EXHIBIT 10.22
LICENSE AND DEVELOPMENT AGREEMENT
THIS AGREEMENT, made and entered into this 18th day of December 1991 (the
"Effective Date") by and between Xxxxx X. XxXxxxxx, an individual citizen of the
Commonwealth of Massachusetts (hereinafter referred to as "XxXxxxxx") and
XxXxxxxx Optics, Inc., a corporation duly organized and existing under the laws
of the Commonwealth of Massachusetts and having its principal office at 000
Xxxxxxx Xxxxxxx, Xxxxxxxxxxx, Xxxxxxxxxxxxx 00000 (hereinafter referred to as
"MOI", and sometimes together with XxXxxxxx, as "Licensor"), and American
Surgical Technologies Corporation, a corporation duly organized under the laws
of the State of Delaware and having its principal office at Xxx XxXxxxxx Xxxxxx,
Xxxxxx, Xxxxxxxxxxxxx 00000 (hereinafter referred to as "Licensee").
W I T N E S S E T H:
WHEREAS, Licensor is the owner of certain Technology (as defined below)
relating to a stereoscopic objective lens for use in stereoscopic endoscopes and
has the right to grant licenses thereunder;
WHEREAS, Licensor desires to have the Technology utilized by Licensee in
certain medical device products as hereinafter defined and is willing to grant a
license thereunder;
WHEREAS, Licensee has represented to Licensor, to induce Licensor to enter
into this Agreement, that the Licensee shall commit itself to a diligent program
of developing the Technology for commercial exploitation;
WHEREAS, Licensor is in the business of, and has expertise relative to
conducting research into, designing, developing, engineering and manufacturing
lenses for endoscopes and endoscopic video systems;
WHEREAS, Licensee desires to retain MOI and XxXxxxxx to conduct research
into, design, develop and engineer lenses for endoscopes and endoscopic video
systems utilizing the Technology; and
WHEREAS, in order to induce Licensor to enter into this Agreement, in
addition to the consideration set forth in this Agreement, Licensor has
previously issued to XxXxxxxx * * * shares of Licensee's Common Stock.
* * * Confidential Treatment Requested
NOW, THEREFORE, in consideration of the premises and the mutual covenants
contained herein, the parties agree as follows:
ARTICLE 1 -- DEFINITIONS
For the purposes of this Agreement, the following words and phrases shall
have the following meanings:
1.1 "Licensee" shall mean American Surgical Technologies Corporation and
any subsidiary of American Surgical Technologies Corporation.
1.2 "Subsidiary" shall mean any corporation, division, company or other
entity more than fifty percent (50%) of whose voting stock is owned or
controlled directly or indirectly by American Surgical Technologies Corporation.
1.3 "Technology" shall mean certain existing Patent Rights (as defined
below), Licensed Processes (as defined below), Know How, copyrights, trade
secrets, inventions and other intellectual property or proprietary rights, as
more fully described in Appendix A attached hereto and made a part hereof. As
Used herein, the term "Know-How" means all unpatented scientific, engineering,
or other know-how schematic designs, computer programs, code, software,
firmware, technical data or information, all methods, processes and procedures,
all products, formulations and kits and all instruments and apparatus materially
related to the Licensed Products.
1.4 "Patent Rights" shall mean only those United States patent
applications filed which are set forth in Appendix A or corresponding foreign
patent applications to be filed (hereinafter referred to as the "Patent Rights
Patent Application(s)"), and the United States patents and foreign patents
issuing therefrom (hereinafter referred to as "Patent Rights Patent(s)") and any
continuations, continuations-in part, divisions, reissues or extensions of any
of the foregoing.
1.5 "Licensed Products" shall mean any endoscope which (a) is designed,
marketed or sold for medical purposes AND (b) incorporates a stereo objective
lens for use in endoscopes of any length, diameter or configuration, as
disclosed in the patent application filed April 16, 1991 by XxXxxxxx (a copy of
which is attached hereto).
1.6 "Licensed Process(es)" shall mean a process(es) for making any item
relating to the above Technology which (a) is covered in whole or in part by a
pending claim contained in a Patent Rights Patent Application, (b) is covered in
whole or in part by a valid and unexpired claim contained in a Patent Rights
Patent, or (c) otherwise materially incorporates any of the Technology.
1.7 "Marketing Period" shall mean any twelve (12) month period commencing
on the second or any subsequent anniversary of the date of initial marketing
release by Licensee of a Licensed Product.
