LICENSE AGREEMENT
This License Agreement ("Agreement"), effective as of September 30, 1998,
is made by and between:
DADE BEHRING INC., a State of Delaware corporation having its principal
office at 1717 Deerfield Road, Deerfield, IL 60015.
and
PACKARD INSTRUMENT COMPANY, INC., a State of Delaware corporation having
its principal office at 800 Research Parkway, Meriden, Connecticut 06450.
W I T N E S S E T H:
WHEREAS, Dade Behring owns certain patent rights, trade secrets, knowhow
and technology relating to luminescent oxygen channeling immunoassays;
WHEREAS, Dade Behring and Packard have heretofore entered into a certain
Letter of Intent effective February 28, 1998, as amended (the "LOI"), pursuant
to which Dade Behring granted to Packard a license to use, examine, modify and
enhance the LOCI technology for purposes of determining the feasibility of
commercializing products utilizing such technology, and an option to acquire a
license to utilize such technology in the Field of Use (as hereinafter defined);
WHEREAS, the parties now desire to enter into this Agreement to further
memorialize their agreements set forth in the LOI and to set forth the terms of
a definitive license agreement, as contemplated by the LOI;
WHEREAS, in order to avoid potential disputes, Dade Behring has entered
into a license agreement with [* * *] under which Dade Behring received the
right to grant sublicenses in accordance with the Sublicense Agreement (as
defined below), a copy of which is attached hereto as Exhibit A;
WHEREAS, due to Dade Behring's knowledge, expertise, and experience with
regard to the manufacture of certain products to be used in the practice of
LOCI, Packard and Dade Behring wish to enter into a Supply Agreement (as defined
below), a copy of which is attached hereto as Exhibit B, pertaining to the
supply of such products to Packard for the duration of this Agreement;
NOW THEREFORE, in consideration of the promises and of the mutual
agreements and covenants herein contained, the parties hereto agree as follows:
[* * *] 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.
I. DEFINITIONS
In this Agreement, the following terms shall have the following meanings:
1.1 "Affiliate" shall mean a corporation, company, or other entity of which
fifty percent (50%) or more of the ownership interest representing the
right to make the decisions for such corporation, company or entity is, now
or hereafter, owned or controlled, directly or indirectly, by a Party, but
such corporation, company, or other entity shall be deemed to be an
Affiliate only so long as such ownership or control exists.
1.2 "Analyte" shall mean and include any target to be detected by a specific
binding assay, including without limitation the following classes of
materials: proteins, deoxyribonucleic acids, ribonucleic acids,
carbohydrates, bacteria, polynucleotide probes, peptide nucleic acids, and
small molecules (the latter including but not limited to peptides, drugs,
steroids, and hormones).
1.3 "Consumables and Supplies" shall mean buffers, microplates, solutions, or
sample containers and other components that are marketed, packaged, used,
or sold by Packard and/or its Affiliates explicitly to practice LOCI.
1.4 "Customer" shall mean a Third Party non-Affiliate of Packard.
1.5 "Dade Behring" shall mean and be composed of Dade Behring Inc. and its
Affiliates.
1.6 "Dade Behring Improvements" shall mean inventions, discoveries, ideas,
processes, methods, compositions, formulae, techniques, information and
data, whether or not patentable, conceived, developed or reduced to
practice after the Effective Date that beneficially change or enhance the
economic and/or technical attributes of LOCI on which Dade Behring prepares
an invention record and/or upon which Dade Behring files for patent
protection. Dade Behring Improvements shall not include information
relating solely to any instrument developed by Dade Behring that uses LOCI
technology to the extent that such information is not, and could not
reasonably be expected to be, used or useful in the Field of Use.
1.7 "Dade Behring Original Technology" shall mean any and all Original
Technology owned or controlled by Dade Behring including, without
limitation, the Original Technology which is the subject of Dade Behring
Patents. For purposes of the foregoing, "controlled by" means possession of
the ability to grant a license or sublicense as provided for herein without
violating the terms of any agreement with or other arrangement with any
Third Party.
Page 2
1.8 "Dade Behring Patents" shall mean all patents and patent applications
listed in Exhibit C hereto.
1.9 "Dade Behring Supplemental Technology" shall mean any and all Supplemental
Technology owned or controlled by Dade Behring after the Effective Date but
during the term of this Agreement. Dade Behring Supplemental Technology
specifically excludes license rights granted to Dade Behring after the
Effective Date of this Agreement and Dade Behring Improvements.
1.10 "Dade Behring Technology" shall mean any and all Dade Behring Original
Technology, Dade Behring Supplemental Technology and Dade Behring
Improvements.
1.11 "Dade Behring Trademark" shall mean the common law "LOCI" trademark and any
registrations pertaining thereto.
1.12 "Effective Date" shall mean September 30, 1998.
1.13 "Execution Date" shall mean the date on which the last of the Parties to
this Agreement shall have executed this Agreement.
1.14 "Exclusive License" and "Non-exclusive License" shall mean the respective
licenses granted under Section 2.1.
1.15 "Field of Use" means [* * *].
1.16 "Homogeneous Assay" shall mean [* * *].
1.17 "Instrument" shall mean an instrument sold, placed, or distributed by
Packard and its Affiliates for the practice of LOCI.
1.18 "IN VITRO Diagnostics" shall mean diagnostic assays for the presence,
absence or quantification of an Analyte carried out on a specimen obtained
from a human being, except expressly excluding assays (which may or may not
be carried out on a specimen obtained from a human being) where the assays
are directed to
[* * *] 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.
Page 3
agricultural and in vitro veterinary testing, in vitro pharmaceutical
testing and/or clinical trials, food testing and/or testing for
environmental hazards.
1.19 "LOCI" shall mean the technology described in [* * *], including all
foreign counterparts, reissued patents, re-examined patents, continuations,
and continuations-in-part.
