EXHIBIT 10.13
SETTLEMENT AGREEMENT
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This Settlement Agreement (hereinafter "Agreement") is made and entered
into effective this 12th day of October, 1999, by and between ALARIS Medical
Systems, Inc., a Delaware corporation ("ALARIS Medical"), and Medex, Inc., an
Ohio Corporation ("Medex"), on the one hand, and Becton Xxxxxxxxx and Company, a
New Jersey corporation ("Becton Xxxxxxxxx"), Xxxxxx Xxxxxxxxx Infusion Therapy
Systems, Inc., a Delaware corporation ("BDITS"), and Xxxxxx X. Xxxxxxx, an
individual ("Xxxxxxx"), on the other hand, with respect to the following:
RECITALS:
A. ALARIS Medical and Medex on the one hand and Becton Xxxxxxxxx and
BDITS on the other hand are parties to a civil action pending in the United
States District Court for the Southern District of California, Civil Action No.
98CV 2205 IEG JAH ("California Action").
X. Xxxxxx Xxxxxxxxx and Xxxxxxx on the one hand and ALARIS Medical on
the other hand are parties to a civil action pending in the United States
District Court for the District of Utah, Central Division, Case No. 2:
98-CV-00279C ("Utah Action").
C. The California Action involves: (a) claims by ALARIS Medical against
Becton Xxxxxxxxx and BDITS for infringement of United States Letters Patent No.
5,549,577 to Xxxxxx et al., entitled "Needleless Connector," issued on August
27, 1996; and (b) claims by ALARIS Medical and Medex against Becton Xxxxxxxxx
and BDITS for infringement of United States Letters Patent No. Re. 35,841 to
Xxxxx et al., entitled "Needleless Connector Sample Site," issued on July 7,
1998. Becton Xxxxxxxxx and BDITS have raised certain defenses, and have filed a
counterclaim seeking a declaration of non-infringement and that the
patents-in-suit are invalid.
D. The Utah Action involves claims by Becton Xxxxxxxxx and Xxxxxxx
against ALARIS Medical for infringement of United States Letters Patent No.
5,699,821 to Xxxxxxx, entitled "Control of Fluid Flow", issued on December 23,
1997. ALARIS Medical has raised certain defenses, and has filed a counterclaim
seeking a declaration of non-infringement and that the patent-in-suit is
invalid.
E. All parties desire to amicably settle and compromise the disputes
between them that are the subject matter of the California Action and the Utah
Action and to avoid the expense and inconvenience of further litigation.
TERMS, CONDITIONS, AND COVENANTS:
In consideration of the foregoing, and of the covenants and conditions
hereinafter set forth, and in settlement of the above controversies that exist
between them, the parties agree as follows:
1. DEFINITIONS
a. AFFILIATE
The term "Affiliate" as used herein shall mean an
affiliate as defined under the Securities Act of 1933 (including as amended).
b. EFFECTIVE DATE
The term "Effective Date" as used in this Agreement
shall mean the date first written above.
x. XXXXX PATENTS
"Xxxxx Patents" as used in this Agreement shall mean
U.S. Patent No. Re. 35,841 to Xxxxx et al., issued July 7, 1998, and any and all
U.S. and foreign patent rights claiming priority from the application for that
patent or U.S. Patent No. 5,203,775 to Xxxxx et al., issued April 20, 1992, any
and all U.S. and foreign patent rights claiming priority from an application
from which the application for U.S. Patent No. Re. 35,841 or U.S. Patent No.
5,203,775 claims priority, and any counterpart or corresponding U.S. or foreign
patent rights to any of the foregoing and any reissues or reexaminations
thereof.
d. ICU MEDICAL
"ICU Medical" as used in this Agreement shall mean
ICU Medical Inc. and all parent, subsidiary, joint venture, Affiliate,
predecessor and/or successor companies or entities.
x. XXXXX PATENTS
"Xxxxx Patents" as used in this Agreement shall mean
United States Letters Patent Nos. 5,199,947; 5,344,414; 5,688,254; and
5,776,116; and any and all U.S. and foreign patent rights claiming priority from
any application for any of those patents, any and all U.S. and foreign patent
rights claiming priority from any application from which any application for any
of those patents claims priority, and any counterpart or corresponding U.S. or
foreign patent rights to any of the foregoing and any reissues or reexaminations
thereof.
f. MINOR MODIFICATIONS
"Minor Modifications" as used in this Agreement shall
mean changes that do not alter the basic design, such as changes in material or
dimensions.
g. NEEDLELESS VALVES
"Needleless Valves" as used in this Agreement shall
mean medical fluid valves, connectors, adaptors, sites or ports which permit
fluid communication in response to a luer taper or a blunt cannula.
