IMMUCELL CORPORATION AND SUBSIDIARY
Exhibit 10.25
License Agreement between the Registrant and Hydros Environmental
Diagnostics, Inc. dated December 8, 1999.
LICENSE AGREEMENT
LICENSE AGREEMENT
This License Agreement ("Agreement") is made effective the 8th day of
December, 1999 by and between Hydros Environmental Diagnostics, Inc., a
Massachusetts corporation with its principal place of business at 230
Jones Road, Falmouth, Massachusetts 02540, USA (hereinafter called
"Hydros"), and ImmuCell Corporation (hereinafter called "ImmuCell"), a
Delaware corporation with its principal place of business at 56 Evergreen
Drive, Portland, Maine, 04103, USA, together hereinafter called the
Parties.
WHEREAS, Hydros has developed certain technology as described in
Section 1.1 herein entitled "LICENSED TECHNOLOGY", and Hydros is
willing to grant a license for said LICENSED TECHNOLOGY to ImmuCell;
NOW, THEREFORE, in consideration of the mutual covenants and
agreements set forth below, the Parties covenant and agree as follows:
Section 1: Definitions
1.1 "LICENSED TECHNOLOGY" shall refer to and mean the Components
assembled in a Tip format and an associated Tray with Kit Reagents
that can be used to further manufacture diagnostic kits to detect
infectious disease organisms or other substances. Such LICENSED
TECHNOLOGY also shall refer to and include (i) United States Patent
5,171,537 and any additional related patents now or hereafter owned or
licensed by Hydros, (ii) all foreign equivalents thereof, (iii) any
and all U.S. and/or foreign patent applications that claim said
LICENSED TECHNOLOGY. LICENSED TECHNOLOGY does not include the
reagents and other materials exclusively supplied by ImmuCell.
1.2 "Field of Use" shall mean detection of certain diseases in
bovines set forth in Appendix A, through the detection of an agent or
any marker indicating the presence of such disease. This Field of Use
may be expanded pursuant to the provisions of Section 5 of this
Agreement.
1.3 "Territory" shall be worldwide.
1.4 "TTJ" shall mean ImmuCell's product, Tip-Test:
<trademark> Johne's, for which a complete product license application
was submitted to the U.S. Department of Agriculture on or about June
30, 1999. TTJ is the first test to be developed by ImmuCell utilizing
the LICENSED TECHNOLOGY.
1.5 "Kit Reagents" shall mean certain chemical formulations
used to effect the desired diagnostic test result. Kit Reagents do
not include the chemical formulations currently supplied by ImmuCell
for TTJ.
1.6 "Trays" shall mean a multi well plastic container used to
contain the Kit Reagents and Tip(s) together with a lid seal.
1.7 "Tip" shall mean the Hydros AffiniTip, which is a single
plastic tip having at least three elements, two covers and a storage
buffer.
1.8 "Components" shall mean the Kit Reagents, a Tray and a Tip,
which collectively comprise the intended diagnostic test. Components
shall not include the luer adapter or syringe.
1.9 "Bulk Product" shall mean certain non-assembled Components
including Tip(s) and Kit Reagents supplied by Hydros in bulk
containers which are part of the diagnostic test. Bulk Product shall
not include the syringe, luer adapter or Trays.
Section 2: License
2.1(a) Hydros hereby grants to ImmuCell an exclusive license to
use the LICENSED TECHNOLOGY to use and sell Components as part of
diagnostic kits in the Field of Use throughout the Territory for the
term of the Agreement, including any extension thereof.
2.1(b) Hydros hereby further grants to ImmuCell an exclusive
license to use the LICENSED TECHNOLOGY to make Trays and/or Bulk
Product as part of diagnostic kits in the Field of Use throughout the
Territory for the term of the Agreement, including any extension
thereof, provided that ImmuCell meets the minimum purchase
requirements defined in Section 3.1 and pays the royalties due to
Hydros as defined in Section 4.
2.1 (c) Hydros hereby further grants to ImmuCell an exclusive
license to use the LICENSED TECHNOLOGY to make Tips, Trays and/or Bulk
Product as part of diagnostic kits in the Field of Use throughout the
Territory for the term of the Agreement, including any extension
thereof, which license shall be operative only if Hydros fails to
supply a) the minimum purchase requirements of Components defined in
Section 3.1 by the first of each month as defined or b) subsequent
orders for Components, Tips and/or Bulk Product within three months of
an order by ImmuCell, except that any delays caused by ImmuCell
supplying reagents late will not count toward the three month period.
