EXHIBIT 10.44
AGREEMENT
This Agreement (the "Agreement") is entered into as of the 31st day of
December, 1997, by and between STAAR Surgical Company, a Delaware corporation,
whose principal place of business is 0000 Xxxxxx Xxxxxx, Xxxxxxxx, Xxxxxxxxxx
00000 (hereinafter "Staar") and Mentor Corporation, a Minnesota corporation,
whose principal place of business is 0000 Xxxxxxxxx Xxxxxx, Xxxxx Xxxxxxx,
Xxxxxxxxxx 00000, and its affiliated companies (hereinafter "Mentor"). Staar
and Mentor are sometimes referred to individually herein as a "party" and
collectively as the "parties."
RECITALS
A. On December 16, 0000, Xxxxx and Optical Radiation Corporation ("ORC")
entered into that certain License Agreement (the "License Agreement") whereby
Staar granted to ORC a license to practice the inventions claimed in U.S. Patent
No. 4,573,998 (the "998 Patent").
B. Mentor is the rightful assignee of the License Agreement and,
accordingly, has the right to practice the 998 Patent claimed inventions
pursuant to the terms of the License Agreement.
C. A dispute has arisen between the parties relating to the interpretation
of various terms and conditions of the License Agreement and the rights
transferred under it (the "Dispute").
D. The parties wish to amend and restate the License Agreement as well as
to relinquish any and all claims between them relating to the right to practice
the claimed inventions of the 998 Patent. Neither party acknowledges the merit
of the other party's interpretation of the License Agreement.
NOW, THEREFORE, the parties agree as follows:
DEFINITIONS, FINAL TERMS AND RELEASES
For and in consideration of their mutual promises, covenants and agreements
included in this Agreement, the sufficiency of which is hereby acknowledged, the
parties agree as follows:
1. Definitions.
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For the purpose of this Agreement, and solely for this purpose, the terms
set forth hereinafter shall be defined as follows:
(a) "998 Patent" shall mean United States Patent No. 4,573,998, issued
March 4, 1986, and entitled METHODS FOR IMPLANTATION OF DEFORMABLE INTRAOCULAR
LENSES and any reissue thereof, as well as all divisional applications,
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continuations, continuations-in-part, re-examinations, restrictions and foreign
counterparts.
(b) "Valid Patent Claim" shall mean a bona fide, unexpired claim in the 998
Patent which has not been held invalid by a decision of a court or other
goernmental agency of competent jurisdiction, unappealable or unappealed within
the time allowed for appeal, and which has not been admitted to be invalid by
the owner through reissue or disclaimer. If there should be two or more such
decisions conflicting with respect to the validity of the same claim the
decision of the higher or highest tribunal shall thereafter control; however,
should the tribunals be of equal dignity, the decision or decisions holding the
claim invalid shall prevail.
(c) "Licensed Products" shall mean any product, including intraocular
lenses, especially made, used, or sold by Mentor to its customers, for use in a
manner covered by a Valid Patent Claim of the 998 Patent.
(d) "Net Sales" or "Net Selling Price" shall mean the actual selling price
of Licensed Products sold by Mentor to others as per the invoices covering
Mentor's sales, less bona fide trade and cash discounts, allowance for returns,
give aways, royalties other than those due pursuant to this Agreement, and sales
and other taxes and governmental charges applicable to sales and packages.
2. Consideration for Agreement.
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(a) Consideration from Mentor. The consideration extended by Mentor to
Staar for entering into this Agreement is the payment to Staar, upon execution
of this Agreement, of three million two hundred fifty thousand dollars
($3,250,000).
(b) Consideration from Staar. The consideration extended by Staar to
Mentor for entering into this Agreement is:
(i) a covenant, as set forth in Section 6 below, not to xxx Mentor for
practicing the claimed inventions of the 998 Patent which covenant shall be
in effect during the period beginning upon Mentor's acquisition of its
rights under the License Agreement and ending on December 31, 2000 (the
"Initial Term"); and
(ii) the grant of an option to Mentor to extend the covenant not to
xxx, for the period beginning on January 1, 2001 and ending on the
expiration of the 998 Patent, pursuant to the terms set forth in Section 7
below.
