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Exhibit 10.1
AGREEMENT RE IMPLANTABLE PUMP BUSINESS
This Agreement Re Implantable Pump Business (this "Agreement") is
entered into as of this 1st day of September 1998, between MiniMed Inc. a
Delaware corporation ("MiniMed"), and Medical Research Group, LLC, a California
limited liability company ("MRG").
R E C I T A L S
MiniMed has developed implantable pump systems used for the infusion of
insulin and potentially other drugs in the treatment of diabetes and other
conditions (the "Implantable Pump Business"). The parties now desire that
MiniMed grant to MRG certain rights with respect to the Implantable Pump
Business on the terms set forth in this Agreement.
A G R E E M E N T
1. LICENSE OF TECHNOLOGY. Concurrently with the execution and
delivery of this Agreement, MiniMed and MRG are entering into an Implantable
Pump License and Distribution Agreement by which MiniMed is licensing to MRG
technology relating to the Implantable Pump Business and MRG is granting to
MiniMed certain distribution rights with respect to implantable pump systems.
2. LEASE OF MACHINERY AND EQUIPMENT.
2.1. LEASE. MiniMed hereby leases to MRG, and MRG hereby leases
from MiniMed and acknowledges delivery and acceptance of, the machinery and
equipment related to the Implantable Pump Business more particularly described
in Schedule 2.1 attached to this Agreement. (Such machinery and equipment are
collectively referred to herein as the "Equipment", and the provisions of
Sections 2.1 through 2.11 are referred to herein as the "Equipment Lease.")
2.2. TERM. The term of the Equipment Lease will commence on the
date of this Agreement and continue through December 31, 2008. If the Equipment
is not returned to MiniMed upon the expiration of the term of the Equipment
Lease, the Lease shall be deemed to have been extended on a month-to-month basis
at the rent in effect at the end of the term unless either party has notified
the other in writing thirty (30) days prior to the expiration of the term or of
any monthly period thereafter of its election to terminate the Equipment Lease.
2.3. RENT. MRG agrees to pay to MiniMed as rent for the Equipment
the amounts set forth in Schedule 2.3. Said rents shall be payable monthly in
advance, on or before
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the first day of each calendar month, and rent for any fractional month
commencing on the date of this Agreement shall be paid with the rent for the
first full calendar month.
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2.4. PURCHASE OF EQUIPMENT. MiniMed will have the right and
option (but not the obligation) to cause MRG to purchase the Equipment
exercisable at any time from July 1, 1998 through December 31, 1999. The
purchase price of the Equipment shall be the amount set forth in Schedule 2.4(A)
for the period in which the purchase is consummated. MiniMed may only exercise
its right to cause the Equipment to be purchased by MRG by delivering written
notice to MRG of its election to do so. Thereafter the purchase and sale of the
Equipment shall be consummated at the principal offices of MiniMed at the time
and on the date specified in the notice given by MiniMed, which in no event
shall be less than 30, nor more than 90 days, after the delivery of the notice
of exercise and in no event shall the time of the consummation of the
transaction be other than during normal business hours on a normal business day.
The purchase price for the Equipment and the inventory to be purchased pursuant
to Section 3.3 shall be paid pursuant to a Secured Promissory Note in the form
of Schedule 2.4(B) attached to this Agreement, which provides for interest at
the rate of 7% per annum, principal due in a lump sum on or before December 31,
2003, and all accrued interest payable annually in arrears commencing December
31, 1998. MRG shall also deliver to MiniMed concurrently with the Secured
Promissory Note its check in the amount of any sales tax payable with respect to
the sale of the Equipment to MRG. The Secured Promissory Note will be secured by
a security interest in the equipment purchased and all replacements thereof
pursuant to a Security Agreement in the form of Schedule 2.4(C) attached to this
Agreement. Against delivery of such Secured Promissory Note and Security
Agreement, MiniMed will deliver to MRG a xxxx of sale with respect to the
Equipment in the form of Schedule 2.4(D), attached to this Agreement.
