Exhibit 10.2
*** Portions of this Exhibit have been omitted pending a confidential
treatment request by the Company.
DEVELOPMENT AND LICENSE AGREEMENT
THIS AGREEMENT ("Agreement") is made and entered into as of the Effective
Date by and between OPTICAL SENSORS INCORPORATED, a Delaware corporation
("Licensor" and sometimes "OSI"), with an address at 0000 Xxxxxx Xxxxxxxx Xxxxx,
Xxxxx X, Xxxxxxxxxxx, Xxxxxxxxx 00000, and NELLCOR PURITAN XXXXXXX, INC., a
Delaware corporation ("Licensee" and sometimes "NPB") and a division of Tyco
Healthcare Group LP, with an address at 0000 Xxxxxxxx Xxxxx, Xxxxxxxxxx,
Xxxxxxxxxx 00000.
RECITALS:
A. Licensor is the exclusive licensee of issued U.S. Patent No. 6,055,447
and U.S. Patent No. 6,216,024 B1, and related patents and applications owned by
the Institute of Critical Care Medicine ("ICCM"), a California nonprofit
corporation, with an address at 0000 Xxxxx Xxxxxxx Xxx, Xxxxxxxx #0, Xxxx
Xxxxxxx, Xxxxxxxxxx 00000, all such patents and applications relating to a
method and device for taking measurements in the alimentary canal region between
the stomach and the mouth, or in the respiratory canal region between the lungs
and face (including mouth and nasal regions) to assess or help assess systemic
hypoperfusion, each as listed in Exhibit A1 attached hereto; and OSI owns other
related patents and pending patent applications, each listed in Exhibit A2
attached hereto (collectively all patent and patent applications in Exhibits A1
and A2 being hereinafter referred to as "Patents" and "Patent Applications").
B. Licensee desires to obtain from Licensor, and Licensor desires to grant
to Licensee, an exclusive, worldwide Field of Use sublicense and license under
the Patent Rights (as defined below), including but not limited to the Patents
and Patent Applications listed in Exhibits A1 and A2, on the terms and
conditions set forth in this Agreement.
C. Licensee desires Licensor to complete development of the Model 3000, to
manufacture the Model 3000, and then transfer such manufacturing capability to
Licensee.
1
D. Licensor desires to retain exclusive, worldwide right and license, with
the right to grant sublicenses, to practice the Patent Rights and to have made,
use, promote, market and sell products in connection with practicing the Patent
Rights that are not covered within the Field of Use.
NOW THEREFORE, in consideration of the foregoing recitals and the mutual
representations, warranties, covenants and agreements contained herein, the
parties hereto agree as follows:
1. Definitions.
a. "Affiliate" as used in this Agreement with respect to a person or
entity means any corporation, company, partnership, joint venture, entity
and/or firm which controls, is controlled by or is under common control
with such person or entity.
b. "Average Selling Price" as used in this Agreement means with
respect to each country (i) the aggregate Net Sales of Sensors during a
particular period sold for use in each country divided by (ii) the
aggregate number of Sensors sold, net of returns, during the same period
for use in each country. Average Selling Price shall be calculated
separately for each country.
c. "Date of First Commercial Sale" shall mean that date on which an
initial transfer by Licensee of a Section 3.a(3) "manufactured" Model 3000
Sensor and related Instrument is made to a third party in exchange for
value, which Sensor and Instrument shall constitute "manufactured" product
made after an "effective transfer" from development to manufacturing and
after the Section 3.a(3) milestone has been met.
d. "Effective Date" shall mean the date of complete execution of this
Agreement.
e. "Field Forward Military Applications" means specially hardened
designs or products made to comply with non-civilian specifications
delineated by the U.S. or a
2
foreign military for the detection and monitoring of regional and/or
systemic hypoperfusion of military personnel prior to and during combat
from a location remote from a military critical care unit.
f. "Field of Use" means applications for taking measurements in the
alimentary canal region between the stomach and the mouth, or in the
respiratory canal region between the lungs and face (including mouth and
nasal regions) to assess or help assess systemic hypoperfusion, and
specifically excludes all Field Forward Military Applications and all other
applications not directly related to taking measurements in the alimentary
and respiratory regions referred to herein to assess or help assess
systemic hypoperfusion (e.g., measurements for regional tissue perfusion of
any internal organ, appendage, etc.).
g. "Gross Margin" as used in this Agreement means the difference
between Net Sales of Sensors or Instruments and Licensee's direct cost of
manufacturing Sensors or Instruments (i.e., direct material cost, direct
labor cost and manufacturing overhead) or having third parties manufacture
Instruments, as calculated in accordance with generally accepted accounting
principles consistently applied as utilized by Licensee in its normal
financial reporting. Freight costs for product shipped from OSI to Licensee
shall be included in Licensee's direct cost of manufacturing regardless of
Licensee's normal financial reporting standards. As of the date of this
Agreement, Licensee calculates direct cost of manufacturing for its other
products in accordance with the methodology described in Exhibit B.
h. "ICCM License" shall mean the "patent license agreement" entered
into as of July 20, 1998, between Institute of Critical Care Medicine and
Licensor.
i. "Instrument" as used in this Agreement means any device which
connects to a Sensor and processes signals obtained therefrom to assess or
help assess systemic hypoperfusion, and which is covered by a validly
issued U.S. patent included in the Patent Rights. An Instrument can
comprise a standalone monitor, an OEM board for sale
3
to third parties who make monitors (which monitors shall not be considered
"Instruments", just the OEM boards), and that portion of any multiparameter
monitor dedicated to assessing or helping to assess systemic hypoperfusion
using signals obtained from the alimentary canal region between the stomach
and the mouth, or the respiratory canal region between the lungs and face
(including mouth and nasal regions).
j. "Know-How" shall mean any and all techniques, processes and
apparatus for designing and/or making Instruments and/or Sensors, including
but not limited to the Model 3000 system.
k. "Major Countries" as used in this Agreement means each of the
following geographic territories: United States, Japan, United Kingdom,
France, Germany and Italy.
l. "Model 3000" is a next generation Instrument and Sensor in
development at OSI which constitutes an improvement to a model 2000
Instrument and Sensor previously developed by OSI. The Model 2000 has been
cleared by OSI to market by the U.S. Food and Drug Administration (FDA).
m. "Net Sales" as used in this Agreement means the amount actually
received by Licensee and its Affiliates from the sale of Sensors or
Instruments, as the case may be, less the sum of the following deductions
where applicable: cash, trade or quantity discounts, sales, use, tariff,
import/export duties or other excise or similar taxes imposed upon
particular sales, transportation and related insurance charges and
allowances or credits to customers because of rejections or returns, as
calculated in accordance with consistently applied and generally accepted
accounting principles as utilized by Licensee in its normal financial
reporting. In the event Sensors or Instruments are bundled with or included
as part of another product (a "Combined Product"), the amount received by
Licensee for the Sensor and/or Instrument shall be deemed to be that
portion of the total amount received by Licensee for the Combined Product
that the cost of the Sensor and/or Instrument bears to the total cost of
the Combined Product. "Net Sales" shall not include any xxxx-up charged by
sales agents of Licensee which are not Affiliates and shall only
4
include amounts actually received by Licensee as specified herein.
