Exhibit 99.2
CONFIDENTIAL MATERIALS OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION. ASTERISKS
DENOTE OMISSIONS.
SETTLEMENT AND LICENSE AGREEMENT
PARTIES
This Agreement (the "AGREEMENT"), entered into as of this 23rd day of
May, 2005 (the "Effective Date"), is between CYTOMEDIX, INC. ("Cytomedix" or
"Licensor"), a Delaware corporation having a principal place of business at 000
Xxxxxxxxxx Xxxxx, Xxxxx 000, Xxxxxxxxx, Xxxxxxxx 00000, and HARVEST TECHNOLOGIES
CORPORATION ("Harvest"), a Massachusetts corporation having a principal place of
business at 00 Xxxxxxx Xxxx, Xxxxxxxx, Xxxxxxxxxxxxx 00000. Each of Cytomedix
and Harvest are referred to in this Agreement as a "Party" and
collectively as the "Parties."
RECITALS
WHEREAS, CYTOMEDIX and Harvest are engaged in litigation (hereinafter,
the "Massachusetts Action"), Civil Action No. 02-12077 PBS, in the United States
District Court for the District of Massachusetts, relating to a controversy
between the parties arising in connection with Harvest's alleged manufacture,
use, offer to sell, and/or sale of certain products (the "Massachusetts
Action"); and
WHEREAS, the parties hereto desire, on the terms and conditions
contained herein, to settle the claims that have been filed or asserted or could
have been asserted in their respective pleadings in the Massachusetts Action and
to enter into a mutually agreeable licensing arrangement;
NOW, THEREFORE, in consideration of the following terms, covenants and
conditions, Cytomedix and Harvest hereby agree as follows:
TERMS OF AGREEMENT
1. Definitions.
1.1 "558 Patent" shall mean United States Patent No. 5,599,558 and any
related patent application (including, without limitation, any
continuation, continued prosecution, continuation-in-part,
divisional, foreign counterpart or substitution thereof) and any
patent (including, without limitation, 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.
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1.2 "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 Entity; 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).
1.3 "Claim" shall mean (i) a claim of an issued and unexpired Licensed
Patent which has not been held permanently revoked, unenforceable or
invalid by a decision of a court or other governmental agency of
competent jurisdiction, which decision is unappealable or
unappealable within the time allowed for appeal, and which has not
been admitted to be invalid or unenforceable though reissue or
disclaimer or otherwise, and (ii) a claim of a pending patent
application which claim was filed and is being prosecuted in good
faith and has not been abandoned or finally disallowed without the
possibility of appeal or refiling of the application.
1.4 "Cytomedix" means Cytomedix, Inc., its parent companies or
subsidiaries (whether foreign or domestic), or any other Entity in
which Cytomedix, Inc. (a) directly or indirectly owns 50% or more of
the capital, assets, voting securities, partnership or other
ownership interest, 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.
1.5 "Distributor" means an entity which contracts with Harvest to either
a) provide promotion, sales and distribution services of Harvest
Branded Royalty-Bearing Products, or b) buy Royalty-Bearing Products
from Harvest or one of its Affiliates for resale under a Harvest
Brand.
1.6 "Disposable Product(s)" shall mean equipment or products that are
intended to be used only one time (and specifically excluding all
[**]) which (A) are Harvest Branded or purchased from Harvest or one
of its Affiliates for resale under a Harvest Brand and (B) are
covered by a Claim of one or more Licensed Patents (or the
manufacture, sale, offer for sale, or use of which infringe a Claim
of one or more Licensed Patents, whether based on direct or
contributory infringement, inducement to infringe or any other
theory). Further, irrespective of Licensee's marketing or
promotional activities, the items listed in Exhibit B and all
successor equipment and products that are improvements to such
scheduled equipment and products will be considered Disposable
Products.
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1.7 "Earned Royalty" shall mean royalties payable under this Agreement
on Hardware Products or Disposable Products (as the case may be)
actually Sold by Harvest or its Affiliates or approved sublicensees
to third parties and as to which Harvest recognizes such Sale(s) as
revenue pursuant to Generally Accepted Account Principles ("GAAP").
