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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended March 31, 1997
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
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Commission file number 0-28194
DIGENE CORPORATION
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(Exact name of registrant as specified in its charter)
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<S> <C>
DELAWARE 52-1536128
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(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
9000 VIRGINIA MANOR ROAD, SUITE 207
BELTSVILLE, MARYLAND 20705
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(Address of principal executive offices) (Zip Code)
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Registrant's telephone number, including area code (301) 470-6500
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NOT APPLICABLE
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(Former name, former address and former
fiscal year, if changed since last report)
Indicate by check mark whether the Registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X No
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Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date.
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Shares outstanding as of
Class May 8, 1997
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Common Stock, par value $.01 per share 11,519,186
</TABLE>
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DIGENE CORPORATION
INDEX TO FORM 10-Q
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Page
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PART I. FINANCIAL INFORMATION:
Item 1. Financial Statements -
Balance Sheets - March 31, 1997 and June 30, 1996 1
Statements of Operations - Three months ended March 31, 1997 and 1996;
Nine months ended March 31, 1997 and 1996 2
Statements of Cash Flows - Nine months ended March 31, 1997 and 1996 3
Notes to Financial Statements 4
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations 6
PART II. OTHER INFORMATION:
Item 6. Exhibits and Reports on Form 8-K 10
SIGNATURES 11
EXHIBIT INDEX 12
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PART I. FINANCIAL INFORMATION
DIGENE CORPORATION
BALANCE SHEETS
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<CAPTION>
MARCH 31, JUNE 30,
1997 1996
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(NOTE)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 10,549,107 $ 24,107,325
Short-term investments 11,544,674 4,467,978
Accounts receivable, less allowance of approximately $61,000 at
March 31, 1997 and June 30, 1996 3,212,216 1,626,046
Inventories 1,929,953 1,806,333
Prepaid expenses and other current assets 205,671 299,435
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Total current assets 27,441,621 32,307,117
Property and equipment, net 1,153,373 705,040
Intangible assets, net 2,439,705 49,008
Deposits 156,309 112,462
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Total assets $ 31,191,008 $ 33,173,627
=============== ===============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 1,470,809 $ 2,124,682
Accrued expenses 980,621 456,354
Current maturities of long-term debt 1,220,602 109,857
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Total current liabilities 3,672,032 2,690,893
Long-term debt, less current maturities 835,325 151,532
Accrued rent 111,760 149,907
Deferred rent 43,653 62,014
Stockholders' equity:
Common stock, $.01 par value, 50,000,000 shares authorized,
11,516,525 and 11,303,705 shares issued and outstanding
at March 31, 1997 and June 30, 1996, respectively 115,165 113,037
Additional paid-in capital 49,428,322 49,339,001
Accumulated deficit (23,015,249) (19,332,757)
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Total stockholders' equity 26,528,238 30,119,281
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Total liabilities and stockholders' equity $ 31,191,008 $ 33,173,627
=============== ===============
</TABLE>
Note: The balance sheet at June 30, 1996 has been derived from the audited
financial statements at that date but does not include all of the
information and footnotes required by generally accepted accounting
principles for audited financial statements.
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DIGENE CORPORATION
STATEMENTS OF OPERATIONS
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THREE MONTHS ENDED NINE MONTHS ENDED
MARCH 31, MARCH 31,
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1997 1996 1997 1996
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<S> <C> <C> <C> <C>
Revenues:
Product sales $ 2,418,339 $ 1,595,728 $ 6,237,029 $ 4,464,394
Research and development contracts 99,536 89,278 493,694 293,067
-------------- -------------- --------------- --------------
Total revenues 2,517,875 1,685,006 6,730,723 4,757,461
Costs and expenses:
Cost of product sales 884,712 699,840 2,433,498 2,132,762
Research and development 1,049,803 657,437 2,784,720 1,766,852
Selling and marketing 1,120,323 439,209 2,976,457 1,262,688
General and administrative 1,453,995 403,690 3,213,711 1,018,462
Amortization of intangible assets 91,440 81,888 107,842 259,629
-------------- -------------- --------------- --------------
Loss from operations (2,082,398) (597,058) (4,785,505) (1,682,932)
Other income (expense):
Other income (expense) (37,532) 36,841 (67,561) 115,232
Interest income 373,879 6,805 1,206,478 23,774
Interest expense (32,029) (53,750) (35,904) (162,905)
-------------- -------------- --------------- --------------
Net loss $ (1,778,080) $ (607,162) $ (3,682,492) $ (1,706,831)
============== ============== =============== ==============
Net loss per share $ (0.16) $ (0.71) $ (0.32) $ (2.00)
============== ============== =============== ==============
Weighted average shares outstanding 11,418,954 856,343 11,346,234 852,602
============== ============== =============== ==============
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DIGENE CORPORATION
STATEMENTS OF CASH FLOWS
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<CAPTION>
NINE MONTHS ENDED
MARCH 31,
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1997 1996
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OPERATING ACTIVITIES
Net loss $ (3,682,492) $ (1,706,831)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization of property and equipment 327,443 275,492
Amortization of intangible assets 107,842 259,629
Changes in operating assets and liabilities:
Accounts receivable (1,586,170) (83,279)
Inventories (123,620) (302,872)
Prepaid expenses and other current assets 93,764 (10,136)
Deposits (43,847) 2,809
Accounts payable (653,873) 293,142
Accrued expenses 524,267 109,799
Accrued rent (38,147) (28,564)
Deferred rent (18,361) (12,390)
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Net cash used in operating activities (5,093,194) (1,203,201)
INVESTING ACTIVITIES
Purchases of short-term investments (11,035,962) -
Maturities of short-term investments 3,959,266 -
Capital expenditures (775,776) (222,766)
Additions to intangible assets (2,498,539) (93,379)
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Net cash used in investing activities (10,351,011) (316,145)
FINANCING ACTIVITIES
Net proceeds from issuance of redeemable convertible Preferred Stock - 948,000
Net proceeds from exercise of Common Stock options 91,449 13,500
Proceeds from notes payable 3,330,351 -
Principal repayments on long-term debt (1,535,813 (180,917)
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Net cash provided by financing activities 1,885,987 780,583
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Net decrease in cash and cash equivalents (13,558,218) (738,763)
Cash and cash equivalents at beginning of period 24,107,325 1,142,266
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Cash and cash equivalents at end of period $ 10,549,107 $ 403,503
============== ==============
</TABLE>
3
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DIGENE CORPORATION
NOTES TO FINANCIAL STATEMENTS
1. BASIS OF PRESENTATION
The financial statements for the three month and nine month periods ended March
31, 1997 and 1996 are unaudited and include all adjustments which, in the
opinion of management, are necessary to present fairly the results of
operations for the periods then ended. All such adjustments are of a normal
recurring nature. These financial statements should be read in conjunction
with the Annual Report on Form 10-K of Digene Corporation (the "Company") for
the year ended June 30, 1996, which includes financial statements and notes
thereto for the years ended June 30, 1996, 1995, and 1994.
The results of the Company's operations for any interim period are not
necessarily indicative of the results of the Company's operations for any other
interim period or for a full fiscal year.
2. NET LOSS PER SHARE
The Company's net loss per share calculations are based on the weighted average
number of shares of Common Stock outstanding. Pursuant to the requirements of
the Securities and Exchange Commission staff accounting bulletin No. 83, the
Company included the effect of the convertible Preferred Stock, Common Stock,
and warrants and options to purchase Common Stock in the weighted average
shares outstanding for the three and nine month periods ended March 31, 1996.
However, for the three and nine month periods ended March 31, 1997, the Company
is required to calculate the weighted average shares outstanding pursuant to
APB 15 and thus the net loss per share for the periods is not comparable. APB
15 requires that shares of Common Stock issuable upon the exercise of stock
options and warrants or conversion of convertible Preferred Stock are included
in the weighted average shares outstanding only if the effect of their
inclusion is dilutive. The Company has not included such shares of Common
Stock in its weighted average shares outstanding since the effect is
anti-dilutive. If the Company had calculated the weighted average shares
outstanding for the three months and nine months ended March 31, 1996 in
accordance with APB 15, the net loss per share would have been $1.62 and $4.60
per share, respectively, and the weighted average shares outstanding would have
been 374,775 and 371,034, respectively.
In February 1997, the Financial Accounting Standards Board issued Statement No.
128, Earnings Per Share, which is required to be adopted in the Company's
fiscal 1998 financial statements. At that time, the Company will be required
to change the method currently used to compute earnings per share and to
restate all prior periods. Under the new requirements for calculating primary
earnings per share, the dilutive effect of stock options will be excluded. The
impact of Statement No. 128 on the calculation of primary and fully diluted
earnings per share for the three and nine month periods ended March 31, 1997
and 1996 is not expected to be material.
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3. SIGNIFICANT EVENTS
Effective February 1, 1997, the Company entered into two agreements (the
"Agency Agreement" and the "Customer Transfer Agreement," collectively the
"Agreements") with Murex Diagnostics Corporation, a distributor ("Murex"), to
create a Digene-direct European sales operation for the Company's sexually
transmitted disease business. Under the Agreements, the Company will begin
selling its Hybrid Capture(R) human papillomavirus ("HPV") DNA test directly in
Europe using Murex's distribution infrastructure. The Agreements provide for a
transition period during which the administrative infrastructure will be agreed
to and established. During this transition period, the Company is recording
its transactions, for purposes of transfer of title, consistent with a prior
distribution agreement (the "Distribution Agreement") with Murex, which
Distribution Agreement remains in effect to cover the distribution of the
Company's non-HPV products in areas outside the territory established by the
Agreements. Prior to February 1, 1997, pursuant to the Distribution Agreement,
Murex had been acting as the exclusive European distributor in designated
non-US territories for the Company's HPV test and other of the Company's
products. Under the Agreements, Murex will act as the exclusive agent for the
Company in designated European and Eastern European countries (the "Territory")
for a period of five years during which Murex will receive selling service fees
and a percentage of the Company's HPV revenues in the Territory. In connection
with the Agreements, the Company capitalized approximately $2.5 million for the
acquisition of Murex's HPV business assets. The Company issued promissory notes
in the aggregate amount of $1,702,750 and paid $1.0 million to Murex for the
HPV business assets during the quarter ended March 31, 1997. The Company is
amortizing the HPV business assets over five years, the term of the Agency
Agreement. In addition, the Company agreed to pay set up costs, selling
service fees and a percentage of Digene's HPV revenues in the Territory.
Certain of these costs have been expensed as selling and general and
administrative expenses in the three months ended March 31, 1997 and will
continue to be expensed as such during the term of the Agency Agreement. All
other Digene products (except the Company's HPV products) exclusively
distributed by Murex in Europe and Eastern Europe will not be affected by the
Agreements.
5
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
SIGNIFICANT EVENTS
Effective February 1, 1997, the Company entered into two agreements (the
"Agency Agreement" and the "Customer Transfer Agreement," collectively the
"Agreements") with Murex to create a Digene-direct European sales operation
for the Company's sexually transmitted disease business. Under the Agreements,
the Company will begin selling its Hybrid Capture HPV DNA test directly in
Europe using Murex's distribution infrastructure. The Agreements provide for a
transition period during which the administrative infrastructure will be agreed
to and established. During this transition period, the Company is recording
its transactions, for purposes of transfer of title, consistent with a prior
distribution agreement (the "Distribution Agreement") with Murex, which
Distribution Agreement remains in effect to cover the distribution of the
Company's non-HPV products in areas outside the territory established by the
Agreements. Prior to February 1, 1997, pursuant to the Distribution Agreement,
Murex had been acting as the exclusive European distributor in designated
non-US territories for the Company's HPV test and other of the Company's
products. Under the Agreements, Murex will act as the exclusive agent for the
Company in designated European and Eastern European countries (the "Territory")
for a period of five years during which Murex will receive selling service fees
and a percentage of the Company's HPV revenues in the Territory. In connection
with the Agreements, the Company capitalized approximately $2.5 million for the
acquisition of Murex's HPV business assets. The Company issued promissory notes
in the aggregate amount of $1,702,750 and paid $1.0 million to Murex for the
HPV business assets during the quarter ended March 31, 1997. The Company is
amortizing the HPV business assets over five years, the term of the Agency
Agreement. In addition, the Company agreed to pay set up costs, selling
service fees and a percentage of Digene's HPV revenues in the Territory.
Certain of these costs have been expensed as selling and general and
administrative expenses in the three months ended March 31, 1997 and will
continue to be expensed as such during the term of the Agency Agreement. All
other Digene products (except the Company's HPV products) exclusively
distributed by Murex in Europe and Eastern Europe will not be affected by the
Agreements.
FORWARD LOOKING STATEMENTS
Statements regarding the Company's expectations as to financial results and
other aspects of its business set forth below or otherwise made in writing or
orally by the Company may constitute forward looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995. Although the
Company believes that its expectations are based on reasonable assumptions
within the bounds of its knowledge of its business and operations, there can be
no assurance that actual results will not differ materially from its
expectations. Factors which could cause actual results to differ from
expectations include, but are not limited to, uncertainty of future
profitability, uncertainty of market acceptance, dependence on a single product
(its Hybrid Capture HPV DNA test), limited sales and marketing experience, the
creation of the Company's European direct sales operations, adequacy of third
party reimbursement, competition, extent of government regulations, and the
uncertainty regarding
6
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patents and proprietary rights and technological obsolescence.
RESULTS OF OPERATIONS
Product sales increased to $2,418,000 and $6,237,000 for the three and nine
month periods ending March 31, 1997, respectively, from $1,596,000 and
$4,464,000 for the corresponding periods of the prior year. The increase was
due, primarily, to increased sales of the Company's Hybrid Capture products,
partially offset by declines in revenues related to the discontinuance of the
Company's radioactive DNA test in December 1995. Declines in equipment sales
also partially offset the increase in the product sales for the nine month
period.
Research and development contract revenues increased to $100,000 and $494,000
for the three and nine month periods ending March 31, 1997, respectively, from
$89,000 and $293,000 for the corresponding periods of the prior year. The
fiscal year-to-date increase was due primarily to new contracts.
Cost of product sales increased to $885,000 and $2,433,000 for the three and
nine month periods ending March 31, 1997, respectively, from $700,000 and
$2,133,000 for the corresponding periods of the prior year. Gross margin on
product sales increased to 63% and 61% for the three and nine month periods
ended March 31, 1997, respectively, from 56% and 52% for the corresponding
periods of the prior year. This increase was due primarily to increases in
unit pricing, overhead absorption, and sales of higher-margin Hybrid Capture
HPV DNA products, and decreases in sales of lower-margin products, such as
equipment.
Research and development expenses increased to $1,050,000 and $2,785,000 for
the three and nine month periods ending March 31, 1997, respectively, from
$657,000 and $1,767,000 for the corresponding periods of the prior year. The
increase was due to increases in clinical trials activity, and to the hiring of
additional research and development personnel and the related incidental
expenses to support the Company's research and development efforts to develop
additional tests using the Hybrid Capture technology, and to improve the
sensitivity and ease of use of that technology.
Selling and marketing expenses increased to $1,120,000 and $2,976,000, or 46%
and 48% of revenues from product sales, for the three and nine month periods
ending March 31, 1997, respectively, from $439,000 and $1,263,000, or 28% and
28% of revenues from product sales, for the corresponding periods of the prior
year. The increase was due to substantial increases in sales and marketing
programs and to the hiring of additional selling and marketing personnel and
related expenses to support the Company's revenue growth plans, as well as
increased commissions and other selling costs directly related to the growth in
product sales.
General and administrative expenses increased to $1,454,000 and $3,214,000, or
58% and 48% of total revenues, for the three and nine month periods ending
March 31, 1997, respectively, from $404,000 and $1,018,000, or 24% and 21% of
total revenues, for the corresponding periods of the prior year. The increase
was due primarily to the recognition of set-up costs associated with the
Company's expansion into the European market, as well as the hiring of
additional administrative personnel and the related expenses to support the
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Company's requirements as a publicly traded company and to meet the
revenue growth objectives of the Company. In addition, general and
administrative expenses increased during the nine month period as a result of
the formation of Digene do Brasil, a majority-owned subsidiary.
Amortization of intangible assets increased to $91,000 and decreased to
$108,000 for the three and nine month periods ending March 31, 1997,
respectively, from $82,000 and $260,000 for the corresponding periods of the
prior year. The increase during the three month period is attributable to
amortization expense related to the acquisition of intangible business
assets associated with the Company's expansion into the European market,
partially offset by decreases related to intangible assets becoming fully
amortized during the periods begin compared. The decrease during the nine
month period is due to certain intangible assets becoming fully amortized
during the periods being compared, partially offset by increases attributable
to the amortization expense related to the acquisition of the aforementioned
intangible European business assets.
Interest income increased to $374,000 and $1,206,000 for the three and nine
month periods ending March 31, 1997, respectively, from $7,000 and $24,000 for
the corresponding periods of the prior year. These increases were due
primarily to the investment of substantially all of the net proceeds from the
Company's initial public offering, which was completed in May, 1996.
Interest expense decreased to $32,000 and $36,000 for the three and nine month
periods ended March 31, 1997, respectively, from $54,000 and $163,000 for the
corresponding periods of the prior year. These decreases were due to the
repayment of notes payable related to the acquisition of the Molecular
Diagnostics Division of Life Technologies, Incorporated, consummated in 1990,
partially offset by interest expense on notes payable related to the Company's
expansion into the European market.
LIQUIDITY AND CAPITAL RESOURCES
Since inception, the Company's expenses have significantly exceeded its
revenues, resulting in an accumulated deficit of approximately $23,015,000 at
March 31, 1997. The Company has funded its operations primarily through the
sale of equity securities. The Company experienced negative cash flows from
operations of $5,093,000 and $1,203,000 for the nine months ended March 31,
1997, and 1996, respectively.
Capital expenditures increased to $776,000 for the nine months ended March 31,
1997 from $223,000 for the same period in 1996, due primarily to the
acquisition of leasehold improvements and related furniture and equipment
associated with the expansion of the Company's Beltsville, Maryland facility
and to additional laboratory and computer equipment purchases.
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The Company does not have any bank financing arrangements. The Company's
indebtedness consists of notes payable in the principal amount of $1,920,000
related to its expansion into the European market, notes payable in the
principal amount of $84,000 to former stockholders of the Company, and notes
payable in the principal amount of $52,000 related to leasehold improvements.
The Company has incurred negative cash flows from operations since its
inception, and has expended, and expects to continue to expend in the future,
substantial funds to complete its planned product development efforts, expand
its sales and marketing activities and scale up its manufacturing capabilities.
The Company expects that its existing capital resources will be adequate to
fund the Company's operations through fiscal 1998. No assurances can be given
that there will be no changes in the Company that would consume a significant
amount of its available resources before that time. The Company's future
capital requirements and the adequacy of available funds will depend on
numerous factors, including the successful commercialization of its Hybrid
Capture HPV DNA test, progress in its product development efforts, the
magnitude and scope of such efforts, progress with preclinical studies and
clinical trials, the cost and timing of manufacturing scale-up, the creation of
the Company's direct European sales operations, the development of effective
sales and marketing activities, the cost of filing, prosecuting, defending and
enforcing patent claims and other intellectual property rights, competing
technological and market developments, and the development of strategic
alliances for the marketing of its products. To the extent that the Company's
existing capital resources and funds generated from the Company's operations
are insufficient to meet current or planned operating requirements, the Company
will be required to obtain additional funds through equity or debt financing,
strategic alliances with corporate partners and others, or through other
sources. The Company does not have any committed sources of additional
financing, and there can be no assurance that additional funding, if necessary,
will be available on acceptable terms, if at all. If adequate funds are not
available, the Company may be required to delay, scale-back or eliminate
certain aspects of its operations or attempt to obtain funds through
arrangements with collaborative partners or others that may require the Company
to relinquish rights to certain of its technologies, product candidates,
products or potential markets. If adequate funds are not available, the
Company's business, financial condition and results of operations will be
materially and adversely effected.
In February 1997, the Financial Accounting Standards Board issued Statement No.
