Exhibit 10.14
AMENDED AND RESTATED LICENSE AGREEMENT
THIS AMENDED AND RESTATED LICENSE AGREEMENT, dated as of July 10, 1995,
is between The General Hospital Corporation, a not-for-profit Massachusetts
corporation doing business as Massachusetts General Hospital, having a place of
business at Xxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000 ("GENERAL") and Metasyn,
Inc., a corporation of Delaware having offices at 00 Xxxxxx Xxxxxx, Xxxxxxxxx,
XX 00000 ("METASYN"), and amends and restates, from and after the date hereof, a
License Agreement effective as of March 24, 1992 (the "LICENSE EFFECTIVE DATE")
between GENERAL and METASYN.
WITNESSETH
WHEREAS, under research programs funded by the GENERAL, the GENERAL
Department of Radiology through research conducted by Xxxxxxx X. Xxxxxxx and
Xxxxxx X. Xxxxx has developed certain inventions pertaining to Hepatobiliary NMR
Contrast Agents;
WHEREAS, GENERAL has filed U.S. Patent Applications as identified in
Appendix A and all rights, title and interest in said applications have been
assigned to GENERAL by the inventors;
WHEREAS, GENERAL represents to the best of its knowledge and belief
that it is the owner of all rights, title and interest in said patent
applications and has the right and ability to grant the licenses hereinafter
described;
WHEREAS, as a center for research and education, GENERAL is interested
in licensing PATENT RIGHTS and thus benefiting the public and GENERAL by
facilitating the dissemination of the results of their research in the form of
useful products, but is without the capacity to commercially develop,
manufacture, and distribute any such products; and
WHEREAS, METASYN having such capacity, desires to commercially develop,
manufacture, use and distribute such products throughout the world;
NOW THEREFORE, in consideration of the premises and of the faithful
performance of the covenants herein contained, the parties hereto agree as
follows:
1. DEFINITIONS
1.1. The term "ACCOUNTING PERIOD" shall mean any January through June
or July through December in which PRODUCT is manufactured or sold.
1.2. The term "AFFILIATE" as applied to METASYN shall mean METASYN and
any company or other legal entity other than METASYN in whatever country
organized, controlling, controlled by or under common control with METASYN. The
term "control" means possession, direct or indirect, of the powers to direct or
cause the direction of
the management and policies of a person or entity, whether through the ownership
of voting securities, by contract or otherwise.
1.3. The term "FIELD" shall mean the use of paramagnetic contrast
agents in the magnetic resonance imaging of normal and pathological conditions
in man and animals.
1.4. The term "FIRST COMMERCIAL SALE" shall mean in each country the
first sale of any PRODUCT by METASYN, its AFFILIATES or SUBLICENSEES, following
approval, where required, of its marketing by the appropriate governmental
agency for the country in which the sale is to be made.
1.5. The term "NET SALES PRICE" shall mean the gross billing price of
any PRODUCT as invoiced to the customer by METASYN or its AFFILIATES, less (1) a
bad debt allowance of [ ]* of the gross billing price and (2) the following
amounts actually paid out by METASYN or its AFFILIATES, or credited by them
against the gross billing price of any PRODUCT:
(a) discounts allowed;
(b) refunds or allowances for damaged or outdated goods;
(c) transportation charges or allowances;
(d) customs, duties or charges; and
(e) sales or other excise taxes or other governmental
charges levied on or measured by sales but not
franchise or income taxes of any kind whatsoever.
Transfer of a PRODUCT to an AFFILIATE for sale by the AFFILIATE shall
not be considered a sale; in the case of such a transfer the NET SALES PRICE
shall be based on the gross billing price of the PRODUCT by the AFFILIATE as
invoiced to its customer.
Every commercial use or disposition by METASYN or any of its AFFILIATES
or SUBLICENSEES of any PRODUCT (excluding any use for (i) assuring product
testing or control, (ii) promotional distribution to physicians by or on behalf
of METASYN or any of its AFFILIATES or SUBLICENSEES or (iii) distribution to
researchers by or on behalf of METASYN or any of its AFFILIATES or SUBLICENSEES
or (iv) obtaining regulatory approvals), in addition to a bonafide sale to a
bonafide customer (not to be construed as including METASYN or any such
AFFILIATE or SUBLICENSEE), shall be considered a sale of such PRODUCT at the NET
SALES PRICE then payable in an arm's length transaction.
In the event any PRODUCT is sold as a component of a combination of
functional elements, NET SALES PRICE for purposes of determining royalty
payments on such combination shall be calculated by the fraction A over A+B, in
which "A" is the gross selling price of the PRODUCT portion of the combination
when sold separately during the
*Confidential information omitted and filed with the Commission.
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ACCOUNTING PERIOD in which the sale was made, and "B" is the gross selling price
of the other active elements of the combination sold separately during the
ACCOUNTING PERIOD in question. In the event that no separate sale of either such
above designated PRODUCT or such above designated elements of the combination is
made during the ACCOUNTING PERIOD in which the sale was made, NET SALES PRICE
shall be calculated by multiplying NET SALES PRICE of such combination by the
fraction C over C+D, in which "C" is the standard fully-absorbed cost of the
PRODUCT portion of such combination, and "D" is the standard fully absorbed cost
of the other component(s), with such costs being determined in accordance with
generally accepted accounting practices.
