EXHIBIT 10.30
SETTLEMENT AND LICENSE AGREEMENT
BETWEEN
OVION, INC., ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ AND ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
AND
CONCEPTUS, INC.
SETTLEMENT AND LICENSE AGREEMENT
THIS AGREEMENT is made as of the Effective Date (as defined
below) by and between Ovion, Inc., a corporation organized and existing under
the laws of the State of Delaware, having its principal place of business at ▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ("OVION"), ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, an
individual ("TREMULIS"), ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, an individual ("▇▇▇▇▇▇▇▇▇"), on
the one part, and Conceptus, Inc., a corporation organized and existing under
the laws of Delaware, having its principal place of business at ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ("CONCEPTUS"), on the other part (OVION,
TREMULIS, ▇▇▇▇▇▇▇▇▇ and CONCEPTUS collectively referred to as the "Parties").
WITNESSETH
WHEREAS, OVION is the assignee of the OVION Patents, with the
right to grant licenses under the OVION Patents;
WHEREAS, CONCEPTUS wishes to obtain a license to the OVION
Patents, and OVION is willing to grant such a license to CONCEPTUS, subject to
the terms and conditions set forth herein;
WHEREAS, OVION, TREMULIS AND ▇▇▇▇▇▇▇▇▇ and CONCEPTUS, have
agreed to settle the litigation between the Parties, Civil Action Nos. 02-1968
(MHP) and 02-3884 (MHP), in the United States District Court for the Northern
District of California (the "Litigation"), based on the terms herein; and
NOW, THEREFORE, in consideration of the mutual covenants and
agreements set forth in this Agreement, and for other good and valuable
consideration the receipt and sufficiency of which are hereby acknowledged, the
Parties hereto agree as follows:
I. DEFINITIONS
1.1 Definitions. As used in this Agreement, the following defined
terms shall have the meanings set forth below:
"Change of Control" shall mean the closing of a transaction or
series of related transactions in which (i) OVION consolidates or merges with
any other corporation or business entity, after which the holders of OVION's
outstanding shares immediately before such consolidation or merger do not,
immediately after such consolidation or merger, retain stock or other equity
interests representing a majority of the voting power of the surviving
corporation or business entity or its respective parent, (ii) any of the OVION
Patent Claims or all or substantially all of the assets of OVION are sold,
licensed, assigned or encumbered or (iii) OVION issues stock in excess of 50% of
its outstanding voting power immediately prior to such issuance or stockholders
of
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OVION sell, assign or otherwise transfer more than 50% of the outstanding
capital stock of OVION to a third party or group of related parties.
"Effective Date" of this Agreement is the date referenced in
Section 6.2.
"Licensed Field" means the field of permanent female
sterilization.
"Licensed Products And Methods" means the Essure System as
currently marketed by CONCEPTUS as of October 22, 2003, as described in the
documents attached as Exhibit B and incorporated herein by reference, and
methods of using the Essure System and all future Reasonable Modifications
thereto.
"Net Sales" means the gross amount of any and all sums,
payments, credits or other compensation received by CONCEPTUS or any of its
Subsidiaries for any use, sale, distribution or transfer of any Royalty-bearing
Product reduced by any actual out-of-pocket shipping and distribution costs,
custom duties or excise, sales or use taxes and any cash, credit refund, or
discount provided by CONCEPTUS for any returned or damaged Royalty-bearing
Product. If a sale is made to a Subsidiary of CONCEPTUS the royalty on Net Sales
shall be based upon the first sale by CONCEPTUS or its Subsidiaries to an entity
other than CONCEPTUS or its Subsidiaries.
"OVION Patent Claims" means (1) the claims of U.S. Patent Nos.
6,432,116 and 6,096,052 and (2) any and all related patent claims, including
patent claims which arise from reissues, reexaminations, continuations,
continuations-in-part, divisions, continuing prosecution applications, and
requests for continuing examination of U.S. Patent Application Nos. 08/770,123,
09/112,085, 09/468,749, and any and all foreign counterparts, but excluding any
claims covering inventions not conceived as of October 22, 2003.
"Reasonable Modifications" means changes to Licensed Products
and Methods primarily to improve manufacturability and/or reduce cost such as
changes in size, proportions, relative diameters, materials and lengths.
Furthermore, for the Essure Permanent Female Sterilization Micro-insert,
Reasonable Modifications must have at least the following design
characteristics: (1) an expandable outer coil, (2) an inner coil, and (3) tissue
growth material made of mesh, fibers or tape. Reasonable Modifications
specifically exclude using the Essure System as a carrier of drugs, chemical
agents or other active eluting agents, other than copper.
"Royalty-bearing Products and Methods" means Licensed Products
and Methods, the manufacture, practice, use, offer for sale or sale of which
falls within the scope of any valid and enforceable OVION Patent Claim (in the
country of its manufacture, use or sale). Sections 3.3 and 3.4 shall apply to
this provision.
"Subsidiaries" means any corporation, company or other
business entity in which more than fifty percent (50%) of whose outstanding
shares or stock (representing the right to vote in general meetings or for the
election of directors or other managing
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authority) are, on the date this Agreement is executed or thereafter, owned or
controlled, directly or indirectly, by CONCEPTUS, provided that a corporation,
company or other business entity shall be deemed to be a Subsidiary for the
purposes of this Agreement only so long as such ownership or control exists.
"Transfer" shall mean any sale, assignment, encumbrance,
pledge, conveyance in trust, gift, transfer by request, devise or descent, or
other transfer transaction or disposition of any kind that will result in a
Change of Control.
