FIRST AMENDMENT TO LICENSE AGREEMENT
This First Amendment ("Amendment"), effective as of October 23, 1997, is
made to a certain License Agreement ("Agreement") by and between:
MICRODROP GMBH, Muehlenweg 143, D-22844 Norderstedt, Germany (hereinafter
referred to as "Microdrop")
and
PACKARD INSTRUMENT COMPANY, INC., a State of Delaware corporation having
its principal office at 800 Research Parkway, Meriden, Connecticut 06450, USA
(hereinafter referred to as "Packard").
W I T N E S S E T H:
WHEREAS, Microdrop and Packard entered into the Agreement as of March 26,
1996;
WHEREAS, Microdrop and Packard desire to amend the terms of the Agreement
as set forth in this Amendment;
NOW THEREFORE, in consideration of the premises and of the mutual
agreements and covenants herein contained, the parties hereto agree as follows:
1. Article IV of the Agreement (entitled "Exclusive License") is hereby amended
by changing the heading to read "Exclusive Licenses" and by adding to Article IV
the following new Article 4.2:
4.2 Microdrop hereby grants to Packard an exclusive, worldwide, paid up license
to use Licensed Microdrop Technology to make, have made and sell Microdrop
Products for the Field of Use. Said license shall include the right of Packard
to sublicense its Affiliates to distribute Microdrop Products.
2. The following new Article 4.3 is hereby added immediately following Article
4.2:
4.3 In order to implement the license granted under Article 4.2 hereof,
Microdrop will use its best efforts to transfer all Microdrop Technology and
Technical Information and all existing raw material resources to Packard under
the following terms and conditions:
4.3.1 Microdrop and Packard have jointly evaluated how to transfer
efficiently Technical Information, manufacturing know-how and raw material
resources and both parties agree upon the detailed plan and schedule for the
transfer of the manufacturing technology and know-how attached as SCHEDULE 1 to
this Amendment.
4.3.2 Microdrop agrees to make the necessary resources available to
accomplish the transfer of Microdrop Technology and Technical Information
hereunder. To this end, Microdrop agrees to supply Packard with drawings and
technical information, including to the extent available, all drawings necessary
for production of the Microdrop Products, including drawings of each part,
drawings of assembled products, and drawings of jigs, tools, production, testing
and inspection apparatus; data necessary for working, including processes,
suppliers, subcontractors, bills of material, working hours, and tolerances.
4.3.3 Microdrop grants to Packard permission at any time to send, at
Packard's expense and after prior verbal agreement from Microdrop on the dates,
a reasonable number of engineers for a reasonable time, to Microdrop's facility
to obtain any instructions or information which Packard may reasonably require
to manufacture the Microdrop Products. More specifically, Microdrop and Packard
agree to jointly develop in Microdrop's facility, production equipment for the
manufacturing of the Microdrop Products, and to transfer this equipment to
Packard's production facility in Downers Grove, Illinois, U.S.A., as soon as it
is ready for routine production of the Microdrop Products. At Packard's request
and expense, Microdrop agrees to send a reasonable number of engineers for a
reasonable time to Packard's Downers Grove facility to help with production
startup.
4.3.4 Until Packard is able to manufacture and supply the demand for
Microdrop Products, Microdrop agrees to manufacture, sell and deliver to Packard
Microdrop Products in accordance with the terms and conditions of Paragraph 3 of
the License Agreement.
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4.3.5 In the event that any improvement of the Microdrop Product, in
relation to manufacturing or use, is made by either of the parties, Technical
Information with respect thereto will be furnished to the other party without
payment. These improvements can be used by either party in their respective
Fields of Use.
4.3.6 Microdrop agrees to function as a second supply source to Packard of
Microdrop Products. Microdrop shall sell and deliver to Packard such
second-sourced Microdrop Products under the terms and conditions defined in
paragraph 3 of the Agreement.
4.3.7 Microdrop agrees to deliver to Packard, [* * *] Microdrop
Products as specified in the attached purchase order (EXHIBIT 1), at the
price of [* * *], and at the delivery rate detailed in EXHIBIT 1.
4.3.8 In addition to the confidentiality terms set forth in the Agreement,
Packard agrees to keep all technical information, drawings, specifications,
manufacturing instructions, and other information relating to the production of
Microdrop Products strictly confidential. Packard will not communicate, without
first obtaining the written consent of Microdrop, the same to anyone except to
its employees and subcontractors, and to the extent necessary for the proper
production of Microdrop Products in accordance with the provisions of this
Amendment.
3. Article 5.1(c) is hereby amended to read as follows:
(c) Running royalties during the term of this Agreement (including any
extensions) at the rate of (i) [* * *] of Net Sales by Packard of Licensed
Packard Products containing Microdrop Products manufactured by Microdrop,
(ii) [* * *] of Net Sales by Packard of Licensed Packard Products containing
Microdrop Products manufactured by Packard, and (iii) [* * *] of Net Sales by
Packard of Microdrop Products manufactured pursuant to the license granted in
Article 4.2 and not incorporated in a Licensed Packard Product.
