LICENSE & ROYALTY AGREEMENT
Exhibit
10.49
LICENSE
& ROYALTY AGREEMENT
THIS
LICENSE & ROYALTY AGREEMENT (this
“Agreement”), dated as of the 23th
day of August,
2007 (the “Effective Date”), is made and entered into by
and between OLYMPUS-CYTORI, INC., a Delaware corporation,
located at 0000 Xxxxxx Xxxx, Xxx Xxxxx, XX 00000 (The
"JVCo") and CYTORI
THERAPEUTICS,
INC., a
Delaware
corporation, located at 0000 Xxxxxx Xxxx, Xxx Xxxxx, XX 00000 ("Cytori").
(JVCo
and
Cytori may each be individually referred to herein as a
“Party” and collectively as the
“Parties”).
RECITALS
A. Cytori,
JVCo and Olympus Corporation (“Olympus”) entered into a series of agreements in
November 2005 creating a joint venture (collectively, the “Joint Venture
Agreements”) dedicated to the commercial development, manufacture and sale of
JVCo Licensed Products (as defined below) according to the terms of such
agreements.
B. Cytori
is desirous of commercializing and marketing an earlier version of Cytori
Licensed Product (as defined below) (e.g., CT-800) during the Term (as defined
in Section 2.5 below) or until JVCo starts to sell its comparable “Licensed
Product(s)” defined in the License/ Commercial Agreement dated November 4, 2005
by Cytori and JVCo (“JVCo Licensed Product(s)”). Each of the Parties hereto now
recognizes that it would be beneficial to all Parties for Cytori to
commercialize and market an earlier version of the Licensed Product than had
been anticipated under the Joint Venture Agreements, and have determined that
the appropriate licenses for Cytori to conduct such early commercialization
should be granted to Cytori pursuant to all of the terms and conditions provided
below.
NOW,
THEREFORE, in consideration of the foregoing, the mutual promises herein
contained, and for other good and valuable consideration, the receipt and
adequacy of which are acknowledged, the Parties agree as follows:
1. DEFINITIONS
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1.1
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Defined
Terms. As used in this Agreement, the capitalized terms set
forth in this Section 1 shall have the following
meanings:
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“Affiliate”
means, as to any Party, any Person that, directly or indirectly, controls,
or is
controlled by, or is under common control with, such Party, where “control”
(including, with its correlative meanings, “controlled by” and “under common
control with”) means (a) the beneficial ownership of fifty percent (50%) or more
of the outstanding voting securities of a Party, or (b) the possession, directly
or indirectly, of the power to direct or cause the direction of management
or
policies of a Party, whether through the ownership of securities or partnership
or other ownership interests, by contract or otherwise.
“Agreement”
shall have the meaning set forth in the Preamble.
“Business
Day” shall mean any day on which banking institutions are open in
the United States, and excluding national holidays in Japan.
“Cytori”
shall have the meaning set forth in the Preamble.
“Development
Agreement” shall mean the License/ Joint Development Agreement
dated November 4, 2005 by and among Cytori, Olympus and JVCo.
1
“Distributor
Sale” shall
mean the last sale of Cytori Licensed Product by Cytori or an Affiliate of
Cytori to an unaffiliated third party who intends to resell the Cytori Licensed
Product.
“Effective
Date” shall have the meaning set forth in the
Preamble.
"End-User
Sale” means the last sale of Cytori Licensed
Product within the control of Cytori, or an Affiliate of Cytori, to a Hospital
or physician for use in such Hospital or Physicians facility.
"Fully
Burdened Cost of Sales” means all materials, labor
and overhead costs as determined by Cytori’s accounting policies and procedures,
including any costs associated with set-up and installation of the Cytori
Licensed Products.
“JVCo
IP” or “Licensed IP” shall mean all Intellectual Property Rights
today or hereafter owned by, licensed by or acquired by JVCo (other than JVCO
trademarks and service marks) and useable or useful in the Licensed
Field.
“Licensed
Field” shall
mean the
designing, developing, manufacturing, testing, importing, exporting,
marketing, offering to sell, selling and servicing Cytori Licensed
Products.
“Cytori
Licensed
Product(s)” shall
mean any automated
devices (and related component parts), manufactured
by Cytori
(e.g., “CT-800) ***
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The
Cytori Celution System
is a current
example of a Cytori Licensed
Product.
