EXHIBIT 10.35
AGREEMENT
This Agreement (the "Agreement") is entered into by and between IntraLase
Corp. on behalf of itself, and its affiliates, subsidiaries, predecessors,
successors and assigns (collectively, "IntraLase"), on the one hand, and Escalon
Medical Corp. ("Escalon Medical"), and Escalon Holdings, Inc. ("Escalon
Holdings"), on behalf of themselves and each of their affiliates, subsidiaries,
predecessors, successors and assigns, on the other hand (collectively "the
Escalon Parties"). IntraLase, Escalon Medical and Escalon Holdings are at times
individually each referred to herein as the "Party" and at times collectively
referred to herein as the "Parties."
SECTION ONE
BACKGROUND
1.1 In 1997, IntraLase and Escalon Medical entered into an agreement under
which IntraLase became the exclusive licensee of certain patents, technology and
intellectual property owned by Escalon Medical. This agreement was amended and
restated in October 2000. The original and amended license agreement are
collectively referred to as the "License Agreement." A true and correct copy of
the License Agreement is attached as Exhibit A. In November 2004, Escalon
Medical assigned the License Agreement and all intellectual property covered
thereby to Escalon Holdings.
1.2 On or about June 21, 2004, IntraLase filed an action against Escalon
Medical in the United States District Court for the Central District of
California captioned, IntraLase Corp. x. Xxxxxxx Medical Corp., Case No. SACV
04-724 ("Original California Action"), by which it sought a declaration of its
rights with respect to the disputed interpretations of various terms of the
License Agreement. On or about May 5, 2005, the court entered judgment in the
Original
California Action. IntraLase has appealed that judgment to the United States
Court of Appeals for the Ninth Circuit, and the appeal is pending.
1.3 On or about May 9, 2005, IntraLase filed an action against Escalon
Medical in the United States District Court for the Central District of
California captioned, IntraLase Corp. x. Xxxxxxx Medical Corp., Case No. SACV
05-440 ("Second California Action"). The Second California Action was dismissed
without prejudice on January 11, 2006.
1.4 On or about May 16, 2005, Escalon Medical filed a breach of contract
action against IntraLase in the Delaware Chancery Court captioned, Escalon
Medical Corp. v. IntraLase Corp., Case No. 1344-N ("Delaware License Action").
1.5 On or about September 2, 2005, Escalon Medical and Escalon Holdings
filed an action against IntraLase under Delaware Corporation Law Section 220 in
the Delaware Chancery Court captioned, Escalon Medical Corp. and Escalon
Holdings, Inc. v. IntraLase Corp., Case No. 1605-N ("220 Action").
1.6 In connection with certain disputed royalty payments, IntraLase caused
the establishment of an escrow account ("Escrow") and deposited certain sums
into the Escrow.
1.7 The Parties, and each of them, now desire fully and finally to
compromise, settle and mutually release any and all claims, rights, obligations,
defenses, demands, costs, contracts, liabilities, actions or causes of action
between them relating to or arising from the License Agreement, the Original
California Action, the Second California Action, the Delaware License Action,
and the 220 Action, as set forth below. The Original California Action, the
Second California Action, the Delaware License Action, and the 220 Action are
sometimes collectively referred to as "the Actions."
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SECTION TWO
TERMS OF AGREEMENT
The Parties, and each of them, mutually agree as follows:
2.1 Within ten (10) business days of the execution of this Agreement by all
Parties, IntraLase will pay to Escalon Holdings, or its designee, the aggregate
lump sum of $9,600,000.00 in cash (the "Payment").
2.2 In consideration of the Payment, (a) all disputes between the Parties
will be resolved; (b) the Parties will enter into mutual releases as more fully
described in Section Three below; (c) the Parties will dismiss the Actions as
more fully described in Paragraph 2.8 below; (d) all outstanding and future
royalty amounts or obligations, including all disputed amounts and the amount
due for the fourth quarter of 2006 shall be deemed satisfied; (e) the Escrow
shall be released as more fully described in Paragraph 2.5 below; and (f) the
Escalon Parties shall assign the "Intellectual Property" as more fully described
in Paragraph 2.3 below and IntraLase shall have no further obligations under the
License Agreement, which shall terminate by mutual agreement.