4. Article 5.2 is hereby amended by adding "and Microdrop Products"
immediately following Licensed Packard Products" in the two places where
"Licensed Packard Products" appears therein.
[* * *] Indicates information omitted pursuant to a request for confidential
treatment and filed separately with the Securities and Exchange Commission
pursuant to Rule 24b-2 under the Securities Exchange Act of 1934,
as amended.
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5. Article 5.3 is hereby amended by adding "or Microdrop Products"
immediately following "Licensed Packard Products" where it appears therein.
6. The following new Article 5.5 is hereby added to the Agreement immediately
following Article 5.4:
5.5 In consideration of the exclusive license granted pursuant to
Article 4.2 thereof and the transfer of the technical know-how, Packard
agrees to pay Microdrop [***], in addition to the payments set forth in
paragraph 5 of the Agreement. Said sum of [* * *] will be payable as follows:
(a) [* * *] upon signing of a letter of intent relating to this
Amendment, receipt of which amount is hereby acknowledged by
Microdrop.
(b) [* * *] upon signing of this Amendment.
(c) [* * *] after successful transfer of the production to Packard,
payable as follows:
(1) [* * *] upon production of the first functional Microdrop
Product on Microdrop's new production line apparatus which
will be jointly developed by Packard and Microdrop as outlined
in Article 4.3.3 of this Amendment, no later than May 31,
1997; provided that if such production is delayed after May
31, 1997, the [* * *] payment shall be reduced by [* * *]
for each week of such delay.
(2) [* * *] upon production of the first forty (40)
functional Microdrop Products on the routine production line
transferred from Microdrop to Packard's facility in Downers
Grove, and the completion of all technology transfer
information and data, no later than July 31, 1997; provided
that if such production is delayed after July 31, 1997, the
[* * *] payment shall be reduced by [* * *] for
each week of such delay.
[* * *] Indicates information omitted pursuant to a request for confidential
treatment and filed separately with the Securities and Exchange Commission
pursuant to Rule 24b-2 under the Securities Exchange Act of 1934,
as amended.
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(d) [* * *] upon the sale by Packard of the 100th Licensed Packard
Product, provided that the sale is realized within a [* * *]
maximum period after delivery of the first Licensed Packard Product
which incorporates multiple Microdrop Products.
(e) [* * *] upon the sale of the 250th Licensed Packard Product
provided that the sale is made within a [* * *] maximum period
after delivery of the first Licensed Packard Product which
incorporate multiple Microdrop Products.
5.6 In addition, Packard shall pay Microdrop [* * *] for the
development of a production line at Microdrop, transferable to
Packard, for the routine production of Microdrop Products. This
amount will be paid upon the completion of the transfer of the
product line to Packard in Downers Grove.
7. Article 3.5 is hereby amended to read in its entirety as follows:
3.5 Microdrop shall refer to Packard all potential sales of Microdrop
Products within the Field of Use, and all inquiries from customers or
potential customers for Microdrop Products, worldwide within the Field of
Use. If Packard is unable to meet the needs of a customer, Packard may, in
its sole discretion, but shall not be required hereby to, request Microdrop
to fill the order from such customer that is not filled by Packard. Except
for the orders listed on SCHEDULE 2 hereto, which shall be filled by
Microdrop, Microdrop agrees to cancel all existing orders in the Field of Use
on the date of this Amendment and to refer such customers to Packard. Packard
shall pay Microdrop the sum of [* * *] in consideration of Microdrop's loss of
business opportunity hereunder. Within the Field of Use, the acceptance of
any new orders, and all decisions to, with respect to the supply of,
Microdrop Products and Licensed Packard Products, both to fill new orders and
for service and support of existing customers, shall be at the sole
discretion of Packard. Microdrop agrees to cooperate with and assist Packard
in seeking to convert Microdrop existing customer, [* * *] to the use of
Licensed Packard Products. If Packard determines that it is unable to deliver
to [* * *] Microdrop Products with the required specifications such as those
detailed in EXHIBIT 2, Packard agrees that Microdrop may deliver custom-built
[* * *] Indicates information omitted pursuant to a request for confidential
treatment and filed separately with the Securities and Exchange Commission
pursuant to Rule 24b-2 under the Securities Exchange Act of 1934,
as amended.
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Microdrop Products directly to [* * *] for its sole use in manufacturing
diagnostic tests.
IN WITNESS WHEREOF, the undersigned parties, acting through their duly
authorized representatives, have executed this Agreement in multiple
counterparts.
MICRODROP, GmbH
By: /s/ Michael Doering
-------------------------------
Name: Michael Doering
-----------------------------
Title: Managing Director
----------------------------
Date: September 30, 1997
-----------------------------
PACKARD INSTRUMENT COMPANY, INC.
By: /s/ Richard T. McKernan
--------------------------------
Name: Richard T. McKernan
------------------------------
Title: Managing Director
-----------------------------
Date: October 23, 1997
------------------------------
[* * *] Indicates information omitted pursuant to a request for confidential
treatment and filed separately with the Securities and Exchange Commission
pursuant to Rule 24b-2 under the Securities Exchange Act of 1934,
as amended.
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