[NOTE:
CERTAIN PORTIONS OF THIS DOCUMENT HAVE BEEN MARKED TO INDICATE THAT
CONFIDENTIAL INFORMATION HAS BEEN OMITTED. CONFIDENTIALITY HAS BEEN
REQUESTED FOR THIS CONFIDENTIAL INFORMATION. THE CONFIDENTIAL
PORTIONS HAVE BEEN PROVIDED SEPARATELY TO THE SECURITIES AND
EXCHANGE COMMISSION]
THIS LICENSE
AGREEMENT (the
“Agreement”) is made and entered into as of this
30 th
day of April, 2002 (the
“Effective Date”) by and between Volcano Therapeutics,
Inc. (“VOLCANO”), a corporation organized and existing
under the laws of the State of Delaware and having an office at
26061 Merit Circle, Suite 103, Laguna Hills, CA 92635 and The
Cleveland Clinic Foundation (“CCF”), a non-profit
corporation established under the laws of the State of Ohio and
located at 9500 Euclid Avenue, Cleveland, OH 44195.
WHEREAS, VOLCANO is involved in developing medical
devices for the detection and treatment of atherosclerotic disease,
in particular vulnerable plaque;
WHEREAS, researchers at CCF have developed certain
methods, algorithms, software, devices and related know-how (the
“CCF-IP”) that are complementary to and can enhance the
VOLCANO devices, and whereas CCF has taken steps to protect CCF-IP
including obtaining patent protection for the patentable portions
of the CCF IP; and
WHEREAS, VOLCANO is desirous of licensing, developing and
marketing the CCF-IP and CCF is desirous of granting VOLCANO a
license to the CCF-IP.
NOW,
THEREFORE, in
consideration of the mutual covenants, agreements and conditions
set forth herein, CCF and VOLCANO agree as follows:
These terms
shall have the following meanings when used herein:
1.
“Deliverables” shall mean, in addition to the Licensed
Patents and Licensed Technology, it is contemplated by the parties
that CCF shall provide as an important part of the consideration
for this Agreement certain Deliverables upon which performance by
VOLCANO depends; these Deliverables include transfer of a prototype
product including a look-up table for implementing certain
algorithms and continuing participation of CCF in product
development and testing and after product launch to ensure
continued Improvements of the products.
2.
“Enabled Products” shall mean only those products that
are not themselves Licensed Products but which are specifically
designed to operate in conjunction with Licensed Products so as to
enable other products to operate with the Licensed Products, such
as an adapter that allows the use of a commercial IVUS
(intravascular ultrasound) catheter with an instrument that is a
Licensed Product.
3.
“Field” shall mean the diagnosis and treatment of
atherosclerosis and related vascular diseases using intravascular
methods.
4.
“Improvements” shall mean future improvements to the
Licensed Patents and/or the Licensed Technology, in particular
improvements that are developed by the inventors named in the CCF
cases listed in Exhibit A or by persons who are or have been
members of the laboratories of those inventors.
Page 1 of 16
5.
“Licensed Patents” shall mean the patents and patent
applications listed on Exhibit A hereto, and all provisional
applications, divisional applications, substitution applications,
continuation applications, continuation-in part applications, and
reissue applications, re- examination applications, and extensions
of or derivatives of the preceding, patents issuing on each of the
preceding, and all foreign counterparts based on, containing the
substance of or derived from each of the preceding.
6.
“Licensed Products” shall mean all products or services
covered by a valid issued claim of a Licensed Patent or a claim of
a pending patent application in the country in which such Licensed
Product is sold or manufactured and/or incorporate of otherwise
utilize Licensed Technology.
7.
“Licensed Technology” shall mean all proprietary
information, know-how, procedures, methods, prototypes, designs,
technical data, reports, software, algorithms, trade secrets,
improvements and data owned by CCF or in which CCF has any rights
that are related to or derived from CCF IP including Improvements
thereon made during the term of this Agreement, and that are
necessary or useful in the development, manufacture or use of
Licensed Products.
8. “Net
Sales” shall mean the total amount received from the sales of
a Licensed Product less product returned for credit or used for
demonstration or marketing purposes. Licensed Product donated by
VOLCANO to a bona fide charity or non-profit research entity is not
included in Net Sales provided VOLCANO receives no revenue from
such donations.
