped shall be net 45 days FOB EXIGENT's
shipping point.
5.07. In the event that EXIGENT develops a successor diagnostic instrument
or system and determines to cease production of an earlier model (including the
cartridges, reagents and other consumable supplies for the earlier model),
EXIGENT agrees that it shall continue to supply the earlier model for 12 months
from the date of approval of the successor PRODUCT in each country in the
TERRITORY and to supply the cartridges, reagents and other consumable supplies
for the earlier model for 24 months from such date or in either case for such
longer period of time as EXIGENT makes such PRODUCTS available to other
customers.
SECTION 6. DEVELOPMENT AND COMMERCIALIZATION
---------------------------------
6.01. EXIGENT shall have full control and authority over development of
PRODUCT and registration of PRODUCT in each country of the TERRITORY. EXIGENT
will exercise its reasonable efforts and diligence in developing PRODUCT in
accordance with its business, legal, medical and scientific judgment, and in
undertaking investigations and actions required to obtain appropriate
governmental approvals to market PRODUCT in the TERRITORY. EXIGENT shall bear
all responsibility for development of the PRODUCT and for seeking and obtaining,
at its
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own expense, FDA APPROVAL of the PRODUCT. All such activity shall be undertaken
at EXIGENT's expense. With respect to any meetings or presentations to AGENCIES
with respect to initial approval of the PRODUCT, SBCL agrees to cooperate with
EXIGENT in such meetings or presentations to the extent reasonably requested by
EXIGENT.
6.02. SBCL shall have full control and authority over SBCL's efforts to
commercialize the PRODUCT for the INDEPENDENT COMMERCIAL LABORATORY INDUSTRY in
the TERRITORY. SBCL will exercise its reasonable efforts and diligence in
commercializing PRODUCT in accordance with its business, legal, medical and
scientific judgment. All such commercialization activity shall be undertaken at
SBCL's expense. To the extent that SBCL has rights to distribute the PRODUCT S
in a country in the TERRITORY pursuant to Section 2.01(ii), each party shaft
have full control and authority over its efforts to commercialize the PRODUCT
for markets other than those reserved exclusively to SBCL under Section 2.01(i).
6.03. EXIGENT shall keep SBCL informed of progress of EXIGENT's efforts to
develop and obtain regulatory approval, including FDA APPROVAL, for PRODUCT.
SBCL shall keep EXIGENT informed of progress of SBCL's efforts to commercialize
PRODUCT.
6.04. EXIGENT shall provide to SBCL, at SBCL's request, technical
assistance within its area of expertise concerning commercialization of PRODUCT.
Provision of such technical assistance shall include, but not be limited to,
visits by EXIGENT personnel to SBCL, at EXIGENT's expense, and visits by SBCL
personnel to EXIGENT, at SBCL's expense, at times and for periods of time upon
which the parties will agree. EXIGENT will be responsible, at its costs, for
maintenance and repair necessary to any malfunctioning instruments comprising
part of
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the PRODUCT and will be available at reasonable times as the parties may agree
to SBCL or SBCL's customers to answer, questions and assist in training.
6.05. The parties shall promptly notify each other of any inspection or
other action taken or threatened by any AGENCY or with respect to PRODUCT of
which they become aware.
6.06. Following initial approval of the PRODUCT in a country, in the event
a meeting is scheduled between the FDA or any other AGENCY with EXIGENT or SBCL
regarding marketing or distribution of PRODUCT, including without limitation any
contemplated recall of the PRODUCT, EXIGENT shall give SBCL, or SBCL shall give
EXIGENT, as applicable, reasonable advance notice of such meeting in order to
allow the parties to discuss the contents of the meeting before such meeting
takes place. EXIGENT and SBCL shall consider each time whether the other
party's representatives' attendance and participation in such meeting may be
advisable and/or required by the FDA or other AGENCY.
6.07. The parties agree throughout the TERM OF THIS AGREEMENT to maintain
records and otherwise establish procedures to assure compliance with all
regulatory, professional, and other legal requirements which apply to the
promotion and marketing of PRODUCT.
SECTION 7. PERFORMANCE BY SBCL, PRODUCT MARKETING
--------------------------------------
7.01. In its capacity as distributor of PRODUCT in the INDEPENDENT
COMMERCIAL LABORATORY INDUSTRY within the TERRITORY, SBCL shall have, subject to
EXIGENT's CORPORATION rights for customers other than those in the INDEPENDENT
COMMERCIAL LABORATORY INDUSTRY to which SBCL has exclusive rights, the sole and
exclusive responsibility for all aspects of selling and distributing PRODUCT
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to customers in the TERRITORY, including without limitation, warehousing,
shipping, physical distribution, inventory administration, billing, credit and
collections, rebate administration, contract administration and returned goods.
In discharging its duties and responsibilities, SBCL shall be held to a standard
of performance no less than that which it would exert in support of the
marketing and distribution of one of its own products and services with a
comparable profile and market size.
