Exhibit 10.16
AGREEMENT
This Agreement, entered into as of the 9th day of March, 1998, by and
between XXXXX XXXXXX an individual residing at 00000 X. Xxxxxx Xxxx, Xxxxxxxxx,
Xxxxx 00000 (hereinafter "XXXXXX"); and ProCath Corporation, a New Jersey
(U.S.A.) corporation, having its principal place of business Xxxxxx Run
Executive Park, 575 Route 73 North, Xxxx X-0, Xxxx Xxxxxx, Xxx Xxxxxx 00000,
X.X.X. (together with any successor or assignee, hereinafter "BUYER").
WHEREAS, XXXXXX has developed and owns certain know-how, technology,
methodology, and prototype catheters relating to conductive adhesive bands for
catheter electrodes together with certain inventions, patent applications and
patents relating thereto; and
WHEREAS, XXXXXX intends to assign to BUYER and BUYER intends to acquire
from XXXXXX all of his rights in the aforementioned know-how, technology,
methodology and prototype catheters relating to said process and device for
conductive adhesive bands for catheter electrodes including the inventions,
patent applications and patents relating thereto; and
NOW, THEREFORE, in consideration of the mutual covenants of this
agreement, the parties hereto agree as follows:
1. DEFINITIONS
1.1 PRODUCT. The term "Product" shall mean all of XXXXXX' drawings,
sketches, diagrams, specifications, designs, medical records,
engineering notes, notebooks, testing instructions, know-how, date,
technology, methodology, prototypes, models and other physical and
written descriptions and embodiments, including parts, subsystems
and subassemblies, relating to the conductive adhesive bands for
catheter electrodes, as set forth in United States Patent
Application No. 5,433,742 issues on July 18, 1995, which are
possessed by XXXXXX as of the date hereof together with any and all
future modifications or improvements, of any nature whatsoever, made
thereto whether made by XXXXXX or BUYER.
1.2 PATENT RIGHTS. The term "Patent Rights" shall mean all past, present
or future concepts, ideas, inventions, trade secrets, know-how
(whether patentable or not) relating to the Product, all past,
present or future patent applications and patents (including without
limitation the patent listed on Exhibit A) and other industrial
property rights throughout the world (including all substitutions,
divisions, continuations, continuations-in-part, renewals, reissues,
extensions and the like), all rights of action on account of past,
present or future use or sale of the Product, the right, at any
time,
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to file for applications for patents and like protection for
inventions relating to the Product in any country or jurisdiction
throughout the world and all international rights of priority
associated with the Product.
1.3 NET REVENUES. The term "Net Revenues" shall mean all revenues
received b BUYER, its Affiliates, and any person or entity which is
a licensee or sublicensee of the Product from BUYER, from the sale
or lease of Products protected by patents included in the Patent
Rights to any person or entity which is not an Affiliate of BUYER,
or the licensing of processes protected by patents included in the
Patent Rights, excluding all import, export, or customs duties or
similar sales and excise taxes, shipping charges, packing charges,
paid by the BUYER and less trade discounts, quantity discounts and
rebates.
1.4 AFFILIATE. The term "Affiliate" means any corporation or other
business entity with respect to which BUYER directly or indirectly
owns or controls the majority of the voting stock, or has the right
or power to control its operating management decisions.
2. SALE OF ASSETS TO BUYER
2.1 TRANSFER OF THE PRODUCT TO BUYER. Simultaneously with the execution
of this Agreement, XXXXXX agrees to assign, sell, transfer and
convey to BUYER all of his rights, title and interest throughout the
world in and to the Product and Patent Rights. XXXXXX agrees to
properly execute and deliver all papers and perform such other acts
which shall be deemed appropriate by BUYER to transfer and convey to
BUYER the entire right, title and interest in the Product and Patent
Rights including the Assignment a set forth in Exhibit B attached
hereto.
2.2 TRANSFER OF INFORMATION AND KNOW-HOW. Promptly following execution
of this Agreement, XXXXXX shall transfer to BUYER all of the useful
knowledge in their possession, or which it comes into their
possession, relating to the Product.
3. PAYMENT OF PURCHASE PRICE
3.1 INITIAL PAYMENT. In partial consideration for the transfer of the
rights of the Product and Patent Rights to the BUYER, BUYER agrees
upon assignment of the Patent Rights to BUYER, to pay to XXXXXX the
sum of U.S. Twenty Thousand Dollars (U.S. $20,000).
3.2 EARNED ROYALTY PAYMENTS. In further payment for the Product and
Patent Rights being conveyed hereunder, BUYER agrees to pay to
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WILLIS in U.S. Dollars on January 20, April 20, July 20 and October
20 of each quarterly calendar period, with respect to the previous
quarterly calendar period, an amount equal to 1% of the Net Revenues
for all payments received form customers in respect to the sale or
lease of the Product by BUYER and/or its Affiliates, and fifty
percent (50%) of the Net Revenues received from licensees or
sublicensees of BUYER in respect to the sale or lease of the Product
by such licensees or sublicensees, with an aggregate maximum total
royalty payment to WILLIS OF U.S. One Million Dollars (U.S.
