1
EXHIBIT 10.37
AGREEMENT
This Agreement is entered into this 1st day of December 1996, by and between
ORGANON TECHNIKA BV (hereinafter referred to as "Teknika"), a corporation of
the Netherlands having its principal place of business at Boseind 15, 5281 RM
Boxtel, the Netherlands, represented by Dr. R. Salsmans,
and
CHEMTRAK (hereinafter referred to as "Licensee"), a corporation of the USA,
having its registered offices at 929 E. Arques Avenue, Sunnyvale, CA 94086-4520,
USA, represented by Dr. Prithipal Singh,
WHEREAS, Teknika is the equitable owner of all the right, title and interest in
and to certain interest in and to certain Sol Particle Immuno Assay Patent
Rights (as hereinafter defined) owned by its ultimate holding company Akzo Nobel
NV (a corporation organized under the laws of the Netherlands) including the
exclusive right to grant licenses under such PATENT RIGHTS.
WHEREAS, LICENSEE desires to obtain a license from Teknika under the Patent
Rights, for the purposes stated herein below.
NOW THEREFORE, the parties agree as follows:
1.0 Definitions
1.1. The term "SPIA" means gold sol particle immuno assay.
1.2 The term "SPIA Technology" means a technology employing the SPIA
principle, including, but not limited to, the information
contained in the patents and patent applications included in the
Patent Rights.
1.3 The term "Licensed Products" shall mean tests as specified in
Addendum A, the manufacture, use or sale of which would, in the
absence of the license granted hereunder infringe, contribute to
the infringement of, or induce the infringement of any claim of
the Patent Rights which has neither expired nor been declared
invalid by a court of competent jurisdiction from which no appeal
has been or may be taken.
1.4 The term "Patent Rights" shall mean the patents and patent
applications relating to SPIA Technology as are specified in
Addendum B.
1.5 The term "Net Sales" means [*]. Sales or other transfers of
Licensed Products to Affiliated Companies or between Affiliated
Companies and resold to third parties, shall [*]
- -------
[*] Certain information on this page has been omitted and filed
separately with the Commission. Confidential treatment has
been requested with respect to the omitted portions.
2
[*]
In the event that Licensed Products are sold as part of an
individualized kit consisting of up to two tests, lancets, swabs,
disinfectant and user instructions, the gross amount invoiced on
the sale of Licensed Products in such individualized kit format
shall be calculated either by [*], or by [*] whichever results
in the [*] Net Sales price.
1.6 The term "Territory" shall mean worldwide.
1.7 The term "Affiliated Company" means any company which, by means
of ownership of a majority of share or at lest 50% interest in
income or otherwise, directly or indirectly controls, is
controlled by or is under common control with either party.
2. Licensing of Patent Rights
2.1 Teknika hereby grants to LICENSEE a non-transferable,
non-exclusive license under the Patent Rights, without the right
to sublicense, for the sole purpose of manufacturing, using
and/or selling Licensed Products under its own label in the
Territory for the life of this Agreement.
2.2 Notwithstanding the foregoing, Teknika herewith specifically
agrees that LICENSEE will have the right, by way of exception, to
manufacture a specific Licensed Product in the form of an H.
Pylori test, under the trademark HpChek and under the label of the
third party defined in Addendum C hereto (OEM manufacture). Such
OEM manufacture shall be permitted only and exclusively for the
aforesaid H. Pylori test utilizing the trademark HpChek, for and
on behalf of the third party defined in Addendum C and for no
other party.
The Licensed Product so manufactured will be marketed and
distributed by the third party referred to in Appendix C.
2.3 LICENSEE hereby agrees to take and accept the aforesaid license
as embodied in this Agreement.
3.0 Royalties, Records and Accounting
3.1 In consideration of the rights granted and under Article 2.,
LICENSEE shall pay Teknika upon execution of this Agreement a
non-refundable, non deductible lump sum payment of [*]. to
be paid in two equal installments: [*] - upon signature,
and [*] - on the first anniversary of the signature date,
which payment shall not act as prepaid royalties creditable toward
any running royalties due under this Paragraph as and when such
royalties are due and payable.
3.2 Furthermore, LICENSEE shall pay Teknika as from the first day of
commercial sale, a running royalty as follows.
- -------
[*] Certain information on this page has been omitted and filed
separately with the Commission. Confidential treatment has
been requested with respect to the omitted portions.
3
(i) [*] of the Net sales of Licensed Products other than the
Licensed Product referred to in this Article under (ii) here
below;
(ii) [*] of Net Sales of Licensed Product referred to in
Article 2.2 above.