3. Staar's Release of Mentor. Staar and its affiliates, for themselves and
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their agents, successors and assigns, do hereby forever release and discharge
Mentor, its affiliates and any of their past or present agents, employees,
officers, directors, attorneys
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and suppliers, and any past or present distributors, re-sellers, purchasers
and/or end users of products sold or distributed by Mentor or its affiliates
from any causes of action, losses, promises, damages, costs, expenses,
liabilities and/or demands of whatsoever character, nature and kind, known or
unknown, suspected or unsuspected, fixed or contingent, arising out of or in any
way related to any actions, conduct, omissions, or events alleged, or which
could have been alleged (including allegations of patent infringement), relating
to any matter whatsoever, including, but not limited to, Mentor's obligation to
pay royalties currently due but unpaid and any future monetary obligations under
the License Agreement other than the payments described in Sections 2(a) and 7
herein, the License Agreement and any matter which could be considered an
infringement or form the basis of an action or claim of infringement against
Mentor under the 998 Patent occurring on or prior to the date hereof, except as
to obligations arising out of this Agreement and the exhibits to it.
4. Mentor's Release of Staar. Mentor and its affiliates, for themselves and
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their agents, successors and assigns, do hereby forever release and discharge
Staar, its affiliates and any of their past or present agents, employees,
officers, directors, attorneys and suppliers, and any past or present
distributors, re-sellers, purchasers and/or end users of products sold or
distributed by Staar or its affiliates from any causes of action, losses,
promises, damages, costs, expenses, liabilities and/or demands of whatsoever
character, nature and kind, known or unknown, suspected or unsuspected, fixed or
contingent, arising out of or in any way related to any actions, conduct,
omissions, or events alleged, or which could have been alleged (including
allegations of patent infringement) relating to any matter whatsoever,
including, but not limited to, the License Agreement and any matter which could
be considered an infringement or form the basis of an action or claim of
infringement against Staar under the 998 Patent occurring on or prior to the
date hereof, except as to obligations arising out of this Agreement and the
exhibits to it.
5. Waiver of Section 1542 of the Civil Code. The parties specifically
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understand, acknowledge and agree that this is a full and final release, which
shall be effective as a bar to all actions, claims, counterclaims, obligations,
causes of action, losses, promises, damages, costs, expenses, liabilities and
demands of whatsoever character, nature and kind, known and unknown, suspected
or unsuspected, fixed or contingent, hereinabove specified to be so barred. The
parties, having been fully advised by their respective counsel, hereby expressly
and voluntarily waive all rights or benefits that they and each of them might
otherwise have under the provisions of Section 1542 of the Civil Code of the
state of California, which provides as follows, and under all federal, state
and/or common law statutes or principles of similar effect:
A general release does not extend to claims which the creditor does
not know or suspect to exist in his favor at the time of executing the
release, which if known by him must have materially affected his
settlement with the debtor.
6. Covenant Not To Xxx. Pursuant to the terms of this Xxxxxxx 0, Xxxxx
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covenants and agrees that, during the Initial Term, neither it nor its
affiliates will xxx Mentor and its
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affiliates for any infringement of the 998 Patent. This covenant not to xxx
shall relate to any past or present infringements of the 998 Patent,
irrespective of when such infringements occurred, as well as to any infringement
of the 998 Patent which may occur during the Initial Term. This covenant is for
the benefit of, and may be enforced by, Mentor, purchasers of the Licensed
Products from Mentor, and any assigns permitted pursuant to Section 13(k) of
this Agreement. Staar agrees that it shall not attempt to recover from Mentor,
at law or in equity, any damages that it may sustain during the covenant period,
or any extension thereof, pursuant to Section 7 below.
