SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT PURSUANT TO SECTION 13 AND 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): March 27, 1997.
THERMOGENESIS CORP.
____________________________________________________________________________
(Exact Name of Registrant as Specified in its Charter)
DELAWARE 0-16375 94-3018487
(State or other (Commission (IRS Employer
jurisdiction) file number) Identification No.)
3146 GOLD CAMP DRIVE, RANCHO CORDOVA, CA
95670
(Address of Principal Executive Officer)
(Zip Code)
Registrant's telephone number, including area code: (916) 858-5100
Item 5. Other
(a) On March 27, 1997, the Company and the New York Blood Center ("NYBC")
as licensors entered into a license agreement (the "Agreement") with
Pall Corporation and Medsep Corporation, a subsidiary of Pall, as
Licensees in which Pall Medsep will become the exclusive world-wide
manufacturer (except Japan) of a system of sterile, disposable
containers developed by the Company and NYBC for the processing of
hematopoietic stem cells sourced from placental/umbilical cord blood
("PCB"). The system is designed to simplify and streamline the
harvesting of stem cell rich blood from detached placenta/umbilical
cords and the concentration, cryopreservation (freezing) and
transfusion of the PCB stem cells while maintaining the highest stem
cell population and viability from each PCB donation. These units of
PCB stem cells will be "banked" in frozen storage for "on demand"
hematopoietic reconstitution of patients afflicted with such diseases
as aplastic anemia, hypoproliferative stem and progenitor cell
disorders, leukemia, lymphomas and gaucher disease.
The advantages of PCB stem cell "banks" to patients and transplant
physicians include, (1) the PCB stem cell donations can be easily
harvested from the detached placenta and umbilical cord resulting from
the birth of as many of the millions of babies born each year as
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required; (2) PCB stem cell treated patients, on the average,
demonstrate lower incidence of graft-versus-host disease (GVHD) and
improved probability of event-free survival than patients treated with
bone marrow; and (3) PCB stem cell donations can be stored in frozen
inventory for immediate use in contrast to the average 6-9 month delay
in finding a suitable HLA- matched bone marrow donor who must then
undergo an invasive surgical procedure to harvest the bone marrow. Two
patents on the system are currently pending and a third is being
prepared.
Under the Agreement, the Company and NYBC will receive a $50,000
advance payment, a running royalty equal to ten percent (10%) of Pall
Medsep's net sales resulting from the sale of the licensed product for
use in stem cell blood collection, and a running royalty equal to five
percent (5%) of net sales for non stem cell collection use. There are
certain milestone dates in the Agreement directed at bringing the
product to market as early as possible.
Pall Corporation is the international leader in the design,
manufacture and marketing of fine disposable filters, membranes and
other fluid clarification and separation devices for the health care,
aeropower and fluid processing markets.
NYBC is the largest independent blood distributor in the United
States. Each year, NYBC provides more than one million units of blood
and blood products. As a world leader in biomedical research, NYBC is
making major advances against some of the most serious diseases of our
time. NYBC is developing vaccines to prevent disease, innovative
treatments to improve patient care, and new methods to further
safeguard the blood supply.
Item 7(c). Exhibits.
10. License Agreement by and between THERMOGENESIS CORP. and New York
Blood Center, collectively "Licensor" and PALL Corporation and Medsep
Corporation, collectively "Licensee" entered into and effective March
27, 1997.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
THERMOGENESIS CORP.
Dated: April 11, 1997 By:
Philip Coelho, President and CEO
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LICENSE AGREEMENT
THIS LICENSE AGREEMENT (the AAgreement@) is entered into by and between NEW
YORK BLOOD CENTER (ANYBC@) and THERMOGENESIS CORP., a Delaware corporation
(ATHERMO@), collectively referred to in this Agreement as ALicensor@, and PALL
Corporation, a New York corporation (APALL@) and Medsep Corporation, a
California corporation and subsidiary of PALL (AMedsep@), collectively referred
to in this Agreement as ALicensee@. Effective this __ day of March, 1997, the
parties mutually agree as follows:
SECTION 1. BACKGROUND AND PURPOSE
1.01.Licensor, in conjunction with Dr. Pablo Rubinstein, has developed know-how
and patent rights for plastic disposable bags or containers for the isolation,
collection, processing, freezing and infusion of stem cells for use with
placental/umbilical cord blood; and Licensee desires to obtain the exclusive,
world-wide license (excluding Japan) under the Licensor=s know-how and patent
rights and to certain additional know-how and patent rights which may result
from Dr. Pablo Rubinstein=s continued work at NYBC, all pursuant to the terms
of this Agreement.
SECTION 2. DEFINITIONS
For construction of this Agreement the following terms shall have the meanings
ascribed to them below.
2.01.ALicensed Patent Rights@ shall mean all patent applications and patents
issuing from those applications which are specifically identified on Schedule
2.01. as may be amended from time to time with the agreement of the parties to
the extent they relate to the isolation, collection, freezing or infusion of
umbilical cord stem cells. Any patents and patent applications covering
Improvements as defined in section 2.04. below, and any patent applications
that are renewals, divisions, continuations, continuations in-part, extensions
or reissues of the Licensed Patent Rights, shall be included within the
Licensed Patent Rights. Licensed Patent Rights do not include any other
technology, patents, know-how, or inventions of Licensor.
2.02.AValid Claim@ or AValid Claims@ shall mean one or more claims of an issued
and unexpired patent or pending patent application included within the Licensed
Patent Rights.
