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EXHIBIT 10.1
OPTION & LICENSE AGREEMENT
1. INTRODUCTION
THIS AGREEMENT is between the UNIVERSITY OF SOUTHERN CALIFORNIA,
(hereinafter USC) a California nonprofit corporation with its principal place
of business at Xxxxxxxxxx Xxxx, Xxx Xxxxxxx, Xxxxxxxxxx 00000, and Rubicon
Medical, a Limited Liability Company, with its principal place of business at
0000 Xxxx Xxxxxxxxx, Xxxx Xxxx Xxxx, Xxxx 00000 (hereinafter Licensee).
WHEREAS USC warrants that it is the owner and that it has the right to
exclusively license those inventions which are the subject matter of USC File
No. 2651 entitled "Balloon Protection Guide Wire Device For Carotid Balloon
Angioplasty and Stenting" and USC Pile 2639 entitled "New Balloon-Inflated
Carotid Artery Stent to Assist in Carotid Artery Balloon Angioplasty" of which
the inventor is Xxxxxx X. Xxxxxxxxxx, M.D. of USC (hereinafter Inventor);
WHEREAS Licensee desires to obtain an exclusive license in the defined
FIELD OF USE to manufacture and market products utilizing the inventions as
hereinafter defined;
WHEREAS, USC is willing to grant a worldwide, exclusive license in the
defined FIELD OF USE to Licensee subject to the terms, conditions,
limitations, and restrictions set forth below;
NOW, THEREFORE, in consideration of the covenants herein contained, the
parties agree as follows:
2. DEFINITIONS
For all purposes of this Agreement the following terms shall have the
meanings specified below:
a. The term "PATENT" or "PATENTS" shall mean any and all patent
applications filed on the invention listed in Appendix A (Appendix A may be
added to from time to time by USC and USC shall notify Licensee of any such
additions), any and all patents issued thereon or any continuation,
continuation-in-part, division, extensions or reissue thereof, and any and all
foreign patents issuing from any application filed which corresponds to claims
contained in any of the foregoing patents or applications.
b. "PRODUCT" or "PRODUCTS" shall mean any article, composition,
apparatus, substance, chemical, material, method or service which is made,
used, distributed or sold by Licensee which:
i. is covered in whole or in part by one or more pending or unexpired
claims contained in a PATENT in the country in which the "PRODUCT(S)" is made,
used, distributed or sold;
ii. is manufactured using a method or process which is covered in whole
or in part by one or more pending or unexpired claims contained in a PATENT in
the country in which (a) the PRODUCT(S) is made, use, distributed or sold, or
(b) the method or process is used or sold; or
iii. the use of which is covered in whole or in part by one or more
pending or unexpired claims contained in a PATENT in the country in which (a)
the PRODUCT(S) is made, used, distributed or sold, or (b) the method or
process is used or sold;
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A PRODUCT is covered by a pending or unexpired claim of a PATENT if in
the course of manufacture, use, distribution or sale, it would, in the absence
of this Agreement, infringe one or more claims of the PATENT which has not
been held invalid by a court from which no appeal can be taken.
C. "FIELD OF USE" shall mean diagnostic and/or therapeutic devices to be
used in the treatment or management of patients via the carotid artery or
other arteries or veins.
d. "NET SALES PRICE" shall mean the gross billing price of any PRODUCT
received by Licensee or its SUBLICENSEE for the sale or distribution of any
PRODUCT, less the following amounts actually paid by Licensee or SUBLICENSEE:
i. discounts allowed;
ii. returns;
iii. transportation charges or allowances;
iv. packing and transportation packing material costs (not including
product containers or product packing containers as manufactured by the
Company);
v. customs and duties charges;
vi. sales, transfer and other excise taxes or other governmental charges
levied on or measured by the sales but no franchise or income tax of any kind
whatsoever; and
vii. special permits, licensing, and regulatory compliance costs directly
related to the sale of a PRODUCT.
Every commercial use or disposition of any PRODUCT, other than products
(including samples) distributed for demonstrations, teaching or regulatory
compliance and in addition to a bona fide sale to a customer, shall be
considered a sale of such PRODUCT. The NET SALES PRICE, in the case of a use
or disposition other than a bona fide sale, shall be equivalent to the then
payable NET SALES PRICE of such PRODUCT in an arm's length transaction.
e. SUBLICENSEE shall mean any third party licensed by Licensee to make,
or sell any PRODUCT in accordance with the terms of this Agreement.
f. "EFFECTIVE DATE" of this Agreement shall be the date when the last
party has signed this Agreement.
