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EXHIBIT 10.29
SOFTWARE DEVELOPMENT AND LICENSE AGREEMENT (U.S.)
THIS AGREEMENT, made effective as of the 27th day of January, 1998 ,
hereafter "Effective Date") by and between Xxxxxxx instrument Company, a
corporation incorporated under the laws of the State of Washington of the United
States of America, having its principal offices at 0000 Xxxxx Xxxxx Xxxxxxx,
Xxxxxxx, Xxxxxxxxxx 00000, and any divisions or subsidiaries thereof
thereinafter referred to as "Xxxxxxx"), and Zymed Incorporated, a corporation
incorporated under the laws of the State of California of the United States of
America and having a principal place of business at 00 Xxxxx Xxxxxxx Xxxxxx,
Xxxxxxxxx, Xxxxxxxxxx 00000-0000 (hereinafter "Zymed"), whereby Xxxxxxx and
Zymed agree as follows:
WITNESSETH
WHEREAS, Zymed is engaged in the development, manufacture, marketing and
sale of ambulatory electrocardiogram monitoring systems and related products and
has developed a software package for performing beat detection and
classification of ECGs as well as an arrhythmia analysis software package;
WHEREAS, Xxxxxxx is engaged in the development, manufacture, marketing and
sale of medical devices and instrumentation, including the type of products
manufactured by Zymed and is currently developing and intends to market
instrumentation which is capable of utilizing the software packages developed by
Zymed; and
WHEREAS, Zymed is the owner of the software package for performing beat
detection and classification of ECGs as well as an arrhythmia analysis software
package and Zymed has all of the right, title and interest necessary for the
transfer of the rights as set forth herein and desires to non-exclusively
license the software packages to Xxxxxxx on the terms and conditions contained
herein.
NOW, THEREFORE, the parties further agree as follows:
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SECTION 1: DEFINITIONS
As used in this Agreement, the following terms, singularly or plurally,
shall be deemed to have the following meanings:
1(A) "Affiliate Companies," singular or plural, shall mean any parent or
subsidiary or related company of Xxxxxxx or American Home Products Corporation
(AHPC) or any subsidiary or division of any division or subsidiary of AHPC or
any parent or subsidiary or related company of Company or any subsidiary or
division of any division or subsidiary of Company. As used herein, an Affiliate
Company is not a third party.
1(B) "Arrhythmia Analysis package" shall mean an arrhythmia analysis
software package, including the algorithm therefore, and all related
documentation as marketed by Zymed.
1(C) "Beat Detection and Classification package" shall mean an ECG beat
detection and classification software package, including the algorithm
therefore, and all related documentation as marketed by Zymed.
1(D) "Confidentiality Period" shall extend for five (5) years beyond the
expiration or termination of this Agreement.
1(E) "End User" shall mean a customer, researcher, clinician or other
health care worker that will use the Product which incorporates the Licensed
Product therein or any purchasing group, hospital, clinic or physician or
similar business entity that may acquire rights to use the Product which
incorporates the Licensed Product therein.
1(F) "Enhancement" shall mean any improvement in the features, function
or operation of the Licensed Product including the addition of a single beat
editing feature.
1(G) "Environmental Description" shall mean the required operating
systems, third party software packages, memory configurations and the complete
hardware and software setup and configurations.
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1(H) "Governmental Approval" shall mean the approval of regulatory and/or
governmental agencies of the United States or other country, such as the Food
and Drug Administration or any successor which has or have the authority to
substantially restrict the sale, lease or other transfer of the Products to End
Users in the Territory unless the approval from such agency is received.
1(I) "International License Agreement" shall mean a separate license
agreement for the Licensed Product for all countries outside the Territory as
defined herein.
1(J) "Licensed Product" singularly or plurally shall mean the Arrhythmia
Analysis package and Beat Detection and Classification package, individually or
collectively, and all related documentation or any Enhancements thereof.
1(K) "Product" shall mean any Xxxxxxx cardiology product having the
Licensed Product primarily integrated therewith, operational therewith or added
thereto for use by an End User and shall not include any sale or transfer of a
stand alone Licensed Product for use independently of the Xxxxxxx cardiology
product except with the express written consent of Zymed.
1(L) "Object Code" shall mean software in object or other non-humanly
understandable format.
1(M) "Royalty" and "Royalties" shall mean the royalty payments defined in
Paragraphs 5(A) and 5(B) hereof.
1(N) "Source Code" shall mean software in the C + + programming language,
in source or other humanly understandable format.
1(O) "Territory" shall mean the United States including all states,
territories and possessions thereof.
1(P) "Software" shall mean the Licensed Products developed by Zymed in
accordance with generally accepted software development practices and which is
used to assist the physician in the diagnosis and functional evaluation of
coronary artery disease.
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SECTION 2: ZYMED'S OBLIGATIONS
2(A) Zymed shall provide Xxxxxxx, within ninety (90) days of the
Effective Date of this Agreement, two complete and current versions of the Beat
Detection and Classification package and the Arrhythmia Analysis as set forth in
Exhibit A, and further including the Environmental Description therefore and all
development, interface, operation and testing requirements and all verification
and validation documentation necessary for Quinton's GMP requirements. Zymed
shall promptly provide any subsequent updates, Enhancements or modifications
thereof to Xxxxxxx if Xxxxxxx is not in breach of this agreement.
2(B) Within thirty (30) days of the Effective Date of this Agreement,
Zymed shall supply Xxxxxxx with the currently existing complete technical
information and publications, including user and service manuals, and existing
product specifications and marketing literature for the related Zymed products
and the Licensed Products which shall be provided to Xxxxxxx by Zymed under this
Agreement. Any such submission under this paragraph shall be promptly updated in
subsequent submissions promptly after such information and publications are
updated, enhanced or revised by Zymed.
