AMENDMENT BETWEEN ANGIOTECH PHARMACEUTICALS, INC. AND BOSTON SCIENTIFIC CORPORATION MODIFYING JULY 9, 1997 LICENSE AGREEMENT AMONG ANGIOTECH PHARMACEUTICALS, INC., BOSTON SCIENTIFIC CORPORATION, AND COOK INCORPORATED This Amendment is made and entered...
EXHIBIT 10.2
AMENDMENT BETWEEN ANGIOTECH PHARMACEUTICALS, INC. AND BOSTON SCIENTIFIC
CORPORATION MODIFYING JULY 9, 1997 LICENSE AGREEMENT AMONG ANGIOTECH
PHARMACEUTICALS, INC., BOSTON SCIENTIFIC CORPORATION, AND XXXX INCORPORATED
This Amendment is made and entered into as of this 23nd day of
November, 2004, by and between Angiotech Pharmaceuticals, Inc., a corporation
organized under the laws of the Province of British Columbia ("Angiotech"), and
Boston Scientific Corporation, a Delaware corporation ("BSC").
WHEREAS, Angiotech, BSC, and Xxxx Incorporated ("Xxxx") entered into
the "License Agreement Among Angiotech Pharmaceuticals, Inc., Boston Scientific
Corporation and Xxxx Incorporated" dated July 9, 1997, under which Angiotech
agreed to license on a co-exclusive basis to Xxxx and BSC certain patent rights,
license rights, and technology relating to the use of paclitaxel or other agents
as a coating for certain medical devices, and BSC and Angiotech have amended
that agreement on December 13, 1999 (collectively, the "Angiotech License
Agreement");
WHEREAS, BSC has been advised that, effective as of September 24, 2004
and pursuant to the Angiotech License Agreement, Angiotech and Xxxx agreed, by
Amendment to the Angiotech License Agreement ("Xxxx Amendment"), to terminate
Xxxx'x worldwide rights and licenses within the Licensed Field of Use and
Licensed Applications to use, manufacture, have manufactured, distribute and
sell, and to grant sublicenses to its Affiliates to use, manufacture, have
manufactured, distribute and sell, the Angiotech Technology in the Coronary
Vascular Field of Use;
WHEREAS, BSC is not a party to the Xxxx Amendment and is not bound by
any terms, conditions, premises, understandings, and/or provisions thereof
except to the extent as expressly agreed in a September 24, 2004 letter from BSC
to Angiotech; and
WHEREAS, as provided herein, Angiotech and BSC desire to amend the
Angiotech License Agreement to modify certain rights and licenses granted to
BSC;
NOW THEREFORE, Angiotech and BSC hereby agree as follows:
1. BSC hereby exercises its rights under Section 9.3 of the Angiotech
License Agreement to cause to become exclusive its right and license to
use, manufacture, have manufactured, distribute and sell, and to grant
sublicenses to its Affiliates to use, manufacture, have manufactured,
distribute and sell, the Angiotech Technology in the "Coronary Vascular
Field of Use" for use in the Licensed Applications. As used herein, the
"Coronary Vascular Field of Use" means endoluminal vascular Licensed
Applications for the treatment and/or prevention of disease of the
coronary arteries and their branches, or other vasculature providing
blood flow to the heart.
2. Angiotech hereby grants to BSC the right for BSC to sublicense to any
third party any or all rights or licenses within the Licensed Field of
Use and Licensed Applications to use, manufacture, have manufactured,
distribute, and sell the Angiotech Technology in the Coronary Vascular
Field of Use subject to the provisions in the Licenses. Regarding any
sublicenses granted or to be granted under this Paragraph, BSC agrees
to comply with all obligations regarding any such sublicenses that may
arise under any License, including but not limited to those set forth
in paragraphs 4.01-4.04 of the March 28, 2002 Public Health Service
Patent License Agreement -- Exclusive (the "PHS Agreement"), provided
that Angiotech will continue to be responsible for any amounts due the
licensors under any License. In addition BSC shall provide Angiotech
notice of any sublicense granted pursuant to this Section 2 sufficient
for Angiotech to provide notice to the licensor under the relevant
License. Angiotech agrees not to amend the existing Licenses in the
Coronary Vascular Field of Use without the prior consent of BSC nor
enter into new Licenses that limit BSC's ability to sublicense
Angiotech Technology and/or New Angiotech Technology in the Coronary
Vascular Field of Use without the prior consent of BSC.
