EXHIBIT 10.62
CONFIDENTIAL TREATMENT REQUESTED
SETTLEMENT AND LICENSE AGREEMENT
This Settlement and License Agreement (the "Agreement") is made and
entered into effective as of the 25th day of May, 2001 (the "Effective Date"),
by and between VISX, INCORPORATED, a Delaware corporation ("VISX"), and
LASERSIGHT INCORPORATED, a Delaware corporation.
RECITALS:
A. VISX possesses the right to license the VISX Patents (defined herein).
B. Lasersight contemplates that during the term of this Agreement it will
use, offer to sell, sell, lease, exchange, otherwise dispose of or make
available for use certain apparatus for performing ultraviolet corneal
laser surgery which may embody inventions or improvements or be used to
practice methods covered by one or more of the VISX Patents.
C. VISX has filed a lawsuit against Lasersight in the United States
District Court for the District of Delaware, Civil Action
No. 99-789-JJF. VISX and Lasersight desire to settle all claims
asserted in this action on the terms and conditions set forth in this
Agreement.
D. For the foregoing reasons, Lasersight has requested and desires to
obtain from VISX a nonexclusive license under the VISX Patents. VISX
is willing to grant such a nonexclusive license subject to the terms,
conditions and provisions of this Agreement.
NOW, THEREFOR, for and in consideration of the covenants, conditions
and undertakings hereinafter set forth, it is hereby agreed by and
between the parties as follows:
1. Definitions
1.1 Affiliate The term "Affiliate" shall mean, with respect to
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any Person, any other Person, that directly or indirectly, controls, is
controlled by or is under common control with, that Person. For
purposes of this definition, "control" (including, with orrelative
meaning, the terms "controlled by" and "under common control with"), as
used with respect to any Person, shall mean the possession, directly or
indirectly, of the power to direct and/or cause the direction of the
management and policies of such Person, whether through the ownership
of voting securities, by contract or otherwise.
1.2 Authorized Procedure The term "Authorized Procedure" shall
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mean any Licensed Procedure enabled by Lasersight through an excimer
laser system equipped with a Lasersight Security Mechanism defined
below in Section 1.14.
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** CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS DOCUMENT. THE
REDACTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE COMMISSION PURSUANT TO
AN APPLICATION FOR CONFIDENTIAL TREATMENT.
1.3 Claim The term "Claim" shall mean a patent
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claim which has not expired and which has not been disclaimed,
canceled, or finally held invalid or unenforceable by a court of
competent jurisdiction from which no further appeal is possible or has
been taken within the time period provided under applicable law for
such appeal. If a patent claim has been finally held unenforceable as
provided in the immediately preceding sentence, but thereafter the
unenforceability thereof is purged such that under applicable law it
again becomes enforceable, such patent claim shall thereafter be a
Claim for purposes of the immediately preceding sentence.
1.4 Conveyance The term "Conveyance" shall mean any sale,
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license, rental, lease, making available for use, import or other
disposition or transfer of possession. Any conjugated form of the term
"Conveyance" (e.g, "Convey", "Conveyed", etc.) used in this Agreement
shall have the same meaning, but in the conjugated form (e.g., "sell,
license, rent, . . ." or "sold, licensed, rented, . . ."). Without
limitation, "other disposition or transfer of possession" shall include
any transfer by to another without consideration as well as for
consideration other than money (including barter or exchange)
regardless of the basis of compensation, and shall further include
without limitation a transfer by Lasersight to another for commercial
use and/or use in clinical trials.
1.5 Distributor The term "Distributor" shall mean a Person that
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purchases Licensed Lasersight Products (as hereinafter defined)
manufactured and/or Conveyed, directly or indirectly, by or for
Lasersight solely for Conveyance to Users pursuant to any authority
granted to such Person by Lasersight or pursuant to any other agreement
or arrangement made or participated in by Lasersight.
1.6 Inspector The term "Inspector" shall have the meaning set
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forth in Section 6.2.
1.7 Lasersight The term "Lasersight" shall mean LaserSight
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Incorporated and any of its Subsidiaries as defined in Section 1.15
below.
1.8 LIBOR Rate The term "LIBOR Rate" shall mean a fixed rate of
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interest per annum offered for one-year dollar deposits in the London
market, in effect on the applicable date of reference thereto, as
quoted in the Wall Street Journal.
1.9 Licensed Procedure The Term "Licensed Procedure" shall mean
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any procedure, operation or other treatment within the United States
performed one time on a single human eye using a Licensed Product
manufactured and/or Conveyed, directly or indirectly, by or for
Lasersight.
1.10 Licensed Product The term "Licensed Product" shall mean any
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system or component thereof that is covered by any Claim of any one of
the VISX Patents, or is used in a method covered by any Claim of any
one of the VISX Patents. For purposes of Lasersight's payments through
June 1, 2003, Lasersight agrees that the product(s) listed on Exhibit C
shall be considered Licensed Products for that time period (without
making any admission that the product(s) listed on Exhibit C are
covered by any VISX Patent claim).
1.11 Overdue Rate The term "Overdue Rate" shall mean the LIBOR
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Rate, plus two percent (2%) or the highest rate permitted by applicable
law, whichever shall be less.
1.12 Per-Procedure Royalty The term "Per-Procedure Royalty" shall
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mean the royalty to be paid to VISX for each Authorized Procedure, as
described at Section 3.1.
1.13 Person The term "Person" shall mean an individual or any
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legally recognized entity, including any corporation, partnership,
limited partnership, limited liability company, association or trust.
1.14 Security Mechanism The term "Security Mechanism" shall mean
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an accurate, auditable mechanism on each laser system that Lasersight
sells, leases or otherwise disposes of or installs in the United States
after the Effective Date of the Agreement that precludes the User from
performing more procedures than authorized by Lasersight. For each
laser system that Lasersight sells, leases or otherwise disposes of or
installs outside the United States, each laser system shall have a
mechanism ("Disabling Mechanism") that allows Lasersight to disable the
laser system within sixty (60) days after Lasersight becomes aware that
such a laser system has been brought into the United States without
authorization.
1.15 Subsidiary The term "Subsidiary" shall mean with respect
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to any Person, any other Person, that directly or indirectly, is
controlled by that Person. For purposes of this definition, "control"
(including, with correlative meaning, the terms "controlled by" and
"under common control with"), as used with respect to any Person, shall
mean the possession, directly or indirectly, of the power to direct
and/or cause the direction of the management and policies of such
Person, whether through the ownership of voting securities, by contract
or otherwise.
1.16 United States The term "United States" shall mean all fifty
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states of the United States of America, the District of Columbia,
Puerto Rico and any other territory, commonwealth, or possession or
U.S. military base or installation of the United States of America.
1.17 User The term "User" shall mean any Person in the United
----
States who uses, purchases, leases, or operates a Licensed Product
manufactured and/or Conveyed, directly or indirectly, by or for
Lasersight.
1.18 VISX Patents The term "VISX Patents" shall mean (i) the
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patents and patent applications set forth on Exhibit A hereto (the
"Listed Patents"), and all other patents issued and patent applications
filed as of the Effective Date that relate to refractive excimer laser
systems for laser ablation of corneal tissue to effect a refractive
correction, components and accessories thereof (including eye tracking
devices), and methods relating to the use of said excimer laser system
or its components or accessories, and which, to the extent, VISX or
its Affiliates have the right to grant licenses or sublicenses of or
within the scope granted herein, together with all foreign counterpart
patents and patent applications, filed and still to be filed (the
"Existing VISX Patents"), (ii) all divisions, continuations,
continuations in part, patents of addition and substitutions of the
Existing VISX Patents, and (iii) all patents, certificates of invention
and governmental grants issuing on applications in clauses (i) and
(ii), and (iv) all registrations, reissues, reexaminations or
extensions of any kind with respect to any of the foregoing patents.
The Listed Patents shall be divided into two categories: the
"Term-Defining Group" and the "Non-Term-Defining Group" as indicated on
Exhibit A.
