EXHIBIT 10.8
PURCHASE AGREEMENT
THIS AGREEMENT, dated as of the 23rd day of October, 1997 by and
between Xxxxxxxx Xxxxxxxx ("Xxxxxxxx") and Xx. Xxxxxx Xxxxxxxx ("Xxxxxxxx")
(Xxxxxxxx and Xxxxxxxx collectively hereinafter "Sellers") and Applied
Biometrics, Inc., a Minnesota corporation (hereinafter "Purchaser").
W I T N E S S E T H
WHEREAS, Sellers desire to sell and Purchaser desires to purchase the
technology, know-how and personal property comprising the "Intellectual
Property" (United States and foreign patents, utility models, patent
applications, as well as any divisions, continuations and continuations in part
thereof, copyrights, trademarks, trade secrets, know-how and all other assets
and intellectual property rights relating thereto), inventory, raw materials,
work-in-process and supporting assets relating to the "Vessel/Septal Occluder
Devices" invented by Sellers, all as described in Exhibit A attached hereto and
made a part hereof (collectively the "Assets"), in which Sellers own all right,
title and interest.
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements herein contained and other good consideration, the
receipt and sufficiency which are hereby acknowledged, the parties hereto agree
as follows:
ARTICLE 1
PURCHASE AND SALE
1.1 Subject to the terms and conditions hereof, Purchaser will purchase
and Sellers will sell, transfer, assign and convey to Purchaser all right, title
and interest in the Assets on the closing date (as specified in Article 11 of
this Agreement and hereinafter called the "Closing").
ARTICLE 2
OBLIGATIONS AND LIABILITIES
NOT TO BE ASSUMED
2.1 It is understood and agreed that Purchaser is not assuming,
undertaking or responsible for any debts, liabilities, undertakings, contracts
or obligations of Sellers of any nature or kind.
2.2 Sellers covenant and agree to indemnify, hold harmless and defend
Purchaser, its directors, officers, employees and agents, from any and all
claims, suits, losses, obligations, fines, fees, liabilities and expenses
(including reasonable attorneys' fees) incurred by Purchaser arising from the
development, manufacture, sale, ownership or use of the Assets or the operation
of the business of Implantate on or prior to the Closing.
ARTICLE 3
PURCHASE PRICE
The purchase price for the Assets shall be as described below, subject
to adjustment as provided in Article 3.3 hereof, and shall be payable as
follows:
3.1 A total "Base" of 80,000 shares of "Common Stock" of Purchaser will
be issued to Sellers at the Closing and apportioned according to their
instructions. To the extent that the market value of the Common Stock is less
than $480,000 U.S. as of the effective date of the registration statement filed
by Purchaser with the Securities and Exchange Commission ("SEC") covering the
Common Stock and further described in Article 7 of this Agreement, Purchaser
will issue to Sellers either cash or that number of additional shares of Common
Stock having an aggregate market value sufficient to total $480,000 U.S. when
added to the aggregate market value on the effective date of the Base number of
shares.
3.2 Additional cash consideration equal to 3% of the net sales price of
the individual and actual sales of Vessel/Septal Occluder Devices (or the actual
value thereof if sold in conjunction with other products, instruments or
devices), payable on a quarterly basis commencing on December 31, 1997 and
continuing for a period of six (6) years thereafter and payable one-half to
Xxxxxxxx and one-half to Xxxxxxxx.
3.3 Sellers shall pay all income, capital gains, sales, use, value
added, registration and/or transfer taxes incurred or assessed against Sellers
as a result of the transactions contemplated by this Agreement. Any such taxes
not paid by Sellers and asserted against Purchaser, or any liabilities visited
on Purchaser for products liability, environmental, governmental regulatory
claims or other claims arising out of the Assets or the business of Implantate
concerning facts or circumstances arising before the Closing, may be recovered
directly by Purchaser from Sellers or, at the option of Purchaser, set off
against the deferred consideration payable by Purchaser to Sellers under Article
3.2 of this Agreement.
ARTICLE 4
CONVEYANCE
4.1 The Assets will be conveyed to Purchaser by delivery by Sellers at
the Closing of an instrument of transfer. Sellers agree to provide to Purchaser
any additional evidence of conveyance which Purchaser reasonably requests.
ARTICLE 5
AGREEMENTS, REPRESENTATIONS AND WARRANTIES OF SELLERS
5.1 Sellers hereby jointly and severally specifically represent,
warrant and agree as follows:
a. Sellers are the sole and exclusive owners of the Assets and
have full power and authority to execute, deliver and
perform this Agreement and to consummate the transactions
contemplated hereby.
x. Xxxxxxx have good and marketable title to the Assets, free
and clear of all liens, pledges, claims, conditional sales
contracts, agreements or encumbrances of whatever kind,
except as specifically described in Exhibit B as attached
hereto and made a part hereof.
c. No statute, rule or regulation or order of any court,
tribunal or governmental unit prohibits Sellers from
consummating the transactions contemplated hereby and no
consent, authorization, order or approval of or filing or
registration with any governmental body, agency, official
or authority, and no material consent or authorization from
any other entity or person, is required for the execution
and delivery of this Agreement and the consummation of the
transactions contemplated by this Agreement.
d. As applicable, the Assets shall be in working condition at
the Closing, ordinary wear and tear expected.
e. This Agreement has been duly and validly executed and
delivered by Sellers and constitutes their legal, valid and
binding obligation, enforceable against them jointly and
severally in accordance with its terms.
