EXHIBIT 10.101
LICENSE AGREEMENT
This License Agreement is entered into this 26th day of March, 1999, by
and between Manufacturing and Research, Inc., hereinafter referred to as "MRI"
and American BioMed Inc., hereinafter referred to as "ABMI". MRI is a
corporation organized under the laws of the State or Arizona, with its principal
place of business at 0000 Xxxxx Xxxxxx Xxxxxxxxx, Xxxxxx, Pima County, Arizona.
ABMI is a corporation organized under the laws of the State of Delaware, with
its principal place of business at 00000 Xxxxxxx Xxxx Xxxx, Xxxxx 000, Xxx
Xxxxxxxxx, Xxxxxxxxxx Xxxxxx, Xxxxx. The term MRI shall include Manufacturing
and Research, Inc., as well as, any subsidiary of MRI established to accomplish
the terms of this Agreement.
Recitals
A. ABMI is the owner of the entire right, title and interest in the following
Cathlab and balloon cardiovascular inventions letters patent of the United
States with the indicated patent numbers, issuance dates, and expiration
dates:
1.1 Embolectomy Catheters
1.2 Bi-Lumen Irrigation Catheters
1.3 Occlusion Catheters
1.4 Biliary Catheters
1.5 Termodilution Catheters
1.6 Angiographic/Angioscopic Catheters
1.7 Ahn Thrombectomy Catheters
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Invention Title Patent No. Date Patent Expiration FDA 510K
Issued Date of Registration
Patent
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Embolectomy Catheters * K881455
K905139
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Bi-Lumen Irrigation Catheters * K893680
K897184
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Occlusion Catheters * K910916
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Biliary Catheters * K910917
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Thermodilution Catheters * K893435
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Angiographic/Angioscopic
Catheters 5,464,394 11/07/95 11/07/12 K897051
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Ahn Thrombectomy Catheters Application K972572
Pending
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*All of the catheters listed above are variations of the following patents:
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Product Patent No. Date Patent Expiration
Issued Date of Patent
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Method for Parting Rubber and Products 4,670,313 06/02/87 06/02/04
Formed Thereby, and a Method of Making
a Blood Vessel
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Method for Parting Rubber and Products 4,690,844 09/01/87 09/01/04
Formed Thereby, and a Method of Making
a Blood Vessel
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B. MRI desires to secure exclusive licenses to, and ABMI is willing to grant
exclusive licenses under the above-stated patents to manufacture, use, and
sell the Cathlab and balloon cardiovascular inventions.
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C. ABMI is currently leasing the capital equipment identified in Exhibit "A"
from Aberlyn Capital Management Limited Partnership. Under the terms of such
lease agreement, ABMI has the authority to sublease the identified capital
equipment.
D. ABMI desires to transfer to MRI the capital equipment utilized in its Cathlab
manufacturing business and MRI is willing to provide maintenance and utilize
from ABMI such capital equipment as is, per the attached Exhibit "A".
E. ABMI desires to transfer to MRI and MRI is willing to accept from ABMI the
finished inventory and the raw materials currently held in inventory by ABMI
at ABMI's Cathlab manufacturing facility. See Exhibits "F" and "G".
COVENANTS
In consideration of the mutual covenants and obligations hereinafter set
forth, and the mutual benefits to be derived hereunder, the Parties agree as
follows:
Section One
Definitions
1.1 ABMI customer base. ABMI customer base shall include all ABMI customers
existing at the time this Agreement is executed and all ABMI customers
existing at such time who are interested in purchasing the balloon
cardiovascular devices. ABMI's customer base may also include customers for
which there is no prior or existing customer relationship with ABMI, so
long as an existing customer relationship does not exist with MRI or a
subsidiary of MRI.
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1.2 Clamshell packaging. ABMI's designed polypropylene packaging for Cathlab
products which is manufactured using ABMI's proprietary molds.
1.3 Licensed inventions. Licensed inventions shall be the term used to identify
as a group the following inventions: Embolectomy Catheters, Bi-Lumen
Irrigation Catheters, Occlusion Catheters, Biliary Catheters,
Thermodilution Catheters, Angiographic/Angioscopic Catheters, Ahn
Thrombectomy Catheters, as identified in Section A 1.1 through 1.7.