1.20 "Labels" shall mean [* * *].
1.21 "Licensed Products" shall mean all Instruments, Reagents, Products, or
Consumables and Supplies manufactured or sold by Packard or its Affiliates
which embody Dade Behring Technology or are explicitly sold to practice
LOCI.
1.22 "McCapra Patent Rights" shall mean the McCapra U.S. Patent No. 5,516,636
issued on May 14, 1996 entitled "Assays Utilizing Sensitizer-Induced
Production of Detectable Signals" ("the '636 Patent") and the McCapra U.S.
Patent No. 5,705,622 issued on January 6, 1998 entitled "Sensitizer
Conjugates Containing Porphyrins" ("the '622 Patent") and counterpart
patents and patent applications claiming priority to the '636 Patent or the
'622 Patent or to a patent application upon which the '636 Patent or the
'622 Patent claims priority. All current McCapra Patent Rights are listed
in attached Schedule A to the Sublicense Agreement.
1.23 "Net Sales Revenues" shall mean, as to Licensed Products, [* * *] of the
Net Invoice Price. The "Net Invoice Price" shall mean, as to Licensed
Products, [* * *] less applicable government imposed transportation taxes,
value-added taxes, and sales taxes. If an Instrument sold by Packard is
designed to use multiple detection technologies, including LOCI, "Net
Invoice Price" with respect to such Instrument shall mean [* * *] reduced
as described above and divided by the number of detection technologies
(e.g., fluorescence, luminescence, time-resolved fluorescence,
colorimetric, radio isotopes) that such Instrument is designed to use;
provided, however, for purposes of this calculation, such number shall
not exceed two (2).
[* * *] 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.
Page 4
1.24 "Nucleic Acid Diagnostics" shall mean [* * *].
1.25 "Original Technology" shall mean any LOCI related software and source code,
programs, prototypes, electronic control circuits, specifications,
diagrams, drawings, schematics, blueprints and parts lists that have been
reduced to writing as of the Effective Date, and all other LOCI related
trade secrets, know-how or proprietary information, including, without
limitation, inventions, discoveries, ideas, processes, methods,
compositions, formulae, techniques, information and data, whether or not
patentable, conceived, developed or created on or prior to the Effective
Date, whether or not reduced to writing, including, but not limited to,
inventions, whether or not patentable, patents and patent rights, patent
applications, licenses, designs, discoveries, techniques, methods, ideas,
concepts, data and engineering and manufacturing information. Original
Technology shall not include information relating solely to any instrument
developed by Dade Behring that uses LOCI technology to the extent that such
information is not, and could not reasonably be expected to be, used or
useful in the Field of Use.
1.26 "Packard" shall mean and be composed of Packard Instrument Company, Inc.
and its Affiliates.
1.27 "The Parties" shall mean Packard and Dade Behring, and "Party" shall refer
to a designated one of them.
1.28 "Product" shall mean any assemblage consisting of at least one Reagent
required to perform a Homogeneous Assay within the Field of Use, regardless
of whether or not the assemblage is packaged in the form of a kit.
"Product" shall include the combination of Reagents, buffers, appropriate
solutions or components required to perform a LOCI assay.
1.29 "Reagent" shall mean a chemically and/or biologically active assay reagent
for reaction with a specimen, the manufacture, use or sale of which reagent
is necessary or useful for the performance of LOCI and shall specifically
include Labels conjugated with or otherwise attached to biomolecules,
including, without limitation, the conjugates described in Part 2 of
Schedule S to the Supply Agreement. Reagents are not Labels.
1.30 "Separation" means the process of dividing or partitioning into component
parts; or removing a constituent by washing, filtration, evaporation,
centrifugation, magnetic attraction or other means.
[* * *] 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.
Page 5
1.31 "Sublicense Agreement" shall mean that certain Sublicense Agreement
effective as of September 30, 1998 between the Parties pertaining to the
sublicense of the McCapra Patent Rights by Dade Behring to Packard, a copy
of which is attached as Exhibit A hereto.
1.32 "Supplemental Technology" shall mean any LOCI related software and source
code, programs, prototypes, electronic control circuits, specifications,
diagrams, drawings, schematics, blueprints and parts lists that have been
reduced to writing after the Effective Date and during the term of this
Agreement, and all other LOCI related trade secrets, know-how or
proprietary information conceived or created on or after the Effective Date
and during the term of this Agreement, whether or not reduced to writing,
including, but not limited to, designs, discoveries, techniques, methods,
ideas, concepts, data and engineering and manufacturing information.
Supplemental Technology shall not include information relating solely to
any instrument developed by Dade Behring that uses LOCI technology to the
extent that such information is not, and could not reasonably be expected
to be, used or useful in the Field of Use.
1.33 "Supply Agreement" shall mean that certain Supply Agreement effective
September 30, 1998 between the Parties pertaining to Labels, a copy of
which is attached as Exhibit B hereto.
1.34 "Technical Information" shall mean written and/or oral technical
information describing Dade Behring Technology or describing the design,
engineering, manufacture, production, use, operation, installation, sale
and servicing of any Licensed Product or any improvement or modification
thereof relevant to the Field of Use. "Technical Information" shall not
include information relating solely to any instrument developed by Dade
Behring which may use LOCI technology exclusively in IN VITRO Diagnostics,
veterinary diagnostics, food testing, environmental testing, and
agricultural diagnostic testing.
1.35 "Third Party" shall mean an individual, corporation, company or other
entity other than one of the Parties.