1.8 "Net Sales" shall be determined based on Licensee's invoiced prices
for the Licensed Product(s) produced hereunder less the sum of the following:
(a) Discounts allowed in amounts customary in the trade;
(b) Sales, excise, turnover, value added and/or use taxes or tariff
duties directly imposed and with reference to particular sales;
(c) Outbound transportation prepaid or allowed; and;
(d) Amounts allowed or credited on returns;
provided however, that no deductions shall be made for commissions paid to
individuals whether they be with independent sales agencies or regularly
employed by Licensee and on its payroll, or for cost of collections. In the
event that Licensed Product(s) are sold as part of a larger endoscopic video
system and the invoice for such system does not set forth a separate price for
the Licensed Product(s), then, for purposes of determining Net Sales as set
forth above, the deemed invoiced price for the Licensed Product(s) in the system
shall be determined by multiplying (i) the total invoiced price for the system
by (ii) a fraction, the numerator of which is the Licensee's then-current list
price for the Licensed Product which is part of the system (or which is the
total of the Licensee's then-current list prices for all Licensed Product(s)
sold as part of the system, if the system includes more than one Licensed
Product) and the denominator of which is the total of the Licensee's then-
current list prices for all components of the system (including the Licensed
Product(s) in the system).
ARTICLE 2 -- GRANT; OWNERSHIP OF MODIFICATIONS
AND DEVELOPMENTS
2.1 Licensor, jointly and severally, hereby grants to Licensee a
perpetual, exclusive worldwide license to make, have made, modify, use, lease,
markets sell and otherwise distribute the Licensed Product(s) and any other
medical products embodying the Technology, and to practice the Licensed
Process(es) in the medical field, anywhere in the world, subject to the terms
and conditions (including, under certain circumstances termination of
exclusivity or termination of the license) hereinafter set forth.
2.2 Licensor, jointly and severally hereby also grants to Licensee a
perpetual, exclusive, worldwide license and the right to develop, make, use,
sell and distribute improvements, modifications and derivative works based on
the Licensed Products, the Licensed Processes or the Technology. Licensor
claims no ownership interest in any portion of an improvement, modification or
derivative work which is not part of the Licensed Products, Licensed Processes
or the Technology.
2.3 In the event that Licensor or (in the case of MOI) its officers or
employees invents, controls, or becomes aware of any improvement to the Licensed
Products, Licensed Processes or Technology, it or he, as the case may be, shall
forthwith communicate full details thereof in its or his, as the case may be,
possession to Licensee, such improvements
shall be deemed improvements, modifications or derivative works developed by the
Licensee as provided under section 2.2 above.
2.4 The license granted hereunder shall cease to be exclusive and shall
become nonexclusive upon default (continuing beyond the applicable grace period)
in payment by Licensee of the license exclusivity maintenance royalty as
hereinafter provided. Upon the termination of said exclusivity, notwithstanding
any financial obligations which Licensee shall owe to Licensor and which
Licensee shall nevertheless satisfy according to the terms of this Agreement,
any nonexclusive license shall extend to the full end of the term or terms for
which royalties are payable pursuant to Section 3.1(c)(ii) below, unless this
Agreement is sooner terminated as hereinafter provided in Sections 7.2 and 7.3
below.
2.5 Licensee shall have the right to sublicense any of the rights,
privileges and license granted hereunder only during the exclusive period of
this Agreement. The termination or expiration of this Agreement shall not
terminate or affect sublicenses previously granted by Licensee in accordance
with this Agreement.
2.6 Licensee agrees that any sublicenses granted by it shall have privity
of contract between Licensor and sublicensee such that the obligations of this
Agreement shall be binding upon the sublicensee as if it were in the place of
Licensee. Licensee further agrees to attach copies of this Agreement (from
which the royalty provisions may be deleted) to all sublicense agreements.
2.7 Licensee agrees to forward to Licensor a copy of any and all fully
executed sublicense agreements, and further agrees to forward to Licensor
promptly after the end of each calendar quarter during which any sublicense is
in effect a copy of such reports received by Licensee from its sublicensees
during the preceding calendar quarter under the sublicenses as shall be
pertinent to a royalty accounting under said sublicense agreements.
