THIS LICENSE
AGREEMENT (this “Agreement”) is made and entered into
as of July 21, 2003 (the “Effective Date”) between
VOLCANO THERAPEUTICS, INC. (as defined below,
“Volcano”), a Delaware corporation, and AVE GALWAY
LIMITED (as defined below, “Medtronic”), a corporation
existing under the laws of the Republic of Ireland.
WHEREAS, pursuant
to an Asset Purchase Agreement dated as of July 21, 2003, (the
“ APA ”) Volcano has acquired substantially all
of the assets associated with the functional measurement and IVUS
businesses of JOMED, Inc. and its Affiliates (the “
JOMED Acquisition ”);
WHEREAS, in
connection with the JOMED Acquisition, Volcano has hired 22
engineers who, prior to the JOMED Acquisition, were employed or
retained by JOMED, Inc. or its Affiliates in the IVUS businesses of
JOMED, Inc. (the “ JOMED Engineers ”); a list of
the JOMED Engineers, including the address, telephone number and
rate of pay of each JOMED Engineer, is set forth as
Exhibit A;
WHEREAS,
simultaneous with the closing of the JOMED Acquisition, Volcano and
Medtronic will enter into a Supply Agreement, an Option to
Distribute Agreement and a Right of First Negotiation and First
Refusal Agreement and this Agreement; and
WHEREAS, the
parties desire to enter into this agreement under which Volcano
shall grant Medtronic a license relating to certain assets
associated with the JOMED Acquisition.
NOW, THEREFORE, in
consideration of the respective representations, warranties,
covenants and agreements contained herein, and for other valuable
consideration, the receipt and adequacy of which is hereby
acknowledged, the parties hereto agree as follows:
1.1 Specific
Definitions . As used in this Agreement, the following terms
shall have the meanings set forth or as referenced
below:
“
Affiliate ” of a specified person (natural or
juridical) means a person that directly, or indirectly through one
or more intermediaries, controls, or is controlled by, or is under
common control with, the person specified. “Control”
shall mean ownership of more than 50% of the shares of stock
entitled to vote for the election of directors in the case of a
corporation, and more than 50% of the voting power in the case of a
business entity other than a corporation.
“
Agreement ” means this Agreement and all Exhibits and
Schedules hereto.
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“
Confidential Information ” means any written or
tangible information of one of the parties (the “disclosing
party”) which is disclosed to the other party (the
“receiving party”) that is not generally known to the
public and that is marked or identified as
“Confidential,” “Proprietary” or the like,
including, without limitation, trade secrets and know-how,,
excluding information which:
(a) was already in
the possession of or known by the receiving party prior to its
receipt from the disclosing party;
(b) is or becomes
part of the public domain by reason of acts not attributable to the
receiving party;
(c) is or becomes
available to receiving party from a source other than the
disclosing party which source, has rightfully obtained such
information and has no obligation of non-disclosure or
confidentiality to the disclosing party with respect
thereto;
(d) has been
independently developed by the receiving party without breach of
this Agreement or use of any Confidential Information of the other
party; or
(e) has been or
must be publicly disclosed by reason of legal, accounting or
regulatory requirements beyond the reasonable control of the
receiving party provided the receiving party provides the
disclosing party notice of the intended disclosure in order for the
disclosing party to take such action it deems appropriate to
protect the confidentiality of the information to be
disclosed.
“
Exclusive Field ” means therapeutic catheters,
therapeutic guidewires or other therapeutic intravascular devices
that incorporate an ultrasonic imaging transducer, and related
equipment pertaining to such therapeutic catheters, therapeutic
guidewires or other therapeutic intravascular devices that
incorporate an ultrasonic imaging transducer, other than with
respect to such therapeutic catheters, therapeutic guidewires or
other therapeutic intravascular devices that fall within the
Non-Exclusive Field. The Exclusive Field shall include, but is not
limited to therapeutic catheters, therapeutic guidewires or other
therapeutic intravascular devices used or marketed to image or
diagnose and treat: (i) aneurismal disease; (ii) valvular
disease; or (iii) diseases of the myocardium excluding
atherosclerosis. The Exclusive Field does not include kits where
the diagnostic IVUS device is merely packaged with the therapeutic
device.
“
Fields ” means the Non-Exclusive Field and the
Exclusive Field.
