1
EXHIBIT 10.11
TECHNOLOGY TRANSFER AND ROYALTY AGREEMENT
This Technology Transfer Agreement (the "Agreement") is made this 23rd day of
February, 2000 between Xx. Xxxx Xxxxxxx, an individual residing in Massachusetts
("Xx. Xxxxxxx"), and GMP Thromboflex, Inc., a Delaware corporation (the
"Company").
WHEREAS, Xx. Xxxxxxx is the sole inventor and sole owner of U.S. Patent No.
5,854,423 entitled "Apparatus And Method For Assessment Of Visco-Elasticity And
Shear Adherence Strength Properties Of Blood Clots" which issued on December
29,1998 (the "423 patent");
WHEREAS, the Company is a corporation which has been formed under the laws of
the State of Delaware for the purpose of commercializing the technology embodied
in the '423 patent; and
WHEREAS, the Company wishes to acquire all of rights in the '423 patent together
with the related know-how and technology possessed by Xx. Xxxxxxx;
NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which is hereby acknowledged, the parties agree as follows:
1. Definitions
1.1 "Affiliate" shall mean any legal entity (such as a corporation,
partnership, or limited liability company) that directly or indirectly controls,
is controlled by, or under common control by the Company. For the purposes of
this definition, the term "control" means (i) beneficial ownership of at least
fifty percent (50%) of the voting securities of a corporation or other business
organization with voting securities or (ii)the direct or indirect power, whether
exercised or not, to direct or cause the direction of, or substantially
influence, the policies or business practices of another individual or legal
entity.
1.2 "Branded Products" shall mean spare parts, disposables, reagents and
other products for use in or with Devices of which Xx. Xxxxxxx is the inventor
or which are exclusively sold by the Company or an Affiliate as part of, or for
use with, Devices.
1.3 "Devices" shall mean a device, apparatus or instrument covered by the
'423 patent or the Related Technology for use in the analysis of human blood.
1.4 "Licensing Revenues" shall mean revenues received by the Company from
licensing fees resulting from the sale of Devices or Branded Products by any
non-Affiliate licensees or sublicensees.
1.5 "Net Sales" shall mean gross revenues from sales of the Company or its
Affiliates of Devices or Branded Products to non-Affiliated third parties
(excluding any revenues from
1
2
licenses or sublicenses granted to non-Affiliated third parties) less trade
discounts allowed, third party commissions, refunds, recalls, freight and
delivery costs, sales taxes, rebates accrued, incurred or paid to Federal
Medicaid or State Medicare or other government payors and amounts exactly repaid
or credited by the Company by reason of rejection or return of a Device or
Branded Product.
1.6 "Patents" shall mean U.S. Patent No. 5,854,423 entitled "Apparatus And
Method For Assessment Of Visco-Elasticity And Shear Adherence Strength
Properties Of Blood Clots" which issued on December 29, 1998 (hereinafter "the
'423 patent"), together with any future patent applications which may be filed
covering any improvements or Related Technology, including any foreign,
continuation, continuation-in-part, or divisional application based on or having
a claim of priority to any such patent or patent application and any patent
issuing on any such application, any reissue of any such patent, and any patent
issuing on reexamination of any such patent.
1.7 "Related Technology" shall mean all inventions disclosed in the '423
patent, and all present intellectual property including ideas, know-how,
discoveries, tools, techniques, methods, processes, inventions, works of
authorship, derivative works, programs, products and other technology for the
practice, manufacture, use, sale, testing, application, or development of
medical devices, instruments, reagents, methods and processes for measuring
changes in blood elastic and viscous properties; more particularly, for
instruments and methods for assessing the visco-elasticity and shear adherence
strength properties of blood clots. For purposes of this Agreement, Related
Technology also shall include all processes, blueprints, drawings, designs,
patterns, technology, notebooks, test results, manuals, formulae, information
and documents (including log books), proprietary rights, confidential
information, trade secrets and licenses to make, use, sell, license or
distribute any of the foregoing, whether or not under development or in process,
in each case relating to, constituting part of or used or useful in connection
with the development, testing, production, operation, manufacture or servicing
of any Related Technology, and all rights of action accrued and to accrue under
and by virtue of any of the foregoing, including the right to xxx and recover
for past infringement of the same.
