EXHIBIT 10.1
SUBLICENSE AGREEMENT
This Sublicense Agreement (the "Agreement") is entered into and made
effective this 1st day of April, 2004, (the "EFFECTIVE DATE") between Matritech,
Inc., a Massachusetts corporation, whose principal place of business is at 000
Xxxxxx Xx., Xxxxxx, XX 00000 (hereinafter referred to as "MATRITECH") and Xxxxxx
Laboratories, an Illinois corporation, whose principal place of business is at
000 Xxxxxx Xxxx Xxxx, Xxxxxx Xxxx, Xxxxxxxx 00000-0000 (hereinafter referred to
as "ABBOTT").
For and in consideration of the mutual promises and covenants set forth
below, MATRITECH and ABBOTT agree as follows:
1.0 DEFINITIONS.
1.1 "AFFILIATE" shall mean any corporation or other business entity
controlled by, controlling or under common control with the recited entity. For
this purpose "control" shall mean direct or indirect beneficial ownership of
more than fifty percent (50%) of the voting stock of, or more than fifty percent
(50%) interest in the income of such corporation or other business entity and
the ability to direct the conduct of its business affairs on a regular basis.
1.2 "PROFESSIONAL FIELD" shall mean the human field for the professional
market only. For clarification purposes, the PROFESSIONAL FIELD shall exclude
any PRODUCT sold into the OTC Field.
1.3 "OTC FIELD" shall mean the human field for the
over-the-counter/consumer market, which includes any PRODUCT labeled for sale or
marketed to a final purchaser of a PRODUCT who purchases the PRODUCT for the
purpose of diagnosis of themselves or their family and friends.
1.4 "FIELD" shall mean the PROFESSIONAL FIELD and the OTC FIELD (i.e., any
uses in the human field).
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1.5 "LICENSED PATENT(S)" shall mean United States Patent Nos. 5,073,484,
5,654,162 and 6,020,147; any patents resulting from a reexamination or reissue
from any of the foregoing patents; and any patents, whether issued in the United
States or any other country, which result from an application, whether a
continuation, continuation-in-part, division, foreign equivalent or any other
type, claiming priority from US Application Serial Nos. 356,459; 467,229;
609,794; 891,932; 574,607; and/or 891,864 to Xxxxxxx, et al and/or Xxxxx, et al.
A complete list of LICENSED PATENTS is set forth in Appendix A.
1.6 "PRODUCT(S)" shall mean any product, device, instrument, kit, or
component thereof, the making, using, importing, or selling of which would, in
the absence of the sublicense granted hereunder, infringe, contribute to the
infringement of, or induce the infringement of any VALID CLAIM of a LICENSED
PATENT.
1.7 (a) "NET SALES" shall, unless otherwise specified in this Section 1.7,
equal the amount charged for the PRODUCT by MATRITECH or its AFFILIATES to a
non-affiliated third party (such as a distributor or physician), less, to the
extent they are applicable to the sale of the PRODUCT, an amount equal to: (i)
cash discounts allowed and taken by the non-affiliated third party in connection
with the sale of the PRODUCT, (ii) amounts for transportation or shipping
included in the amount charged to the non-affiliated third party purchasers,
(iii) amounts repaid, credited or rebated by MATRITECH or one of its AFFILIATES
to the non-affiliated third party by reason of a rejection or return of the
PRODUCT, (iv) taxes and duties included in the amount charged to the
non-affiliated third party, and (v) bad debt which shall not exceed [**] percent
([**]%) percent of gross sales. (The foregoing are hereinafter collectively
referred to as the "Deductions").
(b) When a PRODUCT is sold by MATRITECH or one of its AFFILIATES to
a purchaser with which the seller does not deal at arms length, the NET SALES
for that PRODUCT shall equal an average of the NET SALES, as calculated by
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MATRITECH using Section 1.7(a) above, for similar PRODUCTS sold, within the same
calendar quarter as the PRODUCT, to unaffiliated purchasers in arms length
transactions who are in the same geographic market and class of purchasers as
the non-arms length purchaser.
(c) When a PRODUCT is not sold, and is not a free replacement or
sample, but is OTHERWISE DISPOSED OF (as defined in Section 1.8 below), the NET
SALES of that PRODUCT shall equal an average of the NET SALES, as calculated by
MATRITECH using Section 1.7(a) above, for similar PRODUCTS sold, within the same
calendar quarter as the PRODUCT that is OTHERWISE DISPOSED OF, to unaffiliated
purchasers in arms length transactions who are in the same geographic market in
which the PRODUCT was OTHERWISE DISPOSED and the same class of purchasers to
whom the PRODUCT was OTHERWISE DISPOSED.