n. "Patent Rights" as used in this Agreement means all right, title
and interest of Licensor and its Affiliates in (i) the Patents; (ii) any
patents that issue on the Patent Applications; (iii) any patents issuing
from any reissues, renewals, extensions, divisionals, continuations and
continuations-in-part of the Patents and Patent Applications; (iv) any
foreign patents corresponding to such patents; and (v) any patents issuing
on any and all improvements, modifications, enhancements or new ideas
developed or conceived by Licensor and/or ICCM, and their respective
Affiliates, and in which Licensor and/or ICCM retain Field of Use rights in
and to, and which is usable in connection with the Patents and the Patent
Applications for use in the Field of Use.
o. "Sensor" as used in this Agreement means any device which detects
signals either in or around
(1) the alimentary canal between the stomach and the mouth;
(2) the mouth;
(3) the nasal passages; or
(4) the respiratory region between the lungs and face
(nose/mouth),
to assess or help assess systemic hypoperfusion and that is covered by a
validly issued U.S. patent included in the Patent Rights. Sensors can be
disposable or reusable, and shall not include any part of an Instrument,
which may connect to the Sensor to process electrical or optical signals
from the Sensor.
p. "Supplemental Agreement" means the agreement being executed
contemporaneously herewith by Licensee and ICCM.
5
q. "Supply Agreement" means the supply agreement between Licensor and
Licensee being executed contemporaneously herewith.
r. "Third Party Infringement" shall mean any activity by any third
party that constitutes infringement of any of the Patent Rights.
s. "Year 1" shall extend for one year and shall begin on the first day
of the first calendar quarter after the Date of First Commercial Sale.
t. "Year 2" shall extend for one year and begin upon termination of
Year 1.
u. "Year 3" shall extend for one year and begin upon termination of
Year 2.
v. "Year 4" shall extend for one year and begin upon termination of
Year 3.
2. License.
x. Xxxxx. Licensor hereby grants to Licensee an exclusive, worldwide,
right and license to practice the Patent Rights and Know-How in the Field
of Use to make, have made, develop, improve, use, promote, market and sell
Sensors and Instruments, including the right to have third parties
manufacture, sell and distribute on behalf of Licensee. Licensee shall
inform Licensor of the identities of third parties that are selling
Instruments or Sensors on behalf of Licensee, and Licensee shall inform
Licensor of the identities of third parties that are manufacturing
Instruments or Sensors on behalf of Licensee. Licensor hereby reserves the
right to practice the Patent Rights to make or have made Sensors or
Instruments in the Field of Use as necessary to perform under the Supply
Agreement to supply Sensors and Instruments exclusively to Licensee.
Licensor hereby reserves all rights to practice the Patent Rights and the
Know-How outside the Field of Use.
6
b. Conversion to Non-Exclusive License. If Licensee elects not to make
Minimum Royalty Payments to Licensor for an entire year as permitted by
Section 3.e, the license granted in Section 2.a may become, at the option
of Licensor, non-exclusive upon sixty (60) days written notice if the past
due Minimum Royalty Payments are not paid during this sixty (60) day
period.
c. Repurchase Rights. If Licensee elects not to make Minimum Royalty
Payments for two (2) consecutive years as permitted by Section 3.e, OSI, on
thirty (30) days notice, may purchase back from Licensee worldwide
distribution, development and manufacturing rights for the sum of two
million dollars ($2,000,000) plus fifty percent (50%) of Licensee's prior
year's gross margin on worldwide Sensors and Instruments. This repurchase
right shall expire if not exercised within six (6) months of Licensee's
failure to make Minimum Royalty Payments for two (2) consecutive years.
3. Payments; Royalties; Fees.
a. Manufacturing Milestone Payments. In the first year after the
Effective Date, Licensee shall pay Licensor the following product
development and manufacturing development milestone payment amounts (which
amounts are not license fees):
(1) Seven hundred fifty thousand dollars ($750,000) upon complete
execution of this Agreement (net ten (10) days).
(2) Five hundred thousand dollars ($500,000) upon agreement in
writing between Licensee and Licensor on detailed Model 3000 customer
functional requirements which are consistent in detail with Nellcor's
product development process for customer requirements. The parties
expect such requirements to be agreed upon within one (1) month of the
Effective Date. If such agreement cannot be reached within three (3)
months of the Effective Date, Licensee may terminate this Agreement on
thirty (30) days written notice and owe no additional
7
monies hereunder.
(3) Four hundred thousand dollars ($400,000) net forty-five (45)
days after effectively transferring the design of the Model 3000 from
the Licensor's development organization to the Licensor's
manufacturing operation. An effective transfer will occur when the
Licensor has demonstrated that its quality system, the product design
of the Model 3000, and the processes involved in its manufacture are
in compliance with the Quality System Regulation (QSR, 21 CFR Part
820). Evidence of compliance will include ***. An effective transfer
shall require that OSI pass all three audits referenced above, and
successfully demonstrate completion of OSI's QSR procedure. If the
Model 3000 as manufactured by Licensor is subject to a quality recall,
all costs associated with the recall shall be borne *** percent (***%)
by Licensor and *** percent (***%) by Licensee. Licensee shall be
entitled to take a credit against Minimum Royalty Payments and running
royalties for any Licensor recall costs paid or incurred by Licensee.
(4) Three hundred fifty thousand dollars ($350,000) net
forty-five (45) days after: the Date of First Commercial Sale,
Licensor has demonstrated to Licensee's reasonable satisfaction a
first pass yield of 95% while meeting the labor and material costs
specified in the Supply Agreement on standard production lots of
probes and monitors (minimum of 1,000 probes and 100 monitors
required), Licensor obtains U.S. clearance to market or documentation
satisfying FDA letter to file requirements, and Licensor has
transferred all Know-How associated with such Model 3000 manufacturing
to Licensee.
*** Portions of this Exhibit have been omitted pending a confidential
treatment request by the Company.
8
b. License Percentage Royalty to ICCM. Licensee shall pay to ICCM, on
behalf of Licensor, a royalty on Net Sales of any Sensors and Instruments
sold by Licensee equal to the amounts owed by OSI under Section 3(a) of the
ICCM License.
c. Percentage Royalty to Licensor in Patented Countries. Subject to
royalty amounts being reduced as provided by subsection 3.d, in Year 1
Licensee shall pay to Licensor a royalty on Net Sales of any Sensors sold
by Licensee equal to *** percent (***%) of Net Sales of Sensors minus all
amounts payable by Licensee to ICCM for Sensors under Section 3.b. In Year
2 and thereafter, Licensee shall pay to Licensor a royalty on Net Sales of
any Sensors sold by Licensee equal to the percentage set forth below (minus
all amounts payable by Licensee to ICCM for Sensors under Section 3.b)
which is dependent on Licensee's gross margin.
Nellcor Sensor Gross Margin %, before Licensor Royalty %
payment of Royalties to Licensor and ICCM on Sensors
----------------------------------------- ----------
***% + ***%
***% ***%
***% ***%
***% ***%
***% ***%
***% ***%
***% ***%
***% ***%
***% ***%
***% ***%
***% ***%
*** Portions of this Exhibit have been omitted pending a confidential
treatment request by the Company.
