EXHIBIT 10.14
SECOND DEVELOPMENT AND LICENSE AGREEMENT
THIS SECOND DEVELOPMENT AND LICENSE AGREEMENT (the "Agreement") is
effective April 12, 2002 (hereinafter Effective Date) made by and between TYCO
HEALTHCARE GROUP LP, a Delaware Partnership having an office at 00 Xxxxxxxxx
Xxxxxx, Xxxxxxxxx, Xxxxxxxxxxxxx 00000 (hereinafter "Xxxxxxx") and SAFETY
SYRINGE CORPORATION (hereinafter "SSC"), a corporation of the State of Utah and
wholly owned subsidiary of Specialized Health Products International, Inc.
("SHPI") having an office at 000 Xxxx 000 Xxxxx, Xxxxxxxxx, Xxxx 00000. Xxxxxxx
and SSC shall from time to time be referred individually as a Party or
collectively as the Parties.
W I T N E S S E T H:
WHEREAS the First Development and License Agreement (as defined herein)
was made effective on March 29, 2000 by the Parties whereby certain rights to
the patent rights and technical information owned by SSC were assigned to
Xxxxxxx subject to a license for Blood Collection Products to Xxxxxxx & Xxxxxxx;
WHEREAS Xxxxxxx & Johnson's license has been terminated and Xxxxxxx
desires to obtain rights to Blood Collection Products
WHEREAS, Xxxxxxx wishes to fund and desires that the Parties jointly
continue to undertake the development of commercially viable Safety Syringe
Products and now develop Blood Collection Products as described herein;
WHEREAS, SSC and Xxxxxxx desire that such Safety Syringe Products and
Blood Collection Products be made available to the commercial markets; and
WHEREAS Xxxxxxx and SSC wish to amend, in part, the First Development
and License Agreement in accordance with the terms of this Agreement.
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, the Parties hereto agree as follows:
ARTICLE 1 - DEFINITIONS
Where used in this Agreement, the following terms shall have the
meanings attributed to them herein:
1.1 The term "Affiliate" of a Party, shall mean any company or other
legal entity, other than the Party, in whatever country organized, controlling,
controlled by, or under common control with the Party. The term "control" means
the possession of the power to direct or cause the direction of the management
and policies of an entity, whether through the ownership of voting securities,
by contract, or otherwise, and the term "entity" includes a corporation or other
entity.
1.2 The term "Blood Collection Products" shall mean blood collection
needles and blood collection needle/holder combinations that would, but for the
assignment made herein, infringe any Valid Claim (defined below) of an issued
patent included in the Patent Rights (defined below).
1.3 The term "Effective Date" shall mean the date first set forth
above.
1.4 The term "Excluded Products" shall mean the products listed in
Exhibit 1.3, under "Excluded Product Categories" that would, but for the license
granted herein infringe any Valid Claim of an issued patent included in the
Patent Rights.
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1.5 The term "First Blood Collection Commercial Sale Date" shall mean
the date when Xxxxxxx xxxxx commercial quantities (at least 250,000 product
units) of Blood Collection Products or January 1, 2003, which ever occurs first.
1.6 The term "First Development and License Agreement" shall mean the
agreement made effective on March 29, 2000 between Xxxxxxx and SSC whereby
certain rights to the patent rights were assigned to Xxxxxxx subject to a
license for Blood Collection Products to Xxxxxxx & Xxxxxxx.
1.7 The term "First Minimum Annual Royalty" shall have the meaning as
set forth in Section 3.2.
1.8 The term "First Safety Syringe Commercial Sale Date" shall mean the
date when either: (i) Xxxxxxx xxxxx commercial quantities (at least 8,000,000
product units) of Safety Syringe Products (defined below); or (ii) September 29,
2002 (being thirty (30) months from March 29, 2000) which ever occurs first.
1.9 The term "Included Products" shall mean Safety Syringe Products and
Blood Collection Products.
1.10 The term "Initial Equipment" shall have the mean set forth in
Section 12.1.
1.11 The term "Licensed Products" shall mean: (i) Safety Syringe
Products; (ii) Blood Collection Products; and/or (iii) any syringe product that
would, but for the assignment made herein, infringe any Valid Claim of an issued
patent included in Patent Rights.
1.12 The term "Net Sales" shall mean the revenue received by Xxxxxxx, a
sublicensee or an Affiliate from the sale of Licensed Products to independent
third parties less the following amounts: (i) reasonable discounts, including
cash discounts, or rebates actually allowed or granted, (ii) credits or
allowances actually granted upon claims or returns regardless of the Party
requesting the return, (iii) freight charges paid for delivery, and (iv) taxes
or other governmental charges levied on or measured by the invoice amount
whether absorbed by the billing or the billed Party.
1.13 The term "Patent Rights" shall mean all patent applications filed
in any country which claim the benefit of the filing date of any of the patents
or applications listed on Exhibit 1.2 including all continuing, divisional, and
renewal applications thereof, all patent applications, all patents which may be
granted thereon, and all reissues, re-examinations and extensions thereof, and
including all patents and patent applications which later issue into patents
that are owned, licensed currently or at some future time become controlled by
SSC having at least one Valid Claim which covers a Licensed Products.
1.14 Reasonable Commercial efforts shall have the meaning set forth in
Section 12.2.
1.15 The term "Safety Syringe Products" shall mean any hypodermic
needle, hypodermic needle/syringe combination, insulin/TB syringe, spinal
needles, epidural needle, filtered needle, medication transfer needle, biopsy
needle/kit, arterial blood gas needle/syringe, needles for plastic pre-filled
syringe applications and dialysis kits (listed in Exhibit 1.3) that would, but
for the assignment made herein, infringe any Valid Claim of an issued patent
included in Patent Rights
1.16 "Second Minimum Annual Royalty" shall have the meaning as set
forth in Section 3.2.
