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EXHIBIT 10.13
AMENDED AND RESTATED LICENSE AND CROSS-LICENSE AGREEMENT
This Amended and Agreement is made on this 27th day of July, 2000
between MOTOROLA, INC. ("MOTOROLA"), a corporation of the State of Delaware,
having its principal place of business at 0000 Xxxx Xxxxxxxxx Xxxx, Xxxxxxxxxx,
Xxxxxxxx 00000, and GMP|WIRELESS MEDICINE, INC., (hereinafter the "LICENSEE"),
a Delaware corporation, having its principal place of business at Xxx Xxxx
Xxxxxxx Xxxx., Xx. Xxxxxxxxxx, Xxxxxxx 00000.
WITNESSETH:
WHEREAS, MOTOROLA possesses certain PATENT RIGHTS (hereinafter
defined) in wireless medical devices and related technologies that it is
interested in having manufactured, marketed, distributed and sold to hospitals,
healthcare provider offices, and acute, subacute and chronic medical outpatient
facilities throughout the world; and
WHEREAS, LICENSEE desires to manufacture, market, distribute and sell
such devices to hospitals, healthcare provider offices, and acute, subacute and
chronic medical outpatient facilities throughout the world; and
WHEREAS, MOTOROLA has acquired through assignment all rights, title
and interest, in said PATENT RIGHTS; and
WHEREAS, MOTOROLA and LICENSEE will be involved with research and
development directed to improvements to said PATENT RIGHTS and MOTOROLA and
LICENSEE desire to cross-license and market the improvements; and
WHEREAS, the parties hereto have previously entered into a certain
License and Cross License Agreement dated May 11, 2000 (the "LICENSE
AGREEMENT") pertaining to said PATENT RIGHTS and wish to make certain
modifications and amendments to the same.
NOW, THEREFORE, in exchange for the consideration set forth herein,
and other good and valuable consideration, the receipt of which is hereby
acknowledged, and intending to be legally bound hereby, the parties agree to
modify and amend the LICENSE AGREEMENT in accordance with the following amended
and restated terms of said LICENSE AGREEMENT as follows:
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ARTICLE 1 - DEFINITIONS
1.1 "AFFILIATED COMPANY" OR "AFFILIATED COMPANIES" shall mean any
corporation, company, partnership, joint venture or other entity which
controls, is controlled by or is under common control with the LICENSEE. For
purposes of this Paragraph, control shall mean the direct or indirect ownership
of at least fifty percent (50%) of the voting securities of the controlled
entity.
1.2 "DEVELOPMENT AGREEMENT" shall mean the Research and
Development agreement of even date between MOTOROLA and LICENSEE, a copy of
which is attached hereto as Exhibit A, covering the development of wireless EKG
products, including the Working Prototype and other wireless sensor
technologies such as vital sign and pulse oximetry but excluding glucose
monitoring.
1.3 "DISTRIBUTION REVENUES" shall mean gross margins (defined as
sales price minus manufacturing costs (or purchase price, if LICENSEE chooses
to have LICENSED PRODUCTS manufactured on its behalf, all in accordance with US
generally accepted accounting procedures) derived by LICENSEE or AFFILIATED
COMPANIES from their sale, lease or use of LICENSED PRODUCT(S) to a distributor
for resale or lease to or use by end users, less trade discounts allowed,
refunds, returns and recalls, sales taxes, freight, storage and delivery costs,
discounts or rebates accrued, incurred or paid to Federal Medicaid or State
Medicare or other payors, amounts exactly repaid or credited by reason of
rejections or the return of LICENSED PRODUCTS (due to recalls, dating or other
reasons), and any other reasonable and customary deductions that according to
generally accepted accounting principles are bona fide deductions from gross
sales to determine DISTRIBUTION REVENUES. DISTRIBUTION REVENUES do not include
any monies received by LICENSEE or AFFILIATED COMPANIES from SUBLICENSEES.
1.4 "EFFECTIVE DATE" shall mean the later of July 27, 2000.
1.5 "EXCLUDED FIELD" shall mean any field other than the LICENSED
FIELD.
1.6 "EXECUTION DATE" shall mean May 11, 2000.
1.7 "EXCLUSIVE RIGHT" shall mean a grant by MOTOROLA to LICENSEE
of its entire right and interest in the PATENT RIGHTS to make, have made, offer
for sale, sell, use,
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import, market, have sold, develop, distribute and otherwise commercially
exploit LICENSED PRODUCTS throughout the world in the LICENSED FIELD. By this
grant it is intended that MOTOROLA shall not have the right to enter the
LICENSED FIELD.
1.8 "KNOW-HOW" means all business, scientific, technical or any
other knowledge related to the design, commercialization, manufacture, use and
implementation of the PATENT RIGHTS and which is previously or subsequently
created or acquired by MOTOROLA during the term of this Agreement.
1.9 "LICENSED FIELD" shall mean any and all uses of LICENSED
PRODUCT(S) in hospitals; healthcare provider offices; acute, subacute and
chronic medical outpatient facilities; and other health and medical related
facilities. Any other uses by LICENSEE must be approved in writing by MOTOROLA.