2(C) Within sixty (60) days of the Effective Date of this Agreement,
Zymed shall place a copy of the Source Code and Object Code as well as all
related documentation which is necessary or desirable to assist Xxxxxxx in the
modification, development and/or maintenance of the Licensed Products into
escrow pursuant to the escrow agreement attached hereto as Exhibit "B" and
incorporated herein by this reference. The code and materials placed in escrow
shall be promptly updated by Zymed whenever any of the materials contained
therein are updated or modified by Zymed. The costs of such escrow shall be paid
by Zymed and Xxxxxxx shall be allowed periodic access to the escrowed materials
as reasonably desired by Xxxxxxx. Any such access shall be coordinated with
reasonable notice to Zymed to provide Zymed with the opportunity to accompany
Xxxxxxx during the inspection of the escrow materials.
2(D) Within sixty (60) days of the Effective Date of this Agreement,
Zymed shall provide specifications for a complete engineering test system for
the Licensed Products, including but not limited to code development and test
system (compiler, debugger) and any utilities necessary to create the test
system at Xxxxxxx. Source code will be provided only for sample interface C + +
code, no
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assembly source codes or algorithm C + + codes will be provided unless it is
reasonably required to perform reliable testing of the Licensed Product or
Product.
2(E) Zymed shall review and provide comments and assistance at no charge
to Xxxxxxx concerning Quinton's validation and incorporation of the Licensed
Product into the Products and other test results of each version of the Licensed
Product and Product prior to the submission of such test results to the U.S.
Food and Drug Administration or other agency or regulatory body, as needed, and
prior to Quinton's first commercial release of each version of the Product. The
rights in such test results shall be owned solely by Xxxxxxx, and such
evaluations by Zymed shall be completed within thirty (30) days after the
receipt by Zymed of such test results from Xxxxxxx. The decision to submit the
test results to the FDA and/or any other agency for Governmental Approval to
market each version of the Product or Licensed Product shall be at the sole
discretion of Xxxxxxx. Should Zymed disagree with any of the results obtained by
Xxxxxxx or the methodology used by Xxxxxxx, the parties hereto shall meet and
attempt in good faith to resolve any such disputes.
2(F) Zymed shall provide reasonable assistance to Xxxxxxx for compliance
with Quinton's requirements relating to vendor qualification and to assist
Xxxxxxx in preparing applications for and obtaining Governmental Approval as
needed for each version of the Product or Licensed Product by promptly assisting
Xxxxxxx to prepare for and respond to the FDA's or other governmental agencies'
questions or inquiries during the approval process relating specifically to the
development, operation and/or maintenance of the Licensed Product. Such
assistance shall include the provision of a copy of any validation and
verification documents of Zymed for the current version of the Licensed Product
and all supporting documentation therefor, but shall not require the provision
of documentation relating to the development, operation and/or maintenance of
the Xxxxxxx Product. Zymed shall further provide Xxxxxxx with a copy of any
Zymed 510(k) relating to the Licensed Products for use by Xxxxxxx in the
satisfaction of Quinton's GMP requirements and obtaining Governmental Approval
for the Product and Licensed Product.
SECTION 3: XXXXXXX OBLIGATIONS
3(A) As consideration for the research and development and development
related services provided by Zymed for the Licensed Product, the further
development by Zymed, including any
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engineering development, assistance or support necessary to modify the Licensed
Product for use with the Product and as incentive to perform the work necessary
to modify the existing Software to provide the functions and features set forth
in Exhibit A Xxxxxxx shall pay Zymed within ten (10) days of the Effective Date
of this Agreement an advanced Royalty payment ("Advanced Royalty") of
thirty-five thousand dollars ($35,000.00). The Advanced Royalty payment shall be
an advanced payment for the Royalties payable as set forth in Section 5 hereof.
3(B) Xxxxxxx shall perform at its sole cost and expense all testing of
the Products and Licensed Products that Xxxxxxx xxxxx necessary for the
Governmental Approval and/or commercialization of the Products.
3(C) Xxxxxxx shall use commercially reasonable efforts to obtain such
Governmental Approval for the Product in the United States and shall keep Zymed
advised of Quinton's progress towards such Governmental Approval by periodic
progress reports.
3(D) In the event Xxxxxxx decides to withdraw all versions of the Product
from the market during the term of this Agreement, or discontinue development of
the Product prior to the release of the Product, Xxxxxxx shall promptly notify
Zymed of such decision and Zymed may terminate this Agreement in accordance with
the provisions of Paragraph 10(B)(i).
SECTION 4: OWNERSHIP AND LICENSE
4(A) Zymed hereby grants and Xxxxxxx accepts a non-exclusive,
Royalty-bearing, revocable upon termination, license to incorporate and license
the Beat Detection and Classification package as an integral part of a Product
for use by a third party or an End User in the Territory.
4(B) Zymed hereby grants and Xxxxxxx accepts a non-exclusive,
non-Royalty-bearing, paid-up, irrevocable license to incorporate, modify or
otherwise transfer the right to use and license the technical information and
publications, including the user and service manuals, and product specifications
for the Beat Detection and Classification package to a third party or an End
User in the Territory.
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4(C) Zymed hereby grants and Xxxxxxx accepts a non-exclusive,
Royalty-bearing, revocable upon termination, license to incorporate and license
the Arrhythmia Analysis package as an integral part of a Product for use by a
third party or an End User in the Territory.
