EXHIBIT 99.2
SAFELINE AGREEMENT
THIS "SAFELINE AGREEMENT" (the "Agreement") is effective as of October 1, 1997
(the "EFFECTIVE DATE"), by and between ICU MEDICAL, INC., a Delaware
corporation, having a principal place of business at 000 Xxxxx Xxxxxxxx, Xxx
Xxxxxxxx, Xxxxxxxxxx 00000 (hereinafter "ICU"), and X.XXXXX MEDICAL INC., a
Pennsylvania corporation, having a principal place of business at 000 Xxxxxxx
Xxxxxx, Xxxxxxxxx, Xxxxxxxxxxxx 00000-0000 (hereinafter "BBM").
RECITALS
(A) BBM manufactures and sells SAFELINE(TM) Products;
(B) BBM wishes to secure ICU's agreement not to assert any claims
that the manufacture, sale, use, offering for sale, making or having made any
SAFELINE PRODUCTS during the term of this Agreement infringed any patents of
ICU;
(C) BBM and ICU have prior agreements regarding the sharing of
SAFELINE Revenues and desire to replace and supersede those prior agreements, as
defined in Section 4.1.
(D) BBM and ICU have had and are entering into a new Manufacture and
Supply Agreement related to CLAVE Products and those agreements are
consideration in agreeing to the terms of this SAFELINE AGREEMENT.
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DEFINITIONS
1.1 "AFFILIATE" shall mean a person or entity that directly, or indirectly
through one or more intermediates, controls or is controlled by, or is under
common control with, the person or entity specified.
1.2 "BBM" shall mean X.Xxxxx Medical Inc. and those Affiliates of BBM that
market and sell SAFELINE PRODUCTS.
1.3 "NET SALES," shall mean all revenues recognized (under generally
accepted accounting principles consistently applied) by BBM on sales of SAFELINE
PRODUCTS less any allowances actually taken for returns, cash discounts,
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rebates, chargeback allowances, and administration fees. NET SALES shall exclude
sales make to wholesalers until the time at which the final sale to the end
customer is reported to BBM through BBM's standard tracing procedures,
1.4 "REVENUE SHARING PERIOD" shall mean each calendar quarter during the
term of the Agreement.
1.5 "SAFELINE PRODUCTS" shall mean those BBM products described in Exhibit
1 and any future BBM products with injection sites that use split-septum
technology, including related accessories. Such products do not include luer
activated valves.
REVENUE SHARE AGREEMENT
2.1 SAFELINE REVENUE SHARE. See Exhibit 2 hereof which exhibit is
incorporated by reference herein.
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2.2 Release. ICU agrees not to assert at any time any claim, that
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the manufacture, sale, use, offering for sale, making or having made of any
SAFELINE PRODUCTS during REVENUE SHARING PERIODS for which SAFELINE REVENUE
SHARE was due and paid under the Prior Agreement and under this Agreement,
infringes any patents or other proprietary rights of ICU, and, except for the
obligations undertaken by BBM pursuant to this Agreement and the Manufacture and
Supply Agreement, dated January 1, 1998, between the parties, ICU hereby
releases and forever discharges BBM (and each of its directors, officers,
shareholders, employees, attorney, affiliates, agents, predecessors, successors
and assigns) (collectively the "Releasees") from any and all claims, demands,
liabilities, damages, actions or causes of action, costs and expenses of
whatever kind or nature (whether known or unknown, suspected or unsuspected, or
anticipated or unanticipated) which ICU has, had, claims to have or had or
acquires against the Releasees arising at any time, which, arise out of or
relate to the manufacture, sale and use of SAFELINE PRODUCTS by BBM or its
predecessors, including XxXxx, Inc. as used herein, REVENUE SHARING PERIODS and
SAFELINE REVENUE SHARE are as defined in the Prior Agreement and in this
Agreement.
2.3 Net Sales Reports. BBM shall calculate and report to ICU NET
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SALES and unit volume of SAFELINE PRODUCTS within sixty (60) days after each
REVENUE SHARING PERIOD. BBM's reports shall include the calculations and
amounts of the SAFELINE REVENUE SHARE. These amounts will be paid by BBM to ICU
within said 60 days.
