EXHIBIT 10.3
SETTLEMENT AGREEMENT
This Settlement Agreement is effective and entered into as
of May 5, 2000, by and between Nycomed Imaging AS ("Nycomed"); Nycomed Inc.
("Nycomed-NJ"); Mallinckrodt, Inc. f/k/a Mallinckrodt Medical, Inc.
("Mallinckrodt"); Sonus Pharmaceuticals, Inc. ("Sonus"); and Molecular
Biosystems, Inc. ("MBI").
WHEREAS, Nycomed, Mallinckrodt, Sonus, and MBI are parties
to that certain action captioned SONUS PHARMACEUTICAL, INC. AND NYCOMED
IMAGING AS V. MOLECULAR BIOSYSTEMS, INC., AND MALLINCKRODT MEDICAL, INC.,
Civil Action No. 97-1273R pending in the U.S. District Court for the Western
District of Washington (the "Seattle Action"),
WHEREAS, Nycomed, Mallinckrodt, and MBI are parties to the
certain action captioned MALLINCKRODT MEDICAL, INC. AND MOLECULAR BIOSYSTEMS,
INC. V. NYCOMED IMAGING AS, Civil Action Number 97-1732 (PLF/DAR) pending in
the U.S. District Court for the District of Columbia (the "District of
Columbia Action"),
WHEREAS, Nycomed-NJ and Mallinckrodt are parties to that
certain action captioned NYCOMED INC. MALLINCKRODT INC., Civil Action Number
98-1833 (GEB) pending in the U.S. District Court for the District of New
Jersey (the "New Jersey Action"),
WHEREAS, Nycomed, Mallinckrodt, and MBI, and/or their
respective Affiliates, are parties to that certain action captioned NYCOMED
IMAGING AS V. MOLECULAR BIOSYSTEMS, ET AL., case number 98/3609 pending in
the District Court at the Hague, (the "European Action"),
WHEREAS, MBI and/or its Affiliates have filed in the
European Patent Office oppositions against certain Nycomed and Sonus patent
applications related to ultrasound contrast agents, and Nycomed, Sonus,
and/or their respective Affiliates have filed in the European Patent Office
oppositions against certain MBI patent applications related to ultrasound
contrast agents (collectively the "EPO Oppositions"),
WHEREAS the Parties desire to settle and resolve the
disputes that led to the Seattle Action, the District of Columbia Action, the
New Jersey Action, the European Action, the EPO Oppositions, and all claims,
counterclaims, allegations, and defenses asserted therein,
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THEREFORE, in consideration of the premises hereof and
other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties agree as follows:
1. The term "Affiliate" shall mean any entity which
controls, is controlled by, or is under common control with another entity.
An entity is deemed to be in control of another entity (controlled entity) if
such company directly or indirectly owns 50% or more in nominal value of the
issued equity share capital of such other company, or 50% or more of the
shares entitled to vote upon the election of:
(i) the directors,
(ii) persons performing functions similar to those performed by directors,
or
(iii) persons otherwise having the right to elect or appoint (a) directors
having the majority vote of the Board of Directors, or (b) other
persons having the majority vote of the highest and most authoritative
directive body of such other company.
2. Nycomed, Mallinckrodt, Sonus, and MBI will promptly
cause the Seattle Action to be resolved by directing their respective counsel
to execute and file a Final Judgment by Consent in the form annexed as
Exhibit 2 hereto. The Parties will bear their own costs and attorneys' fees
in connection with the Seattle Action.
3. Nycomed, Mallinckrodt, and MBI will promptly cause the
District of Columbia Action to be dismissed with prejudice by directing their
respective counsel to execute and file a Stipulation of Dismissal with
Prejudice in the form annexed as Exhibit 3 hereto. The Parties will bear
their own costs and attorneys' fees in connection with the District of
Columbia Action.
4. Nycomed-NJ and Mallinckrodt will promptly cause the
New Jersey Action to be dismissed with prejudice by directing their
respective counsel to execute and file a Stipulation of Dismissal with
Prejudice in the form annexed as Exhibit 4 hereto. The Parties will bear
their own costs and attorneys' fees in connection with the New Jersey Action.
