License Agreement PARTIES
EXHIBIT
99.2
PARTIES
This
License Agreement (the “Agreement”),
entered into as of this 7th day of October, 2005, (the “Effective Date”), is
between Cytomedix,
Inc.,
a
Delaware corporation having a principal place of business at 000 Xxxxxxxxxx
Xxxxx, Xxxxx 000, Xxxxxxxxx, Xxxxxxxx 00000, and COBE
Cardiovascular, Inc.,
a
Colorado corporation having a principal place of business at 00000 Xxxx 00xx
Xxx, Xxxxxx, Xxxxxxxx 00000. Capitalized terms used herein and not otherwise
defined shall have the meaning set forth in Article 1 hereof.
RECITALS
WHEREAS,
Cytomedix
and
Cobe
have
been
engaged in discussions relating to a license of U.S. Patent No. 5,165,938
(“the
‘938 Patent; and
WHEREAS,
the parties hereto desire, on the terms and conditions contained herein,
to
settle whatever claims one may have against the other in connection with
the
'938 Patent, and to enter into a mutually agreeable licensing
arrangement;
NOW,
THEREFORE, in consideration of the following terms, covenants and conditions,
Cytomedix
and
Cobe
hereby
agree as follows:
TERMS
OF AGREEMENT
| 1. |
Definitions.
|
| 1.1. |
“Affiliate”
shall mean:
|
(a)
any
individual who or Entity that, in whatever country organized or resident,
directly or indirectly through one or more intermediaries, is controlled
by, or
is under common control with, or controls a Party; or
(b)
any
Entity in which any individual or Entity recited in the preceding sub-paragraph
(a) directly or indirectly through one or more intermediaries has at least
a
forty percent (40%) ownership or voting rights interest (whether through
stock
ownership, stock power, voting proxy, or otherwise), or has the maximum
ownership interest it is permitted to have in the country where such Entity
exists.
| 1.2. |
“Cobe”
means COBE
Cardiovascular, Inc., its
parent companies, subsidiaries, companies under common control
with
Cobe
Cardiovascular, Inc.
(whether foreign or domestic), or any entity in which any of the
preceding
entities (a) directly or indirectly owns 50% or more of the capital,
assets, voting securities, partnership or other ownership interest
(or has
the maximum ownership interest it is permitted to have in the country
where such entity exists), or (b) has the power to direct or cause
the
direction of, either directly or indirectly, the management and
policies
of such entity, whether through ownership of voting securities,
interlocking
management, contract, or otherwise.
|
|
1.3.
|
“Cytomedix”
means Cytomedix,
Inc.,
its parent companies, subsidiaries, companies under common control
with
Cytomedix,
Inc.
(whether foreign or domestic), or any entity in which any of the
preceding
entities (a) directly or indirectly owns 50% or more of the capital,
assets, voting securities, partnership or other ownership interest
(or has
the maximum ownership interest it is permitted to have in the country
where such entity exists), or (b) has the power to direct or cause
the
direction of, either directly or indirectly, the management and
policies
of such entity, whether through ownership of voting securities,
interlocking
management, contract, or otherwise.
|
| 1.4. |
“PARTY”
shall mean, as applicable, either: (a) Cytomedix,
Inc.;
or (b) Cobe
Cardiovascular, Inc.
|
| 1.5. |
"Distributor"
means an entity which contracts with Cobe
to
either a) provide promotion, sales and distribution services of
Royalty-Bearing Products, or b) buy Royalty-Bearing Products from
Cobe
for
resale.
|
| 1.6. |
“Disposable
Product(s)” shall mean products that are intended or expected to be used
only one time that are either Cobe
branded disposable equipment or disposable equipment purchased
from
Cobe
for resale under any trademark, tradename or brand name approved
by
Cobe
and
that have instructions for use primarily intended for producing
(in
conjunction with Hardware Products) or applying compositions consisting
of
platelets or platelet releasate (which includes, but is not limited
to,
platelet concentrate or platelet rich plasma (“PRP”)) to facilitate the
healing of wounds or other damaged tissue. Disposable Products
do not
include, for example, items such as syringes, needles, cell washing
bowls,
catheters, gauze or other forms of dressing, gloves, etc. that
are not
sold within a platelet or PRP-related kit. Any Licensee product
which is
marketed by Licensee without direct or indirect reference to platelets
or
platelet releasate, and which is not otherwise covered by the Licensed
Patents, shall not be considered a Disposable Product. For the
term of
this Agreement, the items listed in Exhibit B will be considered
Disposable Products irrespective of the Licensee’s marketing activities
thereon. Cobe
reserves the right to supplement the items listed in Exhibit
B.
|
| 1.7. |
“Earned
Royalty” shall mean royalties payable under this Agreement on
Royalty-Bearing Products actually sold or leased (in countries
where
Licensee has a license identified in Exhibit A) by Licensee to
third
parties and paid for by those third parties, and as to which sale(s)
Licensee recognizes as revenue pursuant to Licensee’s standard finance and
accounting policies. Earned Royalty does not apply to items which
have
been returned to Licensee and a refund has been made, nor to items
which
are not sold but are provided on loan, as free or at no cost, as
no-cost
replacement items for warranty or other purposes, for demonstration
purposes, for training, education or clinical trial purposes, or
to an
academic institution in connection with not-for-profit research
or
teaching.