2.5. OBLIGATIONS OF MRG WITH RESPECT TO EQUIPMENT. At all times
during the term of the Equipment Lease, MRG shall, at its own cost and expense,
(i) pay all charges and expenses in connection with the operation of the
Equipment and keep the Equipment free and clear of all liens, claims and
encumbrances of any kind; (ii) comply with all laws, ordinances, regulations,
requirements and rules with respect to the use, maintenance and operation of the
Equipment and (iii) make all repairs and replacements and perform all
maintenance required to maintain the Equipment in good condition, reasonable
wear and tear excepted. At all times during the term of the Equipment Lease, MRG
shall use the Equipment properly and only for the purpose for which it was
manufactured, shall not alter or modify the Equipment in any way that will
decrease its value, shall not remove the Equipment from its present location,
part with possession or control of the Equipment or sell, pledge, mortgage or
otherwise encumber the Equipment.
2.6. ABSENCE OF WARRANTIES. MRG ACKNOWLEDGES THAT IT HAS
INSPECTED THE EQUIPMENT, THAT MINIMED MAKES NO REPRESENTATIONS OR WARRANTIES OF
ANY KIND, EXPRESS OR IMPLIED, AS TO THE SUITABILITY, DURABILITY, FITNESS FOR
USE, MERCHANTABILITY, CONDITION, QUALITY OR OTHERWISE OF THE EQUIPMENT AND THAT
MRG IS LEASING THE EQUIPMENT AND, IF MINIMED EXERCISES ITS RIGHT UNDER SECTION
2.4, MRG WILL BE PURCHASING THE EQUIPMENT "AS IS." MINIMED SHALL HAVE NO
OBLIGATION TO INSTALL, ERECT, TEST, ADJUST OR
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SERVICE THE EQUIPMENT. NO DEFECT OR UNFITNESS OF THE EQUIPMENT SHALL RELEASE MRG
OF THE OBLIGATION TO PAY RENT OR OF ANY OTHER OBLIGATION UNDER THIS AGREEMENT.
2.7. LOSS, DAMAGE OR DESTRUCTION. MRG shall bear all risk of
loss, damage or destruction of the Equipment during the term of the Equipment
Lease. In the event any of the Equipment is damaged beyond repair, the amount of
rent payable pursuant to Section 2.3 and the amount of the purchase price
referred to in Section 2.4 will remain unchanged.
2.8. INSURANCE. MRG shall during the term of the Lease keep the
Equipment insured against loss or damage by fire, perils commonly covered under
the extended coverage endorsement, malicious mischief and sprinkler leakage to
the extent of the full replacement cost thereof as such cost may vary from time
to time. Unless MiniMed has exercised the right and option to cause MRG to
purchase the equipment pursuant to Section 2.4, such insurance shall be carried
for the mutual benefit and protection of MiniMed and MRG. MRG will have no
obligation pursuant to Section 2.4 to purchase any equipment which is destroyed
prior to such purchase. Amounts collected from such insurance for destruction of
equipment shall be paid to MiniMed who shall be entitled to the portion thereof
equal to MiniMed's book value of the equipment which was destroyed at the time
of its destruction, and MiniMed shall pay the balance of the amount collected to
MRG. In addition, the principal amount of the Secured Promissory Note referred
to in Section 2.4 will be reduced by the amount of such insurance proceeds
retained by MiniMed.. Amounts collected for damage to equipment, at the option
of MRG, will be used by MiniMed to promptly repair the damage or will be
delivered to MRG and MRG will promptly repair the damage, in each case
regardless of whether the insurance proceeds are adequate. Any excess insurance
proceeds paid for damaged equipment and not needed to repair the damage shall be
the property of MRG, and if MiniMed repairs the damage, MiniMed shall promptly
pay such excess to MRG after the repairs have been completed. During the term of
the Equipment Lease, MRG shall also maintain in force for the joint benefit of
MiniMed and MRG property damage and personal liability insurance in customary
form in the amount of $1 million for property damage and $1 million for death or
personal injury in any one accident and $3 million for all accidents in any one
calendar year. MRG shall deliver to MiniMed the policies of insurance or copies
thereof or other evidence satisfactory to MiniMed of such coverage. Each insurer
under such policies shall agree by endorsement upon the policies issued or by
independent instrument to MiniMed that it will give MiniMed 30 days prior
written notice of the effective date of any alteration or cancellation of any
such policy.
2.9. PAYMENT OF TAXES. In addition to the rentals provided for in
Section 2.3, MRG shall pay all sales, use, excise, personal property and ad
valorem taxes on the Equipment. All such taxes shall be paid not later than 30
days prior to the delinquency date thereof. All personal property taxes payable
with respect to the Equipment shall be pro rated between MiniMed and MRG on the
basis of the tax fiscal year of the Government authority collecting such taxes.