f. The execution, delivery and performance by Sellers of this
Agreement do not and will not constitute a material default
under any provision of applicable law or regulation; the
constitutional documents of Implantate; or any agreement or
court or government order affecting Sellers or any Seller.
x. Xxxxxxx own all right, title and interest in the
Intellectual Property comprising part of the Assets set
forth in Exhibit X.
x. Xxxxxxx have disclosed to Purchaser all material facts of
which they have knowledge which bear on the validity or
enforceability of any trademarks, copyrights, patents, and
patent applications included as Intellectual Property in
the Assets. Sellers shall have furnished to Purchaser and
permitted Purchaser and its patent counsel to review all
the materials regarding the prosecution of patent
applications and correspondence and materials related to
any past, pending or threatened interference actions or
other similar actions.
i. Sellers have taken all reasonable steps to maintain their
interest in the Intellectual Property and to protect their
interest from infringements by third parties.
j. None of the features, components or configurations (whether
developed or under development) of the Intellectual
Property infringe, nor has any claim been made that they
may infringe, the intellectual property rights of any other
party.
k. There is no action, suit or proceeding in any court or
before any arbitrator or governmental body, agency or
official pending or, to Sellers' knowledge, threatened
against Sellers in connection with the conduct of the
business of Implantate or Sellers' development,
manufacture, sale, ownership or use of the Assets.
l. The execution, delivery and performance by Sellers of this
Agreement and the consummation by Sellers of the
transactions contemplated by this Agreement require no
amendment of any agreement to which Sellers are party.
m. The inventory (finished goods, work-in-process, raw
materials, parts and supplies) are in good and merchantable
condition, and suitable and usable for the purposes for
which intended or salable in the ordinary course of
business within eighteen (18) months from the date of this
Agreement.
x. Xxxxxxx are acquiring the Purchaser's shares of Common
Stock for investment for their own account and not with a
view to, or for resale in connection with, any distribution
thereof. Each of the Sellers understands that the shares to
be acquired have not been registered under the Securities
Act of 1933, as amended, (the "Act") by reason of a
specific exemption from the registration provisions of the
Act which depends upon, among other things, the bona fide
nature of the investment intent expressed herein.
o. Each of the Sellers acknowledges that the shares of Common
Stock must be held indefinitely unless subsequently
registered under the Act as provided in Article 7 below or
an exemption from such registration is available. Each of
the Sellers is aware of the provisions of Rule 144
promulgated under the Act which permit limited resale of
securities purchased in a private placement subject to the
satisfaction of certain conditions.
p. All negotiations on the part of Sellers and Purchaser
relative to this Agreement and the transactions
contemplated hereby have been carried on by Sellers
directly with Purchaser and there are no brokers or agents
representing Sellers or Purchaser with regard to the sale
and purchase herein contemplated; and any fees for services
-- legal, accounting, or otherwise -- incurred by Sellers
in connection with, shall be their sole obligation.
ARTICLE 6
AGREEMENTS, REPRESENTATIONS AND WARRANTIES OF PURCHASER
6.1 Purchaser hereby represents and warrants as follows:
a. Purchaser is a corporation duly organized and existing in
good standing under the laws of the State of Minnesota.
b. The execution and performance of this Agreement by
Purchaser has been duly authorized by the board of
directors of Purchaser. Neither the execution nor delivery
of this Agreement by Purchaser nor its performance by
Purchaser will result in the breach of any term or
provision of, or constitute a default under, any note,
indenture, mortgage, deed or trust or other agreement to
which Purchaser is a party.
c. All negotiations on the part of Purchaser relative to this
Agreement and the transactions contemplated hereby have
been carried on by Purchaser directly with Sellers and
there are no brokers or agents representing Purchaser with
regard to the sale and purchase herein contemplated; and
any fees for services -- legal, accounting, or otherwise --
incurred by Purchaser in connection herewith, shall be the
sole obligation of Purchaser.
ARTICLE 7
REGISTRATION
7.1 Purchaser agrees to file, as soon as possible following the date of
the Closing, a registration statement with the Securities and Exchange
Commission ("SEC") covering the shares issued to Sellers pursuant to this
Agreement and to use its reasonable best efforts to file all documents and to
take all other reasonable steps in order to have such registration declared
effective within approximately sixty (60) days of the Closing. Purchaser further
agrees that once the registration statement has been declared effective it will
file post-effective amendments to such registration statement as are necessary
to cause such registration statement to remain effective for a period of
twenty-four (24) months, commencing on the effective date of the registration
statement.
7.2 Any registration statement filed by Purchaser shall be required to
cover only the sale by Sellers in varying amounts, at prices then prevailing on
Nasdaq.
7.3 Purchaser shall not be obligated to file any registration statement
if it shall have delivered to Sellers proposing to sell shares delivered
pursuant to this Agreement an opinion of its counsel to the effect that the
shares delivered pursuant to this Agreement may lawfully be sold to the public
without registration under the Act and has delivered to its transfer agent
instructions to register the transfer of any of the Purchaser's shares sold in
reliance on such opinion.
ARTICLE 8
CONDUCT OF BUSINESS PENDING CLOSING
8.1 Sellers and Purchaser agree that during the period (hereinafter the
"Interim Period") from and after the date hereof to the Closing date (except as
otherwise consented or approved by Purchaser in writing), the current business
of sales of Vessel/Septal Occluder Devices shall continue to be conducted by the
Sellers, and during the Interim Period, Sellers covenant and agree that Sellers
will continue to conduct the business diligently and only in the ordinary
course, and will not take any action which will cause any change in the Assets,
other than changes in the ordinary course of
business. Without limitation of the foregoing, Sellers hereby specifically agree
that without prior written consent of Purchaser:
a. No mortgage or pledge or assignment of any of the Assets,
or any other disposition of any such Assets, otherwise that
in the ordinary course of business, shall be made.
b. No capital expenditures, other than ordinary repairs or
maintenance, will be initiated by Sellers with respect to
the Assets.