3.3 LICENSEE agrees to keep or cause to be kept accurate records and
books of account in accordance with good accounting practice,
showing the information required to permit calculation of Net
Sales and the royalties under this Article. These books and
records shall be preserved for at least four (4) years from the
date of the royalty payments to which they pertain.
3.4 On or before the 45th day of each calendar quarter during the
term hereof, LICENSEE shall prepare and send to Teknika royalty
reports for the previous quarter. Said Net Sales and reports
shall indicate total sales and Net Sales per country under this
Agreement for the previous calendar quarter, per Licensed
Product, and shall show the amount of royalty due with sufficient
information to enable confirmation by Teknika, and LICENSEE shall
include payment of the amount of royalties shown to be due with
such report.
3.5 Upon ten (10) days written notice and not more than once per
calendar year, LICENSEE agrees to permit one or more Certified
Public Accountant(s) appointed by Teknika (except one to whom
LICENSEE has a reasonable objection), to enter upon the premises
or LICENSEE during all usual business hours of LICENSEE at any
time following the 60th day of any calendar quarter in order to
inspect files records pertaining to Net Sales and royalties under
this Agreement, and to make on LICENSEE's premises and retain
copies of any and all parts of the records and accounts kept by
LICENSEE pursuant to this Article, including invoices which are
relevant to any report required to be rendered by LICENSEE.
Said copies shall be provided to the Certified Public
Accountant(s) at no expense to Teknika. Said Certified Public
Accountant(s) shall keep all information received from LICENSEE
confidential; however, it will provide Teknika with the Net
Sales, per country, for each type of Licensed Product, specifying
the sales and the application of the appropriate royalty rate so
that royalties due Teknika may be calculated. The information
obtained by the Certified Public Accountant(s) shall be retained
for a period of four (4) years from date of the royalty payment
to which it relates, or 2 years from the date of receipt by the
Certified Public Accountant(s), whichever is longer.
In the event any audit results in a change upward in any royalty
payment of as much a five percent (5%) for any annual period,
LICENSEE shall pay the costs of such audit for such annual
period, otherwise such audit shall be at Teknika's expenses.
3.6 Payment of all royalties hereunder shall be made in Dutch
Guilders at the mean rate of exchange existing on the last day of
the quarter to which the payment applies as published in the Wall
Street Journal (European Edition).
4. Duration
4.1 This Agreement shall become effective as of the date of signing
by both parties to this Agreement and shall remain in effect
until the last to expire of the Patent Rights.
- -------
[*] Certain information on this page has been omitted and filed
separately with the Commission. Confidential treatment has
been requested with respect to the omitted portions.
4
4.2 In the event either party breaches this Agreement, in addition to
all other rights and remedies which either party may have the
party not in default may terminate this Agreement by written
notice. Such termination shall become effective on the date set
forth in the notice of termination, but in no event shall it be
earlier than [*] from the date of mailing thereof and shall have
no effect if the breach has been cured within the said period of
notice.
4.3 The termination of this Agreement shall not relieve LICENSEE from
its obligation to pay Teknika all royalties that shall have
accrued up to the effective date of termination.
5. Assignment
Teknika shall have the right to assign this Agreement to, or
delegate its obligations hereunder to be performed by [*],
provided that [*]. This Agreement is [*] LICENSEE [*].
6. Entirety Clause
As of the date hereof, this agreement supersedes all previous
oral and written agreements between the parties, and constitutes
the only and entire understanding to exist between the parties
with respect to the subject matter of this Agreement, and no
amendment shall be implied or proven from or evidenced by
negotiations between the parties heretofore or hereinafter
conducted or agreements of the parties heretofore or hereafter
executed, unless in writing and signed by the parties hereto.
7. Warranty
7.1 Teknika represents and warrants to LICENSEE that it has the full
right and power to grant the license to LICENSEE to set forth in
this Agreement. Teknika further warrants and represents that
there are no other colloidal gold patents owned or controlled by
Teknika which cover the Licensed Products.
7.2 Except as specifically set forth in paragraph 7.1 herein, Teknika
makes no representations or warranties, either express or
implied, arising by law or otherwise, including, but not limited
to, implied warranties of merchantability or fitness for a
particular purpose. In no event will Teknika have any obligation
or liability arising from tort, or for loss of revenue or profit,
or for incidental or consequential damages.
In particular, with no limitation, nothing in this Agreement will
be construed as:
(i) A warranty or representation by Teknika [*].
