Contract
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[***]
indicates that text has been omitted which is the subject of a
confidential treatment request. This text has been filed separately
with the SEC.
ExhibitΒ 10.6
AMENDED AND RESTATED
LICENSE AND DEVELOPMENT AGREEMENT
LICENSE AND DEVELOPMENT AGREEMENT
This agreement made as of the 20th day of February, 2002.
AMONG:
NUCRYST PHARMACEUTICALS CORP., (formerly Westaim Biomedical Corp.) a corporation incorporated under
the laws of Alberta, and NUCRYST PHARMACEUTICAL INC., (formerly Westaim Biomedical Inc.) a
corporation incorporated under the laws of the State of Delaware in the United States of America
(hereinafter collectively referred to as βNucrystβ)
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XXXXX & NEPHEW, INC., a corporation incorporated under the laws of the State of Delaware in the
United States of America, and X.X. XXXXX & NEPHEW LIMITED, a corporation formed and organized under
the laws of England and Wales
(hereinafter collectively referred to as βS&Nβ)
WHEREAS Nucryst and S&N formed an arrangement concerning the development, promotion and sale
in a specified field of use of certain products incorporating Nucrystβs nanocrystalline silver
antimicrobial coating technology, all upon the terms and subject to the conditions set forth in,
among other agreements, that certain license and development agreement among Nucryst and S&N made
as of the 8th day of May, 2001 (the βOriginal Agreementβ);
AND WHEREAS Nucryst and S&N have agreed to amend and restate the Original Agreement in the
manner set forth in this Agreement and that this Agreement from and after the Effective Date shall
replace and supersede the Original Agreement in all respects;
NOW, THEREFORE, in consideration of the premises and covenants contained herein and other
good and valuable consideration, the receipt and sufficiency of which is hereby agreed to by the
parties, and intending to be legally bound hereby, the parties hereto agree as follows:
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ARTICLE 1
DEFINITIONS
DEFINITIONS
SectionΒ 1.1 Definitions
In this Agreement, unless otherwise provided, the following terms shall have the following
meanings:
Β | 1.1.1 | Β | βActicoat 7 Productβ means the Acticoat 7 product (referred to in FDA 510 K number K001519) which has the features set out in the Specifications applicable thereto and which was marketed and sold by Nucryst under the tradename βActicoat 7β immediately prior to the Original Effective Date, together with all Improvements thereto which S&N and Nucryst agree in writing to implement; |
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Β | 1.1.2 | Β | βActicoat Absorbent Productβ means the Acticoat absorbent dressing product (referred to in FDA 510 K number K002896) which has the features set out in the Specifications applicable thereto and which was marketed and sold by Nucryst under the tradename βActicoat Absorbent Dressingβ immediately prior to the Original Effective Date, together with all Improvements thereto which S&N and Nucryst agree in writing to implement; |
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Β | 1.1.3 | Β | βActicoat Moisture Control Dressing Productβ means the Acticoat moisture control dressing product (referred to in FDA 510 K number K010447) which has the features set out in the Specifications applicable thereto and which was marketed and sold by Nucryst under the tradename βActicoat Moisture Control Dressingβ immediately prior to the Original Effective Date, together with all Improvements thereto which S&N and Nucryst agree in writing to implement; |
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Β | 1.1.4 | Β | βActicoat Productβ means the Acticoat product (referred to in FDA 510 K number K955453) which has the features set out in the Specifications applicable thereto and which was marketed and sold by Nucryst under the tradename βActicoatβ or βActicoat Burn Dressingβ immediately prior to the Original Effective Date, together with all Improvements thereto which S&N and Nucryst agree in writing to implement; |
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Β | 1.1.5 | Β | βActicoat Trade-marksβ means the trade-marks listed on Schedule βAβ; |
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Β | 1.1.6 | Β | βAffiliatesβ means any Person that directly or indirectly controls, is controlled by, or is under common control with another Person. A Person shall be deemed to βcontrolβ another Person if the Person owns, directly or indirectly, more than fifty percent (50%) of the outstanding voting securities, capital stock, or other comparable equity or ownership interest of such Person. If the laws of the jurisdiction in which such Person operates prohibit ownership of more than fifty percent (50%), control shall be deemed to exist at the maximum level of ownership allowed by such jurisdiction; |
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Β | 1.1.7 | Β | βAgreementβ means this amended and restated license and development agreement, together with all Schedules hereto and any amendments to or restatements of this amended and restated license and development agreement; |
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Β | 1.1.8 | Β | βCE ClassΒ III Approvalβ means the initial approval from TUV or such other qualified notified body as a ClassΒ III medical device, including claims relating to (i)Β a sustained release of silver, and (ii)Β prevention and reduction of infection in wounds, of either the Acticoat Product or the Acticoat 7 Product, which product shall be agreed to by the parties within forty-five (45) days from the Original Effective Date, failing such agreement then as specified by S&N in its sole discretion within fifty (50)Β days of the Original Effective Date; provided, however that if the parties fail to agree and S&N fails to specify such product within such fifty (50)Β day period, then Nucryst shall be entitled to choose either the Acticoat Product or the Acticoat 7 Product, in its sole discretion. |
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Β | 1.1.9 | Β | βCommercial Manufacturing Planβ has the meaning attributed to that term in Section 3.2.3; |
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Β | 1.1.10 | Β | βConfidential Informationβ has the meaning attributed to that term in SectionΒ 7.1; |
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Β | 1.1.11 | Β | βConsumer First Aid Productsβ means products which are designed and indicated solely for the prevention, protection and/or treatment of minor dermal xxxxx, wounds or conditions and which are intended for self medication or use without advice from a health care professional. For the avoidance of doubt, this does not exclude such products from being used, applied or recommended by or marketed to such health care professionals; |
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Β | 1.1.12 | Β | βDevelopment Planβ has the meaning attributed to that term in SectionΒ 3.2.1; |
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Β | 1.1.13 | Β | βDistribution Royaltyβ has the meaning attributed to that term in SectionΒ 6.1; |
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Β | 1.1.14 | Β | βEffective Dateβ shall mean the 20th day of February, 2002; |
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Β | 1.1.15 | Β | βEquipmentβ has the meaning attributed to that term in the Supply Agreement; |
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Β | 1.1.16 | Β | βExcluded Usesβ means all: |
Β | 1.1.16.1 | Β | orthopedic uses, such as permanent, temporary or transcutaneous implants; |
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Β | 1.1.16.2 | Β | veterinary uses; |
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Β | 1.1.16.3 | Β | dermatological uses, such as for acne, eczema, impetigo, folliculitis, psoriasis, skin cancer, warts, shingles, minor sunburn, oral herpes, genital herpes, atheleteβs foot, jock itch, diaper rash, scalp care (dandruff), infections of nail beds, contact dermatitis, pyoderma, rosacea and dry/chapped skin but not including Toxic Epidermal |
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Necrolysis Syndrome (TENS), Epidermolysis Bullosa (EB), Xxxxxxx-Xxxxxxxx Syndrome which are
specifically included in the Field;
Β | 1.1.16.4 | Β | non-dermal ophthalmology uses, such as eye drops, ointments, creams, and specially designed dressings; |
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Β | 1.1.16.5 | Β | pediatric uses, such as diaper rash, otitis media, external otitis, impetigo and thrush; |
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Β | 1.1.16.6 | Β | oral and dental uses, such as mucositis, periodontal disease, gingivitis, bad breath, sore throats, tooth infections and thrush; |
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Β | 1.1.16.7 | Β | non-dermal ear, nose and throat uses, such as external otitis, otitis media, sore throat, nasal packing, sinusitis, gargles, rinses and spray; |
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Β | 1.1.16.8 | Β | surgical supply uses, such as for gowns, non-adhesive drapes, masks, casting materials, fluid collecting devices, sterilization solutions; |
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Β | 1.1.16.9 | Β | personal hygiene uses, such as lubricating gels, tampons/pads and for vaginal infections; |
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Β | 1.1.16.10 | Β | ostomy and incontinence uses, such as peristomal skin protection, pouch βsterilizationβ, odor control, diapers and pads, and catheters and bags/bottles; |
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Β | 1.1.16.11 | Β | coated medical device uses, such as implants (permanent, temporary and transcutaneous), catheters and dressings designed specifically for use around non-vascular catheters, trocars/vent tubes and other transcutaneous devices, surgical meshes, sutures, staples, heart valves, shunts and stents; |
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Β | 1.1.16.12 | Β | respiratory uses such as pneumonia, bronchitis and sinusitis; |
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Β | 1.1.16.13 | Β | until such time as the Korean Distribution Agreement expires or is terminated in accordance with SectionΒ 2.8.2 of this Agreement, the use, marketing, promotion, distribution or sale in Korea of the products in the field specified in the Korean Distribution Agreement; and |
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Β | 1.1.16.14 | Β | until such time as the Japanese Distribution Agreement expires or is terminated in accordance with SectionΒ 2.8.1 of this Agreement, the use, marketing, promotion, distribution or sale of the products in the field specified in the Japanese Distribution Agreement; |
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Β | 1.1.17 | Β | βExisting Productsβ means, collectively, the Acticoat Product, the Acticoat 7 Product, the Acticoat Absorbent Product and the Acticoat Moisture Control Dressing Product; |
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Β | 1.1.18 | Β | βFDAβ means the United States Food and Drug Administration, or any successor organization; |
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Β | 1.1.19 | Β | βFieldβ means the use of Nucrystβs nanocrystalline silver antimicrobial coating technology in products designed and indicated solely for the prevention, protection and/or treatment of non-minor dermal wounds or xxxxx on humans including, for greater certainty, Toxic Epidermal Necrolysis Syndrome (TENS), Epidermolysis Bullosa (EB), Xxxxxxx-Xxxxxxxx Syndrome and dressings designed specifically for use around vascular catheters, but excluding for greater certainty (and without limiting the generality of the foregoing) Consumer First Aid Products and any Excluded Uses; |
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Β | 1.1.20 | Β | βForce Majeureβ has the meaning as set out in SectionΒ 13.1; |
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Β | 1.1.21 | Β | βFully Allocated Cost of Goodsβ means with respect to the manufacture and supply of a particular Product, the aggregate of |
Β | 1.1.21.1 | Β | direct material, direct labour and subcontracted costs incurred by Nucryst in connection with the procurement of raw materials or production, manufacture, processing, labeling, testing, transportation and packaging of such Product, and |
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Β | 1.1.21.2 | Β | S&Nβs proportionate share of indirect costs incurred by Nucryst relating to the manufacturing and manufacturing facilities (βManufacturing Costsβ) related to such Product including administration and labour (in either case relating to the manufacturing), depreciation on equipment owned by Nucryst, rent, insurance, utilities, taxes (excluding taxes on income), repairs, maintenance, cleaning, training, quality control and the like, with such calculation to be made in accordance with Canadian GAAP. S&Nβs proportionate share of such indirect costs shall be based on the percentage of the aggregate Manufacturing Costs in the reporting period for which S&N is responsible under the Supply Agreement, being, for Equipment (other than New Equipment) [***] (or [***] if Nucryst has relinquished its [***] reservation of capacity) less the proportion of capacity (in excess of any such reserve capacity, if applicable) actually used by Nucryst in the reporting period for purposes authorized by the Supply Agreement, and for New Equipment, the actual usage of such New Equipment by Nucryst in the reporting period for purposes authorized by the Supply Agreement as a percentage of actual use by Nucryst for other purposes; |
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Β | 1.1.22 | Β | βGAAPβ means, as applicable, Canadian, United States or United Kingdom, generally accepted accounting principles consistently applied; |
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Β | 1.1.23 | Β | βGross Profit Marginβ means, with respect to a particular Product during a particular calendar quarter, the aggregate dollar amount of the Net Sales for such Product during such calendar quarter minus the aggregate of: |
Β | 1.1.23.1 | Β | the Fully Allocated Cost of Goods applicable to such Product Sold during such calendar quarter, |
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Β | 1.1.23.2 | Β | the applicable proportionate amount for such Product Sold during such calendar quarter of the notional depreciation related to the Equipment (based on the net book value of the Equipment (excluding New Equipment) as at DecemberΒ 31, 2000 and a cost of New Equipment at actual cost), calculated in accordance with Canadian GAAP, |
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Β | 1.1.23.3 | Β | where during such calendar quarter such Product is not manufactured in its entirety by or on behalf of Nucryst, any additional costs that S&N incurred in respect of manufacturing the Products, including those of contractors or subcontractors that manufacture for S&N, (beyond any costs payable under this Agreement or the Supply Agreement) for such Product Sold during such calendar quarter to a third party where those costs are analogous to Fully Allocated Costs of Goods, |
expressed as a percentage of the aggregate dollar amount of the Net Sales for such Product during
such calendar quarter;
Β | 1.1.24 | Β | βImprovementsβ has the meaning attributed to that term in SectionΒ 8.1; |
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Β | 1.1.25 | Β | βJapanese Distribution Agreementβ means that certain agreement entered into between Nucryst Pharmaceuticals Corp. (formerly Westaim Biomedical Corp.) and Century Medical Inc., dated OctoberΒ 20, 2000; |
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Β | 1.1.26 | Β | βJoint Improvementsβ has the meaning attributed to that term in SectionΒ 8.1; |
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Β | 1.1.27 | Β | βKnowledgeβ has the meaning attributed to that term in SectionΒ 12.11; |
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Β | 1.1.28 | Β | βKorean Distribution Agreementβ means that certain agreement entered into between Nucryst Pharmaceuticals Corp. (formerly Westaim Biomedical Corp.) and Biomedics Korea Co. Ltd. dated SeptemberΒ 15, 2000; |
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Β | 1.1.29 | Β | βLicensed Acticoat Marksβ means the World Wide Acticoat Trade-xxxx Registrations and the World Wide Acticoat Trade-xxxx Rights; |
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Β | 1.1.30 | Β | βMarket Approvalβ shall mean, with respect to a particular Product in a particular country in the Territory, the approval from the applicable Regulatory Authority required for the Sale of such Product in such country. |
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Β | 1.1.31 | Β | βMarketing Planβ has the meaning attributed to that term in SectionΒ 5.1; |
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Β | 1.1.32 | Β | βNanocrystalline Marksβ means the trade-marks that Nucryst develops to identify a product that contains its nanocrystalline silver antimicrobial coating technology; |
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Β | 1.1.33 | Β | βNet Salesβ means with respect to a particular Product in the Territory, the sum of the gross amounts invoiced for all Sales by S&N and its Affiliates (including Sales to their respective licensees and distributors) of such Product, excluding any Sales between S&N and its Affiliates, where S&N or its Affiliates is not an end user, less the following deductions from such amounts invoiced which are actually and properly incurred in accordance with GAAP: |
Β | 1.1.33.1 | Β | credits or allowances actually granted for damaged Product, returns or rejections of Product; |
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Β | 1.1.33.2 | Β | normal and customary trade, cash and quantity discounts, allowances and credits actually allowed; |
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Β | 1.1.33.3 | Β | sales, value added or similar taxes measured by the billing amount, when included in billing; |
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Β | 1.1.33.4 | Β | freight, postage, shipping, and insurance charges related to delivery of Product measured by the billing amount, when included in billing; and |
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Β | 1.1.33.5 | Β | import and export duties actually paid. |
Any refund or reimbursement of any of the foregoing amounts previously deducted from Net Sales
shall be appropriately credited upon receipt thereof (as Net Sales earned in the calendar quarter
in which such refund or reimbursement was received).
In circumstances where there is a Sale between S&N and its Affiliates, where S&N or its Affiliates
is an end user, the βamount invoicedβ with respect to such Sale shall, for purposes of calculating
βNet Salesβ, be the greater of (a)Β the actual amount invoiced with respect to such Sale, and (b)
the amount which the amount invoiced would have been had such Sale been to a Person at armβs length
with S&N or such Affiliate.
