LICENSE AGREEMENT EXHIBIT 10.29
THIS LICENSE AGREEMENT ("Agreement") is made and entered into as of
December 13, 1996 (the "Effective Date") between Urohealth Systems, Inc., a
Delaware corporation ("Urohealth"), and Vista Medical Technologies, Inc., a
Delaware corporation ("Vista").
RECITALS
A. Vista owns all right, title and interest in the Patent Rights (as
hereinafter defined) and Related Technical Information (as hereinafter defined).
B. Vista wishes to license the Patent Rights and Related Technical
Information to Urohealth, within the Field of Use (as hereinafter defined), on
the terms and conditions set forth below and Urohealth wishes to obtain a
license on such terms.
NOW THEREFORE, for good and valuable consideration, the parties hereby
agree as follows:
ARTICLE 1
DEFINITIONS
1.1 "EFFECTIVE DATE" shall mean the date upon which both of the following
have been completed; (a) this Agreement has been executed by both parties hereto
and (b) the "closing" portion of the license fee set forth in EXHIBIT D has been
paid to Vista.
1.2 "IMPROVEMENTS" means improvements or derivations of the subject matter
covered by the Patent Rights which are developed by Vista, Urohealth or through
the joint efforts of the parties during the term of this Agreement which would
not already be included within the Patent Rights and which are applicable to the
Field of Use.
1.3 "FIELD OF USE" means gynecology, urology and general surgery.
1.4 "LICENSED PRODUCT" means Vista's Aspiroscope, those products or
potential products listed on EXHIBIT A attached hereto, any other products or
potential products utilizing or covered by the Patent Rights or the Related
Technical Information and Improvements.
1.5 "PATENT RIGHTS" means all right, title and interest in and to the
patents, patent applications and invention disclosures set forth in EXHIBIT B
attached hereto (as such exhibit may be amended by mutual agreement of the
parties) including (i) all corresponding patents, utility models, inventor
certificates, registrations or the like in any country of the world with respect
to the foregoing and (ii) all continuations, continuations-in-part, divisionals,
reissues, additions, reexaminations and extensions with respect to any of the
foregoing.
1.6 "RELATED TECHNICAL INFORMATION" means any published or unpublished
research and development information, unpatented inventions, know-how, trade
secrets, copyrights, and all preclinical, clinical and other technical data in
the possession of Vista prior to the Effective Date, or during the term of this
Agreement, in each case which relates to the practice of the Patent Rights in
the Field of Use.
1.7 "VALID CLAIM" shall mean a claim of an issued and unexpired patent
included within the Patent Rights which has not been held unenforceable,
unpatentable or invalid by a court or other governmental agency of competent
jurisdiction, and which has not been admitted to be invalid or unenforceable
through reissue, disclaimer or otherwise.
ARTICLE 2
GRANT OF RIGHTS
2.1 LICENSE. In consideration of the license fees and royalties payable
by Urohealth to Vista pursuant to Article 4 below, and subject to the terms and
conditions of this Agreement, Vista hereby grants to Urohealth an exclusive and
worldwide license under the Patent Rights, Related Technical Information and
Improvements to make, use and sell Licensed Products within the Field of Use.
Urohealth shall have no right to sublicense any rights granted hereunder except
upon Vista's prior written approval (such approval to be given in Vista's sole
and absolute discretion).
2.2 DISCLOSURE OF TECHNOLOGY. Promptly after the Effective Date, and
throughout the term of this Agreement, Vista shall make available to Urohealth,
as reasonably requested by Urohealth, (i) copies of all patent applications
within the Patent Rights, all correspondence and written materials related
thereto, and all Related Technical Information; and (ii) all physical
embodiments of the Patent Rights and Related Technical Information, including,
without limitation, copies of all notebooks, drawings, diagrams, computer files,
manuscripts, patent prosecution documents and other materials created or
obtained in the course of developing the Patent Rights and/or Related Technical
Information or related to their conception, experimentation, design, fabrication
or use. Subject to Article 7 below and the licenses granted in Section 2.1
above, Urohealth may use and disclose such information and embodiments as it
deems appropriate.
2.3 RESTRICTIONS ON DISCLOSURE TO THIRD PARTIES. Vista agrees not to
disclose any Related Technical Information or any other non-public information
relating to the Patent Rights to any third party without the prior written
consent of Urohealth; PROVIDED, HOWEVER, that notwithstanding the foregoing,
Vista may disclose such information to third parties without Urohealth's consent
if (a) such disclosure is made to a third party solely for the purpose of such
third party's intended use outside of the Field of Use; and (b) such disclosure
would not, in Vista's reasonable discretion, conflict with or impair Urohealth's
rights under this Agreement; and (c) such disclosure is made by
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Vista to the third party under confidentiality restrictions at least as severe
as those contained in Article 7 of this Agreement.
2.4 IMPROVEMENTS.
(a) Vista shall, throughout the term of this Agreement, keep
Urohealth apprised of any Improvements that it has developed or is in the
process of developing. Subject to Section 6.1, Urohealth shall have the right,
but not the obligation, to file and to prosecute patent applications with
respect to any such Improvements that might reasonably constitute patentable
inventions. If Urohealth decides in its sole discretion not to file or
prosecute such patent applications with respect to any such Improvement, then
Vista shall have the right to do so for such Improvement at its expense.
(b) All Improvements shall be deemed to be part of the license
granted to Urohealth pursuant to Section 2.1 above and Vista shall own such
Improvements free and clear of any Urohealth claims. Upon Urohealth's request
for all materials reasonably necessary for Urohealth to exercise its license
with respect to such Improvements, Vista shall promptly deliver such to
Urohealth.