(d) When packaged with other products or assays which have
commercial utility other than in combination with the PRODUCT (a "Packaged
Product"), and the PRODUCT is not separately priced, the NET SALES of that
PRODUCT shall equal an amount calculated by multiplying the amount charged by
MATRITECH or one of its AFFILIATES for the sale of the Packaged Product less the
applicable Deductions times a fraction, the numerator of which shall be the
average of the NET SALES, as calculated by MATRITECH using Section 1.5(a) above,
for similar PRODUCTS sold, without such other products or assays, within the
same calendar quarter as the sale of the Packaged Product, to unaffiliated third
parties located in the same geographic market in which the Packaged Product was
sold, and the denominator of which shall be the sum of the average of the
amounts charged for the PRODUCTS and of the other products included in the
Packaged Product sold separately, within the same calendar quarter as the sale
of the Packaged Product, to unaffiliated third parties located in the same
geographic market in which the Packaged Product was sold less the applicable
Deductions. In the event that there is no established NET SALES for the
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PRODUCT when sold without such other products or assays then the fraction shall
be a number whose numerator shall be the average of the fully burdened costs, as
established by the cost accounting records of MATRITECH, to manufacture all
non-packaged PRODUCTS, similar to the PRODUCT that was included in the Packaged
Product, that were manufactured in the same calendar quarter in which the
Packaged Product was sold and whose denominator shall be the average of the
fully burdened costs to manufacture all products included in the Packaged
Products similar to the Packaged Product that were manufactured in the same
calendar quarter in which the Packaged Product was sold.
(e) In the event that a PRODUCT is incorporated into a total package
in which said PRODUCT contributes only a small proportion of the value of the
total package, but the adjustment set forth hereinabove in Section 1.7(d) is
impractical, the parties shall negotiate in good faith to establish an equitable
adjustment to the NET SALES for such PRODUCT to fairly reflect the proportion of
the value of the total package contributed by the PRODUCT. However, in no case
will the value be attributed to the PRODUCT which exceeds that obtained by using
a factor, the numerator of which shall be the number of results obtained from
the PRODUCT and the denominator of which shall be the total number of results
provided by the total package.
1.8 "OTHERWISE DISPOSED OF" shall mean and include:
(a) the delivery of any amount of PRODUCT, other than free
replacements or reasonable quantities of free samples that are standard in the
industry, or PRODUCTS consumed or used to satisfy regulatory requirements that
are standard in the industry, by MATRITECH to others in any transaction other
than a sale, regardless of the basis of consideration, if any; or
(b) the placing into use of any PRODUCT by MATRITECH for any
purpose, other than its internal routine testing and product development,
provided that the scrapping or destruction of any PRODUCT shall not fall within
the definition of
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"OTHERWISE DISPOSED OF" and no value in respect thereof shall be included in
calculating the NET SALES of the PRODUCT. A PRODUCT shall be considered
OTHERWISE DISPOSED OF when used or shipped by, or on behalf of, MATRITECH.
1.9 "CALENDAR QUARTER" shall mean any period of three consecutive calendar
months beginning January 1, April 1, July 1 and October 1 occurring during the
term of this Agreement.
1.10 "TERRITORY A" shall mean all the countries of the world, excluding
the United States.
1.11 "TERRITORY B" shall mean the United States.
1.12 "VALID CLAIM" shall mean, with respect to a particular country, a
claim of an issued patent that (a) has not lapsed or become abandoned,
disclaimed, denied, revoked, or admitted to be invalid or unenforceable through
reissue or disclaimer or otherwise in such country, and (b) has not been
declared invalid or unenforceable by a court of competent jurisdiction or an
administrative agency for which there is no further right of appeal or for which
the right of appeal is waived.
2.0 LICENSE GRANT AND RELEASE.
2.1 Subject to the terms and conditions herein, ABBOTT hereby grants to
MATRITECH and its AFFILIATES, who accept the same, a limited non-exclusive,
personal and non-transferable (except as set forth herein), right and sublicense
under the LICENSED PATENTS, to make, have made for their own use and sale, use,
offer to sell, sell, have sold and import PRODUCTS within the FIELD and within
TERRITORY A and TERRITORY B, and to practice the methods claimed in the LICENSED
PATENTS in connection with such PRODUCTS, and to extend to their customers
purchasing PRODUCTS the right to use and sell the PRODUCTS purchased and to
practice the methods claimed in the LICENSED PATENTS in connection with such
PRODUCT in the FIELD and within TERRITORY A and TERRITORY B. For purposes of
clarification,
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MATRITECH'S agents, custom manufacturers, distributors and sub-contractors will
be covered by this license for MATRITECH'S PRODUCTS.
2.2 ABBOTT further hereby releases MATRITECH and its AFFILIATES, and its
and their officers and employees, agents, custom manufacturers, distributors,
subcontractors, and customers from any liability for any infringement of the
LICENSED PATENTS related to MATRITECH PRODUCTS arising from activities which
occurred prior to the EFFECTIVE DATE.
2.3 No license is hereby granted to MATRITECH by implication, estoppel, or
otherwise under any patent or application thereof other than under the LICENSED
PATENTS.
3.0 TERM.
3.1 This Agreement shall become effective as of the EFFECTIVE DATE hereof
and shall continue in effect until the last to expire of the LICENSED PATENTS
unless earlier terminated pursuant to Article 7.0.