3. OPTION PHASE
a. USC hereby grants Licensee the exclusive right to conduct various
technical, pre-clinical, marketing, patent, and other studies on PRODUCTS in
the FIELD OF USE during a six (6) month period commencing on the collective
date of this Agreement. The option period may be extended for one additional
six (6) month period by mutual written agreement of the parties which- shall
not be unreasonably withheld.
b. The consideration for the grant of this option phase shall be the
market studies and costs related to FDA applications and patent expenses
incurred subject to Paragraph 7. Licensee shall provide USC reports of the
results of the market studies, and FDA filings and correspondence within ten
(10) days of the expiration of the option phase.
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4. LICENSE PHASE
a. In consideration of the license fee and royalties, and subject to the
terms and conditions, as set forth in this Agreement and effective upon
written notification to USC during the option phase that Licensee desires to
license the PATENT(S), USC hereby grants to Licensee:
i. the exclusive worldwide license in the FIELD OF USE to use the
PATENT(S) to manufacture and sell the PRODUCT(S); and
ii. the right to- grant sublicenses to any PATENT licensed exclusively
hereunder, provided that each SUBLICENSEE agrees to be bound by the terms and
conditions of this Agreement applicable to SUBLICENSEES.
b. If USC is not notified of Licensee's desire to enter the license phase
by the end of the option phase or any extensions thereto, this Agreement and
the license granted herein shall immediately terminate. Payments referred to
in Section 3 shall not be refunded upon such termination.
c. All licenses pursuant to 4.a. and 4.b. to inventions conceived or
first actually reduced to practice during the course of research funded by a
U.S. federal agency are subject to the rights, conditions and limitations
imposed by U.S. law. USC agrees to use reasonable efforts to comply with the
requirements of such laws and applicable regulations. The words "exclusive
licenses as used herein shall mean exclusive except the royalty free non-
exclusive license granted to the U.S. government by USC pursuant to 35 USC
Section 202(c)(4) for any PATENT claiming an invention subject to 35 USC
Section 201 and except for the rights of USC and Inventors as set forth in
Paragraphs 5 and 6.
d. For the rights and privileges granted under this Agreement and subject
to the terms and conditions of this Agreement, Licensee will pay to University
an initial license fee of $5,000 within ten (10) days of date that the
Licensee notifies the University that it is exercising its Option.
5. ROYALTY
a. On all sales of PRODUCTS anywhere in the world by Licensee, Licensee
shall pay USC a royalty Or three percent (3 %)of the NET SALES PRICE.
b. If any PRODUCT is manufactured and sold under sublicense from the
Licensee, the Licensee shall pay USC a royalty equal to twenty-five percent
(25%) of all of the Licensee's revenue received from the sublicense, including
but not limited to earned royalty, prepaid royalty and license fees.
c. The Licensee will pay an annual minimum royalty. The minimum royalty
on the PRODUCTS will be Five Thousand Dollars ($5,000) commencing on the
earliest quarterly due date (as specified in Paragraph 5.e. herein) following
the second anniversary of the EFFECTIVE DATE and annually thereafter. Upon
expiration or termination of this Agreement, the minimum royalty for the final
year, prorated to the number of days the Agreement is in force during the
final year, shall be due within fifteen (I5) days of the effective date of
termination. Should Licensee fail to make earned royal payments sufficient to
meet said royally requirements, it may pay the difference between the earned
royalty and the minimum royalty requirement to keep this Agreement in force.
d. Licensee shall pay such royalties to USC on a calendar quarterly
basis. With each quarterly payment, Licensee shall deliver lo USC a full and
accurate accounting to include at least the following information:
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i. Quantity of each PRODUCT sold (by country) by Licensee and its
SUBLICENSEES;
ii. Total receipts for each PRODUCT (by country);
ill. Quantities of each PRODUCT used by Licensee and its SUBLICENSEES;
iv. Names and addresses of SUBLICENSEES of Licensee;
v. Total number of PRODUCTS manufactured (by country); and
vi. Total royalties payable to USC.
e. In each year the amount of royalty due shall be calculated quarterly
as of March 31, June 30, September 30 and December 31 and shall be paid
quarterly within the thirty next (30) days following such date. Every such
payment shall be supported by the accounting prescribed in Paragraph 5.d. and
shall be made in United States currency. Whenever for the purpose of
calculating royalties conversion from foreign currency shall be required, such
conversion shall be at the rate of exchange thereafter published in the Wall
Street Journal for the business day closest to the applicable date of sale of
each PRODUCT.
f. The royalty payments due under this Agreement shall, if overdue, bear
interest until payment at a per annum rate equal to one and a half percent
(1.5%) above the prime rate in effect at 5:00PM U.S. Eastern Time on the due
date, not to exceed the maximum permitted by law. The payments of such
interest shall not preclude USC from exercising any other rights it may have
as a consequence of the lateness of any royalty payment.
g. The royalty payments due under this Agreement may be set-off by any
royalty paid to third parties as a result of a judgement or settlement arising
out of a defensive controversy (Paragraph 8.a.) up to fifty percent (50%) of
what would otherwise be due USC.