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2.10. RETURN AND SURRENDER OF EQUIPMENT. Upon the expiration of
the term of the Lease without the Equipment having been purchased by MRG
pursuant to Section 2.5, MRG will surrender possession of the Equipment to
MiniMed at its current location or, if the Equipment is moved, at such location
in Los Angeles County as MiniMed may designate.
2.11. MINIMED RIGHT TO PAY CLAIMS. In the event MRG shall fail to
pay and discharge or cause to be paid and discharged, when due and payable, any
tax, assessment, or other charge on, or in connection with, the Equipment, or
any lien or claim for labor or material used in, or any claim for damages
arising out of, the maintenance, repair, restoration, replacement or use of the
Equipment or any judgment, lien or claim, MiniMed may, at its option, pay any
such tax, assessment, insurance expense, lien, claim, charge or demand or sever
or discharge any action therefor, or judgment thereon. All costs, expenses,
reasonable attorneys' fees and other sums so incurred or paid by MiniMed shall
be paid by MRG to MiniMed upon demand together with interest thereon at the rate
of 7% per annum from the date incurred or paid.
Section 3. SALE OF INVENTORY.
3.1. PURCHASE OF INVENTORY FROM TIME TO TIME. MiniMed will sell
to MRG from time to time as needed during the period from the date of this
Agreement through December 31, 2008 all components for MiniMed's current models
of the implantable pump system which MiniMed presently has in inventory. Such
purchases will be at the prices set forth in Schedule 3.1 attached to this
Agreement and will be payable within 30 days after such components are
transferred from the stockroom or warehouse facilities where they are stored. At
the end of each fiscal month of MiniMed, MiniMed will invoice MRG for inventory
components actually transferred during any such month, and payment therefor
shall be due within 30 days after the issuance of the invoice.
3.2. MANAGEMENT OF INVENTORY. Within 30 days after the date of
this Agreement, MiniMed will establish in its stockroom/warehouse facilities
space dedicated to the implantable pump system inventory. When such space has
been established, MiniMed will notify MRG, and thereafter MRG will manage the
physical inventory and will bear the entire risk of loss thereof. MiniMed will
also provide MRG with access to certain joint use common areas, including
receiving inspection. MRG will insure the inventory against loss or damage by
fire, perils commonly covered by the extended coverage endorsement, malicious
mischief and sprinkler damage to the extent of the full replacement cost thereof
and will carry such insurance for the mutual benefit and protection of MiniMed
and MRG. MRG shall deliver to MiniMed the policies of insurance or copies
thereof or other evidence satisfactory to MiniMed of such coverage. Each insurer
under such policies shall agree by endorsement on the policies issued or by
independent instrument to MiniMed that it will give MiniMed 30 days prior
written notice of the effective date of any alternation or cancellation of any
such policy. The obligations of the parties under this paragraph shall terminate
upon termination or expiration of the term of the Lease entered into pursuant to
Section 5, except that MRG's obligations with respect to insurance shall
terminate as such earlier date as MiniMed exercises its option to
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cause MRG to purchase the Equipment pursuant to Section 2.4 and the inventory
pursuant to Section 3.3.
MiniMed will provide MRG with such assistance as MRG may
reasonably request in establishing an inventory tracking system. The parties
acknowledge their understanding and agreement that any such system will be
established in a manner which maintains the independent integrity of MiniMed's
information systems and does not afford MRG personnel access to those systems.
All direct out-of-pocket costs and expenses and a proportional portion of
personnel costs and expenses incurred by MiniMed in connection with assisting
MRG to establish the inventory tracking system will be reimbursed by MRG
promptly upon delivery of written request accompanied by appropriate
documentation with respect to the costs and expenses.
3.3. PURCHASE OF INVENTORY. In the event MiniMed exercises its
right pursuant to Section 2.5 to cause MRG to purchase the Equipment, MRG will
also purchase all of MiniMed's then remaining inventory relating to the
implantable pump system for an amount equal to MiniMed's cost of such inventory,
as reflected in the perpetual inventory system maintained by MiniMed, less a
reserve that the parties have agreed upon for excess and obsolescence equal to
$1 million. The purchase price for the inventory shall be paid in the manner
provided in Section 2.4.