ARTICLE 9
CONDITIONS TO PURCHASER'S OBLIGATIONS
The obligations of Purchaser to consummate the purchase of the Assets
under and transactions contemplated by this Agreement shall be subject to and
conditioned upon the satisfaction (or waiver by Purchaser in writing) of all of
the following conditions on or prior to the Closing, and Sellers shall in good
faith exert their best efforts to ensure that each and every such condition is
fulfilled:
9.1 Sellers shall have performed and complied with all of its
agreements and covenants contained herein to be performed at or prior to the
Closing and the representations and warranties of Sellers contained herein shall
be true on and as of the Closing.
9.2 No statute, rule or regulation or order of any court or
governmental body shall be in effect which prohibits Sellers or Purchaser from
consummating all of the material transactions contemplated hereby.
9.3 Purchaser shall be satisfied with the results of its due diligence
investigation conducted between the date of this Agreement and the Closing.
9.4 There will have been no material adverse change in the Assets, and
there will have been no material casualty or other loss or damage to the Assets
whether or not covered by insurance and there shall not have come to the
attention of Sellers or any officer of Implantate any event which may materially
adversely affect the Assets or Purchaser's rights with respect thereto.
9.5 Sellers shall have each entered into legally enforceable consulting
and non-compete agreements with Purchaser as described in Exhibit C attached
hereto and made a part hereof.
ARTICLE 10
SURVIVAL OF REPRESENTATIONS, INDEMNIFICATION
AND RELATED MATTERS
10.1 All representations, warranties, agreements, covenants and
obligations herein shall survive the execution and delivery of this Agreement
and the Closing and the consummation of the transactions contemplated hereby.
10.2 Sellers jointly and severally, agree to indemnify and hold
Purchaser harmless from and against any and all liabilities, claims, causes of
action, losses, suits, fines, damages, deficiencies, or expenses (including
reasonable attorneys' fees) (collectively "Damages") which Purchaser or its
affiliates may suffer or incur arising from or related to:
a. Any misrepresentation, breach or material inaccuracy of any
representations, warranties, covenants or agreements of
Sellers contained in this Agreement.
b. The liabilities of Implantate Gmbh.
c. The operation of Implantate Gmbh or the development,
manufacture, sale, ownership and use of the Assets by
Sellers on or prior to the Closing.
d. Any and all claims incurred by Purchaser which undermine or
frustrate its ability to own or use the Intellectual
Property, including claims of invalidity, prior use or
infringement whether now existing or hereafter arising.
ARTICLE 11
CLOSING
11.1 Unless the Closing date is changed as provided herein, the Closing
shall take place in November, 0000 (xxx "Xxxxxxx") xx Xxxx, Xxxxxxx at such
other hour or at such other place as the parties may agree; and possession or
assumption of the Assets, as appropriate, shall be deemed to take place at the
conclusion of the Closing. Sellers and Purchaser agree that the date of the
Closing set forth above may be changed by mutual agreement between the parties.
11.2 At the Closing, Sellers shall deliver such assignments,
instruments of transfer, and other documents and instruments as may be necessary
or convenient to transfer, assign and convey the Assets to the Purchaser. At the
Closing, Purchaser shall pay and agree to pay to Sellers the purchase price as
outlined in Article 3 above and shall execute such other instruments as may be
reasonably requested by Sellers to evidence Purchaser's covenants and agreements
as set forth in this Agreement.
11.3 Risk of loss, destruction or damage of any of the Assets sold,
transferred, assigned and conveyed hereunder shall pass to Purchaser as of the
later of Closing or the date Purchaser acquires possession of the Assets.
ARTICLE 12
ACCESS
12.1 Sellers covenant and agree that during the Interim Period,
Purchaser and its representatives shall have full access during normal business
hours to the records of Sellers pertaining to the Assets, and Sellers will
furnish to Purchaser all information, documents and records reasonably requested
by Purchaser pertaining to such Assets.
ARTICLE 13
ADDITIONAL INSTRUMENTS AND FURTHER ASSURANCES
13.1 Sellers agree, from time to time, upon the request of Purchaser,
to execute and deliver to Purchaser such instruments of sale, transfer,
assignment and conveyance, and to take such other action as Purchaser may
reasonably require, to more effectively vest ownership in Purchaser and to put
Purchaser in possession of the Assets.
13.2 Purchaser agrees, from time to time, to execute and deliver to
Sellers such additional instruments and to take such additional actions as
Sellers may reasonably request to evidence the covenants and agreements of
Purchaser under this Agreement.
13.3 Sellers agree to cooperate in the prosecution of any and all
existing and future U.S. and foreign patent applications to insure that the
applications reflect, to the best of their knowledge, all items of commercial
and technical interest and importance.
