EX-10.10 2 dex1010.htm LICENSE AND DEVELOPMENT AGREEMENT Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the...
Exhibit 10.10
Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
LICENSE AND DEVELOPMENT AGREEMENT
THIS LICENSE AGREEMENT (the “Agreement”) is made and entered into effective as of November 18, 2005 (the “Effective Date”) by and between CARDIOMEMS, Inc. a Delaware corporation with offices at 00 Xxxxx Xxxxxx, X.X., Xxxxx 000, Xxxxxxx, XX 00000 (“CardioMEMS”), and MEDTRONIC, INC., a Minnesota corporation with offices at 000 Xxxxxxxxx Xxxxxxx, Xxxxxxxxxxx, XX 00000 (“Medtronic”). CardioMEMS and Medtronic may be referred to herein individually as a “Party”, and collectively as the “Parties.”
ARTICLE 1
As used in this Agreement, the following capitalized terms shall have the following meanings:
1.1 “Affiliate” means, with respect to a particular Party, any other person or entity that directly or indirectly controls, is controlled by, or is in common control with such Party. As used in this Section 1.1, the term “controls” (with correlative meanings for the terms “controlled by” and “under common control with”) means the ownership, directly or indirectly, of more than
Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
fifty percent (50%) of the voting securities or other ownership interest of entity, or the possession, directly or indirectly, of the power to direct the management or policies of the entity, whether through the ownership of voting securities, by contract, or otherwise.
1.2 “Back-Up Manufacturing Right” shall mean Medtronic’s right to practice the license granted pursuant to Section 2.1(b), which is expressly conditioned upon the occurrence of a Triggering Event, as set forth in Section 2.4.
1.3 “Bundled Product” means products (including one or more Medtronic Licensed Products) that are either (a) packaged together for sale or shipment as a single unit or (b) sold together in a kit.
1.4 “Change of Control” shall have the meaning set forth in the Supply Agreement.
1.5 “CardioMEMS Intellectual Property” means all Intellectual Property (including CardioMEMS’ interest in the Jointly Owned Intellectual Property) Controlled by CardioMEMS on or after the Effective Date that is related to or useful with the Technology. CardioMEMS Intellectual Property shall specifically include the University Patents.
1.6 “Confidential Information” means all information not publicly known that is disclosed by one party (“Discloser”) to the other party (“Recipient”) during the term of this Agreement (or in contemplation of it), including, without limitation, trade secrets, know-how, and information contained in or relating to designs, specifications, processes, technology, computer programs, products, pricing, costs, finances, personnel, suppliers, customers, markets and business plans (but will not include information specifically excluded below). Disclosures may be made in any manner, including through written documents, magnetic media, electronic transmissions, verbal disclosures, visual presentations, and facility tours. The obligations of this Agreement will apply to all information which the Recipient knows or has reason to know or believe that the Discloser considers to be Confidential Information. Information will be excluded from Confidential Information if it (1) was already rightfully in the possession and control of the Recipient prior to its receipt from the Discloser, (2) is independently derived by the Recipient without use of the Discloser’s Confidential Information, (3) is or becomes a matter
2.
Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
of public knowledge (other than as a result of disclosure by Recipient), or (4) is required to be disclosed under operation of applicable law or regulation provided that the Recipient notifies the Discloser as soon as reasonably possible in order for the Discloser to take action to protect the Discloser’s Confidential Information.
1.7 “Control” means, with respect to Intellectual Property, (a) owning or having a license to such intellectual property right and (b) having the ability to grant to the other Party a license or sublicense (as applicable) to such Intellectual Property as provided for herein without violating the terms of any agreement or other arrangements with any Third Party existing at the time such Party would be first required hereunder to grant the other Party such license or sublicense.
1.8 “Development Program” means the collaborative development program to be conducted by the Parties in accordance with the Work Plan with the goal of developing the Technology as described in Article 3.
1.9 “Exclusivity Period” has the meaning set forth in Section 2.1(c).
1.10 “Field” means wired diagnostic and/or therapeutic applications to address impaired cardiac function and/or hypertension, which wired diagnostic and/or therapeutic applications involve the use of sensors incorporated within implantable leads, which sensors are powered and sensed through the lead wire and are connected to active/battery powered implantable devices. Notwithstanding anything the contrary elsewhere in this Agreement, wireless sensing applications, including without limitation, CardioMEMS’ contemplated wireless congestive heart failure sensing product, shall be excluded from the Field.
1.11 “Intellectual Property” means all forms of intellectual property in any jurisdiction and under any law, whether now or hereafter existing, including (a) inventions, discoveries, patent applications, patents (including letters patent, industrial designs, and inventor’s certificates), design registrations, invention disclosures, and applications to register industrial designs, and any and all rights to any of the foregoing anywhere in the world, including any provisionals, substitutions, extensions, supplementary patent certificates, reissues,
3.
Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
re-exams, renewals, divisions, continuations, continuations in part, continued prosecution applications, and other similar filings or notices provided for under the laws of the United States or of any other country; (b) trade secrets and other confidential or non-public business information, including ideas, formulas, compositions, inventor’s notes, discoveries, improvements, concepts, know-how, manufacturing and development information, data resulting or derived from research activities, inventions, invention disclosures, unpatented blue prints, drawings, specifications designs, plans, proposals and technical data, business and marketing plans, market surveys, market know-how and customer lists and related information; (c) copyrights, whether or not registered, and any non-registered copyright to any writings and other copyrightable works of authorship, including source code, object code, documentation (whether or not released), and databases; (d) integrated circuit topographies and mask works; (e) features of shape, configuration, pattern or ornament; and (f) registrations of, and applications to register, any of the foregoing with any governmental entity and any renewals or extensions thereof and all other rights to any of the foregoing.
1.12 “Knowledge” References to “CardioMEMS’ knowledge” or “knowingly” mean the actual knowledge of CardioMEMS’ management personnel and the knowledge which such persons could have obtained if they had made the due inquiry and exercised the due diligence that a prudent business person would have made or exercised with respect to the management of his or her business affairs. Notwithstanding the foregoing, such duty of due inquiry and due diligence may be limited in this Agreement, in whole or in part, by express language to such effect.
1.13 “Medtronic Device” means any Medtronic Licensed Product other than a Medtronic Lead. For clarity, the Parties contemplate that a Medtronic Device will consist of an active/battery powered implantable device that includes at least one implantable lead that is a Medtronic Licensed Product. If any Medtronic Device includes more than one implantable lead, then these additional implantable leads shall not be treated as Medtronic Leads for the purpose of calculating royalties nor otherwise generate a royalty separate from whatever royalty may be due on such Medtronic Device under this Agreement.
4.
Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
1.14 “Medtronic Lead” means a Medtronic Licensed Product consisting of an implantable lead designed to be connected to an active/battery powered implantable device but sold separately from such device.
1.15 “Medtronic Licensed Product” means any device or system (other than the Supply Deliverables) that utilizes or otherwise incorporates any aspect of the CardioMEMS Intellectual Property.
1.16 “Net Sales” of Medtronic Licensed Products with respect to a particular period means the amounts that Medtronic, or its Affiliates or sublicensees receives from unrelated Third Parties for sales of Medtronic Licensed Products during such period, reduced by the following amounts, to the extent actually incurred or allowed with respect to such sales of Medtronic Licensed Products: (a) credits actually given in connection with retroactive price reductions (subject to Section 4.3), discounts, allowances or repayments as a result of returns, defects, or rejections; (b) sales, use, occupation, excise and turnover taxes and customs duties imposed directly on and actually paid by Medtronic or its sublicensees and included therein; and (c) freight, duty or insurance included therein, if separately itemized on the invoice to the customer, all of the foregoing calculated in accordance with United States Generally Accepted Accounting Principles consistently applied across Medtronic’s organization.
When calculating the Net Sales, the amount of such sales in foreign currencies shall be converted into United States dollars using the methodology used by Medtronic, applied consistently across Medtronic’s product lines. Medtronic shall provide reasonable documentation of the calculation and reconciliation of the conversion figures on a country-by-country basis as part of its report of Net Sales for the period covered under the report.
If Medtronic, its Affiliates, or its sublicensees receive non-cash consideration or no consideration for Medtronic Licensed Product sold or otherwise transferred to an unrelated Third Party, the Net Sales for such Medtronic Licensed Product shall be deemed to be the greater of (a) the fair market value, on the date of the transfer, of any such non-cash consideration, or (b) the gross invoice price that Medtronic or its sublicensee (as applicable) currently charges unrelated Third Parties for such Medtronic Licensed Product, in either case reduced by any applicable amounts in subsections (a) through (c) above.
5.
Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
1.17 “Responsible Executive” means the Chief Executive Officer of the applicable Party, or another senior executive officer of such Party who has been duly appointed by the CEO to act as the representative of the Party.
1.18 “Royalty Cap” means Twenty-Five Million Dollars or such lesser amount as provided in Section 3.4(b)(iii).
1.19 “Royalty Period” means the period commencing on the Effective Date and ending on the earliest of (a) the expiration of the last to expire patent in the CardioMEMS Intellectual Property; (b) twenty (20) years after completion of the Development Program; (c) the end of the Exclusivity Period.