If Product is Sold in combination with another product or products (e.g., in the same kit or
package) and each such product has a separate and distinguishable list price, then βNet Salesβ
under such circumstances shall be calculated by multiplying the βNet Salesβ for the combined
product by the fraction A/(A+B),
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in which A is the existing list price for the Product when Sold separately, and B is the
existing list price for any other product or products in combination when Sold separately. For
greater certainty, the incorporation of a Product into another product shall not be considered
βanother productβ for purposes of this final paragraph of this SectionΒ 1.1.33 and βNet Salesβ under
such circumstances shall be based on the gross amount invoiced for the combined product;
Β | 1.1.34 | Β | βNew Productβ means any product which pursuant to the process set out in SectionΒ 3.2 is adopted as a βNew Productβ and which is produced by, uses and/or incorporates any of the Nucryst Technology or the making, using and/or selling thereof is otherwise covered by any of the valid claims within the Nucryst Patent Rights;. |
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Β | 1.1.35 | Β | βNucryst Improvementsβ has the meaning attributed to that term in SectionΒ 8.2 of this Agreement; |
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Β | 1.1.36 | Β | βNucryst Know-Howβ means all information and data related to the Field used in the manufacturing and production of Products, and which are generally not known to the public and which are proprietary to Nucryst, including but not limited to formulae, protocols, methods, techniques, results of experimentation and testing and Nucryst Improvements which arise or occur after the Original Effective Date and which fall within the ambit of the foregoing. |
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Β | 1.1.37 | Β | βNucryst Patent Rightsβ means all rights applicable in the Field owned by Nucryst in any of the following: |
Β | 1.1.37.1 | Β | the patents listed on ScheduleΒ B; |
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Β | 1.1.37.2 | Β | any patent issuing on any patent application identified in ScheduleΒ B of this Agreement; and |
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Β | 1.1.37.3 | Β | any patent issuing from any continuing applications of those patents or patent applications, including any divisions, continuations, and continuation-in-part applications, as well as any patents issuing on any reissue and/or reexamination application, and including any patent term restoration of any such patents. |
Β | Nucryst Patent Rights also includes all rights applicable in the Field owned by Nucryst in any foreign patents and patent applications which correspond to those described in the preceding sentence and in any patents or patent applications that claim Nucryst Improvements and which fall within the Field; |
Β | 1.1.38 | Β | βNucryst Technologyβ means all Nucryst Patent Rights and Nucryst Know-How; |
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Β | 1.1.39 | Β | βOriginal Agreementβ has the meaning attributed to that term in the first recital of this Agreement; |
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Β | 1.1.40 | Β | βOriginal Effective Dateβ means the 8th day of May, 2001; |
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Β | 1.1.41 | Β | βPercentage Manufacturing Profitβ has the meaning attributed to that term in the Supply Agreement; |
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Β | 1.1.42 | Β | βPersonβ means an individual, corporation, company, cooperative, partnership, trust, unincorporated association, entity with juridical personality or a governmental authority or body, and pronouns which refer to a Person have a similar extended meaning. |
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Β | 1.1.43 | Β | βProductβ means any product which is produced by, uses and/or incorporates any of the Nucryst Technology or the making, using and/or selling thereof is otherwise covered by any of the valid claims within the Nucryst Patent Rights, and includes, without limitation, the Existing Products and the New Products; |
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Β | 1.1.44 | Β | βProject Teamβ has the meaning attributed to that term in SectionΒ 3.1.1; |
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Β | 1.1.45 | Β | βRegulatory Authorityβ means, with respect to a particular Product Sold or to be Sold in a particular country in the Territory, those government agencies or authorities responsible for the approval and regulation of such Product and the Sale thereof in such country; |
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Β | 1.1.46 | Β | βReimbursement Approvalβ shall mean, with respect to a particular Product in a particular country in the Territory, such governmental approval as may be required, if any, for price and/or reimbursement approval of such Product in such country; |
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Β | 1.1.47 | Β | βSaleβ includes, with respect to a particular Product, the sale or other disposition thereof and βSellβ or βSoldβ have corresponding meanings; |
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Β | 1.1.48 | Β | βS&N Improvementsβ has the meaning attributed to that term in SectionΒ 8.3; |
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Β | 1.1.49 | Β | βSpecificationsβ has the meaning attributed to that term in the Supply Agreement; |
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Β | 1.1.50 | Β | βSupply Agreementβ means that certain supply agreement of even date herewith among Nucryst Biomedical Corp., S&N and Xxxxx & Nephew Inc., together with all Schedules thereto and any amendments to or restatements of such supply agreement; |
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Β | 1.1.51 | Β | βSurvival Periodβ has the meaning attributed to that term in SectionΒ 13.10; |
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Β | 1.1.52 | Β | βTermβ means the term of this Agreement as specified in SectionΒ 11.1; |
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Β | 1.1.53 | Β | βTerritoryβ means, subject to SectionsΒ 1.1.16.13 and 1.1.16.14 of this Agreement, all countries of the world; |
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Β | 1.1.54 | Β | βWorld Wide Acticoat Trade-xxxx Registrationsβ means the trade-xxxx registrations and applications for registration in any jurisdiction included within the Territory for the Acticoat Trade-marks together with any new applications and registrations; |
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Β | 1.1.55 | Β | βWorld Wide Acticoat Trade-xxxx Rightsβ means in the case of any Acticoat Trade-xxxx which has been used within any jurisdiction included within the Territory or for which an application has been filed or a registration has been obtained, all right, title and interest for that jurisdiction within the Territory in and to such Acticoat Trade-xxxx, including, without limitation, all common law rights thereto and the goodwill of S&Nβs business as symbolized by the Acticoat Trade-marks; |
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Β | 1.1.56 | Β | βWorld Wide Nanocrystalline Trade-xxxx Registrationsβ means the trade-xxxx registrations and applications for registration in any jurisdiction included within the Territory for the Nanocrystalline Trade-marks together with any new applications and registrations; |
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Β | 1.1.57 | Β | βWorld Wide Nanocrystalline Trade-xxxx Rightsβ means in the case of any Nanocrystalline Trade-xxxx which has been used within any jurisdiction included within the Territory or for which an application has been filed or a registration has been obtained, all right, title and interest for that jurisdiction within the Territory in and to such Nanocrystalline Trade-xxxx, including, without limitation, all common law rights thereto and the goodwill of Nucrystβs business as symbolized by the Nanocrystalline Trade-marks; and |
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Β | 1.1.58 | Β | β[***] Claimβ has the meaning attributed to that term in SectionΒ 4.7. |
SectionΒ 1.2 Number and Gender
Words importing the singular number only in this Agreement shall include the plural number and vice
versa and words importing one gender only in this Agreement shall include all genders and words
importing Persons in this Agreement shall include individuals, partnerships, corporations and any
other entities, legal or otherwise.
SectionΒ 1.3 Headings
The headings used in this Agreement are for ease of reference only and shall not affect the meaning
or the interpretation of this Agreement. References to Sections and Articles are to Sections and
Articles of this Agreement.
SectionΒ 1.4 Schedules
The following Schedules attached to this Agreement shall form part of this Agreement:
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Β | Β | Β |
Schedule | Β | Content |
A
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Β | Acticoat Trade-marks |
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Β | Β |
B
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Β | List of patents and patent applications in Nucryst Patent Rights |
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Β | Β |
C
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Β | Specific performance criteria |
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Β | Β |
D
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Β | Specific Product Sales criteria |
SectionΒ 1.5 Effective Date
This Agreement commences and supercedes the Original Agreement as of the Effective Date.
SectionΒ 1.6 Calendar Quarter
Wherever calendar quarter is used in this Agreement in connection with a matter that pertains to
S&Nβs financial reporting, S&N shall be entitled to interpret the provision to refer to the period
used in its quarterly reporting practice.
SectionΒ 1.7 Legislation
Any reference in this Agreement to legislation or a statute includes, unless otherwise
indicated, rales and regulations passed or in force as at the date of the Original Agreement and
any amendments to such rules or regulations from time to time, and any legislation or regulations
substantially replacing the same.
ARTICLE 2
LICENSE GRANT
LICENSE GRANT
SectionΒ 2.1 Nucryst Grant of License
Β | 2.1.1 | Β | Subject to the terms and conditions of this Agreement, Nucryst hereby grants to S&N a license under the Nucryst Technology to use, market, promote, distribute and sell Products in the Field in the Territory, which license shall be exclusive of Nucryst and all other Persons subject to the rights specifically reserved to Nucryst and its Affiliates under this Agreement and the Supply Agreement and to the extent otherwise required by applicable law or regulation (as, for example, in the European Union under applicable competition law). |
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Β | 2.1.2 | Β | Nothing in this Agreement shall in any way limit the right of Nucryst and its Affiliates and licensees to use or exploit the Nucryst Technology outside of the Field. |
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Β | 2.1.3 | Β | Until such time as S&N ceases to have exclusivity pursuant to this Agreement (except for Acticoat Product and Acticoat 7 Product in Canada and the United States), Nucryst shall not be entitled to use, market, promote, distribute or Sell any products which incorporate the Nucryst Technology in the Field in the |
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Territory unless otherwise expressly provided in this Agreement or the Supply Agreement.
SectionΒ 2.2 Sublicenses
S&N may grant to any Affiliate of S&N a sublicense of the license granted to S&N under Section
2.1.1 without the prior consent of Nucryst, provided that there is and continues to be throughout
the term of the sublicense an enforceable sublicense agreement between S&N and any such Affiliate
wherein such Affiliate agrees to be bound by the provisions of this Agreement relating to the use
and safeguarding of the licensed technology including the confidentiality provisions in ArticleΒ 7.
S&N shall be responsible for diligently enforcing the provisions of such sublicense agreement and
for the acts and omissions of each such Affiliate and such acts and omissions shall be regarded for
the purposes of this Agreement as the acts and omissions of S&N. No such S&N Affiliate shall grant
any further license of such licensed technology to any other Person nor assign its rights to any
other Person, except in either case, to another S&N Affiliate on the terms and conditions specified
in this SectionΒ 2.2. Any distributors retained by S&N to distribute Products, to the extent they
require a sublicense of any marketing or Sales rights granted to S&N under SectionΒ 2.1.1 of this
Agreement, shall, for the purposes of this SectionΒ 2.2., be regarded as Affiliates of S&N and the
provisions hereof shall apply accordingly. Further, S&N may not grant sublicenses of the license
granted to S&N under SectionΒ 2.1.1 to any other Person without the prior written consent of Nucryst
(such consent not to be unreasonably withheld), and provided that there is and continues to be
throughout the term of the sublicense an enforceable sublicense agreement between S&N and such
Person wherein such Person agrees to be bound by the provisions of this Agreement relating to the
use and safeguarding of the licensed technology including the confidentiality provisions in Article
7. No such Person shall grant any further license of such licensed technology to any other Person
nor assign its rights to any other Person. S&N shall be responsible for diligently enforcing the
provisions of such sublicense agreement and for the acts and omissions of its permitted
sublicensees and such acts and omissions shall be regarded for the purposes of this Agreement as
the acts and omissions of S&N.
SectionΒ 2.3 Term of Grant
The license granted under SectionΒ 2.1 shall remain in full force and effect until the date
which is the twenty-fifth (25th) anniversary of the Original Effective Date, unless this
Agreement is terminated earlier pursuant to ArticleΒ 11.
SectionΒ 2.4 Ownership of Test and Clinical Data
All test and clinical data relating to or arising from the research, development, manufacture,
distribution or use of the Products shall be Confidential Information and owned as follows:
Β | 2.4.1 | Β | if it relates to Nucryst Technology, it shall be owned by Nucryst and shall be disclosed by Nucryst to S&N upon collection by Nucryst and shall be treated as Nucryst Technology for purposes of this Agreement; |
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Β | 2.4.2 | Β | if it does not relate to Nucryst Technology, it shall be owned by S&N and shall be disclosed to Nucryst upon collection by S&N and S&N hereby grants to |
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Nucryst a fully paid-up, royalty free and perpetual non-exclusive license to use such
information for its own internal purposes outside the Field.
In neither case shall S&N or Nucryst be deemed to grant to the other of them on disclosure a
warranty that the test data is complete or accurate.
SectionΒ 2.5 Bankruptcy or Insolvency
All rights and licenses granted to S&N under this ArticleΒ 2 are, and shall be deemed to be, for
purposes of applicable bankruptcy law (including Section 365(n) of the United States Bankruptcy
Code), licenses of rights to βintellectual propertyβ (including as such term is defined under
SectionΒ 101(35A) of the United States Bankruptcy Code).
SectionΒ 2.6 Nucryst Rights
Notwithstanding any provision to the contrary in this Agreement or the Supply Agreement, Nucryst
and its Affiliates shall have the right to carry out research and development in the Field,
exercising Nucrystβs rights and fulfilling Nucrystβs obligations under this Agreement or the Supply
Agreement, for purposes of developing Improvements and New Products.
SectionΒ 2.7 S&N Rights
Notwithstanding any provision to the contrary in this Agreement, nothing in or under this
Agreement, including without limitation any action by Nucryst, S&N or the Project Team or the
Development Plans or Marketing Plans or any amendment thereto on review and consultation, approved
by the Project Team shall in any way limit or restrict, or have the effect, whether alone or in
conjunction with any separate agreement or other document, of limiting or restricting, the right of
S&N at its sole discretion:
Β | 2.7.1 | Β | to determine prices, price components, discounts, allowances and credits and billing and pricing policy for Product Sold in the Field in the Territory; |
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Β | 2.7.2 | Β | to freely choose what orders from what users and resellers, or classes of users and resellers, within the Territory to accept, subject to performing its obligations under any applicable laws, rules, regulations or orders; |
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Β | 2.7.3 | Β | to determine the quantity of Product to be manufactured and supplied to S&N; |
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Β | 2.7.4 | Β | to freely choose whether to file, prosecute and/or maintain patent protection for S&N Improvements hereunder. |
SectionΒ 2.8 Japan and Korea
Β | 2.8.1 | Β | With respect to the Japanese Distribution Agreement, Nucryst shall, at least forty-five (45) days prior to each occasion, advise S&N when Nucryst has the opportunity to terminate the Japanese Distribution Agreement and, if requested, in writing by S&N prior to such occasion, shall terminate the |
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Japanese Distribution Agreement on such occasion if S&N advises that S&N plans in a timely
fashion thereafter to market and Sell Products in Japan.
Β | 2.8.2 | Β | With respect to the Korean Distribution Agreement, Nucryst shall exercise its termination rights thereunder at the earliest opportunity following S&Nβs written request to do so and notice that S&N intends in a timely fashion thereafter to market and Sell Products in Korea. |
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Β | 2.8.3 | Β | Without the prior written consent of S&N, Nucryst shall not amend either the Japanese Distribution Agreement or the Korean Distribution Agreement in a manner which is adverse to the interests of S&N. |
ARTICLE 3
PROJECT TEAM
PROJECT TEAM
SectionΒ 3.1 Project Team
Β | 3.1.1 | Β | Project Team. After the Original Effective Date, the parties shall form a project team (the βProject Teamβ) for the purpose of overseeing and managing the development of Product(s) in the Territory in the manner as specified in SectionΒ 3.2. |
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Β | 3.1.2 | Β | Representatives. The Project Team shall be composed of two (2) representatives of Nucryst or its Affiliates and twoΒ (2)Β representatives of S&N or its Affiliates. S&N shall appoint a chair of the Project Team. Each of Nucryst and S&N shall, prior to the first meeting of the Project Team, designate their respective initial members of the Project Team. Each party shall notify the other party in writing of any changes in its representatives to the Project Team. Similarly, S&N shall notify Nucryst in writing of any change in S&Nβs choice of chair. |
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Β | 3.1.3 | Β | Meetings. The Project Team shall meet not less than once per calendar quarter during the period of development of any Product, on such dates and at such times and places as are agreed to by the parties, acting reasonably. S&N shall be responsible for arranging such meetings, including, at least, providing notice and an agenda and providing minutes of the meeting. The first meeting will take place as soon as reasonably practicable after the Original Effective Date, but in no event later than ninety (90)Β days after the Original Effective Date, and will be organized by S&N. Meetings may be conducted in Person or by telephone or video conference. |
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Β | 3.1.4 | Β | Expenses. Each party shall be responsible for the costs and expenses (including travel, lodging and other such costs and expenses) associated with the participation of its representatives on the Project Team. |
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SectionΒ 3.2 Functions and Authority
Β | 3.2.1 | Β | Approval and Formation of Development Plans. Through the Project Team, if either Nucryst or S&N believes that S&N should pursue the development of any New Products or any Improvement to a Product in the Field in the Territory, the matter shall be discussed, and, if S&N approves the pursuit of such development, the Project Team shall develop and approve a Development Plan in respect thereof. |
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Β | 3.2.2 | Β | Development Plans. The Project Team shall oversee the development of each New Product or any Improvement to a Product designated by S&N to be developed in the Territory. Subject to the overriding discretion of S&N to make or veto any decision of the Project Team, the Project Team shall review and approve written Development Plans and shall approve conduct and review progress under any such Development Plan(s) including material supply procedures and capacities, and other matters necessary to development of each Product in the Territory. Such approved Development Plan(s) shall be memorialized as an approved plan or budget in the Project Team meeting minutes. Notwithstanding any provision to the contrary in this Agreement, Nucryst shall not be obligated to undertake any obligations in relation to any Development Plan or any other plan or directive of the Project Team which Nucryst has not specifically approved or agreed to in writing, nor shall Nucryst in any way be bound by any decision of the Project Team which Nucryst has not specifically approved or agreed to in writing. When considering any such approval or agreement, Nucryst shall act reasonably, taking into account its technical ability to manufacture such New Product or Improvement to a Product and the economics associated therewith. |
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Β | 3.2.3 | Β | Manufacturing, Plans. The parties acknowledge that, except in the circumstances specified in SectionΒ 4.1 of the Supply Agreement, Nucryst will, to the extent Nucryst agrees in writing to do so, acting reasonably in the manner described in SectionΒ 3.2.2, be responsible for the manufacture and supply of New Products or Improvements to Products in the Territory, all as specified in the Supply Agreement. Notwithstanding the foregoing and subject to its obligations under the Supply Agreement, Nucryst shall present to the Project Team annually for its review and consultation, beginning a reasonable period of time prior to launch of a particular Product in the Territory, a Commercial Manufacturing Plan, and will not make any material revisions to a previously reviewed Commercial Manufacturing Plan without prior consultation with the Project Team. Nucryst will consider seriously any comments that S&N representatives to the Project Team may have with respect to any such Commercial Manufacturing Plan or material revision thereto, provided, however, that the final decision on any such matter shall be made by Nucryst, acting reasonably in the manner described in SectionΒ 3.2.2. |
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Β | 3.2.4 | Β | Plan Amendments. Subject to the vetoes described above, the Project Team has the authority to amend the Development Plans approved previously on the |
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basis of new information. Any amendment to previously approved Development Plans and budgets
shall be memorialized as an approved amended plan or budget in the Project Team meeting minutes.
The Project Team does not have the authority to amend any terms in this Agreement.
Β | 3.2.5 | Β | Effect of Approved Minutes. Subject to the last sentence of SectionΒ 3.2.2, each party agrees to, in good faith, take the necessary actions described in each approved and approved-amended Development Plan or budget therefore as of the date of the Project Teamβs approval thereof. |
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Β | 3.2.6 | Β | Other Functions. As to those Project Team procedures to which this Agreement does not speak, the Project Team may freely choose what procedure to follow as long as it does not conflict with any term of this Agreement or with any applicable laws or regulations. |
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Β | 3.2.7 | Β | Disbanding. The Project Team shall remain in full force and effect for as long as any Product is or may be developed or Sold under this Agreement. |
SectionΒ 3.3 Costs
Subject to SectionΒ 3.1.4 and Nucrystβs manufacturing obligations under the Supply Agreement, S&N
shall be responsible for all costs and expenses incurred in connection with the development,
commercialization, marketing, promotion and Sale of all New Products and Improvements to Products,
except for costs that Nucryst voluntarily undertakes to assume in writing.
ARTICLE 4
PRODUCT DEVELOPMENT
PRODUCT DEVELOPMENT
SectionΒ 4.1 Exclusive Development
Subject to SectionΒ 2.7, during the Term, Nucryst and S&N will develop and commercialize Products in
the Field in the Territory only in accordance with the terms and conditions of this Agreement.
SectionΒ 4.2 Diligence
S&N shall, at its cost and expense, use reasonable commercial efforts to pursue the development and
commercialization (including without limitation non-clinical and clinical trials) of Products
(including New Products and Improvements to Products) in the Field throughout the Territory within
good business practices.
SectionΒ 4.3 Regulatory Filings and Reimbursement Approvals
S&N will undertake using reasonable commercial efforts, at S&Nβs cost and expense, the preparation,
submission and prosecution and maintenance of:
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Β | 4.3.1 | Β | all Regulatory Authority filings and applications necessary and/or desirable to obtain and maintain all necessary and/or desirable Market Approvals (including without limitation non-clinical and clinical trials but excluding any filings or approvals that relate solely to the manufacturing of Product and the CE ClassΒ III Approval); and |
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Β | 4.3.2 | Β | all filings and applications necessary and/or desirable to obtain and maintain all necessary and/or desirable Reimbursement Approvals, excluding any filings or approvals that relate solely to the manufacturing of Product; |
to use, market and Sell (and, if applicable, be reimbursed for) Product in those countries in the
Territory where it is commercially reasonable for S&N to do so. S&N shall keep Nucryst informed in
respect of the matters which are the subject of this SectionΒ 4.3 and shall give reasonable
consideration to any concerns and suggestions of Nucryst with respect thereto. Nucryst shall offer
to S&N all assistance reasonably required of Nucryst in connection with S&Nβs obligations under
this SectionΒ 4.3, and, in such regard, shall make available to S&N all relevant information in
Nucrystβs possession relating to the Nucryst Technology in the Field (which Nucryst has the lawful
right to disclose) in respect of any such filings or applications, such assistance or information
to be provided by Nucryst in a reasonable and timely manner. Upon the commercial launch by S&N of
the Acticoat Absorbent Product or the Acticoat Moisture Control Dressing Product, Nucryst shall use
reasonable commercial efforts to transfer to S&N the Regulatory Authority approvals for that
Product.
