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LICENSE AGREEMENT
THIS LICENSE AGREEMENT (the "Agreement") is effective as of
this 16th day of May, 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:
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.
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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 for use in coronary applications.
1.3 "CVD FOCUS TECHNOLOGY" shall mean all CVD inventions
(whether or not patentable), ideas, know-how, 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 for coronary applications 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 non-exclusive, 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.
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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 technology of 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.
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.
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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 reasonably 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 agrees to file one or more submissions to the U.S.
FDA within ninety (90) days following the date of execution of this agreement
and use its best efforts to have such submission approved as promptly as
practicable. This submission will include all CVD products currently approved or
pending under the Endosonics PMA. No new applications shall be made under
Endosonics PMA following approval of the first CVD PMA by the FDA, and no CVD
product will be marketed under Endosonics' PMA after six months following
approval of the CVD PMA.
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 patent apparatus claims 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:
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(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.
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
apparatus patent 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.
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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, II, IV, VI, VII, VIII, IX and XI, along with Sections 5.3, 5.4 and
this Section 10.4.
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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
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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.
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: /s/ Reinhard J. Warnking
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Title: President and CEO
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CARDIOVASCULAR DYNAMICS, INC.
By: /s/ Michael R. Henson
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Title: Chairman/CEO
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EXHIBIT A
LICENSED PATENTS
o U.S. Patent No. 5,470,313
o U.S. Patent App. No. 08/201935
o EPO Patent App. No. 94119841.8
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EXHIBIT B
ENDOSONICS TRANSDUCER
Any ultrasound transducer designed,
developed and manufactured by Endosonics, and using any
Art disclosed in the following patents:
US
5603327 Ultrasound catheter probe
5453575 Apparatus and method for detecting blood flow in intravascular
ultrasonic imaging
5368037 Ultrasound catheter
5183048 Methods and apparatus for removing artifacts from
ultrasonically generated image of a small cavity
5167233 Dilating and imaging Apparatus
5135486 Self-Venting balloon dilation catheter
4917097 Apparatus and method for imaging small cavities
EPO
0339087 B1 Device for imaging small cavities
0519060 B1 Dilating and imaging Apparatus
JPO
2020066 Apparatus for imaging
2552421 Dilating and imaging Apparatus