Exhibit 10.24
LICENSE AGREEMENT
Between the party
MEDTRONIC, INC.,
a Minnesota Corporation with its principal offices in
Minneapolis, Minnesota, U.S.A., hereinafter together
referred to with its Subsidiaries as "MEDTRONIC",
And the party
XXXXXX XXXXXXXXXX LTD.,
a New York corporation with its principal offices in
Clarence, New York, U.S.A., hereinafter together
referred to with its Subsidiaries as "GREATBATCH",
Dated this ___________ day of March, 1976
PREAMBLE
WHEREAS, GREATBATCH has licensing rights to certain Subject
Patents, included in APPENDIX A to this Agreement and hereafter defined,
relating to lithium iodide, or other halide, power sources and methods or
apparatus of the manufacture thereof.
WHEREAS, MEDTRONIC wishes to acquire a non-exclusive,
worldwide license under all of said Subject Patents to manufacture, have
manufactured, use and sell, offer for sale or otherwise make available such
lithium iodide, or other halide, power sources;
WHEREAS, GREATBATCH is willing to grant such a license to
MEDTRONIC on the terms and conditions expressed herein.
NOW, THEREFORE, in consideration of the promises the
agreements, covenants and conditions herein contained, the parties hereto
covenant and agree with each other as follows:
ARTICLE I
DEFINITION OF TERMS
For the purpose of this Agreement the following terms shall
mean:
A. "Licensed Products" - means all power sources and any
raw materials, parts and components thereof and any methods or apparatus for
the manufacture thereof coming within the protection of claims of the Subject
Patents in the country of manufacture, use and/or sale by MEDTRONIC.
"Licensed products - Iodide" means any Licensed Product incorporating as a
raw material or component, iodine or an iodine compound. "Licensed Products -
Halide" means any Licensed Product incorporating as a raw material or
component, a halogen other than and/or addition to iodine or and iodine
compound.
B. "Subject Patents" - means the patents listed in APPENDIX
A; any divisions, continuations, re-issues thereof, or substitutes therefor
based upon or corresponding to
the listed patents; any foreign patents corresponding thereto; and, at the
option of MEDTRONIC, any other U.S. patents and corresponding foreign patents
which may be granted for lithium iodide, or other halide, power sources and
methods or apparatus for the manufacture thereof and which GREATBATCH has the
right to include within this License Agreement while the same is in effect.
C. "Sold" - means billed out or delivered or the receipt of
full paument, whichever occurs first.
D. "Subsidiary" - means a corporation, company or any other
entity at least fifty percent (50%) or more of whose outstanding voting stock
is owned or controlled at any time during the course of this Agreement,
directly or indirectly, by a party to this Agreement, but such corporation,
company, or other entity shall be deemed a Subsidiary only so long as such
ownership or control exists.
ARTICLE II
WARRANTIES AND REPRESENTATIONS
A. GREATBATCH represents and warrants that it is the sole
owner of the entire right, title and interest in and to of the Subject
Patents listed on Appendix A.
B. GREATBATCH represents and warrants that it has the right
to enter into this Agreement, and that there are no outstanding assignments,
claims, licenses, mortgages, agreements or understandings, express or implied,
which directly reduce the value to MEDTRONIC of the non-exclusive licenses
and rights herein granted or intended to be granted by GREATBATCH to
MEDTRONIC. It is expressly recognized that GREATBATCH has the unrestricted
right to license others under the Subject Patents.
ARTICLE III
RIGHTS GRANTED
GREATBATCH hereby grants and agrees to grant to MEDTRONIC a
nonexclusive, worldwide license to manufacture, have manufactured, use and
sell, offer for sale or otherwise make available Licensed Products and to
practice methods under the Subject
Patents, for the full life of enforcement thereof, including the right to
pass along licenses under the Subject Patents for use of such Licensed
Products by third parties purchasing the same from MEDTRONIC.
ARTICLE IV
CONSIDERATION
A. Until the expiration of the last to expire of the
Subject Patents, MEDTRONIC shall pay to GREATBATCH, as consideration for the
rights and licenses granted herein, the following unit royalty on all
Licensed Products Sold as a Power Source to third parties, or made by or for
MEDTRONIC'S Power Source manufacturing division or Subsidiary, and accepted
by, MEDTRONIC for incorporation with a medical or other device:
1. Four Dollars ($4.00) for each Licensed Product-Iodide
Sold or accepted for incorporation; and
2. Ten Dollars ($10.00) for each Licensed Product-Halide
Sold or accepted for incorporation.