2. Grant of Rights
2.1 Grant.
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VISX hereby grants Lasersight a nonexclusive license under the VISX
Patents:
(a) to make, have made, use, import, offer to sell, sell, lease or
otherwise dispose of within the United States any Licensed Product
used to perform laser refractive corneal surgery, provided that
such Licensed Product is designed by LaserSight (including
companies becoming Subsidiaries after the Effective Date or assets
acquired after the Effective Date) and manufactured or assembled by
or for LaserSight (including companies becoming Subsidiaries after
the Effective Date or assets acquired after the Effective Date);
and
(b) to perform, and to grant sublicenses, without the right to grant
further sublicenses, to its customers to perform Licensed
Procedures.
2.2 In exchange for these licenses, Lasersight shall pay to VISX
a royalty for each Authorized Procedure by Lasersight or sublicensees
of Lasersight (Users), in the amount described below in Section 3.1
(the "Per-Procedure Royalty"). The content of procedure sublicenses
shall be within the discretion of Lasersight, but shall contain at a
minimum certain terms consistent with the License including without
limitation the terms set forth in Section 2.4.
Except as otherwise expressly provided in Section 11.1, the foregoing
license is personal to Lasersight and nontransferable.
2.3 Future Patents and Patent Applications
--------------------------------------
Provided that Lasersight is in compliance with all of the terms of this
Agreement, if subsequent to the execution of this Agreement with
Lasersight (i) VISX is issued a new U.S. patent (other than a Listed
Patent) that relates to a laser system or a method of using a laser
system for laser ablation of corneal tissue, or (ii) VISX concludes
that Lasersight may be infringing an existing VISX U.S. patent that
relates to a laser system or a method of using a laser system for laser
ablation of corneal tissue, VISX shall notify Lasersight in writing of
such newly issued or existing patent.
For a period of ninety (90) calendar days from such notification, VISX
shall not file any lawsuit against Lasersight for infringement of such
newly issued or existing patent and Lasersight shall not file any
declaratory judgment action against VISX asserting non-infringement
and/or invalidity of such newly issued or existing patent. During the
foregoing 90-day period, Lasersight shall have the right to notify VISX
in writing that it wishes to add such newly issued or existing patent
to its list of Listed Patents.
The patent(s) selected by Lasersight will be included in the license
granted in Section 2.1 for any Licensed Product or Licensed Procedure
for which Lasersight pays Per-Procedure Royalties when due. Any such
added patents shall be deemed to be Listed Patents and in the
Term-Defining Group for purposes of this Agreement.
If VISX receives the right to sublicense a patent that encompasses a
laser system, or a method of using a laser system, for laser ablation
of corneal tissue, VISX shall notify Lasersight in writing of such
right to sublicense. For a period of ninety (90) calendar days from
such notification, Lasersight shall have the right to notify VISX in
writing that it wishes to receive a sublicense under such patent. As a
result, the patent(s) selected by Lasersight will be included in the
license granted in Section 2.1 for any Licensed Product or Licensed
Procedure for which Lasersight pays Per-Procedure Royalties when due.
If VISX has or becomes the owner of patents, or otherwise acquires
patent license rights which it has the right to license (without cost
to VISX) to Lasersight, for any internal memory, recording or counting
system useful for Lasersight's compliance with its obligations under
Section 2.4, it shall, at Lasersight's request, license the same to
Lasersight on a non-exclusive royalty-free basis for the term of this
Agreement.
2.4 User Covenants
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(a) Obligations of Lasersight
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To secure Lasersight's obligations to pay VISX Per-Procedure
Royalties for all Licensed Procedures, except for those procedures
that are exempt under 35 U.S.C. Section 271(e), Lasersight shall
obtain from its customers and assign to VISX a written agreement
(User Covenants, Exhibit F) granting VISX the right to inspect
during regular business hours with twenty-four (24) hour advance
written notice (not including any hours on a Saturday, Sunday or
legal holiday) the User's Licensed Product(s) and the User's
premises at which the Licensed Product(s) is being used as set
forth in and subject to the limitations of Section 2.4(a) herein
and subject to the limitations of Section 2.4(b) below, and the
right to have an independent auditor review the User's financial
and patient records as set forth in Section 2.4(a) herein. Nothing
in this Section is intended to diminish Lasersight's obligations
or liability under the terms of the Agreement. Lasersight intends
that VISX constitute a third party beneficiary under the User
Covenants.
(b) Enforcement of User Covenants
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VISX is concerned about Lasersight's ongoing accountability for
Per-Procedure Royalties arising from use of Licensed Products
within the United States. Lasersight shall provide a Security
Mechanism that precludes the user from performing more procedures
than authorized by LaserSight ("Security Mechanism") and will
install such a Security Mechanism on all Lasersight laser systems
that Lasersight sells, has sold, leases, has leased or otherwise
disposes or has disposed of or installs or has installed in the
United States, no later than thirty (30) calendar days after the
Effective Date. The Security Mechanism shall be fully integrated
into the system and shall be designed with the intention that it
not be capable of being disconnected, overridden, erased,
bypassed, or the number counted altered by any User or third
party. VISX shall also have the right to designate an independent
auditor to inspect (a) Lasersight's records of the number of
Licensed Procedures authorized to its customers ("Authorized
Procedures") (including the Security Mechanisms on Licensed
Products being manufactured), and (b) Licensed Products and
records of the number of Authorized Procedures or procedures
conducted by Licensed Products being used in the United States to
ensure that the Security Mechanism is operational. If VISX has a
reasonable basis to suspect that any LaserSight User in the United
States has tampered or interfered with the Security Mechanism or
has used reporting methods that are not accurate, VISX may notify
LaserSight of its belief and the basis therefor. If after sixty
(60) calendar days, LaserSight has not corrected the problem or
reasonably demonstrated to VISX that VISX's belief was incorrect,
then VISX shall have the right to inspect during regular business
hours with twenty-four (24) hours advance written notice (not
including any hours on a Saturday, Sunday or legal holiday) the
Licensed Product(s) and the User's premises at which the Licensed
Product(s) in question is being used, provided VISX gives
LaserSight same-day prior notice of such inspection. If after the
inspection, and after a second sixty (60) calendar day period,
Lasersight has not corrected the problem, Lasersight shall refuse
to provide authorization to the User and shall disable the
Licensed Product(s) until Lasersight can provide VISX with
reasonable assurances that the User is in compliance with the User
Covenants.
2.5 No Obligation to Charge
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Lasersight shall have no obligation to charge its customers or
sublicensees (Users) any Per-Procedure Royalties.
2.6 No Implied Licenses Only the licenses granted pursuant to the
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express terms of this Agreement shall be of any legal force or effect.
No other license rights, immunity, or other right shall be created by
implication, estoppel or otherwise with respect to any patents or
patent applications, trade secrets, know-how, or other intellectual
property rights of VISX.
3. Payments and Royalties
3.1 Consideration
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(a) Per-Procedure Royalties
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(i) Lasersight shall pay to VISX a Per-Procedure Royalty
for each Authorized Procedure as follows:
(A)[**] for each Authorized Procedure enabled by
Lasersight prior to the Effective Date of this
Agreement, payable in full upon on the signing of this
Agreement by both parties;
(B)[**] for each Authorized Procedure enabled by
Lasersight during the period beginning on the
Effective Date of this Agreement and extending through
[**];
(C)[**] for each Authorized Procedure enabled by
Lasersight during the period commencing [**] and
extending through [**]; and
(D)[**] for each Authorized Procedure enabled by
Lasersight on and after [**].
(ii) [**]
(iii) Except as provided in Section 3.1(a)(ii) above,
Lasersight shall be responsible for accurately
counting, reporting and paying the Per-Procedure
Royalties separately for each Authorized Procedure on
each Licensed Product by serial number in US dollars
on a monthly basis (within twenty (20) calendar days
after the end of each calendar month) thereafter.
(iv) With respect to Licensed Products made or assembled in
the United States and sold, leased, or Conveyed or
exported solely for use outside of the United States,
Lasersight shall pay VISX the royalty due under the
License Agreement between VISX and Lasersight dated
May 27, 1997 (the "International License"), the terms
of which remain in effect.
(v) Lasersight shall not be required to pay a Per-Procedure
Royalty for a Licensed Procedure performed using a
specific device, machine or system which is a Licensed
Product imported into the United States ("Imported
Device") so long as it has not, and does not, while the
Imported Device is in the United States, directly or
indirectly, knowingly (a) service, enable use of, or
otherwise support such Imported Device, (b) assist or
otherwise participate in the importation of such
Imported Device, or (c) provide training in the
operation or use of such Imported Device.