1.8 "Royalties" shall mean the royalty payments defined in Section
3.1.2(iii) hereof.
2. Grant
2.1 Xx. Xxxxxxx hereby irrevocably assigns and transfers to the Company his
full, worldwide, right, title and interest in and to the '423 patent and the
Related Technology, including, without limitation, the right to grant
sublicenses, to make, use, sell, offer to sell, import, license, market,
manufacture, copy, distribute, modify, enhance, prepare derivative works of, and
otherwise exploit the Related Technology anywhere in the world, without duty to
account to Xx. Xxxxxxx under any patent, trade secret or other proprietary right
of Xx. Xxxxxxx not otherwise assigned to the Company hereunder. Xx. Xxxxxxx has
this date assigned all of his rights in the '423 patent and to any future patent
applications which may be filed hereafter
2
3
*** CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
covering the Related Technology as evidenced by the execution and delivery to
the Company of a Patent Assignment in the form attached hereto as Exhibit A.
3. Consideration
3.1 In consideration of the transfer of technology by Xx. Xxxxxxx to the
Company, the Company:
3.1.1 On this Date has:
(i) Paid to Xx. Xxxxxxx [***] as evidenced by a check in
such amount, receipt of which is hereby acknowledged
by Xx. Xxxxxxx;
(ii) Reimbursed Xx. Xxxxxxx for legal fees and expenses
incurred by him in connection with obtaining the '423
patent, as evidenced by a check in the amount of
$10,290.29, receipt of which is hereby acknowledged
by Xx. Xxxxxxx;
(iii) Issued to Xx. Xxxxxxx [***] shares of the Company's
common stock in accordance with the terms of the
Stock Purchase Agreement signed by both parties in
form attached hereto as Exhibit B; and
(iv) Caused to be issued to Xx. Xxxxxxx an option to
purchase [***] shares of the common stock of Global
Medical Products, Inc.("GMP") at an exercise price of
[***] per share pursuant to the terms of the Stock
Option Grant and documents referred to therein,
signed by Xx. Xxxxxxx and GMP in the form attached
hereto as Exhibit C.
3.1.2 After this Date agrees:
(i) To pay Xx. Xxxxxxx [***] upon receipt of the first
FDA approval of the use of a Device in commercial
operations;
(ii) To pay Xx. Xxxxxxx [***] upon receipt by the Company
of the 510K approval from the FDA.
(iii) To pay Xx. Xxxxxxx Royalty payments in the amount of
(a) [***] of Company's Net Sales from Devices and
Branded Products for the first [***] in aggregate Net
Sales revenues, and [***] of Company's Net Sales from
Devices
3
4
*** CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION. ASTERISKS DENOTE SUCH OMISSIONS.
and Branded Products thereafter; and (b) [***] of
Licensing Revenues.
(iv) To make donations of [***] for two years to Xx.
Xxxxxxx' laboratory at Massachusetts General Hospital
for any purpose other than research relating to the
'423 patent or Related Technology. At its sole
discretion, Company may elect to make similar
donations in each of the following two years
thereafter.
Royalty payments due pursuant to Sections 3.1.2(iii) shall be paid
semi-annually on each January 1st and July 1st during the period that any of the
Patents remain valid and unexpired.
3.1.3 Xx. Xxxxxxx agrees that no royalties shall be due for the
internal use of any Device or Branded Product for research and commercial
development purposes by the Company or its Affiliates, or for use by third
parties providing research, development or testing services on behalf of the
Company in seeking governmental approvals, certifications or endorsements.
3.1.4 No royalties shall be payable on sales of Devices or Branded
Products between the Company and any Affiliate, in which event the royalty shall
be based upon the Net Sales by the Affiliate to a non-Affiliated third party.
3.1.5 No multiple royalties shall be due and payable to Xx. Xxxxxxx
on any Device or Branded Product. In the event the Company, any Affiliate, or
any sublicensee is obligated to pay an additional royalty on Devices or Branded
the royalties due Xx. Xxxxxxx hereunder shall be reduced by the amount of such
payments but in no event shall the effective royalty rate due Xx. Xxxxxxx be
less than one-half of the stated amount due as provided in paragraph 3.1.2
above.