7.02. SBCL shall be responsible for the preparation of and cost relating
to all pre- and post-LAUNCH advertising and promotional material and literature
in connection with the marketing and promotion of PRODUCT for the INDEPENDENT
COMMERCIAL LABORATORY INDUST in the TERRITORY. The parties expressly agree that
neither shall be required to, and to the extent proscribed by law shall not
directly or indirectly voluntarily, confer with the other on advertising and
promotional material and literature for markets other than the INDEPENDENT
COMMERCIAL LABORATORY INDUSTRY.
7.03. SBCL shall be responsible for training its professional sales force
in connection with the promotion of PRODUCT.
7.04. With respect to each country in the TERRITORY, SBCL and EXIGENT
agree to limit their respective claims of efficacy and safety for the PRODUCT in
that country to those which are consistent with the regulatory approval received
for the PRODUCT in that country. Neither party shall add, delete or modify
claims of efficacy and safety in the advertising and promotion of the PRODUCT,
nor make any changes in advertising or promotional materials and literature,
unless authorized by the other party in writing. Throughout the TERM OF THIS
-17-
AGREEMENT, the parties shall advertise and promote the PRODUCT in strict
adherence to applicable regulatory, professional and legal requirements.
SECTION 8. PRODUCT RECALLS
---------------
8.01. SBCL and EXIGENT shall share equally in the direct documented costs
incurred by each of them with respect to participating in any withdrawal or
recall, except that EXIGENT shall solely bear the direct costs incurred in
connection with such withdrawal or recall and shall reimburse SBCL for any such
costs incurred by it, in cases where such withdrawal or recall was caused by
EXIGENT by either of the following circumstances:
(a) a defect in manufacturing (i.e. manufacturing not in
accordance with FDA approved specifications), including any adulteration,
mislabeling or misbranding of PRODUCT if EXIGENT was responsible for the stage
of manufacturing in which such adulteration, mislabeling or misbranding
occurred, or
(b) any misrepresentation or willful omission committed by
EXIGENT, its employees, officers, directors, agents, representatives,
independent contractors or AFFILIATES in connection with PRODUCT safety or
efficacy data or information submitted or omitted from submission to any AGENCY.
8.02. SBCL shall solely bear the direct costs incurred in connection with
any PRODUCT withdrawal or recall and shall reimburse EXIGENT for any such costs
incurred by it, in the event that such withdrawal or recall was caused by:
-18-
(a) any misrepresentation made by SBCL or its employees,
officers, directors, agents, representatives, independent contractors or
AFFILIATES in connection with the promotion of PRODUCTS, or
(b) any negligence or wrongful act committed by SBCL or its
employees, officers, directors, agents, representatives, independent
contractors or AFFILIATES, including but not limited to improper storage and/or
handling of PRODUCT, in the distribution of PRODUCT.
SECTION 9. EXCHANGE OF INFORMATION AND CONFIDENTIALITY
-------------------------------------------
9.01. Immediately after the EFFECTIVE DATE, EXIGENT shall disclose all
PRODUCT INFORMATION to SBCL and any other information in its possession relating
to PRODUCT or PRODUCT relevant to the commercialization of the PRODUCT.
Thereafter, EXIGENT shall disclose to SBCL, on an ongoing basis in a timely
manner appropriate to commercialization of the PRODUCT, all information and data
on PRODUCT relevant to such commercialization, verbal or written, filed or
submitted by EXIGENT, or its designated representatives, and/or THIRD PARTY
licensees and/or commercial partners for PRODUCT with an AGENCY or information
received by any of them from any AGENCY. Subject to other provisions of this
Agreement, SBCL shall have the right to utilized, such information and data or
any portion thereof in relation to the performance of its duties and
responsibilities hereunder.
9.02. During the TERM OF THIS AGREEMENT and for five (5) years thereafter,
irrespective of any termination earlier than the expiration of the TERM OF THIS
AGREEMENT, neither SBCL or EXIGENT nor any of their respective AFFILIATES shall
use, reveal or disclose
-19-
to THIRD PARTIES any confidential information received from the other party
under this Agreement (including, without Stations SBCL CONFIDENTIAL INFORMATION
and EXIGENT CONFIDENTIAL INFORMATION) without first obtaining the written
consent of the other party, except as (i) may be otherwise provided herein, (ii)
may be required for purposes of investigating, manufacturing and marketing
PRODUCT pursuant to the terms of an appropriate Confidentiality Agreement, or
for securing essential or desirable authorizations, privileges or rights from
governmental agencies, (iii) is required to be disclosed to a governmental
AGENCY or is otherwise required by law, or (iv) is necessary to file or
prosecute patent applications concerning PRODUCT or to carry out any litigation
concerning PRODUCT. This confidentiality obligation shall not apply to such
information which is or becomes a matter of public knowledge, or is in the
possession of the receiving party on the date hereof, or is disclosed non-
confidentially to the receiving party by a THIRD PARTY having the right to do
so, or is subsequently and independently developed by employees of the receiving
party or AFFILIATES thereof who had no knowledge of the confidential information
disclosed. The parties shall take reasonable measures to assure that no
unauthorized use or disclosure is made by others to whom access to such
information is granted.