6. RIGHTS RETAINED BY UNIVERSITY
Notwithstanding the exclusive license granted in Xxxxxxxxx 0x, XXX and
Inventors will have the absolute, nontransferable right to use the technology
covered by the PATENT(S) and all improvements thereof, for conducting research
and educational purposes.
7. PATENT PROSECUTION
a. Licensee shall retain patent counsel reasonably acceptable to USC and
Licensee shall file, prosecute and maintain, the PATENT(S) during the course
of this Agreement. Should Licensee require the filing of foreign patents,
Licensee shall take responsibility for filing, prosecuting and maintaining
said foreign patents.
b. USC shall have the right to review, consult and comment on all filing
and prosecution. Accordingly, Licensee shall, or it shall require patent
counsel to, (i) timely provide USC with copies of all official actions,
notices or other correspondence received from the U.S. Patent and Trademark
Office or any foreign equivalent, (ii) provide USC with draft responses and
any correspondence sent to the U.S. Patent and Trademark Office or any foreign
equivalent and (iii) provide USC with the original issued patent documents,
certificates or the equivalents thereof. Licensee shall not abandon any patent
application or significantly narrow the scope of a patent application without
prior written notice to USC. Such notice shall be made at least thirty (30)
days prior to the potential loss of rights.
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c. Licensee shall pay all reasonable legal expenses incurred in filing,
prosecuting and maintaining the U.S. and foreign PATENT(S). Licensee shall
reimburse USC within thirty (30) days of invoice, all reasonable legal
expenses incurred by USC prior to, and including, the transfer of files from
USC's attorney to the patent attorney selected by Licensee. These legal
expenses shall include the attorneys' and agents' fees, foreign filing fees
and out-of-pocket costs associated with responding to office actions and any
other reasonable fees and costs directly related to obtaining and/or
maintaining the PATENT(S).
d. If the Licensee elects (i) not to pursue a PATENT or (ii) to terminate
the prosecution or maintenance of a PATENT in any country, the Licensee
surrenders its right to make, use or sell PRODUCTS covered by the non-elected
PATENT in that particular country and shall grant to USC the exclusive rights
previously granted to Licensee, without limitation, for that country. Licensee
agrees to execute all necessary documents to carry out this grant of rights to
USC. Payments referred to in Paragraphs 7.a. and 7.b shall not be refunded
upon such non-election or termination.
8. PATENT INFRINGEMENT
a. Defensive Controversy.
Licensee shall promptly notify USC of all claims, allegations and
notifications of infringement of third party patents. Except for the placing
in escrow of a portion of royalties as referred to hereinafter, USC shall have
no obligation or liability in the event that legal action is brought against
Licensee for patent infringement. Such obligation and liability shall be borne
by Licensee. Licensee may choose legal counsel and defend the patent
infringement lawsuit. During such lawsuit, Licensee may place all of the
royalties derived from sales of the PRODUCT in the country where such lawsuit
is pending in an interest-bearing escrow account. The escrow account shall be
established in a bank mutually acceptable to both parties under escrow
instructions insulating the funds from claims of any creditor. Upon
termination of the action, one-half (1/2) of any judgment amount, reasonable
attorneys' fees and costs, may be paid from this escrow account. Should the
settlement of any such patent infringement lawsuit involve payment of
royalties by Licensee to a third party for the continued right to manufacture,
use, and sell the PRODUCT, then funds in the escrow account and royalties
payable to USC may be applied against up to one-half (1/2) of such royalties to
a third party. Any funds thereafter remaining in the escrow shall be paid to
USC. The above shall constitute USC's sole liability and responsibility in the
event of such action. Royalties paid to third parties as provided for above
shall be included when determining whether the minimum royalty provided for in
this Agreement has been paid in a given year. During the patent infringement
litigation both parties shall keep each other informed in writing of
significant developments in the lawsuit.
b. Offensive Controversy.
Licensee shall promptly notify USC of any potential infringement of a
PATENT. In the event that a third party infringes on a PATENT, Licensee shall
have the right but not an obligation to bring legal action to enforce any such
patent. If Licensee exercises such right, Licensee shall select legal counsel
and pay all legal fees and costs of prosecution of such action. In the event
that Licensee shall choose not to take such action, USC shall have the right,
at its option and at its own expense, to prosecute any action to enjoin such
infringement or to prosecute any claim for damages. The party prosecuting any
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such action shall be entitled to retain any funds received as a result of
settlement or judgment of such action. The parties may also agree to jointly
pursue infringers. After deduction and payment to the parties of their
respective costs and fees (including without limitation reasonable attorneys'
fees) incurred in prosecuting any such actions, the net funds obtained as a
result of settlement or of judgment of any such jointly prosecuted action
shall be divided in the following manner:, 25% of all net funds shall be
divided equally by the parties and 75% of all the net funds shall be divided
between the parties in the proportion to the amount of legal fees and costs
incurred by the parties in the prosecution of such actions. If funds are
insufficient to pay all costs and fees then all of the funds shall be paid to
the parties in said proportion.
c. During any litigation hereunder both parties shall keep each other
timely informed of any significant development in the litigation and provide
all reasonably requested technical assistance. During any said controversy,
full royalty payment shall continue, except as otherwise provided herein.
