EXHIBIT 10.2
EXCLUSIVE LICENSE AND DEVELOPMENT AGREEMENT
THIS EXCLUSIVE LICENSE AND DEVELOPMENT AGREEMENT (the "Agreement") is entered
into as of June 29, 2000 ("Effective Date") by and among ▇▇▇▇▇▇ LABORATORIES,
an Illinois corporation, having a principal place of business at ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇-▇▇▇▇ ("Abbott"), Rubicon Medical,
Inc., a Utah corporation, having a principal place of business at ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇ ("Rubicon") and Guardian RJL, Inc., a
Delaware corporation, having a principal place of business at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇ ("Contractor").
BACKGROUND
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WHEREAS, Rubicon Medical, LC, a Utah Limited Liability Company also known as
Rubicon Medical, LLC, and Rubicon Medical, a Limited Liability Company (the
"Original Licensee"), obtained an option to an exclusive license to USC Patent
Rights (as defined below), with the right to sublicense, from the University
of Southern California ("USC") under that certain Option & License Agreement
dated March 12, 1998 ("USC Agreement"), which USC Patent Rights relate to a
catheter product including a balloon protection device and associated
components;
WHEREAS, pursuant to that certain Option Exercise and License Amendment
Agreement between Original Licensee and USC dated March 31, 1999 ("Option
Exercise Agreement") (collectively the USC Agreement and the Option Exercise
Agreement shall be referred to herein as the "USC License"), the Original
Licensee exercised its option under the USC Agreement;
WHEREAS, under the terms of an Assignment, Assumption and Consent Agreement
dated June 8, 2000, Original Licensee, with the written consent of USC,
transferred and assigned all of its right, title and interest in and to the
USC Patent Rights under the USC License to Rubicon effective June 8, 2000; as
a result Rubicon became the licensee under the USC License;
WHEREAS, Rubicon has developed Other Patent Rights, Rubicon Know-how and
Trademark Rights (all as defined below) relating to, among other areas, a
catheter product;
WHEREAS, Abbott is interested in developing, manufacturing and selling such a
catheter product;
WHEREAS, Abbott has expertise regarding research and development, clinical
development, marketing and sale of medical devices;
WHEREAS, Abbott desires to obtain from Rubicon an exclusive sublicense to the
USC Patent Rights and an exclusive license under the Other Patent Rights,
Rubicon Know-how and Trademark Rights to manufacture, use and sell such
catheter products and to develop further such catheter products and to obtain
regulatory and marketing approvals worldwide, and Rubicon desires to ▇▇▇▇▇
▇▇▇▇▇▇ such sublicense and license; and
WHEREAS, Rubicon and Abbott have identified Contractor as the party to be
responsible to direct certain development activities with respect to Product
(as defined below);
NOW, THEREFORE, in consideration of the recitals and the mutual covenants and
obligations contained herein, Rubicon, Contractor and Abbott agree as follows:
1. DEFINITIONS
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1.1 "Abbott Know-how" shall mean all non-patented and unpublished
documentation, information and data relating to Products owned or controlled
by Abbott or its Affiliates, as of the Effective Date or at any time during
the Term (as defined below), including, but not limited to, research, clinical
and manufacturing data.
1.2 "Abbott Trademarks" shall mean those trademarks that Abbott
develops for any Product, including, but not limited to, trademarks, trade
names and trade dress.
1.3 "Affiliate" of an entity shall mean any entity that controls, is
controlled by, or is under common control with such entity. An entity shall be
deemed to be in control of another entity if it owns or controls, directly or
indirectly, more than fifty percent (50%) of the outstanding voting equity of
the other entity (or other equity or ownership voting interest in the event
that such entity is other than a corporation).
1.4 "CE Approval" shall mean approval from the applicable Regulatory
Authority (as defined below) to market and distribute Product for either
saphenous vein graft or carotid applications throughout the European Union.
1.5 "Competitive Product" shall mean a balloon protection catheter
product that is being, or is contemplated to be, developed, manufactured or
sold by Rubicon, its Affiliates or a Third Party (as defined below) and that
is structurally and/or functionally equivalent to Product.
1.6 "Confidential Information" shall mean all written information and
data provided by one Party (as defined below) to the other hereunder and
marked "Confidential" or a reasonable equivalent thereof or, if disclosed
orally, visually or in some other form, is summarized in a writing identified
as "Confidential" or a reasonable equivalent thereof and provided to the other
Party within thirty (30) days of such disclosure, except any portion thereof
which:
(a) is known to the recipient, as evidenced by its written records,
before receipt thereof under this Agreement;
(b) is disclosed to the recipient without restriction after acceptance of
this Agreement by a Third Party who has the right to make such disclosure;
(c) is or becomes part of the public domain through no breach of this
Agreement; or
(d) is independently developed, as evidenced by its written records, by
or for the recipient by individuals or entities who have not had access to the
information disclosed hereunder.
1.7 "Contract Quarter" shall mean a period of three (3) consecutive
months ending on March 31, June 30, September 30 or December 31; provided,
however, that each of the first and last Contract Quarters may be less than
three (3) full consecutive months.
1.8 "Contract Year" shall mean a period of four (4) consecutive Contract
Quarters; provided, however, that the first and last Contract Years may be
less than four (4) consecutive Contract Quarters in that such Contract Year
shall begin on the first day of the month following the month in which Abbott
obtains CE Approval of Product.
1.9 "Development Plan" shall mean the Product Development Plan to be
developed by the Parties under Section 3.1, as the same may be modified from
time to time.
1.10 "FDA" shall mean the United States Food and Drug Administration or
its successor entity.
1.11 "Field of Use" shall mean diagnostic and/or therapeutic devices
used in the treatment or management of patients via the carotid artery or
other arteries or veins.
1.12 Sales" shall mean:
(a) the gross invoiced price of Products sold by Abbott or its Affiliates
to a Third Party, less the following:
(i) credits, allowances, discounts and rebates to, and chargebacks from
the account of, Third Parties for damaged, out-dated, rejected, returned,
withdrawn or recalled Products;
(ii) actual freight, postage, transportation and insurance costs incurred
in delivering Products;
(iii) cash, quantity and trade discounts actually given to Third Parties;
(iv) rebates and administrative fees actually paid to group purchasing
organizations;
(v) sales, use, value-added, excise and other similar taxes to the
extent billed to and paid by the Third Party;
(vi) wholesaler chargebacks; and
(vii) custom duties, surcharges and other governmental charges incurred
in connection with the exportation or importation of Products.
(b) Net Sales shall not include any Products used in clinical trials,
for research or other non-commercial uses, or supplied as commercial samples
or as charitable or humanitarian donations, so long as Abbott receives no
compensation in any form (other than tax benefits) for such use/donation.
1.15 "Other Patent Rights" shall mean all United States and foreign
patents and patent applications including, but not limited to, the patents and
patent applications listed in Exhibit 1. 15, and all substitutions,
extensions, re-examinations, reissues, renewals, divisions, continuations,
improvements or continuations-in-part therefor or thereof, and all foreign
counterparts of the foregoing, relating to or supportive of the Development
Plan, which are owned by, controlled by or exclusively licensed to (with the
right to sublicense) Rubicon or Contractor or their respective Affiliates
during the Term, other than USC Patent Rights.
1.16 "Party" shall mean either Abbott or Rubicon and "Parties" shall mean
both Abbott and Rubicon.
1.17 "Patent Rights" shall mean Other Patent Rights and USC Patent
Rights, collectively.
1.18 "Product" shall mean any article, component, apparatus, substance,
chemical, material, method or service which is made, used, distributed or sold
by Abbott or its Affiliates which:
(a) is covered in whole or in part by one (1) or more Valid Claims (as
defined below) in a country in which the Product is made, used, distributed or
sold;
(b) is manufactured using a method or process which is covered in whole
or in part by one (1) or more Valid Claims in the country in which (i) the
Product is made, used, distributed or sold, or (ii) the method or process is
used; or
(c) the use of which is covered in whole or in part by one (1) or more
Valid Claims in the country in which (i) the Product is made, used,
distributed or sold, or (ii) the method or process is used.
A Product is covered by a Valid Claim if, in the course of manufacture, use,
distribution or sale, it would, in the absence of this Agreement, infringe one
(1) or more Valid Claims.
1.19 "Reasonable Commercial Efforts" shall mean a level of effort by a
Party comparable to efforts that such Party would use with its own products
having a comparable proprietary position, market potential and commercial
significance in the applicable region.
1.20 "Regulatory Authority" shall mean any federal, state, local or
international regulatory agency, department, bureau or other governmental
entity, including the FDA, which is responsible for issuing approvals,
licenses, registrations or authorizations necessary for the
manufacture, use, storage, import, transport or sale of Products in a
regulatory jurisdiction.
