EXHIBIT 10.18
NOTE: THIS DOCUMENT OMITS CERTAIN INFORMATION PURSUANT TO A REQUEST FOR
CONFIDENTIAL TREATMENT. THE OMITTED INFORMATION HAS BEEN FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION. THE LOCATION OF THE OMITTED INFORMATION
IS INDICATED BY AN ASTERISK.
EXCLUSIVE LICENSE AGREEMENT
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Amendment
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The EXCLUSIVE LICENSE AGREEMENT between Medjet, Inc., on the one hand,
and Nestle, S.A., on the other hand, relating to Waterjet Technology, that
became effective on or about July 22, 1998, and was subsequently assigned by
Nestle, S.A. to Alcon Universal Ltd. on January 1, 1999, is hereby amended by:
1. Deleting Section 3.00 in its entirety and substituting the following.
Section 3.00 Licensing Fee.
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In exchange for the exclusive license granted hereunder, NESTLE shall pay
MEDJET a non-refundable licensing fee of One Million Dollars ($1,000,000.00),
one half (1/2) of which is payable immediately upon signing this Agreement with
the remaining one half (1/2) payable upon: 1) * ; and 2)
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jointly designed experimental verification in cadaver eyes or animal eyes that
the Licensed Product can achieve single pass targeted LASIK equivalent stromal
removal without unacceptable thermal damage meeting the refractive range in the
specifications listed on Exhibit A.
In addition, NESTLE shall pay MEDJET an additional non-refundable
licensing fee of * Dollars ($ * )] upon the successful
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completion (to NESTLE's reasonable satisfaction) no later than December 31,
2002, of clinical studies jointly designed by MEDJET and NESTLE demonstrating
that a Licensed Product meets all of the specifications on attached Exhibit A.
Such pre-FDA clinical study to include blind human eyes and a limited number of
healthy human eyes and will be conducted by MEDJET.
NESTLE shall also pay MEDJET an additional, partially refundable
technology transfer fee of * Dollars ($ * ) for the
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successful transfer (to NESTLE's reasonable satisfaction and as specified as
Medjet Milestones on attached Exhibit C) no later than September 1, 1999, of the
technology for the Licensed Product meeting all the specifications in attached
Exhibit B. * Dollars ($ * ) of which
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will be payment in full by NESTLE to MEDJET for the transfer of the waterjet
technology from MEDJET to NESTLE for the Licensed Product meeting all the
specifications in attached Exhibit B, with the remainder being fully credited
against any royalties due under Section 3.01(a) below, such sum to be payable
according to the following schedule:
January 1999 $ *
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February 1999 $ *
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March 1999 $ *
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April 1999 $ *
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May 1999 $ *
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All determinations of whether experimental verification has been achieved
or whether the completion of any clinical studies has been successful or whether
the Licensed Product meets the specification on attached Exhibits A and B shall
be determined solely by NESTLE, acting reasonably, using measurement methodology
mutually agreed to by NESTLE and MEDJET.
2. Deleting Section 3.01 in its entirety and substituting the following:
Section 3.01 Royalties.
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a) Royalty. In addition to the licensing fee set forth in Section 3.00,
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NESTLE will pay MEDJET a running royalty of:
i) * percent ( * %) of the Net Sales of Licensed
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Products if the cumulative annual Net Sales of Licensed Products are less
than or equal to Twenty-Five Million Dollars ($25,000,000.00); or
ii) * percent ( * %) of the Net Sales of Licensed
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Products if the cumulative annual Net Sales of Licensed Products are
greater than Twenty-Five Million Dollars ($25,000,000.00) but less than or
equal to Seventy-Five Million Dollars ($75,000,000.00); or
iii) * percent ( * %)] of the Net Sales of
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Licensed Products if the cumulative annual Net Sales of Licensed Products
are greater than Ninety-Six Million Four Hundred Thousand Dollars
($96,400,000.00); or
iv) a lump sum of * Dollars ($ *
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) if the cumulative annual Net Sales of Licensed Products are greater than
Seventy-Five Million Dollars ($75,000,000.00) but less than or equal to
Ninety-Six Million Four Hundred Thousand Dollars ($96,400,000.00).
In the event that Licensed Products are sold in a country where Licensed
Patent Rights do not exist and a competitive waterjet product is being sold in
that country, then the running royalty rate shall be computed as set forth above
and then the royalty due to sales in non-patent countries shall be reduced by
one-half (1/2) on Net Sales in such country. E.g., If cumulative Net Sales in
patent and non-patent countries is $25,500,000, with $10,000,000 coming from
non-patent countries, the total royalty dues shall be ( * %) of $15,500,000
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and ( * %) of $10,000,000. In no event shall the reduction in royalties
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for sales in non-patent countries result in the total royalty payment being
greater than the total royalty payment that would have been due if no reduction
had been made for sales in non-patent countries.
2
If MEDJET fails to deliver to NESTLE a Licensed Product that meets all of
the specifications on attached Exhibit A by December 31, 2002, then the running
royalty rates stated above for all Licensed Products shall be reduced
retroactively by an amount to be agreed upon by the parties.