2.03.ALicensed Products@ shall mean any product listed on the attached Schedule
2.03., the manufacture, processing, use or sale of which (a) involves the use
of Know-How (as defined below) or (b) is covered by a Valid Claim of Licensed
Patent Rights. During the term of this Agreement, additional products may be
added to Schedule 2.03. only upon the written consent of Licensor, which shall
be made in Licensor=s sole and unfettered discretion, and under terms
acceptable to Licensor. Any attempted unilateral inclusion of additional
products shall be void and shall result in no grant of rights to Licensee.
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2.04.AKnow-How@ or ATechnical Information@ shall mean the Licensor=s
proprietary technical information, data and documents related to stem cell
isolation, collection, freezing or infusion for use with placental/umbilical
cord blood as described generally on Schedule 2.04. Know-How shall also
include any improvements made by Dr. Pablo Rubinstein (and/or his staff) at
NYBC, or improvements made by THERMO, during the first two years of this
Agreement in the field of stem cell isolation, collection, freezing or infusion
- - e.g., improved bag designs (AImprovements@).
2.05.AAffiliate@ shall mean, with respect to Licensee only, any company or
other business entity which controls, is controlled by, or is under common
control with a party to this Agreement. A company or other business entity
shall be deemed to control another company or business entity if it owns or
controls, directly or indirectly, thirty percent (30%) or more of the voting
equity of the other company or business entity.
2.06.ANet Sales@ shall mean the total consideration received by Licensee and/or
its Affiliates from the sale, transfer or disposal of Licensed Products, less
allowances for (a) return of products or adjustments for defective quality, (b)
customer rebates, (c) actual cash and trade discounts, return credits and
allowances, and (d) separately billed consumer tax, packaging, insurance
premium and transportation charges. Licensed Products shall be deemed to have
been sold when first shipped and billed; provided, however, that when transfers
are made between Licensee and its Affiliates, such Licensed Products shall not
be deemed to have been sold until sold to a purchaser independent of Licensee
or its Affiliates in a bona fide, arm=s-length transaction between unrelated
parties. Royalty obligations shall accrue under this Agreement only once with
respect to the same Licensed Product.
2.07.ANet Proceeds@ shall mean the total consideration received by Licensee in
any form from any third party or parties for sublicense, or other right,
license, privilege or immunity to make, have made, use, sell or otherwise
dispose of the Licensed Products. Net Proceeds does not include Net Sales.
2.08.ARoyalty Year@ shall mean a full calendar year during the term in which
royalties are payable to Licensor under this Agreement.
2.09.AExclusive Field of Use@ shall mean the practice of stem cell isolation
and collection from umbilical cord blood, and the freezing, storage, processing
and infusion of such stem cells. ANon-Exclusive Field of Use@ shall mean all
other applications of the Licensed Product.
2.10. ATerritory@ shall mean the world, with the exclusion of Japan.
SECTION 3. GRANT OF RIGHTS
3.01.GRANT OF LICENSE. Subject to the reservation of rights set forth in this
Section and in Sections 3.02 and 3.03, Licensor grants to Licensee, under the
terms and conditions of this Agreement, an exclusive license within the
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Exclusive Field of Use and the Non-Exclusive Field of Use under the Licensed
Patent Rights and Know-How (a) to make, use, sell, or otherwise dispose of the
Licensed Products, and (b) to use the methods covered by the Licensed Patent
Rights and Know-How for the manufacture, use and sale of Licensed Products.
Licensor retains for itself the right to practice for itself, without the right
to sublicense distribution, the Licensed Patent Rights and Know How within the
Non-Exclusive Field of Use and to use the methods covered by the Licensed
Patent Rights and Know-How.
3.02.SCOPE OF LICENSE; RIGHT TO SUBLICENSE. The licenses granted in Section
3.01. are limited to making, using, selling, or disposing of the Licensed
Products in the Territory, and are exclusive within the Exclusive Field of Use,
and semi-exclusive within the Non-Exclusive Field of Use. The licenses granted
in Section 3.01. include the right to grant sublicenses within the Exclusive
Field of Use and within the Non-Exclusive Field of Use upon Licensor's prior
written consent, which consent shall not be unreasonably withheld; provided,
however, that consent of the Licensor is not needed for sublicenses to
Licensee's customers for such customers' use of the Licensed product.
3.03.RESERVATION OF LICENSOR RIGHTS. Licensor expressly reserves the rights to
manufacture, distribute and sell, and to have manufactured independently for
distribution and sale, an amount of Licensed Products equal to ten percent
(10%) of NYBC's annual needs in any year within the Exclusive Field of Use.
Further, should Licensee be unable to meet the then current and existing demand
of NYBC and/or third parties for Licensed Products, then Licensor shall also
have the right to manufacture, distribute and sell Licensed Products to NYBC
and/or third parties to meet such current demand in the market within the
Exclusive Field of Use. Licensor further retains for itself the right to
practice the rights covered by the Licensed Patent Rights and to use the
methods covered by the Licensed Patent Rights and Know-How for the manufacture,
use and sale of Licensed Products, without limitation in the Non-Exclusive
Field of Use, except that Licensor may not sublicense the distribution in the
Non-Exclusive Field of Use.