1.2 Interpretation. Unless the context of this Agreement otherwise
requires, (i) words of any gender include each other gender; (ii) words using
the singular or plural number also include the plural or singular number,
respectively; (iii) the terms "hereof," "herein," "whereby" and derivative or
similar words refer to this entire Agreement; and (iv) the term "Article" refers
to the specified Article of this Agreement. Whenever this Agreement refers to a
number of days, such number shall refer to calendar days unless otherwise
specified.
II. GRANT OF SOLE LICENSE
2.1 Grant of Sole License. OVION hereby grants to CONCEPTUS and
its Subsidiaries and CONCEPTUS hereby accepts, a sole, worldwide license
(without right to sublicense) in the Licensed Field to make, have made, import,
export, use, offer to sell, sell, distribute (directly or indirectly), consign
and market any Licensed Product and Method under the OVION Patent Claims. OVION
has not and will not grant further licenses in the Licensed Field for the OVION
Patent Claims. OVION retains all rights to practice the subject matter of OVION
Patent Claims and retains all other substantial rights related to the OVION
Patent Claims. Notwithstanding the foregoing, nothing in this Section or
Agreement shall be construed as granting OVION any rights or license (implied or
expressed) to any CONCEPTUS intellectual property, including but not limited to
patents and patent applications.
III. CONCEPTUS PAYMENTS
In consideration of all terms and conditions of this
Agreement, CONCEPTUS shall pay OVION the following:
3.1 Pre-Paid Royalty. On or before ten (10) days after the
Effective Date, CONCEPTUS shall make a non-refundable payment to OVION of two
million dollars (U.S. $2,000,000), which shall be applied against royalties, if
any, that may ever become due under Section 3.3 below.
3.2 Guaranteed Payment. (a) On or before January 31, 2004,
CONCEPTUS shall issue to OVION a non-refundable payment of one million dollars
worth of unrestricted, freely tradable CONCEPTUS common stock as provided in
Securities and Exchange Commission Staff Legal Bulletin Number 3 dated October
20, 1999 and subject to the Court's approval referenced in Section 6.2, with the
precise number of
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shares being determined using the average closing price of the stock per the
Wall Street Journal over the ten (10) trading days preceding the day it is
issued to OVION and (b) on or before April 30, 2004 CONCEPTUS shall issue to
OVION a non-refundable payment of an additional one million dollars worth of
unrestricted, freely tradable (as provided in (a) above) CONCEPTUS common stock,
with the precise number of shares being determined using the average closing
price of the stock per the Wall Street Journal over the ten (10) trading days
preceding the day it is issued to OVION. The share certificates representing the
foregoing shares shall be delivered to OVION as soon as reasonably practical but
in any event within 5 business days after their respective issuance date.
3.3 Running Royalty. CONCEPTUS shall pay OVION a royalty on Net
Sales for the 10-year period consisting of October 1, 2003 to September 30, 2013
as follows:
Cumulative Net Sales Rate
-------------------- ----
0 - $75,000,000 0%
Over $75,000,000 3.25%
The royalty shall be fully paid up after September 30, 2013.
3.4 Royalty Coverage. Solely for purposes of determining royalties
under this Agreement including the determination of whether royalties are due in
an action for relief under and pursuant to this Agreement and for no other
purpose, CONCEPTUS agrees that the Asserted Claims of U.S. Patent No. 6,432,116
(claims 13-15, 25, 30, 31, 34, 35, 41-44, and 46) cover the Licensed Products
and Methods. CONCEPTUS shall have no obligation to pay royalties during any time
period when no valid, enforceable OVION Patent Claim, including but not limited
to the Asserted Claims of U.S. Patent No. 6,432,116, covers the Licensed
Products or Methods. Each issued OVION Patent Claim shall be presumed valid and
enforceable unless or until such claim is held invalid or unenforceable by a
final, non-appealable determination. No refund shall apply to royalties due
prior to such a final determination.
3.5 Reporting. Starting with the first quarter of 2004, CONCEPTUS
shall deliver to OVION a royalty report identifying the products upon which
royalties are being paid and setting forth total Net Sales for all
royalty-bearing sales provided by this Agreement and continuing quarterly
thereafter for the remainder of the time period set forth in Section 3.3. Each
royalty report shall be delivered on or about the same day as CONCEPTUS files
its Form 10Q or Form 10K with the Securities and Exchange Commission and shall
be accompanied by the royalty payment, if any, then due in accordance with such
report. Royalties on sales occurring outside the United States shall be
converted to United States dollars consistent with Generally Accepted Accounting
Principles.
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3.6 Records. CONCEPTUS and its responsible Subsidiaries shall keep
true and accurate books and records with respect to sales under this Agreement
in accordance with customary accounting principles and in a manner consistent
with the accounting methods employed throughout its business. Further, OVION
shall have the right to engage an independent auditor or certified public
accounting firm to review the relevant books and records of CONCEPTUS and its
responsible Subsidiaries during normal business hours on reasonable notice once
each anniversary year to determine the accuracy of royalty reports and payments
provided for herein. CONCEPTUS and its responsible Subsidiaries shall cooperate
with the independent auditor or certified public accounting firm to provide an
accurate opinion, consistent with generally accepted accounting principles,
concerning the accuracy of royalty reports and payments submitted to OVION. If
the OVION audit concludes that the subject royalty payment due exceeds by ten
(10%) percent the actual royalty paid, then CONCEPTUS shall pay the reasonable
fees and expenses of OVION's independent auditors or certified public accounting
firm.
3.7 Purposes of Payments. The payments and royalty rates set forth
in this Agreement are in settlement for the Litigation.
