EXHIBIT 10.25
CONFIDENTIAL TREATMENT HAS BEEN SOUGHT
FOR PORTIONS OF THIS EXHIBIT PURSUANT TO
RULE 24B-2 UNDER THE SECURITIES EXCHANGE
ACT OF 1934, AS AMENDED.
LICENSE AGREEMENT
THIS AGREEMENT is made this 10th day of August, 1998, between Exogen,
Inc., a Delaware corporation having an office located at 00 Xxxxxxxxxxxx Xxxxxx,
Xxxxxxxxxx, XX 00000 ("Exogen"), and Xxxxx & Nephew, Inc., a Delaware
corporation acting on behalf of its Orthopaedic Division having an office
located at 0000 Xxxxxx Xx., Xxxxxxx, XX 00000 ("S&N").
P R E A M B L E :
WHEREAS, S&N and Exogen are concurrently herewith entering into a
Master Agreement ("Master Agreement"), United States Sales Representative
Agreement ("Sales Rep Agreement") and other agreements relating to certain
products that are covered by intellectual property owned by Exogen; and
WHEREAS, S&N seeks to obtain and Exogen has agreed to grant to S&N a
license under such intellectual property;
NOW, THEREFORE, in consideration of the mutual covenants contained
herein, the parties agree as follows:
1. DEFINITIONS
1.1. "Affiliates" has the meaning ascribed to such term in the Master
Agreement.
1.2. "Intellectual Property" as used in this Agreement shall mean all
intellectual property owned by Exogen relating to "Products" (as defined below),
including the patents, patent applications, trademark registrations and
trademark applications set forth in the attached Appendix A, together with all
patent applications or patents that are continuations, continuations-in-part,
divisional applications, reissues, extensions, or foreign counterparts thereof.
The parties agree to supplement Appendix A in order to identify all intellectual
property in all Territories covered by a Sales Rep/Distribution Agreement.
1.3. "Territory" and "Territories" shall mean any area in which S&N has
a Sales Rep/Distribution Agreement.
1.4. "Products" shall have the same meaning as ascribed to such term in
the applicable Sales Rep/Distribution Agreement.
1.5 "Sales Rep/Distribution Agreement" shall mean the Rep Agreement,
U.S. Stocking Distribution Agreement, Global Stocking Distribution Agreement or
Individual Country Stocking Distribution Agreement (as such terms are defined in
the Master Agreement).
2. GRANT OF LICENSE
2.1. Exogen hereby grants to S&N and its Affiliates a royalty-free,
nonexclusive right and license under the Intellectual Property to use and sell
the Products within the Territory and to sublicense others to so do for the term
of this Agreement subject to the terms and conditions of this Agreement. The
parties acknowledge that the consideration paid by S&N to Exogen pursuant to the
Master Agreement at the Initial Closing (as defined in the Master Agreement)
shall serve as the consideration for this Agreement.
2.2. Exogen hereby grants to S&N and its Affiliates an exclusive
(except as to third party second source vendors of Exogen authorized to, from
time to time, and capable of, manufacturing the Products ( each referred to as a
"Manufacturer")) right and license under the Intellectual Property to
manufacture or have manufactured the Products and to sublicense others to so do,
in the United States and in such other territories as to which S&N then has the
right to distribute or sell Products for the term of this Agreement subject to
the terms and conditions of this Agreement. Provided, however, S&N and its
Affiliates shall be permitted to manufacture or to have manufactured the
Products pursuant to this subsection only in the event Exogen fails to provide
or supply Products in accordance with the requirements of the Sales/Rep
Distribution Agreement. S&N may begin such manufacturing commencing on the last
day of the cure period provided for in the applicable Sales/Rep Distribution
Agreement and ending on the date upon which Exogen resumes supplying Products to
S&N in accordance with the applicable Sales/Rep Distribution Agreement
("Manufacturing Term"). Exogen shall provide S&N with written notice of Exogen's
intent to resume supplying Products at least thirty (30) days prior to shipment
of the Products. S&N shall be permitted to fill orders that have been submitted
to S&N during the Manufacturing Term. During the term of this Agreement, Exogen
shall maintain one or more Manufacturers with all information, material,
technology, rights and know-how required to manufacture the finished Product
which is ready for marketing in the Territory and otherwise enable the
Manufacturer to manufacture Products. Exogen shall assign or transfer to S&N, to
the extent assignable, all contracts (or portions thereof) and rights Exogen has
with the Manufacturer with respect to the Products and otherwise assist S&N in
procuring Products from the Manufacturer. S&N shall not be obligated to satisfy
any obligation owed by Exogen to the Manufacturer. If the Manufacturer is unable
or unwilling to provide Products to S&N, Exogen shall provide S&N with all
information, materials, technology, rights and know-how required to manufacture
the finished Products ready for marketing in the Territory. At the end of the
Manufacturing Term or upon the expiration or earlier termination of this
Agreement, S&N shall reassign and retransfer the documents and rights set forth
in this section. The parties acknowledge that the consideration paid by S&N to
Exogen pursuant to the Master Agreement at the Initial Closing (as defined in
the Master Agreement) together with the "Royalty" (as defined below) shall serve
as the consideration for this Agreement. S&N shall pay Exogen a royalty
("Royalty") equal to [****] of the Net Sales (as defined in the Sales