3.4 ABSENCE OF WARRANTIES. MRG ACKNOWLEDGES THAT MINIMED MAKES NO
REPRESENTATIONS OR WARRANTIES OF ANY KIND, EXPRESS OR IMPLIED, AS TO THE
SUITABILITY, DURABILITY, FITNESS FOR ANY PURPOSE, MERCHANTABILITY, CONDITION,
QUALITY OR OTHERWISE OF THE INVENTORY AND THAT MRG IS PURCHASING THE INVENTORY
"AS IS." EXCEPT AS PROVIDED IN THIS SECTION 3.4 BELOW, MINIMED SHALL HAVE NO
OBLIGATION TO INSTALL, ERECT, TEST, ADJUST, REPAIR OR TAKE BACK ANY OF THE
INVENTORY. EXCEPT AS PROVIDED IN THIS SECTION 3.4 BELOW, NO DEFECT, LACK OF
MERCHANTABILITY OR SUITABILITY, UNFITNESS FOR ANY PURPOSE OR OTHER CONDITION OR
QUALIY OF THE INVENTORY SHALL RELEASE MRG OF THE OBLIGATION TO PAY ANY AMOUNT OR
PERFORM ANY OBLIGATION UNDER THIS AGREEMENT.
MiniMed will afford MRG the opportunity at all reasonable times
during the 30 calendar days after the date of this Agreement to inspect the
implantable pump inventory. Any items of inventory which are defective or
damaged and as to which such defect or damage is discovered during said 30 day
period will be excluded from any purchase pursuant to Section 3.1 or 3.3. In the
event of a purchase pursuant to Section 3.3 the purchase price will be reduced
by the carrying value of the damaged or defective inventory on the books of
MiniMed immediately prior to the consummation of any such purchase. If the
purchase price has already been consummated at the time the 30 day period
expires, the adjustment shall be made in the balance of the promissory note
delivered pursuant to Section 2.4, effective as of the date of the note, and
MiniMed will sign such acknowledgement or agreement as to the reduction in the
principal balance of the note as MRG may reasonably request.
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4. WORKING CAPITAL LOANS.
4.1. LINE OF CREDIT AVAILABLE. MiniMed will make available to MRG
from and after the date of this Agreement a line of credit under which MRG will
have the right to borrow from MiniMed up to an aggregate of $3 million. Such
loans will be made from time to time during the period from the date of this
Agreement through December 31, 2001 provided that MRG is not in material default
under this Agreement as provided in Xxxxxxx 00, xxxx of the Events of Default
referred to the Line of Credit Note (as defined below) has occurred and
sufficient collateral for the loans to be made has been pledged pursuant to the
Pledge Agreement referred to in Section 4.2. Any such requests from MRG shall
specify the amount to be borrowed, which shall be designated in an amount
rounded to the nearest $1,000 and shall not be less than $100,000, and MiniMed
shall cause the funds being borrowed to be wire transferred to MRG's bank
account within three business days after receipt of the written request for the
loan in accordance with wire transfer instructions provided by MRG at or prior
to the time it requested the loan. In no event shall such requests be made more
frequently than once in any one calendar week or twice in any one calendar
month.
4.2. LINE OF CREDIT NOTE. The loans made by MiniMed pursuant to
Section 4.1 shall be evidenced by a promissory note of MRG in the form of
Schedule 4.2(A) hereto (the "Line of Credit Note"), which shall be executed and
delivered by MRG to MiniMed prior to MRG's requesting any loans pursuant to
Section 4.1. The Line of Credit Note provides for such loans to bear interest at
the rate of 7% per annum with all principal and interest being due December 31,
2001 in a single, lump-sum payment. MiniMed is hereby authorized to record in
its books and records and in the schedule annexed to the Line of Credit Note the
date and amount of each loan made by MiniMed. The Line of Credit Note will be
guaranteed by Xxxxxx X. Xxxx pursuant to a Guarantee in the form of Schedule
4.2(B) hereto (the Guarantee"), which MRG will cause to be executed and
delivered to MiniMed prior to MRG's requesting any loan pursuant to Section 4.1.