9
***% ***%
***% ***%
***% ***%
***% ***%
***% or less ***%
Subject to royalty amounts being reduced as provided by subsection 3.d,
royalties payable with respect to Net Sales of Sensors shall be calculated
separately for each country based on the Average Selling Price in each
country. Subject to royalty amounts being reduced as provided by subsection
3.d, Licensee shall pay to Licensor a royalty on Net Sales of any
Instruments sold by Licensee equal to *** percent (***%) of the aggregate
Gross Margin with respect to Instruments that are sold by Licensee minus
all amounts payable by Licensee to ICCM for Instruments under Section 3.b.
Royalties under this Section 3.c shall by payable with respect to sales of
Sensors and related Instruments only if a valid patent (or an application
is pending as provided in subsection 3.d), included in the Patent Rights
with claims covering the Sensor or Instruments, as the case may be, has
issued (or is pending), and is in force in the country where the sales
occur, prior to the date of sale.
d. Percentage Royalty to Licensor in Non-Patented Countries. For sales
of Sensors and Instruments in countries in which a valid patent, included
in the Patent Rights, with claims covering the Sensor or Instruments, as
the case may be, has not issued prior to the date of sale, royalties to
Licensor, but not ICCM, shall be *** those set forth in Section 3.c.
However, Licensor may file patent applications in non-patented countries,
and if it does so, Licensee shall pay Licensor full royalties as defined in
Section 3.c (rather than *** royalties) on Net Sales in those countries
where the application is pending, so long as the Sensor or Instrument, as
the case may be, is covered
*** Portions of this Exhibit have been omitted pending a confidential
treatment request by the Company.
10
by enforceable issued claims in a corresponding U.S. case. If, for some
reason, the application(s) never issues as a patent in a reasonable period
of time with claims covering the Sensor or Instruments, as the case may be,
in the non-patented country(ies), Licensee shall deduct the *** percent
(***%) overpayment, if any, in royalties for that country from future
royalty, minimum and/or milestone payments.
e. Minimum Royalty. Notwithstanding Sections 3.a-3.d, Licensee shall
pay to Licensor, or its designee, a minimum royalty equal to:
Year Minimum Royalty
---- ---------------
Year 2 $***
Year 3 $***
Year 4 $***
(hereinafter, "Minimum Royalty Payment"). Prior to October 1, 2003, minimum
royalties payable by Licensee during any year shall first be paid by
Licensee to ICCM on behalf of Licensor to fulfill Licensor's minimum
royalty payment obligation to ICCM under Section 3(b) of the ICCM License,
with any remainder then being paid to OSI. Minimum royalties shall be paid
in equal quarterly installments within forty-five (45) days of the end of
each calendar quarter, beginning with the first calendar quarter of Year 2;
provided that any royalties paid pursuant to Sections 3.b-3.d with respect
to Net Sales received or Gross Margins earned by Licensee for any minimum
royalty year shall be applied as a credit against the Minimum Royalty
Payment for such year. Licensee may elect to stop making Minimum Royalty
Payments. If Licensee makes such election for an entire year, Licensor
shall have the right to convert the license granted to Licensee to a
non-exclusive license pursuant to Section 2.b, and if such election extends
over two (2) years Licensor shall have the right to repurchase the license
rights pursuant to Section 2.c.
*** Portions of this Exhibit have been omitted pending a confidential
treatment request by the Company.
11
f. Payments. All royalties payable to Licensor and ICCM under this
Agreement shall be paid within forty-five (45) days after the end of each
calendar quarter to which such royalty payment relates. The Minimum Royalty
Payment, if any, shall be paid within forty-five (45) days after the end of
each calendar quarter. Each royalty payment shall be accompanied by a
written statement, showing (i) aggregate Net Sales received by Licensee
during such quarter in connection with the sale of Sensors; (ii) Gross
Margin earned by Licensee during such quarter in connection with the sale
or placement of Instruments; (iii) any sublicense fees received; and (iv)
the amount of royalty and sublicense fees, as the case may be, payable to
Licensor and ICCM with respect to each of the foregoing, on a country by
country basis. Licensee shall submit such quarterly statements beginning
with the first royalty payment made pursuant to Sections 3.b-3.d.
g. Books and Records. Licensee agrees to keep for three (3) years
complete and accurate books of account and records covering all
transactions relating to this Agreement. Licensor, at its expense, shall
have the right to have an independent accounting firm, mutually agreeable
to both parties, one time in each calendar year on reasonable notice, to
audit Licensee's books of account and records that related to the subject
matter and terms of this Agreement. Licensor shall not have any right to
audit any other books of account or records of Licensee. Such firm shall
only disclose to Licensor (and copy Licensee) such information as is
necessary to verify the accuracy of Licensee's statements.
4. Licensee's Development and Commercialization Efforts.
So long as the license granted herein remains exclusive, Licensee shall use
reasonable commercial efforts to develop and commercialize Sensors and
Instruments. Licensee shall be responsible for:
a. funding and monitoring any clinical trial and/or outcome studies as
Licensee in its sole discretion deems appropriate;
12
b. R&D support and redesign of Sensors and Instruments (but not
manufacturing engineering support during Year 1);
c. manufacturing Sensors and Instruments and engineering manufacturing
support after Year 1; and
d. developing sales and marketing infrastructure.
5. Licensor's Development and Commercialization Efforts.
a. Licensor shall use reasonable commercial efforts to create Model
3000 customer functional requirements which are agreeable to Licensee so as
to complete the Section 3.a(2) milestone as soon as possible after the
Effective Date.
b. Licensor shall use reasonable commercial efforts to achieve the
Model 3000 development to manufacturing transfer milestone set forth in
Section 3.a(3).
c. Licensor shall use reasonable commercial efforts to supply Licensee
with manufactured Sensors and Instruments in accordance with the terms of
the Supply Agreement, and to effectively transfer manufacturing equipment,
processes and knowledge to Licensee during the term of the Supply
Agreement.
d. Other than the amounts set forth in Section 3 and in the Supply
Agreement, Licensor shall not be entitled to any compensation whatsoever
for development and manufacturing of Sensors and Instruments, or for
providing support therefor. All amounts payable under Section 3.a are for
development and manufacturing support, and are not prepaid royalties.
13
6. Licensee's Representations and Warranties.
Licensee hereby represents and warrants to Licensor that as of the date
hereof:
a. Licensee is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware, and this Agreement
has been duly authorized by all necessary corporate action.
b. This Agreement is the legal, valid and binding obligation of
Licensee, enforceable against Licensee in accordance with its terms.
c. Neither the execution and delivery of this Agreement nor the
compliance with the terms and conditions hereof will conflict with, result
in a breach or violation by Licensee of or constitute a default under any
of the terms, conditions or provisions of any contract, agreement or other
instrument to which Licensee is or may be bound or affected.
d. Licensee is under no obligation or subject to any judicial,
administrative or other proceeding which would limit licensee's ability to
fully perform its obligations hereunder.
7. Licensor's Representations and Warranties.
Licensor hereby represents and warrants to Licensee that as of the date
hereof:
a. Licensor is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware, and this Agreement
has been duly authorized by all necessary corporate action.
b. This Agreement is the legal, valid and binding obligation of
Licensor, enforceable against Licensor in accordance with its terms.