1.20 “Supply Agreement” means that certain Supply Agreement by and between CardioMEMS and Medtronic, of even date herewith.
1.21 “Supply Deliverables” has the meaning set forth in the Supply Agreement.
1.22 “Supply Failure” means any failure to deliver (without regard to force majeure) to Medtronic by the requested delivery date at least [*] of the amount of Supply Deliverables ordered by Medtronic under the Supply Agreement, calculated on an [*] basis in accordance with the following sentence. The [*] threshold shall be determined on a rolling basis by comparing the number of units of Supply Deliverables specified in orders accepted or deemed accepted by CardioMEMS in accordance with the Supply Agreement during the most recent [*] period to the amount of Supply Deliverables delivered by CardioMEMS and accepted or deemed accepted by Medtronic in accordance with the Supply Agreement in the same [*] period; provided, however, that for the [*] following the first scheduled delivery date set forth in an order accepted or deemed accepted in accordance with the Supply Agreement, any failure by CardioMEMS to deliver to Medtronic by the requested delivery date at least [*] of the amount of Supply Deliverables ordered by Medtronic under the Supply Agreement, calculated on a [*] basis, for [*] in such [*] period shall constitute a Supply Failure.
6.
Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
1.23 “Technology” has the meaning set forth in Section 3.1.
1.24 “Third Party” means any individual or entity other than the Parties or their respective Affiliates.
1.25 [*]
1.26 “University Patents” shall mean all Intellectual Property rights licensed to CardioMEMS under the University Licenses.
1.27 “Work Plan” has the meaning set forth in Section 3.2.
ARTICLE 2
7.
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CardioMEMS Intellectual Property solely to make or have made Supply Deliverables solely for use in the Field as part of Medtronic Licensed Products, to sell Supply Deliverables solely as part of Medtronic Licensed Products, and to use and import Supply Deliverables in connection therewith.
8.
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9.
Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
such technical assistance as Medtronic may reasonably require. CardioMEMS shall not be obligated to transfer any manufacturing equipment, tooling, or other tangible assets or materials to Medtronic, unless the Parties mutually agree otherwise. In addition, CardioMEMS will promptly take action (including without limitation termination or waiver of exclusivity obligations) to provide Medtronic access to vendors that have provided goods or services in connection with supplying Supply Deliverables to Medtronic. In the event of the occurrence of a [*] under [*], [*] shall [*] by [*] in [*]. In the event of the occurrence of a [*] under [*], [*] shall [*] by [*] in [*].
10.
Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
the CardioMEMS Intellectual Property to any third party without first notifying such third party of Medtronic’s rights under this Agreement and obtaining such third party’s express agreement to assume CardioMEMS’ obligations under this Agreement. For any [*] to [*] after [*] that is [*] or [*], CardioMEMS shall [*] to [*] to [*] such [*] to [*] in the [*] and the [*] for [*] to further [*] such [*] in accordance with [*].
2.8 [*]. CardioMEMS hereby covenants that, within one [*], it shall obtain and deliver to Medtronic [*] from [*], substantially in the form set forth on Exhibit C (“[*]”). Failure by CardioMEMS to obtain and deliver either of the [*] by such date shall be considered a material breach of the Development Program and of this Agreement. If any payment is required to be made to either [*] in order for Medtronic to exercise a [*], then promptly after obtaining a [*] requiring a [*], CardioMEMS shall escrow [*] of such [*]. If Medtronic wishes to exercise a [*], then CardioMEMS shall transfer the respective escrowed amount to [*], as the case may be, and Medtronic shall be entitled to indemnification from CardioMEMS for the remaining amount of any such [*] pursuant to Section 8.1. Medtronic [*], and shall not unreasonably reject, condition, or delay its acceptance of the [*] delivered by CardioMEMS hereunder. CardioMEMS’ obligation under this Section 2.8 to escrow [*] of [*] shall cease upon (a) the closing of the first firm commitment underwritten public offering by CardioMEMS of its capital stock registered under the Securities Act of 1933, as amended, in which the per share price is at
11.
Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
least [*] (as adjusted for stock splits, dividends, recapitalizations and the like after the date hereof) and the gross proceeds to CardioMEMS are at least [*]; (b) a Change of Control of CardioMEMS following which any entity listed on Exhibit D of the Supply Agreement (or any successor to such entity) is an Affiliate or successor in interest of CardioMEMS; or (c) with respect to a particular [*], the completion of all of CardioMEMS’ [*] in the [*] with the [*] to which such [*] would be owed. For the purpose of this Section 2.8, [*] shall mean CardioMEMS’ obligations under [*] of the [*] and [*] of the [*].
2.9 [*]
ARTICLE 3
12.