|
| 1.8. |
“Entity”
shall mean any corporation, firm, partnership, proprietorship,
or other
form of business organization.
|
| 1.9. |
"Gross
Price" shall mean, with respect to a Royalty-Bearing Product, the
unit
price, without deduction, actually received from the third-party
end user
customer by the Licensee that sells directly to such third-party
end user
customer for the sale of such Royalty-Bearing Product (eliminating
transactions among intermediaries), without inclusion of (i) sales
tax,
(ii) value added or other excise taxes paid or payable, or (iii)
freight
charges.
|
| 1.10. |
“Hardware
Product(s)” shall mean products that are intended to be used multiple
times and are either Cobe
branded equipment or equipment purchased from Cobe
for resale under any trademark, tradename or brand name approved
by
Cobe
having instructions for use primarily for producing compositions
consisting of platelets or platelet releasate (which includes,
but is not
limited to, platelet concentrate or platelet rich plasma (“PRP”)) to
facilitate the healing of wounds or other damaged tissue. Any Licensee
product which is marketed by Licensee without direct or indirect
reference
to platelets or platelet releasate, and which is not otherwise
covered by
the Licensed Patents, shall not be considered a Hardware Product.
For the
term of this Agreement, the items listed in Exhibit C will be considered
Hardware Products irrespective of the Licensee’s marketing or promotional
activities associated therewith. Cobe
reserves the right to revise the items listed in Exhibit
C.
|
| 1.11. |
“Licensee”
shall mean Cobe
and its Distributors and customers and any direct or indirect authorized
sub-licensee of Cobe
under the rights herein provided, as
applicable.
|
| 1.12. |
“Licensed
Fields”
means any and all fields of use.
|
| 1.13. |
"Licensed
Patents”means
the patents and patent applications listed in Exhibit A and any
related
patent application (including any continuation, continued prosecution,
continuation-in-part, divisional, foreign counterpart or substitution
thereof) and any patent (including any reissue or reexamination
thereof),
in any country granted from, or claiming priority to, or for the
benefit
of any of the aforementioned patent applications or patents, as
well as
rights in any third-party patent acquired as a result of an interference
action involving any of the foregoing.
|
| 1.14. |
“Net
Sales Price” shall mean the Gross Price for sales of Royalty-Bearing
Products, less the following "Invoice Adjustments": (i) discounts
and
sales commissions, (ii)credits or repayments due to rejections,
defects,
returns, (iii) net of amounts previously included in the Net Sales
Price
of a product that were written-off by Cobe
or
such sublicensee of Cobe
during such period as uncollectible, and (iv) charitable donations
of
Royalty-Bearing Products. Net Sales which are denominated in currencies
other than U.S. Dollars shall be converted into U.S. Dollars according
to
Cobe's
standard accounting policy for conversion of foreign currencies.
All
deductions for discounts and sales commissions in subclause (i)
above
shall be deemed to be an amount equal to twelve and one-half percent
(12.5%) of the Gross Price.
|
| 1.15. |
“Royalty-Bearing
Products” shall mean Hardware Product(s) and Disposable Product(s) only.
|
| 1.16. |
“Quarter”
shall mean the respective three-month accounting periods ending
in March,
June, September and December of any
year.
|
| 1.17. |
“Royalty
Year” shall mean the year beginning with the first full Quarter following
the Effective Date, and each year thereafter until November 24,
2009.
|
| 2. |
License
Grant/Covenant Not to Xxx/Releases.
|
| 2.1. |
License
Grant. Cytomedix
hereby grants to Cobe
a
non-exclusive license under the Licensed Patents to make, have
made, use,
import, sell, promote, market, offer for sale or otherwise transfer
Royalty-Bearing Products in the Licensed Fields throughout the
world. This
grant includes the right for Cobe
to
grant sublicenses of the rights conveyed in the preceding sentence
to
Distributors and customers, either directly or through one or more
intermediaries and, with the prior written consent of Cytomedix
(which shall not be unreasonably withheld) to other sublicensees.
This
grant also includes the right for any customers (ultimate or in
privity or
other) of any Licensee to use and/or sell (for further use or resale)
Royalty-Bearing Products subject to this Agreement without payment
of any
additional royalty to Cytomedix,
including, but not limited to, the products listed in Exhibits
B and C. In
other words, the license grant “runs with the Royalty-Bearing
Product.”Cytomedix
will only receive one royalty payment per licensed Royalty-Bearing
Product.
|
| 2.2. |
Distributor
and Customer Immunity.
