CONFIDENTIAL TREATMENT REQUESTED
The Company has requested confidential treatment of certain portions
of this exhibit on pages 1, 2, 3 and 4 of the Amendment between
St. Jude Medical, Inc. and Heartport, Inc. dated as of January 31, 1997.
*Confidential portion has been omitted and filed separately with the
Commission.
AMENDMENT
This Amendment (the "Amendment") is made effective the 31st day of January, 1997
(the "Amendment Date") by and between St. Jude Medical, Inc. ("SJM"), a
Minnesota corporation, whose principal offices are located at Xxx Xxxxxxxx
Xxxxx, Xx. Xxxx, Xxxxxxxxx 00000 and Heartport, Inc., a Delaware corporation,
whose principal offices are located at 000 Xxxxxxxxxx Xxxxx, Xxxxxxx Xxxx,
Xxxxxxxxxx 00000 ("Heartport"). This Amendment is the first amendment to that
certain Agreement by and between SJM and Heartport dated as of September 11,
1995 (the "Agreement"). All terms of such Agreement not modified hereby shall
remain in full force and effect. As set forth in Section 14.9 of the Agreement,
the Agreement as amended by this Amendment, together with the documents
mentioned in Section 14.9, shall constitute the entire agreement of the parties
relating to its subject matter. All capitalized terms not defined herein shall
have the meanings given them in the Agreement.
The parties, intending to be legally bound, agree to the following amendments to
the Agreement:
With respect to Section 2.1 regarding the Note dated September 11, 1995
executed by Heartport in favor of SJM and attached as Exhibit A to the
Agreement (the "Note"), the parties agree that all conditions under the
heading Reduction of Note were met on September 30, 1996 and the Note's
balance of [*] shall be deemed to be non-interest bearing, nonrefundable,
prepaid royalties of SJM to Heartport in accordance with the terms of the
Note, the Agreement and this Amendment.
With respect to Section 2.2, the parties agree that SJM shall not be obligated
to pay Heartport [*] as non-interest bearing, nonrefundable, prepaid
royalties.
Section 5.1 is deleted in its entirety and replaced with the following:
5. 1 MINIMUM ROYALTY. Notwithstanding any other sections of this
Agreement, in the event the royalty payment calculated under
Section 5.2 is less than the minimum royalty set forth in this
Section 5.1, SJM will pay Heartport a minimum royalty of [*] per
each CCVDS Transferred (defined below) to a third party worldwide
unless Heartport agrees in writing to a different minimum royalty
level. For each CCVDS Transferred to any third party worldwide,
[*].
Section 5.2 is deleted in its entirety and replaced with the following:
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CONFIDENTIAL TREATMENT REQUESTED
*Confidential portion has been omitted and filed separately with the
Commission.
5. 2 ROYALTY FORMULA. For each CCVDS Transferred to any third party
worldwide, SJM shall pay Heartport a royalty equal to the greater
of (i) [*] of [*] of each CCVDS sold in the country of
such third party and the [*] of the counterpart SJM Prosthesis
designed and intended for use in conventional open heart valve
replacement and repair procedures (a "Counterpart Conventional
Prosthesis") in that same country or (ii) where SJM does not
offer for sale a Counterpart Conventional Prosthesis in the
country of such third party, [*] of [*] of each CCVDS sold
in the country of such third party and the [*] of a Counterpart
Conventional Prosthesis last sold in that country adjusted by
the [*] of other SJM products in that country or, if no such
SJM products are sold in such country, the [*] of other SJM
products in a country with similar pricing. The total royalty
payment obligation for each CCVDS type (e.g., SJM-Registered
Trademark- Mechanical Heart Valve, SJM-Registered Trademark-
Master Series, SJM-Registered Trademark- Hemodynamic Plus Series,
SJM-Registered Trademark- Annuloplasty Ring, etc.) in each
country shall be calculated as follows:
[*]
Total royalty payments in each quarter will be calculated by
summing royalty payment obligations for all CCVDS types in all
countries in which CCVDSs are Transferred. [*] shall be
recalculated each calendar quarter. Example: The [*] of a
CCVDS incorporating an SJM-Registered Trademark- Masters
Series Mechanical Heart Valve in France during the third
calendar quarter of 1997 is [*]. The [*] of the counterpart
SJM-Registered Trademark- Masters Series Mechanical Heart
Valve intended for use in conventional open procedures in
France during that same quarter is [*]. The royalty payment
obligation for each CCVDS incorporating an SJM-Registered
Trademark- Masters Series Mechanical Heart Valve in France
during the third calendar quarter of 1997 is [*].
Section 5.3 is deleted in its entirety and is reserved.