7. Option to Extend Covenant Not To Xxx. Within thirty (30) days before the
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expiration of the Initial Term, Mentor shall have the right to extend the
covenant not to xxx for a period which shall end on March 4, 2003, the date of
the expiration of the 998 Patent. Mentor may, at its sole and absolute
discretion, exercise this right by either:
(i) making a lump sum payment to Staar, on or before December 31,
2000, of three million dollars ($3,000,000); provided, however, that if Mentor
does not have Net Sales, worldwide, during the Initial Term, of at least
$55,000,000 in Licensed Products, then the lump sum payment will be computed by
multiplying the difference between $55,000,000 and Net Sales by a factor of 6%
and subtracting the product from $3,000,000. For example, if Mentor's Net Sales
during the Initial Term total $30,000,000, then the lump sum payment shall be
computed as follows: $55,000,000 - $30,000,000 = $25,000,000 x 6% = $1,500,000.
$3,000,000 - $1,500,000 = $1,500,000; or
(ii) paying to Staar a royalty of six percent (6%) on Net Sales of all
Licensed Products sold on or after January 1, 2001. Royalties shall be paid
within forty-five (45) days after each calendar quarter. Mentor shall prepare
and send to Staar a report stating the Net Sales made by Mentor during such
quarterly period, as set forth in Section 9 below, which report shall contain a
computation of the payment due and the payment.
8. Modification of License Agreement. Pursuant to Section 9.3 of the License
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Agreement, upon execution of this Agreement the License Agreement shall be
deemed to be modified as follows:
(i) Section 2(a) of the License Agreement shall be modified to state:
"Staar grants to Mentor, upon the terms and conditions of this
Agreement as modified on December 31, 1997, a non-exclusive license
under the 998 Patent. There is no right to sublicense included by this
grant." Section 2(b) of the License Agreement shall be deleted in its
entirety.
(ii) The remaining terms and conditions of the License Agreement shall be
superseded and replaced in their entirety by the terms and conditions
of this Agreement; any obligations of either party to the other
incurred pursuant to the terms of the License Agreement prior to this
modification, including the payment of royalties incurred but unpaid
and any future monetary obligations under the License Agreement other
than the
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payments described in Sections 2(a) and 7 herein, shall be governed by
this Agreement.
9. Accounting and Records.
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The following sub-sections shall be the responsibility of Mentor if it
elects to extend the covenant not to xxx pursuant to sub-section 7(ii) above.
(a) Reporting Requirements. Within forty-five (45) days after each
calendar quarter, Mentor shall prepare and send to Staar a report setting forth
the Net Sales of the Licensed Products made by Mentor during such quarterly
period
(b) Record Requirements and Review of Records. Mentor shall keep accurate
records in respect of all sales of the Licensed Products and shall maintain such
records for a period of not less than three years from the date of the report
made pursuant to Section 9.1 above. Staar shall have the right, at its sole
cost and expense, not more than once during each calendar year, to review
Mentor's records in respect of sales of the Licensed Products at times which are
reasonably convenient to Mentor and may use for that purpose an independent
certified public accounting firm acceptable to Mentor. Any reports rendered by
Mentor to Staar prior to the date of such review as to which Staar raises no
reasonable written objection within one hundred twenty (120) days after the
commencement of such review shall be deemed conclusive and binding, provided
that Mentor has not unreasonably impeded such review. If Staar shall dispute
the accuracy of any report, the dispute shall be resolved by a panel of three
independent certified public accountants, one selected by Mentor at its sole
cost and expense, one selected by Staar at its sole cost and expense, and the
third selected by the previously selected accountants, the cost and expense of
the third to be borne equally by Staar and Mentor. The determination of said
panel by majority vote shall be conclusive and binding on Staar and Mentor.
(c) Final Reporting Requirement. At the termination of this Agreement,
Mentor shall render a final report to Staar within sixty (60) days after the end
of the last quarterly period.
10. Term. This Agreement shall become effective on the date it is signed
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by both parties and, unless terminated as provided in Section 11 below, shall
remain in effect until March 4, 2003, the date of the expiration of the 998
Patent or at the earliest date on which there is not at least one Valid Patent
Claim pertinent to the operations of Mentor still in existence or effect.