“
Invention ” means any new and useful invention,
discovery, know-how, trade secret, data, information, technology,
process or concept, whether or not patented or patentable related
to the IVUS Assets, conceived, reduced to practice or otherwise
made, developed or demonstrated to have utility by either party
during the term of this Agreement.
“ IVUS
Assets ” means any and all assets of any type associated
with the intravascular ultrasound business of JOMED, Inc. and its
Affiliates, which, pursuant to the APA, are now owned by, licensed
to, possessed by, under the control of, or otherwise acquired by
Volcano, and
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improvements
thereon. For the avoidance of doubt, “IVUS Assets” does
not include the Philips Technology.
“
Know-How ” means all know-how, trade secrets,
expertise, discoveries and technical information included within
the IVUS Assets as of the Effective Date, including but not limited
to information embodied in drawings, designs, copyrights, copyright
registrations and applications, trademarks, service marks and
registrations thereof and applications therefor, material
specifications, processing instructions, formulas, equipment
specifications, product specifications, confidential data, computer
software, electronic files, research notebooks, invention
disclosures, research and development reports and the like related
thereto, and all amendments, modifications, upgrades and
improvements to any of the foregoing.
“
Liens ” means liens, mortgages, charges, security
interests, claims, voting trusts, pledges, encumbrances, options,
assessments, restrictions, licenses, sublicenses, or third party or
spousal interests of any nature.
“
Medtronic ” means AVE Galway Limited and its
Affiliates.
“
Medtronic Product ” shall have the meaning assigned in
the Supply Agreement.
“
Non-Exclusive Field ” means therapeutic catheters,
therapeutic guidewires or other therapeutic intravascular devices
that incorporate an ultrasonic imaging transducer, and related
equipment pertaining to such therapeutic catheters, therapeutic
guidewires or other therapeutic intravascular devices that
incorporate an ultrasonic imaging transducer, used or marketed to
image or diagnose and treat atherosclerosis (including vulnerable
plaque). The Non-Exclusive Field shall include, but is not limited
to (i) devices incorporating IVUS Assets and stents on one
catheter used or marketed to diagnose and treat atherosclerosis
(including vulnerable plaque), and (ii) devices combining
therapeutic and/or diagnostic IVUS capabilities used or marketed
for imaging and crossing chronic total occlusion. The Non-Exclusive
Field does not include kits where the diagnostic IVUS device is
merely packaged with the therapeutic device.
“
Patents ” means (a) all patents and patents
applications included within the IVUS Assets, including the patents
and patent applications set forth on Exhibit B,
together with any patents that may issue based thereon;
(b) all continuation, divisional, re-issue, re-examination and
substitution applications that may be filed by or for the benefit
of Volcano based on the foregoing referenced patents or patent
application, together with any patents that may issue based
thereon; and (c) all foreign applications that may be filed by
or for the benefit of Volcano based on the foregoing referenced
patents and patent applications, together with all patents which
may issue based thereon.
“ Philips
Technology ” means those U.S. and foreign patents and
patent applications, know-how, trade secrets and other proprietary
technology, which relate to the IVUS Assets and are licensed to, or
acquired by, Volcano pursuant to that Asset Transfer Agreement
dated July 3, 2003 by and between Pacific Rim Medical Ventures
Corp., a wholly-owned subsidiary of Volcano, and Koninklijke
Philips Electronics N.V. (“ Philips ATA
”).
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“
Product ” shall have the meaning assigned in the
Supply Agreement.
“
Volcano ” means Volcano Therapeutics, Inc. and its
Affiliates.
“ Volcano
Technology ” means, collectively, the Patents, Know-How
and Inventions.
1.2
Definitional Provisions .
(a) The words
“hereof,” “herein,” and
“hereunder” and words of similar import, when used in
this Agreement, shall refer to this Agreement as a whole and not to
any particular provisions of this Agreement.
(b) Terms defined
in the singular shall have a comparable meaning when used in the
plural, and vice-versa.
(c) References to
an “Exhibit” or to a “Schedule” are, unless
otherwise specified, to one of the Exhibits or Schedules attached
to or referenced in this Agreement, and references to an
“Article” or a “Section” are, unless
otherwise specified, to one of the Articles or Sections of this
Agreement.