1.21 "Rubicon Know-how" shall mean all non-patented and unpublished
documentation, information and data relating to Products owned or controlled
by Rubicon or its Affiliates, as of the Effective Date or at any time during
the Term, including, but not limited to, research, clinical and manufacturing
data and documentation and prototype and pre-production units of Products but
excluding any documentation, information or data that would be considered
an improvement under Section 2.2.
1.22 "Technology Transfer Plan" shall mean the Technology Transfer Plan
to be developed pursuant to Section 2.1 as the same may be modified from time
to time. The plan shall include a timeline for transferring Rubicon Know-how
to Abbott including, but not limited to, clinical studies, data management,
process development and non-clinical research and all other Rubicon Know-how
related to Product and Patent Rights.
1.23 "Term" shall have the meaning set forth in Section 14.1 of this
Agreement.
1.24 "Territory" shall mean the entire world.
1.25 "Third Party" shall mean a natural person, corporation,
partnership, joint venture, trust, any governmental authority or other
business entity or organization, and any other recognized organization other
than the Parties and/or their Affiliates.
1.26 "Trademark Rib" shall mean the unregistered trademark Guardian
and all goodwill associated therewith.
1.27 "USC Patent Rights" shall mean all United States and foreign
patents and patent applications including, but not limited to, the patents and
patent applications listed in Exhibit 1_, and all extensions, reissues,
renewals, divisions, continuations, or continuations-in-part therefor thereof,
and all foreign counterparts of the foregoing, licensed pursuant to the USC
License.
1.28 "Valid Claim" shall mean a claim of an issued or granted and
unexpired patent included in Patent Rights, which claim has not been held
invalid or unenforceable by a court or agency of competent jurisdiction from
which no further appeal can be taken, or which has not been admitted by the
patentee to be invalid or unenforceable.
2. TECHNOLOGY TRANSFER
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2.1 Technology Transfer by Rubicon. Within thirty (30) days of the
Effective Date, the Parties shall finalize the Technology Transfer Plan and
commence activities described therein. Abbott shall consider Rubicon Know-how
to be Confidential Information and shall treat Rubicon Know-how in accordance
with the terms and conditions in Section 13.1 of this
Agreement.
2.2 Technology Improvements. In the event Abbott or its Affiliates
conceives, reduces to practice or develops improvements to Products, Abbott
shall own exclusively all such improvements. In the event Rubicon or any of
its Affiliates conceives, reduces to practice or develops improvements to
Products during the period up to and including the one (1) year anniversary of
completion of the Technology Transfer Plan, Rubicon, and its Affiliates, as
the case may be, shall assign to Abbott all rights to such improvements,
including all data and documentation relating to such improvements. In the
event Contractor or any entity with whom Contractor contracts pursuant to
Section 3.1 conceives, reduces to practice or develops improvements to
Products during the term of Contractor's activities pursuant to Section 3.1,
and for one additional year thereafter Contractor and such entities with whom
Contractor contracts, as the case may be, shall assign to Abbott all rights to
such improvements, including all data and documentation relating to such
improvements.
2.3 Non-Compete. For a period of four (4) years after the Effective
Date, or for a reasonable period, if any, less than four (4) years in any
jurisdiction that determines four (4)years to be inappropriate, neither
Rubicon, Contractor nor any of their Affiliates shall perform in
the Territory, directly or indirectly, any research, development or
manufacturing activities for itself or for any Third Party with respect to a
Competitive Product.
2.4 Project Managers. Within thirty (30) days of the Effective Date,
Abbott and Rubicon shall each appoint a project manager to coordinate the
transfer of Rubicon Know-how from Rubicon to Abbott.
2.5 Costs . Each Party shall be responsible for any costs that it
incurs in performing its responsibilities under this Article 2.
2.6 Disclosure of Abbott Know-how. During the Term, Abbott may disclose
Abbott Know-how to Rubicon. Rubicon shall consider Abbott Know-how to be
Confidential Information and shall treat Abbott Know-how in accordance with
the terms and conditions in Section 13.1 of this Agreement.
3. PRODUCT DEVELOPMENT, CLINICAL TESTING, AND APPROVAL,
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3.1 Development and Clinical Testing Activities.
(a) Within ninety (90) days after the Effective Date, Contractor shall
contract with Abbott or any Third Party, but not including Rubicon, to develop
the Product and to administrate all clinical testing for Products in
accordance with the Development Plan, at a maximum cost to Contractor of Two
Million Five Hundred Thousand Dollars ($2,500,000). In consideration of
Contractor's obligation, Abbott shall pay to Contractor within ten (10)
business days after the Effective Date, Two Million Five Hundred Thousand
Dollars ($2,500,000). The Parties acknowledge that Contractor may contract
with any Third Party to perform the activities contemplated under this Section
3.1 and to reimburse that Third Party for its costs to perform such
activities; provided that Abbott shall have the right to approve the use of
any such Third Party based on that Third Party's ability to adequately perform
such activities in a competent manner, to meet the necessary time lines and to
appropriately transfer to Abbott any necessary information and work product
after completion of such activities. Contractor shall reimburse the entity
performing the activities described in this Section 3.1 for all costs incurred
in developing Product and in administrating such clinical testing in an amount
not to exceed Two Million Five Hundred Thousand Dollars ($2,500,000). At the
end of each Contract Quarter, the entity performing such activities shall
submit invoices to Contractor for reimbursement of such entity's costs to
perform such development and clinical activities.
(b) Upon completion of Contractor's work under Section 3.1 (a), Abbott,
at ▇▇▇▇▇▇'▇ own cost, shall use Reasonable Commercial Efforts to undertake the
development activities for the Product, including, but not limited to,
conducting or having conducted, and completing or having completed, all
clinical studies and other activities required for approvals from the
applicable Regulatory Authorities. Abbott shall provide Rubicon, within a
reasonable time, with access to information and data reasonably requested by
Rubicon related to such development activities. Pursuant to the Development
Plan, Rubicon shall use Reasonable Commercial Efforts to assist Abbott in
performing development and registration activities for the Product. Abbott
further agrees to use its Reasonable Commercial Efforts to file for all
approvals from all Regulatory Authorities in the United States and the
European Union for Products. Commencing as of the termination of Contractor's
services under-Section 3.1 (a) above, and continuing for the remainder of the
Term, Abbott shall bear the costs and expenses related to the development of
the Products.
(c) The Parties shall in good faith agree upon and complete a plan for
development activities for the Product (the "Development Plan") within ninety
(90) days after the Effective Date. The Development Plan shall cover the
detailed plans for various studies, including without limitation, costs,
timing, data management, adverse event reporting, as well as including
language for diligence, delays and remedies for potential problems, and shall
at a minimum address the issues outlined in the checklist attached in Exhibit
3.1(c).
(d) Within thirty (30) days of the Effective Date, Contractor and
Rubicon shall (and within thirty (30) days of Abbott assuming responsibility
pursuant to Section 3.1(b), Abbott and Rubicon shall) each appoint a
development manager which will primarily responsible to coordinate
communications between the Parties and report on the progress of the
Development Plan. The development managers shall meet when necessary, but at
least every Contract Quarter during the term of the development of the
Product, at such times and places as agreed to by the Parties. ▇▇▇▇▇▇'▇
development manager shall provide periodic written reports to Rubicon on the
status of ▇▇▇▇▇▇'▇ product development, manufacturing and clinical testing
activities concerning Products. As reasonably requested by Rubicon, Abbott
shall also provide Rubicon with copies of related documentation and data. Any
such information and data shall be handled in accordance with the terms and
conditions of Section 13.1 of this Agreement.
3.2 Regulatory Approvals; Reasonable Commercial Efforts. Abbott, at
▇▇▇▇▇▇'▇ own expense, shall use Reasonable Commercial Efforts to submit to and
obtain acceptance from the applicable Regulatory Authorities of the
appropriate regulatory filing for Products in each such jurisdiction. In the
event Rubicon does not in good faith believe that Abbott and its Affiliates
are using Reasonable Commercial Efforts to undertake development activities or
obtain Product approval in any region in the Territory where USC Patent Rights
or Other Patent Rights have been filed except as otherwise agreed by the
Parties, then Rubicon shall provide Abbott with written notice of such
concerns. Abbott shall have sixty (60) days to address such concerns to the
mutual satisfaction of the Parties. If Rubicon reasonably believes Abbott has
not sufficiently addressed the concerns of Rubicon within such sixty (60)-day
period, then the sublicense to the USC Patent Rights and the license to the
Other Patent Rights that are granted to Abbott in the region in question shall
revert to a non-exclusive sublicense and license, respectively, upon the
written election of Rubicon, unless otherwise disputed by Abbott in accordance
with Section 17.9. Further, upon such reversion to a non-exclusive sublicense
and license, respectively, Abbott shall grant to Rubicon a royalty-free,
non-exclusive license to all improvements that have been assigned to Abbott in
such region pursuant to Section 2.2.