II. EXCLUSIVE LICENSE AND NON-EXCLUSIVE LICENSE
2.1 Dade Behring and/or its Affiliates hereby grant to Packard and its
Affiliates a worldwide, royalty bearing, exclusive license ("Exclusive
License") to utilize the Dade Behring Original Technology and Dade Behring
Supplemental Technology, in the Field of Use, and to make, have made,
import, use, distribute, offer for sale and sell (or otherwise convey) the
Licensed Products within the Field of Use. Dade Behring and /or its
Affiliates hereby grant to Packard and its Affiliates a worldwide, royalty
bearing, Non-exclusive License ("Non-Exclusive License") to
Page 6
utilize the Dade Behring Improvements in the Field of Use, and to make,
have made, import, use, distribute, offer for sale and sell (or otherwise
convey) the Licensed Products within the Fieldof Use. Dade Behring and/or
its Affiliates also hereby grant to Packard and its Affiliates a worldwide,
royalty-bearing, non-exclusive license to utilize the Dade Behring
Trademark with respect to Licensed Products within the Field of Use.
2.2 Subject to the provisions of the Sublicense Agreement, this Agreement
specifically includes the right of Packard to sublicense the right of use
of Licensed Products to its Customers within the Field of Use for their own
internal research. [* * *]
2.3 Nothing in this License precludes the rights of Dade Behring, its
Affiliates, or [* * *] to use the Dade Behring Technology which is the
subject of this License for internal research purposes within the Field of
Use, or any purpose outside the Field of Use.
2.4 No license or right is granted by implication or otherwise with respect to
any patent application or patent except as specifically set forth herein.
III. DEVELOPMENT ASSISTANCE
3.1 Dade Behring agrees to make available for a period of nine (9) months
commencing on the Execution Date, at no additional cost to Packard, one FTE
Ph.D. level resource, with substantial prior experience involving LOCI and
conjugation of Labels and reasonably acceptable to Packard, to support
Packard's development effort as directed by Packard. If Packard requires
such assistance to take place outside of Dade Behring's facilities, Packard
agrees to reimburse Dade Behring for all reasonable business expenses,
including travel, food and lodging.
3.2 Packard agrees to proceed diligently to attempt to develop, manufacture,
distribute and sell Licensed Products with the goal of making a first
Commercial Sale (as defined in Section 4.2.2) of a Licensed Product within
[***] from the Execution Date. Prior to the first Commercial Sale, Packard
shall provide Dade Behring with monthly progress reports, due no later than
the 10th day of each month. Beginning the month before the first Commercial
Sale, Packard shall provide Dade Behring each six months with an updated
marketing report which shall contain a report of the marketing efforts
expended for the previous six months, and the marketing efforts planned for
the next six months. Notwithstanding the foregoing, and provided that
Packard has made all payments that have become due and payable under
Section 4.2, if Packard delivers notice to Dade Behring that it does not
intend to pursue further development, manufacture, distribution
or sale of Licensed Products, Packard shall be released as of the date
[* * *] 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.
Page 7
of such notice from all of its obligations under this Section 3.2, without
any further action, and Dade Behring shall have the right to terminate this
Agreement at any time thereafter; provided, however, Packard shall not
deliver such notice to Dade Behring earlier than [* * *].
IV. PAYMENTS
4.1 The parties acknowledge that Packard has heretofore made payment to Dade
Behring of [* * *] in consideration for the License Option and the right
to evaluate LOCI. Such payment is nonrefundable.
4.2 Packard shall pay to Dade Behring the following additional amounts, which,
once paid, become non-refundable, in consideration for the Exclusive
License and the Non-Exclusive License:
4.2.1 [* * *] within thirty (30) days of the Execution Date.
4.2.2 [* * *] within thirty (30) days of completion of a preproduction
unit of the first Licensed Product, but no later than nine months
after the Execution Date, and [* * *] within thirty (30) days of the
first Commercial Sale of the first Licensed Product. Commercial Sale
shall occur when a Licensed Product is invoiced to a Third Party by
Packard.
4.2.3 [* * *] within sixty (60) days of the end of the first calendar
quarter during which aggregate Net Sales Revenues of Licensed Products
(calculated from the date of the first Commercial Sale) exceeds
[* * *]; [* * *] within sixty (60) days of the end of the first
calendar quarter during which aggregate Net Sales Revenues of Licensed
Products (calculated from the date of the first Commercial Sale)
exceeds [* * *]; [* * *] within sixty (60) days of the end of the
first calendar quarter during which aggregate Net Sales Revenues of
Licensed Products (calculated from the date of the first Commercial
Sale) [* * *]; and [* * *] within sixty (60) days of the end of the
first calendar quarter during which aggregate Net Sales Revenues of
Licensed Products (calculated from the date of the first Commercial
Sale) exceeds [* * *].
V. ROYALTIES
5.1 In consideration of the payments received to date and provided for in
Article IV, no additional royalty shall be required for the use of the Dade
Behring Trademark. In addition to the fees provided for in Article IV,
Packard will pay to Dade Behring royalties on the sales of Licensed
Products in an amount equal to [* * *] of Net Sales Revenues of Licensed
Products. In the event that Packard licenses patent rights from a Third
Party necessary to make, have made, use, or sell, or for
[* * *] 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.
Page 8
its customers to use, the Licensed Products, and Packard agrees, under the
terms of such a license, to pay a royalty to such a Third Party, then the
royalty rate payable to Dade Behring with regard to such Licensed Products
shall be reduced by [* * *], up to a maximum [* * *] reduction for
Packard's initial aggregate Net Sales Revenues of Licensed Products of
less than [* * *], and up to a maximum [* * *] reduction for Packard's
aggregate Net Sales Revenues of Licensed Products of [* * *] or more.
Royalties shall be due and paid for the term of this Agreement. Excluded
from such reductions are royalties due under licenses taken by Packard for
[* * *]. The aggregate amount of all royalty payments made by Packard under
the Sublicense Agreement shall be applied by Dade Behring as a credit
against amounts owed by Packard under this Section 5.1.