3.1.6 In the event that the Company elects to transfer a product
line including Devices and/or Branded Products to a non-Affiliate with no
residual rights or payments to the Company, the Company may elect to cause the
royalties due hereunder to cease, in which case the proceeds received by the
Company in consideration of such transfer will be considered Licensing Revenues.
If no such election is made, none of the proceeds from the sale shall be treated
as Royalties or Licensing Revenues for which Xx. Xxxxxxx would be entitled to
receive fees as described in this paragraph, and Xx. Xxxxxxx shall continue to
be paid by the purchaser of the product line the Royalties under paragraph 3.1.2
due from operations after the effective date of the transfer. If the Company
remains in business following the transfer of the product line, Xx. Xxxxxxx
shall have the right to elect, within Thirty (30) days following the effective
date of the transfer of the product line, to receive the percentage of the net
proceeds of the sale (i.e., the gross sales price less any reasonable costs and
expenses, including without limitation any brokerage or
4
5
finders fees, income and transfer taxes and the payment of Xx. Xxxxxxx'x fees
based on Licensing Revenues as provided above, if applicable) equal to his
percentage ownership in the Company as of the effective date of the transfer, in
exchange for his shares of the Company. Such election must be made in writing.
3.1.7 The obligations to make royalty payments to Xx. Xxxxxxx under
this Agreement shall terminate upon the expiration of the last to expire of any
Patents covering the Device or Branded Products.
4. Further Assurances
4.1 Xx. Xxxxxxx shall cooperate with the Company and shall take such
further action as may be reasonably requested by the Company in order to
transfer, secure, perfect or protect the rights and licenses granted hereunder,
including executing such documents of assignment or transfer as the Company may
request in order to record title to the Patents or the Related Technology in the
United States Patent and Trademark Office or any similar office in any other
jurisdiction, executing such declarations, petitions, affidavits or similar
documents as may be requested by the Company in connection with patent
applications within the Related Technology, and testifying as a witness in any
proceedings relating to the Related Technology.
5. Confidentiality
The Related Technology being transferred by Xx. Xxxxxxx to the Company shall be
considered confidential information belonging to the Company and Xx. Xxxxxxx
agrees to not to use such information except as otherwise permitted by the
Company and to employ all reasonable efforts to maintain the information secret
and confidential, such efforts to be no less than the degree of care employed by
Xx. Xxxxxxx to preserve and safeguard his own confidential information. The
information shall not be disclosed or revealed by Xx. Xxxxxxx to anyone except
employees of the Company or as otherwise authorized, in writing by, or under an
agreement with the Company. Xx. Xxxxxxx'x obligations under this Section 5 shall
not extend to any part of the information:
a. that can be demonstrated to have been in the public domain or
publicly known and readily available to the trade or the public prior
to December 2, 1999; or
b. that becomes part of the public domain or publicly known by
publication or otherwise, not due to, or as the result of, an act by
Xx. Xxxxxxx, not authorized by the Company; or
c. that is required to be disclosed by law, government regulation
or court order.
6. Representations and Warranties
5
6
6.1 Representations and Warranties of Xx. Xxxxxxx. Xx. Xxxxxxx makes the
following representations and warranties for the benefit of the Company, as a
present and ongoing affirmation of facts in existence at the time of the
execution and delivery of this Agreement:
6.1.1 No Conflict. Xx. Xxxxxxx represents and warrants that he is
under no obligation or restriction, nor will he assume any such obligation or
restriction that does or would in any way interfere or conflict with, or that
does or would present a conflict of interest concerning, the transfer of
intellectual property interests or related actions and matters to be performed
and acted upon by Xx. Xxxxxxx under this Agreement or the other agreements
executed by the parties on this date and that he is under no obligation or
restriction that would interfere or conflict with his obligations hereunder or
thereunder.
6.1.2 Ownership Rights. Xx. Xxxxxxx represents and warrants that he
is the sole inventor and owner of all Patents and Related Technology, and that
no third party has any claim or rights thereto. Xx. Xxxxxxx represents and
warrants that he has full and sufficient right to assign or grant the rights
granted in the Patents and Related Technology pursuant to this Agreement free
and clear of all liens, claims and encumbrances or other claims of third
parties. Xx. Xxxxxxx further represents and warrants that information pertaining
to the Patents and Related Technology will not be published by or through him
under circumstances that would result in a loss of any intellectual property
rights. Xx. Xxxxxxx further represents and warrants that he is unaware of any
intellectual property interests not belonging to the Company that would be
encompassed or otherwise used in the making, use, offer to sell, sale, or
importation of Devices or Branded Products or the System to be developed under
the agreement for the development of a TVE as contemplated between the Company
and Nova Biomedical Corporation.