2.3 Effective immediately upon receipt of the Payment by Escalon Holdings,
the Escalon Parties hereby assign, sell, transfer and convey to IntraLase, its
successors and assigns, their respective full and complete rights, title, and
interest in and to the "Intellectual Property," free and clear of any and all
claims, liens and encumbrances. Neither of the Escalon Parties, nor any of their
affiliates, subsidiaries, predecessors, successors and assigns shall retain any
right, title and interest therein. As used herein, "Intellectual Property" shall
include any intellectual property licensed to IntraLase pursuant to the License
Agreement entered into between IntraLase and Escalon Medical Corp. in 1997,
which was amended and restated in October 2000 (the "License Agreement")
(including without limitation the "Licensed Patents" and the
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"Technology" as those terms are defined in the License Agreement) and any
intellectual property and related rights derived or arising from the
intellectual property licensed to IntraLase pursuant to the License Agreement,
including without limitation, all intellectual property that is specified in
Exhibit A and Exhibit B to the Assignment of Intellectual Property Agreement
between the Parties dated February 27, 2007. Without limiting the generality of
the foregoing, "Intellectual Property" shall also include with respect to any
intellectual property and related rights derived or arising from the
intellectual property licensed to IntraLase pursuant to the License Agreement,
without limitation, any continuations, continuations-in-part, divisionals,
reissues or reexaminations thereof, and any other rights which claim priority to
or through the foregoing, and foreign counterparts thereto, and any derivative
works developed therefrom, and any similar property or rights, however
denominated, anywhere in the world, including all priority rights under the
International Convention. Simultaneously with receipt of the Payment by Escalon
Holdings, the Escalon Parties shall execute the "Assignment of Intellectual
Property Agreement" in the form attached as Exhibit B to this Agreement to
document such assignment. The Assignment of Intellectual Property is hereby
incorporated into this Agreement by reference. To the extent any party other
than Escalon Medical or Escalon Holdings owns or controls any of the
Intellectual Property, they shall cause such party to enter into an assignment
agreement substantially similar to the Assignment of Intellectual Property to
document the assignment of such Intellectual Property to IntraLase. The failure
of the Parties to enter into the Assignment of Intellectual Property is not a
condition precedent and shall not limit the effectiveness of the assignment set
forth in this Paragraph 2.3.
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2.4 Escalon Holdings and Escalon Medical shall execute all such documents
and take all such actions, at its expense, as may reasonably be required to
fully vest in IntraLase all right, title and interest in and to all of the
Intellectual Property conveyed hereunder.
2.5 Simultaneous with receipt of the Payment, Escalon Medical and/or
Escalon Holdings shall sign such documents and take all actions as are necessary
to release to IntraLase the funds that IntraLase has deposited in the Escrow.
2.6 The Effective Date of this Agreement ("Effective Date") shall be the
date on which all Parties have executed this Agreement.
2.7 On or after the Effective Date of this Agreement, Escalon Medical,
IntraLase, or any of them may issue a press release that has been previously
approved in writing by the other Party. Such approval shall not be unreasonably
withheld. If Escalon Medical or IntraLase makes a request of the other for
approval of a press release, the Party to whom the request is made shall respond
in writing within 24 hours. Such press release(s) shall state only that the
Parties have settled their disputes; IntraLase has paid $9,600,000.00; and
IntraLase will obtain full ownership of all intellectual property presently
licensed under the License Agreement.
2.8 Within two (2) business days of receipt of the Payment by Escalon
Holdings, and IntraLase's receipt of fully executed documents required by
Paragraphs 2.4 and 2.5, the Parties will cause the Original California Action,
the Delaware License Action and the 220 Action to be dismissed with prejudice,
using the forms attached hereto as Exhibit C.