Earned Royalty does not apply to Hardware Products or Disposable
Products 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 any 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 invoiced by Harvest or
its Affiliates for the Sale of such Royalty-Bearing Product, without
inclusion of sales, value added or other excise taxes paid or
payable or freight charges.
1.10 "Hardware Product(s)" shall mean equipment or products that are
intended to be used multiple times (and specifically excluding all
Disposable Products and all [**]) which (i) are Harvest Branded or
purchased from Harvest or one of its Affiliates for resale under a
Harvest Brand and (ii) are covered by a Claim of one or more
Licensed Patents (or the manufacture, sale, offer for sale, or use
of which infringe a Claim of one or more Licensed Patents, whether
based on direct or contributory infringement, inducement to infringe
or any other theory). Further, irrespective of Licensee's marketing
or promotional activities, the items listed in Exhibit C and all
successor equipment and products that are improvements to such
scheduled equipment and products will be considered Hardware
Products.
1.11 "Harvest Brand" shall mean any trademark, trade name or brand name
owned or licensed by Harvest or any of its Affiliates. "Harvest
Branded" shall mean having a Harvest Brand.
1.12 "Licensee" shall mean each of Harvest and its Affiliates,
Distributors and customers/end-users of Licensed Products, as well
as any direct or indirect authorized sub-licensee of Harvest under
the rights herein granted, as applicable.
1.13 "Licensed Fields" means any and all fields of use.
1.14 "Licensed Patents" means the patents and patent applications listed
in Exhibit A and any related patent application (including, without
limitation, any continuation, continued prosecution,
continuation-in-part, divisional, foreign counterpart or
substitution thereof) and any patent (including, without limitation,
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.
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1.15 "Licensed Products" shall mean the Royalty-Bearing Products and the
[**].
1.16 "Licensed Territories" means the entire world.
1.17 "Net Sales" shall mean, with respect to Hardware Products and
Disposable Products, the Gross Price of the Hardware Products or
Disposable Products (as the case may be) multiplied by the quantity
of Hardware Products or Disposable Products (as the case may be)
Sold by Harvest or its Affiliates in the Territory (the "Gross
Sales") less the following: (i) direct selling costs, which shall
include without limitation, trade and quantity discounts actually
allowed and taken; sales salaries and commissions directly
attributable to Royalty-Bearing Products; fees paid to distributors,
wholesalers, selling agents and/or group purchasing organizations
with respect to Royalty-Bearing Products; and marketing costs,
educational studies, and trade show costs related to the promotion
of Royalty-Bearing Products and (ii) amounts repaid or credited by
reason of purchase chargebacks, rebates (including, without
limitation, rebates in kind), rejections, defects or returns. All of
the deductions for direct selling costs in subclause (i) above shall
be deemed to be an amount equal to thirty percent (30%) of the Gross
Sales.
1.18 "Quarter" shall mean the respective three-month accounting periods
ending in March, June, September and December of any year.
1.19 "Royalty-Bearing Products" shall mean Hardware Product(s) and
Disposable Product(s) only.
1.20 [**]
1.21 "Royalty Year" shall mean the one-year period beginning on July 1,
2005 and ending on June 30, 2006, and each one-year period
thereafter; provided that the fourth (and final) Royalty Year shall
be deemed to end on November 24, 2009.
1.22 "Sale", "Sold" and/or "Sell" shall mean the sale, transfer or
disposition of a Royalty-Bearing Product to a third party (whether
an end-user, distributor, wholesaler or otherwise), whether by
Harvest or its Affiliates, but shall not include (i) the transfer or
disposition of free samples of the Royalty-Bearing Products, (ii)
charitable donations of Royalty-Bearing Products (including, without
limitation, compassionate use), (iii) the transfer or disposition of
Royalty-Bearing Products for no monetary consideration for use in
clinical trials or for other research testing purposes, and (iv) the
sale, transfer or disposition of Royalty-Bearing Products between
Harvest and/or its Affiliates.
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2. Settlements.
2.1 The parties agree that within two (2) business days after the
execution of this Agreement, they will execute, through attorneys of
record, and cause to be filed with the United States District Court
for Massachusetts, a stipulated dismissal, with prejudice, of the
Massachusetts Action. This Agreement shall be of no force and effect
unless and until the Massachusetts Action is dismissed with
prejudice. This Agreement shall only become enforceable according to
its terms upon entry in the Massachusetts Action of the Stipulated
Dismissal, the form of which is attached hereto as Exhibit E
(hereinafter, the "Stipulated Dismissal"). In the event the
Massachusetts Action is not so dismissed, this Agreement will become
null and void, but Section 6.1 shall survive.