2.4 Access to Records. No more often than annually, and no later
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than ninety (90) days after receipt by ICU of the final report pursuant to
Section 2.3, BBM will permit an outside firm of independent certified public
accountants, designated by ICU and reasonably
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acceptable to BBM, access during reasonable times to inspect such accounting
books and records, as are reasonably necessary to verify the data and
calculations in the reports. Said independent accounting firm shall be bound by
a confidentiality agreement with BBM whereby the accounting firm may only verify
to ICU that the reports are either accurate or inaccurate and the amount of the
variance, if any. The fees and expenses of the accountant performing this
inspection shall be paid by ICU; provided that if a determination is made that
the amount paid to ICU with respect to any fiscal year was less than ninety-five
percent (95%) of the amount properly due to ICU, BBM shall promptly reimburse
ICU for the cost of such verification.
2.5 Other. The payment of the SAFELINE REVENUE SHARE contemplated by this
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Agreement shall not be construed in any manner as an admission or acknowledgment
on the part of BBM that the SAFELINE PRODUCTS infringe one or more of the claims
contained in any ICU patent or any other proprietary right of ICU or that any
such ICU patent is valid and enforceable. Except as provided in Section 2.2
above, nothing herein shall be construed to preclude in any way ICU's right and
ability to assert a claim that BBM's manufacture, sale, use, offering for sale,
making or having made any product infringed one or more patents or other
proprietary rights of ICU.
TERM AND EXTENSION
3.1 Term. The term of this Agreement shall be from October 1, 1997 through
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June 30, 2000.
3.2 Extension. The parties agree to negotiate in good faith a revenue
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sharing percentage for periods after June 30, 2000, and such percentage will be
less than 8%.
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MISCELLANEOUS
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4.1 Entire Agreement. This Agreement, including the Exhibits and
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Schedules referenced herein which are attached hereto, contains the entire
agreement of the parties regarding the subject matter hereof and supersedes all
prior agreements, understandings, and negotiations regarding the same, including
that certain Manufacture and Supply Agreement dated September 13, 1993, as
thereafter amended, between ICU and BBM and that certain letter agreement, dated
December 30, 1997, as thereafter amended, and related term sheet to the extent
such agreements related to the sharing of revenue by BBM on sales of SAFELINE
PRODUCTS (the "Prior Agreements"). This Agreement may not be changed, modified,
amended or supplemented except by a written instrument signed by both parties.
Furthermore, it is the intention of the parties that waivers of and amendments
to this Agreement shall be effective only if made by non-preprinted, signed
amendments or waivers to this Agreement clearly denoted as an amendment or
waiver.
4.2 Assignability. This Agreement may not be assigned by either party
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without the prior written consent of the other party; provided, however, as long
as this Agreement is in effect, either party may assign this Agreement (i) to
any entity which acquires substantially all of its assets and business, or (ii)
to any of its Affiliates, except that the party making such assignment will not
be relieved of its obligations hereunder without the other party's written
consent. This Agreement shall be binding upon, inure to the benefit of, and be
enforceable by the parties and their respective successors and assigns.
If during the term of this Agreement, ICU transfers, sells or assigns
any of its patents or other proprietary rights relating to split septum
technology to a third party, ICU agrees to cause such third party to provide BBM
with the same release that ICU has provided BBM pursuant to
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Section 2.2 of this Agreement. Nothing herein is intended to be or
shall be construed to be a license under any of ICU's patents or proprietary
rights.
4.3 Reformation / Severability. If any provision of this Agreement is
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declared invalid by any tribunal, then such provision shall be deemed
automatically adjusted to the minimum extent necessary to conform to the
requirements for validity as declared at such time and, as so adjusted, shall be
deemed a provision of this Agreement as though originally included herein. In
the event that the provision invalidated is of such a nature that it cannot be
so adjusted, the provision shall be deemed deleted from this Agreement as though
such provision had never been included herein. In either case, the remaining
provisions of this Agreement shall remain in effect.
4.4 Use of Party's Name. Except as otherwise provided in this Agreement,
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no right, express or implied, is granted by this Agreement to either party to
use in any manner the name of the other or any other trade name or trademark of
the other in connection with the performance of this Agreement.