2.5 RIGHT OF FIRST REFUSAL TO MANUFACTURE AND SUPPLY.
(a) From the Effective Date through the date which is the second
anniversary of the cessation of Vista manufacturing a component of a Licensed
Product, Vista shall have the first right of refusal to manufacture and supply
to Urohealth Urohealth's requirements of the * * *
* * * (collectively, the "Video Equipment") for medical office use in
conjunction with a Licensed Product (the "Right of First Refusal"). Prior to
the first commercial sale of a Licensed Product, Urohealth shall notify Vista of
its requirements and specifications of the Video Equipment for such Licensed
Product (the "Requirements Notice").
(b) If such Requirements Notice is delivered prior to the ***
* * * of the Effective Date, Vista and Urohealth shall negotiate in good
faith and shall agree on the terms and conditions to be applicable to the
manufacture and supply of the Video Equipment by Vista to Urohealth; provided
that Vista shall be obligated to meet the mutually-agreed upon specifications
for the Video Equipment and shall provide Urohealth with competitive pricing for
such Video Equipment.
(c) If such Requirements Notice is delivered following the third
anniversary of the Effective Date through the termination of the Right of First
Refusal as set forth above, Vista and Urohealth shall negotiate in good faith
for a period of * * * the terms and conditions of the manufacture and
supply of the Video Equipment by Vista. The specifications and pricing shall be
mutually agreed upon by Vista and Urohealth. In the event that a definitive
manufacturing and supply agreement is not entered into within such * * *
period, Urohealth may immediately thereafter enter into discussions with a
third party regarding such Video Equipment. Urohealth shall be permitted to
enter into a definitive agreement with respect to such
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Video Equipment on terms and conditions no less favorable in the aggregate than
those last proposed by Urohealth or offered by Vista under this Section 2.4(c).
In the event that the terms and conditions offered by the third party are less
favorable in the aggregate than those last proposed by Urohealth or offered by
Vista, prior to entering into any agreement with such third party with respect
to the manufacture and supply of the specified Video Equipment, Urohealth shall
notify Vista in writing of the material terms and conditions of any such
proposed agreements. Such notice shall be deemed an offer to Vista to enter
into definitive agreements on the same proposed terms and conditions. Vista
shall have * * * to accept the offer contained in such notice. Upon
acceptance by Vista, the parties will negotiate in good faith to draft and
execute definitive agreements within * * * of acceptance. If no
definitive agreements have been executed in such * * * period, the
Right of First Refusal shall lapse with respect to the specified Video Equipment
and Urohealth shall be free to license such Video Equipment to any third party
on any terms and conditions.
(d) The obligations of Urohealth under subparagraphs (a) and (b)
above shall be subject to Vista's ability to then manufacture and provide to
Urohealth Video Equipment of a quality and design for its intended purpose equal
to or better, in the aggregate, to the quality and design of competitive video
equipment then available to Urohealth, taking into account the relative costs of
the Video Equipment and the competitive video equipment.
ARTICLE 3
OWNERSHIP AND FURTHER DEVELOPMENT
3.1 PATENTS AND TECHNOLOGY. Vista owns all right, title, and interest in
the Patent Rights and Related Technical Information. Urohealth shall have no
rights in the Patent Rights and Related Technical Information except as
expressly provided in this Agreement.
3.2 IMPROVEMENTS. Vista shall own all right, title, and interest in any
Improvements created during the term of this Agreement regardless of which party
is responsible for such Improvements, including all patent, copyright, trade
secret, and other intellectual property rights therein. Upon Vista's reasonable
request, Urohealth shall execute all documents necessary to vest title in Vista
to any such Improvements.
3.3 DEVELOPMENT OF LICENSED PRODUCTS. Urohealth shall assume and pay all
Licensed Product development costs incurred by Urohealth from and after the
Effective Date and throughout the term of this Agreement.
ARTICLE 4
LICENSE FEE AND ROYALTY
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4.1 LICENSE FEE. In consideration of the rights granted by Vista to
Urohealth pursuant to this Agreement, Urohealth shall pay Vista a license fee in
accordance with EXHIBIT D and royalties as set forth below.
4.2 ROYALTIES. For the purpose of calculating royalties due hereunder,
the following terms shall have the following meanings:
(a) "Gross Margin" shall mean 100 times (Net Revenue minus
Manufacturing Costs) divided by Net Revenue, calculated cumulatively for each
calendar year.
(b) "Net Revenue" means Urohealth's actual amounts invoiced
(exclusive of any separately itemized taxes, interest, service or maintenance
charges, finance charges, insurance and transportation costs actually paid by
Urohealth's customers) from all sales of the Licensed Products, less (i) any
customary and reasonable credits, refunds for returns or reasonable reserves for
bad debts, (ii) any customary and reasonable credits, rebates, discounts and
promotional allowances to customers and (iii) the amount of any sales, use or
other taxes required to be paid or withheld by Urohealth with respect to
payments due Vista. In the event that any particular Licensed Product is sold
by Urohealth as part of a bundle or kit, the invoiced price for that particular
product shall be determined by multiplying the net selling price of the bundle
or kit by the fraction A/A+B where A is the suggested list price for the
Licensed Product sold separately (as documented by Urohealth's records) and B is
the suggested list price for the remaining products in the bundle or kit sold
separately (as documented by Urohealth's records).