4.0 PAYMENTS AND REPORTING.
4.1 In consideration for the sublicense and release granted hereunder,
MATRITECH shall pay or cause to be paid to ABBOTT:
(a) A non-refundable fee of [**] shall be paid as follows: [**] due
on or before August 20, 2004, and [**} due on or before December 31, 2004, and
[**] due on or before December 31, 2005; and
(b) A royalty for PRODUCTS sold in the PROFESSIONAL FIELD at the
following rates: [**] percent ([**]) of the NET SALES of each PRODUCT sold or
OTHERWISE DISPOSED OF on or subsequent to the EFFECTIVE DATE in the PROFESSIONAL
FIELD in TERRITORY B, and [**] percent ([**]) for the first [**] million dollars
($[**],000,000.00) of the Net Sales of PRODUCTS per year made in TERRITORY B but
sold or OTHERWISE DISPOSED OF on or subsequent to the EFFECTIVE DATE in the
PROFESSIONAL FIELD in TERRITORY A, and [**] percent
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([**]) for Net Sales over [**] million dollars ($[**],000,000.00) of PRODUCTS
per year made in TERRITORY B but sold or OTHERWISE DISPOSED OF on or subsequent
to the EFFECTIVE DATE in the PROFESSIONAL FIELD in TERRITORY A. For
clarification purposes, the [**] million dollar threshold for determining
certain royalty rates shall be calculated on an annual basis (from April 1 each
year through March 31 of the next succeeding year), and shall not reflect
cumulative sales from prior periods.
(c) A royalty for PRODUCTS sold in the OTC FIELD at the same rates
set forth in Section 4.1(b) hereof, but NET SALES of PRODUCTS in the OTC FIELD
shall be multiplied by [**] before applying the royalty rates.
4.2 It is expressly understood that more than one (1) LICENSED PATENT may
issue in a country. However, in no event shall the total royalty for any PRODUCT
made, used, or sold after the EFFECTIVE DATE exceed the amounts stated in
Section 4.1(b) hereinabove, regardless of where such PRODUCT is made, used, or
sold. For clarification purposes, PRODUCTS are defined on a country-by-country
basis and no royalty shall be payable for any Matritech product which is not a
PRODUCT.
4.3 MATRITECH's obligation to pay royalties under Section 4.1 on PRODUCTS
shall only extend to PRODUCTS whose manufacture, sales or use at the time of the
manufacture or sale is covered by a VALID CLAIM of a LICENSED PATENT in the
country in which such PRODUCT is being manufactured, sold or used.
Upon the request of MATRITECH ABBOTT shall promptly inform MATRITECH
when any claim of a LICENSED PATENT expires, lapses, becomes subject to a final
decision of invalidity or unenforceability, or if any U.S. Patent or patent
application covered by this Agreement becomes involved in an interference
proceeding.
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4.4 No royalty shall accrue or become due more than once for a PRODUCT.
4.5 For all sales and royalty-bearing transfers and uses occurring on or
subsequent to the EFFECTIVE DATE, MATRITECH shall provide written reports to
ABBOTT within sixty (60) days after the end of each CALENDAR QUARTER, stating in
each report for each different type of PRODUCT sold, OTHERWISE DISPOSED OF or
given away as free samples or replacements during such CALENDAR QUARTER: (i) the
number of PRODUCTS sold, (ii) the number of PRODUCTS OTHERWISE DISPOSED OF,
(iii) the number of PRODUCTS given away as free samples or replacements, (iv)
the trade name or marketed name of the PRODUCT, and (v) the total of the NET
SALES of PRODUCT sold.
4.6 (a) Concurrently with the making of each report MATRITECH shall pay to
ABBOTT all royalties due, in the amount specified in Section 4.1(b), on the
PRODUCTS included in the report.
(b) Any late payment shall bear interest at the rate of one percent
(1%) per month.
4.7 All payments shall be made hereunder in United States Dollars;
provided, however, that if the proceeds of the sales upon which such royalty
payments are based are received by MATRITECH in a foreign currency or other form
that is not convertible or exportable in United States Dollars, MATRITECH shall
pay such royalties in the currency of the country in which such sales were made
by depositing such royalties in XXXXXX'x name in a bank designated by ABBOTT in
such country. Royalties in United States Dollars shall be computed by converting
the royalty in the currency of the country in which the sales were made in
accordance with the procedures ordinarily used by MATRITECH in converting
foreign currency sales in its normal business operations, which procedures shall
be in accordance with generally accepted accounting principles.
4.8 In the event that any taxes, withholding or otherwise, are levied by
any taxing authority in connection with accrual or payment of any royalties
payable to
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ABBOTT under this agreement, MATRITECH shall have the right to pay such taxes to
the local tax authorities on behalf of ABBOTT and the payment to ABBOTT of the
net amount due, after reduction by the amount of such taxes, shall fully satisfy
MATRITECH's royalty obligations under this Agreement, provided that appropriate
documentation of such tax payment, including evidence of payment and receipt or
any other appropriate documentation, is provided to ABBOTT.
4.9 All payments made hereunder shall be made to ABBOTT at the address set
forth in Article 6.0 of this Agreement or at such changed address as ABBOTT
shall specify by written notice.
4.10 MATRITECH shall keep records sufficient in accordance with generally
accepted accounting principles to permit verification of the reports and
payments made to ABBOTT hereunder regarding all PRODUCT sold or OTHERWISE
DISPOSED OF. Records relating to the NET SALES of a PRODUCT sold in any CALENDAR
QUARTER after the EFFECTIVE DATE shall be available for inspection for two (2)
years after the close of that CALENDAR QUARTER. At XXXXXX'x expense and request
and upon reasonable notice, MATRITECH shall permit such records to be examined
by independent public accountants designated by ABBOTT and reasonably acceptable
to MATRITECH. Such accountants shall report only the amount by which royalties
have been overpaid or underpaid and shall make such report simultaneously to
MATRITECH and ABBOTT. All information acquired in the course of such audits and
inspections, except the amount of royalties due ABBOTT, shall be deemed
confidential information of MATRITECH and shall not be disclosed to ABBOTT, and
the accountants shall execute a written undertaking with respect to such
confidentiality prior to the commencement of any inspection. Such examination
shall take place not more than once each year.