SectionΒ 4.4 CE ClassΒ III Approval
Nucryst agrees to use all reasonable commercial efforts to diligently pursue and shall be
responsible for all costs and expenses (other than S&Nβs internal costs and expenses) in pursuing
the CE ClassΒ III Approval, and to keep S&N fully informed with respect to the status and all other
matters relating to such CE ClassΒ III Approval and to consider seriously any comments that S&N may
have with respect to such approval process. S&N agrees to offer all assistance reasonably requested
by Nucryst in pursuing the CE ClassΒ III Approval. S&N shall pay all of its internal costs and
expenses in providing such assistance.
SectionΒ 4.5 Performance Standards
Each party shall use all commercially reasonable efforts to perform its Product development work
that it has agreed to undertake, in a prudent and skillful manner in accordance, in all material
respects, with all applicable laws and regulations.
SectionΒ 4.6 Reporting
At least quarterly during the Term until all applicable Market Approvals hereunder are obtained,
each party shall provide the other with summary reports which shall describe its progress in
respect of the following: the clinical development and testing of New Products and Improvements to
Products, clinical trials, all regulatory filings and submissions made and the status thereof, and
all approvals obtained and such other information that has a material impact on the manufacturing
or distribution of Products.
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SectionΒ 4.7 [***] Claim
After the Original Effective Date, the parties agree to discuss and consider from time to time and
make a determination with respect to the pursuit of [***] from the FDA for [***] claim and [***] and an effective Reimbursement
Approval for a Product ([***] and Reimbursement Approval, a
β[***] Claimβ). S&N shall pay all costs and expenses (excluding Nucrystβs internal costs and expenses) of
pursuing the [***] Claim and shall keep Nucryst informed with respect to the status and all
other matters relating to such claim [***] and will consider seriously any comments from Nucryst
with respect to such claim or [***] process. The parties agree that the [***]
Claim shall not be pursued if a party determines, acting reasonably, that the likelihood of
obtaining such [***] Claim is remote or the cost (including any payments required to be
made under ArticleΒ 6) of pursuing the [***] Claim would not be economically justified to
either party. Each party agrees to offer to the other all reasonable assistance in connection with
pursuing such [***] Claim, including all [***] data related to or arising from
the research, development, manufacture, distribution or use of the Products. In the event that the
[***] Claim is pursued and obtained, but circumstances have changed or assumptions
originally made in determining that it was economically justifiable to pursue the [***]
Claim have not been met, and S&N determines (acting reasonably and in good faith) that it is not
economically justifiable to commercially launch and offer the Product for Sale, then S&N shall not
be obligated to commercially launch such Product for Sale, and the payment provided for in Section
6.4.3 shall not be applicable. In these circumstances, S&N may request and Nucryst agrees to enter
into good faith negotiations to reduce the amount of the payment provided for in SectionΒ 6.4.3 so
that it becomes economically justifiable to commercially launch and offer for sale the Product that
is the subject of the [***] Claim. However, in the event that no agreement is reached
between S&N and Nucryst as a result of such negotiations, the subject matter of this SectionΒ 4.7
may not be submitted by either party to dispute resolution under SectionΒ 13.4 of this Agreement or
otherwise.
SectionΒ 4.8 Piggyback on S&N Approvals
In respect of any Product for which S&N has lost its exclusivity in any country in the Territory,
subject to the provisions of this Agreement with respect to the use of Joint Improvements, S&N will
not oppose Nucryst applying for Market Approvals and Reimbursements Approvals in those countries
for those Products and using S&Nβs approvals in those countries for those Products (as well as its
generic clinical and test data that it used for its approvals in connection with such applications
in those countries).
ARTICLE 5
PRODUCT MARKETING
PRODUCT MARKETING
SectionΒ 5.1 Marketing Plans
The parties acknowledge that, with respect to the Territory, S&N will be responsible for the Sale
and marketing of Products. Notwithstanding the foregoing, S&N shall present to the Project Team
annually for its review and consultation, beginning a reasonable period of time prior to
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launch of a particular Product in the Territory (and within ninety (90)Β days of the Original
Effective Date with respect to the Existing Products), a Marketing Plan. S&N will reasonably
consider any comments that Nucryst representatives to the Project Team may have with respect to any
such Marketing Plan or material revision thereto, provided, however, that the final decision on any
such matter shall be made by S&N.
SectionΒ 5.2 General Marketing Diligence
The general diligence obligations of S&N as set forth in SectionΒ 4.2 apply equally to this
Article 5.
SectionΒ 5.3 Specific Diligence Thresholds
The specific diligence criteria to be met by S&N following the Original Effective Date are as
follows:
Β | 5.3.1 | Β | S&N shall meet each of the performance criteria set forth in ScheduleΒ C; and |
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Β | 5.3.2 | Β | S&N shall meet the Product Sales criteria set forth in ScheduleΒ D. |
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Β | Β | Β | Subject to SectionsΒ 5.3.3 and 5.3.4, if at any time S&N fails to meet any of the relevant diligence criteria referred to in SectionsΒ 5.3.1 and 5.3.2, then Nucryst may give notice in writing to S&N upon Nucryst acquiring knowledge of such failure or, in any event within [***]Β days of written notice thereof being provided by S&N to Nucryst, that Nucryst elects hereunder to withdraw the exclusivity of the license granted under SectionΒ 2.1 and such license shall thereafter become non-exclusive in respect of all of the Products (except Acticoat Product and Acticoat 7 Product with respect to Canada and the United States) on the [***] after receipt of such notice in writing by S&N, and the provisions of this Agreement shall be deemed to be amended accordingly. |
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Β | 5.3.3 | Β | For the purposes of determining whether the relevant diligence criteria set forth in this Section have been met by S&N, where the failure to meet the relevant diligence criteria is as a result of: |
Β | 5.3.3.1 | Β | Force Majeure; |
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Β | 5.3.3.2 | Β | the failure of Nucryst to provide a Product in the quantities requested by S&N pursuant to the Specifications set forth in the Supply Agreement; |
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Β | 5.3.3.3 | Β | prior to obtaining a CE ClassΒ III license, S&N being required by the applicable Regulatory Authority to cease marketing and Selling Product in the European Union as a result of the successful challenge by a third party of the CE Class IIb license applicable to such Product, except to the extent attributable to the acts or omissions of S&N, its Affiliates or their respective permitted licensees or distributors; or |
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Β | 5.3.3.4 | Β | the failure to obtain the CE ClassΒ III Approval; |
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Β | then, to the extent directly attributable to such cause, the specific diligence criteria affected thereby for the year in question shall be deemed to have been met. |
Β | 5.3.4 | Β | Notwithstanding the foregoing, if at any time any of the criteria specified in SectionΒ 5.3.2 have not been met and Nucryst has given notice as provided for in SectionΒ 5.3, S&N may, once during the Term, pay within twenty (20)Β days of the receipt by S&N of such notice from Nucryst the royalty S&N would have paid to Nucryst if such criteria had been met, and thereupon the failure to meet such criteria shall be deemed to be waived for the year in question. |
SectionΒ 5.4 Sales Force and Use of Distributors
If S&N materially changes its mix of Sales made directly by S&N and Sales made through
distributors from that in effect as at the Original Effective Date, S&N shall give notice to
Nucryst and, either as a result of such notice or Nucryst otherwise becoming aware of such change,
the parties shall at Nucrystβs request meet in a timely fashion thereafter to negotiate in good
faith an agreement to place Nucryst in an equivalent position as if such change had not occurred
taking into account factors including but not limited to the reduced sales price on which the
royalty is calculated as well as any change in the magnitude of Sales and other variables that
result from the change. If Nucryst and S&N do not reach agreement within thirty (30)Β days of
commencing such negotiations, either party may refer the matter for resolution pursuant to Section
13.4.
SectionΒ 5.5 Trade-marks and Branding
Β | 5.5.1 | Β | S&N License to Nucryst |
Β | 5.5.1.1 | Β | License. S&N hereby grants to Nucryst a non-exclusive, fully paid, royalty free licence to use, display, reproduce and publish the Licensed Acticoat Marks in association with the use, marketing, promotion, distribution and sale of: |
Β | 5.5.1.1.1 | Β | until such time as the Korean Distribution Agreement expires or as terminated in accordance with SectionΒ 2.8.2, the products in the field specified in the Korean Distribution Agreement (the βKorean Productsβ); |
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Β | 5.5.1.1.2 | Β | until such time as the Japanese Distribution Agreement expires or is terminated in accordance with SectionΒ 2.8.1 of this Agreement, the products in the field specified in the Japanese Distribution Agreement (the βJapanese Productsβ); and |
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Β | 5.5.1.1.3 | Β | Products in the Field in the Territory in the course of providing Services (as that term is defined in the |
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Transition Services Agreement) to S&N pursuant to the Transition Services Agreement, for the
period beginning on the Original Effective Date and ending on the date that the Nucryst is no
longer entitled to sell Products or provide Services pursuant to the Transition Services Agreement.
Β | 5.5.1.2 | Β | Sublicense. Nucryst shall be entitled to honour its license of the Licensed Acticoat Marks to its distributor in Korea, Biomedics Korea Co., Ltd., for the sale of the Korean Product for the period described in SectionΒ 5.5.1.1.1 and to its distributor in Japan, Century Medical, Inc., for the sale of the Japanese Product for the period described in SectionΒ 5.5.1.1.2. |
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Β | 5.5.1.3 | Β | Publicity Usage. Nucryst shall be entitled to publish or make public statements that it is the developer or co-developer (as the case may be) of the Products, and that its nanocrystalline silver coating technology is contained in the Products, and to use the Licensed Acticoat Marks in connection therewith so long as such does not derogate from the reputation or image of S&N or the Products and such publication conforms to S&Nβs reasonable guidelines for publicity the use of its trade-marks. |
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Β | 5.5.1.4 | Β | Branding. Nucryst shall use the Licensed Acticoat Marks only in association with the Korean Product and the Japanese Product and shall not use the Licensed Acticoat Marks in association with any other products or services whatsoever, except pursuant to the Transitional Services Agreement, the Supply Agreement and this Agreement. |
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Β | 5.5.1.5 | Β | Products. The Korean Product and the Japanese Product offered in association with the Licensed Acticoat Marks shall, at all times, be of a character and quality that meet the standards (consistent with those products as they now exist) established or approved by S&N from time to time, acting reasonably and in good faith. |
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Β | 5.5.1.6 | Β | Use. Nucryst shall utilize or employ and shall permit its sublicensees to utilize or employ the Licensed Acticoat Marks only in the form and manner prescribed by S&N from time to time, subject always to SectionΒ 5.5.1.2. |
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Β | 5.5.1.7 | Β | Notice. Nucryst shall at all times when using the Licensed Acticoat Marks indicate or give notice in such manner as S&N may reasonably direct that Nucryst is a licensee of the Licensed Acticoat Marks and that S&N is the owner of the Licensed Acticoat Marks and shall use reasonable commercial efforts to cause its licensees to behave similarly. |
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Β | 5.5.1.8 | Β | Specimens. Upon S&Nβs request, Nucryst shall supply to S&N or S&Nβs duly authorized representative, specimens of Nucrystβs usage of the Licensed Acticoat Marks for the purpose of ensuring that Nucryst is using the Licensed Acticoat Marks in accordance with the terms of this Agreement and in a manner approved by S&N. |
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Β | 5.5.1.9 | Β | Inspection. S&N, or S&Nβs duly authorized representatives, shall have on prior written notice to Nucryst, the reasonable right of access to Nucrystβs premises during normal business hours, for the purpose of inspecting the Korean Products and the Japanese Products offered by Nucryst in association with the Licensed Acticoat Marks to ensure that the Korean Products and the Japanese Products are of a character and quality that meet the standards that have been established or approved by S&N, acting reasonably and in good faith. Without limiting the generality of the foregoing, and for the purposes of clarity, Nucryst shall offer S&N Nucrystβs full cooperation during the inspection and shall provide S&N or S&Nβs duly authorized representative with access to all applicable records or documents within Nucrystβs possession or under Nucrystβs control (providing Nucryst has the right to produce such documents) relating to the Korean Products and the Japanese Products offered by Nucryst in association with the Licensed Acticoat Marks for purposes of confirming compliance with such standards. |
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Β | 5.5.1.10 | Β | No Other Licenses. Except as expressly provided in this Agreement, Nucryst shall not, without the prior written consent of S&N, license or permit any other Person to use the Licensed Acticoat Marks in association with the Korean Products and the Japanese Products or any other products or services. |
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Β | 5.5.1.11 | Β | Prohibited Use. Except as expressly provided in this Agreement, Nucryst shall not use, nor permit its licensees to use, the Licensed Acticoat Marks or any one of them, as or as part of a corporate name or a trading style or tradename. |
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Β | 5.5.1.12 | Β | Ownership. Nucryst shall not, directly or indirectly, do or cause to be done any act which may in any way jeopardize or adversely effect the validity of the Licensed Acticoat Marks or S&Nβs title to the Licensed Acticoat Marks. |
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Β | 5.5.1.13 | Β | Goodwill. Nucryst agrees that any and all goodwill associated with and identified by the Licensed Acticoat Marks is a part of the Licensed Acticoat Marks and enures directly and exclusively to and for the benefit of S&N and is the property of S&N. No monetary amount whatsoever shall, upon expiration or earlier termination of |
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this Agreement, be assigned or designated as attributable in any way to any goodwill
associated with Nucrystβs activities as licensee of the Licensed Acticoat Marks pursuant to this
Agreement.