(c) "Manufacturing Costs" shall mean (i) Urohealth's manufacturing
costs for the Licensed Products, including manufacturing overhead as determined
under generally accepted accounting procedures applied consistently by Urohealth
and attributable to the production of the Licensed Products by Urohealth, in the
case that Urohealth manufactures Licensed Products; and (ii) the purchase price
to Urohealth in the case that Urohealth purchases the Licensed Products from a
third party provided that such purchase price is subject to the prior written
approval of Vista, which shall not be unreasonably withheld.
(d) "U.S./Direct Royalty Rate" shall mean * * *
* * * and shall apply to all sales of Licensed Products to end-users located
in the United States and all direct sales of Licensed Products by Urohealth
(sales not through an independent distributor) in the rest of the world.
(e) "Foreign Indirect Royalty Rate" shall mean * * *
* * * and shall apply to all indirect sales of Licensed Products
(sales through independent distributors) to end-users located outside the United
States.
4.3 ROYALTY PAYMENT. Urohealth will pay to Vista an amount equal the sum
of the U.S./Direct Royalty Rate and Foreign Indirect Royalty Rate on a
product-by-product
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and country-by-country basis through the later of (i) the expiration of the
last-to-expire patent within the Patent Rights with claims covering such
Licensed Product or (ii) the ninth anniversary of the Effective Date (the
"Royalty Termination Date"). In no event shall either the U.S./Direct Royalty
Rate or the Foreign Indirect Royalty Rate exceed * * * or fall below
* * * for any payment period. All the foregoing amounts will be
calculated on a * * * basis and shall be paid in accordance
with Section 4.4 below. Following the Royalty Termination Date, Urohealth shall
a fully-paid up license to such Patent Rights and the Related Technical
Information and Improvements for such Patent Rights, subject to termination
pursuant to Article 5 below.
4.4 * * * PAYMENTS. All royalty payments owed by Urohealth to Vista
under this Agreement will be payable on a calendar * * * basis no later than
* * * * * * after the end of each * * * . Royalty reports
shall be provided by Urohealth to Vista with each royalty payment. The royalty
reports shall show (i) the number of Licensed Products invoiced during the
calendar * * * in question, (ii) the total gross sales invoiced amount, (iii)
the applicable Manufacturing Costs, (iv) an itemization of deductions, (v) the
amount of royalties due and (vi) the method of calculation of royalties for such
calendar * * * .
4.5 BOOKS AND RECORDS; AUDIT RIGHTS. Urohealth agrees to make and
maintain such books, records and accounts as are reasonably necessary to verify
the payments due Vista under this Agreement. At Vista's sole expense, an
independent certified public accountant, selected by Vista and reasonably
acceptable to Urohealth, who agrees to sign a nondisclosure agreement may, upon
reasonable notice and during normal business hours, but no more often than once
each year, inspect only those records of Urohealth on which the payments to
Vista under this Agreement are based. The accountant may report only the
accuracy of the payments, but may not disclose confidential information,
including specific customers, quantities and pricing by channel or distributor.
If any audit hereunder reveals that Urohealth has failed properly to account for
and pay royalties owing to Vista hereunder, and the amount of any royalties
which Urohealth has failed properly to account for and pay during any * * *
period exceeds by * * * or more the royalties actually accounted for
and paid to Vista for such period, Urohealth shall reimburse Vista for the cost
of the accountant. Urohealth shall also, within * * * after
notification by Vista, pay to Vista any amounts shown as due under such audit,
regardless of whether Urohealth is required to reimburse Vista for the cost of
the accountant.
ARTICLE 5
TERM AND TERMINATION
5.1 TERM. The term of this Agreement shall commence on the Effective Date
and, unless earlier terminated pursuant to this Article 5, shall continue in
full force and effect indefinitely. Notwithstanding the foregoing, the royalty
obligation set forth in
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Section 4.3 shall terminate as set forth therein and thereafter Urohealth shall
have a fully-paid up license as set forth herein.
5.2 TERMINATION FOR BREACH. In the event of a material breach of this
Agreement, the nonbreaching party shall be entitled to terminate this
Agreement by written notice to the breaching party if such breach is not
cured within thirty (30) days after written notice is given by the
nonbreaching party to the breaching party specifying the breach. The parties
agree that if: (i) two (2) consecutive royalty payments are not paid when due
under Section 4.4, and Urohealth fails to pay such royalties within the
thirty (30) days after written notification from Vista, (ii) Urohealth fails
to pay all prosecution, maintenance and infringement costs associated with
the Patent Rights within thirty (30) days after written notification from
Vista, (iii) Urohealth fails to comply with the additional qualifications set
forth in Article 9 of this Agreement within thirty (30) days after written
notification from Vista or (iv) fails to meet mutually-agreed upon
performance standards set forth on attached EXHIBIT C, including the
establishment of a direct sales force and a marketing plan and budget for the
United States and the rest of the world, each shall be deemed to be a
material breach by Urohealth permitting Vista to terminate this Agreement
immediately.
5.3 TERMINATION FOR INSOLVENCY. This Agreement may be terminated by a
party, with notice, (i) upon the institution by or against the other party of
insolvency, receivership or bankruptcy proceedings which proceedings are not
dismissed within sixty (60) days, (ii) upon the other party's assignment for the
benefit of creditors, or (iii) upon the other party's dissolution or ceasing to
do business.
5.4 EFFECT OF TERMINATION.
(a) If Vista terminates this Agreement pursuant to Sections 5.2 or
5.3 hereof, (a) the licenses granted to Urohealth under Article 2 of this
Agreement shall terminate, (b) all rights to the Patent Rights, Related
Technical Information and Improvements shall revert to Vista and (c) all rights
to develop, make, have made, use, sell and import all Licensed Products shall
revert to Vista.