To the extent otherwise consistent with the terms of this Agreement, LICENSEE
agrees to use reasonable efforts to cooperate with MOTOROLA in insuring
compliance by its customers with respect to the use of LICENSED PRODUCTS solely
in the LICENSED FIELD, including if necessary discontinuing sale to customers
using the product outside the LICENSED FIELD. In such circumstances, unless
LICENSEE has taken affirmative actions to facilitate a third party's use
outside of the LICENSED FIELD, MOTOROLA agrees to take no action that would
impose liability or obligations on LICENSEE for third party use of a LICENSED
PRODUCT outside of the LICENSED FIELD.
1.10 "LICENSED PRODUCT(S)" means any device, product, system or
method that is covered by any VALID CLAIM of any patent that is defined in the
PATENT RIGHTS (coverage by a claim shall include, but is not limited to, direct
infringement, contributory infringement, or inducement to infringe).
1.11 "NET SALES" shall mean gross revenues received by LICENSEE or
AFFILIATED COMPANIES from their direct sale, lease or use of LICENSED
PRODUCT(S) to or for end users, less trade discounts allowed, refunds, returns
and recalls, sales taxes, freight, storage and delivery costs, sales taxes,
discounts or rebates accrued, incurred or paid to Federal Medicaid or State
Medicare or other payors, amounts exactly repaid or credited by reason of
rejections or the return of LICENSED PRODUCTS (due to recalls, dating or other
reasons), and any other reasonable and customary deductions that according to
generally accepted accounting principles are bona fide deductions from gross
sales to determine NET SALES. NET SALES do
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not include any monies received by LICENSEE or AFFILIATED COMPANIES from
SUBLICENSEES.
1.12 "PATENT RIGHTS" means:
(a) the United States, international and foreign patents
listed on Appendix A as of the date hereof and any additions to the PATENT
RIGHTS which are the result of modifications to or improvements in the
technology or design employed in LICENSED PRODUCTS used within the LICENSED
FIELD;
(b) any patents which issue from the United States,
international and foreign patent applications converted from provisional
applications listed on Appendix A and any issued patents that claim priority to
said applications;
(c) any divisionals, continuations, continuation-in-part
applications, and/or continued prosecution applications (and their relevant
international or foreign equivalents) of the patent applications listed on
Appendix A;
(d) any patents resulting from reissues, reexaminations, or
extensions (and their relevant international equivalents) of the patents
described in (a), (b), and/or (c) above; and.
(e) any MOTOROLA FUTURE PATENT RIGHTS, as such term is
defined in Article 9 below.
1.13 "SUBLICENSE REVENUES" shall mean revenue received by the
LICENSEE or AFFILIATED COMPANIES from a sublicensee for the sale, lease or use
of LICENSED PRODUCTS by, through or under the SUBLICENSEE.
1.14 "TERM" shall mean the expiration date of the latest expiring
patent that is identified in the PATENT RIGHTS.
1.15 "TERRITORY" shall mean the world.
1.16 "VALID CLAIM" shall mean any claim of an issued and unexpired
patent that is identified in the PATENT RIGHTS, which has not been held
unpatentable, invalid or unenforceable by a court or other government agency of
competent jurisdiction and has not been admitted to be invalid or unenforceable
through reissue, re-examination, disclaimer or otherwise; provided, however,
that if the holding of such court or agency is later reversed by a court or
agency with overriding authority, the claim shall be reinstated as a VALID
CLAIM after the date of such reversal.
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1.17 "WORKING PROTOTYPE" means LICENSED PRODUCTS consisting of a
sensor, transmitter unit and a receiver or base unit for a wireless EKG
machine, the specifics of which will be developed under the DEVELOPMENT
AGREEMENT.
ARTICLE 2 - GRANTS
2. Subject to the terms and conditions of this Agreement, MOTOROLA hereby
grants to the LICENSEE:
2.1 the EXCLUSIVE RIGHTS in the LICENSED FIELD under the PATENT
RIGHTS and KNOW-HOW in the TERRITORY for the TERM;
2.2 the right to sublicense the rights granted under subsection
2.1 above to others, except that LICENSEE shall not have the right to
sublicense its rights under this Agreement to any of Xxxxxx Laboratories, Inc.,
Xxxxxx Corporation, Xxxxxxx & Xxxxxxx, Inc., Hewlett-Packard Corp., Agilent
Corp., GE Medical Systems, Inc., MiniMed, Inc. or Siemens Corp. without the
prior written consent of MOTOROLA, which consent shall not be unreasonably
withheld, LICENSEE agrees to provide a copy of each such sublicense agreement
to MOTOROLA promptly after it is executed; and
2.3 the right of first refusal to make, use, sell and import
LICENSED PRODUCTS for the EXCLUDED FIELD, if MOTOROLA decides to grant any such
rights to third parties; which right shall permit LICENSEE to obtain an
exclusive license for the same upon terms no less favorable than that offered
or given to any third parties.
ARTICLE 3 - PAYMENTS, ROYALTY AND EQUITY
3.1 The LICENSEE shall pay to MOTOROLA an initial licensing fee
of One Million Dollars ($1,000,000) upon the EFFECTIVE DATE of this Agreement.
This fee is non-refundable and shall not be credited towards any royalty or
other payment due under this Agreement.
3.2 The LICENSEE shall pay to MOTOROLA a licensing fee of One
Million Dollars ($1,000,000) within thirty (30) days of the delivery to
LICENSEE of WORKING PROTOTYPES by MOTOROLA that are suitable for submission to
the U.S. Food and Drug Administration ("FDA") and the Federal Communication
Commission ("FCC") in connection with receiving approval to sell
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such LICENSED PRODUCTS. This fee is non-refundable and shall not be credited
towards any royalty or other payment due under this Agreement.