3.3 Alternative Regulatory Approach. With respect to both CE Approval
and FDA approval of Product, Abbott shall use Reasonable Commercial Efforts to
seek approval of Product for at least a saphenous vein graft or carotid
application. In the event Abbott, at its sole discretion in accordance with
Reasonable Commercial Efforts does not seek CE Approval and/or FDA approval of
Product for either of the saphenous vein graft or carotid applications, and
elects rather to seek approval for an alternative vascular application other
than saphenous vein graft or carotid applications, then for purposes of
Section 8.2, the condition of CE Approval and/or FDA approval as described in
Section 8.2(a) or (b), as the case may be, shall be deemed to be satisfied and
Abbott shall be obligated to make the appropriate milestone payment(s) under
such sections, upon the CE Approval and/or FDA approval of such alternative
vascular application. Abbott shall use Reasonable Commercial Efforts in making
its determination and filings and seeking approvals for an alternative
vascular application pursuant to this Section 3.3, or terminate this Agreement
pursuant to Section 14.3, or take other action after review with Rubicon,
provided that any other actions shall be mutually agreed upon.
4. PRODUCT MANUFACTURE AND DISTRIBUTION
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4.1 Product Manufacture and Distribution. Abbott shall use Reasonable
Commercial Efforts to manufacture, market and distribute Products in all
regions in the Territory where appropriate regulatory and marketing approvals
have been obtained from the applicable Regulatory Authorities. Abbott, at
▇▇▇▇▇▇'▇ own expense, shall be responsible for all manufacturing and
commercial activities related to undertaking the obligations pursuant to this
Section 4.1. In the event Rubicon does not in good faith believe that Abbott
and its Affiliates are using Reasonable Commercial Efforts to manufacture,
market or distribute Products in a given region in the Territory where
approval from the Regulatory Authority has been obtained, then Rubicon shall
provide Abbott with written notice of such concerns. Abbott shall have sixty
(60) days to address such concerns to the mutual satisfaction of the Parties.
If Rubicon reasonably believes that Abbott has not sufficiently addressed the
concerns of Rubicon within such sixty (60)-day period, then the sublicense to
the USC Patent Rights and the license to the Other Patent Rights that are
granted to Abbott in the region in question shall revert to a non-exclusive
sublicense and license, respectively, upon the written election of Rubicon,
unless otherwise disputed by Abbott in accordance with Section l 7.9. Further,
upon such reversion to a nonexclusive sublicense and license, respectively,
Abbott shall grant to Rubicon a royalty-free, nonexclusive license to all
improvements that have been assigned to Abbott in such region pursuant
to Section 2.2.
4.2 Labeling. All packaging for Products shall display ▇▇▇▇▇▇'▇ trade
dress and a trademark suitable to Abbott, at ▇▇▇▇▇▇'▇ sole discretion. Abbott
shall make only claims, representations or warranties directly or indirectly
to any Third Party about the Product that are consistent with the Product's
approval from applicable Regulatory Authorities and other
scientific literature.
4.3 Customer Service and Technical Support. Abbott, at ▇▇▇▇▇▇'▇ own
expense, shall be responsible for and use Reasonable Commercial Efforts in
providing training, customer service and technical support for Products.
4.4 Export Control Laws. Abbott shall comply with all applicable export
laws, restrictions and regulations of the Department of Commerce or other
United States or foreign agency or authority, and shall not export, or allow
any export or re-export of any Confidential Information or Products in
violation of any such restrictions, laws or regulations.
5. REGULATORY COMPLIANCE MATTERS AND COMPLAINTS
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5. l Regulatory Matters. In addition to the obligations set forth in
Section 3.2 of this Agreement, Abbott, at ▇▇▇▇▇▇'▇ own expense, shall be
responsible for and take all appropriate corrective or other actions regarding
all regulatory matters in the Territory, including responses to inquiries from
Regulatory Authorities in accordance with all applicable laws.
5.2 Complaints and Recalls.
(a) Product Complaints. Abbott, at ▇▇▇▇▇▇'▇ own expense, shall
investigate, respond to and take all appropriate corrective or other actions
regarding all complaints associated with the manufacture and/or distribution
of Products in accordance with all applicable laws.
(b) Product Recalls. Abbott, at ▇▇▇▇▇▇'▇ own expense and, subject
to an order or directive from a Regulatory Authority, at its sole discretion,
shall be responsible to conduct and to pay for the costs of any recall or
withdrawal of Products in accordance with all applicable laws. Promptly, in
accordance with all applicable laws and if possible, prior to making such
recall, Abbott shall advise Rubicon of the situation and any facts relating to
the advisability of the recall, destruction or withholding from the market of
the Product anywhere in the world.
5.3 Record keeping. Abbott shall keep records of its sales and customers
and other records sufficient to adequately administer a recall of each such
Product and reasonably cooperate in any decision to recall, retrieve and/or
replace any Product, in accordance with all applicable laws and
regulatory requirements.
5.4 Fines and Penalties. Any fines and/or penalties for failure by Abbott
to comply with any requirement or regulation shall be the sole responsibility
of Abbott, except to the extent caused by acts or omissions of Rubicon,
Contractor, or their respective Affiliates.
6. RIGHTS GRANTED
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6.1 Sublicense to USC Patent Rights. Rubicon hereby grants to Abbott
and its Affiliates, upon the terms and subject to the conditions set forth
herein, a worldwide, exclusive right and sublicense under USC Patent Rights in
the Field of Use, with the right to further sublicense in accordance with this
Agreement, to make, have made, use, offer for sale, sell and import Products;
provided that Rubicon shall have the right to consent to any subsequent
sublicense from Abbott, which consent shall not be unreasonably withheld. The
consent by USC to such sublicense to Abbott is expressly acknowledged in the
Letter of Affirmation and Consent attached as Exhibit 6.1. Abbott acknowledges
that it has received a copy of and is familiar with the USC License. Neither
Party shall take any action or fail to take any actions which would give rise
to a violation of the USC License. Any sublicensing permitted by this Section
6.1 shall be subject to the provisions of article 11 of the USC Agreement, as
amended by the Option Exercise Agreement.
6.2 License to Other Patent Rights and Rubicon Know-how. Rubicon hereby
grants to Abbott and its Affiliates, upon the terms and subject to the
conditions set forth herein, a worldwide, exclusive right and license under
Other Patent Rights and Rubicon Know-how, with the right to further sublicense
in accordance with this Agreement, to make, have made, use, offer for sale,
sell and import Products and any other product, Product improvement or
technology identified in Section 2.2 of this Agreement; provided that Rubicon
shall have the right to consent to any subsequent sublicense from Abbott,
which consent shall not be unreasonably withheld.
7. ROYALTIES
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7.1 Royalty Obligation. In consideration of the sublicense and license
rights granted to Abbott pursuant to Sections 6.1 and 6.2, Abbott shall pay to
Rubicon royalties based on Net Sales in countries where a Valid Claim exists.
The applicable royalty rate is as follows:
(a) Five percent (5%) on the first One Hundred Million Dollars ($
100,000,000) of cumulative Net Sales;
(b) Six percent (6%) on the Second One Hundred Million Dollars
($100,000,000) of cumulative Net Sales; and
(c) Seven percent (7%) on all cumulative Net Sales in excess of Two
Hundred Million Dollars ($200,000,000).
Rubicon shall be responsible for any and all payments due to USC under the
USC License.
To the extent Abbott or its Affiliates sell Product in a country that is
not subject to Valid Claims of Patent Rights, but which sales are subsequently
covered by a Valid Claim of a later-issued patent based upon a patent
application that was pending in such country at the time sales of Product were
initiated, Abbott shall pay royalties to Rubicon for such Products under the
terms of this Section 7.1 retroactively to the date of filing of such claim of
the later-issued patent. If there are sales of a Third Party product that
represent ten percent (10%) or more of the unit market for Competitive Product
and such sales would have been infringing upon the later-issued patent it if
had been issued at the time of the sale, then ▇▇▇▇▇▇'▇ obligation to pay
retroactive royalties shall be one-half (1/2) the amount otherwise payable,
but only if such sales continue after the effective date of issue of the
later-issued patent and Abbott prosecutes such infringement under Section 12.3
or 12.4, as applicable, within one hundred twenty (120) days after the date of
issue of such later-issued patent.
7.2 Terms of Payment. Within sixty (60) days following the end of each
Contract Quarter during the Term, Abbott shall pay earned royalties based on
Net Sales during the previous Contract Quarter. All royalty and milestone
payments due Rubicon shall be made in United States dollars, as directed by
Rubicon. For sales made in currency other than United States dollars,
royalties payable under this Agreement shall be determined using ▇▇▇▇▇▇'▇
standard conversion methodology, which is consistent with generally acceptable
accounting principles. The standard conversion methodology is to use the
average of the spot rate as published by Reuters on 9:00 am one business day
prior to the month ending immediately prior to that in which payment is due
and the spot rate as described above for the month ending when payment is due.