Should ImmuCell exercise its right to make Tips under the LICENSED
TECHNOLOGY, Hydros will provide technical training to ImmuCell
personnel as necessary to enable ImmuCell to make Components; provided
however, that Hydros has no obligation to disclose information that is
protected by any other agreement(s) in force on January 12, 1999.
2.2 The licenses shall revert to a non-exclusive licenses
following the term of the Agreement, including any extension thereof.
The provisions of this Section 2.2 shall survive termination of the
Agreement.
2.3 ImmuCell shall not obtain rights of any kind in the
LICENSED TECHNOLOGY other than the rights specifically set forth
herein.
2.4 Hydros hereby acknowledges receipt from ImmuCell of good
and sufficient payment in January 1999 in consideration for the
licenses granted to ImmuCell pursuant to this Agreement.
Section 3: Supply of Components and Services
3.1 Hydros agrees to sell to ImmuCell, and ImmuCell agrees to
purchase from Hydros those quantities of Components and Tips set forth
in Appendix C at the times specified in Appendix C, subject to
ImmuCell's right to cancel set forth in Section 9.3 hereof.
3.2 Appendix B sets forth the prices to be paid by ImmuCell
to Hydros for all tests in the Field of Use. However, if and when the
bill of materials (for raw materials, direct labor and machine costs)
for the Components of a given test supports a cost that is
significantly different (defined as greater than 5%) from the cost
associated with the TTJ Components, Hydros has the right to adjust the
price commensurate with the increased cost of Components for such
test. Such cost increases will be documented in writing. When the
license becomes non-exclusive, Hydros agrees to sell ImmuCell
Components at prices no less favorable than Components sold to other
companies.
3.3 Prices shall be reviewed as of January 1, 2001 and each
January 1 thereafter during the term of this Agreement. The price to
ImmuCell for Components will not increase at a rate that exceeds the
inflation rate as measured by the U.S. consumer price index for the
previous year plus two percent (2%) and may be adjusted no more than
once per year, except that Hydros may increase the price if it
experiences extraordinary increases in its raw materials (defined as
greater than 5%), in which case costs may be passed on to ImmuCell in
their entirety, and such costs will be documented in writing.
3.4 Hydros shall use its best efforts to ship Components
ordered by ImmuCell promptly after its receipt of any written order
for such Components. ImmuCell agrees to make payment to Hydros in
U.S. Dollars for each shipment within thirty (30) days after arrival
of each shipment of Components.
3.5 Hydros agrees to manufacture and supply in bulk all
Components in such quantities as may be ordered from time to time in
writing (fax, mail or commercial courier) by ImmuCell (subject to a
minimum order of 3,000 Components per shipment prior to applicable
regulatory approval of the product and 10,000 per shipment subsequent
to such regulatory approval of the product) and ship the Components to
ImmuCell. ImmuCell will pay for shipping and any additional handling,
vialing or sealing required.
3.6 Hydros shall provide, at ImmuCell's expense, such
technical training of ImmuCell's personnel and such educational, sales
and technical documentation, information and marketing support as
shall be reasonably requested by ImmuCell in furtherance of the
purposes of this Agreement.
3.7 To facilitate ImmuCell's license to make Trays, Hydros
will assist ImmuCell by introducing ImmuCell to appropriate vendors
for the plastic and lid seal materials for direct ordering by
ImmuCell.
3.8 Title to and all risk of loss of all Components ordered
by ImmuCell hereunder shall pass to ImmuCell upon shipment from
Falmouth, MA. ImmuCell shall pay for and determine the best method of
shipment. Shipping is to be coordinated through Hydros and all
delivery will be scheduled with Hydros in advance.
The provisions of this Section 3 shall survive termination of
the Agreement.
Section 4: Royalties
For every Tip that is manufactured by Hydros and that ImmuCell
packages with a Tray not manufactured by Hydros, ImmuCell will pay
Hydros a royalty of $0.10 per test sold by ImmuCell. Hydros will bill
for royalty payments based on the number of Tips sold by Hydros to
ImmuCell less all Tips purchased by ImmuCell for research and
development. ImmuCell will remit royalty payments, if any, to Hydros
semi-annually, on July 31 and January 31 each year during the term of
this Agreement and any extension thereof.
