EXHIBIT 10.8
Certain portions of this exhibit have been omitted based upon a request for
confidential treatment. The omitted portions of this exhibit have been
separately filed with the Securities and Exchange Commission.
LICENSE AGREEMENT
THIS AGREEMENT dated as of May 1, 1995 (hereinafter the "Effective Date")
between Xxxx X. Xxxxxxxxx, a citizen of the United States of America, whose
address is 0000 00xx Xxxxxx, Xxxxxxx, Xxxxxxx, X.X.X. 00000 (hereinafter
"XXXXXXXXX") and Biocon Oy, a Finnish corporation, whose address is P. X. XXX 0,
XXX-00000 Xxxxxxx, Xxxxxxx (hereinafter "BIOCON"'.).
WITNESSETH:
WHEREAS, XXXXXXXXX is the owner of U.S. Patents NOs. 4,873,976 and 4,635,637
and has the right to license others under such patents; and
WHEREAS, BIOCON desires to acquire an exclusive license under the patents;
NOW THEREFORE, in consideration of the promises and mutual covenants herein
contained, XXXXXXXXX and BIOCON agree as follows:
I. Definitions
1.1 "Licensed Patents" means U.S. Patent No. 4,873,976 and any
reissue or re-examination thereof, and U. S. Patent No. 4,635,637 and any
reissue or re-examination thereof.
1.2 "Subsidiary" means a corporation, company, or other entity more
than fifty percent (50%) of whose outstanding shares or securities (representing
the right, other than as affected by events of default, to vote for the election
of directors or other managing authority) are, now or hereafter, owned or
controlled, directly or indirectly, by a party hereto, but such corporation,
company, or other entity shall be deemed to be a Subsidiary only as long as such
ownership or control exists.
1.3 "Licensed Entity" means Bioscience, Inc., BIOCON and all
Subsidiaries of BIOCON sublicensed under Article III and all Sublicensees of
BIOCON under Article IV.
1.4 "Relicensed Product" means an insertable suture intended for
repairing body tissue and coming within the scope of any of the apparatus claims
1-18 and 24-31 of the Licensed Patent No. 4,873,976 or any claim of Licensed
Patent No. 4,635,637.
1.5 "Licensed Method" means a method of repairing a tear in a
meniscus and coming within the scope of any of method claims 19-23 of the
Licensed Patent No. 4,873,976.
1.6 "Net Selling Price" means the price invoiced by a Licensed
Entity to an unaffiliated purchaser for a Licensed Product less the following:
any actual discounts, allowances and commissions; any insurance and freight
charges and any taxes, customs duties and other government charges included in
such invoice price; any amounts repaid or credited because of
returned Licensed Products and retroactive price deductions. If the price
invoiced by Licensed Entity in any transaction with respect to any Licensed
Product is less than its Fair Market Value, the Net Selling Price shall be the
Fair Market Value.
1.7 "Fair Market Value" means the Net Selling Price that Licensed
Entity would realize (assuming a reasonable and fair recovery of cost to
Licensed Entity and a reasonable profit margin) if the relevant Licensed Product
were sold to an unaffiliated buyer in an arm's length sale in the same country,
in the same quantity, and contemporaneously with the relevant transaction.
1.8 "Approval Date" shall mean the date on the first of the month
immediately following the date on which the FDA issues its approval of the sale
and use in the United States of America of the Licensed Product and the Licensed
Method.
1.9 "Approval Year" shall mean the year commencing with the Approval
Date.
2.0 "Reporting Quarter" shall mean each three month period
commencing with the Effective Date.
II. LICENSES
2.1 Subject to Articles V and VI, XXXXXXXXX grants to BIOCON and to
Bioscience Inc., the parent corporation of BIOCON, an irrevocable, exclusive
license under the Licensed Patents to make, have made, import, have imported,
use, sell and otherwise dispose of Licensed Products, to practice the Licensed
Method. Whenever the term "sold'' is employed, it is intended also to embrace
the words ''used'' and the phrase ''otherwise disposed of"; the words "sales"
and "selling'' are to be interpreted correspondingly. XXXXXXXXX also grants to
customers of BIOCON and to those in privity with BIOCON an immunity from suit
under any of the method claims of Licensed Patent No. 4,873,976.