128, Earnings Per Share, which is required to be adopted in the Company's
fiscal 1998 financial statements. At that time, the Company will be required
to change the method currently used to compute earnings per share and to
restate all prior periods. Under the new requirements for calculating primary
earnings per share, the dilutive effect of stock options will be excluded. The
impact of Statement No. 128 on the calculation of primary and fully diluted
earnings per share for the three and nine month periods ended March 31, 1997
and 1996 is not expected to be material.
9
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Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
10.1 Agency and Sales Representation Agreement between the Company and
Murex dated as of February 1, 1997
10.2 Customer Transfer Agreement between the Company and Murex dated as of
February 1, 1997
10.3 First Amendment to the Distribution Agreement between the Company and
Murex dated as of February 1, 1997
11 Statement Re: Computation of Per Share Loss
27 Financial Data Schedule
(b) Reports on Form 8-K
The Company filed the following Report on Form 8-K during the quarter ended
March 31, 1997:
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Date of Report Items Reported
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January 22, 1997 5,7
</TABLE>
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
DIGENE CORPORATION
Date: May 14, 1997 By: /s/ Charles M. Fleischman
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Charles M. Fleischman
Executive Vice President,
Chief Operating Officer,
Chief Financial Officer
(Principal Financial Officer)
Date: May 14, 1997 By: /s/ Joseph P. Slattery
--------------------------- ------------------------------------
Joseph P. Slattery
Controller
(Principal Accounting Officer)
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EXHIBIT INDEX
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Exhibit No. Description Page
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10.1 Agency and Sales Representation Agreement between the
Company and Murex dated as of February 1, 1997
10.2 Customer Transfer Agreement between the Company and
Murex dated as of February 1, 1997
10.3 First Amendment to the Distribution Agreement between
the Company and Murex dated as of February 1, 1997
11 Statement Re: Computation of Per Share Loss
27 Financial Data Schedule
</TABLE>
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Exhibit 10.1
THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST. REDACTED MATERIAL IS BRACKETED AND HAS BEEN FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.
AGENCY AND SALES REPRESENTATION AGREEMENT
This serves to record the agreement (the "Agreement"), effective as of February
1, 1997, between Digene Corporation ("Digene") of 9000 Virginia Manor Road,
Beltsville, MD 20705, U.S.A. and Murex Diagnostics Corporation ("Murex") of
White Park House, White Park Road, Bridgetown Barbados (each of Digene and Murex
a "Party" and collectively the "Parties") relating to the consignment inventory
holding, agency arrangements, distribution and sale of the diagnostic products
supplied by Digene as specified in Schedule I hereto (the "Products") or
subsequently added by agreement in writing between the Parties to customers in
those countries specified in Schedule II hereto (the "Territory"). Unless the
context specifically provides otherwise, all currency amounts, including "$",
set forth herein shall refer to United States currency.
1. Definitions.
1.1 "Affiliate" shall mean any Person that controls, is controlled
by or is under common control with Murex or Digene, as the
context may require. For purposes of this definition "control"
shall mean: (a) in the case of corporate entities, direct or
indirect ownership of at least fifty percent (50%) of the
stock or shares entitled to vote for the election of
directors; and (b) in the case of non-corporate entities,
direct or indirect ownership of at least fifty percent (50%)
of the equity interest with the power to direct the management
and policies of such non-corporate entities.
1.2 "Distribution Agreement" shall have the meaning ascribed to
such term in Section 3.2 hereof.
1.3 "Effective Date" shall mean February 1, 1997.
1.4 "HPV" shall mean Human Papillomavirus.
1.5 "Net Sales" shall mean, with respect to each Product, the
gross amount invoiced on behalf of Digene in connection with
sales of Products under this Agreement, expressed in US
Dollars, less the sum of the following:
1.5.1 sales, tariff duties and/or use or value added taxes
actually paid on behalf of customers by Murex or
Digene, as the case may be, in
<PAGE> 2
THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST. REDACTED MATERIAL IS BRACKETED AND HAS BEEN FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.
connection with the manufacture, importation, use or
sale of such Product;
1.5.2 actual costs of packaging, insurance, freight,
storage and transportation paid on behalf of the
purchaser;
1.5.3 allowances actually made (and not merely reserved or
accrued) for any goods which are sold to customers
and are spoiled, damaged, outdated or returned after
they are shipped by Murex; or
1.5.4 refunds or allowances actually made on account of
retroactive price reductions.
Any Net Sales not expressed in United States dollars shall be
converted to such currency using the monthly weighted average
exchange rate calculated using the daily exchange rates
published in The Wall Street Journal for the period over which
such average is calculated.
1.6 "Nonaffiliate" shall mean any Person that is not an Affiliate
of Murex or Digene, or both, as the context may require.
1.7 "Person" shall mean an individual, a corporation, a
partnership, an association, a joint stock company, a trust,
any unincorporated organization or a government or political
subdivision thereof.
1.8 "Work With" shall mean to provide reasonable assistance, to
consult, to offer advice and to take other reasonable steps
designed to help resolve technical or quality or customer
problems and to provide a professional, unified image to
customers, and timely cooperation in the execution of
marketing programs, pricing or policy changes; provided,
however, that "Work With" shall not mean incurring any capital
expenditure or incurring any expense other than as set forth
in this Agreement. For the purposes of this definition, a
failure to "Work With" shall include a habitual neglect or
failure to perform the activities outlined in this Agreement
over a commercially reasonable period of time, failure to act
in good faith, on a timely basis at the request of the other
Party, or acting in front of customers in a way which is not
consistent with the reasonable operating standards of Murex or
Digene, as the case may be. A failure to "Work With" must be
documented in writing which may include, without limitation,
the use of sworn affidavits as documentary evidence of a
failure to Work With. The Party receiving any notification of
a failure to Work With the other Party shall have sixty (60)
days to cure such failure. If such failure is not cured at the
end of such 60-day period the notifying Party may terminate
this Agreement for cause pursuant to Section 12 hereof.
2
<PAGE> 3
THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST. REDACTED MATERIAL IS BRACKETED AND HAS BEEN FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.
2. Appointment.
2.1 Digene hereby appoints Murex in the Territory with effect from
February 1, 1997 for the provision of agency services as
specified in Section 4 hereto (the "Agency Services") or as
subsequently amended by agreement in writing between the
Parties.
2.2 Digene hereby appoints Murex in the Territory with effect from
February 1, 1997 for the holding of consignment inventory of
Products (the "Inventory Holding Services") and Murex agrees
to act in that capacity subject to the terms and conditions
set forth in Appendix A, the "Distribution Inventory Holding
Agreement", attached hereto and made a part hereof. The
Parties agree there shall be a transition period of three (3)
months to establish the inventory consignment systems
contemplated by this Agreement. In such transition period,
Murex will book inventory transactions to credit sales to
Digene's account on a monthly basis.
2.3 Digene hereby appoints Murex in the Territory with effect from
February 1, 1997 to provide selling services as specified in
Section 6 hereto (the "Selling Services") for the Products and
Murex agrees to act in that capacity subject to the terms and
conditions as set forth herein.
2.4 Murex may appoint any of its Affiliates, distributors or
agents to undertake some or all of its obligations hereunder
and Murex shall ensure that any such Affiliate, distributor or
agent abides by all the terms and conditions of this Agreement
insofar as they relate to the promotion, sale, distribution or
inventory holding of Products in the countries of operation of
said Affiliate, distributor or agent.
2.4.1 Murex shall provide to Digene a list of all current
distributors and agents for the Territory which list
is attached hereto as Schedule IV. In the event Murex
elects to sub-appoint any other distributor or agent
to act on behalf of Murex under any of the
appointments set forth in Section 2.1, 2.2 or 2.3
above, Murex shall first notify Digene in writing in
advance. After such notification, Digene shall have
the right to accept or reject Murex's
sub-appointment. In the event Digene accepts Murex's
sub-appointment, Digene shall have the right to
review the agreement or other arrangement between
Murex and such distributor or agent in order to
confirm that Digene's interests will be protected,
and if necessary, in Digene's sole discretion,
provide for Digene to enter into an agreement
directly with such agent or distributor. In the event
Digene enters into an agreement with such distributor
or agent, Murex, at Murex's option, will have no
obligation
3
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THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST. REDACTED MATERIAL IS BRACKETED AND HAS BEEN FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.
to provide Agency Services to such distributor or
agent as appointed by Digene, but will provide
services to Digene, at Digene's cost for expenses
pre-approved by Digene, to reasonably support Digene
during a transition period. The Parties agree there
shall be a transition period of three (3) months to
establish the agency and other systems contemplated
by this Agreement.
2.4.2 In the event Murex elects to sub-appoint an Affiliate
to undertake some or all of Murex's obligations
hereunder, the Agency Fees payable pursuant to
Section 5.2 hereof shall be calculated to reflect the
sales of Products from such Affiliate to the
third-party end purchaser or to a Nonaffiliate
distributor or agent. In the event Murex elects to
sub-appoint a Nonaffiliate distributor or agent to
undertake some or all of Murex's obligations
hereunder, the Agency Fees payable pursuant to
Section 5.2 hereof shall be calculated to reflect the
sales of Products by Murex to such Nonaffiliate
distributor or agent.
2.4.3 Provided that such termination does not directly
conflict with Murex's written contractual obligations
to such distributor or agent as of the Effective Date
or obligations pursuant to applicable law, if Digene
so chooses, at its sole discretion, Digene may
require that Murex terminate a Murex distributor or
agent upon 90 days written notice unless Digene and
the distributor or agent have agreed in writing to
other provisions, in which case, those provisions
will prevail. In the case of such a termination or
election not to accept a Murex agent or distributor,
no Agency Fees (as defined in Section 5.2 hereof)
will be due to Murex for servicing such distributor
or agent and Murex will have no obligation to provide
Agency Services to such distributor or agent as
appointed by Digene, but will provide services to
Digene, at Digene's cost, for expenses pre-approved
by Digene to reasonably support Digene during a
transition period. Any termination pursuant to this
Section 2.4.3 will not reduce the Selling Services
fees payable in the then current budget year as
determined in accordance with Section 8.4 hereof.
2.5 Murex and Digene will create an Operating Committee which will
be responsible for: reviewing the overall business status of
the Parties with respect to this Agreement; resolving
operating issues which may develop from time to time;
finalizing and agreeing to program budgets; and approving
specific Standard Operating Procedures ("SOP's") for the
operation of the Agency Services, the Inventory Holding
Services and the Selling Services. The Operating Committee
shall initially consist of R. Peter Silveston and Lynwood
Bell, on behalf of Murex, and Evan Jones and Charles M.
4
<PAGE> 5
THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST. REDACTED MATERIAL IS BRACKETED AND HAS BEEN FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.
Fleischman, on behalf of Digene. Any additional replacement
members of the Operating Committee will hold positions of
similar stature or responsibility with the Parties. The
Operating Committee shall also invite other Murex and/or
Digene representatives to participate, as necessary in any
meetings of the Operating Committee. The Operating Committee
shall meet either in person or by telephonic means at least
twice per year. The Parties will Work With each other in the
good faith implementation of this Agreement.
3. Exclusivity and Non-Competition.
3.1 The appointment of Murex to provide Agency Services and
Inventory Holding Services set forth in Section 2.1 and 2.2
shall be exclusive for all Products sold or distributed in the
Territory. Such agency appointments shall not be subject to
revocation separate from termination of this Agreement.
3.2 Murex agrees that during the term of this Agreement, Murex
shall not Compete with Digene. Murex shall have the right to
distribute, sell or sublicense the products of any
manufacturer or internally developed or acquired products
provided that such other products are not similar to or
competitive with the Products designated as exclusive Products
on Schedule I attached hereto or New Products (as defined
herein) and provided Murex does not Compete with Digene.
Without limitation of the foregoing, for purposes of this
Agreement, Murex shall not be deemed to Compete with Digene if
it engages in the research, development, sale or other
distribution of any non-HPV antibody or antigen detection
products or any multi-parameter drug resistance products in
the Inno-LiPA(TM) format. Except as provided in the preceding
two sentences, for purposes of this Agreement, Murex shall be
deemed to "Compete" with Digene if Murex, any of its
Affiliates, parent companies or respective agents begins
research and development of or commences the distribution or
sale of a DNA or RNA probe assay or other DNA or RNA based
product for detection of HPV or chlamydia or gonorrhea or
microtiter plate assay for detection of amplication reaction
products which is based on the SHARP Signal(TM)system assay
format or improvements to such a system previously disclosed
by Digene to Murex, any of its Affiliates or agents, assays
based on Digene Confidential Information, Patent Rights (such
terms as defined in the 1994 Development and License Agreement
dated May 31, 1994) or any pending patent claimed by Digene
and filed by Digene as of the date of the Distribution
Agreement between Digene and Murex Biotech Limited dated
February 28, 1996 (the "Distribution Agreement"), and detailed
in Exhibit G of the Distribution Agreement, incorporated
herein by reference, or any product based in any respect upon
Digene's Hybrid Capture(TM), SHARP Signal or Digene's
proprietary Hybrid Capture assay detection formats.
5
<PAGE> 6
THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST. REDACTED MATERIAL IS BRACKETED AND HAS BEEN FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.
4. Responsibilities of Murex for Provision of Agency Services. Murex shall
provide the following Agency Services to Digene:
4.1 Subject to Section 4.2, Murex shall accept orders from
customers and supply Products to customers at Digene's CIP
country list prices. During the set-up period, Digene shall
review with Murex such country list prices then in effect.
Digene reserves the right to increase such prices twice per
calendar year. As soon as possible but in no event later than
three (3) months from the Effective Date, Murex shall raise
invoices on Digene-headed stationery for Products supplied to
customers. Digene may add new products ("New Products") to
Schedule I of this Agreement, subject to Murex's consent,
which consent shall not be unreasonably withheld. Digene may
withdraw Products from Schedule I, subject to Murex's consent,
which consent shall not be unreasonably withheld. Digene, in
its sole discretion, may withdraw New Products from Schedule I
at any time. Notwithstanding the foregoing, the Parties
recognize that tenders, tender offers or other contracts exist
as of the Effective Date in the name of Murex or Murex
Affiliates in the Territory and that future supply of Products
under such tenders, tender offers or other contracts shall be
made on Murex invoices where legally required.
4.2 Where Murex is providing Selling Services as detailed in
Section 6 of this Agreement and subject to specific
instructions received from Digene from time to time giving
details of the Digene discount structures to be applied to
Products sold in the Territory, Murex shall be free to apply
discounts to Digene's CIP country list prices utilizing
similar rules as Murex applies to its own products.
4.3 Where Murex is providing Selling Services as detailed in
Section 6 of this Agreement and subject to specific
instructions received from Digene from time to time, Murex
shall be free to apply credit terms to customer orders for
Products utilizing similar rules and controls as Murex applies
to its own customers.
4.4 Murex shall maintain an effective accounts receivable system
and shall advise Digene within 30 days after each month end
the amount of sales, where commercially practical, and Net
Sales made by Product by country in the preceding month, and
the amount of accounts receivable with an age profile of the
debt at the previous month end. Murex will make reasonable
efforts to provide such information within 15 days after each
month end.
4.5 Murex shall pay all distribution costs within the Territory
and the costs of shipping Products between Murex Affiliates in
the Territory which arises during the normal course of
business. Digene shall according to Section 8 of
6
<PAGE> 7
THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST. REDACTED MATERIAL IS BRACKETED AND HAS BEEN FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.
this Agreement pay all Products import duties from the US and
any distribution costs arising from specific Products shipment
instructions received from Digene.
4.6 Murex shall carry out on behalf of and for the account of
Digene all importation and customs clearance activities for
Digene literature, samples and goods. All out of pocket
expenses incurred by Murex in connection with the foregoing
shall be reimbursed by Digene.
4.7 Murex shall enter into all sales contracts for the Products as
agent for Digene.
4.8 All Products shall be sold only in the packs supplied by
Digene; Murex shall make no claims as manufacturer of
Products. Murex shall not use, in connection with the
promotion and sale of the Products in the Territory, any
trademarks or brand names, whether in correspondence,
advertising, or otherwise, other than those used by Digene in
connection with the Products and made available to Murex,
without obtaining the prior consent in writing of Digene. For
purposes of this Section 4.8, Murex may use Murex letterhead
for correspondence purposes provided the correspondence
clearly identifies the Digene Product or issue related to such
correspondence.
4.9 Murex shall not, without the prior written authority of
Digene, make any representation or give any warranty or
guarantee in respect of any of the Products beyond those
contained in then current promotional or technical material
supplied by or approved by Digene in writing. Digene hereby
authorizes Murex to make, on Digene's behalf, such warranties
of Digene pertaining to Products as are set forth in Section 6
of the Distribution Agreement.
4.10 Murex undertakes to devote such reasonable time and effort as
is necessary in the exercise of the obligations imposed by
this Agreement.
4.11 Murex will Work With Digene to establish an effective customer
complaint tracking and response system. Such a system will
include front-line collection of information from the
customer, technical service and reporting in the Territory by
Murex. Digene will provide a second line of support directly
to Murex, or the customer, if necessary. Digene will pay all
reasonable, documented costs allocated to such support
services, including costs associated with any Products hold or
recall, as they relate to Digene's Products. Both Parties
agree to use their respective reasonable best efforts to
provide the other Party with copies of all customer
correspondence.
7
<PAGE> 8
THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST. REDACTED MATERIAL IS BRACKETED AND HAS BEEN FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.
4.12 Murex shall keep full and accurate accounting records relating
to the invoicing and inventory holding of the Products. Digene
may inspect, at its own expense, such records no more than
twice per year during Murex's normal working hours, on giving
Murex 5 working days notice.
4.13 Murex shall provide Digene with such sales and operations
reports including, without limitation, historical and updated
customer reports, and sales by Product and by customer
reports, on a timely basis which reports Digene shall
reasonably request concerning the sales of Products in the
Territory and the provision of Agency Services, Inventory
Holding Services and Selling Services by Murex under this
Agreement. Digene shall reimburse Murex for all costs which
Murex shall reasonably incur in producing custom reports
requested by Digene. Where capital expenditures are made to
set-up systems specifically requested and paid for by Digene,
such systems will be the property of Digene.
4.14 At Digene's cost, for expenses pre-approved by Digene, Murex
shall use its reasonable commercial efforts to comply with and
help Digene to comply with all present and future regulations
and/or licensing requirements as they relate to Product
registration and approval promulgated by authorized
governmental authorities effective during the term of this
Agreement and required in order to carry out the provisions of
this Agreement and the activities performed hereunder. Murex
shall comply with routine regulatory responsibilities
associated with the performance of the Agency Services and the
Selling Services at its cost unless Murex can demonstrate that
incremental costs are expected to be incurred with respect to
the Products. In such case, Digene will be responsible for
expenses pre-approved by Digene for incremental regulatory
compliance costs. Murex shall notify Digene promptly of any
changes to such regulatory and/or licensing requirements
affecting the activities performed under this Agreement of
which Murex has knowledge. Both Parties agree to use their
respective best efforts to provide the other Party with copies
of all governmental or regulatory correspondence.
5. Set Up and Ongoing Agency Services and Inventory Holding Fees.
5.1 To cover Murex's initial and ongoing costs during 1997 of
setting up the administration of Agency Services in the
Territory for the Products, Digene shall pay Murex the sum of
$[ ] (the "Set Up Payment") made up of:
<TABLE>
<S> <C>
$[ ] for UK set up
$[ ] for Germany set up
$[ ] for France set up
$[ ] for Italy set up
</TABLE>
8
<PAGE> 9
THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST. REDACTED MATERIAL IS BRACKETED AND HAS BEEN FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.
<TABLE>
<S> <C>
$[ ] for Czech Republic set up
$[ ] for Switzerland set up
$[ ] for Spain set up
$[ ] for Benelux set up
$[ ] in total
</TABLE>
The Set Up Payment shall be divided into 4 payments of
$[ ], $[ ], $[ ] and $[ ] with such Set Up
Payment installments payable by Digene to Murex on each of the
Effective Date, May 1, 1997, August 1, 1997, and November 1,
1997. Murex shall contribute as partial consideration for the
Set Up Payment, Products literature remaining in the Territory
on the Effective Date. The Set-Up Payment shall be
compensation for the specific activities and services
performed by Murex as set forth on Schedule III attached
hereto and made a part hereof.
