Exhibit 10.21
CONFIDENTIAL TREATMENT
REQUESTED
LICENSE
AGREEMENT
This License
Agreement is entered into and made effective as of this 23
rd
day of
January, 2007 (the “Effective Date”), by and between
SCIENT’X S.A., a company incorporated under the laws of
France, company number : Versailles B 348 366 733, having its head
office located in Bâtiment Calypso- Parc Ariane 3-5 rue Alfred
Kastler, 78284 Guyancourt cedex, FRANCE, represented by Mr Olivier
Carli, Chairman, and hereafter called ‘SCIENT’X’,
and ALPHATEC SPINE INC., a California corporation (Employer
Identification Number 33-0412288) with head offices located at 2051
Palomar Airport Road, Suite 100, Carlsbad, California, U.S.A.,
represented by Mr. John Foster and hereafter called
“Licensee”.
RECITALS
A. SCIENT’X is engaged in the
development and production of orthopaedic implants, and especially
spinal implants, has a knowledge and know-how in this area, and is
producing and marketing products based on the three patents set
forth in the Exhibit A hereto, all of these patents being
authorised in the Territory, and hereinafter all together called
the ‘Patents.’
B. Licensee, is engaged in the
business of the development, manufacturing, sale and marketing of
spinal products and medical devices, and has experience and skills
to promote the sale of the products in the Territory. Licensee
wishes to acquire from SCIENT’X the right to carry on such
business.
C. SCIENT’X is willing to
broaden the market for its products by granting to Licensee the
right for the Licensee to exploit the Patents to produce, sell,
market and distribute Licensed Products in the Territory (as set
forth on Exhibit B attached hereto), and Licensee wishes to
acquire, such non exclusive license in the Territory.
AGREEMENT
NOW, THEREFORE, in consideration of
the mutual covenants and conditions set forth herein,
SCIENT’X and Licensee hereby agree as follows:
1. Definitions. Capitalized terms
shall have the meaning set forth below.
1.1 Affiliate. The term
“Affiliate” shall mean any entity which directly or
indirectly controls, is controlled by or is under common control
with Licensee. The term “control” as used herein means
the possession of the power to direct or cause the direction of the
management and the policies of an entity, whether through the
ownership of a majority of the outstanding voting securities or by
contract or otherwise.
1.2 Medical Devices. The term
“Medical Devices,” individually, or collectively, shall
mean any one or more product, device, method, procedure, material,
or element utilized by the surgeons, in order to repair, cure or
reinforce the patient’s spine.
1.3 Confidential Information. The
term “Confidential Information” shall mean any and all
proprietary or confidential information of SCIENT’X or
Licensee which may be
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exchanged between the parties at any time and
from time to time during the term of this Agreement, including
without limitation, the terms of this Agreement. Information shall
not be considered confidential to the extent that it:
a. is publicly disclosed through no
fault of any party hereto, either before or after it becomes known
to the receiving party; or
b. was known to the receiving party
prior to the date of this Agreement, which knowledge was acquired
independently and not from another party hereto (or such
party’s employees); or
c. is subsequently disclosed to the
receiving party in good faith by a third party who has a right to
make such disclosure; or
d. has been published by a third
party as a matter of right.
1.4 Field. The term
“Field” shall mean disorders of the human
spine.
1.5 Licensed Product. The term
“Licensed Product” shall mean any product which cannot
be developed, manufactured, offered to sale, used or sold without
(i) infringing one or more claims under SCIENT’X Patent
Rights; or (ii) utilizing any part of SCIENT’X
Technology not otherwise includable within SCIENT’X Patent
Rights.
1.6 Net Sales. The term “Net
Sales” shall mean the end user gross amount received by
Licensee upon payment of invoice, or its Affiliates and
sublicensees, or any of them, on all sales of Licensed Products,
less (i) discounts actually allowed; (ii) credits for
claims, allowances, retroactive price reductions or returned goods;
(iii) prepaid freight; (iv) sales taxes or other
governmental charges actually paid in connection with sales of
Licensed Products (but excluding what are commonly known as income
taxes and value-added taxes); and (v) refunds or rebates
actually paid. For purposes of determining Net Sales, a sale shall
be deemed to have occurred when an invoice therefore shall be
generated and payment received by Licensee, or its Affiliates and
sublicensees or any of them. Sales of Licensed Products by
Licensee, or an Affiliate or sublicensee of Licensee to any
Affiliate or sublicensee which is a reseller thereof shall be
excluded, and only the subsequent sale of such Licensed Products by
Affiliates or sublicensees of Licensee to unrelated parties shall
be deemed Net Sales hereunder.