In no event shall the applicable royalties exceed the maximum amount payable
under the applicable laws, regulations or administrative rulings of the
territory or country which restricts the royalty rate or amount payable on Net
Sales in such territory or country.
7.3 Term of Royalty Obligation. Subject to the termination provisions of
Article 14 of this Agreement, ▇▇▇▇▇▇'▇ obligation to pay royalties on Products
in each country shall expire on the date when the last patent containing a
Valid Claim in such country expires, lapses or is invalidated.
7.4 Taxation of Royalties. Where any sum due to be paid to Rubicon
hereunder is subject to any withholding or similar tax, the Parties shall use
reasonable efforts to do all such acts and things and to sign all such
documents as will enable them to take advantage of any applicable double
taxation agreement or treaty or appeal procedure. In the event there is no
applicable double taxation agreement or treaty, or appeal procedure, or if any
appeal procedure has been exhausted or if an applicable double taxation
agreement or treaty or appeal procedure reduces but does not eliminate such
withholding or similar tax, notwithstanding any pending appeal, ▇▇▇▇▇▇ shall
pay such withholding or similar tax to the appropriate government authority as
may be required, deduct the amount paid from the amount due Rubicon and secure
and send to Rubicon the best available evidence of such payment.
7.5 Restrictions on Remittance. If, at any time, legal restrictions
prevent the prompt remittance of part or all royalties with respect to any
country where Products are sold, ▇▇▇▇▇▇ shall have the right to make such
payments by depositing the amount thereof in local currency to Rubicon's
account in a bank or other depository institution in such country.
8. DEVELOPMENT FEE AND MILESTONE PAYMENTS
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8.1 Development Fee. ▇▇▇▇▇▇ shall pay Rubicon a fee of One Million
Dollars ($ 1,000,000) under the sublicense grant pursuant to Section 6.1 and
One Million Dollars ($ 1,000,000) under the license grant pursuant to Section
6.2, ("Development Fee") in consideration of the cost and effort expended by
Rubicon with respect to the development of rights granted in such sections.
The Development Fee payment shall be due and payable within ten (10) business
days of the Effective Date.
8.2 Milestone Payments. In addition to the payment described in
Sections 8.1 of this Agreement, ▇▇▇▇▇▇ also shall pay Rubicon milestone
payments according to the following payment schedule:
(a) ▇▇▇▇▇▇ shall pay Rubicon Two Million Dollars ($2,000,000) under the
sublicense grant pursuant to Section 6.1 and Two Million Dollars ($2,000,000)
under the license grant pursuant to Section 6.2, upon the first commercial
shipment of Product within the European Union following CE Approval, or as
otherwise provided in Section 3.3. Such collective payment shall be due within
thirty (30) days of such first shipment.
(b)▇▇▇▇▇▇ shall pay Rubicon Four Million Dollars ($4,000,000) under the
sublicense grant pursuant to Section 6.1 and Four Million Dollars ($4,000,000)
under the license grant pursuant to Section 6.2, upon FDA approval of Products
for either saphenous vein graft or carotid applications, or as otherwise
provided in Section 3.3. Such collective payment shall be due within thirty
(30) days of such FDA approval.
9. REPORTS.
-------
With each quarterly payment made under Section 7.3 of this Agreement, ▇▇▇▇▇▇
shall deliver to Rubicon a full and accurate accounting of all Net Sales by
▇▇▇▇▇▇, its Affiliates and sublicensees, if any, for the relevant Contract
Quarter. Each such report shall include at least the following information:
(a) quantity of each Product sold on a country-by-country basis; (b) gross
receipts from sales of Products on country-by-country basis; (c) total number
of Products manufactured on a country-by-country basis; (d) quantities of each
Product used by ▇▇▇▇▇▇, its Affiliates and sublicensees; (e) any deductions
from gross receipts used to arrive at Net Sales; and (f) ▇▇▇▇▇▇'▇ computation
of the aggregate earned royalties payable to Rubicon.
10. BOOKS AND RECORDS
-----------------
10.1 Procedures. ▇▇▇▇▇▇ shall keep full and accurate accounting records
of Net Sales in sufficient detail to determine the royalties payable to
Rubicon and USC. Such records, together with all necessary supporting data,
shall be kept at ▇▇▇▇▇▇'▇ offices at the address set forth above or such other
address as ▇▇▇▇▇▇ may indicate in writing to Rubicon and USC. Upon reasonable
notice to ▇▇▇▇▇▇, Rubicon and/or USC shall have the right during coronal
business hours to audit on a confidential basis ▇▇▇▇▇▇'▇ financial records
pertaining to Products to verify the royalties payable pursuant to this
Agreement; provided, however, that such audit shall neither
(a) take place more frequently than once in a Contract Year, nor (b)
cover records for more than the preceding four (4) Contract Years. An
adjustment in payment shall be made upon demonstration of any underpayment or
overpayment. With respect to Rubicon's audit rights, Rubicon may only have an
independent certified public accountant, selected by Rubicon and acceptable to
▇▇▇▇▇▇, audit on a confidential basis ▇▇▇▇▇▇'▇ financial records pertaining to
Products to verify the royalties payable pursuant to this Agreement.
10.2 Cost of Audits. The fees and expenses of an audit requested by
Rubicon or USC pursuant to Section 10.1 of this Agreement shall be borne the
party requesting the audit; provided, however, that if any audit reveals that
▇▇▇▇▇▇ underpaid the royalties due to Rubicon under this Agreement as to the
period being audited by more than ten percent (10%) of the amount that was
payable for such period, then ▇▇▇▇▇▇ shall, in addition to paying immediately
to Rubicon any such deficiency, reimburse the party requesting the audit for
the cost of such audit.
10.3 Period to be Kept. ▇▇▇▇▇▇ shall retain all books and records it is
required to maintain under Section 10.1 and 10.4 for four (4) years from the
end of the Contract Year of the royalty payment to which they pertain, or the
retention period required by applicable law, whichever is longer.
10.4 Inspections. Each Party shall permit the other Party's
representatives, upon reasonable notice, to visit at reasonable intervals (but
at least once every Contract Year), and for reasonable durations during
reasonable business hours, and facility used for research, development or
manufacture of the Products or use of the Patent Rights, and will allow such
personnel to review any relevant records (including, but not limited to,
financial records), data, information, documents and/or reports in any media
or format in connection with such inspections.
11. REPRESENTATIONS AND WARRANTIES
------------------------------
11.1 Intellectual Property Warranties. Rubicon represents and warrants to
▇▇▇▇▇▇ that the following statements are true:
(a) To the best of Rubicon's knowledge, from the effective date of the
Option and Exercise Agreement until the Effective Date, Rubicon has been the
sole and exclusive licensee of all right, title and interest in and to the USC
Patent Rights, with the exception of those rights reserved by the United
States government and USC as set forth in Sections 4(c) and 6, respectively,
of the USC License;
(b) As of the Effective Date, Rubicon is the sole and exclusive owner or
licensee, with the right to license or sublicense, of all right, title and
interest in and to the Other Patent Rights with the right to license to
▇▇▇▇▇▇;
(c) To the best of Rubicon's knowledge and belief without independent
inquiry, the Patent Rights have not been obtained through any fraudulent
activity or misrepresentation;
(d) To the best of Rubicon's knowledge and belief, Products would not
infringe Third Party patents or any patents issuing from applications known to
exist as of the Effective Date, as a result of ▇▇▇▇▇▇ or its Affiliates
making, having made, using, selling, offering for sale or importing Products;
(e) There are no suits, claims or proceedings pending or, to the best of
Rubicon's knowledge without independent inquiry, threatened against Rubicon or
any of its Affiliates in any court or by or before any governmental body or
agency with respect to Patent Rights or Rubicon Know-how or the making, having
made, using, selling, offering for sale or importing Products;
(f) To the best of Rubicon's knowledge without independent inquiry, there
are no suits pending or threatened that challenge the validity of any of the
patents within Patent Rights, and Rubicon has no actual knowledge of any
information or action that may jeopardize the validity, enforcement or
ownership of the Patent Rights;
(g) Rubicon or its Affiliates do not own, control or have rights to any
patents, patent applications or know-how other than those licensed or
sublicensed to ▇▇▇▇▇▇ according to the terms of this Agreement, having claims
that are related to or would cover ▇▇▇▇▇▇'▇ making, having made, using,
selling, offering for sale or importing Products;
(h) Rubicon or its Affiliates have no obligations which would
materially and adversely affect their performance under the Agreement; and
(i) Rubicon has the corporate authority to enter into this Agreement.