(b) As further consideration for the license granted in Section
2.1, Lasersight shall convert VISX's license to United States
Patent No. 4,784,135 the "Xxxx Patent") to an irrevocable,
perpetual, fully-paid up license in consideration for VISX
paying the sum of [**] which shall be payable upon the signing
of this Agreement. This provision does not affect VISX's
obligation to pay royalties to LaserSight for products as to
which royalty payments would be due to Nidek as described in
the letter from Xxxxxxx X. Xxxxxx to Xxxx X. Xxxxx dated
February 24, 1998, attached hereto as Exhibit G.
(c) Exemptions
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No Per-Procedure Royalty shall be due or payable with respect
to any particular Authorized and/or Licensed Procedure so long
as, and only so long as, Lasersight can demonstrate in writing
to the reasonable satisfaction of VISX that the said Licensed
Procedure is being performed by the User solely in a manner
which is exempt under 35 United States Code ss. 271(e)(1) or
an equivalent successor statute then in effect, as interpreted
by then applicable precedents, under an Investigational Device
Exemption ("IDE") applied for and obtained by Lasersight or
one of the physician IDE's applied for and obtained by one of
the doctors listed on Exhibit B (the "Physician IDE's"). At a
minimum and without limitation, Lasersight shall provide to
VISX express written approval of the IDE (or any adjunct or
other phase, as applicable) from FDA in which FDA specifies
the number of eyes approved as part of the study (or phase).
Other information in any such FDA approval document that
Lasersight provides to VISX may be redacted by Lasersight. The
redacted FDA approval document shall be disclosed to only one
person at VISX acceptable to Lasersight, who shall maintain
the confidentiality of the redacted FDA approval document.
Lasersight represents that the Physician IDE's are the only
IDE's for which it has provided any right of reference to its
Technical File or Master Device File. Other than the Physician
IDE's, Lasersight represents and agrees that it has not
allowed and will not allow any Person to reference or use any
portion of Lasersight's Pre-Market Approval application,
Technical File, and/or Master Device File in an application or
request for an IDE and that it will not support or assist any
Person in any way in creating an IDE or IDE submission.
Lasersight represents and warrants that as of the Effective
Date, it has made, sold and/or otherwise disposed of no more
than ten (10) laser refractive corneal surgery systems for use
in connection with current FDA approved investigations of
which Lasersight is the sole sponsor (which, together with the
two (2) systems owned by Xx. Xxxx and listed on Exhibit B, are
"Exempt Systems") and that as of the Effective Date Lasersight
has not made, sold and/or otherwise disposed of any other
laser refractive corneal surgery systems for use in connection
with any other current FDA approved investigations. Exempt
Systems are identified by serial number, customer and location
on Exhibit B, which also sets out the number of procedures
allowed under any IDE applied for and obtained by Lasersight.
The parties acknowledge that Lasersight will in the future,
from time to time, be engaged in additional testing as part of
the FDA approval process for which IDEs may be obtained and
that such testing will not be subject to Per-Procedure
Royalties.
(d) Most Favored Licensee
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(i) If at any time subsequent to the execution of this
Agreement with Lasersight, VISX grants a license to
another laser manufacturer under one or more of the
Listed Patents in the Term-Defining Group with a
per-procedure royalty lower than Lasersight's
Per-Procedure Royalty, VISX shall within thirty (30)
business days of such grant notify Lasersight of such
grant and Lasersight may, in its sole discretion, elect
to incorporate into its license such lower
per-procedure royalty in place of the Per-Procedure
Royalty, effective as of the date of the subsequent
license. Within thirty (30) business days after receipt
of such notice, Lasersight must elect by written notice
to accept the terms of the subsequent license or such
right shall lapse and be of no further effect. This
Most Favored Licensee provision shall not apply to any
agreement existing as of the Effective Date, including
any amendment or modification thereto, unless such
amendment or modification is entered into after the
Effective Date and reduces the per-procedure royalty of
the existing agreement, in which event, Lasersight may
incorporate into its license a Per-Procedure Royalty
reduced by the same percentage as the percentage
reduction provided by the amendment or modification to
the other manufacturer's existing per-procedure
royalty. Further, this Most Favored Licensee provision
shall not apply to any license, amendment, or
modification granted by VISX to another laser
manufacturer whereunder VISX is granted a right or
license to at least one patent or other intellectual
property right of such laser manufacturer.
(ii) [**]
(e) VISX shall have the right to designate an independent auditor
to review the financial and patient records of each User
provided, however, that the total number of audited Users may
not exceed twenty percent (20%) of the Licensed Products in
use in the United States each quarter, and further provided
that no User may be audited more than once within any twelve
(12) month period unless an audit reveals the User's
non-compliance with the terms and conditions of this Agreement
or an underpayment hereunder of over five percent (5%), in
which event VISX shall have the right to audit the User more
frequently until the results of the last audit reveal the
User's compliance with the terms and conditions of this
Agreement and less than a five percent (5%) underpayment
hereunder. Such independent auditor shall report to VISX the
number of Licensed Procedures using the audited Licensed
Products. VISX shall pay the fees and expenses of the auditor
unless Lasersight has underpaid the Per-Procedure Royalties
for the audited Licensed Products by five percent (5%) or
more, in which case Lasersight shall pay the reasonable fees
and expenses of the auditor for that quarter's audit and shall
pay any unpaid Per-Procedure Royalties plus interest at the
rate of LIBOR plus three and one half percent (3.5%) or
cumulatively the highest rate permitted by applicable law,
whichever shall be less, for the Licensed Procedures reported
by the auditor. If the auditor finds that Lasersight has
overpaid the Per-Procedure Royalties for the audited Licensed
Products for the audited period, VISX shall refund or credit
the overpaid amount to LaserSight.
(f) In the event that, based on an audit conducted pursuant to
Section 3.1(e) above, VISX determines in its reasonable
discretion that Lasersight's Security Mechanism is inadequate
or that Lasersight's method of counting and reporting
Per-Procedure Royalties is not accurate, VISX shall have the
right to require Lasersight to install an adequate Security
Mechanism and employ accurate counting methods with respect to
all laser systems sold, leased or otherwise disposed of or
installed throughout the world after the Effective Date of the
Agreement including Exempt Systems. Lasersight shall have
sixty (60) calendar days from VISX's notice (the "Cure
Period"), not including days relating to FDA approval for any
changes, if required, to install a replacement Security
Mechanism acceptable to VISX. If Lasersight uses its best
efforts, but is unable to cure the inadequate Security
Mechanism during the Cure Period and employ accurate counting
methods, VISX shall have the right to designate an Independent
Auditor to review the financial and patient records of each
User of a Licensed Product and to report to VISX the number of
Licensed Procedures on each Licensed Product on a monthly
basis until VISX agrees in writing that a replacement Security
Mechanism acceptable to VISX has been installed on each laser
system sold, leased or otherwise disposed of or installed in
the United States after the Effective Date of the Agreement
including each Exempt System. Lasersight shall pay the fees
and expenses of the independent auditor and shall pay any
unpaid Per-Procedure Royalties reported by the independent
auditor plus interest at the rate of LIBOR plus three and one
half percent (3.5%) or cumulatively the highest rate permitted
by applicable law, whichever shall be less, for the Licensed
Procedures reported by the independent auditor for which no
Per-Procedure Royalties have been paid. If after a second
sixty (60) calendar day period, LaserSight has been unable to
cure the inadequate Security Mechanism and employ accurate
counting methods, VISX shall have the right to terminate this
Agreement and all User sublicenses; provided, however, that
VISX's right to terminate shall be postponed for a third and
final sixty (60) calendar day period if Lasersight
demonstrates that, in addition to using its best efforts to
correct the problem, it has retaken possession of any laser
system that VISX reasonably believes does not have an
effective and accurate Security Mechanism or for which
inaccurate reporting methods are being used. Until VISX
elects, if it does, to terminate the License and all User
sublicenses pursuant to the preceding sentence, Lasersight
shall continue to pay the fees and expenses of the independent
auditor and any unpaid Per-Procedure Royalties plus interest
at the rate of LIBOR plus three and one half percent (3.5%) or
cumulatively the highest rate permitted by applicable law,
whichever shall be less, for the Licensed Procedures reported
by the independent auditor for which no Per-Procedure
Royalties have been paid.