1.6. The term "PATENT RIGHTS" shall mean the U.S. patents and patent
applications and the international patent applications identified in Appendix A
and any division, continuation, continuation-in-part thereof, any foreign patent
applications corresponding to any such applications or any United States or
foreign patents or the equivalent thereof issuing thereon or any reissue or
extension thereof.
1.7. The term "PRODUCT" shall mean any article of manufacture or any
other article of commerce for use in the FIELD whose manufacture, use or sale is
covered by a VALID CLAIM of any PATENT RIGHTS.
1.8. The term "SUBLICENSEE" shall mean any non-AFFILIATE third party
licensed by METASYN to manufacture, use or sell any PRODUCT.
1.9. The term "VALID CLAIM" shall mean any claim of any PATENT RIGHT
that has not (i) expired or been abandoned, or (ii) been finally rejected or
declared invalid or unenforceable by a patent office or court of competent
jurisdiction in an unappealed and unappealable decision.
2. LICENSE
2.1. GENERAL hereby grants to METASYN and its AFFILIATES:
(a) an exclusive worldwide royalty-bearing license in the
FIELD under PATENT RIGHTS to make, have made, use and
sell PRODUCT; and
(b) to the extent that GENERAL is precluded by the laws
of a particular country from granting to METASYN and
its AFFILIATES an exclusive license with respect to
such country, a license with as great a degree of
exclusivity as is permitted under the applicable laws
of such country, but in no event less than a
nonexclusive, royalty-bearing license in the FIELD
under PATENT RIGHTS to make, have made, use and sell
PRODUCTS; and
(c) the right to sublicense PATENT RIGHTS exclusively
licensed to METASYN provided that the existence of
any such sublicense shall not relieve METASYN of any
of its obligations hereunder.
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2.2. All licenses to PATENT RIGHTS granted hereunder are subject to (i)
GENERAL's right to make and to use the subject matter described and claimed in
PATENT RIGHTS for research and clinical purposes but for no other purpose and
(ii) for any invention conceived or first reduced to practice in the course of
research supported in part by funds from any U.S. federal agency, the
obligations established by U.S. law including 35 USC 200-212 and 35 CFR Part 401
and such laws and regulations as may be applicable.
2.3. It is understood and agreed that nothing herein shall be construed
to grant METASYN any license, express or implied, under any patent application
or patent in which GENERAL has ownership rights except for the licenses to
PATENT RIGHTS expressly granted in this Section 2.
2.4. The above licenses to sell PRODUCT include the right to grant to
the purchaser of PRODUCT from METASYN, its AFFILIATES or SUBLICENSEES the right
to use such purchased PRODUCT in a method coming within the scope of PATENT
RIGHTS.
3. DUE DILIGENCE OBLIGATIONS
3.1. METASYN, its AFFILIATES and SUBLICENSEES shall use due diligence
to develop PRODUCTS for commercial sales and distribution throughout the world
and to such end, shall seek to achieve the following objectives in accordance
with the following schedule:
(a) initiate Good Manufacturing Practices production of
clinical trial quantities of a PRODUCT within [ ]*
of the LICENSE EFFECTIVE DATE;
(b) initiate animal toxicity studies of a PRODUCT within
[ ]* of LICENSE EFFECTIVE DATE; and
(c) initiate a human clinical study of a PRODUCT within
[ ]* of LICENSE EFFECTIVE DATE.
In the event any objective identified herein or subsequently designated
as provided herein cannot be met for technical or regulatory reasons that the
parties could not have reasonably foreseen or that are beyond the reasonable
control of METASYN, its AFFILIATES or SUBLICENSEES, GENERAL shall not
unreasonably withhold its assent to any revision in the schedule whenever
requested in writing by METASYN, its AFFILIATES or SUBLICENSEES and supported by
evidence of such technical difficulties or delays in the regulatory process.
3.2. At intervals no longer than every six (6) months, METASYN shall
report in writing to GENERAL on progress made toward the objectives designated
in accordance with Paragraph 3.1.
*Confidential information omitted and filed with the Commission.
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4. FILING. PROSECUTION AND MAINTENANCE OF PATENT RIGHTS
4.1. GENERAL shall be responsible for the preparation, filing,
prosecution and maintenance of all patent applications and patents included in
PATENT RIGHTS. GENERAL shall use reasonable efforts to obtain the issuance of
the broadest valid claims in such applications in such countries as METASYN may,
from time to time specify. METASYN shall reimburse GENERAL for all reasonable
costs incurred by GENERAL both prior to and subsequent to the LICENSE EFFECTIVE
DATE for the preparation, filing, prosecution and maintenance of all PATENT
RIGHTS ("COSTS") except as hereinafter provided, provided that patent counsel
selected by GENERAL is acceptable to METASYN. With respect to COSTS incurred by
GENERAL prior to the LICENSE EFFECTIVE DATE, GENERAL shall provide METASYN with
a detailed accounting of such COSTS within thirty (30) days of the LICENSE
EFFECTIVE DATE and METASYN shall reimburse GENERAL for such costs in twenty four
(24) equal monthly installments commencing on the first day of the month
following the month in which METASYN receives such accounting. With respect to
COSTS incurred subsequent to the LICENSE EFFECTIVE DATE, GENERAL shall be
reimbursed by METASYN within thirty (30) days of receipt of GENERAL's notice of
payment of such COSTS and any COSTS not reimbursed within said thirty (30) days
shall be charged interest at the rate of 1.5 percent per month compounded each
thirty (30) days they remain unpaid. Subsequent to the LICENSE EFFECTIVE DATE,
GENERAL (and by instruction, its patent counsel) shall consult with METASYN and
its patent counsel as to the preparation, filing, prosecution and maintenance of
such PATENT RIGHTS and shall furnish to METASYN copies of documents relevant to
such preparation, filing, prosecution or maintenance sufficiently prior to
filing such documents or making any payment due thereunder to allow for review
and comment by METASYN. If, as a result of any such review, METASYN shall elect
not to pay the expenses of any patent application or patent included in PATENT
RIGHTS, METASYN shall so notify GENERAL within thirty (30) days of the receipt
of such documents and shall thereby surrender its rights under such patent
application or patent, provided, however, that METASYN shall remain obligated to
reimburse GENERAL for any costs incurred with respect to such patent application
or patent prior to said election.