11.2 Disclaimer. RUBICON MAKES NO REPRESENTATIONS OR WARRANTIES,
EXPRESSED OR IMPLIED, OTHER THAN THOSE EXPRESSLY MADE HEREIN. ALL OTHER
REPRESENTATIONS OR WARRANTIES, EXPRESSED AND IMPLIED, INCLUDING, WITHOUT
LIMITATION, THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A
PARTICULAR PURPOSE ARE HEREBY DISCLAIMED. Without limiting the generality of
the foregoing, nothing in this Agreement shall be construed as (a) a
representation or warranty as to the validity of any patent or other
intellectual property rights which are the subject of this Agreement, (b) a
representation or warranty that anything made, used, imported, offered for
sale, sold or otherwise disposed of under any of the Patent Rights or the
Rubicon Know-how is or will be free from infringement of patents or other
intellectual property rights of Third Parties, or (c) a grant, by implication,
estoppel, or otherwise, of any license, option, covenant or right other than
those which are expressly stated in this Agreement, including without
limitation any license under any patent or patent application (or claim
thereof) not within the Patent Rights.
12. PATENTS.
--------
12.1 Prosecution of USC Patent Rights. ▇▇▇▇▇▇, at ▇▇▇▇▇▇'▇ own expense,
shall file, prosecute, issue and maintain all USC Patent Rights in accordance
with the terms and conditions of article 7 of the USC Agreement, as unended by
the Option Exercise Agreement. In connection with ▇▇▇▇▇▇'▇ performance of its
obligations under this Section 12.1, ▇▇▇▇▇▇ shall provide written notification
to Rubicon of significant activities resulting from ▇▇▇▇▇▇'▇ actions under
this Section 12.1 and upon written request shall provide Rubicon with
reasonable access to and copies of the records related to such activities.
12.2 Prosecution of Other Patent Rights. ▇▇▇▇▇▇, at ▇▇▇▇▇▇'▇ own
expense, shall file, prosecute, issue and maintain all Other Patent Rights.
Rubicon shall have the right to review, consult and comment on all such patent
filings and prosecutions. In connection with ▇▇▇▇▇▇'▇ performance of its
obligations under this Section 12.2, ▇▇▇▇▇▇ shall provide written notification
to Rubicon of significant activities resulting from ▇▇▇▇▇▇'▇ actions under
this Section 12.2 and upon written request shall provide Rubicon with
reasonable access to and copies of the records related to such activities.
Accordingly, upon reasonable request, ▇▇▇▇▇▇ shall provide Rubicon with copies
of (a) all actions, notices and other correspondence received from the U.S.
Patent and Trademark Of lice or any foreign equivalent, (b) responses and
correspondence to the U.S. Patent and Trademark Of flee or any foreign
equivalent, and (c) the original issued patent documents, certificates or
equivalents thereof. ▇▇▇▇▇▇ shall not abandon any patent application without
providing written notice to Rubicon at least thirty (30) days prior to any
potential loss of rights. In the event ▇▇▇▇▇▇ elects or has elected not to
pursue patent protection or to continue to prosecute or maintain any patent or
patent application of Other Patent Rights, ▇▇▇▇▇▇ shall so advise Rubicon in
writing not less than thirty (30) days prior to any potential loss of rights;
then, Rubicon shall have the right, but not the obligation, to assume
prosecution or maintenance of such patent or patent application of the Other
Patent Rights. If Rubicon elects to assume maintenance of such patent or if
Rubicon elects to assume prosecution of such patent application, and a patent
ultimately issues from such patent application, then thereafter, Rubicon shall
have the ownership rights thereto held by ▇▇▇▇▇▇, ▇▇▇▇▇▇ shall be deemed to
have surrendered its right to make, use, sell or import Products covered by
such patent that ultimately issues and the exclusive rights for such patent
granted to ▇▇▇▇▇▇ shall revert back to Rubicon.
12.3 Infringement Involving USC Patent Rights. ▇▇▇▇▇▇ shall address all
issues involving infringing activities with respect to USC Patent Rights in
accordance with the terms and conditions of article 8 of the USC Agreement. In
connection with ▇▇▇▇▇▇'▇ performance of its obligations under this Section
12.3, ▇▇▇▇▇▇ shall provide written notification to Rubicon of significant
activities resulting from ▇▇▇▇▇▇'▇ actions under this Section 12.3 and upon
written request shall provide Rubicon with reasonable access to and copies of
the records related to such activities.
12.4 Third Party Infringement of Other Patent Right. Each Party agrees
to bring to the attention of the other Party any Third Party product it
discovers or has discovered which relates to any Other Patent Rights under
this Agreement, and to cooperate with each other so that each Party can
determine whether a Third Party product may infringe a Valid Claim of an Other
Patent Right. To the extent a Party believes a Third Party may unlawfully
infringe Other Patent Rights, the Parties shall reasonably cooperate to
address such concerns. Notwithstanding such cooperation, in the event of
alleged Third Party infringement, ▇▇▇▇▇▇, at its sole discretion, may pursue
enforcement within one hundred twenty (120) days of obtaining knowledge of
such alleged infringement; provided, however, that if such infringement does
not represent at least ten percent (10%) of the unit market share for
Competitive Product in such country, ▇▇▇▇▇▇ shall have an additional one
hundred twenty day (120)- period that does not start until such time as such
infringement does represent at least ten percent (10%) of the unit market
share for Competitive Product in such country. Prior to taking any formal
action to enforce or prior to communicating to the alleged infringing Third
Party regarding such alleged infringement, ▇▇▇▇▇▇ shall notify Rubicon in
writing of ▇▇▇▇▇▇'▇ intentions to so act. In the event ▇▇▇▇▇▇ initiates an
infringement action against such alleged infringing Third Party and ▇▇▇▇▇▇
diligently litigates such action, then ▇▇▇▇▇▇ shall have the right to pay
royalties for Net Sales of Product in any country in which such infringement
is occurring and such Third Party represents at least ten percent (10%) of the
unit market share for Competitive Product in such country, at one-half (1/2) the
then-current rate specified in Section 7.2 of this Agreement until the
obligation to pay royalties expires or such time as ▇▇▇▇▇▇ has succeeded in
causing the abatement of such infringement; provided, however, that ▇▇▇▇▇▇
shall not be required to maintain suits for infringement against more than one
(1 ) infringer at a time in any country, or more than two (2) infringers at
any time worldwide, in order to reduce the royalties it pays on Net Sales.
▇▇▇▇▇▇ shall bear the expense of any infringement suit it elects to pursue and
shall retain any reward of monetary damages. In the event ▇▇▇▇▇▇ does not
pursue enforcement within the one hundred twenty (120) day period, Rubicon, at
Rubicon's sole cost, upon prior written notice to ▇▇▇▇▇▇, may pursue such
enforcement action, and if Rubicon wins, Rubicon shall retain exclusively all
settlements or awards.
12.5 Infringement involving Third Party Patents. To the extent a
Product is alleged to infringe a patent of a Third Party, ▇▇▇▇▇▇ shall notify
Rubicon of all such claims, allegations and notifications of such
infringement. ▇▇▇▇▇▇ may choose legal counsel and defend any lawsuit that a
Third Party may file related to such alleged patent infringement. During such
lawsuit, ▇▇▇▇▇▇ may place all of the royalties derived from Net Sales in the
country where such lawsuit is pending in an interest-bearing escrow account.
The escrow account shall be established in a bank mutually acceptable to the
Parties under escrow instructions insulating the funds from claims of any
creditor. Upon termination of the action, one-half (1/2) of the amount of any
judgment, reasonable attorneys' fees and costs may be paid from this escrow
account. Should the settlement of any such patent infringement lawsuit involve
payment of royalties by ▇▇▇▇▇▇ to a Third Party for the continued right to
manufacture, use and sell Product, then the funds in the escrow account and
royalties payable to Rubicon may be applied against up to one-half (1/2) of such
royalties to a Third Party. Any funds thereafter remaining in the escrow shall
be paid to Rubicon. During the patent infringement litigation, both Parties
shall keep the other informed in writing of significant developments in the
lawsuit.
12.6 Patent Marking. ▇▇▇▇▇▇ shall use reasonable efforts to place all
appropriate patent and other intellectual property notices, markings and
indicia on product and marketing literature for Products as needed to protect
the USC Patent Rights and right for damages for infringement thereof.