IV. MUTUAL RELEASES
4.1 By OVION, TREMULIS and ▇▇▇▇▇▇▇▇▇. Except as to such rights or
claims as may be created by this Agreement, OVION, TREMULIS and/or ▇▇▇▇▇▇▇▇▇,
each on their own behalf, and each on behalf of their predecessors, successors,
assignees, agents, principals, partners, servants, directors, officers,
affiliates, shareholders, employees and other representatives (including
consultants, attorneys and accountants), and any trusts, trustees and
beneficiaries of trusts in which their representatives individually or
collectively hold or have held any interest and anyone claiming by or through
their representatives, in each case past and present, do hereby fully and
forever release CONCEPTUS and each of its predecessors, successors, assignees,
agents, principals, partners, servants, directors, officers, affiliates,
shareholders, employees and other representatives (including consultants,
attorneys and accountants), and any trusts, trustees and beneficiaries of trusts
in which their representatives individually or collectively hold or have held
any interest and anyone claiming by or through their representatives, in each
case past and present, from any and all claims, debts, liabilities, demands,
obligations, guarantees, costs, expenses, attorneys' fees, damages, or causes of
action of whatever kind or nature, whether known or unknown, arising out of, or
relating in any way to, claims made by, or which could have been made by OVION,
TREMULIS and/or ▇▇▇▇▇▇▇▇▇, including, but not limited to, the claims asserted in
the Litigation, and any other claims under federal or state law that could have
been brought by OVION, TREMULIS and/or ▇▇▇▇▇▇▇▇▇ against CONCEPTUS or any other
person and/or entity released by this paragraph arising out of or in any way
connected with the Litigation or which could have been asserted in the
Litigation ("OVION Released Claims"). It is the intention of OVION, TREMULIS
and/or ▇▇▇▇▇▇▇▇▇ in executing this Agreement that this Agreement shall be deemed
effective as a full and final accord and satisfaction and release.
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4.2 By CONCEPTUS. Except as to such rights or claims as may be
created by this Agreement, CONCEPTUS, on its own behalf, and on behalf of its
predecessors, successors, assignees, agents, principals, partners, servants,
directors, officers, affiliates, shareholders, employees and other
representatives (including consultants, attorneys and accountants), and any
trusts, trustees and beneficiaries of trusts in which their representatives
individually or collectively hold or have held any interest and anyone claiming
by or through their representatives, in each case past and present, do hereby
fully and forever release OVION, TREMULIS and/or ▇▇▇▇▇▇▇▇▇ and each of their
predecessors, successors, assignees, agents, principals, partners, servants,
directors, officers, affiliates, shareholders, employees and other
representatives (including consultants, attorneys and accountants), and any
trusts, trustees and beneficiaries of trusts in which their representatives
individually or collectively hold or have held any interest and anyone claiming
by or through their representative, in each case past and present, from any and
all claims, debts, liabilities, demands, obligations, guarantees, costs,
expenses, attorneys' fees, damages, or causes of action of whatever kind or
nature, whether known or unknown, arising out of, or relating in any way to,
claims made by, or which could have been made by CONCEPTUS, including, but not
limited to, the claims asserted in the Litigation, and any other claims under
federal or state law that could have been brought by CONCEPTUS against OVION,
TREMULIS and/or ▇▇▇▇▇▇▇▇▇ or any other person and/or entity released by this
paragraph arising out of or in any way connected with the Litigation or which
could have been asserted in the Litigation ("CONCEPTUS Released Claims"). It is
the intention of CONCEPTUS in executing this Agreement that this Agreement shall
be deemed effective as a full and final accord and satisfaction and release.
WAIVER OF CALIFORNIA CIVIL CODE SECTION 1542
4.3 It is the desire of the Parties to fully, finally, and forever
settle, compromise, and discharge any and all disputes and claims between them
arising from or relating to each and every cause of action and theory of
liability in the Litigation. Accordingly, OVION, TREMULIS and ▇▇▇▇▇▇▇▇▇ and
CONCEPTUS each waive all rights and benefits afforded by Section 1542 of the
Civil Code of the State of California as to unknown claims arising from or
relating to each and every of the claims, causes of action or theories of
liability in the Litigation, and do so understanding the significance of that
waiver. Section 1542 provides:
A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR
DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF
EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE
MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR.
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V. ADDITIONAL OBLIGATIONS
5.1 Obligations of OVION, TREMULIS and ▇▇▇▇▇▇▇▇▇
(a) Covenant Not To ▇▇▇. Except for actions for relief
under this Agreement, OVION, TREMULIS and ▇▇▇▇▇▇▇▇▇ on behalf of themselves and
the other releasing parties referenced in Section 4.1 covenant that they will
not ▇▇▇ or assert in any way, in or out of a domestic or foreign legal,
equitable or administrative proceeding any claim or cause of action against
CONCEPTUS and/or its Subsidiaries, the parties released in Section 4.1 and their
respective direct or indirect distributors and customers in the future with
respect to Licensed Products and Methods in the Licensed Field; provided
however, that this Section 5.1(a) shall not apply to (i) patent infringement of
patent claims of OVION, TREMULIS, or ▇▇▇▇▇▇▇▇▇ for inventions not conceived as
of October 22, 2003 and (ii) tortious acts of CONCEPTUS which first occurred
after October 22, 2003.
(b) Right of First Refusal.
(i) If any of OVION, TREMULIS, CALLISTER, and/or any
holder of any equity interest in OVION (any of the foregoing, an "Offeror")
propose to make a Transfer, then such Offeror shall promptly give written notice
(the "Transfer Notice") to CONCEPTUS at least 45 days prior to the closing of
such Transfer. The Transfer Notice shall describe in reasonable detail the
proposed Transfer including, without limitation, the property to be transferred
(the "Offered Interest"), the nature of such Transfer, the consideration to be
paid for the Offered Interest and the name and address of each prospective
purchaser or transferee.