4.5 Notices. Any notice or communication required or permitted by this
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Agreement shall be deemed sufficiently given if in writing and, if delivered
personally, when it is delivered or, if delivered in another manner, the earlier
of when it is actually received by the party to whom it is directed, or when the
period set forth below expires (whether or not it is actually received):
(A) if transmitted by telecopier, telex or facsimile transmission
("fax"), one business day after (a) transmission to the party's telecopier
number set forth below, with the party's name and address set forth below
clearly shown on the page first transmitted, and (b) receipt by the
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transmitting party of written confirmation of successful transmission, which
confirmation may be produced by the transmitting party's equipment;
(B) if deposited with the US Postal Service, postage prepaid, and
addressed to the party to receive it as set forth below, (i) five (5) business
days after such deposit as registered or certified mail if addressed to a
location in the USA, or (ii) ten (10) days after such deposit as registered or
certified airmail if addressed to a location outside of the USA; or
(C) if accepted by Federal Express or a similar delivery service in
general usage for delivery to the address of the party to receive it as set
forth below, one (1) business day after the delivery time promised by the
delivery service.
If to ICU:
ICU Medical, Inc.
000 Xxxxx Xxxxxxxx
Xxx Xxxxxxxx, XX 00000
Attention: Chief Financial Officer
Telecopier Number : (000) 000-0000
With a copy to:
Xxxxxx Xxxxxx White & XxXxxxxxx
000 Xxxxx Xxxxxxxx Xxxxxx 00xx Xxxxx
Xxx Xxxxxxx, XX 00000-0000
Attention: Xxxxxxx X. Xxxxxx, Esq.
Telecopier Number: (000) 000-0000
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If to BBM:
X.XXXXX MEDICAL INC.
000 Xxxxxxx Xxxxxx
Xxxxxxxx , XX 00000-0000
Attention: Xxx Xxxxxx
Telecopier Number: (000) 000-0000
With a copy to:
X.XXXXX MEDICAL INC.
0000 XxXxx Xxxxxx
Xxxxxx, XX 00000
Attention: Associate General Counsel
Telecopier Number: (000) 000-0000
A party may change its address or telecopier number or the
address or telecopier number to which copies shall be sent by giving notice of
the change to each other party. The new address and telecopier number shall
become effective for purposes of this Agreement five days after notice of the
new address and telecopier number, as the case may be, is given.
4.6 Rules of Construction. This Agreement has been negotiated by the
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parties and is to be interpreted according to its fair meaning as if the parties
had prepared it together and not strictly for or against any party. Unless
expressly indicated otherwise, all references in this Agreement to "parties"
refer to parties to this Agreement. Unless expressly indicated otherwise,
references in this Agreement to Articles and Sections are to Articles and
Sections of this Agreement, and references in this Agreement to Exhibits are to
Exhibits attached to this Agreement. References in this Agreement to
"provisions" of this Agreement refer to the terms, conditions and promises
contained in this Agreement. At each place in this Agreement where the context
so requires, the masculine,
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feminine or neuter gender includes the others and the singular or plural number
includes the other. "Including" means "including without limitation." "Or" is
inclusive and includes "and."
4.7 Relationships of the Parties. Both parties are independent
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contractors under this Agreement. Nothing contained in this Agreement is
intended nor is to be construed so as to constitute ICU and BBM as partners or
joint venturers with respect to this Agreement. Neither party hereto shall have
any express or implied right or authority to assume or create any obligations on
behalf of or in the name of the other party or to bind the other party to any
contract, agreement, or undertaking with any third party.
4.8 Waiver. No waiver of any term, provision, or condition of this
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Agreement, whether by conduct or otherwise, in any one or more instances, shall
be deemed to be, or shall constitute, a waiver of any other provision hereof,
whether or not similar, or a waiver of the provision itself nor shall such
waiver constitute a continuing waiver, and no waiver shall be binding unless
executed in writing by the party making the waiver.
4.9 Specific Performance. If either party should default in any
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obligation under this Agreement, the parties each acknowledge that it would be
impracticable to measure the resulting damages and it may not be possible to
adequately compensate the injured party by monetary damages. Accordingly,
without prejudice to the right to seek and recover monetary damages, each non-
defaulting party shall be entitled to xxx in equity for specific performance of
this Agreement or other injunctive relief, and each party hereby waives any
defense that a remedy in damages would be adequate.
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4.10 Applicable Law. The validity, construction and performance of this
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Agreement and any dispute arising with respect to the subject matter of this
Agreement shall be governed by and construed in accordance with the laws,
without regard to the laws as to choice or conflict of laws, of the State of
California.