4(D) Zymed hereby grants and Xxxxxxx accepts a non-exclusive,
non-Royalty-bearing, paid-up, irrevocable license to incorporate, modify or
otherwise transfer the right to use and license the technical information and
publications, including the user and service manuals, and product specifications
for the Arrhythmia Analysis package to a third party or an End User in the
Territory.
4(E) The termination or revocation of the licenses granted to Xxxxxxx
above shall not affect the ability of Xxxxxxx, Affiliate Companies, third
parties and/or End Users to continue using Products having Licensed Products
therein which are properly licensed under this Agreement prior to termination,
and termination also shall not affect the ability of Xxxxxxx and Affiliate
Companies to continue providing customer support to its End Users or third
parties who obtained Products having Licensed Products therein which were
properly licensed under this Agreement prior to termination. Additionally, the
termination or revocation of the licenses granted to Xxxxxxx above shall not
affect the ability of Xxxxxxx, Affiliate Companies and/or End Users to transfer
Products having Licensed Products therein for which a Royalty was previously
paid to Zymed by Xxxxxxx or Affiliate Companies or for which an order has been
received by Xxxxxxx or Affiliate Companies and for which a Royalty will be paid
upon shipment of the Product having the Licensed Products therein.
4(F) The termination or revocation of the licenses granted to Xxxxxxx
above shall not affect the ability of Zymed to continue providing support to
Xxxxxxx to enable Xxxxxxx to continue providing customer support to Affiliate
Companies, third parties or its End Users who obtained Products having Licensed
Products therein which are properly licensed under this Agreement prior to
termination.
SECTION 5: ROYALTIES
5(A) As consideration for the exercise of the license of the Licensed
Product, maintenance of the Licensed Product and other rights granted herein
from Zymed to Xxxxxxx, Xxxxxxx agrees to pay Zymed a Royalty of two hundred
dollars ($200.00) for each unit of the Arrhythmia Analysis package of the
Licensed Product sold, leased, sublicensed, or otherwise transferred to a third
party or an End
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User ("Royalty") during the Term of this Agreement in the Territory. For the
purpose of determining the amount of Royalty payments due hereunder, a unit
shall be deemed to be sold, leased, sublicensed, or otherwise transferred to a
third party or an End User when invoiced. Xxxxxxx agrees to invoice as soon as
is customary. If no Licensed Product is operational in the Product when sold,
leased, sublicensed, or otherwise transferred to the third party or End User,
but is subsequently made available, altered or otherwise modified by Xxxxxxx to
become operational or is subsequently added to a previously transferred Product,
a Royalty shall then be payable when invoiced to the third party or End User by
Xxxxxxx for such Licensed Product.
5(B) As consideration for the exercise of the license of the Licensed
Product, maintenance of the Licensed Product and other rights granted herein
from Zymed to Xxxxxxx, Xxxxxxx agrees to pay Zymed a Royalty of fifty dollars
($50.00) for each unit of the Beat Detection and Classification package of the
Licensed Product sold, leased, sublicensed, or otherwise transferred to a third
party or an End User ("Royalty") during the Term of this Agreement in the
Territory. For the purpose of determining the amount of Royalty payments due
hereunder, a unit shall be deemed to be sold, leased, sublicensed or otherwise
transferred to a third party or an End User when invoiced. Xxxxxxx agrees to
invoice as soon as is customary. If no Licensed Product is operational in the
Product when sold, leased, sublicensed, or otherwise transferred to the third
party or End User, but is subsequently made available, altered or otherwise
modified by Xxxxxxx to become operational or is subsequently added to the
Product, a Royalty shall then be payable when invoiced to the third party or End
User by Xxxxxxx for such Licensed Product.
5(C) Within thirty (30) days of the written acceptance of the Licensed
Product or the availability of the Licensed Product, whichever is later, Xxxxxxx
may order from Zymed, engineering development and sales demonstration packages
of the Licensed Product Royalty-Free as needed by Xxxxxxx for the development,
maintenance, sale and promotion of the Licensed Product. Any Royalties due for
the subsequent sale, license or other transfer of the Products to a third party
shall be paid for by Xxxxxxx within thirty (30) days of any sale, lease,
sublicense, or other transfer of the demonstration packages to a third party or
an End User during the Term of this Agreement in the Territory upon the issuance
of an invoice therefor.
5(D) The Advanced Royalty payment referred to above in Section 3 above
shall be offsettable in full against all Royalties due from Xxxxxxx for each
unit of the Licensed Product sold,
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leased, sublicensed, or otherwise transferred to a third party or an End User in
the Territory until the Advanced Royalty is fully recovered by Xxxxxxx.
Thereafter, Xxxxxxx shall make quarterly payments to Zymed as set forth below
for each unit of the Licensed Product sold, leased, sublicensed, or otherwise
transferred to a third party or an End User in the Territory. In the event that
Xxxxxxx terminates this Agreement pursuant to Section 10 hereof or if the
initial term of the Agreement expires prior to the full recovery of the Advanced
Royalty payment, Zymed shall refund any unrecovered Advanced Royalty amount
within thirty (30) days of written request by Xxxxxxx.
5(E) Royalties shall be paid quarterly by Xxxxxxx to Zymed within thirty
(30) days of the end of each calendar quarter for each unit of the Licensed
Product sold, leased, sublicensed, or otherwise transferred to a third party or
an End User in the Territory. The check or other payment for all Royalties with
respect to sales in the Territory shall be made payable to Zymed and mailed or
otherwise transferred to Zymed as follows:
Xxxx X. Xxxxxxxxxx
President and COO
Zymed Incorporated
00 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000-0000
5(F) In the event Zymed licenses any of the Licensed Products or related
products and which are similar to Licensed Products in function and appearance
to an End User to a third party for a lower royalty than that specified in
Paragraph 5(A) or 5(B), the Royalty specified in Paragraphs 5(A) or 5(B) shall
be reduced to equal this lower royalty to such third parties for all subsequent
payments made by Xxxxxxx to Zymed.