1.17 The term "Technical Information" shall mean inventions, know-how,
and trade secrets relating to Licensed Products that are currently or at some
future time become owned, licensed or controlled by SSC as well as improvements
thereof.
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1.18 The term "Term" of the Agreement shall mean the period of time
commencing on the Effective Date and ending on the date of the expiration of the
last of the issued patents to expire included in the Patent Rights, unless
earlier terminated in accordance with Article 12.
1.19 The term "Valid Claim" shall mean a claim of an issued patent
which has not lapsed or become abandoned and which claim has not been declared
invalid or unenforceable by a final non-appealable decision or judgment of a
court of competent jurisdiction.
ARTICLE 2 - ASSIGNMENT AND LICENSE
2.1 Concurrent with the payment of the ** dollars ($**) pursuant to
Section 3.1 a), SSC shall execute an assignment using a copy of the forms
attached hereto as Exhibit 2.1, irrevocably transferring to Xxxxxxx all rights
title and interest to patents and patent applications listed in Exhibit 1.2 B.
The Parties acknowledge that monies paid and obligations met by Xxxxxxx prior to
the Effective Date pursuant to the First Development and License Agreement were
in consideration for the patents and patent applications listed in Exhibit 1.2 A
that were assigned to Xxxxxxx prior to the Effective Date.
2.2 Xxxxxxx agrees to grant and hereby does grant to SSC, and any SSC
Affiliate designated in writing by SSC, an exclusive, royalty free, worldwide
license, with the right to sublicense others, to make, have made, use and sell
Excluded Products. In the event Xxxxxxx decides to develop any Excluded
Products, Xxxxxxx will notify SSC of its intent in writing and Xxxxxxx will be
given the right to negotiate in good faith an expansion of the rights granted
herein to cover such product, assuming SSC has the rights to grant.
2.3 In the event that Xxxxxxx decides to license Patent Rights to third
parties for any reason other than to sell the all or part of Safety or Blood
collection products business or supply Xxxxxxx with components or finished
Licensed Products, Xxxxxxx will notify SSC in writing of its intent and SSC will
be given a first option to negotiate for an exclusive or non-exclusive license
on terms to be negotiated in good faith to commercially use the Patent Rights
for Safety Syringe Product and/or Blood Collection Products. In the event the
Parties have not agreed on terms for such a license within ninety (90) days of
said receipt by SSC, Xxxxxxx may thereafter be free to offer a license to any
independent third party.
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The "**" marks the location of information that has been omitted and filed
separately with the Securities and Exchange Commission pursuant to a request for
confidential treatment.
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ARTICLE 3 - PAYMENT
3.1 Xxxxxxx shall pay SSC:
a) ** dollars ($**) within ten (10) days of the Effective
Date;
b) one million five hundred thousand dollars ($1,500,000)
within thirty days (30) of the First Safety Syringe Commercial Sale
Date; ** dollars ($**) within ten (10) days of the date when the
assignment of the rights to the 510k clearance relating to Blood
Collection Products are executed and transferred to Xxxxxxx; ** dollars
($**) within thirty days (30) of the date of the First Blood Collection
Commercial Sale Date;
e) five hundred thousand dollars ($500,000) of the fee paid
pursuant to Section 3.1 b) will be credited toward annual royalty
payment owed pursuant to Section 3.1f);
b) f) an annual royalty payment in the amount of ** percent
(**%) on Net Sales of Licensed Products by Xxxxxxx and its Affiliates
and licensees.
3.2 Xxxxxxx shall have the following minimum annual royalty
obligations:
a) relative to Safety Syringe Products, Xxxxxxx shall have a
minimum annual royalty obligation of five hundred thousand dollars
($500,000) payable for year one (1) on the first anniversary of the
First Safety Syringe Commercial Sale Date and one million dollars per
year ($1,000,000) payable on the second and third anniversary dates of
the subsequent two years (hereinafter "First Minimum Annual Royalty");
and
b) relative to Blood Collection Products, Xxxxxxx shall have a
minimum annual royalty obligation of ** dollars ($**) payable for year
one (1) on the first anniversary of the First Blood Collection
Commercial Sale Date and ** dollars per year ($**) payable on the
second and third anniversaries of the subsequent two years regards to
Blood Collection Products (hereinafter "Second Minimum Annual
Royalty").
3.3 Except as provided in Article 10, in any year in which the royalty
that is required in Section 3.1 f) does not meet or exceed the amount of the
minimum royalty due under Section 3.2, Xxxxxxx shall, with the payment made for
that year, pay an amount as additional royalty sufficient to bring the total
royalties payable for such year up to an amount equal to the minimum royalty
required hereby. Any payments pursuant to Section 3.2 or this Section 3.3, shall
be made within sixty (60) days of the date the payment is due.
3.4 No royalty shall be payable on sales of any Licensed Products
between Xxxxxxx and any Affiliate or licensee, and only one (1) royalty shall be
payable hereunder with respect to the sale of any one (1) Licensed Products no
matter how many patents or claims may cover the Licensed Products.
3.5 Xxxxxxx'x obligation to pay royalties in any given country with
respect to the sale of Licensed Products shall terminate upon expiration of the
last patent to expire included in the Patent Rights covering such Licensed
Products in a given country.
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The "**" marks the location of information that has been omitted and filed
separately with the Securities and Exchange Commission pursuant to a request for
confidential treatment.
