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EXHIBIT 10.20
LICENSE AGREEMENT
THIS LICENSE AGREEMENT (the "Agreement") is effective as of this 6th day of
February, 1997 (the "Effective Date"), by and between Endosonics Corporation, a
corporation organized and existing under the laws of the State of Delaware and
having a principal place of business at 2870 Kilgore Road, Rancho Cordova,
California 95670 ("Endosonics") and Cardiovascular Dynamics, Inc., a corporation
organized and existing under the laws of the State of Delaware and having a
principal place of business at 13844 Alton Parkway, Suite 140, Irvine,
California 92718 ("CVD").
WHEREAS, CVD is the owner of the entire right, title and interest in and to
the Licensed Patents set forth in Exhibit A;
WHEREAS, CVD has developed various catheter products using proprietary
technology covered by the Licensed Patents;
WHEREAS, Endosonics is desirous of acquiring a non-exclusive license to the
Licensed Materials (as defined below) which shall include a limited exclusive
license to make, have made, use, sell and have sold catheter products developed
by Endosonics using the Licensed Materials;
WHEREAS, CVD is desirous of acquiring a non-exclusive license to use
Endosonics PMA Number P910031 (the "Endosonics PMA"), to reference, use and rely
upon information in the Endosonics PMA in order to enable CVD to file for and
obtain PMA approval for the Focus Catheters from the U.S. Food and Drug
Administration ("FDA"); and
WHEREAS, the parties are willing to grant such licenses upon the terms and
subject to the conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the foregoing and other mutual
covenants, terms and conditions hereinafter expressed, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto agree as
follows:
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ARTICLE I
DEFINITIONS
1.1 "LICENSED PATENTS" shall mean the patents set forth in Exhibit A
attached hereto and incorporated herein by this reference, and any and all
divisions, continuations-in-part, reissues, renewals, or extensions thereof.
1.2 "FOCUS CATHETERS" shall mean all catheter products combining CVD Focus
Technology on the same catheter with an Endosonics transducer developed by
Endosonics pursuant to this Agreement using the Licensed Patents and/or CVD
Focus Technology.
1.3 "CVD FOCUS TECHNOLOGY" shall mean all CVD inventions (whether or not
patentable), ideas, knowhow, trade secrets, processes and other technical
information necessary or useful in manufacturing the Focus Catheters (including
without limitation the Specifications (as defined below)) that CVD (i) owns or
controls as of the Effective Date or (ii) acquires or develops during the term
of this Agreement.
1.4 "LICENSED MATERIALS" shall mean the Licensed Patents associated with
CVD Focus Technology.
1.5 "ENDOSONICS TRANSDUCER" shall mean the Endosonics ultrasound
transducer product(s) set forth in Exhibit B attached hereto and incorporated
herein by this reference.
1.6 "SPECIFICATIONS" shall mean the specifications for Focus Catheter
products developed by CVD using or incorporating the Licensed Materials.
ARTICLE II
LICENSE GRANT
2.1 Subject to the terms and conditions of this Agreement, CVD hereby
grants to Endosonics (i) a non-exclusive, worldwide, fully paid-up, royalty-free
right and license to practice under the Licensed Patents and to use the CVD
Focus Technology to make, have made and use the Focus Catheters, (ii) an
exclusive, worldwide, fully paid-up, royalty-free right and license to market,
sell or otherwise distribute the Focus Catheters only as bundled on the same
catheter device with an Endosonics Transducer. Upon execution of this Agreement,
CVD shall transfer a copy of all existing Licensed Materials to Endosonics.
2.2 Subject to the terms and conditions of this Agreement, Endosonics
hereby grants to CVD a nonexclusive, worldwide, fully paid-up, royalty-free
right and license to reference, use, and rely upon information in the Endosonics
PMA in order to enable CVD to file for and obtain PMA approval, as evidenced by
a separate CVD PMA number on file at the FDA, for the coronary balloon
dilatation catheters from the FDA. CVD shall use, reference, or rely upon the
Endosonics PMA for the limited purpose of obtaining FDA approval of a unique PMA
which will be in CVD's name and shall not be a PMA supplement to Endosonics'
PMA.
2.3 Subject to the terms and conditions of this Agreement, Endosonics
shall furnish to CVD a complete copy of all manufacturing information in the
Endosonics PMA applicable to CVD's manufacture of CVD coronary balloon
dilatation products.