Section 5.4 is deleted in its entirety and replaced with the following:
5. 4 The parties, after considering a number of alternatives, have
agreed that, for mutual convenience, and in lieu of negotiating
milestone payments, technology transfer fees and the like, that
subject to the suspension provision of Section 5.9, [*], as a
technology fee for sales [*], provided that if the sale were to
occur in the United States, a patent royalty would be owed and
that the duty to pay the technology fee (as opposed to the [*] in
each country [*] a) when a Licensed Patent issues covering such
sales in the country or b) when a [*] (i.e. a closed-chest
valve delivery system consisting of a prosthesis and a prosthesis
holder, each of which is manufactured and intended for use in a
closed-chest valve delivery system), manufactured and marketed
by [*] bound by agreement with Heartport to pay a comparable fee
meeting the standards of Section 5.10, becomes available in
that country.
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CONFIDENTIAL TREATMENT REQUESTED
*Confidential portion has been omitted and filed separately with the
Commission.
Section 5.10 is deleted in its entirety and replaced with the following:
5.10 MOST FAVORED LICENSEE STATUS. (i) PRODUCTS NOT INCORPORATING A
[*]. Heartport will not grant to any other licensee receiving
a license to make, use or sell Less Invasive Prosthesis Holders
or closed-chest valve delivery systems (which shall be defined
as a CCVDS which includes a non-SJM Prosthesis that incorporates
a valve product other than a [*] instead of an SJM Prosthesis)
in the field of closed-chest valve repair or replacement a
license [*] than those extended to SJM in this Agreement or
under [*] less restrictive than those extended to SJM, unless
those terms are similarly extended to SJM with respect to [*]
granted to such other licensee. In the event Heartport grants
a license covered by this Section 5.10, Heartport shall provide
SJM written notice of such License within thirty (30) days of
grant. Such notice should include a certification that such
other agreement does not require Heartport to grant a [*]
to SJM under this Section 5.10. (ii) PRODUCTS INCORPORATING A
[*]. Notwithstanding the foregoing, the parties agree that
Heartport may, without restriction, grant licenses to make, use
or sell Less Invasive Prosthesis Holders or closed-chest valve
delivery systems that incorporate a [*]. In the event that
Heartport grants such a license with respect to [*] to one
or more third parties, Heartport agrees that, at such time as SJM
has completed the design and/or regulatory approval process for a
[*] to be utilized in a closed-chest valve delivery system in
any country, at the request of SJM Heartport must grant SJM
a license with respect to [*]
6. DELIVERY HANDLE.
All sections, Section 6.1 through Section 6.5 are deleted in their entirety
and are reserved.
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CONFIDENTIAL TREATMENT REQUESTED
*Confidential portion has been omitted and filed separately with the
Commission.
Section 14.10 is added in its entirety:
14.10 RENEGOTIATION. After the [*] anniversary of the Amendment
Date, SJM shall have the right to request renegotiation of the
[*] set forth in [*]; provided, however, that any amendment
to the Agreement resulting from such negotiations shall be [*]
Section 15.1 is deleted in its entirety and replaced with the following:
15. 1 CCVDS. "CCVDS" shall consist of no more than one of each of the
following: an SJM Prosthesis and a Less Invasive Prosthesis
Holder.
Section 15.3 is deleted in its entirety and replaced with the following:
15. 3 HEARTPORT PORT-ACCESS DELIVERY HANDLE. "Heartport Port-Access
Delivery Handle" and the "Handle" shall mean a handle developed
and manufactured by Heartport or its designee.
Section 15.5 is deleted in its entirety and replaced with the following:
15. 5 LESS INVASIVE PROSTHESIS HOLDER. "Less Invasive Prosthesis
Holder" shall mean prosthesis holders compatible with a Heartport
Port-Access Delivery Handle or covered by Heartport patents,
including, but not limited to, prosthesis holders covered by
Heartport method patents when sale of the prosthesis holder in
the absence of a license would constitute contributory
infringement of such patents.
Section 15.14 is added in its entirety:
15.14 [*] shall mean a [*]. This includes, but is not limited to, [*].
Section 15.15 is added in its entirety:
15.15 [*] shall mean any [*] whose primary function is to [*].
Section 15.16 is added in its entirety:
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CONFIDENTIAL TREATMENT REQUESTED
15.16 TRANSFERRED OR TRANSFER. "Transferred" or "Transfer" shall mean
a transaction in which the title of a CCVDS is transferred for
compensation or as part of an agreement. Transfer includes, but
is not limited to, a valve transferred as part of a VIP
agreement. Transfer excludes consigned inventory and product
donated for humanitarian or scientific purposes.
[The remainder of this page is blank.]
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CONFIDENTIAL TREATMENT REQUESTED
IN WITNESS WHEREOF, authorized representatives of the parties have executed this
Amendment to the Agreement as of the Amendment Date.
HEARTPORT, INC. ST. JUDE MEDICAL, INC.
/s/ Xxxxxx X. Xxxxxxx, M.D. /s/ Xxxxxx X. Matricaria
------------------------------------- ----------------------------------------
Xxxxxx X. Xxxxxxx, M.D. Xxxxxx X. Xxxxxxxxxx
President and Chief Executive Officer President and Chief Executive Officer
6