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3.6 Xxxxxxx shall keep accurate books and records of sales of Licensed
Products and of all payments due SSC hereunder for one year after the Term of
the Agreement. Xxxxxxx shall contractually obligate all Xxxxxxx licensees to
keep accurate books and records of Net Sales of Licensed Products and of all
data necessary for the computation of royalties hereunder for the relevant sale
period. Xxxxxxx shall deliver to SSC written reports of Net Sales of Licensed
Products for the calendar quarter in which the Licensed Products was sold, on or
before the sixtieth (60th) day following the end of the calendar quarter. Such
reports shall include a calculation of the royalties due and be accompanied by
payment of the monies due. For avoidance of doubt the calendar quarters end on
March 31, June 30, September 30 and December 31.
3.7 SSC shall have the right to nominate an independent accountant
acceptable to and approved by Xxxxxxx who shall have access to Xxxxxxx and/or
its Affiliates' and/or its sublicensees records during reasonable business
hours, upon executing an appropriate confidentiality agreement, for the purpose
of verifying the royalty payable as provided for in this Agreement for the two
(2) preceding years, but this right may not be exercised more than once in any
year, and the accountant shall disclose to SSC only information relating solely
to the accuracy of the royalty report and the royalty payments made in
accordance with this Agreement. Xxxxxxx shall impose similar contractual
obligations on its sublicensees to allow an independent public accountant to
inspect the sublicensee's books and records to verify payments under such
sublicense.
3.8 Royalty payments under this Agreement shall be made in United
States dollars.
3.9 Any sum required under United States tax laws, or the tax laws of
any other country, to be withheld by Xxxxxxx from payments shall be promptly
paid by Xxxxxxx to the appropriate tax authorities, and Xxxxxxx shall furnish
SSC with official tax receipts or other appropriate evidence issued by the
appropriate tax authorities sufficient to enable SSC to support a claim for
income tax credit in respect of any sum so withheld.
3.10 Except for the circumstances relating to infringement outlined in
Sections 10.2 and 10.4, Xxxxxxx guarantees to pay SSC nine hundred and ten
thousand dollars ($910,000) for the milestone payments for Blood Collection
Products pursuant to Section 3.1 c), and d) and the annual minimum royalties for
Blood Collection Products pursuant to Section 3.2 b) (payments itemized below)
within the time frame specified in the appropriate Sections, regardless of
whether this Agreement is terminated pursuant to Article 12.1 b). In the event
Xxxxxxx terminates pursuant to 12.1.b), the payment pursuant to 3.1 c) and d)
($** + $** = $**), listed below, will become due within ninety (90) days from
the date Xxxxxxx mails a notice of termination to SSC. Subsequent payments (also
listed below) for only the first three years of the Second Minimum Annual
Royalty (Year 1, Year 2 and Year 3) will become due within ninety (90) days from
January 1, 2003 ($**), January 1, 2004 ($**) and January 1, 2005 ($**),
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The "**" marks the location of information that has been omitted and filed
separately with the Securities and Exchange Commission pursuant to a request for
confidential treatment.
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respectively. However, said payments will not be made for Blood Collection
Products: (i) if payment already has been paid pursuant to Sections 3.1 and/or
3.2 before the date of termination; (ii) if the Agreement is terminated due to
material breach by SSC; (iii) if Xxxxxxx terminates due to court order
preventing the sale of Blood Collection Products; or (iv) if Xxxxxxx terminates
due to settlement or court order related to patent infringement requiring the
payment for damages and/or monies to a third party.
Blood Collection
-------------------
3.1 c) Milestone (510K Clearance) $**
3.1 d) Milestone (First Blood Collection...Sale) $**
3.2 Second Minimum Annual Royalty (Year 1) $**
3.2 Second Minimum Annual Royalty (Year 2) $**
3.2 Second Minimum Annual Royalty (Year 3) $**
-------------------
TOTAL $910,000
ARTICLE 4 - RESEARCH AND DEVELOPMENT
4.1 During the Term of this Agreement, SSC and Xxxxxxx shall each use
reasonable commercial efforts to develop the Licensed Products consistent with
the project funding, product requirement documents, the development schedule and
projected product launch dates found in Exhibits 1.3, 4.1, 4.2 and 4.3 or such
other specifications as may be mutually approved by the Parties. Xxxxxxx shall
fund SSC for its development of the Licensed Products relative to FlexLoc(R) and
ReLoc(TM) syringes up to a maximum amount of ** dollars ($**) in accordance with
the development schedule and key project milestones found in Exhibit 4.1. At
Xxxxxxx'x option, Xxxxxxx shall fund SSC for its development of the Licensed
Products relative to Blood Collection Products to a maximum amount of ** dollars
($**) in accordance with the development schedule and key project milestones.
The Parties agree that the development funding may be amended by the mutual
written agreement of the Parties. Development costs exceeding the maximum
amounts identified above shall be approved in writing by the Parties before
commencing such work. Xxxxxxx agrees to keep SSC apprised of its development and
marketing efforts.
4.2 SSC shall perform and be responsible for the design and development
of FlexLoc(R)and ReLoc(TM)products as described in the development schedule in
Exhibit 4.3 through the design input and design output phases of the project.
Xxxxxxx shall be responsible for design verification, design validation,
regulatory submissions and activities and bringing the product to market. SSC,
at Xxxxxxx'x expense, shall assist and cooperate with Xxxxxxx through the design
verification, design validation, regulatory submission and activities and
bringing the products to market. It is recognized that the product funding and
project development schedules set forth in Exhibit 4.1 and 4.3
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The "**" marks the location of information that has been omitted and filed
separately with the Securities and Exchange Commission pursuant to a request for
confidential treatment.
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are for ** needle sizes for each of FlexLoc(R) and ReLoc(TM) syringe needles.