9.03. No public announcement or other disclosure to THIRD PARTIES
concerning the existence or terms of this Agreement shall be made, either
directly or indirectly, by SBCL or EXIGENT, or their respective AFFILIATES,
except as may be legally required or otherwise deemed advisable under the U.S.
Federal Securities laws, based upon the written opinion of outside legal
counsel, without first obtaining the approval of the other party and agreement
upon the nature and text of such announcement or disclosure, which approval
shall not be
-20-
unreasonably withheld. All publicity relating to this Agreement shall be
jointly planned and coordinated by and between SBCL and EXIGENT.
9.04. Nothing herein shall be construed as preventing SBCL from disclosing
any information received from EXIGENT to an AFFILIATE, sublicensee or
distributor of SBCL, provided, in the case of a sublicensee or distributor, such
sublicensee or distributor has undertaken a similar obligation of
confidentiality with respect to the confidential information.
9.05. All confidential information disclosed by one party to the other
shall remain the intellectual property of the disclosing party. In the event
that a court or other legal or administrative tribunal, directly or through an
appointed master, trustee or receiver, assumes partial or complete control over
the assets of a party to this Agreement based on the insolvency or bankruptcy of
such party, the bankrupt or insolvent party shall promptly notify the court or
other tribunal (i) that confidential information received from the other party
under this Agreement remains the property of the other party and (ii) of the
confidentiality obligations under this Agreement. In addition, the bankrupt or
insolvent party shall, to the extent permitted by law, take all steps necessary
or desirable to maintain the confidentiality of the other party's confidential
information and to ensure that the court, other tribunal or appointee maintains
such information in confidence in accordance with the terms of this Agreement.
Nothing in this Agreement shall be construed as preventing or in any way
inhibiting SBCL from other purpose. complying with statutory and regulatory
requirements governing the sale or other distribution of PRODUCT in any manner
which it reasonably deems appropriate, including, for example, by disclosing to
regulatory authorities confidential or other information received from EXIGENT
or THIRD PARTIES.
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9.06. During the TERM OF THIS AGREEMENT, each party shall promptly inform
the other party of any information that it obtains or develops regarding the
utility or safety of PRODUCT.
SECTION 10. TRADEMARKS AND NON-PROPRIETARY NAMES
------------------------------------
10.01. In accordance with the terms and subject to the conditions set
forth in this AGREEMENT, EXIGENT hereby grants to SBCL a non-exclusive, non-
transferable, royalty-free license to use the EXIGENT TRADEMARKS without
alteration solely for the purpose and in the context of identifying the origin
of the PRODUCTS and all related services in advertising and promotional
materials in the TERRITORY during the TERM OF THIS AGREEMENT and not for any
other purpose.
10.02. By accepting the TRADEMARK LICENSE, SBCL does not become the owner
of the EXIGENT TRADEMARKS and acknowledges EXIGENT's ownership of the EXIGENT
TRADEMARKS including any current and future registrations thereof SBCL shall not
at any time do, permit or cause to be done anything inconsistent with such
ownership. SBCL further acknowledges that, none of this AGREEMENT, the
TRADEMARK LICENSE or the use by SBCL of the EXIGENT TRADEMARKS shall create in
SBCL's favor any right, title or interest in or to the EXIGENT TRADEMARKS by
SBCL and that all use of the EXIGENT TRADEMARKS and all of the goodwill
associated therewith shall inure solely to SBCL's benefit.
10.03. SBCL shall use the EXIGENT TRADEMARKS and any associated logos in
the form and manner, and with all appropriate legends, that are currently or
then being used by
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EXIGENT, as such form and manner may be modified from time to time during the
TERM OF THIS AGREEMENT. SBCL shall ensure that each use of any of the EXIGENT
TRADEMARKS indicates that such EXIGENT TRADEMARK is EXIGENT's property. Without
limiting any of the foregoing and except as expressly provided otherwise in this
Agreement, SBCL shall, prior to any proposed use of the EXIGENT TRADEMARKS, give
EXIGENT at least thirty (30) days' prior written notice of exactly how SBCL
proposes to use each such EXIGENT TRADEMARK, which notice shall include drawings
of all advertising copy, if any. SBCL shall make whatever changes EXIGENT
requests in the use of any EXIGENT TRADEMARKS before making any public
distribution thereof. Without EXIGENT's prior written consent, SBCL shall not
use any EXIGENT TRADEMARK in any country in the TERRITORY until such EXIGENT
TRADEMARK has been registered in such country. SBCL shall execute any and all
Registered User Agreements reasonably necessary to protect the EXIGENT
TRADEMARKS in each country, if applicable.
10.04. SBCL shall, at all times during the TERM OF THIS AGREEMENT, abide
by EXIGENT's standards for the quality of products and services marketed,
distributed or licensed under the EXIGENT TRADEMARKS as provided by EXIGENT to
SBCL from time to time during the TERM OF THIS AGREEMENT upon ninety (90) days'
prior written notice. SBCL understands and acknowledges that SBCL's adherence
to such quality standards constitutes an essential condition of the TRADEMARK
LICENSE.