3.2 Reports and Payments
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(a) Monthly Reports
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Within twenty (20) calendar days after the end of each
calendar month, Lasersight shall deliver to VISX a written
report in form and substance reasonably acceptable to VISX,
and certified as to accuracy by the chief financial officer of
Lasersight or any other officer of equal or higher rank, which
shall specify the amount of Per-Procedure Royalties due and
payable by Lasersight, and shall contain a statement of (i)
the number of Licensed Procedures (broken down by the serial
number of the Licensed Product intended for performance of
such procedures) authorized during the preceding calendar
month, and (ii) any other relevant information reasonably
specified by VISX from time to time.
(b) Monthly Payments
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Within twenty (20) calendar days after the end of each
calendar month, Lasersight shall pay to VISX, in U.S. Dollars
at such place as VISX may designate in writing to Lasersight
from time to time, an amount equal to all Per-Procedure
Royalties due and payable to VISX with respect to the month to
which any report referred to in Section 3.2(a) relates.
(c) Interest on Amounts Due
-----------------------
In the event that any amount payable under this Agreement is
not paid when due, it shall be paid with interest at the
Overdue Rate, calculated as of the due date, for the period
commencing on the day the payment is due until the date
payment thereof is made in full.
(d) Taxes
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If Lasersight is required to withhold any taxes from any sum
payable to VISX hereunder, Lasersight shall withhold such
taxes and pay the same to the appropriate tax authorities for
the account of VISX. Lasersight shall obtain, and promptly
furnish to VISX, a receipt evidencing each such tax payment.
4. Settlement of Pending Litigation
Within five (5) business days of the Effective Date, VISX and
Lasersight shall cause to be filed in the action pending in the United
States District Court for the District of Delaware (Civil Action No.
99-789- JJF) a fully executed stipulated order in the form attached
hereto as Exhibit D, with each party to bear its own costs.
5. Term; Termination
5.1 Term
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Except as set forth in Section 5.2, this Agreement shall terminate upon
the earlier of (a) expiration of the last to expire of the Listed
Patents in the Term-Defining Group, or (b) a ruling by a court or
administrative tribunal of competent jurisdiction in a final decision
from which there is no further right of appeal that each of the claims
of the unexpired Listed Patents in the Term-Defining Group are either
not infringed by Lasersight or invalid or unenforceable (or the final
ruling of a series of such rulings each with respect to fewer than all
of the unexpired Listed Patents with the same cumulative effect that
all of the claims of the Listed Patents in the Term-Defining Group are
held either invalid or unenforceable or not infringed by Lasersight
with no further right of appeal).
5.2 Termination
-----------
This Agreement (including the licenses granted to Lasersight in this
Agreement) may be terminated by VISX prior to the expiration of the
Term upon the occurrence of any one or more of the following events:
(a) Lasersight shall at any time fail to make any payment, when
and as due, of Per-Procedure Royalties or other amounts due
under this Agreement; provided that such failure has not been
cured within twenty (20) calendar days of written notice from
VISX (the "Notice Period") specifying in reasonable detail the
basis of VISX's conclusion that Lasersight has failed to pay
all Per-Procedure Royalties due under this Agreement
(including a copy of any report prepared for VISX by the
independent auditor pursuant to Section 2.4(b) hereof),
provided that if Lasersight asserts that a product, which is
more than colorably different from the LaserScan LSX (and
Lasersight continues to make the payments due for the
LaserScan LSX), does not infringe any of the Listed Patents,
VISX's right to terminate under this paragraph does not arise
until after (1) either (i) Lasersight designates such
colorably different product as a Licensed Product or (ii) VISX
obtains a ruling by a court or administrative tribunal of
competent jurisdiction in a final decision from which there is
no further right of appeal that such colorably different
product infringes one or more claims of one or more of the
VISX Patents and (2) Lasersight fails to begin making payments
within 20 days after 5.2(a)(1)(i) or (ii) above;
(b) Lasersight shall at any time fail to cure any violations of
Section 2.4(b) within one hundred eighty (180) calendar days
of receipt of a written notice of noncompliance.
(c) Lasersight shall at any time breach any of its obligations
under Sections 2.4(a), 3.2, 6.1, 6.2, 7.2, and 11.1, and fail
to cure such breach within thirty (30) calendar days after
being given notice of such breach by VISX, provided that the
foregoing thirty (30) calendar day grace period shall not
apply if Lasersight has received more than three (3) such
thirty (30) day grace periods in any twelve (12) month period;
(d) Lasersight becomes insolvent, makes an assignment for the
benefit of creditors or is generally not paying its debts as
they mature;
(e) Lasersight attempts to assign, transfer or delegate any of its
rights, licenses, duties or obligations under this Agreement
in violation of the terms, conditions or provisions of Section
11.1
VISX may exercise its right to terminate this Agreement (including the
licenses granted to Lasersight herein) by written notice to Lasersight
specifying therein the election to so terminate.
5.3 No Contest Period
-----------------
(a) Lasersight
(i) shall not, prior to June 1, 2003, directly or
indirectly, contest in any proceeding, or otherwise
aid, assist or participate in any proceeding
contesting, the infringement of US Patent No. 4,718,418
(the " `418 Patent") by the Lasersight Laserscan LSX or
any other Lasersight product which is not more than
colorably different from the Laserscan LSX;
(ii) shall not, prior to June 1, 2003, directly or
indirectly contest in any proceeding, or otherwise aid,
assist or participate in any proceeding contesting, the
validity or enforceability of the `418 Patent, unless
Lasersight products which are more than colorably
different from the Laserscan LSX are at issue in such
proceeding and are Lasersight products for which
Lasersight has obtained a formal written opinion of
outside counsel that the more than colorably different
product does not infringe any of the Listed Patents in
the Term-Defining Group; and
(iii) shall pay the Per-Procedure Royalties due under this
Agreement until at least June 1, 2003, notwithstanding
that the `418 Patent may be challenged as or held
invalid or unenforceable, or not infringed by the
Lasersight products, in any other proceeding at a later
date.
(b) Nothing in this Agreement, including without limitation,
Lasersight's payments under this Agreement and/or Lasersight's
marking pursuant to this Agreement,shall be used in any
proceedings against Lasersight, its indemnitees, Users, and/or
sublicensees, as an admission or to suggest or tend to prove
that any Lasersight product or the use thereof is covered by
or falls within the scope of any claim of any VISX Patent.
5.4 Effect of Termination
---------------------
If this Agreement and the licenses granted herein are terminated as
provided in this Agreement, then all licenses and sublicenses acquired
by Lasersight or any other Person acquiring any rights from or through
Lasersight to the VISX Patents by virtue of this Agreement, including
any User, shall terminate.
5.5 Limited Survival of Agreement
-----------------------------
Notwithstanding the expiration this Agreement as provided in Section
5.1 or the earlier termination of this Agreement and the licenses
granted herein as provided in Section 5.2, any term or provision of
this Agreement pertaining to any of the subject matter described in
this Section 5.5 shall continue in effect after such expiration or
termination to the degree necessary to permit its complete fulfillment
or discharge.
(a) Any Lasersight obligation to maintain or cause the maintenance
of records and/or to provide any reports required under this
Agreement which relate to any period ending on or before such
expiration or termination, and VISX's right to conduct any
audit or inspection with respect thereto;
(b) VISX's right to receive or recover, and Lasersight's
obligation to pay, any amounts due to VISX under this
Agreement which have accrued or were earned at any time prior
to such expiration or termination, including any amounts which
may be due by reason of any adjustment arising from an
inspection or audit pursuant to this Agreement;
(c) The provisions of Section 9 in effect at the time of such
expiration or termination with respect to confidential
information of either party to this Agreement, provided
however, that notwithstanding any other provision of this
Agreement, such covenant or agreement with respect to such
confidential information shall expire and be of no further
force and effect on and after three (3) years after the
expiration or termination of this Agreement.
6. Records, Inspections and Audits
6.1 Records
-------
Without limiting the requirements of Sections 2.4(a) and 3.2,
Lasersight shall keep and maintain, books and records, utilizing
generally accepted accounting principles and practices (to the extent
applicable), which contain information necessary to calculate any
Per-Procedure Royalties payable to VISX under this Agreement, and to
assure compliance by Lasersight with the terms of this Agreement,
including, without limitation, information necessary to verify the
number of Authorized Procedures, and the specific Licensed Product
intended for performance of each Authorized Procedure.