5(G) It is understood that this Agreement includes no obligation, express
or implied, on the part of Xxxxxxx to continue the development of the Product,
to sell any quantity or dollar volume of Licensed Products or Products or to do
so in any set period of time.
SECTION 6: WARRANTIES
6(A) Zymed represents and warrants to the best of its knowledge, as of
the Effective Date of this Agreement, that the rights granted by Zymed to
Xxxxxxx under this Agreement do not infringe
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any copyright, trade secret, patent or any other intellectual property right of
any third party. Zymed further represents and warrants that Zymed is not aware
of any copyright, trade secret, patent or other intellectual property right of a
third party that is or would be infringed by any version of the Product, or
Licensed Product when used individually or in combination with the Product.
6(B) Zymed represents and warrants that it owns or has acquired all
rights necessary to grant the licenses granted in Section 4 hereof and that all
rights which are necessary for Xxxxxxx to incorporate each version of the
Licensed Product into the Product are granted to Xxxxxxx by this Agreement.
6(C) Zymed represents and warrants that each version of the Licensed
Product provided hereunder will, when properly installed on the properly
configured Product will execute its programming instructions.
6(D) Zymed represents and warrants that each version of the Licensed
Product will be and has been developed, and all services rendered hereunder
shall be rendered in a workmanlike manner, with professional diligence and
skill, and that all Licensed Products developed hereunder will function for the
purposes that such Licensed Products were designed, and that all such Licensed
Products were designed and will conform to the specifications, plans and
descriptions therefor.
6(E) Zymed represents and warrants that the Licensed Products, including
the software therein, conform to the standards generally observed in the
industry and to the best of Zymed's knowledge, shall be free from significant
programming errors; the Licensed Products and Software therefore do not contain
any feature that would impair or disable in any way the operations of the
Licensed Products and Software and/or Product including, but not limited to, a
virus, a trojan horse, a worm, a software lock and/or a drop dead device; and
the media which embodies the Licensed Product are and will be free from physical
defects.
6(F) Each of the parties agrees to indemnify and hold harmless the other
and its officers, directors, employees, and agents, and any of their respective
Affiliate Companies, successors, heirs and assigns (the "Indemnities"), against
any claim, demand, liability, damage, loss, judgment or expense (including
reasonable attorneys' fees and expenses) incurred by or imposed upon the
Indemnities to the extent arising out of the indemnifying party's actions,
omissions, negligence or
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product defect (including without limitation actions in tort, warranty or strict
liability), to the extent that it is held by a court of competent jurisdiction
in a proceeding in which the indemnifying party is a party at the time of such
holding, that the loss is due to the indemnifying party's actions, omissions,
negligence, product defect or breach of any of the representations and
warranties of this Section 6. Each of the parties shall notify the other in
writing within ten (10) business days of any claim, demand, suit or action
arising out of any activity hereunder, which is or it believes is likely to
become the subject of the indemnity herein, and each shall cooperate as
reasonably required in the defense of the matter, and the other shall bear the
reasonable out-of-pocket cost of such cooperation. If a party elects in writing
to indemnify the other party herein pursuant to this Section prior to a finding
by a court of competent jurisdiction, the indemnifying party shall have sole
control over any litigation or settlement of that matter unless the party to be
indemnified elects not to be indemnified, in which case there shall be no
obligation to indemnify and no duty to cooperate, and neither party shall have
control over the defense or settlement of the matter. Neither party shall be
required to pay any amount of any settlement to which it has not given its prior
written consent.
If the terms of this provision are in any way inconsistent with the rights
to indemnification bestowed upon either party by the laws of a jurisdiction in
which a claim for indemnification arises, the parties intend that this provision
govern their respective rights. The parties further intend that this provision
be solely for their mutual benefit and that of their Affiliate Companies and do
not intend that any party other than their Affiliate Companies be a third-party
beneficiary hereunder.
6(G) Both parties represent and warrant that they have the right to
disclose any Confidential Information transferred or disclosed to the other
party hereunder.
SECTION 7: ROYALTY CALCULATION, REPORTS, RECORDS AND WITHHOLDING TAXES
7(A) Xxxxxxx shall provide Zymed with Royalty reports indicating the
amount of Advanced Royalties remaining (if any) and the Royalties paid or
credited and units sold, leased or otherwise transferred at the same time as
payments are made in accordance with Section 5 hereof. Xxxxxxx agrees to keep
true and accurate records adequate to establish any Royalty payable under this
Agreement and to permit an independent accounting organization chosen and
compensated by Zymed, and reasonably acceptable to Xxxxxxx (which acceptance
shall not be unreasonably withheld) to audit,
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on a confidential basis, said records once annually at reasonable times and upon
reasonable notice, but only within a period of three (3) years after the Royalty
period to which such records relate. In the event that such audit finds any
annual payment by Xxxxxxx to be underpaid by at least 10%, then Xxxxxxx shall
reimburse Zymed for the reasonable expenses of such audit. Any underpayment or
overpayment shall be included or credited with the next payment under this
Agreement.