10.05. EXIGENT may discontinue use of any of the EXIGENT TRADEMARKS at any
time, and SBCL shall thereafter cease to use any such EXIGENT TRADE . In
addition,
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EXIGENT may alter any EXIGENT TRADEMARK, or add a new trademark or service xxxx,
at any time and from time to time during the TERM OF THIS AGREEMENT.
10.06. This AGREEMENT is not intended to convey and does not convey to
SBCL the right to use any trademarks or service marks of EXIGENT other than the
EXIGENT TRADEMARKS.
10.07. SBCL shall ensure that none of the EXIGENT TRADEMARKS or any
confusingly similar xxxx appears in any portion of any trademark or service xxxx
of SBCL or of any marks or names under which SBCL may do business without the
prior written consent of EXIGENT in its sole discretion.
SECTION 11. PATENT PROSECUTION AND LITIGATION
---------------------------------
11.01. EXIGENT agrees to keep SBCL promptly and fully informed of the
course of patent prosecution or other proceedings. SBCL shall hold all
information disclosed to it under this section as confidential subject to the
provisions of Sections 9.02 and 9.03.
11.02. Each party shall have and retain sole and exclusive title to all
inventions, discoveries and know-how which are made, conceived, reduced to
practice or generated by its respective employees, agents, or other persons
acting under its authority in the course of or as a result of this Agreement.
Ownership in all such inventions, discoveries and know-how made, conceived,
reduced to practice or generated jointly by employees, agents, or other persons
acting under the authority of both parties in the course of or as a result of
this Agreement will be negotiated on a case by case basis, and in the event
there is no agreement from such negotiation, such ownership shall be divided
equally. Except as expressly provided in this Agreement or as
-24-
subsequently negotiated pursuant to the foregoing sentence, each joint owner may
make, use, sell, keep, license, assign, or mortgage such jointly owned
inventions, discoveries and know-how, and otherwise undertake all activities a
sole owner might undertake with respect to such inventions, discoveries and
know-how, without the consent of and without accounting to the other joint
owner. Notwithstanding anything above in this paragraph, if (i) SBCL uses its
invention or discovery to modify EXIGENT TECHNOLOGY or (ii) EXIGENT expresses an
interest in an exclusive license to SBCL's interest in any joint invention
(subject to preexisting rights in THIRD PARTIES), then SBCL and EXIGENT shall in
good faith negotiate a license of SBCL's invention or discovery or SBCL's
interest in such joint invention, as the case may be, to EXIGENT.
11.03. SBCL shall have the right to assume responsibility for any PATENT
or any part of a PATENT which EXIGENT intends to abandon or otherwise cause or
allow to be forfeited. EXIGENT shall give SBCL reasonable written notice prior
to abandonment or other forfeiture of any PATENT or any part of a PATENT so as
to permit SBCL to exercise its rights under this Section.
11.04. In the event of the institution of any suit by a THIRD PARTY
against EXIGENT, SBCL or its sublicensees or distributors for patent
infringement involving the manufacture, use, sale, distribution or marketing of
PRODUCT anywhere in the TERRITORY, the party sued shall promptly notify the
other party in writing. If named as a defendant in such suit, SBCL shall have
the right but not the obligation to defend such suit at its own expense and
shall allow EXIGENT to participate therein if it does assume such defense. If
both parties are sued, EXIGENT shall
-25-
have the right to control the defense thereof EXIGENT and SBCL shall assist one
another and cooperate in any such litigation at the other's request without
expense to the requesting party.
11.05. In the event that EXIGENT or SBCL becomes aware of actual or
threatened infringement of a PATENT anywhere in the TERRITORY, that party shall
promptly notify the other party in writing. EXIGENT shall have the first right
but not the obligation to bring, at its own expense, an infringement action
against any THIRD PARTY and to use SBCL's name in connection therewith and to
name SBCL as a party thereto. If EXIGENT does not commence a particular
infringement action within ninety (90) days after receipt of the notice of
infringement, then SBCL, after providing reasonable advance notice to EXIGENT in
writing, shall be entitled to bring such infringement action at its own expense.
The party conducting such action shall have full control over its conduct,
including settlement thereof subject to Section 11.07. In any event, EXIGENT and
SBCL shall assist one another and cooperate in any such litigation at the
other's request without expense to the requesting party.
11.06. In any action brought pursuant to Section 11.05 where the interests
of SBCL and EXIGENT are adverse, the party bringing the action shall indemnify
the other party, its officers, directors, shareholders, employees, agents,
successors and assigns from any loss, damage or liability, including for
attorney's fees and costs, which may result from defending against claims,
counterclaims or crossclaims asserted by a defendant, except to the extent that
such losses, damages or liabilities result from the negligence or willful
misconduct of the other party.
11.07. In a joint action by EXIGENT and SBCL, each shall recover their
respective actual out -of-pocket expenses, or equitable proportions thereof,
associated with any litigation or settlement thereof from any recovery made by
any party.