3. License Grant/Covenant Not to Xxx/Releases.
3.1 License Grant. Licensor hereby grants to Licensees a non-exclusive
license under the Licensed Patents to make, have made, use, import,
sell, promote, market, or offer for sale Licensed Products in the
Licensed Fields throughout the Licensed Territories. This grant
includes without limitation the right for Harvest to grant
sublicenses to Distributors and Affiliates, 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 without limitation the
right for any customers (ultimate or in privity or otherwise) of any
Licensee or sublicensee to use import, market, offer for sale,
and/or sell (for further use or resale) Licensed Products subject to
this Agreement without payment of any additional royalty or amount
to Cytomedix, including, but not limited to, the products listed in
Exhibits B, C and D. The license grant "runs with the Licensed
Product" and the Licensed Patents shall be exhausted with respect to
every Licensed Product as to which the required royalty hereunder is
paid.
3.2 Grant of Immunity. Cytomedix (for itself and on behalf of its
predecessors, successors, assigns, and each of its and their
respective Affiliates and sublicensees, officers, directors,
employees and agents) (collectively, the "Cytomedix Parties") hereby
irrevocably grants immunity to the Licensees, their respective
predecessors, successors and assigns, and its and their respective
Affiliates, sublicensees, officers, directors, employees, agents,
shareholders, partners, representatives, and all other persons
acting by or on its or their behalf) (collectively, the "Harvest
Releasees") against any and all actions for or claims of
infringement (whether based on a direct or contributory
infringement, inducement to infringe, or other theory) relating to
the Licensed Products, whether Sold or otherwise disposed of prior
to or after the Effective Date of this Agreement.
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3.3 Cytomedix Release. The Cytomedix Parties hereby immediately,
irrevocably, unconditionally and fully releases and forever
discharges the Harvest Releasees of and from any claims that any of
the Cytomedix Parties have ever had or may now have, whether known
or unknown, against the Harvest Releasees related to the claims,
counterclaims and affirmative defenses that were or could have been
asserted in or in connection with the Massachusetts Action. This
release shall extend to the customers and end-users of the Licensed
Products as to any claims that any of the Cytomedix Parties has ever
had against them based on their use of a Licensed Product.
3.4 Harvest Release. Harvest (for itself and on behalf of its
predecessors, successors, assigns, and each of its and their
respective Affiliates, sublicensees, officers, directors, employees
and agents) (collectively, the "Harvest Parties") hereby
immediately, irrevocably, unconditionally and fully releases and
forever discharges Cytomedix (and its predecessors, successors and
assigns, and its and their respective Affiliates, sublicensees,
officers, directors, employees, agents, shareholders, partners,
representatives, and all other persons acting by or on its or their
behalf) (collectively, the "Cytomedix Releasees"), of and from any
claims that any of the Harvest Parties has ever had or may now have,
whether known or unknown, against the Cytomedix Releasees related to
the claims, counterclaims and affirmative defenses that were or
could have been asserted in or in connection with the Massachusetts
Action. Except as it may otherwise be compelled by a court of
competent jurisdiction, or in connection with a valid subpoena,
Harvest (for itself and on behalf of the Harvest Parties) further
agrees 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 or agency, including, without limitation, the United States
Patent and Trademark Office. In the event Harvest 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, Harvest shall promptly notify Cytomedix
of any such request pursuant to the notice provisions set forth in
Section 11.1 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 the relevant Harvest
Party or Harvest Affiliate or Harvest Distributor or Harvest
customer.
3.5 Covenant Not to Xxx. Cytomedix (for itself and on behalf of its
predecessors, successors and assigns, and each of its and their
respective Affiliates and sublicensees) covenants not to file or to
continue to prosecute any claim or cause of action against the
Harvest Releasees, claiming that the Harvest Releasees making,
having made, using, importing, selling, promoting, marketing and/or
offering for sale any Licensed Product infringes (i) any Claim of
one or more Licensed Patents or (ii) any claim of the 558 Patent,
provided, however, that Harvest, its Affiliates and authorized
sublicensees have not used assays to optimize patient treatment on
an end-user - by - end-user basis, have not instructed Distributors
or end-users on the use of assays in connection with Licensed
Products, and have not manufactured, sold, or offered for sale any
assay for use in connection with the Licensed Products, in each
case, whether based on direct or contributory infringement,
inducement to infringe or any other theory.