Β | 5.5.1.14 | Β | Opposition. Nucryst shall not oppose any application by S&N to register the Acticoat Trade-marks in any jurisdiction included within the Territory, for any wares or services, or any application to extend any registration of the World Wide Acticoat Trade-xxxx Registrations. |
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Β | 5.5.1.15 | Β | Contestation. Nucryst shall not, during the Term of this Agreement or thereafter, dispute, contest or challenge, directly or indirectly, the validity or enforceability of any one or more of the World Wide Acticoat Trade-xxxx Rights, the World Wide Acticoat Registrations or the ownership thereof by S&N, nor to counsel, procure, or assist anyone else to do the same. |
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Β | 5.5.1.16 | Β | Dilution. Nucryst shall not, during the Term of this Agreement or thereafter, dilute or attempt to dilute, directly or indirectly, the value of the goodwill attaching to the Licensed Acticoat Marks, nor to counsel, procure or assist anyone else to do the same. |
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Β | 5.5.1.17 | Β | No Rights. Except as expressly provided in this Agreement, Nucryst shall not claim any rights or interests in the Licensed Acticoat Marks by way of Nucrystβs use of the Licensed Acticoat Marks in accordance with the terms of this Agreement. |
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Β | 5.5.1.18 | Β | Maintenance, Protection and Registrations. S&N shall, at S&Nβs sole cost and expense, protect, defend and maintain the World Wide Acticoat Trade-xxxx Registrations in effect for the Term of this Agreement and shall use S&Nβs best efforts to obtain registrations for any of the World Wide Acticoat Trade-xxxx Registrations that are the subject of a trade-xxxx application within any jurisdiction included within the Territory. |
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Β | 5.5.1.19 | Β | Cessation on Termination. Subject to SectionsΒ 5.5.1.1.1 and 5.5.1.1.2 and except in connection with the disposition of then existing product (including Korean Product and Japanese Product), upon the termination of this Agreement, for any reason whatsoever, Nucryst shall immediately cease any and all use of the Licensed Acticoat Marks and discontinue the offering of all products and services in association with the Licensed Acticoat Marks. |
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Β | 5.5.1.20 | Β | Post Termination. Nucryst shall not, following the termination of this Agreement, do anything inconsistent with the validity of the Licensed Acticoat Marks or inconsistent with S&Nβs ownership of the Licensed Acticoat Marks. |
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Β | 5.5.2 | Β | Nucryst License to S&N |
Β | 5.5.2.1 | Β | License. Nucryst hereby grants to S&N, during the Term of this Agreement, a non-exclusive, fully paid, royalty free licence to use, display, reproduce and publish the Nanocrystalline Marks in association with the use, marketing, promotion, distribution and Sale of Products. |
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Β | 5.5.2.2 | Β | Sublicense. As directed by Nucryst and until such direction is revoked by Nucryst, S&N shall assign its license to the Nanocrystalline Marks to any assignee with rights under this Agreement. As directed by Nucryst and until such direction is revoked by Nucryst, S&N shall sublicense its license to the Nanocrystalline Marks to its Affiliates, and to the licensees and distributors of S&N and its Affiliates, and shall cause them to comply with the terms of this license (and all references to S&N in SectionΒ 5.5.2.3 through to and including SectionΒ 5.5.2.19 shall, as applicable, include such permitted licensees, distributors and assignees of S&N). Otherwise, S&N shall not assign nor sublicense its rights under this license. |
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Β | 5.5.2.3 | Β | Branding. Except to the extent that S&N is able to demonstrate that there is a negative connotation associated with the Nanocrystalline Marks, all Product labels, sales and promotional literature and the like shall include, in a readily noticeable form, the Nanocrystalline Marks, as may be reasonably directed by Nucryst. S&N shall use the Nanocrystalline Marks in this manner only in association with Products and shall not use the Nanocrystalline Marks in association with any other products or services whatsoever. |
Β | |||
Β | 5.5.2.4 | Β | Products. Each Product offered in association with the Nanocrystalline Marks shall, at all times, be of a character and quality that is consistent with the standards of quality that existed when Nucryst requested S&N to brand that Product pursuant to SectionΒ 5.5.2.3. Nucrystβs sole remedy for any inconsistent quality of a Product will be to request S&N to cease using Nucrystβs brand in relation to that Product. |
Β | |||
Β | 5.5.2.5 | Β | Use. S&N shall utilize or employ and shall permit its sublicensees to utilize or employ the Nanocrystalline Marks only in the form and manner reasonably prescribed by Nucryst from time to time. |
Β | |||
Β | 5.5.2.6 | Β | Notice. S&N shall at all times when using the Nanocrystalline Marks indicate or give notice in such manner as Nucryst may direct that S&N is a licensee of the Nanocrystalline Marks and that Nucryst is the owner of the Nanocrystalline Marks and shall cause its licensees to behave similarly. |
Β
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Β | 5.5.2.7 | Β | Specimens. Upon Nucrystβs request, S&N shall supply to Nucryst or Nucrystβs duly authorized representative, specimens of S&Nβs usage of the Nanocrystalline Marks for the purpose of ensuring that S&N is using the Nanocrystalline Marks in accordance with the terms of this Agreement and in a manner approved by Nucryst. |
Β | |||
Β | 5.5.2.8 | Β | Inspection. Nucryst, or Nucrystβs duly authorized representatives, shall, upon prior written notice to S&N, have the reasonable right of access to S&Nβs premises during normal business hours, for the purpose of inspecting the Products and associated materials offered by S&N in association with the Nanocrystalline Marks consistent with the standards of quality that existed when Nucryst requested S&N to brand that Product pursuant to SectionΒ 5.5.2.3. Without limiting the generality of the foregoing, and for the purposes of clarity, S&N shall offer Nucryst S&Nβs full cooperation during the inspection and shall provide Nucryst or Nucrystβs duly authorized representative with access to all applicable records or documents within S&Nβs possession or under S&Nβs control relating to the Products offered by S&N in association with the Nanocrystalline Marks. |
Β | |||
Β | 5.5.2.9 | Β | No Other Licenses. Except as expressly provided in this Agreement, S&N shall not, without the prior written consent of Nucryst, license or permit any other Person to use the Nanocrystalline Marks in association with the Products or any other products or services. |
Β | |||
Β | 5.5.2.10 | Β | Prohibited Use. Except as expressly provided in this Agreement, S&N shall not use, nor permit its licensees to use, the Nanocrystalline Marks or any one of them, as or as part of a corporate name or a trading style or tradename. |
Β | |||
Β | 5.5.2.11 | Β | Ownership. S&N shall not, directly or indirectly, do or cause to be done any act which may in any way jeopardize or adversely effect the validity of the Nanocrystalline Marks or Nucrystβs title to the Nanocrystalline Marks. |
Β | |||
Β | 5.5.2.12 | Β | Goodwill. S&N agrees that any and all goodwill associated with and identified by the Nanocrystalline Marks is a part of the Nanocrystalline Marks and enures directly and exclusively to and for the benefit of Nucryst and is the property of Nucryst. No monetary amount whatsoever shall, upon expiration or earlier termination of this Agreement, be assigned or designated as attributable in any way to any goodwill associated with S&Nβs activities as licensee of the Nanocrystalline Marks pursuant to this Agreement. |
Β
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Β | 5.5.2.13 | Β | Opposition. S&N shall not oppose any application by Nucryst to register the Nanocrystalline Marks in any jurisdiction included with the Territory, for any wares or services, or any application to extend any registration of the World Wide Nanocrystalline Trade-xxxx Registrations. |
Β | |||
Β | 5.5.2.14 | Β | Contestation. S&N shall not, during the Term of this Agreement or thereafter, dispute, contest or challenge, directly or indirectly, the validity or enforceability of any one or more of the Nanocrystalline Marks or any World Wide Nanocrystalline Trade-xxxx Registrations or the ownership thereof by Nucryst, nor to counsel, procure, or assist anyone else to do the same. |
Β | |||
Β | 5.5.2.15 | Β | Dilution. S&N shall not, during the Term of this Agreement or thereafter, dilute or attempt to dilute, directly or indirectly, the value of the goodwill attaching to the Nanocrystalline Marks, nor to counsel, procure or assist anyone else to do the same. |
Β | |||
Β | 5.5.2.16 | Β | No Rights. Except as expressly provided in this Agreement, S&N shall not claim any rights or interests in the Nanocrystalline Marks by way of S&Nβs use of the Nanocrystalline Marks in accordance with the terms of this Agreement. |
Β | |||
Β | 5.5.2.17 | Β | Maintenance and Registrations. Nucryst shall, at Nucrystβs sole cost and expense, protect, defend and maintain any World Wide Nanocrystalline Trade-xxxx Registrations in effect for the Term of this Agreement. |
Β | |||
Β | 5.5.2.18 | Β | Cessation on Termination. Except in connection with the disposition of then existing Product, upon the termination of this Agreement, for any reason whatsoever, S&N shall immediately cease and shall cause all of its permitted assigns and sublicensees to cease, any and all use of the Nanocrystalline Marks and discontinue the offering of all products and services in association with the Nanocrystalline Marks. |
Β | |||
Β | 5.5.2.19 | Β | Post Termination. S&N shall not, following the termination of this Agreement, do anything inconsistent with the validity of the marks or inconsistent with Nucrystβs ownership of the Nanocrystalline Xxxx. |
SectionΒ 5.6 Non-Competition
Other than as provided for in this Agreement, and only for so long as S&N has an exclusive license
in respect of a Product (other than Acticoat Product and Acticoat 7 Product with respect to Canada
and the United States) during the Term, S&N and its Affiliates shall not, either directly or
indirectly, or in partnership or jointly or in conjunction with any Person, firm, association,
syndicate or corporation, as principal, agent, shareholder, partner, member,
Β
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beneficiary or in any other capacity or manner whatever, carry on, engage in, be concerned
with or undertake any business or other activities in any way involving silver-based products,
including silver salts, (but excluding silver sulphadiazine products) in the Field and, except for
a period of one year from the date of the acquisition specified hereafter, where the violation of
the foregoing covenant not to compete is a result of S&N either acquiring a corporation or
acquiring assets comprising all or substantially all of a product line or business of a corporation
that includes products in breach of the foregoing covenant. In the event of a breach by S&N of the
foregoing covenant not to compete, the sole remedy of Nucryst shall be to elect hereunder to
withdraw the exclusivity of the license and such license shall become non-exclusive in respect of
all Products (except Acticoat Product and Acticoat 7 Product with respect to Canada and the United
States) on the 90th day after notice in writing hereunder has been received by S&N, and the
provisions of this Agreement shall be deemed to be amended accordingly.
SectionΒ 5.7 Product Recalls
S&N shall be responsible for implementing all Product recalls: (a)Β required by a request, directive
or order of any applicable Regulatory Authority; (b)Β required by the order of a court of competent
jurisdiction; and (c)Β required by S&N, acting reasonably and with input from Nucryst (if time
permits). To the extent that the Product recalled was Sold prior to the date of the Original
Agreement or to the extent that the adverse event or complaint resulting in the recall was
attributable to Nucryst, S&N out-of-pocket expenses incurred in connection with such recall shall
be borne by Nucryst. S&N shall handle any such recall in a timely manner and in compliance with all
applicable laws and regulations. S&N shall keep Nucryst informed in a timely manner with respect to
any such recall. No communications regarding any such recall shall be initiated by either S&N or
Nucryst with the news media, customers, the FDA or any other Regulatory Authority, except if and to
the extent required by applicable law or regulatory requirement, without the prior written approval
of the other of them, which approval shall not be unreasonably withheld or delayed. If a party does
not respond in writing to the other party within the time period requested by the other party,
acting reasonably, and in a timely fashion but in any event within ten (10)Β days after receipt of
any request for approval, such failure to respond will be deemed to be a response that the party
does not have any comment in respect of the recall. In the event of a recall, the defect giving
rise to such recall shall be remedied as promptly as possible by the party responsible for the
defect.
SectionΒ 5.8 Complaints and Adverse Events
Each of S&N and Nucryst shall notify the other party no later than the following business day,
after becoming aware of any report of any serious adverse event or consumer complaint, and within
ten (10)Β business days after becoming aware of any non-serious adverse events or consumer
complaints, associated with the use of a Product, whether or not determined to be attributable to
Product. Such notification shall be by facsimile or e-mail (with flagged priority). Evaluation,
follow-up and reporting of all adverse events and customer complaints shall be the responsibility
of S&N. Nucryst shall provide all assistance reasonably requested by S&N in the foregoing regard.
Each party shall maintain a record of all reported adverse events.
Β
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ARTICLE 6
CONSIDERATION, PAYMENTS AND ACCOUNTING
RECORDS AND PROCEDURES
CONSIDERATION, PAYMENTS AND ACCOUNTING
RECORDS AND PROCEDURES
SectionΒ 6.1 Royalties
Subject to SectionsΒ 6.2 and 6.3, in consideration for the grant of the license referred to
in SectionΒ 2.1.1 and in addition to the event milestone payments provided for in SectionΒ 6.4 and
the sales milestone payments provided for in SectionΒ 6.5:
Β | 6.1.1 | Β | Xxxxx & Nephew, Inc. shall pay from the United States to Nucryst Biomedical Corp. in Canada, with respect to a particular Product Sold in Canada; |
Β | |||
Β | 6.1.2 | Β | Xxxxx & Nephew, Inc. shall pay from the United States to Nucryst Biomedical Inc. in the United States, with respect to a particular Product Sold in the United States; and |
Β | |||
Β | 6.1.3 | Β | X.X. Xxxxx & Nephew Limited shall pay from the United Kingdom to Nucryst Biomedical Inc. in the United States, with respect to a particular Product Sold in any country in the Territory other than Canada or the United States; |
within [***]Β days following
the end of each calendar quarter, a royalty equal to [***] of
Net Sales of such Product (the βDistribution Royaltyβ) made in that calendar quarter. Each royalty
payment shall be accompanied by the report described in SectionΒ 6.6.
SectionΒ 6.2 Increase in Royalties
With respect to a particular Product during a particular calendar quarter, the Distribution
Royalty shall be increased:
Β | 6.2.1 | Β | by [***] for each [***] that the Gross Profit Margin for such Product during such calendar quarter exceeds [***], up to a maximum increase (pursuant to this SectionΒ 6.2.1) in the Distribution Royalty of [***] (i.e., to an aggregate maximum Distribution Royalty of [***]); and |
Β | |||
Β | 6.2.2 | Β | in circumstances where Nucryst is not manufacturing and supplying to S&N such Product pursuant to the Supply Agreement during such calendar quarter, the Distribution Royalty shall further be increased (i.e., in addition to any increase pursuant to SectionΒ 6.2.1) by [***] of Net Sales of such Product during such calendar quarter until the earlier of (i)Β MayΒ 8, 2004, and (ii)Β the first day of the calendar quarter immediately following four (4) consecutive calendar quarters during which aggregate Net Sales of all Products in the Territory equaled at least [***], whereupon the Distribution Royalty shall be increased pursuant to this SectionΒ 6.2.2 (in addition to any increase pursuant to Section 6.2.1) by [***] of Net Sales of such Product during such quarter. |
Β
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SectionΒ 6.3 Decrease in Royalties
The Distribution Royalty shall be reduced as follows:
Β | 6.3.1 | Β | βUnprotected Competitionβ means, with respect to a particular Product in a particular country in the Territory: |
Β | 6.3.1.1 | Β | the absence of any Nucryst Patent Rights in relation to such Product then in effect in such country; and |
Β | |||
Β | 6.3.1.2 | Β | a third party is marketing or Selling a product in that country, the Sale of which would infringe a Nucryst Patent Right that covers such Product if one had been in effect in that country at that time. |
Β | 6.3.2 | Β | If S&N learns of the occurrence of Unprotected Competition in a country in the Territory in relation to a particular Product, it may give written notice thereof to Nucryst and thereupon Nucryst and S&N shall negotiate in good faith for the reduction of the Distribution Royalty applicable in that country to such Product for the period of such Unprotected Competition. If either party considers these negotiations are not likely to produce a mutually satisfactory agreement, it may refer the matter to arbitration pursuant to SectionΒ 13.4. In no event shall the Distribution Royalty with respect to such Product in such country be reduced by more than [ * * * ] (i.e., if pursuant to SectionsΒ 6.1 and 6.2 the Distribution Royalty was [ * * * ], the maximum reduction pursuant to this SectionΒ 6.3.2 would be to reduce such Distribution Royalty to [ * * * ] on account of that or any other Unprotected Competition in that country with respect to such Product. The reduction in the Distribution Royalty shall apply only to that Product in that country for the period of such Unprotected Competition. No increases in the Distribution Royalty that would otherwise apply pursuant to SectionΒ 6.2.1 shall apply thereafter with respect to such Product in such country for the period of such Unprotected Competition, The arbitrator shall take into account all factors relating to the market for such Product for that country, including without limitation, the market share of the competitor. |
Β | |||
Β | 6.3.3 | Β | If S&N is unable to make an acceptable (industry standard) Gross Profit Margin in relation to the Sale of a particular Product in the Territory, Nucryst agrees to negotiate in good faith with S&N to address possible solutions to such issue in relation to such Product. However, in the event that no agreement is reached between S&N and Nucryst as a result of such negotiations, the subject matter of this Section may not be submitted by either party to dispute resolution under SectionΒ 13.4 or otherwise. |
Β | |||
Β | 6.3.4 | Β | With respect to the Sale of a particular Product in the United States (or other country in the Territory (i)Β with βstep-downβ requirements similar to those in the United States and (ii)Β in which there existed at the relevant time Nucryst Patent Rights covering such Product) following the expiration or other |
Β
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termination of the last of the Nucryst Patent Rights covering such Product in such country
(i.e., all Nucryst Patent Rights in any way covering such Product in such country have expired or
otherwise terminated including, without limitation, rights included in the Nucryst Patent Rights
which may have application to, for example, the manufacture of such Product as well as other
products), the Distribution Royalty applicable to the Net Sales of such Product in such country
shall be reduced by [ * * * ] of the then current Distribution
Royalty upon the expiration or other termination of the last of the Nucryst Patent Rights covering
such Product in such country (i.e., if pursuant to SectionsΒ 6.1 and 6.2 the Distribution Royalty
was [ * * * ], such Distribution Royalty in the circumstances specified in this Section
6.3.4 would be reduced to [ * * * ]).
SectionΒ 6.4 Event Milestone Payments
In consideration for Nucryst agreeing to grant S&N a license for the use in the manner specified in
this Agreement of the Nucryst Technology and in addition to the royalty payments provided for in
SectionΒ 6.1 and the sales milestone payments provided for in SectionΒ 6.5 of this Agreement, S&N
shall pay to Nucryst Biomedical Inc., in the United States, the following milestone payments within
[ * * * ] of the occurrence of the applicable event specified below:
Β | 6.4.1 | Β | three million dollars ($3,000,000) to be paid by X.X. Xxxxx & Nephew Limited upon receipt by S&N of notice of the granting of the first [ * * * ]; |
Β | |||
Β | 6.4.2 | Β | one million dollars ($1,000,000) to be paid by X.X. Xxxxx & Nephew Limited upon the 90Β day anniversary of the first [ * * * ]. For clarification, only one such payment shall be made; and |
Β | |||
Β | 6.4.3 | Β | [ * * * ] to be paid by Xxxxx & Nephew, Inc. upon receipt of the [ * * * ] and the commercial launch and offer for Sale of the Product that is the subject of the [ * * * ]. |
All event milestone payments made by S&N under this SectionΒ 6.4 are non-refundable to S&N.
SectionΒ 6.5 Sales Milestone Payments
Β | 6.5.1 | Β | Subject to SectionΒ 6.5.2, in consideration for Nucryst agreeing to grant S&N a license for the use in the manner specified in this Agreement of the Nucryst Technology and in addition to the royalties provided for in SectionΒ 6.1 and the event milestone payments provided for in SectionΒ 6.4, S&N shall pay to Nucryst the following sales milestone payments within fifteen (15)Β days of achieving each such sales milestone: |
Β | 6.5.1.1 | Β | five million dollars ($5,000,000) upon Net Sales in any four (4)Β consecutive calendar quarters for all Products in the Territory |
Β
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exceeding
for the first time [***];
Β | 6.5.1.2 | Β | five million dollars ($5,000,000) upon Net Sales in any four (4)Β consecutive calendar quarters for all Products in the Territory exceeding for the first time [***]; |
Β | |||
Β | 6.5.1.3 | Β | five million dollars ($5,000,000) upon Net Sales in any four (4)Β consecutive calendar quarters for all Products in the Territory exceeding for the first time [***]; |
Β | |||
Β | 6.5.1.4 | Β | [***] upon Net Sales in any four (4)Β consecutive calendar quarters for all Products in the Territory exceeding for the first time [***]; |
Β | |||
Β | 6.5.1.5 | Β | [***] upon Net Sales in any four (4)Β consecutive calendar quarters for all Products in the Territory exceeding for the first time [***]; and |
Β | |||
Β | 6.5.1.6 | Β | [***] upon Net Sales in any four (4)Β consecutive calendar quarters for all Products in the Territory exceeding for the first time [***]. |
For clarification, each of S&Nβs sales milestone payments identified in this SectionΒ 6.5 shall be
made only once for the stated sales milestone triggering event. However, more than one (1)Β sales
milestone may be achieved in a particular four consecutive quarter time period, in which case (if
not previously paid) each such sales milestone payment shall be made by S&N to Nucryst. All sales
milestone payments made by S&N under this SectionΒ 6.5 are non-refundable to S&N.
Β | 6.5.2 | Β | The sales milestone payments provided for in SectionΒ 6.5.1 shall be apportioned between Canada, the United States, and the remaining countries in the Territory based on the ratio that Net Sales in Canada, the United States, and the remaining countries in the Territory, as applicable, for such Products bear to Net Sales for all countries in the Territory and shall be paid in the same manner as the royalties specified in SectionΒ 6.1. |
SectionΒ 6.6 Sales Report
Within forty-five (45)Β days after the end of each calendar quarter during the Term, S&N shall
provide Nucryst with a detailed report consistent with GAAP and the accounting records and
principles of S&N showing in reasonable detail on a Product-by-Product basis (unless, for the
purposes of the royalty calculations in SectionsΒ 6.1, 6.2 or 6.3 another basis is required in order
Β
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to calculate such royalty, in which case S&N shall provide the detailed report on that
other basis):
Β | 6.6.1 | Β | the number of units of such Product sold during such calendar quarter; |
Β | |||
Β | 6.6.2 | Β | to the extent practicable, the total xxxxxxxx for such Product during such calendar quarter; |
Β | |||
Β | 6.6.3 | Β | to the extent practicable, the deductions applicable to the determination of Net Sales with respect to such Product during such calendar quarter; |
Β | |||
Β | 6.6.4 | Β | the Net Sales with respect to such Product during such calendar quarter; |
Β | |||
Β | 6.6.5 | Β | the average sales price of and Gross Profit Margin associated with such Product during such calendar quarter; and |
Β | |||
Β | 6.6.6 | Β | the total royalties due and the basis of the calculation thereof. |
Within ninety (90)Β days after the end of each calendar year during the Term, S&N shall provide
Nucryst with a detailed report consistent with GAAP and the accounting records and principles of
S&N showing in reasonable detail on a Product-by-Product and country-by-country basis.