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11.08. The parties shall keep one another informed of the status of and of
their respective activities regarding any litigation or settlement thereof
concerning PRODUCT, provided however that no settlement or consent judgment or
other voluntary final disposition of any suit defended or action brought by a
party pursuant to this Section 11 may be entered into without the consent of the
other party if such settlement would require the other party to be subject to an
injunction or to make a monetary payment or would otherwise adversely affect the
other party's rights under this Agreement. No party withholding consent from a
proposed settlement shall be indemnified for any amount above the amount at
which it could have settled under the proposed settlement.
11.09. At SBCL's request, EXIGENT shall seek to obtain SPC's or authorize
SBCL to obtain SPC's on EXIGENT's behalf. Where SBCL holds a relevant Marketing
Authorization, SBCL shall at EXIGENT's request provide to EXIGENT a copy of said
Marketing Authorization and any information necessary for the purpose of
obtaining an SPC.
SECTION 12. REPRESENTATIONS, WARRANTEES AND COVENANTS
-----------------------------------------
12.01. Each party represents, warrants and covenants to the other that it
has the fun right and authority to enter into this Agreement, and that it is not
aware of any impediment that would inhibit its ability to perform its
obligations under this Agreement.
12.02. EXIGENT represents, warrants and covenants that (i) it has or will
acquire the exclusive right to use the PATENT in connection with the
manufacture, use and sale of PRODUCT in each country of the TERRITORY, and (ii)
it has or will acquire sole and exclusive rights to manufacture, use and sell
PRODUCT in each country of the TERRITORY.
-27-
12.03. EXIGENT hereby represents that it has no present knowledge from
which it can be inferred that any PATENT is or will be when issued invalid or
that any use thereof would infringe patent rights of THIRD PARTIES.
12.04. EXIGENT acknowledges that, in entering into this Agreement, SBCL
has relied or will rely upon PRODUCT INFORMATION, and EXIGENT warrants,
represents and[ covenants that the PRODUCT INFORMATION is and will be timely and
accurate in all material respects to its best knowledge and belief EXIGENT
further warrants and represents that it has not, up through and including the
date of this Agreement, omitted to furnish SBCL with any information known to
EXIGENT concerning the PRODUCT or the transactions contemplated by this
Agreement, which would be material to SBCL's decision to enter into this
Agreement and to undertake the commitments and obligations set forth herein.
12.05. EXIGENT represents and warrants that, to the best of its knowledge
and belief, it has no present knowledge of the existence of any pre-clinical or
clinical data or information concerning the PRODUCT which suggests that there
may exist toxicity, safety and/or efficacy concerns which may materially impair
the utility and/or safety of the PRODUCT. EXIGENT shall extend to SBCL the same
warranties it received from its manufacturers and suppliers.
12.06. EXIGENT represents, warrants and covenants that all PRODUCT shall
be supplied to SBCL free and clear of any hens, encumbrances or rights of THIRD
PARTIES of any notice whatsoever, including THIRD PARTY patent rights, and that
all PRODUCT supplied to SBCL shall conform to standards of quality approved by
applicable AGENCIES, shall be produced according to applicable GNP (Good
Manufacturing Practices) standards in the applicable country of the TERRITORY or
any other applicable laws or regulations of the
-28-
applicable country of the TERRITORY, shall not be adulterated or misbranded, and
shall be manufactured in accordance with the specifications reviewed and
approved by SBCL and EXIGENT.
SECTION 13. INSURANCE AND INDEMNIFICATION
-----------------------------
13.01. During the TERM OF THIS AGREEMENT and for a period of five (5)
years after its expiration or earlier termination, EXIGENT and SBCL shall each
obtain and/or maintain, respectively, at their sole cost and expense, product
liability insurance or self-insurance that meets the following requirements:
(a) the insurance shall insure the respective company against all
liability related to the PRODUCT (whether the company's liability arises from
the company's own conduct or by virtue of its participation in this Agreement),
including liability for bodily injury, property damage, wrongful death, and any
contractual indemnity obligations imposed by this Agreement; and
(b) the insurance shall be in amounts, respectively, that are
reasonable and customary in the U.S. clinical laboratory and medical device
manufacturing companies of comparable sizes and activities.
13.02. EXIGENT will indemnify and hold SBCL, its directors, officers,
employees and representatives harmless from any claims, damages, or losses of a
THIRD PARTY, including reasonable attorneys' fees (hereinafter "Losses"),
arising from (i) the sale of PRODUCT, if such claims are the result of any
negligent or wrongful act of EXIGENT or a defect in manufacturing by EXIGENT,
including without limitation PRODUCT not manufactured by EXIGENT in
-29-
accordance with FDA approved specifications therefor, (ii) any misrepresentation
or breach of warranty or covenant by EXIGENT, or (iii) the infringement of any
THIRD PARTY patent through the manufacture, sale or use of the PRODUCT in the
TERRITORY, unless such claims, damages or losses arise from or otherwise relate
to SBCL's breach of its responsibilities under this Agreement or a negligent or
wrongful act or any misrepresentation or breach of warranty or covenant by SBCL
in which case BCL shall indemnify and hold harmless EXIGENT, its directors,
officers, employees, and representatives for any claims, damages, or losses,
including reasonable attorneys' fees, incurred by it as a result of SBCL's
negligent or wrongful acts.