5. Nycomed, Mallinckrodt, and MBI will promptly cause the
European Action to be dismissed with prejudice by directing their respective
counsel to execute and file appropriate papers effecting such dismissal. The
Parties will bear their own costs and attorneys' fees in connection with the
European Action.
6. MBI, Sonus, and Nycomed will promptly cause the EPO
Oppositions to be dismissed by directing its counsel or representatives to
execute and file appropriate papers effecting such dismissal. The Parties
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will bear their own costs and attorneys' fees in connection with the EPO
Oppositions. Mallinckrodt, MBI, and their respective Affiliates shall not
commence, maintain, or assist any opposition, revocation, protest, or
reexamination proceedings in the European Patent Office or any other patent
office against any patents or current claims in patent applications assigned
to or filed by Nycomed or Sonus relating to ultrasound contrast agents that,
under the rules governing such proceedings, were subject to the commencement
of such proceedings on or before the date of this Agreement.
7. Nycomed releases MBI, its Affiliates, and their
respective current and former officers, directors, employees, agents, and
attorneys from all claims of any kind or nature that it may have against
them. This releases all claims and obligations resulting from anything which
has happened up to now, including claims of which Nycomed is not aware, and
specifically including without limitation all claims that were or could have
been asserted in the Seattle Action, the District of Columbia Action, or the
European Action. Nycomed and its Affiliates shall not assert, nor assist
others in asserting, any claim released under this paragraph.
8. MBI releases Nycomed, its Affiliates, and their
respective current and former officers, directors, employees, agents, and
attorneys from all claims of any kind or nature that it may have against
them. This releases all claims and obligations resulting from anything which
has happened up to now, including claims of which MBI is not aware, and
specifically including without limitation all claims that were or could have
been asserted in the Seattle Action, the District of Columbia Action, or the
European Action. MBI and its Affiliates shall not assert, nor assist others
in asserting, any claim released under this paragraph.
9. Sonus releases MBI, its Affiliates, and their
respective current and former officers, directors, employees, agents, and
attorneys from all claims of any kind or nature that it may have against
them. This releases all claims and obligations resulting from anything which
has happened up to now, including claims of which Sonus is not aware, and
specifically including without limitation all claims that were or could have
been asserted in the Seattle Action. Sonus and its Affiliates shall not
assert, nor assist others in asserting, any claim released under this
paragraph.
10. MBI releases Sonus, its Affiliates, and their
respective current and former officers, directors, employees, agents, and
attorneys from all claims of any kind or nature that it may have against
them. This releases all claims and obligations resulting from anything which
has happened up to now, including claims of
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which MBI is not aware, and specifically including without limitation all
claims that were or could have been asserted in the Seattle Action. MBI and
its Affiliates shall not assert, nor assist others in asserting, any claim
released under this paragraph.
11. Sonus releases Mallinckrodt, its Affiliates, and
their respective current and former officers, directors, employees, agents,
and attorneys from all claims of any kind or nature that it may have against
them. This releases all claims and obligations resulting from anything which
has happened up to now, including claims of which Sonus is not aware, and
specifically including without limitation all claims that were or could have
been asserted in the Seattle Action, the District of Columbia Action, or the
European Action. Sonus and its Affiliates shall not assert, nor assist others
in asserting, any claim released under this paragraph.
12. Mallinckrodt releases Sonus, its Affiliates, and
their respective current and former officers, directors, employees, agents,
and attorneys from all claims of any kind or nature that it may have against
them. This releases all claims and obligations resulting from anything which
has happened up to now, including claims of which Mallinckrodt is not aware,
and specifically including without limitation all claims that were or could
have been asserted in the Seattle Action. Mallinckrodt and its Affiliates
shall not assert, nor assist others in asserting, any claim released under
this paragraph.
13. Nycomed and Nycomed-NJ release Mallinckrodt, its
Affiliates, and their respective current and former officers, directors,
employees, agents, and attorneys from all claims (i) which it may have
against them based on or arising out of infringement of U.S. Patents
5,558,094, 5,573,751, and 5,529,766, or European Patent EP576521B1, and/or
(ii) asserted in the Seattle Action, the District of Columbia Action, the New
Jersey Action, and the European Action. Nycomed and Nycomed-NJ and their
Affiliates shall not assert, nor assist others in asserting, any claim
released under this paragraph.