ARTICLE 3 -- ROYALTIES
3.1 For the rights, privileges and license granted hereunder and for the
services to be performed by Licensor hereunder, Licensee shall pay royalties to
Licensor (in the manner hereinafter provided) to the end of the term of this
Agreement unless it shall be terminated as hereinafter provided:
(a) A license issue royalty of * * *, which said
license issue royalty shall be deemed earned and due immediately
upon the execution of this Agreement;
(b) A license exclusivity maintenance royalty of * * *
* * * per Marketing Period during the first * * *
Marketing Periods, which amount shall increase by the amount of
* * * per Marketing Period during each
subsequent Marketing Period until such time as the license
exclusivity maintenance royalty equals * * * , and
thereafter at a rate of * * * per Marketing
Period, which said license exclusivity maintenance royalty shall
be
* * * Confidential Treatment
Requested payable in monthly installments, in arrears, and
shall be credited in full against the royalties on sales due
for each Marketing Period pursuant to Section 3.1(c)(ii);
(c) Royalties on sales in an amount equal to:
(i) * * * upon sale of the 25th 3-D Video System (as such
term is defined in the description of Technology set forth
in Appendix A attached hereto) incorporating a Licensed
Product, and an additional * * * upon sale of each of the
* * * and *** such 3-D Video Systems incorporating a
Licensed Product;
(ii) thereafter, through the date on which the Patent Rights
Patent(s) expire (or, if no Patent Right Patents issue
within three years of the date of this Agreement, through
the fifteenth anniversary of the date of this Agreement),
* * * first * * * of Net Sales, * * * of the next
* * * of Net Sales, and * * * of all
subsequent Net Sales.
(d) From and after the date on which the Patent Rights Patent(s)
expire (or, if no Patent Right Patents issue within * * * years
of the date of this Agreement, from and after the * * *
anniversary of the date of this Agreement), the obligation of
Licensee to pay a license exclusivity maintenance royalty or any
royalties on sales hereunder shall terminate and the license
granted herein shall become perpetual, exclusive and royalty-
free.
3.2 All royalties payable to Licensor under Section 3.1 above shall be
considered earned by Licensor * * * by Licensee of
payment for the license, use or sale of Licensed Products, and shall be
payable * * * as set forth in Article 4 of this Agreement, except for
license exclusivity maintenance royalties which shall be payable * * *
immediately at the * * * in the manner as provided above.
3.3 All payments that are not paid for whatever reason when they become
due shall be subject to the addition of interest at a floating rate per annum
equal to the prime rate as published from time to time in the WALL STREET
JOURNAL, calculated from said due date to the date a negotiable payment check is
mailed by certified mail to Licensor for all monies due and owed to Licensor.
Furthermore, Licensor shall not be obligated to give notice for interest to
begin to accrue.
3.4 No multiple royalties shall be payable because the Licensed Product(s)
or Licensed Process(es) are or shall be covered by more than one patent
application or patent licensed under this Agreement, nor shall royalties be
adjusted upon the granting of any patent or the finding of invalidity of any
patent or portion thereof governed by this Agreement.
* * * Confidential Treatment Requested
3.5 Royalty payments shall be paid in United States dollars in Boston,
Massachusetts, or at such other place as Licensor may reasonably designate
consistent with the laws and regulations controlling in any foreign country. If
any currency conversion shall be required in connection with the payment of
royalties hereunder, such conversion shall be made by using the exchange rate
prevailing at a first-class foreign exchange bank on the last business day of
the calendar quarterly reporting period to which such royalty payments relate.
ARTICLE 4 -- REPORTS AND RECORDS
4.1 Licensee shall keep full, true and accurate books of account
containing all particulars that may be necessary for the purposes of showing the
amount payable to Licensor under this Agreement as aforesaid. Said books of
account shall be kept at Licensee's principal place of business or the principal
place of business of the appropriate subsidiary of Licensee to which this
Agreement directly relates. Said books and the supporting data shall be open at
reasonable business times, for * * * years following the end of the calendar
year to which they pertain, to inspection, no more frequently than *** times
per year, by an independent certified public accountant retained by Licensor, at
Licensor's expense, for the purpose of verifying Licensee's royalty statement or
compliance in other respects with this Agreement.
4.2 Licensee, within * * * after * * *
and * * * of each calendar year shall deliver to Licensor true and
accurate reports, giving such particulars of the business conducted by Licensee
during the preceding * * * period under this Agreement as shall be
pertinent to a royalty accounting hereunder. These reports shall include at
least the following:
(a) All Licensed Products manufactured and sold;
(b) Total xxxxxxxx and receipts for Licensed Products sold;
(c) Accounting for all the Licensed Process(es) used or sold;
(d) Allowable deductions;
(e) Total royalties due; and
(f) List prices for the Licensee's products during such * * *
period; customer sales literature distributed during such * * *
period and press releases distributed during such * * *
period.
4.3 With each such report submitted, Licensee shall pay to Licensor the
royalties then due and payable under this Agreement. If no payments shall be
due, Licensee shall so report.