4.11 In the event that an examination by ABBOTT of MATRITECH's records
reveals an underpayment to ABBOTT, MATRITECH shall pay ABBOTT the deficiency
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within sixty (60) days of receiving the report of said accountants. If such
underpayment is at least [**] percent ([**]%), MATRITECH shall pay ABBOTT
interest on that underpayment at a rate of one percent (1%) per month from the
date the underpayment occurred. In the event that an examination by ABBOTT of
MATRITECH's records reveals an overpayment to XXXXXX, XXXXXX shall pay MATRITECH
the surplus within sixty (60) days of receiving the report of said accountants.
In the event that such underpayment amounts to [**] percent ([**]%) or more of
the total amount payable for the period examined, MATRITECH shall also reimburse
ABBOTT for the reasonable out-of-pocket expenses of said independent public
accountants that are directly associated with such examination.
5.0 TRANSFERABILITY OF RIGHTS AND OBLIGATIONS.
5.1 This Agreement and the sublicense granted under it are personal in
nature and may not be assigned or sold, wholly or in part, by MATRITECH without
the express written consent of ABBOTT except that MATRITECH may assign its
rights and obligations hereunder in connection with any merger, reorganization,
or consolidation with or into another entity, or any sale or transfer of any of
its assets or business or to any other person or entity in the event of a Change
of Control as that term is defined in Section 7.5 of this Agreement, with the
prior written consent of ABBOTT.
Notwithstanding the foregoing, MATRITECH shall have the right to
transfer its rights granted hereunder without the need for prior written consent
from ABBOTT to any of its current shareholders or a private equity fund or an
institutional investment fund or other such investor or investor group which may
purchase an equity ownership position in MATRITECH, even if such purchase
constitutes a Change in Control as defined in Section 7.5. Such transfer of
rights by MATRITECH to current shareholders or a private equity fund or an
institutional investment fund or other such investor or investor group shall be
at no cost to MATRITECH and XXXXXX'x consent shall not be required. MATRITECH
shall also have the right, at no cost to MATRITECH
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and XXXXXX'x consent shall not be required, to assign its rights and obligations
hereunder in connection with (a) any merger, reorganization or consolidation
with or into another entity which is not an EXCLUDED COMPANY as defined herein
or (b) any sale or transfer of any of its assets or business or to any entity
which is not an EXCLUDED COMPANY as defined herein. In the event of MATRITECH's
assignment to a non-EXCLUDED COMPANY, ABBOTT shall have the right to terminate
this Agreement immediately after the effective time of the assignment, but such
termination shall not be deemed to be for breach by MATRITECH or its assignee,
and in the event of any such termination, the provisions of Article 14.0 shall
apply.
If MATRITECH desires to assign or sell this Agreement to an EXCLUDED
COMPANY, as defined herein, in an event that requires XXXXXX'x express written
consent and ABBOTT denies such consent, MATRITECH may, in its sole discretion,
purchase the right from ABBOTT to make such assignment or sale for the following
sum: (i) in the event the assignment occurs within the first twelve (12) months
after the EFFECTIVE DATE, [**]; (ii) in the event the assignment occurs within
the second twelve (12) months after the EFFECTIVE DATE, [**]; (iii) in the event
the assignment occurs more than twenty-four (24) months after the EFFECTIVE
DATE, [**].
For purposes of this Agreement, an EXCLUDED COMPANY is defined as a
company without a license under the LICENSED PATENTS to make, have made, use,
offer to sell, sell, have sold and import PRODUCTS in the FIELD in TERRITORY B.
5.2 ABBOTT may freely assign this Agreement in whole or in part and any or
all of the rights to LICENSED PATENTS.
5.3 This Agreement and each and every one of the terms and conditions
thereof, shall inure to the benefit of and be binding upon the permitted
successors and assignees of both parties.
6.0 NOTICE.
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6.1 Any notice, payment, report, or other correspondence (hereinafter
collectively referred to as "correspondence") required or permitted to be given
hereunder shall be mailed by certified mail or delivery by hand or overnight
courier to the party to whom such correspondence is required or permitted to be
given hereunder. If mailed, any such notice shall be deemed to have been given
when received by the party to whom such correspondence is given, as evidenced by
written and dated receipt of the receiving party or within five (5) business
days, whichever is the earlier.
6.2 Alternatively, any correspondence provided for in this Agreement shall
be deemed sufficiently given by the party sending the correspondence when sent
by facsimile to the party to whom the correspondence is addressed. A
confirmation copy of the correspondence will be sent by Certified or Registered
Mail. The date of the facsimile transmission will constitute the date of receipt
of the correspondence if an acknowledgment of the receipt of the proper number
of pages is obtained from the receiving instrument.
