EXHIBIT 10(y)
DEVELOPMENT AND OPTION AGREEMENT
This Agreement, dated as of August 27, 1996, is by and between Misonix
Incorporated, a New York corporation, with its principal place of business at
0000 Xxx Xxxxxxx, Xxxxxxxxxxx, Xxx Xxxx 00000 ("Misonix"), and United States
Surgical Corporation, a Delaware corporation, with its principal place of
business at 000 Xxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxxxxx 00000 ("USSC").
WHEREAS, Misonix designs and develops ultrasonic medical devices and
desires to further develop its proprietary ultrasonic cutting, sealing and
dissection technology (the "Technology"); and
WHEREAS, USSC develops, manufactures, markets and sells medical products;
and
WHEREAS, subject to the terms and conditions hereof, Misonix and USSC
(collectively, the "parties") desire that Misonix conduct development of the
Technology; and
WHEREAS, subject to the terms and conditions hereof, the parties also
desire that USSC be permitted to evaluate the Technology, and that USSC be
granted an option for an exclusive worldwide license in and to the Technology,
and obtain certain other rights as hereinafter specifically provided.
NOW THEREFORE, in consideration of the mutual promises, covenants,
undertakings and obligations set forth herein and for other good and valuable
consideration the receipt of which is hereby acknowledged, the parties hereto
agree as follows:
ARTICLE 1 - DEFINITIONS
1.1 For the purposes of this Agreement, the definitions set forth below
shall be applicable.
Affiliate - The term "Affiliate" means a corporation or other entity
controlled by, controlling or under common control with another person,
corporation or other entity. For the purpose of this Agreement, "control" means:
(i) the ownership, directly or indirectly, of 50% or more of the voting stock or
analogous interest in a corporation or other entity, by another person,
corporation or other entity; or (ii) the commonality of 50% or more of the
directors on the Board of a corporation or other entity with the directors on
the
Board of another corporation or other entity; or (iii) the commonality of
50% or more of the directors on the Board of such corporation or other entity
with the executive officers, or holders of 5% or more of any class of the
outstanding capital stock of another corporation or other entity; or (iv) the
commonality of 50% or more of the partners (general or limited), principals, or
other controlling parties of any entity, with the partners (general or limited),
principals or other controlling parties of another entity; or (v) the existence
of any other relationship between a corporation or other entity and such other
person, corporation or other entity which results in effective managerial
control by one over the other, regardless of the level of commonality of the
number of directors, partners, principals or other controlling parties or
whether such control is continuously exercised.
Field - The term "Field" means all human and veterinary medical
applications.
Know-How - The term "Know-How" means any and all secret or confidential
information, trade secrets, specifications, test results, analyses and data,
inventions, methods, processes, formulae, mixtures, compositions, designs,
techniques, applications, ideas or concepts, whether or not reduced to practice,
relating directly or indirectly to the Products, including, but not limited to,
technology that is or could be the subject matter of a foreign or domestic
patent or patent application, whether or not reduced to writing in a patent
application.
Patents and Trademarks - The term "Patents and Trademarks" means all
patents, patent applications, registered trademarks and trademark applications
relating to the Technology to be utilized in the Field and identified on
Schedule 1 hereto, all other foreign and domestic patents, patent applications,
registered trademarks and trademark applications filed by or assigned to Misonix
prior or subsequent to the date hereof and covering or relating to an invention,
method, process, formula, mixture, and composition, having application to a
Product, and all foreign and domestic patents and registered trademarks issuing
on any of the foregoing patent applications and trademark applications, and all
continuations, continuations-in-part, divisions, reissues, reexaminations,
additions and renewals thereof.
Products - The term "Product" or "Products" means any instrument, device or
system usable in the Field (defined above) which involve or relate to the
Technology and embody or utilize any or all of the following in which
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Misonix has or, during the Term (defined below), acquires a proprietary
interest: (i) the inventions, methods, processes, formulae, mixtures, and
compositions disclosed and/or claimed in the Patents and Trademarks (defined
below), and any invention, method or process, formula, mixture, or composition
similar or related to, or designed for use with, any of the foregoing; (ii)
every part, subassembly, component or accessory of, and addition or improvement
to, any of the foregoing; (iii) Know-How (defined below); and (iv) all
registered trademarks and trademark applications within Patents and Trademarks
and all good will associated with such registered trademarks and trademark
applications. Attachment 1 to this Agreement sets forth the parties current,
mutual understanding for the Product.
Trademarks - The term "Trademark" means all registered trademarks and
trademark applications within Patents and Trademarks.
ARTICLE 2 - DEVELOPMENT WORK
2.1 Attached to this Agreement as Attachment 2 is a description of the
development work which the parties have agreed that Misonix shall undertake
under this Agreement. During the Term, Misonix shall pursue the development work
described in Attachment 2 in a competent and professional manner, to meet the
objectives set forth therein prior to the end of the term of this Agreement for
the consideration set forth in Article 4. The development work shall not be
changed in any material respect, except by mutual written agreement of the
parties.
2.2 The parties acknowledge the importance and benefit of providing first
generation Working Prototypes suitable in appearance and performance for
presentation as investigational devices at the American College of Surgeon
meeting in October, 1996 and that the target date for full production is April
1, 1997. Misonix hereby undertakes to use reasonable efforts to develop and
deliver to USSC ten clamping/sealing probes/tips and five hook/cutting
probes/tips by September, 15, 1996.
ARTICLE 3 - DEVELOPMENT REPORTS AND IMPROVEMENTS
3.1 Misonix shall keep USSC informed and shall communicate with USSC on an
ongoing basis concerning the results of development work undertaken pursuant to
this Agreement. In addition to the foregoing, during the term of this Agreement,
Misonix, shall, upon USSC's request, meet with USSC representative at times
during and places mutually agreed upon but no less
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frequently than monthly, to discuss the progress and results of the development
work, as well as ongoing plans, or changes therein. Misonix shall also permit
USSC's representatives to visit the facilities where the development work is
being conducted from time to time upon reasonable prior notice during the term
of this Agreement during normal business hours.
3.2 If, during the Term, Misonix solely conceives or develops, whether
under this Agreement or otherwise, any new invention, method, process, formula,
mixture, composition, modification or improvement relating to a Product or
Know-How, or the use or manufacture of any thereof, Misonix shall furnish full
details thereof to USSC, including all conceptual, technical and design
information, specifications, test results, analyses, data, prototypes, drawings,
formulas, mixtures, compositions, delivery systems and any other useful
information. Such inventions, methods, processes, formulae, mixtures,
compositions, modifications and improvements relating to a Product, or the use
or manufacture of any thereof, shall be deemed included in the License Option
(defined below) except insofar as USSC agrees in writing to exclude from the
Exhibit A License (defined below)all or any po?tion of such inventions, methods,
processes, formulas, mixtures, compositions, modifications or improvements.
3.3 All Patents and Trademarks and all inventions, methods, processes,
formulae, mixtures, compositions, modifications or improvements referred to in
Section 3.2 above, shall be the exclusive property of Misonix, and, upon USSC's
exercise of the License Option, subject to the Exhibit A License.
3.4 Misonix covenants and agrees for as long as this Agreement shall be and
remain in effect, that it shall not grant to any other or different person or
entity any other right, option or license to evaluate, develop, test, conduct
clinical trials, obtain governmental approvals, make, have made, use, practice,
manufacture, have manufactured, sell, transfer or commercialize any Product or
any new inventions, methods, processes, formulae, mixtures, compositions,
modifications or improvements thereon relating to ~e Technology in the Field or,
to practice or use Know-How anywhere in the world.
ARTICLE 4 - CONSIDERATION
4.1 The total consideration to be paid by USSC for the development work to
be performed under this Agreement, the grant of the License Option and the other
rights granted hereunder and the non-compete agreement pursuant to Article 8
shall be the payment to Misonix of Fifty Thousand Dollars ($50,000.00)
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which Misonix hereby acknowledges was paid to Misonix prior to the execution of
this Agreement by both parties.
4.2. This is a fixed fee agreement and USSC has no obligation to pay or
reimburse Misonix for any further amount (in addition to the amounts set forth
in Section 4.1 above and this Section 4.2) involving the Development Work under
this Agreement. While Misonix presently believes it can produce the Working
Prototype described in Attachment 2 to USSC's satisfaction for such fixed fee,
it does not represent or warrant that it will be able to do so. To further
incent Misonix to provide first generation Working Prototypes which, in USSC's
view, are suitable in appearance and performance for presentation as
investigational devices at the American College of Surgeons meeting in October,
1996, USSC shall, in addition, pay Misonix the following: (a) Twenty-Five
Thousand Dollars ($25,000.00) if Misonix develops and delivers to USSC one
clamping/sealing probe/tip and one hook/cutting probe/tip, by September 10,
1996, and (b) Fifty Thousand Dollars ($50,000.00) if Misonix develops and
delivers to USSC ten damping/sealing probes/tips and five hook/cutting
probes/tips, by September 15;1996. Notwithstanding anything to the contrary
contained in this Agreement or in any of the Attachments thereto, the Working
Prototypes to be developed and delivered by Misonix are to be development and
evaluation models oniy and not suitable necessarily for clinical tests of such
Working Prototypes.