* * * Confidential Treatment Requested
ARTICLE 5 -- DEVELOPMENT; TECHNICAL ASSISTANCE AND
RIGHT OF FIRST OFFER
5.1 Licensee hereby engages Licensor, and Licensor, jointly and severally,
accepts such engagement, for Licensor to use Licensor's best efforts to conduct
research into, design develop and engineer, at Licensee's direction, certain
improvements with respect to the Licensed Products (the "Licensed Product
Developments") and certain products relating to the Licensed Products
("Development Products"), each as specified on APPENDIX B hereto. The Licensee
and Licensor acknowledge that it is their intent to use their respective best
efforts to accomplish certain development in accordance with the following
schedule:
On or before April 5, 1992 Completion of four Prototypes (as defined in
APPENDIX B) and the related 3-D Video System
On or before September 5, 1992 Completion of four Pre-Production Products
and the related 3-D Video System
On or before October 5, 1992 Completion of Manufacturable Product (as
defined in APPENDIX B) and the related 3-D
Video System
Upon completion and delivery of the first of four Prototypes, Licensee shall pay
Licensor a one-time design fee of * * *
Any and all Licensed Product Developments, Development Products, and all
patents, patent applications,. copyrights, trade secrets, inventions know how
and other intellectual property or proprietary rights embodied in the Licensed
Product Developments and Development Products shall be owned by Licensee and
Licensee shall at all times have the exclusive title to the Licensed Product
Developments and Development Products and shall have the exclusive right to
license, sell, transfer and otherwise use and dispose of the Licensed Product
Developments, and Development Products.
5.2 In addition to the development services enumerated above, XxXxxxxx
and MOI will use their respective best efforts to assist the Company with
respect to (i) employee and customer training with respect "to the Licensed
Products and 3-D Video Systems; (ii) service and repair the Licensed Products
and 3-D Video Systems; (iii) securing adequate sources of optical lenses and
lens systems for the Licensed Products, as well as other components of 3-D
Video Systems; (iv) preparation of FDA and other regulatory submissions; and
(v) improvement and updating of the Technology in order to maintain the
Technology as the state-of-the-art.
5.3 In order to assist the Company in the development and marketing of the
Licensed Products and 3-D Video Systems, Licensor jointly and severally agrees
to loan to the Company the existing demonstration 3-D Video System until the 3-D
Video System developed in conjunction with the Prototype pursuant to subsection
5.1 above is available, so that Company may use the demonstration 3-D Video
System for purposes of testing, inspection, demonstrations, and marketing, and
other appropriate purposes, whether on its own premises, or in hospitals or
laboratories. The Licensor jointly and severally consents to any modification
and alteration of the demonstration 3-D Video System that the parties
* * * Confidential Treatment Requested
agree may be necessary for such purposes. The Company agrees to indemnify and
hold harmless XxXxxxxx and MOI on account of any such use of the said
demonstration 3-D Video System, and to assume the cost of any modifications or
alterations of the demonstration 3-D Video System that may be necessary in
connection with the use of the demonstration 3-D Video System hereunder. The
Company, XxXxxxxx, and MOI will cooperate so that XxXxxxxx and MOI will also be
able to use the demonstration 3-D Video System on a reasonable basis. Upon
completion and delivery to the Company of the 3-D Video System developed in
conjunction with the first of the four Prototypes pursuant to subsection 5.1
above, the demonstration 3-D Video System will revert back to the Licensor.
5.4 XxXxxxxx and MOI each agree not to license, sublicense, assign, sell
or otherwise transfer any medical optical device (including, without limitation,
any endoscope capable of use for medical purposes) developed by either or both
of them during the period in which royalties are paid pursuant to this
Agreement, which device is not (a) otherwise the subject of an existing
agreement with the Company, or (b) developed as a work for hire for a third
party unaffiliated with MOI or XxXxxxxx pursuant to specifications provided by
such third party, (an "Option Product"), unless in each such case XxXxxxxx, MOI,
or both of them, as the case may be, have first complied with the provisions of
this subsection. XxXxxxxx, MOI or both of them, as the case may be, shall
deliver to the Company a written notice of any proposed or intended license,
sublicense, assignment, sale or other transfer of an Option Product (the
"Offer"), which Offer shall (i) identify and describe the Option Product, (ii)
describe the price and other terms upon which the Option Product is to be
licensed, sublicensed, assigned or sold and (iii) offer to license, sublicense,
assign, sell, or otherwise transfer, as the case may be, to the Company the
Option Product. The Company shall have the right, for a period of * * *
following delivery of the Offer, to license, sublicense, be assigned or
otherwise acquire, at a price and upon the other terms specified in the Offer,
the Option Product. The Offer by its terms shall remain open and irrevocable
for such * * * period. To accept an Offer, the Company must deliver a written
notice to XxXxxxxx, MOI or both, as the case may be, prior to the end of the
* * * period of the Offer (the "Notice of Acceptance"). In the event that the
Company does not deliver a Notice of Acceptance, XxXxxxxx, MOI, or both, as the
case may be, shall have * * * from the expiration of the * * * period of the
Offer to license, sublicense assign, sell or otherwise transfer the Option
Product, but only upon terms and conditions which are not more favorable to the
acquiring person or persons or less favorable to XxXxxxxx, MOI or both of them,
as the case may be, than those set forth in the Offer. In the event that the
Company determines to acquire the Option Product, the closing of such
acquisition must take place within * * * of the delivery date of the Notice of
Acceptance, subject in all cases to the preparation, execution and delivery by
the Company and XxXxxxxx, MOI or both, as the case may be, of an agreement
relating to such Option Product reasonably satisfactory in form and substance to
the Company. Any Option Product not acquired by the Company or other persons in
accordance with this subsection 5.4 may not be licensed, sublicensed, assigned,
sold or otherwise transferred, until such Option Product is again offered to the
Company under the procedures specified in this subsection 5.4.