3.04.MILESTONES; TERMINATION. The license granted pursuant to this Agreement
shall be terminated, and without further condition upon Licensor, if Licensee
fails to attain the items set forth in the performance and implementation
schedule attached as Schedule 3.04. of this Agreement; provided, however, that
Licensee may cure the failure by payment of a $5,000 performance fee in each
instance it fails to attain a specific performance goal, and provided further
that should the failure not be remedied within thirty (30) days, Licensee pays
an additional $5,000 performance fee. Since Licensee's performance goals are
dependent upon THERMO attaining certain performance goals set forth in Schedule
3.04., THERMO shall be subject to the same performance fee and shall be
obligated to pay Licensee a $5,000 performance fee for failure to attain a
specific performance goal and an additional $5,000 performance fee if the
failure is not remedied in thirty (30) days. In each instance where a
performance goal is not achieved, and upon payment of the performance fee by
either THERMO or Licensee, as applicable, the remaining performance goal
achievement dates shall be restated taking into consideration the delay time
resulting from the failure. THERMO and Licensee may waive the obligations
under this section by mutual consent evidenced in writing signed by duly
authorized officers of each respective entity.
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3.05.USE OF LICENSOR TRADEMARK WITH LICENSED PRODUCT. Licensee shall use the
following designation, or substantially similar wording, on the Licensed
Products, and THERMO grants to Licensee a non-exclusive, royalty-free license
to use THERMO's trademarks as delineated below during the term of this
Agreement, in connection with marketing, distributing, and selling the Licensed
Products.
"Produced under License from THERMOGENESIS CORP.,
U.S. Patent Pending (replaced by issued patent number)"
Except as provided in this Section 3.05., Licensee shall not, directly or
indirectly, use Licensor's trademarks in connection with promotions,
advertising, or sales of the Licensed Products.
3.06.PAYMENT OF PATENT PROSECUTION AND MAINTENANCE FEES. Licensor shall apply
for and seek prompt issuance of the Licensed Patent Rights within the territory
at its cost, except that Licensee shall pay fifty percent (50%) of the patent
prosecution costs for Europe. As of the date of this Agreement, Licensee shall
be responsible for the payment of all patent maintenance costs. Licensor shall
keep the Licensee fully informed regarding prosecution of the Licensed Patent
Rights and notify Licensee of all required maintenance and annuity schedules.
Either party may, after reasonable notice to the other party, decide not to
file a patent, or decide not to pay maintenance fees in any particular country
for any patent encompassed within the Licensed Patent Rights. In the event of
such decision, the other party may file such application or pay such
maintenance fees, and the party declining shall retain no further rights in
such patent or application and, if it is the Licensor who declines prosecution
or maintenance, such patent or application shall be excluded from Licensed
Patent Rights.
3.07.NO IMPLIED RIGHTS. Nothing contained in this Agreement shall be construed
or interpreted as a grant, by implication or otherwise, of any license except
as expressly specified in this Section 3. Licensee agrees not to utilize the
Licensed Patent Rights and Know-How licensed under this Agreement in the
development, manufacture or use of any product not listed on Schedule 2.03.
SECTION 4. DELIVERY AND IMPLEMENTATION OF TECHNICAL INFORMATION
4.01.DELIVERY OF TECHNICAL INFORMATION. Within thirty (30) days from the
execution of this Agreement, Licensor shall deliver to Licensee the Technical
Information possessed by Licensor related to the Licensed Patents and the
Licensed Products. All documents delivered are subject to the terms of this
Agreement, including the confidentiality provisions contained in Section 11.
4.02.ASSISTANCE WITH INITIAL IMPLEMENTATION. After delivery of the Technical
Information, and for a period of sixty (60) days from such delivery, Licensor
shall provide reasonable assistance to Licensee in connection with the
implementation of such Technical Information.
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SECTION 5. RECORD MAINTENANCE AND ADJUSTMENTS
5.01.MAINTENANCE AND COPIES OF BOOKS AND RECORDS. Licensee shall keep full and
accurate books of accounts and other records in accordance with generally
accepted accounting practices, showing all information necessary for Licensor
to ascertain and verify the royalties payable by Licensee to Licensor under
this Agreement.
5.02.INSPECTION OF RECORDS. No more than once in each annual period ending
December 31st, Licensor shall have the right, at Licensor's sole expense, to
have the Licensee's accounts, invoices, books and records maintained in
connection with Licensed Products reviewed and copied by an accountant selected
by Licensor (subject to Licensee=s reasonable objection to selection and
subject to confidential treatment of such books and records) to ascertain the
proper royalty due under this Agreement; provided, however, that such
examination shall be conducted during normal business hours, and all
information obtained by the accountant and disclosed to Licensor shall be
subject to the confidentiality provisions of this Agreement, and shall not be
used by Licensor for any purpose other than verification of sales and royalty
payments. In the event the Licensor's accountant concludes that the royalty
payment was underpaid by more than ten percent (10%) for the audit period, then
Licensee shall pay the cost for conducting the audit of the records.
5.03.ADJUSTMENTS. Prompt adjustment shall be made to compensate for any errors
or omissions disclosed through Licensor's examination as provided in Section
5.02. above. Independent of any examination, Licensor and Licensee shall
receive credit, respectively, in the amount of any overpayment or underpayment
of royalties made in error, which is identified and fully explained to Licensor
or Licensee in a written notice prepared by the other and delivered within
eighteen (18) months following the overpayment or underpayment.