ARTICLE 14
PATENT INFRINGEMENT
14.1 Upon learning of the infringement of the Intellectual Property by
a third party, Purchaser may at its own expense and sole discretion take
whatever steps, if any, it determines to be necessary to stop the infringement
and recover damages. Sellers agree to provide all reasonable assistance
necessary to prosecute and/or settle any such lawsuit or claim including, if
requested by Purchaser, joining with Purchaser as a party to any action brought
by Purchaser for such purpose and/or executing all pleadings, documents and
other papers necessary or appropriate in conjunction therewith. Purchaser shall
have full control over any action taken including, without limitation, the right
to settle on any terms it deems advisable in its discretion, to appeal any
adverse decision rendered in any court, to discontinue any action taken by it,
and to otherwise make any decision in respect thereto that Purchaser in its
discretion deems advisable. Purchaser shall receive the full benefits of any
action it takes pursuant to this Article 14, including retaining all sums
recovered in any such suit or in settlement thereof after paying Sellers any
additional consideration to the extent required under Article 3.2 of this
Agreement which shall be calculated from the amount of net sales, if any,
asserted by Purchaser to support any award of compensatory damages (as opposed
to punitive or other damages) and adjusted to reflect the actual amount of
compensatory damages recovered.
14.2 Purchaser shall give Sellers prompt notice of each claim or
allegation received by it that the use or sale of the Intellectual Property
constitutes a significant infringement of a third-party patent or patents.
Purchaser shall have full control over any action taken including, without
limitation, the right to settle on any terms it deems advisable in its
discretion, to appeal any adverse decision rendered in any court and to
otherwise make any decision in respect thereto that in its discretion Purchaser
deems advisable. Sellers agree to cooperate with Purchaser in any reasonable
manner deemed by Purchaser to be necessary in defending any such claim or
allegation. Upon receiving written notice by any third party that Purchaser's
use or sale of the Intellectual Property constitutes a significant infringement
of a third-party patent or patents, Purchaser may hold any additional
consideration owed Sellers from net sales under Article 3.2 of this Agreement,
if any, in escrow
pending the resolution of any such action, claim or allegation. Purchaser shall
have the right to reduce or set off any amounts owing Sellers under Article 3.2
of this Agreement against any amounts Purchaser is obligated to pay any third
party.
ARTICLE 15
TERMINATION
15.1 This Agreement may be terminated and the transactions contemplated
herein abandoned by either party on or at any time prior to the Closing by
notice to the other party given in a manner provided in this Agreement only upon
the happening of one or more of the following events:
a. If any party fails to observe or perform in a timely
manner any of the covenants and agreements contained
herein and fails to cure the same within a period of ten
(10) days after notice and the other party declares a
default;
b. If any actual investigation, action or proceeding, or
notice of probable investigation, action or proceeding, by
or before any court or any other governmental body,
seeking to restrain, prohibit, or invalidate the
transactions contemplated by this Agreement or which might
affect the right of Purchaser to develop, manufacture,
sell, own, use, market or control the Assets, shall have
been commenced against either party;
c. If Purchaser's due diligence uncovers material problems
with the title to or condition of the Assets or
Purchaser's ability to own and operate the Assets; or
d. By mutual written consent of the Purchaser and Sellers;
PROVIDED, HOWEVER, the option to declare a default and to
terminate as set forth in Subparagraph (a) above shall be
deemed to be an additional right of the party having the
power to exercise it and shall not relieve the other party
from the obligation to perform the provisions of this
Agreement or preclude an action for specific performance
of the provisions of this Agreement by the party having
the power to exercise the option.
ARTICLE 16
ASSIGNMENT
16.1 This Agreement may not be assigned by any party hereto without the
written consent of the other parties.
ARTICLE 17
ENTIRE AGREEMENT
17.1 This Agreement embodies the entire understanding between Sellers
and Purchaser and shall supersede all prior understandings relating to the
subject matter hereof; and it cannot be amended, altered, enlarged,
supplemented, abridged, modified, or any provisions waived except by a writing
duly signed by the party affected.
ARTICLE 18
NOTICES
18.1 All notices, requests, demands, replies and other communications
hereunder shall be in writing, signed by the party giving notice and shall be
deemed to have been duly given if mailed by certified or registered mail with
postage prepaid:
(a) If to Purchaser, to: Xxxxxx X. Xxxxxx, President
Applied Biometrics, Inc.
000 Xxxx Xxxxxxx 00
Xxxxxxxxxx, XX 00000
with a copy to: Xxxxxxx Xxxxxxx, Esq.
Xxxxxxxxx & Xxxxxx P.L.L.P.
0000 XXX Xxxxxx
00 Xxxxx 0xx Xxxxxx
Xxxxxxxxxxx, XX 00000
(b) If to Sellers, to Xx. Xxxxxxxx Xxxxxxxx
and Xx. Xxxxxx Xxxxxxxx
Xxxxxxxx Implantate Gmbh
Xxxxx Xxxxxx 0
X-00000 Xxxxxxxxxx
Xxxxxxx
(c) To such other person and place as Sellers or Purchaser shall
respectively designate in the foregoing manner to the other
party.
ARTICLE 19
COUNTERPARTS
19.1 This Agreement may be executed in several counterparts, in both
German and English each of which shall be deemed to be an original, but all of
which shall constitute one and the same instrument. The English language version
of the Agreement shall govern.
ARTICLE 20
SEVERABILITY
20.1 If any one or more covenants or agreements provided in this
Agreement should be held contrary to law or declared unenforceable by a tribunal
of competent jurisdiction, then such covenant or covenants, agreement or
agreements shall be null and void and shall in no way affect the validity of the
other provisions of this Agreement, which shall otherwise remain fully effective
and enforceable.
ARTICLE 21
AMENDMENTS AND WAIVERS
21.1 No amendment or waiver of any provision of this document or any
related document shall be effective unless such amendment or waiver is in
writing and signed by Purchaser, and such amendment or waiver shall be effective
only in the specific instance and for the specific purpose for which it was
given.