B. The unit royalty of four and ten dollars under part A.
1. and 2. of this ARTICLE IV shall be effective as of May 1, 1976 for the
Medtronic fiscal year ending April 30, 1977. On the first day of May for each
year thereafter that this License Agreement remains in effect, the unit
royalty then prevailing for that Medtronic fiscal year shall be adjusted by a
percentage equivalent to the percentage change in the United States
Department of Commerce cost of living index from that index prevailing on May
1, 1976, the base year for purposes of calculation.
C. Only one royalty payment shall accrue hereunder on
each Licensed Product even though such Licensed Product is manufactured in
accordance with or incorporates inventions covered by more than one Subject
Patent.
D. The aforesaid unit royalty, subject to modification as
hereafter provided is being adopted as a matter of mutual convenience,
regardless of which one(s) of the Subject
Patents may be involved, and is freely accepted by the parties hereto as a
reasonable royalty for the respective Licensed Products, and for the
privilege provided MEDTRONIC to operate under any or all of the Subject
Patents.
E. These royalties shall be consideration attributable only
to the Subject Patents and shall be due and payable only so long as and to
the extent that the manufacture, use or sale of Licensed Products would
infringe one or more subsisting claims in any one or more issued patents in
the country of issue included in the Subject Patents, which claims have not
been abandoned, cancelled, disclaimed, expired, or awarded to another in an
interference proceeding or declared invalid or otherwise unenforceable by a
court of competent jurisdiction in a final judgment, for which no right of
appeal lies, if such Licensed Products had been made, used or sold without
authority or the owner of such patent.
F. If GREATBATCH hereafter grants any license to another
under any one or more of the Subject Patents with a royalty base or rate more
favorable than those granted under this license to MEDTRONIC, then from the
effective date of such more favorable license, GREATBATCH agrees that
MEDTRONIC shall be entitled to the benefit of any such more favorable base or
rate.
G. Should MEDTRONIC be obligated, because of a dominating
patent which necessarily would be infringed by MEDTRONIC'S exercise of the
rights and licenses granted herein, to pay any patent license fee or royalty
to a third party on sales of Licensed Products halide, then the adjusted unit
royalty payable under Part A.2. of this ARTICLE IV shall thereafter be
reduced in amount by the fee or royalty paid to such third party; however,
such reduction shall in no event cause the unit royalty to fall below the
amount of six dollars ($6.00), adjusted annually with changes in the cost of
living index in the manner specified under paragraph B of this ARTICLE IV. In
the event that a one-time payment or installment payments are made to such a
third party for a fully-paid-up license, then the adjusted unit royalty
payable under the said Part A.2. shall be reduced to the then prevailing
adjusted unity royalty payable under this paragraph G only until such third
party payment is fully credited.
ARTICLE V
REPORTS, PAYMENTS AND ROYALTY VERIFICATION
A. Reports and Payments - MEDTRONIC agrees to make written
summary reports to GREATBATCH within thirty (30) days after the first days of
November and May of each year during the term of this Agreement after the
Effective Date. Such reports shall state the description and number of
Licensed Products Sold to others or accepted for use by MEDTRONIC in medical
or other devices in any country under the licenses herein granted, and a
calculation of the net royalty due GREATBATCH for same during the preceding
six (6) calendar months before the date the particular report is due.
Simultaneously, with the making of such report, MEDTRONIC agrees to pay to
the order of GREATBATCH the royalties then due.
B. Royalty Verification - MEDTRONIC agrees to keep true and
accurate written records showing the description and number of Licensed
Products Sold to others or accepted for use by MEDTRONIC in medical or other
devices in any country, said records to be in sufficient detail to enable the
royalties payable hereunder by MEDTRONIC'S place of business and at usual
business hours to an audit by or in behalf of GREATBATCH to the extent
necessary to verify the reports hereinafter provided. Such audit shall occur
no more frequently than once during any calendar year, and it shall be made
at the expense of GREATBATCH by a Licensed Public Accountant or Certified
Public Accountant appointed by GREATBATCH. Said accountant shall be licensed
by either New York or Minnesota. No such examination shall cover a period
longer than two (2) years preceding the start of such examination nor shall
it cover any records or periods previously examined and no claim may be
asserted unless made within ninety (90) days following an examination made
pursuant to this paragraph.