x. XXXXXXX PATENTS
"Xxxxxxx Patents" as used in this Agreement shall
mean United States Letters Patent No. 5,699,821 to Xxxxxxx, issued on December
23, 1997, and any and all U.S. and foreign patent rights claiming priority from
the application for that patent, any and all U.S. and foreign patent rights
claiming priority from an application from which the application for that patent
claims priority, and any counterpart or corresponding U.S. or foreign patent
rights to any of the foregoing and any reissues or reexaminations thereof.
x. XXXXXX PATENTS
"Xxxxxx Patents" as used in this Agreement shall mean
United States Letters Patent No. 5,549,577 to Xxxxxx et al., issued on August
27, 1996, and any and all U.S. and foreign patent rights claiming priority from
the application for that patent, any and all U.S. and foreign patent rights
claiming priority from an application from which the application for that patent
claims priority, and any counterpart or corresponding U.S. or foreign patent
rights to any of the foregoing and any reissues or reexaminations thereof.
x. XXXXXX XXXXXXXXX LICENSED PRODUCTS
"Becton Xxxxxxxxx Licensed Products" as used in this
Agreement shall mean Needleless Valves:
(a) incorporating Becton Dickinson's current
PosiFlow Valve design, as substantially disclosed in Exhibit
C, which, as disclosed in Exhibit C, incorporates a radial leaf spring, an
internal cannula, and a normally closed movable plug that is opened through
movement of the plug and the interaction of the radial leaf spring and the
internal cannula; or
(b) (1) incorporating any past Becton Xxxxxxxxx
PosiFlow or Atrium Valve design, or any modification of such current PosiFlow or
any such past PosiFlow or Atrium Valve design, that is covered by the Xxxxxx
Patents or Xxxxx Patents (including, through method claims, if any, directed to
a method of making or use) and (2) that, as with the current PosiFlow Valve
design, incorporates a radial leaf spring, an internal cannula, and a normally
closed movable plug that is opened through movement of the plug and the
interaction of the radial leaf spring and the internal cannula.
The parties acknowledge, understand and agree that
"Becton Xxxxxxxxx Licensed Products," in no event, includes Needleless Valves
having the same or substantially the same mode of operation with respect to the
interaction of the seal and the elongated member as any of the Clave or Clave II
Valve designs as substantially shown in Exhibits F1 and F2, respectively, or
having the same or substantially the same mode of operation as the CLC 2000
Valve design as substantially shown in Exhibit F3. The parties also acknowledge,
understand and agree that "Becton Xxxxxxxxx Licensed Products," in no event,
includes "ALARIS Medical Licensed Products."
k. ALARIS MEDICAL LICENSED PRODUCTS
"ALARIS Medical Licensed Products" as used in this
Agreement shall mean Needleless Valves:
(a) incorporating ALARIS Medical's current SmartSite
Valve design, as substantially disclosed in Exhibit D, which, as disclosed in
Exhibit D, incorporates a plug having a normally open entrance opening that is
closed by an inlet, and that is opened by movement of the plug; or
(b) (1) incorporating any past ALARIS Medical
SmartSite Valve design, or any modification of such current or any such past
SmartSite Valve design, that is covered by the Xxxxxxx Patents (including
through method claims, if any, directed to a method of making or use) and (2)
that, as with the current SmartSite Valve design, incorporates a plug having a
normally open entrance opening that is closed by an inlet, and that is opened by
movement of the plug.
2. STIPULATED DISMISSAL
Upon execution of this Agreement by the parties, counsel for
the parties shall execute Stipulations of Dismissal substantially in the form
attached hereto as Exhibits A and B, and shall, not later than seven (7)
business days after the execution of this Agreement, present the same to the
appropriate Courts for approval and filing. If modified versions of such
documents are later required to accomplish the purposes of such documents, the
parties shall diligently cooperate in the preparation, execution and filing of
such modified versions.
3. MUTUAL RELEASES
Conditioned upon execution by the parties of this Agreement
and upon execution and entry of the Stipulations and Orders of Dismissal
(Exhibits A and B), ALARIS Medical and Medex on the one hand, and Becton
Xxxxxxxxx, BDITS and Xxxxxxx, on the other hand, on behalf of themselves, their
respective predecessors, successors, Affiliates, parents, subsidiaries, heirs,
executors, administrators, assigns, stockholders, officers, directors,
attorneys, agents, employees and representatives, hereby release and discharge
the opposing parties and their respective predecessors, successors, Affiliates,
parents, subsidiaries, heirs, executors, administrators, assigns, stockholders,
officers, directors, attorneys, agents, employees and representatives, from any
and all debts, claims, demands, damages, liabilities, obligations, and causes of
action (including without limitation, those asserted in the Complaint, Answer,
Counterclaims and Amendments thereto of the California Action and the Utah
Action), arising out of any infringement or alleged infringement of the Xxxxx
Patents and/or Xxxxxx Patents, on the one hand, by the use, manufacture, sale,
offer for sale, importation, or exportation of any Becton Xxxxxxxxx Licensed
Products, occurring prior to the Effective Date, and arising out of any
infringement or alleged infringement of the Xxxxxxx Patents, on the other hand,
by the use, manufacture, sale, offer for sale, importation, or exportation of
any ALARIS Medical Licensed Products, occurring prior to the Effective Date.