4.2. METASYN may offset royalty payments payable by METASYN to GENERAL
pursuant to Section 5 hereof during any ACCOUNTING PERIOD against up to [ ]* of
all reimbursable expenses described in Paragraph 4.1 and incurred during the
same or any prior ACCOUNTING PERIOD; provided, however, that the aggregate
amount of expenses offset shall not reduce royalties payable by METASYN during
such ACCOUNTING PERIOD by more than [ ]*.
4.3. GENERAL agrees that it shall not abandon the prosecution of any
patent applications under PATENT RIGHTS nor shall it fail to make to any payment
or fail to take any other action necessary to obtain or maintain a patent under
PATENT RIGHTS unless it has notified METASYN in sufficient time for METASYN to
assume such prosecution, make such payment or take such action, and METASYN
shall thereafter have the right to prosecute and/or maintain such PATENT RIGHTS
at its expense in GENERAL's name, and GENERAL shall thereafter render to METASYN
all necessary assistance in order to facilitate such prosecution and/or
maintenance.
*Confidential information omitted and filed with the Commission.
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5. CONSIDERATION AND ROYALTIES
5.1. As additional consideration for the license granted hereunder,
METASYN shall issue and sell to GENERAL [ ]* shares of the common stock,
$0.01 par value per share, of METASYN (the "SHARES") at par value.
5.2. On all sales of PRODUCTS anywhere in the world by METASYN and its
AFFILIATES, METASYN shall pay GENERAL royalties in accordance with the following
schedule, such undertaking and schedule having been agreed to for the purpose of
reflecting and advancing the mutual convenience of the parties. For each PRODUCT
sold by METASYN or its AFFILIATES;
(a) [ ]* of the NET SALES PRICE on each PRODUCT
manufactured, used or sold in any country wherein
such manufacture, use or sale would, except for the
license granted by this Agreement, infringe a VALID
CLAIM of any PATENT RIGHTS licensed exclusively to
METASYN; and
(b) [ ]* of the NET SALES PRICE on each PRODUCT
manufactured, used or sold in any country wherein
such manufacture, use or sale would, except for the
license granted by this Agreement, infringe a VALID
CLAIM of any PATENT RIGHTS licensed non-exclusively
to METASYN.
5.3. On all sales of PRODUCT anywhere in the world by SUBLICENSEES, so
long as the PRODUCT manufactured, used or sold in any country is covered by a
VALID CLAIM of any PATENT RIGHTS in such country, METASYN shall pay GENERAL a
royalty of [ ]* of all royalties on sales of PRODUCTS received by METASYN from
SUBLICENSEES under the terms of the sublicenses between METASYN and said
SUBLICENSEES (but not including any amounts received by METASYN which are not
based on sales of PRODUCTS by such SUBLICENSEE, including without limitation any
expense reimbursements, license fees, technology transfer fees, up-front
payments, milestone payments, funding for collaborative research and development
pertaining to any PRODUCT or the proceeds from the sale of equity in METASYN);
provided, however, that the royalty payable to GENERAL by METASYN with respect
to sales of PRODUCTS by any SUBLICENSEE for any ACCOUNTING PERIOD shall not be
less than [ ]* of the NET SALES PRICE of the PRODUCTS sold by such SUBLICENSEE
during the same ACCOUNTING PERIOD.
5.4. In the event METASYN requires rights under patents owned by a
third party to practice PATENT RIGHTS licensed hereunder, METASYN may reduce the
amount paid GENERAL hereunder by [ ]* the amount paid to such third party
or parties, provided, however, that the aggregate of any reduction in royalties
under this Paragraph 5.4 shall not exceed [ ]* of any royalty payment otherwise
due GENERAL under Paragraph 5.2 of this Agreement.
*Confidential information omitted and filed with the Commission.
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5.5. If any license granted pursuant to Section 2 shall be or become
non-exclusive and GENERAL shall license any PATENT RIGHT to another licensee for
the purpose of making using or selling PRODUCTS in the FIELD and accept a
royalty or royalties more favorable to such licensee than herein provided for
METASYN, GENERAL shall give written notice thereof to METASYN and as of the
LICENSE EFFECTIVE DATE of such more favorable royalty or royalties, METASYN's
obligation hereunder to pay royalty or royalties to GENERAL shall be revised to
the more favorable rate.