3.3 The LICENSEE shall pay to MOTOROLA a licensing fee of One
Million Dollars ($1,000,000) within thirty (30) days of LICENSEE receiving
regulatory approval for the WORKING PROTOTYPES from the FDA and FCC (the
"APPROVAL DATE"). This fee is non-refundable and shall not be credited towards
any royalty or other payment due under this Agreement.
3.4 The LICENSEE shall pay to MOTOROLA a licensing fee of One
Million Five Hundred Thousand Dollars ($1,500,000) either one (1) year after
the EFFECTIVE DATE or six (6) months after the APPROVAL DATE, whichever is
earlier. This fee is non-refundable and shall not be credited towards any
royalty or other payment due under this Agreement.
3.5 The LICENSEE shall pay to MOTOROLA Running Royalties of Two
Percent (2%) of current NET SALES where the aggregate of NET SALES over the
life of this Agreement is less than Twenty-five Million Dollars ($25,000,000).
For aggregate NET SALES over the life of this Agreement greater than Twenty-
Five Million Dollars ($25,000,000) but less than Fifty Million Dollars
($50,000,000), the Running Royalties due from LICENSEE shall be two and
one-half percent (2.5%) of such NET SALES. For aggregate NET SALES over the
life of the Agreement greater than Fifty Million Dollars ($50,000,000), the
Running Royalty due from LICENSEE shall be three percent (3%) of such NET
SALES.
3.6 The LICENSEE shall pay to MOTOROLA a royalty of twenty
percent (20%) of any and all payments received by LICENSEE constituting
DISTRIBUTION REVENUES.
3.7 In the event LICENSEE has granted sublicenses under this
Agreement, LICENSEE shall pay a Royalty to MOTOROLA the greater of: (1) twenty
percent (20%) of any and all payments received by LICENSEE from SUBLICENSE
REVENUES; or (2) one half (1/2) of the amount that MOTOROLA would have received
if such sale had been made directly by LICENSEE.
3.8 The LICENSEE shall provide to MOTOROLA within forty-five (45)
days of the end of each March, June, September and December after the APPROVAL
DATE of this Agreement, a written report containing the amount of LICENSED
PRODUCTS sold by the LICENSEE and AFFILIATED COMPANIES, the total associated
NET SALES, DISTRIBUTION REVENUES and SUBLICENSE REVENUES and the running
royalties due to MOTOROLA as a result of NET SALES, DISTRIBUTION REVENUES and
SUBLICENSE REVENUES for the applicable calendar
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quarter. Payment of any such royalties due shall accompany such report.
In the event that any payment due hereunder is not made when due, the
payment shall accrue interest beginning on the tenth day following the due date
thereof, calculated at the annual rate of the sum of two percent (2%) plus the
prime interest rate quoted by The Wall Street Journal on the date said payment
is due, the interest being compounded on the last day of each calendar quarter;
provided, however, that in no event shall said annual interest rate exceed the
maximum legal interest rate for corporations. Each such royalty payment when
made shall be accompanied by all interest so accrued. Said interest and the
payment and acceptance thereof shall not negate or waive the right of MOTOROLA
to seek any other remedy, legal or equitable, to which it may be entitled under
this Agreement because of the delinquency of any payment.
3.9 The LICENSEE shall make and retain, for a period of three (3)
years following the period of each report required by Paragraph 3.8, true and
accurate records, files and books of account containing all the data reasonably
required for the full computation and verification of sales and other
information required in Paragraph 3.8. Such books and records shall be in
accordance with generally accepted accounting principles consistently applied.
The LICENSEE shall permit the inspection and copying of such records, files and
books of account by MOTOROLA or its agents during regular business hours upon
ten (10) business days' written notice to the LICENSEE. Such inspection shall
not be made more than once each calendar year. All costs of such inspection and
copying shall be paid by MOTOROLA, provided that if any such inspection shall
reveal that an error has been made in the amount equal to ten percent (10%) or
more of such payment, reasonable costs for such inspection and copying shall be
borne by the LICENSEE. The LICENSEE shall include in any agreement with its
AFFILIATED COMPANIES or its sublicensees that permits such party to make, use
or sell the LICENSED PRODUCT(S), a provision requiring such party to retain
records of sales of LICENSED PRODUCT(S) and other information as required in
Paragraph 3.8 and permit MOTOROLA to inspect such records as required by this
Paragraph.
3.10 No royalties shall be payable on LICENSED PRODUCT sales,
sublicenses or other transactions between the LICENSEE and any AFFILIATED
COMPANIES, in which event the royalty shall be based upon the NET SALES,
DISTRIBUTION REVENUES or SUBLICENSE REVENUES of the AFFILIATED COMPANY.
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3.11 No multiple royalties shall be due and payable because any
LICENSED PRODUCT is covered by more than one patent that is within the
definition of PATENT RIGHTS.
3.12 MOTOROLA agrees that no royalties shall be due for the
internal use of the LICENSED PRODUCTS for research and commercial development
purposes by the LICENSEE and AFFILIATED COMPANIES or for use by third parties
providing research and development activities on behalf of the LICENSEE or
AFFILIATED COMPANIES in seeking governmental and professional approvals,
certifications or endorsements, or for training purposes, except where the
LICENSEE or any AFFILIATED COMPANY receives revenues for the sale, lease or use
of the LICENSED PRODUCT from the organization using the device for such stated
proposes.