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3.6 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 Licensor are granted or
shall be deemed granted to Licensee or any other person.
3.7 Taxes and Authorizations. Licensee 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.
Licensee 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.
4. Payment and Payment Terms.
4.1 Lump-Sum Payment. On the later of (a) June 28, 2005 and (b) the
first business day after the entry of the order dismissing, with
prejudice, the Massachusetts Action, Harvest shall by wire-transfer
deliver Five Hundred Thousand Dollars ($500,000) to Cytomedix's
account in accordance with the prior written instructions of
Cytomedix.
4.2 Royalty Payments; Minimum Royalty. Harvest shall pay to Cytomedix a
royalty on Licensed Products Sold by Harvest, its Affiliates and
authorized sublicensees in the following amounts:
4.2.1 Earned Royalty on Hardware Products. With respect to Hardware
Products, an Earned Royalty of one and one-half percent (1.5%)
of the Net Sales of Hardware Products Sold for each country of
the Territory in which the Hardware Products are covered by a
Claim of one or more Licensed Patents (or the manufacture,
sale, offer for sale, or use of which infringe a Claim of one
or more Licensed Patents, whether based on direct or
contributory infringement, inducement to infringe or any other
theory), on a country-by-country basis, from June 30, 2005
until the expiration of the last to expire of such Licensed
Patents in such country;
4.2.2 Earned Royalty on Disposable Products. With respect to
Disposable Products, an Earned Royalty of seven and one-half
percent (7.5%) of the Net Sales of Disposable Products Sold
for each country of the Territory in which the Disposable
Products are covered by a Claim of one or more Licensed
Patents (or the manufacture, sale, offer for sale, or use of
which infringe a Claim of one or more Licensed Patents,
whether based on direct or contributory infringement,
inducement to infringe or any other theory), on a
country-by-country basis, from June 30, 2005 until the
expiration of the last to expire of such Licensed Patents in
such country; and
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4.2.3 [**]
With respect to Sections 4.2.1 and 4.2.2, in each of the first,
second, third and fourth Royalty Years, Harvest shall pay to
Cytomedix a minimum annual royalty (in each case, the "Applicable
Minimum Royalty") which shall be computed, for each such Royalty
Year, as follows: the sum of (A) Thirty-Seven Thousand Five Hundred
Dollars ($37,500) multiplied by the number of Quarters during which
Harvest, its Affiliates and authorized sublicensees booked sales in
the office market, and (B) Twelve Thousand Five Hundred ($12,500)
multiplied by the number of Quarters during which Harvest, its
Affiliates and authorized sublicensees booked sales in the hospital
market. 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 Territory, on a
country-by-country basis, upon 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. For the avoidance of doubt, the foregoing
shall be subject to the payment obligations provided herein in
respect of Sales of Royalty-Bearing Products on or before November
24, 2009 in the United States and, in each other country of the
Licensed Territory, on a country-by-country basis, through the
expiration of the last to expire of the Licensed Patents in such
country.
4.3 Foreign Currency. Payments made under this Agreement shall be
payable in United States dollars. Sales that have been invoiced in a
Quarter in any currency other than United States dollars shall be
converted into United States dollars using the exchange rate
reported in The Wall Street Journal, East Coast Edition, for the
last Business Day of such Quarter.
4.4 No Royalty Stacking. Only one Earned Royalty shall be payable in
respect to any given unit of a Royalty-Bearing Product, and no
Earned Royalty shall be due under this Agreement with respect to any
unit of a Royalty-Bearing Product for which a third party is
obligated to pay a royalty to Licensor.
4.5 Reports, Payments. Within two months after the end of each Quarter,
Harvest shall furnish Licensor with a written report setting forth
the Net Sales of Royalty-Bearing Products upon which an Earned
Royalty is payable under this Section 4 during such Quarter and the
computation of the Earned Royalties payable with respect thereto.