SectionΒ 6.7 Records and Audits
S&N will keep and maintain proper and complete records and books of account in such form and
detail as is necessary for the determination of the amounts payable by S&N (on behalf of itself and
its Affiliates and permitted licensees and distributors) to Nucryst under this Agreement and S&N
shall during normal business hours upon fifteen (15)Β days prior notice from Nucryst make those
records available for audit by a nationally recognized accounting firm designated by Nucryst
(except one to which S&N shall have objection, acting reasonably) for the sole purpose of, and S&N
will only be required to disclose information related to, verifying such payments, revenues, Net
Sales, Gross Profit Margins, costs, expenses and deductions and the correctness of calculations and
classifications in respect thereof. S&N shall preserve such records made in any calendar year for a
period of seven (7)Β years following the close of that calendar year. In the event that such audit
discloses that the actual royalties or other amounts payable by S&N to Nucryst are greater than the
royalties or other amounts paid by S&N, then S&N shall pay to Nucryst any additional royalties and
other amounts based on the results disclosed by such audit plus interest as provided for in Section
6.10. In the event that such audit discloses that the actual royalties or other amounts payable by
S&N to Nucryst pursuant to this ArticleΒ 6 are less than the royalties or other amounts paid by S&N,
then Nucryst shall reimburse S&N for any such overpayment based on the results disclosed by such
audit less Nucrystβs reasonable costs of such audit. The cost of such audit shall be borne by
Nucryst unless such audit discloses that the actual royalties and other amounts payable by S&N to
Nucryst are greater by five percent (5%) or more than the royalties and other amounts paid by S&N,
or such audit discloses that the actual royalties and other amounts payable by S&N to Nucryst are
less than the royalties and other amounts paid by S&N, in which cases S&N shall be responsible for
payment of all reasonable costs of such audit to a maximum of the amount of any overpayment by S&N
to Nucryst due to an incorrect calculation of royalties and other amounts payable by S&N and
Nucryst shall be
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responsible for payment of all other costs of such audit. Notwithstanding the foregoing,
Nucryst shall not have the right to conduct more than once, for the same purpose, an audit of the
same information, books and records, whether under this Agreement or the Supply Agreement;
provided, however that if any such audit discloses that the actual royalties or other amounts
payable by S&N to Nucryst hereunder was calculated incorrectly such that a payment by S&N or a
reimbursement by Nucryst is required pursuant to this SectionΒ 6.7, then Nucryst shall have a
further right to audit the same information, books and records for the same purpose until such
time as no further errors are found.
SectionΒ 6.8 Currency and Conversion
All payments made under this Agreement shall be in United States dollars. With respect to any
payment based on Net Sales Revenue made in a currency other than U.S. dollars, S&N shall convert
such Net Sales Revenue to U.S. dollars using the applicable average rate of exchange for U.S.
dollars for the prior quarter quoted as local currency per US $1, published in The Financial Times
(London edition).
SectionΒ 6.9 Bank Accounts
All payments hereunder shall be made by wire transfer of immediately available funds to such
bank account as may be designated in writing from time to time by Nucryst.
SectionΒ 6.10 Late Payments
Any late payments of any nature made under this Agreement shall bear interest, running from
the date such payment was due until such payment is made, at a rate per annum equal to the average
thirty (30)Β day U.S. dollar LIBOR rate (as published from time to time by Reuters) [***].
SectionΒ 6.11 Set-Off
If pursuant to any of the terms of this Agreement, or any other agreement or instrument
contemplated in this Agreement, including, without limitation, the Transition Services Agreement,
the Asset Purchase Agreement or the Supply Agreement, it is determined pursuant to the dispute
resolution procedure in SectionΒ 13.4 or otherwise by an unappealable decision of a court of law,
that a party owes any amount to the other or to an Affiliate of the other, then without limiting or
waiving, in any respect, any rights or remedies of the other party, the other party shall have the
right to set-off the aggregate amount of such amount owing against, and apply it in full or partial
satisfaction of, any amounts payable by the other party or an Affiliate of the other party,
pursuant to the terms of this Agreement or any other agreement or instrument contemplated in this
Agreement, including, without limitation, the Transition Services Agreement, the Asset Purchase
Agreement or the Supply Agreement.
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ARTICLE 7
CONFIDENTIALITY
CONFIDENTIALITY
SectionΒ 7.1 Confidentiality
The parties to this Agreement recognize that from time to time one party may disclose to another
party(ies) information which is of a confidential nature (βConfidential Informationβ) and it is
therefore agreed that:
Β | 7.1.1 | Β | Except as otherwise expressly authorized in writing by the discloser or specifically provided for in this Agreement, all Confidential Information of the disclosing party shall be held in strict confidence by the receiving party and the receiving party shall employ or cause to be employed diligent efforts and reasonable care in order to ensure that such Confidential Information is not made available to any third party, excepting only as required under this Agreement or to the directors, officers, employees, agents and consultants of the receiving party whose duties require disclosure of the same or as expressly authorized in writing and then (in any such case) only if the parties to whom such Confidential Information is being disclosed have given to the disclosing party an enforceable undertaking (in a form of contract used by the disclosing party in its normal course of business and that that deals with equivalently sensitive information) not to disclose such Confidential Information to any other party. |
Β | |||
Β | 7.1.2 | Β | Subject to SectionΒ 7.1.3, Confidential Information shall not include information that is in the public domain at the time of disclosure, that the recipient can demonstrate based on written records was lawfully already in its possession, that is approved in writing for release by the discloser or that is obtained by any party to this Agreement from a third party without obligation of confidence (provided, however, that no third party from which the information is obtained has any obligation of confidence to any parties to this Agreement) or that becomes public knowledge otherwise than through the fault of the recipient or any Person to whom it has disclosed the Confidential Information. |
Β | |||
Β | 7.1.3 | Β | Disclosure of Confidential Information shall not be precluded if such disclosure is in response to a valid order of a court or other governmental body or of any political subdivision thereof or is otherwise required to be disclosed by law. Notwithstanding the foregoing, in the event that a party is required to make a disclosure of the other partyβs Confidential Information pursuant to this SectionΒ 7.1.3, it will, except where impractical, give reasonable advance written notice to the other party of such disclosure and use reasonable commercial efforts to secure confidential treatment of such information. |
Β | |||
Β | 7.1.4 | Β | Confidential Information that is specific shall not be deemed to be within the public domain merely because it is embraced by general knowledge in the public domain. Further, any Confidential Information dealing with any |
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combination of features of a specific matter shall not be deemed to be
within the public domain, unless the combination of features and the principle
of operation are in the public domain.
Β | 7.1.5 | Β | Each party to this Agreement shall, upon the termination of this Agreement, return all corporeal Confidential Information to the owner of such Confidential Information with a written undertaking that no copies (electronic or otherwise) have been retained, except that the receiving party may retain one (1)Β copy in its legal files solely to allow it to monitor its obligations hereunder. |
Β | |||
Β | 7.1.6 | Β | Each of the parties to this Agreement acknowledges that the other party to this Agreement would suffer irreparable harm as a result of the breach of any of the non-disclosure and confidentiality obligations set forth in this SectionΒ 7.1 and that legal remedies are inadequate; therefore, each of the parties to this Agreement agrees that, in addition to any damages and other remedies that the other party to this Agreement may be entitled to as a result of such a breach, the other party to this Agreement shall be entitled to seek an order from a court of competent jurisdiction restraining such party from breaching or continuing to breach any of the provisions of this SectionΒ 7.1. |
Β | |||
Β | 7.1.7 | Β | The covenants of the parties under this SectionΒ 7.1 shall continue in full force and effect notwithstanding the termination of this Agreement by effluxion of time or otherwise. |
SectionΒ 7.2 No Disclosure
Except as required by law or any applicable regulatory authority or as otherwise provided herein,
the parties agree that the existence of this Agreement and the contents of this Agreement shall
not be disclosed to any third party without the prior written consent of the other parties.
Notwithstanding the foregoing, in the event that a party is required to make a disclosure of the
other partyβs Confidential Information pursuant to this SectionΒ 7.2, it will, except where
impractical, give reasonable advance written notice to the other party of such disclosure and use
reasonable commercial efforts to secure confidential treatment of such information.
SectionΒ 7.3 Press Releases
Except as required by law or any applicable regulatory authority, any press releases or public
statements relating to this Agreement or the subject matter hereof shall prior to being released
or made final be provided to the other party for comment in a timely manner.
ARTICLE 8
INVENTIONS AND PATENTS
INVENTIONS AND PATENTS
SectionΒ 8.1 Joint Improvements
All inventions, discoveries, improvements or other technology to the extent specifically applicable
in the Field and all processes or uses relating thereto, which are capable of protection as
proprietary intellectual property, that arise after the Original Effective Date as a result of
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conduct under this Agreement (including the Original Agreement) (βImprovementsβ) made jointly
by employees or others acting on behalf of Nucryst and S&N (the βJoint Improvementsβ) shall be
jointly owned by Nucryst and S&N, each to an undivided one-half interest, and shall be managed in
accordance with SectionΒ 8.6.
SectionΒ 8.2 Nucryst Improvements
Improvements made solely by employees of Nucryst in the course of their employment or others acting
on behalf of Nucryst who have assigned their rights with respect thereto to Nucryst (the βNucryst
Improvementsβ) shall be owned solely by Nucryst and, to the extent applicable, shall be subject to
the license granted to S&N in ArticleΒ 2. Nucryst shall have the first right to file, prosecute, and
maintain patent protection for Nucryst Improvements. If Nucryst at any time during the Term fails
to file, prosecute or maintain patent protection in any jurisdiction for a Nucryst Improvement that
has specific application within the Field in circumstances where S&N has agreed to develop, market
and sell a Product utilizing such Nucryst Improvement and has so advised Nucryst in writing, S&N
shall, upon thirty (30)Β days prior written notice to Nucryst, have the right (if Nucryst does not
agree to file, prosecute or maintain such patent protection in such jurisdiction during such thirty
(30)Β day period), on behalf of Nucryst, to file, prosecute, and maintain at S&Nβs own cost, patent
protection for that Nucryst Improvement in that jurisdiction and Nucryst shall cooperate with S&N
with respect thereto, including the execution and delivery of any further instruments or documents
and taking all such further actions and providing all such further information as S&N may
reasonably request in that regard.
SectionΒ 8.3 S&N Improvements
Improvements made solely by employees or others acting on behalf of S&N (the βS&N
Improvementsβ) shall be owned solely by S&N and may be used or practiced by S&N within and outside
the Field. If any such S&N Improvement is required by Nucryst for purposes of this Agreement or
the Supply Agreement or to develop, manufacture or produce Products, then S&N shall be deemed to
have granted to Nucryst a fully paid, royalty free and perpetual license to use such S&N
Improvement for that purpose. S&N shall have the first right to file, prosecute and maintain
protection for S&N Improvements. If S&N at any time fails to file, prosecute or maintain patent
protection in any jurisdiction for an S&N Improvement, Nucryst shall, upon thirty (30)Β days prior
written notice to S&N, have the right (if S&N does not agree to file, prosecute or maintain such
patent protection in such jurisdiction during such thirty (30)Β day period), on behalf of S&N, to
file, prosecute, and maintain at Nucrystβs own cost, patent protection for that S&N Improvement in
that jurisdiction and S&N shall cooperate with Nucryst with respect thereto, including the
execution and delivery of any further instruments or documents and taking all such further actions
and providing all such further information as Nucryst may reasonably request in that regard.
SectionΒ 8.4 Determination of Inventorship
Inventorship shall be determined in accordance with the U.S. patent law rules and inventorship
shall determine whether or not an Improvement is made solely by employees or others acting on
behalf of Nucryst or on behalf of S&N.
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SectionΒ 8.5 Invention Disclosure
Nucryst shall promptly disclose to S&N and S&N shall promptly disclose to Nucryst details of any
Joint Improvements, Nucryst Improvements or S&N Improvements, as the case may be, which such party
has developed and such details shall be treated as Confidential Information.
SectionΒ 8.6 Independent Use of Joint Improvements
Β | 8.6.1 | Β | In circumstances where S&N ceases to have exclusivity pursuant to this Agreement (for Products other than Acticoat Product and Acticoat 7 Product in Canada and the United States), without the duty to account or report to S&N and without S&Nβs consent, Nucryst may use any Joint Improvement that relates to the manufacture or production of any substance coated with nanocrystalline silver or the process of coating any substance with nanocrystalline silver whether such activity is within or outside the Field, provided that Nucryst shall not use any such Joint Improvement in any activity that relates to the design or configuration (e.g., combination of materials, (or processes to achieve such combination) shape, size and physical specifications) of any Product that S&N had in the commercial market or in active development when it lost its exclusivity pursuant to this Agreement, provided such design or configuration is inventive and is not trivial, obvious or in the public domain. For clarification, this proviso is not intended to stop Nucryst from simply coating a product of a competitor of S&N so long as Nucryst does not use any such design or configuration developed in collaboration with S&N as aforesaid. |
Β | |||
Β | 8.6.2 | Β | Without the duty to account or report to Nucryst and without Nucrystβs consent, S&N may use any Joint Improvement in relation to the design and configuration (as described and qualified in SectionΒ 8.6.1) of any Product inside or outside the Field. |
SectionΒ 8.7 Prosecution and Maintenance of Joint Patents
Β | 8.7.1 | Β | Filing, Prosecution and Maintenance. S&N shall have the primary right, but not the obligation, to assume, with respect to each Joint Improvement, the responsibility for filing, prosecuting and maintaining patent applications with respect to such Joint Improvements. If S&N at any time fails to file, prosecute or maintain patent protection in any jurisdiction for a Joint Improvement, Nucryst shall, upon thirty (30)Β days prior written notice to S&N, have the right to file, prosecute and maintain patent protection for that Joint Improvement in that jurisdiction. Unless otherwise agreed in writing, all reasonable costs incurred with respect to the filing, prosecution and maintenance of patent applications and patents covering Joint Improvements, including fees and expenses of patent counsel, shall be borne equally by the parties. Notwithstanding that one party may be delegated responsibility for filing, prosecuting and maintaining patent applications with respect to a particular Joint Improvement, the other party must approve in writing the taking of any |
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material action with respect thereto including without limitation approving
any patent application prior to filing. Both Nucryst and S&N shall have the
right to participate fully in the formation and implementation of patent
strategies for such Joint Improvements. Failing agreement, S&N shall have the
right to conduct the filing, prosecution and maintenance of any such patents or
patent applications (and any material action in relation thereto) at its own
cost.
Β | 8.7.2 | Β | Cooperation. Each party shall make available to the other party or its authorized attorneys, agents or representatives, its employees, agents or consultants necessary or appropriate to enable the appropriate party to file, prosecute and maintain patent applications and resulting patents with respect to all Joint Improvements, for a period of time sufficient for such party to obtain the assistance it needs from such personnel. All reasonable costs incurred by either party in providing such cooperation shall be shared by the parties as provided in Section 8.7.1. |
SectionΒ 8.8 No Waiver
For the avoidance of doubt, by entering into this Agreement, and subject to the licenses granted
in this Agreement, neither party waives or forfeits any of its rights to any intellectual property
that it owns and that exists at or after the Original Effective Date.
ARTICLE 9
PATENT INFRINGEMENT
PATENT INFRINGEMENT
SectionΒ 9.1 Infringement by Third parties
Β | 9.1.1 | Β | Notification. If either party becomes aware of any facts that indicate the likelihood that any intellectual property in any Product, Acticoat Trade-xxxx, Nanocrystalline Marks, or Joint Improvement is being infringed by any Person, or if any Person wrongfully engages in any activity in the Territory that is covered by the Nucryst Technology, that party shall inform the other party in writing of those facts in reasonable detail. |
Β | |||
Β | 9.1.2 | Β | Initiate Proceedings. If the perceived infringing activity relates primarily to an activity within the Field, then S&N shall have the primary right, but not the obligation, to initiate, prosecute and control any action or proceeding with respect to such perceived infringement at its own cost, provided that if S&N fails to initiate proceedings and attend to remedy such infringement within ninety (90)Β days of receiving written notice of such infringement then Nucryst may bring and control any such action. Otherwise Nucryst shall have the primary right but not the obligation, to initiate, prosecute and control any action or proceeding with respect to any such infringement at its own cost, provided that if Nucryst fails to initiate proceedings or attend to remedy such infringement within ninety (90)Β days of receiving written notice of such infringement then S&N may bring and control any such action. In either case if one party initiates proceedings and attends to remedy such infringement then |
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it shall keep the other party informed with respect to such proceedings
and shall permit the other party to participate in all material discussions
concerning such proceedings and the other party shall cooperate and give
reasonable assistance in this regard to the party.
Β | 9.1.3 | Β | Distribution of Awards. Any monetary award received as a result of proceedings contemplated by this SectionΒ 9.1 shall be first used to compensate: |
Β | 9.1.3.1 | Β | the party who has primary control over the action for its costs relating to the action; and |
Β | |||
Β | 9.1.3.2 | Β | the other party for its costs relating to the action. |
Any award monies remaining after such reimbursement shall be paid to the party
who had primary conduct of the action, provided that if S&N is that party, then
such amounts shall be deemed to be Net Sales received in the quarter in which
such amount is received by S&N.
However, if both parties took primary conduct of the action, then such amount
shall be divided equally between the parties.
Β | 9.1.4 | Β | Voluntary Disposition. No settlement or consent judgment or other voluntary final disposition of a suit under this SectionΒ 9.1 may be entered into by either party without the prior consent of the other party, such consent not to be unreasonably withheld. |
SectionΒ 9.2 Claims Against Nucryst Technology and Joint Technology
Β | 9.2.1 | Β | Notice. |
Β | 9.2.1.1 | Β | If a third party asserts that a patent or other right owned by it is infringed by Nucrystβs and/or S&Nβs use in the manner prescribed in this Agreement of any Nucryst Technology, the party first obtaining knowledge of such claim shall immediately provide the other party with written notice of such claim and the related facts as are then known, in reasonable detail. Nucryst shall have the obligation to control the defence and settlement of any such claim in relation to the Nucryst Technology. If Nucryst fails to assume the control and settlement of any such claim within ninety (90)Β days of receiving written notice thereof, then S&N may control the defence and settlement of such action. The controlling party shall keep the non-controlling party fully informed with respect to all matters in relation to such claim and shall consult with the non-controlling party in relation to all material decisions concerning such claim and the defence thereof. The non-controlling party agrees to cooperate and provide reasonable assistance in defending such claims. No settlement shall be entered into without the prior |
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written consent of the other party, such consent not to be
unreasonably withheld.