* * * Confidential Treatment Requested
ARTICLE 6 -- PATENT PROSECUTION
6.1 Licensor, at Licensor's sole expense, shall apply for and shall seek
prompt issuance of United States patents based upon the Patent Rights, PROVIDED
that this provision shall not be interpreted to prohibit Licensee from taking
such actions with respect to the Patent Rights if, in the reasonable judgment of
Licensee, Licensor is not diligently fulfilling its obligations under this
subsection 6.1. Unless the licenses granted hereunder have ceased to be
exclusive, the prosecution and maintenance of corresponding foreign Patent
Rights Patents and Patent Rights Applications and all expenses relating thereto,
shall be the responsibility of Licensee, PROVIDED that Licensee shall have no
obligation hereunder to reimburse Licensor for expenses incurred by Licensor to
date in connection with foreign Patent Rights Patents or Patent Rights
Applications. Licensor shall cooperate fully with Licensee in the prosecution
and maintenance of such foreign Patent Rights Patents.
6.2 Licensor agrees that upon Licensee's request and at Licensee's
expense, it shall promptly make all disclosures, execute all instruments and
documents and perform all acts whatsoever necessary or desirable to vest or
confirm in Licensee's, its successor's, assigns, and nominees, all rights
created or contemplated by Sections 2.2 and 2.3 of Article 2 above and by
Article 5 above including any and all applications, writings and documents as
may be necessary to permit Licensee to obtain any patents or copyrights or any
assignments thereof.
ARTICLE 7 -- TERMINATION
7.1 Should Licensee fail in its remittance to Licensor of license
exclusivity maintenance royalties due in accordance with Section 3.1(b) of this
Agreement, Licensor shall have the right to notify Licensee of termination of
exclusivity of the license granted under this Agreement effective * * * after
such notice unless Licensee shall pay to Licensor, within the * * * period, all
such royalties due and payable. Upon the expiration of the * * * period, if
Licensee shall not have paid all such monies due and payable, the exclusive
rights, privileges and license granted hereunder shall thereupon immediately
terminate as provided in Section 2.2, and the license granted hereunder shall
thereupon be nonexclusive as provided in said Section 2.4.
7.2 Except as is provided in Section 7.1 above with respect to failure to
remit payment of exclusivity maintenance royalties, after the second anniversary
of the date of this Agreement, and not before, upon any breach or default of
this Agreement by Licensee, Licensor shall have the right to notify Licensee of
termination of this Agreement effective * * * after mailing of such notice
unless Licensee shall have cured any breach underlying such notice within the
* * * period. Upon the expiration of the * * * period, if Licensee shall not
have cured such breach, the rights, privileges and license granted hereunder
shall thereupon immediately terminate in full, provided, however, that if there
is a dispute relating to such breach which either party has submitted to
arbitration pursuant to Article 8 below, there shall be no termination prior to
the final decision in the arbitration and the decision reached in the
arbitration shall determine whether a termination may take place.
* * * Confidential Treatment Requested
7.3 Licensee shall have the right to terminate this Agreement at any time
upon * * * prior notice to Licensor, provided that the Licensee shall continue
to pay the license exclusivity maintenance royalty payment according to the
terms of Article 3 above for the * * * in which such termination takes effect
and for the * * * following such * * *. Upon such termination, Licensee
shall have no further rights, whether exclusive or non-exclusive, to the
Licensed Products, the Licensed Process(es) or the Technology hereunder.
7.4 Upon termination of this Agreement for any reason, Licensee and/or any
sublicensee thereof may sell all Licensed Products, and complete Licensed
Products in the process of manufacture at the time of such termination and sell
the same, provided that Licensee shall pay to Licensor the royalties therefor as
required by Article 3 of this Agreement and shall submit the reports required by
Article 4 hereof on such sales.