5.2 If the aggregate royalties accrued under Section 5.1 for any of the
calendar years following the first Commercial Sale through the termination
of this Agreement, inclusive, shall be less than [* * *], then, Packard
shall pay to Dade Behring, as agreed minimum royalties for such year,
[* * *], less the amount of royalties accrued under Section 5.1 during such
year, unless on or prior to January 30 of any year, Packard shall advise
Dade Behring in writing that it desires to convert the licenses granted
hereunder to perpetual, royalty bearing (as set forth in Section 5.1),
non-exclusive licenses, in which event the licenses shall automatically be
so converted and this Section 5.2 shall no longer be of any force and
effect. Minimum royalties described in this Section 5.2 are due with the
fourth quarter due date of royalties according to Section 5.1 of any year.
5.3 All amounts due by Packard to Dade Behring under any provision of this
Agreement shall be payable in United States currency by electronic funds
transfer (SWIFT) to the account identified immediately below. The
obligations to pay shall only be fulfilled on the day on which the relevant
amount of money is credited to the aforesaid account. For the conversion of
non-US currency into U.S. Dollars with respect to payments due, the
average of the official spot selling rates published in the Wall Street
Journal on the last business day of each of the months during the period to
which the payment of royalties relates and including the Sixty (60) day
reporting period thereafter shall apply. If any payment is delayed, the
spot selling rate(s) valid on the last business day of the month(s) of the
delay shall be added to the average calculation. Packard shall be
responsible on its own account for any charges for conversion of currencies
and the transfer of funds into the designated Dade Behring account. Dade
Behring shall be responsible on its own account for its own corporate
income taxes.
[* * *] 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.
Page 9
[* * *]
If Packard shall fail to pay any amount specified under this Agreement
after the due date thereof, the amount owed shall bear interest at the
average discount rate(s) of the One - Month U.S. LIBOR published in the
Wall Street Journal on the last business day of the month(s) of the delay
plus [* * *] percentage points, from the due date until paid, provided,
however, that if this interest rate is held to be unenforceable for any
reason, the interest rate shall be the maximum rate allowed by law at the
time the payment is due. Any such losses suffered by Dade Behring in terms
of less favorable exchange rates as a result of such delayed payments will
be refunded by Packard to Dade Behring.
5.4 The Net Sales Revenues of the Licensed Products that are commercially used
by Packard and which are conveyed by Packard to any person, firm or
corporation, existing now or in the future, controlling, controlled by, or
under common control with Packard, or enjoying a special course of dealing
with Packard, shall be determined by reference to the Net Sales Revenues
which would be applicable under this Section in an arm's length transaction
for the sale of such Licensed Products by Packard to a Third Party other
than such person, firm or corporation. Royalties shall be fully due and
payable to Dade Behring on such Net Sales Revenues.
5.5 Packard shall within [* * *] days after the first day of January, April,
July and October of each year during the Term deliver to Dade Behring a
true and accurate royalty report as to Packard and its Affiliates. Such
reports shall cover the preceding [* * *] calendar months and shall be
submitted either (a) on the "Summary Royalty Report", a copy of which is
attached hereto as Appendix A, or (b) on a form generated by Packard which
duplicates the format of the Summary Royalty Report; and shall include,
with separate reporting as to Nucleic Acid Diagnostics, at least the
following (and subject to Section 5.4):
(i) separately the names of each Licensed Product and Combination Product
(as defined in the Sublicense Agreement) commercially used by Packard, and
conveyed to Third Parties during those [* * *] months; (ii) the total
gross invoice sales of Products commercially used by Packard and conveyed
to Third Parties during those [* * *] months; (iii) the total gross
invoice sales of Reagents commercially used by Packard and conveyed to
Third Parties during those [* * *] months; (iv) separately the total
gross invoice sales of such Combination Product commercially used by
Packard and conveyed to Third
[* * *] 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.
Page 10
Parties during those [* * *] months; (v) the total gross invoice sales of
Instruments commercially used by Packard and conveyed to Third Parties
during those [* * *] months; (vi) the total gross invoice sales of
Consumables and Supplies commercially used by Packard and conveyed to Third
Parties during those [* * *] months; (vii) the government imposed taxes
which were deducted; (viii) Net Sales Revenues and the calculation of total
royalties thereon; and (ix) the calculation of the net royalty payable to
Dade Behring for transfer to Dade Behring. If no royalties are due, it
shall be so reported.
The correctness and completeness of such report shall be attested to in
writing by a responsible financial officer for Packard. The royalty reports
shall be sent by Packard by the due date to the address stated in Section
11.2. Accompanying each such royalty report as to Packard and its
Affiliates, Packard shall pay to Dade Behring the royalty due under this
Agreement for the applicable period, including any payments due from
Affiliates.
5.6 Packard shall keep (and ensure that its Affiliates shall keep) correct and
complete records of account as to Licensed Products containing all
information required for the computation and verification of the Net Sales
Revenues and of the royalties or other payments to Dade Behring required by
way of any other provision under this Agreement. All books and the
supporting data shall be open at all reasonable times, for three (3) years
following the end of the calendar year to which they pertain (and access
shall not be denied thereafter, if records are reasonably available), to
the inspection of an independent certified public accountant retained by
Dade Behring and reasonably acceptable to Packard for the purpose of
verifying Packard's royalty statements and Packard's compliance in other
respects with this Agreement. Dade Behring shall limit such inspections to
once per calendar year. If in dispute, such records shall be kept until the
dispute is settled. The inspection of records shall be at Dade Behring's
sole cost and expense, unless the inspector concludes that royalties
reported by Packard for the period being audited are understated by [***]
or more from actual royalties and at least [***], in which case the costs
and expenses of such inspection shall be paid by Packard. The information
made available to the independent certified public accountant shall be in
accordance with standard auditing practices.