(b) If Urohealth terminates this Agreement pursuant to Sections 5.2
or 5.3 hereof, the provisions of Sections 2.1, 2.2, 2.3, 2.4, 5.4 and 5.5 and
Articles 3 and 4 of this Agreement shall survive; PROVIDED, HOWEVER, if
Urohealth fails to perform or observe or otherwise breaches a material
obligations under this Agreement, which failure or breach is unremedied for a
period of thirty (30) days after receipt by Urohealth of written notice thereof
from Vista, Vista shall have the right to terminate this Agreement with the same
effect as if Vista were to terminate this Agreement pursuant to Section 5.4(a)
hereof.
5.5 SURVIVAL.
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(a) Termination of this Agreement for any reason shall not release
either party hereto from any liability which at the time of such termination has
already accrued to the other party.
(b) In the event this Agreement is terminated for any reason,
Urohealth shall have the right to sell or otherwise dispose of its existing
stock of Licensed Products as completed products.
(c) Articles 7, 8, and 10 shall survive the expiration or termination
of this Agreement for any reason.
ARTICLE 6
PATENTS AND INFRINGEMENT
6.1 PATENT PROSECUTION. Urohealth shall have the right but not the
obligation to prosecute all patents under the Patent Rights within the Field of
Use at Urohealth's expense. If Urohealth does not prosecute a patent in a
particular country, Vista may do so, provided that Vista bears all costs and
expenses in connection with such prosecution. Vista and Urohealth agree,
throughout the term of this Agreement, to cooperate in: (i) formulation of a
general intellectual property strategy; (ii) foreign filings; and (iii)
determination of the content of each new application, divisional continuation or
continuation-in-part. Each further agrees to assist the other in any
formalities relating to the foregoing and each shall use its best efforts to
ensure that the other receives copies of all relevant correspondence.
6.2 INFRINGEMENT CLAIMS. If the production, sale or use of Licensed
Products by Urohealth results in any claim for patent infringement against
Urohealth, Urohealth shall promptly notify Vista thereof in writing. As between
the parties to this Agreement, Urohealth shall have the right at its own expense
to defend and control the defense of any such claim against Urohealth, by
counsel of its own choice. Vista shall provide such support to Urohealth as
Urohealth may reasonably request, in connection with such defense.
6.3 ENFORCEMENT OF PATENT RIGHTS. In the event that any of the Patent
Rights are infringed by a third party within the Field of Use, Urohealth shall
have the exclusive right, but not the obligation, to institute, prosecute and
control any action or proceeding with respect to such infringement, by counsel
of its choice, including any declaratory judgment action arising from such
infringement. Urohealth shall be entitled to any and all proceeds recovered
from third parties as a result of the enforcement of the Patent Rights. If
Urohealth does not take any action with respect to an infringement, then Vista
shall have the right to take action upon notice to Urohealth. In such case,
Vista shall be entitled to any and all proceeds as a result of the enforcement
of the Patent Rights. In the event both parties mutually agree to take action
against an infringer, then the proceeds as a result of the enforcement of the
Patent Rights shall be divided * * * * * * to each party's
expenditures in connection with such enforcement.
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ARTICLE 7
CONFIDENTIALITY
7.1 NONDISCLOSURE. Except as otherwise provided in this Agreement, each
party (the "Receiving Party") shall hold in confidence and not disclose to any
third party any business or technical information that is disclosed to it by the
other party in a tangible form marked "Confidential" or that is so disclosed to
it orally and confirmed in writing as confidential within * * * after
its initial disclosure ("Proprietary Information"). Proprietary Information of
a party shall not include:
(a) Information which at the time of disclosure is published or
otherwise generally available to the public;
(b) Information which, after disclosure by the other party, is
published or becomes generally available to the public through no fault of the
Receiving Party, or
(c) Information which the Receiving Party can document was or is in
its possession at the time of disclosure and was not acquired directly or
indirectly from such party.
7.2 EXCEPTIONS. The Receiving Party may disclose Proprietary Information
of the other:
(a) In connection with the order of a court of law or in compliance
with laws or regulations relating to registrations or sale of securities, or as
is reasonably necessary in connection with the prosecution, maintenance or
enforcement of the Patent Rights or obtaining product approvals upon notice to
the other party; or
(b) If such information is also rightfully acquired from a third
party who, to the best of such party's knowledge and belief, is entitled to
rightfully make such disclosure, but only to the extent such party complies with
any restrictions imposed by the third party.
ARTICLE 8
WARRANTIES
8.1 WARRANTY. Vista represents and warrants that:
(a) Vista is the owner or exclusive licensee of all of the Patent
Rights and has the full right and authority to enter into this Agreement, to
disclose any and all of the information disclosed to Urohealth hereunder, and to
grant the rights and licenses granted herein;
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(b) Vista has not previously granted and shall not grant any rights
in the Patent Rights that are inconsistent with the rights and licenses granted
to Urohealth herein;
(c) Vista has not previously entered into any agreements and shall
not in the future enter into any agreements that are inconsistent with or
conflict with this Agreement or the rights and licenses granted to Urohealth
herein;
(d) To Vista's knowledge, as of the Effective Date, the Licensed
Products do not infringe any patent rights, trade secret rights or other
proprietary rights of any third party;
(e) As of the Effective Date, there are no existing or threatened
actions, suits or claims pending against Vista with respect to the Patent Rights
or the right of Vista to enter into and perform its obligations under this
Agreement; and
(f) EXHIBIT B includes all patents and patent applications within the
Patent Rights existing as of the Effective Date, and Vista does not own rights
in any other patent or patent application, the claims of which relate to the
manufacture, sale or use of a product within the Field of Use or that would
dominate the claims of a patent or application within the Patent Rights.