The guarantee of Xx. Xxxx will be secured by a pledge of outstanding shares of
Common Stock of MiniMed pursuant to a Pledge Agreement in the form of Schedule
4.2(C) hereto which MRG will cause to be executed and delivered to MiniMed with
the Guarantee. The Pledge Agreement provides that prior to the date any loan is
to be made by MiniMed pursuant to Section 4.1, Xx. Xxxx will deliver to MiniMed,
duly endorsed in blank or accompanied by stock powers duly endorsed in blank,
certificates evidencing shares of MiniMed Common Stock having a market value at
least equal to 150% of the aggregate amount then being borrowed plus all
interest which would accrue thereon through December 31, 2001. For this purpose,
"market value" shall mean the average of the closing prices of MiniMed Common
Stock on the first 7 of the last 10 trading days next preceding the date of the
loan requested by MRG pursuant to Section 4.1. Unless such stock certificates
are delivered by Xx. Xxxx, MiniMed will have no obligation pursuant to Section
4.1 to make any such loan. MRG will not use the proceeds of any such loan to
purchase or carry any "margin stock" within the meaning of Regulation G of the
Board of Governors of the Federal Reserve System.
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5. LEASE. Concurrently with the execution and delivery of this
Agreement, MiniMed and MRG are entering into a lease with respect to certain
space in MiniMed's principal facility that is presently being used for the
Implantable Pump Business. At MRG's request and cost MiniMed will provide
maintenance services for this space. The obligations of MRG under the Lease will
be guaranteed by Xx. Xxxx pursuant to the Guarantee.
6. TRANSITION. Effective on the first business day after the
date of this Agreement, or on any day within 10 business days thereafter at
MiniMed's option, MiniMed will terminate the employ of all of the employees
listed in Schedule 5 to this Agreement, constituting all of MiniMed's employees
who are working full-time in the Implantable Pump Business. Also effective on
that date, MRG will offer employment to all said employees at the same
compensation levels and will give such employees credit for years in service
under MRG's compensation and benefit programs for the period such employees were
employed by MiniMed. All accumulated vacation and ECTO time will be credited to
the employee by MRG; MiniMed will pay MRG a lump sum equal to the value of the
accumulated vacation and ECTO time at the employees' current hourly rate or
salary rate, as the case may be. All stock options granted by MiniMed to such
employees shall be amended within 10 days after the date of this Agreement to
provide that the options shall remain in full force and effect notwithstanding
such termination of employment and will become exercisable at the same times and
with respect to the same numbers of shares as is presently provided in said
agreements, except that all previously existing provisions relating to the
termination of the options in connection with termination of employment of the
employee with MiniMed will be amended to provide that such termination
provisions apply to the termination of employment of the employee with MRG.
MiniMed also agrees, at MiniMed's sole expense, to continue the health insurance
benefits of these employees for a period of at least 30 days beyond the date of
transfer.
MiniMed will also make available for a period of six months after
the date of this Agreement the services of its supervisorial personnel for
shipping, receiving, manufacturing, engineering, stockrooms, materials
management, purchasing, quality assurance and document control, all at no cost
to MRG. During said six-month period, MiniMed will also provide at no cost to
MRG transitional support for the Implantable Pump Business consisting of
accounting, finance, information systems, legal (limited to contractual and
related matters with third parties as they relate to the transferred activities
and business relationship) and payroll. MRG will be responsible for
establishing, at its own cost and expense, information systems for its employees
separate and apart from, and not compromising the separate integrity of,
MiniMed's information systems.
If employees currently performing Reliability and Quality
Engineering functions do not transfer to MRG then, to the extent such employees
remain with MiniMed, MiniMed will provide transitional support for these
functions equivalent to 75% of full time of two employees for the two functions
for a period of three months after the date of this Agreement followed by 25% of
full time of two employees for the functions for the next three months. MRG will
reimburse MiniMed monthly in arrears on the last day of each calendar month for
the
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portion of the salary of such employees that is proportional to the time to be
spent (75% or 25%) plus 27 % of such salary.
MiniMed will allow MRG employees to participate in MiniMed's
corporate training program known as "MiniMed University" courses if, as and when
offered by MiniMed, on a basis which does not interfere with the implementation
of the program for MiniMed employees and MiniMed's program with the State of
California Educational Training Panel. MRG shall reimburse MiniMed for that
portion of any costs directly related to these courses that equals the
proportion of the number of MRG employees attending to all employees attending.