C. During the pendency of a proceeding or
litigation before a court or administrative board in any country having
competent jurisdiction over the subject matter contesting the scope, validity
or infringement of certain or all claims or any Subject Patent, MEDTRONIC
shall have the right to make all payments due under this Agreement pertaining
directly and solely to such contested patent claims into an escrow account at
the Northwestern National Bank in Minneapolis, Minnesota, pending the final,
unappealed or unappealable decision in the litigation or proceeding. When a
final decision from which no right of appeal lies is rendered the sums in the
escrow account will be disbursed to GREATBATCH if the patent claims are held
valid or infringed to the Licensed Products, the latter holding excusing
MEDTRONIC if the patent claims are held invalid or noninfringed by the
Licensed Products, the latter holding excusing MEDTRONIC from any further
obligation under ARTICLE IV with respect to the patent claims litigated.
ARTICLE VI
DURATION
A. This Agreement shall continue to the full end of the
term of the first Subject Patent to expire and may be extended by MEDTRONIC
to the full end of the terms of any or all of the Subject Patents, unless
sooner terminated in accordance with the provisions hereof, but all payments
to be rendered to GREATBATCH under the Agreement shall be calculated in
accordance with the right exercised under this License Agreement on a
country-by-country basis with respect to unexpired patents following the
successive expirations of the Subject Patents in each country.
B. Upon termination of this Agreement for any reason,
MEDTRONIC shall have the right to complete and dispose of those Licensed
Products which MEDTRONIC is
obligated to deliver under any then existing contract, including any contract
which may result from formal bids submitted to a prospective customer
previous to such termination date where acceptance of such bids by such
prospective customer would result in a formal contractual obligation.
MEDTRONIC shall also have the right to complete and dispose of any Licensed
Product which is in the process of manufacture and to dispose of any Licensed
Product in its inventory as of the date of such termination, and to replace
and repair any Licensed Product where required to do so by a product
warranty; provided, however, that such use, sale, or other disposition shall
be subject to the payments provided for in ARTICLE IV of this Agreement.
ARTICLE VII
ASSIGNMENT
This Agreement shall inure to the benefit of and be binding
upon each of the parties hereto and their respective successors and assigns. It
may not be voluntarily assigned in whole or in part by MEDTRONIC without the
prior consent of GREATBATCH, except upon the merger, consolidation or other
transfer of all or substantially all of its assets in the power source field.
Either party may, however, assign this Agreement to its Subsidiaries without the
prior consent of the other, as long as the transferor party remains liable
hereunder, and GREATBATCH may freely assign as long as the rights of MEDTRONIC
are not adversely affected.
ARTICLE VIII
VALIDITY AND SCOPE
A. Any admission of validity of any Subject Patent that may
be implied by the acceptance of any license under any such Patent under this
Agreement is limited to the term and scope of such license. MEDTRONIC shall
not be estopped by such acceptance form
contesting the validity of any Subject Patent in any country before any board
or court of competent jurisdiction.
B. Any final decision by a court or administrative board
declaring the validity, scope or both, of any claims of one or more of the
Subject Patents shall be binding on the parties hereto with respect to any
right or obligation under this Agreement arising out of any acts of
manufacture, use or sale, under the rights and licenses herein granted
occurring subsequent to such final decision in the country where the decision
is rendered; however, such a final decision shall not, in and of itself
terminate this Agreement. A decision is not final when subject to reversal or
modification by appeal or by certiorari.
ARTICLE IX
BANKRUPTCY
GREATBATCH shall have the right to terminate this Agreement
on occurrence of either of the following:
1. MEDTRONIC becomes insolvent or makes an assignment for
the benefit or creditors;
2. any proceeding is commenced by or against MEDTRONIC
under any bankruptcy, reorganization, arrangement, liquidation, readjustment
of debt, or moratorium law or statute and such proceeding is not dismissed
within 60 days of its institution.
ARTICLE X
TERMINATION FOR DEFAULT
In case of the failure of MEDTRONIC to fulfill any of its
obligations hereunder, GREATBATCH shall have the right, without limitation of
any other right it may have on account of such failure, to terminate this
Agreement by giving MEDTRONIC ninety (90) days' written notice of its
intention so to do, provided, however, that if MEDTRONIC shall remedy such
failure during such ninety (90) day period, then such notice of termination
shall be null and void; otherwise, this Agreement shall be considered as
terminated on and after the expiration of said ninety (90) day period.