2.4 Subject to the provisions of this Agreement, Endosonics is authorized
to improve, modify, correct and enhance the Licensed Materials as it may deem
appropriate, and Endosonics shall exclusively control, and own all right, title
and interest in and to, the resulting improvement, modification, correction or
enhancement including, without limitation, any patent rights available with
respect thereto, any trade secrets pertaining thereto and any copyrights
subsisting therein as derivative works, but only to the extent that the same
shall be separate and clearly distinguishable from the underlying work. Nothing
in this Section 2.4 is intended to modify Endosonics' limited rights to market,
sell or otherwise distribute Focus Catheters only as bundled on the same
catheter with an Endosonics Transducer, as defined in Section 2.1 of this
Agreement.
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ARTICLE III
REPORTS AND EXPENSE REIMBURSEMENT
3.1 Should Endosonics incur any out-of-pocket expenses to assist CVD in
executing Sections 2.2 or 2.3 of this Agreement, CVD shall reimburse Endosonics
for such out-of-pocket expenses up to a maximum of One Thousand Dollars
($1,000.00). If such out-of-pocket expenses exceed One Thousand Dollars
($1,000.00), Endosonics shall request CVD's prior written approval prior to
incurring such expenses.
3.2 Should CVD incur any out-of-pocket expenses to assist Endosonics in
executing Section 2.1 of this Agreement, Endosonics shall reimburse CVD for such
out-of-pocket expenses up to a maximum of One Thousand Dollars ($1,000.00). If
such expenses exceed One Thousand Dollars ($1,000.00), CVD shall request
Endosonics' prior written approval prior to incurring such expenses.
ARTICLE IV
OWNERSHIP
4.1 CVD Rights. As between the parties and subject to the rights granted
to Endosonics under this Agreement, all right, title and interest in and to the
Licensed Materials (including, without limitation, all patent rights,
copyrights, trade secret rights and other proprietary rights) is and shall
remain in CVD.
4.2 Endosonics' Rights to Endosonics' PMA. Subject to the rights granted
to CVD under Section 2.2 of this Agreement, all right, title and interest in and
to the information contained in the Endosonics PMA (including, without
limitation, all patent rights, copyrights, trade secret rights and other
proprietary rights) shall remain in Endosonics.
ARTICLE V
PATENT AND REGULATORY MATTERS
5.1 Patent Enforcement. During the term of this Agreement, CVD shall
diligently maintain, protect and enforce the Licensed Patents, which shall
include taking all necessary action to prevent and terminate any third party
infringement of the Licensed Patents. CVD shall have no responsibility to
maintain, protect and enforce any technology or patents resulting from any
modifications to the Licensed Materials.
5.2 Domestic Regulatory Matters; CVD PMA Submission. Endosonics shall
cooperate fully with CVD in preparing regulatory filings associated with CVD's
submission of a PMA for all current Focus Catheter products and shall prepare
and execute promptly all documents or instruments necessary to enable CVD to
make such regulatory filings and to obtain FDA approval of the PMA, including,
without limitation:
(a) a signed, written statement from Endosonics to the FDA that authorizes
CVD and the FDA to reference, use, and reply upon the Endosonics PMA in seeking
approval for a PMA for CVD's Focus Catheter products; and
(b) a statement signed by both CVD and Endosonics confirming that
Endosonics has furnished CVD with a complete copy of all manufacturing
information in the Endosonics PMA applicable to CVD's manufacture of the Focus
Catheter products.
5.3 Domestic Regulatory Matters; Annual Reporting Requirements. CVD shall
cooperate fully with Endosonics in preparing regulatory filings associated with
Endosonics submission of PMA reports required by the FDA, including but not
limited to Annual Reports. CVD shall disclose to Endosonics all changes to any
product distributed under the Endosonics PMA, whether considered significant or
not, and whether undertaken before or after initial product introduction, no
later than August 15 of each calendar year. CVD's obligations under this Section
shall terminate upon abandonment of Endosonics' PMA approvals for CVD
distributed products. A final report of all changes as described above shall be
submitted to Endosonics fifteen (15) days following such abandonment.
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5.4 Domestic Regulatory Matters; Distribution of CVD Product under
Endosonics' PMA. CVD will cease to distribute CVD Focus products which were
approved under Endosonics' PMA following approval by the FDA of CVD's original
PMA Application, or twelve (12) months after execution of this Agreement,
whichever occurs first. No new applications shall be made under Endosonics' PMA
following execution of this Agreement.
5.5 Foreign Regulatory Matters. Endosonics shall obtain and maintain all
applicable approvals and registrations for the Catheters in any country into
which Endosonics shall distribute the Focus Catheters and CVD shall render all
necessary assistance to enable Endosonics to accomplish the foregoing.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF CVD
6.1 Title. CVD represents and warrants that, to the best of its
knowledge, it has complete title to the Licensed Materials, free from any liens
or encumbrances, and that, to the best of its knowledge, the use of, or practice
under, the Licensed Materials in the United States and its territories will not
infringe the intellectual property rights of any third party.