14
c. Neither the execution and delivery of this Agreement nor the
compliance with the terms and conditions hereof will conflict with, result
in a breach or violation by Licensor of or constitute a default under any
of the terms, conditions or provisions of any contract, agreement or other
instrument to which Licensor is or may be bound or affected.
d. The Patent Rights include all patents and patent applications that
Licensor has any interest in and which are useable in connection with
making, using or selling Sensors and/or Instruments in the Field of Use.
e. Except for the non exclusive rights Nihon Kohden has in U.S. Patent
No. 5,579,763 and foreign equivalents in conjunction with ISFET pCO2 and
CO2 sensors, Licensor is the sole and exclusive licensee of the Exhibit A1
Patent Rights and Licensor has not granted any licenses or any other rights
in the Exhibit A1 Patent Rights to any party other than Licensee. Licensor
is the sole and exclusive owner of the Exhibit A2 Patent Rights, free and
clear of any license, security interests, known claims, encumbrances or
known charges of any kind, and has full right, power and authority to enter
into this Agreement and to grant to Licensee the rights to be granted
hereunder. Licensor has not granted to any third party any rights of first
refusal with respect to the licenses granted herein or any other rights to
obtain a license from Licensor to practice the Patent Rights, other than as
set forth in the ICCM License.
f. Licensor is not under any obligations inconsistent with the
provisions of this Agreement.
g. To the best of Licensor's knowledge, (i) the Patent Rights are
valid and enforceable, including inventorship, and (ii) the rights granted
under this Agreement do not infringe any patent, copyright, trademark,
license, trade secret or other intellectual property right of any third
party. Licensor is not aware of any information which could render any of
the claims of any of the Patent Rights invalid or unenforceable.
h. There is no legal, administrative, arbitration, or other
proceeding, suit, claim or action of any nature, judgment, decree,
decision, injunction, writ or order pending or,
15
to the knowledge of Licensor, threatened or contemplated by or against or
involving Licensor or its shareholders, directors or officers (but only in
their capacity as such), pertaining to the Patent Rights or this Agreement,
whether at law or in equity, before or by any person, entity governmental
or quasi-governmental, administrative or regulatory agency or any court,
other than pending patent applications.
i. OSI is in compliance with all, and not in breach of any of, the
terms of the ICCM License, including but not limited to all royalty
payments and development and commercialization obligations.
8. Term and Termination.
a. Term. The term of this Agreement shall commence on the Effective
Date and shall remain in force, unless terminated earlier in accordance
with Section 8.b, until the latest expiration date of a validly issued U.S.
or foreign patent subject to this Agreement.
b. Termination. Notwithstanding the provisions of Section 8.a, this
Agreement may be terminated in accordance with the following provisions:
(1) By Licensor under Section 3.a(2).
(2) Upon mutual written agreement of the parties.
(3) Either party may terminate this Agreement by giving notice in
writing to the other party in the event the other party is in material
breach of this Agreement, so long as the other party does not, in good
faith, dispute the validity of the breach, and the other party shall
have failed to cure such breach within ninety (90) days of receipt of
written notice thereof from the first party, unless such breach cannot
reasonably be cured within ninety (90) days, in which case the
breaching party shall have undertaken good faith efforts to cure such
breach within ninety (90) days. If the breach is disputed, in good
faith, the Agreement
16
can only be terminated on ninety (90) days notice after the dispute is
resolved unless such breach cannot reasonably be cured within ninety
(90) days, in which case the breaching party shall have undertaken
good faith efforts to cure such breach within ninety (90) days.
(4) Licensee may terminate this Agreement immediately if any
material claim of ***.
(5) Licensee may terminate this Agreement for any reason upon one
hundred eighty (180) days notice anytime after December 31, 2002.
c. Rights and Obligation on Termination. In the event of termination
of this Agreement for any reason, the parties shall have the following
rights and obligation:
(1) Licensee shall remain responsible for any payment due to
Licensor that has accrued prior to the effective date of termination.
(2) The license granted to Licensee hereunder shall immediately
terminate and be of no further force and effect for products not yet
manufactured.
(3) Sections 10, 11.a, 11.b and 12 shall survive termination of
this Agreement.
(4) Licensee, its Affiliates and sublicensees shall be permitted
to sell any inventory of Sensors and Instruments on hand at the
effective date of termination, provided that no provision of this
Agreement shall prevent Licensee, its Affiliates or sublicensees from
practicing the Patent Rights or selling Sensors and Instruments after
termination of this Agreement if the relevant Patent Rights have
expired.
*** Portions of this Exhibit have been omitted pending a confidential
treatment request by the Company.
17
9. Patent Prosecution and Maintenance.
a. Existing Patents and Patent Applications and Licensor Improvements.
Licensor shall pay when due all maintenance fees for the Patent Rights in
accordance with applicable law and regulation. Licensor shall prosecute the
Patent Applications and any other applications comprising the Patent
Rights, at Licensor's expense. If Licensor prosecutes any such patent
application and a valid patent issues thereon, then Licensor shall
maintain, including payment of any maintenance fees, any patents that issue
on such patent application that Licensor prosecuted. If Licensor (and ICCM)
fails to prosecute or maintain any such patent or patent application,
Licensor shall so notify Licensee in a timely manner, and Licensee shall
have the right, but not the obligation, to prosecute and maintain any such
patent or patent application, at Licensee's expense, and Licensor shall
then promptly assign to Licensee ownership of such patent or patent
application if owned by Licensor or assign its license to Licensee if the
patent or patent application is licensed to Licensor. Licensor shall
provide Licensee with copies of all relevant documentation on a
confidential basis so that Licensee may undertake such prosecution or
maintenance it assumes, and both parties shall keep the other informed and
apprised of the continuing prosecution and maintenance with respect to all
Patent Rights.
b. Future Patents and Patent Applications Covering Licensee
Improvements. Licensee shall have the right, but not the obligation, to
prosecute and maintain any patent applications covering any modifications
or improvements it creates to the Sensors and Instruments, at Licensee's
expense. All such modifications and improvements shall be solely owned by
Licensee. Licensee shall determine in its sole discretion whether any
particular patent application shall be filed or prosecuted or any patent
shall be maintained pursuant to this Section 9.b. Any such patent
application and patent shall be in the name of Licensee and shall not be
part of the Patent Rights.
18
10. Infringement.
a. Action by Licensor. When information comes to the attention of
Licensor or Licensee to the effect that any of the Patent Rights have been
or are threatened to be infringed by a third party, Licensor shall have the
initial right, but not the obligation, at its expense, to take such action
as Licensor may deem necessary to prosecute or prevent such Third Party
Infringement, including the right to bring any suit, action or proceeding
(or defend a declaratory judgement action) involving any such Third Party
Infringement. Licensor shall notify Licensee promptly of the receipt of any
such information and of the commencement of any such suit, action or
proceeding. If Licensor determines that it is necessary or desirable for
Licensee to join any such suit, action or proceeding, Licensee shall
execute all documents and perform such other acts as may be reasonably
required. In the event that Licensor brings a suit, any sums recovered in
such suit or in settlement thereof shall be distributed as follows: (i)
first to Licensor for reimbursement for all costs and expenses, including
reasonable attorneys' fees, involved in such suit; (ii) second to Licensor
for accrued and unpaid royalties, if any; and (iii) the balance, if any,
*** percent (***%) to Licensee and *** percent (***%) to Licensor.
b. Action by Licensee. If, within ninety (90) days after receipt of
infringement information described in Section 10.a or after giving ninety
(90) days notice to Licensee of such information, Licensor does not notify
Licensee that Licensor has commenced suit against any infringer, Licensee
shall have the right, but not the obligation, to bring suit (or defend a
declaratory judgement action) for such alleged Third Party Infringement.
