1
EXHIBIT 10.28
ADDITIONAL LICENSEE AGREEMENT
This Additional License Agreement,
effective the 1st day of January 1997, is by and
between Xx. Xxxxxxxx X. Xxxxxxxx, an individual
residing in Chicago, Illinois (hereinafter
"Licensor") and Horizon Medical Products, Inc., a
Georgia corporation, having a place of business at
Seven North Parkway Square, 0000 Xxxxxxxxx Xxxxxxx,
X.X., Xxxxxxx, Xxxxxxx 00000 (hereinafter
"Licensee").
WITNESSETH
WHEREAS, Licensor warrants that he owns the
entire right, title and interest in and to United
States Patent No. *** entitled *** issued on ***;
WHEREAS, Licensor warrants that he has
the right to grant *** license to Claims *** of
United States Patent No. *** entitled *** issued on ***;
WHEREAS, Licensee wishes to obtain and
Licensor is willing to grant to Licensee a
*** to offer, make, have made for it, use, sell, and
import the products covered by the Claims *** and ***
of United States Patent No. ***
----------
*** Confidential Treatment Requested
1
2
entitled ***.
NOW THEREFORE, in consideration of mutual
covenants and promises made herein and for other
good and valuable considerations the parties agree
as follows:
ARTICLE I. DEFINITIONS
A. LICENSED PATENT RIGHTS -- Shall mean
Claims *** of United States Patent No. *** entitled
*** and all corresponding claims of foreign
counterparts of the said patents and divisions,
continuations, continuations-in-part or reissues of
such patents.
B. LICENSED PRODUCTS -- Shall mean any
product that is covered by any claim of the
'Licensed Patent Rights' sold for both ***
applications, in *** form or in combination with
accessories.
C. NET SALES -- Shall mean the amount
invoiced to Licensee's customers (including ***)
f.o.b. Licensee's
----------
*** Confidential Treatment Requested
2
3
factory/warehouse/premises, exclusive of allowances for returns or taxes and
unpaid invoices actually "written off," but shall include all ***, or other
components sold or packaged with any *** or other products covered by this
Agreement.
D. *** -- Shall mean any *** who purchases the Licensed Products for a
purpose other than *** and shall include hospitals, clinics, and HMOs.
E. *** -- Shall mean any entity that purchases Licensed Products for
purposes of ***.
ARTICLE II. LICENSE GRANT
A. Licensor hereby grants Licensee, a *** license under said Licensed
Patent Rights to make, have made, offer to sell and use Licensed Products.
Licensee shall have no rights to grant sub-licenses under any of the Licensed
Patent Rights. The sale of the Licensed Products under this Agreement shall not
be considered as grant of a sub-license.
B. No license or right is granted by implication or otherwise to any
patent or pending patent applications or any future patents of Licensor except
as specifically
----------
*** Confidential Treatment Requested
3
4
set forth in the definition of Licensed Patent Rights.
C. Specifically, Licensee is granted no rights to offer, sell and
promote the Licensed Products covered by Claims *** and *** that claim a *** for
***.
D. Licensee acknowledges that Licensor has granted ***. A copy of
pages *** of the *** has been provided to Licensee. Licensee agrees that it will
do nothing that will interfere with the ***.
ARTICLE III. ROYALTIES
A. Licensee shall pay Licensor a royalty of *** on net sales of all
the Licensed Products, as long as Licensee pays the royalty due under the
License for the *** patent in the parties' January 1, 1995 License Agreement.
This *** royalty shall be additional to any other royalty already paid under
the January 1, 1995 Agreement.
----------
*** Confidential Treatment Requested
4
5
B. Effective upon the expiry of the *** patent or termination of the
January 1, 1995 License Agreement, whatsoever occurs first, the royalty payable
under this Agreement shall be:
FOR SALES MADE ***
For the *** along with *** the Royalty shall be *** of Net Sales of
Licensed Products;
FOR SALES MADE ***
For the *** along with *** the Royalty shall be *** of Net Sales of
Licensed Products.
C. In the case of all royalties due Licensor, there shall be included
in the royalty base for the purpose of determining the royalties due, the Net
Sales of all *** which are sold in combination with, or packaged with, the ***
that are Licensed Products.
D. In the event Licensor shall hereafter ***, Licensor shall ***,
provided Licensee ***.
----------
*** Confidential Treatment Requested
5
6
E. In the event the applicable claims of the Licensed Patent Rights
are finally adjudged to be invalid or unenforceable in any final order or
judgment in any civil action or other proceeding from which no appeal has been
or can be taken, then Licensee shall receive the benefit of any such final
order or judgment as if it were a party to that proceeding including,
specifically, relief from any obligation to pay further royalties under the
applicable claim of the Licensed Patent Rights.
F. In the event of any future significant infringement [infringing
sales of any one infringer equal to or exceeding *** of Licensee's unit sales]
and upon written request to that effect by Licensee, Licensor at his option
shall enforce the licensed patent rights against third party for any non-license
sales of *** at his own expense or ask Licensee to advance the litigation
expense, and Licensee agrees to do so, until the conclusion of the litigation.