The license set forth in Paragraph 2.1 shall constitute
a grant of
immunity against any action for or claim of infringement (whether
based on
a direct or contributory infringement, inducement to infringe,
or other
theory) against the Licensee’s Distributors and authorized resellers,
agents, employees, customers and users relating to Royalty-Bearing
Products sold or otherwise disposed of by any Licensee prior to
or after
this Agreement.
|
| 2.3. |
Cytomedix,
on behalf of itself, its predecessors and successors, and each
of their
respective affiliates, officers, directors, employees and agents,
hereby
irrevocably and unconditionally releases and forever discharges
Cobe
and its officers, directors, employees, agents, shareholders,
representatives, parent companies, subsidiaries, affiliated companies,
partners, predecessors, and all other persons acting by or on their
behalf
(collectively, the “Cobe
Releasees”),
of and from any claims that Cytomedix
has ever had or may now have against the Cobe
Releasees
related to the claims, counterclaims and affirmative defenses that
were or
could have been asserted in connection with matters relating to
the '938
Patent. Cytomedix
also releases customers of Cobe
as
to any claims that Cytomedix
has ever had against them based on their use of a product sold
to them by
Cobe.
|
| 2.4. |
Cobe,
on behalf of itself, its predecessors and successors, and each
of their
respective shareholders, affiliates, members, officers, directors,
employees and agents, hereby irrevocably and unconditionally releases
and
forever discharges Cytomedix,
its officers, directors, employees, agents, shareholders, representatives,
parent companies, subsidiaries, affiliated companies, predecessors,
and
all other persons acting by or on behalf of Cytomedix
(collectively, the "Cytomedix
Releasees"),
of and from any claims that Cobe
has ever had or may now have against Cytomedix
or
any of the other Cytomedix
Releasees
related to the claims, counterclaims, and affirmative defenses
that were
or could have been asserted in connection with matters relating
to the
'938 Patent. Except as it may otherwise be compelled by a court
of
competent jurisdiction, domestic or foreign governmental authority
agency
or tribunal, or in connection with a valid subpoena, Cobe
and Cobe
Releasees further agree not to challenge, cause to be challenged,
or
assist others to challenge, directly or indirectly, the validity
and/or
enforceability of the Licensed Patents in any court or other tribunal,
including the United States Patent and Trademark Office and foreign
patent
offices. In the event Cobe
is
served with a subpoena, agency directive, or court order compelling
it to
testify or provide documents or other information related to the
Licensed
Patents or this Agreement, Cobe
shall promptly notify Cytomedix
of
any such request pursuant to the notice provisions set forth in
Paragraph
10.1 of this Agreement so as to allow Cytomedix
to, at its cost and expense, seek a protective order, file a motion
to
quash, or seek other appropriate relief on behalf of Cobe
or
Cobe
Affiliate or Cobe
Distributor or Cobe
customer.
|
| 2.5. |
Covenant
Not to Xxx. Cytomedix,
for itself and its Affiliates, covenants not to file or to continue
to
prosecute any suit against Cobe
or
Cobe
Distributor or any customers of Cobe
or
Cobe’s
Affiliates or Distributors, claiming that Cobe’s
(or Cobe
Affiliates, Distributors or customers) making, having made, using,
selling, or offering for sale any Royalty-Bearing Product infringes
any
Licensed Patent.
|
| 2.6. |
No
Implied Licenses.
No other rights or licenses not expressly granted herein with respect
to
the Licensed Patents or
any other intellectual property owned or controlled by Cytomedix
are granted or shall be deemed granted to Licensee or any other
person.
|
| 2.7. |
Taxes
and Authorizations.
Cobe
shall be solely responsible for the payment and discharge of any
taxes,
duties, or withholdings relating to any transaction in connection
with the
manufacture, use, sale, or other commercialization of any Royalty-Bearing
Product. Cobe
shall, at its own expense, be responsible for applying for and
obtaining
any approvals, authorizations, or validations relative to this
Agreement
under the appropriate federal, state, or local
laws.
|
| 3. |
Payment
Terms.
|
| 3.1. |
License
Payment.
Within two months after the Effective Date, Cobe
shall pay Cytomedix
a
license payment of forty-five thousand, three hundred ninety U.S.
Dollars
($45,390.00).
|
| 3.2. |
Earned
Royalties.
Cobe
shall pay a royalty on sales of Royalty-Bearing Products by any
Licensee
to third parties, and paid for by those third parties, that take
place
after the Effective Date and prior to November 24, 2009 under the
following conditions:
|
| 3.2.1. |
The
Earned Royalty rate shall be one and one-half percent (1.5%) of
the Net
Sales Price of Hardware Products sold in countries where the sale
of such
Hardware Product is covered by a granted, valid, unexpired patent
within
the Licensed Patents.
|
| 3.2.2. |
The
Earned Royalty rate shall be seven and one-half percent (7.5%)
of the Net
Sales Price of Disposable Products sold in countries where
the sale of
such Disposable Products is covered by a granted, valid, unexpired
patent
within the Licensed Patents.
|
| 3.2.3. |
No
payments shall be due with respect to the sale of any Licensed
Products
after November 24, 2009 in the United States and, in each other
country of
the Licensed Territories, on a country-by-country basis, after
the
expiration of the last to expire of the Licensed Patents in
such country,
at which time in each such country the licenses granted in
this Agreement
shall become fully paid-up and royalty
free.
|
| 3.3. |
No
Royalty Stacking.