1.4 Licensed patents. Licensed patents shall mean all patents issued to ABMI
regarding or relating to the Cathlab and any and all balloon cardiovascular
devices.
1.5 Licensed products. Licensed products shall mean all products manufactured
by MRI using the licensed patents owned by ABMI and the processes developed
by ABMI in conjunction with the licensed patents, including, but not
limited to the licensed inventions and any newly designed non-Cathlab
products designed by MRI using ABMI's patented balloon cardiovascular
technology on an application by application basis.
1.6 Net receipts. The term net receipts shall mean MRI's gross receipts less
refunds for returned goods, and the cost of transportation and insurance.
1.7 OEM. OEM means original equipment manufacturer.
1.8 Sales. The term sales as used herein shall mean the sales of the licensed
products that are made in the territorial limits of the United States, its
territories, and Mexico, and export sales originating in the United States
and Mexico, or any other facility controlled by MRI.
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Section Two
Grant of License
ABMI grants to MRI an exclusive license to use the licensed patents and
to manufacture and sell the licensed inventions. ABMI shall grant to MRI an
exclusive right to utilize the processes involved in manufacturing the licensed
inventions. MRI shall assume ABMI's FDA 510K approvals on the licensed
inventions and the respective processes. The exclusive license conveyed in this
Agreement shall be exercisable throughout the United States, its territories and
possessions, and in all foreign countries.
Section Three
Licensing Fee
MRI shall pay ABMI a one-time license fee in the amount of TWENTY-FIVE
THOUSAND AND NO/100 ($25,000.00) DOLLARS for the exclusive right to manufacture,
use and sell the licensed inventions. Payment of the licensing fee will be
divided into six (6) equal monthly installments of FOUR THOUSAND ONE HUNDRED
SIXTY-SIX AND 66/100 ($4,166.66) DOLLARS and commence six (6) months after the
close of this Agreement. Furthermore, MRI will pay ABMI a one-time license fee
in the amount of FIVE HUNDRED AND NO/100 ($500.00) DOLLARS for each newly
designed non-Cathlab product designed by MRI using ABMI's patented balloon
technology processes.
Section Four
Royalty
During the term of this Agreement, MRI shall pay to ABMI a royalty
interest on the net receipts received from all sales by MRI of licensed
inventions, as follows:
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Annual Net Receipts Royalty Percentage
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0 - $1,000,000 5.0%
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$1,000,000 - $2,000,000 4.0%
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$2,000,000 + 2.5%
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On all newly designed non-Cathlab products designed and manufactured by
MRI using ABMI's patented balloon cardiovascular technology which are sold
during the term of this Agreement, MRI shall pay to ABMI a royalty interest on
the net receipts received from such sales by MRI as follows:
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Annual Net Receipts Royalty Percentage
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0 - $2,000,000 2.5%
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$2,000,000 + 1.5%
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Section Five
Payment
Royalty payments hereunder shall be due and payable thirty (30) days
after the end of each calendar quarter during which this Agreement is in effect,
commencing October 30, 1999.
Section Six
Reporting
MRI shall submit written reports to ABMI quarterly commencing July 1,
1999. Each such report shall include a statement of the number, description, and
net receipts of licensed products sold or otherwise disposed of during the
preceding three calendar months and on which royalty is payable.
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as provided in Section Four. The first such report shall include all licensed
products sold or otherwise disposed of from the date of this Agreement.
Section Seven
ABMI Right to Purchase
Subject to the terms of Section Eighteen, ABMI shall have a right to
purchase from MRI at the price as set forth in Exhibit "E" all licensed
inventions subject to this Agreement for a period of ten years, or until this
Agreement expires. In addition, ABMI shall have a right to purchase from MRI and
resell under its own label, MRI's OEM produced products including all Silicone
Xxxxx Catheters, the Silicone Gastronomy Tubes and the Silicone Temperature
Sensing Catheters.