3.13 To the extent that LICENSEE incurs costs in connection with
any alleged infringement of third party patents and/or obtains, subsequent to
the EXECUTION DATE, licenses to third party patents or other intellectual
property that are necessary to make, use, import or sell LICENSED PRODUCTS with
the same functionality as: (a) the Working Prototype, or (b) otherwise covered
by a PATENT RIGHT as the same existed on the EFFECTIVE DATE, LICENSEE may
deduct from the royalties due to MOTOROLA fifty percent (50%) of the costs
incurred and/or royalties due on such third party patents or intellectual
property up to an amount equal to fifty percent (50%) of royalties due
hereunder. The royalty deductions described in this Paragraph 13 shall not
apply to any third party licenses that encompass aesthetic changes or
additional product functionality.
3.14 For purposes of calculating royalties, in the event that a
LICENSED PRODUCT includes both component(s) covered by a VALID CLAIM of a
PATENT RIGHT ("Patented Component") and component(s) that are useful alone or
in a combination which does not require the Patented Component, and such
components are not covered by a VALID CLAIM of a PATENT RIGHT ("Unpatented
Component"), then NET SALES, DISTRIBUTION REVENUES or SUBLICENSE REVENUES of
the Combination Product shall be calculated using one of the following methods:
(a) By multiplying the NET SALES, DISTRIBUTION REVENUES
or SUBLICENSE REVENUES of the Combination Product during the
applicable royalty accounting period ("accounting period") by
a fraction, the numerator of which is the aggregate gross
selling price of the Patented Component(s) contained in the
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Combination Product if sold separately, and the denominator
of which is the sum of the gross selling price of both the
Patented Component(s) and the Unpatented Component(s)
contained in the Combination Product, if sold separately; or
(b) In the event that no such separate sales are made of
the Patented Component(s) or the Unpatented Components during
the applicable accounting period, NET SALES, DISTRIBUTION
REVENUES or SUBLICENSE REVENUES for purposes of determining
royalties payable hereunder shall be calculated by
multiplying the NET SALES, DISTRIBUTION REVENUES or
SUBLICENSE REVENUES, as applicable, of the Combination
Product by a fraction, the numerator of which is the fully
allocated production cost of the Patented Component(s) and
the denominator of which is the sum of the fully allocated
production costs of the Patented Component(s) and the
Unpatented Component(s) contained in the Combination Product.
Such fully allocated costs shall be determined by using
LICENSEE's standard accounting procedures, which procedures
must conform to standard cost accounting procedures.
(c) For purposes of Subparagraphs (a) or (b) above,
Patented Components shall include any LICENSED PRODUCTS that
have the functional equivalent of any Unpatented Component
and the Unpatented Component shall not include any such
functionally equivalent device.
3.15 LICENSEE agrees to fund no less than Six Million Dollars
($6,000,000) for research and development under the DEVELOPMENT AGREEMENT
between LICENSEE and MOTOROLA. Such funds will be paid pursuant to the payment
terms set forth in the DEVELOPMENT AGREEMENT. Any inventions or discoveries
conceived or first reduced to practice in the performance of activities under
the DEVELOPMENT AGREEMENT shall be owned and cross-licensed as detailed below.
ARTICLE 4 - OTHER AGREEMENTS
4.1 The LICENSEE shall issue to MOTOROLA upon the EFFECTIVE DATE
One Million Five Hundred Thousand (1,500,000) shares of LICENSEE'S common stock
pursuant to the
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Stock Acquisition Agreement to be dated the EFFECTIVE DATE between MOROROLA and
the LICENSEE, a copy of which is attached hereto as Exhibit B.
4.2 MOTOROLA, LICENSEE and GMP|Companies, Inc. ("GMP") agree to
enter into that certain Shareholders Agreement on the EFFECTIVE DATE, a copy of
which is attached hereto as Exhibit C.
4.3 From and after the EFFECTIVE DATE of this Agreement, MOTOROLA
agrees to provide to LICENSEE, from time to time, and as requested by LICENSEE,
copies of all tangible materials representing KNOW-HOW, including without
limitation, reports, studies, diagrams, designs, bills of material, business
plans, test data, manufacturing data, and specifications. MOTOROLA also agrees
to cause appropriate representatives of MOTOROLA to confer with LICENSEE and
its sublicensees with respect to technical matters related to LICENSED PRODUCTS
and the manufacture, design, use and regulatory approvals of the same.
4.4 MOTOROLA shall have the right of first refusal to bid to be
the supplier of LICENSED PRODUCTS where the LICENSEE or a sublicensee elects to
have third parties manufacture such products for commercial purposes in such
quantities and/or periods of time as specified by the LICENSEE or a
sublicensee. For purposes of this Agreement, the parties intend to implement
the right of first refusal as follows: If LICENSEE or sublicensee elects to
have third parties manufacture LICENSED PRODUCTS for commercial purposes, it
shall provide MOTOROLA with a request for proposal for such manufacture, which
proposal shall include specifications, terms and conditions as may be
reasonably requested by LICENSEE or a sublicensee. Such proposal shall be
submitted by MOTOROLA to the LICENSEE or sublicensee within 20 business days
from the date of receipt of the request from the LICENSEE or sublicensee or
such later date specified in the request. The LICENSEE or sublicensee shall
then be allowed to seek other bids from third parties, provided that MOTOROLA
shall have the right to match any such bid. If the LICENSEE or a sublicensee
receives a bid from another manufacture which the LICENSEE or a sublicensee
wishes to pursue, the LICENSEE or sublicensee shall provide Motorola notice of
such proposal, and MOTOROLA shall have the right to match such proposal.