Only one royalty shall be payable in respect to any Royalty-Bearing
Product.
|
| 3.4. |
Reports,
Payments and Currency Conversions.
Within two months after the end of each Quarter, Cobe
shall furnish Cytomedix
with a written report setting forth the sales of Royalty-Bearing
Products
upon which a royalty is payable under this Article 3 during such
Quarter
and the computation of the royalties payable with respect thereto.
Each
report shall be accompanied by the amount due in U.S. Dollars,
less any
taxes required to be withheld by governmental agencies in respect
to
royalties payable to Cytomedix
for that Quarter. Each report and any accompanying payment shall
be sent
to the address specified for the Cytomedix
according to Paragraph 10.1. If Cobe
is
precluded because of the laws or any governmental decree of a particular
country from obtaining royalties from any Licensee in such country
or can
do so only at great expense and effort, Cobe
shall have the right to pay or have paid royalties applicable to
such
country in the currency of such country at a banking institution
of
Cytomedix's
selection in such country and Cytomedix
shall cooperate with Cobe
in
preparing appropriate documents to accomplish the aforesaid. Whenever
a
conversion from one currency to another is involved in making or
crediting
a royalty the exchange rate shall be the monthly financial rate
used by
Licensee in the ordinary course of business for which the royalty
is being
paid or credited.
|
| 3.5. |
Records.
The Licensees shall keep accurate records in sufficient detail
to enable
Earned Royalties payable hereunder to be determined and shall,
upon
written notice by Cytomedix
to
Cobe,
permit such records to be inspected (but only to the extent necessary
to
verify the amount of royalty payable hereunder or financial data
provided
to Cytomedix
by
Cobe
before or after the Effective Date) once annually during normal
business
hours by a certified public accountant or firm of certified public
accountants reasonably acceptable to Cobe
and appointed by Cytomedix
at
Cytomedix's
expense. The accountants making such inspection shall report to
Cytomedix
only the amount of Earned Royalty due and payable and shall be
bound by
the provisions of Paragraph 5.1 (confidentiality). Records inspected
under
this Paragraph 3.5 shall be retained by the Licensees until Cytomedix
and Cobe
have agreed upon the amount of Earned Royalty payable thereon.
Except as
aforesaid, no Licensee shall be required to retain any records
longer than
three (3) years after the end of the Quarter in which such records
were
prepared.
|
| 3.6. |
Royalty-Bearing
Product Dispute.
|
| 3.6.1. |
In
the event of any dispute between the Parties as to whether or not
a
product sold by a Licensee or sublicensee is a Royalty-Bearing
Product for
which a royalty is due, Cobe
shall have the right to submit the dispute to binding arbitration,
as
provided in Article 8 hereof. Cobe
shall be entitled to withhold Earned Royalties in dispute during
the
pendency of such arbitration and for one (1) month thereafter.
During the
pendency of the arbitration and the said one (1) month period,
Cobe
shall not be deemed in default of this Agreement for nonpayment
of
royalties.
|
| 3.6.2. |
In
the event the product in dispute is determined not to be a Royalty-Bearing
Product, Cytomedix
shall pay to Cobe
the costs, expenses, and fees paid by Cobe
associated with such arbitration.
|
| 3.6.3. |
In
the event the product in dispute is determined to be a Royalty-Bearing
Product, in addition to paying any amount unpaid for past royalties,
and
taking any action required as a result of the determination to
thereby
maintain the Agreement in force, Cobe
shall pay to Cytomedix
the costs, expenses, and fees paid by Cytomedix
associated with such arbitration.
|
| 3.7. |
Cobe
Right to Inspect.
In order to confirm whether grants of other licenses to the Licensed
Patents
contain a more favorable Hardware Product royalty rate or a more
favorable
Disposable Product royalty rate, Cobe
or
its duly authorized agent shall be permitted, at its own expense,
to
inspect records of Cytomedix
reflecting license royalty rates payable by medical device manufacturers
in respect of the Licensed
Patents and
to make copies of or extracts from such records during regular
business
hours throughout the term of this Agreement and for a reasonable
period of
not less than three (3) years
thereafter.
|
| 4. |
Most
Favored Licensee
|
| 4.1. |
Most
Favored Licensee.
If Cytomedix
enters into a license agreement involving any Licensed Patent
with any
Entity other than any Entity with whom Cytomedix
already
has entered into a license agreement (hereinafter, an “Other License”),
then Cytomedix
will, within two (2) months after the effective date of the
Other License
agreement or this Agreement (whichever is later), provide Cobe
with a confidential copy of the Other License agreement for
review by
COBE's
officers and directors, attorneys, and financial advisors only;
provided,
however, that
if the Other License is filed by Cytomedix
with the SEC without redaction as to the royalty rate terms
and conditions
in said Other License, then Cytomedix
shall
be deemed to have complied with such delivery requirements.