3. In consideration of the right to sublicense granted by Angiotech to BSC
hereunder and as further consideration for the other modifications to
the Angiotech License Agreement as set forth herein, BSC agrees to pay
Angiotech on November 24, 2004, $13,900,000.00 (US). In addition,
pursuant to Section 9.3 of the Angiotech License Agreement, as of
November 24, 2004, BSC royalty rates set forth in Section 3.2 of the
Angiotech License Agreement shall be increased by 1% solely with
respect to Net Sales within the Coronary Vascular Field of Use.
Specifically, the royalty rates set forth in Sections 3.2(a) shall be
increased in the Coronary Vascular Field of Use for use in the Licensed
Applications to the following rates: Section 3.2(a)(i), six percent
(6%); Section 3.2(a)(ii), eight percent (8%); Section 3.2(a)(iii),
eleven percent (11%), and after the $100,000,000 payment threshold,
nine percent (9%).
4. In the event that Xxxx, its Affiliates, Distributors, or agents make
any sales at any time in any Geographic Area of the Logic(TM) PTX(TM)
and/or V-Flex Plus PTX(TM) drug eluting coronary stents in the Coronary
Vascular Field of Use, but only so long as said sales are expressly
permissible under the terms of the Xxxx Amendment, BSC agrees that:
(a) Section 8.11 of the Angiotech License Agreement does not apply to
any such sales by Xxxx, its Affiliates, or Distributors; and
(b) the De Facto Exclusivity (of Section 3.3 of the Angiotech License
Agreement) for any BSC Eligible Product in any particular country shall
not be deemed to be lost as a result of any such sales by Xxxx, its
Affiliates, or Distributors.
5. Subject to subsection (a) and (b) hereof, BSC agrees that if it
exercises its right under this Amendment to grant a sublicense in the
Coronary Vascular Field of Use to a third party, within thirty (30)
days of the close of any such transaction, BSC (or its successors or
assigns, as the case may be) will pay to Angiotech 15% of the fair
market value of all non-recurring, monetary and/or non-monetary
consideration received by BSC or any of its Affiliates, successors, or
assigns from or on behalf of such third party for receipt of such
sublicense. Notwithstanding any assessment of actual fair market value
for said consideration, the minimum amount due Angiotech under such
circumstances for any sublicense shall be $100 million ($100,000,000),
and the maximum amount due Angiotech under such circumstances shall be
$250 million ($250,000,000). Notwithstanding the foregoing:
(a) No payment shall be due from BSC for the fair market value of
non-recurring consideration if BSC's primary purpose for the grant of
such a sublicense is to maintain the ability to manufacture, use, offer
for sale, and/or sell Stent Products or Endoluminal Products for
Licensed Applications. However, before any such sublicense is granted
to a third party, BSC agrees to inform Angiotech of such sublicense;
(b) In the event that BSC is required to offer a sublicense by any
governmental agency or court order for any reason, then there shall be
no minimum payment due Angiotech as a result of said sublicense;
(c) Any amounts due shall be based solely on the fair market value of
any and all consideration received for said sublicense only. To
determine the fair market value of such consideration, within twenty
(20) days of the close of any such sublicense transaction, BSC will
afford Angiotech access to all information necessary to determine such
consideration; and
(d) If Angiotech and BSC cannot agree on the fair market value of such
consideration under 5(c), or, if any other dispute arises under this
Amendment, Angiotech or BSC may submit the matter to arbitration in
accordance with Section 10.2 of the Angiotech License Agreement.
6. BSC agrees that if it exercises its right under this Amendment to grant
a sublicense in the Coronary Vascular Field of Use to a third party,
BSC will remain liable for BSC's obligations under the Angiotech
License Agreement and that no such sublicense shall be effective unless
it, as fully executed by the sub-licensee, requires and states in
writing, that (1) the sub-licensee agrees to be bound by and comply
with (as if it were BSC) the relevant terms of the Licenses and the
Angiotech License Agreement, including, but not limited to, Section
6.4, and (2) the sub-licensee agrees that within sixty (60) days after
the end of each Contract Quarter during the term of the sublicense, the
sub-licensee shall pay to BSC a royalty of at least 12% on all Net
Sales by the sub-licensee of Eligible Products (that are covered in the
country of sale by one or more valid and enforceable claims included in
the Patent Rights) during such Contract Quarter in each of the
Geographical Areas. BSC shall pay a royalty of 12% to Angiotech of such
Net Sales within (10) days of receipt of royalties from sub-licensee.
BSC further agrees that any sales by BSC's sub-licensees will not
affect, and in particular shall not (by the action of any provision of
the Angiotech License Agreement, including, but not limited to,
Sections 3.3 and 8.11 of the Angiotech License Agreement) decrease, any
royalty obligations on sales by BSC, its Affiliates, or Distributors.