11. Termination and Effect of Termination.
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(a) Termination. This Agreement may be terminated by one party giving
written notice to the other party of its intent to terminate, while stating with
specificity the grounds for termination in the event that the other party fails
to perform or otherwise breaches any material obligations hereunder. The party
so notified shall have sixty (60)
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days after receipt of the notice to cure the breach or seek legal redress. In no
event shall such notice of intention to terminate be deemed to waive any right
to damages or any other remedy which the party giving the notice may have as a
consequence of such failure or such breach.
(b) Disposition of Licensed Products. In the event that this Agreement is
finally terminated (i.e., by operation of the present terms or legal decree),
then Mentor shall have the right to dispose of all the Licensed Products coming
under the terms of this Agreement, to utilize all inventory then on hand to
produce such Licensed Products, and to complete all orders for Licensed Products
then on hand. In the event that this Agreement is finally terminated (i.e., by
operation of the present terms or legal decree), then both parties shall be
released from all obligations and duties imposed or assumed under this Agreement
except the payment of royalties pursuant to Section 7(ii) above.
12. Representations and Warranties.
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(a) By Staar. Staar, on behalf of itself and its affiliates, represents
and warrants to Mentor and its affiliates as follows:
(i) Staar has not assigned, in whole or in part, any claim which has
been released pursuant to the terms of this Agreement.
(ii) Staar has the authority to enter into this Agreement.
(iii) Staar and/or its affiliates have not filed any litigation
relating to the 998 Patent against Mentor or its affiliates in any
jurisdiction, nor does Staar have any unasserted claims against Mentor or
its affiliates that are not resolved upon execution of this Agreement.
(iv) Staar has the right, free of any limitation or encumbrance, to
grant the covenant not to xxx set forth in Sections 6 and 7 above.
(b) By Mentor. Mentor, on behalf of itself and its affiliates, represents
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and warrants to Staar and its affiliates as follows:
(i) Mentor has not assigned, in whole or in part, any claim which has
been released pursuant to the terms of this Agreement.
(ii) Mentor has the authority to enter into this Agreement.
(iii) Mentor and/or its affiliates have not filed any litigation
relating to the 998 Patent against Staar or its affiliates in any
jurisdiction, nor does Mentor have any unasserted claims against Staar or
its affiliates that are not resolved upon execution of this Agreement.
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13. Miscellaneous.
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(a) Confidentiality. The terms and conditions of this Agreement shall be
confidential and shall not be disclosed by any of the parties to this Agreement
to any third party, other than to an actual or potential affiliate, successor or
assign, except that any party may disclose the terms and conditions of this
Agreement (i) to its legal or accounting advisors, as necessary, so long as they
agree to be bound by the terms of this confidentiality provision; or (ii) if
such party receives a subpoena or other process or order to produce this
Agreement, provided that such party shall, prior to any disclosure to any third
party, promptly notify the other party to this Agreement so that the party has a
reasonable opportunity to respond to such subpoena, process or order. The party
receiving the subpoena, process or order shall take no action contrary to the
confidentiality provisions set forth above and shall make reasonable efforts to
produce only subject to a protective order. The party objecting shall have the
burden of defending against such subpoena, process or order. The party
receiving the subpoena, process or order shall be entitled to comply with it
except to the extent that any other party is successful in obtaining an order
modifying or quashing it.
(b) Entire Agreement/No Collateral Representations. Each party expressly
acknowledges and agrees that this Agreement, together with the exhibits attached
hereto and the agreements and documents referenced herein : (1) is the final,
complete and exclusive statement of the agreement of the parties with respect to
the subject matter hereof; (2) supersedes any prior or contemporaneous
agreements, proposals, commitments, guarantees, assurances, communications,
discussions, promises, representations, understandings, conduct, acts, courses
of dealing, warranties, interpretations or terms of any kind, whether oral or
written (collectively and severally, the "prior agreements"), and that any such
prior agreements are of no force or effect except as expressly set forth herein;
and (3) may not be varied, supplemented or contradicted by evidence of prior
agreements, or by evidence of subsequent oral agreements. No prior drafts of
this Agreement, and no words or phrases from any prior drafts, shall be
admissible into evidence in any action or suit involving this Agreement.