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the preparation and filing of all regulatory filings related thereto. CardioMEMS agrees to use commercially reasonable efforts at its own expense to assist Medtronic in such clinical and regulatory efforts relating to Medtronic Licensed Products in the Field; provided, however, that Medtronic shall reimburse CardioMEMS for any material costs incurred by CardioMEMS as a result of such assistance. Medtronic shall have exclusive ownership of all data, including but not limited to clinical data, related to any Medtronic Licensed Product associated with the Development Program. CardioMEMS shall grant Medtronic a right of right of reference to CardioMEMS’ regulatory filings, which shall survive termination of this Agreement. Medtronic shall keep CardioMEMS reasonably informed regarding the progress and results of any clinical and regulatory development activities relating to the Medtronic Licensed Product to the degree CardioMEMS is required to meet its reporting obligations to Third Parties under agreements licensing CardioMEMS Intellectual Property to CardioMEMS.
3.4 Termination of Development Program.
(i) For Convenience. CardioMEMS may elect at any time to terminate its involvement in the Development Program by providing Medtronic with [*] days prior written notice of such election. Such termination shall have the effect set forth in Section 3.4(b)(iii).
13.
Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
(i) Medtronic shall have the right, at its sole discretion, to terminate its involvement in the Development Program if CardioMEMS materially breaches any term of this Agreement which breach is not cured within [*] days after CardioMEMS is notified in writing of such breach. Such termination shall have the effect set forth in Section 3.4(b)(iii).
(ii) CardioMEMS shall immediately notify Medtronic in writing upon the occurrence of a Change of Control. If any entity listed on Exhibit D of the Supply Agreement (or any successor to such entity) is an Affiliate or successor in interest of CardioMEMS following such Change of Control, then during the [*] days following the date of such notification, Medtronic shall have the right, at its sole discretion, to terminate its involvement in the Development Program effective [*] days after delivery of written notice to CardioMEMS or its successor in interest. Such termination shall have the effect set forth in Section 3.4(b)(iii).
(iii) In the event Medtronic terminates its involvement in the Development Program under Section 3.4(b)(i) or 3.4(b)(ii) above, or CardioMEMS terminates its involvement in the Development Program under Section 3.4(a)(i) or 3.4(a)(ii) above, then this Agreement shall continue in full force and effect with the License maintained as exclusive. Additionally: (1) Medtronic shall have no obligation to pay any milestone payments under Section 4.1 with respect to events occurring after the effective date of Medtronic’s or CardioMEMS’ termination of its involvement in the Development Program; (2) the materials in escrow, if any, shall be released to Medtronic and, at the request of Medtronic, CardioMEMS shall promptly provide to Medtronic all materials and tangible manifestations of information then in CardioMEMS’ possession (without any duty to update or provide consulting services) that arose out the Development Program or were used by CardioMEMS in connection with the Development Program, (3) the duration of the Exclusivity Period shall continue to be governed by Section 2.1(c), except that CardioMEMS shall have the right, at CardioMEMS’s election, to convert the License from exclusive to co-exclusive any time after the [*] year anniversary of the Effective Date (or such later date as provided in Section 3.5(c)); and (4) the parties’ covenants and obligations under Sections 3.1, 3.2 and 3.3 shall immediately terminate. Furthermore, in the event CardioMEMS terminates its involvement in the Development Program under Section
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Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
3.4(a)(i), Medtronic shall have the right, at Medtronic’s election, to have the Royalty Cap immediately and automatically reduced to a figure equal to [*] (measured as of the effective date of CardioMEMS’ termination of its involvement in the Development Program). Medtronic shall reimburse CardioMEMS for its reasonable expenses in providing the information and materials under Section 3.4(b)(iii)(2) if Medtronic terminates its involvement in the Development Program under Section 3.4(b)(ii) above. Notwithstanding any of the above, Medtronic may also elect at any time to terminate its involvement in the Development Program by terminating this Agreement (including the License) pursuant to Section 9.3.
(a) If Medtronic does not submit to the FDA a clearance/approval application relating to a Medtronic Licensed Product on or before the Submission Deadline (as defined below), the License shall immediately and automatically become non-exclusive after the Submission Deadline. For the purpose of this Agreement, “Submission Deadline” shall mean the date that is (i) [*] after the achievement of the milestone set forth in Section 4.1(c), or (ii) solely in the event that the Development Program is terminated pursuant to Section 3.4 prior to achievement of such milestone, [*] after the Effective Date. Notwithstanding the foregoing, Medtronic may extend, on a quarter-by-quarter basis, the Submission Deadline by [*] a [*] to [*] on or before [*]. [*] may [*] for up to [*], and [*] upon [*] to [*] or at the end of [*] if Medtronic has not submitted to the FDA such clearance/approval application relating to a Medtronic Licensed Product by the end of the Submission Deadline, as extended.