7. Angiotech hereby grants to BSC the right for BSC to have third party
Distributors distribute Eligible Products. For purposes of this
Amendment, a "Distributor" is defined as a third party and its
Affiliates whose business is to buy medical devices for resale, but
shall in no instance include any third party that, by itself or through
its Affiliates (1) in any way manufactures all or any part of stent
products or stent-delivery systems for sale in the United States or
Europe, or (2) manufactures or provides BSC or its Affiliates with all
or any part of any Eligible Products. BSC further agrees that any sales
by BSC's Distributors may not be the basis of a royalty reduction
pursuant to Sections 3.3 and/or 8.11 of the Angiotech License
Agreement.
8. It is acknowledged that, in the event that BSC distributes Eligible
Products through Distributors in any Geographic Area, Net Sales as used
in the Angiotech License Agreement shall be calculated from the gross
sales by BSC to Distributors, provided that for purposes of this
calculation BSC's aggregate average selling price to Distributors of
Eligible Products in a Geographic Area other than Japan would not be
less than seventy percent (70%) of BSC's aggregate average selling
price for direct sales of Eligible Products in the Geographic Area, and
provided further that for purposes of this calculation in the event BSC
does not have any direct sales in a Geographic Area other than Japan,
Net Sales shall be calculated as seventy percent (70%) of the average
selling price of Eligible Products as reported to BSC by the
Distributors in the Geographic Area.
9. Angiotech and BSC hereby agree that from September 24, 2004, all
provisions, rights, and obligations of Section 8.2 through and
including 8.5, and 8.11 of the Angiotech License Agreement shall no
longer apply to Xxxx regarding those matters or actions that relate to
the Coronary Vascular Field of Use or to products indicated for use in
the Coronary Vascular Field of Use.
10. Section 8.2 of the Angiotech License Agreement is hereby modified
solely as to the enforcement of the NeoRx Technology, and the Angiotech
Technology (including the NIH Patent Rights) in the Coronary Vascular
Field of Use as follows:
o 8.2(a) Subject to Angiotech's obligations to NIH and any other
third party licensors, BSC shall have in the first instance
the right, in its sole discretion and its own expense, to
prosecute in its own name any alleged infringements of (i) the
NeoRx Technology (as sublicensed to BSC by the December 13,
1999 Agreement With Respect to License Agreement Among
Angiotech Pharmaceuticals, Inc., Boston Scientific Corporation
and Xxxx Incorporated) in the Coronary Vascular Field of Use,
and (ii) the NIH Patent Rights (as included within the
Angiotech Technology) in the Coronary Vascular Field of Use.
o 8.2(b) As between Angiotech and BSC, (i) BSC agrees to allow
Angiotech to participate as a party plaintiff, at its own
expense, in any suit brought with respect to infringement of
the NeoRx Technology and/or the NIH Patent Rights, and (ii),
Angiotech agrees to allow BSC to include Angiotech, at the
expense of BSC, as a plaintiff in any suit brought with
respect to any such infringement.
o 8.2(c) As between Angiotech and BSC, (i) Angiotech agrees to
allow BSC to participate as a party plaintiff, at BSC's own
expense, in any suit brought with respect to infringement of
the Angiotech Technology other than the NeoRx Technology or
the NIH Patent rights, and (ii) BSC agrees to allow Angiotech
to include BSC, at the expense of Angiotech, as a plaintiff in
any suit brought with respect to any such infringement.
o 8.2(d) The parties agree to consult with each other in good
faith on any significant matters relating to such litigation
(as set forth in 8.2(a) -(c)) reasonably in advance of any
acts regarding such matter so that the other party can timely
provide its advice. Significant matters include, for example,
initiation of any suit, and any other acts that may adversely
affect the interpretation, validity, or enforceability of any
patent right under the NeoRx Technology or the Angiotech
Technology (including the NIH Patent Rights). BSC agrees to
comply with all obligations regarding infringement and patent
enforcement set forth in all Licenses, including but not
limited to the PHS Agreement.
Section 8.2 of the Angiotech License Agreement remains unmodified other than as
to the Coronary Vascular Field of Use.