Section Eight
ABMI Right to Sell and Distribute
ABMI shall have the authorization and consent from MRI to sell and
distribute all licensed inventions subject to this Agreement to ABMI's customer
base, as are identified in Exhibit "C". ABMI shall be responsible for taking all
orders and for all order correspondence with its customer base. Upon receipt of
a customer order, ABMI shall contact MRI either by e-mail or facsimile and
provide all pertinent information including units ordered by part number and
shipment method. Upon completion of the shipment by MRI to ABMI's customer, MRI
will notify ABMI either by e-mail or facsimile of the items shipped and the
transportation charges incurred for such order.
Section Nine
Purchase Price
ABMI shall purchase the licensed inventions from MRI at the prices set
forth in Exhibit "E".
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The purchase prices are based on ABMI's current manufacturing cost. The prices
are fixed for the 1999 calendar year. In the calendar year 2000 and thereafter,
the Parties shall review the prices and adjustments may be made to such prices
upon mutual agreement of both Parties. A reduction in the manufacturing costs of
the licensed inventions may be considered in making adjustments to such prices.
Section Ten
Inventory of Cathlab Products
ABMI shall be responsible for maintaining an inventory of Cathlab
finished goods in MRI's warehouse to meet ABMI's customers needs. MRI shall fill
ABMI's orders for finished goods within six (6) weeks from the confirmation of
placement of such order by ABMI. The payment terms for the finished inventory
will be net twenty (20) days from the date of shipment from MRI to ABMI's
contract sterilizer.
Section Eleven
Shipping Charges
MRI will xxxx ABMI directly for shipping charges incurred by MRI in
shipping orders to ABMI's customers, including bonding and insurance, if any.
MRI will directly xxxx the shipping charges according to ABMI's customer account
numbers, and utilize ABMI's billing accounts with freight vendors.
Section Twelve
Handling Charges
MRI will assess ABMI a handling charge in the amount of two (2%) percent
of the purchase
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price to perform the following services: (1) receive ABMI's Cathlab products
from its sterilizer; and (2) identifying the Cathlab products ordered by ABMI
customers from ABMI's inventory of finished goods in MRI's warehouse and
packaging such products for shipment.
Section Thirteen
Transfer of Capital Equipment
The capital equipment used by ABMI in the manufacturing of the licensed
inventions, which are identified in Exhibit "A", shall be relocated to MRI's
Tucson manufacturing facility. In addition, ABMI shall transfer and relocate all
finished inventory and all raw materials included in inventory, which are
specifically identified in Exhibits "F" and "G" respectively, to MRI's Tucson
manufacturing facility. ABMI and MRI shall mutually agree upon the capital
equipment to be relocated to MRI's Tucson manufacturing facility. ABMI shall be
responsible for and pay for loading the capital equipment, finished inventory,
and raw materials included in ABMI's inventory, to MRI's Tucson manufacturing
facility. MRI shall be responsible for the shipping and delivery of the capital
equipment, finished inventory, and raw materials. MRI shall be responsible for
the setup and ongoing maintenance of ABMI's manufacturing equipment.
Section Fourteen
Name
All licensed products that are subject to this Agreement and are
manufactured by MRI shall be distributed under the company name of MRI, Cathlab,
or MRI's OEM Customers.
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Section Fifteen
Option to Purchase Licensed Invention
If, during the term of this Agreement, ABMI desires to sell the licensed
inventions, or any improvements thereon, or any patents relating thereto, ABMI
shall give MRI the first opportunity to purchase the same at a price to be
mutually agreed on, which price shall not be greater than that for which the
invention, improvements, or patents are offered for sale to any other purchaser.
Section Sixteen
Exclusive Right
ABMI shall license to MRI the exclusive right to use and manufacture the
Cathlab balloon cardiovascular devices and ABMI will not directly or indirectly,
through an entity owned by them, individually or collectively or otherwise,
including officers, directors, shareholders, subsidies or merged or parent
company of successor, compete with MRI in the use and manufacturing of Cathlab
and balloon cardiovascular devices, other than as stated in Paragraphs Seven and
Eight.