ARTICLE 5 - EVALUATION OF PROTOTYPE AND OPTION
5.1 For a ninety (90) day period following receipt by USSC of a Working
Prototype, USSC shall be permitted to evaluate and test the same throughout the
world (the "Exclusive Evaluation Period"). In connection therewith, Misonix
shall promptly answer questions USSC may have related thereto and provide to
USSC test results, analysis and other Know-How in Misonix's possession or
control which may be useful in connection with USSC's evaluation. Without
limiting or being limited by the foregoing, the Exclusive Evaluation Period may
be extended by USSC, at its option, for one additional thirty (30) day period in
the event of any one or more of the following: (a) USSC requires, in the
reasonable opinion of its counsel, additional time to evaluate the intellectual
property rights issues related to the Product or Know-How, or (b) USSC requires,
in its reasonable judgment, additional time to evaluate the Product or the
Know-How
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5.2 Misonix hereby grants to USSC, and USSC hereby accepts from Misonix, an
exclusive paid up option (the "License Option") exercisable in USSC's sole and
absolute discretion to acquire the license and other rights set forth in Exhibit
A (the "Exhibit A License") in the Field. The License Option shall be subject to
exercise by USSC by notice to Misonix at any time prior to the end of such
ninety (90) day period or such one hundred and twenty day (120) period referred
to in 5.1, as the case may be, that USSC is exercising the License Option. Upon
delivery of such notice and the cash consideration required to be delivered by
USSC, the license in the form of Exhibit A shall be deemed executed by, binding
upon and enforceable against the parties thereto covering the Exhibit A License
Field. However, within thirty (30) days thereafter, the parties thereto shall
execute copies of the Exhibit A License for their records. Failure to so execute
copies of the Exhibit A License for the records of the parties shall not affect
the effectiveness or enforceability of the provisions thereof.
5.3 The provisions of this Article 5 shall survive termination of this
Agreement.
ARTICLE 6 - PROPRIETARY INFORMATION
6.1 USSC hereby covenants and agrees that it will not, directly or
indirectly, disclose, either during or for five (5) years subsequent to the
Term, any Confidential Information of Misonix to any other person or entity,
except to its attorneys and accountants as may be required in connection with
this Agreement who have been or will be instructed to maintain its
confidentiality and to third parties who shall execute binding written
agreements requiring such parties not to disclose Confidential Information
disclosed to them by USSC. In addition to the foregoing, USSC hereby covenants
and agrees that it will not, directly or indirectly, during the term of this
Agreement, use the Working Prototype or any Know-How developed by Misonix except
as permitted by this Agreement. USSC further covenants and agrees that,
following termination of this Agreement, except in the event it has exercised
the License Option and entered into the License referred to herein (and as
permitted by such License), USSC shall not use, directly or indirectly, the
Working Prototype or any Know-How disclosed by Misonix for five (5) years
thereafter to the extent and for so long as it constitutes Misonix Confidential
Information.
6.2 Misonix hereby covenants and agrees that it will not, directly or
indirectly, disclose during or for five (5) years subsequent to the Term, any
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Confidential Information of USSC to any other person or entity, except to
Misonix's attorneys and accountants as may be required in connection with this
Agreement who have been or will be instructed to maintain its confidentiality.
6.3 It is not intended by this Article 6 that USSC or Misonix shall be
required to obtain specific written commitments in relation to this Agreement
from materials and/or component suppliers where only specifications are
disclosed to said materials and/or component suppliers by USSC and by Misonix.
6.4 For purposes of this Agreement, "Confidential Information" shall mean
verbal and written disclosures from Misonix, on the one hand, or USSC, on the
other hand, (the "Discloser") to the other party (the "Disclosee"), which
concern the Discloser including, without limitation, information which concerns
the Discloser's business, operations, products or research and development
efforts, or which concern the Products or Know-How, but shall not include
information which: (a) at the time of disclosure is published or otherwise
becomes a part of the public domain through no fault of Disclosee (but only
after, and only to the extent that, it is published or otherwise becomes a part
of the public domain); (b) Disclosee can show was known to it at the time of
disclosure, free of restriction; (c) has been or hereafter is disclosed to
Disclosee without any obligation of confidentiality by a third party who is in
lawful possession of such information and has the right to disclose it to
Disclosee; (d) has been or hereafter is disclosed by Discloser to a third party
free of any obligations of confidentiality; (e) was independently developed by
the Disclosee, or (f) is disclosed by Disclosee pursuant to the order or
requirement of a court, administrative agency or other governmental body,
provided that the Disclosee promptly informs the Discloser of its intent to make
such disclosure, takes all reasonable steps to limit such disclosure and does
not inhibit the Discloser in taking whatever lawful steps the Discloser
considers necessary to attempt to preserve the confidentiality of such
information. Disclosures made to Disclosee by Discloser which are specific shall
not be deemed to be within the foregoing exceptions merely because they are
embraced by general disclosures in the public domain or in the possession of
Disclosee. The existence, terms and condition of this Agreement shall be deemed
Confidential Information of the parties to this Agreement.
6.5 Misonix and USSC covenant and agree with each other and shall ensure
that each individual and entity involved with the Development Work
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described in Attachment 2 (including, its employees, outside vendors and
consultants) are bound in writing to maintain the confidentiality of the other
party's Confidential Information.
6.6 During the Term each of Misonix and USSC shall put in place and
maintain procedures and take precautions to safeguard the existence, integrity
and confidentiality of the other's knowledge respecting the matters covered
hereby. Nothing in this Article 6 is intended to require Misonix to obtain
specific written commitments in relation to this Agreement from material and/or
component suppliers where only specifications are disclosed to said material
and/or component suppliers by Misomx.
6.7 The parties hereby acknowledge and agree that any breach of this
Article 6 by Misonix, on the one hand, or USSC, on the other hand, would likely
cause irreparable injury to the other party and that such other party's remedy
at law for any such breach would be inadequate. Accordingly, the parties agree
that, in addition to any other remedies provided for herein or otherwise
available at law, temporary and permanent injunctive relief and other equitable
relief may be granted in any action, suit or proceeding brought by either party
to enforce the provisions of this Article 6 without the necessity of proof of
actual damage. Each party agrees promptly to seek temporary and permanent
injunctive relief against any of its directors, officers, employees or
consultants who breach the aforesaid obligations with respect to any matter
relating to this Agreement.
6.8 The provisions of this Article 6 shall survive termination of this
Agreement for five (5) years.
ARTICLE 7 - INVENTIONS
7.1 It is recognized and understood that certain existing inventions and
technologies are the separate property of USSC and Misonix and are not affected
by this Agreement, and none of the parties shall have any claims or rights in
such separate inventions and technologies. All patentable and unpatentable
inventions, discoveries and ideas ("Inventions") which are made or conceived
solely by Misonix during the Term and as a result of work performed under this
Agreement ("Misonix Inventions") shall be the property of Misonix but shall be
subject to USSC's rights set forth in this Agreement and the Exhibit A License
upon the execution or effectiveness thereof in accordance with this Agreement.
All Inventions which are made or conceived solely by employees of USSC or other
persons employed or retained by USSC during the Term (other than Misonix and/or
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others under its direction) and as a result of work performed under or in
connection with this Agreement including, without limitation, Inventions made or
conceived by such persons ("USSC Inventions") shall be the sole property of
USSC. All Inventions which are made or conceived jointly by Misonix (and/or
others under its direction) and USSC (and/or others under its direction) during
the Term and as a result of work performed under this Agreement ("Joint
Inventions") shall be owned jointly by Misonix and USSC, but Misonix's rights
therein shall be subject to USSC's rights set forth in this Agreement and the
Exhibit A License upon the execution or effectiveness thereof in accordance with
this Agreement. If the Exhibit A License is executed, USSC shall have the sole
and exclusive right to apply for and obtain patent protection at its sole
discretion and shall be solely responsible at its expense for the filing,
prosecution and maintenance of patent applications and patents regarding Joint
Inventions. Misonix shall do such acts and sign such documents as are reasonably
necessary to permit USSC to perform its patent function under the Exhibit A
License regarding Joint Inventions and USSC shall provide copies of proposed
filings regarding Joint Inventions with any patent counsel for Misonix in
reasonably sufficient time to allow Misonix to comment on such proposed filings.
A Misonix Invention disclosure for each Misonix Invention shall be promptly sent
in writing by Misonix to USSC and not sent to or discussed by any of them,
directly or indirectly, with any third party. The parties shall mutually notify
each other regarding any Joint Invention.
7.2 The provisions of this Article 7 shall survive termination of this
Agreement.
ARTICLE 8 - NON-COMPETE
8.1 Misonix hereby agrees that during the term of this Agreement except as
expressly permitted by this Agreement, it shall not, directly or indirectly,
develop, manufacture, or sell any Product, or any similar or related instrument,
device or system, or Know-How to any third person or entity, or to consult with
or provide technical assistance or advice to any third person or entity with
respect to the design, development, manufacture or sale of any Product or
similar instrument, device, or system without USSC's prior written consent in
USSC's sole and absolute discretion. USSC has been advised by Misonix and
acknowledges that Misonix is engaged in an undertaking with Medical Device
Alliance, Inc. ("MDA") in connection with the development of
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devices used in ultrasonic soft tissue aspiration and related endeavors and that
such efforts shall not be deemed to fall within the foregoing precluded area.
8.2 The parties acknowledge and agree that any breach of any of the
provisions of this Article 8 by Misonix will cause immediate and irreparable
injury to USSC and that USSC's remedy at law for any such breach would be
inadequate. Accordingly, the parties agree that, in addition to any other
remedies provided for herein or otherwise available at law, temporary and
permanent injunctive relief and other equitable relief may be granted in any
action, suit or proceeding which may be brought by USSC to enforce the
provisions of this Article 8 without the necessity of proof of actual damage.
8.3 The provisions of this Article 8 shall survive termination of this
Agreement.
ARTICLE 9 - INDEMNIFICATION
9.1 Subject to the fulfillment by Misonix of its obligations pursuant to
Section 9.2 below, USSC agrees to defend, indemnify and hold harmless Misonix
and each of Misonix's directors, officers, employees, agents, and
representatives, from and against any claims, demands, judgments, executions,
awards, or damages, including reasonable attorney's fees and expenses incurred
by Misonix in defending the same, constituting a product liability action or
other action, suit or proceeding arising as a result of the design, manufacture
or use of a Product by USSC. In furtherance of the foregoing, USSC shall include
Misonix as a covered person on USSC's product liability insurance in an amount
of at least $5,000,000, with waiver of subrogation. In satisfaction of the
foregoing indemnification and hold harmless agreement, USSC may pay directly to
the claimant or plaintiff in any such claim, action, suit or proceeding, the
amount of any award, judgment, settlement or recovery, or execution rendered
thereon, and may pay to Misonix and Misomx 5 directors, officers, employees,
agents, and representatives, any other damages or reasonable expenses sustained
by them in defending any such claim, action, suit or proceeding. USSC shall have
the right to conduct the legal defense, or to enter into any settlement
agreement, as it, in its sole discretion, deems appropriate. Misonix may
participate in such action, suit or proceeding through its own attorneys at its
sole cost and expense.