(b) If Medtronic does not obtain from the FDA a clearance/approval for a Medtronic Licensed Product on or before the Approval Deadline, the License shall immediately and automatically become non-exclusive after the Approval Deadline. For the purpose of this Agreement, “Approval Deadline” shall mean the date that is (i) [*] after the achievement of the milestone set forth in Section 4.1(c), or (ii) solely in the event that the Development Program is terminated pursuant to Section 3.4 prior to achievement of such milestone, [*] after the Effective Date; provided, however, that the Approval Deadline shall be automatically extended to the extent such clearance/approval is delayed as a direct result of any delays in Medtronic receiving from CardioMEMS information that CardioMEMS is obligated to provide under this Agreement
15.
Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
and that is necessary for obtaining FDA clearance/approval. Notwithstanding the foregoing, Medtronic may extend, on a quarter-by-quarter basis, the Approval Deadline by [*] a [*] to [*] on or before [*]. [*] may [*] for up to [*], and [*] upon [*] to [*] or at the end of [*] if Medtronic has not obtained from the FDA such clearance/approval application relating to a Medtronic Licensed Product by the end of the Submission Deadline, as extended.
(c) Any quarterly extension of the Submission Deadline obtained by Medtronic as set forth in Section 3.5(a) shall automatically extend the Approval Deadline by an additional quarter, but only for the first [*] quarterly extensions under 3.5(a). Thereafter, any quarterly extension of the Submission Deadline under Section 3.5(a) shall [*] the Approval Deadline, and any quarterly extension of the Approval Deadline under Section 3.5(b) shall [*] the Submission Deadline; provided, however, that any quarterly extension of the Submission Deadline that would have the effect of moving the Submission Deadline to a later date than the Approval Deadline shall also cause an automatic quarterly extension of the Approval Deadline. If the Development Program is terminated pursuant to Section 3.4, any extension of the Approval Deadline under this Section 3.5 shall automatically extend the [*] year anniversary date in Section 3.4(b)(iii)(3) by the same amount.
(d) CardioMEMS sole remedy for Medtronic’s failure to submit to the FDA the clearance/approval application under Section 3.5(a) by the Submission Deadline, or its failure to obtain from the FDA the clearance/approval under Section 3.5(b) by the Approval Deadline shall be the conversion of the License from exclusive to non-exclusive.
ARTICLE 4
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(a) Medtronic shall pay [*] to CardioMEMS within fifteen (15) days after the later of: [*]. Such payment shall be non-refundable and non-creditable. The milestone event set forth in this Section 4.1(a) shall be deemed to have been met if Medtronic initiates or permits CardioMEMS to initiate work under Phase 2 of the Work Plan
(b) Medtronic shall pay [*] to CardioMEMS within fifteen (15) days after the later of: [*]. Such payment shall be non-refundable and non-creditable. The milestone event set forth in this Section 4.1(b) shall be deemed to have been met if Medtronic initiates or permits CardioMEMS to initiate work under Phase 3 of the Work Plan
(c) Medtronic shall pay [*] to CardioMEMS within fifteen (15) days after the later of [*]. Such payment shall be non-refundable and non-creditable. The milestone event set forth in this Section 4.1(c) shall be deemed to have been met if Medtronic initiates human clinical testing.
(a) [*] of Net Sales for such quarter for Medtronic Leads, but in no event less than [*] for each Sensor included in such Medtronic Leads; and
(b) [*] of Net Sales for such quarter for Medtronic Devices, but in no event less than [*] for each Sensor included in such Medtronic Devices.
For the purpose of this Section 4.2, “Sensor” shall mean a single MEMS sensor that utilizes or otherwise incorporates any aspect of the CardioMEMS Intellectual Property. No more than one (1) payment calculated in accordance with Section 4.2 shall be paid on any single Medtronic Licensed Product even though such Medtronic Licensed Product, including its manufacture, sale or use, may be covered by more than one aspect of the CardioMEMS Intellectual Property. Furthermore, for any particular Medtronic Licensed Product for which a royalty is due, such royalty shall be calculated in accordance with Section 4.2(a) or 4.2(b), as appropriate, but in no
17.
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event shall a royalty be generated under both 4.2(a) and 4.2(b) for any Medtronic Licensed Product or component thereof.
18.