7.5 Upon termination of this Agreement, nothing herein shall be construed
to release either party from any obligation(s) that matured under this Agreement
prior to the effective date of such termination, which obligation(s) shall
continue until fully met by such party.
7.6 Notwithstanding the foregoing, following termination hereunder, the
provisions of Sections 2.5, 2.6, 3.1(c), 4.l, 4.2, 6.2, 10.2, 10.3, Article 11
and 12.4 shall remain in full force and effect.
ARTICLE 8 -- ARBITRATION; INJUNCTIVE RELIEF
8.1 Except as to issues relating to the validity, construction or effect
of any patent licensed hereunder, any and all claims, disputes or controversies
arising under, out of, or in connection with this Agreement, which have not been
resolved by communication between the parties, shall be resolved by final and
binding arbitration in Boston, Massachusetts under the rules of the American
Arbitration Association then obtaining. The arbitrators shall have no power to
add to, subtract from or modify any of the terms or conditions of this
Agreement. Any award rendered in such arbitration may be enforced by either
party in either the courts of the Commonwealth of Massachusetts or in the United
States District Court for the District of Massachusetts, to whose jurisdiction
for such purposes Licensor and Licensee each hereby irrevocably consents and
submits.
8.2 Claims, disputes or controversies concerning the validity,
construction or effect of any patent licensed hereunder shall be resolved in any
court having jurisdiction thereof.
8.3 In the event that, in any arbitration proceeding, any issue shall
arise concerning the validity, construction or effect of any patent licensed
hereunder, the arbitrators shall assume the validity of all claims as set forth
in such patent, and the arbitrators shall not delay the arbitration proceeding
for the purpose of obtaining or permitting either party to obtain judicial
resolution of such issue, unless an order staying such arbitration proceeding
shall be entered by a court of competent jurisdiction. Neither party shall
raise any issue concerning the validity, construction or effect of any patent
* * * Confidential Treatment Requested
licensed hereunder in any proceeding to enforce any arbitration award hereunder
or in any proceeding otherwise arising out of any such arbitration award.
8.4 Notwithstanding the foregoing, nothing in this Article 8 shall be
construed to waive any rights or timely performance of any obligations existing
under this Agreement. Furthermore, nothing in this Article 8 shall be construed
to waive the right of Licensee to obtain, in addition to any and all other
remedies available to it at law or equity, injunctive relief to enforce the
exclusivity of the rights, privileges and license granted to it hereunder. In
that regard, Licensor acknowledges that any grant or attempted grant by it to
grant to any other person or entity a license or other right to use the
Technology or the Patent Rights for any medical purpose will cause irreparable
damage to Licensee and Licensor agrees that Licensee shall be entitled to
injunctive relief for the event of any such grant or attempted grant.
ARTICLE 9 -- INFRINGEMENT
9.1 Licensee and Licensor shall promptly inform each other in writing of
any alleged infringement of which it shall have notice committed by a third
party regarding any patents within the Patent Rights and shall provide each
other with any available evidence of such infringement.
9.2 During the term of this Agreement, Licensee shall have the right, but
shall not be obligated, to prosecute at its own expense any infringements of the
Patent Rights and, in furtherance of such right, Licensor hereby agrees that
Licensee may join Licensor as a party plaintiff in any infringement suit,
without expense to Licensor. The total cost of any infringement action
commenced or defended solely by Licensee shall be borne by Licensee, and
Licensee shall keep any recovery or damages for past infringement derived
therefrom.
9.3 If within * * * after having been notified of any alleged
infringement, Licensee shall not have obtained from the alleged infringer an
agreement to desist and shall not have brought and shall not be prosecuting any
infringement actions, or if Licensee shall notify Licensor at any time prior
thereto of its intention not to bring suit against any alleged infringer, then,
and in those events only, Licensor shall have the right, but shall not be
obligated, to prosecute at its own expense any infringement of the Patent
Rights, and Licensor may, for such purposes, use the name of Licensee as party
plaintiff, and shall pay Licensee's legal fees and expenses related thereto. No
settlement, consent judgment or other voluntary final disposition of the suit
may be entered into without the consent of Licensee, which consent shall not
unreasonably be withheld. Licensor shall indemnify Licensee against any order
for costs that may be made against Licensee in such proceedings.
9.4 If Licensee and Licensor agree to institute suit jointly, the suit
shall be brought in both of their names, and all expenses and recoveries
(whether by judgment, accord, decree or settlement) shall be borne equally.
Licensee shall exercise control over such suit, including employment of counsel
of its own selection at its own expense.
9.5 In any infringement suit as either party may institute to enforce the
Patent Rights pursuant to this Agreement, the other party hereto shall, at the
request and expense of the party initiating such suit, cooperate in all respects
and, to the extent possible, have
* * * Confidential Treatment Requested
its employees testify when requested and make available relevant records,
papers, information, samples, specimens, and the like.