9.2 In the event that any claim is asserted against Misonix or Misonix's
directors, officers, employees, agents or representatives, or such person is
made a party defendant in any action, suit or proceeding involving a matter
which is the
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subject of USSC's indemnification and hold harmless agreement as set forth above
in Section 9.1, then within ten (10) days of the receipt by any of such persons
of notice of such event and within seven (7) days of receipt of a complaint or
other formal pleading regarding such event, such persons shall give written
notice of such claim, action, suit or proceeding to USSC, and USSC shall be
given an opportunity to assume the defense and control any settlement on behalf
of such persons. Misonix shall provide its full cooperation to USSC in
connection with the defense of such claim, action, suit or proceeding.
9.3 Subject to the fulfillment by USSC of its obligations pursuant to
Section 9.4 below, Misonix agrees to defend, indemnify and hold harmiess USSC
and each of USSC's directors, officers, employees, agents, and representatives,
from and against any claims, demands, judgments, executions, awards, or damages,
including reasonable attorney's fees and expenses incurred by USSC in defending
the same, to the extent constituting liability for personal injury (on whatever
legal theory) action, suit or proceeding arising on Misonix's premises in
connection with this Agreement. In satisfaction of the foregoing indemnification
and hold harmiess agreement, Misonix may pay directly to the claimant or
plaintiff in any such claim, action, suit or proceeding, the amount of any
award, judgment, settlement or recovery, or execution rendered thereon, and may
pay to USSC and USSC's directors, officers, employees, agents, and
representatives, any other damages or reasonable expenses sustained by them in
defending any such claim, action, suit or proceeding. Misonix shall have the
right to conduct the legal defense, or to enter into any settlement agreement,
as it, in its sole discretion, d~ems appropriate. USSC may participate in such
action, suit or proceeding through its own attorneys at its sole cost and
expense.
9.4 In the event that any claim is asserted against USSC or USSC's
directors, officers, employees, agents or representatives, or such person is
made a party defendant in any action, suit or proceeding involving a matter
which is the subject of Misonix's indemnification and hold harmless agreement as
set forth above in Section 9.3, then within ten (10) days of the receipt by any
of such persons of notice of such event and within seven (7) days of receipt of
a complaint or other formal pleading regarding such event, such persons shall
give written notice of such claim, action, suit or proceeding to Misonix, and
Misonix shall be given an opportunity to assume the defense and control any
settlement on behalf of such persons. USSC shall provide their full cooperation
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to Misonix in connection with the defense of such claim, action, suit or
proceeding.
9.5 The provisions of this Article 9 shall survive termination of this
Agreement.
ARTICLE 10 - FDA INTERACTION
10.1 Interaction with the regulatory agencies in any country including, but
not limited to, the U.S. Food and Drug Administration (collectively, "FDA")
concerning the Products shall be conducted by USSC, and for purposes of any
filings with the FDA concerning the Products, subject to USSC's exercise of the
License Option, USSC shall be the official company sponsor. In the event of a
dispute between USSC and Misonix concerning any matter relating to interaction
with the FDA, USSC shall have final authority to act as USSC, in its sole
discretion1 deems appropriate with respect to the matter in dispute.
10.2 During the Term of this Agreement, Misonix, at USSC's request, shall
assist USSC during FDA interaction concerning the Products; provided that USSC
shall reimburse Misonix for all its documented and prior approved out-of-pocket
expenses, other than attorneys fees, incurred by Misonix in providing such
assistance.
10.3 Notwithstanding any provision of this Agreement to the contrary, USSC
shall not be obligated to, and shall have no liability to Misonix for failure to
evaluate, develop, test, conduct clinical trials, make, have made, use,
practice, manufacture or have manufactured any Product or practice or use the
Know-How or for failure to seek or pursue any FDA or other regulatory approvals.
USSC shall have the unqualified right, at any time to cease or suspend all
efforts to obtain FDA or other regulatory approvals.
ARTICLE 11 - PATENTS
11.1 Upon or prior to the date of this Agreement, Misonix shall deliver to
USSC copies of ail Patents and Trademarks in its possession or control and all
related documents and correspondence in its possession or control relating to
the Products or Know-How.
ARTICLE 12 - REPRESENTATIONS AND WARRANTIES
12.1 Each of the parties hereby represents and warrants that (a) it has
full right, power and authority to enter into and by bound by the terms and
conditions of this Agreement, to transfer the rights and to carry out their
respective obligations under this Agreement, without the approval or consent of
any other person or
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entity; (b) the entering into of this Agreement, the transfer of rights and the
carrying out of their respective obligations under this Agreement is not
prohibited, restricted or otherwise limited by any contract, agreement or
understanding entered into by any of them or their directors, officers,
employees or consultants, or by which any of such persons or entities is bound,
with any other person or entity, including, without limitation, any federal,
state or local governmental body, agency or authority; (c) there is no contract,
agreement or understanding entered into by them or their directors, officers,
employees or consultants, or by which any of such persons or entities is bound,
which if enforced, terminated or modified, would be in derogation of, contrary
to, or adversely affect the rights acquired or to be acquired hereunder by USSC;
and (d) there is no action, suit, proceeding or investigation pending or
currently threatened against any of them which, if adversely determined, would
restrict or limit the right of any of them to enter into this Agreement,
transfer the rights or carry out their respective obligations under this
Agreement,
12.2 Misonix hereby further represents, warrants and covenants that (a) it
has not granted, assigned, sold or otherwise transferred, and it is not
obligated to grant, assign, sell or otherwise transfer, and it shall not, except
to the extent and in the manner expressly permitted by this Agreement, grant,
assign, sell or otherwise transfer during the term of this Agreement any right,
title, interest, license or option in, to, or under, any Patents and Trademarks,
Products, or Know-How to any other person or entity including, without
limitation, any federal, state or local governmental body, agency or authority;
(b) no other person or entity has, or during the term of this Agreement shall
have, except to the extent and in the manner expressly permitted by this
Agreement, the right to acquire any right, title, interest, license or option
in, to or under any Patents and Trademarks, Products, or Know-How; (c) it has
not filed any patent application or trademark application or been issued or
assigned any patent or registered trademark on or prior to the date of this
Agreement for any instrument, device or system similar to a Product, other than
the Patents and Trademarks.
12.3 All representations, warranties and covenants made by the parties
shall be considered to have been relied upon by the other parties hereto
regardless of any discussion, review, or investigation made by, or on behalf of,
the other party.
12.4 The provisions of this Article 12 shall survive termination of this
Agreement.
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ARTICLE 13 - TERM AND TERMINATION
13.1 The term of this Agreement (the "Term") shall commence upon the date
hereof and shall terminate upon the earliest of the following:
(a) one (1) business day following the end of the Exclusive Evaluation
Period;
(b) Upon the written agreement of USSC and Misonix; and
(c) Notwithstanding any other provision of this Agreement, USSC at all
times shall have the right for any or no reason to terminate this Agreement upon
ten (10) days prior written notice to Misonix. In the event USSC effects
termination in accordance with this Section 13.1(c), there shall not be due to
Misonix any termination penalty or similar payment.
ARTICLE 14 - RIGHTS AFTER TERMINATION
14.1 All rights and obligations of the parties which accrue on or before
the effective termination date shall be fully enforceable by either party after
termination.
14.2 The provisions of this Article 14 shall survive termination of this
Agreement.
ARTICLE 15 - PUBLICITY RELEASES
15.1 Misonix shall not issue any press release or make any public
disclosure, announcement, comment or statement concerning the existence or the
terms and conditions of this Agreement without first advising and receiving the
written consent of USSC in its discretion, except to the extent necessary under
applicable laws or regulations or the requirements of any exchange on which
Misonix's securities are traded in the reasonable opinion of its counsel, in
which event Misonix shall in each instance provide USSC with a copy of the
proposed press release or public disclosure as far in advance as is reasonably
possible under the circumstances.
ARTICLE 16 - INDEPENDENT CONTRACTORS
16.1 In the performance of all development work hereunder, Misonix shall be
deemed to be and shall be an independent contractor and, as such, none of
Misonix or its employees shall be entitled to any benefits or rights applicable
to employees of USSC. Neither Misonix, on the one hand, nor USSC, on the other
hand, is authorized or empowered to act as agent for the other for any purpose
and shall not on behalf of the other enter into any contract, warranty, or
14
representation as to any matter. Neither shall be bound by the acts or conduct
of the other.
ARTICLE 17 - WAIVER
17.1 No waiver by any party, express or implied, or any breach of any term,
condition, or obligation of this Agreement by any party shall be construed as a
waiver of any subsequent breach of any term, condition, or obligation of this
Agreement, whether of the same or different nature.
ARTICLE 18 - NOTICES
18.1 Any notice required or permitted to be given hereunder shall be in
writing and shall be mailed by certified mail, return receipt requested, or
delivered by messenger or air courier, and all payments shall be delivered, to
the party to whom such notice or payment is required or permitted to be given~at
its address set forth as follows: if given to Misonix, to: Misonix Incorporated,
0000 Xxx Xxxxxxx, Xxxxxxxxxxx, Xxx Xxxx 00000; or, if given to USSC, to: Attn.:
Xxxxxx X. Xxxxxx, Vice President and General Counsel, United States Surgical
Corporation, 000 Xxxxxx Xxxxxx, Xxxxxxx, XX 00000. Any such notice shall be
considered given when delivered, as indicated by signed receipt or other written
delivery record. A party may change that address to which notice to it is to be
given by notice as provided herein.
ARTICLE 19 - ASSIGNMENT
19.1 Neither this Agreement nor the performance of any part hereof may be
assigned or transferred by Misonix, on the one hand, and USSC, on the other
hand, without the prior written consent of the other party in its sole and
absolute discretion, except that USSC may assign this Agreement and the
performance of any part hereof without such consent to an Affiliate of USSC.