13. CONFIDENTIALITY AND PUBLIC ANNOUNCEMENTS
----------------------------------------
13.1 Confidentiality. It is contemplated that in the course of the
performance of this Agreement each Party may disclose from time to time
Confidential Information to the other Party. Each Party agrees (a) not to use
Confidential Information received from the other for any purpose other than
the performance of its rights and obligations hereunder, and (b) not to
disclose Confidential Information so received to any Third Party, except as is
necessary for such performance or as is required by a court or governmental
authority. In the event that such disclosure to a Third Party becomes
necessary or required, the disclosing Party shall give to the Party from whom
the Confidential Information was received the greatest practical prior written
notice so as to permit the latter to take all possible action to perfect
and/or safeguard its rights in the Confidential Information. The obligations
of the Parties relating to Confidential Information shall expire five (5)
years after the later of the termination of this Agreement or the expiration
of any Patent Rights; provided, however, each of ▇▇▇▇▇▇'▇ and Rubicon's
obligations to keep Rubicon Know-how and ▇▇▇▇▇▇ Know-how, respectively,
confidential shall not expire so long as such know-how is within the
definition of Confidential Information provided in this Agreement.
13.2 Public Announcements. Neither Party shall make any public
announcement concerning the transactions contemplated herein, or make any
public statement which includes the name of the other Party or any of its
Affiliates or USC, or otherwise use the name of the other Party or any of its
Affiliates in any public statement or document, except as may be required by
law or judicial order, without the written consent of the other Party, which
consent shall not be unreasonably withheld. Subject to any legal or judicial
disclosure obligation, any such public announcement proposed by a Party that
names the other Party shall first be provided in draft to the other Party
which shall have ten (10) business days to review such draft prior to the
issue or publication of the announcement.
14. TERM AND TERMINATION
--------------------
14.1 Term. This Agreement shall commence on the Effective Date and
shall remain in effect for the term of any royalty obligation under Section
7.4 of this Agreement or the term of the USC License, whichever is longer,
unless otherwise terminated earlier by operation of law or by acts of the
Parties in accordance with the terms of this Agreement.
14.2 Termination by Either Party. Except as provided in Articles 3 and 4,
either Party may terminate this Agreement upon written notice to the other
Party in the event the other Party (a) materially breaches this Agreement and
fails to cure such breach within thirty (30) days after receipt of written
notice of breach from the non-breaching Party, or (b) makes a general
assignment for the benefit of creditors, has a receiver appointed on its
behalf, or files or otherwise becomes subject to bankruptcy or insolvency
proceedings which continues unstayed and in effect for a period of thirty (30)
days. If terminated by Rubicon under this Section, then ▇▇▇▇▇▇ shall grant to
Rubicon a worldwide, royalty-free, co-exclusive license (with sublicensing
rights but without ▇▇▇▇▇▇ retaining a right to license) to all improvements to
Product that have been assigned to ▇▇▇▇▇▇ pursuant to Section 2.2 and a
world-wide, royalty free, non-exclusive license to the ▇▇▇▇▇▇ Know-how.
14.3 Termination Without Cause by ▇▇▇▇▇▇. ▇▇▇▇▇▇ may terminate this
Agreement without cause, with twelve (12) months prior written notice to
Rubicon. During such twelve (12)-month period, ▇▇▇▇▇▇ shall continue to
perform its obligations under this Agreement in accordance with its terms and
shall cooperate with Rubicon to transition the development work and/or
business with respect to Product to Rubicon or its designee. Further, Rubicon
shall be entitled to contract with a Third Party, to be effective upon the
termination hereunder, to replace ▇▇▇▇▇▇ with respect to the development
and/or sale of Product. Upon termination under this Section 14.3, ▇▇▇▇▇▇ shall
grant to Rubicon a worldwide, royalty-free, co-exclusive license (with
sublicensing rights but without ▇▇▇▇▇▇ retaining a right to license) to all
improvements to Product that have been assigned to ▇▇▇▇▇▇ pursuant to Section
2.2 and a world-wide, royalty free, non-exclusive license to the ▇▇▇▇▇▇
Know-how. In no event shall ▇▇▇▇▇▇ be required to pay Rubicon the milestone
payments under Sections 8.2(a) and/or (b) in the event of a termination under
this Section 14.3 unless such milestone payment is then or becomes payable in
accordance with Section 8.2(a) of (b), as applicable, prior to the effective
date of such termination.
14.4 Termination for Safety/Efficacy Reasons. During the Term, until
▇▇▇▇▇▇ obtains FDA approval of Product, ▇▇▇▇▇▇ shall have the right to
terminate this Agreement by providing Rubicon with ninety (90) days prior
written notice in the event ▇▇▇▇▇▇ determines that Product has adverse safety
and/or efficacy problems that render continuation hereunder commercially
unacceptable. Upon termination under this Section 14.4, ▇▇▇▇▇▇ shall grant to
Rubicon a worldwide, royalty-free, co-exclusive license (with sublicensing
rights but without ▇▇▇▇▇▇ retaining a right to license) to all improvements to
Product that have been assigned to ▇▇▇▇▇▇ pursuant to Section 2.2 and a
world-wide, royalty free, non-exclusive license to the ▇▇▇▇▇▇ Know-how. In no
event shall ▇▇▇▇▇▇ be required to pay Rubicon the milestone payments under
Sections 8.2(a) and/or (b) in the event of a termination under this Section
14.4 unless such milestone payment is then or becomes payable in accordance
with Section 8.2(a) of (b), as applicable, prior to the effective date of such
termination.
14.5 Termination by Rubicon. If ▇▇▇▇▇▇ repeatedly fails to use Reasonable
Commercial Efforts as required in this Agreement, Rubicon may submit the issue
order to seek additional remedies, including without limitation, termination
of the Agreement.
14.6 Accrued Rights and Obligations. The termination, expiration,
cancellation or abandonment of this Agreement through any means and for any
reason shall not relieve the Parties of any obligations accruing prior thereto
and shall be without prejudice to the rights and remedies of either Party with
respect to the antecedent breach of any of the provisions of this Agreement.
Further, Section 5.3, Articles 10 and 11, Section 13.1, Articles 1$, and
Section 17.9 shall survive the termination of this Agreement for a period of
five (5) years, unless otherwise provided herein to the contrary. Any
royalty-free license to be granted by ▇▇▇▇▇▇ under this Agreement shall
survive termination of this Agreement.
14.7 Covenants Regarding Products. Upon termination if this Agreement,
▇▇▇▇▇▇ agrees to immediately discontinue the manufacture and sale of the
Products and the use of the Patent Rights and Rubicon Know-how. Within twenty
(20) days after such termination, ▇▇▇▇▇▇ shall provide Rubicon with a written
inventory of all Products currently in its stock as of the date of termination
(the "Inventory"). Rubicon shall have the option to grant to ▇▇▇▇▇▇ the
privilege of selling of such Inventory at its normal prices, unless discounted
prices are expressly authorized by Rubicon. ▇▇▇▇▇▇ shall sell the Inventory
only to customers who had previously purchased products from ▇▇▇▇▇▇ during the
term of this Agreement. The sale of all such Inventory, however, shall be
subject to all of the terms and conditions of this Agreement. ▇▇▇▇▇▇ shall not
destroy such unsold Products, unless damaged or not merchantable. All royalty
obligations shall be accelerated and shall become immediately due and payable.
In addition, ▇▇▇▇▇▇ shall immediately deliver to Rubicon (i) all materials
relating to the Patent Rights and Rubicon Know-how, together with all copies
thereof, all at no cost whatsoever to Rubicon.
15. INDEMNIFICATION; INSURANCE AND LIMITATION OF LIABILITY
------------------------------------------------------
l5. 1 Indemnification by Rubicon. Rubicon shall indemnify, defend and
hold harmless ▇▇▇▇▇▇ and its Affiliates their respective officers, directors,
employees, agents and representatives ("▇▇▇▇▇▇ Indemnitees") from and against
any and all liabilities, claims, demands, actions, suits, losses, damages,
costs and expenses (including reasonable attorneys' fees) based upon or
arising out of Rubicon's or its Affiliates' or Contractor's negligence,
willful or deliberate misconduct; recklessness, or breach of any covenant,
agreement, representation or warranty made by Rubicon or its Affiliates or
Contractor in this Agreement; provided that Rubicon shall not be required to
indemnify ▇▇▇▇▇▇ or any ▇▇▇▇▇▇ Indemnitee to the extent it arises from the
negligence, willful or deliberate misconduct, or recklessness of ▇▇▇▇▇▇
Indemnitees, ▇▇▇▇▇▇'▇ breach of this Agreement, or any other matter for which
▇▇▇▇▇▇ is responsible to indemnify Rubicon and its Affiliates pursuant to
Section 15.2 of this Agreement.