9.6 Licensee, during the exclusive period of this Agreement, shall have
the sole right in accordance with the terms and conditions of this Agreement to
sublicense any alleged infringer under the Patent Rights.
ARTICLE 10 -- WARRANTIES AND COVENANTS
10.1 Licensor hereby covenants and agrees that as and from the effective
date of this Agreement through and until the second anniversary date of this
Agreement, and thereafter so long as the license granted hereunder remains
exclusive, neither XxXxxxxx nor MOI will design (including, without limitation,
designs for objective or relay lenses for use in endoscopes as described below)
develop, consult with, or otherwise assist in any manner, directly or indirectly
any person or entity other than Licensee in the design or development of any
endoscope which (a) is designed, marketed, or sold for medical purposes, or (b)
Licensor knew or should have known is capable of use for medical purposes,
unless Licensor limits, in writing, the use of such endoscope to non-medical
purposes; or (c) is manufactured by means of a Licensed Process(es), or (d)
otherwise materially incorporates the Technology.
10.2 Licensor hereby warrants and represents that (a) to the best knowledge
of XxXxxxxx and of MOI, the Technology does not infringe or otherwise violate
any other patent, license or agreement; (b) the Technology and other rights
granted hereunder are and will be licensed exclusively to Licensee for medical
use; (c) the Technology constitutes all of XxXxxxxx'x and MOI's relevant and
necessary inventions, patents, patent applications, designs, art, and Know-How
with respect to 3-D Video Systems; and (d) there are no breaches of any
warranties or covenants, or other such undisclosed or contingent liabilities
with respect to the Technology or to this Agreement.
10.3 Licensee hereby warrants and represents that (a) it is a corporation
duly organized and in good standing in the State of Delaware and that it is
qualified to do business in the Commonwealth of Massachusetts, and (b) it is not
in breach of its warranties or covenants in this Agreement.
10.4 Licensor and Licensee shall at all times during the term of this
Agreement and thereafter, indemnify, defend and hold the other, its officers,
directors, employees and affiliates, harmless against all claims and expenses,
including legal expenses and reasonable attorneys' fees, arising out of any
breach of any or all of the foregoing warranties made by Licensor or Licensee,
as the case may be.
ARTICLE 11 -- PAYMENTS, NOTICES AND OTHER COMMUNICATIONS
Any payment, notice or other communication pursuant to this Agreement shall
be sufficiently made or given on the date of mailing if sent to such party by
certified or first
class mail, postage prepaid, addressed to such party at such party's address
below (or at an address as such party shall designate by written notice given to
the other parties);
In the case of Licensor:
Xx. Xxxxx X. XxXxxxxx
XxXxxxxx Optics, Inc.
000 Xxxxxxx Xxxxxxx
Xxxxxxxxxxx, Xxxxxxxxxxxxx 00000
With a copy to:
W. Xxxxx Xxxxx, Esq.
Doherty, Wallace, Pillsbury and Xxxxxx, P.C.
One Monarch Place
0000 Xxxx Xx., 00xx Xxxxx
Xxxxxxxxxxx, Xxxxxxxxxxxxx 00000-0000
In the case of Licensee:
American Surgical Technologies Corporation
Xxx XxXxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xx. Xxxxxx X. Xxxxxxx
With a copy to:
Xxxxxxx X. Xxxxx, Esq.
Cuddy, Lynch, Xxxxx & Xxxxx
Xxx Xxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
ARTICLE 12 -- MISCELLANEOUS PROVISIONS
12.1 This Agreement shall be construed, governed, interpreted and applied
in accordance with the laws of the Commonwealth of Massachusetts, except that
questions affecting the construction and effect of any patent shall be
determined by the law of the country in which the patent was granted.
12.2 The parties hereto acknowledge that this Agreement sets forth the
entire Agreement and understanding of the parties hereto as to the subject
matter hereof, and shall not be subject to any change or modification except by
the execution of a written instrument subscribed to by the parties hereto.
12.3 The provisions of this Agreement are severable, and in the event that
any provision of this Agreement shall be determined to be invalid or
unenforceable under any controlling body of law, such invalidity or
unenforceability shall not in any way affect the
validity or enforceability of the remaining provisions hereof.
12.4 Licensee agrees to xxxx the Licensed Products sold in the United
States with all applicable United States patent numbers. All Licensed Products
shipped to or sold in other countries shall be marked in such a manner as to
conform with the patent laws and practice of the country of manufacture or sale.
12.5 The failure of either party to assert a right hereunder or to insist
upon compliance with any term or condition of this Agreement shall not
constitute a waiver of that right or excuse a similar subsequent failure to
perform any such term or condition by the other party.
