Exhibit 10.1
Form 8-K
Viking Systems, Inc.
File No. 000-49636
PATENT AND TECHNOLOGY LICENSE AGREEMENT
This AGREEMENT ("AGREEMENT") is made on this ________ day of _______2003
("EFFECTIVE DATE"), by and between Vista Medical Technologies, Inc., a Delaware
corporation, having a principal place of business located at 2101 Faraday
Avenue, Carlsbad, CA 92008 ("LICENSOR"), and Viking Systems, Inc., a Nevada
corporation, having a principal place of business located at 7514 Girard Ave.,
Suite 1509, La Jolla, CA 92037 ("LICENSEE").
RECITALS
A. WHEREAS, pursuant to that certain Asset Purchase Agreement by and between
LICENSOR and LICENSEE dated December 22 (the "Asset Purchase Agreement"),
LICENSEE is acquiring from the LICENSOR, and LICENSOR is selling to LICENSEE,
certain assets ("ASSETS") of the LICENSOR's medical device and technology
business ("BUSINESS"); and
B. WHEREAS, LICENSOR owns certain intellectual property rights necessary to make
use of such ASSETS, commercialize LICENSED PRODUCTS and operate the BUSINESS;
and
C. WHEREAS, LICENSEE desires to license certain intellectual property rights
necessary to make use of such ASSETS, commercialize LICENSED PRODUCTS and
operate the BUSINESS and LICENSOR is willing to grant such an exclusive license
to LICENSEE.
NOW, THEREFORE, in consideration of the mutual covenants and promises
herein contained, the parties agree as follows:
I. DEFINITIONS
All definitions below or elsewhere in this AGREEMENT apply to both their
singular and plural forms, as the context may require. "Herein," "hereunder,"
and "hereof" and other similar expressions refer to this AGREEMENT. "Section"
refers to sections in this AGREEMENT. "Including" means "including without
limitation." "Days" means "calendar days," unless otherwise stated.
1.1 "AFFILIATE" means any business entity more than fifty percent (50%)
owned by LICENSEE, any business entity which owns more than fifty percent (50%)
of LICENSEE, or any business entity that is more than fifty percent (50%) owned
by a business entity that owns more than fifty percent (50%) of LICENSEE.
1.2 "CONFIDENTIAL INFORMATION" means the proprietary or confidential
information of a party (each, a "DISCLOSER") which is disclosed to the other
party (each, a "RECIPIENT") before or after the EFFECTIVE DATE and (i) is
identified as "confidential" by DISCLOSER in writing prior to disclosure and
(ii) relates to products, plans, designs, costs, prices, finances, marketing
plans, business opportunities, personnel, research, development, know-how, trade
secrets, inventions, blueprints, techniques, chemical or biological materials,
drugs, devices, specimens, apparatus, processes, algorithms, software programs,
schematics, designs, contracts, customer lists, procedures, formulae, patent
applications and other information relating to DISCLOSER's business, services,
processes or technology. CONFIDENTIAL INFORMATION shall not include information
that RECIPIENT proves: (i) was known by RECIPIENT, or was publicly available,
prior to disclosure by DISCLOSER to RECIPIENT; (ii) became publicly available
after disclosure by DISCLOSER to RECIPIENT through no act of RECIPIENT; (iii) is
hereafter rightfully furnished to RECIPIENT by a third party without
confidentiality restriction; or (iv) is disclosed with the prior written consent
of DISCLOSER or as expressly authorized under this AGREEMENT.
1.3 "GROSS REVENUES" means royalties, up-front payments, marketing,
distribution, franchise, option, license, or documentation fees, bonus and
milestone payments, equity securities or any other payment or value received by
License from the sale, licensing, sublicensing, renting, leasing or other
commercialization of Licensed Products, less sales/and/or use taxes actually
paid, import and/or export duties actually paid, outbound transportation prepaid
or allowed, and amounts allowed or credited due to returns.
1.4 "IMPROVEMENTS" means any and all derivative works, modifications,
improvements, enhancements, translations, abridgements, additional developments
or the like to the existing LICENSED TECHNOLOGY made by LICENSEE, LICENSEE's
AFFILIATES and/or LICENSEE's sublicensees after the EFFECTIVE DATE.
