JOINT DEVELOPMENT AND
EXCLUSIVE LICENSE AGREEMENT
WHEREAS, Live Tissue Connect (“LTC”)
(“LICENSOR”) owns certain Patents (as hereinafter
defined) and Technical Information (as hereinafter defined)
relating to certain medical devices;
WHEREAS, ConMed Corporation, including its affiliates,
(“LICENSEE”) (collectively “LICENSEE”),
wishes to obtain from LICENSOR and LICENSOR wishes to grant to
LICENSEE certain exclusive rights under the Patent and Technical
Information, all subject to the terms and conditions set forth
herein;
WHEREAS, the parties wish to define research and development
projects to focus on the development of products for first
development of a marketable product for coagulation of tissue for
removal of tissue in duct and vessel sealing and second
reconnection of opposing end or sides of live tissues and organs.
First products for procedures to be developed are listed in
Addendum 1 attached hereto.
NOW, THEREFORE, LICENSEE AND LICENSOR HEREBY AGREE AS
FOLLOWS:
1. Definitions . As used herein,
the following terms will have the meanings set forth
below:
(a) “Boxes” means the power source which is part of the
Product.
(a)
“Improvement” or “Improvements” means
any modifications, whether or not patentable, of the Product
(as hereinafter defined), (including any related patents or
unpublished research and development information, unpatented
invention, know-how, trade secrets, and technical data made by
LICENSOR or LICENSEE) provided such modification, if
unlicensed, would infringe one or more claims of the
Patents.
(b)
“Licensed Territory” means all of the world except
the former Soviet Union.
(c)
“Net Sales” means gross sales of the Products
billed and shipped by LICENSEE or its subsidiaries or
affiliates, less normal and customary allowances and discounts
actually allowed (other than advertising allowances, or fees
or commissions to salesmen or sales representatives), returns,
invoices written off as uncollectible, billed taxes and
customs duties paid by LICENSEE, costs of insurance and
transportation (freight and transit insurance), and shall not
include samples or demonstration materials or any sale to
LICENSEE employees for any reason other than resale. The term
“Net Sales” shall not include sales between the
parties, sales by independent distributors which have
purchased Product from LICENSEE, or sales between LICENSEE and
its affiliates or subsidiaries.
(d)
“Patents” means all U.S. Patents listed on
Addendum (2) and all divisions, continuation, reissues,
reexaminations, substitutes, extensions, and equivalents, or
any and all patents or applications which derive from, claim
priority from U.S. Patents listed in Addendum 2 attached
hereto.
|
Exhibit
10.22
|
| |
|
Page 1 of
10 Pages |
|
(e)
“Product” means a power source and set of hand
instruments designed to bond or weld and reconnect living soft
biological tissue without the use of foreign matter or
conventional wound closing devices such as sutures, staples,
sealant, or glues and avoid charring, searing and necrosis
using low heat delivery aimed at restoration of the normal
functions of the live organs and tissue, the manufacture, use
or sale of which would, if unlicensed, infringe a valid claim
of the Patents or utilize the Technical Information. Product
expressly includes any Improvements to such Products. The
first Product shall be the duct and vessel sealing power
sources and accompanying hand instruments and the second
Product shall be a reconnection power source and accompanying
hand instruments.
(f)
“Technical Information” means the unpublished
research and development information, know-how, and technical
data provided by LICENSOR to LICENSEE or developed by LICENSOR
pursuant to the LICENSEE’S Development Project that may
be necessary or useful to make, use and sell the
Product.
(g)
“Third Party” means a person or entity other than
LICENSOR, LICENSEE or their affiliates.
(h)
“Valid Claim” means a claim of any of the Patents
that has not expired or been held invalid by a court of
competent jurisdiction.
2. Exclusive License
.
(a)
Grant Of Exclusive License As To Product Generally .
LICENSOR hereby grants to LICENSEE an exclusive license under
the Patents and Technical Information to import, make, have
made, use, sell and/or distribute the Product in the Licensed
Territory. BOXES are to be manufactured by Licensor unless
otherwise agreed by both parties.
(b)
Grant of Right to Manufacture . LICENSOR hereby grants
to LICENSEE an exclusive license under the Patents to
manufacture the Products in the Licensed Territory and to use
the Technical Information to manufacture the Products in the
Licensed Territory.
(c)
Exclusive License . LICENSOR represents and warrants
that the licenses granted to LICENSEE to the Patent and the
Technical Information pursuant to this Agreement are, and
shall remain, exclusive as to all persons, including LICENSOR,
in the Licensed Territory.