5.6. In the event that the royalty paid to GENERAL is a significant
factor in the return realized by METASYN so as to diminish METASYN's capability
to respond to competitive pressures in the market, GENERAL agrees to consider a
reasonable reduction in the royalty paid to GENERAL as to each such PRODUCT for
the period during which such market condition exists. Factors determining the
size of the reduction will include profit margin on PRODUCT and on analogous
products, prices of competitive products, total prior sales by METASYN, and
METASYN' s expenditures in PRODUCT development.
5.7. METASYN, its AFFILIATES or SUBLICENSEES shall not owe GENERAL the
royalties set forth in Paragraph 5.2 above on sales of PRODUCT to the United
States Government, its agencies or instrumentalities when the government reduces
NET SALES PRICE by the amount of the royalty due GENERAL hereunder on the basis
of its royalty-free license for government use of the PATENT RIGHTS for which
the royalty, in the absence of such license, would be due hereunder.
5.8. Any tax required to be withheld by METASYN, its AFFILIATES or
SUBLICENSEES under the laws of any foreign country for the account of GENERAL
shall be promptly paid by METASYN, its AFFILIATES or SUBLICENSEES, as the case
may be, for and on behalf of GENERAL to the appropriate governmental authority,
and METASYN, its AFFILIATES or SUBLICENSEES, as the case may be, shall use best
efforts to furnish GENERAL with proof of payment of such tax. Any such tax
actually paid on GENERAL'S behalf shall be deducted from royalty payments due
GENERAL.
6. REPORTS AND PAYMENTS
6.1. METASYN shall keep, and shall cause each of its AFFILIATES and
SUBLICENSEES, if any, to keep full and accurate books of account containing all
particulars that may be necessary for the purpose of calculating all royalties
payable to GENERAL. Such books of account shall be kept at their principal place
of business and, with all necessary supporting data shall, during all reasonable
times for the three (3) years next following the end of the calendar year to
which each shall pertain and which shall be open for inspection at reasonable
times by an independent certified public accountant to whom METASYN, its
AFFILIATES or SUBLICENSEES have no reasonable objection at GENERAL's expense for
the purpose of verifying royalty statements or compliance with this Agreement.
6.2. In each year the amount of royalty due shall be calculated
semiannually as of the end of each ACCOUNTING PERIOD and shall be paid
semiannually within the sixty (60) days next following such date, every such
payment to be supported by the accounting prescribed in Paragraph 6.3 and to be
made in United States currency, except as provided in Paragraph 6.5 hereto.
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6.3. With each semiannual payment, METASYN shall deliver to GENERAL a
full and accurate accounting to include at least the following information:
(a) Quantity of each PRODUCT sold or leased (by country)
by METASYN, and its AFFILIATES or SUBLICENSEES;
(b) Total xxxxxxxx for each PRODUCT (by country);
(c) Quantities of each PRODUCT used by METASYN and its
AFFILIATES OR SUBLICENSEES;
(d) Names and addresses of all SUBLICENSEES of METASYN;
and
(e) Total royalties payable to GENERAL.
6.4. The royalty payments due under the Agreement shall, if overdue,
bear interest until payment at a per annum rate equal to one percent (1%) above
the prime rate in effect at the First National Bank of Boston on the due date,
not to exceed the maximum permitted by law. The payments of such interest shall
not preclude GENERAL from exercising any other rights it may have as a
consequence of the lateness of any royalty payment.
6.5. Except as set forth below, revenues from sales of PRODUCTS or
sublicenses received by METASYN in the form of foreign currency which is
convertible into U.S. dollars shall be converted, for purposes of computation of
royalties due GENERAL, at the conversion rate published in the Wall Street
Journal on the day on which such foreign currency is received by METASYN. If by
law, regulations, or fiscal policy of a particular country, conversion into
United States dollars or transfer of funds of a convertible currency to the
United States is restricted or forbidden, METASYN shall give GENERAL prompt
notice in writing and shall pay the royalty and other amounts due through such
means or methods as are lawful in such country as GENERAL may reasonably
designate. Failing the designation by GENERAL of such lawful means or methods
within thirty (30) days after such notice is given to GENERAL, METASYN shall
deposit the royalty payment due in local currency to the credit of GENERAL in a
recognized banking institution designated by GENERAL or, if none is designated
by GENERAL within the period of thirty (30) days as described above, in a
recognized banking institution selected by METASYN and identified in a notice in
writing given to GENERAL by METASYN, and such deposit shall fulfill all
obligations of METASYN with respect to such royalties and other amounts due.
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7. REPRESENTATION AND WARRANTIES
7.1. Nothing in this Agreement shall be construed as a warranty or
representation by either party as to the validity of any PATENT RIGHTS. Nothing
in this Agreement shall be construed as a warranty or representation by either
party that anything made, used, sold, sublicensed, or otherwise disposed of
under any license granted under this Agreement is or will be free from
infringement of domestic or foreign patent rights or other rights of other
parties.
7.2. GENERAL represents that to the best of its knowledge it is the
sole owner of all right title and interest in any inventions to be claimed in
any PATENT RIGHTS and represents that it has not made nor will during the term
of this Agreement make without the written consent of METASYN, any agreement
with others dealing with the PATENT RIGHTS in conflict with the rights granted
herein, subject to any rights of the Federal government pursuant to Paragraph
2.2. hereof.
7.3. GENERAL hereby represents to the best of its knowledge that
whatever rights, title and interest its employees or members of its medical
staff have in the PATENT RIGHTS by virtue of their employment or medical staff
membership as of the LICENSE EFFECTIVE DATE have been assigned to GENERAL.