Licensee may join Licensor and/or ICCM as party plaintiff (or declaratory
judgement defendant), if appropriate, or if Licensor and/or ICCM is not
joined Licensor and/or ICCM shall assign the relevant Patent Rights to
Licensee. Licensor and ICCM shall execute all documents and take all other
actions, including giving testimony, which may reasonably be required in
connection with such suit, action or proceeding. Licensor hereby grants to
Licensee the right to exclusive control of any such suit, action or
*** Portions of this Exhibit have been omitted pending a confidential
treatment request by the Company.
19
proceeding and the exclusive right to compromise, litigate, settle or
otherwise dispose of any such suit, action or proceeding. In the event that
Licensee brings a suit, any sums recovered in such suit or in settlement
thereof shall be distributed as follows: (i) first to Licensee for
reimbursement for all costs and expenses, including reasonable attorneys'
fees, involved in such suit; (ii) second to Licensor for accrued and unpaid
royalties, if any; and (iii) the balance, in any, *** percent (***%) to
Licensee and *** percent (***%) to Licensor.
c. Joint Action. If a third party infringes any Patent Rights and any
relevant patent owned by Licensee, Licensor and Licensee may elect to
jointly bring (or jointly defend in a declaratory judgement action) a suit,
action or proceeding to stop all Third Party Infringement and infringement
of patents owned by Licensee, and will equally share all costs and
expenses, including reasonable attorneys' fees, involved in such suit. In
the event that Licensor and Licensee jointly bring a suit, any sums
recovered in such suit or in settlement thereof shall be distributed as
follows: (i) first to Licensor and Licensee for reimbursement for all costs
and expenses, including reasonable attorneys' fees, involved in such suit;
(ii) second to Licensor for accrued and unpaid royalties; if any; and (iii)
the balance, if any, *** percent (***%) to Licensee and *** percent (***%)
to Licensor. If one party hereto elects not to join in such suit after
ninety (90) days notice, the other party many proceed with the suit as
provided in Section 10.a or 10.b, as the case may be.
d. Enforcement of Licensee Patents. Licensee shall have sole authority
and responsibility for enforcing Licensee-owned patents against
infringement.
e. Reduction of License Payments Due to Competitive Product and Suit.
Notwithstanding the parties' efforts pursuant to Sections 10.a-10.c, if a
competitor is selling or offering to sell a product that infringes any of
the independent claims of U.S. Patent No. *** (or reissue or reexamination
patents thereof) and which is competitive with Sensors or Instruments,
then:
*** Portions of this Exhibit have been omitted pending a confidential
treatment request by the Company.
20
(1) if the Third Party Infringement is in a Major Country, the
Minimum Royalty Payments shall be suspended as long as the Third Party
Infringement continues, and will only resume when all such Third Party
Infringement ceases in all Major Countries, the resumption being at
the minimum royalty rate in effect at the time the suspension began;
(2) if the Third Party Infringement is anywhere in the world and
Licensee's fiscal annual Net Sales are decreased in any given country
by *** percent (***%) or more of any prior fiscal annual level in the
previous three (3) years in such given country, then the royalties
owed to Licensor under Sections 3.c and 3.d for such country(ies)
shall continue to accrue but the amount that is payable shall be
reduced by *** with respect to sales in the country in which Net Sales
have so decreased by *** percent (***%) so long as the Third Party
Infringement continues in such country, and unpaid accrued amounts
shall only be payable out of any sums recovered from actions brought
under Sections 10.a-c, and in addition;
(3) if Licensee brings a suit, action or proceeding (or defends a
declaratory judgement action) associated with the Third Party
Infringement, all royalties thereafter accruable to Licensor under
Sections 3.c and 3.d (but not including amounts payable under Section
3.b) shall be creditable against all costs and expenses, including
reasonable attorneys' fees, and damages involved in such suit (and to
the extent so credited such royalties shall not be payable to
Licensor) until all such costs, expenses and damages have been
recovered by Licensee using credited royalties and any settlement or
judgement amount collected from the infringer. Ongoing Licensor
royalties shall only restart and be payable to Licensor for Net Sales
which result in royalties which exceed all such Licensee costs,
expenses and damages.
*** Portions of this Exhibit have been omitted pending a confidential
treatment request by the Company.
21
f. Action Against Licensee. Licensor will cooperate with Licensee in
the defense of any suit, action or proceeding against Licensee, or any
Affiliate or sublicensee of Licensee, alleging the infringement of a patent
or other intellectual property right owned by a third party by reason of
the use of the Patent Rights in the manufacture, use, promotion or sale of
Sensors and/or Instruments. Licensee shall give Licensor prompt notice of
the commencement of any such suit, action or proceeding or claim of
infringement. Licensor hereby grants to Licensee the right to exclusive
control of any such suit, action or proceeding and the exclusive right to
compromise, litigate, settle or otherwise dispose of any such suit, action
or proceeding and shall provide all information and assistance necessary to
defend or settle any such suit, action or proceeding. Licensee may join
Licensor as a defendant, if necessary or desirable, and Licensor shall
execute all documents and take all other actions, including giving
testimony, which may reasonably be required in connection with the defense
of such suit, action or proceeding. Licensee shall be solely responsible
for all out-of-pocket defense costs (including attorney fees) incurred by
Licensee with the defense of such suit, action or proceeding, and Licensee
shall be entitled to retain any recovery associated with such suit, action
or proceeding. Licensor shall be responsible to Licensee for half of any
damages awarded to such third party in such suit, action or proceeding, or
in settlement thereof. Licensor shall pay Licensee its share of such
damages as follows:
Within thirty (30) days of a final judgement or settlement, an amount
not to exceed all royalties paid to Licensor during the period the
suit, action or proceeding was pending, and to the extent any amount
of Licensor's share of such damages remains, Licensee shall take a
credit against all royalties thereafter payable to Licensor under
Section 3.c (but not including amounts payable under Section 3.b)
until all such Licensor's share of damages is paid.
g. ***
*** Portions of this Exhibit have been omitted pending a confidential
treatment request by the Company.
