SECOND MODIFICATION TO LICENSE AGREEMENT
THIS AGREEMENT entered into this 30th day of May, 1997 between
DALTEX MEDICAL SCIENCES, INC. (a corporation of the State of Delaware), having a
place of business at 00 Xxxxxx Xxxx, Xxxxxxxxx, XX 00000 ("Licensor") and ARROW
INTERNATIONAL, INC., (a Pennsylvania corporation), having a place of business at
0000 Xxxxxxxxx Xxxx, Xxxxxxx, XX 00000 ("Licensee").
WHEREAS, Licensor and Licensee have previously entered into a
License Agreement dated the 28th day of March, 1991 ("1991 License Agreement")
relating to certain technology set forth therein and which remains in full force
and effect;
WHEREAS, Licensor and Licensee have also previously entered
into a Modification to the 1991 License Agreement ("First Modification
Agreement") regarding the payment of royalties, which First Modification
Agreement remains in full force and effect; and
WHEREAS, Licensor and Licensee, to their mutual benefit,
desire to again modify the terms of the 1991 License Agreement for certain of
the Licensed Products in the Fields of Application.
NOW, THEREFORE, in consideration of the above premises and the
mutual covenants and conditions hereinafter contained, and for other good and
valuable consideration, the receipt and sufficiency of which is acknowledged by
the execution and delivery hereof, the parties hereby covenant and agree as
follows:
1. Definitions: The terms used in this Agreement
shall have the same meaning as those defined in Article 1 of the
1991 License Agreement.
2. Modification to 1991 License Agreement: The
following paragraphs are hereby added to Article 1(d) (Fields of
Application) of the 1991 License Agreement:
(v) Epidural catheters used to infuse
drugs into the epidural space in
the spinal column.
(vi) Implantable infusion ports and
pumps and their attached
catheters used for drug therapy
and access to the vascular
system.
(vii) Intra-aortic balloon catheters.
(viii) Drainage catheters used to drain
chest cavities, surgical
incisions, wounds and abscesses.
3. Supplemental Modification to 1991 License
Agreement: The following paragraph is hereby added to Article 1
of the 1991 License Agreement (Definitions):
h) Running royalty rate is defined as Five
(5%) Percent of Unit Net Sales of
products sold by Licensee which fall
within the added Fields of Application
(v-viii) set forth above. For a
Licensed Product or Products within the
added Fields of Application (v-viii)
that is sold together with other non-
licensed products in a single package to
a customer, the Running royalty rate of
Five (5%) Percent shall apply only to
the established Unit Net Sales price of
the Licensed Product or Products.
4. Payments: In consideration of the foregoing
additions to the Fields of Application under the 1991 License
Agreement, upon execution of this Agreement, Licensee shall pay
Licensor a one-time, non-refundable, non-creditable fee of One
Hundred Thousand ($100,000.00) Dollars.
Upon execution of this Agreement, and for the first (3) years
thereafter, Licensor waives development fees and minimum annual royalties due
for products sold by Licensee falling under the added Fields of Application
(v-viii) set forth above.
After the third full year this Agreement is in force, Licensee
shall pay development fees of $2,500.00, payable quarterly in advance, for each
of the new Fields of Application (v-viii) set forth above, during their
development phase and prior to Licensee sales of products in each of the new
Fields of Application. Licensee's obligation to pay development fees shall cease
in the quarter following Licensee's sale of a product in each of the added
Fields of Application. After such time a sale is made, Licensee shall pay the
Running royalty rate defined above in Article 3(h) herein, and at a minimum,
shall pay a minimum royalty of $2,500.00, payable quarterly in advance, for each
of the new Fields of Application (v-viii) set forth above. All payment terms
herein are effective throughout the remaining term of the 1991 License Agreement
and in accordance with the payment and recording terms provided in Article 4 of
the 1991 License Agreement.
5. Net Sales: Net Sales are hereby defined as the
total invoiced amount of all sales by Licensee to the trade, less
cash and trade discounts, returns, allowances, free goods and
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replacements, taxes applicable to such sales, and government charges assumed and
delivery charges borne by Licensee.
6. Best Efforts: Licensee shall use all reasonable endeavors,
to manufacture, promote and sell the products with a view to achieving maximum
benefit in its judgment to the parties hereto, and Licensor shall be entitled to
call for information from time to time on the endeavors being made. In the event
that the Licensor considers that Licensee has failed properly to comply with
this provision, or a sub-licensee has so failed, Licensor may give Licensee six
months notice (accompanied by detailed reasons for its decision) of its
intention to convert the Field of Use to a non-exclusive right, unless
Licensee's, or sub-licensee's, performance has been remedied to the reasonable
satisfaction of Licensor.
7. The 1991 License Agreement: Except as expressly modified
herein, the provisions of the 1991 License Agreement between Licensor and
Licensee, and the terms of the First Modification Agreement, remain in full
force and effect. In addition, this second modification to the 1991 License
Agreement between Licensor and Licensee does not modify or alter the terms of a
Patent Settlement Agreement dated January 1, 1995, between the Trustees of
Columbia University, Daltex Medical Sciences, Inc., Arrow International Inc.,
and Becton Xxxxxxxxx and Company.
THE PARTIES have duly executed this Second Modification
Agreement in duplicate executed counterparts, effective the first date written.
DALTEX MEDICAL SCIENCES, INC.
By: /s/Xxxxx Xxxxxxx
May 9, 1997
Date Title: President
ARROW INTERNATIONAL, INC.
By: Xxxxxx Xxxxxx, Xx.
May 30, 1997
Date Title: President
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