All correspondence to ABBOTT shall be addressed as follows:
XXXXXX LABORATORIES
Director, Global Licensing
Dept. 9RK, Bldg. AP6C
000 Xxxxxx Xxxx Xxxx
Xxxxxx Xxxx, Xxxxxxxx 00000-0000
Fax No.: 000-000-0000
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with a copy to:
XXXXXX LABORATORIES
Vice President, Domestic Xxxxx
Xxxx. 000, Xxxx. XX0X
000 Xxxxxx Xxxx Xxxx
Xxxxxx Xxxx, Xxxxxxxx 00000-0000
Fax No.: 000-000-0000
All correspondence to MATRITECH shall be addressed as follows:
MATRITECH
000 Xxxxxx Xx.
Xxxxxx, XX 00000
Attention: Xxx Xxxxxxx
Fax No.: 000-000-0000
Either party may change the address to which correspondence to it is
to be addressed by written notification as provided for herein.
7.0 TERMINATION.
7.1 ABBOTT shall have the right to terminate this Agreement if MATRITECH
has materially defaulted in the performance of any of its royalty payment
obligations herein contained, and such default has not been cured within thirty
(30) days after written notice from ABBOTT affirming its intention to terminate.
For clarification purposes, a breach of any representation or warranty contained
in Article 9.0 by MATRITECH shall be considered a material breach for the
purposes of this Section 7.1.
7.2 In the event that MATRITECH shall be adjudicated bankrupt, go into
liquidation, receivership or trusteeship, make a composition with its creditors
or enter into any similar proceeding of the same nature, then ABBOTT shall have
the right without liability therefor to terminate this Agreement forthwith by
notice in writing to MATRITECH.
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7.3 MATRITECH and its AFFILIATES shall have the right to terminate its
respective sublicense by giving thirty (30) days advance written notice.
MATRITECH and its AFFILIATES shall be obligated for royalty payments under
Section 4.1 for any PRODUCT sold or OTHERWISE DISPOSED OF during such thirty
(30) day notice period and shall be obligated to complete the payments provided
for in Section 4.1(a) but shall have no further obligations to ABBOTT, except
for those outlined in Article 14.0.
7.4 ABBOTT shall have the right to terminate this Agreement, on a
country-by-country basis, if MATRITECH, after the Effective Date, institutes a
suit, nullity action, opposition to grant, or other legal action seeking to
invalidate the claims of a LICENSED PATENT in that country, or actively
participates (other than by legal compulsion) in any of the foregoing.
MATRITECH's payment obligations under Section 4.1(a) shall survive any
termination of this Agreement by MATRITECH on or prior to December 31, 2005 and
the cumulative total of any remaining installments shall become due within
thirty (30) days of the effective date of such early termination.
7.5 If there is a Change of Control (as defined herein) to any third party
except an entity that has been an AFFILIATE of MATRITECH since the EFFECTIVE
DATE, then MATRITECH shall promptly notify ABBOTT of such Change of Control, and
such Change of Control will be considered to be an assignment of the license and
shall be subject to the requirements for approval and other provisions set forth
in Section 5.1. For purposes of this Agreement, "Change of Control" of MATRITECH
shall occur upon the consummation of the sale or transfer in a single
transaction of more than fifty percent (50%) of the voting stock in MATRITECH to
a single acquiring entity, a single affiliated entity group, a single person, or
a single affiliated group of persons.
8.0 GOVERNING LAW.
8.1 This Agreement shall be governed by, interpreted in accordance with
and enforced under the laws of the State of Illinois, U.S.A. (regardless of its
or any other
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jurisdiction's choice of law principles), or, as necessary, the laws of the
United States of America or the laws of the appropriate foreign country if the
issue is the scope or validity of the patent rights granted by that country.
9.0 REPRESENTATIONS WARRANTIES AND LIMITATIONS.
9.1 Nothing in this Agreement shall be construed as:
(a) A warranty or representation by ABBOTT as to the validity or
enforceability of any LICENSED PATENTS; or
(b) A warranty or representation by ABBOTT that anything made, used,
sold or OTHERWISE DISPOSED OF under the sublicense granted in this Agreement, is
or will be free from infringement of patents or other rights of third parties;
or
(c) A requirement that ABBOTT shall file any patent application or
secure any patent; or
(d) An obligation of either party to bring or prosecute actions or
suits against third parties for infringement of any patents; or
(e) Conferring a right to use in advertising, publicity, or the like
any tradename, or trademark of MATRITECH or ABBOTT; or
(f) Granting by implication, estoppel or otherwise any licenses or
rights under any letters patents and applications for letters patents other than
under the LICENSED PATENTS; or
(g) An obligation by ABBOTT to furnish know-how or any other
technical information not disclosed in the LICENSED PATENTS.
9.2 ABBOTT represents to MATRITECH that: (a) ABBOTT is the exclusive
licensee of the LICENSED PATENTS and has the right to grant the sublicense
hereunder; and (b) the LICENSED PATENTS include all of the patent rights in the
lateral flow area (including issued patents and patent applications) owned or
controlled by ABBOTT or its AFFILIATES that cover the PRODUCTS being sold by
MATRITECH
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and its AFFILIATES as of the EFFECTIVE DATE. In the event that the LICENSED
PATENTS as defined herein do not include all of the patents rights in the
lateral flow area (including issued patents and patent applications) owned or
controlled by ABBOTT or its AFFILIATES as of the EFFECTIVE DATE, this sublicense
and the release in Section 2.2 hereof shall be automatically extended to include
all such patent rights.