SECTION 6. REPORTS, RECORDS AND ROYALTY PAYMENTS
In consideration for the licenses and rights granted pursuant to Section 3 and
for the Technical Information delivered pursuant to Section 4 of this
Agreement, Licensee agrees to pay to Licensor the following sums:
6.01.AMOUNT OF ROYALTY; ADVANCE PAYMENT. A running royalty equal to ten
percent (10%) of Licensee=s Net sales resulting from the sale of Licensed
Product in the Exclusive Field of Use shall be payable to Licensor. A running
royalty equal to five percent (5%) of Licensee=s Net Sales resulting from the
sale and use of Licensed Products in the Non-Exclusive Field of Use shall also
be payable to Licensor. In addition to the royalty on Net Sales, Licensee
shall pay Licensor fifty percent (50%) of Net Proceeds within the Exclusive
Field of Use and within the Non-Exclusive Field of Use. Such royalties shall
apply, except as otherwise provided below, to the sale, lease, distribution or
use of all Licensed Products. Upon execution of this Agreement, Licensee shall
pay to Licensor a $50,000 non-refundable advance against future royalty
payments. Royalty payments shall continue to be paid on account of the
manufacture, sale and use of the Licensed Products until the later of the last-
to-expire U.S. patents included within the Licensed Patent Rights, or, if a
patent shall fail to issue, after the tenth anniversary of the first commercial
sale of Licensed Products by Licensee.
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6.02.CALCULATION AND EXCHANGE RATE FOR ROYALTIES. Royalty amounts due on sales
by Licensee or Licensee=s Affiliate to third party customers outside of the
United States shall be calculated and paid in U.S. Dollars using the exchange
rates set forth in THE WALL STREET JOURNAL on the last day of each quarter in
which Royalty payments accrue.
6.03.REPORTS OF ROYALTY DUE. Within thirty (30) days after the end of each
quarterly period of a Royalty Year (ending on March 31st, June 30th, September
30th, and December 31st) and commencing with the first quarterly period during
which this Agreement becomes effective, the Licensee shall furnish to Licensor
at the address specified in Section 16.01 a statement, including a copy of any
reports from sublicensees (collectively "Royalty Report") certified by an
officer of Licensee showing in a manner acceptable to Licensor: (a) all
Licensed Products sold, leased or put into use during the quarterly period, (b)
the Net Sales and Net Proceeds received from the sale, sublicense, or
distribution of all Licensed Products (by category of Exclusive Field of Use
and Nonexclusive Field of Use), (c) the amount of royalty due to Licensor,
including minimum guaranteed royalties, for all Licensed Products sold or
distributed by Licensee, its affiliates or sublicensees, and (d) all reductions
of royalty and all exclusions from royalty as provided in the definition of Net
Sales, if any. If no Licensed Products have been sold, leased or otherwise put
into use during the semiannual period, a statement to that effect shall be
certified and delivered.
6.04.PAYMENT OF ROYALTY. At or prior to the time the Royalty Report is
submitted, Licensee shall pay the Royalty due to Licensor to THERMO, in United
States dollars, at THERMO=s address specified in Section 16.01.
6.05.TAXES AND WITHHOLDINGS. Licensee shall not deduct from any royalty due,
or otherwise pay on account of Licensor, any tax (and related interest or
penalty), however designated, imposed as a result of the existence or operation
of this Agreement, including any tax which the Licensee is required to withhold
or deduct from payments to Licensor, and Licensee shall assume any such
obligation.
6.06.MINIMUM ROYALTY. If Licensee does not terminate this Agreement by written
notification delivered at least ninety (90) days prior to the second
anniversary of the effective date of this Agreement, then beginning with the
twelve-month period beginning in the second full calendar year following
receipt of U.S. regulatory approval, and in each successive twelve-month period
thereafter, Licensee agrees to pay to Licensor guaranteed minimum annual
royalties (to be credited against actual royalties payable pursuant to Section
6.01. above) during each twelve-month period in an amount equal to the royalty
that would be payable based upon a 25% market share for each country in which
regulatory approval has been obtained or, in the event that regulatory approval
is not required, upon the commencement of sales in that country, on an
aggregated basis. For purposes of calculating the total market, the parties
will refer to industry and trade publications and material that reference the
total number of cord-blood collections on an annual basis, or similar indicia
in recognized industry guides. Further, for purposes of measuring Licensee's
attainment of a 25% market share, Licensee's sale of Licensed Products to NYBC
shall be included. This guaranteed minimum annual royalty is non-refundable
and will be paid to Licensor at the end of each twelve-month period, to the
extent applicable. In no event shall any difference between actual royalties
and minimum guaranteed royalties in any twelve-month period beginning after
receipt of U.S. regulatory approval effect Licensee=s obligation to pay minimum
guaranteed royalties in any other twelve-month period.
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6.07.CLAIMS; SALES TO AFFILIATES. Royalties shall attach and be imposed only
once with respect to the same unit of Licensed Product regardless of the number
of Valid Claims which cover that unit, and regardless of whether the unit
encompasses both Valid Claims and Technical Information. Royalties shall not
attach or be paid on account of sales of Licensed Products between Licensee and
Licensee=s Affiliates which are intended for resale to end users, provided that
the obligation to pay royalties will arise upon the subsequent resale.
Notwithstanding the foregoing, royalties will not arise on account of sales of
Licensed Products between Licensee and Licensee=s Affiliates until such time as
the Licensee Affiliate distributes the Licensed Product to the commercial
market or end-user for the Licensed Product in an arm=s-length transaction.
6.08.REDUCTION OF ROYALTY -- KNOW-HOW ONLY. For consideration of the licensed
Know-How, if Licensed Patent Rights fail to include an issued U.S. patent with
claims covering a Licensed Product by the second anniversary date of this
Agreement, the royalty rates set forth above shall be reduced by fifty percent
(50%) with respect to Net Sales of such Licensed Product and there shall be no
minimum royalty as set forth in section 6.06. If, thereafter, Licensed Patent
Rights include an issued U.S. patent with claims covering such Licensed
Product, then such royalty rate reduction shall cease, and full royalty rates
shall apply to all sales of such Licensed Product.