9.
“Territory” shall mean worldwide.
10.
“Unit” shall mean a Licensed Product that consists of
(i) a combination of the Licensed Patents and/or the Licensed
Technology with VOLCANO technology or (ii) the Licensed
Patents and/or the Licensed Technology without VOLCANO technology
(i.e., a stand-alone product), as the case may be, and that
generates a gross revenue amount upon sale of such Unit.
CCF hereby
grants and VOLCANO hereby accepts an exclusive irrevocable license
(subject to the terms and conditions herein) in the Field and
Territory to the Licensed Patents and Licensed Technology to make,
have made, use, import, have imported, develop, have developed,
improve, have improved, offer for sale, sell and have sold Licensed
Products in the Territory. This license includes the right to grant
and authorize sublicenses, under the Licensed Patents and Licensed
Technology.
1. A payment of
two hundred thousand dollars ($200,000) will be made to CCF upon
execution of this License Agreement and delivery of the Licensed
Patents, Licensed Technology and the existing prototype product
including data, documentation, algorithms, look up tables and
source code software developed by CCF prior to the execution of
this Agreement.
Page 2 of 16
2. A payment of
one hundred and twenty-five thousand dollars ($125,000) will be
made to CCF upon European Community regulatory clearance or first
commercial sale within the European Community, whichever event
occurs first.
3. A payment of
one hundred and twenty-five thousand dollars ($125,000) will be
made to CCF upon United States FDA regulatory clearance or first
commercial sale within the United States, whichever event occurs
first.
Section 4 —
PARTICIPATION
1. Within
sixty- (60) days of the execution of this Agreement the
parties will mutually develop and agree upon a plan and schedule
(the “PD Plan”) whereby CCF shall diligently
participate with VOLCANO in the development and testing of Licensed
Products leading to regulatory clearance and product launch
(commercial sale) for the Licensed Products. As part of the PD
Plan, Contact Personnel at CCF and at VOLCANO shall be identified.
The PD Plan will then be attached to this Agreement as
Exhibit B and may be updated from time to time at the request
of the parties.
2. CCF will
make a written report to VOLCANO on a quarterly basis detailing its
progress on the PD Plan and presenting results and any Improvements
to VOLCANO.
3. The Contact
Personnel from CCF and VOLCANO will meet periodically, but no less
frequently than quarterly, to report and discuss their respective
progress. These meetings may be held by video or teleconference as
the parties may decide; however, if VOLCANO requests that CCF
Contact Personnel travel outside of the Cleveland metropolitan area
to meet, then VOLCANO shall reimburse the reasonable travel
expenses incurred by the CCF Contact Personnel pursuant to such
meeting. At these meetings, the PD Plan will be revised if
necessary with the revisions being promulgated to the
parties.
4. According to
the PD Plan, VOLCANO may submit instruments and/or software to CCF
with requests for testing and evaluation, with the costs and
particulars for such testing and evaluation to be mutually agreed
upon by the parties in advance. VOLCANO will propose a target for
the completion of each such request. CCF shall make its best
efforts to respond to these requests in a timely manner. If CCF
reasonably believes the proposed target is unattainable, it must
make a counter proposal, and the parties will mutually agree upon a
target. Failure to respond to requests of this Section 4 in a
timely manner by meeting the target shall toll the time limits of
Section 9 for so long as the request remains unmet.
5. If, in the
sole opinion of VOLCANO, CCF is not diligently participating in the
PD plan, then the following procedures will apply:
(a) VOLCANO
shall provide written notice to CCF in which it specifies the
nature of CCF’s perceived lack of diligent participation
(hereafter “breach of participation”).
(b) CCF shall
have sixty- (60) days in which to respond to the written
notice, such response to delineate CCF’s position thereto,
i.e., agreement or rebuttal.
Page 3 of 16
(c) After
receipt of CCF’s response, the parties will schedule and then
conduct a meeting by video or teleconference to reach consensus as
to what action or actions need to be taken and/or whether the PD
Plan should be modified to accommodate new
circumstances.