6.2 Inspection and Audit.
--------------------
(a) VISX shall have the right, exercisable by VISX not more
frequently than once every three (3) months during the Term,
to designate an independent technical and/or accounting firm
(which may be VISX's current auditors, Xxxxxx Xxxxxxxx LLP)
(the "Inspector"), and to request the Inspector to conduct an
inspection and/or audit, and make a report to VISX as outlined
in this Section 6.2, in order to verify Lasersight's and its
Subsidiaries' compliance with the terms, conditions and
provisions of this Agreement and each User's compliance with
the User Covenants, including an inspection or audit, during
regular business hours after giving at least forty-eight (48)
hours written notice, (not including any hours on a Saturday,
Sunday or legal holiday), of (a) Lasersight's records of the
number of Authorized Procedures (including the Security
Mechanisms on Licensed Products being manufactured), and (b)
Licensed Products and records of the number of Authorized
Procedures or procedures conducted by Licensed Products being
used in the United States to ensure that the Security
Mechanism is operational.
(b) The Inspector shall be permitted to make copies of documents
or any other information necessary to establish noncompliance
with the terms, conditions and provisions of this Agreement.
To the extent possible, the Inspector shall endeavor to avoid
disrupting Lasersight's business in the course of conducting
the inspection. Lasersight agrees to cooperate fully with and
inspection and audit conducted by the Inspector as provided
herein and to comply with all reasonable requests of VISX in
regard thereto. The Inspector may prepare a report for VISX
of the results of any audit and inspection of Lasersight. To
the extent practicable, the Inspector shall endeavor to
prepare the report in a manner which minimizes the disclosure
of Lasersight's Confidential Information, taking into account,
however, VISX's right to be advised of any information which
in the sole judgment of the Inspector and/or VISX's legal
counsel reflects a violation of this Agreement or the User
Covenants or an incorrect calculation of payments due to VISX
under this Agreement.
(c) Consequence of Underpayments.
----------------------------
Without limiting the provisions of Section 2.4, if the
Inspector reasonably determines that Lasersight has underpaid
any Per-Procedure Royalties due during any audited period,
Lasersight shall within five (5) business days of receipt of
notice from VISX, such notice including a copy of the
Inspectors report, pay to VISX the underpaid amount plus
interest on the underpaid amount calculated at the Overdue
Rate (calculated as of the date the underpaid amount was
originally due) for the period from the date the underpaid
amount was originally due to the date of payment thereof. In
addition, if the underpaid amount during any calendar month
during an audited period is more than five percent (5%) of the
Per-Procedure Royalties actually paid to VISX for that month,
then (without limiting any other remedies available to VISX)
Lasersight shall also pay to VISX all reasonable costs
incurred by VISX with respect to or related to the audit,
including, without limitation, all accounting or auditing
fees, attorneys' fees and any other costs and expenses of VISX
incurred in ascertaining or determining such underpayment or
in collecting full payment thereof.
7. Covenants, Representations and Warranties
7.1 Representations and Warranties
------------------------------
VISX hereby represents and warrants that (i) it has the legal power,
authority and right to enter into this Agreement and to perform all of
its obligations hereunder, and (ii) it will not grant any rights in the
VISX Patents which are inconsistent with the rights granted to
Lasersight herein, or in violation of any of VISX's covenants made in
this Agreement.
Lasersight hereby represents and warrants that (i) it has the legal
power, authority and right to enter into this Agreement and to perform
all of its obligations hereunder.
7.2 Covenants
---------
Lasersight hereby covenants and agrees to comply with each of the
following covenants:
(a) Labeling and Notices Negating Implied Licenses
(i) From and after July 1, 2001, Lasersight shall give each
User written notice that Licensed Procedures may be
authorized by Lasersight and performed by the User only
if such User has agreed to be bound by the User
Covenants, and that any use of the Licensed Product to
perform Licensed Procedures without such agreement may
constitute patent infringement. The notice shall list
by number the VISX Patents, or a subset of the VISX
Patents, as reasonably requested by VISX in writing.
The notice shall in particular exclude any implied
license or other right of such Person to perform
Licensed Procedures in the United States by reason of
any Conveyance.
(ii) At a minimum, the notice shall include the language set
forth in Exhibit E. VISX reserves the right from time
to time during the term of this Agreement to modify
Exhibit E for the purpose of adding or deleting
Existing Patents or adding patents selected by
Lasersight for inclusion in the Term-Defining Group
list of VISX Patents in Exhibit E. Upon delivery by
VISX of a modified Exhibit E to Lasersight, the
modified Exhibit E shall replace the previous Exhibit E
for all purposes of this Agreement as of the date of
such delivery, and Lasersight shall take any and all
action required to cause each notice (and label as
required in Section 7.2(a)(iii) below) thereafter given
or affixed pursuant to this Section 7.2(a)(ii) to
reflect the language of the modified Exhibit E.
(iii) The aforesaid notice shall be prominently stated in a
sales, lease or other agreement relating the Conveyance
of a Licensed Product with each User. Such notice
shall also be prominently and permanently affixed, or
caused to be affixed, by Lasersight as a label to each
Licensed Product that is Conveyed by or for Lasersight,
directly or indirectly, for use in the United States on
or after August 1, 2001. The purpose of the label is
to provide notice of the VISX Patents to other parties
to establish or support a claim by VISX against any
such other party of damages due to infringement. Each
notice and label shall be in capitalized and bold
lettering with a minimum font size of 10 points. With
respect to Licensed Products Conveyed prior to May 28,
2001 for use in the United States, Lasersight shall
affix, or cause to be affixed, such label by
September 1, 2001. Lasersight shall take all measures
necessary to contractually bind the recipients of the
notice to the limitations and conditions set forth
therein.
(iv) Lasersight shall provide VISX with a copy of the form
of any notice and label which Lasersight proposes to
use to comply with the foregoing requirements that
differs from the notice and label attached as Exhibit E
hereto, including any proposed amendment thereto, at
least ten (10) days prior to the date Lasersight first
intends to provide such notice and affix such label or
amended notice and label, as the case may be.
(b) Labeling on Laser Systems Conveyed Outside the United States
On any Licensed Product Conveyed, directly or indirectly,
after the Effective Date by Lasersight outside the United
States, Lasersight shall attach a permanent label which
states, "Not for use in the United States. Not licensed under
U.S. patents." Such a Licensed Product is not licensed in the
United States unless licensed by VISX under separate agreement
for use in the United States, at which time the label can be
removed.
7.3 Nothing contained in this Agreement shall be construed as:
(a) a warranty or representation by VISX as to the validity,
enforceability or scope of any of the VISX Patents;
(b) a warranty or representation by VISX that the manufacture,
sale, offer for sale, lease, import, use or other disposition
of Licensed Products or the performance of Licensed Procedures
hereunder will be free from infringement of intellectual
property rights of third parties;
(c) an agreement by VISX to file any patent application, secure
any patent or maintain any patent in force;
(d) conferring any rights to use in advertising, publicity, or
other marketing activities any name, trademark, or other
designation of either party hereto;
(e) conferring by implication, estoppel or otherwise any license
or other rights except the licenses and rights expressly
granted hereunder;
(f) prohibiting either party from licensing any third party under
its patents; or
(g) a warranty or representation (whether implied, statutory or
otherwise), except as expressly provided in this Section 7.
8. Indemnification
---------------
8.1 Indemnification Disclaimer
--------------------------
VISX disclaims and shall have no obligation to defend or indemnify
Lasersight or any User with respect to any claim for infringement of
any third party intellectual property right as a result of the exercise
of rights granted hereunder.