6.09.REDUCTION OF ROYALTY -- INFRINGEMENT. If Licensee is required to pay a
royalty or other payment to a third party under any patent rights of such third
party or is sued for patent infringement by a third party for making, using or
selling the Licensed Products, then Licensee may deduct one-half (2) of such
royalty payments made to the third party and one-half (2) of the expenses and
costs of such action from royalties due and payable to Licensor pursuant to
this Agreement; provided, however, that in no event will royalties due and
payable to Licensor be reduced in the aggregate by more than one-half (2)
pursuant to Section 6.09. In no event will royalties due and payable to
Licensor be reduced by more than sixty-six percent (66%) by virtue of this
Section 6.09. and by virtue of Section 6.08. above, collectively.
SECTION 7. LIMITATIONS ON LICENSOR'S LIABILITY
7.01.LIMITATION ON LICENSOR=S LIABILITY. LICENSOR SHALL NOT BE LIABLE UNDER
ANY CIRCUMSTANCES FOR ANY SPECIAL, INDIRECT, OR CONSEQUENTIAL DAMAGES ARISING
OUT OF OR IN CONNECTION WITH THIS AGREEMENT, OR ARISING OUT OF OR IN CONNECTION
WITH THE MANUFACTURE, SALE, DISTRIBUTION, OR USE OF THE LICENSED PRODUCTS.
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SECTION 8. COVENANTS
8.01.LICENSEE=S AGREEMENT TO COMPLY WITH LAWS AND REGULATIONS. Licensee agrees
that in its performance of its obligations under this Agreement, and in
connection with its manufacture and use of the Licensed Products, and use of
the Technical Information, it shall obey all laws, rules, regulations and
edicts of any government, including, without limitation, the United States
Export Administration Act, and the regulations issued under that Act.
8.02.LICENSEE=S AGREEMENT TO OBTAIN REQUIRED REGULATORY APPROVAL. Licensee
acknowledges that the Licensed Products have not received all required United
States Food and Drug Administration (AFDA@) approvals, nor have the Licensed
Products received other consents or approvals that may be required by other
state, federal or foreign agencies, for Licensee to manufacture, sell,
distribute and use the Licensed Products, whether within the Exclusive Field of
Use or otherwise. Licensee represents and warrants that it will use its best
efforts to expeditiously obtain all required approvals, consents, and
authorizations from applicable state, federal and foreign agencies required for
Licensee to manufacture and distribute the Licensed Products and for use of the
Licensed Products in the Exclusive Field of Use, and in such Nonexclusive
Fields of Use as Licensee deems desirable. Licensee further agrees to keep
Licensor informed of all substantive FDA regulatory actions concerning the
Licensed Products, and agrees to provide Licensor with copies of all
substantive regulatory correspondence, marketing submissions, and final agency
actions regarding submissions. Licensee further agrees to permit Licensor to
audit all development documentation and raw data which supports and may be
material to regulatory marketing submissions, and agrees to provide copies of
all Medical Device Reports filed with the FDA in accordance with 21 CFR 803 and
804 and copies, when requested by Licensor, of all safety complaint
documentation kept in accordance with 21 CFR 820.198.
8.03.NYBC=S AGREEMENT TO PURCHASE LICENSED PRODUCT. NYBC may, at any time
during the term of this Agreement, place Purchase Orders with Licensee for the
purchase of Licensed Products in an amount equal to at least ninety percent
(90%) of NYBC's annual requirements for plastic disposable bags or containers
for the isolation, collection, processing, freezing or infusion of umbilical
cord blood stem cells and Licensee agrees to sell to NYBC all Licensed Products
requested. Delivery of the Licensed products to NYBC as provided in this
Section 8.03. shall be on mutually acceptable terms and at prices to be agreed
upon from time to time; provided, however, that the price to NYBC shall not be
less favorable than the price to any customer of Licensee or Licensee's
affiliates or sublicensees before deducting the applicable royalty percentage
that would have otherwise applied -- e.g., NYBC shall pay most favored price
less the applicable royalty that Licensee would have to pay on the sale.
Licensee acknowledges and agrees that NYBC is free (both prior to and after
regulatory approval of Licensed Products) to purchase and use non-patented
disposable bags (i.e. bags which are not covered by the Licensed Patent Rights
relating to bag design) from third parties to fulfill any or all of its
requirements with regard to bags or containers for umbilical cord blood, in the
event NYBC determines that use of the patented disposable bags (taking into
consideration the entire process and costs associated with the process) is not
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economically practicable or sound from a business standpoint when compared to
other methods or processes existing at that time, provided however, that once
NYBC makes such a determination it shall promptly provide in reasonable detail
the reasons for such determination to Licensee and give Licensee ninety (90)
days to cure such reasons to NYBC's satisfaction. In this regard, NYBC retains
the right to practice the Licensed Patent Rights relating solely to methods of
isolation, collection processing, freezing or infusion of umbilical cord blood.
However, if NYBC decides to purchase the patented disposable bags, then NYBC
shall purchase 90% of such requirements from Licensor in accordance with the
terms and conditions of this Agreement.
SECTION 9. REPRESENTATIONS AND WARRANTIES OF LICENSOR
9.01.ESTOPPEL; RIGHTS GRANTED. Nothing in this Agreement is or shall be
construed as:
(a)A warranty or representation by Licensor that anything made or used by
Licensee under any license granted in this Agreement is or will be free from
infringement of patents, copyrights, or other rights of third parties; or
(b)Granting by implication, estoppel, or otherwise any license, right or
interest other than as expressly stated in this Agreement.