7.4. GENERAL represents that to the best of its knowledge it does not
have any patents or patent applications, other than those included in the PATENT
RIGHTS, which (i) would prevent METASYN from making, using or selling PRODUCTS
or practicing or otherwise using the PATENT RIGHTS or (ii) dominate the
inventions claimed in the PATENT RIGHTS.
7.5. GENERAL represents that it is acquiring the SHARES for its own
account, for investment and not for, with a view to, or in connection with, any
transfer, assignment, resale or distribution thereof, in whole or in part.
GENERAL understands that the SHARES have not been registered under the
Securities Act of 1933, as amended, nor have they been registered or qualified
pursuant to the provisions of the securities laws of any other applicable
jurisdictions, by reason of their issuance in a transaction exempt from the
registration requirements of the Securities Act and such laws, and that they
must be held indefinitely unless they are subsequently registered under the
Securities Act and such laws or a subsequent disposition thereof is exempt from
registration. GENERAL acknowledges that the certificates for the SHARES shall
bear a legend substantially in the following form restricting their transfer,
and that a notation restricting such transfer will be made on the stock transfer
books of METASYN:
The securities represented hereby have not been registered
under the Securities Act of 1933, as amended, and may not be
sold, assigned or otherwise transferred in the absence of an
effective registration statement under said Act covering the
transfer or an opinion of counsel satisfactory to the issuer
that registration under said Act is not required.
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GENERAL has sufficient knowledge and experience in business and
financial matters and with respect to investment in securities of privately held
companies so as to enable it to analyze and evaluate the merits and risks of
acquisition of the SHARES contemplated hereby and is capable of protecting its
interest in connection with this transaction. GENERAL is able to bear the
economic risk of owning the SHARES, including a complete loss of their value.
GENERAL acknowledges that its representatives have had the opportunity to ask
questions and receive answers from officers and representatives of METASYN in
connection with its acquisition of the SHARES.
7.6. METASYN represents that its authorized capital stock consists of
8,000,000 shares of common stock, $.01 par value per share (the "Common Stock"),
of which 2,062,236 shares were issued and outstanding as of February 23, 1995,
and 3,237,922 shares of Preferred Stock, $.01 par value per share, of which
417,552 have been designated Series A Preferred Stock and 481,097 of which were
issued and outstanding as of February 23, 1995, and 2,820,370 of which have been
designated Series B Preferred Stock and 2,643,736 of which were issued and
outstanding as of February 23, 1995. A copy of the Certificate of Incorporation,
as amended, and the Bylaws of METASYN, each as in effect on and as of the date
hereof, is being delivered concurrently with the delivery of this Agreement.
8. INFRINGEMENT
8.1. METASYN shall inform GENERAL promptly in writing of any alleged
infringement of PATENT RIGHTS by a third party of which it shall have knowledge
and provide any available evidence of infringement.
8.2. GENERAL shall have the right, but shall not be obligated, to
prosecute at its own expense any such infringements of PATENT RIGHTS and, in
furtherance of such rights, METASYN hereby agrees that GENERAL may join METASYN
as a party plaintiff in any such suit, without expense to METASYN. The total
cost of any such infringement action commenced or defended solely by GENERAL
shall be borne by GENERAL. No settlement, consent judgment or other voluntary
final disposition of the suit may be entered into without the consent of METASYN
which consent shall not unreasonably be withheld. Any recovery or damages for
past infringement derived from such action shall first be used to reimburse
GENERAL for all expenses and legal fees connected with such action. GENERAL
shall then keep any recovery or damages equal to the amount of royalties not
received by GENERAL. Any recovery or damages then remaining shall be used to
compensate METASYN for its lost profits or a reasonable royalty on the sales of
the infringer, whichever measure of damages the court shall have applied. In the
event the damages remaining after the deductions of expenses and legal fees are
not sufficient to cover the allocations to both GENERAL and METASYN set forth in
the preceding two sentences, the remaining damages will be allocated between
GENERAL and METASYN on a pro rata basis. In the event recovery or damages still
remain after the above-mentioned allocations the remainder shall be divided as
follows: [ ]* to GENERAL and the remaining [ ]* to METASYN.
8.3. If within six months after having been notified of any alleged
infringement GENERAL shall have been unsuccessful in causing the alleged
infringer to desist and shall
*Confidential information omitted and filed with the Commission.
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not have brought or shall not be diligently prosecuting an infringement action,
or if GENERAL shall notify METASYN at any time prior thereto of its intention
not to bring suit against any alleged infringer, then, in those events only,
METASYN may, for such purposes, use the name of GENERAL as party plaintiff, and
GENERAL shall cooperate with METASYN in such action at METASYN's expense. No
settlement, consent judgment or other voluntary final disposition of the suit
which invalidates or restricts the claims of such PATENT RIGHTS may be entered
into without the consent of GENERAL, which consent shall not be unreasonably
withheld. METASYN shall indemnify GENERAL against any order for payment that may
be made against GENERAL in such proceedings.
8.4. In the event that any action is brought against METASYN for
infringement of any patent or for wrongful use of any proprietary information of
any third party arising out of METASYN's exercise of any PATENT RIGHTS licensed
under this Agreement, GENERAL agrees to cooperate with METASYN, at METASYN's
expense, in connection with METASYN's defense of such action.