(c) Amendment; Waiver; Forbearance. Except as expressly provided otherwise
herein, neither this Agreement nor any of the terms, provisions, obligations or
rights contained herein, may be amended, modified, supplemented, augmented,
rescinded, discharged or terminated (other than by performance), except by a
written instrument or instruments signed by all of the parties to this
Agreement. No waiver of any breach of any term, provision or agreement
contained herein, or of the performance of any act or obligation under this
Agreement, or of any right granted under this Agreement, or the grant of any
extension of time for performance of any such act or obligation, shall be
effective and binding unless such waiver shall be in a written instrument or
instruments signed by each party claimed to have given or consented to such
waiver and each party affected by such waiver. Except to the extent that the
party or parties claimed to have given or consented to a waiver may have
otherwise agreed in writing, no such waiver shall be deemed a waiver or
relinquishment of any other term, provision, agreement, act, obligation or right
granted under this Agreement, or any preceding or subsequent breach thereof. No
forbearance by a party to seek a remedy for any noncompliance or breach by
another party hereto shall be deemed to be a waiver by such forbearing party of
its rights and remedies with respect to such noncompliance or
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breach, unless such waiver shall be in a written instrument or instruments
signed by the forbearing party.
(d) Remedies Cumulative. The remedies of each party under this Agreement
are cumulative and shall not exclude any other remedies to which such party may
be lawfully entitled.
(e) Severability. If any term or provision of this Agreement or the
application thereof to any person or circumstance shall, to any extent, be
determined to be invalid, illegal or unenforceable under present or future laws,
then, and in that event: (1) the performance of the offending term or provision
(but only to the extent its application is invalid, illegal or unenforceable)
shall be excused as if it had never been incorporated into this Agreement, and,
in lieu of such excused provision, there shall be added a provision as similar
in terms and amount to such excused provision as may be possible and be legal,
valid and enforceable; and (2) the remaining part of this Agreement (including
the application of the offending term or provision to persons or circumstances
other than those as to which it is held invalid, illegal or unenforceable) shall
not be affected thereby, and shall continue in full force and effect to the
fullest extent provided by law.
(f) Parties in Interest. Notwithstanding anything else to the contrary
herein, nothing in this Agreement shall confer any rights or remedies under or
by reason of this Agreement on any persons other than the parties hereto and
their respective successors and assigns, if any, as may be permitted hereunder,
nor shall anything in this Agreement relieve or discharge the obligation or
liability of any third person to any party to this Agreement.
(g) No Reliance Upon Prior Representation. Each party acknowledges that:
(i) no other party has made any oral representation or promise which would
induce them prior to executing this Agreement to change their position to their
detriment, to partially perform, or to part with value in reliance upon such
representation or promise; and (ii) such party has not so changed its position,
performed or parted with value prior to the time of the execution of this
Agreement, or such party has taken such action at its own risk.
(h) Headings; References; Incorporation; "Person"; Gender; Statutory
References. The headings used in this Agreement are for convenience and
reference purposes only, and shall not be used in construing or interpreting the
scope or intent of this Agreement or any provision hereof. References to this
Agreement shall include all amendments or renewals thereof. Any exhibit
referenced in this Agreement shall be construed to be incorporated in this
Agreement by such reference. As used in this Agreement, the term "person" is
defined in its broadest sense as any individual, entity or fiduciary who has
legal standing to enter into this Agreement such as, by way of example and not
limitation, individual or natural persons and trusts. As used in this
Agreement, each gender shall be deemed to include the other gender, including
neutral genders appropriate for entities, if applicable, and the singular shall
be deemed to include the
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plural, and vice versa, as the context requires. Any reference to statutes or
laws will include all amendments, modifications, or replacements of the specific
sections and provisions concerned.
(i) Applicable Law. This Agreement and the rights and remedies of each
party arising out of or relating to this Agreement (including, without
limitation, equitable remedies) shall be solely governed by, interpreted under,
and construed and enforced in accordance with the laws (without regard to the
conflicts of law principles) of the state of California, as if this Agreement
were made, and as if its obligations are to be performed, wholly within the
state of California.