8.2 DISCLAIMER. EXCEPT AS OTHERWISE EXPRESSLY SET FORTH IN THIS
AGREEMENT, VISTA MAKES NO REPRESENTATIONS AND EXTENDS NO WARRANTIES OF ANY KIND,
EITHER EXPRESS OR IMPLIED, INCLUDING BUT NOT LIMITED TO, WARRANTIES OF
MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE.
8.3 EFFECTS OF REPRESENTATIONS AND WARRANTIES. If Urohealth must pay a
third party claiming any rights to the rights granted herein royalties on a
Licensed Products pending resolution of any dispute with each third party or
subject to any injunction with the prior written consent of Vista, the royalty
payments of Urohealth due hereunder for such Licensed Product shall be reduced
by such payments, but such reduction shall be no more than * * *
of the amount due during such payment period.
ARTICLE 9
ADDITIONAL QUALIFICATIONS
9.1 CONSULTING. Concurrently with this Agreement, the parties shall enter
into a Consulting Agreement, attached hereto as EXHIBIT E (the "Consulting
Agreement").
9.2 UNITED STATES FOOD AND DRUG ADMINISTRATION APPROVAL. Urohealth shall
direct all submissions and registrations for the Licensed Products and shall
assume all costs related thereto in connection with United States Food and Drug
Administration and other foreign regulatory agencies. Urohealth shall provide
Vista with copies of all
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documentation in Urohealth's possession concerning such submissions and
registrations. In this regard, Urohealth shall be responsible for (i) the
development of a general strategy, (ii) the selection of clinical sites, and the
managing of clinical studies, and (iii) the content and timing of submissions.
ARTICLE 10
MISCELLANEOUS
10.1 PRODUCT LIABILITY INDEMNITY. Urohealth agrees to indemnify and defend
Vista and its employees and agents from and against any liability or expense
arising from any product liability claim asserted by any party as to any
Licensed Product manufactured or distributed pursuant to this Agreement or as to
the exploitation of the Patent Rights pursuant to this Agreement, including
reasonable attorneys' fees, except to the extent that such claim, liability or
expense results from the gross negligence or intentional misconduct of Vista or
its employees or agents. Such indemnity and defense obligation shall apply to
any claims made by employees, subcontractors, sublicensees or other agents of
Urohealth as well as any member of the general public.
10.2 CONFIDENTIALITY OF AGREEMENT. Both Urohealth and Vista agree that the
terms and conditions of this Agreement shall be treated as confidential
information and that no reference to the terms and conditions of this Agreement
or to activities pertaining thereto can be made in any form without the prior
written consent of the other party; PROVIDED, HOWEVER, that the general
existence of this Agreement shall not be treated as confidential information and
that either party may disclose the terms and conditions of this Agreement:
(i) as required by any court or other governmental body;
(ii) as otherwise required by law (provided that the parties shall
mutually agree on the extent of any confidential treatment to be requested in
filings with the Securities and Exchange Commission);
(iii) to legal counsel of the parties;
(iv) in confidence, to accountants, banks, proposed investors, and
financing sources and their advisors;
(v) in confidence, in connection with the enforcement of this
Agreement or rights under this Agreement; or
(vi) in confidence, in connection with a merger or acquisition or
proposed merger or acquisition, or the like.
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10.3 WAIVER. No waiver by either party hereto of any breach or default of
any of the covenants or agreements herein set forth shall be deemed a waiver as
to any subsequent and/or similar breach or default.
10.4 ASSIGNMENTS. This Agreement shall be binding upon and inure to the
benefit of the parties hereto and the successors or assigns of the parties
hereto; PROVIDED, HOWEVER, Urohealth may assign this Agreement, and its rights
and obligations hereunder, to any business organization that succeeds to the
business of Urohealth to which this Agreement relates.
10.5 INDEPENDENT CONTRACTORS. The relationship of the parties hereto is
that of independent contractors. Neither party hereto is an agent, partner or
joint venturer of the other for any purpose.
10.6 NOTICES. Any notice required or permitted to be given to the parties
hereto shall be deemed to have been properly given if delivered in person, when
received if mailed by first-class certified mail to the other party at the
appropriate address as set forth below or to such other addresses as may be
designated in writing by the parties from time to time during the term of this
Agreement or when transmitted by electronic facsimile (with a confirmation copy
to be sent by mail).
Vista: Vista Medical Technologies, Inc.
0000 Xxxxxxx Xxxxxxx, Xxxxx X
Xxxxxxxx, Xxxxxxxxxx 00000
Fax: (000) 000-0000
Attn: President
With a copy to:
Xxxxxxx, Phleger & Xxxxxxxx LLP
000 Xxxx X Xxxxxx, Xxxxx 0000
Xxx Xxxxx, Xxxxxxxxxx 00000
Fax: (000) 000-0000
Attn: Xxxxx X. Xxxxxxx, Esq.
Urohealth: Urohealth Systems, Inc.
0 Xxxxx Xxxxx
Xxxxxxx Xxxxx, Xxxxxxxxxx 00000
Fax: (000) 000-0000
Attn: President
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With a copy to:
Urohealth Systems, Inc.