9. RECORDS
Licensee and SUBLICENSEES shall keep complete, true and accurate books of
account and records for the purpose of showing the derivation of all amounts
payable to USC under this Option and License Agreement. Said books and records
shall be kept at Licensee's principal place of business for at least four (4)
years following the end of the calendar year to which they pertain and shall
be open at all reasonable times, but not in excess of more than once per
twelve (12) month period, for inspection by a representative of USC for the
purpose of verifying Licensee's royalties statement or Licensee's compliance
in other respects with this Option and License Agreement. All information
obtained as a result of such audit shall be maintained in confidence, except
that the representative may disclose to USC the aggregate amount of royalties
due to USC during each year, as determined in such audit. Should an audit by
USC show an underpayment of royalties by more than 10%, Licensee shall
immediately pay such underpayment and all interest, as well as for USC's
reasonable audit expenses.
10. SERVICES OF INVENTORS
USC shall make reasonable efforts to make Inventors available during
regular business hours to answer questions concerning certain technical
aspects of the technology. Should Licensee desire to use the services of
Inventors for further testing and/or market studies of the technology, a
separate research and development and/or consulting agreement should be
negotiated with Inventors, in the case of a consulting agreement, or the USC
Office of Contracts and Grants, in the case of a research and development
agreement.
11. SUBLICENSE PERMISSION
Licensee may sublicense the PATENT(S) only with prior written permission
from USC, which permission will not be unreasonably withheld. Notwithstanding
the foregoing, no permission will be granted for a sublicense unless the
SUBLICENSEE agrees in writing to be bound by the terms of this Agreement.
12. PATENT MARKING
Licensee shall use reasonable efforts to place all appropriate patent and
other intellectual property notices, markings and indicia on product and
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marketing literature for the PRODUCTS as needed to protect the patent and
other intellectual property rights of USC and right for damages for
infringement thereof.
13. PUBLICATIONS
Nothing in this Agreement shall limit or prevent USC or Inventors from
publishing any information about the PATENT(S) provided USC provides to
Licensee prior notice of such publication as follows: (i) USC shall inform
Licensee of the proposed publication, providing a copy of the proposed
publication for confidential review by Licensee; (ii) within thirty (30) days
of receipt by Licensee of the copy of the proposed publication, Licensee shall
notify USC, in writing, whether Licensee desires to pursue intellectual
property rights in any invention disclosed in the proposed publication and
(iii) if Licensee does desire to pursue such rights, USC shall ensure that,
unless otherwise expressly agreed to by Licensee, publication does not occur
sooner than three month after receipt, by Licensee, of the copy of the
proposed publication or until a patent application is filed covering such
invention, whichever occurs earlier. If Licensee elects not to pursue
intellectual property rights that may be disclosed by such publication, then
USC shall be free to allow publication at any time upon notice by Licensee or
upon the expiration of the initial thirty (30) day notice period, whichever
occurs earlier.
14. PUBLICITY
Neither party shall use the name, trade name, trademark or other
designation of the other party in connection with any products, promotion or
advertising without the prior written permission of the other party.
15. ASSIGNMENTS/TRANSFERS
Licensee may not assign or transfer a part of this Agreement to any third
party without the prior written permission of USC, which permission shall not
be unreasonably withheld. However, the Licensee may assign the entire
Agreement to successors of the entire business of the PRODUCTS if the
successor agrees to be bound by this Agreement and prior written notice is
provided to USC.
16. TERMINATION
a. Upon the breach of or default under this Option and License Agreement
by either party, the non-breaching party may terminate this Option and License
Agreement by forty-five (45) days written notice to the breaching party. Said
notice shall be effective at the end of such period unless during said period
breaching party shall remedy such defect or default. Licensee may also
terminate this Agreement at any time, for any reason, by providing USC a sixty
(60) days Written notice. No option fees, license fees, or royalties shall be
returnable. This Agreement may also be terminated immediately by USC upon
notice to Licensee upon the occurrence of any of the following: (i) Licensee
attempts to use, sublicense, transfer or assign its rights or obligations
under this Agreement in any manner contrary to the terms of this Agreement or
in derogation of USC's proprietary rights; (ii) Licensee fails to obtain and
maintain the insurance coverages required by Paragraph 24 hereof; or (iii)
Licensee is determined to be insolvent or makes an assignment for the benefit
of creditors, or has a bankruptcy petition filed by or against it, or a
receiver or trustee in bankruptcy or similar officer is appointed to take
charge of all or part of Licensee's property. Upon termination of the
Agreement all rights granted to or provided by each party to the other shall
automatically and irrevocably revert to the granting party.