9.3 Each party represents and warrants that it has full authority to enter
into and become bound by the terms and conditions of this Agreement and that its
execution of this Agreement will not violate, contravene or be in conflict with
any law, rule, by-law, article of incorporation, order, regulation or other
agreement.
9.4 MATRITECH represents and warrants that its cumulative historical sales
of PRODUCTS are less than or equal to two and three quarters million dollars
($2,750,000.00) prior to the EFFECTIVE DATE.
10.0 DISCLAIMER AND HOLD HARMLESS PROVISION.
10.1 It is understood and agreed by and between the parties hereto that
nothing contained in this Agreement shall constitute or be construed to
constitute any undertaking, representation, suggestion, inducement, warranty,
assurance or guarantee whatsoever by either party regarding the safety, quality,
yield, production, cost, profit, saleability, licenseability, demand, utility,
performance, availability of raw materials, or potential of accident or injury
to person or property of PRODUCTS or any assay, product, material, service,
process or apparatus related to PRODUCTS.
10.2 MATRITECH expressly indemnifies and holds ABBOTT, its AFFILIATES,
successors, and assigns and its officers, directors and employees harmless from
and against any and all third party claims, liabilities, damages, costs,
expenses (including reasonable attorneys' fees), and/or third party actions of
any kind whatsoever which arise from or are connected with the manufacture, use,
lease, sale, or other disposition of PRODUCTS by MATRITECH or its AFFILIATES
under the LICENSED PATENTS
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provided that MATRITECH receives prompt written notice of any such claims and
has the right to control the defense thereof.
10.3 Neither of the parties hereto shall be liable in damages or have the
right to cancel for any delay or default in performing hereunder (other than
delay or default in the payment of money) if such delay or default is caused by
conditions beyond its control, including but not limited to Acts of God,
governmental restrictions, terrorist actions, continuing domestic or
international problems such as war or insurrections, strikes, earthquakes,
fires, flood, work stoppages, embargoes and/or other casualty or cause;
provided, however, that any party hereto shall have the right to terminate this
Agreement upon thirty (30) days prior written notice if the other party is
unable to fulfill its obligations under this Agreement due to any of the
above-mentioned causes and such inability continues for a period of six (6)
months.
11.0 CAPTIONS.
11.1 The captions and paragraph headings of this Agreement are solely for
the convenience of reference and shall not affect its interpretation.
12.0 SEVERABILITY.
12.1 Should any part or provision of this Agreement be held unenforceable
or in conflict with the applicable laws or regulations of any jurisdiction, the
invalid or unenforceable part or provision shall be replaced with a provision
which accomplishes, to the extent possible, the original business purpose of
such part or provision in a valid and enforceable manner, and the remainder of
this Agreement shall remain binding upon the parties hereto.
13.0 WAIVER.
13.1 No failure or delay on the part of a party in exercising any right
hereunder shall operate as a waiver of, or impair, any such right. No single or
partial exercise of any such right shall preclude any other or further exercise
thereof or the exercise of any
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other right. No waiver of any such right shall be deemed a waiver of any other
right hereunder.
14.0 SURVIVAL.
14.1 The provisions of Section 2.2 (Releases) and Articles 4.0 (Payments &
Reporting), 8.0 (Governing Law), 9.0 (Representations Warranties and
Limitations) and 10.0 (Disclaimer and Hold Harmless Provision) shall survive the
termination or expiration of this Agreement and shall remain in full force and
effect, provided however that Articles 4.0, 9.0 and Section 10.2 shall only
survive for two (2) years after such termination or expiration of this
Agreement, and further provided that the royalty and reporting obligations under
Article 4.0 will survive only with respect to PRODUCTS sold or OTHERWISE
DISPOSED OF prior to the date of termination or expiration of the Agreement.
Specifically, termination or expiration shall not affect, inter alia;
(a) MATRITECH's obligation to pay royalties and supply reports for
PRODUCTS sold or OTHERWISE DISPOSED OF up to such termination or expiration as
specified in Article 4.0 of this Agreement;
(b) XXXXXX'x right to receive or recover and MATRITECH's obligation
to pay royalties accrued or accruable for payment at the time of any
termination;
(c) MATRITECH's obligation to maintain records pertaining to the NET
SALES of PRODUCTS sold or OTHERWISE DISPOSED OF prior to such termination or
expiration and XXXXXX'x right to conduct a final examination of records in
accordance with Section 4.10 of this Agreement within two (2) years of such
termination or expiration; and
(d) Licenses and releases running in favor of custom manufacturers,
distributors, subcontractors, customers or transferees of either party in
respect to PRODUCTS made or sold or OTHERWISE DISPOSED OF prior to termination
of this Agreement.
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14.2 The provisions of this Agreement which do not survive termination or
expiration hereof (as the case may be) shall, nonetheless, be controlling on,
and shall be used in construing and interpreting, the rights and obligations of
the parties hereto with regard to any dispute, controversy or claim which may
arise under, out of, in connection with, or relating to this Agreement.
14.3 Notwithstanding the above, Section 18 (Confidentiality) shall survive
and remain in full force and effect for a period of five (5) years from the
effective date of termination.