Section Seventeen
Patent Infringement
In the event that a third person or entity is using the licensed
inventions and it is known or reasonably known that such use is an infringement
of the patents, ABMI and MRI shall take suitable action to stop
such infringement. It is expressly understood and agreed that ABMI and MRI will
pursue the adjudication of the infringement claim together. ABMI and MRI will
initiate such action each agreeing to be responsible for one-half of the expense
incurred. In the event of recovery of any damages in any such litigation,
reasonable attorney's fees and costs incurred by ABMI and MRI shall be first
deducted from the gross recovery and the balance shall be divided one-half to
ABMI and one-
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half to MRI.
Section Eighteen
ABMI's OEM Customers
MRI will provide ABMI a quote to manufacture and assemble the Polamedco
Nasopharyngeal Airway for which ABMI has an OEM agreement. ABMI will provide MRI
with its current specifications to include bills of materials, routing, process
procedures, inspection procedures, drawings, etc. MRI will submit a quote within
three weeks following the receipt of the requested information and materials.
Section Nineteen
Packaging
AMBI's current clamshell packaging will remain the exclusive property of
ABMI for its current Cathlab brand Emobectomy Catheter products. ABMI's current
clamshell packaging for the Cathlab Thermodilution Catheters will be available
to MRI and MRI's OEM customers, however, such packaging material shall be color
tinted in order to differentiate the product from ABMI's Cathlab Thermodilution
Catheters.
Section Twenty
Representations and Warranties
A. ABMI warrants that it is the sole owner, free from the obligations of
any license or encumbrance whatsoever, and no threatened or pending legal
action, of all the patents or rights to patents assigned hereunder. Further,
AMBI warrants it has the authority
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to grant such licenses as is contemplated herein.
B. ABMI is a corporation duly formed and validly existing under the
laws of the State of Delaware and has the full power and authority to enter into
this Agreement to carry out the transactions contemplated hereby to be carried
out by it; and all persons signing this agreement and/or any documents and
instruments in connection herewith on behalf of ABMI have full corporate power
and authority to do so.
C. The execution, delivery and performance by ABMI and such other
instruments and documents to be executed and delivered in connection herewith by
ABMI does not, and will not, result in any violation of, or conflict with or
constitute a default under, any provisions of any Agreement of ABMI or any
mortgage, deed of trust, indenture, lease, security agreement, or other
instrument or agreement to which ABMI is a party, or any judgment, writ,
decree, order, injunction, rule or governmental regulation to which it is
subject.
D. ABMI is not prohibited from consummating the transaction
contemplated by this Agreement by any law, rule, regulation, instrument,
agreement, order or judgment.
E. To ABMI's knowledge, there are not, nor has ABMI received any notice
of, any current violations of any laws, statutes, ordinances, regulations or
other requirements of any governmental agency in connection with or related to
ABMI.
F. To ABMI's knowledge, there are not any existing, pending or
anticipated litigation, or similar proceedings against or involving ABMI,
including without limitation, patent infringement, or any other claims, actions,
suits or other proceedings threatened or pending which would materially and/or
adversely affect ABMI's right, title and/or interest in and to, or enjoyment or
use of ABMI.
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F. There are no attachments, levies, executions, assignments for the
benefit of creditors, receivership, conservatorship, or voluntary or involuntary
proceedings in bankruptcy (or pursuant to any other debt or relief laws)
contemplated by ABMI, filed by ABMI or, to ABMI's knowledge, pending or
threatened in any current judicial or administrative proceedings against ABMI.
Section Twenty-One
Transferability of Rights and Obligations
The license granted in this Agreement shall be binding on any successor
to ownership or control of the licensed patents. The obligations shall run in
favor of any successor of MRI. Neither Party shall have any right to assign its
rights hereunder except to a subsidiary of MRI established to accomplish the
terms of this Agreement or to the purchaser of substantially all its business,
without the written consent of the other Party.
Section Twenty-Two
Duration of Agreement
Unless sooner terminated as hereinafter provided, the terms of this
Agreement shall continue for a period of ten (10) years or until the expiration
of the last of such licensed patents, including any extensions or reissues
thereof.