7(B) All taxes, assessments and fees of any nature levied by any
governmental entity on the sale, lease, license or sublicense of, including or
utilizing the Licensed Product shall be paid by Xxxxxxx for its accounts. If an
income or other tax, fee or assessment may be levied on Zymed based on Royalty
or other payments under this Agreement by any governmental entity and Xxxxxxx is
legally required to withhold such income or other tax, fee or assessment from
the payment of Royalty or other payments provided for in this Agreement, Xxxxxxx
shall make such payment for the account of Zymed and furnish Zymed with a
receipt for such payment.
SECTION 8: CONFIDENTIALITY
8(A) Until the expiration of the Confidentiality Period, Xxxxxxx agrees
to use the same degree of care as Xxxxxxx uses to protect its own confidential
information of a like nature, but no less than a reasonable degree of care, to
prevent the unauthorized disclosure, publication or dissemination of Zymed's
confidential information. Xxxxxxx further agrees to limit the circulation of
Zymed's confidential information to those employees, consultants or advisors of
Xxxxxxx who have a need to know for purposes of evaluating or performing this
Agreement. Xxxxxxx further agrees not to use Zymed's confidential information
for any purpose other than authorized by this Agreement.
8(B) Until the expiration of the Confidentiality Period, Zymed agrees to
use the same degree of care as Zymed uses to protect its own confidential
information of a like nature, but no less than a reasonable degree of care, to
prevent the unauthorized disclosure, publication or dissemination of Quinton's
confidential information. Zymed further agrees to limit the circulation of
Quinton's confidential information to those employees, consultants or advisors
of Zymed who have a need to know for purposes of evaluating or performing this
Agreement. Zymed further agrees not to use Quinton's confidential information
for any purpose other than authorized by this Agreement.
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8(C) This Agreement imposes no obligation upon Xxxxxxx with respect to
confidential information that: (a) was in Quinton's possession before receipt
from Zymed; (b) is or becomes a matter of public knowledge through no fault of
Xxxxxxx; (c) is rightfully received by Xxxxxxx from a third party without a duty
of confidentiality to Zymed; (d) is disclosed by Zymed to a third party without
a duty of confidentially on the third party; (e) is independently developed by
Xxxxxxx; (f) is disclosed under operation of law; or (g) is disclosed by Xxxxxxx
with Zymed's prior written approval.
8(D) This Agreement imposes no obligation upon Zymed with respect to
confidential information that: (a) was in Zymed's possession before receipt from
Xxxxxxx; (b) is or becomes a matter of public knowledge through no fault of
Zymed; (c) is rightfully received by Zymed from a third party without a duty of
confidentiality to Xxxxxxx; (d) is disclosed by Xxxxxxx to a third party without
a duty of confidentially on the third party; (e) is independently developed by
Zymed; (f) is disclosed under operation of law; or (g) is disclosed by Zymed
with Quinton's prior written approval.
8(E) Both parties shall adhere to all applicable laws, regulations and
rules relating to the export of technical data, and shall not export or reexport
any technical data, any products received from the other party, or the direct
product of such technical data to any proscribed country listed in such
applicable laws, regulations and rules unless properly authorized.
8(F) Upon expiration of the Confidentiality Period for any confidential
information of either party, any use, disclosure, publication, and dissemination
of the formerly confidential information is subject to any patent, copyright or
other intellectual property right and/or license still in effect on the date of
expiration.
SECTION 9: TECHNICAL SUPPORT
9(A) Zymed shall provide, beginning with the Effective Date and
continuing for a period of four (4) years beyond the termination or expiration
of the Agreement, technical consultation to Xxxxxxx as may be reasonably
required by Xxxxxxx to facilitate Quinton's understanding of the Licensed
Products at Quinton's headquarters or other mutually agreeable facilities.
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9(B) As additional consideration for the Royalties set forth in Section 5
hereof, Zymed shall provide, beginning with the Effective Date of this Agreement
and continuing during the term of this Agreement, consultation relating to
product training to Xxxxxxx as may be reasonably required by Xxxxxxx to
facilitate Quinton's understanding of the subject version of the Licensed
Product.
9(C) Should additional technical or other consultation be requested by
Xxxxxxx of Zymed during times other than those set forth in Paragraphs 9(A) and
9(B) above, Zymed will use reasonable efforts to provide such consultation,
consistent with Zymed's other business requirements.
9(D) Zymed's obligation to provide any of the support set forth in
Sections 9(A) and 9(B) hereof shall be provided at no charge for the first 160
hours during the first four years of this agreement. Should any request for such
services be made later than four years after the effective date (regardless of
whether a total of 160 hours has been used) Zymed shall be compensated at its
then current rates for such services. Any request by Xxxxxxx for services as
described herein that exceed 160 hours during the first four years of this
agreement shall thereafter be paid at Zymed's then current support rates.
Xxxxxxx shall at all times be responsible for authorized and documented travel
and other related expenses upon prior written approval of Xxxxxxx and incurred
by Zymed solely to provide the services requested.
9(E) Xxxxxxx shall provide all direct customer service and direct
customer support for the Products and Licensed Products. Coordination of all
technical, product or other support in Section 9 hereof shall be through the
Headquarters of Xxxxxxx.
9(F) Zymed agrees to promptly provide Xxxxxxx with training and
assistance to enable Xxxxxxx to train Xxxxxxx employees for troubleshooting
Xxxxxxx and customer problems associated therewith. Zymed agrees to provide
prompt error correction and product support for the Licensed Product, including
any necessary error correction, anomaly, bug fixes and/or corrective software
upgrades and revisions of the Licensed Products for any version then being held
and/or utilized by Xxxxxxx, its representatives and Affiliate Companies and
direct or indirect customers or End Users of Xxxxxxx at no charge during the
Term of this Agreement and for a period of twelve months following the sale,
lease or other transfer of the last unit of the then current version of the
Licensed Product.