(ii) For 30 days following the date of such Transfer
Notice or such longer period as is necessary to resolve any disputes pursuant to
Section 5.1(b)(vi) (the "ROFR Period"), CONCEPTUS shall have the option to
purchase all of the Offered Interest specified in the Transfer Notice at the
price and upon the terms set forth in the Transfer Notice (subject to any
adjustments to the price pursuant to Section 5.1(b)(vi)). In the event CONCEPTUS
elects to purchase the Offered Interest, it shall give written notice (the
"Election Notice") to the Offeror of its election prior to the end of the ROFR
Period and settlement for said Offered Interest shall be made as provided below
in Section 5.1(b)(iii). Failure of CONCEPTUS to provide the Election Notice
prior to the end of the ROFR Period shall constitute a waiver by CONCEPTUS of
its option to purchase the Offered Interest specified in the Transfer Notice.
(iii) In the event CONCEPTUS elect(s) to acquire the
Offered Interest as specified in the Transfer Notice, settlement thereof shall
be made either in cash or shares of freely tradable common stock of CONCEPTUS
(other than the effects of Rule 145 of the Securities Act of 1933, if
applicable), or a combination of the foregoing, in each case at the election of
CONCEPTUS, within 15 days following the end of the ROFR Period.
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(iv) The exercise or non-exercise of the rights of
CONCEPTUS hereunder to participate in one or more Transfers made by any Offeror
shall not adversely affect CONCEPTUS' rights to participate in subsequent
Transfers by any Offeror pursuant to this Section 5.1(b).
(v) If the right of first refusal set forth in Section
5.1(b) is not exercised in full by CONCEPTUS, the Offeror may, not later than 30
days following the end of the ROFR Period and subject to the provisions of this
Section 5.1(b), enter into an agreement providing for the closing of the
Transfer of the Offered Interest covered by the Transfer Notice within 30 days
of such agreement on terms and conditions not materially more favorable to the
transferee(s) than those described in the Transfer Notice (as adjusted pursuant
to Section 5.1(b)(vi)). Any proposed Transfer on terms and conditions materially
more favorable to the transferee(s) than those described in the Transfer Notice
(as adjusted pursuant to Section 5.1(b)(vi)) as well as any subsequent proposed
Transfer by any Offeror, shall again be subject to the right of first refusal of
CONCEPTUS and shall require compliance by the Offerors with the procedures
described in this Section 5.1(b)
(vi) If the Transfer of the Offered Interest is to be
settled with property other than cash or securities traded on a national
securities exchange or NASDAQ, at any time during the ROFR Period, CONCEPTUS may
object to the valuation of the Offered Interest as set forth in the Transfer
Notice by delivering to the Offeror a notice (a "Notice of Disagreement")
containing the basis for such objection together with such additional
information as shall be reasonably necessary to resolve such disagreement.
CONCEPTUS and the Offeror shall use commercially reasonable efforts to resolve
all matters raised in the Notice of Disagreement within 15 days of the date of
the Notice of Disagreement. If, at the end of such period, CONCEPTUS and the
Offeror are unable to resolve such disagreements, CONCEPTUS and the Offeror
shall jointly select an independent third-party appraiser or valuation
consultant (the "Appraiser") of recognized national standing to resolve any
remaining disagreements. The determination by the Appraiser of the value of the
Offered Interest shall be final, binding and conclusive on the parties for
purposes of the determination of consideration to be paid for such Offered
Interest. CONCEPTUS and the Offeror shall use their commercially reasonable
efforts to cause the Appraiser to make its determination within 30 calendar days
of accepting its selection. The fees and expenses of the Appraiser shall be
borne by OVION and CONCEPTUS equally.
(vii) The provisions of this Section 5.1(b) shall have no
applicability to any Transfer agreements that are entered into after September
30, 2006. This Section 5.1 (b) shall not apply to any license or encumbrance of
OVION Patent Claims solely outside of the Licensed Field.
5.2 Obligations of CONCEPTUS
(a) CONCEPTUS agrees that it shall not file a lawsuit or
request for reexamination seeking to invalidate or render unenforceable or
challenging the ownership
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of any of the claims of U.S. Patent Numbers 6,432,116 and 6,096,052 or seeking a
finding of non-infringement of the claims of U.S. Patent Numbers 6,432,116 and
6,096,052 with respect to the Licensed Products and Methods. This Section 5.2(a)
shall not apply to defenses, claims or counter claims for products or patents
outside this Agreement.
(b) Notwithstanding Section 5.2 (a), CONCEPTUS will not
be precluded from seeking to invalidate or render unenforceable or challenging
the ownership of any of the claims of U.S. Patent Numbers 6,432,116 and
6,096,052 or seeking a finding of non-infringement of the claims of U.S. Patent
Numbers 6,432,116 and 6,096,052 in any litigation filed against CONCEPTUS or its
Subsidiaries, except as provided in Section 5.2 (c) below.
(c) In any action for relief under and pursuant to this
Agreement, CONCEPTUS will not argue that any of the Asserted Claims, as they
currently read, are invalid or unenforceable or not infringed as a defense to
the payment of royalties under Section 3.3. Nothing in this Section 5.2 or
Agreement shall be construed to diminish the effects of Section 10.1.
(d) Nothing in this Agreement shall be construed as
preventing CONCEPTUS from provoking or maintaining any interference proceeding.