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during normal business hours by an independent accounting firm selected by CardioMEMS, solely to verify reports provided for in Section 4.4. Such accounting firm shall execute a suitable confidentiality agreement reasonably acceptable to Medtronic prior to conducting such audit. Unless CardioMEMS obtains the prior written consent of Medtronic, such accounting firms must be selected from among the four largest U.S. accounting firms. Such audit shall not be performed more frequently that once per calendar year nor more frequently than once with respect to records covering any specific period of time. Such examination is to be made at the expense of CardioMEMS, except in the event that the results of the audit reveal an underpayment by Medtronic of [*] or more over the period being audited, in which case the reasonable, documented expenses incurred by CardioMEMS in connection with such examination shall be paid by Medtronic. Medtronic shall in any event promptly remedy any underpayment revealed by any such audit.
ARTICLE 5
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forth in United States patent law with respect to jointly owned inventions, except as otherwise provided in this Agreement or agreed in writing by the Parties.
(a) Subject to Section 5.3(b), each Party shall be solely responsible, at is expense, for the prosecution and maintenance of all patents and patent applications owned by such Party.
(b) Medtronic, at its expense, shall have the first right (but not the obligation) to file, prosecute and maintain any patents or patent applications in the Jointly Owned Intellectual Property (“Joint Patents”). Medtronic shall reasonably consult with CardioMEMS with respect to the preparation, prosecution, and maintenance of such patent applications and patents and shall provide CardioMEMS sufficient opportunity (unless in its commercially reasonable judgment the time for response is too short to provide CardioMEMS such an opportunity) to comment on any material document that Medtronic intends to file or to cause to be filed with the relevant intellectual property or patent office. Notwithstanding the foregoing, Medtronic shall retain the right to determine strategy with respect to such filings or other appropriate actions in its sole and complete discretion. Medtronic shall deliver to CardioMEMS copies of all documents materially related to such prosecution efforts. If Medtronic decides not to continue the prosecution or maintenance of any Joint Patent, it shall notify CardioMEMS sufficiently in advance to permit CardioMEMS to undertake such prosecution and maintenance without a loss of rights. Following such notice, CardioMEMS may, in its sole discretion, take over the prosecution and maintenance of such Joint Patent.
(c) At the request of the Party performing the prosecution and/or maintenance of any Joint Patent under this Section 5.3, the other Party will cooperate, in all reasonable ways, in connection with such prosecution and/or maintenance. Each Party shall make available to the other Party or its authorized attorneys, agents or representatives such of its employees or consultants as the other Party in its reasonable judgment deems necessary in order to assist such other Party with such prosecution and maintenance. Each Party shall sign or use commercially
20.
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reasonable efforts to have signed at no charge to the other Party all legal documents necessary in connection with such prosecution and maintenance.
5.4 Enforcement of Jointly Owned Intellectual Property.
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thereof, that materially adversely affects the other Party’s interest in the Jointly Owned Intellectual Property, without the written consent of such other Party, such consent not to be unreasonably withheld.
5.5 Infringement of Third Party Rights.
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Owned Intellectual Property without CardioMEMS’ written consent, such consent not to be unreasonably withheld. Unless the Parties otherwise agree, CardioMEMS shall have the exclusive right, at its sole expense, to defend any Third Party Claim that may be brought against CardioMEMS and shall have the sole right and authority to settle any such Third Party Claim; provided, however, that CardioMEMS shall not enter into any settlement that adversely affects Medtronic’s rights or interests in the CardioMEMS Intellectual Property or the Jointly Owned Intellectual Property without Medtronic’s written consent, such consent not to be unreasonably withheld.
ARTICLE 6
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regulation, or order. In addition, either Party may disclose the terms of this Agreement to investors and potential investors, strategic partners and potential strategic partners, potential acquirers, or merger candidates who agree to be bound by confidentiality obligations equivalent in scope to those set forth in this Article 6, provided that such disclosure is used solely for the purpose of evaluating such investment, acquisition, or merger (as the case may be). After the occurrence of a Triggering Event, Medtronic shall be permitted to disclose CardioMEMS’ Confidential Information (including any information of CardioMEMS’ vendors disclosed by CardioMEMS or its vendors to Medtronic, and specifically any information placed in escrow) on a need-to-know basis to its vendors who are obligated to keep such information confidential pursuant to written agreements with Medtronic, provided that Medtronic causes each of its vendors who is provided access to CardioMEMS’ Confidential Information to comply with Medtronic’s confidentiality and non-use obligations with respect to such Confidential Information as if such vendor were a party hereto.
ARTICLE 7
REPRESENTATIONS AND WARRANTIES
(a) Power. Medtronic is duly organized and validly existing under the laws of Delaware and has full power and authority to enter into this Agreement and to carry out the provisions hereof.