ARTICLE 20 - CONSTRUCTION
20.1 This Agreement shall be construed and enforced in accordance with the
Laws of the State of New York and any action, suit or proceeding brought under
this Agreement shall be brought only in, and the parties hereby consent to the
jurisdiction of, the federal and state courts located in the State of New York.
20.2 The provisions of this Article 20 shall survive termination of this
Agreement.
15
ARTICLE 21 - ENTIRE UNDERSTANDING/AMENDMENT
21.1 This Agreement and the attached schedules and exhibits constitute the
entire understanding and agreement between the parties, and supersedes all
previous agreements (whether written or oral) concerning the subject matter
hereof. This Agreement shall not be modified, amended, or supplemented except by
a written document executed by both parties.
ARTICLE 22 - HEADINGS
22.1 The headings in this document are for information purposes only and
are not meant to have any legal effect in interpreting this document.
ARTICLE 23 - SEVERABILITY; FURTHER ASSURANCES
23.1 The invalidity or unenforceability of any Article, Section provision
of this document shall not affect the validity or enforceability one or more of
the other Articles, Sections or provisions.
23.2 The parties hereto will execute any further instruments or perform any
acts which are or may be necessary to effectuate each of the terms and
provisions of this Agreement.
ARTICLE 24 - COUNTERPARTS
24.1 This Agreement may be executed in any number of counterparts1 each of
which shall be deemed to be an original but all of which together shall
constitute one and the same instrument.
16
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
MISONIX INCORPORATED
By: /s/ Xxxxxx Xxxxxxxx
------------------------------------------
Name: Xxxxxx Xxxxxxxx
----------------------------------------
Title: PRESIDENT & CEO
---------------------------------------
UNITED STATES SURGICAL CORPORATION
By: /s/ Xxxxx Xxxxx
------------------------------------------
Name: Xxxxx Xxxxx
----------------------------------------
Title: Vice President, Strategic Planning and
---------------------------------------
Business Development
17
ATTACHMENT 1
ULTRASONIC SURGERY SYSTEM
(Intentionally Omitted)
18
ATTACHMENT 2
DESCRIPTION OF WORKING PROTOTYPE OF ULTRASONIC
TISSUE ABLATOR AND CAUTERIZER
The following is a description of a Working Prototype for the Ultrasonic Tissue
Ablator and Cauterizer offered under this contract. The unit is envisioned to be
suitable for lab tests in vitro or in live lab animals for demonstration of
cutting, ablating and coagulation performance.
GENERATOR
The Generator section will include circuitry to generate sinusoidal signals at
sufficient voltage and current to power handpiece. Working frequency tracking
and amplitude control will be provided. All indicators, such as Electrical
Fault, Mechanical Fault and Overload will be provided. All indicators, such as
Electrical Fault, Mechanical Fault and Overload will be provided. Ultrasonic
Time Meter and Reset will be installed. Although these features will be
functional, it is not guaranteed that performance suitable for production units
will be attained. Further engineering may deemed necessary after analysis of
results of first series of tests.
Generator will be mounted in a Sonicator XL-2020 type enclosure with custom
front fascias. Standard Misonix Inc. Colors will be used. Connectors for
Handpiece Cable (12ft) and other devices such as Footswitch will be of readily
available types, which may be different from what is ultimately chosen for
production systems.
Unit will be able to be run on 115VAC 60Hz or 230VAC 50Hz only.
GENERATOR WILL NOT BE CONSTRUCTED TO UL 2601-1 OR IEC 601-1 STANDARDS. FCC OR CE
COMPLIANCE CANNOT BE GUARANTEED. UNIT NOT GUARANTEED TO BE SUITABLE FOR USE IN
HUMAN CLINICALS.
Circuit cards may be engineering breadboards, not suitable for shipping by air.
Although Misonix will use as many 'off-the-shelf' components as possible,
prototype assembly techniques will be used throughout construction.
CONFIDENTIAL
MISONIX, INC., 0000 XXX XXXXXXX, XXXXXXXXXXX, X.X. 00000
--------------------------------------------------------------------------------
ATTACHMENT 2
HANDPIECE
Handpiece will be resonant at frequency of operation and be suitable for
attaching and driving Probes at their resonant frequency and provide amplitudes
which will demonstrate cutting, coag and ablation. The Handpiece will be
constructed of titanium and crystal elements. The case will be either aluminum,
engineering plastic or resin. Provisions for mounting Sheaths will be available.
A machined case is envisioned. No moldings will be provided.
THE HANDPIECE IS NOT GUARANTEED TO BE ABLE TO BE STERILIZED BY STEAM AUTOCLAVE.
ETO STERILIZATION MAY BE USED, DEPENDING UPON THE MATERIAL OF CONSTRUCTION.
Although an effort will be made to provide a unit which is ergonomically sound,
refinements may have to be made after clinical feedback.
PROBES AND SHEATHS
A Ball tip, a Hook cutting tip and a Clamping/Sealing tip will be provided.
Sheaths for use with each Probe/Tip will be provided. Sheath material(s) To Be
Determined, but machining techniques will be used for construction. No moldings
will be provided.
The initial prototype desired is three types of probes that would be compatible
with existing generators, cables and handpieces. Most important is a clamping
device which can be used to clamp, seal and divide tissue. Such a device would
meet the design criteria enclosed which was described at the 3/20/96 meeting and
which can be demonstrated in tissue to be equally efficacious as existing
ultrasonic clamping devices.
ACCESSORIES
Handpieces, Cables, Shipping Cartons (if needed), wrenches and special cleaning
materials( if needed) will be provided. Rudimentary documentation on use and
care will be provided. All power cords will be provided.
NO FDA, UL, CE OR OTHER REGULATORY BODY APPROVALS OR CERTIFICATIONS WILL BE
PROVIDED. NO SUBMISSIONS TO SUCH ORGANIZATIONS WILL BE PREPARED. VALIDATIONS OF
STERILITY PROTOCOLS OR MATERIAL BIOCOMPATABILITY WILL NOT BE CONDUCTED.
CONFIDENTIAL
MISONIX, INC., 0000 XXX XXXXXXX, XXXXXXXXXXX, X.X. 00000
--------------------------------------------------------------------------------
XXXXXX XXXXXX SURGICAL CORPORATION
CONFIDENTIAL
To use the device to divide tissue, two embodiments are considered:
1) A hinged component which compressed tissue between it and the angled
tip, such that vibration seals and divides tissue.
[DIAGRAM OF A HINGE]
2) A sliding component whose angle matches the angled tip such that
vibration seals and divides tissue when the sliding angled component
is advanced to compress tissue between it and the angled tip.
[DIAGRAM OF A HINGE]
SCHEDULE 1
----------
Patent/Trademark
Title Country No. Status Date
----- ------- ---------------- ------ ----
PATENTS
-------
TRADEMARKS
----------
30
EXHIBIT A
---------
LICENSE AGREEMENT
This Agreement, dated as of _________________________ , 19__, is by and
between Misonix Incorporated, a New York corporation, with its principal place
of business at 0000 Xxx Xxxxxxx, Xxxxxxxxxxx, Xxx Xxxx 00000 ("Misonix"), and
United States Surgical Corporation, a Delaware corporation, with its principal
place of business at 000 Xxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxxxxx 00000 ("USSC").
WHEREAS, Misonix designs and develops ultrasonic medical devices and
desires to further develop its proprietary ultrasonic cutting, sealing and
dissection technology (the "Technology"); and
WHEREAS, USSC develops, manufactures, markets and sells medical products.
NOW THEREFORE, in consideration of the mutual promises, covenants,
undertakings and obligations set forth herein and for other good and valuable
consideration the receipt of which is hereby acknowledged, the parties hereto
agree as follows:
ARTICLE 1 - DEFINITION
1.1 For the purposes of this Agreement, the definitions set forth below
shall be applicable.
Affiliate - The term "Affiliate" means a corporation or other entity
controlled by, controlling or under common control with another person,
corporation or other entity. For the purpose of this Agreement, "control" means:
(i) the ownership, directly or indirectly, of 50% or more of the voting stock or
analogous interest in a corporation or other entity, by another person,
corporation or other entity; or (ii) the commonality of 50% or more of the
directors on the Board of a corporation or other entity with the directors on
the Board of another corporation or other entity; or (iii) the commonality of
50% or more of the directors on the Board of a corporation or other entity with
the executive officers, or holders of 5% or more of any class of the outstanding
capital stock, of another corporation or other entity; or (iv) the commonality
of 50% or more of the partners (general or limited), principals, or other
controlling parties of any entity, with the partners (general or limited),
principals or other controlling parties of another entity; or (v) the existence
of any other relationship
between a corporation or entity and another person, corporation or other entity
which results in effective managerial control by one over the other, regardless
of the level of commonality of the number of directors, partners, principals or
other controlling parties or whether such control is continuously exercised.
Field - The term "Field" means all human and veterinary medical
applications.
Know-How - The term "Know-How" means any and all secret or confidential
information, trade secrets, specifications, test results, analyses and data,
inventions, methods, processes, formulae, mixtures, compositions, designs,
techniques, applications, ideas or concepts, whether or not reduced to practice,
relating directly or indirectly to the Products, including, but not limited to,
technology that is or could be the subject matter of a foreign or domestic
patent or patent application, whether or not reduced to writing in a patent
application.
Net Sales - (i) The term "Net Sales" means gross sales of the Products
billed and shipped by USSC or its Subsidiaries, Affiliates, Sublicensees, or
permitted assignees, less allowances and discounts actually allowed (other than
advertising allowances, or fees or commissions to salesmen or sales
representatives), returns, billed taxes and customs duties paid by USSC, freight
and transit insurance, and shall not include samples or demonstration materials
or any sale to USSC employees for any reason other than resale. The term "Net
Sales" shall not include sales between the parties, sales by independent
distributors, or sales between USSC and its Affiliates, Subsidiaries,
Sublicensees or permitted assignees.