The independent certified public accountant may disclose the information
specified in Section 5.5, but not the additional information identified in
this Section, to Dade Behring. Notwithstanding the preceding sentence, in
the event that royalties reported by Packard for the period being audited
are, in the opinion of the independent certified public accountant,
understated by [* * *] or more from actual royalties and at least [* * *],
then Dade Behring shall have the right to obtain access to such additional
information identified in this Section (except for identification of
Packard's customers). Such access by Dade Behring shall be restricted to
the person designated as the financial controller of Dade Behring, and Dade
Behring's legal counsel. Subject to Article VIII, such
[* * *] 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.
Page 11
controller and legal counsel shall ensure that such additional information
is not disclosed in whole or part (verbally, by access to documents, or
otherwise) to any other persons; and that such information is not used by
Dade Behring for any purpose other than the collection of royalties and
enforcement of this Agreement. All information disclosed to Dade Behring,
and to the independent certified public accountant under this Section shall
be protected under Article VIII. All information disclosed to the
independent certified public accountant under this Section shall be kept
confidential from Dade Behring, except as specifically provided in this
Agreement.
5.7 In the event that any action is brought against Packard alleging that the
manufacture, use or sale of any Licensed Products or Labels infringes the
patent rights or any other rights of a Third Party and such allegation of
infringement relates to any Dade Behring Technology, Packard's obligation
to remit the royalties set forth in Section 5.2 to Dade Behring with
respect to the allegedly infringing Licensed Products shall be suspended,
provided that if such action terminates with no finding of infringement and
no other adverse finding or adverse effect, then Packard's obligation to
remit the royalty payments set forth in Section 5.2 shall be reinstated. No
other royalty or other obligation, including royalties due under the
Sublicense Agreement, shall be suspended in the event that any action is
brought against Packard alleging that the manufacture, use or sale of
Licensed Product or Labels infringes the patent rights or any other rights
of a Third Party and such allegation of infringement relates to any Dade
Behring Technology.
5.8 If, after the end of the third year from the Effective Date, and any
subsequent year of this Agreement, Packard's aggregate running royalties,
as computed in accordance with Section 5.1 hereof do not exceed [* * *],
then on or prior to January 30 of the following year, Dade Behring
has the option to terminate or convert the license granted hereunder to a
royalty bearing (as set forth in Section 5.1) non-exclusive license and
Section 5.2 hereof shall no longer be of any force and effect. Dade Behring
may not invoke the option of this Section 5.8 if the failure of Packard to
reach such aggregate running sales is attributable to the action or
inaction of Dade Behring. Dade Behring may not invoke the option of this
Section 5.8 if the failure of Packard to reach such aggregate running sales
is attributable to the cessation of sales of Licensed Products due to a
pending Third Party patent infringement suit against Packard based upon
Packard's manufacture, use or sale of Licensed Products.
5.9 The aggregate amount of all payments made by Packard under the Sublicense
Agreement shall be applied by Dade Behring as a credit against amounts owed
by Packard under Section 5.1 of this Agreement.
[* * *] 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.
Page 12
VI. INTELLECTUAL PROPERTY MATTERS
6.1 All rights, title and interest in and to any improvements to Dade Behring
Technology and any new techniques and methods used to apply Dade Behring
Technology, whether made by solely Dade Behring, solely by Packard or its
Affiliates, or jointly by any employees of Dade Behring and/or Packard or
its Affiliates and resulting from any collaboration or joint efforts
pursuant to this Agreement shall be owned exclusively Dade Behring.
6.2 All right, title and interest to any improvements to Original Technology or
Supplemental Technology of Packard or its Affiliates, and any new
techniques or methods used to apply thereto, whether made solely by Dade
Behring or by Packard, or jointly by any employees of Dade Behring and/or
Packard, and resulting from any collaboration or joint efforts pursuant to
this Agreement shall be owned exclusively by Packard.
6.3 During the term of this Agreement, each party shall promptly notify the
other in writing of any significant improvement or modification, invention
or discovery, whether or not believed to be patentable conceived, reduced
to practice, or otherwise developed which relates to the Original
Technology, Supplemental Technology or Dade Behring Improvement of the
other party. In addition, the notifying party shall promptly provide the
other party with a detailed written description of any such invention or
discovery. In the event that Dade Behring, in its sole discretion, elects
not to file for patent or other intellectual property protection with
regard to a LOCI related invention or discovery arising out of this
Agreement by Dade Behring, and Dade Behring determines that it does not
wish to maintain such invention or discovery as a trade secret, then Dade
Behring shall notify Packard of such decision. Packard, may, in its
discretion, file for intellectual property protection with regard to such
invention or discovery; provided that Dade Behring and its Affiliates will
have an irrevocable, royalty-free, world-wide, license, with the right to
fully sublicense, to practice under such invention or discovery. In the
event that Packard, in its sole discretion, elects not to file for patent
or other intellectual property protection with regard to a LOCI related
invention or discovery arising out of this Agreement by Packard, and
Packard determines that it does not wish to maintain such invention or
discovery as a trade secret, then Packard shall notify Dade Behring of such
decision. Dade Behring, may, in its discretion, file for intellectual
property protection with regard to such invention or discovery; provided
that Packard and its Affiliates will have an irrevocable, royalty-free,
world-wide, license, with the right to fully sublicense, to practice under
such invention or discovery.