4. WAIVER OF CODE SECTION
Each of ALARIS Medical, Medex, Becton Xxxxxxxxx, BDITS and
Xxxxxxx hereby waives with respect to the mutual release of paragraph 3 above,
the benefits of Section 1542 of the Civil Code of California to the extent that
such benefits may contravene a provision hereof. Such section reads as follows:
"1542 GENERAL RELEASE; EXTENT.
A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR
DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF
EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE
MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR."
5. LICENSE GRANTS
a. THE XXXXX AND THE XXXXXX PATENTS
(1) ALARIS Medical hereby grants Becton Xxxxxxxxx and
its Affiliates, including without limitation BDITS, a paid-up non-exclusive,
worldwide license, with no right to sublicense, under the Xxxxxx Patents, and a
paid-up non-exclusive, worldwide sublicense, with no right to sublicense
(sub-sublicense), under the Xxxxx Patents, to use, make, have made, import,
export, offer to sell, sell or otherwise dispose of Becton Xxxxxxxxx Licensed
Products, and to practice any methods and processes under the Xxxxxx Patents and
under the Xxxxx Patents in connection with such Becton Xxxxxxxxx Licensed
Products. This license and sublicense to any Affiliate shall exist only while
the Affiliate status with Becton Xxxxxxxxx exists and only if the Affiliate
adheres to the applicable duties and obligations of this Agreement.
(2) The term of this sublicense under the Xxxxx
Patents or license under the Xxxxxx Patents, respectively, shall extend until
and terminate upon the expiration date of the patent last to expire, be
abandoned or dedicated to the public, or be finally held invalid and/or
unenforceable, among the Xxxxx Patents or Xxxxxx Patents, respectively, subject
to earlier termination of this sublicense under the Xxxxx Patents concurrently
with any earlier termination by Medex or ALARIS Medical of ALARIS Medical's
license from Medex under the Xxxxx Patents, or subject to earlier termination of
this license as a whole by Becton Xxxxxxxxx. At its own election, upon sixty
(60) days prior written notice to ALARIS Medical and Medex, Becton Xxxxxxxxx may
terminate the sublicense and license granted under this subparagraph 5.a.
Subject to subparagraph 5(a)(3), termination of the sublicense or license,
respectively, granted under this subparagraph 5.a. as to the Xxxxx Patents or
Xxxxxx Patents, respectively, shall also terminate the covenant not to xxx
granted under subparagraph 6.a.(1) as to the Xxxxx Patents or Xxxxxx Patents,
respectively. Subject to subparagraph 5(a)(3), termination of the sublicense and
license as to the Xxxxx Patents and Xxxxxx Patents shall terminate the covenants
not to xxx granted under subparagraphs 6.a.(1) and 6.a.(2).
(3) If, under subparagaraph 5.a.(2), the sublicense
under the Xxxxx Patents granted under subparagraph 5.a. is terminated earlier
than the end of the full potential term due to earlier termination by Medex or
ALARIS Medical of ALARIS Medical's license from Medex under the Xxxxx Patents,
then Medex shall grant to Becton Xxxxxxxxx a license under the Xxxxx Patents,
with no right to sublicense, retroactive to such earlier termination,
substantially equivalent to that which would have continued to exist but for
such earlier termination, except the license shall be from Medex to Becton
Xxxxxxxxx, and the covenant not to xxx under the Xxxxx Patents under
subparagraph 6(a)(1) and the covenant not to xxx under subparagraph 6(a)(2)
shall not terminate. Becton Xxxxxxxxx shall have no obligation to pay any
consideration for such license.
b. THE XXXXXXX PATENTS
(1) Becton Xxxxxxxxx hereby grants ALARIS Medical and
its Affiliates a paid-up non-exclusive, worldwide sublicense, with no right to
sublicense (sub-sublicense), under the Xxxxxxx Patents, to use, make, have made,
import, export, offer to sell, sell or otherwise dispose of ALARIS Medical
Licensed Products, and to practice any methods and processes under the Xxxxxxx
Patents in connection with such ALARIS Medical Licensed Products. This license
to any Affiliate shall exist only while the Affiliate status with ALARIS Medical
exists and only if the Affiliate adheres to the applicable duties and
obligations under this Agreement.