9.02.LIMITATION OF WARRANTIES. Except as expressly set forth in this
Agreement, the parties MAKE NO REPRESENTATIONS AND EXTEND NO WARRANTIES OF ANY
KIND, EITHER EXPRESS OR IMPLIED, EITHER IN FACT OR BY OPERATION OF LAW, STATUTE
OR OTHERWISE, AND THE PARTIES SPECIFICALLY DISCLAIM ANY IMPLIED WARRANTY OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, OR WARRANTY OF NON-
INFRINGEMENT.
9.03.AUTHORITY TO LICENSE. Licensor represents and warrants that it has full
power and authority to enter into this Agreement and grant the licenses, and
that nothing in this Agreement violates any other agreement of Licensor.
9.04.OWNERSHIP OF TECHNOLOGY. Licensor represents and warrants that as of the
date of this Agreement it owns the entire right, title and interest in the
Licensed Patent Rights by virtue of assignments of the inventors of such
rights.
9.05.RESTRICTIONS ON TRANSFER OR LICENSE. Licensor represents and warrants
that during the term of this Agreement it will not enter into any agreement
with any other party which would contradict the terms of this Agreement, or
transfer the Licensed Patent Rights if such transfer would operate to deprive
Licensee of the rights contained in this Agreement.
SECTION 10. REPRESENTATIONS AND WARRANTIES OF LICENSEE
10.01.AUTHORITY FOR AGREEMENT. Licensee represents and warrants that it is
duly incorporated under the laws of the State of New York and California,
respectively, and has full authority to enter into this Agreement.
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10.02.COMPLIANCE WITH FOREIGN LAWS. The Licensee represents and warrants that
it will comply with all laws, domestic and foreign, applicable to the
manufacture, sale and use of the Licensed Products.
10.03.INSURANCE. Licensee represents that it has, and warrants that it will
maintain, adequate insurance and financial resources to cover all liability
resulting from any failure including, without limitation, failure in design,
manufacture, production and/or operation, in connection with the Licensed
Products.
SECTION 11. CONFIDENTIALITY
11.01.LIMITED USE OF DISCLOSED INFORMATION. Licensor and Licensee each agree
to hold in confidence any information and material which is related to the
disclosing party=s business or is designated as proprietary and confidential at
the time of disclosure by the disclosing party in connection with the
transactions contemplated by this Agreement. Each party agrees not to make use
of such designated information and material other than for the performance of
their respective obligations under this Agreement. Proprietary and
confidential information includes information related to research, development,
pricing, trade secrets, or customer lists of the parties to this Agreement,
except as such disclosure may be required by applicable laws, rules, or
regulations. Obligations of this section shall not apply to any information
which:
(a)is or subsequently becomes known to the public through no fault of the
receiving party; or
(b)was in the receiving party's possession prior to disclosure by the other
party as established by that party's documentation; or
(c)is obtained from a third party who or which has the lawful right to disclose
the information to the receiving party; or
(d) is developed by the receiving party completely independent of any
disclosure hereunder as evidenced by the receiving party's
documentation; or
(e)is disclosed to governmental authorities in response to a lawful order or
demand for disclosure, or in order to obtain required consents, permits,
licenses, or other approvals relating to the manufacture, use or sale of the
Licensed Products (provided that such information is designated as confidential
with such agency and a request to purge the file of such confidential
information is made as part of the submission); or
(f)is necessary information to explain the Licensed Products to users of the
Licensed Products, provided that Licensor is given thirty (30) days advance
notice of the intent to use or disclose such information.
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SECTION 12. PATENT INFRINGEMENT
12.01.NOTICE; ACTION BY LICENSOR. Licensee shall promptly provide written
notice to Licensor in the event it learns of any third party infringement, or
possible infringement, of Licensed Patent Rights in the Territory. Upon
receipt of such notice, Licensor shall have the right, at its sole discretion,
to take appropriate legal action in connection with such alleged activity. In
the event that Licensor shall elect to take such action, the conduct of the
action shall be entirely directed by Licensor and Licensor shall pay all costs
and expenses associated with the action. Any settlement or recovery received
from any such action shall be divided fifty percent (50%) to Licensee and fifty
percent (50%) to Licensor after Licensor first deducts from any such settlement
or recovery its reasonable attorneys= fees and out-of-pocket expenses related
to the legal proceedings or action.
12.02.ACTION BY LICENSEE WITH LICENSOR=S CONSENT. In the event that Licensor
shall elect not to take any legal action as specified in section 12.01., then,
Licensee may take legal action in connection with any third party infringement.
If Licensee agrees to take legal action against alleged infringement, then
Licensee shall consult with Licensor regarding the conduct of the action and
Licensee shall pay all costs and expenses associated with the action. Any
settlement or recovery received from any such action shall be divided fifty
percent (50%) to Licensor and fifty percent (50%) to Licensee after Licensee
first deducts from any such settlement or recovery its reasonable attorneys=
fees and out-of-pocket expenses related to the legal proceedings or action.
12.03.COOPERATION IN ACTIONS. In the event that either party takes legal
action as permitted in this section to enforce any Licensed Patent Rights
against an alleged infringer, the other party shall fully cooperate and shall
supply all assistance reasonably requested, including being a party to such
suit if required by the laws of the jurisdiction of such suit, at the sole cost
and expense of the party who initiates the legal action.
12.04.REPORTS OF CLAIMS AGAINST LICENSED PATENT RIGHTS. Licensee agrees to
report to Licensor, promptly and in written detail, each claim of patent
infringement made by a third party against Licensee as a result of Licensee=s
manufacture, use or sale of Licensed Products.
12.05.ACTIONS AGAINST LICENSEE. If a lawsuit or other action is brought
against Licensee for patent infringement based upon Licensee=s manufacture, use
or sale of Licensed Products, then Licensor shall provide reasonable technical
assistance to Licensee, at Licensee=s expense, in defending such action.