(d)
Reservation of Right to Perform Research .
Notwithstanding the above-described grant of exclusive
license, LICENSOR retains a non-exclusive right to use the
Patents and Technical Information in connection with
performing research relating to the development of new
Products or to perfection of prior designs of the Product;
provided further that the retained non-exclusive right to use
the Patents and Technical Information as provided in this
subsection shall not be construed as providing LICENSOR with
the right to manufacture or sell any Product resulting from
LICENSOR’S research relating to the development of new
Products, it being understood that any new Products developed
in this manner shall be subject to the terms of this Agreement
to the extent that the manufacture, use or sale of such newly
developed devices infringes a valid claim of a Patent or
utilizes Technical Information.
|
Exhibit
10.22
|
| |
|
Page
2 of 10 Pages |
|
(e)
No Express License . Notwithstanding any other language
in this Agreement that may suggest otherwise, this Agreement
shall in no way be construed as providing any license, express
or implied, to any patent or intellectual property owned by or
licensed to LICENSEE.
(f)
Improvements to Technology, Equipment and Instruments by
LICENSEE. Product improvements on technology, equipment
and instruments by LICENSEE as provided in this subsection
shall not be construed as providing LICENSEE with the right to
manufacture or sell any Product resulting from
LICENSEE’S research relating to the development of new
Products, without it being understood that any new Products
developed in this manner shall be subject to the terms of this
Agreement to the extent that such newly developed devices
infringe a valid claim of a Patent.
3. Development
Projects.
(a)
Licensor’s Development Project. LICENSOR shall
submit the development schedule for the initial Product, duct
and vessel sealing power sources as an addendum to this
Agreement within thirty (30) days of signing this Agreement
which schedule must be acceptable to LICENSEE.
(b)
Licensee’s Development Project.
LICENSEE shall submit a development schedule for the
accompanying hand instruments as an addendum to this Agreement
within sixty (60) days of signing of this
Agreement.
(c)
Cooperation. The parties shall cooperate in the
development projects as defined above such that each shall
have access to the research and development information,
know-how, and technical data that may be necessary or useful
to the other in developing the equipment and
handpieces.
4. Regulatory Approvals. LICENSOR
shall be primarily responsible, including paying any related costs,
for obtaining the appropriate regulatory approvals for the use of
the Products. These approvals will include FDA marketing
clearances, CE marking and applicable safety agency requirements
for manufacturing and distribution of the Products. LICENSOR agrees
to submit to LICENSEE any proposed submissions which relate to the
Products prior to submitting to any governmental agency, for
comment and approval, and agrees not to make any submissions
without such approval. Such approval shall not be unreasonably
withheld.
5. Licensing Fees and Royalty
Payments . In consideration for the above-described
exclusive license of the Patents, LICENSEE agrees to make royalty
payments as follows:
The
total sum of one million dollars ($1,000,000) to be paid into
the account designated below payable according to Addendum
3:
|
Exhibit
10.22
|
| |
|
Page 3 of
10 Pages |
|
Bank
of America
ABA:
111000025
For
Further Credit to:
Live
Tissue Connect, Inc.
500
No. Shoreline, Suite 701 No.
Corpus
Christi, TX 78471
Acct.
Number: 005770576306
(a)
Ten percent (10%) of the Net Sales sold in the Licensed
Territory by LICENSEE until such time as the cumulative
Net Sales equal Thirty Five Million Dollars ($35,000,000).
Royalties shall be paid on a quarterly basis and shall be paid
within 45 days following the end of each quarter.
(b)
Seven percent (7%) of the Net Sales of the Products sold in
the Licensed Territory by LICENSEE after the cumulative
Net Sales reach Thirty Five Million Dollars
($35,000,000) Royalties shall be paid on a quarterly
basis and shall be paid within 45 days following the end of
each quarter.
(c)
Nothing in this Agreement shall be construed as creating any
implied royalty obligation, including, but not limited to, any
obligation to pay royalties with respect to the use of the
Technical Information.
(d)
Minimums
(1)
Conmed agrees to pay a minimum royalty on handpieces subject
to subsection (3) below.
(2)
Failure to meet minimum purchases or royalties set forth below
at the earlier of the time when the Product is officially
launched or the commencement of the fourth year after the
execution of the Joint Development and Exclusive License
Agreement between LICENSOR and LICENSEE results in a loss of
exclusivity as the sole remedy. The term “officially
launched” shall mean that the clinical tests of the
Product are complete, key surgeons have used it in their
surgeries, have tested the functional capability of the
instr
| 