8.2 Indemnification By Lasersight
-----------------------------
Lasersight shall indemnify, defend and hold harmless VISX and its
successors, assigns, officers, directors, shareholders, employees,
representatives, attorneys and agents (each such Person an "Indemnified
VISX Person") from and against any and all claims, liability, loss,
damage, costs or expense of whatsoever kind or nature (excluding the
Indemnified VISX Person's attorneys' fees and costs and any special,
consequential or economic damages) asserted against or suffered or
incurred by an Indemnified VISX Person arising or resulting from or
otherwise concerning:
(a) The manufacture, use, offer to sell, or Conveyance by
Lasersight, directly or indirectly, of any Licensed Product
manufactured and/or Conveyed, directly or indirectly, by or
for Lasersight, including any product liability claim arising
therefrom;
(b) Any claim for personal injury or property damage, whether
successful or not, related to or otherwise concerning any
Licensed Product manufactured, used, offered for sale or
Conveyed by Lasersight or the performance of any Licensed
Procedure; and/or
(c) Any breach or failure to perform by Lasersight of any of
Lasersight's representations, warranties, covenants,
agreements or obligations under this Agreement.
The foregoing indemnification and agreement to defend and hold harmless
shall include, without limitation, any cost or expense incurred or to
be incurred by an Indemnified VISX Person by reason of its having been
or being a party or being threatened to be made a party to any such
threatened, pending or completed action, suit or proceeding, whether
civil, criminal, administrative or investigative (excluding the
Indemnified VISX Person's attorneys' fees and costs). The Indemnified
VISX Person shall be entitled to retain counsel of such Person's choice
to defend that Person. The fees and other expenses of the Indemnified
VISX Person's counsel shall be borne by that Person. Lasersight shall
not settle any claim subject to this provision without first obtaining
the Indemnified VISX Person's consent, which consent shall not
unreasonably be withheld.
8.3 Indemnification By VISX
-----------------------
VISX shall indemnify, defend and hold harmless Lasersight and its
successors, assigns, officers, directors, shareholders, employees,
representatives, attorneys and agents (each such Person an "Indemnified
Lasersight Person") from and against any and all claims, liability,
loss, damage, costs or expense of whatsoever kind or nature (excluding
the Indemnified Lasersight Person's attorneys' fees and costs and any
special, consequential or economic damages) asserted against or
suffered or incurred by an Indemnified Lasersight Person arising or
resulting from or otherwise concerning: any breach or failure to
perform by VISX or any of its Affiliates of any of VISX's
representations, warranties, covenants, agreements or obligations under
this Agreement.
The foregoing indemnification and agreement to defend and hold harmless
shall include, without limitation, any cost or expense incurred or to
be incurred by an Indemnified Lasersight Person by reason of its having
been or being a party or being threatened to be made a party to any
such threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative (excluding the
Indemnified Lasersight Person's attorneys' fees and costs). The
Indemnified Lasersight Person shall be entitled to retain counsel of
such Person's choice. The fees and other expenses of the Indemnified
Lasersight Person's counsel shall be borne by that Person. VISX shall
not settle any claim subject to this provision without first obtaining
the Indemnified Lasersight Person's consent, which consent shall not
unreasonably be withheld.
9. Confidentiality
9.1 Confidential Information
------------------------
Each party agrees that it shall not disclose to any third party or use
except in furtherance or enforcement of this Agreement any confidential
information of the other party disclosed in connection with the
Agreement. Either party may disclose any confidential information of
the other party or its Affiliates or Subsidiaries to the extent
necessary to comply with an order or request of a court or governmental
agency or to comply with a formal discovery request or an information
request of a governmental agency.
9.2 Non-Confidential Information
----------------------------
A party shall be under no obligation with respect to any portion of
confidential information of the other party or its Affiliates or
Subsidiaries referred to in Section 9.1, which it can demonstrate by
clear and convincing evidence:
(a) Is not clearly and prominently labeled in writing as
confidential information;
(b) Through no act or failure to act on its part, becomes
generally known or available to the public;
(c) Is known by the party at the time of receiving such
confidential information;
(d) Is furnished to the party by any Person not legally precluded
from making the disclosure without restriction on disclosure;
and/or
(e) Is independently developed by the party without use of such
confidential information.
9.3 Nondisclosure of Certain Terms of Agreement
-------------------------------------------
Each party hereby covenants and agrees that it shall exercise all
reasonable efforts to maintain the amount of the Per-Procedure Royalty,
the other economic terms, and certain other terms of this Agreement
that the parties will identify prior to signing this Agreement (the
"Confidential Terms") in strict confidence and shall not disclose the
Confidential Terms to any Person other than their employees and agents
who have an absolute need to know that information. In the event that
under applicable securities laws, the rules of any governmental
authority, the terms of an order of a court of competent jurisdiction
or a formal discovery request any party is required to make disclosures
of any of the Confidential Terms, then before making any such
disclosure that party shall consult with the other party concerning
such requirement and shall apply and request in accordance with the
rules of the applicable governmental authority or court that the
Confidential Terms be maintained in strict confidence (e.g., in the
case of a court, by obtaining the strictest available protective order,
or, in the case of the Securities and Exchange Commission, by obtaining
confidential treatment). Either party may issue a press release or
other statement announcing the existence (but not the Confidential
Terms) of this Agreement, provided that the party first obtains the
other party's written approval of the content of the press release,
which approval will not be unreasonably withheld.
10. Enforcement of VISX Patents
In the event that (i) a third party manufacturer of a laser vision
correction systems is granted premarket approval by the FDA to market
such product for an indication that can be demonstrated to infringe one
or more claims of a patent in the Term-Defining Group of the Listed
Patents and (ii) such manufacturer sells, leases or otherwise disposed
of at least ten (10) such products for use in the United States after
the date of such premarket approval, Lasersight may promptly notify
VISX by identifying in writing the name of the manufacturer and the
location of the ten (10) products (the "Notice"). Within thirty (30)
business days following receipt by VISX of such Notice, VISX will
provide written notice to Lasersight that VISX intends to do one of the
following: (a) use commercially reasonable efforts for a period of up
to one hundred eighty (180) business days from the date of the Notice
to enter into a license agreement with the third party manufacturer
(the "License Option"); (b) take prompt reasonable steps, including
litigation, to xxxxx such infringement (the "Litigation Option"); or
(c) take no action. If VISX elects the License Option and fails to
either (a) enter into a license agreement with the infringing third
party manufacturer within the 180-day period or (b) initiate legal
action against the infringing third party manufacturer within sixty
(60) business days following expiration of the 180-day period, then no
Per-Procedure Royalties shall accrue after the expiration of that sixty
(60) business day period until VISX enters into a license agreement
with, or initiates legal action against, the infringing third party
manufacturer.
If VISX elects the Litigation Option and fails to initiate legal action
against the infringing third party manufacturer within sixty (60)
business days following receipt of the Notice, then no Per-Procedure
Royalties shall accrue after the expiration of that 60-day period until
VISX enters into a license agreement with, or initiates legal action
against, the infringing third party manufacturer.
If VISX elects to take no action, Lasersight may provide to VISX a
written opinion of outside patent counsel who is acceptable to both
VISX and Lasersight expressing an affirmative determination that the
preponderance of the available evidence demonstrates that such system
infringes one or more claims of a patent in the Term-Defining Group of
the Listed Patents (the "Opinion"). Within thirty (30) business days
following receipt by VISX of the Opinion, VISX will provide written
notice to Lasersight that VISX intends to pursue either the License
Option or the Litigation Option. If VISX thereafter fails to pursue the
option it elected, the parties will proceed as described above.
If there is a dispute between VISX and Lasersight regarding VISX's
satisfaction of its obligations hereunder, Lasersight shall pay all
royalties otherwise due under this Agreement into an escrow account
pending settlement of the dispute or resolution by binding arbitration
in accordance with the Commercial Arbitration Rules of the American
Arbitration Association.
11. Miscellaneous
11.1 No Assignment
-------------
The rights and licenses granted by VISX in this Agreement are personal
to Lasersight. Except as expressly provided below, other than the
sublicenses to Users provided for in Section 2.1, Lasersight shall not
transfer or delegate any of its rights or obligations under this
Agreement without the express written consent of VISX, which consent
may be withheld in VISX's sole discretion and said transfer or
delegation without such consent shall be null and void for all
purposes; provided, however, that Lasersight may assign all but not
less than all of its rights and obligations under this Agreement to any
successor by way of merger, consolidation or acquisition of
substantially all of Lasersight's assets associated with laser ablation
of corneal tissue, if such successor first agrees in writing to be
bound by the provisions of this Agreement. Lasersight's liability under
this Agreement shall nevertheless continue until expressly released by
VISX, which release shall not be unreasonably withheld. Notwithstanding
the foregoing, the right to make an assignment to a successor by way of
merger, consolidation or acquisition of substantially all of
Lasersight'sassets associated with laser ablation of corneal tissue
("Permitted Assignment") shall apply only with respect to (i) the
models of Licensed Products that are sold or leased by and manufactured
by Lasersight at least ninety (90) days prior to any such Permitted
Assignment and (ii) all improvements and upgrades to such models made
in the ordinary course of development; but such right shall not apply
to any improvements or upgrades on a laser platform that was not a
Lasersight laser platform prior to the Permitted Assignment.