Cytori
Licensed
Products shall
not include: ***
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“Net
Sales" means the total of the gross invoice prices from the Sale of
Cytori Licensed Product by Cytori in the form of a Distributor Sale
or End –User Sale, less the sum of the following actual and customary deductions
where applicable: cash, trade or quantity discounts; sales, use,
tariff, import/export duties or other excise taxes imposed on particular sales
(excepting value added taxes or income taxes); transportation, handling and
refrigeration charges, including insurance; and allowances or credits to
customers because of rejections or returns (“Customary
Deductions”). If Cytori or any Affiliate of Cytori sells at a single
price or rate a packaged combination of products and/or services, not all of
which if sold individually would be Cytori Licensed Products, then “Net Sales”
with respect to such sales of packaged products shall equal the number of units
of each Cytori Licensed Product sold as part of such packaged
products multiplied by the respective average adjusted net selling
price for the same type of Cytori Licensed Product sold
individually, and in the same market and distribution method, over
the preceding six month period , in each case excluding rejections, defects
and
returns.
“Person”
shall mean an association, corporation, individual, partnership, trust or any
other entity or organization, including a governmental entity, other than a
Party.
_________________________
***Material
has been omitted
pursuant to a request for confidential treatment filed separately with the
Securities and Exchange Commission
2
“Term”
shall have the meaning set forth in Section 2.5.
“Three-Way
NDA” shall mean the Three-Way Non-Disclosure Agreement, dated
November 4, 2005, entered into by and among Cytori, Olympus and
JVCo.
“Intellectual
Property Rights” shall mean “Intellectual Property Rights” defined
in the License/ Commercial Agreement dated November 4, 2005 by Cytori and
JVCo.
1.2 References. In
this Agreement, a reference to:
(a) A
Section, Sub-section, Preamble, Recital, Attachment, Schedule or Exhibit is,
unless the context otherwise requires, a reference to a section or sub-section
of, or a preamble, recital, attachment, schedule or exhibit to, this
Agreement;
(b) “This
Agreement” (or any specific provision hereof) shall be construed as references
to this Agreement or that provision as amended, varied or modified from time
to
time;
(c) “¥”
or “JPY” refers to Japanese Yen, the lawful currency for the time being of
Japan. “$” or “USD” refers to United States Dollars, the lawful
currency for the time being of the United States of America; and
(d) All
references in this Agreement to “days” will, unless otherwise specified herein,
mean calendar days.
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1.3
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Headings. Headings
in this Agreement are for ease of reference only and shall not affect
the
interpretation or construction of this
Agreement.
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2. THE
LICENSE GRANTED BY JVCO
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2.1
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License
Grant.
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Subject
to the terms, conditions and obligations set forth in this Agreement
including the royalty payments to be made by Cytori to JVCo hereunder,
JVCo hereby grants to Cytori a non-exclusive, worldwide license to
the
JVCo IP (including any improvements thereto) for use in the Licensed
Field
for the Term. In addition, Cytori shall be entitled to sublicense
sales
rights to its distributors during the Term, and to sublicense the
manufacture of certain component parts, but such rights shall not
extend
the third party manufacture of all or substantially all of the any
finished Cytori
Licensed Product. For avoidance of doubt, the license granted
herein is intended to allow Cytori to develop, make, and use Cytori
Licensed Products for commercial sale during the Term, and the exercise
of
the rights granted herein in accordance with the terms in this Agreement,
shall not be construed as competing with any products of the Joint
Venture
or in any way violating the Joint Venture
Agreements.
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2.2
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Royalty
Payments. In consideration of the license granted by JVCo to Cytori
pursuant to Section 2.1 above (and subject to the exceptions described
in
2.2 (b)):
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(a)
Cytori shall pay to JVCo a payment in the form of a royalty as described in
either of the following cases:
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***
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***
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(b)
Cytori shall not be required to pay a royalty for its distribution or provision
of Cytori Licensed Products without charge or cost to the receiving party (i.e.
for clinical trials, regulatory, reimbursement etc.).
_________________________
***Material
has been omitted
pursuant to a request for confidential treatment filed separately with the
Securities and Exchange Commission
3
| 2.3 | Reports. Effective upon the first commercial sale of a Cytori Licensed Product, Cytori shall make quarterly royalty reports to JVCo on or before each February 15 (for the quarter ending December 31), May 15 (for the quarter ending March 31), August 15 (for the quarter ending June 30) and November 15 (for the quarter ending September 30) of each year. Each royalty report will cover Cytori's most recently completed calendar quarter and will show: | |
| (a) all Net Sales during the most recently completed calendar quarter; | ||
| (b) the Fully Burdened Cost of Sales associated with the Net Sales in 2.3 (a); | ||
| (c) the number of each type of Cytori Licensed Product sold; | ||
| (d) the royalties, in U.S. dollars, payable to JVCo hereunder; | ||
| (e) the method used to calculate the royalty ; and | ||
| (f) the exchange rates used. | ||
| If no Net Sales have been made during any reporting period, then a statement to this effect is required. | ||
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2.4
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Books
and Records. Cytori shall keep accurate books and records
showing all Cytori Licensed Product manufactured, and/or sold under
the
terms of this Agreement. Books and records must be preserved
for at least five (5) years from the date of the royalty payment
to which
they pertain. Books and records must be open to inspection by
representatives or agents of JVCo at reasonable times, subject to
a
reasonable and customary confidentiality agreement. JVCo shall
bear the fees and expenses of examination, but if an error in royalties
of
more than five percent (5%) of the total royalties due for any calendar
year is discovered in any examination, then Cytori shall bear the
fees and
expenses of that examination.