6.2 Validity. CVD represents and warrants that, to the best of its
knowledge, the Licensed Patents are valid and enforceable and that, to the best
of its knowledge, there are no third party infringers of the Licensed Materials.
ARTICLE VII
CONFIDENTIALITY
Each party agrees that all inventions, processes, materials, chemicals,
reagents, know-how and ideas and all other business, technical and financial
information it obtains from the other are the confidential property of the
disclosing party ("Proprietary Information" of the disclosing party). Except as
expressly allowed in this Agreement, the receiving party will hold in confidence
and not use or disclose any Proprietary Information of the disclosing party and
shall similarly bind its employees in writing. The receiving party shall not be
obligated under this Article VII with respect to information that:
(i) is or has become readily publicly available through no fault of the
receiving party or its employees or agents; or
(ii) is received from a third party lawfully in possession of such
information and lawfully empowered to disclose such information and
provided the receiving party abides by all restrictions imposed by such
third party; or
(iii) was rightfully in the possession of the receiving party prior to its
disclosure by the other party provided the receiving party abides by all
restrictions imposed on its possession of such information; or
(iv) was independently developed by employees or consultants of the
receiving party without access to such Proprietary Information; or
(v) is required by order of a government agency or court of competent
jurisdiction to be disclosed.
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ARTICLE VIII
INDEMNIFICATION
CVD agrees to indemnify Endosonics from, for, and against any loss, cost,
damages, liability or expense (including reasonable attorney's fees) arising out
of any claim ("Claim") brought by third parties (i) alleging that the
manufacture, use or sale of a Focus Catheter infringes any third party rights or
(ii) relating to any breach of the warranties set forth in Article VI above
(collectively, "Damages"); provided, however, that CVD's indemnification
obligations hereunder shall not apply to the extent (and only to the extent)
that such Damages result from (i) Endosonics's use or distribution of technology
and materials other than the Licensed Materials or (ii) modifications,
improvements, corrections or enhancements made by Endosonics to the Licensed
Materials. Endosonics agrees to indemnify CVD from, for, and against Damages
incurred by CVD that are excluded from CVD's indemnification obligations
pursuant to the foregoing sentence. In the event of a Claim, the party seeking
indemnification hereunder shall promptly notify the indemnifying party of such
Claim, shall allow the indemnifying party to have sole defense of such Claim and
shall cooperate and render reasonable assistance upon the request, and at the
expense, of the indemnifying party.
ARTICLE IX
DISCLAIMERS AND LIMITATION OF LIABILITY
9.1 EXCEPT FOR THE WARRANTIES EXPRESSLY SET FORTH IN THIS AGREEMENT,
NEITHER PARTY MAKES ANY WARRANTIES WITH RESPECT TO THE TECHNOLOGY OR MATERIALS
THAT IT PROVIDES TO THE OTHER PARTY UNDER THIS AGREEMENT AND EACH PARTY HEREBY
DISCLAIMS ALL IMPLIED WARRANTIES, INCLUDING ALL WARRANTIES OF MERCHANTABILITY
AND FITNESS FOR A PARTICULAR PURPOSE.
9.2 NEITHER PARTY WILL BE LIABLE TO THE OTHER (I) WITH RESPECT TO ANY
SUBJECT MATTER OF THIS AGREEMENT UNDER ANY CONTRACT, NEGLIGENCE, STRICT
LIABILITY OR OTHER LEGAL OR EQUITABLE THEORY FOR ANY SPECIAL, INCIDENTAL OR
CONSEQUENTIAL DAMAGES OR (II) FOR LOST PROFITS OR DATA.
ARTICLE X
TERM AND TERMINATION
10.1 This Agreement shall commence as of the Effective Date, and shall
continue in force (unless terminated earlier in accordance with this Article X)
until the last of the Licensed Patents expires and any PMA or regulatory
approvals obtained through the use of Endosonics' PMA are abandoned, or the last
of the Licensed Patents is ruled invalid or unenforceable in a final decision by
a court of competent jurisdiction or by the United States Patent and Trademark
Office.
10.2 This Agreement and all licenses granted hereunder may be terminated
by either party immediately if the other party breaches a material term or
provision of this Agreement and fails to cure such breach within sixty (60) days
after written notice from the non-breaching party.