14. Mallinckrodt releases Nycomed and Nycomed-NJ, their
Affiliates, and their respective current and former officers, directors,
employees, agents, and attorneys from all claims (i) which it may have
against them based on or arising out of infringement of U.S. Patents
4,628,969 and 4,718,463, and/or (ii) asserted in the Seattle Action, the
District of Columbia Action, the New Jersey Action, and the European Action.
Mallinckrodt and its Affiliates shall not assert, nor assist others in
asserting, any claim released under this paragraph.
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15. To the extent that it may apply to this Settlement
Agreement, the parties waive any and all rights under California Civil Code
Section 1542 (as well as any similar statute or law in any other
jurisdiction), which section has been duly explained to each of the parties
by their respective counsel, and which reads as follows: "A general release
does not extend to claims which the creditor does not know or suspect to
exist in his favor at the time of executing the release, which if known by
him must have materially affected his settlement with the debtor."
16. The releases granted in paragraphs 7-14 above shall
not be deemed to grant any license, covenant not to xxx, or other rights,
whether express or implied, in any patents or other intellectual property
rights of any party hereto. To the extent provided, the grant of any such
rights is set forth in paragraphs 17-20 below.
17. For itself, its Affiliates, licensees and assigns,
MBI hereby covenants not to xxx or maintain any claim against Sonus, its
Affiliates, or licensees on any of the patents and applications identified in
Exhibit 17 hereto on account of the manufacture, use, sale, offer to sell, or
importation of the ultrasound contrast agents known as EchoGen or SonoGen in
all the countries of the world except for Japan, Taiwan, China, South Korea,
Hong Kong, Thailand, Indonesia, Singapore, Malaysia, and the Philippines.
This covenant extends to purchasers and end-users of EchoGen and/or SonoGen.
MBI represents that it has the full right, power, and authority to grant an
effective covenant not to xxx under all of the patents and applications
specified in this paragraph and that such covenant binds any person or entity
having a right to assert any such patents or applications.
18. For itself, its Affiliates, licensees and assigns,
Mallinckrodt hereby covenants not to xxx or maintain any claim against Sonus,
its Affiliates, or licensees on any of the patents or applications identified
in Exhibit 18 hereto on account of the manufacture, use, sale, offer to sell,
or importation of the ultrasound contrast agents known as EchoGen or SonoGen
in all countries of the world except for Japan, Taiwan, China, South Korea,
Hong Kong, Thailand, Indonesia, Singapore, Malaysia, and the Philippines.
This covenant extends to purchasers and end-users of EchoGen and/or SonoGen.
Mallinckrodt represents that it has the full right, power, and authority to
grant an effective covenant not to xxx under all of the patents and
applications specified in this paragraph and that such covenant binds any
person or entity having a right to assert any such patents or applications.
19. The covenants not to xxx granted in paragraphs 17 and
18 above constitute part of the Consideration to Sonus as that phrase is
defined in and provided by paragraph 5.5(iii) of that certain license
agreement between Nycomed and Sonus dated August 31, 1999, and the scope of
the covenants not to xxx granted in
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paragraphs 17 and 18 above shall be construed to be as broad as that required
by paragraph 5.5(iii) of such agreement.
20. For themselves, their Affiliates, licensees and
assigns, MBI and Mallinckrodt hereby covenant not to xxx or maintain any
claim against Nycomed, its Affiliates, or their respective agents, licensees,
distributors, or customers, under any existing patent, or any patent that may
issue in the future based on or claiming priority to any existing patent
application, on account of the manufacture, use, sale, offer to sell, or
importation of ultrasound contrast agents, PROVIDED THAT, the covenant
granted by MBI shall not apply in Japan, Taiwan, China, South Korea, Hong
Kong, Thailand, Indonesia, Singapore, Malaysia, and the Philippines. MBI and
Mallinckrodt warrant and represent that this covenant embraces all patents
related to ultrasound contrast agents issued to Xx. Xxxxxx Xxxxxxxxx and
licensed or assigned at any time to MBI or Mallinckrodt, and binds any person
or entity having a right to assert any such patent.