Each report shall be accompanied (or preceded) by the amount due in
U.S. Dollars. If the Earned Royalties on Royalty-Bearing Products in
a given Royalty Year are not equal to or higher than the Applicable
Minimum Royalty, Harvest shall include in the royalty payment due
for the fourth Quarter of such Royalty Year an amount equal to the
difference between (x) the Applicable Minimum Royalty and (y) the
Earned Royalties on Royalty-Bearing Products as calculated under
Sections 4.2.1 and 4.2.2 for such Royalty Year. Harvest may deduct
from any payments made to Cytomedix any taxes required to be
withheld by governmental agencies in respect to royalties payable to
Licensor. Each report and any accompanying payment shall be sent to
the address specified for the Licensor according to Section 11.1.
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4.6 Records. Harvest shall, and shall ensure that its Affiliates and
approved sublicensees shall, keep accurate records in sufficient
detail to enable Earned Royalties payable hereunder to be determined
and shall, upon written notice by Licensor to Harvest, permit such
records to be inspected (but only to the extent necessary to verify
the amount of Earned Royalty payable hereunder or financial data
provided to Cytomedix by Harvest 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 Harvest and appointed by Licensor at Licensor's
expense. The accountants making such inspection shall report to
Licensor only the amount of Earned Royalty due and payable and shall
sign an agreement with Harvest, in form and substance reasonably
satisfactory to Harvest, agreeing to be bound by the provisions of
Section 6.1 (confidentiality). Records inspected under this Section
4.6 shall be retained until Licensor and Harvest have agreed upon
the amount of Earned Royalty payable thereon; provided, however,
that Harvest, its Affiliates and approved sublicensees shall not be
required to retain any records longer than three (3) years after the
end of the Quarter in which such records were prepared.
4.7 Royalty-Bearing Product Dispute.
4.7.1 In the event of any dispute between the Parties as to whether
or not a product sold by Harvest, its Affiliates or an
approved sublicensee is a Royalty-Bearing Product for which an
Earned Royalty is due, Harvest shall have the right to submit
the dispute to binding arbitration, as provided in Section 9
hereof. Harvest 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, Harvest shall not be deemed
in default of this Agreement for nonpayment of royalties.
4.7.2 In the event the product in dispute is determined not to be a
Royalty-Bearing Product, Licensor shall pay to Harvest the
costs, expenses, and fees paid by Harvest associated with such
arbitration.
4.7.3 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, Harvest shall pay to Licensor the
costs, expenses, and fees paid by Licensor associated with
such arbitration.
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4.8 Harvest Right to Inspect. In order to confirm whether grants of
other licenses after the Effective Date of this Agreement to the
Licensed Patents contain a more favorable Hardware Product royalty
rate or a more favorable Disposable Product royalty rate, Harvest 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.
Cytomedix shall not redact the financial terms of any such records
and such other terms as are reasonably necessary to interpret the
financial terms. Records which are inspected by Harvest shall be
governed by the confidentiality provisions of Section 6.
5. Most Favored Licensee.
5.1 Most Favored Licensee. If, after the Effective Date of this
Agreement, Licensor enters into a license agreement with any
for-profit Entity (other than those providing direct medical care)
that manufactures, markets or sells medical devices involving any
Licensed Patent ("Other License"), then Licensor will, within one
(1) month after the effective date of the Other License agreement or
this Agreement (whichever is later), provide Harvest with a
confidential copy of the Other License agreement for review by
Harvest's officers and directors, attorneys, and financial advisors
only. Harvest 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 (and terms
and conditions related thereto) of said Other License agreement for
the royalty rate (and terms and conditions related thereto) of this
Agreement. The Parties shall cooperate in good faith in promptly
making any refund or payment adjustment required in the event terms
or conditions of an Other License agreement are substituted pursuant
to this Section.
6. Confidentiality.
6.1 Confidentiality. The Parties agree to keep confidential 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). If any Party is required to disclose confidential information
of the other Party by law or legal process, such Party shall provide
prior notice of such intended disclosure to such other Party if
possible under the circumstances and shall disclose only such
confidential information of such other Party as is required to be
disclosed. The Parties acknowledge that Cytomedix intends to
disclose the entirety of this Agreement in a public filing with the
Securities and Exchange Commission.