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9(G) Zymed shall promptly provide, beginning with the Effective Date and
continuing until the termination or expiration of the Agreement, all bug fixes
and anomaly or error corrections which affect the operation or appearance of the
Licensed Product without additional charge to Xxxxxxx.
9(H) Zymed shall provide Xxxxxxx with any Enhancements, significant
software upgrades and revisions, including additional or revised features based
on reasonable Xxxxxxx or End User requests, or changes to accommodate new
industry standards or operating platforms at no charge to Xxxxxxx for
improvements in the features and functions that exist or are contemplated by the
parties to be added to the Licensed Products at the time of the acceptance of
the Licensed Products by Xxxxxxx. Thereafter, any Enhancements of the Licensed
Product shall be at a mutually agreed upon fixed rate not to exceed two hundred
percent of the applicable Royalty set forth in Section 5 hereof.
9(I) Zymed shall use its best efforts to provide, beginning with the
Effective Date and continuing until the termination or expiration of the
Agreement, any Enhancements, substantial additional or revised features or
improvements in the Licensed Products based on reasonable Xxxxxxx or End User
requests, or any changes to accommodate new industry standards or operating
platforms to Xxxxxxx to maintain the competitiveness of the Licensed Product in
the applicable market.
9(J) Zymed agrees to promptly enter all possible anomalies or reported
bugs in the Licensed Products herein reported to Zymed by Xxxxxxx into Zymed's
normal anomaly tracking and resolution process, and to provide a written report
to Xxxxxxx on a monthly basis detailing Zymed's disposition of such possible
anomalies or reported bugs.
SECTION 10: TERM AND TERMINATION
10(A) This Agreement shall be effective upon the Effective Date specified
at the beginning hereof and shall remain in force, unless otherwise terminated
as provided herein, for an initial term of five (5) years from the Effective
Date of this Agreement ("Initial Term"). This Agreement shall be automatically
renewed for annual increments, unless either party notifies the other party in
writing of its intent to terminate this Agreement in accordance with Paragraph
10(D) below.
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10(B) (i) In the event that Xxxxxxx shall fail to comply with any of its
material obligations under this Agreement after Zymed has given sixty (60) days
written notice of such failure to Xxxxxxx, which notice shall fully specify the
obligation with which Xxxxxxx has not complied, then Zymed, upon further written
notice to Xxxxxxx, may terminate this Agreement thirty (30) days after such
further written notice. In addition, Xxxxxxx shall remain obligated to pay any
undisputed Royalties pursuant to Section 5 hereof that are due or owing prior to
the date of such termination. Should it subsequently be determined that Xxxxxxx
has breached this agreement, Xxxxxxx shall be obligated to pay all Royalties
properly due hereunder.
(ii) In the event that Zymed shall fail to comply with any of its
material obligations under this Agreement after Xxxxxxx shall have given sixty
(60) days written notice of such failure to Zymed, which notice shall fully
specify the obligation with which Zymed has not complied, then Xxxxxxx, upon
further written notice to Zymed, may terminate this Agreement thirty (30) days
after such further written notice. Any undisputed Royalties due or owing as a
result of past or continuing transfers of the Licensed Product, in accordance
with Paragraphs 5(A) and 5(B), shall continue to be paid to Zymed.
(iii) Because the development and product support provided hereunder
by Zymed and the obligations of Xxxxxxx set forth above are considered to be
personal for the purposes of the bankruptcy laws, to the extent permitted by
bankruptcy laws, either party shall have the right to terminate this Agreement
in the event of the filing of a voluntary or involuntary petition of bankruptcy
of the other party.
10(C) In the event of termination of this Agreement by Xxxxxxx due to a
breach of this Agreement by Zymed or the filing of voluntary or involuntary
bankruptcy by Zymed, in accordance with Paragraph 10(B)(ii) or 10(B)(iii)
hereof, Zymed shall release the rights to all Source Code of the Licensed
Products and documentation therefor and the object code and documentation
therefore to Xxxxxxx to enable Xxxxxxx to continue development of the Licensed
Products and provide continued support to the End Users for the Licensed
Products; and, at Quinton's sole option, Xxxxxxx may elect to continue to sell,
offer to sell, lease, sublicense or otherwise transfer the Licensed Products to
a third party or an End User provided that Royalties are paid to Zymed in
accordance with Paragraphs 5(A) or 5(B) for a period of four (4) years following
termination. Thereafter, Quinton's rights shall be deemed to be fully paid-up.
Any release of the Source Code shall be in accordance with the terms and
conditions set forth on Exhibit "B" attached hereto and incorporated herein by
this reference.
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10(D) In the event that either party desires to terminate this Agreement
without cause after the Initial Term of this Agreement, The party desiring to
terminate this Agreement shall provide the other party with written notice of
its intent to terminate this Agreement. Any such written notice shall be
effective two (2) years from the date of receipt of such notice or two years
following the Initial Term, whichever is later.
SECTION 11: SOFTWARE DELIVERY AND COPYING
11(A) As set forth in Section 2 hereof, Zymed shall deliver each version
of the Arrhythmia Analysis package and the Beat Detection and Classification
package to Xxxxxxx for testing, acceptance by Xxxxxxx and for incorporation into
the Product promptly after the completion of each version of the Licensed
Product. When upgrades or Enhancements to the Licensed Products are developed by
Zymed, or when demonstration unit or production unit upgrades are conducted by
Xxxxxxx, Zymed shall provide Xxxxxxx with the necessary upgrades or Enhancements
for each version of the Arrhythmia Analysis package and the Beat Detection and
Classification package to reflect the most current configuration of the Licensed
Products as well as to provide support for the then current version of the
existing Licensed Product.
