LICENSE AGREEMENT
This Agreement, effective as of April __, 1996 ("Effective Date"), is made
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 owns production rights and valuable technology relating
to a microvolume liquid dispensing head consisting of a glass capillary tip with
ceramic piezo-electric activation;
WHEREAS, Microdrop has heretofore granted to Packard an option to acquire
an exclusive license from Microdrop for a specific field of use;
WHEREAS, Packard desires to exercise its option; and
WHEREAS, Microdrop and Packard desire to enter into the license as
contemplated by the option agreement.
NOW THEREFORE, in consideration of the premises and of the mutual
agreements and covenants herein contained, the parties hereto agree as follows:
I. DEFINITIONS
In this Agreement, the following terms shall have the following meanings:
1.1. "Affiliate" shall mean any entity which controls, is controlled or is under
common control with Microdrop or Packard. An entity shall be regarded as in
control of another entity if it owns or controls at least fifty percent
(50%) of the shares of the subject entity entitled to vote in the election
of directors (or, in the case of an entity that is not a corporation, for
the election of corresponding managing authority).
1.2. "Field of Use" shall mean all liquid handling applications in the life
sciences research and/or clinical diagnostics markets.
1.3. "Licensed Microdrop Technology" shall mean any and all Technology owned or
controlled by Microdrop during the term of this Agreement or any extension
thereof, relating to the engineering, development, design, manufacture,
production, use, operation, installation, sale or servicing of any
Microdrop Product, including without limitation any such Technology
developed during the term of the Option or during the term of this
Agreement (including extensions). 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.
1.4. "Licensed Packard Products" shall mean liquid handling products
manufactured or sold by Packard, which incorporate one or more Microdrop
Products and embody Microdrop Technology, and which are sold for use in the
Field of Use. As used herein, the term "liquid handling products" shall
mean products designed and used for the handling of liquids or fluids and
shall include all component parts necessary to the functional operation of
the liquid handling function, but shall not include products, parts of
components that may form part of an integrated unit or system that are not
functionally required for the liquid handling function.
1.5. "Microdrop Product" shall mean (i) a glass capillary dispensing head with
ceramic piezo-electric activation, including without limitation tip,
fluidic channels and drive electronics, and having the ability to dispense
fluids over a range of volumes from picoliters to microliters, with
picoliter resolution; (ii) any component thereof, and (iii) any improvement
or modification thereto.
1.6. "Net Sales" shall mean [* * *]. A "sale" shall also include a transfer or
other disposition for consideration other than cash, in which case such
consideration shall be valued at the fair market value thereof.
1.7. "Option" shall mean the option granted by Microdrop to Packard pursuant to
an Option Agreement dated September 18, 1995 to enter into the exclusive
license described herein.
1.8. "Technical Information" shall mean written technical information describing
the design, engineering, manufacture, production, use, operation,
installation, sale and servicing of any Microdrop Product or any
improvement or modification thereof.
1.9. "Technology" shall mean any trade secrets, know-how or proprietary
information, whether or not reduced to writing, including, but not limited
to, inventions, whether or not patentable, patents and patent rights,
patent applications, licenses, software, programs, prototypes, designs,
discoveries, techniques, methods, ideas, concepts, data, engineering and
manufacturing information, electronic control circuits, specifications,
diagrams, drawings, schematics, blueprints and parts lists.
II. OPTION EXERCISE
2.1. By its execution of this Agreement, Packard shall thereby be deemed to have
exercised the Option and such execution by Packard shall be deemed to
constitute the written notice specified in Article II.3. of the Option.
Microdrop hereby
[* * *] 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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acknowledges receipt from Packard of the Option fee described in Article
III of the Option.