(j) Consent to Jurisdiction; Service of Process. Any "action or
proceeding" (as such term is defined below) arising out of or relating to this
Agreement shall (except to the extent governed by sub-section (l) relating to
arbitration) be filed in and heard and litigated solely before the state courts
of California located within the County of Los Angeles. Each party generally
and unconditionally accepts the exclusive jurisdiction of such courts and venue
therein; consents to the service of process in any such action or proceeding by
certified or registered mailing of the summons and complaint in accordance with
the notice provisions of this Agreement; and waives any defense or right to
object to venue in said courts based upon the doctrine of "forum non
conveniens." The term "action or proceeding" is defined as any and all claims,
suits, actions, hearings, arbitrations or other similar proceedings, including
appeals and petitions therefrom, whether formal or informal, governmental or
non-governmental, or civil or criminal.
(k) Successors and Assigns. All of the representations, warranties,
covenants, conditions and provisions of this Agreement shall be binding upon and
shall inure to the benefit of each party and such party's respective successors
and permitted assigns, spouses, heirs, executors, administrators, and personal
and legal representatives. The rights and obligations of each party under this
Agreement shall not be assignable or otherwise transferable without the prior
written consent of the other, except that (i) Mentor may assign any or all of
its rights or obligations under this Agreement to any of its affiliates, which
assignment shall not release Mentor from any of its obligations under this
Agreement, and (ii) Mentor may assign all of its rights and obligations under
this Agreement to any person in connection with the transfer or sale of all or a
portion of its business or the merger or consolidation of Mentor with or into
any other company, so long as such transferee, purchaser or surviving company
shall assume such obligations of Mentor. For purposes of this sub-section,
"affiliates" shall mean any corporation, other juridical entity, partnership or
other business enterprise which qualifies under any one of the following: (x)
fifty-one percent (51%) or more of the voting rights with respect to the
election of directors or other governing body or members is owned or controlled,
directly or indirectly, by Mentor; (y) fifty-one percent (51%) or more of the
voting rights with respect to the election of directors or other governing body
or members is owned or controlled, directly or indirectly, by any corporation,
other juridical entity, partnership or other business qualifying under item (x);
or (z) an exclusive distributor retained under contract.
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(l) Counterparts. This Agreement may be executed in counterparts, each of
which shall be deemed an original, and all of which together shall constitute
one and the same instrument, binding on all parties hereto. This Agreement may
be executed manually or by facsimile signature in two or more counterparts, each
of which shall be deemed an original, and all of which together shall constitute
but one and the same instrument.
(m) Notices. Unless otherwise specifically provided in this
Agreement, all notices or other communications (collectively and severally
called "Notices") required or permitted to be given under this Agreement, shall
be in writing, and shall be given by: (A) personal delivery (which form of
Notice shall be deemed to have been given upon delivery), (B) by telegraph or by
private airborne/overnight delivery service (which forms of Notice shall be
deemed to have been given upon confirmed delivery by the delivery agency), or
(C) by electronic or facsimile or telephonic transmission, provided the
receiving party has a compatible device or confirms receipt thereof (which forms
of Notice shall be deemed delivered upon confirmed transmission or confirmation
of receipt). Notices shall be addressed to the address set forth in the
introductory section of this Agreement, or to such other address as the
receiving party shall have specified most recently by like Notice, with a copy
to the other party.
(n) Preparation of Agreement. It is acknowledged by each party that
such party either had separate and independent advice of counsel or the
opportunity to avail itself or himself of same. In light of these facts it is
acknowledged that no party shall be construed to be solely responsible for the
drafting hereof, and therefore any ambiguity shall not be construed against any
party as the alleged draftsman of this Agreement.
WHEREFORE, the parties hereto have, for purposes of this Agreement, executed
this Agreement in the City of Los Angeles, County of Los Angeles, State of
California, as of the date first written above.
STAAR Surgical Company
By: /s/ Xxxx X. Xxxx
______________________________________
Xxxx Xxxx, its President
Mentor Corporation
By: /s/ Xxxxxxx X. Xxxxx
______________________________________
Xxxxxxx X. Xxxxx, its President
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