Notwithstanding anything to the contrary in this Section 11.1, in no
event, however, shall the granted license run in favor of any device
competitive with the Licensed Products which, prior to the Effective
Date of this Agreement, was manufactured by a Person who, prior to the
date of this Agreement, is engaged in the production or sale of such
competitive device.
11.2 Entire Agreement
----------------
This Agreement, together with any Exhibits attached hereto, constitutes
the entire agreement between the parties with respect to the subject
matter hereof and supersedes any prior understandings, agreement or
representations by or between the parties, written or oral, that may
have related in any way to the subject matter hereof. The parties
acknowledge that the international License Agreement dated May 27, 1997
between VISX and Lasersight is unaffected by this Agreement and will
continue in full force and effect and Lasersight shall continue to pay
royalties in accordance with the terms of that agreement.
11.3 Independent Contractors
-----------------------
The relationship of VISX and Lasersight established by this Agreement
is that of independent contractors. Nothing in this Agreement shall be
construed to create any other relationship between VISX and Lasersight.
Neither party shall have any right, power or authority to assume,
create or incur any expense, liability or obligation, express or
implied, on behalf of the other.
11.4 Force Majeure
-------------
Neither party hereto shall be in default by reason of any failure in
the performance of this Agreement in accordance with its terms if such
failure is due to acts of God, war, strikes, riots, storms, fires or
any other cause whatsoever beyond the reasonable control of the party.
The party so prevented or delayed in the performance of its obligations
shall promptly notify the other party and shall be excused from such
performance to the extent and during the period of such prevention or
delay.
11.5 Compliance with Laws
--------------------
In exercising its rights under this Agreement, each party shall fully
comply in all material respects with the requirements of any and all
applicable laws, regulations, rules and orders of any governmental body
having jurisdiction over the exercise of the rights hereunder.
11.6 No Waiver
---------
A waiver, express or implied, by either party of any right under this
Agreement or of any failure to perform or breach hereof by the other
party shall not constitute or be deemed to be a waiver of any other
right hereunder or of any other failure to perform or breach hereof by
such party, whether of a similar or dissimilar nature thereto.
11.7 Modifications
-------------
No amendment of any provisions of this Agreement shall be valid unless
the same shall be in writing and signed by both VISX and Lasersight.
11.8 Notices
-------
Any notice or report required or permitted to be given or made under
this Agreement by VISX or Lasersight shall be in writing and delivered
to the other party at its address indicated below (or to such other
address as a party may specify by notice hereunder) by courier or by
registered or certified airmail, postage prepaid, or by facsimile;
provided, however, that all facsimile notices shall be promptly
confirmed, in writing, by registered or certified airmail, postage
prepaid. All notices shall be effective as of the date received by the
addressee at the address provided for the addressee.
If to VISX:
VISX, Incorporated
0000 Xxxxxxx Xxxxxxxxxx
Xxxxx Xxxxx, XX 00000
Attention: Chief Executive Officer
Fax: (000) 000-0000
If to Lasersight:
LaserSight Incorporated
0000 Xxxxxxxxxx Xxxx., Xxxxx 000
Xxxxxx Xxxx, XX 00000
Attention: Chief Executive Officer
Fax: (000) 000-0000
Any party may change the address of designated recipient to which
notices, requests, demands, claims and other communications hereunder
are to be delivered by giving the other party notice in the manner
herein set forth.
11.9 Governing Law
-------------
This Agreement shall be construed, and the legal relations between the
parties hereto shall be determined, in accordance with the laws of the
State of Delaware, without reference to conflicts of laws principles.
11.10 Venue and Jury Waiver
---------------------
IN ANY LITIGATION RELATING TO OR ARISING OUT OF THIS AGREEMENT, THE
PARTIES AGREE NOT TO CONTEST JURISDICTION OR VENUE IF THE ACTION IS
FILED IN THE FEDERAL OR STATE COURTS WITHIN THE STATE OF DELAWARE. THE
PARTIES ALSO AGREE THAT IN ANY LITIGATION RELATING TO OR ARISING OUT OF
THIS AGREEMENT IN WHICH THEY SHALL BE ADVERSE PARTIES THEY SHALL WAIVE
THE RIGHT TO TRIAL BY JURY.
11.10 Headings
--------
The headings of sections are inserted for convenience of reference only
and are not intended to be a part of or to affect the meaning or
interpretation of this Agreement.
11.11 No Coercion
-----------
Lasersight acknowledges and agrees that the VISX Patents licensed under
this Agreement are freely chosen by Lasersight and are not coerced, and
that the methods for calculating royalties are chosen by Lasersight and
VISX for the convenience of the parties. Nothing in this Agreement
shall be construed as an admission by Lasersight that any VISX Patent,
including without limitation any patent that is, on the Effective Date
of this Agreement, or later becomes a Listed Patent, is valid or
enforceable or is infringed by a Lasersight product.
11.12 Severability
------------
If any term or provision of this Agreement, or the application of such
term or provision to any Person or circumstance, is held to be illegal,
invalid or unenforceable, then, at the option of VISX exercised by
written notice to Lasersight (i) the remainder of this Agreement, or
the application of such term or provision to Persons or circumstances
other than those to which it is held illegal, invalid or unenforceable,
shall not be affected thereby, or (ii) VISX shall have the right to
have the parties renegotiate this Agreement, which the parties agree to
do promptly and in good faith after such option is exercised, so as to
place each of the parties, to the fullest extent legally possible, in
substantially the same economic position as each of them would have
been if such holding of illegality, invalidity or unenforceability had
not occurred.
11.13 Injunctive Relief
-----------------
The remedy at law for breach of VISX's unique rights pursuant to this
Agreement being inadequate, Lasersight agrees that VISX shall be
entitled, in addition to such other remedies as it may have at law or
otherwise, to temporary and permanent injunctive relief and/or specific
enforcement for any breach or threatened breach of this Agreement by
Lasersight without proof of any actual damages that have been or may be
caused to VISX by such breach. The remedy at law for breach of VISX's
unique rights pursuant to Section 7.2 of this Agreement being
inadequate, Lasersight agrees that VISX shall be entitled, in addition
to such other remedies as it may have at law or otherwise, to temporary
and permanent injunctive relief and/or specific enforcement for any
breach or threatened breach of Section 7.2 of this Agreement by
Lasersight without proof of any actual damages that have been or may be
caused to VISX by such breach.
11.4 Maximum Lawful Interest Rate
----------------------------
Notwithstanding any provision contained in this Agreement, the total
liability of Lasersight for payment of interest pursuant to this
Agreement shall not exceed the maximum amount of such interest
permitted by law to be charged, collected, or received from Lasersight,
and if any payments by Lasersight include interest in excess of such a
maximum amount, VISX shall apply such excess to the reduction of the
unpaid balance due pursuant to this Agreement, or if none is due, such
excess shall be refunded to Lasersight.
11.5 Counterparts.
------------
This Agreement and any amendments, waivers, consents or supplements
hereto may be executed in any number of counterparts, and by different
parties in separate counterparts, each of which when so executed and
delivered shall be deemed an original, but all such counterparts
together shall constitute but one and the same agreement. Each such
agreement shall become effective upon the execution of a counterpart
hereof or thereof by each of the parties hereto.
IN WITNESS WHEREOF, each party has caused this Agreement to be executed as of
the date first written above by its duly authorized representatives.