11(B) Within one hundred and twenty (120) days of receipt of each version
of the Arrhythmia Analysis package and the Beat Detection and Classification
package from Zymed, Xxxxxxx shall complete all V&V and performance testing on
the Licensed Products to determine if each version of the Arrhythmia Analysis
package and the Beat Detection and Classification package meets or exceeds the
Product Specification and Functional Specification for the Licensed Product. All
such testing shall be performed by Xxxxxxx in accordance with the V&V plan and
performance testing developed for the Licensed Product. In the event that each
version of the Arrhythmia Analysis package and the Beat Detection and
Classification package fails to meet or exceed the Product Specification and
Functional Specification for the Licensed Products or the software contains one
or more Showstopper or High errors or five (5) or more Medium errors, Xxxxxxx
shall promptly notify Zymed of the results of the testing and identify with
reasonable specificity, the reason or reasons for the failure. Zymed shall
thereafter use its best efforts to revise or correct the Licensed Product
and/or affected Software within thirty (30) calendar days of Zymed receipt of
the notice of failure from Xxxxxxx. In the event that Zymed is unable to revise
or correct the Licensed Product and/or the affected Software within the thirty
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(30) calendar days time period, the parties shall attempt to reach agreement on
a mutually acceptable alternate development schedule. If Zymed and Xxxxxxx are
unable to reach agreement on a mutually acceptable alternate development
schedule, this Agreement shall be immediately terminated. The Licensed Product
and all related documentation shall be immediately returned to Zymed with no
further obligation for the payment of Royalties under Section 5 hereof and Zymed
shall immediately refund the entire Advanced Royalty set forth in Section 3(A).
In the event that Zymed revises or corrects the Licensed Product and/or the
affected software within the time period set forth above, Xxxxxxx shall again
complete all V&V and performance testing on the revised or corrected Licensed
Product within one hundred and twenty (120) days of Quinton's receipt thereof.
In the event that the Licensed Product and/or the affected software fails to
meet the Product Specification and Functional Specification for the Licensed
Product or the affected software contains one or more Showstopper or High errors
or five (5) or more Medium errors, Xxxxxxx shall promptly notify Zymed of the
results of the testing and identify, with reasonable specificity, the reason or
reasons for the failure. Zymed shall thereafter promptly forward all
documentation for the Product and Licensed Product to Xxxxxxx, and this
Agreement shall be immediately terminated.
11(C) As referred to herein, a "Showstopper" error is a defect which
causes the computer to abnormally exit (i.e., system crash), corrupt patient
data, report incorrect information, or does not function similar to previous or
independent versions of the Product. The probability of occurrence of this type
of error may be frequent. A "High" error shall mean a defect causing the
computer to abnormally exit (i.e., system crash) or corrupt patient data. The
probability of occurrence of this type of error may be probable. A "Medium"
error shall mean a defect which affects user preference issues or defects which
will not result in patient injury. The probability of occurrence of this type of
error is remote. A "Low" error shall mean a defect which is not related directly
to patient care and will not result in patient injury. The probability of
occurrence of this type of error is remote. A "could not reproduce" error shall
mean a defect which was reported but could not be reproduced during site and
engineering laboratory testing.
11(D) The Source Code and all documentation and technical information
reasonably necessary for Xxxxxxx to maintain, modify and enhance the Product or
Licensed Product, as well as any firmware, Object Code and software drivers for
the Product or Licensed Product, not previously provided to Xxxxxxx shall be
provided to Xxxxxxx upon the completion of the acceptance testing referred to in
Page 19 of 23
Section 11(B) or within five (5) days of the termination of this Agreement in
accordance with Section 10(C).
SECTION 12: PUBLICATION AND NOTICES
12(A) Xxxxxxx is allowed to refer to Zymed as the source of the Licensed
Product in all literature or other materials that relate or refer to the
Licensed Products, provided such reference is done in a factual and not
misleading manner.
12(B) Xxxxxxx agrees to provide an appropriate copyright notice in the
Software of the Licensed Product.
SECTION 13: RECALLS
13(A) If either party determines that it is necessary to recall any
product incorporating the Licensed Product, it shall immediately notify the
other party.
13(B) Prior to commencing any such recall, the parties shall review with
one another the need for a recall; the manner in which the recall is to be
carried out; and any instructions or suggestions with respect to notification of
the applicable regulatory authorities.
13(C) If, at Zymed's sole discretion, Zymed initiates any recall of the
Licensed Product that necessitates a recall of the Product or Licensed Product,
Zymed shall implement such recall on behalf of Xxxxxxx at Zymed's expense.
13(D) If, at Quinton's sole discretion, Xxxxxxx initiates any recall of
the Product that necessitates a recall of the Product or Licensed Product,
Xxxxxxx shall implement such recall on behalf of Zymed at Quinton's expense.
13(E) If it is determined by either party that it is necessary or
advisable to initiate any recall of the Products or Licensed Products due to a
cause related to the Licensed Product and not solely
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related to the Product, Zymed or Xxxxxxx shall implement such recall on behalf
of Xxxxxxx and Zymed at Zymed's expense.
SECTION 14: LITIGATION
14(A) Zymed agrees to, at its expense, defend and indemnify Xxxxxxx
together with its officers, directors, employees, agents, insurers, Affiliate
Companies and customers, for actions based on any claim that the Licensed
Product alone or used in combination with Product, infringes any patents,
copyrights, trade secrets, or other intellectual property rights, and to pay all
costs associated therewith, including attorney's fees, and damages finally
awarded in any such suit by a court of competent jurisdiction. Zymed shall be
notified promptly in writing of the suit and Zymed will, at its expense, control
the suit and receive reasonable assistance from Xxxxxxx in defending the suit.