7. REPRESENTATIONS AND WARRANTIES OF MINIMED. MiniMed hereby
represents and warrants to MRG as follows:
7.1. POWER AND AUTHORITY. MiniMed is a corporation duly
organized, existing and in good standing under the laws of the State of Delaware
and has full corporate power and authority to enter into and carry out the terms
of this Agreement and every other agreement and document specifically referred
to herein to be entered into by it. The execution, performance and delivery of
this Agreement and of such other agreements and documents will not violate or
constitute an event of default (with or without the giving of notice and/or
passage of time) under the terms and provisions of any agreement, document or
instrument to which MiniMed is a party or by which MiniMed is bound or a
violation of any provision of law or any order, judgment or decree to which
MiniMed is subject or by which it is bound. All corporate proceedings required
to be taken by or on behalf of MiniMed to authorize it to enter into this
Agreement and the other agreements and documents specifically referred to herein
have been duly and properly taken. No further consent of any person or entity is
required in connection with the execution and delivery of, or the performance by
MiniMed of its obligations under, this Agreement or any other agreement or
document specifically referred to herein to be entered into by MiniMed.
7.2. TITLE TO EQUIPMENT AND INVENTORY. MiniMed has good and
marketable title to the Equipment and will have, at the time of sale pursuant to
Section 3, good and marketable title to the inventory referred to in Section 3.
8. REPRESENTATIONS AND WARRANTIES OF MRG. MRG hereby represents
and warrants to MiniMed that MRG is a limited liability company duly formed,
existing and in good standing under the laws of the State of California. MRG has
the requisite power and authority to enter into and carry out the terms of this
Agreement and every other agreement and document specifically referred to herein
to be entered into by MRG. The execution, performance and delivery of this
Agreement and of such other agreements and documents will not violate or
constitute an event of default (with or without the giving of notice and/or
passage of time) under the terms and provisions of any agreement, document or
instrument to which MRG is a party or by which MRG is bound or a violation of
any provision of law or any order, judgment or decree to which MRG is subject or
by which it is bound. All proceedings required to be taken by or on behalf of
MRG to authorize it to enter into this Agreement and the other
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agreements and documents specifically referred to herein have been duly and
properly taken. No further consent of any person or entity is required in
connection with the execution and delivery of, and the performance by MRG of its
obligations under, this Agreement or any other agreement or documents
specifically referred to herein to be entered into by MRG.
9. NO SOLICITATION OF EMPLOYEES Except as provided in Section 6, for
a period of five years after the date of this Agreement neither MiniMed nor MRG
will actively solicit or induce any employee of the other party to terminate his
or her employment by the other party while such employee is employed by the
other party or within one year after the termination of the employment of the
employee with the other party, whether by the employee or by the other party.
Unless agreed to in writing by the other Party hereto, in the event that either
MiniMed or MRG receives, without solicitation, an application from an employee
of the other party for an open position and the party receiving said application
hires said employee the party hiring the employee will pay the other party a fee
equal to 25% of the employee's annual salary.
10. NOTICES Any notice, request, demand or other communication
required or permitted hereunder shall be in writing and shall be deemed to have
been given (a) if personally delivered, when so delivered, (b) if mailed,
seventy-two (72) hours after having been placed in the United States mail,
registered or certified, postage prepaid, addressed to the party to whom it is
directed at the address set forth below or (c) if given by telex or telecopier,
when such notice or other communication is transmitted to the telex or
telecopier number specified below and the appropriate answer back or telephonic
confirmation is received:
If to MiniMed:
MiniMed Inc.
00000 Xxx Xxxxxxxx Xxxx
Xxxxxx, Xxxxxxxxxx 00000
Attention: General Counsel
Telephone No.: (000) 000-0000
Telecopier No: (000) 000-0000
With a copy to:
Xxxxxx, Xxxx and Xxxxxxxx LLP
000 Xxxxx Xxxxx Xxxxxx
Xxx Xxxxxxx, XX 00000
Attention: Xxx X. Xxxxxxx
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
If to Medical Research Group, LLC:
Medical Research Group, LLC
00000 Xxx Xxxxxxxx Xxxx
Xxxxxx, Xxxxxxxxxx 00000
Attention: President
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Telephone No.: (000) 000-0000
Telecopier No: (000) 000-0000
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With a copy to:
Lyon & Lyon LLP
000 X. Xxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000-0000
Attention: Xxx X. Xxxxxxxx, Esq.
Telephone No.: (000) 000-0000
Telecopier No: (000) 000-0000
11. ASSIGNMENT. Neither party shall be entitled to assign its rights
or to delegate its duties under this Agreement, whether by law or otherwise,
without the express written consent of the other party except that either party
may assign this Agreement to (a) a wholly owned subsidiary of said party, or (b)
a third party who acquires either party by merger or acquisition of 80% or more
of the outstanding capital stock of said party, or (c) a third party who
acquires all or substantially all of the assets of either party, so long as the
assignee agrees to assume all of the obligations of said party under this
Agreement.