(2) The term of this license shall extend until and
terminate upon the expiration date of the patent last to expire, be abandoned or
dedicated to the public, or be finally held invalid and/or unenforceable, among
the Xxxxxxx Patents, subject to earlier termination of the license concurrently
with any earlier termination by Xxxxxxx or Xxxxxx Xxxxxxxxx of Xxxxxx
Dickinson's license from Xxxxxxx under the Xxxxxxx Patents, or subject to
earlier termination of this license by ALARIS Medical. At its own election, upon
sixty (60) days prior written notice to Becton Xxxxxxxxx and Xxxxxxx, ALARIS
Medical may terminate this license granted under this subparagraph 5.b. Subject
to subparagraph 5(b)(3), termination of this license granted under this
subparagraph 5.b shall also terminate the covenants not to xxx granted under
subparagraph 6.b.
(3) If, under subparagraph 5.b.(2), this license
granted under subparagaraph 5.b. is terminated earlier than the end of the full
potential term due to earlier termination by Xxxxxxx or Xxxxxx Xxxxxxxxx of
Xxxxxx Dickinson's license from Xxxxxxx under the Xxxxxxx Patents, then Xxxxxxx
shall grant to ALARIS Medical a license, with no right to sublicense,
retroactive to such earlier termination, substantially equivalent to that which
would have continued to exist but for such earlier termination, except the
license shall be from Xxxxxxx to ALARIS Medical, and the covenants not to xxx
under subparagraphs 6(b)(1) and 6(b)(2) shall not terminate. ALARIS Medical
shall have no obligation to pay any consideration for such license.
6. COVENANTS NOT TO XXX
x. COVENANTS BY ALARIS MEDICAL AND MEDEX
(1) ALARIS Medical covenants not to xxx Xxxxxx
Xxxxxxxxx or its Affiliates, including without limitation BDITS, or any of their
customers or distributors or suppliers (including Xxxxxxx, where applicable),
for infringement of the
Xxxxx or Xxxxxx Patents, and Medex covenants, for so long as Becton Xxxxxxxxx
is licensed under the Xxxxx Patents pursuant to this Agreement, not to xxx
Xxxxxx Xxxxxxxxx or its Affiliates, including without limitation BDITS, or
any of their customers or distributors or suppliers (including Xxxxxxx, were
applicable), for infringement of the Xxxxx Patents, arising out of Becton
Xxxxxxxxx or its Affiliates making, having made, using, importing, exporting,
offering to sell or selling, in the United States or elsewhere, Becton
Xxxxxxxxx Licensed Products, to the extent such Becton Xxxxxxxxx Licensed
Products are subject to the mutual release of paragraph 3 or subject to the
license or sublicense of subparagraph 5.a.
(2) Beyond the covenant of subparagraph a.(1), ALARIS
Medical covenants not to xxx, or permit suit of, Becton Xxxxxxxxx or its
Affiliates, including without limitation BDITS, or any of their customers or
distributors or suppliers (including Xxxxxxx, where applicable), for
infringement of any current or future patent claim (a) issuing from an
application, or having priority from an application, filed before the Effective
Date of this Agreement, where (b) as of the Effective Date of this Agreement,
ALARIS Medical, directly or indirectly, owns or controls, or holds licensing
rights to, the current or future patent claim, arising out of Becton Xxxxxxxxx
or its Affiliates making, having made, using, importing, exporting, offering to
sell or selling, in the United States or elsewhere, Becton Xxxxxxxxx Licensed
Products, to the extent such Becton Xxxxxxxxx Licensed Products are subject to
the mutual release of paragraph 3 or subject to the license or sublicense of
subparagraph 5.a.
b. COVENANTS BY BECTON XXXXXXXXX AND XXXXXXX
(1) Becton Xxxxxxxxx, BDITS, and Xxxxxxx, and each of
them, covenant not to xxx ALARIS Medical or its Affiliates, or any of their
customers or distributors or suppliers (including Medex or its Affiliates, where
applicable), for infringement of the Xxxxxxx Patents, arising out of ALARIS
Medical or its Affiliates making, having made, using, importing, exporting,
offering to sell or selling, in the United States or elsewhere, ALARIS Medical
Licensed Products, to the extent such ALARIS Medical Licensed Products are
subject to the mutual release of paragraph 3 or subject to the license of
subparagraph 5.b.
(2) Beyond the covenant of subparagraph b.(1), Becton
Xxxxxxxxx, BDITS, and each of them, covenant not to xxx, or permit suit of,
ALARIS Medical or its Affiliates, or any of their customers or distributors or
suppliers (including Medex or its Affiliates, where applicable), for
infringement of any current or future patent claim (a) issuing from an
application, or having priority from an application, filed before the Effective
Date of this Agreement, where (b) as of the Effective Date of this Agreement,
Becton Xxxxxxxxx and/or BDITS, directly or indirectly, owns or controls, or
holds licensing rights to, the current or future patent claim, arising out of
ALARIS Medical or its Affiliates making, having made, using, importing,
exporting, offering to sell or selling, in the United States or elsewhere,
ALARIS Medical Licensed Products, to the extent such ALARIS Medical Licensed
Products are subject to the mutual release of paragraph 3 or subject to the
license of subparagraph 5.b.