If MEDJET fails to meet the Medjet Milestones on Exhibit C for the
successful transfer to NESTLE of the waterjet technology by September 1, 1999,
then the entire * Dollars ($ * )
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technology transfer fee shall be fully credited against any royalties due
provided that MEDJET's failure to meet the Medjet Milestones is not the result
of NESTLE failing to meet the Nestle Milestones on Exhibit C. Additionally, if
the Licensed Product fails to meet all of the specifications on Exhibit B, then
the running royalty rates stated above for that Licensed Product shall be
reduced retroactively by an amount to be agreed upon by the parties.
b) Minimum Royalties. To maintain exclusivity, the running royalty
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specified in Section 3.01(a) shall be subject to a minimum annual royalty of
* Dollars ($ * ) beginning in 2000, paid
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quarterly. This minimum annual royalty shall be payable regardless of whether
NESTLE has commercially marketed any Licensed Product but shall be deducted
from, and fully credited against, any running royalty earned under Section
3.01(a), provided that MEDJET has demonstrated progress (in NESTLE's sole
opinion) in achieving the specification in attached Exhibit A.
In the event that, by December 31, 2002, MEDJET has failed to deliver to
NESTLE a product that meets all of the specifications on attached Exhibit A,
then the minimum annual royalties specified above shall be reduced to *
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Dollars ($ * ).
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Beginning in the year 2001, in the event that NESTLE fails to pay the
minimum royalty due in any given year: 1) the exclusive license granted in
Section 2.00 shall become non-exclusive; and 2) MEDJET shall be free to grant
other non-exclusive licenses to the Licensed Patent Rights and Know-How to third
parties; and 3) NESTLE shall no longer be required to make minimum royalty
payments under this Section 3.01(b); and NESTLE and MEDJET shall, at the request
of MEDJET, negotiate in good faith, the termination of this Agreement, such
termination to include adequate mutually agreed upon compensation to NESTLE.
c) Unblocking License. With the exception of U.S. Patent No. 4,840,175
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(Peyman), in the event that NESTLE reasonably determines, in its sole
discretion, that a license is required from any third party in order for NESTLE
to make, use or sell Licensed Products, the royalties payable to MEDJET under
this Section 3.01 shall be reduced accordingly. The provisions of this Section
3.01(c) shall not apply to any changes to the Licensed Products made by NESTLE
unless such change(s) were required to make the Licensed Product meet the
specifications on attached Exhibit A and B.
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d) Payment Schedule. Royalties due under Section 3.01 above shall be paid
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by NESTLE to MEDJET in United States dollars within sixty (60) days after the
end of each calendar quarter. Partial calendar quarters, if any, shall be
treated as calendar quarters. If NESTLE fails to make any payment within the
prescribed period, such unpaid amount shall bear interest at an annual rate of
five (5) percentage points above the prime lending rate quoted by Citibank,
N.A., New York, New York on the date such payment is due, such interest being
payable from the date that the payment was due until the date the payment is
actually made.
ALCON UNIVERSAL LTD. MEDJET INC.
/s/ Xxxxx Xxxxxx /s/ Xxxxxx Xxxxxx
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Xxxxx Xxxxxx, General Manager Xxxxxx Xxxxxx, CEO
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EXHIBIT B
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Product Specifications for MEDJET Microkeratome
*
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EXHIBIT C
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Medjet Milestones
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Milestone 1. Medjet to collect all existing documentation for the laboratory
waterjet microkeratome, and begin ordering parts for a duplicate waterjet
microkeratome for Nestle. Nestle to reimburse Medjet for all mutually agreed,
documented expenses associated with such effort.
Milestone 2. Medjet will support Nestle by supplying pump design documentation
and expertise by securing and retaining the services of the original pump design
engineers as required at Medjet's expense.
Milestone 3. Medjet to develop clinical protocol, and secure all facilities and
materials, for demonstration of feasibility. Nestle to approve protocol prior
to commencement of study. Nestle to reimburse Medjet for all mutually agreed,
documented expenses associated with such effort.
Milestone 4. Medjet to develop clinical protocol, and secure all facilities and
materials, for demonstration of working prototype (clinical scanner head) on
blind human eyes, at Medjet's expense. Nestle to approve protocol prior to
commencement of study.
Milestone 5. Medjet to deliver reports of the feasibility study at the
conclusion of the study.
Milestone 6. Medjet to deliver reports of the working prototype study at the
conclusion of the study.
Nestle Milestone
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Milestone 1. Nestle promptly to identify and assign a dedicated engineer
responsible for receiving and managing the waterjet technology transfer.
Milestone 2. Nestle to produce a schedule for receipt of the waterjet
technology transfer and completion of the design.
Milestone 3. Nestle shall receive, assemble, operate and maintain the
experimental laboratory Medjet prototype to enable completion of the design.
Milestone 4. Nestle shall provide Medjet with a quarterly report of Nestle's
development activities for the waterjet technology.
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