5.2 In consideration for the provision of Agency Services and
Inventory Holding Services as described in Section 4 and
Appendix A of this Agreement, Digene shall pay Murex,
according to Section 8 of this Agreement, agency fees (the
"Agency Fees"). Subject to the provisions of Section 2.4.2
hereof, the Agency Fees shall be calculated as a percentage of
Net Sales of Products in the Territory. The percentage rate
shall be [ ] percent ([ ]%) of the Net Sales of Products in
the Territory. In addition, Digene shall refund Murex for any
documented out of pocket costs and expenses incurred by Murex
for shipment of Products at Digene's request free of charge or
at a substantial discount.
5.3 All payments required to be paid by Digene hereunder shall be
deemed to be expressed herein exclusive of value added, sales
or similar taxes, and such taxes, if any, shall be the sole
obligation of Digene.
6. Responsibility of Murex for Selling Services. Murex shall provide the
following Selling Services to Digene:
6.1 Murex shall, from February 1, 1997, provide all the services
of selling Products in the Territory as outlined below. Both
Parties will Work With each other in good faith and with
reasonable endeavor to make the terms of this Agreement work
in the interests of growing the business for the Products in
the Territory. In the performance of Selling Services Murex
shall:
6.1.1 Use its reasonable efforts in the Territory to sell,
service and support the Products including, without
limitation, the requirement as agreed with Digene to
market the Products to customers, advertise the
Products and participate and exhibit the Products at
major local
9
<PAGE> 10
THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST. REDACTED MATERIAL IS BRACKETED AND HAS BEEN FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.
exhibitions for infectious disease diagnostics on a
country by country basis each year. All expenses or
expenditures incurred by Murex and prior approved by
Digene associated with this Section 6.1.1 will be
reimbursed by Digene.
6.1.2 Maintain an adequate and competent technical
assistance system, at a level no less than current
systems, in support of any prospective or actual
Products sales in the Territory including training
salesmen and end users.
6.1.3 Work With Digene to maintain at all times an
inventory of Products as necessary to supply
reasonable estimated demand therefor with
consideration given to normal time delays, subject to
Digene's obligation to meet its Products delivery
schedules as set forth in Section 7.2 hereof.
6.1.4 Provide reasonable customer and technical support for
the Products and reasonably assist Digene in the
discharge of Selling Services obligations to
customers.
6.1.5 Provide to end users written instructions which have
been agreed upon by Digene and Murex as to the usage
of each of the Products.
6.1.6 Deliver Products in the packaging agreed upon by
Digene and Murex and provided by Digene. This
packaging will include the name and logo of Digene,
as the manufacturer.
6.1.7 Work With Digene quarterly to determine Murex's
estimated Products requirements for the next quarter,
marketing potential, trends and forecasts,
competition, marketing techniques, current
developments in the Territory, changes of regulations
governing the sale of Products in the Territory and
amounts of Products sold.
All employees providing Selling Services under this Section
6.1 shall report directly to Murex but will be responsible to
operate within the norms and operating procedures established
by Digene for its European operations and to cooperate with
Digene personnel. In the event a Murex employee fails to meet
such standards, and following good faith discussions to
resolve any issues, Digene will have the right to request that
such Murex employee be removed from the team servicing Digene.
In the event of termination under Section 12 hereof, other
than a Termination for Cause by Murex, Digene shall have the
right to offer employment to any employees providing Selling
Services under this Agreement on a full-time basis.
10
<PAGE> 11
THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST. REDACTED MATERIAL IS BRACKETED AND HAS BEEN FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.
6.2 In the event that Digene desires to appoint its own personnel
and desires such personnel to be based in the offices of Murex
or a Murex Affiliate in the Territory, Murex agrees, at
Digene's request, to pay the salary, any pension contributions
and expenses of such personnel as authorized by Digene and
Digene agrees to reimburse Murex for such authorized payments
on a monthly basis according to Section 8 of this Agreement.
For the purposes of this Section 6.2, telephone and fax
charges incurred by Digene personnel shall be deemed to be
incurred as if prior authorized by Digene. Such personnel will
report directly to Digene but will be responsible to operate
within the norms and operating procedures established by Murex
and to cooperate with Murex personnel. In the event an
employee fails to meet such standards and following good faith
discussions to resolve any issues, Murex will have the right
to request that such employee of Digene be removed from the
Digene team operating in Murex facilities. In the event of
termination under Section 12, Digene shall have the right to
begin paying any of its own personnel operating under this
Section 6.2 directly.
6.3 Utilization by Digene personnel of Murex's office space shall
be subject to Murex's prior approval, which approval shall not
be unreasonably withheld and shall be based upon factors
including availability of office space and facilities. In the
event that Digene personnel utilize office space on a
full-time basis within a Murex or Murex Affiliate facility as
agreed by Murex, Digene shall pay Murex on a monthly basis
according to Section 8 of this Agreement a proportion of
Murex's and Murex's Affiliate's general office facility
expenses, as applicable, at the rate to be agreed upon by
Murex and Digene based on the allocated cost of an individual
full time equivalent (total office costs divided by the
relevant full time equivalent value) (the "Facility Charge").
Murex shall have the right to increase the monthly Facility
Charge on January 1st of each year during the term of this
Agreement in line with the rate of inflation in each country
where Digene utilizes the office facilities of Murex or a
Murex Affiliate.
6.4 Digene shall be responsible for payment to Murex on a monthly
basis according to Section 8 of this Agreement of all other
expenses incurred or authorized by Digene or its personnel and
paid by Murex or a Murex Affiliate.
6.5 During the 90 day period following the Effective Date, Murex
shall, at the cost of Digene, carry on all necessary servicing
of certain luminometers and shakers (the "Equipment") used by
customers of Products in the Territory in the same manner in
which Murex has been providing such servicing to such
customers. Murex shall determine the aforesaid reasonable cost
for such Equipment servicing during said 90 day period and
Digene shall pay such costs in accordance with Section 8 of
this Agreement.
11
<PAGE> 12
THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST. REDACTED MATERIAL IS BRACKETED AND HAS BEEN FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.
6.6 During the 90 day period following Effective Date, Murex and
Digene will Work With each other in good faith to agree on the
appropriate way for the future provision of Equipment
servicing and the payment of the associated costs.
6.7 Murex acknowledges and agrees that all Digene proprietary
rights in Products delivered to Murex by Digene are and shall
remain at all times the exclusive property of Digene or its
licensors, and may not be duplicated by Murex or used except
pursuant to this Agreement and that Murex, by taking delivery
of, making payment for, distributing, and selling or otherwise
using or transferring any of the Products, shall not become
entitled to any proprietary rights in any such Products.
Neither Murex or any of its Affiliates shall take any action
to interfere with Digene's proprietary rights in the Products.
6.8 Trademark Protection. Murex is hereby granted a non-exclusive
license to use Digene's current and future trademarks solely
for the purposes of promoting the Products and fulfilling its
obligation under the terms of this Agreement. Murex agrees not
to apply for registration of any trademarks used by Digene or
any other Person relative to the Products, except with the
consent of Digene.
6.9 In consideration of the provision by Murex of the Selling
Services performed in the Territory as described in this
Section 6, and until such time as the Parties shall agree on a
revision to the fees as determined in Section 8.4 of this
Agreement, Digene shall pay Murex for 7.5 full time
equivalents according to Section 8 of this Agreement, a
monthly Selling Services fee of $[ ].
7. Responsibilities of Digene. Digene shall:
7.1 Be responsible for the placement of Equipment and subject to
Section 6.6 all costs including servicing of the Equipment
supporting Products in the Territory and for all marketing
activities, including promotion, associated with the Products
in the Territory, unless otherwise agreed with Murex.
7.2 Make every reasonable effort to deliver Products advised by
Murex as required to maintain adequate inventory levels within
Murex and Murex Affiliates to meet customers' orders. Delivery
by Digene of Products except for the SHARP Signal System Assay
and HPV Probe Groups, Digene Part No. 4603-1100 shall be made
to Murex or a Murex Affiliate as determined by Murex no later
than 45 days from the date on which the order is received.
12
<PAGE> 13
THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST. REDACTED MATERIAL IS BRACKETED AND HAS BEEN FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.
Digene reserves the right to immediately cease all shipments
of any Product upon the discovery of a non-conformity to
specification in such Product. Digene shall renew shipment
only upon correction of such non-conformity. Digene shall be
responsible for all costs associated with recalling the
Products in the Territory. If Murex is providing Selling
Services, Digene shall notify Murex of the discovery and
nature of any non-conformity of any Product to its product
specification and/or product claims, and keep Murex informed
of the progress of corrective actions instigated by Digene.
7.3 Take all reasonable steps to ensure that the Products comply
with all present and future regulations and licensing
requirements issued by any authorized governmental authority
which are effective during the term of this Agreement where
such compliance is required by law to carry out the
distribution and sale of the Products within the Territory.
Murex agrees to provide Digene, at Digene's cost, with
reasonable assistance in the performance of its obligations
pursuant to this paragraph.
7.4 Take all reasonable steps necessary to gain and maintain all
governmental approvals necessary for the manufacture,
marketing, export and sale of the Products and without
prejudice to the generality of the foregoing, all FDA
approvals for Murex to act as agent or as sales representative
for the Products, in the Territory, as applicable. Murex shall
at Digene's cost take all reasonable steps to assist Digene to
obtain such regulatory approvals as are necessary for
marketing and sale of Products in the Territory.
8. Payments for Services.
8.1 Beginning on the Effective Date, Murex and its Affiliates will
continue to cause funds received from customers for payment of
Digene Products purchased in the Territory to be deposited in
bank accounts established by Murex or its Affiliates. Such
funds are hereinafter referred to as the Digene Receivables.
Murex and each Murex Affiliate responsible for the bank
accounts holding the Digene Receivables shall transfer such
Digene Receivables, on a monthly basis as soon as practicable
but in no event longer than the last working day of the
following month to a Digene account identified by Digene.
Prior to each transfer, the Murex Affiliate or Murex may
offset the Digene Receivables to be transferred only by the
amount of documented costs and expenses prior approved by
Digene and actually incurred by Murex or such Affiliate and
specifically arising under Sections 2.4.1, 2.4.3, 4.5, 4.6,
4.11, 4.13, 4.14, 6.2, 6.3, 6.4, 6.5, 6.6, and Appendix A,
Sections 3.2 and 4 under this Agreement. In the set-up period,
the Parties shall begin promptly to work in good faith,
subject to commercial impracticality, to establish separate
Digene bank accounts in the Territory for
13
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THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST. REDACTED MATERIAL IS BRACKETED AND HAS BEEN FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.
the deposit of the Digene Receivables directly from customers.
Murex shall use all reasonable efforts to establish such
systems and to revise payment instructions and methods so that
Products customers will deposit the Digene Receivables in such
Digene accounts. Digene shall pay Murex for all reasonable,
documented costs associated with the establishment and
maintenance of such accounts and payment systems. The Parties
agree to Work With each other as needed on a case by case
basis to prevent either Party from losing business as a result
of the implementation of the activities contemplated by this
Section 8.1.
8.2 Murex shall provide Digene within 30 days of each month end a
statement detailing and reconciling the Digene Receivables.
Murex shall also invoice Digene within 30 days of each month
end for the costs and expenses reimbursement to be paid by
Digene to Murex under this Agreement, specifically arising
under Sections 2.4.1, 2.4.3, 4.5, 4.6, 4.11, 4.13, 4.14, 5.2,
6.2, 6.3, 6.4, 6.5, 6.6, 6.9, 7.1, 8.1 and Appendix A,
Sections 3.2 and 4 and not paid to the Murex Affiliates
directly pursuant to Section 8.1 hereof. Digene shall pay such
invoice in full within 30 days of receipt. Digene may, in its
discretion, at the request of Murex, authorize specific Murex
employees to have signatory power to withdraw funds from the
Digene account(s) established to reimburse Murex or its
Affiliates for costs and expenses incurred by Murex and its
Affiliates and prior approved by Digene arising from the
Agency Services, Inventory Holding Services and Selling
Services provided under this Agreement, and such authorization
by Digene shall not be unreasonably withheld. In the event
such authorization is provided and the Digene Receivables are
insufficient to cover the total invoice, Murex shall invoice
Digene for such shortfall and Digene shall pay such shortfall
invoice in full within 30 days of receipt.
8.3 Murex and its Affiliates agree to use the same level of due
diligence to collect outstanding Digene Receivables as they
use to collect their own outstanding receivables. Digene shall
bear the cost of any bad debt incurred in the sale of Products
in the Territory; provided, however, that Digene shall perform
a quarterly reconciliation of all bad debt existing. Digene
reserves the right, following good faith discussions with
Murex, to invoice Murex for reimbursement of the Agency Fees
paid with respect to uncollected receivables less the
distribution and shipping costs incurred by Murex and
pertaining to such uncollected receivables, upon Digene's
having recognized and written off such uncollected receivables
for its own financial reporting purposes, and certifying the
same in writing to Murex, and Murex shall pay the invoice in
full within 30 days of receipt.
14
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THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST. REDACTED MATERIAL IS BRACKETED AND HAS BEEN FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.
8.4 Prior to January 1, 1998 and every year thereafter during the
term of this Agreement, Murex and Digene shall discuss and
agree to revisions in the level of Selling Services to be
provided in the following calendar year and the associated
costs payable by Digene to Murex. In the event that Digene has
not notified Murex of any change in the level of Selling
Services to be provided by Murex under Section 6 of this
Agreement prior to the end of any calendar year, then the
level of Selling Services shall continue at the level then set
and the associated Selling Services fees and related expenses
as set forth in Section 6 of this Agreement payable by Digene
to Murex shall remain at the then current level subject to an
increase in line with the rate of inflation in the country
where the Selling Services are performed. In the event the
Parties cannot agree on the level of Selling Services or
Selling Services fees in any given year during the term of
this Agreement then either Party shall be free to terminate
the use of Murex employees in the provision of Selling
Services as described in Section 6 of this Agreement. In such
event, the Selling Services fees set forth in Section 6.9 will
no longer be payable to Murex and Murex will no longer be
responsible for performing the Selling Services.
9. Term.
This Agreement shall become effective on February 1, 1997 and shall
continue in full force and effect for a period of 5 years unless
terminated earlier under Section 12 hereof. Unless this Agreement is
terminated early under Section 12 hereof or is terminated at the end of
the initial 5 year term by either Party giving to the other no less
than six (6) months notice in writing, the term of the Agreement shall
automatically continue until either Party serves six (6) months'
written notice of termination on the other at any time thereafter.
10. Relationship.
This Agreement is personal to Murex and Digene and shall not be
assigned or delegated by either Party without the prior written
agreement of the other Party, except that Murex may assign any or all
of its rights and delegate any or all of its obligations to one or more
of its Affiliates, agents or distributors as provided herein; provided,
however, that in such event, Murex shall guarantee and be responsible
for the performance of such obligations by such Affiliate, agent or
distributor.
11. Confidentiality.
11.1 From time to time, Digene may make available to Murex
information of a confidential nature (the "Digene Confidential
Information") including, but not limited to, medical and
technical data, test and analysis data, marketing,
application, manufacturing, financial, bookkeeping, business,
market and
15
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THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST. REDACTED MATERIAL IS BRACKETED AND HAS BEEN FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.
customer information in a written form or orally. Subject to
the remainder of this Section 11.1, Murex shall not use such
Digene Confidential Information without Digene's prior written
consent, except as contemplated by this Agreement or another
agreement between Digene and Murex or an Affiliate thereof,
and shall not disclose such Digene Confidential Information to
others or use such Digene Confidential Information without the
prior written consent of Digene, except to the extent required
to be disclosed to Murex's Affiliates, agents and distributors
in the course of performing its obligations under this
Agreement, required to be disclosed pursuant to other
provisions of this Agreement or other agreements between the
Parties (including their Affiliates) and except as required by
law.
Murex further recognizes that it may acquire access to other
proprietary information of Digene including Digene's
proprietary technology, trade secrets, patented procedures,
research and development data, know-how, formulae, pricing
policies of Digene, the substance of agreements between Digene
and its customers and others and any documents embodying the
foregoing, and, with respect to the Products and New Products,
the following Digene Market Information (as defined herein).
The "Digene Market Information" shall include all (i) customer
lists owned by Digene pertaining to Products and New Products,
(ii) computer software paid for entirely by Digene and (iii)
customer lists, address books, rolodexes, business cards,
telephone lists, price lists, contract forms, books, records
and files, but only such of the foregoing items as are
provided by Digene to Murex for the purposes of the
performance of this Agreement, or generated by Murex under
this Agreement for the purpose of fulfilling its obligations
to provide the Agency Services, Inventory Holding Services and
Selling Services and pertaining solely to Products and New
Products under this Agreement. The Parties recognize that the
Digene Market Information is proprietary to Digene. The Digene
Confidential Information and the Digene Market Information is
hereinafter collectively referred to as the "Digene
Information". All Digene Information acquired by Murex during
the term of this Agreement shall be treated by Murex with the
same care as it would exercise in the handling of its own
proprietary information. In no event shall the Digene
Information be disclosed to any Person including any employee,
consultant and/or contractor unless such Person agrees to be
bound by the terms of this provision or another agreement
providing for the same obligation. The provisions of the
preceding sentence shall not apply to any disclosure required
pursuant to any other provisions of this Agreement or other
agreements between the Parties or between Digene and an
Affiliate of Murex, or required by law. Upon termination or
cancellation of this Agreement for any reason, all such Digene
Information which has been reduced to a writing shall be
immediately returned by Murex to an officer of Digene and the
limitations and undertakings
16
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THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST. REDACTED MATERIAL IS BRACKETED AND HAS BEEN FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.
specified in this Section 11.1 shall remain in effect for a
period of four (4) years from the date of termination or
expiration of this Agreement. Notwithstanding anything else in
this Section 11.1 to the contrary, Digene Information as
referred to in this Section 11.1 shall not include information
(i) which is or becomes public knowledge other than as a
result of a disclosure by Murex or its Affiliates in violation
of this Agreement; (ii) which is disclosed to Murex on a
non-confidential basis by a third party having no obligation
of secrecy to Digene or its Affiliates; (iii) which Murex can
show by documentary evidence was already in Murex's possession
at the time of disclosure by Digene, and not subject to
another confidentiality agreement with, or obligation of
secrecy to, Digene or its Affiliates; or (iv) which is in
Murex's possession at the time such information is provided to
Digene and is used at the time of this disclosure to Digene
for non-HPV testing purposes. The provisions of this Section
11.1 shall not be construed to prevent Murex or its Affiliates
from developing, or acquiring from third parties, its own
customer lists and subsequently selling or marketing products
or services to those customers even if they are Digene
customers or using such customer lists for any business
purpose not otherwise conflicting with Murex's obligations
under this Agreement. Digene agrees to make available to Murex
such Digene Market Information to enable Murex to perform the
Agency Services, Inventory Holding Services and Selling
Services as required to be performed hereunder. Digene Market
Information shall exclude all "Murex Market Information," as
defined in Section 11.2 hereof.
11.2 From time to time, Murex may make available to Digene
information of a confidential nature (the "Murex Confidential
Information") including, but not limited to, medical and
technical data, test and analysis data, marketing,
application, manufacturing, financial, bookkeeping, business,
market and customer information in a written form or orally.
Subject to the remainder of this Section 11.2, Digene shall
not use such Murex Confidential Information without Murex's
prior written consent, except as contemplated by this
Agreement or another agreement between Digene and Murex or an
Affiliate thereof, and shall not disclose such Murex
Confidential Information to others without the prior written
consent of Murex, except to the extent required to be
disclosed to Digene's Affiliates in the course of performing
its obligations under this Agreement, required to be disclosed
pursuant to other provisions of this Agreement or other
agreements between the Parties (including their Affiliates)
and except as required by law.