Agreed to: Agreed to:
VISX, INCORPORATED LASERSIGHT INCORPORATED
By: /s/Xxx Xxxxxx By: /s/Xxxxxxx X. Xxxxxx
------------------------------ -------------------------------
Name: Xxx Xxxxxx Name: Xxxx Xxxxxx
------------------------------ -------------------------------
Title: Chairman & CEO Title: President/CEO
------------------------------ -------------------------------
Date: 5/25/01 Date: May 25, 2001
------------------------------ -------------------------------
EXHIBIT A
Listed Patents
(All issued in the United States)
[**]
EXHIBIT B
EXEMPT SYSTEMS
[**]
EXHIBIT C
LASERSIGHT LICENSED PRODUCTS
Lasersight Laserscan LSX
EXHIBIT D
STIPULATED ORDER
UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF DELAWARE
VISX, INCORPORATED, a Delaware
corporation,
Plaintiff,
v. Civil Action No. 99-789-JJF
LASERSIGHT, INC., a Delaware corporation,
Defendant.
------------------------------------------
STIPULATION OF DISMISSAL
------------------------
IT IS HEREBY STIPULATED AND AGREED by plaintiff VISX, Incorporated and
defendant Lasersight, Inc. that the above-captioned action is dismissed without
prejudice pursuant to Rule 41(a)(1) of the Federal Rules of Civil Procedure,
with each party to bear its own costs.
YOUNG XXXXXXX STARGATT & XXXXXX MORRIS, NICHOLS, ARSHT & XXXXXXX
------------------------------- -----------------------------------
Xxxxxxx X. Xxxxx (I.D. #531) Xxxx X. Xxx (#3304)
Xxxxxx Square North 0000 Xxxxx Xxxxxx Xxxxxx
X.X. Xxx 000 P.O. Box 1347
Wilmington, Delaware 19801 Xxxxxxxxxx, Xxxxxxxx 00000
Telephone: (000) 000-0000 Telephone: (000) 000-0000
Counsel for Plaintiff Counsel for Defendant
EXHIBIT E
NOTICE AND LABEL NEGATING IMPLIED LICENSES
[DESCRIBE SYSTEM] SYSTEM AND ITS USE MAY BE COVERED BY ONE OR MORE OF THE
FOLLOWING UNITED STATES PATENTS:
4,665,913 4,993,826 5,283,598
4,669,466 4,998,819 5,286,964
4,718,418 5,054,907 5,474,548
4,721,379 5,098,426 5,711,762
4,773,414 5,106,183 5,729,564
4,798,204 B1 5,108,388 5,865,832
4,885,471 5,163,934 5,966,197
4,902,123 5,170,193 6,106,513
4,903,695
THESE PATENTS COVER APPARATUS AND METHODS FOR PERFORMING OPHTHALMIC LASER
SURGERY. THE PURCHASE, LEASE, EXCHANGE, DISPOSITION OR OTHER METHOD OF
ACQUISITION, OWNERSHIP OR POSSESSION BY ANY PERSON OF THE SYSTEM, WHETHER NEW OR
USED, DOES NOT RESULT IN ANY LICENSE OR OTHER RIGHT WHATSOEVER TO SUCH PERSON,
BY IMPLICATION, ESTOPPEL OR OTHERWISE TO PERFORM REFRACTIVE OPHTHALMIC LASER
SURGERY PROCEDURES WITH THE SYSTEM IN THE UNITED STATES NOR ANY LICENSE OR OTHER
RIGHT WHATSOEVER, BY IMPLICATION, ESTOPPEL OR OTHERWISE UNDER ANY UNITED STATES
PATENTS. ANY SUCH LICENSES OR OTHER RIGHTS ARE HEREBY EXPRESSLY EXCLUDED AND
DISCLAIMED.
REFRACTIVE OPHTHALMIC LASER SURGERY PROCEDURES MAY BE PERFORMED WITH THE SYSTEM
IN THE UNITED STATES IF, AND ONLY IF, AN AGREEMENT HAS BEEN ENTERED INTO WITH
LASERSIGHT UNDER WHICH LASERSIGHT HAS GRANTED RIGHTS, CONDITIONED ON COMPLIANCE
WITH CERTAIN COVENANTS, TO PERFORM SUCH PROCEDURES WITH THE SYSTEM AND THAT
SUBLICENSE AGREEMENT IS IN EFFECT AT ALL TIMES WHEN SUCH PROCEDURES ARE BEING
PERFORMED WITH THE SYSTEM. USE OF THE SYSTEM TO PERFORM REFRACTIVE OPHTHALMIC
LASER SURGERY PROCEDURES IN THE UNITED STATES WITHOUT SUCH AN AGREEMENT IN
EFFECT MAY CONSTITUTE PATENT INFRINGEMENT.
EXHIBIT F
USER COVENANTS
(a) Unless otherwise defined herein, all capitalized terms shall
have the meaning ascribed to them in the User Covenants.
(b) The term "Sublicensor" means Lasersight.
(c) The term "Sublicensee" means the User
(d) The term "User" means any Person who uses, purchases, leases,
or operates Licensed Product manufactured and/or conveyed,
directly or indirectly, by or for Lasersight.
(e) The term "Performing User" means a User who is an agent,
employee, or partner of another User ("Operator User") or
another authorized individual and whose use of a given
Licensed Product is governed by the agreement containing the
User Covenants signed by the Operator User.
(b) The term "System" means the specific Licensed Product to be
used by Sublicensee to perform Licensed Procedures.
1. Grant. Sublicensor hereby grants to Sublicensee a non-exclusive
-----
sublicense to perform Licensed Procedures using the System at
____________________ (the "Installation Site"). The rights hereby
granted shall be conditioned upon Sublicensee's ongoing compliance with
the covenants contained herein and are subject to the provisions of any
label on the System or notice given to Sublicensee. These rights shall
automatically terminate in the event of non-compliance with any of the
covenants contained herein and may be terminated at any time, with or
without cause. Sublicensor shall be permitted to assign its rights
hereunder without Sublicensee's consent. The Sublicense extends only
to Sublicensee and its Performing Users. Sublicensee shall at all
times keep and make available for inspection by Sublicensor a list of
all such Performing Users. Termination of the rights granted under
this Section shall not terminate or release any of Sublicensee's
accrued or other obligations hereunder, which shall survive such
termination until discharged or satisfied in full.
2. Change of Designated Location. Sublicensee hereby covenants and agrees
-----------------------------
that Sublicensee shall not remove or allow any other Person to remove
the System from the Installation Site without first giving Sublicensor
prior written notice of the proposed removal, stating in the notice the
new Installation Site.
3. Notice Negating Implied Licenses. Only the sublicense granted pursuant
--------------------------------
to the express terms of this User Covenants shall be of any legal force
or effect. No other license rights shall be created by implication,
estoppel, Conveyance, or otherwise
4. Prohibition On Tampering With Labels or Notices. Sublicensee shall not
-----------------------------------------------
remove or otherwise tamper with any label or notice affixed to the
System.
5. Monitoring System or Mechanism. Sublicensee shall at all times allow
------------------------------
Sublicensor to install in, or attach to, the System and modify and/or
enhance a recording, memory or other system or mechanism, and/or
software which monitors and measures the number Licensed Procedures
performed with the System. Sublicensee shall not tamper in any manner
with any such system, mechanism or software or request, allow or permit
any other Person (e.g., a third party service provider) to do so.
6. Record Keeping. Sublicensee shall keep such books and records with
--------------
respect to its use of the System necessary to establish the number of
Licensed Procedures performed, including, to the extent permitted by
applicable law, a written waiver in the form prescribed by Sublicensor
of the doctor-patient privilege.
7. Right of Inspection. Sublicensee shall during its regular business
-------------------
hours and upon at least twenty-four (24) hours notice allow Sublicensor
and its representatives, and other designated Persons, access to the
System, any related memory or other system or mechanism and software
contemplated in Section 5 and all output thereof, and all of
Sublicensee's books and records maintained as required under Section 6,
including patient records (with patient names replaced by patient
numbers, if required under applicable law), and the right to inspect
and audit the same for the purpose of obtaining the number and types of
Licensed Procedures performed with the System and to monitor compliance
by Sublicensee with the covenants used herein.
8. Transfer of System. Sublicensee shall not Convey to any Person who
------------------
intends to perform Licensed Procedures, unless prior to any such
Conveyance Sublicensee causes such Person to enter into with
Sublicensor an agreement containing the User Covenants in the form then
required by Sublicensor with respect to systems identical or similar to
the System.
9. Right to Disable. Upon Sublicensee's breach or default of its
----------------
obligations under this Sublicense, Sublicensor shall also have the
right to disable the System until the breach or default has been cured.