15.2 Indemnification by ▇▇▇▇▇▇. ▇▇▇▇▇▇ shall indemnify, defend and hold
harmless Rubicon and its Affiliates and Contractor and their respective
officers, directors, employees, agents and representatives ("Rubicon
Indemnitees',) from and against any and all liabilities, claims, demands,
actions, suits, losses, damages, costs and expenses (including reasonable
attorneys' fees) based upon or arising out of ▇▇▇▇▇▇'▇ or its Affiliates'
negligence, willful or deliberate misconduct, recklessness, or breach of any
covenant, agreement, representation or warranty made by ▇▇▇▇▇▇ in this
Agreement; provided that ▇▇▇▇▇▇ shall not be required to indemnify Rubicon or
its Affiliates or Contractor to the extent it arises from the negligence,
willful or deliberate misconduct, or recklessness of an Rubicon Indemnitee,
Rubicon's or its Affiliates' or Contractor's breach of this Agreement or any
other matter for which Rubicon is responsible to indemnify ▇▇▇▇▇▇ pursuant to
Section I5.1 of this Agreement.
15.3 Conditions of Indemnification. If either Party proposes to seek
indemnification from the other under the provisions of this Article 15, it
shall notify the other Party within fifteen (15) days of receipt of notice of
any such claim or suit and shall cooperate fully with the other Party in the
defense of such claims or suits. No settlement or compromise shall be binding
on a Party hereto without its prior written consent. Failure to provide such
notice will not relieve indemnity obligation except to the extent adversely
effected by failure to receive notice.
15.4 Insurance. During the Term, each Party shall maintain insurance in
at least the amounts specified in article 24 of the USC License insuring such
Party's performance under this Agreement and any other liabilities mentioned
in said article 24, naming USC, Contractor and the other Party hereto as
additional insureds. Each Party shall within thirty (30) days after the
Effective Date deliver to each of the other Party and Contractor a certificate
of insurance evidencing such insurance, naming USC, Contractor and the other
Party as additional insureds, and providing that such insurance may not be
amended, terminated or allowed to expire without thirty (30) days' prior
notice to such additional insureds.
15.5 Limitation of Liability. Neither Party shall be liable to the other
Party for any indirect, special, incidental, consequential (including, without
limitation, lost profits), or punitive damages of the other Party resulting
from any breach of a Party's obligations hereunder.
16. TRADE NAMES AND TRADEMARKS
--------------------------
16.1 Rubicon Trademark License. Rubicon hereby grants to ▇▇▇▇▇▇ and its
Affiliates an exclusive, worldwide license, with the right to sublicense, to
use the Trademark Rights in the Territory, for the sole purpose of marketing
Product in accordance with this Agreement; provided that Rubicon shall have
the right to consent any subsequent sublicense from ▇▇▇▇▇▇, which consent
shall not be unreasonably withheld. ▇▇▇▇▇▇ and its Affiliates shall take no
action or in any way impair Rubicon's right, title and interest in or to
Rubicon's trademarks, trade names and trade dress and will not use any of the
foregoing for its own benefit or for the benefit of any Third Party during or
after the Term except in accordance with this Section 16.1.
16.2 Use of Trade Names. Rubicon and its Affiliates acknowledge that all
▇▇▇▇▇▇ Trademarks that will accompany or will be affixed to Products are the
property of ▇▇▇▇▇▇ or its Affiliates and that Rubicon and its Affiliates shall
not claim or obtain any rights in any ▇▇▇▇▇▇ Trademarks. Rubicon and its
Affiliates and Contractor shall take no action that will in any way impair
▇▇▇▇▇▇'▇ right, title, and interest in and to ▇▇▇▇▇▇ Trademarks and will not
use for its own benefit or for the benefit of any Third Party any ▇▇▇▇▇▇
Trademarks during or after the Term.
l7. MISCELLANEOUS
-------------
17.1 Entire Agreement. This Agreement, together with the exhibits,
constitutes the entire agreement between the Parties concerning the subject
matter hereof and supersedes all written or oral prior agreements or
understandings with respect thereto.
17.2 Amendment or Modification. No Party shall claim any amendment,
modification or release from any provision hereof by mutual agreement, unless
in writing signed by an authorized representative of each Party and under no
circumstances shall a Party claim any amendment, modification or release from
any provision of this Agreement by virtue of a Party signing or complying with
the terms of the other Party's purchase order or order acknowledgment forms or
failing to object to any term or condition that is contained in any such
forms.
17.3 Severability. If any term or provision os this Agreement shall
for any reason be held invalid, illegal or unenforceable in any respect, such
invalidity, illegality or unenforceability shall not affect any other term or
provision hereof, and this Agreement shall be interpreted and construed as if
such term or provision, to the extent the same shall have been held to be
invalid, illegal or unenforceable, had never been contained herein.
17.4 Assignment. Neither Party shall assign this Agreement in whole
or in part without the prior written consent of the other Party; provide,
however, that either Party may assign this Agreement without such consent to
an Affiliate, in connection with the transfer or sale of substantially its
entire business to which this Agreement pertains, or in the event of its
merger or consolidation with another company. Any permitted assignee shall
assume all obligations of its assignor under this Agreement and provide prior
written notice to USC pursuant to article 15 of the USC License. No
assignment shall relieve any Party of responsibility for the performance of
any accrued obligation that such Party has hereunder.
17.5 Independent Contractor. The relationship of Rubicon and its
Affiliates to Abbott is that of independent contractor. In no event shall
either Party hold itself out to others or allow itself to be considered the
agent, employee, or representative of the other Party.
17.6 Notices. All notice hereunder shall be in writing and shall be
delivered (a) personally, (b) by overnight delivery, delivery prepaid, (c)
mailed by registered or certified mail, postage prepaid, (d) mailed by express
mail service, or (e) given by facsimile, to the following addresses of the
respective Parties:
If to Rubicon Medical, Inc.: President
Rubicon Medical, Inc.
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▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Facsimile Number: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Sheppard, Mullin, ▇▇▇▇▇▇▇ & Hampton LL:
▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile Number: (▇▇▇) ▇▇▇-▇▇▇▇
If to Contractor: President
Guardian RJL, Inc.
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▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Facsimile Number: (▇▇▇) ▇▇▇-▇▇▇▇
If to Abbott: President, Hospital Products Division
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Facsimile Number (▇▇▇) ▇▇▇-▇▇▇▇
With copy to: Divisional Vice President
Legal Division D-322
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Facsimile Number (▇▇▇) ▇▇▇-▇▇▇▇
Notices shall be effective upon receipt if personally delivered on the
next business day following deposit with an overnight delivery service, on the
third business day following the date of mailing if sent by certified or
registered mail, and on the second business day following the date of delivery
to the express mail service if sent by express mail, or the date of
transmission (or next business day if transmitted on a non-business day) if
sent by facsimile and the sending machine prints a verification of receipt by
the receiving machine. A Party may change its address listed above by notice
to the other Party.
17.7 Force Majeure. Any delay in the performance of any of the duties
or obligations of either Party under this Agreement caused by an event outside
the affected Party's reasonable control shall not be considered a breach of
this Agreement, and the time required for performance shall be extended for a
period equal to the period of such delay. Such events shall including,
without limitation: acts of God; riots; embargoes; labor disputes, including
strikes, lockouts, job actions, or boycotts; fires; explosions; earthquakes;
floods; shortages of material or energy; or other unforeseeable causes beyond
the reasonable control and without the fault or negligence of the Party so
affected. The Party so affected shall give prompt notice to the other Party
of such cause and shall take whatever reasonable steps are necessary to
relieve the effect of such cause as rapidly as possible.
17.8 Governing Law. This Agreement shall be construed, interpreted and
governed by the laws of the State of Illinois, without regard to conflicts of
law principles.
17.9 Dispute Resolution. Any controversy or claim arising out of or
relating to this Agreement, or the breach thereof, shall be resolved through
the alternative dispute resolution described in Exhibit 17.9.
17.10 Nonpublicity. Rubicon and its Affiliates shall not publish or
otherwise disclose the existence of this Agreement, or its terms, without
▇▇▇▇▇▇'▇ prior written consent.
17.11 Binding Effect. This Agreement shall be binding upon and shall
inure to the benefit of the Parties hereto and its respective assigns and
successors in interest.
17.12 Waiver. No waiver or modification of any of the terms of this
Agreement shall be valid unless in writing and signed by an authorized
representative of the Parties. Failure by either Party to enforce any rights
under this Agreement shall not be construed as a waiver of such rights, nor
shall a waiver by either Party in one or more instances be construed as
constituting a continuing waiver or as a waiver in other instances.
17.13 Commitment Under the USC License. Abbott hereby acknowledges and
agrees that upon consent from USC to this Agreement, Abbott shall be bound and
obligated to the provisions under the USC License pertaining to the
Sublicensee, as that term is defined therein.
17.14 Rubicon Guaranty. Rubicon hereby guarantees the performance by
Contractor of all of Contractor's obligations under this Agreement.
17.15 Exhibits. All exhibits that are attached to this Agreement are
incorporated herein by reference.
17.16 Headings. The headings used in this Agreement are for
convenience and reference purposes only and shall not affect the meaning or
interpretation of this Agreement.
17.17 Counterparts. This Agreement may be executed in two (2) or more
original counterparts, each of which shall be deemed an original, but both of
which together shall constitute one and the same instrument.