SECTION THREE
RELEASES
3.1 IntraLase, on behalf of itself and its affiliates, subsidiaries,
predecessors, successors, and assigns (the "IntraLase Releasing Persons"), and
each of them, hereby releases the Escalon Parties, and each of its respective
officers, directors, employees, attorneys, affiliates,
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subsidiaries, predecessors, successors, and assigns, and each of them (all of
whom are referred to collectively as the "Escalon Released Persons"), from any
and all potential or actual claims, rights, obligations, defenses, demands, fee
awards, fees, costs, contracts, liabilities, actions and causes of action of
every kind or nature, whether in law or in equity or otherwise, known or
unknown, suspected or unsuspected, whether or not concealed or hidden, that the
IntraLase Releasing Persons ever had, now have, or will have against any of the
Escalon Released Persons relating to or arising from the License Agreement, the
Intellectual Property or any of the Actions including, without limitation, any
claims or causes of action that were brought or could have been brought in any
of the Actions.
3.2 The Escalon Parties, on behalf of themselves and each of their
respective affiliates, subsidiaries, predecessors, successors, and assigns (the
"Escalon Releasing Persons"), and each of them, hereby releases the IntraLase
Releasing Persons, and each of them, and each of their respective officers,
directors, employees, attorneys, affiliates, subsidiaries, predecessors,
successors (including but not limited to Advanced Medical Optics, Inc.), and
assigns, and each of them (all of whom are referred to collectively as the
"IntraLase Released Persons"), from any and all potential or actual claims,
rights, obligations, defenses, demands, fee awards, fees, costs, contracts,
liabilities, actions and causes of action of every kind or nature, whether in
law or in equity or otherwise, known or unknown, suspected or unsuspected,
whether or not concealed or hidden, that the Escalon Releasing Persons ever had,
now have, or will have against any of the IntraLase Released Persons relating to
or arising from the License Agreement, the Intellectual Property or any of the
Actions including, without limitation, any claims or causes of action that were
brought or could have been brought in any of the Actions.
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3.3 The Parties, and each of them, hereby expressly waive any and all
rights and benefits conferred upon them by the provisions of Section 1542 of the
California Civil Code ("Section 1542") and all similar provisions of the laws of
any other state, territory or other jurisdiction. Section 1542 reads in
pertinent part:
A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES
NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE
RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS
SETTLEMENT WITH THE DEBTOR.
The Parties, and each of them, expressly agree that all release provisions in
this Agreement shall be given full force and effect, including those terms and
provisions relating to concealed, unknown, unsuspected or future claims,
circumstances, demands and causes of action. The Parties, and each of them, each
assume for themselves the risk of subsequent discovery or understanding of any
matter, fact or law, that if now known or understood, would in any respect have
affected its entering into this Agreement.
3.4 The Parties, and each of them, agree that neither the releases
contained in Paragraphs 3.1 and 3.2, nor the waiver contained in Paragraph 3.3
above shall have any force or effect prior to the Effective Date of this
Agreement. The Parties, and each of them, further agree that in the event there
is no Effective Date, or this Agreement otherwise fails to be effective for any
reason, the releases contained in Paragraphs 3.1 and 3.2, above and the waiver
contained in Paragraph 3.3 above shall be null and void.
3.5 The Parties, and each of them, agree that Advanced Medical Optics, Inc.
is a third party beneficiary of the releases and waivers contained in Section
Three of this Agreement.
3.6 Nothing in this Agreement shall be deemed an admission of wrongdoing,
liability, infringement or invalidity by any Party.
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3.7 Nothing in Paragraphs 3.1, 3.2 or 3.3 or the above releases and waivers
shall release or waive any present or future obligations under this Agreement or
the Assignment of Intellectual Property Agreement.
SECTION FOUR
WARRANTIES AND REPRESENTATIONS
4.1 Each Party represents and warrants that it is an organization duly
organized, validly existing and in good standing under the laws of its
respective state of organization.
4.2 Each Party represents and warrants that it has full power and authority
to enter into this Agreement and perform its obligations hereunder, and that
this Agreement and the terms and conditions herein have been authorized and
approved by all necessary corporate action. Further, each Party represents and
warrants that each person executing this Agreement on such Party's respective
behalf is duly authorized and has full authority to execute this Agreement and
bind such Party hereto.
4.3 Each Party represents and warrants that the execution and delivery by
such Party of this Agreement, and the performance by the Party of its
obligations under this Agreement does not and will not: (a) conflict with or
result in a violation or breach of any of the terms, conditions or provisions of
the articles of incorporation or bylaws (or equivalent organizational documents)
of such Party, or (b) conflict with or result in a violation or breach of any
applicable law, rule or regulation.