4.5 The parties agree to actively promote the relationship of the
parties with respect to the subject matter of this Agreement, including,
without limitation, co-branding the LICENSED PRODUCTS with MOTOROLA'S and
LICENSEE'S names, in a form to be mutually agreed upon
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by the parties.
4.6 Except as otherwise provided by this Agreement, LICENSEE
shall not use MOTOROLA's name nor the name of any of its corporate affiliates
or employees, nor any adaptation thereof, in any advertising, promotional or
sales literature without prior written consent obtained from MOTOROLA in each
case, except that LICENSEE must state that it is licensed by MOTOROLA under one
or more of the patents comprising the PATENT RIGHTS, that the LICENSED PRODUCTS
are developed in cooperation with MOTOROLA, and LICENSEE may comply with
disclosure requirements of all applicable laws relating to its business,
including United States and State securities laws as determined by LICENSEE's
counsel. Any consent required hereunder shall not be unreasonably withheld or
delayed by MOTOROLA.
ARTICLE 5 - PATENT RIGHTS AND CONFIDENTIAL INFORMATION
5.1 MOTOROLA shall, at its cost, file, prosecute and maintain all
patents and patent applications specified under PATENT RIGHTS in the United
States, Europe, Japan, Mexico and Australia, together with such other
jurisdictions as reasonable requested by LICENSEE. LICENSEE shall be copied
directly on all patent correspondence, provided copies of all correspondence
received from any patent office and provided drafts of any papers or
applications to be filed at least two weeks prior to patent office submission
or as promptly as practicable for comment. LICENSEE's comments shall be
considered and reasonably incorporated and LICENSEE agrees to reasonably and
promptly cooperate in the execution and delivery of documentation required in
connection with such matters and Licensee shall take all reasonable steps to
ensure its participation in these processes meet whatever filing deadlines may
be required. In any country where MOTOROLA elects not to file a patent
application or to pay expenses associated with filing, prosecuting, or
maintaining a patent application or patent, MOTOROLA shall notify LICENSEE of
its election a reasonable amount of time prior to the deadline for filing,
prosecuting or maintaining any applications in said country. LICENSEE
thereafter may file, prosecute, and/or maintain a patent application or patent
at its own expense and for its own exclusive benefit in said country and
LICENSEE thereafter shall not be required to pay any royalties, NET SALES or
SUBLICENSE REVENUES to MOTOROLA for
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products covered by such patent or patent application in the applicable
country.
5.2 LICENSEE agrees that any and all individual LICENSED
PRODUCT(S) sold, used or leased by LICENSEE, AFFILIATED COMPANIES and
sublicensees will be marked with the number of the applicable patent(s)
licensed hereunder in accordance with each country's patent laws. If it is
impossible to xxxx the LICENSED PRODUCT directly, LICENSEE may xxxx the product
package.
5.3 If necessary, the parties will exchange information, which
they consider to be confidential. The recipient of such information agrees to
accept the disclosure of said information which is marked as confidential at
the time it is sent to the recipient, and to employ all reasonable efforts to
maintain the information secret and confidential, such efforts to be no less
than the degree of care employed by the recipient to preserve and safeguard its
own confidential information. The information shall not be disclosed or
revealed by the recipient to anyone except employees and affiliates of the
recipient who have a need to know the information and who have entered into a
secrecy agreement with the recipient, under which such employees and affiliates
are required to maintain confidential the proprietary information of the
recipient and such employees and affiliates shall be advised by the recipient
of the confidential nature of the information and that the information shall be
treated accordingly. The recipient's obligations under this Paragraph shall not
extend to any part of the information:
(a) that can be demonstrated to have been in the public
domain or publicly known and readily available to the trade or the
public prior to the date of the disclosure; or
(b) that can be demonstrated, from written records to
have been in the recipient's possession or readily available to the
recipient from another source not under obligation of secrecy to the
disclosing party prior to the disclosure; or
(c) that becomes part of the public domain or publicly
known by publication or otherwise, not due to any unauthorized act by
the recipient; or
(d) that is demonstrated from written records to have
been developed by or for the receiving party without reference to
confidential information disclosed by the disclosing party; or
(e) that is required to be disclosed by law, government
regulation or court order, as reasonably determined by counsel.
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The obligations of this Paragraph shall also apply to AFFILIATED COMPANIES
and/or sublicensees provided such information by LICENSEE. MOTOROLA'S,
LICENSEE'S, AFFILIATED COMPANIES', and sublicensees' obligations under this
Paragraph shall extend until three (3) years after the termination of this
Agreement. Upon written request of the disclosing party, the other party shall
return or certify to the destruction of all copies of materials containing
confidential information of the disclosing party.
ARTICLE 6 - PATENT INFRINGEMENT
6.1 Each party will notify the other promptly in writing when any
infringement by another of the PATENT RIGHTS in the LICENSED FIELD is uncovered
or suspected.