Digene further recognizes that it may acquire access to other
proprietary information of Murex, including Murex's
proprietary technology, trade secrets, patented procedures,
research and development data, know-how, formulae, pricing
policies and the substance of agreements between Murex or
17
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THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST. REDACTED MATERIAL IS BRACKETED AND HAS BEEN FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.
an Affiliate of Murex or another party on whose behalf Murex
serves as agent, and customers or others, and all documents
embodying the foregoing, and the following Murex Market
Information (as defined herein). "Murex Market Information"
shall include customer lists, computer software, address
books, rolodexes, business cards, telephone lists, price
lists, contract forms, catalogs, books, records and files of
Murex, but shall not include any of the foregoing items which
(i) are provided to Murex by Digene for the purpose of the
performance of this Agreement or (ii) pertain exclusively to
the Products and New Products and are generated by Murex for
the purpose of fulfilling its obligations to provide the
Agency Services, Inventory Holding Services and Selling
Services under this Agreement. The Parties recognize that the
Murex Market Information is proprietary to Murex. The Murex
Confidential Information and the Murex Market Information is
hereinafter collectively referred to as the "Murex
Information". All Murex Information acquired by Digene during
the term of this Agreement shall be treated by Digene with the
same care as it would exercise in the handling of its own
proprietary information and in no event shall such Murex
Information be disclosed to any Person including any employee,
consultant and /or contractor unless such Person agrees to be
bound by the terms of this provision or another Agreement
providing for the same obligation. The provisions of the
preceding sentence shall not apply to any disclosure required
pursuant to any other provisions of this Agreement or other
agreements between the Parties or between Digene and an
Affiliate of Murex, or required by law. Upon termination or
cancellation of this Agreement for any reason, all such Murex
Information shall be immediately returned by Digene to an
officer of Murex and the limitations and undertakings
specified in this Section 11.2 shall remain in effect for a
period of four (4) years from the date of termination or
expiration of this Agreement. Murex Information as referred to
in this Section 11.2 shall not include information (i) which
is or becomes public knowledge other than as a result of a
disclosure by Digene or its Affiliates in violation of this
Agreement; (ii) which is disclosed to Digene on a
non-confidential basis by a third party having no obligation
of secrecy to Murex or its Affiliates; or (iii) which Digene
can show by documentary evidence was already in Digene's
possession at the time of disclosure by Murex, and not subject
to another confidentiality agreement with, or obligation of
secrecy to, Murex or its Affiliates. The provisions of this
Section 11.2 shall not be construed to prevent Digene or its
Affiliates from developing, or acquiring from third parties,
its own customer lists and subsequently selling or marketing
products or services to those customers even if they are Murex
customers or using such customer lists for any business
purpose not otherwise conflicting with Digene's obligations
under this Agreement.. Murex Market Information shall exclude
all "Digene Market Information," as defined in Section 11.1
hereof.
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THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST. REDACTED MATERIAL IS BRACKETED AND HAS BEEN FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.
12. Termination.
12.1 Digene may terminate this Agreement by sixty (60) days notice
to Murex upon occurrence of any of the following events
("Termination for Cause"), should any such event not be
remedied within such sixty day notice period.
12.1.1 Murex fails to remit a payment which is due to
Digene.
12.1.2 Murex fails to fulfill one or more of its obligations
under Section 2, 3, 4, 5, 6, 7, 8, 11, 14, or 15 of
this Agreement.
12.1.3 Murex or International Murex Technologies Corporation
("IMTC") becomes bankrupt, insolvent or becomes
unable to pay its obligations when they become due.
12.1.4 One or both of the Development and License Agreements
dated May 31, 1994 or April 14, 1993, respectively
between IMTC and Digene are terminated by Digene
because of a breach by IMTC.
12.2 Murex may terminate this Agreement by sixty (60) days notice
to Digene upon occurrence of any of the following Termination
for Cause events should any such event not be remedied within
such sixty day notice period.
12.2.1 Digene fails to remit a payment which is due to
Murex.
12.2.2 Digene fails to fulfill one or more of its
obligations under Section 2, 3, 4, 5, 6, 7, 8, 11,
13, 14 or 15 of this Agreement.
12.2.3 Digene becomes bankrupt, insolvent or becomes unable
to pay its obligations when they become due.
12.2.4 One or both of the Development and License Agreements
dated May 31, 1994 or April 14, 1993, respectively
between IMTC and Digene are terminated by IMTC
because of a breach by Digene.
12.3 Either Party may terminate this Agreement without cause by
providing six (6) months written notice to the other Party,
provided that Murex shall not be entitled to terminate without
cause prior to January 1, 1999, and provided, further, that if
Digene terminates this Agreement without cause it shall pay to
Murex all payments due and owing to Murex as contemplated by
this Agreement as of the date of termination.
19
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THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST. REDACTED MATERIAL IS BRACKETED AND HAS BEEN FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.
12.4 If there is a Termination for Cause by Digene, no further
payments will be required from Digene under this Agreement
except for obligations payable to Murex under Section 8 of
this Agreement up to the date of termination and for services
which may be provided during any agreed-upon wind down period
which may occur.
12.4.1 For purposes of this Section 12.4, "July Target Sales
Levels" shall mean Products sales in the Territory of
a minimum of $[ ] per three-month period in the most
recent three-month period preceding July 1, 1997, for
which sales figures are available. For purposes of
this Section 12.4, "November Target Sales Levels"
shall mean Products sales in the Territory of a
minimum of $[ ] per three-month period in the most
recent three-month period preceding November 1, 1997,
for which sales figures are available.
12.4.2 In the event of termination under this Section 12.4,
under circumstances whereby Digene shall not have
made the July Target Sales Levels and shall not have
made the November Target Sales Levels, Murex shall
pay to Digene, on April 1, 1997, the sum of $[ ], but
only for a termination effective on or prior to April
1, 1997.
12.4.3 In the event of termination under this Section 12.4
under circumstances whereby Digene shall have made
the July Target Sales Levels, but shall not have made
the November Target Sales Levels, Murex shall pay to
Digene the payments designated below, but only to the
extent that the dates set forth below occur after the
effective date of such termination:
April 1, 1997 $[ ]
September 30, 1997 $[ ]
December 31, 1997 $[ ]
March 31, 1998 $[ ]
June 30, 1998 $[ ]
September 30, 1998 $[ ]
December 31, 1998 $[ ]
12.4.4 In the event of termination under this Section 12.4
under circumstances whereby Digene shall not have
made the July Target Sales Levels, but shall have
made the November Target Sales Levels, Murex shall
pay to Digene the payments
20
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THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST. REDACTED MATERIAL IS BRACKETED AND HAS BEEN FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.
designated below, but only to the extent that the
dates set forth below occur after the effective date
of such termination:
April 1, 1997 $[ ]
December 31, 1997 $[ ]
March 31, 1998 $[ ]
June 30, 1998 $[ ]
September 30, 1998 $[ ]
December 31, 1998 $[ ]
12.4.5 In the event of termination under this Section 12.4
under circumstances whereby Digene shall have made
the July Target Sales Levels and shall have made the
November Target Sales Levels, Murex shall pay to
Digene the payments designated below, but only to the
extent that the dates set forth below occur after the
effective date of such termination:
April 1, 1997 $[ ]
September 30, 1997 $[ ]
December 31, 1997 $[ ]
March 31, 1998 $[ ]
June 30, 1998 $[ ]
September 30, 1998 $[ ]
December 31, 1998 $[ ]
All payments under this Section 12.4 shall be without right of
set-off, withholding or counterclaim by Murex.
12.5 If there is a Termination for Cause by Murex, Digene shall pay
all Set Up Payment installments still owed under this
Agreement whether or not due and shall pay all obligations of
Digene under Section 8 of this Agreement up to the date of
termination and for services which may be provided during any
agreed-upon wind down period which may occur.
12.6 In the event this Agreement is terminated by Digene under the
provisions of Section 12.3, but there is no Termination for
Cause under Section 12.1, then Digene shall make the following
termination payment to Murex within 30 days of the date of
termination.
12.6.1 If less than or equal to $[ ] in Agency Fees have
been paid then $[ ] will be payable.
21
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THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST. REDACTED MATERIAL IS BRACKETED AND HAS BEEN FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.
12.6.2 If more than $[ ] of Agency Fees have been paid, but
less than $[ ], then the difference between $[ ] and
the amount paid will be payable.
12.6.3 If $[ ] or more of Agency Fees have been paid by
Digene over the course of the term of this Agreement,
then no termination payment will be due.
12.7 The termination of this Agreement shall not relieve either
Party of liability for any breach having occurred prior to
such termination, or for any obligation to pay amounts owing
hereunder prior to such termination.
13. Representations and Warranties.
13.1 Representations and Warranties by Digene. Digene hereby represents
and warrants to Murex as of the Effective Date as follows:
13.1.1 Digene has full legal right, power and authority to
execute, deliver and perform its obligations under
this Agreement;
13.1.2 The execution, delivery and performance by Digene of
this Agreement do not contravene or constitute a
default under any provision of its organizational
documents or of any agreement or other instrument
binding upon Digene; and
13.1.3 To the best of Digene's knowledge, the performance by
the Parties does not violate or contravene the
applicable laws and governmental regulations in the
Territory.
13.2 Representations and Warranties by Murex. Murex hereby represents
and warrants to Digene as of the Effective Date as follows:
13.2.1 Murex has full legal right, power and authority to
execute, deliver and perform its obligations under
this Agreement;
13.2.2 The execution, delivery and performance by Murex of
this Agreement do not contravene or constitute a
default under any provision of its organizational
documents or of any agreement or other instrument
binding upon Murex; and
13.2.3 To the best of Murex's knowledge, the performance by
the Parties does not violate or contravene the
applicable laws and governmental regulations in the
Territory.
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THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST. REDACTED MATERIAL IS BRACKETED AND HAS BEEN FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.
14. Indemnification.
14.1 Indemnification by Digene. Digene shall indemnify, defend and
hold harmless Murex and its Affiliates and their respective
directors, officers, employees, consultants and agents (each,
including Murex and its Affiliates, a "Murex Indemnified
Person") from and against any and all claims, actions,
proceedings, expenses, liabilities or losses, including
reasonable attorneys' and accountants' fees and expenses (the
"Losses") suffered or incurred by any such Murex Indemnified
Person either in its individual capacity or as a stockholder
as a result of, or with respect to, or arising out of, or
incidental to, the performance by Murex and such Murex
Indemnified Persons of their obligations under this Agreement
or, arising from or based on a material breach of Digene's
representations, warranties and covenants contained in this
Agreement except to the extent that any such Loss shall, as
determined by final judgment rendered by a court or
arbitration panel of competent jurisdiction, have resulted
from a material breach by such Murex Indemnified Person of the
provisions of this Agreement or from the intentional
misconduct of Murex or such Murex Indemnified Person in the
performance of such activities under the Agreement. Without
limiting the foregoing, Digene agrees to indemnify and hold
harmless Murex and the Murex Indemnified Persons as a result
of or with respect to any claim of personal or property injury
or patent, trademark, trade secret or other property right
infringement arising from or related to the manufacture, use
or sale of any Product distributed, sold or otherwise disposed
of by Murex and its Affiliates, agents or distributors,
provided, however, that nothing contained herein shall serve
to expand Digene's product liability or otherwise conflict
with Digene's warranties with respect to such Products as such
warranties are set forth in Section 6 of the Distribution
Agreement and incorporated herein by reference.
Notwithstanding anything herein contained to the contrary, the
provisions of this Section 14.1 and Digene's obligations under
Section 14.3 shall survive the termination of this Agreement
to the maximum extent permitted by law.
14.2 Indemnification by Murex. Except to the extent caused by the
intentional misconduct of Digene, Murex shall indemnify,
defend and hold harmless Digene and its Affiliates and their
respective directors, officers, employees, consultants and
agents from and against any and all Losses arising from or
based on a material breach of Murex's representations,
warranties and covenants contained in this Agreement.
Notwithstanding anything herein contained to the contrary, the
provisions of this Section 14.2 and Murex's obligations under
Section 14.3 shall survive the termination of this Agreement
to the maximum extent permitted by law.
23
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THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST. REDACTED MATERIAL IS BRACKETED AND HAS BEEN FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.
14.3 Notice and Defense of Third-Party Claims. If any action, claim
or proceeding shall be brought or asserted under this Section
14 against an indemnified party or any successor thereto (the
"Indemnified Person") in respect of which indemnity may be
sought under this Section 14 from an indemnifying person or
any successor thereto (the "Indemnifying Person"), the
Indemnified Person shall give prompt written notice of such
action or claim to the Indemnifying Person who shall assume
the defense thereof, including the employment of counsel
reasonably satisfactory to the Indemnified Person and the
payment of all expenses; the Indemnified Person shall have the
right to employ separate counsel in any of the foregoing
actions, claims or proceedings and to participate in the
defense thereof, but the fees and expenses of such counsel
shall be at the expense of the Indemnified Person unless both
the Indemnified Person and the Indemnifying Person are named
as parties and in the opinion of counsel for the Indemnified
Person common counsel would be inappropriate due to actual or
potential conflicts of interest between the Parties. In the
event that the Indemnifying Person, within ten days after
notice of any such action or claim, fails to assume the
defense thereof, the Indemnified Person shall have the right
to undertake the defense, compromise or settlement of such
action, claim or proceeding for the account of the
Indemnifying Person, subject to the right of the Indemnifying
Person to assume, at its expense, the defense of such action,
claim or proceeding with counsel reasonably satisfactory to
the Indemnified Person at any time prior to the settlement,
compromise or final determination thereof. Anything in this
Section 14 to the contrary notwithstanding, the Indemnifying
Person shall not, without the Indemnified Person's prior
written consent, settle or compromise any action or claim or
consent to the entry of any judgment with respect to any
action, claim or proceeding for anything other than money
damages paid by the Indemnifying Person. The Indemnifying
Person may, without the Indemnified Person's prior written
consent, settle or compromise any such action, claim or
proceeding or consent to entry of any judgment with respect to
any such action or claim that requires solely the payment of
money damages by the Indemnifying Person and that includes as
an unconditional term thereof the release by the claimant or
the plaintiff of the Indemnified Person from all liability
with respect to such action, claim or proceeding.
15. Miscellaneous Provisions.
15.1 Arbitration. Subject to the provisions of the Federal
Arbitration Act, 9 U.S.C. Section 1 et. seq., any claim,
controversy or dispute arising out of or relating to this
Agreement or any interpretation or breach thereof or
performance thereunder, including without limitation any
dispute concerning the scope of this arbitration provision,
shall be settled by submission to final and binding
arbitration ("Arbitration") for determination, without any
right by
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any Party to a trial de novo in a court of competent
jurisdiction. The Arbitration and all pre-hearing, hearing,
post-hearing arbitration procedures shall be conducted in
accordance with the Commercial Arbitration Rules (the
"Commercial Rules") of the American Arbitration Association
(herein referred to as the "Association") as supplemented
hereby. The Arbitration hearing shall take place in
Washington, D.C. All pre-hearing and post-hearing matters and
procedures shall take place at such place and manner,
including telephonically, as shall be agreed by the Parties.
In the event the parties fail to reach agreement regarding the
foregoing, the chair of the Arbitration panel shall determine
the manner and location of such matters. In addition to the
Commercial Rules, the Parties shall also follow the procedures
described below:
15.1.1 The Party seeking Arbitration shall give notice of a
demand to arbitrate (herein referred to as the
"Demand") to the other Party and to the Association.
The Demand shall include (i) the nature of the claim
that is being asserted and the remedy or relief that
is requested, or the issues to be determined if no
claim is being asserted, (ii) a copy of this
arbitration provision, and (iii) unless the Parties
shall have otherwise agreed upon the mutual selection
of a single arbitrator, the designation of one
arbitrator, who shall have no prior or existing
personal or financial relationship with the
designating Party.
15.1.2 Within thirty (30) days after receipt of the Demand,
the other Party shall give notice (herein referred to
as the "Response") to the Party that demanded
arbitration, and to the Association, of (i) any
additional issues to be arbitrated, (ii) its answer
to the claims or issues raised by the Party that sent
the Demand, and (iii) its designation of a second
arbitrator, who shall have no prior or existing
personal or financial relationship with the
designating Party. The Response shall also set forth
all third party claims and the relief requested in
respect thereof that are intended to be asserted by
such Party providing the Response.
15.1.3 If a Response designating a second arbitrator is not
received within the above-mentioned thirty (30) day
period, the Association shall immediately designate
the second arbitrator.
15.1.4 The two arbitrators as designated pursuant to the
foregoing provision shall then designate a third
arbitrator within ten (10) days after the designation
of the second arbitrator. If the two arbitrators
cannot agree on the designation of the third
arbitrator
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SECURITIES AND EXCHANGE COMMISSION.
within the ten (10) day period allotted, the
Association shall designate the third arbitrator.
Such third arbitrator designated pursuant to this
Section 15.1.4 shall be the chair of the Arbitration
panel.
15.1.5 The Arbitration panel as designated above shall
proceed with the Arbitration by giving notice to all
Parties of its proceedings and hearings in accordance
with the Association's applicable procedures. Within
15 days after all three arbitrators have been
appointed or at such other time as shall be agreed by
the Parties, an initial meeting among the chair of
the Arbitration panel and counsel for the Parties
shall be held for the purpose of establishing a plan
for administration of the Arbitration, including: (i)
definition of issues; (ii) scope, timing and type of
discovery, which may at the discretion of the
arbitrators include production of documents in the
possession of the Parties, but may not, without the
consent of the Parties, include depositions; (iii)
exchange of documents and filing of detailed
statements of claims and pre-hearing memoranda; (iii)
schedule and place of hearings; and (iv) any other
matters that may promote the efficient, expeditious
and cost-effective conduct of the proceeding. The
substantive law of the State of Maryland shall be
applied by the arbitrators to the resolution of the
dispute, provided that the arbitrators shall base
their decision on the express terms, covenants and
conditions of this Agreement. The arbitrators shall
be bound to make specific findings of fact and reach
conclusions of law, based upon the submissions and
evidence of the Parties, and shall issue a written
decision explaining the basis for the decision and
award.
15.1.6 The Parties agree that the arbitrators shall have no
power to alter or modify any express provision of
this Agreement or to render any award which, by its
terms, effects any such alteration or modification.
15.1.7 Upon written demand to any Party to the Arbitration
for the production of documents and things (including
computer discs and data) reasonably related to the
issues being arbitrated, the Party upon which such
demand is made shall promptly produce, or make
available for inspection and copying, such documents
or things without the necessity of any action by the
arbitrators, provided, however, that no such demand
shall be effective if
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THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
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SECURITIES AND EXCHANGE COMMISSION.
made within the twenty (20) day period prior to the
first day of the Arbitration hearing.
15.1.8 Subject to the limitations imposed by Section 15.1.5,
the arbitrators shall have the power to grant any and
all relief and remedies, whether at law or in equity,
including provisional relief, that the courts in the
State of Maryland may grant and such other relief as
may be available under the Commercial Rules, other
than punitive damages. Any award of the arbitrators
shall include pre-award and post-award interest at
the applicable rate or rates under Maryland law. The
decision of the arbitrators shall be final and as an
"award"within the meaning of the Commercial Rules and
the Federal Arbitration Act and judgment upon the
arbitration award may be entered in the United States
District Courts of Maryland ("Maryland District
Courts") or any other court having jurisdiction, as
if it were a judgment of that court. The Parties to
this Agreement expressly consent to the jurisdiction
of the Association, including, without limitation,
reasonable attorney's fees and the Parties waive any
objection they may have as to jurisdiction and venue
regarding the Maryland District Courts.
15.1.9 The Arbitration panel is specifically authorized to
award attorney's fees and expenses to the prevailing
Party, as determined by the Arbitration panel.
15.2 Force Majeure. Either Party shall be excused from any delay or
failure in performance hereunder caused by any labor dispute,
governmental requirement, act of God, earthquake, inability to
secure materials and transportation facilities, and other
causes beyond its control. If such delay, except for any such
delay caused by governmental regulations, shall continue for
more than 90 days, and 135 days in the case of Digene's
inability to deliver Products to customers, the Party injured
by the inability of the other Party to perform shall have the
right, upon written notice to the other Party, to terminate
this Agreement. If a delay or failure to perform hereunder
shall continue for more than 90 days, and 135 days in the case
of Digene's inability to deliver Products to customers and is
caused by any implementation of governmental restrictions or
regulations that make it commercially impossible for Digene to
sell the Products in the Territory, either Party injured by
the inability to perform under the Agreement shall have the
right, upon written notice to the other Party, to terminate
this Agreement. In the event a termination arising only under
the preceding sentence of this Section 15.2 occurs, Digene
shall not be responsible for any payments not then due and
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REQUEST. REDACTED MATERIAL IS BRACKETED AND HAS BEEN FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.
owing to Murex under this Agreement, except for the Set-Up
Payments set forth in Section 5.1 hereof, and Murex shall be
required to pay the amounts set forth in Section 12.4 hereof,
as if there had been Termination for Cause by Digene.