15.0 UNLICENSED COMPETITION.
15.1 At the written request of MATRITECH, ABBOTT shall consider the
enforcement of any LICENSED PATENT against a third party identified by MATRITECH
as a potential infringing third party within TERRITORY A or TERRITORY X. XXXXXX
shall take the steps that it deems reasonable in its sole commercial judgement
to protect the LICENSED PATENTS. Nothing in this Agreement shall be construed as
an obligation upon ABBOTT to enforce any LICENSED PATENT against any third party
within TERRITORY A or TERRITORY B.
16.0 ENTIRE AGREEMENT.
16.1 This Agreement constitutes the entire agreement between the parties
hereto respecting the subject matter hereof, and supersedes and terminates all
prior agreements respecting the subject matter hereof, whether written or oral,
and may be amended only by an instrument in writing executed by both parties
hereto.
17.0 DISPUTE RESOLUTION.
17.1 The parties recognize that from time to time a dispute may arise
relating to either party's rights or obligations under this Agreement. The
parties agree that any such dispute shall be resolved by the Alternative Dispute
Resolution ("ADR") provisions set forth in this Article 17.0, the results of
which shall be binding upon the parties.
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To begin the ADR process, a party first must send written notice of
the dispute to the other party for attempted resolution by good faith
negotiations between their respective presidents (or their designees) of the
affected subsidiaries, divisions, or business units within twenty-eight (28)
days after such notice is received (all references to "days" in this ADR
provision are to calendar days). If the matter has not been resolved within
twenty-eight (28) days of the notice of dispute, or if the parties fail to meet
within such twenty-eight (28) days, either party may initiate an ADR proceeding
as provided herein. The parties shall have the right to be represented by
counsel in such a proceeding.
17.2 To begin an ADR proceeding, a party shall provide written notice to
the other party of the issues to be resolved by ADR. Within fourteen (14) days
after its receipt of such notice, the other party may, by written notice to the
party initiating the ADR proceeding, add additional issues to be resolved within
the same ADR proceeding.
17.3 Within twenty-one (21) days following receipt of the original ADR
notice, the parties shall select a mutually acceptable neutral to preside in the
resolution of any disputes in this ADR proceeding. If the parties are unable to
agree on a mutually acceptable neutral within such period, either party may
request the President of the CPR Institute for Dispute Resolution ("CPR"), 000
Xxxxxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, to select a neutral
pursuant to the following procedures:
(a) The CPR shall submit to the parties a list of not less than five
(5) candidates within fourteen (14) days after receipt of the request, along
with a Curriculum Vitae for each candidate. No candidate shall be an employee,
director, or shareholder of either party or any of their subsidiaries or
affiliates.
(b) Such list shall include a statement of disclosure by each
candidate of any circumstances likely to affect his or her impartiality.
(c) Each party shall number the candidates in order of preference
(with the number one (1) signifying the greatest preference) and shall deliver
the list to the
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CPR within seven (7) days following receipt of the list of candidates. If a
party believes a conflict of interest exists regarding any of the candidates,
that party shall provide a written explanation of the conflict to the CPR along
with its list showing its order of preference for the candidates. Any party
failing to return a list of preferences on time shall be deemed to have no order
of preference.
(d) If the parties collectively have identified fewer than three (3)
candidates deemed to have conflicts, the CPR immediately shall designate as the
neutral the candidate for whom the parties collectively have indicated the
greatest preference. If a tie should result between two candidates, the CPR may
designate either candidate. If the parties collectively have identified three
(3) or more candidates deemed to have conflicts, the CPR shall review the
explanations regarding conflicts and, in its reasonable and sole discretion, may
either (i) immediately designate as the neutral the candidate for whom the
parties collectively have indicated the greatest preference, or (ii) issue a new
list of not less than five (5) candidates, in which case the procedures set
forth in Sections 17.3(a) - 17.3(d) shall be repeated.
17.4 No earlier than twenty-eight (28) days or later than fifty-six (56)
days after selection, the neutral shall hold a hearing to resolve each of the
issues identified by the parties. The ADR proceeding shall take place at a
location agreed upon by the parties. If the parties cannot agree, the neutral
shall designate a location other than the principal place of business of either
party or any of their subsidiaries or affiliates.
17.5 At least seven (7) days prior to the hearing, each party shall submit
the following to the other party and the neutral:
(a) a copy of all exhibits on which such party intends to rely in
any oral or written presentation to the neutral;
(b) a list of any witnesses such party intends to call at the
hearing, and a short summary of the anticipated testimony of each witness;
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(c) a proposed ruling on each issue to be resolved, together with a
request for a specific damage award or other remedy for each issue. The proposed
rulings and remedies shall not contain any recitation of the facts or any legal
arguments and shall not exceed one (1) page per issue;
(d) a brief in support of such party's proposed rulings and
remedies, provided that the brief shall not exceed twenty (20) pages. This page
limitation shall apply regardless of the number of issues raised in the ADR
proceeding.
Except as expressly set forth in Sections 17.5(a) - 17.5(d), no
discovery shall be required or permitted by any means, including depositions,
interrogatories, requests for admissions, or production of documents.
17.6 The hearing shall be conducted on two (2) consecutive days and shall
be governed by the following rules:
(a) Each party shall be entitled to five (5) hours of hearing time
to present its case. The neutral shall determine whether each party has had the
five (5) hours to which it is entitled.