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b. Surviving any termination are:
i. Licensee's obligation to pay royalties accrued or accruable.
ii. Licensee's obligation of Paragraph 9 to keep and allow a final audit.
iii. Any cause of action or claim of Licensee or USC, accrue or to
accrue, because of any breach or default by the other party.
iv. The provisions of Paragraphs 22, 23 anal 24.
c. Upon termination of this Agreement, Licensee agrees to immediately
discontinue the manufacture and sale of the PRODUCTS and the use of the
PATENT(S). Within travesty (20) days after such termination, Licensee shall
provide USC with a written inventory of all PRODUCTS currently in its stock as
of the date of termination (the "INVENTORY"). USC shall have the option to
grant to Licensee the privilege of disposing of such INVENTORY at its normal
prices, unless discounted prices are expressly authorized by USC, within three
(3) months after said termination. Licensee shall dispose of this INVENTORY
only to customers who had previously purchased PRODUCTS from Licensee during
the term of this Agreement, and in no event shall Licensee sell such INVENTORY
to wholesalers, diverters, jobbers or any other entity which does not sell at
retail exclusively or to any one else who intends to sell such INVENTORY at
close-out. The disposition of all such INVENTORY, however, shall be subject to
all of the terms and conditions of this Agreement. After the three (3) month
sell-off period, Licensee shall destroy or return to USC all remaining unsold
PRODUCTS, and all packaging and marketing materials, and shall certify their
destruction or return to USC specifying the number of each destroyed or
resumed. All royalty obligations, including any unpaid portions of the minimum
royalty, shall be accelerated and shall become immediately due and payable. In
addition, Licensee shall immediately deliver to USC (i) all materials relating
to the PATENT(S), together with all copies thereof, all at no cost whatsoever
to USC.
17. NOTICES, REPORTS AND PAYMENTS
Any notice, report or payment permitted or required under this Agreement
shall be in writing, and shall be sent or delivered to the receiving party at
the address set forth below or at such address as either party may from time
to time designate in writing.
USC: Office of Patent and Copyright Administration
University of Southern California
0000 Xxxxx Xxxx Xxxxxx, Xxxxx 000
Xxx Xxxxxxx, Xxxxxxxxxx 00000-0000 (U.S.A.)
Attn: Director
LICENSEE: Rubicon Medical, LLC
0000 Xxxx Xxxxxxxxx
Xxxx Xxxx Xxxx, XX 00000
Attn: Xxxxxxx X. Xxxxx
Executive Vice President
18. PARAGRAPH HEADINGS
Paragraph headings are for the convenience of this Agreement only and
shall not add to or detract from any of the terms or provisions.
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19. SEVERABILITY
If any provision of this Agreement is held invalid under any law
applicable to the parties, SUBLICENSEES and/or assignees, that provision shall
be considered severable and its invalidity shall not affect the remainder of
this Agreement, which shall continue in full force and effect.
20. DISPUTE RESOLUTION, CONTROLLING LAW, JURISDICTION AND VENUE
a. This Agreement shall be deemed to be executed and to be performed in
the State of California, and shall be construed in accordance with the laws of
the State of California as to all matters, including but not limited to
matters of validity, construction, effect and performance.
b. All controversies, claims and disputes arising in connection with this
Agreement shall be settled by mutual consultation between the parties in good
faith as promptly as possible, but failing an amicable settlement shall be
settled finally by arbitration in accordance with this Paragraph 20. Such
arbitration shall be conducted by a single arbitrator in Los Angeles County,
California, in accordance with the Commercial Arbitration Rules of the
American Arbitration Association, and the parties hereto agree that such
arbitration shall be the sole and exclusive method of resolving any and all
such controversies, claims or disputes.
c. In any such arbitration, the arbitrator will not extend, modify or
suspend any of the terms of this Agreement, but will have the authority to
assess damages sustained by reason of any breach of this License Agreement. A
demand for arbitration will not operate to stay, postpone or rescind the
effectiveness of any termination or other action provided for by this
Agreement, and the parties will be relegated to their remedy in damages as
determined by the arbitrator. In the event either party fails to appear at any
properly noticed arbitration proceeding, an award may be entered against such
party by default or otherwise notwithstanding such failure to appear. The
decision of the arbitrator shall be final and binding on all parties.
d. The costs and expense of the arbitration, including without limitation
reasonable attorneys' fees, shall be home by the parties in the manner
determined by the arbitrators.
e. Legal action for entry of judgement upon any arbitration award may be
heard or tried only in the courts of the State of California or the Federal
District Court for the Central District of California. Each of the parties
hereto hereby waives any defense of lack of in personam jurisdiction of said
courts and agrees that service of process in such action may be made upon each
of them by mailing it certified or registered mail, to the other party at the
address provided for in Paragraph 17 hereof. Both parties hereby submit to the
jurisdiction of the court so designated, to the exclusion of any other courts
which might have had jurisdiction apart from this Paragraph 20, and agree that
the prevailing party shall be entitled to recover from the non-prevailing
party reasonable expenses, including without limitation reasonable attorneys'
fees.