ARTICLE 22
REMEDIES
22.1 The election by any party of any particular right or remedy shall
not be deemed to exclude any other right or remedy and all rights and remedies
of the parties shall be cumulative. The parties agree that, in addition to any
other relief afforded under the terms of this Agreement or by law, Sellers and
Purchaser shall have the right to enforce this Agreement by injunctive or
mandatory relief to be issued by against the other parties, it being understood
that both damages and specific performance shall be proper modes of relief and
are not to be considered as alternative remedies.
ARTICLE 23
GOVERNING LAW
23.1 This Agreement shall be governed by, construed and enforced in
accordance with the internal (and not the conflicts of laws) of the State of
Minnesota, U.S.A. The United Nations Convention on the International Sale of
Goods shall not apply to this Agreement.
ARTICLE 24
VENUE
24.1 In the event that Purchaser shall bring any action for any relief,
declaratory or otherwise, or seeks to enforce the terms of this Agreement by any
judicial proceeding, Purchaser hereby irrevocably submits and consents to the
jurisdiction of the courts sitting in Germany, over any action or proceeding
arising out of or relating to this Agreement or any of the other transaction
documents and further agrees that all claims in respect of such action or
proceeding shall be heard and determined in any such court.
24.2 In the event that Sellers or any Seller shall bring any action for
any relief, declaratory or otherwise, or seeks to enforce the terms of this
Agreement by any judicial proceeding, Sellers jointly and severally hereby
irrevocably submit and consent to the jurisdiction of the courts sitting in the
State of Minnesota, U.S.A., over any action or proceeding arising out of or
relating to this Agreement or any other transaction documents and further agree
that all claims in respect of such action or proceeding shall be heard and
determined in any such court.
24.3 Nothing in this Article 24 shall be construed to displace the
governing law as set forth in Article 23 of this Agreement.
ARTICLE 25
HEADINGS AND CAPTIONS
25.1 The headings and captions in this Agreement are inserted for
convenience of reference only and shall not constitute a part hereof.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
effective the day and year first above written.
SELLERS:
XXXXXXXX XXXXXXXX
/s/ Xxxxxxxx Xxxxxxxx
XX. XXXXXX XXXXXXXX
/s/ Xxxxxx Xxxxxxxx
PURCHASER:
APPLIED BIOMETRICS, INC.
By: /s/ Xxxxxx X. Xxxxxx
Xxxxxx X. Xxxxxx
Its: President
WITNESS:
/s/ Xxxx Cockheyt
Xxxx Cockheyt
EXHIBIT A
DESCRIPTION OF THE ASSETS
1. Tangible/Intangible
a. Any and all literature, marketing materials, hand tools,
customer lists, vendor lists, platinum struts, titanium balls
and miscellaneous inventory and supplies related to the
Vessel/Septal Occluder Devices.
b. Any and all trade secrets relating to the Intellectual
Property, Vessel/Septal Occluder Devices and Assets including,
but not limited to, formulas, patterns, compilations, programs,
devices, methods, techniques or processes, or bodies of
information used by Sellers in connection with the
Vessel/Septal Occluder Devices that derives independent
economic value, actual or potential, from not being generally
known to, and being readily ascertainable by proper means, by
third parties who can obtain economic value from its disclosure
or use.
c. Any and all know how relating to the Intellectual Property,
Vessel/Septal Occluder Devices and Assets including, but not
limited to, any (i) design drawings, (ii) specifications, test
materials, data and performance criteria, (iii) operating
instructions and manuals, (iv) manufacturing information,
including production documentation, (v) computer software and
related documentation, including, without limitation, source
and object code listings, (vi) prototypes, models or samples,
(vii) files relating to the registration of, and disclosures
and applications to register, patents, copyrights, trademarks,
and trade secrets relating to the Vessel/Septal Occluder
Devices.
d. Any and all United States or foreign copyrights, trademarks and
any other intellectual property rights relating to any of the
above.
2. Intellectual Property
a. German Utility Model 29500381.2 registered August 21, 1995
entitled Vorrichtung zum Verschlie en eines Ductus,
insbesondere des Ductus arteriosus
b. German Utility Model 9413645 registered October 27, 1994
entitled Vorrichtung zum Verschlie en eines Ductus,
insbesondere des Ductus arteriosus
c. European patent application 951133441.2 filed August 24, 1995
entitled Occlusion Device For Closing An Opening In A Vessel
d. German Utility Model Application 29714242.9 filed August 8,
1997 entitled Verschlusseinrichtung zum Verschlie en einer
korperlichen Anomalie wie Gefa offnung oder Offnung in einder
Scheidewand
e. United States Application Serial No. 08/585114 filed January
11, 1996 entitled Closure Device For Closing A Vascular
Opening, Such As Patent Ductus Arteriosus
f. Any divisionals, continuations, continuations-in-part, or
reissues filed from a-e.
EXHIBIT B
ENCUMBRANCES ON ASSETS
NONE.
EXHIBIT C
CONSULTING AGREEMENT
This Consulting Agreement ("Agreement") dated as of October 23, 1997 is
made and entered into by and between Applied Biometrics, Inc., a Minnesota
corporation (the "Company") and Xxxxxxxx Xxxxxxxx (the "Consultant").
BACKGROUND
The Company and Consultant are parties to a certain Purchase Agreement
(the "Purchase Agreement") dated October 23, 1997, whereby the Company acquired
all right, title and interest in specified assets (the "Assets", as that term is
defined in the Purchase Agreement). As a material inducement to the Company's
agreement to enter into and consummate the Purchase Agreement, the parties have
agreed to enter into this Agreement and hereby acknowledge the importance of the
Company's ability to (i) utilize the knowledge, experience, skill and services
of Consultant; and (ii) protect the Company's significant interest the Assets
and in its worldwide business of developing, marketing, distributing and selling
Vessel/Septal Occluder Devices and related products, instruments or devices.