13.03. Each party to this Agreement expects that all actions taken by the
parties in furtherance of this Agreement will be in compliance with a reasonable
standard of care and all requirements of the law.
13.04. Any party of this Agreement which believes it is entitled to
indemnity hereunder shall promptly notify the party from whom indemnity is
sought of any claim, lawsuit or proceeding believed to give rise to a duty to
indemnify. The party from whom indemnity is sought shall have the right to
assume and control the defense of said claim, lawsuit or proceeding (including
the right to designate attorneys); provided that the claim, lawsuit or
proceeding may not be settled without approval of the indemnitee but if not
settled because the indemnitee does not approve a proposed settlement, the
indemnitor's liability for cash damages shall be limited to the amount offered
to and declined by the indemnitee. Notwithstanding the foregoing, the party
seeking indemnification may participate in the defense or settlement of such
claim, lawsuit or proceeding with counsel of its choice and at its own expense.
The parties agree to cooperate fully with each other in connection with the
defense, negotiation or settlement of any claim,
-30-
lawsuit or proceeding. In the event the party from whom indemnity is sought
declines to accept control of the defense of the claim, lawsuit or proceeding,
the party seeking indemnity may retain counsel at the expense of the party owing
the indemnity and control the defense of the lawsuit, provided that the claim,
lawsuit or proceeding may not be settled without the approval of the party from
whom indemnity is sought.
SECTION 14. TERM AND TERMINATION
--------------------
14.01. Unless terminated earlier pursuant to this Section the TERM OF THIS
AGREEMENT shall be for five (5) years from the date of FDA APPROVAL.
14.02. Notwithstanding Section 14.01, a non-defaulting party shall have
the option, in addition to all other legal and equitable rights and remedies
available to it, to terminate this Agreement effective immediately, or upon the
expiration of any applicable cure period, in the event of a "default" by the
other party (as defined below) if written notice of the defaulting activity has
been given to the party in default. The term "default" shall mean any of the
following events:
(a) failure by SBCL or EXIGENT to comply with or perform any material
provision of this Agreement and such default remains uncured for sixty (60) days
following written notice of the defaulting activity (if the default is cured
within the sixty (60) day notice period, the notice shall become null and void
and of no further effect); provided that, if the defaulting party can establish
to the reasonable satisfaction of the other party that it is diligently and
actively pursuing a cure at the expiration of such 60 day period, then such
period shall be
-31-
extended for so long as a cure is being diligently and actively pursued, not to
exceed 120 days in the aggregate; or
(b) a party becomes insolvent, is unable to pay its debts as they
mature, is the subject of a petition in bankruptcy whether voluntary or
involuntary or of any other proceeding under bankruptcy, insolvency or similar
laws, makes an assignment for the benefit of creditors, is named in, or its
property is subject to, a suit for the appointment of a receiver, or is
dissolved or oxidated.
14.03. In addition to the events of termination described above, SBCL
shall have the right to terminate this Agreement upon sixty (60) days written
notice to EXIGENT in the event that:
(a) EXIGENT shall not have received FDA APPROVAL for PRODUCT on
or before December 31, 2000;
(b) any of the PATENTS are declared invalid or otherwise
unenforceable by a final unappealable determination of a court of competent
jurisdiction and a THIRD PARTY has commenced selling PRODUCT in the U.S. which
is not covered by remaining PATENTS (if any) which have not been declared
invalid or unenforceable.
14.04. SBCL may, in its discretion, terminate this Agreement upon ninety
(90) days written notice to EXIGENT. In the event of termination under this
Section 14.04, SBCL shall remain liable to purchase all PRODUCTS ordered under
firm purchase orders and shall remain liable for all DISTRIBUTOR FEES past due
or for the current year to the extent not yet paid. If such termination is
prior to FDA APPROVAL, notwithstanding such termination SBCL shall remain
obligated to pay the initial DISTRIBUTOR FEE, if any, due upon such FDA
-32-
APPROVAL; provided, however, that if such termination is prior to June 1, 1998,
SBCL's sole obligation on such termination shall be payment of $50,000 which
shall be due and payable at termination whether or not FDA APPROVAL is
ultimately obtained.
SECTION 15. EFFECT OF TERMINATION
---------------------
15.01. Upon expiration or termination of this Agreement for whatever
reason, SBCL shall cease use, in any manner or for any purpose, directly or
indirectly, of any trademark used to identify PRODUCT or any marks or symbols
deceptively similar thereto as well as of all advertising and promotional
labeling and materials relative to PRODUCT. SBCL shall fulfill its marketing,
promotional and other obligations hereunder up to the effective date of
expiration or termination and shall promptly after said date of expiration or
termination remove EXIGENT's name and any trademark used to identify PRODUCT
from any other materials it possesses or controls.
15.02. Expiration or termination of this Agreement shall not affect
EXIGENT's or SBCL's obligations to pay any amount accruing to EXIGENT or SBCL,
respectively, under the provisions of this Agreement while it was in effect.