Cobe
shall, at its option, be entitled at any time during the life
of any said
Other License to substitute, effective as of the effective
date of the
Other License, the royalty rate terms and conditions of said
Other License
agreement for the royalty rate terms and conditions of this
Agreement. The
Parties shall cooperate in good faith in making any refund
or payment
adjustment required in the event of such royalty rate substitution.
|
| 5. |
Confidentiality
|
| 5.1. |
Confidentiality.
The Parties agree to keep the terms of this Agreement
confidential, as well as any information exchanged between the
Parties
that is designated or agreed to be held as confidential, and shall
not
disclose them without the express written permission of the other
Party,
except in response to a court order (for which the other Party
shall be
provided reasonable advance notice), in any action concerning the
enforcement of this Agreement,
as otherwise permitted or required by the terms of this Agreement,
or as
otherwise required by law (including, without limitation, Cytomedix's
obligations in connection with its requirements under federal or
state
securities laws, or other contractual or legal obligations for
which no
notice need be provided to the other
Party).
|
| 5.2. |
Press
Release:
The Parties may issue a press release reporting that the Parties
have
entered into a License Agreement with respect to '938 Patent. The
Parties
acknowledge that they have reviewed and find acceptable the other’s
proposed initial press release. With respect to press releases
other than
the initial press release the Parties will each have the right
to review
and approve the content and timing of any such press release proposed
by
the other Party relating to this Agreement, such approval not to
be
unreasonably withheld. It is Cytomedix's
intention,
consistent with past practice, to file this Agreement with the
SEC,
without redaction, as a contract material to its business. Upon
such
filing with the SEC the terms of this Agreement become available
to the
public. Therefore, the obligations of confidentiality as to the
terms of
this Agreement expire when the Agreement is filed with the
SEC.
|
| 5.3. |
Notwithstanding
Paragraphs 5.1 and 5.2 of the Agreement, in the event any third
party,
COBE
agent, COBE
Distributor or customer (the “Inquiring Party”) inquires whether its use
of any product sold by COBE
(including the products set forth in Exhibits B and C) is covered
by or
infringes any Licensed Patent, COBE
may disclose this Agreement to the Inquiring Party only, provided
that the
Inquiring Party has agreed in writing to maintain the confidentiality
of
this Agreement and its terms. Notwithstanding Paragraphs 5.1, 5.2,
and the
preceding provisions of this Paragraph 5.3, COBE may state to its
customers and Distributors that it is licensed under one or more
of the
Licensed Patents and that such customer or Distributor shall have
no
royalty obligation to COBE or Cytomedix,
without requiring a confidentiality agreement between the customer
or
Distributor and COBE.
|
|
6
|
Subsequent
Review
|
| 6.1 |
Cobe
shall be entitled to discontinue any Earned Royalty payments
under
Paragraph 3.2 of this Agreement in respect to any country or
non-US
foreign territory where a Licensed Patent exists immediately
upon the
occurrence of:
|
| 6.1.1 |
in
any reexamination, reissue or court proceeding of the Licensed
Patent
applicable to that country or foreign territory, entry of a
judgment,
order, decree or decision to the effect that: (A) all of the
claims of
such Licensed Patent which cover a Royalty-Bearing Product
are invalid,
or; (B) the use of human platelet releasate (or the sale or
offering for
sale of products substantially equivalent to the Royalty-Bearing
Products)
to facilitate healing of human wounds or human tissue infringes
none of
the valid and enforceable claims of such Licensed Patent, or
|
| 6.1.2 |
Cytomedix
expressly and in writing disclaims or abandons any independent
claim in
any Licensed Patent applicable to that country or foreign territory,
or
|
| 6.1.3 |
claims
in any Licensed Patent applicable to that country or foreign
territory are
disallowed or so substantially narrowed in any reexamination
proceeding,
such that the Royalty-Bearing Products would be rendered
non-infringing.
|
| 6.1.4 |
In
the event Cytomedix
obtains reversal of any adverse determination in Paragraphs
6.1.1 or 6.1.3
hereof that enabled Cobe
to
discontinue any Earned Royalty payments, then Cobe
shall resume Earned Royalty payments affected thereby, and
pay
Cytomedix
any Earned Royalties which accrued between suspension and resumption
of
Earned Royalty payments. Under no circumstances shall Cobe’s
obligation to Cytomedix
to
make Earned Royalty payments extend beyond the term of this
Agreement set
forth in Paragraph 3.2.3.
|
|
7
|
Representations
and Warranties.
|
| 7.1 |
Authorization.
Each Party hereby represents and warrants that it (a) has the power
and
authority and the legal right to enter into this Agreement on behalf
of
itself and all Affiliated Entities and to perform its obligations
hereunder, and (b) has taken all necessary action on its part to
authorize
the execution and delivery of this Agreement and the performance
of its
obligations hereunder. This Agreement has been duly executed and
delivered
on behalf of such Party, and constitutes a legal, valid, binding
obligation, enforceable against such Party in accordance with its
terms.
|
| 7.2 |
Limitation
of Warranties.