21. TERM OF THE AGREEMENT
Except as otherwise terminated pursuant to the other provisions of this
OPTION AND LICENSE AGREEMENT, this Agreement shall terminate upon expiration
of the last to expire of the patents or fifteen (15) years from the Effective
Date of this Agreement, whichever is longer.
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22. NEGATION OF WARRANTIES
a. Nothing in this Agreement shall be construed as:
i. a warranty or representation by USC as to the validity or scope of the
PATENT(S) and/or PATENT Application(s); or
ii. a warranty or representation that any PRODUCTS made, used, sold or
otherwise disposed of under any license granted in this Agreement is or will
be free from infringement of patents of third parties; or
iii. an obligation to bring or prosecute actions or suits against third
parties for infringement; or
iv. conferring the rights to use in advertising, publicity or otherwise
any trademark, tradename, or names or any contraction, abbreviation,
simulation or adoption thereof, of USC or Licensee; or
v. any obligation to furnish any know-how not provided.
b. USC MAKES NO EXPRESS OR IMPLIED WARRANTIES OF MERCHANTABILITY OR
FITNESS FOR A PARTICULAR PURPOSE, nor does USC represent that the rights
granted hereunder will result in PRODUCTS that are commercially successful.
c. Licensee further agrees that it will not rely upon technical
information provided by USC and Inventors in developing and manufacturing any
PRODUCTS hereunder, but will independently test, analyze and evaluate all
PRODUCTS prior to manufacture and distribution of such PRODUCTS. USC shall
reasonably cooperate, at Licensee's cost, with Licensee to facilitate
Licensee's efforts in obtaining FDA approval and commercial viability of a
PRODUCT.
23. INDEMNITY
a. Licensee shall defend, indemnify and hold harmless USC and its
trustees, officers, medical and professional staff, employees and agents and
their respective successors, heirs and assigns (the "Indemnitees"), against
all liabilities, demands, losses, costs, and expenses (including without
limitation reasonable attorneys' fees) incurred by or imposed upon the
Indemnitees or any one of them in connection with any claims, suits, actions,
demands or judgments arising out of any theory of liability (including but not
limited to, actions in the form of tort, warrantee, or strict liability) for
death, personal injury, illness, or property damage arising from Licensee's
use, sale, or other disposition of the PRODUCT.(S).
b. Licensee agrees, at its own expense, to provide licensed attorneys
with no history of malpractice judgements, at least ten years of litigation
experience, and free of conflicts with USC to USC to defend against any
actions brought or filed against any party indemnified hereunder with respect
to the subject of indemnity contained herein, whether or not such actions are
rightfully brought.
24. INSURANCE
a. At least ten (10) days prior to the exercise of the option granted
herein, shall at its sole cost and expense, procure and maintain in effect a
comprehensive general liability policy of insurance in single limit coverage
of not less than One Million Dollars ($1,000,000) per incident and One Million
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Dollars ($1,000,000) annual aggregate for death, bodily injury or illness and
Two Hundred Thousand Dollars ($200,000) annual aggregate in property damage.
Such comprehensive general liability insurance shall provide (i) product
liability coverage and (ii) broad form contractual liability coverage for
Licensee''s indemnification. If Licensee elects to self-insure all or part of
the limits described above (including deductibles or retention which are in
excess of $50,000 annual aggregate) such self-insurance program must be
acceptable to USC. Each such policy of insurance shall name USC as an
additional insured and shall provide for not less than thirty (30) days prior
written notice before any cancellation or material change in coverage shall be
effective. A Certificate evidencing the comprehensive general liability policy
herein defined shall be delivered to USC within ten (10) days of the EFFECTIVE
DATE of this Agreement. Licensee shall maintain such comprehensive general
liability insurance until such time as the policy in Paragraph 24.b. or
Paragraph 24.c is procured, or until fifteen (15) years after the term of this
Agreement.