14(B) In the event that any version of the Licensed Product alone or in
combination with Product is enjoined from use and/or sale as a result of such
suit, Zymed additionally agrees, at its expense, to use its best efforts to i)
obtain for Xxxxxxx the right to use and/or sell the enjoined Licensed Product or
combined Product at no additional expense to Xxxxxxx; ii) substitute a
non-infringing Licensed Product or Product which is acceptable to Xxxxxxx having
equivalent or greater functions, features and efficiency; or refund one fourth
of the Royalty payments paid during the previous four (4) calendar years and all
of Advanced Royalty not yet credited against Royalties.
14(C) Xxxxxxx agrees to, at its expense, defend and indemnify Zymed
together with its officers, directors, employees, agents, insurers, Affiliate
Companies and customers, for actions based on any claim that the Product apart
from the Licensed Product, infringes any patents, copyrights, trade secrets, or
other intellectual property rights, and to pay all costs associated therewith,
including attorney's fees, and damages finally awarded in any such suit by a
court of competent jurisdiction. Xxxxxxx shall be notified promptly in writing
of the suit and Xxxxxxx will, at its expense, control the suit and receive
reasonable assistance from Zymed in defending the suit.
Page 21 of 23
SECTION 15: MISCELLANEOUS
15(A) The section and subsection headings used herein are for reference
and convenience only, and shall not enter into the interpretation of this
Agreement.
15(B) No delay or omission by either party hereto to exercise any right or
power occurring upon any noncompliance or default by the other party with
respect to any of the terms of this Agreement shall impair any such right or
power or be construed to be a waiver thereof. A waiver by either of the parties
hereto of any of the covenants, conditions or agreements to be performed by the
other shall not be construed to be a waiver of any succeeding breach thereof or
of any other covenant, condition or agreement herein contained. Unless stated
otherwise, all remedies provided for in this Agreement shall be cumulative and
in addition to and not in lieu of any other remedies available to either party
at law, in equity or otherwise.
15(C) This Agreement shall be governed by and construed in accordance with
the laws of the State of Washington without regard to its conflict of laws
provisions and the courts of which shall have exclusive jurisdiction over any
dispute arising hereunder.
15(D) This Agreement and any Attachments or Exhibits hereto constitute the
entire agreement between the parties. No change, waiver or discharge hereof
shall be valid unless it is in writing and is executed by both parties.
15(E) In the event that performance of this Agreement or any obligation
hereunder, other then payment of money as herein provided by either party is
prevented, restricted or interfered with by reason of any cause not within the
control of the respective party, and which could not by reasonable diligence
have been avoided by such party, the party so affected, upon giving prompt
notice to the other party, as to the nature and probable duration of such event
shall be excused from such performance to the extent and for the duration of
such prevention, restriction or interference, provided that the party so
affected shall use reasonable efforts to avoid or remove such cause of non-
performance and shall fulfill and continue performance hereunder with the utmost
dispatch and whenever and to the extent such cause or causes are removed
provided that such prevention, restriction or interference shall not exceed four
(4) months from the interruption of the performance or obligation. For the
purpose of the present paragraph, but without limiting the generality thereof,
Page 22 of 23
the following shall be considered as not within the control of the respective
party: acts of God, acts or omissions of a governmental agency, compliance with
requests, recommendations, rules, regulations or orders of any governmental
authority or any officer, department, agency, or instrument thereof, flood,
storm, earthquake, fire, war, riots, insurrection, accidents, acts of the public
enemy, invasion, quarantine restrictions, strike, lockout, differences with
workmen, embargoes, delays or failure in transportation and acts of a similar
nature.
15(F) Should one of the provisions of this Agreement become or prove to be
null and void, such will be without effect on the validity of this Agreement as
a whole. Both parties will, however, endeavor to replace the void provision by a
valid one which in its economic effect is most consistent with the void
provision.
15(G) Under this Agreement, if one party is required to give notice to the
other, such notice shall be deemed given if mailed by U.S. mail, first class,
postage prepaid, and addressed as first indicated on page 1 hereof unless
otherwise provided for herein.
15(H) Xxxxxxx and Zymed are each independent contractors and not joint
venturers, partners, agents, employer, or employee of each other. All
obligations associated with business are the sole responsibility of Zymed, and
all obligations associated with Quinton's business are the sole responsibility
of Xxxxxxx. Neither party shall have the authority to act for or bind the other
party in any manner.
15(I) This Agreement may not be assigned by either party to a third party
without the written consent of the other party, which shall not be unreasonably
withheld except that Xxxxxxx may transfer or assign its rights hereunder to any
of its Affiliate Companies or along with the sale or assignment of the entire
company or the product line to which this Agreement relates.
15(J) This Agreement shall be binding upon and shall inure to the
exclusive benefit of the respective parties, their legal representatives,
successors, or permitted assigns. This Agreement is not intended to, nor shall
it, create any right in any other party.
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IN WITNESS WHEREOF, the parties have executed this Agreement in duplicate
as shown below.
ZYMED INCORPORATED XXXXXXX INSTRUMENT COMPANY
/s/ Xxxx X. Xxxxxxxxxx 1/27/98 /s/ Xxxxxx X. Xxxxxxx 1/27/98
-------------------------------------- --------------------------------------
Xxxx X. Xxxxxxxxxx Date Xxxxxx X. Xxxxxxx Date
President President