0 Xxxxx Xxxxx
Xxxxxxx Xxxxx, Xxxxxxxxxx 00000
Fax: (000) 000-0000
Attn: General Counsel
10.7 GOVERNING LAWS; JURISDICTION. This Agreement shall be interpreted and
construed in accordance with the laws of the State of California, without regard
to conflicts of law principles. All disputes arising out of this Agreement
shall be subject to the exclusive jurisdiction and venue of the California state
courts of San Diego County, California (or, if there is exclusive federal
jurisdiction, the United States District Court for the Southern District of
California), and the parties consent to the personal and exclusive jurisdiction
of these courts.
10.8 COMPLETE AGREEMENT. This Agreement constitutes the final, exclusive
and complete agreement between the parties respecting the subject matter hereof,
and supersedes any prior or contemporaneous agreements. No amendment or change
hereof or addition hereto shall be effective or binding on either of the parties
hereto unless reduced to writing and executed by the party to be charged.
10.9 SEVERABILITY. In the event that any provision of this Agreement
becomes or is declared by a court of competent jurisdiction to be illegal,
unenforceable or void, such provision shall be changed and interpreted so as to
best accomplish the objectives of the original provision to the fullest extent
allowed by law and the remaining provisions of this Agreement shall continue in
full force and effect.
10.10 FORCE MAJEURE. Nonperformance by either party (except for payment
obligations) shall be excused to the extent and for the period of time that
performance is rendered impossible by strike, fire, earthquake, flood,
governmental acts, orders or restrictions, failure of suppliers, or any other
reason where failure to perform is beyond the reasonable control and not caused
by the negligence of the nonperforming party.
10.11 NO CONSEQUENTIAL DAMAGES. IN NO EVENT SHALL EITHER PARTY BE LIABLE
FOR SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES ARISING OUT OF THIS AGREEMENT
OR THE EXERCISE OF RIGHTS HEREUNDER, EVEN IF NOTIFIED IN ADVANCE OF THE
POSSIBILITY OF SUCH DAMAGES.
10.12 COUNTERPARTS. This Agreement may be executed in counterparts, each
of which shall be deemed to be an original and both together shall be deemed to
be one and the same agreement.
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, both Vista and Urohealth have executed this Agreement,
in duplicate originals, by their respective officers hereunto duly authorized,
the day and year first above written.
UROHEALTH SYSTEMS, INC. VISTA MEDICAL TECHNOLOGIES, INC.
By: /s/Xxxxx X. Xxxxxxx By: /s/Xxxx X. Xxxx
------------------------------- -------------------------------
Name: Xxxxx X. Xxxxxxx Name: Xxxx X. Xxxx
----------------------------- -----------------------------
Title: Senior Vice President Title: President
---------------------------- ----------------------------
[SIGNATURE PAGE TO LICENSE AGREEMENT]
EXHIBIT A
LICENSED PRODUCTS
* * *
* * *
* * *
* * *
* * *
* * * Confidential Treatment Requested
A-1
EXHIBIT B
PATENT RIGHTS
1. * * * U.S. Patent No. * * * dated * * *
2. * * * U.S. Patent Application No. * * * filed
* * * .
* * * Confidential Treatment Requested
B-1
EXHIBIT C
UROHEALTH PERFORMANCE STANDARDS
1. Urohealth will staff a direct (company employee) sales force in the United
States. This sales force will be adequate in number to call on
gynecologists in their office practice, and in no event will be less than
*** representatives. *** of this sales force will be in place by December
31, 1997.
2. Urohealth will complete the development of the * * * and begin
manufacturing and distribution in the United States by * * *
Urohealth will complete development of other Licensed Products, including
the * * * , within a time scale comparable to that for similar
medical devices. Urohealth will dedicate a reasonable allocation of
development resources to the Licensed Products, consistent with the market
results of the * * *
3. Urohealth will develop and implement marketing plans and budgets for the
introduction and continued promotion of the * * * and other
Licensed Products as they are distributed in the United States and world-
wide, employing Urohealth's international distribution network. Such
marketing budgets will be at levels appropriate for reasonably similar
products marketed by equivalent companies.
4. Urohealth will seek advice regarding clinical applications of the * * *
and other Licensed Products, including relevant advocacy from appropriate
physician scientific advisors with the objective of creating awareness of
product line benefits in the medical community.
5. Urohealth will exhibit the * * * and other Licensed Products as
they are introduced, at key national and international gynecology, urology
and other appropriate surgical trade shows and conventions.
6. Urohealth will develop and implement training programs for its domestic
sales force and international distributors to provide adequate levels of
knowledge of clinical applications and sales methods for the * * *
and other Licensed Products.
7. Urohealth will maintain active sales and marketing programs for the
* * * and other Licensed Products. If Urohealth discontinues a
Licensed Product, or fails to conduct reasonable active sales and marketing
programs for * * * within the context of these performance
standards, then such Licensed Products will revert to Vista, its successors
or assigns.
* * * Confidential Treatment Requested
C-1
EXHIBIT D
A license fee consisting of (i) $1,000,000 cash and (ii) 110,000 shares of
Urohealth's common stock (the "Shares") shall be tendered to Vista upon the
execution of this Agreement. Vista's rights to register the resale of the
Shares shall be as set forth in that certain Investment Representations and
Registration Rights letter dated the date hereof.
D-1
EXHIBIT E
CONSULTING AGREEMENT
E-1
CONSULTING AGREEMENT
BY AND BETWEEN
UROHEALTH SYSTEMS, INC.
AND
VISTA MEDICAL TECHNOLOGIES, INC.
THIS CONSULTING AGREEMENT (this "Agreement") is entered into as of December
13, 1996 (the "Effective Date"), by and between UROHEALTH Systems, Inc.