(ii) A warranty or representation that anything made, used,
sold or otherwise disposed of under the license granted in this
Agreement [*];
- -------
[*] Certain information on this page has been omitted and filed
separately with the Commission. Confidential treatment has
been requested with respect to the omitted portions.
5
(iii) Conferring the right to use in advertising, publicity,
or otherwise any trademark, trade name, or any contraction,
abbreviation, simulation, or adaptation thereof, of Teknika; or
(iv) Conferring by implication, estoppel, or otherwise any
license or rights under any patents of Teknika other than the
Patent Rights, regardless of whether the patents are dominant or
subordinate to the Patent Rights.
7.3 In the event LICENSEE becomes aware of infringement of the
Licensed Patents by a third party, it will immediately notify
Teknika thereof. Teknika intends to use such reasonable efforts,
as it in its sole discretion determines, to pursue infringers and
enforce its rights under its Licensed Patents.
LICENSEE, at Teknika's request, shall render all reasonable
assistance and cooperation in that regard. Any reasonable out of
pocket expenses incurred at the request of Teknika with regard to
furnishing such assistance and cooperation (e.g., travel and
lodging expenses) shall be reimbursed by Teknika. Any recoveries
resulting from such action by Teknika shall be Teknika's
property.
8. Applicable Law: Severability
8.1 This Agreement shall be deemed to have been made in and shall be
construed in accordance with the laws of the Kingdom of the
Netherlands, for all matters other than scope and validity of the
PATENT RIGHTS, as to which the laws of the particular country
where the Patent Rights are in dispute shall apply.
8.2 All disputes arising in connection with the present Agreement
shall be finally settled at the competent court of
"s-Hertogenbosch, The Netherlands.
9 Miscellaneous Provisions
9.1 All notices which shall or may be given hereunder shall be in
writing in English and shall be prepared registered mail
addressed to the recipient at the addresses herein stated, or at
such other address as a party may from time to time designate:
Organon Teknika B.V.
c/o Organon Teknika N.V.
Veedijk 58
2300 Turnhout
Belgium
Attn: President
and
ChemTrak
929 E. Arques Avenue
Sunnyvale, CA 94086-4520
USA
Attn: President
6
9.2 Payment of lump sum fees and royalties, due under this Agreement
are to be made to Organon Teknika B.V., Boxtel, the Netherlands,
to its account with [*].
9.3 Confidentiality
Each party to this Agreement agrees that any information obtained
by it form the other party pursuant to this Agreement shall be
kept in the strictest confidence and shall only be used for the
proper performance of this Agreement, except that this obligation
shall not apply to:
a) information which is in or becomes part of the public
domain otherwise than by breach of this Agreement, or
b) information which the recipient can show was in its
possession at the date of signing of this Agreement; or
c) information which was received by the recipient on a
nonconfidential basis from a third party having the legal right to
transmit the same.
The foregoing obligation shall cease five (5) years after
termination or expiration of this Agreement.
As agreed at Boxtel, As agreed at Sunnyvale,
ORGANON TEKNIKA, B.V. CHEMTRAK
Dr. R. Salsmans Dr. Prithipal Singh
President Chairman and CEO
A.J.F. Stap
Executive Vice President
Corporate Development &
Program Management
- -------
[*] Certain information on this page has been omitted and filed
separately with the Commission. Confidential treatment has
been requested with respect to the omitted portions.
7
ADDENDUM A
LICENSED FIELD OF USE:
[*]
- -------
[*] Certain information on this page has been omitted and filed
separately with the Commission. Confidential treatment has
been requested with respect to the omitted portions.
8
ADDENDUM B
SPIA PATENT SERIES
Country Patent No. Expiration Date
- ------- --------- ---------------
Australia [*] [*]
Austria [*] [*]
Belgium [*] [*]
Canada [*] [*]
Denmark [*] [*]
Finland [*] [*]
France [*] [*]
Germany [*] [*]
Greece [*] [*]
Hungary [*] [*]
Ireland [*] [*]
Israel [*] [*]
Italy [*] [*]
Luxembourg [*] [*]
Mexico [*] [*]
Philippines [*] [*]
Portugal [*] [*]
South Africa [*] [*]
Spain [*] [*]
Sweden [*] [*]
U.S.A. [*] [*]
Switzerland [*] [*]
The Netherlands [*] [*]
U.K. [*] [*]
- -------
[*] Certain information on this page has been omitted and filed
separately with the Commission. Confidential treatment has
been requested with respect to the omitted portions.
9
ADDENDUM C
LICENSEE'S marketing partner in the United States for the H. Pylori test
("HpChek") is:
Astra Merck, Inc.
Wayne, PA