22
11. Indemnification and Insurance.
a. Indemnification by Licensor. Licensor shall indemnify, hold
harmless, defend and protect Licensee and its Affiliates, sublicensees,
successors, assigns, employees, representatives and agents from and against
any and all claims, causes of action, costs, expenses, losses, damages and
liabilities (including, without limitation, reasonable attorneys' fees)
arising out of or resulting from (i) any breach by Licensor of this
Agreement, (ii) any claim by ICCM that OSI is in breach of the ICCM License
and which breach is cured by Nellcor, (iii) any claim that any rights
within Patent Rights were granted by Licensor to any third party, or (iv)
any unlawful misappropriation by Licensor of trade secrets or proprietary
rights belonging to any third party. Licensee shall have the right to
deduct any amount to which it is entitled to indemnification hereunder
against royalties or other payments due under Sections 3.a, 3.c and 3.d as
long as Licensee pays all such deducted amounts to a third party escrow
agent, which is reasonably satisfactory to Licensee and Licensor, to be
held until the indemnification claim is resolved.
b. Indemnification by Licensee. Licensee shall indemnify, hold
harmless, defend and protect Licensor and its Affiliates, successors,
assigns, employees, representatives and agents, from and against any and
all claims, causes of action, costs, expenses, losses, damages and
liabilities (including, without limitation, reasonable attorneys' fees)
arising out of or resulting from any breach by Licensee of this Agreement.
c. OSI Breach of ICCM License. In addition to rights NPB has under
Section 11.a, if OSI breaches the ICCM License more than once, and NPB
chooses to cure such breaches, the ICCM License shall immediately revert
from OSI and be assigned to NPB by OSI and NPB shall immediately assume all
OSI rights and obligations under the ICCM License. In addition, if the cure
of any single breach by OSI costs NPB one million dollars ($1,000,000) or
more to correct, the ICCM License shall immediately revert from OSI and be
assigned to NPB by OSI and NPB shall immediately assume all OSI rights and
obligations under the ICCM License. NPB may only exercise its rights under
this Section 11.c only if NPB is in compliance with this Agreement.
23
12. Confidentiality.
Each party agrees not to disclose to any third party or use the other
party's Confidential Information, as defined in this Section 12, other than
for purposes of this Agreement. Upon termination of this Agreement, all
Confidential Information shall be returned to the disclosing party.
"Confidential Information" means any information which is disclosed in any
tangible form and is clearly labeled or marked as confidential, proprietary
or its equivalent, or information which is disclosed orally or visually, is
designated confidential, proprietary or its equivalent at the time of its
disclosure and is reduced to writing and clearly marked or labeled as
confidential, proprietary or its equivalent within thirty (30) days of
disclosure; provided that "Confidential Information" shall not include
information that (i) was in the receiving party's possession or was known
to it prior to its receipt from the disclosing party; (ii) is or becomes
public knowledge without the fault of the receiving party; (iii) is or
becomes rightfully available on an unrestricted basis to the receiving
party from a source other than the disclosing party; (iv) becomes available
on an unrestricted basis to a third party from the disclosing party or from
someone acting under its control; (v) is independently developed by the
receiving party as demonstrated by its written records.
13. Covenant Not to Compete
So long as Licensee's license is in force and is exclusive, Licensor agrees
not to compete with Licensee by making and/or selling any product for any third
party or providing any service to any third party in the Field of Use. Licensor
retains the right to make and/or sell any existing or future product for any
third party or to provide service to any third party outside of the Field of
Use.
24
14. Miscellaneous.
a. Public Announcements. Each of the parties hereto agrees that it
will not, without the prior written consent of the other party, make any
public announcement of this Agreement or any of the terms and conditions of
this Agreement, except for such disclosure to the public or to governmental
agencies as its counsel shall deem necessary to comply with applicable law,
rule or regulation. Notwithstanding the foregoing, either party may
disclose publicly that Licensor has granted Licensee an exclusive,
worldwide license to manufacture and sell Sensors and Instruments within
the Field of Use.
b. Assignment. Neither party may assign or otherwise transfer its
rights and obligations under this Agreement without the prior written
consent of the other party, except to (i) an Affiliate, provided that the
original party to the Agreement remains obligated to perform under this
Agreement or (ii) any successor in interest of all or substantially all of
the business of such party relating to the licensed Patent Rights, whether
by merger, operation of law, assignment, purchase or otherwise. Any
prohibited assignment shall be null and void. All terms and conditions of
this Agreement shall be binding on and inure to the benefit of the
successors and permitted assigns of the parties.
c. Relationship. This Agreement shall not constitute either party as
the legal representative, partner, joint venturer or agent of the other
party hereto, nor shall either party have the right or authority to assume,
create or incur any liability or any obligation of any kind, express or
implied, against or in the name of or on behalf of the other party hereto.
d. Entire Agreement; Amendment. This Agreement, the Supplemental
Agreement, the ICCM License and the Supplier Agreement constitute the
entire agreement between the parties hereto relative to the subject matter
hereof, and supersedes any and all prior agreements, written or oral,
between the parties relating to such subject matter. No modifications or
amendments of any of the terms hereof shall be valid or binding unless made
in writing and signed by Licensor and Licensee.
e. Waiver. No waiver of any breach of any provision of this Agreement
shall constitute a waiver of any prior, concurrent or subsequent breach of
the same or any other
25
provision hereof, and no waiver shall be effective unless made in writing.
f. Patent Recording. Licensor agrees to execute documents in the form
given in Exhibit C for recording (at Licensee's expense) with the United
States Patent Office for each patent included in the Patent Rights which
issues in the United States. Licensor will cause such documents to be filed
with the United States Patent Office for recording within thirty (30) days
of the Effective Date of this Agreement or within thirty (30) days of
issuance, whichever occurs later. Licensor further agrees to cooperate in
executing and filing any additional forms necessary to perfect rights of
Licensee granted herein. Licensee agrees to cooperate in executing and
filing any additional forms desired by Licensor (at Licensor's expense) in
the event the license to Licensee becomes nonexclusive or is terminated.
g. Notices. Notice permitted or required to be given under this
Agreement shall be deemed sufficient if given in writing by facsimile,
commercial air delivery service or by registered or certified air mail,
postage prepaid, return receipt requested, addressed to the respective
addresses of the parties set forth below or at such other address as the
respective parties may designate by like notice from time to time. Notices
so given shall be effective upon the earlier of: (i) receipt by the party
to which notice is given (which, in the instance of a facsimile, shall be
deemed to have occurred at the time that the machine transmitting the
facsimile verifies a successful transmission of the facsimile); (ii) on the
fifth business day following the date such notice was deposited in the
mail; or (iii) on the second business day following the date such notice
was delivered to a commercial air delivery service. Notices shall be given
as follows:
If to Licensor: Optical Sensors Incorporated
0000 Xxxxxx Xxxxxxxx Xxxxx
Xxxxx X
Xxxxxxxxxxx, Xxxxxxxxx 00000
Attn: Chief Executive Officer
Fax: (000) 000-0000
If to Licensee: Nellcor Puritan Xxxxxxx, Inc.
0000 Xxxxxxxx Xxxxx
Xxxxxxxxxx, Xxxxxxxxxx 00000
26
Attn: President, Nellcor Business Unit
Fax: (000) 000-0000
With a copy to: Nellcor Puritan Xxxxxxx, Inc.