SECTION 13. COMPLIANCE; INDEMNIFICATION FOR OPERATIONS
13.01.NO LIABILITY FOR INJURY TO PERSONS. Licensor shall not be liable to
Licensee, its Affiliates, its Sublicensees or any third party for injury,
illness, diseases, allergy, allergic reaction, side effect, death, or other
adverse experience arising out of, or in connection with, or as a consequence
of research, manufacture, testing, advertising, sale, distribution, or other
use of the Licensed Products.
13.02.STANDARDS OF LICENSEE=S OPERATIONS. Licensee agrees to exercise
reasonable standards of care in conducting its activities relating to the
Licensed Products, including testing, manufacturing, packaging, marketing,
advertising, distributing and selling of the Licensed Products.
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<PAGE>
13.03.INDEMNIFICATION. Licensee agrees to indemnify, defend and hold harmless
Licensor, its officers, directors, employees and agents, from and against any
and all losses, damages, demands, claims, actions and causes of action,
assessments, liabilities, costs and expenses which they may incur because of
injury to or death of any person or any other claim arising out of, or in
connection with, or as a consequence of, Licensee=s manufacture, sale or third
party use of the Licensed Products manufactured or sold by Licensee.
SECTION 14. TERM; TERMINATION; EFFECT OF TERMINATION
14.01.TERM. The term of this Agreement is for a period equal to the last-to-
expire U.S. patent encompassed within the Licensed Patent Rights, unless
terminated earlier as provided for below (the ALicense Period@), or ten years
from the first commercial sale of Licensed Products by Licensee if no patents
are issued.
14.02.TERMINATION FOR FAILURE OF LICENSEE TO PAY ROYALTY DUE. Notwithstanding
any provision to the contrary herein, this Agreement may be terminated by
Licensor upon thirty (30) days written notice of Licensee=s failure to pay any
royalty owed under this Agreement when due, provided, however, that such notice
of termination will be of no effect if Licensee cures the deficiency in the
payment due within the thirty (30) days from the date of the notice.
14.03.TERMINATION FOR FAILURE TO PERFORM OR BREACH OF TERMS. Notwithstanding
any provision to the contrary herein, this Agreement may be terminated by
either party in the event the other party shall be in substantial and material
breach of its obligations hereunder and such failure is not remedied within
sixty (60) from the date of a written notice setting forth the failure of
performance.
14.04.AUTOMATIC TERMINATION. Notwithstanding any provision to the contrary,
this Agreement shall terminate automatically and without the necessity of prior
written notice if any of the following events occur:
a)the bankruptcy or insolvency of Licensee, whether voluntary or involuntary,
provided that such proceeding continues undismissed for sixty days; or
b)the winding-up or liquidation of Licensee, whether voluntary or involuntary;
or
c)Licensee ceases to do business or becomes for any reason incapable of
performing its obligations hereunder; or
d)Licensee ceases to offer the Licensed Products; or
e)Licensee gives Licensor ninety (90) days prior written notice pursuant to
section 6.06.
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14.06.EFFECT OF TERMINATION. Upon termination of this Agreement for any
reason, all royalty obligations and maintenance fees shall cease to accrue, and
the parties understand and agree to the following:
a)Licensee shall immediately discontinue all activities relating to the
Licensed Products and the Licensed Patent Rights, except that termination will
not affect the right of Licensee to sell Licensed Products manufactured prior
to the date of termination, provided royalties shall continue to be payable on
account of such sales, notwithstanding termination, and provided further that
the termination is not due to Licensee=s failure to previously pay royalties
when due.
b)The provisions of Sections 5, 6, 7, 10, 11, and 13 shall survive any such
termination.
c)Within ten (10) days from the date of termination, Licensee shall redeliver
all original Know-How in its possession or control, and certify destruction of
all copies of the Know-How in its custody, control, or possession in any form
or media.
d)All monies owed by Licensee to Licensor shall become immediately due and
payable notwithstanding any credit terms that may previously have been made
available, and Licensee=s obligation to make such payments shall survive the
termination of this Agreement.
SECTION 15. TITLE, PROPRIETARY RIGHTS, TRADE SECRETS AND COPYRIGHT
15.01.OWNERSHIP. The Licensed Patent Rights, the Technical Information and all
trade secret, copyright, trademark, and other intellectual and proprietary
rights therein, are and shall at all times remain the property of Licensor.
SECTION 16. MISCELLANEOUS PROVISIONS
16.01.NOTICES. Any and all notices or other communications required or
permitted by this Agreement or by law to be served on or given to either party
by the other party shall be in writing and shall be deemed duly served and
given when personally delivered to the party to whom it is directed, or in lieu
of such personal service, on the same day of transmission by facsimile (if
followed by mail), or three (3) days after deposit in the mail, first class
postage prepaid, addressed as follows:
IF TO THERMO: WITH COPY TO:
Philip H. Coelho, President & C.E.O. David C. Adams, General Counsel
THERMOGENESIS CORP. THERMOGENESIS CORP.
3146 Gold Camp Drive 3146 Gold Camp Drive
Rancho Cordova, CA 95670 Rancho Cordova, CA 95670
Telephone No.: (916) 858-5100
Facsimile No.: (916) 858-5199
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IF TO NYBC: WITH COPY TO:
Mark DeWyngaert, Ph.D. Kenneth George, Esq.