Rep/Distribution Agreement) of Products manufactured by the Manufacturer or S&N
during the Manufacturing Term; provided, however, S&N shall not be obligated to
pay a Royalty on Net
------------------------------------
[****] REPRESENTS MATERIAL WHICH HAS BEEN REDACTED PURSUANT TO A REQUEST
FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 24B-2 UNDER THE
SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
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Sales of Products sold by S&N under the Sales Rep/Distribution Agreement and
manufactured under this License for a term equivalent to the period of time
commencing on the date upon which S&N provides a notice of default to Exogen and
ending on the date upon which S&N first receives Products from Manufacturer or
S&N manufacturers Products. The Royalty shall be paid quarterly within 45 days
after the end of each quarter. S&N shall keep and maintain detailed and accurate
books and records with regard to Net Sales of Products and the calculation
thereof. Exogen shall be entitled to review and audit such books and records
from time to time during normal business hours upon reasonable notice to S&N and
at Exogen's expense for the sole purpose of determining the accuracy of the
Royalty payment calculation. S&N shall remit to Exogen the amount of any
underpayment and interest thereon calculated at the rate of one percent (1%) per
month, calculated from the dates that the relevant payments should have been
made.
2.3. Exogen and S&N (or its relevant Affiliates) shall execute a
license or licenses in such other form or forms as may be necessary to give
effect to this Agreement in any country where such is required to conform with
the laws of any such country in respect of the Intellectual Property and such
license or licenses shall be subject to all the terms and conditions of this
Agreement.
2.4. All rights and licenses granted by Exogen to S&N under or pursuant
to this Agreement are and shall otherwise be deemed to be, for the purposes of
Section 365(n) of the United States Bankruptcy Code (the "Bankruptcy Code"),
licenses or rights to "intellectual property" as defined under Section 101(35A)
of the Bankruptcy Code or a "supplementary agreement" (as that term is used in
the Bankruptcy Code) to such licenses and grants of intellectual property
rights. Without limiting any of the other rights granted to S&N hereunder, all
of the rights of S&N and obligations of Exogen hereunder shall also apply from
the date a bankruptcy petition is filed by or against Exogen to the date this
Agreement is rejected; it being the intent of the parties that this Agreement
also grants S&N all of the rights, and imposes upon Exogen and the Exogen
bankruptcy estate all of the obligations, referenced in Section 365(n)(4) of the
United States Bankruptcy Code.
3. MARKING
If S&N exercises its rights under Section 2.2 of this Agreement to
manufacture or have manufactured the Products, S&N agrees that it will xxxx its
product with the appropriate patent number in accordance with the patent laws
within the Territory in which the Products are sold and will otherwise comply
with the FDA labeling, product labeling and other requirements of S&N pursuant
to the Master Agreement and the Sales Rep/Distribution Agreement.
4. TERM AND TERMINATION
4.1. The term of this Agreement shall commence upon the date first
above written. This Agreement shall continue in effect in a Territory as long as
the Sales Rep/Distribution Agreement is effective in that Territory. If,
however, the Sales Rep/Distribution Agreement
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terminates for a reason other than a breach by S&N, then the term of this
Agreement shall be for the remaining term (including renewal options) of the
Sales Rep/Distribution Agreement if the same had not terminated.
4.2. S&N shall have the right to terminate this Agreement at any time
and for any reason upon providing Exogen thirty (30) days' written notice of its
intention to terminate.
5. NOTICES
All notices under this Agreement shall be in writing and shall be deemed given
if delivered in accordance with the terms of the Master Agreement.
6. REPRESENTATIONS AND WARRANTIES
6.1. Exogen warrants and represents that it has full right, power, and
authority to enter into this Agreement and to license such Intellectual Property
to S&N.
6.2. S&N warrants and represents that it has all requisite right and
power to enter into this Agreement and perform its obligations hereunder.
6.3. Exogen warrants and represents that, except as set forth on
Schedule 8 to the Master Agreement, the Intellectual Property is free and clear
of all liens, claims, encumbrances and interests. Exogen shall not, without the
prior written approval of S&N, which approval shall not be unreasonably
withheld, sell, transfer, convey, pledge or otherwise encumber the Intellectual
Property or any Intellectual Property developed in the future relating to
Products; provided, however, that Exogen shall not be precluded from granting a
security interest in substantially all of its assets in connection with
obtaining a loan or line of credit or similar financing from one or more
financial institutions, provided Exogen delivers an effective and legally
binding agreement from the secured party wherein the secured party agrees to
subordinate its claims and interests to those of S&N and not to disturb,
terminate or modify any rights S&N may have with respect to any security or
collateral if the secured party exercises rights with respect to such security
or collateral.