5.3 Survival. The obligations of this Article V shall survive and
remain in effect notwithstanding the assignment of this Agreement pursuant to
Article XI or the termination of this Agreement for any reason except for a
material breach by any Party.
VI. DISMISSAL OF THE LITIGATION
6.1 Dismissal of the Litigation. The Parties shall have their
counsel execute and submit a Stipulation and Order of Dismissal of the
Litigation in the form attached as Exhibit A. Both Parties agree to dismiss the
Litigations against each other in their entirety, with prejudice.
6.2 Court Approval. The Parties agree that, within five business
days of the execution of this Agreement, they will file a joint motion with the
Court seeking an immediate hearing to approve this Agreement. Each of the
Parties agrees to use his or its respective best efforts to obtain the Court's
approval of this Agreement after a hearing by the Court, at which each Party has
a right to appear, of the terms and conditions of the issuance of the shares of
CONCEPTUS common stock referenced in Section 3.2, all in accordance with Section
3(a)(10) of the Securities Act of 1933, as amended ("Section 3(a)(10)"). This
Agreement shall be effective on the date that the Court so approves it (the
"Effective Date").
6.3 Effect of Failure to Obtain Court Approval. If the Court does
not approve this Agreement as described above (whether by express disapproval by
the Court or by failure to approve by November 7, 2003), the Parties shall
negotiate in good faith the
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terms required for the Company to issue the shares of CONCEPTUS common stock
referenced to Section 3.2 to OVION as a private placement followed by the
registration of the Stock for resale on a registration statement(s) on Form S-3.
6.4 No Admission of Wrongdoing. The Parties agree that entering
into this Agreement is not, and shall not be construed as an admission of
liability or wrongdoing by any of the Parties hereto.
VII. TERM OF AGREEMENT
7.1 Term. Unless sooner terminated as provided herein, this
Agreement shall commence as of the Effective Date and shall continue until the
earlier of the expiration date of the last-to-expire patent included within the
OVION Patents Claims or July 8, 2018.
7.2 Termination. Notwithstanding any other provisions of this
Agreement:
(a) In the event of a material breach of this Agreement
by any Party, if such breach is not corrected within thirty (30) days after
written notice by the non-breaching Party describing such breach, then the
non-breaching Party shall have the right to terminate this Agreement forthwith
by notice in writing, other than Sections 3.1 and 3.2.
(b) CONCEPTUS may terminate this Agreement to the extent
provided by law, upon the institution of voluntary or involuntary proceedings by
or against OVION in bankruptcy, insolvency, moratorium, or for a receivership,
or for a winding-up or for the dissolution or reorganization of OVION.
(c) OVION may terminate this Agreement to the extent
provided by law, upon the institution of voluntary or involuntary proceedings by
or against CONCEPTUS in bankruptcy, insolvency, moratorium, or for a
receivership, or for a winding-up or for the dissolution or reorganization of
CONCEPTUS.
VIII. REPRESENTATIONS, WARRANTIES AND UNDERTAKINGS
8.1 General Representations and Warranties. Each of the Parties to
this Agreement, each with respect to himself or itself, represents and warrants
to the other as follows:
(a) The signatories to this Agreement have full power,
right and authority to execute this Agreement on behalf of the Parties hereto,
and to enter into releases on behalf of the persons and entities identified
herein.
(b) No promise, inducement, statement, representation,
warranty or agreement not contained in this Agreement has been made to any of
the Parties, and each of the Parties has entered into this Agreement without
reliance upon any such statement,
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warranty, promise, agreement or representation of any other Party hereto or any
agent for said Party or Parties to this Agreement.
(c) The Parties expressly accept and assume the risk that
the facts with respect to which this Agreement is executed may be found
hereafter to be different from the facts now believed to be true, and
acknowledge and agree that this Agreement shall be and remain effective
notwithstanding such difference in facts, if any.
(d) The Parties have read and understand this Agreement,
have sought legal advice regarding the same, and have entered into this
Agreement voluntarily and free of duress, undue influence, or coercion.
(e) The Parties shall cooperate with respect to the
preparation of, and shall execute or deliver, such documents as may be
appropriate to effectuate the meaning, intent and purpose of this Agreement.
8.2 Representation, Warranties and Undertakings of OVION, TREMULIS
and ▇▇▇▇▇▇▇▇▇. OVION, TREMULIS and ▇▇▇▇▇▇▇▇▇ hereby represent and warrant the
following:
(a) OVION is a corporation duly incorporated, validly
existing and in good standing under the laws of Delaware and in good standing in
California, and has full corporate power and authority to enter into this
Agreement, to perform its obligations hereunder and to consummate the
transactions contemplated hereby.
(b) The execution and delivery by OVION of this Agreement
and the performance by OVION of its obligations hereunder have been duly and
validly authorized by OVION. This Agreement has been duly and validly executed
and delivered by OVION and constitutes a legal, valid and binding obligation of
OVION enforceable against OVION in accordance with its terms.
(c) OVION is the assignee of the OVION Patent Claims and
OVION has the exclusive right to grant licenses under the OVION Patent Claims.
OVION has complete, sole and unencumbered title to the OVION Patent Claims.
OVION, TREMULIS and ▇▇▇▇▇▇▇▇▇ have not previously licensed, or encumbered any
rights in the OVION Patent Claims.
(d) OVION, TREMULIS and ▇▇▇▇▇▇▇▇▇ have the right to enter
into this Agreement and to grant the license under the OVION Patent Claims
pursuant to this Agreement. OVION, TREMULIS and ▇▇▇▇▇▇▇▇▇ are not a party to any
other agreement or under any obligation to any third party that would prevent
OVION, TREMULIS and ▇▇▇▇▇▇▇▇▇ from entering into this Agreement or adversely
affect the rights granted herein.