21. This Agreement shall be binding on the successors or
assigns of any party hereto. The covenants not to xxx granted in paragraphs
17-20 above shall run with the patents and applications to which they apply,
and shall be binding on any successor, assignee or licensee of any such
patents or applications.
22. Each party to this Agreement represents and warrants
to the other parties that it has the full right, power, and corporate
authority to enter into this Agreement, and to make and give the promises,
releases, and covenants set forth herein.
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23. In any action or proceeding to interpret or enforce the
terms of this Agreement (including proceedings in bankruptcy), the prevailing
party shall be entitled to recover its attorneys fees, costs and other
expenses of suit.
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NYCOMED IMAGING AS MALLINCKRODT, INC.
By: ___________________________ By: ____________________________
Name Xxxxx Xxxx Name Xxxxxxx Xxxxxxx
Title Finance Director Title VP Corporate Development
SONUS PHARMACEUTICALS, INC. MOLECULAR BIOSYSTEMS, INC.
By: ___________________________ By: ____________________________
Name Xxxxxxx Xxxxxxx Name Xxxxx Xxxxxxxxxx
Title President & CEO Title President & CEO
NYCOMED INC.
By: ___________________________
Name Xxxx Xxxxxx
Title Vice President
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Exhibit 2
[Caption of Seattle Action]
FINAL JUDGMENT BY CONSENT
Upon consent of the parties, it is ORDERED, ADJUDGED, AND DECREED
as follows:
1. Claims 13, 17, 18, and 21 of U.S. Patent 5,558,094 and claims
2, 5, 6, 7, 15, 16, 18, and 22 of U.S. Patent 5,573,751 are not invalid, are
not unenforceable, and are infringed by defendants' use, manufacture, sale,
and offer for sale of the ultrasound contrast agent known as Optison or FS069.
2. The counterclaims asserted by defendants are dismissed with
prejudice on the merits.
3. Judgment shall be and hereby is entered in favor of plaintiffs
and against defendants.
4. This Final Judgment resolves all claims pending in this case by
and against all parties hereto.
5. Each party shall bear its own costs and attorneys fees.
--------------------------------------
XXXXXXX XXXXXX XXXXXXXXX, U.S.D.J.
[Signature lines for counsel]
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Exhibit 3
[Caption of District of Columbia Action]
STIPULATION OF DISMISSAL WITH PREJUDICE
This matter having been amicably adjusted by and between the
parties, it is hereby stipulated and agreed that the above-captioned action,
and all claims and counterclaims asserted herein, shall be and hereby are
DISMISSED WITH PREJUDICE and without costs.
[Signature lines for counsel]
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Exhibit 4
[Caption of New Jersey Action]
STIPULATION OF DISMISSAL WITH PREJUDICE
This matter having been amicably adjusted by and between the
parties, it is hereby stipulated and agreed that the above-captioned action, and
all claims and counterclaims asserted herein, shall be and hereby are DISMISSED
WITH PREJUDICE and without costs.
[Signature lines for counsel]
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Exhibit 17
(Certain Molecular Biosystems patents and applications)
U.S. Patent No. 5,965,109
U.S. Patent No. 6,030,603
U.S. Patent No. 5,716,597
U.S. Patent No. 5,606,973
U.S. Patent No. 5,562,893
U.S. Patent No. 5,536,489
U.S. Patent No. 5,855,865
U.S. Patent No. 5,820,850
U.S. Patent No. 5,776,063
U.S. Patent No. 5,732,707
U.S. Patent No. 5,674,469
PCT WO 95/01187
PCT WO 95/29705
PCT WO 96/04018
PCT WO 96/40283
PCT WO 97/46264
PCT WO 98/16257
EPO 885,615
and all patents (now or hereafter issued) or patent applications (worldwide)
claiming priority, directly or indirectly, from the above applications and/or
the applications resulting in the above patents.
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Exhibit 18
(Certain Mallinckrodt patents and applications)
PCT WO 96/40288
PCT WO 98/53857
and all patents (now or hereafter issued) or patent applications (worldwide)
claiming priority, directly or indirectly, from the above applications and/or
the applications resulting in the above patents.
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