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Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
(d) Medtronic will (and will cause its sublicensees to) use, manufacture, market, promote, and sell Medtronic Licensed Products in compliance with all applicable present and future orders, regulations, requirements and laws of any and all federal, state, provincial and local authorities and agencies of the territory or territories, including without limitation all laws and regulations of such territories applicable to the transportation, storage, use, handling and disposal of hazardous materials. Medtronic will (and will cause its sublicensees to) obtain and maintain all government permits, approvals, and/or clearances necessary for the sale of Medtronic Licensed Product during the term of this Agreement.
(a) Corporate Power. CardioMEMS is duly organized and validly existing under the laws of Delaware and has full corporate power and authority to enter into this Agreement and to carry out the provisions hereof.
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Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
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Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
produced via methods, that are covered by [*], nor will CardioMEMS knowingly use [*] to develop the Technology, in either case except to the extent that Medtronic is granted a sublicense in the Field under such [*] pursuant to one or more of the license grants set forth in Section 2.1.
(e) There are no actions, suits, claims, disputes or proceedings or governmental investigations pending or, to CardioMEMS’s knowledge, threatened against CardioMEMS or any of its Affiliates with respect to the CardioMEMS Intellectual Property or the use thereof by CardioMEMS, either at law or in equity, before any court or administrative agency or before any governmental department, commission, board, bureau, agency or instrumentality, or before any arbitration board or panel whether located in the United States or a foreign country. CardioMEMS has not failed to comply with any law, rule, regulation, writ, judgment, injunction, decree, determination, award or other order of any court or other governmental agency or instrumentality, domestic or foreign, which failure in any case would in any material respect impair any rights of Medtronic under this Agreement.
(f) CardioMEMS has made all statutorily required filings, if any, to record its interests and taken reasonable actions to protect its rights in the CardioMEMS Intellectual Property.
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Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
ARTICLE 8
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Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
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Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
any such claim in good faith as permitted herein, the indemnified party shall not pay or settle any such claim. The controlling party shall deliver, or cause to be delivered, to the other party copies of all correspondence, pleadings, motions, briefs, appeals or other written statements submitted in connection with the settlement or defense of any such claim, and timely notices of, and the right to participate pursuant to (iii) above in any hearing or other court proceeding relating to such claim.
ARTICLE 9
(a) all rights and licenses granted by CardioMEMS to Medtronic under this Agreement shall terminate and shall revert to CardioMEMS without further action by either CardioMEMS or Medtronic.
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Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
(b) each Party shall promptly return, or at the other party’s request destroy, any Confidential Information of the other Party in such Party’s possession or control at the time of termination;
(c) each Party shall retain any and all rights or remedies such Party may have in law or in equity, provided that neither Party may claim compensation for lost opportunity, lost profits, or consequential damages arising out of the fact of such early termination; and
(d) Medtronic and its Affiliates and sublicensees shall have the right to import, export, use, offer to sell, sell, resell and otherwise exploit any Medtronic Licensed Product and Supply Deliverables in the Field existing on the date of such termination, provided that royalties are paid to CardioMEMS which would otherwise be payable under the terms of this Agreement.
9.6 Preservation of Licenses in Bankruptcy.
(a) If CardioMEMS files a petition under bankruptcy laws, or if any involuntary petition shall be filed against CardioMEMS, Medtronic shall be protected in the continued enjoyment of its rights as licensee hereunder to the maximum feasible extent including, without limitation, if it so elects, the protection conferred upon licensees under Section 365(n) of Title 11 of the U.S. Code, or any similar provision of any applicable law. CardioMEMS shall give Medtronic reasonable prior notice of the filing of any voluntary petition, and prompt notice of the filing of any involuntary petition, under any bankruptcy laws.
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Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
(b) The CardioMEMS Intellectual Property as well as the license granted herein shall be deemed to be “intellectual property” as that term is defined in 11 U.S.C. Section 101(56) or any successor provision.
ARTICLE 10
GOVERNING LAW; DISPUTE RESOLUTION.
10.1 Governing Law; Dispute Resolution.
(a) This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware without reference to the choice of law principles thereof. Subject to Section 10.1(b), and without limiting the rights of the parties to pursue in any appropriate jurisdiction their respective rights with respect to any judgment obtained in respect hereof, the parties hereby irrevocably consent to the exclusive jurisdiction and venue of any United States court of competent jurisdiction located in the State of Minnesota and/or the state courts located in Anoka County therein to adjudicate any legal action commenced in respect of this Agreement and waive any objections either may have at any time to such jurisdiction and venue. The parties agree to the personal jurisdiction of such courts and agree that service of process may be made pursuant to notice sent in accordance with Section 11.4.