ARTICLE XI
VOLUNTARY TERMINATION
MEDTRONIC shall have the unconditional right to terminate
forthwith any license herein granted to MEDTRONIC and/or its Subsidiaries
under any patent or patents by giving written notice to that effect to
GREATBATCH. Such termination shall be effective upon receipt of the notice by
GREATBATCH, although GREATBATCH shall have the right to receive payment at
the regular dates fixed in ARTICLE V of outstanding royalty amounts. This
Agreement shall terminate automatically without notice to either party upon
the expiration of the last to expire of the Subject Patents.
ARTICLE XII
NOTICES
A. For the purposes of mailing any notice permitted or
required by this Agreement, the addresses of the parties here are as follows:
To MEDTRONIC: Medtronic, Inc.
0000 Xxx Xxxxxxx Xxxxx
P. O. Box 1453
Minneapolis, Minnesota 55440
U. S. A.
Attn: Vice-President, Operations
Copy to: Medtronic, Inc.
0000 Xxx Xxxxxxx Xxxxx
P. O. Xxx 0000
Xxxxxxxxxxx, Xxxxxxxxx 00000
Attn: Law Department
To GREATBATCH: Xxxxxx Xxxxxxxxxx, Ltd.
10,000 Xxxxxx Xxxxx
Xxxxxxxx, Xxx Xxxx 00000
B. All notices required to be given hereunder shall be
delivered by hand or shall be sent by telex, telegram or registered mail and
deemed to be given on the date that they are deposited in the post office or
transmitted by cable or telex.
C. Notices shall be sent to the addresses specified above
or to such addresses as the parties may hereafter notify to the other in
writing.
ARTICLE XIII
CONSTRUCTION
This Agreement shall be construed and interpreted under and in
accordance with the laws of the State of Minnesota, United States of America.
ARTICLE XIV
MISCELLANEOUS
A. Nothing in this Agreement shall be construed as granting
any right or license to make, use and/or sell any product or apparatus, or
practice any method, in any place or in any manner prohibited by law.
B. Except as otherwise expressly provided herein, nothing
contained in or pursuant to this Agreement shall be construed as:
1. Granting any license or conferring any right, by
implication, estoppel or otherwise, under any technical information, patent
application or patent.
2. Granting any sublicensing right, it being understood, of
course, that the licence granted herein extends to use and resale of licensed
products made and sold hereunder.
3. Imposing any obligation to carry out or forego any
action in regard to the filing or prosecution of any patent application, the
obtaining of any patent, the maintaining of any patent in force, or the
initiation or prosecution of any interference or other contest of priority of
invention.
4. Imposing any obligation, or conferring any right, to
enforce any patent.
5. Any representation, warranty, assurance, guarantee or
inducement whatsoever with respect to quality, production, cost, profit,
demand, utility, availability or marketing of any particular product,
apparatus, part or material, damage, accidents or injury to
persons or property, or infringement or contribution to infringement of
patent rights or other rights of third parties, or the changing of any design
or specification, or the validity of any Subject Patent.
6. Creating any obligation with respect to technical
information furnished by either party to the other except obligations as may
arise under the patent laws, unless otherwise agreed to in a separate written
document signed by a duly authorized officer.
C. MEDTRONIC agrees to apply an appropriate patent notice to
all Licensed Products, and to accept the reasonable suggestions of GREATBATCH
with respect thereto.
D. This Agreement constitutes the entire agreement between
the parties hereto with respect to the subject matter hereof and supersedes
all previous communications, representations, understandings, and agreements,
either oral or written, between the parties or any officials or
representatives thereof, with respect to said subject matter.
IN WITNESS WHEREOF, GREATBATCH and MEDTRONIC have caused
the Agreement to be executed by their duly authorized officers and their
corporate seals to be hereunto affixed, as of the day and year first above
written.
MEDTRONIC, INC.
By /s/ Xxxxxx Xxxx
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Xxxxxx Xxxx
Senior Vice-President
Date: [illegible] 76
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Place: [illegible]
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XXXXXX XXXXXXXXXX, LTD.
By: /s/ Xxxxxx Xxxxxxxxxx PRES
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Date: 08 MAR 76
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Place: Clarence, NY
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APPENDIX A
PATENT NO. DATE OF ISSUE TITLE
---------- ------------- -----
3,723,183 March 27, 1973 Lithium Battery Enclosure
3,773,557 November 20, 1973 Solid State Battery
3,817,791 June 18, 1974 Lithium Iodine Battery
3,874,929 April 1, 1975 Lithium Iodine Battery
3,895,962 July 22, 0000 Xxxxx Xxxxx Xxxxxxx