6.4 Dade Behring and/or its Affiliates represent and warrant that it/they
has/have legal title to, owns, or is the licensee of, the Dade Behring
Original Technology, including the Dade Behring Patents, and has the right
to grant the licenses hereunder. Based solely on the actual knowledge as of
the Effective Date,
Page 13
(without any investigation) of Dade Behring's executive officers Dade
Behring represents that no other party has made any written claim of
ownership of or title to any of the Dade Behring Patents. Dade Behring has
not previously granted any rights (and is not bound by any agreement to
grant any rights) in the Dade Behring Original Technology, including the
Dade Behring Patents, that conflict with the rights granted to Packard
hereunder. Dade Behring represents and warrants that as of the Effective
Date, Dade Behring is a licensee of [* * *]. In its sole discretion, Dade
Behring shall take all actions as may be necessary to maintain the Dade
Behring Patents, including the payment of any maintenance fees, and ensure
that the Dade Behring Patents are in full force and effect throughout the
term of this Agreement. In the event that Dade Behring decides to abandon
a Dade Behring Patent or not make a maintenance fee payment in a particular
country, Dade Behring shall give Packard written notice of such decision,
provided that, where feasible, Dade Behring shall give Packard such notice
at least sixty (60) days prior to any deadline for taking action to
maintain any Dade Behring Patent. Packard shall notify Dade Behring in
writing, within thirty (30) days of the receipt of such notice whether
Packard shall assume the responsibilities for the prosecution and
maintenance of such Dade Behring Patent. Should Packard assume such
responsibilities, Packard may take such action as may be necessary to
maintain such patents, and may offset all costs of such action
against royalty payments due pursuant to Article V; provided that Dade
Behring and its Affiliates will have an irrevocable, royalty-free,
world-wide, license, with the right to fully sublicense, to practice under
such Dade Behring Patent. DADE BEHRING MAKES NO REPRESENTATIONS, CONDITIONS
OR WARRANTIES, WHETHER EXPRESS OR IMPLIED, WITH REGARD TO THE VALIDITY OR
ENFORCEABILITY OF THE DADE BEHRING PATENTS, OR THAT ANY MANUFACTURE,
IMPORTATION, USE, SALE OF, OTHER DISPOSAL, REPRODUCTION OR ADAPTATION OF
THE LABELS IS NOT AN INFRINGEMENT OF ANY PATENT, REGISTERED DESIGN,
COPYRIGHT OR UNREGISTERED DESIGN RIGHT NOT VESTED IN DADE BEHRING, WITH THE
SOLE EXCEPTION OF THE REPRESENTATION AND WARRANTY CONCERNING THE MCCAPRA
PATENTS, SET FORTH ABOVE.
VII. TERM; TERMINATION
7.1 The initial term of this Agreement shall be for a period from the Effective
Date through the last to expire of the Dade Behring Patents. Thereafter,
the license granted pursuant to Article II, Section 2.1, shall convert to a
royalty bearing, nonexclusive license for a period of ten years for
Licensed Products. If Packard so requests, Dade Behring shall, pursuant to
the terms of the Supply Agreement, continue to supply Packard with Labels
and be the exclusive supplier of Labels.
[* * *] 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.
Page 14
7.2 Either party shall have the right to terminate this Agreement at any time
for a material breach of this Agreement by the other party, provided that
the nonbreaching party shall have first given [* * *] days prior written
notice to the breaching party describing such breach and stating the
nonbreaching party's intention to terminate this Agreement if such breach
remains uncured, and the breaching party thereafter fails to cure such
breach [***].
7.3 No termination hereunder shall constitute a waiver of any rights or causes
of action that either party may have for any acts or omissions or breach
hereunder by the other party prior to the termination date. Articles I,
VIII, IX, X and Section 5.6 shall survive any termination of this
Agreement, as well as such other provisions as, by their intent or meaning,
are intended to so survive.
7.4 Except as expressly provided otherwise herein, any delays in or failures of
performance by either party under this Agreement shall not be considered a
breach of this Agreement if and to the extent caused by occurrences beyond
the reasonable control of the party affected, including but not limited to:
acts of God, new regulations or laws of any government; strikes or other
concerted acts of workers; fire, floods, explosions; riots; wars;
rebellion; and, sabotage, and any time for performances hereunder shall be
extended by the time of delay reasonably occasioned by such occurrence.
VIII. CONFIDENTIALITY
8.1 Each Party agrees that any financial, legal or business information or any
Technical Information relating to practice of LOCI disclosed to it (the
"Receiving Party") by the other (the "Disclosing Party") in connection with
this Agreement shall be considered confidential and proprietary and the
Receiving Party shall not disclose same to any Third Party and shall hold
it in confidence for a period of [* * *] from the date of disclosure
and will not use it other than as permitted under this Agreement provided,
however, that any information, know-how or data which is orally disclosed
to the Receiving Party shall not be considered confidential and proprietary
unless such oral disclosure is reduced to writing and given to the
Receiving Party in written form within thirty (30) days after oral
disclosure thereof. Such confidential and proprietary information shall
include, without limitation, marketing and sales information,
commercialization plans and strategies, research and development work
plans, and Technical Information such as patent applications, inventions,
trade secrets, systems, methods, apparatus, designs, tangible material,
organisms and products and derivatives thereof and all reports delivered by
Packard hereunder.
[* * *] 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.
Page 15
8.2 The obligations of confidentiality stated in the preceding Section shall
not be applicable to the extent:
a) such information is general public knowledge or, after disclosure
hereunder, becomes general or public knowledge through no fault of the
Receiving Party; or
b) such information can be shown by the Receiving Party by its written
records to have been in its possession prior to receipt thereof hereunder;
c) such information is received by the Receiving Party from any Third
Party for use or disclosure by the Receiving Party without any obligation
to the Disclosing Party provided, however, that information received by the
receiving Party from any Third Party funded by the Disclosing Party (e.g.
consultants, subcontractors, etc.) shall not be released from
confidentiality under this exception;
d) the disclosure of such information is required or desirable to
comply with or fulfill court orders, subpoenas, governmental requirements,
submissions to governmental bodies, or the securing of regulatory
approvals, provided, however, that the Disclosing Party first shall have
given notice to the other Parties in order to permit the Disclosing Party
to try to obtain a protective order requiring that the Information and/or
documents so disclosed be kept confidential and used only for the purposes
for which the order was issued; or
e) such information is disclosed to employees or contractors of the
Receiving Party or any Affiliate of the Receiving Party on a need to know
basis, provided the Receiving Party takes reasonable precautions to
preclude any further disclosure of such confidential information.