17.18 Late Payments. Any payment, including without limitation,
royalty and milestone payments made by Abbott under this Agreement after the
date such payment is due shall bear interest at the lesser of 1 1/2% above the
prime rate in effect at 5:00PM U.S. Eastern Time on the due date and the
maximum rate permitted by applicable law.
IN WITNESS WHEREOF, each Party has caused this Agreement to be executed
on its behalf by its duly authorized officer as of the Effective Date.
▇▇▇▇▇▇ LABORATORIES RUBICON MEDICAL, INC.
By:/S/ By:/S/
---------------- ------------------
Vice president/Controller President/CEO
Title: Hospital Products ------------------
-----------------
Date: 6/30/00 Date: 6/29/00
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GUARDIAN RJL, INC.
By: /S/
--------------
Title: President
---------
Date: 6/29/2000
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Exhibit 1.15
Other Patent Rights
-------------------
U.S. Provisional Patent Application No. 60/212,187, National filing date June
16, 2000
Exhibit 1.27
USC Patent Rights
-----------------
Issued Patents:
Australian Patent No. 712619, Issued February 24, 2000
U.S. Patent No. 5,807,330, Issued September 15, 1998
Patent Applications:
Canadian Patent Application No. 2,273,793, International filing date
December 16, 1997
European Patent Application No. 97950978.3, International filing date
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▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ Application No. TBD, International filing date December 16,
1997
Japanese Patent Application No. 10-527934, National filing date June 14,
1999
PCT Patent Application No. PCT/US97/23257, International filing date
December 16, 1997
US Patent Application No. 08/767,221, National filing date December 16, 1996
Exhibit 17.9
Alternative Dispute Resolution
------------------------------
The parties recognize that a bona fide dispute as to certain matters may arise
from time to time during the term of this Agreement that relates to either
party's rights and/or obligations. To have such a dispute resolved by this
Alternative Dispute Resolution (ADR) provision, a party must first send
written notice of the dispute to the other party for attempted resolution by
good faith negotiations between their respective presidents (or their
equivalents) of the affected subsidiaries, divisions, or business units
withing twenty-eight (28) days after such notice is received (all references
to days in this ADR provision are to calendar days).
If the matter has not been resolved within the twenty-eight (28) days of the
notice of dispute, or if the parties fail to meet within such twenty-eight
(28) days, either party may initiate an ADR proceeding as provided herein.
The parties shall have the right to be represented by counsel in such a
proceeding.
1. To begin an ADR proceeding, a party shall provide written notice to the
other party of the issues to be resolved by ADR. Within fourteen (14) days
after its receipt of such notice, the other party may, by written notice to
the party initiating the ADR, add additional issues to resolved within the
same ADR.
2. Within twenty-one (21) days following receipt of the original ADR notice,
the parties shall select a mutually acceptable neutral to preside in the
resolution of any disputes in this ADR proceeding. If the parties are unable
to agree on a mutually acceptable neutral within such period, either party may
request the President of the CPR Institute for Dispute Resolution (CPR), ▇▇▇
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pursuant to the following procedures:
(a) The CPR shall submit to the parties a list of not less than five (5)
candidates within fourteen (14) days after receipt of the request along with a
Curriculum Vitae for each candidate. No candidate shall be an employee,
director, or shareholder of either party or any of their subsidiaries or
affiliates.
(b) Such list shall include a statement of disclosure by each candidate of
any circumstances likely to affect his or her impartiality.
(c) Each party shall number the candidates in order of preference (with
number one (1) signifying the greatest preference) and shall deliver the list
to the CPR within seven (7) days following receipt of the list of candidates.
If a party believes a conflict of interest exists regarding any of the
candidates, that party shall provide a written explanation of the conflict to
the CPR along with its list showing its order of preference for the
candidates. Any party failing to return a list of preferences on time shall
be deemed to have no order or preference.
(d) If the parties collectively have identified fewer than three (3)
candidates deemed to have conflicts, the CPR immediately shall designate as
the neutral the candidate for whom the parties collectively have indicated the
grates preference. If the parties collectively have identified three (3) or
more candidates deemed to have conflicts, the CPR shall review the
explanations regarding conflicts and, in its sole discretion, may either (I)
immediately designate as the neutral the candidate for whom the parties
collectively have indicated the greatest preference, or (ii) issue a new list
of not less than five (5) candidates in which case the procedures set forth in
subparagraphs 2(a) - 2(d) shall be repeated.
3. No earlier than twenty-eight (2*) days or later than fifty-six (56) days
after the selection, the neutral shall hold a hearing to resolve each of the
issues identified by the parties. All ADR proceeding shall take place at a
location agreed upon by the parties.
4. At least seven (7) days prior to the hearing, each party shall submit the
following to the other party and the neutral:
(a) a copy of all exhibits on which such party intends to rely in any
oral or written presentation to the neutral:
(b) a list of any witnesses such party intends to call at the hearing,
and a short summary of the anticipated testimony of each witness;
(c) a proposed ruling on each issue to be resolved, together with a
request for a specific damage award or other remedy for each issue. The
proposed rulings and remedies shall not contain any recitation of the facts or
any legal arguments and shall not exceed one (1) page per issue.
(d) a brief in support of such party's proposed rulings and remedies,
provided that the brief shall not exceed twenty (20) pages. This page
limitation shall apply regardless of the number of issues raised in the ADR
proceeding.
Except as expressly set forth in subparagraphs 4(a)- 4(d), no discovery shall
be required or permitted by any means, including depositions, interrogatories,
requests for admissions, or production of documents.
5. The hearing shall be conducted on two (2) consecutive days and shall be
governed by the following rules:
(a) Each party shall be entitled to five (5) hours of hearing time to
present its case. The neutral shall determine whether each party has had the
five (5) hours to which it is entitled.
(b) Each party shall be entitled, but not required, to make an opening
statement, to present regular and rebuttal testimony, documents or other
evidence, to cross-examine witnesses, and to make a closing argument. Cross-
examination of witnesses shall occur immediately after their direct testimony,
and cross-examination time shall be charged against the party conducting the
cross-examination.
(c)The party initiating the ADR shall begin the hearing and, if it choose
to make an opening statement, shall address not only the issues it raised but
also any issues raised by the responding party. The responding party, if it
chooses to make an opening statement, also shall address all issues raised in
the ADR. Thereafter, the presentation of regular and rebuttal testimony and
documents, other evidence, and closing arguments shall proceed the same
sequence,
(d) Except when testifying, witnesses shall be excluded from the hearing
until closing arguments.
(e) Settlement negotiations, including any statements made therein, shall
not be admissible under any circumstances. Affidavits prepared for purposes
of the ADR hearing also shall not be admissible. As to all other matters, the
neutral shall have the sole discretion regarding the admissibility of any
evidence.
6. Written seven (7) days following completion of the hearing, each party
may submit to the other party and the neutral a post-hearing brief in support
of its proposed ruling and remedies, provided that such brief shall not
contain or discuss any new evidence and shall not exceed ten (10) pages. This
page limitation shall apply regardless of the number of issues raised in the
ADR proceeding.
7. The neutral shall rule on each disputed issue within fourteen (14) days
following completion of the hearing. Such ruling shall adopt in its entirety
the proposed ruling and remedy of one of the parties on each disputed issue by
may adopt one party's proposed rulings and remedies on some issues and the
other party's proposed rulings and remedies on other issues. The neutral
shall not issue any written opinion or otherwise explain the basis of the
ruling.
8. The neutral shall be paid a reasonable fee plus expenses. These fees and
expenses, along with the reasonable legal fees and expenses of the prevailing
party (including all expert witness fees and expenses), the fees and expenses
of a court reporter, and any expenses for a hearing room, shall be paid as
follows:
(a) If the neutral rules in favor of one party on all disputed issues in
the ADR, the losing party shall pay one hundred percent (100%) of such fees
and expenses other than travel and accommodation expenses.
(b) If the neutral rules in favor of one party on one issues and the
other neutral shall issue with the rulings a written determination as to how
such fees and expenses shall be allocated between the parties. The neutral
shall allocate fees and expenses in a way that bears a reasonable relationship
to the outcome of the ADR, with the party prevailing or more issues, or on
issues of greater value or gravity, recovering a relatively larger share of
its legal fees and expenses.
9. The ruling of the neutral and the allocation of fees and expenses shall
be binding, non-reviewable, and non-appealable, and may be entered as a final
judgment in any court having jurisdiction.
10. Except for the ruling pursuant to paragraph 9 or as required by law, the
existence of the dispute, any settlement negotiations, the ADR hearing, any
submissions (including exhibits, testimony, proposed rulings, and briefs), and
the rulings shall be deemed Confidential Information. The neutral shall have
the authority to impose sanctions for unauthorized disclosure of Confidential
Information.