Nothing in this Agreement shall be construed as: (a) a warranty
or
representation by Cytomedix
as
to the validity or scope of any Licensed
Patents;
(b) a warranty or representation that anything made, used, sold,
or
otherwise disposed of under any license granted in this Agreement
is or
will be free from infringement of patent or from suits by third
parties
for infringement of patent; (c) except as otherwise provided in
Article 5
herein, conferring the right to use in advertising, publicity or
otherwise
any trademark, trade name, or names, or any contraction, abbreviation,
simulation or adaptation thereof, of either Party; or (d) an obligation
to
furnish any know-how associated with the Licensed
Patents.
|
| 7.3 |
Ownership
and Right to Grant License.
Cytomedix
herein represents, covenants, and warrants that it is co-owner
of the
entire right, title, and interest in the Licensed
Patents with
the University of Minnesota. The University of Minnesota has assigned
all
rights to the Licensed
Patents but
has retained a non-exclusive perpetual license to the Licensed
Patents solely
in connection with not-for-profit research and teaching. Cytomedix
further warrants that no existing prior agreement or assignment
presently
conflicts in any manner with this Agreement
or
otherwise prevents Cytomedix
from fulfilling all of its obligations under this Agreement.
Cytomedix
further covenants, warrants and represents that it has the sole
right to
grant licenses to the Licensed
Patents.
|
| 7.4 |
Disclaimer.
Each
Party
makes no representations other than those expressly set forth in
this
Article 7. Each Party expressly disclaims all other representations,
warranties and conditions, express, implied, statutory, or otherwise,
regarding the Licensed
Patents,
including without limitation, any warranty of merchantability,
fitness for
a particular purpose, or
non-infringement.
|
| 7.5 |
Complete
List of Patents.
Cytomedix
represents and warrants that Exhibit
A sets forth all patents and applications for patent that are owned
by,
controlled by, or licensed to Cytomedix
as
of the Effective Date that relate to the Royalty-Bearing Products,
including their design, features, composition, manufacture, use
or sale.
|
| 7.6 |
Representation
regarding Disposable Products and Hardware Products and Related
Financial
Data. Licensee
represents that (a) all products currently marketed or promoted
by
Licensee that constitute Disposable Products are included on Exhibit
B,
(b) all products currently marketed or promoted by Licensee that
constitute Hardware Products are included on Exhibit C, (c) all
financial
data regarding sales of Hardware Products and Disposable Products
provided
to Cytomedix
before or after the Effective Date are and shall be true and accurate
representations of such data as reflected on Cobe’s
financial statements, and (d) the lump-sum amount to be paid by
Cobe in
Section 3.1 hereof equals the sum of 1% of the Net Sales Price
of all
Hardware Products plus 5% of the Net Sales Price of all Disposable
Products sold by any Licensee prior to the Effective Date of this
Agreement, regardless of whether such products are currently marketed
by
any Licensee.
|
| 8 |
Dispute
Resolution.
|
| 8.1 |
Except
as specified elsewhere in the Agreement, any dispute arising out
of or
relating to the formation or performance of this Agreement, including
the
breach, termination or validity thereof, which has not been resolved
by
good faith negotiation between representatives of Cobe
and Cytomedix
who have authority to fully and finally resolve the dispute within
thirty
(30) days after initiation of a negotiation procedure, shall be
finally
resolved by binding arbitration by three arbitrators in accordance
with
the American Arbitration Association (“AAA”) Commercial Arbitration Rules
then currently in effect; provided, however, that if one Party
fails to
participate in the negotiation as agreed herein, the other Party
can
commence binding arbitration prior to the expiration of the time
period
set forth above. The three arbitrators’ award shall be binding on the
Parties. One arbitrator shall be selected by each Party. The third
arbitrator shall be chosen by agreement of the Parties. The arbitrators
shall have no jurisdiction or authority to award punitive or exemplary
damages against either Party. The prevailing Party in any arbitration
hereunder shall be awarded its reasonable attorneys fees and costs
in
addition to any other relief to which it may be entitled under
this
Agreement, but such attorney fees and costs shall not exceed 50%
of the
amount in dispute. The binding arbitration shall be governed by
the
Federal Arbitration Act, 9 U.S.C. §§1-16, and judgment upon the award
rendered by the arbitrators, or a majority thereof, may be entered
by any
court having jurisdiction thereof. If a Party is forced into court
to
enforce an arbitration award, it shall be entitled to recover its
reasonable attorney fees and costs. In any arbitration, the parties
shall
be entitled following initiation of the action to the same discovery
that
they would be allowed under the Federal Rules of Civil Procedure;
provided,
however, that
the parties shall cooperate in good faith to cause such discovery
to be
completed within ninety (90) days following initiation of the arbitration
action.
|
| 8.2 |
Damages.
Cobe
and Cytomedix
each agree to waive any right to receive punitive, consequential,
special
or indirect damages relating in any way to this
Agreement.
|
| 9. |
Termination.
|
| 9.1 |
Expiration/Termination.