III. PRODUCTION, SHIPPING AND MANUFACTURING OBLIGATIONS OF MICRODROP
3.1. Microdrop shall sell and deliver to Packard Microdrop Products in such
quantities and in accordance with purchase orders provided from time to
time by Packard during the term of this Agreement and thereafter for so
long as shall reasonably be required in order for Packard to establish a
second source for such Microdrop Products pursuant to Article 3.4.
3.2. The price for Microdrop Products sold to Packard hereunder shall be the
Fully-Loaded Cost therefor plus [* * *]. The Fully-Loaded Cost shall
include: [* * *].
3.3. Microdrop warrants for [* * *] from shipment, solely to Packard and not to
Packard's customers, that [* * *]. Microdrop shall, at its option, repair
or replace at no expense to Packard any Microdrop Product returned
under the foregoing warranty within thirty (30) days after Microdrop
receives the returned Microdrop Products from Packard.
3.4. If (a) at any time Microdrop fails to deliver Microdrop Products
to Packard within sixty (60) days of receipt of a bona fide order from
Packard, or (b) this Agreement shall be terminated under Article 10.1 or
Article 10.2 (except for termination by Microdrop for material breach by
Packard), Microdrop shall, and hereby does, grant to Packard a
non-exclusive, royalty-free, sublicenseable license to make, have made and
use Microdrop Products in Licensed Packard Products and to sell and
distribute Microdrop Products as a part of such Licensed Packard Products.
In such event, Microdrop will use its best efforts to transfer all
Technical Information and then existing raw material resources to Packard
or its sublicensee.
3.5 Until the first commercial sale by Packard of a Licensed Packard Product,
Microdrop reserves the right to sell Microdrop Products within the Field of
Use (a) directly to customers in Europe; provided that Microdrop shall
provide written notice to Packard of any sale or sales to a customer of
four (4) or more Microdrop Products and (b) to customers outside of Europe;
provided that Microdrop shall, prior to making any such sale, notify
Packard in writing of the intended sale and seek Packard's advice with
respect thereto. After the first commercial sale by
[* * *] 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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Packard of a Licensed Packard Product, Microdrop shall refer to Packard all
potential sales of Microdrop Products, and all inquiries from customers or
potential customers for Microdrop Products, worldwide within the Field of
Use. If Packard shall notify Microdrop that it is unable to meet the needs
of any such customer, Microdrop shall have the right to fill any order from
such customer not filled by Packard provided that any new order or
subsequent inquiry shall again be referred to Packard.
IV. EXCLUSIVE LICENSE
4.1. Microdrop hereby grants to Packard an exclusive, worldwide, royalty-bearing
license to use Microdrop Technology to make, have made and sell Licensed
Packard Products for the Field of Use. Said license shall include the right
of Packard to sublicense its Affiliates or third parties to distribute
Licensed Packard Products.
V. PAYMENTS AND ROYALTIES
5.1. In consideration of the rights and licenses granted hereunder, Packard
shall pay to Microdrop the following amounts:
(a) An initial payment in the amount of [* * *] to be paid in full within
thirty (30) days after the Effective Date. Microdrop hereby
acknowledges receipt of this payment;
(b) A payment in the amount of [* * *], to be paid in full within
thirty (30) days following the first commercial sale by Packard of a
Licensed Packard Product;
(c). Running royalties during the term of this Agreement (including any
extensions) at the rate of [* * *] of Net Sales by Packard of Licensed
Packard Products; and
(d). An amount equal to [* * *] of all up-front licensing fees, option
fees, and running royalties received by or due to Packard from any
third party to which Packard sublicenses any of the rights licensed to
Packard under Article 4.1 of this Agreement.
5.2. Royalties hereunder shall accrue with respect to Licensed Packard Products
upon the date of shipment by Packard or its Affiliate of such product to
the customer or other recipient thereof and shall be payable within thirty
(30) days after the end of each calendar quarter with respect to the
Licensed Packard Products shipped during such calendar quarter. Payment of
royalties hereunder shall be made in United States dollars by wire transfer
to an account at a United States banking institution designated by
Microdrop.