This includes preparation of all applications to the United States Food and Drug
Administration, whether by application for premarket approval or 510(k)
notification, or otherwise.
4.3 In the event Xxxxxxx requests SSC to perform Blood Collection
Products development , SSC shall perform and be responsible for the design and
development of Blood Collection Products pursuant to a mutually agreed upon
development schedule through the design input and design output phases of the
project. Xxxxxxx shall be responsible for design verification, design
validation, regulatory submissions and activities and bringing the product to
market. SSC, at Xxxxxxx'x expense, shall assist and cooperate with Xxxxxxx
through the design verification, design validation, regulatory submission and
activities and bringing the products to market. This includes preparation of all
applications to the United States Food and Drug Administration, whether by
application for premarket approval or 510(k) notification, or otherwise.
4.4 Projected product launch dates for other Included Products are set
forth in Exhibit 1.3. In the event an Included Products is not launched within
one year of the projected launch date listed in Exhibit 1.3, then such product
shall become an Excluded Products unless otherwise agreed in writing by the
Parties.
4.5 When ReLoc(TM)is launched, Xxxxxxx agrees to provide **.
4.6 The Parties shall attempt in good faith to resolve any dispute
relating to the development effort by negotiations between executives who have
authority to settle the controversy. Any Party may give the other Party written
notice of any dispute not resolved in the normal course of business together
with a request that the Parties meet and confer. Within twenty (20) days after
delivery of the notice of dispute, executives of both Parties shall meet at a
mutually acceptable time and place, and thereafter as often as they reasonably
deem necessary, to exchange relevant information and to attempt to resolve the
dispute. If the matter has not been resolved within sixty (60) days after
delivery of the notice of dispute, either Party may seek remedies at law.
ARTICLE 5 - FUNDING OF DEVELOPMENT
5.1 Funding under the development of the Licensed Products shall be
paid for by Xxxxxxx within forty five (45) days of the date Xxxxxxx has
reasonably determined that SSC has met the monthly milestones objectives set
forth in Exhibit 4.1 and has been invoiced by SSC or has otherwise been mutually
agreed to by the Parties in writing.
5.2 Changes to the development schedule found in Exhibit 4.3 or the key
project milestones and funding schedule found in Exhibit 4.1 shall be proposed
in writing by either Party and adopted as an amendment to the respective
Exhibits only after receipt of written approval by both Parties.
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The "**" marks the location of information that has been omitted and filed
separately with the Securities and Exchange Commission pursuant to a request for
confidential treatment.
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ARTICLE 6 - RESEARCH REPORTS AND OVERSIGHT
6.1 The Parties shall each furnish to the other written monthly
informal reports on the progress of the development of the Licensed Products.
6.2 The Parties shall each name a key research and development and marketing
contact through which day-to-day contact and decision-making may be made and to
facilitate communication between the Parties. Each Party will make reasonable
effort to timely respond to all questions and requests from the other Party. A
key contact person may be changed from time-to-time by notifying the other Party
of the change in its key contact person.
ARTICLE 7 - PROPRIETARY INFORMATION
All proprietary information of any Party to this Agreement disclosed to
another Party in connection with the development of the Licensed Products and
identified in writing and marked by the disclosing Party as confidential will be
treated by the receiving Party and its employees as confidential throughout the
Term of this Agreement and for an additional five (5) years. The above-mentioned
obligation of confidentiality shall not apply to information which: (i) at the
time of the disclosure was known to the receiving Party as evidenced by written
records and was not previously subject to any obligation of confidentiality; or
(ii) was generally available to the public or otherwise part of the public
domain at the time of its disclosure; or (iii) becomes generally available to
the public or otherwise part of the public domain after its disclosure other
than through an act of omission or commission of the receiving Party in breach
of this Agreement; or (iv) becomes known to the receiving Party by disclosure of
a third party under no obligation of confidentiality to the disclosing Party; or
(v) was independently developed by a Party, its agent or Affiliate without
reliance on the disclosed proprietary information.
ARTICLE 8 - OWNERSHIP OF PATENT RIGHTS AND TECHNICAL INFORMATION
8.1 Each Party will jointly own title to any and all technical
information and inventions first conceived jointly or discovered jointly by
Xxxxxxx'x employees and SSC's employees or personnel during the Term, which
falls outside the scope of the Patent Rights and/or Technical Information. SSC
agrees to promptly assign to Xxxxxxx all right, title and interest to any joint
inventions, which fall within the scope of Patent Rights and Technical
Information. For those inventions outside of the scope of Patent Rights and
Technical Information, SSC agrees to grant to Xxxxxxx an option to an exclusive
worldwide license on all rights to such jointly conceived inventions on terms to
be negotiated in good faith. Xxxxxxx agrees to grant to SSC an option to an
exclusive worldwide license on all rights to such jointly conceived inventions,
outside the scope of the Patent Rights and Technical Information, on terms to be
negotiated in good faith.
8.2 Each Party who retains the services of a consultant to provide
technical services in accordance with the development effort should require
their consultants to execute agreements protecting the proprietary information
of the other Party and assign all rights to intellectual property in accordance
with the terms of this Agreement.
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ARTICLE 9 - PATENT FILINGS
9.1 Unless otherwise agreed, Xxxxxxx shall pay the patent filing,
prosecution and maintenance costs in the jurisdictions identified in Exhibit
9.1. SSC shall identify those additional jurisdictions outside the United States
where it would like Xxxxxxx to file, prosecute and maintain patent protection
with regard to patents and patent applications that are not listed in Exhibit
9.1. If Xxxxxxx plans to sell Licensed Products in such jurisdictions, then
Xxxxxxx shall pay all patent filings, prosecution and maintenance costs in those
foreign jurisdictions. Such applications shall be filed and prosecuted utilizing
patent counsel selected by Xxxxxxx. Should Xxxxxxx elect not to file such patent
application or applications in jurisdictions other than those identified in
Exhibit 9.1, SSC may elect to have Xxxxxxx file and prosecute such patent
application or applications in Xxxxxxx'x name wherein SSC will reimburse Xxxxxxx
for all related costs.