("UROHEALTH"), and Vista Medical Technologies, Inc. ("Consultant") and, with
respect to Sections 1, 4, 6, 7, 8 and 9 below, Xxxxx Xxxxxx, Consultant's
employee ("Xxxxxx").
WITNESSETH:
WHEREAS, UROHEALTH desires to retain the medical and consultation services
of Consultant to aid in UROHEALTH's continuing mission to develop, improve, and
expand its medical product business, including those products relating to
minimally invasive surgery;
WHEREAS, Consultant possesses the medical knowledge and professional
expertise to aid UROHEALTH in its mission to develop, improve and expand its
business as referenced above;
NOW, THEREFORE, in consideration of the mutual promises contained herein
and other good and valuable consideration, the receipt and sufficiency of which
is hereby acknowledged, the parties agree as follows:
SECTION 1. CONSULTING SERVICES. During the term of this Agreement,
Consultant shall serve as a consultant for UROHEALTH, using its reasonable
commercial efforts to make available to Urohealth 25% of the working time of
Xxxxxx. In connection herewith, Xxxxxx'x duties shall include, but not be
limited to, assisting UROHEALTH in developing and obtaining regulatory approvals
for Licensed Products under the terms of that certain License Agreement, dated
the date hereof, between UROHEALTH and Consultant (the "License Agreement") and
otherwise exploiting the rights granted to UROHEALTH under the License
Agreement.
Xxxxxx shall also perform any other services as are mutually agreed upon by
the parties. Consultant shall use its reasonable commercial efforts to ensure
that Xxxxxx devotes sufficient time and best efforts as a consultant in order to
perform the responsibilities under this Agreement to the reasonable satisfaction
of UROHEALTH. Xxxxxx shall provide services under this Agreement as reasonably
requested by UROHEALTH at the times mutually agreeable to UROHEALTH and
Consultant.
SECTION 2. TERM. The term of this Agreement shall begin on the Effective
Date of the License Agreement and shall continue until the first Licensed
Product (as defined in the License Agreement) under the License Agreement is
commercially introduced by UROHEALTH.
SECTION 3. TERMINATION. This Agreement may be terminated by either
party immediately upon written notice of termination in the event the other
party has materially breached this Agreement and has not cured such breach
within thirty (30) days following written notice of the breach from the
non-breaching party. In addition, this Agreement shall be terminated
automatically upon the (i) termination of the License Agreement or (ii) death
or incapacity, whether mental or physical, of Xxxxxx. UROHEALTH or its
designee shall determine in good faith whether Xxxxxx is incapacitated for
the purposes of this Section 3. In addition, UROHEALTH may in its sole
discretion terminate this Agreement if Xxxxxx is unavailable, unwilling or
unable to provide the consulting services contemplated hereby on behalf of
the Company. Notwithstanding anything to the contrary herein contained, in
the event performance by either party hereto of any term, covenant, condition
or provision of this Agreement shall (i) jeopardize the licensure of
UROHEALTH, (ii) jeopardize its participation in (a) Medicare, Medicaid, Blue
Cross, or other reimbursement or payment programs, or (b) the FDA approval
process, regulatory program and guidelines, or (c) any other state or
nationally recognized accrediting organization, or (iii) be in violation of
any statute, ordinance, or be otherwise deemed illegal, or be deemed
unethical by any recognized body, agency, or association in the medical
fields, UROHEALTH may, at its option, terminate this Agreement immediately.
SECTION 4. COMPENSATION. In consideration for the services rendered
by Consultant to UROHEALTH under this Agreement, UROHEALTH shall pay to
Consultant during the term of this Agreement, an amount equal to * * *
* * * of Consultant to employ Xxxxxx; provided,
that such annualized costs shall not exceed * * * Such sum shall be paid in
monthly installments to cover the cost of regular salary and benefits and an
additional amount shall be paid in the month following verification that a bonus
has been paid to Xxxxxx and the amount thereof. Consultant shall be reimbursed
by UROHEALTH for all proper, necessary and reasonable business expenses incurred
as a result of the performance of services requested by UROHEALTH. Consultant
shall submit a detailed xxxx and documentation as deemed necessary by UROHEALTH
for expenses which shall be subject to the reasonable approval of UROHEALTH's
Chief Financial Officer. Consultant is not required to, and nothing herein nor
in any other agreement shall be construed to require Consultant to, utilize
UROHEALTH products.
SECTION 5. INDEMNIFICATION. UROHEALTH shall indemnify Consultant with
respect to all matters relating to services rendered by Consultant hereunder,
except for those caused by Consultant's willful misconduct.
* * * Confidential Treatment Requested
-2-
SECTION 6. CONFIDENTIALITY. During the term of this Agreement, UROHEALTH,
its clients, and its prospective clients may reveal to Consultant confidential
and proprietary information of UROHEALTH ("Confidential Information").
Confidential Information shall include, but not be limited to, that information
which is designated as confidential either in writing or orally, or that
information which is not generally known to the public. With respect to any
Confidential Information disclosed to Consultant, Consultant agrees to: (a) not
disclose such Confidential Information to third parties except: (i) third
parties for whom Consultant has secured the prior written approval of UROHEALTH,
and/or (ii) as required by law or by any court or governmental body, agency or
department of competent jurisdiction; (b) use at least the same degree of care
to protect the Confidential Information as used with respect to Consultant's
confidential and proprietary information, however in no event shall the degree
of care be less than holding the Confidential Information in confidence; and (c)
use the Confidential Information only for the purpose of performing its
obligations under this Agreement. Notwithstanding anything to the contrary
herein, Consultant shall not have an obligation to preserve the confidentiality
of any Confidential Information which was previously known to Consultant free of
any obligation to keep it confidential or is or becomes publicly available by
other than unauthorized disclosure. The provisions of this Section 6 shall
survive expiration or termination of this Agreement for any reason. As used
herein, "Confidential Information" shall not include anything which is not
"Confidential Information" as defined in the License Agreement.