(e) OVION, TREMULIS and ▇▇▇▇▇▇▇▇▇ are not a party to any
agreement, arrangement or understanding with any third party which prevents
OVION,
12
TREMULIS and ▇▇▇▇▇▇▇▇▇ from fulfilling any of their obligations under the terms
of this Agreement.
8.3 Representations, Warranties and Undertakings of CONCEPTUS.
CONCEPTUS hereby represents and warrants the following:
(a) CONCEPTUS is a corporation validly existing and in
good standing under the laws of the State of Delaware and in good standing in
California, and has full corporate power and authority to enter into this
Agreement, to perform its obligations hereunder and to consummate the
transactions contemplated hereby, and to make the warranties and undertake the
obligations herein on behalf of itself.
(b) The execution and delivery by CONCEPTUS of this
Agreement and the performance by CONCEPTUS of its obligations hereunder have
been duly and validly authorized by CONCEPTUS. This Agreement has been duly and
validly executed and delivered by CONCEPTUS and constitutes a legal, valid and
binding obligation of CONCEPTUS enforceable against CONCEPTUS in accordance with
its terms.
(c) CONCEPTUS has the right to enter into this Agreement.
CONCEPTUS is not a party to any other agreement or under any obligation to any
third party that would prevent CONCEPTUS from entering into this Agreement or
adversely affect the rights granted herein.
(d) CONCEPTUS is not a party to any agreement,
arrangement or understanding with any third party which prevents CONCEPTUS from
fulfilling any of its material obligations under the terms of this Agreement.
8.4 Indemnity for Breach of Representations, Warranties and
Undertakings.
(a) OVION shall indemnify and hold CONCEPTUS harmless
from all costs and expenses, including attorneys' fees, resulting from any
breach of OVION'S representations and warranties or covenants herein.
(b) TREMULIS shall indemnify and hold CONCEPTUS harmless
from all costs and expenses, including attorneys' fees, resulting from any
breach of TREMULIS'S representations and warranties or covenants herein.
(c) ▇▇▇▇▇▇▇▇▇ shall indemnify and hold CONCEPTUS harmless
from all costs and expenses, including attorneys' fees, resulting from any
breach of ▇▇▇▇▇▇▇▇▇'▇ representations and warranties or covenants herein.
(d) CONCEPTUS shall indemnify and hold OVION, TREMULIS
and ▇▇▇▇▇▇▇▇▇ harmless from all costs and expenses, including attorneys' fees,
resulting from any breach of CONCEPTUS' representations and warranties or
covenants herein.
13
(e) OVION shall indemnify, defend and hold harmless
CONCEPTUS from and against any and all liabilities, damages, losses, costs, or
expenses (including reasonable attorneys' fees) resulting from a claim, suit, or
other proceeding brought by a third party against CONCEPTUS for infringement of
any OVION Patent Claim, in connection with the rights granted to under this
Agreement.
IX. PATENT PROSECUTION
9.1 Maintenance of Patents. OVION shall have the obligation to
maintain all patents included in the OVION Patent Claims, at OVION's expense.
9.2 Enforcement of Patents. If any patent included in the OVION
Patent Claims is infringed by a third party in the Licensed Field, the party to
this Agreement first having knowledge of such infringement shall promptly notify
the other party in writing. Such notice shall provide details of such
infringement and substantially conveying how a OVION Patent Claim covers the
accused product or method. OVION shall have the right, but not the obligation,
to institute, prosecute or control any action or proceeding with respect to such
infringement using counsel of its choice at its expense. CONCEPTUS shall have
the right to intervene in such action and to be represented by counsel of its
choice at its expense. If OVION fails to bring an action or proceeding within a
period of one hundred and twenty (120) days after having notice of infringement
by CONCEPTUS, then OVION shall not be entitled to any royalty under Section 3.3
for Net Sales recorded during the period of time that OVION fails to institute
and prosecute such an action or proceeding. OVION shall have no obligation to
file and prosecute more than one (1) infringement action at any given point in
time.
X. SETTLEMENT OF DISPUTES
10.1 Arbitration. Any dispute between the parties concerning the
construction, interpretation, and effect of this Agreement or any clause herein
contained, or the rights and liabilities or damages of the parties hereunder
shall be resolved, if necessary, by binding arbitration with a three member
arbitration panel (where at least two of members shall have been admitted before
the United States Patent and Trademark Office) in accordance with the commercial
arbitration rules of the American Arbitration Association, and judgment upon the
award rendered by the arbitrator may be entered in any court having jurisdiction
thereof. The locale of the arbitration shall be San Mateo County, California.
OVION and CONCEPTUS shall share the costs of the arbitration and each party
shall pay its own costs and attorneys' fees. In any arbitration under this
Article X or in any judicial proceeding to enforce an arbitration award,
CONCEPTUS will not argue that any of the Asserted Claims, as they currently
read, are invalid or unenforceable or not infringed as a defense to the payment
of any Royalties under Section 3.3. Notwithstanding the foregoing, in any
arbitration under this Article X, the arbitration panel shall have the
discretion to award to the prevailing party its share of the arbitration costs
and its reasonable costs and attorney fees if the panel determines that the
14
non-prevailing party acted in bad faith or that its positions as a whole in the
arbitration were taken in bad faith.
XI. MISCELLANEOUS
11.1 Miscellaneous. Nothing contained in this Agreement shall be
construed as:
(a) conferring any right to use in advertising, publicity
or otherwise, any trademark, tradename or name, or any contraction, abbreviation
or simulation thereof, of either party; or
(b) conferring by implication, estoppel or otherwise,
upon any party licensed hereunder, any license or other right under any patent
except the licenses and rights expressly granted hereunder.