b. During such time and in each country where PRODUCT, or any
modification thereof, is utilized in human clinical trials by Licensee or any
SUBLICENSEE, Licensee shall at its sole cost and expense, procure and maintain
in effect a comprehensive general liability policy of insurance in single
limit coverage of not less than Five Million Dollars ($5,000,000) per incident
and Five Million Dollars ($5,000,000) annual aggregate for death, bodily
injury, illness or property damage. Such comprehensive general liability
insurance shall provide (i) product liability coverage and (ii) broad form
contractual liability coverage for Licensee's indemnification. If Licensee
elects to self insure all or part of the limits described above (including
deductibles or retention which are in excess of S125,000 annual aggregate)
such self-insurance program must be acceptable to USC. Each such policy of
insurance shall name USC as an additional insured and shall provide for not
less than thirty (30) days prior written notice before any cancellation or
material change in coverage shall be effective. A Certificate evidencing the
comprehensive general liability policy herein defined shall be delivered to
USC prior to any manufacture, sale, distribution or administration to humans.
Licensee shall maintain such comprehensive general liability insurance until
such time as the policy in Paragraph 24.c is procured, or until fifteen (15)
years after the term of this Agreement.
c. During such time and in each country where PRODUCTS, or any
modification thereof, is administered to humans, manufactured or distributed
for any purpose (including for the purpose of obtaining regulatory approvals)
by Licensee or any SUBLICENSEE, Licensee shall at its sole cost and expense,
procure and maintain in effect a comprehensive general liability policy of
insurance in single limit coverage of not less than Ten Million Dollars
($10,000,000) per incident and Ten Million Dollars ($10,000,000) annual
aggregate for death, bodily injury, illness or property damage. Such
comprehensive general insurance shall provide (i) product liability coverage
and (ii) broad form contractual liability coverage for Licensee's
indemnification. If Licensee elects to self-insure all or part of the limits
described above (including deductibles or retention which are in excess of
$250,000 annual aggregate) such self-insurance program must be acceptable to
USC. Each such policy of insurance shall name USC as an additional insured and
shall provide for not less than thirty (30) days prior written notice before
any cancellation or material change in coverage shall be effective. A
Certificate evidencing the comprehensive general liability policy herein
defined shall be delivered to USC prior to any manufacture, sale, distribution
or administration to humans. Licensee shall maintain such comprehensive
general liability insurance during the period that the PRODUCT, or any
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modification thereof is being manufactured, sold, distributed or administered
to humans by the Licensee or its SUBLICENSEES and a reasonable period
thereafter which in no event shall be less than fifteen (15) years.
d. Alternatively, Licensee and USC may obtain an independent opinion from
legal counsel mutually agreeable to the parties in each country in which
Licensee intends to manufacture and/or distribute or sell PRODUCTS, such
opinion to assist in determining the amount of general and products liability
insurance required to be carried by Licensee in such country. Where
independent legal counsel determines that little or no liability risk to USC
exists under the present and reasonably anticipated future legal trends in
that country, Licensee will be required to maintain liability insurance on
USC's behalf which is determined by USC to be reasonably adequate to pay
litigation defense costs. Where independent legal counsel determines that the
risk of liability on the part of USC is more than minimal in that country, USC
and Licensee will evaluate such risk and negotiate in good faith to determine
the amounts of liability insurance necessary to reasonably insure USC's
interests. If USC and Licensee cannot agree on the amounts and types of
insurance reasonably necessary to protect USC's interest in a particular
country, Licensee will not manufacture or market the PRODUCTS in that country.
e. In the event that Licensee does not maintain such insurance, but is
self-insured, or carries a substantial self-retention, USC may grant
permission for such self-insurance only if, in the sole discretion of USC, the
net worth, assets and earnings of the Licensee are deemed sufficient to
protect USC's economic interests in the event of claims, liability, demands,
damages, expenses and losses from death, personal injury, illness, or property
damage.
f. The minimum amounts of insurance coverage required under this
Paragraph (subparts 24.a., 24.b., 24.c and 24.d.) shall not be construed to
create a limit of Licensee's liability with respect to its indemnification in
Paragraph 23 or any other provision of this Agreement.
g. By SUBLICENSEES
As a condition precedent to a grant of permission by USC for Licensee to
sublicense the PATENT(s) rights herein, the prospective SUBLICENSEE shall
agree to indemnify Licensee and USC to the same extent and degree as Licensee
has agreed to indemnify USC herein. Such SUBLICENSEE shall also provide
insurance identical in coverage and amount to that required of Licensee in
subparagraph a., b., and c. above, naming both Licensee and USC as additional
insured. A Certificate evidencing the comprehensive general liability policy
shall be delivered to USC prior to USC's giving permission for such
sublicensing agreement and a Certificate evidencing the product liability
coverage shall be delivered prior to first manufacture of any PRODUCTS by the
SUBLICENSEE. In the event a prospective SUBLICENSEE does not maintain such
insurance, but is self-insured, or carries a substantial self-retention, USC
may grant permission for such sublicense only if, in the sole discretion of
USC, the net worth, assets and earnings of such prospective SUBLICENSEE are
deemed sufficient to protect USC's economic interests in the event of claims,
liability, demands, damages, expenses and losses from death, personal injury,
illness, or property damage.