(b) Other than as set forth in the Work Plan, any dispute arising under this Agreement shall be referred first to the Responsible Executive of each Party within [*] business days after receipt of a notice from either party specifying the nature of the dispute and referencing this Section. Each Responsible Executive shall make a good faith attempt to begin discussions regarding such dispute in person or by telephone with the other Responsible Executive within [*] business days of a dispute being referred to him or her. The Responsible Executives shall meet as often as the parties reasonably deem necessary in order to gather and furnish to the other all information with respect to the matter in issue which the parties believe to be appropriate and germane in connection with its resolution. The Responsible Executives shall discuss the problem and negotiate in good faith in an effort to resolve the dispute without the necessity of any formal proceeding. Should the Responsible Executives fail to reach agreement
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Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
within [*] days of the initiation of the dispute resolution process (or such longer period as such representatives may agree in writing), then formal proceedings for the resolution of a dispute may be commenced in accordance with Exhibit B hereto. The results of such arbitration proceedings shall be binding upon the parties, and judgment may entered upon the arbitration award in any court having jurisdiction thereof. Notwithstanding the foregoing, either party may seek interim injunctive relief from any court of competent jurisdiction
ARTICLE 11
33.
Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
confirmed facsimile, in each case sent to the address or facsimile number set forth below: (or any updated addresses communicated to the other Party in writing)
If to CardioMEMS: | CardioMEMS, Inc. 00 Xxxxx Xxxxxx, X.X., Xxxxx 000 Xxxxxxx, XX 00000 Attention: CEO Facsimile: [*] | |
with a copy to: | Cooley Godward LLP Five Palo Alto Square 0000 Xx Xxxxxx Xxxx Xxxx Xxxx, XX 00000 Attention: Xxxxx X. Xxxxxxx, Esq. Facsimile: (000) 000-0000 | |
If to Medtronic: | Medtronic, Inc. World Headquarters 000 Xxxxxxxxx Xxxxxxx, X.X. Xxxxxxxxxxx, XX 00000-0000 Attention: General Counsel FAX: [*] | |
with a copy to: | Medtronic, Inc. Cardiac Rhythm Management 0000 Xxxxxxx Xxxxxx, X.X. Xxxxxxxxxxx, XX 00000-0000 Attention: Vice President and Senior Legal Counsel, CRM FAX: [*] |
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Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
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Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
governmental regulation, fire, flood, labor difficulties, civil disorder, and acts of God, provided that the Party experiencing the delay promptly notifies the other Party of the delay.
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Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
IN WITNESS WHEREOF, the Parties hereto have duly executed this License and Development Agreement as of the Effective Date.
CARDIOMEMS, INC. | MEDTRONIC, INC. | |||||||
By: | /s/ Xxxxx X. Xxxxx | By: | /s/ Xxxxxxx X. Xxxxxxx |
Name: | Xxxxx X. Xxxxx | Name: | Xxxxxxx X. Xxxxxxx |
Title: | President & CEO | Title: | Vice President & Chief Development Officer |
Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
EXHIBIT A
Work Plan
[*]
Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
EXHIBIT B
ALTERNATIVE DISPUTE RESOLUTION
(1) Each party may serve no more than [*] set of interrogatories;
Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
(2) Each party may depose the other party’s expert witnesses who will be called to testify at the hearing, plus [*] fact witnesses without regard to whether they will be called to testify (each party will be entitled to a total of not more than [*] hours per deposition of the other party’s witnesses); and
(3) Document discovery and other discovery shall: (i) be limited to matters that are directly relevant and material to the matters, and (ii) be under the control of and enforceable by the arbitrator.
(4) Discovery disputes shall be decided by the arbitrator. The arbitrator is empowered:
(i) To issue subpoenas to compel pre-hearing document or deposition discovery;
(ii) To enforce the discovery rights and obligations of the parties;
(iii) To truncate discovery proceedings;
(iv) To further limit the number of witnesses involved in the proceeding;
(v) Otherwise to control the scheduling and conduct of the proceedings.
(i) Documents shall be self-authenticating, subject to valid objection by the opposing party;
Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
(ii) Expert reports, witness biographies, depositions, and affidavits may be utilized, subject to the opponent’s right of a live cross-examination of the witness in person;
(iii) Charts, graphs, and summaries shall be utilized to present voluminous data, provided (i) that the underlying data was made available to the opposing party [*] days prior to the hearing, and (ii) that the preparer of each chart, graph, or summary is available for explanation and live cross-examination in person.
(iv) The hearing should be held on consecutive business days without interruption to the maximum extent practicable.
(v) The arbitrator shall establish all other procedural rules for the conduct of the arbitration in accordance with the rules of arbitration of the Center for Public Resources.
Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.
EXHIBIT C
[*]