Section 5: Option to Expand Field of Use
ImmuCell has the option to expand the Field of Use to cover
two additional bovine disease indications selected by ImmuCell
(Disease A and Disease B) by paying Hydros $5,000 upon the signing of
this Agreement. The specific diseases covered by this option must be
named by ImmuCell on or before December 31, 1999. It is understood
that ImmuCell's exclusive rights to the LICENSED TECHNOLOGY with
respect to Disease A and Disease B shall revert to non-exclusive
status if submissions of complete product license applications to the
applicable regulatory agency are not made by January 12, 2002 for
Disease A and January 12, 2003 for Disease B. Such revision of rights
to a non-exclusive status for either Disease A or Disease B shall not
effect the exclusive status for the other disease if the relevant
performance requirements have been met for that other disease.
Section 6: Non-Competition
Hydros agrees not to sell Components of tests to detect the
presence of the diseases set forth in the Field of Use outside of the
Field of Use except at a price that is four times the transfer price
of Components sold to ImmuCell during the term of this Agreement,
including any extension hereof. Hydros will take all necessary steps
to ensure that Components used to manufacture diagnostic tests for the
detection of diseases covered by the Field of Use in other species
shall not be used in the Field of Use. ImmuCell shall not advertise
its diagnostic tests using Components outside the Field of Use nor
will it fund any research that will enable the test's use other than
in bovines. On an annual basis, Hydros shall notify ImmuCell of the
quantity of Components being used for further or final manufacture of
tests for diseases covered by the Field of Use that are being used
outside the Field of Use. In no case shall Hydros use technology or
reagents from ImmuCell to manufacture a test to detect diseases
covered by the Field of Use in a species other than bovine. ImmuCell
agrees not to sell any diagnostic tests in the Field of Use with Tips
that are developed after the date of execution of this Agreement
unless the Tips are obtained from Hydros.
Section 7: Certain Warranties of Hydros
7.1 As to the LICENSED TECHNOLOGY Hydros warrants that it has
the right to grant the licenses to ImmuCell as provided in this
Agreement. However, nothing in this Agreement shall be construed as a
warranty or representation by Hydros as to the validity, enforceability
or scope of any LICENSED TECHNOLOGY or as to its effectiveness or as to
any results or advantage to be achieved by its use. If a third party
makes a claim against ImmuCell that the LICENSED TECHNOLOGY infringes any
patent, copyright, trade secret or trademark, Hydros will defend ImmuCell
at Hydros' expense against the claim and pay all costs, damages and
expenses (including reasonable legal fees) incurred by ImmuCell arising
out of such claim. ImmuCell agrees to assist Hydros, at no cost to
ImmuCell, including agreeing to be named as a party plaintiff in any
legal action, in the event that Hydros decides to pursue third party
infringers of the LICENSED TECHNOLOGY.
7.2 Nothing contained in this Agreement shall be construed to
convey to ImmuCell any ownership rights, proprietary interest or other
rights or interest of any kind, except for the licenses granted in
Section 2 and right to use the LICENSED TECHNOLOGY in the manufacture,
distribution and sale of diagnostic tests using Components which is
expressly granted by this Agreement. ImmuCell covenants and agrees
that it shall not at any time during the term of this Agreement
challenge or contest the ownership of the LICENSED TECHNOLOGY, or
trademark or trade name used by Hydros ("TRADEMARKS"), including the
trademark and trade name "Hydros." ImmuCell shall not challenge the
validity or enforceability of any of the Patents and/or TRADEMARKS
associated with this License, nor do anything that in any way
tarnishes them or otherwise impairs their value.
7.3 Hydros warrants that Components sold hereunder shall
perform to ImmuCell's specifications for such Components as set forth
in Appendix D hereto. Hydros disclaims all other warranties not
expressly set forth in this Agreement, including warranties of
merchantability and fitness for a particular purpose.
The provisions of this Section 7 shall survive termination of the
Agreement.
Section 8: Regulatory Registration
8.1 ImmuCell shall utilize commercially reasonable efforts to
conduct clinical trials of products made from the Components in the
Territory. The costs for such clinical trials shall be borne by ImmuCell.