4.4 Other than expressly set forth in this Agreement, the Parties, and each
of them, represent and warrant that they have not heretofore assigned or
transferred or purported to assign or transfer to any person or entity any of
the claims, rights, obligations, defenses, demands, costs, contracts,
liabilities, actions or causes of action released herein, or any portion thereof
including, without limitation, any of the Actions.
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4.5 With respect to the Intellectual Property being assigned
hereunder, Escalon Holdings and Escalon Medical, on behalf of themselves, each
other, and each of their respective affiliates, subsidiaries, predecessors,
successors and assigns hereby represents and warrants as follows:
(a) Escalon Holdings and/or Escalon Medical are the sole and exclusive
owners of all right, title and interest in and to all Intellectual Property.
Each item of Intellectual Property is owned solely and exclusively by either
Escalon Holdings or Escalon Medical, free and clear of all claims, liens and
encumbrances and the Escalon Parties have all requisite power and authority to
grant the assignment contemplated by this Agreement. Prior to the effectiveness
of the assignment contemplated herein, there has not been any transfer (by way
of license, assignment or otherwise) to any third party of any right, title or
interest in or to any Intellectual Property, nor has Escalon Holdings or Escalon
Medical licensed or otherwise authorized any third party to retain any right to
use any Intellectual Property as defined herein.
(b) At the time of consummation of the transactions set forth herein,
all Intellectual Property: (i) will be solely and exclusively owned by
IntraLase; (ii) will be freely useable by IntraLase; and (iii) will be freely
transferable, licensable, conveyable, and/or assignable by IntraLase to any
entity located in any jurisdiction in the world other than to entities located
in jurisdictions to which exports are generally prohibited pursuant to the
export laws and regulations of the United States or as otherwise prohibited by
applicable law; in each case without any restriction, constraint, control,
payment obligation, supervision, or limitation whatsoever.
(c) Neither this Agreement nor any of the transactions contemplated
hereby will result in the grant of any right or license with respect to the
Intellectual Property or any
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intellectual property of IntraLase to any third party pursuant to any contract
or license to which either of the Escalon Parties is a party or by which any of
their respective assets and properties are bound.
(d) To the best of the Escalon Parties' knowledge and belief, the
Intellectual Property is valid. Escalon Medical and Escalon Holdings, to the
best of their knowledge and information, have taken all necessary and
appropriate steps to which they have been legally obligated pursuant to the
License Agreement to protect and preserve ownership of Intellectual Property and
secure valid written assignments from all consultants, employees and other third
parties who contributed to the creation or development of the Intellectual
Property.
(e) No Intellectual Property is subject to any order, action or
proceeding, settlement, or "march in" right that restricts, or that could
reasonably be expected to restrict, in any manner the use, transfer or licensing
of any Intellectual Property by IntraLase or that may affect the validity, use
or enforceability of such Intellectual Property.
4.6 The warranties and representations made herein are material and shall
survive the execution, delivery and performance of this Agreement, and shall be
binding upon the Parties' respective heirs, representatives, assigns and
successors. However, IntraLase hereby agrees and acknowledges that the
warranties and representations in Sections 4.5(d) and (e) shall not apply to any
Intellectual Property to the extent that IntraLase has not paid applicable
maintenance fees in any jurisdiction, resulting in the termination of
IntraLase's rights in such Intellectual Property due to "abandonment." Any
investigation, diligence or review by any party shall not in any way impair the
viability and full effect of any provision of this Agreement including, but not
limited to, the representations and warranties.
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SECTION FIVE
EFFECTIVE AGREEMENT
5.1 This Agreement shall be binding on and inure to the benefit of the
IntraLase Released Persons and the Escalon Released Persons, and each of them,
and each of their respective heirs, representatives, successors and assigns. The
Parties enter into this Agreement on behalf of themselves and their respective
affiliates and subsidiaries and shall cause such affiliates and subsidiaries to
comply with the terms and conditions hereof.