(ii) For the purposes of this Section 1.1(e), the term "Products" shall
also include Products sold in packages, trays, or other groups of items
consisting of one or more Products and one or more non-Products (the "Package"
or "Packages"). The Net Sales price of any Product sold in a Package shall bear
the same ratio to the Net Sales price of the Package, as the individual retail
list price of the Product bears to the sum of all individual retail list prices
of every item in the Package if all of such items were sold separately.
Patents and Trademarks - The term "Patents and Trademarks" means all
patents, patent applications, registered trademarks and trademark applications
identified on Schedule 1 hereto, all other foreign and domestic patents, patent
applications, registered trademarks and trademark applications filed by or
assigned in whole or in part to Misonix prior or subsequent to the date hereof
2
and covering or relating to any Invention (defined below) having application to
a Product, all foreign and domestic patents and registered trademarks issuing on
any of the foregoing patent applications and trademark applications, and all
continuations, continuations-in-part divisions, reissues, reexaminations,
additions, and renewals thereof.
Products - The term "Product" or "Products" means any instrument, device or
system usable in the Field (defined below) which involve or relate to the
Technology and embody or utilize any or all of the following in which Misonix
has or, during the term of this Agreement, acquires a proprietary interest: (i)
the inventions, methods, processes, formulae, mixtures, and compositions
disclosed and/or claimed in the Patents and Trademarks (defined below), and any
invention, method, process, formula, mixture, or composition similar or related
to, or designed for use with, any of the foregoing; (ii) every part,
subassembly, component or accessory of, and addition or improvement to, any of
the foregoing; (iii) Know-How (defined below); and (iv) all registered
trademarks and trademark applications within Patents and Trademarks and all good
will associated with such registered trademarks and trademark applications.
Sublicensee - The term "Sublicensee" means any third party to whom USSC
grants a sublicense to manufacture or sell the Products.
Subsidiary - The term "Subsidiary" means any corporation, partnership or
other entity, 50% or more of the outstanding shares of any class of stock,
general partnership interest, or other equity of which is owned by USSC; and any
operating division of USSC not separately incorporated or organized as an
independent business entity.
Trademarks - The term "Trademarks" means all registered trademarks and
trademark applications within Patents and Trademarks.
ARTICLE 2 - THE GRANT
2.1 Misonix hereby grants to USSC, and USSC hereby accepts from Misonix, an
exclusive worldwide right and license during the term of this Agreement (and for
five (5) years after the Unilateral Termination Date in the event of a
termination of this Agreement under Section 14.1(c) below), including the right
to grant sublicenses, to evaluate, develop, test, conduct clinical trials,
obtain governmental approvals, make, have made, use, practice, manufacture, have
manufactured, sell, transfer or commercialize Products and to practice and use
the Know-How and the Trademarks throughout the world (the "License").
3
ARTICLE 3 - IMPROVEMENTS IN THE FIELD; PRODUCT MANUFACTURE
3.1 If, during the term of this Agreement, Misonix conceives, develops or
acquires any new invention1 method, process, design, formula, mixture,
composition, modification or improvement relating to a Product, or the use or
manufacture thereof (collectively "Invention"), Misonix shall furnish full
details thereof to USSC, including all conceptual, technical and design
information, specifications, test results, analyses and data, prototypes,
drawings, formulae, mixtures, compositions and any other useful information.
Such inventions, methods, processes, formulae, mixtures, compositions,
modifications and improvements shall be deemed, without any compensation being
due thereby, included in the License except insofar as USSC, upon request
by Misonix, agrees in writing to exclude from the License all or any portion of
such inventions, methods, processes, formulae, mixtures, compositions,
modifications or improvements.
3.2 All Patents and Trademarks and all inventions, methods, processes,
formulae, mixtures, compositions, delivery systems, modifications or
improvements thereto referred to in Section 3.1 above, shall be the exclusive
property of Misonix, subject to the License hereby granted.
3.3 Misonix hereby covenants and agrees for as long as this Agreement shall
be and remain in effect, that it shall not grant to any other or different
person, or entity, any other right, option or license to evaluate, develop,
test, conduct clinical trials, obtain governmental approvals, make, have made,
use, practice, manufacture, have manufactured, sell, transfer or commercialize
any Product, or any new inventions, methods, processes, formulae, mixtures,
compositions, modifications or improvements thereon, or, to practice or use the
Know-How or to use the Trademarks, anywhere in the world.
3.4 The parties acknowledge that USSC has substantial expertise in the
manufacture of surgical products. USSC shall have the right, in its discretion,
to manufacture or have one or more third parties selected by it, in its
discretion, to manufacture the Product. However, if during the term of this
Agreement, USSC wishes to have a party other than USSC manufacture the Product,
it shall notify Misonix in writing thereof and shall for a period of thirty (30)
days thereafter negotiate with Misonix in good faith concerning a manufacturing
agreement on terms and conditions mutually acceptable to both parties in their
discretion.
4
ARTICLE 4 - CONSIDERATION
4.1 The total consideration to be paid by USSC for the license and other
rights granted hereunder and the non-compete agreement pursuant to Article 8
shall be a license fee (the "License Fee"), milestone payments (the "Milestone
Payments") and a periodic royalty (the "Royalty"), all calculated and payable in
accordance with this Article 4.
4.2 The License Fee shall be in the amount of Two Hundred and Seventy Five
Thousand Dollars ($275,000) and shall be payable with execution and delivery of
this Agreement.
4.3 The Milestone Payments shall be as follows:
(a) One Hundred Thousand Dollars ($100,000) payable within three (3)
business days of USSC's completion of the first full production units of both
the hook probe and the clamping/sealing probe (the "First Generation"), but no
less than fifty percent (50%) of such amount on the date which is one year from
the date hereof;
(b) One Hundred Thousand Dollars ($100,000) if USSC completes the first
full production units of the First Generation on or before March 1, 1997; and
(c) One Hundred Thousand Dollars ($100,000) payable within three (3)
business days of (i) receipt by USSC of FDA Approval to market the Product or
(ii) approval of USSC's application to market the Product in any country in the
world.
4.4 The Royalty shall be as follows:
(a) an amount equal to five percent (5%) of Net Sales of a Product
occurring during the term of this Agreement; and
(b)
(i) if USSC terminates this Agreement under Section 14.1(c) and on
such termination date (the "Unilateral Termination Date") neither Misonix
nor any Affiliate of Misonix owns or has exclusive license rights to a
issued patent covering the Product, which patent is unexpired and has not
been held invalid by a court of competent jurisdiction from which no appeal
can be taken, an amount equal to five percent (5%) of Net Sales of a
Product for a period of five (5) years after the Unilateral Termination
Date, provided, and for so long as, in either case, USSC has the License;
or
5
(ii) if USSC terminates this Agreement under Section 14.1(c) and on
the Unilateral Termination Date either Misonix or any Affiliate of Misonix
owns or has exclusive license rights to a issued patent covering the
Product, which patent is unexpired and has not been held invalid by a court
of competent jurisdiction from which no appeal can be taken, an amount
equal to five percent (5%) of Net Sales of a Product for the Unilateral
Termination Patent Protected Period (defined below), provided and for so
long as, in either case, USSC has the License. For purposes of the
immediately preceding sentence the "Unilateral Termination Patent Protected
Period" shall mean the number of years following the Unilateral Termination
Date which shall be equal to (x) five years, minus (y) the longest number
of years, not to exceed five years, which remain on the life of a patent
which (aa) as of the Unilateral Termination Date either Misonix or any
Affiliate of Misonix owns or under which either Misonix or any Affiliate of
Misonix has exclusive license rights, and (bb) which patent covers the
Product. The Unilateral Termination Patent Protected Period and USSC's
rights granted by Misonix under this Agreement to sell Products shall in no
event extend longer than five (5) years from the Unilateral Termination
Date.
4.5 The Royalty shall accrue as and when a sale subject to a royalty is
recorded by USSC in accordance with Section 1.1(e), and shall be paid to Misonix
quarterly on or before forty-five (45) days after each calendar quarter during
which a sale is recorded.
ARTICLE 5 - PAYMENT, REPORTING AND RECORDS
5.1 USSC agrees to deliver quarterly written reports to Misonix for each
three (3) month period ending on the last day of the months of March, June,
September, and December of each year, within forty-five (45) days after the end
of each such period. The report shall set forth the number of Products sold by
USSC, its Subsidiaries, Affiliates, Sublicensees and permitted assignees during
the immediately preceding calendar quarter, Net Sales applicable to all such
Products, and the amount of License Fees and Royalties (and including any
catchup adjustments) then payable to Misonix. All information contained in such
quarterly reports shall be treated as USSC's Confidential Information (defined
below) subject to Article 6.
5.2 Simultaneously with the submission of each report, USSC shall pay to
Misonix by check or bank transfer the full amount of License Fees and
6
Royalties due to Misonix for the report period under the terms of this
Agreement. USSC shall maintain records in sufficient detail and, upon reasonable
notice, allow any independent certified public accounting firm of nationally
recognized standing, appointed by Misonix, and reasonably acceptable to USSC, to
examine its consolidated books and records, and the books and records of its
Sublicensees and permitted assignees pertaining to the Products. Such
examinations shall occur on or after February 15 of any calendar year (or, if
Misonix appoints for purposes of such examination the accounting firm employed
by USSC to conduct its regular annual audit, prior to February 15,) only during
business hours, and not more than once a year, and shall be solely for the
purpose of verifying the calculation of License Fees and Royalties due under
this Agreement. A final such examination may occur once during the year
immediately succeeding termination of this Agreement. In the event Misonix
appoints for the purpose of examining USSC's consolidated books and records the
accounting firm employed by USSC to conduct its regular annual audit, and if the
examination provided for herein is performed at substantially the same time as
such regular annual audit, the fees and expenses of the accounting firm
performing the examination shall be borne by USSC. In any other event, the fees
and expenses of the accounting firm performing the examination shall be borne by
Misonix. Unless written objection is made by Misonix and delivered to USSC
within thirty (30) days after completion of such examinations, the calculation
of License Fees and Royalties paid by USSC prior to the date of such examination
shall be final and binding on the parties, except insofar as adjusted or
corrected as a result of USSC's regular annual audit. It is understood that USSC
shall not be required to furnish or permit the examination of the identities, at
any time, of customers or prices or other information as to specific sales. Any
information provided to Misonix or its accountants pursuant hereto shall be
treated as USSC's Confidential Information subject to Article 6.