ARTICLE 1
SCOPE OF WORK
1.1 Consultant is engaged to provide the Company with such services as
may be requested from time to time by the Company in connection with the
research, engineering, manufacturing, marketing and development of Vessel/Septal
Occluder Devices.
1.2 Consultant will devote such time for consulting services to the
Company as reasonably requested by the Company during the term of this
Agreement.
1.3 In order for Consultant to perform the services described in
Section 1.1 above, it may be necessary for Consultant to use Confidential
Information relating to the Assets possessed prior to the date of this Agreement
and for the Company to provide Consultant with Confidential Information (as
defined below) regarding the Company's business. The Company will rely heavily
upon Consultant's integrity and prudent judgment to use this information only in
the best interests of the Company.
1.4 In rendering services under this Agreement, Consultant shall
conform to high professional standards of work and business ethics. Consultant
shall not use time, materials, or equipment of the Company without the consent
of the Company. In no event shall Consultant take any action or accept any
assistance or engage in any activity that would result in any university,
governmental body, research institute or other person, entity or organization
acquiring any rights of any nature in the Inventions (as defined below) or to
the results of work performed by or for the Company. Consultant shall take all
reasonable steps to ensure that no funds are used in the performance of its
services under this Agreement, other than those provided or authorized by the
Company.
1.5 Consultant shall not use the service of any person, entity or
organization in the performance of Consultant's duties without the prior written
consent of the President of the Company. Should the Company consent to the use
by Consultant of the services of any other person, entity or organization, no
information regarding the Inventions or the services to be performed under this
Agreement shall be disclosed to that person, entity or organization until such
person, entity or organization has executed an agreement satisfactory to the
Company to protect the confidentiality of the Company's Confidential Information
and the Company's absolute and complete ownership of all right, title and
interest in the Inventions and the results of work performed under this
Agreement.
1.6 Consultant shall provide the Company with such written, periodic
reports as the Company may reasonably require and, upon termination of this
Agreement, a final report. These reports shall contain such information as may
reasonably be requested by the Company.
ARTICLE 2
INDEPENDENT CONTRACTOR
2.1 Consultant is an independent contractor and not an employee,
partner or co-venturer of, or in any other service relationship with, the
Company, and the manner in which Consultant's services are rendered shall be
within Consultant's sole control and discretion. Consultant is not authorized to
speak for, represent, or obligate the Company in any manner without the prior
express written authorization from an officer of the Company. Consultant shall
be responsible for all payroll and other taxes arising from compensation and
other amounts paid under this Agreement.
ARTICLE 3
COMPENSATION
3.1 The Company agrees to compensate Consultant for services rendered
to the Company under this Agreement at the rate of One Hundred Dollars ($100.00)
U.S. per hour during the term of this Agreement.
3.2 The Company will only compensate Consultant for actual hours worked
following receipt of Consultant's written verification of those hours and only
for those hours that were authorized and approved by the Company.
3.3 Notwithstanding paragraphs 3.1 and 3.2 of this Agreement, the
Company agrees to compensate Consultant a minimum of Twenty Thousand Dollars
($20,000) U.S. for, and only for, the first year of this Agreement; subject,
however, to the condition that the Agreement remains in full force and effect
and has not been terminated in accordance with Article 4 below.
ARTICLE 4
TERM AND CANCELLATION
4.1 This Agreement shall be effective as of the date last signed and
shall continue in effect until October 23, 2000, unless earlier terminated as
provided for herein.
4.2 Either the Company or the Consultant may terminate this Agreement
at any time on thirty (30) days prior written notice upon a material breach of
the provisions of this Agreement if such breach has not been cured during such
notice period. On termination of this Agreement under any part of this Article
4, Consultant shall deliver to the Company all Company property and information
in the possession of the Consultant or any of his employees, representatives or
agents relating to the services performed on the request of the Company.
4.5 The provisions of Articles 5, 6, 7, 8 and 9 of this Agreement shall
survive the termination of this Agreement and remain in full force and effect
thereafter. Termination of this Agreement shall not relieve the Company of its
obligations to pay to Consultant monies due and unpaid at the time of
termination.
ARTICLE 5
CONFIDENTIAL INFORMATION
5.1 In performing services under this Agreement, Consultant may be
required to use certain "Confidential Information" (as hereinafter defined) of
the Company. Consultant agrees that it will not, and his employees, agents or
representatives will not, use, directly or indirectly, such Confidential
Information for the benefit of any person (including without limitation,
Consultant's colleagues), entity or organization other than the Company, or
disclose such Confidential Information without the written authorization of the
President of the Company, either during or after the term of this Agreement, for
as long as such information retains the characteristics of Confidential
Information.
5.2 "Confidential Information" means information not generally known,
including trade secrets, about the Company's methods, processes, technology,
intellectual property and products, including but not limited to information
relating to such matters as research and development, (including without
limitation, information related to the Assets and Inventions) analysis,
manufacturing methods, patents, patent applications, Inventions, processes,
techniques, composition of materials, applications for particular technologies,
materials or designs, vendor names, customer lists, schematics, designs,
drawings, management systems and sales and marketing plans. All information
disclosed to Consultant or to which Consultant has access or which is generated
by Consultant on behalf of the Company during the term of this Agreement which
Consultant has a reasonable basis to believe is Confidential Information or
which is treated by the Company as Confidential Information shall be presumed to
be Confidential Information. Confidential Information includes all trade secrets
and know how relating to the Assets known by Consultant prior to the date of
this Agreement or trade secrets and know how that may in the future be
developed, acquired or made available to the Company.