9.2 With respect to all patent applications referred to above, the
Parties shall provide each other with reasonable opportunity to advise the other
and shall cooperate with each other in the prosecution of all patent
applications and claims relating thereto.
ARTICLE 10 - INFRINGEMENT
10.1 In the event that there is infringement of the Patent Rights or
Technical Information assigned to Xxxxxxx, the Parties shall notify each other
in writing to that effect. During the ninety (90) day period after such notice,
Xxxxxxx will have the right, but not the obligation to bring suit against the
alleged infringer. Xxxxxxx shall bear the expenses of any suit brought by it and
shall retain all damages or other monies awarded or received in settlement of
such suit. Xxxxxxx shall have the final decision on all matters relating to
litigation and any settlement discussions. SSC will use reasonable efforts to
cooperate with Xxxxxxx in any such suit and shall have the right to consult with
Xxxxxxx and be represented by its own counsel at its own expense. All reasonable
costs incurred by SSC associated with providing such cooperation to Xxxxxxx will
be paid by Xxxxxxx.
If, after the expiration of said ninety (90) days from the date of such
notice, Xxxxxxx has not brought suit against a third party infringer, then SSC
shall have the right after such ninety (90) day notice period, but not the
obligation, to bring suit against such infringer and join Xxxxxxx as a party
plaintiff provided that SSC shall bear all expenses of such suit. SSC shall
retain all damages or other monies awarded or received in settlement of such
suit. Xxxxxxx will reasonably attempt to cooperate with SSC in any suit for
infringement of the subject patent brought by SSC against a third party and
shall have the right to consult with SSC and to participate in and be
represented by independent counsel in such litigation at its own expense. All
reasonable costs incurred by Xxxxxxx associated with providing cooperation to
SSC shall be paid by SSC. Where it is necessary for SSC to have standing to file
the suit, Xxxxxxx shall assign limited concurrent rights to the licensed Patent
Rights for the terms of the suit.
10.2 In the event SSC has decided to bring suit against an infringer,
it shall use reasonable commercial efforts to xxxxx such infringement. It is
understood that the reasonable commercial efforts under this Section 10.2 shall
include the filing for injunctive relief and all other actions, which could
bring about an early abatement of the infringing activity. Notwithstanding
foregoing, SSC shall not enter into any settlement agreement, or take any
position in litigation, which adversely impacts Xxxxxxx'x rights under this
Agreement without written consent by Xxxxxxx.
During the period commencing with Xxxxxxx'x filing of a complaint for
infringement of the Patent Rights or Technical Information and ending on a
court's issuance of a final non-appealable decision or other termination of the
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proceeding, Xxxxxxx'x royalty obligation under Section 3.1f) shall be reduced by
fifty percent (50%) and Xxxxxxx'x obligation to pay a minimum annual royalty
under Section 3.2 shall be suspended. Notwithstanding the foregoing, Xxxxxxx'x
obligation to pay minimum royalties and any reduction in the royalty obligation
shall not be effective until and unless Xxxxxxx has determined in its sole
discretion and in good faith that it's ability to market and sell Licensed
Product is materially affected by the alleged infringement.
10.3 In the event Xxxxxxx is charged with infringement by a third party
for the manufacture, use or sale of Licensed Product, Xxxxxxx shall have the
right to defend against such charge of infringement, and during the period in
which such litigation is pending, Xxxxxxx shall have the right to withold up to
fifty percent (50%) of the royalties due SSC on sales of the allegedly
infringing Licensed Products and apply it against all its litigation expenses.
If, as a result of judgment in the litigation or settlement with a third party
with or without litigation, Xxxxxxx is required to pay royalty and/or other
monies to such third party, Xxxxxxx may thereafter deduct from the amount of
royalties due SSC on unit sales of the Licensed Product charged to infringe, an
amount which is the lesser of all royalties and/or other monies paid by Xxxxxxx
to such third party, or fifty percent (50%) of all royalty payments otherwise
payable to SSC on the Net Sales of such Licensed Product during Term.
10.4 With respect to SSC, nothing in this Agreement shall be construed
as:
(a) A warranty or representation that any Patent Rights in the
form of patent applications filed or that may be filed disclosing and
claiming any aspect of the Included Products will mature into issued
patents; or
(b) An obligation to bring, defend or prosecute actions or
suits against third parties for infringement of any Patent Rights.
10.5 Except for a breach of SSC's representation and warranties, in the
event a complaint for patent infringement is filed against Xxxxxxx, Xxxxxxx'x
remedies against SSC shall be limited to those remedies expressly set forth in
this Article 10.
10.6 In the event there is any dispute as to whether a particular
product falls under the designations listed in Exhibit 1.3 as "Included Products
" or "Excluded Products ", the Parties agree to attempt to resolve such disputes
by negotiations between executives who have authority to settle the matter. Any
Party may give the other Party written notice of any dispute not resolved in the
normal course of business together with a request that the Parties meet and
confer. Within twenty (20) days after delivery of the notice of dispute,
executives of both Parties shall meet at a mutually acceptable time and place,
and thereafter as often as they reasonably deem necessary, to exchange relevant
information and to attempt to resolve the dispute. If the matter has not been
resolved within sixty (60) days after delivery of the notice of dispute, either
Party may seek remedies at law.