Section Twenty-Three
Termination of Agreement
A. If ABMI defaults or breaches any of the provisions of this Agreement
or fails to account for or pay the respective party any of the royalties due or
purchase price due and
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payable under this Agreement, the non-defaulting party may cancel this license
on the giving of ninety (90) days written notice. If the defaulting party,
within such ninety (90) days remedies the default or breach, the license shall
continue in full force and effect in accordance with this Agreement. If this
license is terminated for default or breach, the defaulting party shall not be
relieved of its duties and obligations to pay all royalties accrued and/or
purchase price due and payable at the effective day of the termination.
B. If any of the claims of any of the licensed patents are adjudged or
decreed to be invalid by an appellate court or by a lower court of competent
jurisdiction from whose decree no appeal is seasonably taken, MRI may, at MRI's
option, by giving sixty (60) days written notice thereto to ABMI, elect either
to terminate this Agreement in its entirety or to continue the same in force
with respect to such patents or claims as shall not have been so adjudged or
decreed to be invalid.
C. The occurrence of any of the following events shall cause a default
or breach of this Agreement by ABMI: (i) the making by ABMI of any general
arrangement or assignment for the benefit of creditors; (ii) ABMI's becoming a
"debtor" as defined in 11 U.S.C. (S)101 or any successor statute thereto
(unless, in the case of a petition filed against ABMI, the same is dismissed
within sixty (60) days); (iii) the appointment of a trustee or receiver to take
possession of substantially all of ABMI's assets; or (iv) the attachment,
execution or other judicial seizure of substantially all of ABMI's assets, where
such seizure is not discharged within thirty (30) days; provided, however, in
the event that any provision of this subparagraph (C) is contrary to any
applicable law, such provision shall be of no force or effect, and not affect
the validity of the remaining provisions.
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Section Twenty-Four
Closing
MRI and ABMI shall comply with the transaction and transfers
contemplated herein on or within forty-five (45) days after execution of this
Agreement.
Section Twenty-Five
Arbitration
All disputes that may arise in connection with this Agreement and that
are not settled by the Parties themselves shall be submitted to arbitration
under the rules and regulations of the American Arbitration Association. All
costs of arbitration shall be divided equally between the Parties, and the
Parties agree to abide by the award.
Section Twenty-Six
Ordinary Course of Business
MRI and ABMI agree that ABMI's Cathlab business will be operated
from this date through the closing date in the ordinary course of business,
consistent with past practices, unless otherwise agreed to by the Parties.
Section Twenty-Seven
Cooperation
ABMI shall provide MRI with all requested technical information relating
to the licensed inventions, provided that such information is in ABMI's
possession and shall aid MRI in manufacturing or developing the licensed
inventions.
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Section Twenty-Eight
Notices
Any notices or other communication required or permitted hereunder shall
be deemed sufficiently given if sent by registered or certified mail, return
receipt requested, and addressed as follows (the address for any Party may be
changed by giving notice thereof to the other Party in accordance with this
section):
Manufacturing and Research, Inc. (MRI)
Attn: Xxxxxx Xxxxxxxx
0000 X. Xxxxxx Xxxx., Xxxxx 000
Xxxxxx, Xxxxxxx 00000
American BioMed, Inc. (ABMI)
Attn: Xxxxxx X. Xxxx
00000 Xxxxxxx Xxxx Xx., Xxxxx 000
The Woodlands, Texas 77380
Section Twenty-Nine
Binding Effect
This agreement shall be binding upon and inure to the benefit of the
representatives, successors and assigns of the Parties hereto.
Section Thirty
Governing Law
This Agreement and all other matters relating to the execution of this
Agreement shall be governed in all respects, including without limitation,
validity, interpretation, construction and performance, by the laws of the State
of Texas. The Parties consent and agree to the jurisdiction of the State of
Texas.
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Section Thirty-One
Entire Agreement
This Agreement and the Letter of Intent dated March 3, 1999, constitutes
the entire agreement between the Parties hereto with respect to the subject
matter hereof and may not be amended, altered, or modified in any manner
whatsoever, except by written instrument executed by both Parties hereto.
In witness whereof, the Parties have executed this Agreement the day and
year first written above.
Manufacturing and Research, Inc. American BioMed, Inc.
/s/ Xxxxxx X. Xxxxxxxx /s/ Xxxxxx X. Xxxx
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By: XXXXXX X. XXXXXXXX, President By: XXXXXX X. XXXX, President, CEO
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