Office of Licensee Affairs Amster, Rothstein & Ebenstein
NEW YORK BLOOD CENTER 90 Park Avenue
310 East 67th Street New York, NY 10016
New York, NY 10021
Telephone No.: (212) 570-3215 Telephone No.: (212) 697-5995
Facsimile No.: (212) 879-5922 Facsimile No.: (212) 286-0854
IF TO PALL: IF TO MEDSEP:
Gilbert Weiner, Esq. Clarence Treppa, President
PALL Corporation Medsep Corporation
2200 Northern Blvd. 1630 Industrial Park Street
East Hills, NY 11548 Covina, CA 91722
Telephone No.: (516) 484-3600 Telephone No.: (818) 915-8288
Facsimile No.: (516) 484-3529 Facsimile No.: (818) 966-3690
Such addresses and telephone or facsimile numbers may change from time to time,
upon notification of such changes being made in writing as provided for in
this Section 16.01.
16.02.INTEGRATION, FINAL AGREEMENT. This Agreement (including all schedules
and exhibits attached hereto) constitutes the complete and entire agreement of
the parties with respect to the subject matter hereof, and supersedes all prior
negotiations and agreements, written or oral, with respect to the subject
matter contained in this Agreement.
16.03.AMENDMENT. This Agreement may be amended only by a written document,
duly executed by an authorized representative of the respective parties hereto.
16.04.RELATIONSHIP OF PARTIES. Each party to this Agreement is an independent
contractor of the other, and neither shall be deemed an employee, agent,
partner or joint venturer of the other. Neither party shall make any
commitment, by contract or otherwise, binding upon, or purporting to be binding
upon the other, nor represent that it has any authority to do so.
16.05.THIRD PARTY RIGHTS. Nothing in this Agreement shall be construed to
grant any rights to any third parties.
16.06.HEADINGS. The headings contained in this Agreement are for reference
purposes only and shall not affect in any way the meaning or interpretation of
this Agreement.
16.07.FORCE MAJEURE. Neither party shall be responsible or liable to the other
party for nonperformance or delay in performance of any terms or conditions of
this Agreement due to acts of God, acts of governments, wars, riots, strikes or
other labor disputes, shortages of labor or materials, or other causes beyond
the reasonable control of the non-performing or delayed party; PROVIDED,
HOWEVER, nonperformance or delay in excess of one-hundred-eighty (180) days
shall constitute cause for termination of this Agreement by the aggrieved party
pursuant to Section 14 above, and implementation of the rights afforded to such
party pursuant to the terms and provisions of this Agreement.
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16.08.COUNTERPARTS AND ORIGINALS. This Agreement may be executed in any number
of counterparts, each of which shall be deemed an original, and all of which
together shall constitute one and the same instrument. There shall be executed
duplicate originals of this Agreement.
16.09.GOVERNING LAW. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of New York.
16.10.FORUM AND JURISDICTION OF DISPUTES. Any dispute or controversy arising
under, or related to this agreement, and the parties' obligations and
performance hereunder, shall be resolved in a court of competent jurisdiction
within the County and City of New York, New York, and each party hereto
consents to jurisdiction of such court and agrees that process for such actions
may be made by mail to the address provided herein for each party, and each
party further consents to exclusive venue in the County and City of New York
for all such actions or proceedings, notwithstanding the inability to join
necessary or indispensable parties to such action or dispute.
The parties have caused this Agreement to be executed in duplicate by their
respective duly authorized representatives.
LICENSOR:
NEW YORK BLOOD CENTER THERMOGENESIS CORP.
_________________________________ ________________________________
(John Adamson, M.D., President) (Philip H. Coelho, President & C.E.O.)
Date: ____________________________ Date:____________________________
LICENSEE:
PALL CORPORATION MEDSEP CORPORATION
________________________________ _________________________________
(Gilbert Weiner, General Counsel) (Clarence Treppa, President)
Date:___________________________ Date:_____________________________
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SCHEDULE 2.01.
LICENSED PATENTS AND PATENTS PENDING
PATENT APPLICATIONS UNDER DEVELOPMENT U.S. PATENT SERIAL #
Bag Set and Design for the Infusion of Stem Cells To Be Assigned
PATENTS PENDING U.S. PATENT SERIAL #
Method of Isolation of Stem Cells and Bag Array U.S. #08/349,747
Improved Bag Design and Method of Manufacturing U.S. #08/670,368
PATENTS ISSUED U.S. PATENT SERIAL #
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SCHEDULE 2.03.
DESCRIPTION OF LICENSED PRODUCTS
A multicompartment bag array for use with the collection and/or storage of
cryopreserved placental/umbilical cord blood. (See attached figures)
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SCHEDULE 2.04.
DESCRIPTION OF KNOW-HOW
Licensor will provide access and a copy of Dr. Rubinstein's research and
findings related to the following:
1. Clinical details of all cord blood transfusions completed to date
using Dr. Rubinstein's stored cells and access to additional clinical
information as it becomes available.
2. Methods and descriptions of devices developed an NYBC useful in the
isolation of stem cells from umbilical cord blood.
3. Training of Licensee in Dr. Rubinstein's laboratory at NYBC in order
to facilitate transfer of technology.
4. Any available information about reagents used in the storage and
isolation of umbilical cord stem cells.
5. All available data from Dr. Rubinstein's laboratory detailing reagent
concentrations, quality control procedures, and reagent sources.
6. All available data related to selection of current centrifugation
conditions.
7. The information conveyed will include any specialized procedures and
systems developed by Dr. Rubinstein to enhance the stability and recovery of
cord blood stem cells.
8. Current bag design and plastic composition.
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SCHEDULE 3.04.
PERFORMANCE AND IMPLEMENTATION SCHEDULE
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