ARTICLE 11 - INDEMNIFICATION
11.1 SSC agrees to indemnify Xxxxxxx, for all costs associated with any
claims, liabilities, suits or judgments arising out of sublicenses to Excluded
Products granted by SSC pursuant to the First Development and License Agreement
and this Agreement.
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11.2 Xxxxxxx agrees to indemnify SSC, for all costs associated with any
claims, liabilities, suits or judgments arising out of Xxxxxxx'x use of Patent
Rights and Technical Information.
11.3 Xxxxxxx assumes complete liability for and will indemnify and hold
SSC and its Affiliates harmless against all liabilities, demands, damages,
expenses, or losses, including, without limitation, reasonable fees for
attorneys, expert witnesses and litigation costs, and including costs incurred
in the settlement or avoidance of any such claim, which result from or are in
connection with any claims of or in connection with any bodily injury (including
death) or property damage, by whomsoever such claim is made, arising out of any
manufacture, use, sale, or other disposition by Xxxxxxx or its sublicensees or
its Affiliates of Included Products or use of processes to make the Included
Products.
11.4 The indemnification and assumptions of liability contained in
Sections 11.1 and 11.2 shall continue in full force and effect after the
termination of this Agreement for a time period specified by the laws of the
State of Delaware.
ARTICLE 12 - TERMINATION
12.1 This Agreement shall commence on the Effective Date and shall
continue thereafter for the Term, unless sooner terminated in accordance with
the provisions of Article 12. Xxxxxxx may terminate this Agreement:
a) in relation to Safety Syringe Products, at will with
fifteen (15) days prior written notice to SSC; and/or
b) in relation to Blood Collection Products, at will with four
and half (41/2) months prior written notice to SSC.
(c) i. In the event Xxxxxxx terminates this Agreement as it
relates to Safety Syringe Products , without cause, Xxxxxxx shall grant
SSC the right to a worldwide royalty-free exclusive license to Safety
Syringe Products.
ii. In the event Xxxxxxx terminates this Agreement as
it relates to Blood Collection Products, without cause,
Xxxxxxx will grant to SSC the right to a worldwide royalty
free exclusive license to Blood Collection Products, but only
if SSC purchases the Initial Equipment (as defined below) and
510K rights from Xxxxxxx for ** dollars ($**). The Parties
agree that the term "Initial Equipment" shall constitute the
Blood Collection manufacturing equipment Xxxxxxx purchased
from ** for a sum of approximately ** dollars ($**).
---------------
The "**" marks the location of information that has been omitted and filed
separately with the Securities and Exchange Commission pursuant to a request for
confidential treatment.
Page 11
iii. In the event Xxxxxxx terminates the Agreement as
it relates to both Blood Collection Products and Safety
Syringe Products, without cause, then Section 12.1 (c) i and
ii shall both apply.
12.2 After the third anniversary of the First Blood Collection Sale
Date as defined in Section 3.2 (b), upon receipt by Xxxxxxx of written notice by
SSC that Xxxxxxx has not put forth Reasonable Commercial Efforts (as defined
herein), to market Blood Collection Products, the Parties shall meet within
thirty (30) days of receipt of such notice to discuss the issue. Both Parties
agree that "Reasonable Commercial Efforts" means maintaining a level of sales
and marketing commensurate with similar Xxxxxxx products generating the same
level of sales as those relating to the Blood Collection Products being sold by
Xxxxxxx and stocking a sufficient level of inventory to support such sales.
After said meeting, if SSC does not see that Xxxxxxx is maintaining a level of
sales and marketing commensurate with similar Xxxxxxx products generating the
same level of sales as those relating to Blood Collection Products being sold by
Xxxxxxx and has stocked a sufficient level of inventory to support such sales
then, SSC shall provide a second written notice to Xxxxxxx and Xxxxxxx will have
ninety days (90) to cure from the date of receipt of said second written notice.
In the event Xxxxxxx has not cured by the end of the ninety (90) day period
Xxxxxxx will xxxxx SSC the right to a worldwide royalty-free exclusive license
to Blood Collection Products, but only if SSC purchases the Initial Equipment
and the relevant 510K rights from Xxxxxxx for ** dollars ($**).
12.3 Upon the date of receipt of notice of termination for the Blood
Collection Products by SSC pursuant to Section 12.1, SSC will be given a first
option to purchase all of the remaining equipment being used in the manufacture
of the Blood Collection Products at market value on terms to be negotiated in
good faith. In the event the Parties have not agreed on terms for such a
purchase within ninety (90) days of said receipt by SSC, Xxxxxxx may thereafter
be free to sell said equipment to any independent third party.
12.4 Upon the conclusion of the ninety (90) day cure period pursuant to
Section 12.2, SSC will be given a first option to purchase all of the remaining
equipment being used in the manufacture of the Blood Collection Products at
market value on terms to be negotiated in good faith. In the event the Parties
have not agreed on terms for such a purchase within ninety (90) days of said
receipt by SSC, Xxxxxxx may thereafter be free to sell said equipment to any
independent third party.
12.5 Except with respect to cure periods otherwise specified, any
material breach of or material default under this Agreement by either Party, the
other Party, with sixty (60) day written notice, may pursue legal action against
the other Party unless during such sixty (60) day period the breaching Party has
cured such breach or default. In the event a Party pursues legal action, the
Agreement shall terminate only upon a final non-appealable decision by a court
wherein the breaching Party is found to have materially breached said Agreement.
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The "**" marks the location of information that has been omitted and filed
separately with the Securities and Exchange Commission pursuant to a request for
confidential treatment.