7. PAYMENT OBLIGATION
In consideration of the rights granted and obligations excused
by ALARIS Medical and Medex and by Becton Xxxxxxxxx, BDITS and Xxxxxxx, taking
into account set-off of mutual obligations between the parties, and without
admission of infringement by any party, ALARIS Medical shall pay to Becton
Xxxxxxxxx the sum of $6,500,000.00 (Six Million and Five Hundred Thousand
Dollars), no later than October 13, 1999, by wire transfer to Becton Xxxxxxxxx.
8. PATENT MARKING
a. ALARIS Medical will, starting within a commercially
reasonable time period, patent xxxx the ALARIS Medical Licensed Products, or
labeling therefor, in accordance with applicable laws, with respect to the
Xxxxxxx Patents.
x. Xxxxxx Xxxxxxxxx will, starting within a commercially
reasonable time period, patent xxxx the Becton Xxxxxxxxx Licensed Products, or
labeling therefor, in accordance with applicable laws, with respect to the Xxxxx
and the Xxxxxx Patents.
9. WARRANTIES
a. ALARIS Medical represents and warrants that it has the
authority to grant to Becton Xxxxxxxxx the rights granted herein under the Xxxxx
Patents and the Xxxxxx Patents, with its authority to grant rights under the
Xxxxx Patents derived by license from Medex in an agreement between ALARIS
Medical and Medex entered into as of November 24, 1998. Medex represents and
warrants that in the event the contingency referenced in subparagraph 5.a.(3)
occurs, it will have the authority to grant the license under the Xxxxx Patents
referenced in that subparagraph. Any warranties set forth in this Agreement by
ALARIS Medical and Medex are expressly in lieu of any other warranties of ALARIS
Medical or Medex, implied or otherwise, including patent validity or
enforceability, or against infringement.
x. Xxxxxx Xxxxxxxxx represents and warrants that it has the
authority to grant to ALARIS Medical the rights granted herein under the Xxxxxxx
Patents, with its authority to grant rights under the Xxxxxxx Patents derived by
license from Xxxxxxx in an agreement between Becton Xxxxxxxxx and Xxxxxxx
entered into as of November 20, 1995. Xxxxxxx represents and warrants that in
the event the contingency referenced in subparagraph 5.b.(3) occurs, he will
have the authority to grant the license under the Xxxxxxx Patents referenced in
that subparagraph. Any warranties set forth in this Agreement by Becton
Xxxxxxxxx and Xxxxxxx are expressly in lieu of any other warranties of Becton
Xxxxxxxxx, BDITS, or Xxxxxxx, implied or otherwise, including patent validity or
enforceability, or against infringement.
x. Xxxxxx Xxxxxxxxx represents and warrants that Becton
Xxxxxxxxx and ICU Medical are not Affiliates.
d. BDITS represents and warrants that BDITS and ICU Medical
are not Affiliates.
x. Xxxxxxx represents and warrants that he and ICU Medical are
not Affiliates.
x. Xxxxxx Xxxxxxxxx represents and warrants that Becton
Xxxxxxxxx and BDITS are Affiliates.
10. PUBLICITY
a. The parties agree to refrain from releasing any information
to anyone not a party to this Agreement concerning the terms of this Agreement
without prior written consent of all other parties, except as set forth in the
Press Release(s) or Schedule(s) attached hereto as Exhibit E, or as otherwise
provided herein. This prohibition includes, but is not limited to, educational
and scientific conferences, promotional materials, governmental filings, and
discussions with public officials, and the media, but shall not extend to
disclosures necessary to carry out the provisions of this Agreement and shall
not extend to disclosures necessary and in accordance with Securities and
Exchange Commission requirements, nor to investment bankers and lenders, nor to
potential assignees or transferees, as those terms are used in paragraph 13, nor
to potential Affiliates, provided such disclosures to potential assignees,
transferees or Affiliates are pursuant to non-disclosure agreements.
b. If any of the parties determines that a release of
information subject to the prohibition in the preceding paragraph is required by
law, it shall promptly notify all other parties hereto in writing at least ten
(10) business days before the time of the proposed release. The notice shall
include the exact text of the proposed release and the time and manner of the
release. At any other party's request and before the release, the party desiring
to release the information shall consult with such other party on the necessity
for the disclosure and the text of the proposed release. Absent approval in
advance from such other party, in no event shall a release, other than one in
accordance with subparagraph a. above, include information regarding the terms
of this Agreement that is not required by law.
c. Should any third party seek to obtain any information by
legal process with respect to the terms of this Agreement from any party hereto,
such party shall promptly notify the other parties hereto, and shall take
appropriate measures to provide such other parties an opportunity to avoid and
minimize the release of such information.