1.7 SCIENT’X Patent Rights.
The term “SCIENT’X’ Patent Rights” shall
mean rights arising out of or resulting from any and all U.S. and
foreign patent applications and patents, here above called, the
Patents; including all provisionals, substitutions, continuations,
continuations-in-part, divisionals, supplementary protection
certificates, renewals, all letters patent granted thereon, and all
reissues, reexaminations, extensions, confirmations, revalidations,
registrations, patents of addition thereof, PCTs and foreign
counterparts, so long as said patents have not been held invalid
and/or unenforceable by a court of competent jurisdiction from
which there is no appeal or, if appealable, from which no appeal
has been taken.
1.8 SCIENT’X Technology. The
term “SCIENT’X Technology” shall mean so much of
the technology specifically related to the products listed on
Exhibit A attached hereto as is proprietary to
SCIENT’X together with materials, information and know-how
related thereto whether or not the same is eligible for protection
under the patent laws of the United States or elsewhere, and
whether or not any such processes and technology, or information
related thereto, would be enforceable as a trade secret or the
copying of which would be enjoined or restrained by a court as
constituting unfair competition.
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1.9 Control or Controlled. The term
“Control” of “Controlled” shall mean with
respect to any intellectual property right, the possession by a
party of the ability to grant a license or sublicense of such
intellectual property as provided for herein without violating the
terms of any arrangement or agreements between such party and any
third party.
2. License Terms and
Conditions.
2.1 Grant of License. SCIENT’X
hereby grants to Licensee a non exclusive license in the Territory,
including the right to sublicense, under SCIENT’X Patent
Rights as specified in Exhibit A and the SCIENT’X
Technology, to make, to have made, to import, to use, to offer for
sale (including offers for sale made by Licensee’s
third-party agents), and to sell (including sales made by
Licensee’s third-party agents) Licensed Products in the
Field, subject to the terms of this Agreement. The parties agree
that this grant of license shall not affect the rights of
SCIENT’X to develop, manufacture, market and sell its
products either by itself or through its distribution
agents.
2.2 Initial License Fee. In partial
consideration for the non exclusive license granted pursuant to
Section 2.1 hereof, Licensee shall pay to SCIENT’X a
non-refundable license fee upon execution of this Agreement in the
amount of two million euros (€2,000,000) (the
“Initial License Fee”). The Initial License Fee
described in this Section is consideration for the grant and
continuation of the license hereunder, and SCIENT’X shall
have no obligation to return any portion of such the Initial
License Fee, notwithstanding any failure by Licensee to develop any
Licensed Product or market any Licensed Product commercially, and
notwithstanding the volume of sales of any such Licensed
Product.
2.3 [***] SCIENT’X agrees that
during the time period beginning on the Effective Date and ending
[***] years thereafter, that it shall not enter any into a
licensing or similar transaction related to the SCIENT’X
Patents on better financial terms than those set forth in this
Agreement, provided that such restriction shall not be of any force
and effect in connection with or following the transfer or sale of
all or substantially all of SCIENT’X’s assets or
business related to this Agreement, or in the event of
SCIENT’X’s merger, consolidation, change in control or
similar transaction.
2.4 Royalties
2.4.1 Percentage Royalty. In
addition to the payment described in Section 2.2 above,
Licensee agrees to pay Licensor during the term of this Agreement a
royalty for each Licensed Product sold by Licensee or its
sublicensees (but not more than one royalty for each Licensed
Product) of [***]%) of the Net Sales of Licensed Product in
the Territory.
Licensee’s obligation to pay
royalties hereunder shall cease upon the earlier of (i) the
expiration of the Patents or (ii) the termination of this
Agreement (the “Royalty Term”). The Patents shall be
deemed to have expired upon the non-payment of the maintenance fee,
upon the judgment of invalidity or unpatentability by a court or
administrative agency of competent jurisdiction from which no
appeal is taken or can be taken or upon expiration of the term of
the Patents
At the time Licensee delivers the
accounting statement required by Section 2.9 below, Licensee
shall simultaneously pay to Licensor a sum equal to the aggregate
payment due based on the information contained in such accounting
statement and consistent with this Agreement.