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6.2 Press Release. Each Party may state, in whole or in part, only the
following with respect to the other Party, this Agreement, and the
Massachusetts Action (the exact words need not be used, provided the
substance is the same): "(1) The Parties have resolved the dispute
related to the litigation to their mutual satisfaction, (2) the
lawsuit has been dismissed, and/or (3) a license has been granted as
part of the settlement."
6.3 Notwithstanding Sections 6.1 and 6.2 of this Agreement, in the event
any third party, Harvest agent, Harvest Distributor or customer (the
"Inquiring Party") inquires whether its use of any product sold by
Harvest (including, without limitation, the products set forth in
Exhibits B and C) is covered by or infringes any Licensed Patent,
Harvest 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
Sections 6.1, 6.2, and the preceding provisions of this Section 6.3,
Harvest 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 Harvest
or Licensor, without requiring a confidentiality agreement between
the customer or Distributor and Harvest.
7. Subsequent Review.
7.1 On a country-by-country basis, Harvest shall be entitled to
discontinue any Earned Royalty payments under Section 4.2 of this
Agreement with respect to a Licensed Product immediately upon the
occurrence of the following with respect to all Claims of Licensed
Patents covering such Licensed Product:
7.1.1 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
covering such Licensed Product are invalid or otherwise
unenforceable, or; (B) the use of human platelet releasate (or
the manufacture, sale, offer for sale, or use of products
substantially equivalent to the Royalty-Bearing Products) to
facilitate healing of human wounds or human tissue infringes
none of the Claims of such Licensed Patent, or
7.1.2 Licensor expressly and in writing disclaims or abandons any
independent Claim of such Licensed Patent applicable to that
country or foreign territory, or
7.1.3 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.
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7.2 In the event Licensor obtains reversal of any adverse determination
in Section 7.1.1 or 7.1.3 hereof that enabled Harvest to discontinue
any Earned Royalty payments, then Harvest shall resume Earned
Royalty payments affected thereby, and pay Licensor any Earned
Royalties that accrued between suspension and resumption of Earned
Royalty payments. Under no circumstances shall Harvest's obligation
to Licensor to make Earned Royalty payments extend beyond November
24, 2009.
8. Representations and Warranties.
8.1 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 its Affiliates 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.
8.2 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 Section
6 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.
8.3 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 exclusively licensed to
Cytomedix all substantial rights to the Licensed Patents and 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.
8.4 Disclaimer. Each Party makes no representations other than those
expressly set forth in this Section 8. 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.
12
8.5 Complete List of Patents. Licensor represents and warrants that
Exhibit A sets forth all patents and applications for patent that
are owned by, controlled by, or licensed to Licensor as of the
Effective Date that relate to compositions containing platelets
and/or platelet releasate (which includes, but is not limited to,
platelet concentrate or platelet rich plasma) to facilitate the
healing of wounds or other damaged tissue, excluding, however,
United States Patent Nos. 5,470,831, 5,599,558, 5,776,892,
6,303,112, 6,524,568 and European Patent No. 05633329 and any
related patent application (including, without limitation, any
continuation, continued prosecution, continuation-in-part,
divisional, foreign counterpart or substitution thereof) and any
patent (including, without limitation, 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.
8.6 Representation regarding Licensed Products and Related Financial
Data. Harvest represents that (a) all products currently marketed or
promoted by Harvest that constitute Disposable Products are included
on Exhibit B, (b) all products currently marketed or promoted by
Harvest that constitute Hardware Products are included on Exhibit C,
(c) all products currently marketed or promoted by Harvest that
constitute [**] are included on Exhibit D, and (d) all financial
data regarding sales of Licensed Products provided to Cytomedix
before or after the Effective Date are and shall be true and
accurate representations of such data in all material respects as
reflected on Harvest's financial statements.