2.2 XXXXXXXXX agrees not to assert any claim of infringement of the
Licensed Patents against any customer, mediate and immediate, of a Licensed
Entity with respect to any Licensed Product and/or with respect to any practice
of the Licensed Method in the circumstance in which (a) the Licensed Product has
been obtained directly or indirectly from a Licensed Entity and (b) the
applicable royalty has been paid pursuant to this agreement.
III. EXTENSION OF LICENSE TO SUBSIDIARIES
The license granted herein shall include the right of BIOCON to license its
Subsidiaries. Each Subsidiary so sublicensed shall be bound by the terms and
conditions of this agreement (except to the extent that the obligations of such
terms and conditions are fulfilled on its behalf by BIOCON under the provisions
of Article V as if it were named herein in place of BIOCON). Any sublicense
granted to a Subsidiary shall automatically, and without the requirement of
individual notice, terminate on the date such sublicensed Subsidiary ceases to
be a
-2-
Subsidiary of BIOCON, or this agreement is terminated under any of the
provisions of Article VI, whichever is earlier.
IV. SUBLICENSES
4.1 BIOCON shall have the exclusive right under the Licensed Patents
to grant sublicenses to others at royalty rates not less than those required to
be paid in accordance with Article V of this Agreement.
4.2 With respect to sublicenses granted by BIOCON under this Article
4.1, BIOCON shall pay over to XXXXXXXXX that portion of royalties received from
its sublicensees necessary to yield XXXXXXXXX returns on Licensed Products, sold
by such sublicensees equal to the amounts which XXXXXXXXX would have received
from BIOCON on equivalent Licensed Products sold by it.
4.3 Termination under any of the provisions of Article VI of the
license granted to BIOCON in this Agreement shall terminate all sublicenses
which may have been granted by BIOCON, provided that any sublicensee may elect
to continue its sublicense by advising XXXXXXXXX in writing, within (60) sixty
days of the sublicensee's receipt of written notice of such termination, of its
election, and of its agreement to assume in respect to XXXXXXXXX all the
obligations (including obligations for payment) contained in its sublicensing
agreement with BIOCON. Any sublicense granted by BIOCON shall contain provisions
corresponding to those of this paragraph respecting termination and the
conditions of continuance of sublicenses.
V. ROYALTIES
5.1 Within thirty (30) days after the date of execution of this
Agreement by XXXXXXXXX, BIOCON shall pay to XXXXXXXXX the amount of
[CONFIDENTIAL PORTION OMITTED AND FILED SEPERATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION]
5.2 BIOCON agrees to pay a sales royalties to XXXXXXXXX for each
Licensed Product sold by a Licensed Entity in the amount of [CONFIDENTIAL
PORTION OMITTED AND FILED SEPERATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION]
5.3 BIOCON shall calculate the amount of royalties due to Xxxxxxxxx
in accordance with Article 5.2 for each Licensed Product which, when made or
sold by Licensed Entity or by a sublicensee of BIOCON would, but for the license
granted hereunder, constitute infringement of any claim of the Licensed Patents.
Licensed Products which are built and used solely for the purposes of product
development, testing, and marketing of Licensed Products, including those used
for verification of design, qualification of design, reliability testing, and
demonstration units, and also those which are given as samples without charge to
physicians, hospitals, and the like for the purpose of promoting sales of the
Licensed Products are exempt from royalty.