ImmuCell will perform such trials in a timely manner so as to achieve the
regulatory submission milestones set forth in Sections 5 and 9.2. If
requested to do so, Hydros will provide reasonable assistance to ImmuCell
in conducting clinical trials at no cost to ImmuCell.
8.2 Any and all regulatory filings to obtain applicable regulatory
approvals and any and all approvals in the Territory shall be filed in the
name of and owned by ImmuCell.
Section 9: Term And Termination
9.1 Except as provided below, the term of this Agreement shall
begin as of January 12, 1999 and continue until the earlier of (i) December
31, 2006, (ii) a petition for bankruptcy is filed by or against ImmuCell
or (iii) liquidation proceedings are instituted by or against ImmuCell.
ImmuCell may extend the term of exclusivity granted in this Agreement an
additional six (6) years by payment to Hydros of three percent (3%) of
sales of product under this license in the year 2005. Such payment must be
made to Hydros by December 31, 2006
9.2 It is understood that ImmuCell's exclusive rights to LICENSED
TECHNOLOGY with respect to each disease in the Field of Use shall revert to
non-exclusive status if the following is not met: submission of complete
product license application to the applicable regulatory agency by the
following dates: 1) Johne's disease January 12, 2000; 2) Disease #2 and
Disease #3 by January 12, 2001; and 3) Disease #4 by July 12, 2001. Such
reversion of rights to a non-exclusive status for any of the four diseases
shall not effect the exclusive status for any diseases for which
performance requirements have been met.
9.3 ImmuCell may terminate this Agreement at any time by
giving at least ninety (90) days' written notice of such termination
to Hydros. ImmuCell shall pay to Hydros a termination fee of $2,500
if it terminates the Agreement early without cause. This right to
terminate does not apply to the commitments defined in Appendix C,
Part I.
9.4 If ImmuCell at any time defaults in the timely payment
of any monies due to Hydros or commits any material breach of any
other covenant herein contained, and fails to remedy such breach
within ninety (90) days after written notice thereof by Hydros, Hydros
may, at its option, terminate this Agreement by giving written notice
of termination to ImmuCell.
9.5 Upon the termination of this Agreement, ImmuCell shall
remain obligated to pay any outstanding monies owed for Components
sold by Hydros to ImmuCell and the following Sections shall survive
termination or expiration of this Agreement: Sections 2.2, 3, 7, 9.5,
12, 13, 16, 18 and 19.
9.6 Upon the termination of this Agreement, all rights to
LICENSED TECHNOLOGY will revert to Hydros and the license to ImmuCell
shall immediately cease.
Section 10: Distribution Obligation of ImmuCell
ImmuCell shall comply with all governmental laws, ordinances,
rules and regulations applicable in connection its sale or shipment of
, or use or service of diagnostic tests which use Components, or the
fulfillment of any of ImmuCell's obligations under this Agreement
including, but not limited to, the payment of any duties (excluding
Hydros income taxes), obtaining of any governmental permits,
clearances or approvals, and compliance with customs requirements or
testing of Components.
Section 11: Minimums
ImmuCell agrees that the minimums defined by Section 3.1 and
Appendix C are reasonable and that if such annual minimums are not
achieved, the license will become non-exclusive.
Section 12: Confidentiality
Each party acknowledges and agrees that it may be necessary
during the term hereof that each party (the "Disclosing Party")
disclose to the other party (the "Recipient Party") confidential or
proprietary information of the Disclosing Party pertaining to the
Field of Use. Each Recipient Party agrees that during the term hereof
and for a period of 5 years thereafter, it shall keep confidential and
refrain from disclosing to any third party or using for its own
account, any such confidential or proprietary information of the
Disclosing Party. The Parties agree that the foregoing provisions
shall not apply with respect to any information that (i) is (through
no improper action or inaction by the Recipient Party) generally known
to the public, (ii) was in the Recipient Party's possession or known
by it prior to receipt from the Disclosing Party, or (iii) was
rightfully disclosed to the Recipient Party by a third party without
restriction. Each Recipient Party may make disclosures required by
court order provided it uses diligent effort to limit disclosures and
to obtain confidential treatment or a protective order and has allowed
Hydros the opportunity to participate in the proceeding. Each
Recipient Party further agrees that upon expiration or termination of
this Agreement, it shall return all such information which is in
writing, along with all pamphlets, referencing materials, manuals,
brochures and the like which may have been furnished to the Recipient
Party by the Disclosing Party during the term hereof, including all
copies, reproduction or translations thereof, and Hydros shall return
to ImmuCell all reagents in its possession therefore delivered to
Hydros by ImmuCell. The provisions of this Section 12 shall survive
termination of the Agreement.