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2.4.2 Minimum Royalty. Licensee
shall pay to SCIENT’X, as a minimum annual royalty for the
twelve (12) month period beginning with the commencing date of
this Agreement, [***]€[***][***] euros, and the amount of the
minimum annual royalty payable for each of the [***] subsequent
twelve (12) month periods during the term hereof shall be
[***]€[***] euros. Any percentage royalties earned and paid
to SCIENT’X pursuant to Section 2.4.1 hereof for any
twelve (12) month period shall be credited against the minimum
royalty payable for such period, and the payment of any shortfall
between actual royalties paid and the minimum annual royalty
applicable to such twelve (12) month period shall be payable
to SCIENT’X within sixty (60) days after the last day of
such twelve (12) month period.
2.4.3 One Royalty. Only one royalty,
calculated at the highest applicable royalty rate under this
Section 2, shall be payable to SCIENT’X hereunder for
each sale of a Licensed Product.
2.5 Quarterly Payments.
2.5.1 Sales by Licensee. With regard
to Net Sales made by Licensee or its Affiliates, royalties shall be
payable by Licensee quarterly, within sixty (60) days after
the end of each calendar quarter, based upon the Net Sales of
Licensed Products in the Territory during such preceding calendar
quarter, commencing with the calendar quarter in which the first
commercial sale of any Licensed Product is made.
2.5.2 Sales by Sublicensees. With
regard to Net Sales made by sublicensees- only when such sublicense
are expressly agreed by SCIENT’X of Licensee or its
Affiliates, royalties shall be payable by Licensee quarterly,
within ninety (90) days after the end of each calendar
quarter, based upon the Net Sales of Licensed Products by such
sublicensee during such preceding calendar quarter, commencing with
the calendar quarter in which the first commercial sale of any
Licensed Product is made by such sublicensee.
2.6 Term of License. Unless
terminated sooner in accordance with the provisions of this
Agreement, the term of this license is [***] years and shall
expire when the last of the royalty obligations set forth has
expired.
2.7 Sublicense. Licensee shall no
grant sublicense without SCIENT’X’s prior written
agreement, provided that Licensee shall be entitled to allow its
third party distribution agents to market and sell the Licensed
Products without obtaining the approval of
SCIENT’X.
2.8 Duration of Royalty Obligations.
The royalty obligations of Licensee as to each Licensed Product
shall terminate with the expiration of each SCIENT’X Patent
Rights utilized by or in such Licensed Product, with respect to
Licensed Products not utilizing any SCIENT’X Patent Rights,
[***] years after the date of first commercial sale of such
Licensed Product in such country.
2.9 Reports. Licensee shall furnish
to SCIENT’X at the same time as each royalty payment is made
by Licensee, a detailed written report of Net Sales of the Licensed
Products and the royalty due and payable thereon, including a
description of any offsets or credits deducted therefrom, on a
product-by-product basis, for the calendar quarter upon which the
royalty payment is based.
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2.10 Records. Licensee shall keep,
and cause its Affiliates and sublicensees to keep, full, complete
and proper records and accounts of all sales of Licensed Products
in sufficient detail to enable the royalties payable on Net Sales
of each Licensed Product to be determined. SCIENT’X shall
have the right to appoint an independent certified public
accounting firm approved by Licensee, which approval shall not be
unreasonably withheld, to audit the records of Licensee, its
Affiliates and sublicensees as necessary to verify the royalties
payable pursuant to this Agreement. Any auditing firm appointed by
SCIENT’X shall execute a confidentiality agreement with
Licensee prior to performing such audit. Licensee, its Affiliates
and sublicensees shall pay to SCIENT’X an amount equal to any
additional royalties to which SCIENT’X is entitled as
disclosed by the audit, plus interest thereon at the rate of
one-and-one-half percent (1.5%) per month. Such audit shall be
at SCIENT’X’ expense; provided, however, that if the
audit discloses that SCIENT’X was underpaid royalties with
respect to any Licensed Product by at least five percent
(5%) for any calendar quarter, then Licensee, its Affiliates
or sublicensee, as the case may be shall reimburse SCIENT’X
for any such audit costs. SCIENT’X may exercise its right of
audit as to each of Licensee, its Affiliates or sublicensees no
more frequently than once in any calendar year. The accounting firm
shall disclose to SCIENT’X only information relating to the
accuracy of the royalty payments. Licensee, its Affiliates and
sublicensees shall preserve and maintain all such records required
for audit for a period of three (3) years after the calendar
quarter to which the record applies.