(d) If,
despite best efforts, the parties fail to reach a consensus or if
CCF fails to fulfill its mutually-agreed-upon responsibilities as
to a cure for a breach of participation within one hundred and
twenty- (120) days following the video or teleconference, then
CCF shall refund five percent (5%) of the License Fee paid to that
date.
Section 5 — PRODUCT
MEETINGS
Following
product launch, Contact Personnel from VOLCANO and CCF shall
continue to have Product Meetings at least quarterly to report to
each other problems or progress with existing Licensed Products and
development of new Licensed Products. These meetings may be held by
video or teleconference as the parties may decide; however, if
VOLCANO requests that CCF Contact Personnel travel outside of the
Cleveland metropolitan area to meet, then VOLCANO shall reimburse
the reasonable travel expenses incurred by the CCF Contact
Personnel pursuant to such meeting.
1. CCF shall
have a continuing affirmative duty to work diligently to update the
data, documentation, algorithms, look up tables and source code
software delivered in Section 3 as changes and Improvements to
the same are made by CCF.
2. Prior to
commercial launch of the first Licensed Product, the Updates shall
be made through the PD Plan and meetings connected with the PD
Plan.
3. Following
commercial launch, the Updates shall be made through the Product
Meetings or sua sponte by CCF.
4. VOLCANO
shall have a continued right to submit instruments and/or software
to CCF with requests for testing and evaluation. VOLCANO will
submit such requests in writing to CCF and CCF shall use reasonable
efforts to respond to these requests in a timely manner. If CCF is
willing and able to perform such testing and evaluation, then the
parties will mutually agree upon the costs and particulars
(including milestones) for such testing and evaluation in
advance.
5. For
technologies un-related to the Licensed Patents and/or the Licensed
Technology, VOLCANO shall have a right to submit instruments and/or
software to CCF with requests for testing and evaluation. Such
testing and evaluation shall be conducted at the sole discretion of
CCF, with the costs and particulars for such testing and evaluation
to be mutually agreed upon by the parties in advance.
Page 4 of 16
1. In countries
where manufacture, sale or use of Licensed Products is covered by a
valid claim of an issued Licensed Patent and or incorporates or
otherwise utilizes the Licensed Technology, a royalty of
[CONFIDENTIAL] of the Net Sales amount received by VOLCANO,
or its sublicensees, from the sale of each Unit of Licensed Product
will be paid to CCF.
2. In countries
where manufacture, sale or use of Licensed Products is covered by a
valid claim of an issued Licensed Patent and/or incorporates or
otherwise utilizes the Licensed Technology, a royalty of
[CONFIDENTIAL] of the Net Sales amount received by VOLCANO,
or its sublicensees, from the sale of each unit of an Enabled
Product will be paid to CCF.
3. After the
last Licensed Patent expires the royalty of Section 7.1 shall
be reduced to [CONFIDENTIAL] and the royalty of
Section 7.2 shall be reduced to [CONFIDENTIAL]
.
4. If VOLCANO,
in its sole discretion, determines that CCF is not diligently
participating in the Progress Meetings and/or is not diligently
responding to requests to evaluate instruments and software, then
the following procedures will apply:
(a) VOLCANO
shall provide written notice to CCF in which it specifies the
nature of CCF’s perceived lack of diligent response
(hereafter “breach of diligent response”).
(b) CCF shall
have sixty- (60) days in which to respond to the written
notice, such response to delineate CCF’s position thereto,
i.e., agreement or rebuttal.
(c) After
receipt of CCF’s response, the parties will schedule and then
conduct a meeting by video or teleconference to reach consensus as
to what action or actions need to be taken.
(d) If,
despite best efforts, the parties fail to reach a consensus or if
CCF fails to fulfill its mutually-agreed-upon responsibilities as
to a cure for a breach of diligent response within one hundred and
twenty days- (120) days following the video or teleconference,
then VOLCANO may, in its sole discretion, withhold payment of fifty
percent (50%) of the Royalties then due and owing to CCF until such
time CCF cures such breach of diligent response to the satisfaction
of VOLCANO. Upon cure by CCF, VOLCANO would then immediately remit
to CCF any Royalties being withheld.
Page 5 of 16
Payments
arising hereunder will be made within sixty- (60) days of when
the obligation accrues. In the case of Royalty Payments the accrual
date will be the close of each calendar quarter (March 31,
June 30, Septem
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