Β | 9.2.1.2 | Β | If a third party asserts that a patent or other right owned by it is infringed by the use, in the manner prescribed in this Agreement, of any Joint Improvements, the party first obtaining knowledge of such claim shall immediately provide the other party with written notice of such claim and the related facts as are then known, in reasonable detail. S&N shall have the primary right, but not the obligation, to control the defence and settlement of any such claim. If S&N fails to assume the control and settlement of any such claim within ninety (90)Β days of receiving written notice thereof, then Nucryst may control the defence and settlement of such action. The controlling party shall keep the non-controlling party fully informed with respect to all matters in relation to such claim and shall consult with the non-controlling party in relation to all material decisions concerning such claim and the defence thereof. The non-controlling party agrees to cooperate and provide reasonable assistance in defending such claims. No settlement shall be entered into without the prior written consent of the non-controlling party, such consent not to be unreasonably withheld. |
Β | 9.2.2 | Β | Damages |
Β | 9.2.2.1 | Β | After complying fully with the procedures set forth in SectionΒ 9.2.1, any damages or other payments that result from a claim of infringement as specified in SectionΒ 9.2.1 or that are required to be paid as a result of reaching a settlement with a third party in the manner prescribed in SectionΒ 9.2.1 or is the result of a judgment from a competent court (which is unappealable or with respect to which the appeal period has expired) shall be paid: |
Β | 9.2.2.1.1 | Β | to the extent that the infringement relates primarily to the Nucryst Technology as at the Original Effective Date, by Nucryst; |
Β | |||
Β | 9.2.2.1.2 | Β | to the extent that the infringement relates primarily to the combination by S&N of Nucryst Technology with technology possessed by S&N or another Person, by S&N; or |
Β | |||
Β | 9.2.2.1.3 | Β | to the extent that the infringement relates primarily to a Joint Improvement or to any Improvement included as part of the Nucryst Technology after the Original Effective Date, equally by S&N and Nucryst. |
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Finally, the reasonable costs and expenses of Nucryst and S&N in defending
and settling any such action shall be also dealt with accordingly.
ARTICLE 10
INDEMNIFICATION
INDEMNIFICATION
SectionΒ 10.1 Indemnification by Nucryst
Nucryst shall indemnify and hold S&N (its affiliates and their respective officers, directors,
shareholders, employees, agents and their successors and permitted assigns) (collectively the βS&N
Indemniteesβ) free and harmless from any claims, demands, liabilities, losses, actions or causes
of actions, and any and all expenses associated therewith (including without limiting the
generality of the foregoing, reasonable defence costs and legal fees), arising out of or in
connection with, or that are the result of, or are otherwise related to: (i)Β any claim, suit,
proceeding or cause of action against any of the S&N Indemnitees alleging physical injury
(including death) or property damage as a result of the acts or omissions of Nucryst or its
officers, directors, shareholders, employees or agents, except to the extent attributable to any
one or more of the S&N Indemnitees; (ii)Β any failure of Nucryst to perform, in whole or in part,
any covenants or obligations under this Agreement (including the Original Agreement), except to
the extent attributable to any one or more of the S&N Indemnitees; (iii)Β Nucrystβs non-compliance
with any applicable national, federal, provincial or state laws or regulations, except to the
extent attributable to any one or more of the S&N Indemnitees; (iv)Β for the period specified in
SectionΒ 13.10, any breach by Nucryst of any of its representations or warranties under this
Agreement (including the Original Agreement). The liability of the parties included in the
definition βNucrystβ shall be joint and several.
SectionΒ 10.2 Indemnification by S&N
S&N shall indemnify and hold Nucryst (its affiliates and their respective officers, directors,
shareholders, employees, agents and their successors and permitted assigns) (collectively the
βNucryst Indemniteesβ) free and harmless from any claims, demands, liabilities, losses, actions or
causes of actions, and any and all expenses associated therewith (including without limiting the
generality of the foregoing, reasonable defence costs and legal fees), arising out of or in
connection with, or that are the result of, or are otherwise related to: (i)Β any claim, suit,
proceeding or cause of action against any of the Nucryst Indemnitees alleging physical injury
(including death) or property damage as a result of the acts or omissions of S&N or its officers,
directors, shareholders, employees or agents, except to the extent attributable to any one or more
of the Nucryst Indemnitees; (ii)Β any failure of S&N to perform, in whole or in part, any covenants
or obligations under this Agreement (including the Original Agreement), except to the extent
attributable to any one or more of the Nucryst Indemnitees; (iii)Β S&Nβs non-compliance with any
applicable national, federal, provincial or state laws or regulations, except to the extent
attributable to any one or more of the Nucryst Indemnitees; (iv)Β for the period specified in
SectionΒ 13.10, any breach by S&N of any of its representations or warranties under this Agreement
(including the Original Agreement); or (v)Β S&Nβs marketing and Sale of Product, except to the
extent attributable to any one or more of the Nucryst Indemnities. The liability of the parties
included in the definition βS&Nβ shall be joint and several.
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SectionΒ 10.3 Infringement Indemnification
In the event of any action or threatened action against S&N in which it is asserted that the Sale
of any Product infringes a copyright, patent, or other industrial property right, S&N shall
promptly notify Nucryst of such action or threatened action. If a court of competent jurisdiction
upholds the infringement action in a judgment that has become incapable of appeal, or if an
injunction has been granted, Nucryst shall use reasonable commercial efforts to:
Β | 10.3.1 | Β | procure the right for S&N to continue Selling the allegedly infringing Product; or |
Β | |||
Β | 10.3.2 | Β | replace or modify the Product, as the case may be, so that it becomes non- infringing but has substantially equivalent capabilities as the infringing technology. |
Without limiting or waiving, in any respect, any rights or remedies of S&N or any Affiliate of S&N
in any other Section of this Agreement, if as a result of an infringement claim in relation to the
Products other than New Products or solely to the Nucryst Technology incorporated into any New
Product, then (a)Β S&N is required to pay any damages it shall be entitled to recover such damages
from Nucryst, or (b)Β S&N is required to pay any royalty to the claimant for ongoing rights to
permit continued sale of the Product, S&N shall be entitled to deduct such damages or royalties
from the amount payable to Nucryst under this Agreement (including the Original Agreement), this,
in addition to any application of SectionΒ 6.3, being the sole remedy for recovery of such damages
or royalties unless Nucryst has breached any representation given to S&N in SectionΒ 12.7.1 in
respect of the said infringement.
SectionΒ 10.4 Procedure
The indemnified party shall give prompt written notice to the indemnifying party(ies) of any
suits, claims or demands by third parties (βClaimβ) which may give rise to any loss for which
indemnification may be required under this ArticleΒ 10, provided, however that failure to give such
notice shall not impair the obligation of the indemnifying party to provide indemnification
hereunder except if and to the extent that such failure materially impairs the ability of the
indemnifying party to defend the Claim. The indemnifying party shall be entitled to assume the
control, defence and settlement of any Claim or demand of any third party at its own cost and
expense; provided, however, that the other party shall have the right to be represented by its own
counsel at its own cost in such matters. In the event that the indemnifying party shall decline to
assume control of any such Claim, the party entitled to indemnification shall be entitled to
assume such defence of, and settle such Claim, all at the sole cost and expense of the
indemnifying party. Neither the indemnifying party nor the indemnified party shall settle or
dispose of any such matter in any manner which would adversely impact the rights and interests of
the other party without the prior written consent of the indemnified party, which shall not be
unreasonably withheld. Each party shall cooperate with the other party and its counsel in the
course of the defence of any such Claim, such cooperation to include using reasonable efforts to
provide or make available documents, information and witnesses.
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ARTICLE 11
TERM AND TERMINATION
TERM AND TERMINATION
SectionΒ 11.1 Term
This Agreement shall come into force and replace and supercede the Original Agreement on
the Effective Date. However, the term of this Agreement (βTermβ) shall be deemed to have commenced
on the Original Effective Date and shall continue until the date which is the twenty-fifth
(25th) anniversary of the Original Effective Date, unless sooner terminated pursuant to
SectionΒ 11.2 or by mutual written agreement of Nucryst and S&N (effective as of the time specified
in such written agreement).
SectionΒ 11.2 Early Termination
Upon the happening of any of the following events with respect to a party:
Β | 11.2.1 | Β | such party defaults in the due and punctual payment of any amount payable under this Agreement, when and as due, and such default continues for a period of thirty (30)Β days or such longer period as the non-default party may agree to in writing after written notice thereof has been received by such party from the non-defaulting party; |
Β | |||
Β | 11.2.2 | Β | fails to perform or observe in any material respect any material covenant, condition or provision of, or fails to rectify a material breach of, this Agreement, and such default continues for a period of forty-five (45)Β days (or such longer period as the non-defaulting party may agree to in writing) after written notice thereof has been received by such party from the non-defaulting party; |
Β | |||
Β | 11.2.3 | Β | such party ceases to carry on business, or takes any action to liquidate its assets, stops making payments in the usual course of business, or voluntarily suspends for more than twenty (20)Β business days all or substantially all of its business operations, other than suspensions of a temporary nature resulting from Force Majeure; |
Β | |||
Β | 11.2.4 | Β | such party institutes proceedings to be adjudicated a bankrupt or insolvent or to be wound-up, or consents to the institution of bankruptcy, insolvency or winding-up proceedings against it, or files a petition, answer or consent seeking dissolution or winding up under any bankruptcy, insolvency or analogous laws, or if any such proceedings are commenced in respect of the party and are not being contested in good faith (and with the intended result of such contestation being to suspend any adverse effect of such proceeding on the rights of the party hereunder) within thirty (30)Β days after the other party becomes aware thereof or if the other party consents to the filing of any such petition or to the appointment of a receiver over its business and assets generally or makes a general assignment for the benefit of creditors, or admits in writing its inability to pay its debts generally as they become due; |
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Β | 11.2.5 | Β | such party institutes proceedings under the Companiesβ Creditors Arrangement Act, the Bankruptcy and Insolvency Act or similar legislation or seeks or takes any proceeding relating to a compromise or arrangement with creditors or claimants generally; |
Β | |||
Β | 11.2.6 | Β | a custodian, receiver, manager or any other Person with like powers is appointed to take charge of all or any part of such partyβs undertaking, business, property or assets; or |
Β | |||
Β | 11.2.7 | Β | an order is made or a resolution passed for the winding up or liquidation of such party, |
the non-defaulting party may immediately terminate this Agreement and the rights and licences
granted hereunder by giving a written notice to that effect to the defaulting party.
SectionΒ 11.3 Survival of Obligations and Disposition of Inventory
Such provisions of this Agreement that, by their nature, would be expected to survive termination
of this Agreement, including without limitation SectionsΒ 2.4, 4.8, 5.7, 5.8, 6.7, 11.4, 11.5 and
13.9 and Articles 7, 8, 9 and 10, shall survive any such termination. Subject to being in
compliance with all applicable laws and regulatory requirements, S&N may sell any Products which
are in S&Nβs inventory at the time of termination, provided that S&N shall pay to Nucryst the
royalties thereon (and any other payments) as required under this Agreement (including without
limitation ArticleΒ 6) and shall submit the reports required by this Agreement (including without
limitation SectionΒ 6.6), and provided further that the event giving rise to termination was not a
failure to pay.
SectionΒ 11.4 Continuing Liability
Termination of this Agreement for any reason shall not release any party from any liability,
obligation or agreement which has already accrued nor affect the survival of any provision hereof
which is expressly stated to survive such termination. Termination of this Agreement for any
reason shall not constitute a waiver or release of, or otherwise be deemed to prejudice or
adversely affect, any rights, remedies or claims, whether for damages or otherwise, which a party
may have hereunder or which may arise out of or in connection with such termination.
SectionΒ 11.5 Return of Confidential Information
Upon termination of this Agreement, each party shall return to the other all Confidential
Information of such other party that remains in its possession, except that each party shall be
entitled to retain one copy of any such information for archival purposes.
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ARTICLE 12
REPRESENTATIONS AND WARRANTIES
REPRESENTATIONS AND WARRANTIES
SectionΒ 12.1 Definition of Party
In this ArticleΒ 12, a party means one of S&N and Nucryst, and the representation or warranty shall
apply collectively and individually as appropriate, to the entities comprising each of S&N and
Nucryst respectively.
SectionΒ 12.2 Corporate Existence and Power
Each party represents and warrants to the other party that (a)Β it is a corporation duly
organized and validly existing and in good standing, under the laws of the jurisdiction of its
incorporation; (b)Β it has the corporate power and authority and the legal right to own its
property and assets, to lease the property and assets it operates under lease, and to carry on its
business as it is now being conducted; and (c)Β it is in compliance with all requirements of
applicable law, except to the extent that any non-compliance would not have a material adverse
effect on the properties, business, financial or other condition of such party and would not
materially adversely affect such partyβs ability to perform its obligations under this Agreement.
SectionΒ 12.3 Authorization and Enforcement of Obligations
Each party represents and warrants to the other party that it has the corporate power and
authority and legal right to enter into this Agreement and to perform its obligations hereunder;
and that this Agreement has been duly executed and delivered on behalf of each party and, except
as it may be limited by applicable law, constitutes a legal, valid, binding obligation, according
to its terms.
SectionΒ 12.4 Consents
Each party represents and warrants to the other party that all necessary consents, approvals and
authorizations of all governmental authorities and others required to be obtained by such party in
connection with this Agreement have been obtained.
SectionΒ 12.5 No Conflict
Each party represents and warrants to the other party that the execution and delivery of this
Agreement and the performance of such partyβs obligations hereunder do not conflict with or
violate any requirement of applicable laws or regulations, and do not conflict with, or constitute
a default under any contractual obligation of such party.
SectionΒ 12.6 Authorization of Obligations
The execution, delivery and performance by each party of this Agreement have been duly authorized
by all necessary corporate action and do not and will not (a)Β require any consent or approval of
its stockholders or any other third party that has not been received by the Effective Date, (b)
violate any provision of any law, rule, regulation, order, writ, judgment, injunction, decree,
determination or award presently in effect that have applicability to it or any provision of
Β
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its charter documents or (c)Β result in a breach of or constitute a default under any material
agreement, mortgage, lease, license, permit or other instrument or obligation to which it is a
party or by which it or its properties may be bound or affected.
SectionΒ 12.7 Nucryst Representations
Nucryst represents and warrants to S&N that as of the date of the Original Agreement:
Β | 12.7.1 | Β | That it is the owner of the Nucryst Patent Rights and that such ownership is unencumbered by any lien or security interest granted by Nucryst and, to the Knowledge of Nucryst, it is the owner of the Nucryst Know-How and that all formal requirements in connection with the maintenance and continuation of the patents included in the Nucryst Patent Rights (including the payment of fees and taxes necessary for the continued use of and/or registration thereof) have been complied with as at the Original Effective Date. Nucryst has no Knowledge of any reason why any patent included in the Nucryst Patent Rights would be held to be invalid or otherwise unenforceable, of any reason why any patent application included in the Nucryst Patent Rights would be refused or withdrawn, of any reason why any Person would claim that the production, use or sale of Products, would infringe its intellectual property rights or that any trade secret of another Person has been appropriated by Nucryst in the production or design of the Products. Nucryst has taken reasonable measures to avoid misappropriation of trade secrets or infringement of copyright. For purposes of this SectionΒ 12.7.1, it is acknowledged that βownershipβ goes to title and not to right to use or exploit, and that title does not necessarily give the right to use or otherwise exploit. |
Β | |||
Β | 12.7.2 | Β | Except for the Japanese Distribution Agreement and the Korean Distribution Agreement, Nucryst has not assigned or conveyed, as at the Original Effective Date, any interest in Nucryst Technology in existence as at the Original Effective Date licensed to S&N under this Agreement or the Supply Agreement to any third party other than S&N, or entered into any agreement or made any commitment which is inconsistent with or in derogation of the rights granted to S&N hereunder or thereunder. |
SectionΒ 12.8 Certain Covenants of Nucryst and S&N
Throughout the term of this Agreement, for the benefit of the other party, Nucryst and S&N each
shall:
Β | 12.8.1 | Β | maintain and preserve its corporate existence, rights, franchises and privileges in the jurisdictions of its formation; and |
Β | |||
Β | 12.8.2 | Β | comply in all material respects with the requirements of all applicable laws, rules, regulations and orders of any government authority to the extent necessary to perform its obligations hereunder, except for those laws, rules, regulations, and orders it may be contesting in good faith. |
Β
- 47 -
SectionΒ 12.9 S&N Representation
S&N represents and warrants to Nucryst that as of the date of the Original Agreement it has
no Knowledge of any issue concerning the invalidity of any claims of the Nucryst Patent Rights nor
does it have any Knowledge of any potential infringement by making, using and/or selling the
Products of the proprietary rights of any third parties.
SectionΒ 12.10 No Further Representations or Warranties
Except as expressly provided in this ArticleΒ 12 or any other provision of this Agreement, neither
party makes any representation or warranty of any kind to the other party, express or implied.
SectionΒ 12.11 Knowledge
βKnowledgeβ of S&N shall be the actual knowledge of Xxxxxxx Xxxx, Xxxxx Xxxxxxx, Xxxxxx
Xxxxxx and Xxx Xxxxx, after reasonable inquiry. βKnowledgeβ of Nucryst shall be the actual
knowledge of Xxxxx Xxxx, Xxxxx Xxxxxx and Xxxxxxx Xxxxxxxx, after reasonable inquiry.
ARTICLE 13
MISCELLANEOUS
MISCELLANEOUS
SectionΒ 13.1 Force Majeure
Β | 13.1.1 | Β | Means an event, the cause of which is beyond the reasonable control of the party affected thereby and which could not reasonably have been foreseen and provided against, including, without limitation, acts of God, strikes, lock-outs or other labour or industrial disturbances, accidents, fires, explosions, weather conditions materially affecting or preventing work, inability to secure fuel, power, materials, contractors or labour, mechanical breakdown, failure of equipment or machinery, delays in transportation, wars, civil commotion, riot, sabotage, interruptions by government, court orders, or orders or rulings by regulatory bodies; provided that an event caused by or materially contributed to by a partyβs financial difficulty shall not be included as a force majeure event. |
Β | |||
Β | 13.1.2 | Β | Notwithstanding any other provision of this Agreement, if by reason of Force Majeure, either party is wholly or partly unable to perform certain of its obligations under this Agreement, it shall be relieved of those obligations to the extent, and for the period, that it is affected by Force Majeure, provided that the affected party gives the other party prompt notice of such inability and nature, cause and expected duration of the Force Majeure. The party affected by Force Majeure shall use all reasonable efforts to remedy the situation and remove, so far as possible and with reasonable dispatch, the cause of its inability to perform, provided that there shall be no obligation on a party so affected to settle labour disputes or to test or to refrain from testing the validity of any order, regulation or law in any court having jurisdiction. The party affected by Force Majeure shall give prompt notice of the cessation and the cause thereof, and shall provide reports at least every seven (7)Β days as to its |
Β
- 48 -
progress in dealing with the Force Majeure. Should the Force Majeure event
continue for a period longer than thirty (30)Β business days, the party shall no
longer be relieved of its obligations under this Agreement.
SectionΒ 13.2 Notice
Any notice or other communication required or permitted to be given hereunder shall be in
writing and shall be delivered in Person, transmitted by facsimile or similar means of recorded
electronic communication or sent by registered mail, charges prepaid, addressed as follows:
if to S&N:
Xxxxx & Nephew, Inc.