6.2 MOTOROLA shall have the first right to enforce any patent
within PATENT RIGHTS in the LICENSED FIELD against any infringement or alleged
infringement, past or future, thereof, and shall at all times keep LICENSEE
informed as to the status thereof. MOTOROLA may, in its sole judgment and at
its own expense, institute suit against any such infringer or alleged infringer
and control, settle, and defend such suit in a manner consistent with the terms
and provisions hereof. Should any damages award or settlement obtained exceed
the costs of such action, the remaining portion shall be treated as NET SALES.
This right to xxx for infringement shall not be used in an arbitrary or
capricious manner. LICENSEE shall reasonably cooperate in any such litigation.
6.3 If MOTOROLA elects not to enforce any patent within the
PATENT RIGHTS in the LICENSED FIELD against any infringer, then it shall so
notify LICENSEE in writing within six (6) months of receiving notice that an
infringement may exist, or such other shorter period as may be reasonably
requested by LICENSEE, and LICENSEE may, in its sole judgment and at its own
expense, take steps to enforce any patent and control, settle, and defend such
suit in a manner consistent with the terms and provisions hereof. MOTOROLA
shall reasonably cooperate in any such litigation.
6.4 Any recovery by LICENSEE under Paragraph 6.3 shall be deemed
to reflect loss of commercial sales, and LICENSEE shall pay to MOTOROLA the
same percent of the recovery net of
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all reasonable costs and expenses associated with each suit or settlement as if
such net constituted NET SALES. If the cost and expenses exceed the recovery,
then the excess shall be credited against royalties payable by LICENSEE to
MOTOROLA hereunder in connection with sales or services in the country of such
legal proceedings, provided, however, that any such credit under this Paragraph
shall not exceed fifty percent (50%) of the royalties otherwise payable to
MOTOROLA with regard to sales or services in the country of such action in any
one calendar year, with any excess credit being carried forward to future
calendar years.
ARTICLE 7 - TERM AND TERMINATION
7.1 This Agreement shall commence upon the EFFECTIVE DATE and
shall expire in each country on the date of expiration of the last to expire
patent included within PATENT RIGHTS in that country or if no patents issue
twenty (20) years from the EFFECTIVE DATE of this Agreement.
7.2 LICENSEE and MOTOROLA shall exercise reasonable efforts to
develop and commercialize the LICENSED PRODUCTS using good scientific and
business judgment.
7.3 Upon material breach or default of any of the terms and
conditions of this Agreement, the defaulting party shall be given written
notice of such default in writing and a period of sixty (60) days after receipt
of such notice to correct the default or breach or thirty (30) days in the case
of a financial default or breach. If the default or breach is not corrected
within the applicable sixty (60) or thirty (30) day period, the party not in
default shall have the right to terminate this Agreement.
7.4 LICENSEE may terminate this Agreement and the license granted
herein, for any reason, upon giving MOTOROLA sixty (60) days written notice, or
such longer period as may be reasonably requested by MOTOROLA. Upon the giving
of notice of such termination, except as set forth in the next sentence, no
further amounts will be due or payable hereunder. If said termination is based
on a reasonable determination by LICENSEE's counsel that the manufacture, use,
sale or importation within the United States of America of LICENSED PRODUCTS
would, infringe upon rights of any third party, which were in the public domain
as of the EFFECTIVE DATE, LICENSEE shall be entitled to rescind the transaction
and be reimbursed by MOTOROLA for any monies paid to MOTOROLA, unless MOTOROLA
cures any potential infringement within such sixty (60) day
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period.
7.5 Termination under Paragraph 7.3 shall not affect MOTOROLA's
right to recover due and unpaid royalties or fees owed prior to the termination
date. Upon termination all rights in and to the licensed technology shall
revert to MOTOROLA at no cost to MOTOROLA, provided that MOTOROLA shall honor
sublicensee agreements in the event the sublicensee cures any payment defaults
which relate to that sublicense agreement and agrees to directly assume the
obligations of the LICENSEE under this Agreement and to make all payments
directly to MOTOROLA. In this connection MOTOROLA agrees to promptly issue,
from time to time, upon written request, estoppel certificates in favor of the
LICENSEE, AFFILIATED COMPANIES, sublicensees or potential sublicensees setting
forth the status of this Agreement and, if in default, the conditions required
to cure the same.
7.6 In the event that the EFFECTIVE DATE has not occurred on or
before July 1, 2000, either party may terminate this Agreement by giving
written notice to the other party of such election. Upon any such termination,
neither party shall have any further obligations hereunder or under any of the
other agreements executed in connection with this Agreement.
ARTICLE 8 - REPRESENTATIONS AND WARRANTIES
8.1 PATENT MATTERS: As of the Effective Date: (i) MOTOROLA
warrants and represents that it owns or has a license to the PATENT RIGHTS and
KNOW HOW, and that it has not made any commitments to others regarding the
PATENT RIGHTS and/or KNOW HOW in the LICENSED FIELD that would conflict with
such rights; (ii) MOTOROLA warrants and represents that it has not received
written notice from any third party that any composition, process or use
claimed by the PATENT RIGHTS infringes an issued patent of such third party;
(iii) MOTOROLA warrants and represents that it has no actual knowledge of any
current action conducted by a third party which is or would constitute an
infringement of the PATENT RIGHTS in the LICENSED FIELD; and (iv) MOTOROLA
warrants and represents that it has reviewed those portions of its intellectual
property portfolio which it believes are most relevant to the LICENSED FIELD
and believes that there are no other patents or patent applications owned by
MOTOROLA or licensed to MOTOROLA with the right to grant sublicenses which
would be infringed in the practice of the
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PATENT RIGHTS in the LICENSED FIELD in the TERRITORY. Should it later eventuate
that any patent or patent application, that is owned by MOTOROLA or licensed to
MOTOROLA with the right to grant sublicenses, would be infringed in the
practice of the PATENT RIGHTS in the LICENSED FIELD in the TERRITORY, then that
patent or patent application shall be deemed to be licensed to LICENSEE as part
of the PATENT RIGHTS under this Agreement; and (v) MOTOROLA represents and
warranties that the rights and options granted to LICENSEE under this Agreement
are free and clear of liens, claims and encumbrances of any third parties.