Page 12
12.6 Failure to terminate this Agreement following breach shall not
constitute a waiver of the Party's defenses, rights or causes of action arising
from such or any future breach or non-compliance.
12.7 The provisions hereof relating to the Parties' obligation of
confidentiality shall survive the termination of this Agreement by five years.
12.8 The Parties acknowledge that Xxxxxxx'x assigned rights to the
Patent Rights and Technical Information are irrevocable except as provided in
Section 12.1.
ARTICLE 13 - NOTICE
Any notices given under this Agreement shall be in writing and shall be
deemed delivered and effectively made as of the delivery date if hand-delivered,
or it by telecopy or over night airmail, courier the business day the sender has
written confirmation such telecopy or overnight package was received, or when
sent by First Class mail, postage prepaid, addressed to the Parties as follows
(or at such other addresses as the Parties may notify each other in writing four
business days following deposit in the mail:
To Xxxxxxx
Tyco Healthcare Group LP
Attn: Vice President Intellectual Property
00 Xxxxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
To SSC
Safety Syringe Corporation
Attn: President
000 Xxxx 000 Xxxxx
Xxxxxxxxx, Xxxx 00000
ARTICLE 14 - GENERAL
14.1 No Party to this Agreement shall employ or use the name of the
other Party in any promotional materials or advertising without the prior
express written permission of such other Party. Nothing herein, however, shall
limit the Parties' right to disclose material information or to make such
disclosures as are required by applicable law.
14.2 SSC and Xxxxxxx each for all purposes related to this Agreement,
shall be deemed an independent contractor of the other, and nothing in this
Agreement shall be deemed to create a relationship of employment or agency, or
to constitute SSC and Xxxxxxx as partners or joint ventures.
14.3 Each Party hereto acknowledges and agrees: (i) that no
representation or promise not expressly contained in this Agreement has been
made by the other Party hereto or by any of its agents, employees,
representatives or attorneys concerning the subject matter of this Agreement;
(ii) that this Agreement is not being entered into on the basis of or in
reliance on, any promise or representation, express or implied, covering the
subject matter hereof other than those which are set forth expressly in this
Page 13
Agreement; and (iii) that each Party has had the opportunity to be represented
by counsel of its own choice in this matter, including during the negotiations
which preceded the execution of this Agreement.
14.4 SSC warrants and represents that is has the full right and power
to make the promises and grant the assignments set forth in this Agreement, and
that there are no outstanding agreements, assignments or encumbrances in
existence inconsistent with the provisions of this Agreement. SSC further
warrants and represents that, to the best of its knowledge, the Patent Rights
are valid and SSC has followed all material and applicable patent rules,
procedures and laws in countries where one or more of the Patent Rights have
been filed or have issued.
14.5 Xxxxxxx warrants and represents that it has the full right and
power to make the promises set forth in this Agreement, and that there are no
outstanding agreements, assignments or encumbrances in existence inconsistent
with the provisions of this Agreement.
14.6 No Party shall be liable for any failure to perform as required by
this Agreement, to the extent such failure to perform is caused by any reason
beyond the Party's control, or by reason of any of the following: labor
disturbances or disputes of any kind, accidents, failure of any required
governmental approval, civil disorders, acts of aggression, acts of God, energy
or other conversation measures, failure of utilities, mechanical breakdowns,
material shortages, disease, or similar occurrences.
14.7 No Party hereto shall assign this Agreement to any other person
without the prior written consent of the other Party, and any purported
assignment without such consent shall be void; provided, however, that either
party may assign this Agreement to a successor in ownership of all or
substantially all of its business assets related to Blood Collection Products
and/or Safety Syringe Products whether by sale of assets, merger, consolidation
or otherwise.
14.8 In the event that a court of competent jurisdiction holds any
provision of this Agreement to be invalid, such holding shall have no effect on
the remaining provisions of this Agreement, and they shall continue in full
force and effect.
14.9 This Agreement, as it amends the First Development and License
Agreement, and the Exhibits hereto contain the entire agreement between the
Parties. No amendments or modifications to this Agreement or the attached
Exhibits shall be effective unless made in writing and signed by an authorized
representative of both parties.
14.10 This Agreement shall be governed by and construed in accordance
with the laws of the State of Delaware.
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement by
their duly authorized officers or representatives.
SAFETY SYRINGE CORPORATION TYCO HEALTHCARE GROUP LP
By /s/ Xxxxxxx X. Xxxxxxx By /s/ Xxxxx Xxxxx
---------------------------- -----------------------------------------
Its: President Its: President of Tyco Healthcare Group LP
Date April 24, 2002 Date April 24, 2002
Page 14
EXHIBIT 1.2 A
(Assigned to Tyco Healthcare Group LP)
--------------- ----------------------- ------------- -------------------- ------------ -------------- ---------------
SHPI Title Filing Date App. No. Issue Date Patent No. Family/Notes
Ref. No.
--------------- ----------------------- ------------- -------------------- ------------ -------------- ---------------
** Medical Needle Safety 9/10/97 08/927,053 10/20/98 5,823,997 **
Apparatus and Methods EP 1011759
WO 99/12592
--------------- ----------------------- ------------- -------------------- ------------ -------------- ---------------
** ** ** ** ** ** **
--------------- ----------------------- ------------- -------------------- ------------ -------------- ---------------
---------------
The "**" marks the location of information that has been omitted and filed
separately with the Securities and Exchange Commission pursuant to a request for
confidential treatment.
EXHIBIT 1.2 B
(NOT assigned to Tyco Healthcare Group LP)
--------------- ----------------------- ------------- -------------------- ------------ -------------- ---------------
SHPI Title Filing Date App. No. Issue Date Patent No. Family/Notes
Ref. No.