0000 Xxxxxxxx Xxxxx
Xxxxxxxxxx, Xxxxxxxxxx 00000
Attn: General Counsel
Fax: (000) 000-0000
h. Severability. If any provision of this Agreement shall be held
invalid or unenforceable by any court of competent jurisdiction, the
remaining provisions of this Agreement shall remain in full force and
effect. Further, should any provision of this Agreement be deemed
unenforceable by virtue of its scope, such provision shall be deemed
limited to the extent necessary to render the same enforceable.
i. Governing Law. This Agreement will be construed in accordance with,
and governed by, the laws of the State of California in all respects,
including, without limitation, interpretation, performance, effect and
remedies (without regard to the laws of conflict of any jurisdiction).
j. Headings. The headings of sections and subsections of this
Agreement have been inserted for the convenience of reference only and
shall in no way restrict or otherwise modify the terms on this Agreement.
k. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original, but each of
which together shall constitute one and the same document.
27
IN WITNESS WHEREOF, the parties hereto have executed this License Agreement
as of the date and year written below.
OPTICAL SENSORS INCORPORATED
By
----------------------------------
(Printed Name)
(Title)
Date:
-------------------------------
NELLCOR PURITAN XXXXXXX INCORPORATED
By
----------------------------------
(Printed Name)
(Title)
Date:
--------------------------------
28
EXHIBIT A1
----------
Patents and Patent Applications
-----------------------------------------------------------------------------------------------------------------------------
OSI Country Patent No. or Title Status
Reference No. Appl. No.
-----------------------------------------------------------------------------------------------------------------------------
0379-0046 US 5,579,763 MEASUREMENT OF SYSTEMIC PERFUSION Issued, 2nd Maintenance Fee due June 3,
2004, no foreign filings
-----------------------------------------------------------------------------------------------------------------------------
*** *** **** *** ***
-----------------------------------------------------------------------------------------------------------------------------
*** *** **** *** ***
-----------------------------------------------------------------------------------------------------------------------------
0379-0046.22 US 6,055,447 MINIMALLY INVASIVE MEASUREMENT OF Issued, 1st Maintenance Fee due October
SYSTEMIC PERFUSION 24, 2003
-----------------------------------------------------------------------------------------------------------------------------
0379-0046.23 US 6,216,024 METHOD AND DEVICE FOR ASSESSING Issued, 1st Maintenance Fee due March 24,
PERFUSION FAILURE IN A PATIENT 2002
-----------------------------------------------------------------------------------------------------------------------------
0379-0046.40 PCT Pub. PCT/US98/20118 MINIMALLY INVASIVE MEASUREMENT OF In National Phase in EPO, Australia,
from WO 99/16346 SYSTEMIC PERFUSION Canada, Japan, Filed September 25, 1998,
00379-0046.23 Published
-----------------------------------------------------------------------------------------------------------------------------
*** *** **** *** ***
-----------------------------------------------------------------------------------------------------------------------------
*** *** **** *** ***
-----------------------------------------------------------------------------------------------------------------------------
0379-0046.43 EPO 98948547.9 METHOD AND DEVICE FOR ASSESSING Pending, Filed September 25, 1998,
PERFUSION FAILURE IN A PATIENT Designated France, Germany, UK, Italy,
Netherlands, and Spain. Bibliographic
data published July 19, 2000 under
EP-A-1018933.
-----------------------------------------------------------------------------------------------------------------------------
0379-0046.44 Japan 2000-513493 METHOD AND DEVICE FOR ASSESSING Pending, Filed September 25, 1998
PERFUSION FAILURE IN A PATIENT
-----------------------------------------------------------------------------------------------------------------------------
0379-0046.24 US 6,258,046 METHOD AND DEVICE FOR ASSESSING Issued,
PERFUSION FAILURE IN A PATIENT BY
MEASUREMENT OF BLOOD FLOW
-----------------------------------------------------------------------------------------------------------------------------
*** *** **** *** ***
-----------------------------------------------------------------------------------------------------------------------------
0379-0046WO2 PCT Pub. PCT.US00/08683 METHOD AND DEVICE FOR ASSESSING In National Phase, entered during
WO 00/59372 PERFUSION FAILURE IN A PATIENT BY September 2001 designating EPO, Japan,
MEASUREMENT OF BLOOD FLOW Australia, and Canada
-----------------------------------------------------------------------------------------------------------------------------
TBD Austrailia NA METHOD AND DEVICE FOR ASSESSING NA
PERFUSION FAILURE IN A PATIENT BY
MEASUREMENT OF BLOOD FLOW
-----------------------------------------------------------------------------------------------------------------------------
TBD Canada NA METHOD AND DEVICE FOR ASSESSING NA
PERFUSION FAILURE IN A PATIENT BY
MEASUREMENT OF BLOOD FLOW
-----------------------------------------------------------------------------------------------------------------------------
TBD EPO NA METHOD AND DEVICE FOR ASSESSING NA
PERFUSION FAILURE IN A PATIENT BY
MEASUREMENT OF BLOOD FLOW
-----------------------------------------------------------------------------------------------------------------------------
TBD Japan NA METHOD AND DEVICE FOR ASSESSING NA
PERFUSION FAILURE IN A PATIENT BY
MEASUREMENT OF BLOOD FLOW
-----------------------------------------------------------------------------------------------------------------------------
0379-0048 US 6,071,237 pCO2 DETERMINATION IN THE TRACHEA Issued, 1st Maintenance Fee due December
6, 2003
-----------------------------------------------------------------------------------------------------------------------------
0379-0048.40 PCT Pub. PCT/US00/04305 pCO2 DETERMINATION IN THE TRACHEA In National Phase, entered during month of
August 2001, designating EPO, Japan, Australia
and Canada
-----------------------------------------------------------------------------------------------------------------------------
TBD Austrailia NA pCO2 DETERMINATION IN THE TRACHEA NA
-----------------------------------------------------------------------------------------------------------------------------
TBD Canada NA pCO2 DETERMINATION IN THE TRACHEA NA
-----------------------------------------------------------------------------------------------------------------------------
*** Portions of this Exhibit have been omitted pending a confidential
treatment request by the Company.
29
-----------------------------------------------------------------------------------------------------------------------------
TBD EPO NA pCO2 DETERMINATION IN THE TRACHEA NA
-----------------------------------------------------------------------------------------------------------------------------
TBD Japan NA pCO2 DETERMINATION IN THE TRACHEA NA
-----------------------------------------------------------------------------------------------------------------------------
*** *** **** *** ***
-----------------------------------------------------------------------------------------------------------------------------
*** *** **** *** ***
-----------------------------------------------------------------------------------------------------------------------------
*** *** **** *** ***
-----------------------------------------------------------------------------------------------------------------------------
*** *** **** *** ***
-----------------------------------------------------------------------------------------------------------------------------
*** *** **** *** ***
-----------------------------------------------------------------------------------------------------------------------------
*** Portions of this Exhibit have been omitted pending a confidential
treatment request by the Company.
30
EXHIBIT A2
----------
Patents and Patent Applications
-----------------------------------------------------------------------------------------------------------------------------
OSI Country Patent No. or Title Status
Reference No. Appl. No.
-----------------------------------------------------------------------------------------------------------------------------
0379-0031 US 5,672,515 SIMULTANEOUS DUAL EXCITATION / Issued, 2nd Maintenance fee due March 30th,
SINGLE EMISSION FLUORESCENT 2005.