5.3 Consultant agrees that all materials developed by the Consultant on
behalf of the Company or as a result of this Agreement, or provided by or on
behalf of the Company to Consultant, whether or not provided, conceived, or
developed during Consultant's affiliation therewith, are and shall remain the
exclusive property of the Company. Consultant shall not copy, summarize or
remove from the Company's premises such Confidential Information or material in
whole or in part at any time prior to or after termination except as permitted
in writing by the Company. Promptly upon the expiration or termination of this
Agreement, or upon the request of
the Company, Consultant shall return to the Company all documents and tangible
items, including samples, provided to Consultant or created by Consultant for
use in connection with services to be rendered hereunder, including without
limitation all Confidential Information, together with all copies and abstracts
thereof.
5.4 The burden of establishing that any information possessed by
Consultant is not Confidential Information shall be that of Consultant. This
burden shall be met only if Consultant is able to establish by clear and
convincing evidence that the information, free of any obligations of
confidentiality does not relate to the Assets or Vessel/Septal Occluder Devices
and:
A. Was known to Consultant (as evidenced by written records of
Consultant in existence prior to a disclosure by the Company of the information
involved) and its value appreciated prior to Consultant's employment by the
Company; or
B. Was generally known to the general public at large or the Company's
competitors and its value appreciated prior to any use or disclosure of such
information by Consultant.
ARTICLE 6
RIGHTS AND DATA
6.1 All ideas, concepts, drawings, models, designs, formulas, methods,
information, works of authorship, documents and tangible items prepared for or
submitted to the Company by Consultant under this Agreement shall belong
exclusively to the Company and shall be deemed to be works made for hire (the
"Deliverable Items"). To the extent that any of the Deliverable Items may not,
by operation of law, be works made for hire, Consultant hereby assigns to the
Company the ownership of copyright or mask work in the Deliverable Items, and
the Company shall have the right to obtain and hold in its own name any
trademark, copyright, or mask work registration, and any other registrations and
similar protection which may be available in the Deliverable Items. Consultant
agrees to give the Company or its designees all assistance reasonably required
to perfect such rights.
6.2 To the extent that any preexisting materials are contained in the
Deliverable Items, Consultant grants to the Company an irrevocable,
nonexclusive, world-wide, royalty-free license to (a) use, execute, reproduce,
display, perform, distribute (internally or externally) copies of, and prepare
derivative works based upon, such preexisting materials and derivative works
thereof; and (b) authorize others to do any, some or all of the foregoing.
6.3 No license or right is granted to Consultant, either expressly or
by implication, estoppel or otherwise, to use, execute, publish, reproduce,
prepare derivative works based upon, distribute copies, publicly display, or
perform the Deliverable Items either during or after the term of this Agreement.
ARTICLE 7
INVENTIONS
7.1 Consultant agrees that all "Inventions" (as hereinafter defined)
which Consultant (or any person, entity or organization hired by Consultant) may
conceive or reduce to practice in the performance of services for the Company
and all Inventions which Consultant (or any person, entity or organization hired
by Consultant) may conceive or reduce to practice which are based in whole or in
part upon Confidential Information possessed by Consultant or obtained from the
Company or conceived as a result of the performance of this Agreement shall be
the exclusive property of, and are hereby assigned without charge to, the
Company unless released to Consultant in writing by the President of the
Company. "Invention" shall mean any invention, discovery, work of authorship,
modification, improvement, concept or idea, whether patentable or not (including
those which may be subject to trademark, copyright or mask work registration)
including but not limited to products, technologies, machines, devices,
instruments, processes, methods, techniques, know-how and formulae.
7.2 Consultant shall (a) promptly and fully disclose and describe all
Inventions in writing to an officer of the Company or anyone else designated by
the Company (such disclosure shall include, if requested, a detailed report of
the procedure employed and the results achieved by Consultant); and (b) give the
Company all assistance the Company requires to perfect, protect and use its
rights to Inventions, including but not limited to signing all documents, doing
all things and supplying all information that the Company may deem necessary or
desirable to (i) transfer or record the transfer to the Company of the entire
right, title and interest of Consultant and/or Consultant's employees in
Inventions, and (ii) enable the Company to obtain patent, copyright, mask work
or trademark protection for the Inventions anywhere in the world. The
obligations of this paragraph shall continue beyond the expiration or
termination of this Agreement with respect to Inventions which Consultant and/or
Consultant's employees, agents or representatives conceive or make during the
term of this Agreement.
ARTICLE 8
NON-COMPETE--RESTRICTIONS ON CERTAIN ACTIVITIES
8.1 Consultant agrees that during the term of this Agreement and for a
period of three (3) years thereafter, he shall not, directly or indirectly:
A. Render any consulting, research, analytical, marketing,
developmental, or other services to any person, entity or organization with
respect to any product, device, instrument, process, technique, or project which
is substantially similar in function or purpose to those to which Consultant's
services under this Agreement relate, including the manufacture, marketing and
development of Vessel/Septal Occluder Devices or related technology, products,
instruments and devices;
B. Participate in the ownership, management, operation, control or
financing of, or be connected as an investor, partner, officer, director,
principal, agent, representative, consultant or otherwise be associated with, or
permit his name to be used in connection with any business enterprise, wherever
located, which is engaged in the development of any product, device,
instrument, process, technique, or project which is substantially similar in
function or purpose to those to which Consultant's services under this Agreement
relate, including the development of Vessel/Septal Occluder Devices or related
technology, products, instruments and devices; or
C. Take any action which is designed, intended or might reasonably be
anticipated to compete with the Company's business or interfere with the
relationship of the Company and any of its customers or suppliers, whether
previously existing or acquired in connection with the Purchase Agreement.