12.6 This Agreement may not be assigned in whole or in part by Licensor
without the prior consent of Licensee. Subject to the preceding sentence, this
Agreement shall be binding upon the parties hereto and their respective
successors and assigns.
12.7 Licensee acknowledges that Licensor may be obligated to pay a fee to
* * * in connection with the transactions
contemplated by this Agreement and certain related transactions. Licensee
hereby agrees to reimburse Licensor for Licensor's payment of such fee, upon
receipt of written evidence from Licensor of payment therefor, up to a maximum
amount of * * * , provided that closing of Licensee's sale of its Series I
Preferred Stock, Common Stock and Warrants on the date hereof for an aggregate
sale price equal to or greater than * * * has occurred.
* * * Confidential Treatment Requested
IN WITNESS WHEREOF, the parties hereto have hereunto set their hands and
seals and duly executed this License Agreement as of the day and year first
above written.
/s/ Xxxxx X. XxXxxxxx
--------------------------------------------
Xxxxx X. XxXxxxxx
XXXXXXXX OPTICS, INC.
By: /s/ Xxxxx X. XxXxxxxx
-----------------------------------------
Xxxxx X. XxXxxxxx, President
AMERICAN SURGICAL TECHNOLOGIES
CORPORATION
By: /s/ illegible
----------------------------------------
APPENDIX A
TECHNOLOGY
1. A stereo objective lens (the "Lens") for use in endoscopes of any
length, diameter, or configuration, as disclosed in the patent application filed
as of April 16, 1991 by XxXxxxxx (a copy of which is annexed hereto).
2. All Know-How, copyrights, trade secrets, inventions and other
intellectual property or proprietary rights relating to incorporating the Lens
into a commercially manufactured medical endoscope and connecting such endoscope
to an endoscopic video system in a manner which results in an apparent three
dimensional image of the object being viewed with the endoscope (a "3-D Video
System").
APPENDIX B
LICENSED PRODUCT DEVELOPMENTS
Preparation of technical specifications and drawings for a working
prototype of the Licensed Product and design and development of such prototype
(the "Prototype"). Refinement and improvement of Prototype for pre-production
(the "Pre-Production Product"). Refinement and improvement of Pre-Production
Product for commercial manufacture (the "Manufacturable Product").
DEVELOPMENT PRODUCTS
Products required to make or connect a medical endoscope embodying the
Technology to video cameras or other electronic imaging devices.
Products and processes necessary to manufacture and market 3-D Video
Systems utilizing the Technology, which systems include (1) an endoscope
utilizing the Technology (2) a coupler or other means of attachment, alignment
and integration of the endoscope with the remainder of the system, (3) two video
cameras, (4) a suitable light source and its cables, connectors and the like,
and (5) a video display system using video switching or other appropriate
technology, resulting in the display of an apparent three-dimensional image of
the object being viewed with the endoscope.
--------------------------------------------------------------------------------
XxXXXXXX OPTICS, INC.
FAX: (000) 000-0000 000 XXXXXXX XXXXXXX TEL: (000) 000-0000
X.X. XXX 000
XXXXXXXXXXXX, XXXXXXXXXXXXX
00000-0000
--------------------------------------------------------------------------------
June 28, 1994
AMERICAN SURGICAL TECHNOLO
000 XXXXXXXXX XXXX
XXXXXXXXXX, XXXXXXXXXXXXX
00000
ATTN: Xxx Xxxxx
Dear Xxx,
This letter constitutes an Agreement to alter the provisions of the LICENSE
AND DEVELOPMENT AGREEMENT between XXXXXXXX OPTICS, Inc. and AMERICAN SURGICAL
TECHNOLOGIES CORPORATION, dated December 18, 1991.
For Paragraph 3.1(c)(i) substitute the following:
(i) * * * upon sale of the *** 3-D Video System (as such term is
defined in the description of Technology set forth in Appendix A attached
hereto) incorporating a Licensed Product, and an additional * * * upon
sale of each of the *** and *** such 3-D Video Systems incorporating a
Licensed Product, and * * * upon sale of the *** such 3-D Video Systems
incorporating a Licensed Product.
All other terms of the previous agreement shall remain in effect.
This change is hereby agreed to by the undersigned.
AMERICAN SURGICAL TECHNOLOGIES CORP.
/s/ Xxxxxxx X. Xxxxxxxxxxx
-----------------------------------
Xxxxxxx X. Xxxxxxxxxxx, CFO
XxXXXXXX OPTICS, Inc.
/s/ Xxxxx X. XxXxxxxx
-----------------------------------
Xxxxx X. XxXxxxxx, President
* * * Confidential Treatment Requested