9. Disputes and Dispute Resolution.
9.1 Except as specified elsewhere in the Agreement, any dispute arising
out of or relating to the formation or performance of this Agreement
(including, without limitation, the breach, termination, or validity
of this Agreement, or the determination of whether a product is a
Royalty-Bearing Product or a [**]) which has not been resolved by
good faith negotiation between representatives of Harvest and
Licensor who have authority to fully and finally resolve the dispute
within thirty (30) days after the delivery of a dispute notice by
one Party to the other, 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 (the "Rules"); 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. If, within thirty (30) days after a Party notifies the
13
other that arbitration must be commenced, either Party has not
selected its arbitrator or if the Parties fail within such time to
agree upon the third arbitrator, such arbitrator(s) shall be
appointed by AAA in accordance with its Rules. The arbitrators shall
have no jurisdiction or authority to award treble, 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 fifty percent (50%) of the amount in dispute. The
binding arbitration shall be governed by the Federal Arbitration
Act, 9 U.S.C. ss.ss.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.
9.2 Damages. Harvest and Licensor each agree to waive any right to
receive treble, punitive, consequential, special or indirect damages
relating in any way to this Agreement.
10. Termination.
10.1 Expiration/Termination. If this Agreement is not terminated sooner
as provided for herein, it shall expire upon the expiration of the
last Claim to expire of the Licensed Patents.
10.2 Termination Upon Default. Upon material default by any Party in the
performance of any material 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 two (2) months
following the giving of such notice (or if such cure cannot be
completed within such two (2) 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
then one (1) month from the date of such further notice.
10.3 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.
14
10.4 Survival. Upon expiration of this Agreement, Sections 3.2, 3.3, 3.4,
3.5, 4.4, 4.5, 4.6, 4.7, 4.8, 5, 6, 9, 10, 11 and the last two
sentences of Section 4.2 shall survive indefinitely. Upon
termination of this Agreement, Sections 3.3, 4.5, 4.6, 4.7, 4.8, 5,
6, 9, 10, 11 and the first sentence of Section 3.4 shall survive
indefinitely.
11. Miscellaneous.
11.1 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 Harvest: Harvest Technologies Corporation
00 Xxxxxxx Xxxx
Xxxxxxxx, Xxxxxxxxxxxxx 00000
Attention: President
With a copy which shall not constitute notice to
Xxxxxx Xxxxxx Xxxxxxxxx Xxxx and Xxxx
00 Xxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attn: Xxxx X. Xxxxx
If to Cytomedix: Cytomedix, Inc.
000 Xxxxxxxxxx Xxxxx, Xxxxx 000
Xxxxxxxxx, Xxxxxxxx 00000
Attention: Chief Executive Officer
With a copy which shall not constitute notice to
Xxxxxx X. Xxxxxxx & Associates
00 Xxxx Xxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxxxx X. Xxxxxxxxxx
11.2 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of Massachusetts without regard to the
conflicts of law principles thereof.
11.3 Assignment. This Agreement and any of the rights and obligations
thereof are fully assignable by both Parties.
15
11.3.1 In the event of an assignment by Harvest (whether by
operation of law, merger, acquisition or change of
control) (an "Assignment"), Sections 3.2, 3.3 and 3.5
shall not apply to past, present, or future actions for
or claims of infringement against any of the Assignee
Parties in respect of an unlicensed product that
infringes any Claim of one or more Licensed Patents
(whether based on direct or contributory infringement,
inducement to infringe or any other theory). Further,
Section 3.4 shall not apply to the Assignee Parties.
"Assignee Parties" shall mean the assignee, and its
predecessors, successors and assigns, and its and their
respective Affiliates, sublicensees, officers, directors,
employees, agents, shareholders, partners,
representatives, and all other persons acting by or on
its or their behalf.
11.3.2 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.
11.4 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.
11.5 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:
16
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.
11.6 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.
11.7 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.
11.8 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 or implied, against or
in the name of, or on behalf of, the other, except as expressly
provided herein.
11.9 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.
17
IN WITNESS WHEREOF, the parties have executed this Agreement on the
date indicated below.
CYTOMEDIX, INC. HARVEST, INC.