11. CHANGE OF OWNERSHIP OR CONTROL
a. For purposes of this paragraph 11:
(1) "control of [a party]" shall mean possession,
whether direct or indirect, of the power to elect or cause the election of a
majority of the Board of Directors of the party;
(2) "change in control of [a party]" shall mean an
event after which the party, or all or substantially all of the business or
assets of the party related to this Agreement is controlled by a person or
entity who did not possess such control immediately prior to the event; and
(3) "change in ownership of [a party]" shall mean an
event after which a person or entity owns 50% or more of the party's common
stock (or owns some combination of common stock, securities convertible into
common stock and/or other rights to acquire common stock which would enable such
person or entity to achieve ownership of 50% or more of the party's common
stock) and such person or entity did not previously so own or have such rights
to acquire such common stock.
b. ALARIS Medical and Medex have entered into this Agreement
in reliance on Becton Dickinson's present ownership and control. Becton
Xxxxxxxxx shall promptly notify ALARIS Medical and Medex in the event of a
change in its control or a change in ownership involving ICU Medical. In the
event of a change in control or ownership of Becton Xxxxxxxxx which involves ICU
Medical, or should ICU Medical become an Affiliate of Becton Xxxxxxxxx, if Medex
has not previously obtained a fully paid-up, irrevocable, non-exclusive,
worldwide license in and to the Xxxxx Patents, then Becton Xxxxxxxxx, at its own
option, shall either grant or cause to be granted to Medex a fully paid-up,
irrevocable, non-exclusive, worldwide license in and to the Xxxxx Patents, or
pay to Medex the sum of two million dollars ($2,000,000). If such a license is
not granted or if the payment of two million dollars ($2,000,000) is not made,
and Medex has not previously obtained such a license, any license to Becton
Xxxxxxxxx and its Affiliates under the Xxxxx Patents pursuant to subparagraph
5.a. shall terminate as of the effective date of such occurrence.
x. Xxxxxx Xxxxxxxxx has entered into this Agreement in
reliance on ALARIS Medical's present ownership and control. ALARIS Medical shall
promptly notify Becton Xxxxxxxxx in the event of a change in its control or a
change in ownership involving ICU Medical. In the event of a change in control
or ownership of ALARIS Medical which involves ICU Medical, or should ICU Medical
become an Affiliate of ALARIS Medical, if Becton Xxxxxxxxx has not previously
obtained a fully paid-up, irrevocable, non-exclusive, worldwide license in and
to the Xxxxx Patents, then ALARIS Medical, at its own option, shall either grant
or cause to be granted to Becton Xxxxxxxxx a fully paid-up, irrevocable,
non-exclusive, worldwide license in and to the Xxxxx Patents, or pay to Becton
Xxxxxxxxx the sum of two million dollars ($2,000,000). If such a license is not
granted or if the payment of two million dollars ($2,000,000) is not made, and
Becton Xxxxxxxxx has not previously obtained such a license, any license to
ALARIS Medical and its Affiliates under the Xxxxxxx Patents pursuant to
subparagraph 5.b. shall terminate as of the effective date of such occurrence.
12. TERM
This Agreement shall be effective as of the Effective Date and
it shall remain effective until and terminate when both the license and
sublicense granted to Becton Xxxxxxxxx under subparagraph 5.a., including any
license under subparagraph 5.a.(3), and the license granted to ALARIS Medical
under subparagraph 5.b., including any license under subparagraph 5.b.(3), have
terminated.
13. ASSIGNMENT
The obligations and benefits of this Agreement shall be
binding upon the parties hereto, their successors and legal representatives,
specifically including the respective assignee or transferee of ownership or
control of, or licensing rights in, any patent subject to a license or a
covenant granted herein. However, the benefits granted under the license grant
and rights of paragraph 5 and under the covenants and rights of paragraph 6
shall not be assigned or transferred by ALARIS Medical or Becton Xxxxxxxxx
without the written consent of Becton Xxxxxxxxx or ALARIS Medical, respectively,
except in conjunction with a sale or transfer of all or substantially all of the
business or assets of the transferor party related to the subject matter to
which this Agreement pertains, either directly, or by sale of stock, merger,
consolidation or other corporate transaction or transfer. Additionally, even
under conditions of the foregoing exception, no assignment or transfer of such
benefits shall be made by Becton Xxxxxxxxx to ICU Medical, without the written
consent of ALARIS Medical and Medex; and no assignment or transfer of such
benefits shall be made by ALARIS Medical to ICU Medical without the written
consent of Becton Xxxxxxxxx. In the absence of the satisfaction of the
conditions for any such assignment or transfer of such benefits, any purported
transfer or assignment of such benefits shall be null and void. The benefits
granted under the license grant and rights of paragraph 5 and under the
covenants and rights of paragraph 6 may not be assigned or transferred by
Affiliates of Becton Xxxxxxxxx or of ALARIS Medical, and any such purported
transfer or assignment shall be null and void.