5.3. Notwithstanding the provisions of Article 5.1 above, no royalties shall be
payable by Packard with respect to transactions between Packard and its
Affiliates in
[* * *] 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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which Licensed Packard Products shall be for the internal use of Packard or
any of its Affiliates and not for ultimate sale to any third party.
5.4. If the aggregate royalties accrued under Article 5.1 for any of the
calendar years 1997 through 2006, inclusive, shall be less than the amount
specified for such year below, then, unless Packard shall pay, as agreed
minimum royalties for such year, the amount specified below for such year,
by the due date for royalty payments specified in Article 5.2 above, the
exclusive license granted to Packard pursuant to Article 4.1 above shall
thereupon automatically be changed and converted to and shall become a
non-exclusive license without further action of the parties hereto;
provided, however, that if in any of the foregoing years Packard shall pay
royalties in excess of the amount so specified, the amount of any such
excess may be applied to the immediately preceding year or to any of the
two (2) succeeding years in which the earned royalty did not amount to the
amount specified for such year and any adjustment required hereby shall be
made. The minimum royalties herein specified shall be as follows:
1997 [* * *]
1998 [* * *]
1999 [* * *]
2000 and thereafter [* * *]
VI. FUTURE PRODUCTS
6.1. If Microdrop shall, during the term of this Agreement (including any
extensions thereof), develop, either alone or in cooperation with any
third party, any liquid handling product using [* * *] Microdrop
agrees to offer to Packard a right of first refusal with respect to
an exclusive license to make, have made, sell and distribute all such
liquid handling products on substantially the same terms as set forth in
this Agreement. Packard shall have a period of [* * *] days after written
notice to it of such an opportunity, which notice shall describe the
project in reasonable detail, to inform Microdrop whether or not it
intends to enter into such an agreement. In the event that Packard
decides not to enter into an agreement for such a new market segment, or
if Packard shall not provide a response within [* * *] days, Microdrop
shall be free to offer the project to any third party for distribution
in the new market segment.
VII. RECORDS AND INSPECTION
7.1. Packard and Microdrop shall maintain complete and accurate records of all
data necessary to calculate: royalties due under Article 5, in the case of
Packard; and the transfer price of Microdrop Products under Article 3.2 in
the case of Microdrop. Each party shall make such records available for
inspection by authorized representatives of the other at such place or
places where such records are customarily kept upon reasonable notice and
at reasonable hours for the
[* * *] 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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purpose of verifying the accuracy of royalty or transfer price calculations
pursuant to this Agreement. Each party shall retain such records in its
possession for a minimum period of three (3) years following the date of
any payment the calculation of which is based in whole or in part upon such
records. Each party agrees to hold strictly in confidence all information
learned in the course of any inspection hereunder except to the extent that
it is necessary for such party to reveal such information in order to
enforce its rights under this Agreement.
VIII. INTELLECTUAL PROPERTY RIGHTS
8.1. Except as otherwise expressly provided in this Agreement, all rights, title
and interest to any improvements to Packard technology and any new
techniques and methods used to apply Packard technology made during the
term of this Agreement (including extensions), whether made solely by
Packard or by Microdrop, or jointly by any employees of Packard and/or
Microdrop, and resulting from any collaboration or joint efforts pursuant
to the Option or this Agreement shall be owned exclusively by Packard.
8.2. Except as otherwise expressly provided in this Agreement, all rights, title
and interest to any improvements to Microdrop Technology and any new
techniques and methods used to apply Microdrop Technology made during the
term of this Agreement (including extensions), whether made solely by
Microdrop or by Packard, or jointly by any employees of Microdrop and/or
Packard, and resulting from any collaboration or joint efforts pursuant to
the Option or this Agreement shall be owned exclusively by Microdrop.