ARTICLE 6 - PROPRIETARY INFORMATION
6.1 USSC hereby represents and warrants that it will not, directly or
indirectly, disclose, either during or for three (3) years subsequent to the
term of this Agreement, any Confidential Information of Misonix to any other
person or entity, except to its attorneys and accountants as may be required in
connection with this Agreement who have been or will be instructed to maintain
its confidentiality and to third parties who shall execute binding written
agreements
7
requiring such third parties not to disclose Confidential Information disclosed
to them by USSC. Notwithstanding the foregoing, USSC shall have the right to use
Confidential Information of Misonix without obtaining such written agreements in
connection with any regulatory and patent filings involving or relating to
matters covered by this Agreement.
6.2 Misonix hereby agrees that it will not, directly or indirectly,
disclose during or for three (3) years subsequent to the term of this Agreement,
any Confidential Information of USSC, to any other person or entity, except to
the Misonix's attorneys and accountants as may be required in connection with
this Agreement who have been and will be instructed to maintain its
confidentiality and, to the extent necessary in the reasonable opinion of
Misonix's counsel, to be publicly disclosed and/or included in any filings
required under applicable securities laws involving or relating to matters
covered by this Agreement, provided, that in any such event, Misonix shall
advise USSC thereof as far in advance as is reasonably possible under the
circumstances to permit USSC to comment thereon and to take any action which it
may deem appropriate to limit the scope and extent of such disclosure.
6.3 It is not intended by this Article 6 that USSC or Misonix shall be
required to obtain specific written commitments in relation to this Agreement
from materials and/or component suppliers where only specifications are
disclosed to said materials and/or component suppliers by USSC or Misonix.
6.4 For purposes of this Agreement, "Confidential Information" shall mean
verbal and written disclosures from Misonix, on the one hand, or USSC, on the
other hand, (the "Discloser") to the other party (the "Disclosee"), which
concern the Discloser including, without limitation, information which concerns
the Discloser's business, operations, products or research and development
efforts, or which concern the Products or Know-How, but shall not include
information which: (a) at the time of disclosure is published or otherwise
becomes a part of the public domain through no fault of Disclosee (but only
after, and only to the extent that, it is published or otherwise becomes a part
of the public domain); (b) Disclosee can show was known to it at the time of
disclosure, free of restriction; (c) has been or hereafter is disclosed to
Disclosee without any obligation of confidentiality by a third party who is in
lawful possession of such information and has the right to disclose it to
Disclosee; (d) has been or hereafter is disclosed by Discloser to a third party
free of any
8
obligations of confidentiality; (e) is independently developed by Disclosee; or
(f) is disclosed by Disclosee pursuant to the order or requirement of a court,
administrative agency or other governmental body, provided that the Disclosee
promptly informs the Discloser of its intent to make such disclosure, takes all
reasonable steps to limit such disclosure and does not inhibit the Discloser in
taking whatever lawful steps the Discloser considers necessary to attempt to
preserve the confidentiality of such information. Disclosures made to Disclosee
by Discloser which are specific shall not be deemed to be within the foregoing
exceptions merely because they are embraced by general disclosures in the public
domain or in the possession of Disclosee. The existence, terms and conditions of
this Agreement shall be deemed Confidential Information of the parties to this
Agreement.
6.5 The parties hereby acknowledge and agree that any breach of this
Article 6 by Misonix, on the one hand, or USSC, on the other hand, would likely
cause irreparable injury to the other party and that such other party?5 remedy
at law for any such breach would be inadequate. Accordingly, the parties agree
that, in addition to any other remedies provided for herein or otherwise
available at law, temporary and permanent injunctive relief and other equitable
relief may be granted in any action, suit or proceeding which may be brought by
either party to enforce the provisions of this Article 6 without the necessity
of proof of actual damage. Each party agrees promptly to seek temporary and
permanent injunctive relief against any of its directors, officers, employees or
consultants who breach the aforesaid obligations with respect to any matter
relating to this Agreement.
6.6 The provisions of this Article 6 shall survive termination of this
Agreement for three (3) years.
ARTICLE 7 - INVENTIONS
7.1 All patentable and unpatentable inventions, discoveries and ideas
("Inventions") relating to Products which are made or conceived solely by
employees of USSC or other persons or entities or retained by USSC during the
term of this Agreement shall be the property of USSC. All Inventions which are
made or conceived solely by Misonix or by other persons or entities retained by
Misonix shall be the property of Misonix, but subject to USSC's rights set forth
in this Agreement. All Inventions which are made or conceived by Misonix (and/or
other persons or entities retained by Misonix), on the one hand, and
9
USSC (and/or other persons or entities retained by USSC), on the other hand,
shall be owned jointly by Misonix and USSC, but subject to USSC's rights set
forth in this Agreement.
ARTICLE 8 - NON-COMPETE
8.1 Misonix agrees that during the term of this Agreement, except as
expressly permitted by this Agreement, it shall not, directly or indirectly,
develop, manufacture, or sell any Product, or similar or related instrument,
device or system, or Know-How to any third person or entity, or to consult with
or provide technical assistance or advice to any third person or entity with
respect to the design, development, manufacture or sale of any Product or
similar instrument, device, or system without USSC's prior written consent in
USSC's sole and absolute discretion. The foregoing shall not be construed to
prohibit Misonix from engaging in its own development of Products and Know-How,
subject to the rights of USSC with respect thereto as set forth in this
Agreement. In addition, Misonix shall have the right to continue its undertaking
with Medical Device Alliance, Inc. ("MDA") in connection with the development of
devices used in ultrasonic soft tissue aspiration and related endeavors provided
it does not involve the Technology or violate Article 6 above.
8.2 The parties acknowledge and agree that any breach of this Article 8 by
Misonix would likely cause irreparable injury to USSC and that USSC's remedy at
law for any such breach would be inadequate. Accordingly, the parties agree
that, in addition to any other remedies provided for herein or otherwise
available at law, temporary and permanent injunctive relief and other equitable
relief may be granted in any action, suit or proceeding which may be brought by
USSC to enforce any provision of this Article 8 without the necessity of proof
of actual damage.
ARTICLE 9 - INDEMNIFICATION
9.1 Subject to the fulfillment by Misonix of its obligations pursuant to
Section 9.2 below, USSC agrees to defend, indemnify and hold harmless Misonix
and each of Misonix's directors, officers, employees, agents, and
representatives, from and against any claims, demands, judgments, executions,
awards, or damages, including reasonable attorney's fees and expenses incurred
by USSC in defending the same, constituting a product liability action or other
action, suit or proceeding arising as a result of the design, manufacture, use
or sale of a Product
10
by USSC, its Subsidiaries Affiliates, Sublicensees or permitted assigns. In
furtherance of the foregoing, USSC shall include Misonix as a covered person on
USSC's product liability insurance in an amount of at least $5,000,000, with
waiver of subrogation. In satisfaction of the foregoing indemnification and hold
harmless agreement, USSC may pay directly to the claimant or plaintiff in any
such claim, action, suit or proceeding, the amount of any award, judgment,
settlement or recovery, or execution rendered thereon, and may pay to Misonix
and Misonix's directors, officers, employees, agents, and representatives, any
other damages or reasonable expenses sustained by them in defending any such
claim, action, suit or proceeding. USSC shall have the right to conduct the
legal defense, or to enter into any settlement agreement, as it, in its sole
discretion, deems appropriate. Misonix may participate in such action, suit or
proceeding through its own attorneys at their sole cost and expense.
9.2 In the event that any claim is asserted against Misonix or Misonix's
directors, officers, employees, agents or representatives, or such person is
made a defendant in any action, suit or proceeding involving a matter which is
the subject of USSC's indemnification and hold harmless agreement as set forth
above, then within ten (10) days of such person 5 receipt of notice of such
event and within seven (7) days of receipt of a complaint or other formal
pleading regarding such event, such persons shall give written notice of such
claim, action, suit or proceeding to USSC, and USSC shall be given an
opportunity to assume the defense and control any settlement on behalf of such
persons. Misonix shall provide their full cooperation to USSC in connection with
the defense of such claim, action, suit or proceeding.
9.3 Misonix shall provide indemnifications to USSC with respect to product
liability (on any legal theory) actions, suits and proceedings to the same
extent as set forth above in this Article 9 for Products which Misonix may, in
Misonix's discretion, sell or transfer to USSC. For purposes of this Section
9.3, Misonix's collection of royalties hereunder shall not be deemed to
constitute the sale or transfer of Products.
9.4 The provisions of this Article 9 shall survive termination of this
Agreement.
ARTICLE 10 - FDA INTERACTION
11
10.1 Interaction with the regulatory agencies in any country including, but
not limited to, the U.S. Food and Drug Administration (collectively, "FDA")
concerning the Products shall be conducted by USSC, and for purposes of any
filings with the FDA concerning the Products USSC shall be the official company
sponsor. In the event of a dispute between USSC and Misonix concerning any
matter relating to interaction with the FDA, USSC shall have final authority to
act as USSC, in its sole discretion, deems appropriate with respect to the
matter in dispute.
10.2 During the term of this Agreement, Misonix shall, at USSC's request,
assist USSC during FDA interaction concerning the Products; provided that USSC
shall reimburse Misonix for all out-of-pocket expenses, other than attorneys
fees, incurred by Misonix in providing such assistance.
10.3 Notwithstanding any provision of this Agreement to the contrary, USSC
shall not be obligated to, and shall have no liability to Misonix for failure to
evaluate, develop, test, conduct clinical trials, make, have made, use,
practice, manufacture or have manufactured any Product or practice or use the
Know-How or for failure to seek or pursue any FDA or other regulatory approvals.