6.4. Except as specifically set forth in this Agreement, Exogen makes
no warranties to S&N with respect to the Products or any services. Exogen
disclaims all implied warranties, including warranties of merchantability and
fitness for a particular purpose.
6.5. Neither Exogen nor S&N shall in any event be liable for any loss
of profits, or for any special, incidental or consequential damages arising out
of or in connection with the sale, use or performance of the Products.
7. SEVERABILITY
If any provision of this Agreement shall be determined by a court of
competent jurisdiction to be unenforceable, invalid or illegal for any reason,
the other provisions shall be equitably modified by the parties so as to
accomplish as closely as possible the original intent of the parties.
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8. AMENDMENT AND WAIVER
This Agreement may be amended only by an agreement in writing executed
by both parties. The failure of either party to require the performance of any
term of this Agreement, or the waiver by either party of any breach under this
Agreement, shall not prevent a subsequent enforcement of such term or be deemed
a waiver of any subsequent breach.
9. GOVERNING LAW
This Agreement shall be governed by and construed in accordance with
the laws of the state of Delaware.
10. ENTIRE AGREEMENT
This Agreement, together with the agreements referred to herein,
contains the entire agreement of the parties with respect to the subject matter
hereof and may not be changed, modified or rescinded except by a written
instrument executed by all parties hereto.
[SIGNATURE PAGE TO FOLLOW]
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IN WITNESS WHEREOF, the parties, intending to be legally bound, have
executed this Agreement as of the day and year first above written.
EXOGEN, INC.
By: /s/ Xxxxxxx X. XxXxxxxx
-----------------------
Name: Xxxxxxx X. XxXxxxxx
Title: President and
Chief Executive Officer
XXXXX & NEPHEW HOLDINGS, INC.
By: /s/ Xxxxx X. Xxxxxxx
---------------------
Name: Xxxxx X. Xxxxxxx
Title: President
Orthopaedic Division
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APPENDIX A
U.S. AND FOREIGN PATENTS,
TRADEMARKS AND APPLICATIONS
(L) indicates license
PATENTS
Index No. Number Country Status Issued (Filing) Inventor(s) Description
Date
Ultrasound
------------------------------------------------------------------------------------------------------------------------
0* 0000000 XXX Issued 7/23/85 Xxxxxx Method for Healing Bone
Fractures by Ultrasound
2 5003965 / USA Issued 4/2/91 Talish / Medical Device for Ultrasonic
8042 Lifshey Treatment of Living Tissue
and/or Cells
2A 1328485 / Canada Issued Talish / Medical Device for Ultrasonic
8042 Lifshey Treatment of Living Tissue
and/or Cells
3 5186162 / USA Issued 2/16/93 Talish / Ultrasonic Transducer Device
0089 Lifshey for Treatment of Living
Tissues and/or Cells
4 5211160 / USA Issued 5/18/93 Talish / Ultrasound Orthopaedic
0090 Lifshey Treatment Head and Body -
Mounting Means Therefor
5 5520612 / USA Issued 5/28/96 Winder / Acoustic System for Bone
4031 Talish / Ryaby Fracture Xxxxxxx
0X Xxxxx # Xxxxx Published 12/17/96 Winder / Acoustic System for Bone
8-332209 Talish / Ryaby Fracture Therapy
601-11J
(Cross
Reference:
Section 28)
5B 080390 4031 Taiwan Issued 8/11/96 Winder / Acoustic System for Bone
Talish et al Fracture Therapy
6 5556372 / USA Issued 9/17/96 Talish / Apparatus for Ultrasonic Bone
601-8 Ryaby et al Treatment (SAFHS 2000(R))
6B Pub. EPO Published 12/03/97 Talish / Apparatus for Ultrasonic Bone
#0-000-000 Ryaby et al Treatment (SAFHS 2000(R))
601-8 PCT/EPO
-------------
* Patent Term Extension under 35 USC#156: Filed 12/5/94; Extension received
5/31/96; term extension --5 years to 11/12/2007.