00000 Xxxxxxx Xxxx
X.X. Xxx 0000
Xxxxx, Xxxxxxx, 00000-0000
Attention: President
Facsimile: (000)Β 000-0000
00000 Xxxxxxx Xxxx
X.X. Xxx 0000
Xxxxx, Xxxxxxx, 00000-0000
Attention: President
Facsimile: (000)Β 000-0000
with a copy to:
Xxxxx & Nephew, Inc.
0000 Xxxxxx Xxxx
Xxxxxxx, Xxxxxxxxx, 00000
Attention: General Counsel
Facsimile: (000)Β 000-0000
0000 Xxxxxx Xxxx
Xxxxxxx, Xxxxxxxxx, 00000
Attention: General Counsel
Facsimile: (000)Β 000-0000
and a copy to:
X.X. Xxxxx & Nephew Limited
X.X. Xxx 00
101 Hessle Road
Hull, HU3 2BN
England
Attention: Corporate Secretary
Facsimile: (+44) (0)Β 1482328326
X.X. Xxx 00
101 Hessle Road
Hull, HU3 2BN
England
Attention: Corporate Secretary
Facsimile: (+44) (0)Β 1482328326
if to Nucryst:
Nucryst Pharmaceuticals Corp.
00000-000 Xxxxxx
Xxxx Xxxxxxxxxxxx, Xxxxxxx X0X 0X0
Attention: President
Facsimile: (000)Β 000-0000
00000-000 Xxxxxx
Xxxx Xxxxxxxxxxxx, Xxxxxxx X0X 0X0
Attention: President
Facsimile: (000)Β 000-0000
Β
- 49 -
with a copy to:
Nucryst Pharmaceuticals Corp.
0000, 000 β 0xx Xxxxxx X.X.
Xxxxxxx, Xxxxxxx X0X 0X0
Attention: President
Facsimile: (000)000-0000
0000, 000 β 0xx Xxxxxx X.X.
Xxxxxxx, Xxxxxxx X0X 0X0
Attention: President
Facsimile: (000)000-0000
and a copy to:
Nucryst Pharmaceuticals Corp.
00 Xxxxxxx Xxxx, XxxxxΒ X
Xxxxxxxxx, Xxxxxxxxxxxxx 00000
Attention: President
Facsimile: (000) 000-0000
00 Xxxxxxx Xxxx, XxxxxΒ X
Xxxxxxxxx, Xxxxxxxxxxxxx 00000
Attention: President
Facsimile: (000) 000-0000
Any such notice or other communication shall be deemed to have been given and received on the day
on which it was delivered or transmitted (or, if such day is not a business day, on the next
following business day) or, if mailed, on the fifth (5th) business day following the date of
mailing; provided, however, that if at the time of mailing or within five (5)Β business days
thereafter there is or occurs a labour dispute or other event that might reasonably be expected to
disrupt the delivery of documents by mail, any notice or other communication hereunder shall be
delivered or transmitted by means of recorded electronic communication as aforesaid. Either party
may at any time change its address for service from time to time giving notice to the other party
in accordance with this SectionΒ 13.2.
SectionΒ 13.3 Waivers
No waiver of any term, provision, or condition of this Agreement, whether by conduct or otherwise,
in any one or more instances, shall be deemed to be construed as a further or continuing waiver of
any such term, provision, or condition of this Agreement unless reduced to writing signed by an
authorized representative of each party.
SectionΒ 13.4 Dispute Resolution
Should any dispute arise between the parties concerning this Agreement, the parties agree to first
attempt to resolve the dispute in good faith. If within sixty (60)Β days of one party providing
written notice of such dispute to the other party such dispute is not resolved as aforesaid, then
the dispute shall immediately thereafter be referred for resolution to the President of X.X. Xxxxx
& Nephew Limited Wound Management Global Business Unit and the President of Nucryst before
resorting to any other forum for a remedy. If resolution of the dispute is not reached between the
Presidents within sixty (60)Β days of such dispute being referred to the Presidents, then the
parties shall refer the dispute to binding arbitration by a single arbitrator under the
Arbitration Act (Ontario) which shall be held at a neutral site in Xxxxxxx, Xxxxxxx, Xxxxxx.
Β
- 50 -
SectionΒ 13.5 Assignment
The Parties agree that this Agreement, (except for assignment by Nucryst pursuant to SectionsΒ 13.6
or 13.7 which S&N shall be deemed to have consented to, assignments by S&N as a part of the
disposition by S&N of all or substantially all of its wound care business and the assignment by a
party to one or more of its Affiliates, which may be done without consent provided the party
remains responsible to the other party for the performance of this Agreement by its Affiliate) may
not be assigned or otherwise transferred, nor may any right or obligations hereunder be assigned or
transferred directly or indirectly by either party, whether voluntary, by operation of law or
otherwise, without the written consent of the other party, such consent not to be unreasonably
withheld. In connection with Nucryst determining whether to consent to an assignment, the parties
agree that Nucryst shall be deemed to be acting reasonably if it withholds its consent in
circumstances where the proposed assignee is not a corporation of equal or greater financial
resources, marketing strength and expertise (including in the burn and wound care area), and
stature in the xxxxx and wounds industry as S&N. Any purported assignment in violation of this
SectionΒ 13.5 shall be void. Any permitted assignee (which includes assignments by Nucryst pursuant
to SectionsΒ 13.6 or 13.7 and assignments by S&N as a part of the disposition by S&N of all or
substantially all of its wound care business, but excludes assignments to Affiliates without
consent) shall assume all obligations of the assignor under this Agreement and the assignor shall
be released from all obligations under this Agreement other than the obligations set out in
SectionsΒ 13.6 and 13.7 and the assignor shall be released from all obligations under this
Agreement, from the date of such assignment. For clarification, nothing in this Agreement shall
restrict in any manner whatsoever the ability to transfer shares in the capital of Nucryst and its
Affiliates, issue shares in the capital of Nucryst or its Affiliates or to otherwise effect a
change of control of Nucryst or one or more of its Affiliates.
SectionΒ 13.6 Right of First Offer
If Nucryst desires to sell assets that include all or substantially all of the Nucryst Technology
in each case, including without limitation assignment of this Agreement (the βTechnology Assetsβ),
Nucryst shall give written notice (the βTransfer Noticeβ) to S&N of that desire. The Transfer
Notice shall describe the Technology Assets in sufficient detail to permit S&N to make an informed
decision regarding whether to offer to purchase the Technology Assets and on what terms. During
the [***] (the βNegotiation Periodβ) immediately following the date the Transfer
Notice is given, Nucryst and S&N shall in good faith negotiate the sale and purchase of the
Technology Assets by Nucryst to S&N. If during the Negotiation Period S&N determines that it is
not interested in purchasing the Nucryst Technology, it shall forthwith advise Nucryst of such
determination in writing, and Nucryst shall be free to sell the Technology Assets to any other
Person on any terms at any time, and the provision of this SectionΒ 13.6 shall have no further
application. If during the Negotiation Period Nucryst and S&N reach an agreement concerning the
sale and purchase of the Technology Assets and such sale and purchase transaction is completed,
the provisions of this SectionΒ 13.6 shall have no further application. If Nucryst and S&N fail to
reach an agreement during the Negotiation Period concerning the sale and purchase of the
Technology Assets, S&N shall be entitled at any time prior to the expiry of the Negotiation Period
to make an offer (the βS&N Offerβ) to purchase the Technology Assets, which offer shall be
maintained in confidence by Nucryst. If S&N does not make the S&N Offer by the expiry of the
Negotiation Period, Nucryst shall be free to sell the
Β
- 51 -
Technology Assets to any other person on any terms at any time, and the provisions of this
SectionΒ 13.6 shall have no further application. The S&N Offer shall be in writing and shall
indicate the offered price (βS&N Purchase Priceβ) for the purchase of the Technology Assets and
the proposed terms (βS&N Purchase Termsβ) for such purchase. The S&N Offer shall be capable of
acceptance by Nucryst for a period (the βTransfer Periodβ) ending no earlier than 11:59Β p.m.
Calgary time on the [***] following the expiry of the Negotiation Period. The S&N Offer shall
specify a closing date (the βTransfer Closing Dateβ) for the sale and purchase, which shall not be
earlier than [***] or more than [***] after the date the S&N Offer is
accepted. The S&N Purchase Price shall be paid in cash by S&N on the Transfer Closing Date. During
the Transfer Period, Nucryst shall have the option of either selling the Technology Assets to S&N
pursuant to the S&N Offer or selling the Technology Assets to a third party on terms no less
favourable than the terms of the S&N Offer, having regard for both the S&N Purchase Price and the
S&N Purchase Terms. During the [***] period (the βFree Transfer Periodβ) following the later of
the expiry of the Transfer Period, or the date it determined that the sale pursuant to an accepted
S&N Offer will not close for any reason other than the default of Nucryst, Nucryst shall be
entitled to sell the Technology Assets to a third party on terms no less favourable than the terms
of the S&N Offer, having regard for both the S&N Purchase Price and the S&N Purchase Terms. Any
transfer of the Technology Assets made after the last day of a Free Transfer Period, other than
where S&N did not deliver the S&N Offer, without strict compliance with the terms, provisions and
conditions of this SectionΒ 13.6 and the other terms, provisions and conditions of this Agreement,
shall be null, void and of no force or effect. The provisions of this SectionΒ 13.6 shall not apply
to the transfer of the Technology Assets to a transferee that is an Affiliate of Nucryst; provided
that the Affiliate agrees to be bound by the terms of this SectionΒ 13.6. Any assignment of this
Agreement to a third party as a part of the transfer of the Technology Assets pursuant to this
SectionΒ 13.6, whether as a result of S&N not making the S&N Offer by the expiry of the Negotiation
Period or as a result of Nucryst selling the Technology Assets to a third party during the Free
Transfer Period on terms no less favourable than the S&N Offer, shall be considered an assignment
to a permitted assignee for purposes of SectionΒ 13.5.
SectionΒ 13.7 Right of First Refusal
If Nucryst receives from a competitor of S&N in the wound care market a bona fide offer
(βQualifying Offerβ) to purchase the Technology Assets and Nucryst desires to accept the Qualifying
Offer, Nucryst shall give written notice (the βFirst Refusal Transfer Noticeβ) to S&N of that
desire. The First Refusal Transfer Notice shall describe the Technology Assets and the proposed
price (βOffered Purchase Priceβ) for the sale of the Technology Assets and the proposed terms
(βOffered Purchase Termsβ) for such sale as set forth in the Qualifying Offer. Nucryst shall not be
obligated to provide to S&N a copy of the Qualifying Offer or disclose the name of the competitor
of S&N that made the Qualifying Offer. S&N shall have the option (the βPurchase Optionβ) to
purchase all of the Technology Assets for the Offered Purchase Price and on the Offered Purchase
Terms. The Purchase Option shall be and remain irrevocable for a period (the βFirst Refusal
Transfer Periodβ) ending on the earlier of (i)Β 11:59Β p.m. Calgary time on the [***] following
the date the First Refusal Transfer Notice is given by Nucryst to S&N; and (ii)Β 11:59Β p.m. Calgary
time on the business day prior to the day the Qualifying Offer expires pursuant to its terms. S&N
may elect to exercise the Purchase Option by giving written notice of its election to Nucryst,
which exercise shall be maintained in confidence by Nucryst. If S&N
Β
- 52 -
elects to exercise the Purchase Option, S&Nβs notice of election shall fix a closing date (the
βFirst Refusal Transfer Closing Dateβ) for the purchase of the Technology Assets, which shall not
be later than the business day prior to the expiry of the Qualifying Offer. The Offered Purchase
Price shall be paid in cash by S&N on the First Refusal Transfer Closing Date. If S&N does not
exercise the Purchase Option or if the Purchase Option is exercised but the transition does not
close by the expiry of the First Refusal Transfer Period for any reason other than the default of
Nucryst, Nucryst shall be permitted to accept the Qualifying Offer or another offer on
substantially similar or better terms at any time during the period ending [***] (the βFirst
Refusal Free Transfer Periodβ) after the expiry of the First Refusal Transfer Period. If Nucryst
does not transfer the Technology Assets pursuant to the Qualifying Offer or another offer on
substantially similar or better terms within a First Refusal Free Transfer Period, Nucrystβs right
to transfer the Technology Assets pursuant to this SectionΒ 13.7 shall cease and terminate. Any
transfer of the Technology Assets made after the last day of the First Refusal Free Transfer Period
without strict compliance with the terms, provisions and conditions of this SectionΒ 13.7 and the
other terms, provisions and conditions of this Agreement, shall be null, void and of no force or
effect. Any assignment of this Agreement to a third party as part of the transfer of the Technology
Assets pursuant to this SectionΒ 13.7, whether as a result of S&N not exercising the Purchase Option
or as a result of S&N exercising the Purchase Option but the transaction not closing by the expiry
of the First Refusal Transfer Period for any reason other than the default of Nucryst, shall be
considered an assignment to a permitted assignee for purposes of SectionΒ 13.5.
SectionΒ 13.8 Consents
In this Agreement where the consent of a party is required, S&N shall be deemed to be one party
and Nucryst shall be deemed to be one party. The execution of a consent by any entity comprising
part of S&N shall be deemed to be the consent of S&N and consent by any entity comprising part of
Nucryst shall be deemed to be the consent of Nucryst.
SectionΒ 13.9 Limitation
The maximum aggregate liability of Nucryst under the Supply Agreement, the Asset Purchase
Agreement, this Agreement (including the Original Agreement) and all other agreements and
documents referred therein shall at no time exceed [***]. Neither party shall have any liability to the
other party or any other Person pursuant to this Agreement for any special, indirect or
consequential damages, including but not limited to loss of profits, loss of business
opportunities or loss of business investment.
SectionΒ 13.10 Survival
The representations and warranties of the Parties contained in this Agreement (as it amends and
restates the Original Agreement), in the Schedules annexed to this Agreement or in any certificate
or other document delivered or given pursuant to this Agreement, shall remain in full force and
effect (the βSurvival Periodβ) for the applicable limitation period specified under Alberta law as
at the Original Effective Date, except for any representation and warranty in
Β
- 53 -
respect of which a claim based on fraud or intentional misrepresentation is made, which in
each case shall be unlimited as to duration.
A claim for indemnification under this Agreement may be made by giving a written notice asserting
the claim within the Survival Period. Any claim for indemnification made during the Survival
Period will result in the representations and warranties relating thereto remaining in effect for
purposes of indemnification notwithstanding such claim may not be resolved within the Survival
Period. The covenants set forth herein will survive without limitation. All representations,
warranties and covenants and agreements made by the Parties will not be affected by any
investigation made by and on behalf of a party and will not be deemed merged into any instruments
or agreements delivered in connection with this Agreement or otherwise in connection with the
transactions contemplated hereby.
SectionΒ 13.11 Integration Clause
This Agreement (as it amends and restates the Original Agreement) is the sole agreement
with respect to the subject matter hereof, and supersedes all proposals, negotiations,
conversations, discussions, agreements and/or representations, whether oral or written, including
any industry custom or past dealing between the parties relating to the subject matter of this
Agreement. The parties agree that any and all obligations between the parties that are outside the
terms of this Agreement (as it amends and restates the Original Agreement) and that relate to the
subject matter of this Agreement that preceded the Original Effective Date have been
satisfactorily executed or are null and void.
SectionΒ 13.12 Independent Contractors
Β | 13.12.1 | Β | This Agreement shall not constitute or give rise to an agency, partnership or joint venture between the parties and each partyβs performance hereunder is that of a separate, independent entity. |
Β | |||
Β | 13.12.2 | Β | Nothing in this Agreement shall be deemed to be the grant by either party to the other of any right, title or interest in any product, material or proprietary rights of the other except as may be expressly provided for in this Agreement. |
SectionΒ 13.13 Severability and Survival
To the extent that any provision of this Agreement shall be prohibited by or held to be
invalid or unenforceable under applicable law, such provision shall be ineffective to the extent of
such prohibition, invalidity or unenforceability, without invalidating the remainder of such
provision or the remaining provisions of this Agreement.
SectionΒ 13.14 U.S. Dollars
Unless otherwise provided, any reference in this Agreement to dollars shall be to U.S.
dollars.
Β
- 54 -
SectionΒ 13.15 Amendment of Agreement
No change, modification, extension, termination, waiver or other amendment of this Agreement or
any of the provisions contained herein, shall be valid unless made in writing and signed by a duly
authorized representative of each party.
SectionΒ 13.16 Governing Law and Attornment
This Agreement is subject to and shall be governed by the laws of the Province of Alberta (without
giving effect to the conflict of law provisions thereof) and the parties agree to irrevocably
attorn to the jurisdiction of the courts of Alberta.
SectionΒ 13.17 Non-Solicitation
Except as set out in the Transition Services Agreement or as otherwise agreed to in writing by
Nucryst and S&N, during the Term, S&N shall not solicit to employ any employees of Nucryst or any
of its Affiliates, nor shall Nucryst solicit to employ any of the former Nucryst employees hired by
S&N pursuant to the Transition Services Agreement, so long as they are employed by S&N or its
Affiliates, unless an employee responds directly to a general advertisement for employment that is
posted in a newspaper or on a website of any other form of publication directed at the public in
general.
SectionΒ 13.18 No Right to Use Names
Except as otherwise provided in this Agreement, no right, express or implied, is granted by this
Agreement to use in any manner the name βNucrystβ, βWestaimβ, βXxxxx & Nephewβ or any other trade
name or trade-xxxx of any party to this Agreement or their respective Affiliates in connection
with the performance of this Agreement.
SectionΒ 13.19 Counterparts
This Agreement may be executed in several counterparts, each of which when so executed shall be
deemed to be an original and shall have the same force and effect as an original but such
counterparts together shall constitute but one and the same instrument.
Β
- 55 -
IN WITNESS WHEREOF, the parties hereto have each caused this Agreement to be executed by
their duly authorized representatives as of the date first above written.