10.3 This Agreement also may be terminated by either party, at its option,
upon written notice to the other party, (i) upon the institution by the other
party of insolvency, receivership or bankruptcy proceedings or any similar
proceedings for the settlement of its debts, or (ii) upon the institution of
such proceedings against the other party, which are not dismissed or otherwise
resolved in such party's favor within sixty (60) days thereafter.
10.4 The following Articles shall survive termination of this Agreement:
I, IV, VI, VII, VIII, IX and XI, along with this Section 10.4. Except in the
case of termination by CVD pursuant to Section 10.2 above, the licenses granted
to Endosonics under Section 2.1 of this Agreement shall also survive termination
of this Agreement. In the event this Agreement is terminated by CVD pursuant to
Section 10.2 above, Endosonics
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shall have the right thereafter to sell completed Focus Catheters then on hand,
in the process of being manufactured or as otherwise needed to meet its
then-existing supply obligations. Except in the case of termination by
Endosonics pursuant to Section 10.2 above, the licenses granted to CVD under
Sections 2.2 of this Agreement shall also survive termination of this Agreement.
In the event this Agreement is terminated by Endosonics pursuant to Section 10.2
above, the licenses granted to CVD under Sections 2.2 of this Agreement shall
continue thereafter only as necessary to sell completed CVD products then on
hand, in the process of being manufactured or to meet CVD's then-existing supply
obligations.
ARTICLE XI
MISCELLANEOUS
11.1 Assignment. This Agreement shall be binding upon and inure to the
benefit of the parties hereto, their respective subsidiaries, successors and
permitted assigns. Either party may freely assign this Agreement to an acquiror
of all or substantially all of its stock, business or assets relating to this
Agreement (whether by merger, acquisition or otherwise).
11.2 Notices. All notices given by either party under the terms of this
Agreement shall be in writing and personally delivered, sent by certified mail
(return receipt requested) or by commercial overnight courier service to a
party's address as set forth in the initial paragraph of this Agreement. Notices
shall be effective five (5) days after mailing or upon actual receipt, whichever
is sooner. Either party may change the person to whom, or address to which,
notice should be directed by giving written notice thereof.
11.3 Entire Agreement. This Agreement constitutes the entire agreement
and understanding between the parties and supersedes the December 22, 1995
License Agreement between the parties in its entirety, and all other previous or
contemporaneous communications, memoranda, understandings or agreements, either
oral or written, between the parties with respect to the subject matter hereof.
11.4 Governing Law. This Agreement shall be governed by and interpreted
in accordance with the laws of the State of California without regard to the
conflicts of laws provisions thereof. The sole jurisdiction and venue for
actions related to the subject matter hereof shall be the California state and
U.S. federal courts having within their jurisdiction the location of
Endosonics's principal place of business. Both parties consent to the
jurisdiction of such courts and agree that process may be served in the manner
provided herein for giving of notices or otherwise as allowed by California
state or U.S. federal law. In any action or proceeding to enforce rights under
this Agreement, the prevailing party shall be entitled to recover costs and
attorneys' fees.
11.5 Headings. Headings and captions are for convenience only and are not
to be used in the interpretation of this Agreement.
11.6 Severability. If any provision of this Agreement is held by a court
of competent jurisdiction to be illegal, invalid or unenforceable, that
provision shall be limited or eliminated to the minimum extent necessary so that
this Agreement shall otherwise remain in full force and effect and enforceable.
11.7 Relationship of Parties. The parties hereto expressly understand and
agree that for the purposes of this Agreement the other is an independent
contractor in the performance of each and every part of this Agreement and is
solely responsible for all of its employees and agents and its labor costs and
expenses arising in connection therewith. This Agreement in no way creates a
partnership, joint venture or agency relationship between the parties and
neither party shall have the right or authority to bind the other in any way as
a result of this Agreement.
11.8 Amendment and Waiver. Except as otherwise expressly provided herein,
any provision of this Agreement may be amended and the observance of any
provision of this Agreement may be waived (either generally or in any particular
instance and either retroactively or prospectively) only with the written
consent of the parties. The failure of either party to enforce its rights under
this Agreement at any time for any period shall not be construed as a waiver of
such rights.
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IN WITNESS WHEREOF, each party has caused this Agreement to be executed by
its duly authorized representative as of the day and year first above written.
ENDOSONICS CORPORATION
By:
Title:
CARDIOVASCULAR DYNAMICS, INC.
By:
Title:
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EXHIBIT A
LICENSED PATENTS
- - U.S. Patent No. 5,470,313
- - U.S. Patent App. No. 08/201935
- - EPO Patent App. No. 94119841.8
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EXHIBIT B
ENDOSONICS TRANSDUCER