5.2 The Parties, and each of them, agree that no promise or inducement has
been offered or made for this Agreement except as herein set forth, that this
Agreement is executed without reliance on any statements or any representations
or warranties not contained herein, and that this Agreement reflects the entire
settlement and agreement between the Parties. The Parties, and each of them,
agree that there are no agreements, undertakings, restrictions, warranties or
representations between them relating to the License Agreement or the Actions
other than those set forth in this Agreement and that no oral or written
understandings, statements, promises or inducements contrary or in addition to
the terms of this Agreement exist. All earlier understandings, oral agreements,
statements, promises, representations and warranties relating to the License
Agreement or the Actions, whether express or implied, are expressly superseded
by the terms of this Agreement and have no further force or effect.
5.3 No purported amendment, modification, alteration or termination of this
Agreement shall be effective unless in writing and signed by authorized
representatives of the signatories to this Agreement.
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SECTION SIX
MISCELLANEOUS
6.1 This Agreement, the rights and obligations of the Parties, and each of
them, and any claims asserted regarding or pursuant to this Agreement shall be
interpreted, construed and enforced in accordance with and governed by the
internal substantive and procedural laws, statutes and rules of the State of
Delaware, without regard to Delaware's choice of law principles. Any
controversy, dispute or claim arising out of or in connection with this
Agreement shall be finally submitted to a mutually acceptable arbitrator for
final and binding arbitration and the successful or prevailing party shall be
entitled to reasonable attorneys' fees, expert and consultant fees, arbitrator's
fees and other costs actually incurred in connection with the arbitration, in
addition to any other relief to which the successful or prevailing party may be
entitled. The Federal Rules of Civil Procedure and the Federal Rules of Evidence
shall apply to the proceeding, however, there shall be no oral testimony taken
prior to the proceeding or presented during the proceeding, unless so requested
by the arbitrator. Rather, each party shall provide the arbitrator with a
written summary of its legal position and relevant supporting documents. Based
upon the information provided by the Parties, the arbitrator shall render a
decision which shall be final, unappealable and binding, and judgment on the
award rendered by the arbitrator may be entered in any court having jurisdiction
thereof. The arbitrator shall be authorized to award any relief to the Party so
entitled to such relief, including the relief set forth in Paragraph 6.2 below.
6.2 The Parties further acknowledge that the covenants and agreements set
forth in this Agreement are of a special, unique, unusual, extraordinary and
intellectual character, giving them peculiar value, the loss of which cannot be
reasonably or adequately compensated in damages; and that a breach or threatened
breach of such covenants and agreements would cause an aggrieved Party
irreparable injury and damages. Accordingly, without limiting any of an
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aggrieved Party's other rights or remedies available hereunder or at law or
equity, the Parties agree that an aggrieved Party shall be entitled to
injunctive or other equitable relief as a remedy for any breach or threatened
breach of this Agreement.
6.3 The descriptive headings contained in this Agreement are inserted for
convenience only and shall not control or affect the meaning or construction of
any of the provisions hereof.
6.4 This Agreement has been jointly negotiated and drafted. The language of
this Agreement shall be construed as a whole according to its fair meaning, and
not strictly for or against any of the Parties. Whenever required for proper
interpretation, the words in singular shall include the plural. As used herein,
the word "person" shall include entities, whether corporate, partnership or
other, as well as individuals.
6.5 Except as expressly provided herein, this Agreement shall not confer
any right or benefit upon, or release from liability any person who is not a
party to this Agreement.
6.6 Provided the remainder of this Agreement does not frustrate the purpose
and intent of the law and the Parties in entering into this Agreement, in the
event that any portion of this Agreement shall be determined to be invalid or
unenforceable to any extent, the same shall to that extent be deemed severable
from this Agreement and the invalidity or unenforceability thereof shall not
affect the validity and enforceability of the remaining portions of this
Agreement.
6.7 With the exception of obligations created by this Agreement, each of
the Parties shall be responsible for paying its own fees and costs incurred in
or arising out of the Actions including, without limitation, the fees and costs
incurred in or arising out of the preparation of this Agreement.