(d) The term
“person” includes any individual, partnership, joint
venture, corporation, trust, unincorporated organization or
government or any department or agency thereof.
ARTICLE 2
LICENSE TO MEDTRONIC
2.1 License of
Volcano Technology . Subject to the terms and conditions of
this Agreement and in consideration and subject to Volcano’s
receipt of the License Fee, Volcano hereby grants to
Medtronic:
(a) a fully paid,
royalty-free, perpetual, irrevocable, worldwide, sublicensable,
sole and exclusive license to the Volcano Technology to make, have
made, use, import, distribute, sell, offer to sell and have sold
products in the Exclusive Field, to practice methods covered by the
Volcano Technology in the Exclusive Field, and otherwise to
commercialize and exploit the Volcano Technology in the Exclusive
Field.
(b) a fully paid,
royalty-free, perpetual, irrevocable, worldwide, sublicensable
non-exclusive license to the Volcano Technology to make, have made,
use, import, distribute, sell, offer to sell and have sold products
in the Non-Exclusive Field, to practice methods covered by the
Volcano Technology in the Non-Exclusive Field, and otherwise to
commercialize and exploit the Volcano Technology in the
Non-Exclusive Field.
2.2 License of
Philips Technology .
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(a) At such time
as, and to the extent that, (i) Volcano develops any IVUS
Assets or iterations thereof which utilize, or are covered by, the
Philips Technology; or (ii) any Volcano product (including,
without limitation, products acquired pursuant to the APA)
utilizes, or is covered by, any Philips Technology and is covered
by one or more Patents, Volcano hereby grants to Medtronic an
exclusive, royalty-free, worldwide license (or sublicense as the
case may be) to Volcano’s rights in the Philips Technology to
make, have made, use, import, distribute, sell, offer to sell and
have sold products in the Exclusive Field, to practice methods
covered by the Philips Technology in the Exclusive Field, and
otherwise to commercialize and exploit the Philips Technology in
the Exclusive Field.
(b) To the extent
that, (i) Volcano develops any IVUS Assets or iterations
thereof which utilize, or are covered by, the Philips Technology;
or (ii) any Volcano product (including, without limitation,
products acquired pursuant to the APA) utilizes, or is covered by,
any Philips Technology and is covered by one or more Patents,
Volcano agrees that it will use commercially reasonable efforts to
grant Medtronic, to the extent that Volcano is not prohibited under
the Philips ATA and related agreements from doing so, a
non-exclusive, royalty-free, worldwide license (or sublicense as
the case may be) to make, have made, use, import, distribute, sell,
offer to sell and have sold products in the Non-Exclusive Field, to
practice methods covered by the Philips Technology in the
Non-Exclusive Field, and otherwise to commercialize and exploit the
Philips Technology in the Non-Exclusive Field. Furthermore, if
Volcano is prohibited under the Philips ATA and related agreements
from granting Medtronic such license, then, to the extent that
Volcano is not prohibited under the Philips ATA and related
agreements from doing so, Volcano will supply to Medtronic any
product in the Non-Exclusive Field covered by the Philips
Technology under terms and conditions substantially similar to the
Supply Agreement for the term of any patent within the Philips
Technology.
(c) To the extent
that the license grant set forth in Section 2.2(a) has not
become effective and no license has been granted with respect to
Section 2.2(b) prior to Volcano’s consummation of a
transaction with a third party whereby Volcano’s rights in
and to all or a portion of the Philips Technology is assigned, sold
or otherwise transferred, or exclusively licensed, to such third
party, without any right or interest in such portion of the Philips
Technology remaining with Volcano (a “Philips
Transaction”), the rights and obligations of Medtronic and
Volcano with respect to such portion of the Philips Technology
under Sections 2.2(a) or 2.2(b) shall terminate on the date
that such Philips Transaction is consummated. In the event Volcano
reacquires through license or otherwise obtains rights to any such
Philips Technology, Medtronic’s and Volcano’s rights
and obligations under Sections 2.2(a) and 2.2(b) shall be
revived.
(d) Volcano agrees
that to the extent the license grant set forth in
Section 2.2(a) becomes effective or a license is granted with
respect to Section 2.2(b), such effectiveness and grants shall
not terminate upon a Philips Transaction, and any Philips
Transaction shall be, and the third party in any Philips
Transaction shall acquire the Philips Technology, subject to such
license rights of Medtronic.