$1,000,000) (i.e., no further royalty payment shall be due XXXXXX
under this Agreement after WILLIS' aggregate royalty totals U.S. One
Million Dollars (U.S. $1,000,000).
3.3 MINIMUM ROYALTY PAYMENTS. Beginning January 1, 2001, through the
date of expiration or declaration of invalidity of the patent listed
in Exhibit A, should earned royalties be less than $3,00 in any
quarterly calendar period, BUYER agrees, at BUYER's option, to
either 1) pay an additional amount such that royalties due in any
quarter will be not less than $3,000, or 2) xxxxx XXXXXX a
non-exclusive, royalty-free license to the patent listed in Exhibit
A which shall contain provisions to allow XXXXXX to sublicense to a
third party.
4. PAYMENTS
4.1 Each quarterly payment made by BUYER to XXXXXX shall be accompanied
by a statement stating the amount of net revenues with respect to
which royalty payments are due to XXXXXX hereunder together with
sufficient additional information to show how the net revenues was
determined. Late payments under the Agreement shall accrue interest
at the rate of twelve percent (12%) per annum.
5. BOOKS AND RECORDS
5.1 BUYER shall keep and maintain at its principal office, accurate
records and accounts for an exact determination of all net revenues
with respect to which payments are due to XXXXXX hereunder. Said
records and accounts shall be preserved by BUYER for a period of
five (5) years and shall at all reasonable times during business
hours be open to the unrestricted examination and copying or audit
of an accountant designated by XXXXXX. Any such examination shall be
at the sole cost and expense of XXXXXX unless such examination
discloses a discrepancy in the amount of Earned Royalties due in any
quarterly period of more than ten percent (10%), whereupon such
examination shall be at the sole cost and expense of BUYER.
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6. IMPROVEMENTS TO THE PRODUCT
6.1 During the term of this agreement and provided BUYER has not
committed any breach under this agreement, XXXXXX shall promptly
disclose to buyer, without further compensation, all improvements to
the product made by XXXXXX, and BUYER shall have the right to
prepare, file and prosecute patent applications covering such
improvements. All such improvements and any and all improvements
made to the Product by BUYER or its Affiliates shall be subject to
being the exclusive property of BUYER.
7. WARRANTIES
7.1 WARRANTIES OF XXXXXX. XXXXXX expressly warrants and represents to
BUYER that: (a) XXXXXX is the owner of the Patent Rights free and
clear of any rights or claims or licensee of others, and has not
entered into any agreements or contracts authorizing others to use
the Patent Rights; (b) to the best of XXXXXX' knowledge, no person
or entity is infringing or has threatened to infringe any of the
Patent Rights; (c) to the best of XXXXXX' knowledge, the existing
patents included in the Patent Rights are valid and enforceable;
(de) to the best of XXXXXX' knowledge, the manufacture, use and sale
of the Product will not constitute infringement of another's patent
rights or otherwise constitute unfair competition or trade secret
infringement; (e) to the best of XXXXXX' knowledge, there is no
pending or threatened litigation related in any way to the validity,
use or enforceability of the Patent Rights; (f) all right, title and
interest to the Product and Patent Rights acquired by BUYER under
this Agreement are free and clear of all liens, encumbrances or
other claims of creditors of XXXXXX; and g) upon execution and
delivery of this Agreement and the documents identified herein,
XXXXXX will have conveyed to BUYER good and clear title to the
Product and Patent Rights.
7.2 WARRANTIES OF BUYER. BUYER warrants to XXXXXX as follows:
(a) BUYER is a corporation duly organized, validly existing and is
in good standing under the laws of the State of New Jersey;
(b) All necessary and corporate actions have been taken to
authorize the execution, delivery and performance of this
Agreement by BUYER; and
(c) This Agreement when duly signed by BUYER and XXXXXX will be a
binding obligation of BUYER enforceable in accordance with its
terms.
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8. TERM AND TERMINATION
8.1 Term. Unless otherwise terminated pursuant to the terms of this
Agreement, this Agreement shall commence on the date first above
written and continue in full force until the earlier of 1) payment
to XXXXXX of royalties totaling one million dollars ($1,000,000) or
2) the expiration or declaration of invalidity of the patent listed
in Exhibit A.
8.2 TERMINATION FOR DEFAULT. Either party may terminate this Agreement
in the event that the other party fails to perform any material
obligation under this Agreement, provided, however, that the
defaulting party shall have first been given written notice by the
other party specifying the failure to perform and the defaulting
party does not cure such failure within thirty (30) days of such
notice.