IX. INDEMNITY
9.1 Dade Behring shall indemnify, defend and hold harmless Packard and its
Affiliates, and the directors, officers employees and agents of Packard and
such Affiliates, and the successors and assigns of any of the foregoing
(the "Packard Indemnitees"), from and against any and all liabilities,
damages, losses, costs or expenses (including reasonable attorneys' and
professional fees and other expenses of litigation and/or arbitration)
resulting from a claim, suit or proceeding brought by a Third Party against
a Packard Indemnitee for [* * *] (the "Lawsuit"). Dade Behring's total
aggregate liability under this indemnification and for the warranties
and representations made in Section 6.4 shall be limited to [* * *]
[* * *] 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.
Page 16
[* * *]. In the event that a judgment or a settlement with Dade Behring's
consent is rendered in a Lawsuit, Packard may credit a portion of such
judgement or settlement against the royalty payments due and owing pursuant
to Section 5.1 as follows:
(a) the royalties due [* * *] must be paid without regard to such
judgement;
(b) in each reporting period, up to a maximum of [* * *] of the difference
between the running royalties owed pursuant to Section 5.1 hereof and the
royalties payable during such period under [* * *]; and
(c) the credit must be taken in consecutive reporting periods to the extent
of available running royalties.
[* * *]
9.2 EXCEPT AS PROVIDED IN SECTION 9.1, DADE BEHRING SHALL BE UNDER NO LIABILITY
WHATSOEVER TO PACKARD (WHETHER IN NEGLIGENCE OR OTHERWISE) FOR ANY EXPENSE,
LOSS, DAMAGE OR INJURY OF ANY KIND (INCLUDING ANY LOSS OF PROFIT OR
CONSEQUENTIAL DAMAGE) SUSTAINED BY PACKARD OR ANY THIRD PARTY ARISING OR
INCURRED IN CONNECTION WITH THE RESEARCH AND DEVELOPMENT AND APPLICATION OF
DADE BEHRING TECHNOLOGY BY PACKARD OR DERIVING DIRECTLY OR INDIRECTLY OUT
OF THE PROVISION OR USE OF THE DADE BEHRING PATENTS OR DADE BEHRING
TECHNOLOGY OR OTHERWISE ARISING OUT OF THE GRANT OF ANY RIGHTS HEREUNDER,
OR THE PROVISION OF ANY INFORMATION IN CONNECTION HEREWITH.
9.3 Except for liabilities, damages, losses, costs or expenses arising from or
related to a Lawsuit described Section 9.1, Packard shall indemnify, defend
and hold harmless Dade Behring and its Affiliates, and the directors,
officers, employees and agents of Dade Behring and such Affiliates, and the
successors and assigns of any of the foregoing (the "Dade Behring
Indemnitees"), from and against [* * *]
[* * *] 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.
Page 17
9.4 If either party intends to claim indemnification under this Article IX, it
shall promptly notify the other party (the "Indemnifying Party") in writing
of any loss, claim, damage, liability or action and the Indemnifying Party
shall have the right to assume the defense thereof with counsel mutually
satisfactory to the parties. The indemnity agreement in this Article IX
shall not apply to amounts paid in settlement of any loss, claim, damage,
liability or action if such settlement is effected without the consent of
the Indemnifying Party, which consent shall not be withheld unreasonably.
The failure to deliver written notice to the Indemnifying Party within a
reasonable time after the commencement of any such action, if prejudicial
to its ability to defend such action, shall relieve the Indemnifying Party
of any liability to the Indemnitee under this Section 9.4. At the
Indemnifying Party's request, the Indemnitee and its employees and agents,
shall cooperate fully with the Indemnifying Party and its legal
representatives in the investigation of any action, claim or liability
covered by this indemnification and provide full information with respect
thereto.
X. ADDITIONAL TRADEMARK PROVISIONS
10.1 If Packard, in its sole discretion, uses the Dade Behring Trademarks, it
shall legibly apply the Dade Behring Trademarks to each item and all
cartons and cases of and for each and every one of the Licensed Products
manufactured, distributed or sold under this Agreement in a manner approved
by Dade Behring. (Once approval is obtained, all similar materials may be
marked in the same manner without additional approvals.) On advertising,
promotional, packaging and wrapping material and any other such material
wherein the Dade Behring Trademarks appear, the initials "TM" or (R) shall
be used as directed by Dade Behring from time to time in connection with
the Dade Behring Trademarks.
10.2 At all times during the Term of this Agreement, Packard shall maintain the
quality standards set forth in this paragraph in connection with its use of
the Dade Behring Trademarks. Packard shall not use the Dade Behring
Trademarks other than in connection with the Licensed Products. The
Licensed Products that bear the Dade Behring Trademarks shall be at least
equal in quality to comparable unlicensed products as then manufactured and
marketed by Packard. Dade Behring shall have the right to reasonably modify
or supplement the quality standards applicable hereunder by providing
written notice thereof to Packard with the express approval of Packard,
which approval shall not be unreasonably
Page 18
withheld under the circumstances. Packard shall promptly furnish to Dade
Behring, without cost, any samples of advertisements or other then existing
uses of the Dade Behring Trademarks requested by Dade Behring. Dade Behring
also shall have the right to inspect the Licensed Products and Packard's
facilities and business operations to determine their conformity with the
quality standards set forth herein. Technical meetings to address mutually
important issues are to be held on an "as needed" basis.
10.3 Goodwill derived through use of the Dade Behring Trademarks inures to the
benefit of Dade Behring. Packard recognizes the great value of the
publicity and goodwill associated with the Dade Behring Trademarks and, in
such connection, acknowledges that such goodwill, and all rights in the
Dade Behring Trademarks, exclusively belong to Dade Behring. Packard
further recognizes and acknowledges that a breach by Packard of any of its
covenants, agreements or undertakings with regard to the Dade Behring
Trademarks may cause Dade Behring irreparable damage, which cannot be
readily remedied in damages in an action at law, and may in addition
thereto, constitute an infringement of the Dade Behring Trademarks thereby
entitling Dade Behring to immediate injunctive relief relative to products
bearing the Dade Behring Trademarks, costs and reasonable attorneys' fees.
