AMENDED AND RESTATED LICENSE
AGREEMENT
THIS
AMENDED AND RESTATED LICENSE AGREEMENT (this “
Agreement ”) is made and entered into effective as of
January 1, 2008 (the “ Effective Date ”),
by and between Bio Control Medical (B.C.M), Ltd., an Israeli
company (“ Bio Control ”), and American Medical
Systems, Inc., a Delaware corporation (“ AMS
”).
A.
Bio Control and AMS are parties to that certain Asset Purchase
Agreement dated April 26, 2006 (the “ Asset Purchase
Agreement ”), pursuant to the terms of which AMS
purchased certain assets of Bio Control’s Urology Business,
as defined therein, excluding certain intellectual property rights
that were subject to the terms of a related original License
Agreement by and between Bio Control and AMS dated April 26,
2006 (the “ License Agreement ”).
B.
Subsequent to entering into the License Agreement, Bio Control and
AMS determined that it is in their best interests to transfer
certain patents and patent applications originally licensed to AMS
under the License Agreement, to AMS, with AMS granting to Bio
Control certain license rights therein, as reflected in a
Non-Binding Memorandum of Understanding, dated September 25,
2007, between Bio Control and AMS (the “ Memorandum of
Understanding ”).
C.
Bio Control and AMS wish to amend and restate the License Agreement
in its entirety exclusively on the terms and conditions provided in
this Agreement.
NOW,
THEREFORE, in consideration of the foregoing recitals and the
mutual representations, warranties, covenants and agreements
contained herein, the parties hereto agree as follows:
(a)
“Affiliate” means, with respect to any Person, any
Person directly or indirectly controlling, controlled by or under
direct or indirect common control with such other
Person.
(b) “AMS
Patents” means those patents and patent applications listed
on Exhibit B hereto.
(c) “AMS
Patent Rights” as used in this Agreement means each and all
of the following: (i) all right, title and interest of AMS and its
Affiliates in the AMS Patents and any patents issuing on any patent
applications, including any reissues, re-examinations,
provisionals, divisionals, continuations and continuations-in-part,
and extensions thereof; and (ii) any corresponding foreign
patents or patent applications related or claiming priority
thereto, in each case to the extent not already included in the AMS
Patents or in the Transferred Intellectual Property (as defined in
the Asset Purchase Agreement).
(d) “Bio
Control Patents” means all of Bio Control’s patents and
patent applications as in existence on April 26, 2006,
including, but not limited to, those listed on Exhibit A
hereto.
(e) “Bio
Control Patent Rights” as used in this Agreement means each
and all of the following: (i) all right, title and interest of
Bio Control and its Affiliates in the Bio Control Patents and any
patents issuing on any patent applications, including any reissues,
re-examinations, provisionals, divisionals, continuations and
continuations-in-part, and extensions thereof; and (ii) any
corresponding foreign patents or patent applications related or
claiming priority thereto, in each case to the extent not already
included in the Bio Control Patents.
(f)
“Confidential Information” means any information that
is disclosed in any tangible form and is clearly labeled or marked
as confidential, proprietary or its equivalent, and any information
that is disclosed orally or visually, is designated confidential,
proprietary or its equivalent at the time of its disclosure and is
reduced to writing and clearly marked or labeled as confidential,
proprietary or its equivalent within thirty (30) days of
disclosure, including, without limitation, any non-public
information of a disclosing party or its Affiliates, and any
scientific or technical data, know-how or expertise of a disclosing
party or its Affiliates that relates to a Licensed Product of such
disclosing party or its Affiliates (whether existing at
or
after the
Effective Date); provided, however, that “Confidential
Information” shall not include information that (i) was
in the receiving party’s possession or was known to it prior
to its receipt from the disclosing party; (ii) is or becomes
public knowledge without the fault of the receiving party;
(iii) is or becomes rightfully available on an unrestricted
basis to the receiving party from a source other than a party owing
an obligation of confidentiality to the disclosing party; or
(iv) becomes available on an unrestricted basis to a third
party from the disclosing party or from someone acting under its
control.
(g) “AMS
Field of Use” means the field of urology, gynecology,
colorectal disorders, sexual dysfunction and related pelvic
disorders.
(h)
“Governmental Authority” means any foreign, domestic,
federal, territorial, state or local governmental authority,
quasi-governmental authority, instrumentality, court, government or
self-regulatory organization, commission, tribunal or organization
or any regulatory, administrative or other agency, or any political
or other subdivision, department or branch of any of the
foregoing.
(i)
“Intellectual Property Rights Licensed to AMS” means
the following: (i) the Bio Control Patent Rights;
(ii) the Urology Business Information; and (iii) all
copyrights, trade secrets, know-how and other proprietary rights
related thereto.
(j)
“Intellectual Property Rights Licensed to Bio Control”
means the following: (i) the AMS Patent Rights and
(ii) all copyrights, trade secrets, know-how and other
proprietary rights related thereto.
(k)
“Licensed Intellectual Property Rights” means the
Intellectual Property Rights Licensed to Bio Control or the
Intellectual Property Rights Licensed to AMS, as the case may
be.