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2.5
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Term
and Termination. The term of this Agreement
(“Term”) shall commence on the Effective Date and shall
continue in full force and effect for a period of *** for each
Cytori Licensed Product offered by Cytori hereunder. The Term shall
expire
earlier with respect to any specific Cytori Licensed Product at such
time
as JVCo notifies Cytori in writing that it has an alternative commercially
salable JVCo Licensed Product manufactured by or for JVCo that serves
in
the same market as such specific Cytori Licensed Product (“Termination
Notice”). Notwithstanding the foregoing, the Term of the
license rights granted hereunder shall continue after the Term with
respect to:
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***
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***
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2.6 Representations
and Warranties.
2.6.1 Representations
and Warranties of Cytori. Cytori represents and warrants to JVCo
that:
(a) Cytori
is a corporation duly organized, validly existing and in good standing under
the
laws of the State of Delaware, and that Cytori has full power and authority,
and
has taken all action necessary, to execute and deliver this Agreement and to
fulfill its obligations under, and to consummate the transactions contemplated
by, this Agreement.
_________________________
***Material
has been omitted
pursuant to a request for confidential
treatment filed
separately with the Securities and Exchange Commission
4
(b)
The execution, delivery and performance of this Agreement by Cytori will not
result in any breach or violation of, or conflict with, any third-party
contract, agreement, undertaking, judgment, decree, order, law, regulation
or
rule to which Cytori is a party or by which Cytori or any of its assets are
bound, provided Olympus Corporation gives its consent to this transaction,
which
shall be attached hereto as Exhibit I.
(c)
This Agreement has been duly and validly executed and delivered by Cytori and
is
binding upon and enforceable against Cytori in accordance with its terms, except
as enforceability may be limited or affected by applicable bankruptcy,
insolvency, reorganization or other laws of general application relating to
or
affecting the rights of creditors and except as enforceability may be limited
by
rules of law governing specific performance, injunctive relief or other
equitable remedies.
2.6.2 Representations
and Warranties of JVCo. JVCo represents and
warrants to Cytori that:
(a)
JVCo is a corporation duly organized, validly existing and in good standing
under the laws of the State of Delaware, and that JVCo has full power and
authority, and has taken all action necessary, to execute and deliver this
Agreement and to fulfill its obligations under, and to consummate the
transactions contemplated by, this Agreement.
(b) The
execution, delivery and performance of this Agreement by JVCo will not result
in
any breach or violation of, or conflict with, any contract, agreement,
undertaking, judgment, decree, order, law, regulation or rule to which JVCo
is a
party or by which JVCo or any of its assets are bound, provided Olympus
Corporation gives its consent to this transaction, which shall be attached
hereto as Exhibit I.
(c)
This Agreement has been duly and validly executed and delivered by JVCo and
is
binding upon and enforceable against JVCo in accordance with its terms, except
as enforceability may be limited or affected by applicable bankruptcy,
insolvency, reorganization or other laws of general application relating to
or
affecting the rights of creditors, and except as enforceability may be limited
by rules of law governing specific performance, injunctive relief or other
equitable remedies.
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2.7
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Indemnification. In
the event that any of the activities of Cytori in exercising the
rights
granted herein results in the assertion of any claim by a third party
against JVCo, Cytori shall indemnify and hold harmless JVCo and its
Affiliates, successors and assigns, and its and their respective
directors, officers, employees and agents, from and against any and
all
claims and losses resulting from Cytori’s activities, including but not
limited to attorneys fees and expenses. JVCo shall promptly notify
Cytori
of any such third party claim and Cytori shall have the full right
to
control the defense of such claim, provided that it selects counsel
reasonably acceptable to JVCo, and provided it can reasonably assure
JVCo
of its financial ability to fulfill its indemnity obligation. JVCo
shall
cooperate with Cytori in the defense of such claim, and neither
party shall settle any such claim without the other’s prior written
approval, which approval shall not be unreasonably
withheld.