8.5. In the event that METASYN shall undertake the enforcement and/or
defense of the PATENT RIGHTS by litigation, METASYN may withhold up to [ ]*
of the royalties and sublicense revenues otherwise due GENERAL hereunder
(after any reduction pursuant to Paragraph 5.4) after notification of
infringement and apply the same toward reimbursement of its expenses, including
reasonable attorneys' fees, in connection therewith. In order for such royalties
to be continued to be withheld, METASYN must continuously and diligently pursue
such enforcement and/or defense. GENERAL may retain counsel at its expense to
represent it in such suit. Any recovery of damages by METASYN for any such suit
shall be applied first in satisfaction of any unreimbursed expenses and legal
fees of METASYN and then the expenses and legal fees of GENERAL, if any,
relating to the suit. Next the remaining damages shall be applied toward
compensation for METASYN's lost profits or a reasonable royalty on the sales of
the infringer, whichever measure of damages the court shall have applied, and
the reimbursement to GENERAL of royalties withheld by METASYN pursuant to this
Paragraph 7.5 and royalties not received by GENERAL from sales by the infringer.
In the event damages remaining after the deduction of any unreimbursed expenses
and legal fees of METASYN or GENERAL relating to the suit are not sufficient to
cover the allocations to METASYN and GENERAL set forth in the preceding
sentence, the damages remaining after reimbursement of expenses and legal fees
shall be allocated to METASYN and GENERAL on a pro rata basis. Any damages or
recovery remaining after the allocations to METASYN and GENERAL of lost profits
or unrecovered royalties as previously set forth shall be divided as follows:
[ ]* to METASYN and [ ]* to GENERAL.
8.6. In the event that a declaratory judgment action alleging
invalidity or non-infringement of any of the PATENT RIGHTS shall be brought
against METASYN, GENERAL as its option, shall have the right, within thirty (30)
days after commencement of such action to intervene and take over the sole
defense of the action at its own expense.
8.7. In the event one party undertakes the enforcement and/or defense
of any PATENT RIGHTS hereunder, the other party shall use reasonable efforts to
fully cooperate with and shall supply all assistance reasonably requested by the
party initiating or carrying
*Confidential information omitted and filed with the Commission.
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out such proceedings. The party that institutes any proceeding to enforce or
defend PATENT RIGHTS shall have sole control of that proceeding and shall bear
the reasonable expenses incurred by said other party in providing such
assistance and cooperation as is requested pursuant to this Section.
9. INDEMNIFICATION AND INSURANCE
9.1. METASYN shall indemnify, defend and hold harmless GENERAL and its
trustees, officers, medical and professional staff, employees, and agents and
their respective successors, heirs and assigns (the "Indemnitees"), against any
liability, damage, loss, or expense (including reasonable attorney's fees and
expenses of litigation) incurred by or imposed upon the Indemnitees or any one
of them in connection with any claims, suits, actions, demands or judgments (i)
arising out of the design, production, manufacture, sale, use in commerce,
lease, or promotion by METASYN or by a SUBLICENSEE, AFFILIATE or agent of
METASYN of any product, process or service relating to, or developed pursuant
to, this Agreement or (ii) arising out of any other activities to be carried out
pursuant to this Agreement.
9.2. METASYN's indemnification under Paragraph 9.1(i) shall apply to
any liability, damage, loss or expense whether or not it is attributable to the
negligent activities of the Indemnitees. METASYN's indemnification under
Paragraph 9.1(ii) shall not apply to any liability, damage, loss or expense to
the extent that it is attributable to the negligent activities or willful
misconduct of the Indemnitees.
9.3. GENERAL shall promptly notify METASYN of any claim of which it has
knowledge which could give rise to an obligation of METASYN to indemnify it
hereunder, shall cooperate with METASYN in any proceeding arising under
Paragraph 9.1 and agrees that METASYN shall have full control over the conduct
of the defense and settlement thereof. METASYN agrees, at its own expense, to
provide attorneys reasonably acceptable to the GENERAL to defend against any
actions brought or filed against any party indemnified hereunder with respect to
the subject of indemnity contained herein, whether or not such actions are
rightfully brought.
9.4. At such time as any product, process or service relating to, or
developed pursuant to, this Agreement is being commercially distributed or sold
(other than for the purpose of obtaining regulatory approvals) by METASYN or by
a SUBLICENSEE, AFFILIATE or agent of METASYN (hereinafter "OTHER SELLER"),
METASYN shall itself or in the alternative shall ensure that OTHER SELLER either
(i) at its sole cost and expense, procure(s) and maintain(s) comprehensive
general liability insurance in amounts not less than $2,000,000 per incident and
$2,000,000 annual aggregate and naming the Indemnitees as additional insureds or
(ii) pay(s) for the procurement and maintenance by GENERAL of insurance in the
amounts and in the form set forth in this Paragraph. Such comprehensive general
liability insurance shall provide (i) product liability coverage and (ii) broad
form contractual liability coverage, both of which shall apply to METASYN' s
indemnification under Paragraph 9.1 of this Agreement. METASYN shall ensure that
if METASYN or OTHER SELLER elects to self-insure all or part of the limits
described above (including deductibles or retentions which are in excess of
$250,000 annual aggregate) such
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self-insurance program must be reasonably acceptable to the GENERAL and the Risk
Management Foundation of the Harvard Medical Institutions Inc. The minimum
amounts of insurance coverage required under this Paragraph 9.4 shall not be
construed to create a limit of METASYN's liability with respect to its
indemnification under Paragraph 9.1 of this Agreement.