4.11 Mediation.
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(A) Any controversy, claim or dispute between the parties to this
Agreement arising out of, in connection with, or in relation to the
interpretation, validity, performance or breach of this Agreement shall, at the
request of either party, be submitted to face-to-face, amicable negotiation
between the principal executive officers of the parties. If the matter remains
unresolved after thirty (30) days, it shall be submitted to non-binding
mediation in a manner, time, and place agreed upon by the parties.
(B) The mediation will be a non-binding effort to resolve disputes
between the parties. No party will be bound by the suggestion, recommendation,
or award of the mediators. All disputes which are in fact resolved will, if
appropriate, be the subject of a separate settlement agreement. After the
mediation proceeding, both parties will be free to pursue de novo litigation or
other remedies that they would have had absent this mediation provision.
(C) During this dispute resolution and mediation proceeding, the
parties will maintain the status quo that existed before the dispute arose,
including the ongoing supply and sale of the SAFELINE PRODUCTS.
4.12 Captions. Article and section captions are inserted for convenience
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only and are not to be construed to define, limit or affect the construction or
interpretation of this Agreement.
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4.13 Force Majeure. A party shall not be liable nor be deemed to have
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defaulted under or breached this Agreement as a result of nonperformance or
delay in performance caused by any event reasonably beyond the control of such
party, including, but not limited to, wars, hostilities, revolutions, riots,
civil commotion, national emergency, epidemics, fire, flood, earthquake, force
of nature, explosion, embargo or any other Act of God.
4.14 Remedies. The rights and remedies of a party set forth herein with
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respect to failure of the other to comply with the terms of this Agreement
(including, without limitation, rights upon termination of this Agreement) are
not exclusive, the exercise thereof shall not constitute an election of
remedies, and the aggrieved party shall in all events be entitled to seek
whatever additional remedies may be available in law or in equity.
4.15 Publicity and Press Releases. Except to the extent necessary to
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comply with applicable laws, the parties agree that no news release or other
written public announcement relating to this Agreement shall be made, or any
information concerning the terms of this Agreement shall be disclosed, without
joint approval of both parties.
4.16 Confidential Information. Except as otherwise provided in this
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Agreement, during the term of this Agreement and for a period of five (5) years
thereafter, each party shall hold in confidence and not use or disclose to any
third party any product, technical, manufacturing, process, marketing,
financial, business or other information, ideas or know-how ("PROPRIETARY
INFORMATION") of or used by the other; provided, however, that PROPRIETARY
INFORMATION of a party shall not include:
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(A) items which at the time of disclosure are published or otherwise
generally available to the public;
(B) items which, after disclosure by the other party, are published
or become generally available to the public through no breach of this Agreement
by the other or the other's employees or agents; or
(C) items which the other can document were (a) in its possession at
the time of disclosure and were not acquired directly or indirectly from such
party, or (b) independently developed.
A party may disclose PROPRIETARY INFORMATION of the other:
(A) in connection with the order of a court of law or with respect
to disclosing this Agreement or any matter related thereto as required to by
applicable securities or securities exchange laws or rules or regulations
thereunder; provided (a) the other party is notified and given the opportunity
to discuss the issue prior to disclosure and (b) such party takes all
appropriate action to avoid or limit disclosure to the extent consistent with
legal obligations; or
(B) if such PROPRIETARY 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.
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4.17 Counterparts. This Agreement may be executed in any number of
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counterparts, each of which shall be deemed an original, but all of which, when
taken together, shall constitute one and the same instrument.
4.18 Prevailing Party. In the event of any litigation or arbitration between
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the parties arising from this Agreement, the prevailing party shall be entitled
to recover, in addition to any other relief granted or awarded, its reasonable
attorney's fees, costs and expenses incurred in the preceding.
IN WITNESS WHEREOF, this Agreement has been executed by the parties on this 10th
day of June, 1998.
ICU MEDICAL, INC.
By /s/ Xxxxxxx X. X'Xxxxx
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Xxxxxxx X. X'Xxxxx
Chief Financial Officer
X.XXXXX MEDICAL INC.
By /s/ Xxxxxxx X. Xxxxxxx
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Xxxxxxx X. Xxxxxxx
President and CFO
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