If
this Agreement is not terminated sooner as provided for herein,
it shall
terminate with the expiration of the last to expire of the Licensed
Patents.
|
| 9.2 |
Termination
Upon Default.
Upon default by any Party in the performance of any obligation
hereunder
to be performed by such Party, the Party aggrieved by such default
shall
give notice in writing to the Party in default specifying the thing
or
matter in default. Unless such default be cured within one (1)
month
following the giving of such notice (or if such cure cannot be
completed
within such one (1) month period, if the cure thereof be not undertaken
promptly upon receipt of such notice, and diligently pursued thereafter),
then the Party giving such notice may give further written notice
to the
Party in default terminating this Agreement; in such event, this
Agreement
shall terminate on the date specified in such further notice, which
date
shall be no earlier than one (1) month from the date of such further
notice.
|
| 9.3 |
Prior
Obligations and Liability; Non-waiver.
No expiration or termination of this Agreement shall relieve any
Party of
any obligation accrued prior to the date of expiration or termination
or
relieve a Party in default from liability for damages for breach
of this
Agreement.
|
| 9.4 |
Survival.
Upon termination of this Agreement, the confidentiality provisions
of
Paragraph 5.1 shall remain in force, and the dispute resolution
provisions
of Article 8 shall survive.
|
| 10. |
Miscellaneous.
|
| 10.1 |
Notices.
Any consent, notice or report required or permitted to be given
or made
under this License
Agreement
by
one of the Parties hereto to the other Party shall be in writing
and
delivered to such other Party at its address indicated below, or
to such
other address as the addressee shall have last furnished in writing
to the
addressor. Said notice shall be deemed to have been given on the
date of
its receipt by the addressee.
|
|
If
to Cobe:
|
COBE
Cardiovascular, Inc.
|
|
00000
Xxxx 00xx Xxx
|
|
|
Xxxxxx,
Xxxxxxxx 00000
|
|
|
Attention:
President
|
|
|
with
a copy to:
|
|
|
Xxxxx
X. Xxxxx
|
|
|
Xxxxxxxx
& Xxxxx
|
|
|
000
Xxxxx Xxxxxx Xxxxx, Xxxxx 000
|
|
|
Xxxxxxxxxxx,
Xxxxxxxxx 00000
|
|
|
If
to Cytomedix:
|
Cytomedix,
Inc.
|
|
|
000 Xxxxxxxxxx Xxxxx, Xxxxx 000 |
|
|
Xxxxxxxxx, Xxxxxxxx 00000 |
|
|
Attention: Xxxxxxx Xxxxx, Ph.D, CEO |
|
with
a copy to:
|
|
|
Xxxxx
Xxxxxxxxxx
|
|
|
The
Xxxxxxx Law Firm
|
|
|
00
Xxxx Xxxxxx Xxxxx, Xxxxx 0000
|
|
|
Xxxxxxx,
Xxxxxxxx 00000
|
|
| 10.2 |
Governing
Law.
This Agreement
shall be governed by and construed in accordance with the laws
of the
State of Illinois, without regard to the conflicts of law principles
thereof.
|
| 1 0.3 |
Assignment.
This Agreement and any of the rights and obligations thereof are
fully
assignable by both Parties, and further subject to the
following:
|
| 10.3.1 |
In
the event of an assignment by Cobe (whether by operation of
law, merger,
acquisition or change of control) (an “Assignment”), Cytomedix shall be
paid by Cobe or said assignee cash in an amount equal to the
sum of 1% of
the Gross Price of all Hardware Products plus 5% of the Gross
Price of all
Disposable Products sold by said assignee prior to the Effective
Date of
this Agreement, regardless of whether such products are currently
marketed
by assignee within thirty (30) days of the effective date of
the
Assignment.
|
| 10.3.2 |
In
the event (i) an Assignment occurs, and (ii) the assignee or one
of its
Affiliates has an agreement with Cytomedix
granting a license to one or more of the Licensed Patents (the
"Assignee
License Agreement"), Cytomedix
hereby agrees that the Assignee shall not be in breach of the Assignee
License Agreement or this Agreement so long as it complies, on
a licensed
product-by-licensed product basis, with the terms and conditions
of the
Assignee License Agreement or the terms and conditions of this
Agreement.
The assignee shall not be considered to have failed to comply with
respect
to a particular product under the Assignee License Agreement or
this
Agreement on the basis of the field of use so long as assignee
(1) makes a
good faith judgment either on an invoice-by-invoice basis or by
reasonable
means (such as allocation) as to which agreement covers particular
sales
of a particular product and (2) pays the royalty due under the
agreement
it has determined in good faith to cover the particular sales of
the
particular product. For the avoidance of doubt, if assignee determines
in
good faith that both agreements cover particular sales of a particular
product, it may select to pay the royalty under either agreement.
For the
further avoidance of doubt, only one royalty shall be payable in
respect
of the sale of a given unit of a particular
product.
|
| 10.4 |
Force
Majeure.