Section 13: Severability
In the event that any one or more provisions of this Agreement
shall be declared to be illegal or unenforceable under the law, rule
or regulation of any government having jurisdiction over the Parties
hereto, such illegality or un-enforceability shall not affect the
validity or enforceability of the other provisions hereof, and the
Parties hereto shall agree upon the modification of this Agreement
with respect to such illegal or unenforceable provisions to eliminate
such illegality or un-enforceability. The provisions of this Section
13 shall survive termination of the Agreement.
Section 14: Counterparts
This Agreement may be executed in any number of counterparts,
each of which shall be deemed to be an original, and all of which
together shall be deemed to be one and the same instrument.
Section 15: Future Products
Hydros agrees, in the event that it develops new products for
which a market to end customers in the bovine market may exist, that
it shall enter into good faith negotiations with ImmuCell with respect
to the distribution of such products by ImmuCell in the bovine market.
Section 16: Patent Marking:
The Parties shall agree on the manner in which patent(s) and
patent application(s) are shown on the end customer packaging of
products using Components to comply with applicable United States and
international law. Except as provided in this paragraph, all end
customer package copy shall be at the sole discretion and sole
responsibility of ImmuCell. The provisions of this Section 16 shall
survive termination of the Agreement.
Section 17: Benefit/Non-Assignability.
This Agreement shall be assignable to, inure to the benefit of
and be binding upon purchasers acquiring all or substantially all of
the assets of ImmuCell or Hydros to which this Agreement relates, and
any successor to ImmuCell or Hydros by merger, and no other person,
and this Agreement and the rights and obligations of either party
hereunder may not otherwise be assigned or transferred without the
written consent of the other party; provided, however, that Hydros
acknowledges and agrees that ImmuCell may appoint sub-distributors to
assist in discharging ImmuCell marketing obligations hereunder.
Section 18: Governing Law.
The rights and obligations of the Parties under this Agreement
shall be governed by the laws of the Commonwealth of Massachusetts,
USA. The provisions of this Section 18 shall survive termination of
the Agreement.
Section 19: Notices:
Any notice to be served or given hereunder shall be deemed to
have been given when delivered personally or sent by certified or
registered United States mail, postage prepaid, to Hydros or
ImmuCell, as the case may be at the respective addresses set forth in
this Agreement or such other address for which notice was given in the
manner provided herein. The provisions of this Section 19 shall
survive termination of the Agreement.
Section 20: Relationship.
ImmuCell shall act only as an independent contractor under
this Agreement and shall have no power, right or authority, expressed
or implied, to create or assume in any manner any obligation of any
kind on behalf of Hydros or in Hydros' name. Neither party is in any
respect an agent, employee or a legal representative of the other
party and neither party shall hold itself out as such for any purpose
whatsoever.
Section 21: Integration.
This Agreement constitutes the full understanding between the
Parties with reference to the subject matter hereof, and no statements
or agreements by or between the Parties, whether orally or in writing,
except as provided for elsewhere herein, made prior to or at the
signing hereof, shall vary or modify the written terms of this
Agreement. Neither party shall claim any amendment, modification, or
release from any provisions of the Agreement by mutual agreement,
acknowledgment, or otherwise, unless such mutual agreement is in
writing, signed by the other party and specifically states that it is
an amendment to this Agreement.
IN WITNESS WHEREOF, ImmuCell and Hydros have executed this Agreement
by their duly authorized officers or representatives, effective on the
date first above written.
Hydros, Inc. ImmuCell Corporation
By: /S/ Steven H. Boyd By: /S/ Michael F. Brigham
Steven H. Boyd, President Michael F. Brigham,
Vice President and CFO
(Date) 12/8/99 (Date) 12/9/99
Witness : /S/ Kendra Williams Witness: /S/ Joyce N. Watson
(Date) 12/8/99 (Date) 12/9/99