11.2 Initial Press Releases; Confidentiality Obligation.
(a) The Parties agree that OVION and CONCEPTUS may each
issue a press release announcing the execution of this Agreement, provided that
such press release has been approved by the other Party, which approval shall
not be unreasonably withheld or delayed.
(b) Each party agrees that, without the prior written
consent of the other party or unless required by law, it shall not disclose to
any third party the terms of this Agreement or any confidential information
regarding the other party or the business of such party which has been made
available to it; except that the terms of this agreement may be disclosed to
outside legal counsel and independent outside auditors and other outside
advisors provided that such outside legal counsel and independent outside
auditors and other outside advisors agree to maintain the contents of this
Agreement in confidence.
(c) Notwithstanding any other provision of this Section
11.2, if a party is required by statute, rule or regulation, including the rules
and regulations of the Securities and Exchange Commission, or under force of
process of law to disclose information related to this Agreement, such party
shall promptly notify the other party. In addition, the terms of this Agreement
may be disclosed by a party to any Court(s), mediator(s), arbitrator(s) and to
opposing counsel and outside experts in any legal proceeding concerning
indemnity, contribution or insurance owed or alleged to be owed to that party
for any payments made under this Agreement. The parties agree that such
mediator(s), arbitrator(s) and outside experts shall execute an undertaking to
keep confidential the terms of this Agreement. Disclosure of the terms of this
Agreement in such proceedings shall take place under the terms ordered by the
Court.
(d) Notwithstanding any other provision of this Section
11.2, either party may disclose the contents of this Agreement to any
prospective purchaser of the
15
assets of that party to which this Agreement relates, any investor or potential
investor, any creditor or potential creditor, financial consultants, or to any
insurance company which may be asked to pay defense costs or to indemnify,
provided that each such party agrees to maintain the contents of this Agreement
in confidence.
(e) The above obligations of confidentiality shall
survive expiration or termination of this Agreement.
11.3 Force Majeure. If for reasons of Force Majeure, as hereinafter
defined, any party fails to comply with its obligations hereunder other than the
payment of money, such failure shall not constitute breach of contract. For the
purpose of this Article, Force Majeure shall mean acts of God; acts, regulations
or laws of any government; war; civil commotion; destruction of production
facilities or materials; fire, earthquake or storm; labor disturbances; failure
of public utilities or common carriers and any other causes beyond the
reasonable control of any party.
11.4 Transfer of Rights with Sale of Business. This Agreement is
not transferable or assignable, and no party shall have the power or right to
assign, transfer or delegate any of its rights or obligations hereunder, whether
by operation of law or otherwise; provided, however, that subject to the Right
of First Refusal in Section 5.1(b), either party may assign its rights and
delegate its duties in connection with a merger or consolidation with another
business entity or in connection with a sale of substantially all of its assets
to which this Agreement relates. Any assignment in derogation of the foregoing
shall be void. Subject to the foregoing, this Agreement shall be binding upon
the Parties' successors and permitted assigns.
11.5 Exception to the Protective Order. Despite the protective
order entered by the Court in the Litigation, outside trial counsel (▇▇▇▇▇▇▇▇▇,
Held & ▇▇▇▇▇▇ Ltd for OVION and ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ LLP for
CONCEPTUS) (a) shall not be prohibited from participating in proceedings in the
U.S. Patent and Trademark Office involving the patents or patent applications of
OVION or CONCEPTUS and (b) shall be entitled to maintain copies of the
pleadings, deposition transcripts and exhibits, document productions and
summaries of the same, except that business and financial records and FDA
documents of OVION and CONCEPTUS (except those FDA documents which relate to
expandability/unexpandability, a listing of which shall be discussed and agreed
to by counsel to CONCEPTUS and OVION), shall be destroyed pursuant to the
protective order. In addition, despite the protective order, OVION and CONCEPTUS
shall use reasonable efforts to agree on which information previously designated
as confidential or confidential - attorneys eyes only shall be submitted to the
U.S. Patent and Trademark Office as appropriate to satisfy 37 CFR Section 1.56.
This process shall involve an initial request for information specifically
identified by production ▇▇▇▇▇ number to be sent to the U.S. Patent and
Trademark Office followed by a response agreeing or not agreeing as to each
identified piece of information. The Parties shall cooperate to implement these
exceptions to the protective order.
16
11.6 Notices. All notices, requests and other communications
hereunder must be in writing in the English language and will be deemed to have
been duly given only if delivered personally or by facsimile transmission or by
mail (first class or air mail in the case of international correspondence,
postage prepaid) or by an internationally recognized common carrier's overnight
courier to the parties at the following addresses or facsimile numbers:
If to OVION:
▇▇▇▇ ▇▇▇▇▇▇▇
President & CEO
OVION, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Tel: ▇▇▇-▇▇▇-▇▇▇▇ Fax: ▇▇▇-▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq
▇▇▇▇▇▇▇▇▇, Held & ▇▇▇▇▇▇, Ltd.
▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Tel: ▇▇▇-▇▇▇-▇▇▇▇ Fax: ▇▇▇-▇▇▇-▇▇▇▇
If to CONCEPTUS:
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
President & CEO
CONCEPTUS, Inc.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇.
▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Tel: ▇▇▇-▇▇▇-▇▇▇▇ Fax: ▇▇▇-▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇ ▇▇▇▇▇▇▇, Esq.