IX. LITIGATION
9.1. In the event of any claim, suit, litigation or other proceeding against
Packard or any officer, director, employee or affiliate of Packard based in
whole or in part on a claim of infringement or violation of a patent,
trademark, copyright, or other intellectual property right of any third
party arising from the rights licensed to Packard hereunder or the use of
such rights by Packard (or any sublicensee), or the use or sale by Packard
of any Microdrop Product, Microdrop agrees to provide Packard with its full
support (technical advice, testimony, prior art, supporting documents,
etc.) to defend its position.
X. TERM; TERMINATION
10.1. The initial term of this Agreement shall be for a period from the
Effective Date through December 31, 2006. Thereafter, the term shall be
automatically extended for additional successive periods of one (1) year
each unless either party shall give written notice to the other at least
six (6) months prior to the end of the then existing term of its desire
that the term not be further extended.
10.2. 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 non-breaching party shall have first given ninety (90) days prior
written notice to the
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breaching party describing such breach and stating the non-breaching
party's intention to terminate this Agreement if such breach remains
uncured, and the breaching party thereafter fails to cure such breach.
10.3. Upon termination of this Agreement, all licenses in force at the time
shall terminate concurrently, except (a) the license granted under Article
4.1 (and the provisions of Article V) shall survive such termination, but
shall automatically convert to a non-exclusive license unless the
termination was by Packard for material breach by Microdrop, in which case
the license shall remain exclusive as long as minimum royalty payments as
specified in Article 5.4 are made; and (b) any license arising under the
provisions of Article 3.4(b) upon termination shall survive such
termination.
10.4. 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 3.3
and 3.4(b) and Articles VI, VIII, IX, X, XI, XII, and XIII (all
paragraphs) shall survive any termination of this Agreement, as well as
such other provisions as, by their intent or meaning, are intended to so
survive.
10.5. 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.
XI. CONFIDENTIALITY
11.1. Microdrop and Packard shall not disclose any confidential information of
the other party received pursuant to this Agreement or otherwise, or use
any such confidential information in any manner, or for any purpose, that
is not expressly permitted hereby, without the prior written consent of
such other party. These obligations shall not apply to: (a) information
which is known to the receiving party at the time of disclosure or
independently developed by the receiving party, and documented by written
records; (b) information disclosed to the receiving party by a third party
which has a right to make such disclosure; (c) information which becomes
patented or otherwise part of the public domain without breach of this
Agreement by the disclosing party; (d) disclosures of such confidential
information to the affiliates or employees of the disclosing party on a
need-to-know basis, provided the disclosing party takes reasonable
precautions to preclude any further disclosures of such confidential
information; or (e) disclosure of such confidential information to any
regulatory body reasonably required pursuant to this Agreement or as
required by applicable statute or regulation.
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11.2. PUBLICITY: Neither party shall, in connection with its activities under
this Agreement, use the name of the other party in any advertising,
promotional or sales literature, or other publicity, without prior written
consent obtained from the other party, which consent shall not be
unreasonably withheld.
XII. NON-COMPETITION
12.1. For so long as Packard maintains its exclusive rights pursuant to Article
4,1, except as permitted under Article 3.5, Microdrop agrees that it will
not work for, consult with or provide assistance to any person, company or
entity engaged in the manufacture, development, marketing or distribution
of liquid handling products used or useable in the Field of Use other than
Packard. For purposes hereof, it is agreed that Microdrop will be deemed
to be in violation of the foregoing if during the term of this Agreement
any of its officers, while employed by Microdrop, serves as a Director,
officer or employee of any corporation or other entity marketing products
which compete with liquid handling products of Packard in the Field of Use
or provides consulting services for any such corporation or other entity
in connection with a specific product which is competing and which such
Microdrop officer knows is intended to compete, with any liquid handling
product of Packard in the Field of Use.