USSC shall have the unqualified right, at any time to cease or suspend all
marketing efforts and all efforts to obtain FDA or other regulatory approvals.
Nothing herein shall prevent USSC from setting its own prices for Products or
determining USSC's marketing policies and practices in its sole discretion.
ARTICLE 11 - PATENT AND TRADEMARK PROSECUTION AND INFRINGEMENT
11.1 Upon or prior to the date of this Agreement, Misonix shall deliver to
USSC copies of all Patents and Trademarks in its possession or control and all
related documents and correspondence in its possession or control to the extent
not delivered by the date of this Agreement. During the term of this Agreement
and subject to Section 11.3, USSC shall, at its own expense, use reasonable
efforts to obtain and maintain patents and trademark registration based on the
Patents and Trademarks in the United States. USSC shall also assume prosecution
and all future costs incurred and due during the term of this Agreement in
connection with the Patents and Trademarks filed prior to the date hereof set
forth in Schedule 1. Misonix agrees to fully cooperate with USSC in the
preparation, filing and prosecution of all applications for letters patent and
trademark registrations which USSC may in its sole discretion file and prosecute
12
in the United States and foreign countries in accordance with this Section 11.1,
and in the prosecution of the Patents and Trademarks, and, in connection with
such applications and the Patents and Trademarks, Misonix further agrees to
execute and deliver all documents which USSC may deem necessary or desirable.
11.2 Misonix, on the one hand, and USSC, on the other hand, shall promptly
give written notice to the other of any apparent infringement discovered by it
with respect to any patent or trademark issuing from the Patents and Trademarks.
Such notice shall set forth the facts of the apparent infringement in reasonable
detail. In such event, Misonix agrees to cooperate with USSC and to jo USSC
shall have the right to bring or settle, in USSC's sole discretion, any action,
suit or proceeding with respect to such apparent infringement at its own expense
and for its own benefit; provided, however, that after recovery by USSC of its
litigation costs, including reasonable outside attorneys fees, USSC shall pay to
Misonix at the Royalty rate set forth in Article 4 from the amount actually
received by USSC in connection with the settlement or a judgment in such
litigation. in in such action, suit or proceeding as a party plaintiff if
requested to do so by USSC and to give USSC all needed information, assistance
and authority to file and prosecute such suit; provided that USSC shall
reimburse Misonix for all out-of-pocket expenses incurred by it in providing
such assistance, other than attorneys' fees and expenses, incurred by Misonix.
11.3 If USSC or Misonix receives notice of a claim, action, suit or
proceeding by a third party alleging infringement of such third party's rights
in connection with the manufacture, use or sale of a Product by USSC, its
Affiliates, Subsidiaries, Sublicensees or permitted assignees, USSC shall have
the right to conduct the legal defense, and to enter into any disposition with
respect thereto, as USSC in its sole discretion deems desirable. Misonix shall
fully cooperate with USSC in its defense of such infringement claim, provided
that USSC shall reimburse Misonix for all out-of-pocket expenses, other than
attorneys' fees and expenses, incurred by it in providing such cooperation.
11.4 Subject to the fulfillment by Misonix of its obligations pursuant to
Section 11.6 below, USSC shall defend Misonix against a third party infringement
claim which results from the manufacture, use or sale of a Product by USSC, its
Affiliates, Subsidiaries, Sublicensees or permitted assignees, and indemnifv
Misonix against the cost of such defense undertaken by USSC, including
reasonable attornevs' fees and court costs, and damages awarded or amounts paid
13
in settlement in any such action. However, notwithstanding the foregoing, if
Misonix had actual knowledge on or prior to the date of the Development and
Option Agreement of a claim by a third party for infringement, USSC shall have
no obligation to defend or indemnify Misonix. USSC shall at all times keep
Misonix apprised of the status of any such claim, action, suit or proceeding and
allow Misonix to participate in all major decisions regarding the conduct of
such litigation including without limitation any decision to settle or pursue
the case to trial, provided, however, that USSC shall retain exclusive authority
to make all decisions regarding the conduct of such litigation or the
negotiation and consummation of any settlement.
11.5 The cost of USSC's defense of any claim referred to in Section 11.4
above, and any damages awarded or any amount paid in settlement or other
disposition of such claim, shall be set off against and, thereby, reduce, as set
forth in this Section 11.5, fifty percent (50%) the outstanding and future
Royalties due from USSC to Misonix.
(a) Except with respect to circumstances set forth in Section 11.5(b)
during the pendency of any such claim, action, suit or proceeding, USSC shall
have the right to deposit with a bank escrow agent the payments then due and
thereafter becoming due under the terms of this Agreement. USSC shall instruct
such escrow agent to deposit such payments in an interest-bearing account and to
release the same to the third party(s), if any, awarded damages in such action,
suit or proceeding pursuant to such award of damages, or to the third party(s),
if any, with whom USSC settles pursuant to this Section 11.5(a), to the extent
required by the terms of such settlement, and pay USSC's legal costs and
expenses as and when billed to USSC in connection with any such claim, action,
suit or proceeding and the balance, if any, of the principal and interest to
Misonix after final determination of and any reduction for all of the foregoing.
Such future Royalties shall be subject to escrow in accordance with this Section
11.5(a).
(b) Notwithstanding Section 1.5(a) above, in the event that Misonix commits
or has committed any fraud upon USSC in connection with this Agreement or
misrepresentation or breach of warranty of any matter which is the subject of
any of Misonix's representations and warranties contained herein1 in addition to
all other remedies available to it at law or in equity, USSC shall have the
right upon the receipt of any claim or the commencement of any action, suit or
proceeding, by either party hereto or any third party, relating to or
14
arising gout of such fraud or misrepresentation or breach of warranty, deposit
with a bank escrow agent the payments then due and thereafter becoming due under
the terms of this Agreement. USSC shall instruct such escrow agent to deposit
such payment in an interest-bearing account and to release the same to the third
party(s), if any, awarded damages in such action, suit or proceeding pursuant to
such award of damages or to the third party(s), if any, with whom USSC settles
pursuant to this Section 11.5(b), to the extent required by the terms of such
settlement, and to pay USSC's legal costs and expenses as and when billed to
USSC in connection with any such claim, action, suit or proceeding and the
balance, if any, of the principal and interest to Misonix after final
determination if and any reduction for all of the foregoing, the liability of
Misonix and the Principals for such award, amounts paid in settlement and USSC's
legal costs and expenses shall be up to the entire amount in escrow pursuant to
this Section 11.5(b), plus all future Royalties payable by USSC under this
Agreement. Such future Royalties shall be subject to escrow in accordance with
this Section 11.5(b). Notwithstanding the foregoing, the parties agree that any
such withholding of payments shall not limit the liability of Misonix for
damages in the event of any fraud, misrepresentation or breach of warranty
specified in this Section 11.5(b) or in the event of any other breach of this
Agreement by any of them, and shall not affect any right or license granted to
USSC hereunder or any other provisions of this Agreement or any party's
available remedies.
11.6 In the event that any claim is asserted against Misonix or USSC, or
any of their respective officers, directors, employees, agents or
representatives, or such person is made a party defendant in any action or
proceeding involving a matter which is the subject of USSC's indemnification and
hold harmless agreement as set forth above, or Misonix becomes the subject of a
claim of infringement against USSC, its Subsidiaries, Affiliates, Sublicensees
or permitted assignees as a result of their manufacture, use or sale of a
Product, then within 10 days of receipt by any Misonix or by USSC of notice of
any such event, and within 7 days of such party's receipt of a written complaint
or other formal pleading regarding any such event, such party shall give the
other party hereto written notice of such claim, action, suit, proceeding,
patent or patent application.
ARTICLE 12 - RIGHT OF FIRST REFUSAL
15
12.1 Misonix hereby grants to USSC, and USSC hereby accepts, the right of
first refusal set forth herein. In accordance with such right of first refusal,
Misonix hereby agrees that, during the term of this Agreement and except
pursuant to this Article 12, it shall not, directly or indirectly, transfer, by
sale, license or otherwise, to any third person or entity, a) any interest in
any of the Patents and Trademarks, a Product or the Know-How. No such sale,
license or other transfer shall be made without the prior written consent of
USSC, which may be withheld in its sole and absolute discretion. Prior to
offering or responding to an offer for such sale, license or other transfer,
Misonix hall have complied with all of their respective obligations under this
Agreement to be complied with prior to such offer or response. Prior to any
sale, license or other transfer, Misonix shall obtain a bona ,fide written offer
(the "Outside Offer") from such third party describing the subject of such sale,
licensee or other transfer, the interest to be sold, licensed or otherwise
transferred, and a stated cash consideration at which the third party offers to
acquire, and Misonix desires to sell, license or otherwise transfer, said
interest. After obtaining the Outside Offer, Misonix shall promptly, and before
accepting the Outside Offer, deliver to USSC an offer, irrevocable for forty
five (45) days from its receipt, to sell, license or otherwise transfer to USSC
the interest which is the subject of the Outside Offer for the cash
consideration and upon all other terms and conditions stated in the Outside
Offer. A copy of the Outside Offer shall accompany the offe# to USSC. If USSC
accepts such offer within said forty five (45) days, Misonix shall transfer the
relevant interest to USSC pursuant to the terms and conditions of such offer.
Otherwise, subject to the confidentiality and non-compete provisions of Articles
6 and 10, Misonix may transfer such interest to the third party who made the
Outside Offer in accordance with its terms and conditions during the sixty (60)
days immediately following expiration of the aforesaid forty-five (45) day
period. Notwithstanding the foregoing, nothing herein contained shall be
construed to limit the right of Misonix (or to give USSC any rights with respect
to any sale of shares of capital stock of Misonix or the merger or combination
of Misonix with or into any other firm, corporation or entity, but the rights of
USSC set forth in this Agreement shall survive any such sale, merger or
combination. Notwithstanding, Misonix shall not have the right, and nothing in
this Section 12.1 or anything else in this Agreement shall be construed to
authorize Misonix
16
to sell license or otherwise transfer any of the license or other rights
granted to USSC under this Agreement.