10.4 During the term hereof, Packard agrees that:
(a) It will not attack the title of Dade Behring in and to the Dade
Behring Trademarks, nor will it attack the validity of the trademark
license granted hereunder;
(b) It will not misuse the Dade Behring Trademarks;
(c) It will manufacture, sell and distribute the Licensed Products
that bear the Dade Berhing Trademarks in an ethical manner and in
accordance with the terms and intent of this License Agreement;
(d) It will not create any expenses chargeable to Dade Behring without
the prior written consent of Dade Behring; and
(e) It will comply with all laws and regulations relating or
pertaining to this License Agreement or to the manufacture, sale,
advertising or use of the Licensed Products; maintain the quality and
standards required by this License Agreement; and comply with all
requirements and regulations of any regulatory agencies which have
jurisdiction over the Licensed Products.
10.5 Registration and any other protection for the Dade Behring Trademarks shall
only be obtained by Dade Behring in its name and at its expense. Packard
shall furnish
Page 19
to Dade Behring at its request any information about, and specimens
illustrative of, the manner of use of the Dade Behring Trademarks by
Packard. All use of the Dade Behring Trademarks by Packard and its
Affiliates shall inure to the benefit of Dade Behring. Enforcement of the
Dade Behring Trademarks by the institution of litigation or otherwise shall
be in the sole discretion of Dade Behring, but Packard shall cooperate with
Dade Behring by providing documentary evidence, employee testimony or the
like in any enforcement action undertaken by Dade Behring. Dade Behring
shall reimburse Packard for any out of pocket expenses incurred by Packard
with regard to such cooperation. Packard shall notify Dade Behring in the
event that Packard obtains information related to infringement of the Dade
Behring Trademarks.
XI. GENERAL
11.1 This Agreement shall be binding upon the parties' respective successors and
permitted assigns. Neither party may assign this Agreement or any of its
rights or obligations hereunder without the prior written consent of the
other party (not to be unreasonably withheld), and any such attempted
assignment shall be void; provided, that either party shall assign this
Agreement as part of a merger or consolidation in which the surviving
entity assumes all of such party's rights and obligations hereunder to such
surviving entity and that either party shall assign this Agreement upon the
sale of substantially all of the assets of such party to which this
Agreement relates to the purchaser of such assets.
11.2 Any notice required or permitted to be given by this Agreement shall be
given postpaid by first class, registered or certified mail, or by courier,
properly addressed to the other Parties at the respective address(es) as
shown below:
If to PACKARD
Packard Instrument Company, Inc.
800 Research Parkway
Meriden, CT 06450
Attention: President
with a copy to:
Packard Instrument Company, Inc.
800 Research Parkway
Meriden, CT 06450
Attention: Legal Department
If to BEHRING:
President, Microbiology
Dade BEHRING, Inc.
1717 Deerfield Road,
Deerfield, Illinois 60015 U.S.A.
Page 20
with a copy to:
General Counsel
Dade Behring Inc.
1717 Deerfield Road
Deerfield, Illinois 60015 U.S.A.
Any Party may change its address(es) by providing notice to the other
Parties. Unless otherwise specified herein, any notice given in accordance
with the foregoing shall be deemed given within four (4) full business days
after the day of mailing, or one full business day after the date of
delivery to the courier, as the case will be.
11.3 This Agreement, the Supply Agreement, and the Sublicense Agreement
constitute the entire agreement between the Parties as to the subject
matter hereof, and all prior negotiations, representations, agreements and
understandings are merged into, extinguished by and completely expressed by
it. This Agreement, the Supply Agreement, and the Sublicense Agreement may
be modified or amended only by a writing executed by authorized officers of
each of the Parties.
11.4 This Agreement and its effects are subject to and shall be construed and
enforced in accordance with the laws of the State of Delaware, U.S.A.,
except as to any issue which depends upon the validity, scope or
enforceability of any patent, which issue shall be determined in accordance
with the applicable patent laws of the United States or the subject foreign
country. The Parties agree that the exclusive jurisdiction and venue for
any dispute or controversy arising from the Agreement shall be in the
United States District Court for the District of Delaware if federal
jurisdiction exists, and if no federal jurisdiction exists, then in the
state courts of Delaware.
11.5 Nothing in this Agreement shall be construed so as to require the
commission of any act contrary to law, and wherever there is any conflict
between any provision of this Agreement or concerning the legal right of
the Parties to enter into this Agreement and any statute, law, ordinance or
treaty, the latter shall prevail, but in such event the affected provisions
of the Agreement shall be curtailed and limited only to the extent
necessary to bring it within the applicable legal requirements.
11.6 Should any provision of this Agreement be or become invalid, then the
Parties hereto shall modify such invalid provision to render it valid and
such that its economic effect comes as close as possible to that of the
invalid provision. In any event, all other provisions of this Agreement
shall be deemed valid and enforceable to the full extent possible.
11.7 The failure of any Party to take action for non-performance or for any
breach of this Agreement shall not be construed as a general waiver or
relinquishment of any such term or condition, or of the right to enforce or
take advantage of the same in respect of any breach or non-observance
thereof, either original or recurring.
Page 21
IN WITNESS WHEREOF, the undersigned parties, acting through their duly
authorized representatives, have executed this Agreement in multiple
counterparts.
DADE BEHRING INC.
By: /s/ Friedhelm Blobel
-------------------------------
Name: Friedhelm Blobel
Title: Executive Vice President
Date: 12/7/98
PACKARD INSTRUMENT COMPANY, INC.
By: /s/ Richard McKernan
-------------------------------
Name: Richard McKernan
Title: President
Date: 12/7/98
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