Any such litigation expenses advanced by the Licensee will be reimbursed to
Licensee after the conclusion of the litigation, solely from any recovery from
such lawsuit and any award of
----------
*** Confidential Treatment Requested
6
7
legal fees of such litigation by the court. If there is any settlement of any
such litigation Licensee shall be granted the same favorable license term
granted such third party by Licensor.
ARTICLE IV. BOOKS, RECORDS AND PAYMENTS
A. Licensee shall keep accurate and complete books and records
sufficient to determine the quantity of Licensed Products made and sold to the
extent necessary to accurately reflect all items material to the determination
of the amount of royalty due and owing Licensor. At the request of Licensor,
Licensee shall cause the same to be reviewed by an outside certified public
accountant named by the Licensor, at least annually as a part of its annual
audit of the books and records of relevant business of the Licensee.
B. The books and records of the Licensee shall identify the quantity of
all Licensed Products that are made, used, sold or otherwise disposed of by the
Licensee, with credit for returns for which credit is given to the customers.
Such records shall show separately the quantity of the Licensed Products made
for or sold to *** or that are otherwise used or disposed of, net price and the
date of invoice or shipment. Sales shall be considered as made on the date of
the invoice
----------
*** Confidential Treatment Requested
7
8
unless shipped more than thirty (30) days
before invoiced, in which event such sales
shall be considered as made on the date of
shipment.
C. Within one month after the last day
of each calendar quarter, Licensee shall send
Licensor a report, in writing, certified by
an officer to its correctness, showing
separately the quantity of Licensed Products
subject to royalty payments that were made
and sold to its customers and computing the
amount of royalty due Licensor for the
preceding quarter as to each category of
customer. Each report shall be due on the
last day of January, April, July and October
and shall be accompanied by the proper
royalty amount then payable to the Licensor
as shown in that report. The report due for
each quarter which coincides with the end of
the calendar year or termination of this
Agreement, shall also include a statement of
the total payments made for such year
pursuant to this Agreement.
D. All such reports, books, records and
accounts shall be retained for not less than
three (3) years and shall be open to
confidential examination at Licensor's
expense at all reasonable times, not more
than twice per year, by an independent
outside certified public account designated
by the Licensor.
8
9
E. Any failure by Licensee to keep and
maintain such books and records or to provide
reports or payments to Licensor as required
by this Agreement shall constitute a material
breach of this Agreement.
F. In the event an Audit or Licensee's
books and records by an outside certified
public accountant establishes that Licensee's
payments are deficient by an amount greater
than *** of the amount actually due Licensor,
Licensee shall be required upon the receipt
of the notice of such deficiency to pay the
Licensor *** times the amount due, plus interest
at the prime rate charged by major New York
banks at the time the deficiency is discovered.
G. Within thirty (30) days of June 30
and December 31 of each year, Licensee shall
provide Licensor one copy of sales,
instruction of use, and promotional
literature for each Licensed Product along
with one sample of the unsterile/sterile
product in its customary packaging. Within
thirty (30) days of December 31 of each year,
Licensee shall also provide Licensor with a
complete product catalog identifying the
products Licensee sells.
ARTICLE V. TERM AND TERMINATION
A. This Agreement shall continue in full
force and effect, unless sooner terminated as
----------
*** Confidential Treatment Requested
9
10
hereinunder provided, with respect to the
various Licensed Products licensed hereunder,
until the expiration date of each
corresponding Licensed Patent Right covering
each Licensed Product.
B. Licensor may terminate this Agreement
upon written notice to Licensee, if:
1. Licensee shall become insolvent,
or shall make any assignment for the
benefit of creditors, or Licensee is
adjudicated bankrupt, or a receiver or
trustee of the Licensee's property shall
be appointed.
2. Licensee shall be in default of
any payment or report required hereunder
or fail to comply with any other provision
of this Agreement for a period of more
than forty-five (45) days after a written
notice specifying such default is given
by Licensor.
3. Licensee shall otherwise continue
to violate any term, condition, or
provision of this Agreement for a period
more than forty-five (45) days after written
notice specifying such violation is given
by Licensor.
In the event Licensee cures any default
within the forty-five (45) day time
10
11
period set forth above, the subject
Agreement shall not be terminated and
shall remain in full force and effect.
C. Termination of this Agreement shall
not relieve the Licensee of the obligation to
make payments accruing under this Agreement
prior to the termination nor shall it bar
Licensor from obtaining any relief to which
Licensor may be entitled in law or in equity,
including the right to bring suit for
infringement by Licensee of any issued patent
of said Licensed Patent Rights.
D. Upon termination of this Agreement
for any reason, Licensee shall immediately
cease manufacture, use or sale of the
Licensed Products.
ARTICLE VI. ASSIGNMENTS
A. This Agreement shall inure to the
benefit of and be binding upon the
successors, legal representatives or assigns
of Licensor.