SENSING TECHNIQUE FOR pH
-----------------------------------------------------------------------------------------------------------------------------
0379-0031.40 PCT Pub. PCT/US96/13791 SIMULTANEOUS DUAL EXCITATION / In National Phase in EPO, Canada, and Japan,
WO 97/10495 SINGLE EMISSION FLUORESCENT Filed August 27, 1996, Published
SENSING TECHNIQUE FOR pH
-----------------------------------------------------------------------------------------------------------------------------
0379-0031.41 Canada 2,231,771 SIMULTANEOUS DUAL EXCITATION / Pending, 1st Office Action Received
SINGLE EMISSION FLUORESCENT
SENSING TECHNIQUE FOR pH
-----------------------------------------------------------------------------------------------------------------------------
0379-0031.42 EPO 96929074.1 SIMULTANEOUS DUAL EXCITATION / Pending, August 27, 1996 Filing Date.
SINGLE EMISSION FLUORESCENT Designated France, Germany, UK, Italy,
SENSING TECHNIQUE FOR pH Netherlands, and Spain. Bibliographic data
published July 1, 1998 under EP-A-0850409
-----------------------------------------------------------------------------------------------------------------------------
0379-0031.43 Japan 9-511977 SIMULTANEOUS DUAL EXCITATION / Pending, August 27, 1996 Filing Date.
SINGLE EMISSION FLUORESCENT Published October 26, 1999 under 11-512521.
SENSING TECHNIQUE FOR pH Request for examination not filed.
-----------------------------------------------------------------------------------------------------------------------------
0379.0034 & US 5,714,121 OPTICAL CARBON DIOXIDE SENSOR AND Issued, 1st maintenance fee due August 3,
.10 ASSOCIATED METHODS OF MANUFACTURE 2001.
-----------------------------------------------------------------------------------------------------------------------------
0379.0034.40 PCT Pub. PCT/US96/15353 OPTICAL CARBON DIOXIDE SENSOR In National Phase in EPO, Australia, Canada,
WO 97/12227 AND ASSOCIATED METHODS OF and Japan, Filed September 25, 1996, Published
MANUFACTURE
-----------------------------------------------------------------------------------------------------------------------------
0379.0034.41 Austrailia 715,086 OPTICAL CARBON DIOXIDE SENSOR AND Issued
ASSOCIATED METHODS OF MANUFACTURE
-----------------------------------------------------------------------------------------------------------------------------
0379.0034.42 Canada 2,233,284 OPTICAL CARBON DIOXIDE SENSOR AND Pending, Filed September 25, 1996, A Request
ASSOCIATED METHODS OF MANUFACTURE for Examination not filed.
-----------------------------------------------------------------------------------------------------------------------------
0379.0034.43 EPO 96933131.3 OPTICAL CARBON DIOXIDE SENSOR AND Pending, Filed September 25, 1996, Designated
ASSOCIATED METHODS OF MANUFACTURE France, Germany, UK, Italy, Netherlands, and
Spain. Bibliographic data published August 19,
1998 under EP-A-0858594. Response to 1st office
action filed September of 2000.
-----------------------------------------------------------------------------------------------------------------------------
0379.0034.44 Japan 9-513592 OPTICAL CARBON DIOXIDE SENSOR AND Pending, Filed September 25, 1996, Published
ASSOCIATED METHODS OF MANUFACTURE on November 2, 1999 under 11-512819. Request
for examination not filed.
-----------------------------------------------------------------------------------------------------------------------------
0379-0039 US 5,690,215 DEVICE FOR MAINTAING THE PARTIAL Issued, 2nd Maintenance Fee due May 25, 2005.
PRESSURE OF A DISSOLVED GAS IN A
FLUID AND RELATED METHODS OF USE
-----------------------------------------------------------------------------------------------------------------------------
0379-0039.40 PCT Pub. PCT/US97/08795 DEVICE FOR MAINTAING THE PARTIAL In National Phase in EPO, Australia, Canada,
WO 98/01365 PRESSURE OF A DISSOLVED GAS IN A Japan, Filed May 21, 1997, Published
FLUID AND RELATED METHODS OF USE
-----------------------------------------------------------------------------------------------------------------------------
0379-0039.41 Austrailia 712,791 DEVICE FOR MAINTAING THE PARTIAL Issued
PRESSURE OF A DISSOLVED GAS IN A
FLUID AND RELATED METHODS OF USE
-----------------------------------------------------------------------------------------------------------------------------
0379-0039.42 Canada 2,259,412 DEVICE FOR MAINTAING THE PARTIAL Pending, Filed September 21, 1997, A Request
PRESSURE OF A DISSOLVED GAS IN A for Examination filed May of 2001.
FLUID AND RELATED METHODS OF USE
-----------------------------------------------------------------------------------------------------------------------------
0379-0039.43 EPO 97928652.3 DEVICE FOR MAINTAING THE PARTIAL Pending, Filed September 21, 1997, Designated
PRESSURE OF A DISSOLVED GAS IN A France, Germany, UK, Italy, Netherlands, and
FLUID AND RELATED METHODS OF USE Spain. Bibliographic data published July 21,
1999 under EP-A-0929470.
-----------------------------------------------------------------------------------------------------------------------------
0379-0039.44 Japan 10-505185 DEVICE FOR MAINTAING THE PARTIAL Pending, Filed September 21, 1997
PRESSURE OF A DISSOLVED GAS IN A
FLUID AND RELATED METHODS OF USE
-----------------------------------------------------------------------------------------------------------------------------
31
EXHIBIT B
---------
Methodology Currently Used for Calculating Direct Cost of Manufacturing
At the beginning of each calendar year, Licensee projects total
manufacturing overhead costs, total purchased materials cost, and total direct
labor hours to produce product for sale for such year. Manufacturing overhead
costs consist of the costs of facilities, utilities, staff, travel and expenses
related to the production of product as accumulated in individual departmental
budgets. Total purchased materials costs are estimated by suppliers. Total
direct labor hours are estimated by extending engineered per unit direct labor
hours multiplied by the projected unit production of products. Total
manufacturing overhead costs are then divided by total direct labor hours to
arrive at a per direct labor hour manufacturing overhead rate. The average cost
of any individual product is determined by applying a direct labor rate and a
manufacturing overhead rate against the estimated direct labor hours for that
product, plus direct material costs. Total cost of sales for that product for
the year is determined by multiplying unit sales by the per unit standard cost.
32
EXHIBIT C
---------
Notice of License
To Whom It May Concern
Notice is hereby given by Optical Sensors Incorporated, having its
principal office at 0000 Xxxxxx Xxxxxxxx Xxxxx, Xxxxx X, Xxxxxxxxxxx, Xxxxxxxxx
00000 ("OSI"), and Nellcor Puritan Xxxxxxx, Inc., having its principle office at
0000 Xxxxxxxx Xxxxx, Xxxxxxxxxx, Xxxxxxxxxx 00000 ("Nellcor"), wherein OSI
granted Nellcor an exclusive Field of Use license to practice the invention
claimed by the following patent:
__________________, which was issued on ______________, entitled
____________________, including all divisionals, continuations,
continuations-in-part, reissues, reexaminations or extensions thereof and any
letters of patent that issue thereon.
OPTICAL SENSORS INCORPORATED
By:
------------------------------
Print Name:
----------------------
Title:
---------------------------
Date:
----------------------------
33