(b) Each party shall be entitled, but not required, to make an
opening statement, to present regular and rebuttal testimony, documents or other
evidence, to cross-examine witnesses, and to make a closing argument.
Cross-examination of witnesses shall occur immediately after their direct
testimony, and cross-examination time shall be charged against the party
conducting the cross-examination.
(c) The party initiating the ADR proceeding shall begin the hearing
and, if it chooses to make an opening statement, shall address not only issues
it raised but also any issues raised by the responding party. The responding
party, if it chooses to make an opening statement, also shall address all issues
raised in the ADR proceeding. Thereafter, the presentation of regular and
rebuttal testimony and documents, other evidence, and closing arguments shall
proceed in the same sequence.
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(d) Except when testifying, witnesses shall be excluded from the
hearing until closing arguments.
(e) Settlement negotiations, including any statements made therein,
shall not be admissible under any circumstances. Affidavits prepared for
purposes of the ADR proceeding also shall not be admissible. As to all other
matters, the neutral shall have sole discretion regarding the admissibility of
any evidence.
17.7 Within seven (7) days following completion of the hearing, each party
may submit to the other party and the neutral a post-hearing brief in support of
its proposed rulings and remedies, provided that such brief shall not contain or
discuss any new evidence and shall not exceed ten (10) pages. The proposed
remedies must be in accordance with diagnostic industry standards. This page
limitation shall apply regardless of the number of issues raised in the ADR
proceeding.
17.8 The neutral shall rule on each disputed issue within fourteen (14)
days following completion of the hearing. Such ruling may adopt in its entirety
the proposed rulings and remedies of one of the parties or may adopt one party's
proposed rulings and remedies on some issues and the other party's proposed
rulings and remedies on other issues. The neutral shall not issue any written
opinion or otherwise explain the basis of the ruling.
17.9 The neutral shall be paid a reasonable fee plus expenses. These fees
and expenses, along with the fees and expenses of a court reporter, and any
expenses for a hearing room, shall be paid as determined by the neutral which
shall assign responsibility for fees and expenses based on its assessment of the
relationship of the parties' respective positions to the outcome of the ADR
proceeding. The neutral may also assign to a party responsibility for some or
all of the reasonable legal fees and expenses of other party based on its
assessment of the relationship of the parties' respective positions to the
outcome of the ADR proceeding.
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17.10 The rulings of the neutral and the allocation of fees and expenses
shall be binding, non-reviewable, and non-appealable, and may be entered as a
final judgment in any court having jurisdiction.
17.11 Except as provided in Article 18.0 or as required by law, the
existence of the dispute, any settlement negotiations, the ADR proceeding, any
submissions (including exhibits, testimony, proposed rulings, and briefs), and
the rulings shall be deemed Confidential Information. The neutral shall have the
authority to impose sanctions for unauthorized disclosure of Confidential
Information.
17.12 The ADR proceedings shall be conducted in the English language.
17.13 Notwithstanding any of the above, this Section shall not apply to,
and no ADR proceeding shall deal with, disputes relating to the issues of the
validity and/or enforceability of any of the LICENSED PATENTS.
18.0 CONFIDENTIALITY.
18.1 This Agreement, its terms, and any information provided by a party
hereto pursuant to this Agreement, shall be kept in strictest confidence by the
parties hereto except that the parties hereto may disclose the terms of the
Agreement as required by law, to their custom manufacturers, subcontractors,
distributors and agents to the extent required to conduct the business relating
to the PRODUCTS, or to prospective purchasers of the business relating to
PRODUCTS; provided that any such persons to whom disclosure is permitted have
agreed to keep such terms confidential. Except as provided above, no party
hereto shall provide this Agreement or any of its terms to any person or entity
not a party hereto. Notwithstanding any of the above, the parties hereto may
disclose publicly that ABBOTT has granted and MATRITECH has accepted a
non-exclusive right and sublicense under the LICENSED PATENTS.
18.2 Notwithstanding Section 18.1, if either of the parties hereto is
required (by deposition, questions, interrogatories, requests for information or
documents as required by or in any legal proceedings, subpoenas, civil
investigative demands, or any
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other similar compulsory processes) to disclose any of the terms of this
Agreement, each party so required shall provide the other party with prompt
written notice of any such request or requirement so that such other party may
seek a protective order or other appropriate remedy or waive compliance with the
provisions of Section 18.1 of this Agreement.
18.3 Notwithstanding the foregoing, neither of the parties shall be
prohibited from disclosing the terms of this Agreement in a Quarterly Report on
Form 10-Q or Annual Report on Form 10-K, if upon the advice of legal counsel,
such disclosure is required by the rules and regulations of the Securities and
Exchange Commission, including but not limited to Regulations S-K and S-X.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
by their respective officers thereunto duly authorized to be effective as of the
EFFECTIVE DATE.
MATRITECH
By: /s/ Xxxxxxx X. Xxxxx
------------------------
Printed Name: Xxxxxxx X. Xxxxx
Title: CEO
Date: Aug 18, 2004
XXXXXX LABORATORIES
By: /s/ Xxxxxx X. Xxxxxxx, Xx.
------------------------------
Xxxxxx X. Xxxxxxx, Xx.
Senior Vice President, Diagnostic Operations
President, Abbott Diagnostics Division
Date: 8-17-04
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