By: /s/ Xxxxxxx Xxxxx By: /s/ Xxxx Xxxxxxx
------------------------ ------------------
Xxxxxxx Xxxxx, Ph.D, CEO Xxxx Xxxxxxx, President
Date: May 23, 2005 Date: May 23, 2005
18
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
--------------------------------
APC-120
--------------------------------
APC-120i
--------------------------------
APC-20
--------------------------------
APC-20i
--------------------------------
APC-60
--------------------------------
APC-60i
--------------------------------
PRP-1
--------------------------------
PRP-2
--------------------------------
PRP-20
--------------------------------
LK/2
--------------------------------
SK/S
--------------------------------
EXHIBIT C
Schedule of Hardware Products
--------------------------------
SMP-1000-115
--------------------------------
SMP2-115
--------------------------------
BW-20
--------------------------------
PDR-1
--------------------------------
PDR-2
--------------------------------
BW-60
--------------------------------
PDR-20
--------------------------------
Carts
--------------------------------
EXHIBIT D
Schedule of [**]
--------------------------------
[**]
--------------------------------
[**]
--------------------------------
[**]
--------------------------------
[**]
--------------------------------
EXHIBIT X
XXXXXX XXXXXX XXXXXXXX XXXXX
XXXXXXXX XX XXXXXXXXXXXXX
------------------------------------------------
HARVEST TECHNOLOGIES CORPORATION, Civil Action No. 02-12077PBS
Plaintiff,
v.
CYTOMEDIX, INC.,
Defendant.
------------------------------------------------
STIPULATED DISMISSAL WITH PREJUDICE
The parties have agreed to settle the above-captioned matter and jointly
request entry of this Stipulated Dismissal With Prejudice. It is, therefore
ORDERED, ADJUDGED, AND DECREED as follows:
1. The above-captioned action is hereby dismissed, with prejudice, in
its entirety.
2. Each party shall bear its own costs and attorneys' fees.
Date: , 2005
---------------------------- -------------------------------------
UNITED STATES DISTRICT COURT JUDGE
The Parties hereto, through counsel, consent to entry of the above
Stipulated Dismissal With Prejudice.
HARVEST TECHNOLOGIES CORPORATION, CYTOMEDIX, INC.
By its attorneys, By its attorneys,
------------------------------------- -------------------------------------
Xxxx X. Xxxxx, Esq. (BBO #415120) Xxxxxxx Xxxxxxx, Esq.
Xxxxx Xxxxxx, Esq. (BBO #564537) Xxxx X. Xxxxxxxx, Esq.
Xxxxx X. Xxxxxxx, Esq. (BBO #657791) Xxxx X. Xxxx, Esq.
XXXXXX XXXXXX XXXXXXXXX Xxxxxxx X. Xxxxxxx, Esq.
XXXX AND XXXX LLP Xxxx X. Xxxxx, Esq.
00 Xxxxx Xxxxxx FITCH, EVEN, TABIN & XXXXXXXX
Xxxxxx, Xxxxxxxxxxxxx 00000 000 Xxxxx XxXxxxx Xxxxxx, Xxxxx 0000
Telephone: (000) 000-0000 Xxxxxxx, Xxxxxxxx 00000-0000
Facsimile: (000) 000-0000 Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Xxxxxxxx Xxxxxx, Esq. (BRN-102,192) Xxxxxx X. Xxxxx, Esq. (BBO# 542531)
Xxx Xxxxxxxxx, Esq. (BRN-509,188) Xxxxxxxx X. Xxxxxxx, Esq. (BBO# 651190)
XXXXXX, XXXXXXXXXX PROSKAUER ROSE LLP
XXXXXX & XXXXXX P.C. Xxx Xxxxxxxxxxxxx Xxxxx, 00xx Xxxxx
0 Xxxxxxxx Xxxxxx Xxxxxx, Xxxxxxxxxxxxx 00000
Xxxxxx, Xxx Xxxx 00000-0000 Telephone: (000) 000-0000
Telephone: (000) 000-0000 Facsimile: (000) 000-0000
Facsimile: (000) 000-0000
Xxxx X. Xxxxxxxxx, Esq. Xxxxxx X. Xxxxxxx, Esq.
Xxxxxxxxx & Dunkless LLP Xxxxxx X. Xxxxxxxxxx, Esq.
000 Xxxx Xxxxxx, 0xx Xxxxx XXXXXX X. XXXXXXX & ASSOCIATES
Xxxxxx, Xxxxxxxxxxxxx 00000 00 Xxxx Xxxxxx Xxxxx, Xxxxx 0000
Telephone: (000) 000-0000 Xxxxxxx, Xxxxxxxx 00000
Facsimile: (000) 000-0000 Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Dated: May _____, 2005