12.2 The parties acknowledge and agree that any breach of this Article 12
by Misonix would likely cause irreparable injury to USSC and that USSC's remedy
at law for any such breach would be inadequate. Accordingly, the parties agree
that in addition to any other remedies provided for herein or otherwise
available at law, temporary and permanent injunctive relief and other equitable
relief may be granted in any action, suit or proceeding which may be brought by
USSC to enforce any provision of this Article 12 without the necessity of proof
of actual damages.
ARTICLE 12A - DEVELOPMENT FUNDING
12A.1 Subject to the terms of this Section 12A.1, development funding for
Products which USSC may in its sole discretion desire to have developed by
Misonix hereunder ("Development Funding") shall be at the cost of USSC. Prior to
Misonix incurring any Development Funding costs or expenses, Misonix shall
notify USSC in writing of the proposed project and proposed expenditures in
reasonable detail and USSC shall have a period of ten business days within which
to approve or reject the same, in writing, in USSC's sole discretion. If such
proposed expenditures are approved by USSC, the acceptance by USSC shall be
accompanied by a check to Misonix in the approved amount of the agreed upon
Development Funding. If such proposed expenditures are rejected, such rejection
shall be reasonably detailed. Misonix shall maintain books and records
concerning Development Funding during the term of this Agreement and for five
(5) years thereafter. USSC and its representatives shall have the right to
review such books and records during normal business hours upon prior notice.
Nothing hereinabove in this Section 12A.1 commits USSC to any Development
Funding or prohibit or limit USSC from engaging in development of Products by
itself or with any third party at the cost of USSC.
12A.2 The provisions of this Article 12A shall survive termination of this
Agreement.
ARTICLE 13 - REPRESENTATIONS AND WARRANTIES
13.1 Each of the parties hereby represents and warrants that (a) it has
full right, power and authority to enter mto and by bound by the terms and
conditions of this Agreement, to transfer the rights and to carry out their
respective obligations under this Agreement, without the approval or consent of
17
any other person or entity; (b) the entering into of this Agreement, the
transfer of rights and the carrying out of their respective obligations under
this Agreement is not prohibited, restricted or otherwise limited by any
contract, agreement or understanding entered into by any of them or Misonix's
directors, officers, employees or consultants, or by which any of such persons
or entities is bound, with any other person or entity, including, without
limitation, any federal, state or local governmental body, agency or authority;
(c) there is no contract, agreement or understanding entered into by them or
Misonix's directors, officers, employees or consultants, or by which any of such
persons or entities is bound, which if enforced, terminated or modified, would
be in derogation of, contrary to, or adversely affect the rights acquired or to
be acquired hereunder by USSC; and (d) there is no action, suit, proceeding or
investigation pending or currently threatened against any of them which, if
adversely determined, would restrict or limit the right of any of them to enter
into this Agreement, transfer the rights or carry out their respective
obligations under this Agreement.
13.2 Misonix hereby further represents, warrants and covenants that (a) it
has not granted, assigned, sold or otherwise transferred, and it is not
obligated to grant, assign, sell or otherwise transfer, and they shall not,
except to the extent and in the manner expressly permitted by this Agreement,
grant, assign, sell or otherwise transfer during the term of this Agreement any
right, title, interest, license, or option, in, to, and under any Patents and
Trademarks, Products, Know-How to any other person or entity including, without
limitation, any federal, state or local governmental body, agency or authority;
(b) no other person or entity has, or during the term of this Agreement shall
have, the right to acquire, except to the extent and in the manner expressly
permitted by this Agreement, any right, title, interest, llcense or option in,
to or under any Patents and Trademarks, Products, Know-How; (c) it has not filed
any patent application or trademark application or been issued or assigned any
patent or registered trademark on or prior to the date of this Agreement for any
instrument, device or system similar to a Product, other than the Patents and
Trademarks; and (d) to the best of their knowledge, without special review for
this purpose, USSC's manufacture, use or sale of a Product substantially as
described in the Patents and Trademarks which exist as of the date of the
Development and Option Agreement dated as of August __, 1996 by and between
18
Misonix and USSC, would not infringe the patent rights or trademark rights of
any third person or entity.
13.3 All representations, warranties and covenants made by the parties
shall be considered to have been relied upon by the other parties hereto
regardless of any discussion, review or investigation made by, or on behalf of,
the other parties, and shall survive termination of this Agreement.
13.4 The provisions of this Article 12 shall survive termination of this
Agreement.
ARTICLE 14 - TERM AND TERMINATION
14.1 The term of this Agreement shall commence upon the date hereof and
shall terminate upon last of the following:
(a) With respect to all of the provisions of this Agreement (i) insofar as
the same relate to Products which embody at least one valid claim included in a
patent within the Patents and Trademarks, the last day upon which all such valld
claims covering an invention embodied in such Product expire1 or (ii) twenty
(20) years, whichever is later;
(b) Upon the written agreement of USSC and Misonix; and
(c) Notwithstanding any other provision of this Agreement, USSC at all
times shall have the right for any or no reason to terminate this Agreement upon
ten (10) days prior written notice to Misonix. In the event USSC effects
termination in accordance with this Section 14.1(c), there shall not be due to
the Principals any termination penalty or similar payment but, in such event,
the parties shall have the rights and obligations set forth in Section 4.4(b)
above.
ARTICLE 15 - RIGHTS AFTER TERMINATION
15.1 All rights and obligations of the parties which accrue on or before
the effective termination date shall be fully enforceable by either party after
termination.
15.2 If this Agreement terminates and, as a result thereof, USSC is
required to cease making Products at the end of the term of this Agreement or
after the Unilateral Termination Period, as the case may be, USSC may,
nonetheless, for a period not to exceed six (6) months after such termination,
and subject to the periodic royalty provisions set forth herein, dispose of
inventory of Products, complete and dispose of any Products in the process of
manufacture, and utilize materials then on order.
19
15.3 All Know-How, inventions, developments and improvements, whether
patentable or not, are and, after termination of this Agreement, shall (i)
remain the property of Misonix insofar as the same were conceived, made and
developed solely by Misonix prior to, or in performance of, this Agreement; and
(ii) the property of USSC insofar as the same were conceived, made and developed
solely by USSC prior to, or in performance of, this Agreement or jointly by
Misonix and USSC ("Joint Results") in the performance of this Agreement. USSC
shall retain exclusive ownership of all Know-How, inventions, developments and
improvements which were its property as of or prior to the date of this
Agreement or which were conceived, made and developed during the term of the
Agreement solely by USSC, whether or not the same is necessary to reduce to
practice any Joint Results.
15.4 Following termination of this Agreement, USSC shall assign to Misonix,
to the extent permissible by law, all filings with the FDA concerning Products
on which a royalty would be payable hereunder.
15.5 The provisions of this Article 15 shall survive termination of this
Agreement.
ARTICLE 16 - WAIVER
16.1 No waiver by any party, express or implled, or any breach of any term,
condition, or obligation of this Agreement by any party shall be construed as a
waiver of any subsequent breach of any term, condition, or obligation of this
Agreement, whether of the same or different nature.
ARTICLE 17 - NOTICES
17.1 Any notice required or permitted to be given hereunder shall be in
writing and shall be mailed by certified mail, return receipt requested, or
delivered by messenger or air courier, and all payments shall be delivered, to
the party to whom such notice or payment is required or permitted to be given at
its address set forth as follows: if given to Misonix, to: Misonix Incorporated,
0000 Xxx Xxxxxxx, Xxxxxxxxxxx, Xxx Xxxx 00000; or, if given to USSC, to: Attn.:
Xxxxxx X. Xxxxxx, Vice President and General Counsel, United States Surgical
Corporation, 000 Xxxxxx Xxxxxx, Xxxxxxx, XX 00000. Any such notice shall be
considered given when delivered, as indicated by signed receipt or other written
delivery record. A party may change that address to which notice to it is to be
given by notice as provided herein.
20
ARTICLE 18 - ASSIGNMENT
18.1 Neither this Agreement nor the performance of any part hereof may be
assigned or transferred by any one or more of Misonix and any one or more of the
Principals, on the one hand, and USSC, on the other hand, without the prior
written consent of the other party in its sole and absolute discretion, except
that (a) USSC may assign this Agreement and the performance of any part hereof
without such consent to an Affiliate of USSC, and (b) USSC may enter into one or
more sublicenses with any third persons or entities on terms and conditions as
USSC shall determine in its sole and absolute discretion provided, however, that
any such sublicense is not inconsistent with the terms of this Agreement.
ARTICLE 19 - CONSTRUCTION
19.1 This Agreement shall be construed and enforced in accordance with the
Laws of the State of New York and any action, suit or proceeding brought under
this Agreement shall be brought only in, and the parties hereby consent to the
jurisdiction of, the federal and state courts located in the State of New York.
19.2 The provisions of this Article 19 shall survive termination of this
Agreement.
ARTICLE 20 - ENTIRE UNDERSTANDING/AMENDMENT
20.1 This Agreement and the attached schedules constitute the entire
understanding and agreement between the parties, and supersedes all previous
agreements (whether written or oral) concerning the subject matter hereof. This
Agreement shall not be modified, amended, or supplemented except by a written
document executed by both parties.
ARTICLE 21 - HEADINGS
21.1 The headings in this document are for information purposes only and
are not meant to have any legal effect in interpreting this document.
ARTICLE 22 - SEVERABILITY; FURTHER ASSURANCES
22.1 The invalidity or unenforceability of any Articles, Section or
provision of this document shall not affect the validity or enforceability of
any one or more of the other Articles, Sections or provisions.
22.2 The parties hereto will execute any further instruments or perform any
acts which are or may be necessary to effectuate each of the terms and
provisions of this Agreement.
21
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
MISONIX INCORPORATED
By:
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Name:
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Title:
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UNITED STATES SURGICAL CORPORATION
By:
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Name:
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Title:
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SCHEDULE 1
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Patent/Trademark
Title Country No. Status Date
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23