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2.3
Restriction . The licenses granted under Sections 2.1
above shall be subject to the applicable existing terms and
conditions, if any, of the current agreement between JOMED, Inc.
and TransVascular, Inc. to the extent such agreement is part of the
assets acquired by Volcano in the JOMED Acquisition. Volcano agrees
that, subject to receipt of the License Fee by Medtronic, Volcano
shall not extend the term of such agreement.
ARTICLE 3
TECHNOLOGY TRANSFER & ASSISTANCE
3.1 Hiring of
JOMED Engineers by Medtronic .
(a) Subject to
Section 3.2(b), on and after the Effective Date, Volcano
agrees to provide Medtronic with access to interview the JOMED
Engineers and seek from said JOMED Engineers relevant hiring
information for the purposes of offering employment or a
consultancy arrangement to not more than two (2) of the JOMED
Engineers; provided, however, that each JOMED Engineer so
chosen by Medtronic to be contacted by Medtronic for the above
purpose shall be reasonably acceptable to Volcano; provided,
further, that should Volcano reasonably determine that such a
JOMED Engineer chosen by Medtronic is not acceptable, including the
determination that such JOMED Engineer is indispensable to the
Product or other Volcano products, Volcano will allow Medtronic to
contact and approach an alternative JOMED Engineer that is
qualified for the Purpose. Without limiting the generality of the
foregoing, Volcano will, but only to the extent permitted under
employment laws and regulations applicable to Volcano and the JOMED
Engineers, from time to time and upon Medtronic’s reasonable
request provide Medtronic with information about the skills sets
and expertise of, and the nature of work done by, the JOMED
Engineers. Each JOMED Engineer approached by Medtronic with an
offer of employment or consultancy arrangement shall have sole
discretion in determining his or her acceptance or decline of such
offer. The JOMED Engineers so hired or retained by Medtronic
hereunder are referred to as the “ Medtronic Engineers
.” In the event a JOMED Engineer (or any other employee of
Volcano with similar skills as the JOMED Engineers) elects on his
or her own to approach Medtronic for employment or a consultancy
arrangement, such Volcano employee shall count as one of the two
Medtronic Engineers if Medtronic enters into an employment or
consultancy arrangement with said Volcano employee.
(b) Prior to
Medtronic contacting or interviewing any of the JOMED Engineers for
the purpose of offering employment or a consultancy arrangement,
Medtronic shall provide Volcano 20 business days prior written
notice before the intended contact date of such JOMED Engineers,
which notice shall specify the names of the JOMED Engineers
Medtronic intends to contact. Volcano shall have 7 business days
following receipt of such notice to notify Medtronic if any or all
of the JOMED Engineers are not acceptable to Volcano for hire or
retention by Medtronic, which notification shall provide Medtronic
with one or more alternative JOMED Engineers, as applicable. Except
as to alternative JOMED Engineers designated by Volcano, the
protocol set forth in this Section 3.1(b) shall apply to each
JOMED Engineer Medtronic intends to contact or interview for the
purpose of offering employment or consultancy.
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(c) Except as set
forth in this Section 3.1, Medtronic agrees that it shall not
solicit employment or consultancy arrangements to any employees or
consultants of Volcano. Volcano similarly agrees that it shall not
solicit employment or consultancy arrangements to any employees or
consultants of Medtronic who works or worked on the projects
relating to the IVUS Assets. The obligations on the parties under
this Section 3.1(c) shall terminate upon the earlier of:
(i) five (5) years from the Effective Date, or
(ii) one (1) year after a termination of rights and
obligations in accordance with Sections 3.4(a) or
3.4(b).
(d) The Medtronic
Engineers will be employees or independent consultants, as
applicable, of Medtronic, and Medtronic will be responsible for the
costs associated with soliciting, hiring and paying the Medtronic
Engineers. Medtronic may hire or retain the Medtronic Engineers on
terms (including pay and benefits) satisfactory to Medtronic and
the Medtronic Engineers in each of their sole
discretion.
3.2 Access to
Volcano Facilities and Personnel; Technology Transfer
.