12. SEVERABILITY. The provisions of this Agreement are severable, and
if any one or more provisions may be determined to be illegal or otherwise
unenforceable, in whole or in part, the remaining provisions, and any partially
unenforceable provisions to the extent enforceable, shall nevertheless be
binding and enforceable.
13. SURVIVAL OF REPRESENTATIONS, WARRANTIES AND AGREEMENTS. All
representations, warranties and agreements made by MiniMed or MRG in this
Agreement shall survive the date hereof and any investigations, inspections,
examinations or audits made by or on behalf of any party hereto.
14. ENTIRETY. This Agreement constitutes the entire agreement between
the parties hereto pertaining to the subject matter hereof, and supersedes all
prior agreements, understandings, negotiations and discussions, whether oral or
written, relating to the subject matter of this Agreement, except the Mutual
Nondisclosure Agreement between the parties with an effective date of January 2,
1996 and the Implantable Pump License and Distribution Agreement and the License
Option and Exclusive Marketing Agreement between the parties both dated the date
as this Agreement.
15. AMENDMENT; WAIVER. This Agreement may be amended, modified,
superseded or canceled, and any of the terms and conditions hereof may be
modified, only by a written instrument executed by the parties or, in the case
of a waiver, by the party waiving compliance. No supplement, modification,
waiver or termination of this Agreement shall be valid unless it has been
reduced to writing and executed by the party to be bound thereby. The failure of
a party at any time or from time to time to require performance of any provision
hereof shall in no manner affect the right of such party at a later time to
enforce the same, and no waiver of any nature, whether by conduct or otherwise,
in any one or more instances, shall be deemed to be or considered as a further
or continuing waiver of any other provision of this Agreement.
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16. SETTLEMENT OF DISPUTES.
16.1 DISPUTES AND ARBITRATION. Unless the relief sought requires the
granting of equitable relief pursuant to Section 16.1.1, below, any dispute or
controversy (whether based upon the law of torts or of contracts) arising in
connection with this Agreement, including (a) disputes relating to the formation
of this Agreement or the performance, interpretation, enforcement, application
or validity of its provisions, and (b) issues that may be based upon or arise
out of disputes that MRG or MiniMed has with third parties, shall upon the
demand of either party hereto be resolved by arbitration held at Los Angeles,
California, in accordance with the arbitration procedures established by the
Rules of Commercial Arbitration of the American Arbitration Association, except
as otherwise provided herein.
16.1.1 INTERIM COURT RELIEF. If in connection with any such
dispute or controversy either party seeks the issuance of a temporary
restraining order or the granting of preliminary injunctive relief, the court
shall have the right and power to grant the requested relief on a temporary
basis pending the resolution of factual issues by arbitration in accordance with
Section 16.1.2, and to thereafter enforce any award made in such arbitration
proceedings.
16.1.2 CONDUCT OF ARBITRATION. The following principles and
conditions will apply in all arbitration proceedings conducted pursuant to this
Agreement:
A. During the thirty (30) days following the date that the
written notice is given by either party demanding the submission of the dispute
to arbitration, MRG and MiniMed will endeavor to select three independent
arbitrators having no substantial economic or other material relationship with
either MRG or MiniMed. If the issue in dispute involves matters of patents,
licensing or technology, the arbitration panel shall include at least two
persons who are knowledgeable in such matters. If the parties cannot mutually
agree on the three arbitrators within such thirty (30)-day period, then each
party will, within seven (7) days after the expiration of such thirty (30)-day
period, select one independent arbitrator and those two arbitrators shall select
the third independent arbitrator.
B. Discovery of evidence shall be conducted expeditiously by
the parties and in accordance with the general principles embodied in the
California Civil Discovery Act. To the extent that it is necessary, either party
may apply to a court of competent jurisdiction for assistance in obtaining
discovery of evidence for presentation to the arbitrators.
C. The arbitrators shall issue findings of fact and
conclusions of law.
D. The arbitration will be conducted as a case would be
represented to a trial court without a jury. The arbitrators in their discretion
may hear any type of evidence, including hearsay evidence. The arbitrators shall
render a written decision, setting forth their findings of fact and the
principles upon which they relied in making their award and that decision will
be final and binding on the parties.
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16.1.3 AWARD BECOMING FINAL. An arbitration award from which an
appeal is not taken within such thirty (30) day period shall be conclusive and
binding on each party and may be enforced by a court of competent jurisdiction.