Termination under this Section 15.2 shall not relieve either
Party of any payment obligation due and owing under this
Agreement or for liability for any breach hereunder.
15.3 Entire Agreement.
This Agreement sets forth the entire agreement and
understanding between the Parties relative to the subject
matter contained herein and supersedes all other agreements,
oral and written, heretofore made between the Parties, with
respect to the subject matter herein. Any amendment hereto
must be in writing and signed by an authorized representative
of each of Digene and Murex.
15.4 Captions. Section titles or captions contained herein are for
reference only and shall not be considered in construing this
Agreement.
15.5 Notices. All notices and requests required or authorized
hereunder, shall, except where specifically provided
otherwise, be given in writing, and delivered either by
personal delivery to the Party to whom notice is to be given,
or sent by registered mail or by an internationally recognized
express delivery service, addressed to the Party intended at
the address set forth below. The date of delivery in the case
of personal or mail delivery or the date upon which it is
deposited with the express delivery service in the case of
notice by express delivery service, shall be deemed to be the
date of such notice.
Digene: Digene Corporation
9000 Virginia Manor Road
Beltsville, MD 20705
Attn: President or Executive Vice President
Murex: Murex Diagnostics Corporation
White Park House, White Park Road
Bridgetown, Barbados
Attn: Managing Director
15.6 Waivers. The waiver by either Party of any breach or alleged
breach of any provision hereunder shall not be construed to be
a waiver of any concurrent, prior or succeeding breach of said
provision or any other provision herein.
Any waiver must be in writing.
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THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST. REDACTED MATERIAL IS BRACKETED AND HAS BEEN FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.
15.7 Records. Murex shall keep accurate and detailed records of all
sales of the Products, and Murex shall permit examination and
inspection of such records by authorized representatives of
Digene, no more than two times per calendar year, during usual
business hours upon five working days notice. Murex may limit
inspection of such information to an agreed independent
auditor, only to the extent such inspection may divulge
confidential information of Murex. In the event Murex
exercises its right to limit inspection to an auditor, written
records of sales not containing such confidential information
shall be supplied by Murex per the terms of Sections 4.13 and
6.1.7 hereof.
15.8 Governing Law. This Agreement, and all of the rights and
duties in connection therewith, shall be governed by and
construed under the law of the State of Maryland, U.S.A.,
without regard to conflicts of laws principles, applicable to
agreements made and to be performed in that State.
15.9 Press Release and Other Permitted Disclosures Regarding the
Agreement.
15.9.1 Press Releases. Each of Digene and Murex agree not to
announce this Agreement by press release or other
form of communication without the written approval of
the other Party.
15.9.2 Permitted Disclosure. The Parties agree to keep the
terms of this Agreement confidential with exception
of such information which in the opinion of counsel
to the disclosing party is required to be disclosed
by applicable law, rule, regulation or generally
accepted accounting practice, including any rules of
applicable stock exchanges and other self-regulatory
authorities or organizations on which the Parties or
their Affiliates are listed. Provided, however, that
in the event a Party or its Affiliate shall be
required to disclose any of the terms of this
Agreement, whether pursuant to subpoena, deposition,
interrogatory, or otherwise, or a Party or its
Affiliate shall otherwise propose to disclose any of
the terms of this Agreement (except in connection
with such Party's or such Affiliate's required
disclosure under any applicable securities laws, the
rules of any applicable stock exchange or other self
regulatory authority or organization or other
reporting requirements) such disclosing Party shall
provide the other Party with prompt written notice of
such requirement so that the other Party may seek a
protective order or other appropriate remedy and/or
waive compliance with the terms of this Agreement.
Notwithstanding the foregoing, except as otherwise
required by the provisions of Section 15.9.1 hereof,
(i) no prior written
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SECURITIES AND EXCHANGE COMMISSION.
notice shall be required in connection with
any Party's (or its Affiliate's) required
compliance with applicable securities laws,
the rules of any applicable stock exchange
or other self-regulatory authority or
organization or other reporting
requirements; and (ii) any Party shall be
permitted to submit this Agreement as
evidence in any proceeding in connection
with any dispute between the Parties. The
provisions of this Section 15.9.2 shall not
restrict a Party from making any disclosure
of any terms of this Agreement to the extent
such terms become generally available to the
public (other than as a result of a
disclosure by such Party in violation of
this Agreement), or restrict the ability of
the Parties from making disclosure to the
extent such disclosure is required for the
effective undertaking by the Parties of
their respective rights and obligations
hereunder. By way of example and not in
limitation of the foregoing, Murex shall be
entitled to disclose to proposed customers
the fact that it is acting as an authorized
agent of Digene.
15.10 Guaranty. International Murex Technologies Corporation shall,
subject to the consent of Bank of America, FSB (the "Bank"),
guarantee the payment obligations of Murex and its Affiliates
arising hereunder. Digene hereby consents to Murex's
disclosure to the Bank of such information pertaining to this
Agreement as is relevant to Murex's request for the Bank to
grant such consent.
15.11 Severability. In case any one or more of the provisions or
parts of a provision contained in this Agreement shall for any
reason be held to be invalid, illegal or unenforceable in any
respect, such invalidity, illegality or unenforceability shall
not affect any other provision or part of a provision of this
Agreement, but this Agreement shall be reformed and construed
as if such invalid or illegal or unenforceable provision or
part of a provision had never been contained herein.
15.12 Counterparts: Effectiveness of Agreement. This Agreement shall
be executed in counterparts, each of which shall be deemed an
original but both of which together shall constitute the same
instrument.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
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SECURITIES AND EXCHANGE COMMISSION.
In consideration of the mutual covenants and conditions herein set
forth, the Parties have executed this Agreement as of the Effective Date.
Murex Diagnostics Corporation Digene Corporation
Signature /s/ LYNWOOD BELL Signature /s/ EVAN JONES
---------------- ----------------
By: Lynwood Bell By: Evan Jones
Title: Managing Director Title: President & CEO
Date 3/3/97 Date 3/3/97
--------------------- ---------------------
FOR PURPOSES OF SECTION 15.10 ONLY:
International Murex Technologies Corporation
Signature /s/ C. ROBERT CUSICK
---------------------
By: C. Robert Cusick
Title: CEO
Date 2/1/97
--------------------------
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THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST. REDACTED MATERIAL IS BRACKETED AND HAS BEEN FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.
APPENDIX A
DISTRIBUTION INVENTORY HOLDING AGREEMENT
TERMS AND CONDITIONS
1. Storage Facilities
1.1 Murex shall provide secure storage facilities acceptable to
Digene adequate for the Products to be maintained at 2 to
8 degrees C and -20 degrees C as required.
1.2 Inspection of the storage facilities by an authorized
representative of Digene shall be permitted at all reasonable
times on five (5) working days notice during Murex's normal
business hours.
1.3 Digene shall inform Murex if, at any time, it is aware of any
fault or problem which could lead to abnormal deterioration of
Products.
1.4 Murex shall ensure that the facilities and services provided
under this Agreement are compliant with those GMP and
governmental regulations which apply in the Territory and are
relevant to the performance of all activities contemplated by
this Agreement.
2. Inventory Reporting
Murex shall provide to Digene within 30 days of the end of every month
during this Agreement an inventory report detailing the quantity of
each inventory item of Products held in each Affiliate warehouse in the
Territory.
3. Inventory Holding
3.1 All inventory of Products shall remain the property of Digene.
Murex shall label the outer door of Murex's stores containing
Products with the Part Codes of Digene Products held in such
stores and with a statement to the effect that such Products
are the property of Digene, and, in addition, to the extent
space in Murex's facilities is available, segregate Digene's
Products from Murex's products within the facilities of Murex,
and maintain the Products as property of Digene throughout the
term of the Agreement. Murex shall cooperate in the execution
and delivery of any and all documents and filings made by
Digene to assert and maintain its property interest in the
inventory of Products while in the physical possession of
Murex, including, if applicable, security interest filings.
A-1
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REQUEST. REDACTED MATERIAL IS BRACKETED AND HAS BEEN FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.
3.2 Duties of Murex as inventory holder shall include the
importation of Products into the Territory. All taxes and
duties for importation shall be for the account of Digene and
shall be paid by Digene according to Section 8 of this
Agreement.
3.3 Subject to Section 3.5 below, Murex shall only deliver
Products to customers up to a time one month prior to a
Product's expiration date as shown on the package and shall
not deliver any Products found to be defective.
3.4 Under no circumstances whatsoever shall Murex supply Products
to a customer after that Product's expiration date.
3.5 Murex shall maintain a strict inventory rotation system at all
times and shall use all reasonable endeavors to sell batches
of Products prior to their life expiration.
4. Discards
Murex shall notify Digene of all Products remaining unsold within one
(1) month of the expiration date assigned by Digene as shown on its
packaging. Expired Products shall be disposed of by Murex as directed
by Digene and at Digene's cost, such cost to be invoiced at the time of
disposal, provided that Murex shall be responsible for the cost of
disposal of Products which require disposal due to the actions of
Murex.
A-2
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REQUEST. REDACTED MATERIAL IS BRACKETED AND HAS BEEN FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.
SCHEDULE I - PRODUCTS
EXCLUSIVE PRODUCTS
<TABLE>
<CAPTION>
Digene Part
Exclusive Product Description Number*
- ----------------------------- -------
HUMAN PAPILLOMAVIRUS DETECTION KIT
<S> <C>
Human Papillomavirus (HPV) DNA Assay (6/11/42/43/44 and 4401-1030
16/18/31/35/45/51/52/56)
HPV DNA Test Panel 4401-1024
Digene Specimen Collection Kit 4203-0020
Digene Sample Transport Medium 4203-1030
Human Papillomavirus (HPV) Target: LI Region (Consensus) Probe Groups 4603-1100
(6/11/42/43/44 and 16/18/31/35/39/45/51/52/56/68)
INDIVIDUAL HPV PROBE PACKS:
HPV Type 6/11 4401-1611
HPV Type 16 4401-1016
HPV Type 18 4401-1018
HPV Type 31 4401-1031
HPV Type 33 4401-1033
HPV Type 35 4401-1035
HPV Type 42 4401-1042
HPV Type 43 4401-1043
HPV Type 44 4401-1044
HPV Type 45 4401-1045
HPV Type 51 4401-1051
HPV Type 52 4401-1052
HPV Type 56 4401-1056
</TABLE>
NON-EXCLUSIVE PRODUCTS
<TABLE>
<CAPTION>
Digene Part
Non-Exclusive Product Description Number*
- --------------------------------- -------
HYBRID CAPTURE SYSTEM EQUIPMENT AND ACCESSORIES
<S> <C>
DCR-1 Luminometer 4300-1010
Rotary Shaker Assembly (22v) 4300-1025
Printer Paper (DCR-1 Compatible) 4300-1012
Wash Apparatus 4301-1001
Decanting Racks 4301-1002
Hybridization Rack 4301-1003
Disposable Transfer Pipettes 4301-1500
Luminometer Validation Reagents 4400-1000
Hybridization Tube Caps (red) 4400-1040
Hybridization Tube Caps (green) 4400-1041
SHARP Signal System Assay 4600-1192
</TABLE>
- --------
* Represents all current products within such part number category.
<PAGE> 35
THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST. REDACTED MATERIAL IS BRACKETED AND HAS BEEN FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.
SCHEDULE II
TERRITORY
EUROPE
Germany
Switzerland
Austria
Belgium
Netherlands
Luxembourg
France
Italy
Spain
United Kingdom
EASTERN EUROPE
Poland
Czech and Slovak Republics
Hungary
Romania
Commonwealth of Independent States
Bulgaria
Estonia
Slovenia
Croatia
Macedonia
Lithuania
<PAGE> 36
THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST. REDACTED MATERIAL IS BRACKETED AND HAS BEEN FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.
SCHEDULE III
SET-UP ACTIVITIES
1. Set up, where applicable, new electronic databases to segregate Digene
exclusive Products from Murex products.
2. Define and implement how and when non-exclusive Products will be
recognized within Murex systems.
3. Agree with Digene all reports required from Murex systems and produce,
or have produced, any special program code for this.
4. Determine the appropriate way to capture costs and expenses to be
reimbursed by Digene.
5. Determine and set up all new accounting systems to enable correct
reporting to Digene on Digene's inventory and Digene's sales.
6. Determine and recruit the additional Murex full time equivalents
required to operate the Agreement effectively.
7. Investigate, where determined applicable, Digene bank accounts.
8. Labeling cold stores to list the Digene exclusive Products contained
inside.
<PAGE> 37
THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST. REDACTED MATERIAL IS BRACKETED AND HAS BEEN FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.
SCHEDULE IV
MUREX DISTRIBUTORS AND AGENTS FOR THE PRODUCTS IN THE TERRITORY
AT FEBRUARY 1ST, 1997
Austria - Szabo-Scandic HandelsgmbH & Co KG
Czech Republic - Schulze s.r.o.
Lachema a.s.
P-Lab
Chis s.r.o.
Slovak Republic - Timed Spol s.r.o.
- Tatra Alpine a.s.
Hungary - Unilab
Reanal
Estonia - Lisa
Promed
Lithuania - Generix
Poland - Alexim sp.z.o.o.
Cefarm - Dialab
Bulgaria - Global Medical Ltd
Gerganov
Romania - Tamisa Trading srl
Russia - Nearmedic
Dynatech GmbH
Biochemmack
Slovenia - A-Z Consulting
Iris
Croatia - Biognost
<PAGE> 38
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REQUEST. REDACTED MATERIAL IS BRACKETED AND HAS BEEN FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.
G.A.M. Ideja
Macedonia - Replek - Makedonija
<PAGE> 1
Exhibit 10.2
THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST. REDACTED MATERIAL IS BRACKETED AND HAS BEEN FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.
CUSTOMER TRANSFER AGREEMENT
This serves to record the agreement (the "Agreement"), effective as of
the 1st day of February, 1997 between DIGENE CORPORATION ("DIGENE") of 9000
Virginia Manor Road, Beltsville, MD 20705, U.S.A. and MUREX DIAGNOSTICS
CORPORATION ("MUREX") of White Park House, White Park Road, Bridgetown, Barbados
(the "Parties") relating to the transfer to DIGENE of the sales and customer
lists of MUREX and its AFFILIATES for the diagnostic products as specified in
SCHEDULE 1 hereto in those countries specified in SCHEDULE 2 hereto. All
currency amounts, including "$", set forth herein shall refer to United States
currency.
1. Definitions.
1.1 "Affiliate" shall mean any Person that controls, is controlled
by or is under common control with Murex or Digene, as the
context may require. For purposes of this definition "control"
shall mean: (a) in the case of corporate entities, direct or
indirect ownership of at least fifty percent (50%) of the
stock or shares entitled to vote for the election of
directors; and (b) in the case of non-corporate entities,
direct or indirect ownership of at least fifty percent (50%)
of the equity interest with the power to direct the management
and policies of such non-corporate entities.
1.2 "Customer" shall mean any Person who purchases exclusive
Products from Murex or any of its Affiliates in the Territory
or purchases non-exclusive Products from Murex or any of its
Affiliates in the Territory for HPV-testing purposes.
1.3 "Effective Date" shall mean the date first set forth herein.
1.4 "HPV" shall mean Human Papillomavirus.
1.5 "HPV Information" shall have the meaning set forth in Section
2.1 hereof.
1
<PAGE> 2
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REQUEST. REDACTED MATERIAL IS BRACKETED AND HAS BEEN FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.
1.6 "Person" shall mean an individual, a corporation, a
partnership, an association, a joint stock company, a trust,
any unincorporated organization or a government or political
subdivision thereof.
1.7 "Products" shall mean the exclusive and non-exclusive products
set forth on Schedule I attached hereto.
1.8 "Territory" shall mean the counties set forth on Schedule II
attached hereto.
2. Transfer of Customer Lists and Consideration.
2.1 Murex shall cause itself and its Affiliates to transfer all
HPV Information in their possession to Digene. For purposes of
this Agreement, HPV Information means the Customer lists
relating to Customers in the Territory to whom Products have
been sold in the previous 12 months, lists of Customers to
whom Products have been sold in the Territory but not in the
previous 12 months, lists of prospective Products Customers in
the Territory and any mailing lists used by Murex or any of
its Affiliates for sending information on Products to any
current or prospective Customers in the Territory and the
goodwill associated with such HPV Information. The aforesaid
HPV Information shall only be used by Digene in its normal
course of business, shall be confidential to the Parties and
Digene shall not resell or provide the foregoing HPV
Information to any other commercial organization unless it is
included as part of the sale or joint venture of the business
or Products lines. Without limitation of Murex's right to make
use of its customer lists, the foregoing is not intended to
preclude Murex's ability to continue to use its customer
lists, which may include the HPV Information, for non-HPV
purposes in the Territory and anywhere in the world or for any
purpose outside the Territory in the countries as listed on
Schedule 3 attached hereto.
2.2 Digene will pay Murex as consideration for the HPV Information
a total payment of $2,702,750, which payment will be made as
follows. Digene shall within 5 business days following the
Effective Date pay $500,000 to an account specified by Murex.
Within 5 business days following the Effective Date, Digene
will place the remaining $500,000 in an escrow account
specified by Murex (the "Escrow Payment") in accordance with
the terms of the Escrow Agreement between the Parties of even
date herewith (the "Escrow Agreement"), a form of which is
attached as Exhibit "A" to this Agreement. Murex will direct
the Escrow Agent (as defined in the Escrow Agreement) to
release the Escrow Payment to Murex on April 1, 1997, if Murex
has provided Digene with the HPV Information. In accordance
with the terms of the Escrow Agreement, Digene shall have the
right to instruct the Escrow
2
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THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST. REDACTED MATERIAL IS BRACKETED AND HAS BEEN FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.
Agent not to release the Escrow Payment. Digene agrees not to
issue such contrary instructions if Murex has provided the HPV
Information.
The payment of the remaining $1,702,750 will be made as
follows. Digene will, on the Effective Date, deliver to the
Escrow Agent an executed promissory note in the form of
Exhibit "B" hereto, effective as of [ ] (the "[ ]
Note"), in the amount of $[ ] payable to Murex in [ ]
installments, such subpayments to be made on the following
dates and in the following amounts:
[ ]
Murex will direct the Escrow Agent to release the [ ] Note to
Murex on or after [ ] if the Products sales target
levels set forth in Section 2.3 hereof are met. In accordance
with the terms of the Escrow Agreement, Digene shall have the
right to instruct the Escrow Agent not to release the July
Note. Digene agrees not to issue such contrary instructions if
the Products sales target levels are met.
Digene will, on the Effective Date, deliver to the Escrow
Agent an executed promissory note in the form of Exhibit "C"
hereto effective as of [ ] (the "[ ] Note"),
in the amount of $[ ] payable to Murex in [ ]
installments, such subpayments to be made on the following
dates and in the following amounts:
[ ]
Murex will direct the Escrow Agent to release the [ ]
Note to Murex on or after [ ] if the Products
sales target levels set forth in Section 2.3 hereof are met.
In accordance with the terms of the Escrow Agreement, Digene
shall have the right to instruct the Escrow Agent not to
release the [ ] Note. Digene agrees not to issue such
contrary instructions if the Products sales target levels are
met.
3
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THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST. REDACTED MATERIAL IS BRACKETED AND HAS BEEN FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.
All payments under the [ ] Note and the [ ] Note shall
be without right of set-off, withholding or counterclaim by
Digene.
The obligations evidenced by the [ ] Note and the [ ]
Note are primary obligations of Digene hereunder. If for any
reason the [ ] Note or the [ ] Note are held to be
invalid or unenforceable, or are not issued because the Escrow
Agreement is for any reason held to be invalid or
unenforceable, Digene agrees to make such payments as are set
forth in this Section 2.2 directly to Murex upon the
respective scheduled payment dates, notwithstanding such
invalidity or unenforceability, subject only to the
satisfaction of the conditions provided in Section 2.3 hereof.