2.11 Foreign Sales. Licensee shall
not do sales out of the Territory, unless prior written agreement
with SCIENT’X.
3. Patent Matters.
3.1 Patent Prosecution and
Maintenance. From and after the date of this Agreement, the
provisions of this Section 3 shall control the prosecution and
maintenance of any patent included within SCIENT’X Patent
Rights. Subject to the requirements, limitations and conditions set
forth in this Agreement, SCIENT’X shall direct and control
(i) the preparation, filing and prosecution of the United
States and foreign patent applications within SCIENT’X Patent
Rights (including any interferences and foreign oppositions); and
(ii) maintain the patents issuing therefrom. SCIENT’X
shall select the patent attorney, subject to Licensee’s
written approval, which approval shall not be unreasonably
withheld. Licensee shall have full rights of consultation with the
patent attorney so selected on all matters relating to
SCIENT’X Patent Rights. SCIENT’X shall use its best
efforts to implement all reasonable requests made by Licensee with
regard to the preparation, filing, prosecution and/or maintenance
of the patent applications and/or patents within SCIENT’X
Patent Rights. In the event SCIENT’X fails to prosecute or
maintain any of the SCIENT’X Patent Rights, Licensee shall
have the right to control the prosecution and maintenance of any
patent included within SCIENT’X Patent Rights and all amounts
spent by the Licensee in connection with such activities shall be
credited against any royalty amounts that are due.
3.2 Information to Licensee.
SCIENT’X shall keep Licensee informed with regard to the
patent application and maintenance processes. SCIENT’X shall
deliver to Licensee copies of all patent applications, amendments,
related correspondence, and other related matters.
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3.3 Patent Costs. SCIENT’X
shall pay for the patent’s costs.
3.4 Ownership. The patent
applications filed and the patents obtained by SCIENT’X
pursuant to Section 3.1 hereof shall be owned solely by
SCIENT’X, assigned to SCIENT’X and deemed a part of
SCIENT’X Patent Rights.
3.5 Intentionally
Omitted.
3.6 Infringement Actions.
3.6.1 Prosecution and Defense of
Infringements. SCIENT’X shall prosecute any and all
infringements of any SCIENT’X Patent Rights and shall defend
all charges of third party infringement of the SCIENT’X
Patent Rights. SCIENT’X may enter into settlements,
stipulated judgments or other arrangements respecting such
infringement, at its own expense and without the consent of the
Licensee, provided that the Licensee’s rights under this
Agreement are not affected in a materially adverse manner by such
settlement, stipulated judgment or other arrangement, in which case
SCIENT’X shall seek the consent of the Licensee prior to
entering into such settlement, stipulated judgment or other
arrangement, and Licensee shall not unreasonably withhold such
consent. Licensee agrees to provide reasonable assistance of a
technical nature which SCIENT’X may require in any litigation
arising in accordance with the provisions of this
Section 3.6.1, for which SCIENT’X shall pay to Licensee
a reasonable hourly rate of compensation.
3.6.2 Allocation of Recovery. Any
damages or other recovery from an infringement action undertaken by
SCIENT’X pursuant to Section 3.6.1 shall first be used
to reimburse the parties for the costs and expenses incurred in
such action, and shall thereafter be allocated between the parties
on a pro rata basis in proportion to the amount that each party
contributed to the costs and expenses incurred in such action.
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4. Obligations Related to
Commercialization.
4.1 Licensee’s Right of First
Refusal. During the term of this Agreement and for a period of six
months following the expiration or termination of this Agreement
(the “ROFR Period”), if SCIENT’X makes a filing
to obtain government approval for the sale or marketing in the
Territory of [***] (such Medical Device shall be referred to as a
“ROFR Device”), SCIENT’X shall notify the
Licensee within thirty (30) following such filing. Licensee
shall have a right of first refusal (the “ROFR”) with
respect to a license of the technology Controlled by SCIENT’X
that is embodied in such ROFR Device (the “ROFR
Technology”) and the Licensee shall be required to provide
notice to SCIENT’X within twenty (20) days following
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