11. Section 8.3 of the Angiotech License Agreement is modified solely as to
the Coronary Vascular Field of Use as follows:
o 8.3(a) For any potential infringement of the NeoRx Technology
and/or the NIH Patent Rights subject to Section 8.2(a), and
subject to Angiotech's obligations to NIH and any other third
party licensors, in the event that BSC, within ninety (90)
days after being notified by Angiotech of any infringement,
shall have been unsuccessful in negotiating with the alleged
infringer to cease and desist such infringement and shall not
have brought an infringement action, or shall have notified
Angiotech that it has determined not to bring an action
against the alleged infringer, then, in those events,
Angiotech shall have the right to bring an action against such
infringer at its own expense. Prior to instituting any such
action, Angiotech shall provide at least twenty (20) days
written notice of such action to BSC, which shall have the
right to confer with Angiotech prior to the filing of such
action. BSC agrees to allow Angiotech to include it, at the
expense of Angiotech, as a plaintiff in any suit brought with
respect to any such infringement.
o 8.3(b) As between Angiotech and BSC, for any potential
infringement of the Angiotech Technology other than the NeoRx
Technology and the NIH Patent Rights subject to Section
8.2(c), and subject to Angiotech's obligations to NIH and any
other third party licensors, in the event that Angiotech,
within ninety (90) days after being notified by BSC of any
infringement, shall have been unsuccessful in negotiating with
the alleged infringer to cease and desist such infringement
and shall not have brought an infringement action, or shall
have notified BSC that it has determined not to bring an
action against the alleged infringer, then, in those events,
BSC shall have the right at its own expense to bring an action
against such infringer. Prior to instituting any such action,
BSC shall provide at least twenty (20) days written notice of
such action to Angiotech, which shall have the right to confer
with BSC prior to the filing of such action. Angiotech agrees
to allow BSC to include it, at the expense of BSC, as a
plaintiff in any suit brought with respect to any such
infringement.
o 8.3(c) The parties agree to consult with each other on any
significant matters relating to such litigation (as set forth
in 8.3(a) or (b) reasonably in advance of any acts regarding
such matter so that the other party can timely provide its
advice. Significant matters include, for example, initiation
of any suit, and any other acts that may adversely affect the
interpretation, validity, or enforceability of any patent
right under the NeoRx Technology or the Angiotech Technology
(including the NIH Patent Rights). BSC agrees to comply with
all obligations regarding infringement and patent enforcement
set forth in all Licenses, including but not limited to the
PHS Agreement.
12. Section 8.3 of the Angiotech License Agreement remains unmodified other
than as to the Coronary Vascular Field of Use. Section 8.5 of the
Angiotech License Agreement shall be amended to include the following:
"In no event shall any party other than BSC enter into any settlement,
consent judgment, or voluntary final disposition of an action that
undermines in any way BSC's rights in the Coronary Vascular Field of
Use including, for example, by purporting to grant sub-license rights
in the Coronary Vascular Field of Use or to release infringement claims
against products indicated for use in the Coronary Vascular Field of
Use."
13. As between Angiotech and BSC, BSC shall provide Angiotech notice of
BSC's prosecution of actions for any infringements of any rights within
the NeoRx Technology or the NIH Patent Rights in the Coronary Vascular
Field of Use. Pursuant to Section 8.5 of the Angiotech License
Agreement, Angiotech shall be entitled to require BSC to consult with
Angiotech and obtain Angiotech's consent (not to be unreasonably
withheld) to enter into any settlement, consent judgment, or other
voluntarily final disposition of any actions for any infringements of
any rights within the NeoRx Technology or the NIH Patent Rights in the
Coronary Vascular Field of Use where such settlement, consent judgment,
or other voluntarily final disposition would adversely affect the
validity or enforceability of any of the Patent Rights included in the
Angiotech Technology, and specifically including the NeoRx Technology
and the NIH Patent Rights, in the Peripheral Vascular Field of Use
(defined as the endoluminal vascular Licensed Applications for
treatment or prevention of disease of the peripheral blood vessels of
the body) or in the GI Field of Use (defined as the endoluminal
Licensed Applications for the treatment or prevention of disease of the
alimentary tract or liver).
14. Capitalized terms not otherwise defined in this Amendment will carry
their meaning as set forth in the Angiotech License Agreement.
15. Angiotech and BSC agree that, except as expressly provided in this
Amendment, the Angiotech License Agreement shall remain unmodified and
shall continue in full force and effect.
16. All provisions of this Amendment, including the preamble and WHEREAS
clauses, are material, enforceable terms hereof.
IN WITNESS WHEREOF, the undersigned have duly executed this Amendment
as of the date first set forth above.
ANGIOTECH PHARMACEUTICALS, INC.
By: /s/ Xxxxxxx X. Xxxxxx
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Name: Xxxxxxx X. Xxxxxx
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Title: President and Chief
Executive Officer
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BOSTON SCIENTIFIC CORPORATION
By: /s/ Xxxxxxxx X. Best
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Name: Xxxxxxxx X. Best
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Title: Chief Financial Officer
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