The foregoing will only be applicable in the event of such
invalidity or unenforceability and will not require Digene to
make duplicate payments.
2.3 The release to Murex of the [ ] Note and the [ ] Note
issued by Digene pursuant to Section 2.2 hereof are subject to
Digene having made Product sales in the Territory of a minimum
of US $[ ] per three month period in the most recent three
month period immediately preceding the release of the [ ]
Note or the [ ] Note, as applicable, for which sales
figures are available. If such minimum Product sales target
levels are not met in the three month period immediately
preceding the release of the [ ] Note or the [ ] Note,
as applicable, the Escrow Agent will be instructed by Murex to
release the [ ] Note or the [ ] Note, as applicable, to
Digene. Notwithstanding the aforesaid, if the three month
sales minimum referenced herein is not met due to any default
by Digene in the timely delivery of Product to customers in
the Territory or in the quantity and meeting the
specification, quality and performance claims of Digene, then
this Section 2.3 shall be of no effect.
2.4 In the event conflicting instructions are given to the Escrow
Agent regarding the release from escrow of any of the Escrow
Payment, the [ ] Note or the [ ] Note as described in
Section 2.2, the Parties agree to submit any such dispute to
arbitration immediately, and to inform the Escrow Agent of
such arbitration proceeding.
3. Miscellaneous.
3.1 Arbitration. Subject to the provisions of the Federal
Arbitration Act, 9 U.S.C. Section 1 et. seq., any claim,
controversy or dispute arising out of or relating to this
Agreement or any interpretation or breach thereof or
performance thereunder, including without limitation any
dispute concerning the scope of this arbitration provision,
shall be settled by submission to final
4
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THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST. REDACTED MATERIAL IS BRACKETED AND HAS BEEN FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.
and binding arbitration ("Arbitration") for determination,
without any right by any Party to a trial de novo in a court
of competent jurisdiction. The Arbitration and all
pre-hearing, hearing, post-hearing arbitration procedures
shall be conducted in accordance with the Commercial
Arbitration Rules (the "Commercial Rules") of the American
Arbitration Association (herein referred to as the
"Association") as supplemented hereby. The Arbitration hearing
shall take place in Washington, D.C. All pre-hearing and
post-hearing matters and procedures shall take place at such
place and manner, including telephonically, as shall be agreed
by the Parties. In the event the parties fail to reach
agreement regarding the foregoing, the chair of the
Arbitration panel shall determine the manner and location of
such matters. In addition to the Commercial Rules, the Parties
shall also follow the procedures described below:
3.1.1 The Party seeking Arbitration shall give notice of a
demand to arbitrate (herein referred to as the
"Demand") to the other Party and to the Association.
The Demand shall include (i) the nature of the claim
that is being asserted and the remedy or relief that
is requested, or the issues to be determined if no
claim is being asserted, (ii) a copy of this
arbitration provision, and (iii) unless the Parties
shall have otherwise agreed upon the mutual selection
of a single arbitrator, the designation of one
arbitrator, who shall have no prior or existing
personal or financial relationship with the
designating Party.
3.1.2 Within thirty (30) days after receipt of the Demand,
the other Party shall give notice (herein referred to
as the "Response") to the Party that demanded
arbitration, and to the Association, of (i) any
additional issues to be arbitrated, (ii) its answer
to the claims or issues raised by the Party that sent
the Demand, and (iii) its designation of a second
arbitrator, who shall have no prior or existing
personal or financial relationship with the
designating Party.
3.1.3 If a Response designating a second arbitrator is not
received within the above-mentioned thirty (30) day
period, the Association shall immediately designate
the second arbitrator.
3.1.4 The two arbitrators as designated pursuant to the
foregoing provision shall then designate a third
arbitrator within ten (10) days after the designation
of the second arbitrator. If the two arbitrators
cannot agree on the designation of the third
arbitrator within the ten (10) day period allotted,
the Association shall designate the third arbitrator.
Such third
5
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THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST. REDACTED MATERIAL IS BRACKETED AND HAS BEEN FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.
arbitrator designated pursuant to this Section 3.1.4
shall be the chair of the Arbitration panel.
3.1.5 The Arbitration panel as designated above shall
proceed with the Arbitration by giving notice to all
Parties of its proceedings and hearings in accordance
with the Association's applicable procedures. Within
15 days after all three arbitrators have been
appointed or at such other time as shall be agreed by
the Parties, an initial meeting among the chair of
the Arbitration panel and counsel for the Parties
shall be held for the purpose of establishing a plan
for administration of the Arbitration, including: (i)
definition of issues; (ii) scope, timing and type of
discovery, which may at the discretion of the
arbitrators include production of documents in the
possession of the Parties, but may not, without the
consent of the Parties, include depositions; (iii)
exchange of documents and filing of detailed
statements of claims and pre-hearing memoranda; (iii)
schedule and place of hearings; and (iv) any other
matters that may promote the efficient, expeditious
and cost-effective conduct of the proceeding. The
substantive law of the State of Maryland shall be
applied by the arbitrators to the resolution of the
dispute, provided that the arbitrators shall base
their decision on the express terms, covenants and
conditions of this Agreement. The arbitrators shall
be bound to make specific findings of fact and reach
conclusions of law, based upon the submissions and
evidence of the Parties, and shall issue a written
decision explaining the basis for the decision and
award. The arbitrators shall have the authority to
issue instructions to the Escrow Agent in connection
with any dispute pertaining to the Escrow Agreement.
3.1.6 The Parties agree that the arbitrators shall have no
power to alter or modify any express provision of
this Agreement or to render any award which, by its
terms, effects any such alteration or modification.
3.1.7 Upon written demand to any Party to the Arbitration
for the production of documents and things (including
computer discs and data) reasonably related to the
issues being arbitrated, the Party upon which such
demand is made shall promptly produce, or make
available for inspection and copying, such documents
or things without the necessity of any action by the
arbitrators, provided, however, that no such demand
shall be effective if made within the twenty (20) day
period prior to the first day of the Arbitration
hearing.
6
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THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST. REDACTED MATERIAL IS BRACKETED AND HAS BEEN FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.
3.1.8 Subject to the limitations imposed by Section 3.1.5,
the arbitrators shall have the power to grant any and
all relief and remedies, whether at law or in equity,
including provisional relief, that the courts in the
State of Maryland may grant and such other relief as
may be available under the Commercial Rules, other
than punitive damages. Any award of the arbitrators
shall include pre-award and post-award interest at
the applicable rate or rates under Maryland law. The
decision of the arbitrators shall be final and as an
"award"within the meaning of the Commercial Rules and
the Federal Arbitration Act and judgment upon the
arbitration award may be entered in the United States
District Courts of Maryland ("Maryland District
Courts") or any other court having jurisdiction, as
if it were a judgment of that court. The Parties to
this Agreement expressly consent to the jurisdiction
of the Association, including, without limitation,
reasonable attorney's fees and the Parties waive any
objection they may have as to jurisdiction and venue
regarding the Maryland District Courts.
3.1.9 The Arbitration panel is specifically authorized to
award attorney's fees and expenses to the prevailing
Party, as determined by the Arbitration panel.
3.2 Entire Agreement.
This Agreement including the Exhibits and Schedules attached
hereto and the Escrow Agreement, the [ ] Note and the
[ ] Note set forth the entire agreement and understanding
between the Parties relative to the transfer of the HPV
Information and the payment therefor and supersede all other
agreements, oral and written, heretofore made between the
Parties, with respect to the transfer of the HPV Information
and the payment therefor. Any amendment hereto must be in
writing and signed by an authorized representative of each of
Digene and Murex.
3.3 Captions. Section titles or captions contained herein are for
reference only and shall not be considered in construing this
Agreement.
3.4 Notices. All notices and requests required or authorized
hereunder, shall, except where specifically provided
otherwise, be given in writing, and delivered either by
personal delivery to the Party to whom notice is to be given,
or sent by registered mail or by an internationally recognized
express delivery service, addressed to the Party intended at
the address set forth below. The date of delivery in the case
of personal or mail delivery or the date upon which it is
deposited with the express delivery service in the case of
7
<PAGE> 8
THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST. REDACTED MATERIAL IS BRACKETED AND HAS BEEN FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.
notice by express delivery service, shall be deemed to be the
date of such notice.
Digene: Digene Corporation
9000 Virginia Manor Road
Beltsville, MD 20705
Attn: President or Executive Vice President
Murex: Murex Diagnostics Corporation
White Park House, White Park Road
Bridgetown, Barbados
Attn: Managing Director
3.5 Waivers. The waiver by either Party of any breach or alleged
breach of any provision hereunder shall not be construed to be
a waiver of any concurrent, prior or succeeding breach of said
provision or any other provision herein.
Any waiver must be in writing.
3.6 Press Release and Other Permitted Disclosures Regarding the
Agreement.
3.6.1 Press Releases. Each of Digene and Murex agree not to
announce this Agreement by press release or other
form of communication without the written approval of
the other Party.
3.6.2 Permitted Disclosure. The Parties agree to keep the
terms of this Agreement confidential with exception
of such information which in the opinion of counsel
to the disclosing party is required to be disclosed
by applicable law, rule, regulation or generally
accepted accounting practice, including any rules of
applicable stock exchanges and other self-regulatory
authorities or organizations on which the Parties or
their Affiliates are listed. Provided, however, that
in the event a Party or its Affiliate shall be
required to disclose any of the terms of this
Agreement, whether pursuant to subpoena, deposition,
interrogatory, or otherwise, or a Party or its
Affiliate shall otherwise propose to disclose any of
the terms of this Agreement (except in connection
with such Party's or such Affiliate's required
disclosure under any applicable securities laws, the
rules of any applicable stock exchange or other self
regulatory authority or organization or other
reporting requirements) such disclosing Party shall
provide the other Party with prompt written notice of
such requirement so that the other Party may seek a
protective order or other appropriate remedy and/or
waive compliance with the terms of this Agreement.
Notwithstanding the foregoing, except as
8
<PAGE> 9
THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST. REDACTED MATERIAL IS BRACKETED AND HAS BEEN FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.
otherwise required by the provisions of Section 3.6.1
hereof, (i) no prior written notice shall be required
in connection with any Party's (or its Affiliate's)
required compliance with applicable securities laws,
the rules of any applicable stock exchange or other
self-regulatory authority or organization or other
reporting requirements; and (ii) any Party shall be
permitted to submit this Agreement as evidence in any
proceeding in connection with any dispute between the
Parties. The provisions of this Section 3.6.2 shall
not restrict a Party from making any disclosure of
any terms of this Agreement to the extent such terms
become generally available to the public (other than
as a result of a disclosure by such Party in
violation of this Agreement), or restrict the ability
of the Parties from making disclosure to the extent
such disclosure is required for the effective
undertaking by the Parties of their respective rights
and obligations hereunder. By way of example and not
in limitation of the foregoing, Murex shall be
entitled to disclose to proposed customers the fact
that it is acting as an authorized agent of Digene.
3.7 Governing Law. This Agreement, and all of the rights and
duties in connection therewith, shall be governed by and
construed under the law of the State of Maryland, U.S.A.,
without regard to conflicts of laws principles, applicable to
agreements made and to be performed in that State.
3.8 Counterparts; Effectiveness of Agreement. This Agreement shall
be executed in counterparts, each of which shall be deemed an
original but both of which together shall constitute the same
instrument.
In consideration of the mutual covenants and conditions herein set
forth, the parties have executed this Agreement as of the day and year
above written.
Murex Diagnostics Corporation Digene Corporation
Signature /s/ LYNWOOD BELL Signature /s/ EVAN JONES
-------------------- ----------------
By: Lynwood Bell By: Evan Jones
Title: Managing Director Title: President & CEO
Date 3/3/97 Date 3/3/97
------------------------- ---------------------
9
<PAGE> 10
THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST. REDACTED MATERIAL IS BRACKETED AND HAS BEEN FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.
SCHEDULE I - PRODUCTS
EXCLUSIVE PRODUCTS
<TABLE>
<CAPTION>
Digene Part
Exclusive Product Description Number*
- ----------------------------- -------
HUMAN PAPILLOMAVIRUS DETECTION KIT
<S> <C>
Human Papillomavirus (HPV) DNA Assay (6/11/42/43/44 and 4401-1030
16/18/31/35/45/51/52/56)
HPV DNA Test Panel 4401-1024
Digene Specimen Collection Kit 4203-0020
Digene Sample Transport Medium 4203-1030
Human Papillomavirus (HPV) Target: LI Region (Consensus) Probe Groups 4603-1100
(6/11/42/43/44 and 16/18/31/35/39/45/51/52/56/68)
INDIVIDUAL HPV PROBE PACKS:
HPV Type 6/11 4401-1611
HPV Type 16 4401-1016
HPV Type 18 4401-1018
HPV Type 31 4401-1031
HPV Type 33 4401-1033
HPV Type 35 4401-1035
HPV Type 42 4401-1042
HPV Type 43 4401-1043
HPV Type 44 4401-1044
HPV Type 45 4401-1045
HPV Type 51 4401-1051
HPV Type 52 4401-1052
HPV Type 56 4401-1056
</TABLE>
NON-EXCLUSIVE PRODUCTS
<TABLE>
<CAPTION>
Digene Part
Non-Exclusive Product Description Number*
- --------------------------------- -------
HYBRID CAPTURE SYSTEM EQUIPMENT AND ACCESSORIES
<S> <C>
DCR-1 Luminometer 4300-1010
Rotary Shaker Assembly (22v) 4300-1025
Printer Paper (DCR-1 Compatible) 4300-1012
Wash Apparatus 4301-1001
Decanting Racks 4301-1002
Hybridization Rack 4301-1003
Disposable Transfer Pipettes 4301-1500
Luminometer Validation Reagents 4400-1000
Hybridization Tube Caps (red) 4400-1040
Hybridization Tube Caps (green) 4400-1041
SHARP Signal System Assay 4600-1192
</TABLE>
- --------
* Represents all current products within such part number category.
<PAGE> 11
THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST. REDACTED MATERIAL IS BRACKETED AND HAS BEEN FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.
SCHEDULE II - TERRITORY
EUROPE
Germany
Switzerland
Austria
Belgium
Netherlands
Luxembourg
France
Italy
Spain
United Kingdom
EASTERN EUROPE
Poland
Czech and Slovak Republics
Hungary
Romania
Commonwealth of Independent States
Bulgaria
Estonia
Slovenia
Croatia
Macedonia
Lithuania
<PAGE> 12
THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST. REDACTED MATERIAL IS BRACKETED AND HAS BEEN FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.
SCHEDULE III - OTHER TERRITORY
Denmark
Finland
Ireland
Norway
Portugal
Sweden
Greece - for HPV Hybrid Capture products only
Africa - all countries
United Arab Emirates
Saudi Arabia
<PAGE> 13
THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST. REDACTED MATERIAL IS BRACKETED AND HAS BEEN FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.
EXHIBIT A
ESCROW AGREEMENT
THIS ESCROW AGREEMENT, dated as of the 1st day of February, 1997, among
Murex Diagnostics Corporation ("Murex"), a corporation organized and existing
under the laws of Barbados, Digene Corporation, a Delaware corporation (the
"Company"), and Reid & Priest LLP (the "Escrow Agent"). Capitalized terms used
herein and not defined shall have the meanings ascribed to such terms in that
certain Customer Transfer Agreement, dated of even date herewith, by and between
Murex and the Company (the "Customer Transfer Agreement") a copy of which is
attached hereto as Appendix A.
W I T N E S S E T H:
WHEREAS, simultaneously with the execution of this Agreement, Murex and
the Company are entering into the Customer Transfer Agreement, which provides,
among other things, for the transfer by Murex to the Company of the HPV
Information;
WHEREAS, pursuant to the Customer Transfer Agreement, the Company is
required to place $500,000 in escrow within five (5) business days of the date
hereof, to be disbursed in connection with the provision by Murex to the Company
of the HPV Information;
WHEREAS, pursuant to the Customer Transfer Agreement, the Company is
required to place in escrow two promissory notes (the "Notes"), which are to be
released from escrow at designated times if the sales of the Company's Products
meet certain sales target levels, as described in Section 2.3 of the Customer
Transfer Agreement; and
WHEREAS, the parties to this Agreement desire to define the terms and
conditions pursuant to which the Escrow Agent shall hold and release such funds
or portions thereof and Notes;
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants contained herein, and intending to be legally bound hereby, the
parties hereto hereby agree as follows:
1. Establishment of Escrow. Pursuant to Section 2.2 of the Customer
Transfer Agreement, the Company shall deliver in escrow $500,000 to the Escrow
Agent (the "Escrow Funds"), which will be invested by the Escrow Agent in an
interest bearing account maintained by the Escrow Agent at Citibank, N.A. Upon
delivery of the Escrow Funds, the Escrow Agent shall acknowledge receipt of the
Escrow Funds in escrow pursuant to the terms and conditions of this Agreement.
Upon prior notice to the Company and Murex, the Escrow Agent may deposit the
Escrow Funds in another commercial bank comparable to Citibank, N.A. in New
York, New York.
<PAGE> 14
THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST. REDACTED MATERIAL IS BRACKETED AND HAS BEEN FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.
2. Escrow of Notes. Pursuant to Section 2.2 of the Customer Transfer
Agreement, the Company has delivered in escrow (a) a promissory note in the form
of Exhibit A hereto, fully executed by the Company ("Note A"), and (b) a
promissory note in the form of Exhibit B hereto, fully executed by the Company
("Note B"). The Escrow Agent acknowledges receipt of the Notes in escrow
pursuant to the terms and conditions of this Agreement.
3. Disbursement of Escrow Funds; Delivery of Notes. Subject to the
provisions of Paragraph 4 below, the Escrow Funds will be disbursed, and Notes
will be issued to Murex or the Company, as applicable, as follows:
(a) Request for Funds. Murex shall, at any time provide a
written request for the Escrow Funds ("Request for Funds") to the
Escrow Agent and to the Company. Such Request for Funds shall certify
that Murex has delivered to the Company the HPV Information.
(b) Disbursement of Funds. Unless the Escrow Agent shall have
received a Stop Order (as defined herein) from the Company on or before
the fifteenth (15th) day following the Escrow Agent's receipt of a
Request for Funds, the Escrow Agent shall disburse the Escrow Funds to
Murex on the eighteenth (18th) day following its receipt of a Request
for Funds, but in no event earlier than April 1, 1997. A "Stop Order"
shall mean a written notice from the Company certifying that Murex has
not delivered the HPV Information to the Company. Any Stop Order
provided by the Company to the Escrow Agent under this Agreement must
also be provided by the Company to Murex.
(c) Stop Order. Upon receipt of a Stop Order, the Escrow Agent
shall withhold any disbursement of the Escrow Funds until the Escrow
Agent receives written instructions from the Company directing the
disbursement of the Escrow Funds, or until the Escrow Agent receives
instructions from an arbitration panel or other tribunal in a
proceeding to which Murex and the Company are parties, in accordance
with the provisions of Paragraph 5 hereof.
(d) Requests for Note A and Note B. As applicable, Murex
shall, on or after June 1, 1997, provide a written request for Note A
("Request for Note A") and, on or after October 1, 1997, provide a
written request for Note B ("Request for Note B"), to the Escrow Agent
and to the Company. Such Request for Note A and Request for Note B
shall certify that the requisite target sales levels, as described in
Section 2.3 of the Customer Transfer Agreement pertaining to the
conditions for the release of Note A, or Note B, as applicable, have
been met.
(e) Release of Note A and Note B to Murex. Following the
Escrow Agent's receipt of a Request for Note A or a Request for Note B,
unless the Escrow Agent shall have received a Non-Release Order (as
defined herein) from the Company pertaining to the applicable Note on
or before the fifteenth (15th) day following the
<PAGE> 15
THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST. REDACTED MATERIAL IS BRACKETED AND HAS BEEN FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.