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2.8 Repair,
Service and Warranty. Both Parties acknowledge and agree that
(i) Cytori shall have responsibility for repair, service and warranty
on
Cytori Licensed Products, and (ii) JVCo and Olympus shall have no
responsibility for repair, service and warranty on Cytori
Licensed Products.
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3.
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MISCELLANEOUS
PROVISIONS
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3.1
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Confidentiality. Each
Party will keep confidential all information obtained by or in connection
with this Agreement from the other Party, including marketing plans,
customer information, technical information, trade secrets, know-how
and
financial information as provided for in the Three-Way NDA, and as
otherwise provided for in the Joint Venture
Agreements.
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3.2
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Governing
Law. This Agreement shall be governed in all respects by
the laws of New York without regard to provisions regarding choice
of
laws.
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5
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3.3
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Dispute
Resolution. All disputes arising out of or in connection
with this Agreement, or any relationship created by or in accordance
with
this Agreement, shall be finally settled under the Rules of the American
Arbitration Association (the “Rules”) by three
arbitrators. Judgment on the award rendered by the panel of
arbitrators shall be binding upon the Parties and may be entered
in any
court having jurisdiction thereof. JVCo shall nominate one
arbitrator and Cytori shall nominate one arbitrator. The
arbitrators so nominated by JVCo and Cytori, respectively, shall
jointly
nominate the third arbitrator within fifteen (15) days following
the
confirmation of arbitrators nominated by JVCo and Cytori. If
the arbitrators nominated by JVCo and Cytori cannot agree on the
third
arbitrator, then such third arbitrator shall be selected as provided
in
the Rules. The place of the arbitration and all hearings and
meetings shall be Singapore, unless the Parties to the arbitration
otherwise agree. The arbitrators may order pre-hearing
production or exchange of documentary evidence, and may require written
submissions from the relevant Parties hereto, but may not otherwise
order
pre-hearing depositions or discovery. The arbitrators shall
apply the laws of New York as set forth in Section 3.2; provided,
however,
that the Federal Arbitration Act shall govern. The language of
the arbitral proceedings shall be English. The arbitrators
shall not issue any award, grant any relief or take any action that
is
prohibited by or inconsistent with the provisions of this
Agreement.
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No
arbitration pursuant to this Section 3.3 shall be commenced until the Party
intending to request arbitration has first given thirty (30) days written notice
of its intent to the other Party, and has offered to meet and confer with one
or
more responsible executives of such other Party in an effort to resolve the
dispute(s) described in detail in such written notice. If one or more
responsible executives of the other Party agree, within thirty (30) days after
receipt of such written notice, to meet and confer with the requesting Party,
then no arbitration shall be commenced until the Parties have met and conferred
in an effort to resolve the dispute(s), or until sixty (60) days has elapsed
from the date such written notice has been given.
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3.4
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Successors
and Assigns. Except as otherwise expressly provided herein,
the provisions hereof shall inure to the benefit of, and be binding
upon,
the successors and assigns of the Parties hereto whose rights or
obligations hereunder are affected by such amendments. Neither
this Agreement nor any right, license, privilege or obligation provided
herein may be assigned or transferred by either Party without the
other
Party’s prior written consent. Any purported assignment of this Agreement
of any right and obligation therein without the written consent of
the
other party shall be null and void.
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3.5
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Entire
Agreement. This Agreement, the Joint Venture Agreements
(and any amendments thereto) and the attachments, schedules and exhibits
hereto, which are hereby expressly incorporated herein by this reference,
constitute the entire understanding and agreement between the Parties
with
regard to the subject matter hereof and thereof, and supersedes,
cancels
and annuls in its entirety any and all prior or contemporaneous agreements
and understandings, express or implied, oral or written among them
with
respect thereto. No alteration, modification, interruption or
amendment of this Agreement shall be binding upon the Parties unless
in
writing designated as an amendment hereto, and executed with equal
formality by each of the Parties.
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3.6
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Notices. Except
as otherwise expressly provided herein, all notices, requests, waivers
and
other communications made pursuant to this Agreement shall be in
writing
and shall be deemed to have been duly given (a) when hand delivered
to the
other Party; (b) when received, if sent by facsimile at the address
and
number set forth below, with a written confirmation copy of such
facsimile
sent the next business day in accordance with (c) below; (c) the
second
business day after deposit with a national overnight delivery service,
postage prepaid, addressed to the other Party as set forth below,
provided
that the sending Party receives a confirmation of delivery from the
delivery service provider; or (d) if earlier, when actually
received.