(l)
“Licensed Products” means a Licensed Product of Bio
Control or a Licensed Product of AMS, as the case may
be.
(m)
“Licensed Products of AMS” means any product or device
that is developed, designed, modified, improved, manufactured,
used, imported, sold or offered for sale by AMS in the AMS Field of
Use that (x) in the absence of this Agreement, would infringe
one or more Valid and Enforceable Claims of the Bio Control Patent
Rights or (y) would infringe one or more Valid and Enforceable
Claims of the patent rights included in the Transferred
Intellectual Property (as defined in the Asset Purchase
Agreement).
(n)
“Licensed Products of Bio Control” means any product or
device that is developed, designed, modified, improved,
manufactured, used, imported, sold or offered for sale by Bio
Control, any licensee of or transferee from Bio Control outside the
AMS Field of Use that, in the absence of this Agreement, would
infringe one or more Valid and Enforceable Claims of the AMS Patent
Rights.
(o)
“Licensee” means Bio Control or AMS in its capacity as
licensee under Section 2(a) or Section 2(b), as the case may
be.
(p)
“Licensor” means Bio Control or AMS in its capacity as
licensor under Section 2(a) or Section 2(b), as the case may
be.
(q) “Net
Sales” means AMS’, or, in the case of any sublicensee,
the sublicensee’s properly recognized consolidated aggregate
net sales of Licensed Product during the royalty period provided in
Section 3 hereof, calculated in accordance with generally
accepted accounting principles in the U.S.A. consistently applied
by AMS in accordance with its audited revenue recognition policies,
reduced by the allowance for bad debts recorded related to the
revenue. Whenever a Licensed Product is sold as part of a bundled
product, the “Net Sales” for the Licensed Product
resulting from such sale of such bundled product shall be the
product of (X) the net revenues reported by AMS or its
Affiliate or a sublicensee, whichever is applicable, for such
bundled product multiplied by (Y) a fraction, the numerator of
which is the per unit average selling price of such Licensed
Product and the denominator of which is the sum of the aggregate
per unit average selling prices of all products, including the
Licensed Product, included in such bundled product.
(r)
“Patent Rights” means the Bio Control Patent Rights or
the AMS Patent Rights, as the case may be.
(s)
“Person” means an individual, corporation, partnership,
limited liability company, association, trust, estate or other
entity or organization, including a Governmental
Authority.
(t)
“Software” means all the series of instructions and
algorithms which operate the miniaturo™ Bio Control Device
and physician programmer.
(u)
“Source Code” means the series of statements written in
human-readable computer programming language which, when complied
into machine-readable format, constitute the Software.
(v)
“Urology Business Information” means the following
business information and related records as in existence on the
date hereof to the extent used in or applicable to the Urology
Business:
(i) documentation related to the design,
validation, and production of the miniaturo™ current model of
Bio Control Device, physician programmer, stimulation lead, system
accessories, test fixtures and manufacturing fixtures;
(ii) documentation related to the assembly
of Bio Control Devices, including: (A) process flow charts, process
standard operating procedures (SOPs), (B) copies of all
equipment drawings and manuals, (C) calibration records for
all equipment and other fixed assets; (D) sterilization cycle
validation reports, (E) drawing of molds needed to manufacture
parts for the miniaturo™, (F) floor plan and equipment
list for a facility capable of performing the manufacturing steps
of the miniaturo™ currently performed by Bio Control, and
(G) floor plan, equipment list and software list for a
facility capable of performing the development process currently
performed by Bio Control;
(iii) lists of vendors and suppliers,
including addresses and telephone numbers, if possible, and a
breakdown of purchases by vendor or supplier;
(iv) details of expected cost of goods sold
and other manufacturing costs for Bio Control’s current model
of Bio Control Device;
(v) draft
marketing material (posters, procedure video, etc.);
(vi) lists
of third party software used by Bio Control;
(vii) all
of Bio Control’s preclinical and clinical data, including
animal studies, and human clinical data, descriptions of protocols,
adverse event reports, study reports and database copies (in
printed or electronic format), as well as a list of investigational
sites and principal investigators;
(viii) all
regulatory documents, including submissions, registrations and
licenses;
(ix) all
Software, including Source Code; and
(x) all
invention records created by internal and external personnel not
otherwise included in the Purchased Assets, as defined in the Asset
Purchase Agreement.
(w)
“Valid and Enforceable Claim” with respect to any
patent claim means an issued claim that has not expired or been
rendered invalid or unenforceable by a court of competent
jurisdiction or other Governmental Authority from which no appeal
can be taken.
(y)
“Patents” means the AMS Patents or the Bio Control
Patents, as the case may be.
2. License;
Information Access.