Escrow Agent's receipt of such Request for Note A or Request for Note
B, as applicable, the Escrow Agent shall release Note A to Murex on the
eighteenth (18th) day following its receipt of a Request for Note A,
but in no event earlier than [ ], and shall release Note B to
Murex on the eighteenth (18th) day following its receipt of a Request
for Note B, but in no event earlier than [ ]. A
"Non-Release Order" shall mean a written notice from the Company
certifying that the requisite target sales levels, as described in
Section 2.3 of the Customer Transfer Agreement, have not been met. Any
Non-Release Order provided by the Company to the Escrow Agent under
this Agreement must also be provided by the Company to Murex.
(f) Non-Release Order. Upon receipt of a Non-Release Order in
respect of Note A or Note B, the Escrow Agent shall withhold any
release of Note A or Note B, as applicable, until the Escrow Agent
receives written instructions from the Company directing the release to
Murex of Note A or Note B, as applicable, or until the Escrow Agent
receives instructions from an arbitration panel or other tribunal in a
proceeding to which Murex and the Company are parties, in accordance
with the provisions of Paragraph 5 hereof.
(g) Release of Note A or Note B to Digene. In the event the
requisite sales target levels, as set forth in Section 2.3 of the
Customer Transfer Agreement, are not met in the time period prior to
[ ] or [ ], as applicable, Murex shall provide
written instructions to the Escrow Agent providing for the release of
Note A or Note B, as applicable, to Digene. The Escrow Agent shall
release Note A or Note B, as applicable, to Digene no later than the
third (3rd) day following its receipt of such instructions from Murex.
(h) Interest. All interest earned on the Escrow Funds shall be
added to the Escrow Funds and disbursed by the Escrow Agent with the
Escrow Funds to the party entitled to the Escrow Funds.
4. Termination of Escrow. Except as otherwise provided in Paragraph
5(d) hereof, the escrow arrangements provided for under this Agreement shall
terminate at the earlier to occur of (a) the release of the Escrow Funds,
together with all interest thereon, and the Notes in accordance with the
provisions of Paragraph 2 hereof or (b) the mutual agreement of Murex and the
Company to terminate this Agreement. In the event Murex and the Company elect to
terminate this Agreement, they shall provide the Escrow Agent with joint
instructions with respect to the disbursement of the Escrow Funds and the Notes
remaining in escrow, as applicable.
5. Rights, Duties and Responsibilities of the Escrow Agent. It is
understood and agreed that the duties of the Escrow Agent are purely ministerial
in nature, and are limited to those expressly set forth in this Agreement. It is
further agreed that:
<PAGE> 16
THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST. REDACTED MATERIAL IS BRACKETED AND HAS BEEN FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.
(a) The Escrow Agent shall not be required to enforce the
Customer Transfer Agreement, or any other agreement between the Company
and Murex. In addition, the Escrow Agent shall not be responsible for
the performance under or compliance by the Company or Murex of their
respective obligations under this Agreement or for verifying the
accuracy or completeness of any certificate, demand or other document
submitted to it by either the Company or Murex or both.
(b) The Escrow Agent shall have the right to act in reliance
upon any document, instrument or signature believed by it to be genuine
and to assume that any person purporting to give notice or instructions
pursuant to this Agreement or in connection with any transaction to
which this Agreement relates has been duly authorized to do so. The
Escrow Agent shall not be obligated to make any inquiry as to the
authority, capacity, existence or identity of any person purporting to
give such notice or instructions.
(c) Disbursement of Escrow Funds and release of the Notes by
the Escrow Agent from escrow under this Agreement shall be to Murex or
the Company, as the case may be, to the address or the account set
forth in the notice of payment, and shall not be to any third party.
(d) In the event that the Escrow Agent shall be uncertain as
to its duties or rights hereunder or shall receive instructions with
respect to the Escrow Funds or Notes which, in its sole opinion, are in
conflict with either other instructions received by it or any provision
of this Agreement, or shall receive an objection to the making of any
requested disbursement, the Escrow Agent shall be entitled to hold the
Escrow Funds and/or the Notes pending the resolution of such
uncertainty, conflict, dispute or objection, to the Escrow Agent's sole
satisfaction, by written agreement of the Company and Murex or by final
judgment of an arbitration panel or other tribunal of competent
jurisdiction; or the Escrow Agent, at its option, may deposit the
Escrow Funds and the Notes in the registry of a court or arbitration
tribunal of competent jurisdiction in a proceeding to which all parties
in interest are joined.
(e) The Escrow Agent shall not be liable for any action taken
or omitted by it in good faith and believed by it to be authorized or
within the rights or powers conferred upon it by this Agreement, and
may consult with counsel of its own choice and shall have full and
complete authorization and protection for any action taken or suffered
by it hereunder in good faith and in accordance with the opinion of
such counsel.
(f) The Company acknowledges that the Escrow Agent has
represented affiliates of Murex in connection with corporate and
litigation matters, and may continue to represent Murex or its
affiliates in the future.
6. Fees. The Escrow Agent shall receive an annual fee of $1,000 for
acting as the escrow agent hereunder, payable upon commencement of this
Agreement and each
<PAGE> 17
THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST. REDACTED MATERIAL IS BRACKETED AND HAS BEEN FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.
anniversary date hereof, and shall be reimbursed for all expenses incurred in
connection with its services under this Agreement. The Company and Murex shall
each be responsible for fifty (50%) percent of such fees and expenses.
7. Resignation. The Escrow Agent may resign and be discharged from its
duties or obligations hereunder by giving notice in writing of such resignation
specifying a date when such resignation shall take effect. In the case of the
Escrow Agent's resignation or discharge, its only duty shall be to hold and
dispose of the Escrow Funds and the Notes in accordance with the original
provisions of this Agreement until a successor escrow agent shall be appointed
and written notice of the name and address of such successor escrow agent shall
be given to the original Escrow Agent by the Company and Murex, whereupon the
Escrow Agent's only duty shall be to pay or transfer over to the successor
escrow agent the Escrow Funds and Notes remaining in escrow and to deliver a
statement reflecting any previous disbursements in accordance with the terms of
this Agreement.
8. Indemnification and Contribution. The Company and Murex each agrees
to indemnify the Escrow Agent for and hold it harmless against any loss,
liability or expense (including reasonable attorneys' fees) incurred without
negligence or bad faith on the part of the Escrow Agent arising out of or in
connection with its entering into this Agreement and carrying out its duties
hereunder, including the costs and expenses of defending itself against any
claim of liability hereunder.
9. Governing Law. This Agreement shall be construed in accordance with
and governed by the laws of the State of New York (without giving effect to
conflicts of laws). Any proceeding or arbitration brought by the Escrow Agent
under this Agreement may be instituted in the City of New York, State of New
York, and neither the Company nor Murex shall object to such jurisdiction.
10. Assignment. This Agreement shall be binding upon the parties hereto
and their respective successors, assigns, heirs and administrators; provided,
however, that any assignment or transfer by the Company or Murex of its rights
under this Agreement or with respect to the Escrow Funds and the Notes shall be
void as against the Escrow Agent unless: (a) notice thereof shall be given to
the Escrow Agent, and (b) the Escrow Agent shall have consented to such
assignment and transfer.
11. Notices. All notices, requests and other materials required to be
given in connection with this Agreement shall be in writing and delivered in
person or by internationally recognized overnight courier delivery service, sent
by facsimile or sent by registered or certified mail, return receipt requested,
and addressed as follows:
<PAGE> 18
THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST. REDACTED MATERIAL IS BRACKETED AND HAS BEEN FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.
To Murex at:
Murex Diagnostics Corporation
White Park House
White Park Road
Bridgetown, Barbados
Attn: Managing Director
FAX: 809-497-3801
With a copy to:
Murex Biotech Limited
Central Road, Temple Hill
Dartford, Kent
England
Attn: Vice President and General Manager
FAX: 44-1322-294749
To the Company at:
Digene Corporation
9000 Virginia Manor Road
Beltsville, Maryland 20705
Attn: President or Executive Vice President
FAX: (301) 470-6496
To the Escrow Agent at:
Reid & Priest LLP
40 West 57th Street
New York, New York 10019
Attn: Bruce A. Rich, Esq.
FAX: (212) 603-2001
or to such address as any party hereto may duly give to the other parties
hereto. Notices shall be effective upon actual receipt by the party to whom
notice was intended.
12. Entire Agreement; Modification. This Agreement sets forth the
entire agreement among the parties hereto with respect to the subject matter
herein, and cannot be amended or modified except by an agreement in writing
executed by the parties hereto.
13. Severability. If any provision of this Agreement or the application
thereof to any person or circumstance shall be determined to be invalid or
unenforceable, the remaining provisions of this Agreement or the application of
such provision to persons or circumstances
<PAGE> 19
THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST. REDACTED MATERIAL IS BRACKETED AND HAS BEEN FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.
other than those to which it is held invalid or unenforceable shall not be
affected thereby and shall be valid and enforceable to the fullest extent
permitted by law.
14. Execution in Counterparts. This Agreement may be executed in
counterparts, and all of such counterparts shall constitute one instrument,
binding on all of the parties hereto.
15. Interpretation. For purposes of this Agreement, "day" shall be a
calendar day, and should the day for performance be a day which is a legal
holiday in the State of New York or which is a day when banks chartered in the
State of New York are closed, the day for performance shall be the next
succeeding day which is not a legal holiday and on which such banks are open.
16. Captions. All captions are for convenience only and shall not limit
or define the text hereto.
IN WITNESS WHEREOF, this Escrow Agreement has been executed by the
parties as of the date first above written.
MUREX DIAGNOSTICS CORPORATION
By: ____________________
Name:
Title:
DIGENE CORPORATION
By: ____________________
Name:
Title:
REID & PRIEST LLP
By: ____________________
Name:
Title:
<PAGE> 20
THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST. REDACTED MATERIAL IS BRACKETED AND HAS BEEN FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.
THIS NOTE WAS ORIGINALLY ISSUED ON [ ] AND HAS NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY COMPARABLE STATE SECURITIES
LAW. THE TRANSFER OF THIS NOTE IS SUBJECT TO CERTAIN RESTRICTIONS SET FORTH
HEREIN.
EXHIBIT B
PROMISSORY NOTE
$[ ] [ ]
FOR VALUE RECEIVED, Digene Corporation ("Maker") hereby
promises to pay to the order of Murex Diagnostics Corporation or its assigns
(the "Payee") the principal sum of [ ] Dollars ($[ ]), payable in
installments in the payment schedule provided herein, upon the terms
hereinafter set forth.
The payments to be made hereunder by Maker shall be payable to
the Payee on such dates and in such amounts as follows:
[ ]
The Maker of this Note shall be entitled to prepay this Note, without
premium or penalty, in whole or in part, at any time.
All payments under this Note shall be made in lawful currency of the
United States to such place as shall be designated in writing by the Payee, and
without setoff, withholding or counter-claim.
The following events shall constitute an "Event of Default" hereunder:
(a) The failure of Maker to make any payment within thirty
(30) days of the date when due hereunder; or
(b) The filing by Maker of a voluntary petition of bankruptcy
or a voluntary petition or answer seeking reorganization, arrangement, or
readjustment of its
<PAGE> 21
THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST. REDACTED MATERIAL IS BRACKETED AND HAS BEEN FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.
debts, or any other relief under any applicable bankruptcy laws or insolvency
laws, state, federal, or other, within the United States, or outside the United
States, now or hereafter existing, or any agreement by Maker indicating consent
to, approval or acquiescence in any such petition or proceeding; or
(c) The application by Maker or the consent or acquiescence of
Maker in the appointment of a receiver or trustee for all or a substantial part
of any of its properties; or
(d) The making by Maker of a general assignment for the
benefit of creditors; or
(e) The inability of Maker or the admission of Maker in
writing of its inability to pay its debts as they mature; or
(f) The filing of an involuntary petition against Maker
seeking reorganization, arrangement or readjustment of its debts or for any
other relief under any applicable bankruptcy laws or insolvency laws, state,
federal, or other, within the United States or outside the United States, now or
hereafter existing, or the involuntary appointment of a receiver or trustee of
Maker all or a substantial part of its property or assets, or the issuance of a
warrant of attachment, or execution of similar process against a substantial
part of the property of Maker and the continuance of such for sixty (60) days
undismissed or undischarged.
Upon the occurrence of an Event of Default, as defined herein, at the
option of the Payee or any assignee or holder of this Note and without demand,
presentation, or notice of any kind, any and all of the indebtedness represented
by this Note may be declared and thereupon immediately shall mature and become
due and payable, and the holder may exercise any rights available to the holder
by operation of law. It is agreed that the failure of the Payee to exercise any
right to accelerate the maturity of the indebtedness hereunder, or indulgence
granted, from time to time, shall in no event be considered as a waiver of such
right of acceleration or prevent the Payee from exercising such right.
Maker will from time to time and at all times hereafter upon every
reasonable request of the Payee do, execute, acknowledge and deliver or cause to
be done, executed, acknowledged and delivered all such further acts,
assignments, transfers, conveyances, powers of attorney and assurances as may be
required by the Payee in order to effectively carry out the purposes and intents
evidenced by this Note.
Time is of the essence in the payment and performance of this Note.
MAKER HEREBY WAIVES PRESENTMENT, DEMAND, PROTEST AND NOTICE OF
DISHONOR.
<PAGE> 22
THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST. REDACTED MATERIAL IS BRACKETED AND HAS BEEN FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.
Upon the occurrence of an Event of Default by Maker hereunder,
Maker shall pay all reasonable attorney's fees, charges and expenses and all
other costs and expenses which may be incurred in the enforcement of this Note.
This Note may be transferred only as a whole and not in part.
This Note has not been registered under the Securities Act or any comparable
state securities law.
After all amounts payable under this Note have been paid in
full, this Note shall be surrendered to Maker for cancellation and shall not be
reissued.
Notices to Maker shall be sent to the following address:
Digene Corporation
9000 Virginia Manor Road
Beltsville, Maryland 20705
Attention: President or Executive Vice President
or to such other address as specified in a written notice delivered to the Payee
by Maker.
Payments and any notice to the Payee hereunder are to be
delivered to the Payee the following address:
Murex Diagnostics Corporation
White Park House
White Park Road
Bridgetown, Barbados
Attention: Managing Director
or to such other address or account, in the case of payments, as specified in a
written notice, delivered to Maker by the Payee. Notices sent to either Maker or
the Payee shall be deemed received when delivered personally or two (2) days
after being sent by Federal Express or other internationally recognized
overnight carrier or upon receipt if sent by certified or registered mail.
This Note shall be governed as to validity, interpretation,
construction and in all other respects by the laws of the State of Maryland.
<PAGE> 23
THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST. REDACTED MATERIAL IS BRACKETED AND HAS BEEN FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.
IN WITNESS WHEREOF, the undersigned has caused this Note to be
executed all as of the date first above written.
DIGENE CORPORATION
By:_________________________
Name:_______________________
Title:______________________
<PAGE> 24
THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST. REDACTED MATERIAL IS BRACKETED AND HAS BEEN FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.
THIS NOTE WAS ORIGINALLY ISSUED ON [ ] AND HAS NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY COMPARABLE STATE SECURITIES
LAW. THE TRANSFER OF THIS NOTE IS SUBJECT TO CERTAIN RESTRICTIONS SET FORTH
HEREIN.
EXHIBIT C
PROMISSORY NOTE
$[ ] [ ]
FOR VALUE RECEIVED, Digene Corporation ("Maker") hereby
promises to pay to the order of Murex Diagnostics Corporation or its assigns
(the "Payee") the principal sum of [
] Dollars ($[ ]), payable in installments in the payment
schedule provided herein, upon the terms hereinafter set forth.
The payments to be made hereunder by Maker shall be payable to
the Payee on such dates and in such amounts as follows:
[ ]
The Maker of this Note shall be entitled to prepay this Note, without
premium or penalty, in whole or in part, at any time.
All payments under this Note shall be made in lawful currency of the
United States to such place as shall be designated in writing by the Payee, and
without setoff, withholding or counterclaim.
The following events shall constitute an "Event of Default" hereunder:
(a) The failure of Maker to make any payment within thirty
(30) days of the date when due hereunder; or
(b) The filing by Maker of a voluntary petition of bankruptcy
or a voluntary petition or answer seeking reorganization, arrangement, or
readjustment of its debts, or any other relief under any applicable bankruptcy
laws or insolvency laws, state,
<PAGE> 25
THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST. REDACTED MATERIAL IS BRACKETED AND HAS BEEN FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.
federal, or other, within the United States, or outside the United States, now
or hereafter existing, or any agreement by Maker indicating consent to, approval
or acquiescence in any such petition or proceeding; or
(c) The application by Maker or the consent or acquiescence of
Maker in the appointment of a receiver or trustee for all or a substantial part
of any of its properties; or
(d) The making by Maker of a general assignment for the
benefit of creditors; or
(e) The inability of Maker or the admission of Maker in
writing of its inability to pay its debts as they mature; or
(f) The filing of an involuntary petition against Maker
seeking reorganization, arrangement or readjustment of its debts or for any
other relief under any applicable bankruptcy laws or insolvency laws, state,
federal, or other, within the United States or outside the United States, now or
hereafter existing, or the involuntary appointment of a receiver or trustee of
Maker all or a substantial part of its property or assets, or the issuance of a
warrant of attachment, or execution of similar process against a substantial
part of the property of Maker and the continuance of such for sixty (60) days
undismissed or undischarged.
Upon the occurrence of an Event of Default, as defined herein, at the
option of the Payee or any assignee or holder of this Note and without demand,
presentation, or notice of any kind, any and all of the indebtedness represented
by this Note may be declared and thereupon immediately shall mature and become
due and payable, and the holder may exercise any rights available to the holder
by operation of law. It is agreed that the failure of the Payee to exercise any
right to accelerate the maturity of the indebtedness hereunder, or indulgence
granted from time to time, shall in no event be considered as a waiver of such
right of acceleration or prevent the Payee from exercising such right.
Maker will from time to time and at all times hereafter upon every
reasonable request of the Payee do, execute, acknowledge and deliver or cause to
be done, executed, acknowledged and delivered all such further acts,
assignments, transfers, conveyances, powers of attorney and assurances as may be
required by the Payee in order to effectively carry out the purposes and intents
evidenced by this Note.
Time is of the essence in the payment and performance of this Note.
MAKER HEREBY WAIVES PRESENTMENT, DEMAND, PROTEST AND NOTICE OF
DISHONOR.
<PAGE> 26
THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST. REDACTED MATERIAL IS BRACKETED AND HAS BEEN FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.
Upon the occurrence of an Event of Default by Maker hereunder,
Maker shall pay all reasonable attorney's fees, charges and expenses and all
other costs and expenses which may be incurred in the enforcement of this Note.
This Note may be transferred only as a whole and not in part.
This Note has not been registered under the Securities Act or any comparable
state securities law.
After all amounts payable under this Note have been paid in
full, this Note shall be surrendered to Maker for cancellation and shall not be
reissued.
Notices to Maker shall be sent to the following address:
Digene Corporation
9000 Virginia Manor Road
Beltsville, Maryland 20705
Attention: President or Executive Vice President
or to such other address as specified in a written notice delivered to the Payee
by Maker.
Payments and any notice to the Payee hereunder are to be
delivered to the Payee at the following address:
Murex Diagnostics Corporation
White Park House
White Park Road
Bridgetown, Barbados
Attention: Managing Director
or to such other address or account, in the case of payments, as specified in a
written notice, delivered to Maker by the Payee. Notices sent to either Maker or
the Payee shall be deemed received when delivered personally or two (2) days
after being sent by Federal Express or other internationally recognized
overnight carrier or upon receipt if sent by certified or registered mail.
This Note shall be governed as to validity, interpretation,
construction and in all other respects by the laws of the State of Maryland.
<PAGE> 27
THIS EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST. REDACTED MATERIAL IS BRACKETED AND HAS BEEN FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION.
IN WITNESS WHEREOF, the undersigned has caused this Note to be
executed all as of the date first above written.
DIGENE CORPORATION
By:_______________________
Name:_____________________
Title:____________________
<PAGE> 1
EXHIBIT 10.3
FIRST AMENDMENT TO THE DISTRIBUTION AGREEMENT
This First Amendment (the "First Amendment") to the Distribution Agreement
between Digene Diagnostics, Inc. (now known as Digene Corporation) ("Digene")
and Murex Biotech Limited ("MBL") dated February 28, 1996 (the "Distribution
Agreement") serves to record certain changes mutually agreed between Digene and
MBL with respect to their respective performance under the Distribution
Agreement. Each of Digene and MBL may hereinafter be referred to as a "Party"
and collectively as the "Parties". This Agreement shall be effective as of
February 1, 1997.