Paul, Hastings, Janofsky, Walker, LLP
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Tel: ▇▇▇-▇▇▇-▇▇▇▇ Fax: ▇▇▇-▇▇▇-▇▇▇▇
17
All such notices, requests and other communications shall (i)
if delivered personally to the address as provided in this Article, be deemed
given upon delivery, (ii) if delivered by facsimile transmission to the
facsimile number provided in this Article, be deemed given upon receipt, and
(iii) if delivered by mail or overnight courier in the manner described above to
the address provided in this Article, be deemed given upon receipt (in each case
regardless of whether such notice, request or other communication is received by
any other Person to whom a copy of such notice is to be delivered pursuant to
this Article). Any party from time to time may change its address or facsimile
number upon written notice to the other party.
11.7 No Strict Construction. The Parties have participated jointly
in a negotiation and drafting of this Agreement. In the event an ambiguity or
question or intent or interpretation arises, this Agreement shall be construed
as if drafted jointly by the Parties and no presumption or burden of proof shall
arise favoring or disfavoring any Party by virtue of the authorship of any
provision of this Agreement.
11.8 Law. This Agreement shall be governed by and construed in
accordance with the substantive and procedural law of the State of California,
without giving effect to the conflicts of law principles thereof. Each Party
hereto hereby irrevocably submits to the jurisdiction of the United States
District Court for the Northern District of California with respect to any claim
arising out of this Agreement.
11.9 Entire Agreement. This Agreement constitutes the entire
Agreement between the parties and supersedes all previous communications,
representations, agreements or understandings, either oral or written, between
the parties with respect to the subject matter hereof, and this Agreement may be
amended supplemented or modified only by a written instrument duly executed by
or on behalf of each party hereto which specifically refers to this Agreement.
No evidence relating to or arising from the negotiation of this Agreement,
including drafts of the Agreement, shall be admitted or considered for purposes
of construing or interpreting any provision of this Agreement in any action for
relief under this Agreement or in any other action.
11.10 Waiver. No express or implied waiver by any of the parties to
this Agreement of any breach of any term, condition or obligation of this
Agreement by any other party shall be construed as a waiver of any subsequent or
continuing breach of that term, condition or obligation or of any other term
condition or obligation of this Agreement of the same or of a different nature.
11.11 Severability. If any provision of this Agreement is held to be
illegal, invalid or unenforceable under any applicable present or future law,
and if the rights or obligations of any party hereto under this Agreement will
not be materially and adversely affected thereby, (a) such provision will fully
severable, (b) this Agreement will be construed and enforced as if such illegal,
invalid or unenforceable provision had never comprised a part hereof, (c) the
remaining provisions of this Agreement will remain in full force and effect and
will not be affected by the illegal, invalid or unenforceable provision or by
its severance herefrom and (d) in lieu of such illegal, invalid or
18
unenforceable provision, there will be added automatically as a part of this
Agreement, a legal, valid and enforceable provision as similar in terms to such
illegal, invalid or unenforceable provision as may be possible.
11.12 Agency. The relationship of the parties under this Agreement
is that of independent contractors. No party shall be deemed to be the agent of
the other, and no party is authorized to take any action binding upon any other
party.
11.13 Counterparts and Headings. This Agreement may be executed in
counterparts, each of which shall be deemed to be an original, but all together
will constitute one and the same instrument. All headings in this Agreement are
inserted for convenience of reference only and shall not affect its meaning or
interpretation.
19
IN WITNESS WHEREOF, this Agreement has been duly executed and delivered
by the duly authorized officer of each party hereto as of the date first below
written.
OVION, INC. CONCEPTUS, INC.
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
----------------------- -----------------------------
Name: Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Title: Title: President and CEO
Date: October 23, 2003 Date: October 23, ▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ (individually)
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-----------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ (individually)
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
------------------------
Date: October 23, 2003
20
EXHIBIT A
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF CALIFORNIA
OVION, INC. )
)
Plaintiff/Counter-defendant, )
)
v. )
)
)
CONCEPTUS, INC., )
)
Defendant/Counter-claimant. )
_________________________________________________ ) Civil Actions
) Nos. 02-3884 (MHP) and
CONCEPTUS, INC., ) 02-1968 (MHP)
)
Plaintiff, )
)
v. )
)
)
OVION, INC., ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, )
AND ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ )
)
Defendants. )
)
STIPULATION AND [PROPOSED] ORDER OF DISMISSAL
1. Pursuant to Rule 41 of the Federal Rules of Civil
Procedure, Ovion, Inc. ("OVION"), ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ("TREMULIS"), and ▇▇▇▇▇▇▇
▇. ▇▇▇▇▇▇▇▇▇ ("▇▇▇▇▇▇▇▇▇") on the one hand (collectively "the OVION Parties")
and CONCEPTUS Inc. ("CONCEPTUS"), on the other hand, by their undersigned
attorneys, stipulate that
these actions, including their respective complaints, answers and counterclaims
be dismissed, with prejudice.
3. This Court shall retain continuing jurisdiction over
the parties and the subject matter to enforce the Settlement and License
Agreement of October 23, 2003.
4. Each party shall bear its own costs, expenses and
attorneys' fees of bringing suit.
Dated: November 6, 2003 Dated: November 6, 2003
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------- -------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇, LTD. PAUL, HASTINGS, ▇▇▇▇▇▇▇▇ &
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ Street, ▇▇▇▇ ▇▇▇. ▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇ ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇
Attorneys for OVION, TREMULIS and Attorneys for
▇▇▇▇▇▇▇▇▇ CONCEPTUS
IT IS SO ORDERED.
Dated: November 6, 2003 /s/ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
----------------------
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
United States District Court Judge