9. NOTICES
9.1 NOTICES. Except as provided elsewhere in this Agreement, all
statements, payments, and documents required or permitted by this
agreement to be provided or given to either party shall be deemed to
have been so provided or given upon the mailing thereof, postage
paid by firs-class mail, and all notices required hereunder shall be
deemed to have been given upon the mailing thereof by postage paid
certified mail, return receipt requested, addressed to such party at
its following address or at such other addresses and to the
attention of such other officers or individuals as it may from time
to time designate in writing to the other party:
If to XXXXXX:
XXXXX XXXXXX
00000 X. Xxxxxx Xxxx
Xxxxxxxxx, Xxxxx 00000
If to BUYER:
ProCath Corporation
Xxxxxx Run Executive Park
000 Xxxxx 00 Xxxxx, Xxxx X-0
Xxxx Xxxxxx, Xxx Xxxxxx 00000x
Attention: Xxxxxx Xxxxxxx
With a copy to:
EP MedSystems, Inc.
000 Xxxxxxx Xxxxx, Xxxxx 000
Xx. Xxxxxxxxx, Xxx Xxxxxx 00000
Attention: Xxxxx Xxxxxxx
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10. ENTIRE AGREEMENT
10.1 ENTIRE AGREEMENT. This Agreement shall represent the entire
agreement by and between XXXXXX and BUYER and all previous
understandings or agreements between XXXXXX and BUYER relating to
the subject matter of this Agreement are hereby terminated and
superseded. This Agreement shall not be modified except by an
agreement in writing signed by both parties hereto.
11. MISCELLANEOUS
11.1 ARBITRATION. In the event of a dispute arising under this Agreement
and the parties are unable to reach an agreement within sixty (60)
days of commencement of a request for such agreement by either
party, the matter shall be finally settled by arbitration pursuant
to the rules then in effect of the American Arbitration Association.
The arbitration shall take place in New Jersey. In any such
arbitration proceeding the non-prevailing party shall pay all
arbitration fees and reasonable attorney's fees of the prevailing
party.
11.2 WAIVER. The failure of either party at any time to require
performance by the other party of any provision of this Agreement
shall not affect or in any way derogate from the right to require
such performance at any time thereafter; nor shall the waiver by
either party of a breach of any provision thereof be held to be a
waiver of the provision itself.
11.3 GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of New Jersey.
11.4 ASSIGNMENT. None of the parties hereto shall have the right to
assign its rights or delegate its duties hereunder without the
written consent of the other parties, which consent shall not be
unreasonably withheld. Such consent of XXXXXX shall not be required
for any assignment by BUYER to any of its Affiliates or to any party
which acquires (through purchase, merger, or otherwise) all or
substantially all of the assets and/or business of Buyer. Such
consent of BUYER shall not be required for any assignment by XXXXXX
to any entity controlled by XXXXXX. This Agreement shall be binding
upon, and inure to the benefit of, the successors and assigns of the
parties hereto.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective duly authorized officers.
XXXXX XXXXXX
/s/ Xxxxx X. Xxxxxx Dated: 3-9-98
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PROCATH CORPORATION
By: /s/ Xxxxx X. Xxxxxxx Dated: 3-6-98
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Name: Xxxxx X. Xxxxxxx
Title: Vice President
00
XXXXXXX X
Xxxxxx Xxxxxx Patent Number 5,433,742, issued July 18, 1995, entitled
"CONDUCTIVE ADHESIVE BAND FOR CATHETER ELECTRODE."
EXHIBIT B
I, XXXXX XXXXXX, of 00000 X. Xxxxxx Xxxx, Xxxxxxxxx, Xxxxx 00000, U.S.A.,
am the owner of he entire right, title and interest to the United States Letters
Patent No. 5,433,742 granted July 18, 1995 for
CONDUCTIVE ADHESIVE BANK FOR CATHETER ELECTRODE
For good and valuable consideration, receipt of which is hereby acknowledged
have assigned and do hereby assign to ProCath Corporation, a New Jersey (U.S.A.)
corporation, having its principal place of business Xxxxxx Run Executive Park,
575 Route 73 North, Xxxx X-0, Xxxx Xxxxxx, Xxx Xxxxxx 00000, U.S.A., its
successors, assigns and legal representatives, the entire right, title and
interest in and to the foregoing United States patent together with all rights
and actions thereunder and all right to recovery for past infringements.
Xxxxx 0, 0000 Xxxxx X. Xxxxxx
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State of Idaho )
) SS
County of Bannoch )
I hereby certify that before me in the County of Bannoch, in the State of
Idaho, personally appeared Xxxxx Xxxxxx, personally known by me, who then and
there was duly sworn by me, and under oath acknowledged that the foregoing
assignment was duly signed, sealed, and delivered by him on the date appearing
at the foot thereof.
3-9-98 Xxxxxx Xxxxx
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Notary Public
My Commission Expires:
6-1-99
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