1.5 "INTELLECTUAL PROPERTY" or "INTELLECTUAL PROPERTY RIGHTS" collectively
means any and all patents (including reissues, divisions, continuations and
extensions thereof), patent registrations, patent applications, data rights,
utility models, business processes, trademarks, trade secrets, know how, trade
names, registered or unregistered designs, mask works, copyrights, moral rights
and any other form of proprietary protection afforded by law to intellectual
property, or any applications therefor, which arises or is enforceable under the
laws of the United States, any other jurisdiction or any bi-lateral or
multi-lateral treaty regime.
1.6 "KNOW-HOW" means any and all information, processes, procedures,
documents and materials relating to the design, development and manufacture of
LICENSED PRODUCTS known to LICENSOR as of the EFFECTIVE DATE.
1.7 "LICENSED PRODUCTS" means any product incorporating or arising out of
LICENSED TECHNOLOGY, including the OEM PRODUCTS and the VISTA PRODUCTS.
1.8 "LICENSED PATENTS" means all of the patent applications and patents
listed on Schedule 3.10(a) of the Company Disclosure Schedule (as defined in the
Asset Purchase Agreement), and any patents issued therefrom, together with all
pending and issued foreign counterparts of such applications, and all pending
and issued renewals, continuations, continuations-in-part, divisions, patents of
addition, reexaminations and/or reissues of such applications or foreign
counterparts.
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1.9 "LICENSED TECHNICAL INFORMATION" means LICENSOR's rights in any
technical information, KNOW-HOW, processes, procedures, compositions, devices,
methods, formulae, protocols, techniques, software, designs, drawings or data
which are not claimed in LICENSED PATENTS but that are necessary or useful for
practicing LICENSED PATENTS.
1.10 "LICENSED TECHNOLOGY" means inventions or discoveries covered by
LICENSED PATENTS and/or LICENSED TECHNICAL INFORMATION as more fully defined in
Exhibit A. LICENSED TECHNOLOGY includes any IMPROVEMENTS developed by LICENSEE
or its AFFILIATES subsequent to the EFFECTIVE DATE as set forth in Section 4.2.
1.11 "LIMITED ROYALTY PERIOD" has the meaning set forth in Section 3.1(b).
1.12 "LIMITED ROYALTY PERIOD GROSS REVENUES" means Gross Revenues from
Licensee's Sale of Vista Products less the gross revenues earned by LICENSOR
from its Sale of Vista Products during 2003.
1.13 "OEM PRODUCTS" means the Aesculap product line, the Wolf product line
and the OEM Camera product line as further defined in Exhibit B, and any
improvements, derivatives, modifications or enhancements thereto.
1.14 "SALE" OR "SOLD" means the transfer, licensing, renting, leasing,
disposition or other commercialization of Licensed Products for value.
1.15 "TERM" has the meaning set forth in Section 10.1.
1.16 "VISTA PRODUCTS" means the Endosite System product line and the Three
Chip Endosite System product line as further defined in Exhibit B, and any
improvements, derivatives, modifications or enhancements thereto.
II. LICENSE; TECHNOLOGY TRANSFER
2.1 Subject to the terms and conditions of this Agreement, LICENSOR hereby
grants to LICENSEE, a worldwide, exclusive (even as to LICENSOR) license, with
the right to sublicense, under LICENSED TECHNOLOGY, and all INTELLECTUAL
PROPERTY RIGHTS therein (i) to make, have made, use, import, reproduce, offer to
sell and/or sell LICENSED PRODUCTS; and (ii) to modify and create IMPROVEMENTS.
2.2 Sublicenses. LICENSEE may grant sublicenses under LICENSED TECHNOLOGY
consistent with the terms of Section 2.1 and this AGREEMENT. Notwithstanding
anything else herein and for avoidance of doubt, LICENSEE shall have no right to
commercialize the LICENSED TECHNOLOGY except as incorporated into LICENSED
PRODUCTS.
2.3 Technology Transfer. No later than thirty (30) days following the
EFFECTIVE DATE, LICENSOR shall deliver to LICENSEE all LICENSED TECHNOLOGY.