(a) From the
Effective Date until the termination of the rights and obligations
in this Section 3.2(a) pursuant to Section 3.4 hereof,
Volcano will permit the Medtronic Engineers to work on site at
Volcano’s facilities with Volcano’s IVUS research and
development personnel at no cost to Medtronic for any facility
space used by such Medtronic Engineers for the sole purpose of
developing products in the Fields (the “ Purpose
”). Whether or not the Medtronic Engineers work on site at
Volcano’s facilities, the Medtronic Engineers will, at no
cost to Medtronic, have reasonable access to Volcano personnel and
facilities, as appropriate, so that Medtronic may pursue the
development of products in the Fields and ensure reasonable
compatibility as provided for pursuant to the Supply Agreement of
Medtronic Products with Products.
(b) From the
Effective Date and after the expiration or termination of the
rights and obligations in Section 3.2(a), Volcano shall, upon
Medtronic’s reasonable request from time to time, provide
Medtronic, such cooperation, as is appropriate to enable Medtronic
to utilize the licenses granted to Medtronic under this Agreement.
Such cooperation shall include (i) providing Medtronic with
Know-How reasonably deemed necessary by Medtronic to develop or
commercialize products in the Fields; and (ii) providing
Medtronic with assistance from Volcano’s engineering staff to
help address certain issues related to the efficient manufacture of
products (such issues may include, but not be limited to,
identifying and helping to resolve material issues, identifying and
recommending alternatives to components that may have the potential
of becoming obsolete or difficult to obtain, and assisting with the
resolution of yield issues). In addition, Volcano will make
available personnel as reasonably requested by Medtronic, to
provide such individual training to Medtronic technical and
manufacturing personnel as is necessary to enable Medtronic to
utilize the licenses granted to Medtronic under this Agreement, at
such reasonable times and places as Medtronic may request from time
to time to develop and commercialize products in the Fields.
Volcano agrees to take reasonable steps to ensure that all IVUS
consoles Incorporating IVUS Assets and/or using
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or used with
Product produced and manufactured by or on behalf of Volcano will
be compatible with and interface with the products developed by
Medtronic hereunder, and the parties will take all reasonable and
appropriate steps to ensure such compatibility and interface
concurrently with Volcano’s commercial introduction to market
of any new generation of IVUS consoles incorporating IVUS Assets
and/or using or used with Product or upgrades (including software
and hardware upgrades) thereto. Such steps should include, if
applicable and to the extent appropriate, the provision by Volcano
to Medtronic of all necessary technical specifications, regulatory
information and the like for the purpose of ensuring such
compatibility and interface concurrently with the commercial
introduction of any new IVUS consoles incorporating IVUS Assets
and/or using or used with Product. Medtronic shall pay Volcano a
reasonable and customary per diem rate for each Volcano employee
providing services to Medtronic pursuant to this
Section 3.2(b). Further, Medtronic shall reimburse Volcano for
travel, direct and indirect costs, and other out-of-pocket costs
reasonably incurred by Volcano in connection with such training
upon submission by Volcano of appropriate documentation
thereof.
(c) Volcano will
not consummate any disposition (whether by sale, merger, license,
consolidation or otherwise) of all or any substantial portion of
the IVUS Assets unless the purchaser thereof agrees to be bound by
Volcano’s obligations under Section 3.2(b).
(d)
Notwithstanding anything herein to the contrary, the extent of
access to Volcano’s facilities by the Medtronic Engineers or
any other employees, agents or consultants of Medtronic, including
access to specific areas of the facilities, access to Volcano
personnel, and access to Volcano’s computer systems and
network, shall all be determined and limited by Volcano, in
Volcano’s reasonable discretion.
3.3
Collaboration (formerly quarterly meetings) . Volcano will
participate in meetings with Medtronic personnel, at places and
times to be reasonably agreed by the parties, on at least a
quarterly basis to review and update the progress of any
development of Products and related IVUS technology and potential
applications of such developed technology in the Field.
(a) Unless
otherwise terminated pursuant to Section 3.4(b) below, the
rights and obligations contained in Sections 3.1 and 3.2(a)
shall terminate upon the later of (i) three (3) years
from the date hereof; or (ii) the occurrence of a
“Liquidity Event”. A “Liquidity Event”
means: (A) Volcano sells all or substantially all of its
assets, whether by merger, combination, sale of assets, sale of
shares, licensing or other similar transaction; or (B) Volcano
consummates an initial public offering of shares of its common
stock.