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6
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To
Cytori:
0000
Xxxxxx Xxxx, Xxx Xxxxx, XX 00000, X.X.X.
Attn: Xxxxxxxxxxx
X. Xxxxxxx
Fax: 000-000-0000
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To
JVCo:
0-0
Xxxxxxxx-xxx,
Xxxxxxxx-xxx,
Xxxxx, 000-0000, Xxxxx
Attn:
Xxxxxxx Xxxxxx
Fax: x00-000-00-0000
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A
Party
may change or supplement its address set forth above, or may designate
additional addresses, for purposes of this Section 3.6, by giving the other
Party written notice of the new address in the manner set forth
above.
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3.7
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Amendments
and Waivers. No term or provision of this Agreement may be
amended, waived, discharged or terminated orally but only by an instrument
in writing signed by the Party against whom the enforcement of such
amendment, waiver, discharge or termination is sought. Any
waiver shall be effective only in accordance with its express terms
and
conditions.
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3.8
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Cumulative
Remedies. Unless expressly so stated in this Agreement in
respect of any particular right or remedy, the rights and remedies
herein
provided are cumulative and not exclusive of any rights or remedies
provided by law.
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3.9
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Relationship
of Parties. This Agreement shall not be deemed to
constitute either Party the agent, the partner, the licensee, the
affiliate or the representative of the other Party, and neither Party
shall represent to any third party that it has any such relationship
or
right of representation.
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3.10
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Press
Release. No public announcements or press releases shall be
issued by either Party regarding this Agreement or any of the activities
engaged in by the Parties or JVCo pursuant to this Agreement without
the
prior written approval of the other Party; provided, however, that
either
Party shall have the right to make such public disclosure as may
be
necessary or appropriate to comply with applicable securities or
other
laws.
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3.11
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Counterparts. This
Agreement may be executed by facsimile signature in any number of
counterparts, each of which shall be an original, but all of which
together shall constitute one
instrument.
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3.12
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Severability. Should
any provision of this Agreement be determined to be illegal or
unenforceable, such determination shall not affect the remaining
provisions of this Agreement.
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[Signature
page follows]
7
IN
WITNESS WHEREOF, the Parties have executed this License & Royalty
Agreement as of the Effective Date.
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CYTORI
THERAPEUTICS, INC
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OLYMPUS-CYTORI,
INC.
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By: /s/
Seijiro Shirahama
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By: /s/Yasunobu
Toyoshima
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Title: Sr.
Vice President, Asia-Pacific
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Title: Board
of Director
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Date: August
23, 2007
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Date: August
23, 2007
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8
Exhibit
I
Consent
to License and Royalty Agreement
August
23, 2007
Olympus
Corporation
0-0
Xxxxxxxx-xxx,
Xxxxxxxx-xxx,
Xxxxx, 000-0000, Xxxxx
Attn: Xx.
Xxxxxxx Xxxxxxxx
RE:
Consent to License and Royalty Agreement
Dear
Xx.
Xxxxxxxx:
Cytori
Therapeutics, Inc. (Cytori) and Olympus-Cytori, Inc. (JVCo) intend to enter
into
a license and royalty agreement (Royalty Agreement) whereby Cytori would be
allowed to develop and manufacture certain Licensed Products (the Cytori
“Celution” devices and disposable components) for commercial sale in a manner
that was not contemplated in the Joint Venture Agreements by Cytori, Olympus
Corporation and the JVCo in November of 2005.
Your
Company's consent is hereby requested to allow the execution of the Royalty
Agreement by Cytori and JVCo and for the performance of each party of its rights
and obligations contained therein. It should be noted that the performance
of
the Royalty Agreement may, during the term of that Agreement conflict with
certain exclusive rights of the parties to the Joint Venture Agreements,
including Section 4.6 of the License/Joint Development Agreement. A complete
copy of the form of Royalty Agreement is attached hereto as Exhibit I for your
reference.
Please
signify your Company's consent to this Royalty Agreement and waiver of any
conflicts that this may create with the Joint Venture Agreements by having
an
authorized person sign and date this letter below.
Thank
you
for your consideration.
Sincerely,
/s/
Seijiro Shirahama
Xxxxxxx
Xxxxxxxxx
Xx.
Vice
President, Asia-Pacific
CONSENT
GRANTED (for the License and Royalty Agreement by and between Cytori
Therapeutics, Inc. and Olympus-Cytori, Inc.)
Olympus
Corporation
Name:
Xxxxxxx Xxxxxxxx
Title:
Director, Member of the Board
Date:
August 23, 2007
9