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III. CONSIDERATION, PAYMENTS AND REPORTS
3.1 Royalties. In consideration of rights granted by LICENSOR to LICENSEE
under this AGREEMENT, LICENSEE agrees to pay LICENSOR the following:
(a) A five percent (5%) royalty on Gross Revenues for all OEM PRODUCTS
Sold by LICENSEE, its AFFILIATES or its sublicensees;
(b) For the first (1st) two (2) twelve (12) month periods after the
EFFECTIVE DATE ("LIMITED ROYALTY PERIOD"), a ten percent (10%) royalty on
the Limited Royalty Period Gross Revenues for all VISTA PRODUCTS Sold by
LICENSEE, its AFFILIATES or its sublicensees; and
(c) After the LIMITED ROYALTY PERIOD, a ten percent (10%) royalty on
Gross Revenues for all VISTA PRODUCTS Sold licensed, leased, rented or
otherwise commercialized by LICENSEE, its AFFILIATES or its sublicensees.
3.2 Minimum Royalties. Notwithstanding Section 3.1, the minimum royalty
payment by LICENSEE to LICENSOR for the Licensed Products shall be as follows:
(a) One Hundred and Fifty Thousand U.S. Dollars ($150,000) for the
first (1st) twelve (12) month period after the EFFECTIVE DATE to be paid no
later than thirty (30) days after the first (1st) anniversary of the
EFFECTIVE DATE;
(b) Three Hundred Thousand U.S. Dollars ($300,000) for the second
twelve (12) month period starting on the first (1st) anniversary of the
EFFECTIVE DATE to be paid no later than thirty (30) days after the second
(2nd) anniversary of the EFFECTIVE DATE;
(c) Three Hundred Thousand U.S. Dollars ($300,000) for the third
twelve (12) month period starting on second (2nd) anniversary of the
EFFECTIVE DATE to be paid no later than thirty (30) days after the third
(3rd) anniversary of the EFFECTIVE DATE;
(d) Three Hundred Thousand U.S. Dollars ($300,000) for the fourth
twelve (12) month period starting on the third (3rd) anniversary of the
EFFECTIVE DATE to be paid no later than thirty (30) days after the fourth
(4th) anniversary of the EFFECTIVE DATE; and
(e) Three Hundred and Seventy-Five Thousand U.S. Dollars ($375,000)
for the fifth twelve (12) month period starting on the fourth (4th)
anniversary of the EFFECTIVE DATE to be paid no later than thirty (30) days
after the fifth (5th) anniversary of the EFFECTIVE DATE.
3.3 Termination of License. If LICENSEE does not pay LICENSOR the minimum
royalty for each twelve month period as set forth in Section 3.2, and such
failure continues for thirty (30) days after LICENSOR notifies LICENSEE thereof
in writing, the licenses granted under Section 2 shall terminate immediately and
all rights and interests granted therein shall revert back to LICENSOR. The
parties shall take any and all necessary actions and execute all documents
necessary to ensure that the intent of this Section is enforced.
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3.4 Royalty Obligation and Conditional Transfer of LICENSED TECHNOLOGY. The
royalties agreed to hereunder shall be paid until the earlier of the date on
which LICENSEE has paid LICENSOR an aggregate of Four Million Five Hundred
Thousand U.S. Dollars ($4,500,000) or the fifth anniversary of Effective Date.
("TOTAL ROYALTY"). If LICENSEE pays LICENSOR the TOTAL ROYALTY, LICENSOR shall
assign and transfer to LICENSEE all of LICENSOR's rights, title and interests in
and to the LICENSED TECHNOLOGY. The parties shall take any and all necessary
actions and execute all documents necessary to ensure the intent of this Section
is enforced.
3.5 Payment Terms. The royalties due hereunder shall be paid on a semi
annual basis ("Payment Period") commencing six (6) months from the Effective
Date. Within thirty (30) days after the end of each Payment Period, LICENSEE:
(i) shall pay all royalties set forth in this Section 3 accrued
and payable for such period, and
(ii) furnish LICENSOR with a royalty report along with a written
statement certified by an officer of LICENSEE (a) stating that the
royalty report is true and accurate, and (b) specifying the total
royalties payable to LICENSOR for such period and providing the basis
for the calculation of such royalties.