25. ATTORNEYS' FEES
In any action on or concerning this Agreement, the prevailing party shall
be awarded its reasonable attorneys' fees, costs and necessary disbursements,
to be paid by the nonprevailing party.
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26. PRODUCT DEVELOPMENT
If Licensee exercises its option, Licensee shall use its reasonable
efforts to test, develop the PRODUCT for commercial purposes throughout the
world. On or before January 1 of each year during the term of this Agreement,
commencing January 1, 1998, Licensee shall submit to USC a report detailing
its research, regulatory approval, marketing and product development
objectives the coming year as well as the research, regulatory approval,
marketing and development activities which Licensee undertook during the
preceding year. The reports shall identify specific future milestones
(regulatory approval and product development) and information demonstrating
that the Licensee is providing sufficient financial and manpower resources to
evidence its use of reasonable efforts. Within six (6) months after the
signing of this Agreement, a representative of the Office of Patent and
Copyright Administration of USC, at Licensee's expense (including
transportation, and, if appropriate, lodging and meals), shall visit the
manufacturing and marketing facilities of Licensee and be presented with an
in-depth updating of the manufacturing capability and marketing network of
Licensee. Subsequent visits, which shall occur not more than once every year,
shall be at the expense of USC.
27. EXPORT CONTROLS
It is understood that USC is subject to United States laws and
regulations controlling the export of technical data, computer software,
laboratory prototypes and other commodities (such laws include the Arms Export
Control Act, as amended and the Export Administration Act), and that its
obligations hereunder are contingent on compliance with applicable United
States export laws and regulations. The transfer of certain technical data and
commodities by the Licensee may require a license from the cognizant agency of
the United States Government and/or written assurances by Licensee that
Licensee shall not export data or commodities to certain foreign countries
without prior approval of such agency. USC neither represents that a license
shall not be required nor that, if required, it shall be issued. Licensee
shall not engage in any activity in connection with this Agreement that is in
violation of any applicable U.S. Law.
28. INDEPENDENT CONTRACTOR
In rendering performances under this Agreement, Licensee will function
solely as an independent contractor and not as agent, partner, employee or
joint venturer with USC. Nothing in this Agreement shall be deemed or
construed to create the relationship of principal and agent, or of partnership
or joint venture, and neither party shall hold itself out as an agent, legal
representative, partner, subsidiary, joint Venturer, servant or employee of
the other. Neither party nor any officer, employee, agent or representative
thereof shall, in any event, have any right, collectively or individually, to
bind the other party, to make any representations or warranties, to accept
service of process, to receive notice or to perform any act or thing on behalf
of the other party, except as expressly authorized under this Agreement or in
writing by such other party in its sole discretion.
29.WAIVER
No waiver by either party of any default or breach shall be deemed as a
waiver of prior or subsequent default or breach of the same or other
provisions of this Agreement.
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30. ENTIRE AGREEMENT
This Agreement constitutes the entire agreement between the parties
concerning the subject matter hereof. No amendment, modification, extension or
cancellation of this Agreement shall be binding on the parties unless mutually
agreed to and executed in writing by each of the parties.
UNIVERSITY OF SOUTHERN CALIFORNIA RUBICON MEDICAL, LLC
/S/Xxxxxx X. Xxxxxxxxx /S/Xxxxxxx X. Xxxxx
--------------------------------- -------------------------------
(Signature) (Signature)
Xxxxxx X. Xxxxxxxxx Xxxxxxx X. Xxxxx
----------------------------------- --------------------------------
(Print or Type Name) (Print or Type Name)
Senior Vice President, Administration Executive Vice President
------------------------------------- --------------------------------
(Official Title) (Official Title)
March 11, 1998 March 12, 1998
------------------------------------- --------------------------------
(Date) (Date)
APPENDIX A
INVENTIONS, PATENT APPLICATIONS AND PATENTS
USC File 2651: U.S. Patent Application Serial No. 08/767,221 filed December
16, 1996 (abandoned) entitled "Cerebral Protection Balloon For Use In Carotid
Artery Angioplasty and Stenting"
USC File 2561: U.S. Patent Application Serial No. 08/906,890 filed August 6,
1997 (which is a continuation of U.S. Ser. No. 08/767,221), entitled
Angioplasty Catheter".
USC File 2561: PCT Patent Application Serial No. PCT/US97/23257 filed December
16, 1997 and corresponding to U.S. Patent Applications Serial Nos. 08/767,221
and 08/906,890.
USC File 2639: Invention Disclosure entitled "New Balloon-Inflated Carotid
Artery Stent to Assist in Carotid Artery Balloon Angioplasty".