Further, the expiration or termination of this Agreement shall not affect any
rights and obligations of the parties under this Agreement which are intended by
the parties to survive such termination. Without limiting the generality of the
foregoing, the following provisions of this Agreement shall survive expiration
or termination hereof Sections 9.02, 9.03., 9.04 and 9.05. Any such termination
shall not affect the parties' liabilities to each other for breach hereof.
-33-
SECTION 16. FORCE MAJEURE
-------------
16.01. If any party is prevented from complying, either totally or in
part, with any of the terms or provisions of this Agreement, by reason of force
majeure, including, but not limited to fire, flood, explosion, storm, strike,
lockout or other labor trouble, riot, war, rebellion, accidents, acts of God
and/or any other cause or externally induced casualty beyond its reasonable
control, whether similar to the foregoing matters or not, then, upon written
notice by the party liable to perform to the other parties, the requirements of
this Agreement or such of its provisions as may be affected, and to the extent
so affected, shall be suspended during the period of such disability; provided
that the party asserting force majeure shall bear the burden of establishing the
existence of such force majeure by clear and convincing evidence; and provided
further, that the party prevented from complying shall use its best efforts to
remove such disability within thirty (30) days, and shall continue performance
with the utmost dispatch whenever such causes are removed, and shall notify the
other party of the event not more than five (5) working days from the time of
the event. When such circumstances arise, the parties shall discuss what, if
any, modification of the terms of this Agreement may be required in order to
arrive at an equitable solution.
SECTION 17. GOVERNING LAW
-------------
17.01. This Agreement shall be deemed to have been made in the
Commonwealth of Pennsylvania and its form, execution, validity, construction and
effect shall be determined in accordance with the laws of the Commonwealth of
Pennsylvania, U.S.A.
-34-
SECTION 18. WAIVER OF BREACH
----------------
18.01. The failure of either party at any time or times to require
performance of any provision hereof shall in no manner affect its rights at a
later time to enforce the same. No waiver by either party of any condition or
term in any one or more instances shall be construed as a further or continuing
waiver of such condition or term or of another condition or term. No term or
condition of this Agreement shall be considered waived unless reduced to writing
and duly executed by an officer of the waiving party.
SECTION 19. SEPARABILITY
------------
19.01. To the extent that any provision of this Agreement shall be
prohibited by or invalid under applicable law, such provision shall be
ineffective to the extent of such prohibition or invalidity, without
invalidating the remaining provisions of this Agreement.
19.02. If any of the terms or provisions of this Agreement are in conflict
with any applicable statute or rule of law, then such terms or provisions shall
be deemed inoperative to the extent that they may conflict therewith and shall
be deemed to be modified to conform with such statute or rule of law unless such
modification would render such provision inconsistent with the intent of the
parties. However, in the event that the terms and conditions of this Agreement
are materially altered as a result of this Section, the parties shall in good
faith attempt to renegotiate the terms and conditions of this Agreement to
resolve any inequities.
SECTION 20. ENTIRE AGREEMENT
----------------
20.01. This Agreement, entered into as of the date written above,
constitutes the entire agreement between the parties relating to the subject
matter hereof and supersedes all previous
-35-
writings and understandings. No terms or provisions of this Agreement shall be
varied or modified by any prior or subsequent statement, conduct or act of
either of the parties, except that the parties may amend this Agreement by
written instruments specifically referring to and executed in the same manner as
this Agreement.
SECTION 21. INDEPENDENT CONTRACTORS
-----------------------
21.01. This Agreement shall not constitute or give rise to an employer-
employee, AGENCY, partnership or joint venture relationship among the parties
and each party's performance hereunder is that of a separate, independent
entity.
21.02. Nothing in this Agreement shall be deemed or implied to be the
grant by any party to the other of any right, title or interest in any product,
intellectual property rights or intangibles, material or proprietary rights of
the other except as may be expressly provided for in this Agreement.
SECTION 22. NOTICES
-------
22.01. Any notice required or permitted under this Agreement shall be sent
by air mail, postage pre-paid, to the following addresses of the parties:
If to EXIGENT: Exigent Diagnostics Inc.
000 Xxxxxxxxx Xxxx (Mailcode UW2360)
King of Prussia, PA 19406
Attention: X. Xxxxxxx Stoughton, President
Copy to:
Pepper, Xxxxxxxx & Xxxxxxx LLP
Xxx Xxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
Attention: Xxxxx X. Xxxxxxx, Esquire
-36-
If to SBCL: SmithKline Xxxxxxx Clinical Laboratories, Inc.
0000 Xxxxx Xxxxxxxxxxxx Xxxx
Xxxxxxxxxxxx, XX 00000
Attention: Xxxx X. Xxxxxxx, Xx., Ph.D.
President
Copy to:
SmithKline Xxxxxxx Corporation
One Franklin Plaza (Mail Code FP2230)
X.X. Xxx 0000
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000, X.X.X.
Attention: Legal Operations - Healthcare Services
22.02. Any notice required or permitted to be given concerning this
Agreement shall be effective upon the earliest of (a) receipt by the party to
whom it is addressed, (b) the seventh day after dispatch or (c) the next
business day in the event a courier service is used which guarantees next
business day delivery.