All payments due to LICENSOR shall be made solely in U.S. Dollars in immediately
available funds, via wire transfer to such account as is designated by LICENSOR
in writing to LICENSEE. Late payments shall accrue interest from the date due
until the date paid at a rate of one percent (1%) per month, or the maximum rate
allowed under applicable law, whichever is less. LICENSEE shall make no offset
for any amounts due to LICENSOR regardless of the justification for such
intended offset.
3.6 Right of Audit. During the TERM and for three (3) years after the
expiration and termination of this AGREEMENT for any reason (the "AUDIT
PERIOD"), LICENSEE shall keep complete, true and accurate records containing all
invoices and other data related to the computation and verification of the
royalties to be paid under Section 3 and any other amounts to be paid to
LICENSOR, and (b) the basis of information provided in the royalty report or any
statements provided by LICENSEE to LICENSOR pursuant to this AGREEMENT. During
the AUDIT PERIOD LICENSEE shall permit LICENSOR or its designees or agents, at
LICENSOR's expense and upon ten (10) days prior written notice, to inspect and
make copies of such records for the sole purpose of verifying the accuracy of
the royalties and other payments made by LICENSEE under this AGREEMENT. LICENSEE
shall itself, and shall cause its accountants to, diligently cooperate with the
audit. If any audit reveals any underpayment by LICENSEE, LICENSEE shall within
ten (10) days after such audit remit to LICENSOR all amounts due, with interest
thereon at the rate of one percent (1%) per month compounded (or the highest
rate permitted by applicable law, whichever is lower), calculated from the date
such amounts were due. If any underpayment is more than five percent (5%) of the
total payments due for the period audited, LICENSEE shall remit to LICENSOR in
full all costs for such audits and the subsequent audit, including any fees of a
certified public accountant.
3.7 Taxes. In addition to any other amounts due under this AGREEMENT,
LICENSEE agrees to pay, indemnify and hold LICENSOR harmless from any TAXES
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imposed by any governmental authority with respect to LICENSEE's use of the
LICENSED TECHNOLOGY. "TAXES" herein means any tax, fee or cost not based on
LICENSOR's net income, including any sales, use, excise, import or export, value
added, withholding or similar tax, or any duty or fee and any penalties or
interest associated with any of the foregoing. LICENSEE's obligation to pay
TAXES shall survive any expiration or termination of this AGREEMENT.
Notwithstanding the foregoing, if LICENSEE is required by U.S. or other law to
withhold any amount from sums payable to LICENSOR hereunder, LICENSEE shall
deduct and pay any withholding taxes to the appropriate U.S. or other tax
authorities, respectively, and shall provide LICENSOR with a tax receipt
evidencing such payment.
IV. PATENTS AND INVENTIONS
4.1 Ownership. Except for the licenses granted herein and as set forth in
Section 3, LICENSOR shall retain all of its rights, title and interests, which
it may have, in the underlying INTELLECTUAL PROPERTY RIGHTS of the LICENSED
TECHNOLOGY and any IMPROVEMENTS.
4.2 LICENSEE IMPROVEMENTS. In the event that LICENSEE develops IMPROVEMENTS
subsequent to the EFFECTIVE DATE, LICENSEE shall have all rights to such
IMPROVEMENTS under the terms of the exclusive license granted to LICENSEE in
Section 2.1.
4.3 Patent Prosecution. LICENSEE shall have the responsibility for
preparing, filing, prosecuting and maintaining the LICENSED PATENTS and
conducting any interferences, reexaminations or requesting reissues or patent
term extensions with respect to the LICENSED PATENTS in the United States, and
the right to prepare, file, prosecute and maintain the LICENSED PATENTS and
conduct any interferences, reexaminations or request reissues or patent term
extensions with respect to the LICENSED PATENTS, or to take such similar actions
to protect the LICENSED PATENTS in any other country. During the TERM LICENSEE
shall prosecute and/or maintain, as appropriate, the LICENSED PATENTS in at
least the countries in which LICENSOR has already begun prosecution and/or
maintenance ("PROSECUTION COUNTRIES"), a list of which shall be provided by
LICENSOR upon request. LICENSEE shall keep LICENSOR fully informed as to the
status of such patent matters, including without limitation by providing
LICENSOR with the opportunity to review and comment on any documents which will
be filed in any patent office and by providing LICENSOR copies of any documents
received by LICENSEE from such patent offices including notices of all
interferences, reexaminations, oppositions or requests for patent term
extensions. In the event that LICENSEE declines or fails to prepare, file,
prosecute or maintain any LICENSED PATENTS in any PROSECUTION COUNTRY, LICENSEE
shall promptly, and in no event later than ninety (90) days prior to any filing
deadline, provide written notice to LICENSOR and LICENSOR shall then have the
right to assume such responsibilities at its own expense using counsel of its
choice. In addition, LICENSEE shall promptly notify LICENSOR of any decision to
abandon a patent or application covered by the LICENSED PATENTS in any country,
in which case, LICENSOR shall have the option, at its expense and with counsel
of its choice, of continuing to prosecute any such pending patent application or
of keeping the issued patent in force. If LICENSEE abandons, declines or fails
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to prepare, file, prosecute or maintain any LICENSED PATENTS as set forth in
this Section, the licenses granted by LICENSOR to LICENSEE pursuant to Section
II shall immediately become non-exclusive.