(a) Bio
Control License Grant. Bio Control hereby grants to AMS and its
Affiliates an exclusive (excluding inter alia BioControl),
worldwide, irrevocable (except as provided in Section 4 below)
fully transferable and assignable, right and license (including the
right to grant sublicenses), under the Intellectual Property Rights
Licensed to AMS, solely within the AMS Field of Use, to develop,
design, modify, improve, make, have made, use, import, offer to
sell and sell Licensed Products of AMS. AMS hereby acknowledges
that Bio Control is the sole and exclusive owner of all right,
title and interest in and to the Intellectual Property Rights
Licensed to AMS. Except as set forth in this Agreement, AMS shall
not have any right, title or interest in or to the Intellectual
Property Rights Licensed to AMS. AMS’ license to the Source
Code and Software includes the right to use, modify, sublicense,
and create derivative works of the Source Code and
Software.
(b) AMS
License Grant. AMS hereby grants to Bio Control and its Affiliates
an exclusive (excluding
inter alia
AMS), worldwide, irrevocable, fully transferable and assignable,
royalty-free, right and license (including the right to grant
sublicenses), under the Intellectual Property Rights Licensed to
Bio Control, solely outside the AMS Field of Use, to develop,
design, modify, improve, make, have made, use, import, offer to
sell and sell Licensed Products of Bio Control. Bio Control hereby
acknowledges that AMS is the sole and exclusive owner of all right,
title and interest in and to the Intellectual Property Rights
Licensed to Bio Control. Except as set forth in this Agreement, Bio
Control shall not have any right, title or interest in or to the
Intellectual Property Rights Licensed to Bio Control.
(c) Sublicenses and Cross-licenses. Both
Licensees may grant sublicenses and cross-licenses under their
respective Licensed Intellectual Property Rights and under each
Licensee’s name without the prior written consent of, or
payment of any consideration to, the respective Licensor. In
addition, Licensee may grant sublicenses and cross-licenses under
the Licensed Intellectual Property Rights to develop, design,
modify, improve, make, have made, use, import, offer to sell and
sell the Licensed Products without the prior written consent of
Licensor.
(d) Copying and Access; Destruction.
Commencing upon execution and delivery of this Agreement and as
requested from time to time thereafter, Bio Control will provide
AMS with lists and other reasonable details of the data comprising
the Urology Business Information, and will provide AMS with access
to and, if requested, true and correct copies (at Bio
Control’s expense) of such Urology Business Information in
such format(s) as AMS may request. Bio Control will provide AMS
with at least ninety (90) days prior notice of its intention
to destroy or otherwise dispose of any Urology Business
Information, during which time AMS may request and Bio Control will
provide AMS with access to, copies of, or possession of original
versions of, any such information.
(e) Patent
Assignment. Concurrently with the execution of this Agreement, Bio
Control will assign to AMS the AMS Patents listed on
Exhibit B-3 by an assignment in the form attached as
Exhibit C. The AMS Patents listed in B-3 do not include the
AMS Patents listed in Exhibits B-1 and B-2, which Bio Control has
already assigned to AMS prior to the date hereof. Beginning as of
the date hereof, AMS will bear all costs associated with the AMS
Patents, including costs of prosecution, issuance fees, and
maintenance and annuity fees.
3. Royalties;
Audits; Expenses.
(a) Percentage Royalty. Commencing upon
April 26, 2006, and for a period of ten (10) years
thereafter or, if earlier, upon the expiration or termination of
this Agreement, AMS shall pay to Bio Control, or its designee, a
royalty equal to the percentage of Net Sales set forth below during
each of AMS’ fiscal periods set forth below (subject to
appropriate adjustment for any subsequent change in AMS’
fiscal year
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Fiscal Period
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Royalty Rate
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6
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%
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5
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%
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4
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%
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(b) Sublicense Royalty. In addition to the
percentage royalty set forth in Section 3(a) above, AMS shall pay
or cause its Affiliate to pay royalties to Bio Control based upon
Net Sales of any Licensed Product by sublicensees at the same rate
set forth in Section 3(a) above; provided, however, no royalties
shall be paid in connection with any sublicense granted by AMS
pursuant to any exercise of its authority under Section 6(c) in a
case of infringement of a patent or other intellectual property
right owned by a third party by reason of the use of the Patent
Rights in the manufacture, use or sale of the Licensed
Products..
(c) Payments. During the royalty period,
AMS shall deliver to Bio Control, no later than forty-five
(45) days following the end of each fiscal quarter of AMS, a
royalty payment for the preceding fiscal quarter, accompanied by a
reasonably detailed report, setting forth the royalty calculations
for the quarter to which the payment relates.
(d) Books
and Records. AMS agrees to keep substantially complete and accurate
books of account and records covering all transactions relating to
this Agreement. All such books of account and records shall
be
kept available
for at least two (2) years after the termination or expiration
of this Agreement.
(e) Audit
Rights. Bio Control may cause an audit to be made of those books
and records of AMS as necessary to review and audit any statements
delivered pursuant to Section 3(c) hereof. Such audit shall be
conducted only by an independent certified accountant selected by
Bio Control and reasonably acceptable to AMS, after prior written
notice to AMS and shall be conducted during regular business hours
at AMS’ offices and in such a manner so as not to interfere
with AMS’ normal business activities. AMS shall permit such
accountant, during normal business hours, to have reasonable access
to, and to examine and m
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