l4. PATENT MAINTENANCE
Of the Xxxxxx Patents, ALARIS Medical shall be obligated to
pay or have paid maintenance fees to maintain only U.S. Patent No. 5,549,577 (or
subsequent reissues or reexaminations thereof). Of the Xxxxx Patents, Medex
shall be obligated to pay or have paid maintenance fees to maintain only U.S.
Patent No. Re. 35,841 (or subsequent reissues or reexaminations thereof). Of the
Xxxxxxx Patents, Becton Xxxxxxxxx shall be obligated to pay or have paid
maintenance fees to maintain only U.S. Patent No. 5,699,821 (or subsequent
reissues or reexaminations thereof).
15. PAYMENT OF COSTS AND ATTORNEYS FEES
No party shall have any responsibility to pay an opposing
party's costs or attorneys' fees incurred in connection with the California
Action or the Utah Action.
16. ABSENCE OF WAIVER
The failure of any party to enforce at any time any provision
of this Agreement shall in no way be construed as a waiver of such provision,
nor in any way to affect the validity of this Agreement or any part thereof, or
the right of any party to later enforce each and every such provision. No waiver
of any breach of this Agreement shall be held to be a waiver of any other or
subsequent breach.
17. DISPOSITION OF CONFIDENTIAL INFORMATION PRODUCED
DURING LITIGATION
a. Immediately after filing of the Stipulations of Dismissal
pursuant to paragraph 2 of this Agreement, all Confidential Information produced
by a disclosing party in the California Action or the Utah Action which has been
designated "OUTSIDE LITIGATION COUNSEL EYES ONLY" or "CONFIDENTIAL" pursuant to
the proposed Protective Orders in those actions, at the option of the disclosing
party, shall be returned to the disclosing party at the disclosing party's
expense, or destroyed. Notwithstanding the foregoing, attorneys of record for
any receiving party may retain in its files archival copies of any and all
documents and things which contain Confidential Information that has been
designated "OUTSIDE LITIGATION COUNSEL EYES ONLY" or "CONFIDENTIAL," including
one copy of each pleading, paper or other document filed with the Court, one
copy of each discovery request or response document, and documents constituting
work product which were internally generated based on Confidential Information
that has been designated "OUTSIDE LITIGATION COUNSEL EYES ONLY" or
"CONFIDENTIAL". To the extent that any Confidential Information of a disclosing
party that has been designated "CONFIDENTIAL" has been provided by the attorneys
of record of the receiving party to in-house counsel, advisory counsel or
independent experts aligned with the receiving party, the receiving party shall
have its attorneys of record ensure that all such Confidential Information is
returned to the disclosing party at the disclosing party's expense, or
destroyed. The receiving party or its attorneys of record shall certify in
writing that all such documents and things have been returned or destroyed as
the case may be pursuant to the terms of this subparagraph.
b. Neither attorneys of record for the receiving party nor
in-house counsel, advisory counsel and independent experts aligned with the
receiving party, shall disclose any Confidential Information designated "OUTSIDE
LITIGATION COUNSEL EYES ONLY" or "CONFIDENTIAL" to any other individual or
entity, absent formal discovery request in litigation, subpoena or court order.
Upon receipt of any formal discovery request in litigation or subpoena or court
order for such information, the party receiving the request or subpoena or court
order shall immediately notify the attorneys of record for the disclosing party
of the request or subpoena or court order so that the latter may protect its
interest.
c. In the event that any person violates or threatens to
violate the provisions of this paragraph 17, the aggrieved party may immediately
apply to the court to obtain injunctive relief against any such violation or
threatened violation. In the event that the aggrieved party so applies, the
respondent shall not employ as a defense thereto any claim that the aggrieved
party possesses an adequate remedy at law.
18. ENTIRE AGREEMENT
This Agreement shall constitute the entire agreement between
the parties hereto with respect to the subject matter hereof, and shall
supersede all previous negotiations, commitments, and writings. This Agreement
shall not be modified or altered in any manner except by an instrument in
writing executed by all of the parties hereto.
19. SEVERABILITY
If any provision of this Agreement is found to be prohibited
by law and invalid, or for any reason such provision is held unenforceable, in
whole or in part, that provision shall be considered severable and its
invalidity or unenforceability shall not affect the remainder of this Agreement,
which shall continue in full force and effect.