B. This Agreement and the License granted
hereunder are personal and shall not be
assigned by Licensee to any other business
entity (except entities wholly-owned by the
same shareholders of Licensee or completely
controlled by Licensee), nor shall it be
extended to any third party that purchases
any part of Licensee's assets or stock
11
12
without the prior written consent of the
Licensor. Notwithstanding the foregoing,
however, Licensee shall have the right to
assign this License as part of the sale of
the entire business assets to which this
Agreement relates, provided such sale is
not made to any entity that is involved in
litigation with Licensor relating to the
Licensed Patent Rights (including appeals)
at the time any such assignment, purchase
sale or transfer is made.
ARTICLE VII. PATENT MARKING
Licensee agrees to apply to all
Licensed Products made and sold under this
Agreement, on labels, packaging, sales and
promotional literature, appropriate
markings stating that the products are
licensed under the Licensed Patent Rights.
ARTICLE VIII. SEVERABILITY CLAUSE
If any part, provision, covenant or
condition of this Agreement shall be held
to be invalid, illegal, void or
unenforceable in any respect, such
invalidity, illegality, voidness or
unenforceability shall not affect any other
parts of this Agreement, and this Agreement
shall be construed as if such invalid,
illegal, void or unenforceable part,
provision, convenant or condition had never
been contained herein. Moreover, if any
one or more of the parts, provisions,
convenants, or conditions contained in this
Agreement
12
13
shall for any reason be held to be
excessively broad as to time duration,
geographical scope, activity or object
it shall be construed by limiting and
reducing it so as to be enforceable to
the extent compatible with the
applicable law as it shall then appear.
ARTICLE IX. NOTICES
A. All notices, payments or
communications which either party may desire
or be required or permitted to give or make
to the other by this Agreement shall be in
writing and shall be deemed to have been
duly given or made if and when forwarded by
registered or certified mail to such address
as shall have been designated by notice from
addressee of addressing notices to it, or if
no such designation shall have been made,
then to the address of the party appearing
in this License.
B. The failure to act on default
hereunder shall not be deemed to constitute
a waiver of such default.
C. This Agreement constitutes the
entire understanding of the parties with
respect to its subject matter and may not be
modified or amended, except in writing by
authorized persons on behalf of the parties
hereto.
13
14
D. The validity, legality and
enforceability of any provision hereof shall
not be affected or implied in any way by any
holding that any other provision contained
herein is invalid, illegal or unenforceable
in any respect.
E. Licensor:
Xx. Xxxxxxxx X. Xxxxxxxx
0000 Xxxxx XXXXXXXX Xxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
F. Licensee:
Horizon Medical Products, Inc.
Seven North Parkway Square
0000 Xxxxxxxxx Xxxxxxx, X.X.
Xxxxxxx, Xxxxxxx 00000
G. Any party may change the address to
which notices shall be sent to it by notice
in writing to the other party.
ARTICLE X. NON-WARRANTIES AND WARRANTY
A. Nothing in this Agreement shall be
construed as:
1. A warranty or representation by
Licensor as to the validity or scope of
any patent that has been issued for the
Licensed Patent Rights;
14
15
2. A warranty or representation
that making, selling or using of
Licensed Products will be free from
infringement of any patents owned by
entities other than Licensor.
B. Licensee hereby releases and holds
Licensor harmless from any and all product
liability claims, actions, losses, damages
and any liability resulting from or arising
out of the manufacture, use or sale of the
Licensed Products for the duration of this
Agreement.
C. Licensee agrees to indemnify Licensor
for all product liability claims, actions,
losses, proceedings, damages, liabilities,
costs, expenses, including attorney's fees
arising out of, in connection with or
resulting from the manufacture, use or sale
of the Licensed Products by Licensee.
D. Licensor has not made, and does not
make, any representation, warranty or
covenant, express or implied, with respect to
the condition, quality, durability,
suitability, fitness for a particular purpose
or merchantability of Licensed Products.
Further, Licensor expressly disclaims any and
all warranties, express or implied, regarding
the condition, quality, durability,
suitability, fitness for particular purpose
or merchantability of Licensed Products.
15
16
E. Licensor shall not be liable for any
consequence or damage arising out of or
resulting from the manufacture, use or sale
of products under this Agreement or the
exercise by Licensee of any rights granted
under this Agreement, nor shall Licensor be
liable to Licensee for consequential damages
under any circumstances.
ARTICLE XI. EFFECTIVE DATE
This Agreement shall become effective
and binding upon the parties on the date
first above written.
IN THE WITNESS THEREOF, the parties hereto
have caused to be signed by their duly
authorized officers, this Agreement at the
places indicated and on the dates set forth
below.
Date 5/11/97 /s/ Xxxxxxxx X. Xxxxxxxx
------- ----------------------------------
Xx. Xxxxxxxx X. Xxxxxxxx
Licensor
Date 4/24/97 /s/ unreadable
------- ----------------------------------
Horizon Medical Products Inc.
Seven North Parkway Square
0000 Xxxxxxxxx Xxxxxxx, X.X.
Xxxxxxx, Xxxxxxx 00000
Licensee
16