9.5. METASYN shall provide GENERAL with written evidence of such
insurance upon request of GENERAL. METASYN shall provide GENERAL with written
notice at least fifteen (15) days prior to the cancellation, non-renewal or
material change in such insurance; if METASYN or OTHER SELLER does not obtain
replacement insurance providing comparable coverage prior to the expiration of
such fifteen (15) day period, GENERAL shall have the right to terminate this
Agreement effective at the end of such fifteen (15) day period without notice or
additional waiting periods.
9.6. METASYN shall itself maintain, or shall ensure that OTHER SELLER
maintains or that payments are made for the maintenance by GENERAL of, as the
case may be, such comprehensive general liability insurance beyond the
expiration or termination of this Agreement during (i) the period that any
product, process, or service, relating to, or developed pursuant to, this
Agreement is being commercially distributed or sold (other than for the purpose
of obtaining regulatory approvals) by METASYN or by OTHER SELLER and (ii) a
reasonable period after the period referred to in (c) (i) above which in no
event shall be less than ten (10) years.
9.7. This Section 9 shall survive expiration or termination of this
Agreement.
10. TERMINATION
10.1. METASYN shall have the right to terminate any license granted
hereunder or to convert any such license from an exclusive license to a
nonexclusive license, upon sixty (60) days prior written notice to GENERAL.
METASYN may exercise its right to terminate or convert to a nonexclusive license
any license granted hereunder on a patent-by-patent and/or a country-by-country
basis.
10.2. If either party shall fail to faithfully perform any of its
obligations under this Agreement, the nondefaulting party may give written
notice of the default to the defaulting party. Unless such default is corrected
within sixty (60) days after such notice, the notifying party may terminate this
Agreement upon thirty (30) days prior written notice; provided, however, that
all royalties accrued prior to such termination shall be paid. Termination of a
patent license under one patent shall not affect a patent license under another
patent.
10.3. Notwithstanding any early termination pursuant to Paragraph 10.2
("Early Termination"), METASYN shall have the right for one year after the
effective date of an Early Termination to dispose of all completed or
substantially completed PRODUCTS then in hand and to complete all orders for
PRODUCTS then in hand which METASYN is unable to cancel without penalty.
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10.4. Upon termination of any license granted hereunder METASYN shall
pay GENERAL all royalties due or accrued on (i) the sale of PRODUCT up to and
including the date of termination and (ii) the sale of PRODUCT pursuant to
Paragraph 10.3 hereof.
10.5. Unless otherwise terminated as provided for in this Agreement,
GENERAL shall have the right to terminate the licenses and rights granted to
METASYN in any country under this Agreement in the event that after the FIRST
COMMERCIAL SALE of PRODUCT in such country there is a continuous [ ]* period in
which no PRODUCT is sold in such country, provided that such sale is not
prevented by force majeure, government regulation or intervention, or
institution of a law suit by a third party.
10.6. Unless otherwise terminated as provided for in this Agreement,
the licenses to PATENT RIGHTS granted hereunder will continue on a country by
country basis until the last to expire of any PATENT RIGHTS, the claims of which
but for this Agreement would be infringed by the manufacture, use or sale of any
PRODUCT in the applicable country, at which time METASYN shall have a fully paid
up license.
10.7. In the event that any license granted to METASYN under this
Agreement is terminated, any sublicense under such license granted prior to
termination of said license shall remain in full force and effect, provided
that:
(a) the SUBLICENSEE is not then in breach of its
sublicense agreement;
(b) the SUBLICENSEE agrees to be bound to GENERAL as the
licensor under the terms and conditions of the
sublicense agreement, as modified by the provisions
of this Paragraph 10.7;
(c) the SUBLICENSEE, at GENERAL'S written request,
assumes in a signed writing the same obligations to
GENERAL as those assumed by METASYN under Sections 9
and 11 hereof;
(d) GENERAL shall have the right to receive the greater
of (i) any payments payable to METASYN under such
sublicense agreement to the extent they are
reasonably and equitably attributable to such
SUBLICENSEE'S right under such sublicense to use and
exploit PATENT RIGHTS, or (b) the royalty payments
set forth in Paragraph 5.2 hereof;
(e) the SUBLICENSEE agrees to be bound by the due
diligence obligations of METASYN pursuant to Section
3 hereof, in the field and territory of sublicense;
(f) GENERAL has the right to terminate such sublicense
upon the terms and conditions set forth in Section
10.2; and
(g) GENERAL shall not assume, and shall not be
responsible to such SUBLICENSEE for, any
representations, warranties or obligations of
*Confidential information omitted and filed with the Commission.
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METASYN to such SUBLICENSEE, other than to permit
such SUBLICENSEE to exercise any right to PATENT
RIGHTS that are granted under such sublicense
agreement consistent with the terms of this
Agreement.
11. MISCELLANEOUS
11.1. This Agreement constitutes the entire understanding between the
parties with respect to the subject matter hereof.
11.2. In order to facilitate implementation of this Agreement, GENERAL
and METASYN are designating the following individuals to act on their behalf
with respect to this Agreement for the matter indicated below:
(a) with respect to all royalty payments, any
correspondence pertaining to any PATENT RIGHTS, or
any notice of the use of GENERAL's name: for GENERAL,
the Director, Office of Technology Affairs, and for
METASYN Xx. Xxxxxxx Xxxxxxx, President.