(b)
Notwithstanding the termination provisions of Section 3.4(a)
above, the rights and obligations contained in Section 3.1 and
Section 3.2(a) shall terminate immediately if (i) Medtronic
sells all or substantially all of its assets, whether by merger,
combination, sale of assets, sale of shares, licensing or other
similar transaction to any
8
party listed on
Exhibit C hereto; or (ii) either Medtronic or
Volcano (A) becomes insolvent; (B) commences any action
or proceeding under any bankruptcy or insolvency law for
reorganization, arrangement, composition or similar relief;
(C) has commenced against it any action or proceeding under
any bankruptcy or insolvency law that remains undismissed or
unstayed for a period of 60 days; or (D) makes an
assignment for the benefit of creditors, goes into liquidation or
receivership or otherwise loses legal control of its
business.
4.1 License
Fee . Upon execution of this Agreement, Medtronic shall pay to
Volcano a fee in the amount of Two Million Five Hundred Thousand
Dollars ($2,500,000) (“ License Fee ”). No
further payment of any type shall be due from Medtronic with
respect to the licenses granted under this Agreement.
ARTICLE 5
VOLCANO’S OBLIGATIONS
5.1 Medtronic
Exclusivity .
(a) Volcano will
not, without the prior written consent of Medtronic, promote,
market, supply, sell, transfer or otherwise dispose of any products
or components that are covered by any Patent to any third party if
Volcano should have known after making reasonable inquiry or has
actual knowledge, that such third party intends or is likely to
use, promote, market, supply, sell, transfer or otherwise dispose
of any such products or components in the Exclusive Field. Prior to
any sale, supply, transfer or other disposition to any third party
of any products or components covered by any Patent, Volcano shall
obtain the agreement of such third party that it will not use,
promote, market, supply, sell, transfer or otherwise dispose of any
such products or components in the Exclusive Field or resell such
products or components for use in the Exclusive Field.
(b)
Notwithstanding anything to the contrary in Section 5.1(a),
Section 5.1 (a) shall not apply to the existing terms and
conditions of that certain Supply Agreement, dated as of
June 30, 2003, by and between AVI Corp., a Delaware
corporation, and JOMED, Inc. or the existing terms and conditions
of that certain Supply Agreement, dated as of January 31,
2000, as amended, by and between TransVascular, Inc., a California
corporation, and EndoSonics Corporation, a Delaware corporation
(predecessor to JOMED, Inc.), which agreements will be assumed by
Supplier in the JOMED Acquisition.
5.2 Maintain
Agreements in Force . Volcano shall comply with all of the
provisions of, and shall maintain in full force and effect, all
agreements with third parties which relates to the Volcano
Technology in the Fields. Volcano shall promptly notify Medtronic
if any such third party licensor alleges any breach by Volcano of
any such license agreement directly related to the Volcano
Technology in the Fields. Medtronic shall be entitled, but not
obligated, to cure any
9
alleged breach
by Volcano of such license agreement related to the Volcano
Technology in the Fields. Volcano agrees not to modify, waive or
amend any provision of the Philips ATA without the prior written
consent of Medtronic, which consent shall not be unreasonably
withheld or delayed, if such modification, waiver or amendment
would adversely impact Medtronic’s rights under this
Agreement.
ARTICLE 6
INTELLECTUAL PROPERTY
6.1 Ownership
of Inventions .
(a) Each of
Volcano and Medtronic shall solely own all right, title and
interest in and to any Inventions it solely conceives, reduces to
practice or otherwise makes, develops or lawfully acquires (the
“ Sole Inventions ”) and Volcano and Medtronic
shall jointly own all right, title and interest in and to any
Inventions that they jointly conceive, reduce to practice or
otherwise make, develop or lawfully acquire after the Effective
Date (the “ Joint Inventions ”). For purposes of
this Section, an Invention which is the subject of a patent
application shall be deemed to have been developed jointly by
employees or consultants of Medtronic and Volcano, and thus be a
Joint Invention, if at least one employee or consultant of each of
Medtronic and Volcano is required to be named as an inventor in
such application in order for such patent to be valid.
(b) For any
patentable Invention of Medtronic directly related to the Products
developed pursuant to the licenses granted hereunder which is the
subject of a patent application f
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