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6.8 Any and all notices, consents, or demands permitted or required to be
made or given under this Agreement shall be in writing, signed by the Party
giving such notice, consent, or demand and shall be delivered personally or sent
by registered or certified mail, return receipt requested, to the Party at its
address set forth below:
If to IntraLase:
IntraLase Corp.
0000 Xxxxxxxx Xxxx
Xxxxxx, XX 00000
Attn: General Counsel
with a copy to:
Irell & Xxxxxxx LLP
000 Xxxxxxx Xxxxxx Xxxxx,
Xxxxx 000
Xxxxxxx Xxxxx, XX 00000
Attn: Xxxxx Xxxxxx, Esq.
If to Escalon Medical:
Escalon Medical Corp.
000 X. Xxxxxxxxxx Xxxx,
Xxxxx 000
Xxxxx, XX 00000
Attn: General Counsel
with a copy to:
Xxxxxxx, Xxxxxx Xxxxxx & Dodge
000 X. Xxxxxx Xxxxxx,
Xxxxx 0000
Xxxxxxxxxx, XX 00000
Attn: Xxxx Xxxx, Esq.
If to Escalon Holdings, Inc.:
Escalon Holdings, Inc.
0000 Xxxx Xxxxxx
Xxxxxxxxxx, XX 00000
with a copy to:
Xxxxxxx, Xxxxxx Xxxxxx & Dodge
000 X. Xxxxxx Xxxxxx,
Xxxxx 0000
Xxxxxxxxxx, XX 00000
Attn: Xxxx Xxxx, Esq.
6.9 No Party may assign this Agreement without the prior written consent of
the other Parties, except that any Party may assign this Agreement in connection
with a merger,
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acquisition, reorganization or sale of all or substantially all of such Party's
assets or equity, provided that such assignee agrees to be bound by the terms
and conditions of this Agreement.
6.10 Except as provided in Paragraph 2.7, the terms and conditions of this
Agreement shall be kept strictly confidential and the Parties and their
respective employees, agents and representatives shall not, directly or
indirectly, disclose or cause to be disclosed the specific terms of this
Agreement to any person except to a court for the purposes of enforcing the
terms of this Agreement, or to their attorneys or accountants or as otherwise
required by law or regulation, including without limitation SEC requirements.
6.11 Each of the Parties agrees that in connection with this Agreement it
has obtained the advice of counsel, has been advised of the effect, significance
and consequence of this Agreement, and understands its effect, significance and
consequence. Each of the Parties further agrees that it has carefully read each
and every term of this Agreement, has familiarized itself thoroughly with its
content, and signs this Agreement freely and voluntarily.
6.12 This Agreement may be executed in counterparts, and by fax, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
IN WITNESS WHEREOF, the undersigned acknowledge that they have read the
foregoing Agreement and fully understand it:
INTRALASE CORP.
Dated: February 27, 2007
By: /s/ Xxxxxx X. Xxxxxxxxx
------------------------------------
Name: Xxxxxx X. Xxxxxxxxx
Title: President and CEO
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ESCALON MEDICAL CORP.
Dated: February 27, 2007
By: /s/ Xxxxxxx X. XxXxxxx
------------------------------------
Name: Xxxxxxx X. XxXxxxx
Title: Chairman and CEO
ESCALON HOLDINGS, INC.
Dated: February 27, 2007
By: /s/ Xxxxxxx X. XxXxxxx
------------------------------------
Name: Xxxxxxx X. XxXxxxx
Title: Chairman and CEO
APPROVED AS TO FORM:
XXXXXXX XXXXXX XXXXXX & DODGE LLP
Dated: February 27, 2007
By: /s/ Xxxx X. Xxxx
------------------------------------
Xxxx X. Xxxx
Attorneys for Escalon Medical Corp. and
Escalon Holdings, Inc.
IRELL & XXXXXXX LLP
Dated: February 27, 2007
By: /s/ Xxxxx Xxxxxxx Xxxxxx
------------------------------------
Xxxxx Xxxxxxx Xxxxxx
Attorneys for IntraLase Corp.
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EXHIBIT A
LICENSE AGREEMENT
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EXHIBIT B
ASSIGNMENT OF INTELLECTUAL PROPERTY
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EXHIBIT C
FORMS OF DISMISSAL WITH PREJUDICE
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