8.2 If, in any judicial proceeding, a court shall refuse to enforce
this covenant not to compete because it is more extensive in scope than
necessary to effectuate the purposes of such proceeding, such limitations shall
be deemed reduced to the extent necessary to permit enforcement of this
covenant.
ARTICLE 9
RIGHT TO INJUNCTIVE RELIEF
Consultant acknowledges that a breach of any of the terms of Articles
5, 6, 7, or 8 of this Agreement will render irreparable harm to the Company, and
that a remedy at law for breach of the Agreement is inadequate, and that the
Company shall therefore be entitled to any and all equitable relief, including,
but not limited to, injunctive relief, and to any other remedy that may be
available under any applicable law or agreement between the parties, and to
recover from the Consultant all costs of litigation including, but not limited
to, attorneys' fees and court costs. Consultant acknowledges that the
constraints herein are reasonably necessary to protect the legitimate interests
of the Company, are reasonable in scope and duration and are not unduly
restricted.
ARTICLE 10
REPRESENTATION
Consultant represents and warrants that none of the Consultant's
undertakings or activities under this Agreement will (i) involve the wrongful
use or disclosure of any proprietary rights of any third party, or (ii) give
rise to any claim by any third party of ownership or rights in the Inventions,
New Inventions, or the results of Consultant's testing and evaluation under this
Agreement.
ARTICLE 11
GENERAL PROVISIONS
11.1 Consultant and the Company's respective rights and obligations
under this Agreement are unconditional and shall survive and continue after any
expiration or termination of the Agreement, and shall bind the parties and their
respective legal representatives, heirs, successors and assigns.
11.2 In addition to other relief provided by law, Consultant agrees
that the Company may enforce the covenants contained in the Agreement by an
injunction issued against Consultant and any person concerned, it being
understood that both damages and injunction shall be proper modes of relief and
are not to be considered as alternative remedies.
11.3 In the event any provision of this Agreement is held unenforceable
by a court of competent jurisdiction, such provision shall be severed and shall
not affect the validity or enforceability of the remaining provisions.
11.4 This Agreement shall in all respects and in all instances be
governed by, enforced and construed in accordance with the internal laws (and
not the laws of conflicts) of the State of Minnesota, U.S.A. Any dispute arising
out of or relating to this Agreement must be heard by a state or federal court
sitting in Minneapolis, Minnesota, U.S.A. and Consultant hereby submits and
consents to the personal jurisdiction of such courts.
11.5 This Agreement constitutes the complete agreement and sets forth
the entire understanding and Agreement of the parties as to the subject matter
of this Agreement and supersedes all prior discussions and understandings in
respect to the subject of this Agreement.
11.6 No modification, termination or attempted waiver of this
Agreement, or any provision thereof, shall be valid unless in writing signed by
the party against whom the same is sought to be enforced.
11.7 The waiver by the Company of a breach of any provision of this
Agreement by Consultant shall not operate or be construed as a waiver of any
other or subsequent breach by Consultant.
11.8 This Agreement may not be assigned by either party without the
prior written consent of the other party; provided, however, that the Agreement
shall be assignable by the Company without Consultant's consent in the event the
Company (i) is acquired by or merged into another corporation or (ii) sells its
assets related to its Vessel/Septal Occluder Device business. The benefits and
obligations of this Agreement shall be binding upon and inure to the parties
hereto, their successors and assigns.
11.9 Consultant warrants that Consultant has not previously assumed any
obligations inconsistent with those undertaken by Consultant under this
Agreement.
11.10 The rights of the Company under this Agreement are in addition to
any rights of the Company with respect to the protection of trade secrets and
confidential information arising out of the common or statutory law of the State
of Minnesota, or the law of any state or country where Consultant may from time
to time be employed or found.
11.11 Any notice required or permitted to be given under this Agreement
shall be sufficient if in writing and if sent by facsimile or by
certified/registered mail with return receipt requested to the addresses set
forth below. Notices shall be deemed given only upon receipt (proof of receipt
shall include the return receipt and the facsimile transmission confirmation):
If to the Company:
Applied Biometrics, Inc.
000 X. Xxxxxxx 00
Xxxxxxxxxx, XX 00000
Telephone: 000-000-0000
Fax No.: 000-000-0000
With a copy to:
Xxxxxxxxx & Xxxxxx P.L.L.P.
0000 XXX Xxxxxx
00 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxxxx, XX 00000
Attn: Xxxxxxx Xxxxxxx
Telephone: 000-000-0000
Fax No.: 000-000-0000
If to Consultant:
Xxxxxxxx Xxxxxxxx
Xxxxx Xxxxxx 0
X-00000 Xxxxxxxxxx
Xxxxxxx
Telephone: 00 00 00 00 / 152 84
Fax No.: 00 00 00 00 / 149 79
If the foregoing accurately sets forth our understanding, please so
indicate by signing in the space provided below and returning one fully signed
copy of this letter to the Company.
APPLIED BIOMETRICS, INC.
By: /s/ Xxxxxx X. Xxxxxx
Xxxxxx X. Xxxxxx
Its: President
CONSULTANT
/s/ Xxxxxxxx Xxxxxxxx
Xxxxxxxx Xxxxxxxx