No Party shall be considered in default or be liable for any delay
in
performance or for any non-performance caused by circumstances
beyond the
reasonable control of such Party, including but not limited to
acts of
God, explosion, fire, flood, accident, strike or other labor disturbance,
war (whether declared or not), sabotage, order or decree of any
court or
action of any governmental authority, or other causes, whether
similar or
dissimilar to those specified, that cannot reasonably be controlled
by the
Party who failed to perform.
|
| 10.5 |
Waiver.
Failure by any Party to insist upon strict compliance with any
of the
terms, covenants, or conditions of this Agreement shall not be
deemed a
continuing waiver of such term, covenant, or condition, nor shall
any
waiver or relinquishment of any right or power herein at any time
be
deemed a waiver or relinquishment of the same or any other right
or power,
whether or not similar. Waiver of a breach hereunder may be effected
only
by a writing signed by the waiving Party and such waiver shall
not
constitute a waiver of any other breach not specified in said writing.
The
Parties hereby acknowledge that they have been advised by legal
counsel
and are familiar with section 1542 of the California Civil Code,
which
provides as follows:
|
A
GENERAL
RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT
TO
EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY
HIM
MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR
|
The
Parties acknowledge in that connection that they may have sustained
damage, loss, cost or expense that are presently unknown and unsuspected,
and that such damage, loss, cost or expense as may have been sustained
may
give rise to additional damage, loss, cost or expense in the future.
Nevertheless, the Parties acknowledge that this Agreement has been
negotiated and agreed upon in light of this situation and expressly
waive
any and all rights which they may have under Section 1542 of the
California Civil Code, or any other state or federal statute or
common law
principle of similar effect.
|
|
10.6
|
Entire
Agreement. This Agreement and its Exhibits explicitly referenced
herein embody the entire agreement between the parties and supersede
any
prior representations, understandings and agreements between the
parties
regarding the subject matter hereof. There are no representations,
understandings or agreements, oral or written, between the parties
regarding the subject matter hereof that are not fully expressed
herein.
|
| 10.7 |
Severability.
The parties agree that if any part, term, or provision of this
Agreement
shall be found illegal or in conflict with any valid controlling
law, the
validity of the remaining provisions shall not be affected thereby.
|
| 10.8 |
Independence
of the Parties.
This Agreement
shall not constitute the designation of any Party as the representative
or
agent of the other, nor shall any Party by this Agreement
have the right or authority to make any promise, guarantee, warranty,
or
representation, or to assume, create, or incur any liability or
other
obligation of any kind, express or implied, against or in the name
of, or
on behalf of, the other, except as expressly provided
herein.
|
| 10.9 |
Counterparts.
This Agreement may be executed in two or more counterparts, each
of which
shall be deemed an original, but all of which together shall constitute
one and the same instrument. Facsimile signatures transmitted by
telefax
shall have the same import and effect as if originally
delivered.
|
IN
WITNESS WHEREOF, the parties have executed this Agreement on the date indicated
below.
|
CYTOMEDIX,
INC.
|
COBE
CARDIOVASCULAR, INC.
|
||
|
By:
/s/ Xxxxxxx Xxxxx
|
By:
/s/ Xxxxxx Xxxxxxx
|
||
|
Xxxxxxx Xxxxx, Ph.D, CEO
|
Xxxxxx Xxxxxxx, President, CEO
|
||
| Date: October 7, 2005 | Date: October 7, 2005 |
EXHIBIT
A
U.S.
Patent No. 5,165,938 entitled "Wound Healing Agents," issued
11/24/92
Australia
Patent No. 596,954 entitled "Wound Healing Agents," issued 11/8/85
Canada
Patent No. 1,261,259 entitled "Wound Healing Agents issued 9/26/89
Europe
Patent No. 202,298 entitled "Wound Healing Agents," issued 7/15/92
(validated
in Belgium, France, Germany, Great Britain, Netherlands, and
Sweden)
Israel
Patent No. 77,096 entitled "Wound Healing Agents," issued 11/19/85
Ireland
Patent No. 57,894 entitled "Wound Healing Agents," issued 5/5/93
Japan
Patent No. 1,986,949 entitled "Wound Healing Agents," issued
3/8/95
Exhibit
B
Schedule
of Disposable Products
|
Model
Number
|
Description
|
UOM
|
|
976000501
|
Angel
Processing Set (COBE brand)
|
Case
@ 8 units per case
|
|
976000601
|
Angel
Processing Set (Dideco brand)
|
Case
@ 8 units per case
|
|
976000502
|
Blood
Access Kit (COBE brand)
|
Case
@ 8 units per case
|
|
976000602
|
Blood
Access Kit (Dideco brand)
|
Case
@ 8 units per case
|
Exhibit C
Schedule
of Hardware Products
|
976000100
|
Angel
Whole Blood Separation System (U.S. version)
|
1
unit
|
|
976000101
|
Angel
Whole Blood Separation System (E.U. version, Dideco brand)
|
1
unit
|