-3-
5.4 Licensed Entity agrees to maintain accurate records of its
operations under this license and shall require the maintenance of similar
records by its sublicensed Subsidiaries and sublicensees. Within forty-five
(45) days after the termination of each Reporting Quarter commencing with the
Effective Date and extending throughout the continuance of this agreement,
Biocon shall submit to XXXXXXXXX a report detailing:
(a) the receipts for sales of Licensed Products by Licensed Entity and by
any sublicensee of Licensed Entity pursuant to Article IV during such Reporting
Quarter;
b) the product identification applicable to each Licensed Product
reported;
(c) the deductions allowed under Article 1.6; and
(d) the computation of any royalty payable under Article 2 for such
Reporting Quarter; and at the same time as submitting such report shall pay the
amount due.
5.5 All sums of money specified in Article V are to be paid in lawful
money of the United States of America and shall be remitted via wire transfer to
[CONFIDENTIAL PORTION OMITTED AND FILED SEPERATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION]
5.6 Licensed Entity shall permit the records prescribed under Article
5.4 to be inspected during regular business hours twice during each year of this
agreement by auditors paid for by XXXXXXXXX as to whom BIOCON has no reasonable
objection, but only to the extent necessary to verify the sums due and payable.
VI. TERM OF AGREEMENT; TERMINATION
6.1 The term of this agreement is from the Effective Date until the
expiration date of the Licensed Patent No. 4,873,976, unless terminated earlier
under Articles 6.2 or 6.4.
6.2 This agreement shall terminate only in accordance with the
following provisions:
(a) Termination by BIOCON:
BIOCON shall have the right to terminate this agreement only by giving three
months prior written notice to XXXXXXXXX.
(b) Termination By Final Adjudication:
This agreement will terminate automatically in the event of an adjudication
by a court of competent jurisdiction that all relevant claims of the Licensed
Patents are invalid, which decision is not timely appealed, or if appealed, is
affirmed.
-4-
6.3 Any termination pursuant to Article 6.2 shall not relieve
Licensed Entity of any obligation or liability accrued prior to such
termination, and such termination shall not affect in any manner any rights of
XXXXXXXXX under this agreement prior to such termination.
6.4 XXXXXXXXX has the right to terminate this agreement:
a. forthwith by written notice to BIOCON only if Licensed Entity is
in breach of any of its terms or obligations, and, following written notice
given by XXXXXXXXX identifying such breach, fails to rectify that breach; or
where the breach is incapable of rectification, fails to make amends to
XXXXXXXXX'X satisfaction within forty-five (45) days beginning with the date of
the note; or
b. by notice to BIOCON in the event that BIOCON has:
(1) failed to submit to the FDA within one year following the
Effective Date a request for clearance of the Licensed Product; or
(2) failed to secure approval of the Licensed Product from the U.S.
Food & Drug Administration within four (4) years after the Effective Date.
VII. WARRANTY
XXXXXXXXX represents and warrants that he has the full right and power to
grant the license and release of Articles II and III and that there are no
outstanding agreements, assignments or encumbrances inconsistent with the
provisions of this license and release, and that there are no patents or patent
applications owned by him anywhere in the world, other than United States Patent
No. 4,873,976 and 4,635,637 and which are directed to insertable sutures
intended for repairing body tissue.
VIII. NOTICES AND OTHER COMMUNICATIONS
Any notice or other communication required or permitted to be given to
either party shall be sufficiently given on the date of mailing if sent to such
party by registered or certified mail (sent air mail or otherwise by the fastest
service available) postage prepaid, addressed to it at its address set forth
below, or to such other address as it may designate by written notice given to
the other party.
-5-
In the case of BIOCON:
Biocon Oy
P. X. Xxx 0
XXX-00000 Xxxxxxx,
Xxxxxxx
and
Xxxxx X. Xxxxxxxx
President and C.E.O.
Bioscience Inc.
000X Xxxxx Xxxxxx Xxxxxxx
Xxxxxxx, Xxxxxxxxxxxx 00000
In the case of XXXXXXXXX:
Xxxx X. Xxxxxxxxx
0000 00xx Xxxxxx,
Xxxxxxx, Xxxxxxx,
X.X.X. 00000
IX. TRANSFERABILITY OF RIGHTS AND OBLIGATIONS
9.1 Any license or release granted in this agreement by a party in
respect to the Licensed Patents shall be binding upon any successor of the party
in ownership or control of the Licensed Patents.