8.2 OTHER REPRESENTATIONS: Each party warrants and represents to
the other party that it has the legal power to enter into this Agreement, that
this Agreement constitutes a binding agreement enforceable against such party
in accordance with its terms, and that is has not made any commitments to
others that would conflict with its obligations under this Agreement.
ARTICLE 9 - CROSS-LICENSE OF FUTURE DEVELOPED TECHNOLOGY
9.1 MOTOROLA and LICENSEE are parties to the DEVELOPMENT
AGREEMENT under which any patent rights arising out of or in connection with
that agreement will be owned and controlled by LICENSEE. "LICENSEE FUTURE
PATENT RIGHTS" are those patents and patent applications that are owned by
LICENSEE as described above. LICENSEE agrees to license the LICENSEE FUTURE
PATENT RIGHTS to MOTOROLA worldwide, with the right to grant sublicenses, in
all fields other than the LICENSED FIELD. The license granted to MOTOROLA as
described above shall be royalty free except for sublicenses, in which event
MOTOROLA shall owe LICENSEE a fee equal to that which LICENSEE would owe
MOTOROLA under this AGREEMENT had the sublicense been from LICENSEE for a
LICENSED PRODUCT. LICENSEE shall be responsible for handling patent prosecution
of all patent applications based on LICENSEE FUTURE PATENT RIGHTS.
9.2 "MOTOROLA FUTURE PATENT RIGHTS" are those patents and patent
applications (other than the PATENT RIGHTS) relating to the specific fields of
wireless EKG technology and other wireless medical sensor technologies (such as
xxxxx xxxxx and pulse oximetry, but excluding glucose monitoring) that are now
or hereafter owned or controlled by MOTOROLA during the term of the DEVELOPMENT
AGREEMENT which would be useful to LICENSEE in
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providing new and innovative products (the "MEDICAL FIELD"). MOTOROLA agrees to
grant LICENSEE the option to license the MOTOROLA FUTURE PATENT RIGHTS to
LICENSEE in the MEDICAL FIELD under the royalty provisions of this AGREEMENT
and MOTOROLA shall supplement the PATENT RIGHTS transferred hereunder by
periodically providing a supplemental schedule of PATENT RIGHTS to LICENSEE.
MOTOROLA shall be responsible for handling all patent prosecution of the
MOTOROLA FUTURE PATENT RIGHTS and enforcement of the MOTORALA FUTURE PATENT
RIGHTS shall be in accordance with the enforcement provisions for the PATENT
RIGHTS as described above.
9.3 In the event MOTOROLA elects not to prosecute or maintain its
FUTURE PATENT RIGHTS as described above, it shall give the LICENSEE notice of
such fact in a timely manner so as to allow the continuation of such patent
prosecutions or maintenance, in which event LICENSEE shall have no future
obligations to pay royalties or other fees associated with such patent rights
in the applicable jurisdictions.
ARTICLE 10 - MISCELLANEOUS
10.1 All notices pertaining to this Agreement shall be in writing
and sent certified mail, return receipt requested, or by other commercial
delivery means to the parties at the following addresses or such other address
as such party shall have furnished in writing to the other party in accordance
with this Paragraph:
FOR MOTOROLA: Assistant General Counsel and Director, Patents,
Trademarks and Licensing
Motorola, Inc.
0000 Xxxx Xxxxxxxxx Xxxx
Xxxxxxxxxx, XX 00000
FOR LICENSEE: Xxxx Xxxxxxx, M.D.
President
GMP|Wireless Medicine, Inc.
Xxx Xxxx Xxxxxxx Xxxx.
Xx. Xxxxxxxxxx, XX 00000
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10.2 All written progress reports, royalty and other payments, and
any other related correspondence shall be in writing and sent to:
FOR MOTOROLA: Assistant General Counsel and Director, Patents
Trademarks and Licensing
Motorola, Inc.
0000 Xxxx Xxxxxxxxx Xxxx
Xxxxxxxxxx, XX 00000
10.3 This Agreement is binding upon and shall inure to the benefit
of MOTOROLA, its successors and assignees and shall not be assignable to
another party without the written consent of MOTOROLA, which consent shall not
be unreasonably withheld, except that the LICENSEE shall have the right to
assign this Agreement to another party without the consent of MOTOROLA in the
case of the sale or transfer by the LICENSEE of all, or substantially all, of
its assets relating to the LICENSED PRODUCT to that party.
10.4 In the event that any one or more of the provisions of this
Agreement should for any reason be held by any court or authority having
jurisdiction over this Agreement, or over any of the parties hereto to be
invalid, illegal or unenforceable, such provision or provisions shall be
reformed to approximate as nearly as possible the intent of the parties, and if
unreformable, shall be divisible and deleted in such jurisdictions; elsewhere,
this Agreement shall not be affected.