6.2 Representations and Warranties of The Company. The Company represents
and warrants that it has the authority to perform its obligations under this
Agreement and the other agreements executed by the parties on this date, and
that it is under no obligation or restriction that would interfere or conflict
with its obligations hereunder or thereunder.
7. General Provisions
7.1 Survival of Obligations. The covenants and agreements provided for in
this Agreement shall survive the Closing Date and be unaffected by any
investigation made by or on behalf of any party hereto.
7.2 Notices. Any notice, request, instruction or other document required to
be given hereunder shall be in writing and delivered personally or sent by
registered or certified mail, postage prepaid, by overnight courier or by
facsimile, cablegram or telex, according to the instructions set forth below.
Such notices shall be deemed given: at the time delivered by hand, if personally
delivered; at the time received if sent by registered or certified mail; one
business day after deposited with an overnight courier; at the time when receipt
is confirmed by the receiving facsimile machine if sent by facsimile (provided
written notice by one of the other means is sent on the same day); and when
answered back if sent by cablegram or telexed.
6
7
If to the Company, to: GMP Thromboflex, Inc.
Xxx Xxxx Xxxxxxx Xxxx.
Xxxxx 0000
Xxxx Xxxxxxxxxx, Xxxxxxx
00000
Telephone: 000 000 0000
Fax No.: 000 000 0000
Attn: President
If to Xx. Xxxxxxx, to: 00 Xxxxxx Xxxx
Xxxxxxxxxx, XX 00000
Telephone: (000) 000-0000
Fax No.: (000) 000-0000
7.3 Governing Law. Except as otherwise provided herein, this Agreement
shall be governed by and construed in accordance with the internal laws of the
State of Delaware.
7.4 Arbitration. Any dispute, controversy or claim arising out of or
relating to this Agreement shall be settled by arbitration under the rules of
the American Arbitration Association in Fort Lauderdale, Florida. All awards of
the arbitrators shall be final and binding on the parties and enforceable in any
court of competent jurisdiction. Nothing herein shall prevent a party from
seeking injunctive relief, where appropriate, from a court of competent
jurisdiction pending the outcome of any arbitration concerning the subject of
such arbitration or when authorized by an arbitrator's award or when emergency
relief is required.
7.5 Successors and Assigns. This Agreement shall be binding upon and inure
to the benefit of the parties hereto, and their successors and assigns;
provided, however, that no party may assign any or all of its rights hereunder
without the prior written consent of the other party.
7.6 Parties in Interest. Nothing in this Agreement is intended to confer
any rights or remedies under or by reason of this Agreement on any persons other
than the Company and Xx. Xxxxxxx and their respective successors and permitted
assigns.
7.7 Execution in Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original agreement, but all
of which together shall constitute one and the same instrument.
7.8 Titles and Headings. Titles and headings to sections herein are for
purposes of reference only and shall in no way limit, define or otherwise affect
the provisions herein.
7
8
7.9 Entire Agreement. This Agreement and the other agreements, assignments
and other instruments of transfer and conveyance exchanged by the parties and
GMP's grant of the option to Xx. Xxxxxxx on this date shall constitute the
entire agreements among such entities with respect to the matters covered hereby
and thereby and shall supersede all previous written, oral or implied
understandings with respect to such matters, including, without limitation, the
Letter of Intent between Xx. Xxxxxxx and GMP dated December 2, 1999.
7.10 Amendment and Modification. This Agreement may be amended, modified or
supplemented only by mutual consent set forth in a writing duly signed by the
parties hereto.
8
9
IN WITNESS WHEREOF the parties have executed this Agreement as of the
day and year first above written.
---------------------------------
Xx. Xxxx Xxxxxxx
GMP Thromboflex, Inc.
by:
-----------------------------
Xxxx Xxxxxxx, M.D., President
Attachments:
Exhibit A - Patent Assignment Form
Exhibit B - Stock Purchase Agreement Form
Exhibit C - Stock Option Grant Form
9