20. NOTICE
Any notice, report or written statement to a party permitted
or required under this Agreement shall be in writing and shall be sent by
certified mail, return receipt requested, Federal Express, or hand delivery at
the respective addresses set forth below, or to such other addresses as the
respective parties may from time to time designate:
For ALARIS Medical:
General Counsel
ALARIS Medical Systems, Inc.
00000 Xxxxxxxxx Xxxxxx, Xxxxxxxx X
Xxx Xxxxx, Xxxxxxxxxx 00000-0000
with copies to:
Xxxxxxx X. Xxxxxx, Esq.
Xxxxxxxx Xxxxxx Xxx & Xxxxxx, LLP
00000 Xxxxxxxx Xxxxxxxxx, Xxxxx Xxxxx
Xxx Xxxxxxx, XX 00000
For Medex:
Xxxxxx X. Xxxxxxxxx
President
Medex Inc.
0000 Xxxxx-Xxxxx Xxxx
Xxxxxx, Xxxx 00000
with copies to
Xxxx X. Xxxxxxxx, Esq.
Wood, Herron & Xxxxx, L.L.P.
0000 Xxxxx Xxxxx
Xxxxxxxxxx, Xxxx 00000
For Becton Xxxxxxxxx and BDITS:
Vice President
Becton Xxxxxxxxx Infusion Therapy Systems, Inc.
0000 Xxxxx Xxxxx Xxxxxx
Xxxxx, Xxxx 00000
with copies to
Chief Intellectual Property Counsel
Becton Xxxxxxxxx and Company
0 Xxxxxx Xxxxx
Xxxxxxxx Xxxxx, Xxx Xxxxxx 00000
For Xxxxxxx:
Xxxxxx X. Xxxxxxx
000 Xxxxxxxx Xxxxxx Xxxxx
Xxxxxx Xxxx Xxxxxx, Xxxxx Xxxxxxxx 00000
with copies to
Xxxxxxx X. Xxxxx, Esq.
Xxxxxx & Xxxxxxxx, LLP
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
21. SURVIVAL
The rights and obligations under paragraphs 9, 10, and 17 of
this Agreement shall survive termination of this Agreement and/or of any license
under subparagraph 5.a. and/or 5.b.
22. NO ADMISSION
Neither the entering into this Agreement, nor any provision
hereof, shall be deemed as an admission by any party of any wrong-doing, or of
the validity or invalidity of any position taken or proposed to be taken by or
against the party in the California Action or the Utah Action or any other
litigation.
23. CAPTIONS
Captions are inserted herein only as a matter of convenience,
and for reference, and in no way define, limit, or describe the scope of this
Agreement or the intent of any provision herein.
24. CONSTRUCTION
This Agreement has been prepared with the participation of all
parties, and shall not be strictly construed against any party.
25. COUNTERPARTS.
This Agreement may be executed in counterparts, each of which
shall be deemed an original, but all of which shall constitute one and the same
instrument.
26. CONSULTATION WITH COUNSEL AND RELIANCE
Each of the parties acknowledges that the party has had the
opportunity to consult with counsel of its choice, and that in executing this
Agreement it has not relied upon any statements, representations or agreements
of any other person other than those contained herein.
27. NO BREACH
a. To the extent that any of the terms of this Agreement
conflict with or are otherwise inconsistent with any of the terms of Medex's
license to ALARIS Medical under the Xxxxx Patents, such conflict or
inconsistency shall not constitute a breach of any of the terms of that license.
b. To the extent that any of the terms of this Agreement
conflict with or are otherwise inconsistent with any of the terms of Xxxxxxx'
license to Becton Xxxxxxxxx under the Xxxxxxx Patents, such conflict or
inconsistency shall not constitute a breach of any of the terms of that license.
IN WITNESS WHEREOF, each of the parties has executed this Agreement or
has caused this Agreement to be executed by a duly authorized officer, effective
as of the Effective Date.
ALARIS Medical Systems, Inc.
By:
---------------------------------
Xxxxxxx X. Xxxx
Title: Chief Financial Officer
ATTEST:
---------------
Becton Xxxxxxxxx and Company
By:
---------------------------------
Xxxx X. Xxxxx
Title: President, Worldwide Medical Systems
ATTEST:
---------------
Becton Xxxxxxxxx Infusion Therapy Systems, Inc.
By:
---------------------------------
Xxxx X. Xxxxx
Title: President
ATTEST:
---------------
Medex, Inc.
By:
---------------------------------
Xxxxxx X. Xxxxxxxxx
Title: President
ATTEST:
---------------
Xxxxxx X. Xxxxxxx
-------------------------------------
ATTEST:
---------------