1. Definitions.
1.1 "Affiliate" shall mean any Person that controls, is controlled
by or is under common control with MBL or Digene, as the
context may require. For purposes of this definition "control"
shall mean: (a) in the case of corporate entities, direct or
indirect ownership of at least fifty percent (50%) of the
stock or shares entitled to vote for the election of
directors; and (b) in the case of non-corporate entities,
direct or indirect ownership of at least fifty percent (50%)
of the equity interest with the power to direct the management
and policies of such non-corporate entities.
1.2 "Agency and Sales Representation Agreement" shall mean the
Agency and Sales Representation Agreement dated of even date
herewith between Digene Corporation and Murex Diagnostics
Corporation.
1.3 "Customer" shall mean any Person who purchases Exclusive
Products from MBL or any of its Affiliates in the Territory or
purchases Non-Exclusive Products from MBL or any of its
Affiliates in the Territory for HPV-testing purposes.
1.4 "Digene/Murex Agreements" shall mean the following agreements:
(i) the Distribution Agreement dated May 19, 1992 between
Digene Diagnostics, Inc. and International Murex Technologies
Corporation ("IMTC"), as amended May 26, 1993 and April 4,
1996; (ii) the Development and License Agreement dated April
14, 1993 between Digene Diagnostics, Inc. and IMTC; and (iii)
the Development and License Agreement dated May 31, 1994
between Digene Diagnostics, Inc. and IMTC.
1.5 "Effective Date" shall be the date first set forth herein.
1.6 "Exclusive Products" shall mean the exclusive Products listed
on Schedule 1 attached hereto.
1.7 "HPV" shall mean Human Papillomavirus.
<PAGE> 2
1.8 "Non-Exclusive Products" shall mean the non-exclusive Products
listed on Schedule 1 attached hereto.
1.9 "Person" shall mean an individual, a corporation, a
partnership, an association, a joint stock company, a trust,
any unincorporated organization or a government or political
subdivision thereof.
1.10 "Products" shall mean the Exclusive Products and the
Non-Exclusive Products.
1.11 "Territory" shall mean the countries listed on Schedule II
attached hereto.
2. Cessation of Product Sales and Distribution.
2.1 Except as set forth in the Agency and Sales Representation
Agreement and except as set forth in this Section 2, MBL and
its Affiliates will cease in the Territory, from the Effective
Date, the distribution and sale under the Distribution
Agreement of the Exclusive Products and the sale or other
distribution of the Non-Exclusive Products in connection with
the HPV Products or to Customers who intend to use such
Non-Exclusive Products for HPV-testing purposes. Nothing
contained herein, or in the Agency and Sales Representation
Agreement shall be deemed to terminate or otherwise reduce the
rights of MBL or any of its Affiliates to (i) sell or
otherwise distribute any of the Non-Exclusive Products in the
Territory in connection with non-HPV Digene products,
including to HPV Exclusive Product customers, or to non-HPV
Exclusive Products customers as such rights are set forth in
the Digene/Murex Agreements, or (ii) to sell or otherwise
distribute Products outside of the Territory pursuant to such
Digene/Murex Agreements.
2.2 Digene is also hereby granted the right to request that MBL
cease the distribution and sale of the Products listed in
Schedule I attached hereto in any of the remaining territories
as listed in Exhibit B of the Distribution Agreement, provided
that Digene provides six (6) months advance notice to MBL of
the exercise of such right and further provided that such
request shall not conflict with the terms and provisions in
effect as of the Effective Date in any existing agency or
distribution agreement MBL or its Affiliates utilize to sell
or distribute the Products. In the event MBL or its Affiliates
elect to enter into any new agency or distribution agreement
with respect to the Products, MBL shall first notify Digene in
writing in advance. After such notification, Digene shall have
the right to accept or reject MBL's (or such MBL's
Affiliates') execution of such agreement. Digene shall have
the right to review the agreement or other arrangement between
MBL and such distributor or agent in order to confirm that
Digene's interests will be protected, and if necessary, in
Digene's sole discretion, provide for Digene to enter into an
2
<PAGE> 3
agreement directly with such agent or distributor. In such
event, MBL and MBL's Affiliates will have no obligation to
provide agency or other services under any agreements with
Digene or its Affiliates for servicing such distributor or
agent, except for services provided, at Digene's cost, to
reasonably support Digene during a transition period.
3. Digene is relieved of any obligation under Sections 1.3 and 1.4 of the
Distribution Agreement.
4. Miscellaneous
4.1 Arbitration. Subject to the provisions of the Federal
Arbitration Act, 9 U.S.C. Section 1 et. seq., any claim,
controversy or dispute arising out of or relating to this
Agreement or any interpretation or breach thereof or
performance thereunder, including without limitation any
dispute concerning the scope of this arbitration provision,
shall be settled by submission to final and binding
arbitration ("Arbitration") for determination, without any
right by any Party to a trial de novo in a court of competent
jurisdiction. The Arbitration and all pre-hearing, hearing,
post-hearing arbitration procedures shall be conducted in
accordance with the Commercial Arbitration Rules (the
"Commercial Rules") of the American Arbitration Association
(herein referred to as the "Association") as supplemented
hereby. The Arbitration hearing shall take place in
Washington, D.C. All pre-hearing and post-hearing matters and
procedures shall take place at such place and manner,
including telephonically, as shall be agreed by the Parties.
In the event the parties fail to reach agreement regarding the
foregoing, the chair of the Arbitration panel shall determine
the manner and location of such matters. In addition to the
Commercial Rules, the Parties shall also follow the procedures
described below:
4.1.1 The Party seeking Arbitration shall give notice of a
demand to arbitrate (herein referred to as the
"Demand") to the other Party and to the Association.
The Demand shall include (i) the nature of the claim
that is being asserted and the remedy or relief that
is requested, or the issues to be determined if no
claim is being asserted, (ii) a copy of this
arbitration provision, and (iii) unless the Parties
shall have otherwise agreed upon the mutual selection
of a single arbitrator, the designation of one
arbitrator, who shall have no prior or existing
personal or financial relationship with the
designating Party.
4.1.2 Within thirty (30) days after receipt of the Demand,
the other Party shall give notice (herein referred to
as the "Response") to the Party that demanded
arbitration, and to the Association, of (i) any
additional issues to be arbitrated, (ii) its answer
to the claims or issues raised by
3
<PAGE> 4
the Party that sent the Demand, and (iii) its
designation of a second arbitrator, who shall have no
prior or existing personal or financial relationship
with the designating Party.
4.1.3 If a Response designating a second arbitrator is not
received within the above-mentioned thirty (30) day
period, the Association shall immediately designate
the second arbitrator.
4.1.4 The two arbitrators as designated pursuant to the
foregoing provision shall then designate a third
arbitrator within ten (10) days after the designation
of the second arbitrator. If the two arbitrators
cannot agree on the designation of the third
arbitrator within the ten (10) day period allotted,
the Association shall designate the third arbitrator.
Such third arbitrator designated pursuant to this
Section 4.1.4 shall be the chair of the Arbitration
panel.
4.1.5 The Arbitration panel as designated above shall
proceed with the Arbitration by giving notice to all
Parties of its proceedings and hearings in accordance
with the Association's applicable procedures. Within
15 days after all three arbitrators have been
appointed or at such other time as shall be agreed by
the Parties, an initial meeting among the chair of
the Arbitration panel and counsel for the Parties
shall be held for the purpose of establishing a plan
for administration of the Arbitration, including: (i)
definition of issues; (ii) scope, timing and type of
discovery, which may at the discretion of the
arbitrators include production of documents in the
possession of the Parties, but may not, without the
consent of the Parties, include depositions; (iii)
exchange of documents and filing of detailed
statements of claims and pre-hearing memoranda; (iii)
schedule and place of hearings; and (iv) any other
matters that may promote the efficient, expeditious
and cost-effective conduct of the proceeding. The
substantive law of the State of Maryland shall be
applied by the arbitrators to the resolution of the
dispute, provided that the arbitrators shall base
their decision on the express terms, covenants and
conditions of this Agreement. The arbitrators shall
be bound to make specific findings of fact and reach
conclusions of law, based upon the submissions and
evidence of the Parties, and shall issue a written
decision explaining the basis for the decision and
award.
4.1.6 The Parties agree that the arbitrators shall have no
power to alter or modify any express provision of
this Agreement or to render any award which, by its
terms, effects any such alteration or modification.
4
<PAGE> 5
4.1.7 Upon written demand to any Party to the Arbitration
for the production of documents and things (including
computer discs and data) reasonably related to the
issues being arbitrated, the Party upon which such
demand is made shall promptly produce, or make
available for inspection and copying, such documents
or things without the necessity of any action by the
arbitrators, provided, however, that no such demand
shall be effective if made within the twenty (20) day
period prior to the first day of the Arbitration
hearing.
4.1.8 Subject to the limitations imposed by Section 4.1.5,
the arbitrators shall have the power to grant any and
all relief and remedies, whether at law or in equity,
including provisional relief, that the courts in the
State of Maryland may grant and such other relief as
may be available under the Commercial Rules, other
than punitive damages. Any award of the arbitrators
shall include pre-award and post-award interest at
the applicable rate or rates under Maryland law. The
decision of the arbitrators shall be final and as an
"award" within the meaning of the Commercial Rules
and the Federal Arbitration Act and judgment upon the
arbitration award may be entered in the United States
District Courts of Maryland ("Maryland District
Courts") or any other court having jurisdiction, as
if it were a judgment of that court. The Parties to
this Agreement expressly consent to the jurisdiction
of the Association, including, without limitation,
reasonable attorney's fees and the Parties waive any
objection they may have as to jurisdiction and venue
regarding the Maryland District Courts.
4.1.9 The Arbitration panel is specifically authorized to
award attorney's fees and expenses to the prevailing
Party, as determined by the Arbitration panel.
4.2 Entire Agreement.
This First Amendment, along with the Distribution Agreement,
as amended by this First Amendment thereto, set forth the
entire agreement and understanding between the Parties
relative to the subject matter contained herein and therein
and supersede all other agreements, oral and written,
heretofore made between the Parties, with respect to the
subject matter contained herein and therein. Any amendment
hereto must be in writing and signed by an authorized
representative of each of Digene and MBL.
4.3 Captions. Section titles or captions contained herein are for
reference only and shall not be considered in construing this
Agreement.
5
<PAGE> 6
4.4 Notices. All notices and requests required or authorized
hereunder, shall, except where specifically provided
otherwise, be given in writing, and delivered either by
personal delivery to the Party to whom notice is to be given,
or sent by registered mail or by an internationally recognized
express delivery service, addressed to the Party intended at
the address set forth below. The date of delivery in the case
of personal or mail delivery or the date upon which it is
deposited with the express delivery service in the case of
notice by express delivery service, shall be deemed to be the
date of such notice.
Digene: Digene Corporation
9000 Virginia Manor Road
Beltsville, MD 20705
Attn: President or Executive Vice President
MBL: Murex Biotech Limited
Central Road
Temple Hill, Dartford, Kent DA1 5LR
Attn: Vice President and General Manager
4.5 Waivers. The waiver by either Party of any breach or alleged
breach of any provision hereunder shall not be construed to be
a waiver of any concurrent, prior or succeeding breach of said
provision or any other provision herein. Any waiver must be in
writing.
4.6 Governing Law. This First Amendment, and all of the rights and
duties in connection therewith, shall be governed by and
construed under the law of the State of Maryland, U.S.A.,
without regard to conflicts of laws principles, applicable to
agreements made and to be performed in that State.
4.7 Press Release and Other Permitted Disclosures Regarding the
First Amendment.
4.7.1 Press Releases. Each of Digene and MBL agree not to
announce this First Amendment by press release or
other form of communication without the written
approval of the other Party.
4.7.2 Permitted Disclosure. The Parties agree to keep the
terms of this First Amendment confidential with
exception of such information which in the opinion of
counsel to the disclosing party is required to be
disclosed by applicable law, rule, regulation or
generally accepted accounting practice, including any
rules of applicable stock exchanges and other
self-regulatory authorities or organizations on which
the Parties or their Affiliates are listed. Provided,
however, that in the event a Party or its
6
<PAGE> 7
Affiliates shall be required to disclose any of the
terms of this First Amendment, whether pursuant to
subpoena, deposition, interrogatory, or otherwise, or
a Party or its Affiliates shall otherwise propose to
disclose any of the terms of this First Amendment
(except in connection with such Party's or such
Affiliates' required disclosure under any applicable
securities laws, the rules of any applicable stock
exchange or other self regulatory authority or
organization or other reporting requirements) such
disclosing Party shall provide the other Party with
prompt written notice of such requirement so that the
other Party may seek a protective order or other
appropriate remedy and/or waive compliance with the
terms of this First Amendment. Notwithstanding the
foregoing, except as otherwise required by the
provisions of Section 4.7.1 hereof, (i) no prior
written notice shall be required in connection with
any Party's (or its Affiliates') required compliance
with applicable securities laws, the rules of any
applicable stock exchange or other self-regulatory
authority or organization or other reporting
requirements; and (ii) any Party shall be permitted
to submit this First Amendment as evidence in any
proceeding in connection with any dispute between the
Parties. The provisions of this Section 4.7.2 shall
not restrict a Party or its Affiliates from making
any disclosure of any terms of this First Amendment
to the extent such terms become generally available
to the public (other than as a result of a disclosure
by such Party in violation of this First Amendment),
or restrict the ability of the Parties and their
Affiliates from making disclosure to the extent such
disclosure is required for the effective undertaking
by the Parties of their respective rights and
obligations hereunder. By way of example and not in
limitation of the foregoing, MBL shall be entitled to
disclose to proposed customers the fact that it is
acting as an authorized distributor of the Products
or agent of Digene.
4.8 Counterparts. This First Amendment shall be executed in
counterparts, each of which shall be deemed an original but
both of which together shall constitute the same instrument.
4.9 All references to "Digene Diagnostics, Inc." under the
Distribution Agreement shall hereafter be changed to
references to "Digene Corporation".
4.10 Conflict; Effectiveness of Distribution Agreement. In the
event of conflict between the provisions of this First
Amendment and the Distribution Agreement with respect to the
subject matter herein, this First Amendment shall control. All
other terms and provisions of the Distribution Agreement
remain in full force and effect.
7
<PAGE> 8
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
8
<PAGE> 9
In consideration of the mutual covenants and conditions herein set
forth, the Parties have executed this First Amendment as of the Effective Date.
Accepted and agreed for and on behalf of Digene Corporation
By /s/ EVAN JONES Date 3/3/97
-------------------------------------- --------------------
Print Name Evan Jones
------------------------------
Accepted and agreed for and on behalf of Murex Biotech Limited
By /s/ R. PETER SILVESTON Date 2/1/97
--------------------------------------- ---------------------
Print Name R. Peter Silveston
-------------------------------
9
<PAGE> 10
SCHEDULE I - PRODUCTS
EXCLUSIVE PRODUCTS
<TABLE>
<CAPTION>
Digene Part
Exclusive Product Description Number*
- ----------------------------- -------
<S> <C>
HUMAN PAPILLOMAVIRUS DETECTION KIT
Human Papillomavirus (HPV) DNA Assay (6/11/42/43/44 and 4401-1030
16/18/31/35/45/51/52/56)
HPV DNA Test Panel 4401-1024
Digene Specimen Collection Kit 4203-0020
Digene Sample Transport Medium 4203-1030
Human Papillomavirus (HPV) Target: LI Region (Consensus) 4603-1100
Probe Groups (6/11/42/43/44 and
16/18/31/35/39/45/51/52/56/68)
INDIVIDUAL HPV PROBE PACKS:
HPV Type 6/11 4401-1611
HPV Type 16 4401-1016
HPV Type 18 4401-1018
HPV Type 31 4401-1031
HPV Type 33 4401-1033
HPV Type 35 4401-1035
HPV Type 42 4401-1042
HPV Type 43 4401-1043
HPV Type 44 4401-1044
HPV Type 45 4401-1045
HPV Type 51 4401-1051
HPV Type 52 4401-1052
HPV Type 56 4401-1056
</TABLE>
NON-EXCLUSIVE PRODUCTS
<TABLE>
<CAPTION>
Digene Part
Non-Exclusive Product Description Number*
- --------------------------------- -------
<S> <C>
HYBRID CAPTURE SYSTEM EQUIPMENT AND ACCESSORIES
DCR-1 Luminometer 4300-1010
Rotary Shaker Assembly (22v) 4300-1025
Printer Paper (DCR-1 Compatible) 4300-1012
Wash Apparatus 4301-1001
Decanting Racks 4301-1002
Hybridization Rack 4301-1003
Disposable Transfer Pipettes 4301-1500
Luminometer Validation Reagents 4400-1000
Hybridization Tube Caps (red) 4400-1040
Hybridization Tube Caps (green) 4400-1041
SHARP Signal System Assay 4600-1192
</TABLE>
- --------
* Represents all current products within such part number category.
<PAGE> 11
SCHEDULE II - TERRITORY
EUROPE
Germany
Switzerland
Austria
Belgium
Netherlands
Luxembourg
France
Italy
Spain
United Kingdom
EASTERN EUROPE
Poland
Czech and Slovak Republics
Hungary
Romania
Commonwealth of Independent States
Bulgaria
Estonia
Slovenia
Croatia
Macedonia
Lithuania
<PAGE> 1
EXHIBIT 11
DIGENE CORPORATION
STATEMENT RE: COMPUTATION OF PER SHARE LOSS
<TABLE>
<CAPTION>
Three months ended March 31, Nine months ended March 31,
-------------------------------------- -------------------------------------
1997 1996 1997 1996
--------------- ---------------- ---------------- ---------------
<S> <C> <C> <C> <C>
Net loss per share:
Weighted average shares of Common Stock
outstanding 11,418,954 374,775 11,346,234 371,034
Shares of 1994 Series Preferred Stock
issued during the twelve month period
prior to March 29, 1996, the date of the
filing of the Company's Registration
Statement on Form S-1 (using the treasury
method) - 192,607 - 192,607
Shares of Common Stock issued during the
twelve month period prior to March 29,
1996, the date of the filing of the
Company's Registration Statement on
Form S-1 (using the treasury stock
method) - 5,295 - 5,295
Common equivalent shares from options and
warrants issued during the twelve
month period prior to March 29, 1996,
the date of the filing of the
Company's Registration Statement on
Form S-1 (using the treasury stock
method) - 283,666 - 283,666
--------------- ---------------- ---------------- ---------------
Total 11,418,954 856,343 11,346,234 852,602
=============== ================ ================ ===============
Loss for the period $ (1,778,080) $ (607,162) $ (3,682,492) $ (1,706,831)
=============== ================ ================ ===============
Net loss per share $ (0.16) $ (0.71) $ (0.32) $ (2.00)
=============== ================ ================ ===============
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> JUN-30-1996
<PERIOD-START> JUL-01-1996
<PERIOD-END> MAR-31-1997
<CASH> 10,549,107
<SECURITIES> 11,544,674
<RECEIVABLES> 3,273,216
<ALLOWANCES> 61,000
<INVENTORY> 1,929,953
<CURRENT-ASSETS> 27,441,621
<PP&E> 3,488,441
<DEPRECIATION> 2,335,068
<TOTAL-ASSETS> 31,191,008
<CURRENT-LIABILITIES> 3,672,032
<BONDS> 0
0
0
<COMMON> 115,165
<OTHER-SE> 26,413,073
<TOTAL-LIABILITY-AND-EQUITY> 31,191,008
<SALES> 6,237,029
<TOTAL-REVENUES> 6,730,723
<CGS> 2,433,498
<TOTAL-COSTS> 5,218,218
<OTHER-EXPENSES> 67,561
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 35,904
<INCOME-PRETAX> (3,682,492)
<INCOME-TAX> 0
<INCOME-CONTINUING> (3,682,492)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (3,682,492)
<EPS-PRIMARY> (0.32)
<EPS-DILUTED> (0.32)
</TABLE>