9.2 The obligations of BIOCON to make reports, pay royalties, and
maintain records in respect to any subsisting license under this agreement shall
run in favor of any person or legal entity which is a successor or assignee of
XXXXXXXXX in respect to XXXXXXXXX'x benefits under the agreement.
9.3 The licenses received by any party under this agreement shall
pass to any assigns for the benefit of creditors of the Licensed Entity and to
any receiver of its assets, or to any person or corporation succeeding to its
entire business in Licensed Products as a result of sale, consolidation,
reorganization, or otherwise, provided such assignee, receiver, person, or legal
entity shall, without delay, accept in writing the provisions of this agreement
and agree to become in all respects bound thereby in the place and stead of the
licensed party, but may not otherwise be transferred without the written consent
of the licensed party.
X. KNOW-HOW AND TRADE SECRETS
No license or other right is granted by this agreement to either party,
directly or by implication, estoppel, or otherwise of any trade secrets or know-
how. Neither party is required to furnish or disclose to the other any technical
information.
-6-
XI. APPLICABLE LAW
Recognizing that there is a large body of law of the state of New York
related to commercial transactions, the parties hereto agree that this agreement
shall be construed, and the legal relations between the parties hereto be
determined in accordance with the laws of the State of New York, United States
of America.
XII. ARBITRATION
Provided the parties hereinafter agree in writing, and then only to the
extent agreed in writing, any controversy or claim arising under or related to
this Agreement shall be settled by arbitration in accordance with the Center for
Public Resources Rules for Non-Administered Arbitration of Patent and Trade
Secret Disputes in effect on the date such controversy or claim first arises.
Such arbitration shall be conducted by a single arbitrator; however, if either
party deems the issue or issues are of major importance, it may elect that the
arbitration shall be conducted before a panel of three arbitrators. The
arbitrator(s) shall be appointed by the Center for Public Resources.
Notwithstanding the choice of law provision of Article XI, the arbitration shall
be governed by the United States Arbitration Act, 9 U.S. (S)1-16. The place of
the arbitration shall be Washington D.C. Insofar as the proceeding relates to
issues of patent validity, or scope of patent claims, as distinct from the terms
of this agreement, it shall also be governed by 35 U.S.C. (S)294, to the extent
applicable. In the event the parties hereto do not agree that the controversy or
claim should be settled by arbitration, then either party may seek resolution of
the controversy or claim in a court of competent jurisdiction.
XIII. FDA APPROVAL/MARKETING
13.1 BIOCON agrees to keep XXXXXXXXX reasonably informed regarding
BIOCON's efforts to secure approval from the U. S. Food & Drug Administration.
13.2 BIOCON agrees to take reasonable steps to use XXXXXXXXX'x name in
connection with the marketing and sale of the Licensed Products.
XIV. MISCELLANEOUS
14.1 This agreement becomes operative and binding on the parties as of
the Effective Date only when it has been executed by each party.
14.2 No amendment or modification of this agreement shall be valid or
binding upon the parties unless made in writing and signed by or on behalf of
each party.
14.3 This agreement embodies the entire understanding of the parties
and supersedes all previous communications, representations, or understandings,
either oral or written, between the parties relating to the subject matter
hereof.
-7-
14.4 The headings of the several sections are inserted for convenience
of reference only and are not intended to be a part of, or to affect the meaning
or interpretation of, this agreement.
IN WITNESS WHEREOF the parties hereto have caused this agreement to be duly
executed as follows:
XXXX X. XXXXXXXXX
Date: May 22, 1995 By: /s/ Xxxx X. Xxxxxxxxx
------------------------------- -----------------------------
(Seal)
BIOCON OY
Date: June 6, 1995 By: /s/ Xxxxxx Xxxxxxx
------------------------------- ------------------------------
(Seal)
-8-