Β | Β | Β | Β | Β | Β | Β | Β | Β |
Nucryst Pharmaceuticals Corp. | Β | Β | Β | Xxxxx & Nephew, Inc. | ||||
Β |
Β | Β | Β | Β | Β | Β | Β | Β |
Per:
|
Β | /s/ Xxxxx X. Xxxxxx | Β | Β | Β | Per: | Β | /s/ Xxxxx X. Xxxxxxxx |
Β
|
Β | Β | Β | Β | Β | Β | Β | Β |
Β |
Β | Β | Β | Β | Β | Β | Β | Β |
Per:
|
Β | /s/ Xxxxx X. Xxxx | Β | Β | Β | Per: | Β | |
Β
|
Β | Β | Β | Β | Β | Β | Β | Β |
Β |
Β | Β | Β | Β | Β | Β | Β | Β |
Nucryst Pharmaceuticals Inc. | Β | Β | Β | X.X. Xxxxx & Nephew Limited | ||||
Β |
Β | Β | Β | Β | Β | Β | Β | Β |
Per: /s/ Xxxxx X. Xxxxxx | Β | Β | Β | Per: | Β | /s/ Xxxxx X. Xxxxxxxx | ||
Β
|
Β | Β | Β | Β | Β | Β | Β | Β |
Β |
Β | Β | Β | Β | Β | Β | Β | Β |
Per:
|
Β | /s/ Xxxxx X. Xxxx | Β | Β | Β | Per: | Β | Β |
Β
|
Β | Β | Β | Β | Β | Β | Β | Β |
Β | ||
Amended and Restated License and Development Agreement | Β |
Β
SCHEDULE A
to a License and Development Agreement made effective as of MayΒ 8, 2001 among Westaim Biomedical
Corp., Westaim Biomedical Inc., Xxxxx & Nephew, Inc. and X.X. Xxxxx & Nephew Limited
ACTICOAT TRADE-MARKS
Β
Β
TRADEMARKS AND DOMAIN NAMES
PART I
TRADEMARKS
ACTICOAT
OWNER: Westaim Biomedical Corp.
DESCRIPTION OF XXXX: Word
DESCRIPTION OF WARES:
IN USE WARES:
CANADA: metal products, namely antimicrobial metal coatings for medical and dental applications
US: antimicrobial metal coatings for medical, dental, and industrial applications, in ClassΒ 2
PROPOSED USE WARES:
CANADA: metal products, namely antimicrobial metal coatings for industrial application, and
antimicrobial metal foils, powders and paints for medical and dental and industrial applications
US: antimicrobial paints for medical, dental and industrial uses, in ClassΒ 2; antimicrobial metal
foils and powders for medical, dental and industrial applications, in
ClassΒ 5
OTHER COUNTRIES: antimicrobial metal coatings; antimicrobial metal coatings for medical, dental and
industrial applications; antimicrobial metal foils, powders and paints, in ClassΒ 2; antimicrobial
metal coatings for medical and dental applications; antimicrobial metal foils, powders and paints;
all for use in or in relation to antimicrobial dressings for medical and dental applications, in
ClassΒ 5; medical devices utilizing antimicrobial coatings; devices for using antimicrobial metal
coatings for medical and dental applications; devices using antimicrobial metal foils, powders and
paints for medical and dental applications, in ClassΒ 10
Β | Β | Β | Β | Β | Β | Β | Β | Β | Β | Β |
Β | Β | APPLICATION | Β | APPLICATION | Β | REGISTRATION | Β | CURRENT | Β | Β |
COUNTRY | Β | DATE | Β | NUMBER | Β | NUMBER | Β | EXPIRY DATE | Β | STATUS |
Β | ||||||||||
AUSTRALIA |
Β | 12-Jul-00 | Β | 842184 | Β | Β | Β | Β | Β | Pending |
CANADA (In Use Wares) |
Β | 09-Dec-93 | Β | 743,300 | Β | TMA 488,414 | Β | 1/28/13 | Β | Registered |
CANADA (Proposed Use Wares) |
Β | 24-Jun-98 | Β | 882,402 | Β | Β | Β | Β | Β | Allowed |
EUROPEAN COMMUNITY |
Β | 10-Mar-00 | Β | 001549831 | Β | Β | Β | Β | Β | Published |
JAPAN (class 10) |
Β | 14-Jul-00 | Β | 2000-78 935 | Β | Β | Β | Β | Β | Pending |
JAPAN (class 2) |
Β | 14-Jul-00 | Β | 2000-78 933 | Β | Β | Β | Β | Β | Pending |
JAPAN (class 5) |
Β | 14-Jul-00 | Β | 2000-78 934 | Β | Β | Β | Β | Β | Pending |
NORWAY |
Β | 12-Jul-00 | Β | 200007986 | Β | Β | Β | Β | Β | Pending |
SOUTH KOREA |
Β | 12-Jul-00 | Β | 33752/2000 | Β | Β | Β | Β | Β | Pending |
SWITZERLAND |
Β | 13-Jul-00 | Β | 08324/2000 | Β | Β | Β | Β | Β | Pending |
U.S.A. (In Use Wares) |
Β | 30-Dec-93 | Β | 75/977,405 | Β | 2,217,466 | Β | 1/12/09 | Β | Registered |
U.S.A. (Intent to Use Wares) |
Β | 30-Dec-93 | Β | 74/474,677 | Β | Β | Β | Β | Β | Published |
Β | Β | Β | Β | Β |
As at AprilΒ 11, 2001 | Β | Β | Β | Page 1 of 5 |
Β
Β
ACTICOAT & DESIGN
OWNER: Westaim Biomedical Corp.
DESCRIPTION OF XXXX: word and design
(new)
DESCRIPTION OF WARES:
ClassΒ 2: antimicrobial metal coatings, namely, antimicrobial metal coatings for medical, dental and
industrial applications; antimicrobial metal foils, powders and paints for medical, dental and
industrial applications
ClassΒ 5: medical and surgical wound and burn dressings utilizing antimicrobial coatings
ClassΒ 10:
medical devices utilizing antimicrobial coatings, namely orthopaedic implants and appliances for
shoulders, hips, knees, and elbows, external fixators and transcutaneous devices; catheters
utilizing antimicrobial coatings; catheter accessories utilizing antimicrobial coatings, namely
collection bags and tubings; wound closures utilizing antimicrobial coatings, namely surgical
staples, sutures, tapes, bandages; abdominal support meshes and surgical draperies utilizing
antimicrobial coatings; surgical cutting instruments utilizing antimicrobial coatings, namely
scalpels, scissors, curettes, trepans, trephines; surgical clamping and grasping instruments
utilizing antimicrobial coatings, namely forceps, hemostats, clamps, and retractors; dental
instruments utilizing antimicrobial coatings, namely mirrors and probes; cannulated instruments for
laproscopic and arthroscopic procedures all utilizing antimicrobial coatings; biopsy instruments
utilizing antimicrobial coatings, namely needles and punches
Β | Β | Β | Β | Β | Β | Β | Β | Β | Β | Β |
Β | Β | APPLICATION | Β | APPLICATION | Β | REGISTRATION | Β | CURRENT | Β | Β |
COUNTRY | Β | DATE | Β | NUMBER | Β | NUMBER | Β | EXPIRY DATE | Β | STATUS |
Β | ||||||||||
CANADA |
Β | 14-Aug-00 | Β | 1,070,986 | Β | Β | Β | Β | Β | Pending |
EUROPEAN COMMUNITY |
Β | 13-Feb-0l | Β | 002092872 | Β | Β | Β | Β | Β | Pending |
U.S.A. |
Β | 08-Jan-01 | Β | 76/191,603 | Β | Β | Β | Β | Β | Pending |
ACTICOAT & SUNBURST DESIGN
OWNER: Westaim Biomedical Corp.
DESCRIPTION OF XXXX: Word and Design
(sunburst)
DESCRIPTION OF WARES:
IN USE WARES:
CANADA: antimicrobial metal coatings for medical applications and medical and surgical wound and
burn dressings utilizing antimicrobial coatings US: antimicrobial metal coatings for medical
applications, in ClassΒ 2; medical and surgical wound and burn dressings utilizing antimicrobial
coatings, in ClassΒ 5
Β | Β | Β | Β | Β | Β | Β | Β | Β | Β | Β |
Β | Β | APPLICATION | Β | APPLICATION | Β | REGISTRATION | Β | CURRENT | Β | Β |
COUNTRY | Β | DATE | Β | NUMBER | Β | NUMBER | Β | EXPIRY DATE | Β | STATUS |
Β | ||||||||||
CANADA |
Β | 16-Mar-99 | Β | 1,008,702 | Β | Β | Β | Β | Β | To be abandoned |
EUROPEAN COMMUNITY |
Β | 14-Sep-99 | Β | 001316785 | Β | Β | Β | Β | Β | To be abandoned |
U.S.A. |
Β | 14-Jul-99 | Β | 75/749,238 | Β | Β | Β | Β | Β | To be abandoned |
ACTICOAT 7 & DESIGN
OWNER: Westaim Biomedical Corp.
DESCRIPTION OF XXXX: word and
design
DESCRIPTION OF WARES:
ClassΒ 2: antimicrobial metal coatings, namely, antimicrobial metal coatings for medical, dental and
industrial applications; antimicrobial metal foils, powders and paints for medical, dental and
industrial applications
ClassΒ 5: medical and surgical wound and bum dressings utilizing
antimicrobial coatings
Β | Β | Β | Β | Β | Β | Β | Β | Β | Β | Β |
Β | Β | APPLICATION | Β | APPLICATION | Β | REGISTRATION | Β | CURRENT | Β | Β |
COUNTRY | Β | DATE | Β | NUMBER | Β | NUMBER | Β | EXPIRY DATE | Β | STATUS |
Β | ||||||||||
CANADA |
Β | 14-Aug-00 | Β | 1,070,985 | Β | Β | Β | Β | Β | Pending |
EUROPEAN COMMUNITY |
Β | 14-Feb-01 | Β | 002104164 | Β | Β | Β | Β | Β | Pending |
U.S.A. |
Β | 08-Jan-01 | Β | 76/191,604 | Β | Β | Β | Β | Β | Pending |
Β | Β | Β | Β | Β |
As at AprilΒ 11, 2001 | Β | Β | Β | Page 2 of 5 |
Β
Β
ACTICOAT AB
OWNER: Westaim Biomedical Corp.
DESCRIPTION OF XXXX: Word
DESCRIPTION OF WARES:
CANADA & EUROPE: antimicrobial dressings for medical and dental applications, in ClassΒ 5
US:
antimicrobial dressings, namely, surgical, wound, and burn dressings, for medical and dental
applications, in ClassΒ 5
Β | Β | Β | Β | Β | Β | Β | Β | Β | Β | Β |
Β | Β | APPLICATION | Β | APPLICATION | Β | REGISTRATION | Β | CURRENT | Β | Β |
COUNTRY | Β | DATE | Β | NUMBER | Β | NUMBER | Β | EXPIRY DATE | Β | STATUS |
Β | ||||||||||
CANADA |
Β | 16-Mar-99 | Β | 1,008,700 | Β | Β | Β | Β | Β | Allowed |
EUROPEAN COMMUNITY |
Β | l9-Mar-99 | Β | 001112002 | Β | 001112002 | Β | 3/19/09 | Β | Registered |
U.S.A. |
Β | 14-Jul-99 | Β | 75/749,237 | Β | Β | Β | Β | Β | Pending |
U.S.A. β abandoned |
Β | 25-Jul-96 | Β | 75/141,184 | Β | Abandoned | Β | Β | Β | Abandoned |
ACTICOAT IT.
OWNER: Westaim Biomedical Corp.
DESCRIPTION OF XXXX: word
DESCRIPTION OF WARES:
ClassΒ 2: antimicrobial metal coatings, namely, antimicrobial metal coatings for medical, dental
and industrial applications; antimicrobial metal foils, powders and paints for medical, dental
and industrial applications
ClassΒ 5: medical and surgical wound and burn dressings utilizing antimicrobial coatings
ClassΒ 10: medical devices utilizing antimicrobial coatings, namely orthopaedic
implants and appliances for shoulders, hips, knees, and elbows, external
fixators and transcutaneous devices; catheters utilizing antimicrobial
coatings; catheter accessories utilizing antimicrobial coatings, namely
collection bags and tubings; wound closures utilizing antimicrobial coatings,
namely surgical staples, sutures, tapes, bandages; abdominal support meshes and
surgical draperies utilizing antimicrobial coatings; surgical cutting
instruments utilizing antimicrobial coatings, namely scalpels, scissors,
curettes, trepans, trephines; surgical clamping and grasping instruments
utilizing antimicrobial coatings, namely forceps, hemostats, clamps, and
retractors; dental instruments utilizing antimicrobial coatings, namely mirrors
and probes; cannuiated instruments for laproscopic and arthroscopic procedures
all utilizing
antimicrobial coatings; biopsy instruments utilizing antimicrobial coatings, namely needles and
punches
Β | Β | Β | Β | Β | Β | Β | Β | Β | Β | Β |
Β | Β | APPLICATION | Β | APPLICATION | Β | REGISTRATION | Β | CURRENT | Β | Β |
COUNTRY | Β | DATE | Β | NUMBER | Β | NUMBER | Β | EXPIRY DATE | Β | STATUS |
Β | ||||||||||
CANADA |
Β | 24-Aug-00 | Β | 1,072,380 | Β | Β | Β | Β | Β | Pending |
U.S.A. |
Β | 08-Jan-01 | Β | 76/191,606 | Β | Β | Β | Β | Β | Pending |
ACTICOAT IT. & DESIGN
OWNER: Westaim Biomedical Corp.
DESCRIPTION OF XXXX: word and
design
DESCRIPTION OF WARES:
ClassΒ 2: antimicrobial metal coatings, namely, antimicrobial metal coatings for medical, dental
and industrial applications; antimicrobial metal foils, powders and paints for medical, dental
and industrial applications
ClassΒ 5: medical and surgical wound and burn dressings utilizing antimicrobial coatings
ClassΒ 10: medical devices utilizing antimicrobial coatings, namely orthopaedic implants and
appliances for shoulders, hips, knees, and elbows, external fixators and transcutaneous devices;
catheters utilizing antimicrobial coatings; catheter accessories utilizing antimicrobial
coatings, namely collection bags and tubings; wound closures utilizing antimicrobial coatings,
namely surgical staples, sutures, tapes, bandages; abdominal support meshes and surgical
draperies utilizing antimicrobial coatings; surgical cutting instruments utilizing antimicrobial
coatings, namely scalpels, scissors, curettes, trepans, trephines; surgical clamping and
grasping instruments utilizing antimicrobial coatings, namely forceps, hemostats, clamps, and
retractors; dental instruments utilizing antimicrobial coatings, namely mirrors and probes;
cannuiated instruments for laproscopic and arthroscopic procedures all utilizing antimicrobial
coatings; biopsy instruments utilizing antimicrobial coatings, namely needles and punches
Β | Β | Β | Β | Β | Β | Β | Β | Β | Β | Β |
Β | Β | APPLICATION | Β | APPLICATION | Β | REGISTRATION | Β | CURRENT | Β | Β |
COUNTRY | Β | DATE | Β | NUMBER | Β | NUMBER | Β | EXPIRY DATE | Β | STATUS |
Β | ||||||||||
CANADA |
Β | 24-Aug-00 | Β | 1,072,381 | Β | Β | Β | Β | Β | Pending |
U.S.A. |
Β | 08-Jan-01 | Β | 76/191,605 | Β | Β | Β | Β | Β | Pending |
Β | Β | Β | Β | Β |
As at AprilΒ 11, 2001 | Β | Β | Β | Page 3 of 5 |
Β
Β
SCHEDULE B
to a License and Development Agreement made effective as of MayΒ 8, 2001 among
Westaim Biomedical Corp., Westaim Biomedical Inc., Xxxxx & Nephew, Inc. and X.X.
Xxxxx & Nephew Limited
LIST OF PATENTS AND PATENT APPLICATIONS IN WESTAIM PATENT RIGHTS
Β
Β
[***]
Β
Β
SCHEDULE C
to a License and Development Agreement made effective as of MayΒ 8, 2001 among Westaim
Biomedical Corp., Westaim Biomedical Inc., Xxxxx & Nephew, Inc. and X.X. Xxxxx &
Nephew Limited
SPECIFIC PERFORMANCE CRITERIA
β’ | Β | S&N will commit to a latest launch of Acticoat and Acticoat 7 to the core sales force in Jan 2003 at the annual business meeting, although based on priorities this may be pulled forward. In the interim, as soon as practical after closing, the chronic wound market will be developed through a focused marketing campaign to develop awareness and interest in the dual concepts of topical anti-microbial treatment of wound to lower bacterial burden and remove a potential barrier to healing, alongside the power of nanocrystalline silver in providing the optimal wound bed for healing. This focused marketing campaign will include personal selling by S&Nβs Regional Area Managers (RAM)Β and any Transferred Employees that become part of the RAM organisation and include non personal selling such as journal advertisements and promotion at major wound care meetings routinely attended by S&N. Additionally, in preparation for the full launch, S&N will begin a scientific education program with their existing educational expertise and appropriate clinical opinion leaders. A similar campaign will occur in Canada. |
Β | ||
β’ | Β | S&N will, as soon as practical after the Effective Date, launch Acticoat into a limited number of countries (U.K., Ireland and the Scandinavian countries) within the EU and to other countries outside the EU, subject to obtaining appropriate regulatory approvals outside the EU, with a target date of SeptemberΒ 12, 2001 (European Xxxxx Association meeting) and promoted specifically to the xxxxx market and under the Class IIb classification and with the limited claims available. |
Β | ||
β’ | Β | S&N plans to roll out the product to the remaining countries in EU in Ql 2002. |
Β | ||
β’ | Β | As soon as practical after receipt of the ClassΒ III Approval, S&N will launch Acticoat and/or Acticoat 7 for chronic wound care indications. |
Β
Β
SCHEDULE D
to a License and Development Agreement made effective as of MayΒ 8, 2001 among
Westaim Biomedical Corp., Westaim Biomedical Inc., Xxxxx & Nephew, Inc. and
X.X. Xxxxx & Nephew Limited
SPECIFIC PRODUCT SALES CRITERIA
Minimum Net Sales
Β | Β | Β | Β | Β | Β | Β | Β | Β |
Β | Β | Β | Β | Β | Β | Minimum Aggregate | ||
Β | Β | Β | Β | Β | Β | Net Sales for all | ||
Β | Β | Β | Β | Β | Β | Products | ||
Calendar Year | Β | Β | Β | Β | Β | in the Xxxxxxxxx | ||
Β |
Β | Β | Β | Β | Β | Β | Β | Β |
0000 |
Β | Β | β | Β | Β | $ | [***] | Β |
2007 |
Β | Β | β | Β | Β | $ | [***] | Β |
2008 |
Β | Β | β | Β | Β | $ | [***] | Β |
2009 |
Β | Β | β | Β | Β | $ | [***] | Β |
2010 |
Β | Β | β | Β | Β | $ | [***] | Β |
2011 |
Β | Β | β | Β | Β | $ | [***] | Β |
Provided that after Net Sales greater than $[***] have been attained in any calendar year after the
year 2005, then the minimum Net Sales for the following calendar year and each calendar year
thereafter for the remainder of the Term shall be the greater of:
Β | (a) | Β | The lesser of: |
Β | (i) | Β | [***] of the Net Sales for the previous calendar year; and |
Β | |||
Β | (ii) | Β | [***] |
Β | |||
Β | Β | Β | and |
Β | (b) | Β | [***] |
Β