-i-
Index No. Number Country Status Issued (Filing) Inventor(s) Description
Date
6F Kokai Japan Published 9/17/96 Talish / Acoustic System for Bone
#8-238284 Ryaby et al Fracture Therapy
000-0 Xxxxx
0 0000000 / XXX Issued 5/6/97 Ryaby / Gel Containment Structure
601-4 Talish /
XxXxxx
0 0000000 XXX Issued 5/26/98 Talish / Locator Method & Apparatus
601-3FWC Lifshey
8B Pub. EPO Published 12/12/97 Talish / Locator Method & Apparatus
#0-000-000 Lifshey
601-3 PCT/EPO
8D PCT/US95-1 China Published 3/14/98 Talish / Locator Method & Apparatus
96742.I #CN-1175195A Lifshey
601-3
PCT/China
9 5762616 601-7 USA Issued 6/9/98 Talish Apparatus for Ultrasonic
Treatment of Sites
Corresponding to the Torso
9A PCT/US97 PCT Published 9/18/97 Talish Apparatus for Ultrasonic
WO97 / 33649 Treatment of Sites
601-7 PCT Corresponding to the Torso
11 D380440 601-9 USA Issued 7/1/97 Talish / Ultrasonic Transducer Housing
Ryaby / (Design Patent)
Urgovitch
11A Reg. # Japan Registered 8/29/97 Talish / Ultrasonic Transducer Housing
998899 601-9J Urgovitch / (Japanese Design Patent)
Scowen / Ryaby
12* 5730705 USA Issued 3/24/98 Talish / Ultrasonic Treatment for Bony
661905 601-13 Ryaby / Ingrowth
Xxxxxx / Bobyn
25A WO98 / 10729 PCT Published 3/19/98 Talish Cast Xxxxx
000-00 XXX
00 Xxxxx Xxxxx Published (10/28/97) Winder / Acoustic System for Bone
#9-276352 Talish / Ryaby Fracture Therapy
000-00 XXX
Xxxxx
(Cross-reference:
Section 5A)
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*Co-owned between Exogen, Inc. and inventors.
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Mechanical Strain
2 (L) 5273028 / USA Issued 12/28/93 XxXxxx / Xxxxx Non-Invasive Means for
3009 In-Vivo Bone Growth
Stimulation
2A (L) 000000 Xxxxxx Issued 5/23/93 XxXxxx / Xxxxx Non-Invasive Means for
0000-000 Xx-Xxxx Xxxx Xxxxxx
Xxxxxxxxxxx
0X (X) 000000 Xxxxxxxxx Issued 5/26/93 XxXxxx / Xxxxx Non-Invasive Means for
2030/3009 In-Vivo Bone Growth
Stimulation
3 (L) 5376065 3018 USA Issued 12/27/94 XxXxxx / Xxxxx Non-Invasive Method for
In-Vivo Bone Growth
Stimulation
4 (L) 5103806 2025A USA Issued 4/14/92 XxXxxx / Xxxxx Method for the Promotion of
Growth, Ingrowth & Healing of
Bone Tissue & Prevention of
Osteopenia by Mechanical
Loading of the Bone Tissue
5 (L) 5191880 2025B USA Issued 3/9/93 XxXxxx / Xxxxx Method for the Promotion of
Growth, Ingrowth & Healing of
Bone Tissue & Prevention of
Osteopenia by Mechanical
Loading of the Bone Tissue
Other
1 (L) 4993413/ USA Issued 2/19/91 XxXxxx / Electromagnetic: Method and
2032 Xxxxx Apparatus for Inducing a
Current and Voltage in Living
Tissue
2 4719907 USA Issued 1/19/88 Xxxxx Orthopedic Pin Placement Guide
3.0-001
PATENT APPLICATIONS
Index No. Number Country Status Issued (Filing) Inventor(s) Description
Date
[****]
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[****] REPRESENTS MATERIAL WHICH HAS BEEN REDACTED PURSUANT TO A
REQUEST FOR CONFIDENTIAL TREATMENT PURSUANT TO RULE 24B-2 UNDER THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED.
-iii-
TRADEMARKS
Index No. Number Country Status Issued (Filing) Trademark
Date
1 650974 10.1-002 USA Registered 00/0/00 XXXXX(X)
0X 0-000000 / Xxxxx Listed (10/31/95) SAFHS(R)
10.1-002J
1B 548993 / Canada Registered 4/10/92 SAFHS(R)
10.1-002C Mexico
2 74/530521 USA Registered 7/11/95 EXOGEN(R)
10.1-008
3 720034 / USA Registered 7/16/96 SAFHS 2000(R)
00.0-000
0X 0 / 000000 / Xxxxx Listed (10/30/95) SAFHS 2000(R)
10.1-009J
TRADEMARK APPLICATIONS
Index No. Number Country Status Issued (Filing) Xxxxxxxxx
Xxxx
0X 0-000000 / Xxxxx Pending (10/30/95) EXOGEN(R)
10.1-011J
3A 7 / 111521 / Mexico Pending (10/30/95) SAFHS 2000(R)
10.1-009J Canada Pending
4 317,761 Exogen USA Pending (7/1/97) EXOGEN 2000(TM)
10.-007