--------------- ----------------------- ------------- -------------------- ------------ -------------- ---------------
** ** ** ** ** ** **
--------------- ----------------------- ------------- -------------------- ------------ -------------- ---------------
**
---------------
The "**" marks the location of information that has been omitted and filed
separately with the Securities and Exchange Commission pursuant to a request for
confidential treatment.
EXHIBIT 1.3
Included Product Types
**
Included Product Categories Product Launch Date
**
Included Trademarks
o FlexLoc(R)
o ReLoc(TM)
Excluded Products include, but are not limited to, the following list of
products that are specifically excluded from Licensed Products:
Excluded Product Categories
**
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The "**" marks the location of information that has been omitted and filed
separately with the Securities and Exchange Commission pursuant to a request for
confidential treatment.
EXHIBIT 2.1
ASSIGNMENT
SAFETY SYRINGE CORPORATION (the Assignor), a corporation of the State
of Utah and wholly owned subsidiary of Specialized Health Products
International, Inc. having an office at 000 Xxxx 000 Xxxxx, Xxxxxxxxx, Xxxx
00000 currently is assigned the entire right, title and interest to MEDICAL
NEEDLE SAFETY APPARATUS AND METHODS, U.S. Patent Number 5,823,997, Issued
October 20, 1999, hereinafter called the "invention."
TYCO HEALTHCARE GROUP LP (the Assignee), a Delaware Partnership having
an office at 00 Xxxxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxxxxxxx 00000, desires to
secure the entire right, title and interest in said invention.
In consideration of $1.00 and other goods and valuable considerations
paid to the Assignor by the Assignee, the receipt and sufficiency of which is
hereby acknowledged, IT IS HEREBY ASSIGNED TO THE ASSIGNEE:
The entire right, title and interest in said invention and in the
above-identified United States Patent, and reissues or extension of Letters
Patent or Patents granted thereon, and in all corresponding applications filed
in countries foreign to the United States, and in all patents issuing thereon in
the United States and foreign countries.
It is hereby authorized and requested that the United States
Commissioner of Patents and such Patent Office Officials in foreign countries as
are duly authorized by their patent laws to issue patents, to issue any and all
patents of said invention to the Assignee as the owner of the entire interest,
for the sole use and behoof of the said Assignee, its successors, assigns and
legal representatives.
This assignment and agreement shall be binding upon the heirs and legal
representatives of the Assignor.
Signed _________________________(L.S.)
STATE OF ___________________ )
: ss.
COUNTY OF __________________ )
On __________, 19____, before me personally appeared
________________________ known to me to be the person described and who signed
the annexed assignment in my presence and acknowledge under oath before me that
he has read the same and knows the contents thereof and that he executed the
same as his free act and deed and for the purposes set forth therein.
(SEAL) ________________________________
Notary Public
ASSIGNMENT
SAFETY SYRINGE CORPORATION (the Assignor), a corporation of the State
of Utah and wholly owned subsidiary of Specialized Health Products
International, Inc. having an office at 000 Xxxx 000 Xxxxx, Xxxxxxxxx, Xxxx
00000 currently is assigned the entire right, title and interest to MEDICAL
NEEDLE SAFETY APPARATUS AND METHODS, hereinafter called the "invention."
Preferred embodiments of said invention are disclosed in a United
States patent application heretofore executed, now identified as U.S. Patent
Application Number 09/118,624, filed July 17, 1998, and which was allowed
February 3, 1999 with issue fees having been duly in full paid April 5, 1999.
TYCO HEALTHCARE GROUP LP (the Assignee), a Delaware Partnership having
an office at 00 Xxxxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxxxxxxx 00000, desire to
secure the entire right, title and interest in said invention.
In consideration of $1.00 and other goods and valuable considerations
paid to the Assignor by the Assignee, the receipt and sufficiency of which is
hereby acknowledged, IT IS HEREBY ASSIGNED TO THE ASSIGNEE:
The entire right, title and interest in said invention and in the
above-identified United States Patent application, and reissues or
extension of Letters Patent or Patents granted thereon, and in all
corresponding applications filed in countries foreign to the United
States, and in all patents issuing thereon in the United States and
foreign countries.
It is hereby authorized and requested that the United States
Commissioner of Patents and such Patent Office Officials in foreign countries as
are duly authorized by their patent laws to issue patents, to issue any and all
patents of said invention to the Assignee as the owner of the entire interest,
for the sole use and behoof of the said Assignee, its successors, assigns and
legal representatives.
This assignment and agreement shall be binding upon the heirs and legal
representatives of the Assignor.
Signed _________________________(L.S.)
STATE OF ___________________ )
: ss.
COUNTY OF __________________ )
On __________, 19____, before me personally appeared
________________________ known to me to be the person described and who signed
the annexed assignment in my presence and acknowledge under oath before me that
he has read the same and knows the contents thereof and that he executed the
same as his free act and deed and for the purposes set forth therein.
(SEAL) ________________________________
Notary Public
EXHIBIT 4.1
**
---------------
The "**" marks the location of information that has been omitted and filed
separately with the Securities and Exchange Commission pursuant to a request for
confidential treatment.
EXHIBIT 4.2
**
---------------
The "**" marks the location of information that has been omitted and filed
separately with the Securities and Exchange Commission pursuant to a request for
confidential treatment.
EXHIBIT 4.3
**
---------------
The "**" marks the location of information that has been omitted and filed
separately with the Securities and Exchange Commission pursuant to a request for
confidential treatment.
EXHIBIT 9.1
**
---------------
The "**" marks the location of information that has been omitted and filed
separately with the Securities and Exchange Commission pursuant to a request for
confidential treatment.