12.2. Microdrop acknowledges and agrees that the extent of damage to Packard in
the event of a breach by it of the covenant not to compete contained in
this Article 12.2. would be difficult or impossible to ascertain in that
there would be no adequate remedy at law available to Packard in the event
of such breach. Consequently, Microdrop agrees that, in the event of such
breach, Packard shall be entitled to enforce the covenants contained in
this Article XII by injunctive or other equity relief in addition to
receiving damages or other relief to which Packard may be entitled.
XIII. GENERAL
13.1. 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 may 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 or a
sale of substantially all of the assets of such party to which this
Agreement relates.
13.2. Except as otherwise provided specifically herein, any controversy or claim
under this Agreement shall be settled by arbitration pursuant to the rules
of the commercial arbitration association in the United Kingdom (the
"Association"); provided that the parties shall first use their best
efforts to resolve such dispute by negotiation. Such arbitration shall be
conducted in accordance with the Commercial Arbitration Rules of the
Association. The decision reached by the
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arbitrator shall be conclusive and binding upon the parties hereto and may
be filed with the clerk of any court of competent jurisdiction, and a
judgment confirming such decision may, if desired by any party to the
arbitration, be entered in such court. Each of the parties shall pay its
own expenses of arbitration and the expenses of the arbitrator shall be
equally shared; provided, however, that if in the opinion of the
arbitrator any claim hereunder or any defense or objection thereto was
unreasonable, the arbitrator may assess, as part of the award, all or any
part of the arbitration expenses (including reasonable attorneys' fees)
against the party raising such unreasonable claim, defense or objection.
Nothing herein set forth shall prevent the parties from settling any
dispute by mutual agreement at any time.
13.3. Any legal or other formal notices under this Agreement shall be in writing
and shall be hand delivered, or sent either by registered mail, return
receipt requested, or other method capable of providing reasonable proof
of receipt thereof, to the attention of the party receiving such
communication at the address first set forth or at such other address as
either party may in the future specify to the other party.
13.4. This Agreement shall be governed by and construed in accordance with the
laws of the United Kingdom, without regard or giving effect to its
principles of conflict of laws.
13.5. No modification, supplement to or waiver of this Agreement or any addendum
hereto or any of their provisions shall be binding upon a party hereto
unless made in writing and duly signed by the party to be charged
herewith. In no event may the terms of this Agreement be changed, deleted,
supplemented or waived by any notice, purchase order, receipt, acceptance,
bill of lading or other similar form of document. A failure of either
party to exercise any right or remedy hereunder, in whole or in party, or
on one or more occasions, shall not be deemed either a waiver of such
right or remedy to the extent not exercised, or of any other right or
remedy, on such occasion or a waiver of any right or remedy on any
succeeding occasion.
13.6. This Agreement, and each addendum hereto, and each supplemental written
agreement contemplated hereunder, set forth the entire understanding and
agreement of the parties as to the subject matter thereof, and there are
no other understandings, representations or promises, written or verbal,
not set forth therein or on which either party has relied.
13.7. This Agreement is intended to be severable. If any provision(s) of this
Agreement are or become invalid, are ruled illegal by a court of competent
jurisdiction or are deemed unenforceable under the current applicable law
from time to time in effect during the term hereof, it is the intention of
the parties that the remainder of the Agreement shall not be affected
thereby and shall continue to be construed to the maximum extent permitted
by law at such time. It is further the intention of the parties that in
lieu of each such provision which is invalid, illegal, or unenforceable,
there shall be substituted or added as part of this Agreement by
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such court of competent jurisdiction a provision which shall be as similar
as possible, in economic and business objectives as intended by the
parties to such invalid, illegal or unenforceable provision, but shall be
valid, legal and enforceable.
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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: 6/5/1996
-------------------------------
PACKARD INSTRUMENT COMPANY, INC.
By: /s/ Richard T. McKernan
---------------------------------
Name: Richard T. McKernan
-------------------------------
Title: President
------------------------------
Date: June 15, 1996
-------------------------------
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