10.5 The construction, performance, and execution of this
Agreement shall be governed by the laws of the State of Delaware without regard
to that State's conflict of law provisions.
10.6 Prior to initial human testing or first commercial sale of
any LICENSED PRODUCT as the case may be in any particular country, the LICENSEE
shall establish and maintain, in each country in which LICENSEE, an AFFILIATED
COMPANY or sublicensee shall test or sell LICENSED PRODUCT(S) and LICENSED
SERVICES, product liability or other appropriate insurance coverage appropriate
to the risks involved in marketing LICENSED PRODUCT(S). Upon MOTOROLA'S
request, the LICENSEE will furnish MOTOROLA with a Certificate of Insurance of
each product liability insurance policy obtained.
10.7 This Agreement and the documents referred to herein and in
the documents attached hereto constitute the entire understanding between the
parties with respect to the obligations of the parties with respect to the
subject matter hereof, and supersedes and replaces all prior agreements,
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understandings, writings, and discussions between the parties relating to said
subject matter, including without limitation the LICENSE AGREEMENT.
10.8 This Agreement may be amended and any of its terms or
conditions may be waived only by a written instrument executed by the
authorized officials of the parties or, in the case of a waiver, by the party
waiving compliance. The failure of either party at any time or times to require
performance of any provision hereof shall in no manner affect its right at a
later time to enforce the same. No waiver by either party of any condition or
term in any one or more instances shall be construed as a further or continuing
waiver of such condition or term or of any other condition or term.
10.9 This Agreement shall be binding upon and inure to the benefit
of and be enforceable by the parties hereto and their respective successors and
permitted assigns.
10.10 Upon termination of this Agreement for any reason, Paragraphs
5.3 and 7.5 shall survive termination of this Agreement.
10.11 This Agreement may be executed in two (2) or more
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute one and the same instrument.
10.12 The dispute resolution process set forth in Section 10.1 of
the DEVELOPMENT AGREEMENT between the parties shall apply to this Agreement.
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IN WITNESS WHEREOF the respective parties hereto have executed this
Agreement by their duly authorized officers on the date appearing below their
signatures.
MOTOROLA, INC. GMP|WIRELESS MEDICINE, INC.
By: By:
------------------------------------------- ---------------------------
Xxxxxxxx Xxxxx Xxxx Xxxxxxx, M.D.
Senior Vice President, Assistant General President
Counsel and Director of Patents, Trademarks GMP|Wireless Medicine, Inc.
and Licensing Motorola, Inc. One East Broward Boulevard
0000 Xxxx Xxxxxxxxx Xxxx Xxxxx 0000
Xxxxxxxxxx, XX 00000 Xxxx Xxxxxxxxxx, XX 00000
By:
------------------------------------------
Xxxxx X. Xxxx
Executive Vice President and President
Global Strategy and Business Development
Motorola, Inc.
0000 Xxxx Xxxxxxxxx Xxxx
Xxxxxxxxxx, XX 00000
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Appendix A - Patent Rights
Exhibit A - Development Agreement
Exhibit B - Stock Acquisition Agreement
Exhibit C - Shareholders' Agreement
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Appendix A
1. U.S. Patent No. 5,862,803 Issued January 26, 1999 USSN 08/605,197
"Wireless Medical Diagnosis and Monitoring Equipment"
Xxxxxx, Von Czettriz and Bax, inventors
2. U.S. Patent No. 5,957,854 Issued September 28, 1999 USSN 08/985,673
"Wireless Medical Diagnosis and Monitoring Equipment"
Xxxxxx, Von Czettriz and Bax, inventors
3. U.S. Patent Application Serial No. 09/379,763 Filed September 28, 1999
"Wireless Medical Diagnosis and Monitoring Equipment"
Xxxxxx, Von Czettriz and Bax, inventors
4. European Patent No. EP0719108C Filed September 2, 1994
"Wireless Medical Diagnosis and Monitoring Equipment"
Xxxxxx, Von Czettriz and Bax, inventors
5. U.K. Patent corresponding to EP0719108C
"Wireless Medical Diagnosis and Monitoring Equipment"
Xxxxxx, Von Czettriz and Bax, applicants and inventors
6. French Patent corresponding to EP0719108C
"Wireless Medical Diagnosis and Monitoring Equipment"
Xxxxxx, Von Czettriz and Bax, inventors
7. German Patent corresponding to EP0719108C
"Wireless Medical Diagnosis and Monitoring Equipment"
Xxxxxx, Von Czettriz and Bax, inventors
8. German Patent Application Serial No. 4329898.2
"Wireless Medical Diagnosis and Monitoring Equipment"
9. U.S. Patent Application for "Optical Non Invasive Blood Pressure Sensor and Method" (XxXxxxxxx Docket
No. MBHB 00-212)
10. U.S. Patent Application for "Method for Obtaining Blood Pressure Data From Optical Sensor" (XxXxxxxxx
Docket No. MBHB 00-213)
11. U.S. Patent Application for "Programmable Wireless Electrode System For Medical Monitoring" (Serial No.
09/551,718; XxXxxxxxx Docket No. MBHB 00-214)
12. U.S. Patent Application for "Wireless System Protocol for Telemetry Monitoring" (Serial No. 09/551,719;
XxXxxxxxx Docket No. MBHB 00-214-A)
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13. U.S. Patent Application for "Wireless EKG" filed July 18, 2000
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