(b) any amendment of or waiver under this Agreement, any
written notice or other communication pertaining to
the Agreement: for GENERAL, the Director, Office of
Technology Affairs, and for METASYN, Xx. Xxxxxxx
Xxxxxxx, President.
(c) the above designations may be superseded from time to
time by alternative designations made by: for
GENERAL, the Director, Office of Technology Affairs,
and for METASYN, Xx. Xxxxxxx Xxxxxxx, President.
11.3. This Agreement may be amended and any of its terms or conditions
may be waived only by a written instrument executed by the parties or, in the
case of a waiver, by the party waiving compliance. The failure of either party
at any time or times to require performance of any provision hereof shall in no
manner affect its rights at a later time to enforce the same. No waiver by
either party of any condition or term in any one or more instances shall be
construed as a further or continuing waiver of such condition or term or of any
other condition or term.
11.4. This Agreement shall be binding upon and inure to the benefit of
and be enforceable by the parties hereto and their respective successors and
permitted assigns. METASYN may at any time request that GENERAL ascertain
whether Risk Management Foundation has in effect Uniform Indemnification and
Insurance Provisions more favorable to METASYN than those of this Agreement, in
which event METASYN and GENERAL shall amend this Agreement to include such more
favorable provisions.
11.5. Any delays in or failures of performance by either party under
this Agreement shall not be considered a breach of this Agreement if and to the
extent caused by occurrences beyond the reasonable control of the party
affected, including but not limited to: Acts of
- 15 -
God; acts, regulations or laws of any government; strikes or their concerted
acts of worker; fires; floods; explosions; riots; wars; rebellion; and sabotage.
Any time for performance hereunder shall be extended by the actual time of delay
caused by such occurrence.
11.6. Neither party shall use the name of the other party or of any
staff member, officer, employee or student of the other party or any adaptation
thereof in any advertising, promotional or sales literature, publicity or in any
document employed to obtain funds or financing without the prior written
approval of the party or individual whose name is to be used. For GENERAL, such
approval shall be obtained from the Director of Public Affairs.
11.7. This Agreement shall be governed by and construed and interpreted
in accordance with the laws of the Commonwealth of Massachusetts.
11.8. This Agreement shall not be assignable by GENERAL without
METASYN's written consent except for the right to receive royalties payable
herein. METASYN may at its own discretion and without approval by GENERAL
transfer its interest or any part thereof under this Agreement to a wholly-owned
subsidiary or any assignee or purchaser of the portion of its business
associated with the manufacture and sale of PRODUCT. In the event of any such
transfer, the transferee shall assume and be bound by the provisions of this
Agreement. Otherwise this Agreement shall be assignable by METASYN only with the
consent in writing of GENERAL.
11.9. Except as to issues relating to the validity, construction or
effect of any PATENT RIGHTS, any dispute arising under this Agreement which the
parties are unable to resolve shall be submitted to arbitration pursuant to this
Paragraph 11.9. Any arbitration shall be conducted in accordance with the then
prevailing commercial arbitration rules of the American Arbitration Association
(the "AAA"), except where modified by this Paragraph 11.9, before a panel of
three (3) arbitrators. Each party shall select one (1) arbitrator no later than
twenty (20) days after the serving of a demand for arbitration by either party
and the third arbitrator, who shall be the chairman of the arbitration panel,
shall be appointed by the first two (2) arbitrators no later than twenty (20)
days after the first two (2) arbitrators are selected. In the event any party
fails to select its arbitrator within the required time period or the third
arbitrator is not selected within the required time period, such arbitrator(s)
shall be appointed within ten (10) days by the AAA in accordance with its normal
selection procedures. Each party shall pay fifty percent (50%) of the AAA
arbitration expenses.
11.10. If any provision(s) of this Agreement are or become invalid, are
ruled illegal by any court of competent jurisdiction or are deemed unenforceable
under then current applicable law from time to time in effect during the term
hereof, it is the intention of the parties that the remainder of this agreement
shall not be effected thereby. It is further the intention of the parties that
in lieu of each such provision which is invalid, illegal or unenforceable, there
be substituted or added as part of this Agreement a provision which shall be as
similar as possible in economic and business objectives as intended by the
parties to such invalid, illegal or enforceable provision, but shall be valid,
legal and enforceable.
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THE PARTIES have duly executed this Agreement as of the date first
shown above written.
METASYN, INC. THE GENERAL HOSPITAL CORPORATION
BY /s/ Xxxxxxx X. Xxxxxxx BY /s/ Xxxxxx X. Xxxxxxx
----------------------- ---------------------------
TITLE Chairman TITLE V.P. Patents Licensing and
Industry Sponsored Research
- 17 -
Appendix A
I) U.S. Ser. No. 731,841 filed May 8, 1985 (now U.S. Patent
No. 4,899,755) for "Hepatobiliary NMR Contrast Agents"
Xxxxxxx X. Xxxxxxx and Xxxxxx X. Xxxxx, Inventors
2) U.S. Ser. No. 860,540 filed May 7, 1986 (now U.S. Patent
No. 4,880,008) for "In Vivo Enhancement of NMR Relaxivity,"
Xxxxxxx X. Xxxxxxx, Inventor
3) [ ]*
4) [ ]*
5) [ ]*
*Confidential information omitted and filed with the Commission.
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