16.2 COSTS OF ENFORCEMENT. Should any action or proceeding be
necessary to construe or enforce this Agreement or any arbitration award made
pursuant to Section 16.1, above, then the party prevailing in any such action or
proceeding shall be entitled to recover all court costs and reasonable
attorneys' fees, to be fixed by the court and taxed as part of any judgment
entered therein, and the costs and fees incurred in enforcing or collecting any
such judgment.
17. EFFECT OF DEFAULT. No misrepresentation or breach of warranty or
covenant by either party under this Agreement shall excuse the performance of
any obligation of the other party or give the other party the right to terminate
this Agreement unless such default is material to the Agreement taken as a
whole. For this purpose any failure to pay money shall be deemed material if and
only if:
(a) the money is not paid when due and such failure to pay is not
cured within 30 days after delivery of written notice from the other
party of the default; and
(b) the amount involved exceeds $25,000.
For this purpose the Implantable Pump License and Distribution Agreement
referred to in Section 1, the Lease referred to in Section 5 of this Agreement
and the License Option and Contingent Exclusive Marketing Agreement between the
parties dates as of the same date as this Agreement shall be considered
completely separate agreements. No default under any such other documents shall
affect the rights and obligations of the parties under this Agreement, and no
default under this Agreement shall affect the rights and obligations of the
parties under those other documents. Nothing in this Section 17 is intended to
amend or affect in any way the terms of the Secured Promissory Note referred to
in Section 2.4 or the Line of Credit Note.
18. GOVERNING LAW. The validity, construction and interpretation of
this Agreement shall be governed in all respects by the laws of the State of
California applicable to contracts made between residents of that State and to
be performed wholly within that State.
19. HEADINGS. Section and subsection headings are not to be
considered part of this Agreement and are included solely for convenience and
reference and in no way define, limit or describe the scope of this Agreement or
the intent of any provisions hereof.
20. THIRD PARTIES. Nothing in this Agreement, expressed or implied,
is intended to confer upon any person other than MiniMed or MRG any rights or
remedies under or by reason of this Agreement.
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21. COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each one of which shall be deemed an original, but all of which
shall constitute one and the same instrument.
22. JURISDICTION.
22.1 ACCEPTANCE OF JURISDICTION. Each party hereto irrevocably submits
to the exclusive jurisdiction of any court of the State of California or the
United States of America sitting in the City of Los Angeles over any suit,
action or proceeding arising out of or relating to this Agreement. Any
arbitration proceedings according to Section 16.1 shall be conducted in the City
of Los Angeles. To the fullest extent it may effectively do so under applicable
law, each party irrevocably waives and agrees not to assert, by way of motion,
as a defense or otherwise, any objection that it may now or hereafter have to
the establishment of the venue of any such suit, action or proceeding brought in
any such court and any claim that any such suit, action or proceeding brought in
any such court has been brought in an inconvenient forum.
22.2 ENFORCEMENT OF JUDGMENT. Each party hereto agrees, to the fullest
extent it may effectively do so under applicable law, that a judgment in any
suit, action or proceeding of the nature referred to hereinabove brought in any
such court shall be conclusive and binding upon such person and its successors
and assigns and may be enforced in the courts of the United States of America or
the State of California (or any other courts to the jurisdiction of which such
person is or may be subject) by a suit upon such judgment.
22.3 EFFECT ON ARBITRATION. Nothing in this Section 22 shall be
construed to limit the force or effect of Section 16.
23. ATTORNEYS' FEES. In the event of any litigation or arbitration
arising out of or relating to this Agreement, the prevailing party shall be
entitled to recover its court costs and reasonable attorneys' fees, including
such costs and fees incurred in connection with any appeal or other similar
proceeding.
MEDICAL RESEARCH GROUP, LLC, MINIMED INC.
a California limited liability company
By AEM MiniMed Corp., its Managing Member By: /s/ XXXXXXXX X. XXXXX
-------------------------------------
Xxxxxxxx X. Xxxxx
By: /s/ XXXXXX X. XXXX President and Chief Operating Officer
--------------------------------
Xxxxxx X. Xxxx
President By: /s/ XXXX X. XXXXXX
-------------------------------------
Xxxx X. Xxxxxx
By: /s/ XXXXXX XXXXX Senior Vice President and
--------------------------------- General Counsel
Xxxxxx Xxxxx
President, MRG, LLC