SECTION 7. STATUS OF THE PARTIES. In the performance of this Agreement,
it is mutually understood and agreed that Consultant, Xxxxxx, its other
employees, officers, directors and agents are performing as independent
contractors with, and not as an employee, partner, or joint venturer of or with
UROHEALTH. Neither Consultant nor Xxxxxx shall have any claim under this
Agreement or otherwise against UROHEALTH for workers' compensation, unemployment
compensation, vacation pay, sick leave, disability benefits, retirement
benefits, social security benefits or any other employee benefits of any kind,
all of which shall be the sole responsibility of Consultant. UROHEALTH shall
not withhold on behalf of Consultant or Xxxxxx pursuant to this Agreement any
sums for income tax, unemployment insurance, social security or otherwise
pursuant to any law or requirement of any government agency, and all such
withholding, if any is required, shall also be the sole responsibility of
Consultant. Consultant shall indemnify and hold UROHEALTH harmless from any and
all loss or liability, if any, arising with respect to any of the foregoing
benefits or withholding requirements.
SECTION 8. GOVERNING LAW. This Agreement is being delivered and executed
in the State of California and the validity, construction, and enforcement of
this Agreement shall be governed in all respects by the laws of the State of
California. Venue shall be proper only in a court of competent jurisdiction
located in the State of California. The parties agree to be subject to personal
jurisdiction and consent to service of process issued by a court in which venue
is proper as defined in this Section 8.
-3-
SECTION 9. MODIFICATION AND WAIVER. No modification of this Agreement
shall be deemed effective unless in writing and signed by each of the parties to
which it applies. Any waiver of a breach of any provision of this Agreement
shall not be deemed effective unless in writing and signed by the party against
whom enforcement of the waiver is sought.
SECTION 10. HEADINGS. The descriptive headings of this Agreement are
inserted for convenience only and shall not control or affect the meaning or
construction of any provision hereof.
SECTION 11. ASSIGNMENT. Neither party may assign, delegate, subcontract,
or otherwise transfer its rights or obligations hereunder without the prior
written consent of the other party and any assignment or other transfer in
violation of this Section 11 shall be void; provided, however, that UROHEALTH
may assign its rights and delegate its duties pursuant to this Agreement to any
successor, subsidiary, or affiliate to the business of UROHEALTH to which this
Agreement relates without the written consent of the Consultant.
SECTION 12. SEVERABILITY. If, as a result of any valid Act of Congress or
act of any legislature or any regulation duly promulgated by the United States
or any state acting in accordance with the law, the terms and conditions of this
Agreement, or the payments made pursuant to this Agreement, are rendered illegal
or in violation of law, then the parties shall negotiate in good faith, and
shall take all steps necessary, including, but not limited to, amendment to the
terms and conditions of this Agreement or return of the compensation or any part
of the compensation paid pursuant to this Agreement, in order to reform this
Agreement such that the terms and conditions of this Agreement, or the payments
made pursuant to this Agreement, if any, shall not render any other relationship
or transaction between the parties, or any affiliate of the parties, illegal or
in violation of law.
SECTION 13. NOTICES. All notices, requests, demands, and other
communications provided for hereunder shall be in writing and shall be deemed to
been duly given if (i) delivered in person; (ii) given by prepaid telex or
telegram, or by facsimile or other instantaneous electronic transmission device;
or (iii) deposited in the United States mail, first class, registered or
certified, return receipt requested, with proper postage prepaid, as follows:
If to UROHEALTH:
UROHEALTH Systems, Inc.
0 Xxxxx Xxxxx, Xxxxx 000
Xxxxxxx Xxxxx, Xxxxxxxxxx 00000
Attention: General Counsel
Facsimile: (000) 000-0000
-4-
If to Consultant:
Vista Medical Technologies, Inc.
0000 Xxxxxxx Xxxxxxx, Xxxxx X
Xxxxxxxx, Xxxxxxxxxx 00000
Facsimile: (000)000-0000
Attention: President
SECTION 14. ATTORNEYS' FEES. In the event any party hereto brings an
action or arbitration proceeding in connection with the performance, breach, or
interpretation of this Agreement, the prevailing party in such action or
proceeding shall be entitled to recover from the losing party all reasonable
cost and expenses of such litigation or proceeding, including attorneys' fees,
court costs, costs of investigation, and other costs, fees, and expenses
reasonably related to such action or proceeding.
SECTION 15. BINDING EFFECT. This Agreement shall be binding upon and
shall inure to the benefit of the parties and their respective successors and
permitted assigns.
SECTION 16. ENTIRE AGREEMENT. This Agreement constitutes the entire
understanding and agreement between the parties concerning the subject matter
hereof, and supersedes all prior negotiations, agreements and understandings
between the parties, whether oral or in writing, concerning the subject matter
hereof.
INTENDING TO BE LEGALLY BOUND, the parties, or their duly authorized
representatives, have executed this Agreement to be effective on the Effective
Date.
UROHEALTH SYSTEMS, INC.
By:
-------------------------------
Title: Senior Vice-President
VISTA MEDICAL TECHNOLOGIES, INC.
By:
------------------------------------
Title: President
-5-
With Respect to Sections
1, 4, 6, 7, 8 and 9 only:
----------------------------------------
Xxxxx Xxxxxx
-6-