SECTION 23. ASSIGNMENT
----------
23.01. This Agreement and the licenses herein granted shall be binding
upon and inure to the benefit of the successors in interest of the respective
parties. Neither party may assign this Agreement nor any interest hereunder
without the written consent of the other; provided, however, that either party
may assign this Agreement or any part of its rights and obligations hereunder,
or any PATENT owned by it, to any AFFILIATE or to any corporation with which
such party may merge or consolidate, or to which it may transfer all or
substantially all of its assets to which this Agreement relates, without
obtaining the consent of the other party.
-37-
SECTION 24. ARBITRATION
-----------
24.01. Any significant controversy, claim, or dispute arising out of or
relating to this Agreement or significant breach thereof, shall be settled, if
possible through good faith negotiations between the parties. Only if such
efforts are not successful shall such significant controversy, claim or dispute
be resolved by arbitration. Such arbitration shall take place in Philadelphia,
Pennsylvania and it shall proceed in accordance with the Commercial Arbitration
Rules of the American Arbitration Association. Within ten (10) days after the
filing of the Demand or Submission, or longer if the parties mutually agree,
EXIGENT and SBCL shall each select one arbitrator; the two arbitrators so
appointed shall select and appoint the third neutral arbitrator. Judgment upon
the award rendered by arbitrators may be entered in any court having
jurisdiction thereof. Costs of arbitration are to be divided by the parties in
the following manner: EXIGENT shall pay for the arbitrator it chooses, SBCL
shall pay for the arbitrator it chooses, and the costs of the third neutral
arbitrator shall be divided equally. All other costs shall be divided equally.
SECTION 25. RECORDING
---------
25.01. SBCL shall have the right, at any time, to record, register, or
otherwise notify this Agreement in appropriate governmental or regulatory
offices anywhere in the TERRITORY and as necessary or appropriate under the
laws, rules, regulations or customs thereof, and EXIGENT shall provide
reasonable assistance to SBCL in effecting such recording, registering or
notifying.
-38-
SECTION 26. EXECUTION IN COUNTERPARTS
-------------------------
26.01. This Agreement may be executed in any number of counterparts, each
of which shall be deemed an original but all of which together shall constitute
one and the same instrument.
IN WITNESS WHEREOF, the parties, through their duly authorized
officers, have executed this Agreement as of the date first written above.
EXIGENT DIAGNOSTICS INC.
By: /s/ X. Xxxxxxx Stoughton
---------------------------
Name: X. Xxxxxxx Stoughton
Title: President
SMITHKLINE XXXXXXX CLINICAL LABORATORIES, INC.
By: /s/ Xxxx X. Xxxxxxx
--------------------------
Name: Xxxx X. Xxxxxxx, Xx., Ph.D.
Title: President
-39-
APPENDIX A
POCT TESTS
----------
TEST MENU 1- IST 0 1998
-----------------------
Chemistry Menu
--------------
Electrolytes:
1. Glucose *
2. Potassium *
3. Sodium *
4. Chloride *
5. Total Carbon Dioxide
Other Chemistry
6. Urea Nitrogen (BUN) *
7. Creatinine *
Coagulation Menu
----------------
8. PT *
9. PTT
Immunoassay Menu
----------------
10. Theophylline *
11. Digoxin *
12. Phenytoin *
TEST MENU 2-AUGUST/SEPTEMBER 1998 (Includes Test Menu 1 and the following:)
---------------------------------------------------------------------------
Chemistry Menu
--------------
1. Hemoglobin *
2. Cholesterol
3. Triglycerides
4. HDL-Cholesterol
5. Bilirubin *
6. Ammonia
7. Calcium *
8. Phosphorous
APPENDIX A
POCT TESTS
----------
9. Total Protein
10. Albumin *
11. Uric Acid *
12. Creatine Kinase *
13. Asparate Aminotransferase *
14. Alanine Aminotransferase
15. Alkaline Phosphatase *
16. Gamma Glutamultransferase *
17. Lactate Dehydrogenase *
18. Amylase *
19. Leucine Aminopeptidase
20. Magnesium
21. Ionized Calcium
Coagulation Menu
----------------
1. Activated Clotting Time
2. Fibrinogen
3. Thrombin Time
Immunoassay Menu
----------------
1. Phenobarbital *
2. Carbamazepine *
3. Valproic Acid *
4. Gentamicin *
5. Tobramycin *
6. Amikacin *
7. Vancomycin *
8. T4
9. Thyroid Uptake
TEST MENU 3-JANUARY 1999 includes Test Menus 1 & 2 and the following:)
----------------------------------------------------------------------
Immunoassay Menu
----------------
1. HCG
2. Rubella, IgG & IgM
3. CK-MB
APPENDIX A
POCT TESTS
----------
4. Troponin
5. Myoglobin
6. PSA
7. Hemoglobin A1c
8. H. pylori, IgG
9. Microalbumin (U)
10. Transferrin (U)
11. TSH
APPENDIX B
PATENTS
None