4.4 Additional Filings. LICENSEE shall have the right to file for the
protection of the LICENSED TECHNICAL INFORMATION, or any rights therein in any
country. LICENSEE shall keep LICENSOR fully informed as to the status of such
matters, including without limitation by providing LICENSOR with the opportunity
to review and comment on any documents to protect the LICENSED TECHNICAL
INFORMATION which will be filed in any governmental office or agency and by
providing LICENSOR copies of any documents received by LICENSEE from such
governmental offices or agencies.
V. INFRINGEMENT BY THIRD PARTIES
5.1 Notice. Each party shall promptly notify the other in writing of any
alleged or threatened INTELLECTUAL PROPERTY infringement of the LICENSED
TECHNOLOGY which may adversely impact the rights of the parties hereunder, of
which it becomes aware.
5.2 Enforcement. In the event that either party becomes aware of any
alleged or threatened INTELLECTUAL PROPERTY infringement of the LICENSED
TECHNOLOGY, as between the parties, LICENSEE shall have the first right, but not
the obligation, to take appropriate action against any person or entity directly
or contributorily infringing such LICENSED TECHNOLOGY, and to retain any
recovery from such action. In furtherance of such right, LICENSOR hereby agrees
that LICENSEE may join LICENSOR as a party in any such action (with LICENSOR
having the right to participate in such action and to be represented, if it so
desires and at its own expense, by counsel of its own selection) and to give
LICENSEE reasonable assistance and any needed authority to control, file and
prosecute such action, without expense to LICENSOR. If LICENSEE does not file
suit against a substantial infringer within six (6) months of knowledge thereof,
then LICENSOR may, at its sole discretion, enforce any INTELLECTUAL PROPERTY
RIGHTS in any LICENSED TECHNOLOGY licensed hereunder, provided LICENSOR does so
both on behalf of itself and LICENSEE, with LICENSOR retaining all recoveries
from such enforcement. In furtherance of such right, LICENSEE hereby agrees that
LICENSOR may join LICENSEE as a party in any such action (with LICENSEE having
the right to participate in such action and to be represented, if it so desires
and at its own expense, by counsel of its own selection) and to give LICENSOR
reasonable assistance and any needed authority to control, file and prosecute
such action, without expense to LICENSEE.
5.3 Cooperation. In any suit or dispute involving an infringer, the parties
agree to cooperate fully with each other at the expense of the party bringing
the suit. Cooperation shall include permitting access during regular business
hours upon reasonable notice, to all relevant personnel, records, papers,
information, samples, specimens, and the like in its possession.
5.4 Licenses to Abate Third Party Infringement. LICENSEE shall have the
sole right in accordance with the terms and conditions herein to sublicense the
rights granted to LICENSEE under Section 2.1 to any alleged infringer.
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VI. INDEMNIFICATION
6.1 Indemnification By LICENSOR. Subject to Section 6.2, LICENSOR, at its
own expense, shall: (i) defend, or at its option settle, any claim, suit or
proceeding brought by a third party against LICENSEE: (a) that the LICENSED
TECHNOLOGY (except for IMPROVEMENTS) as used in accordance with this Agreement
infringes any United States patent issued as of the Effective Date, or any
United States copyright or trademark right(s) of a third-party, or
misappropriates any United States trade secret of a third party, (b) that
LICENSOR breached any of its warranties, representations or obligations in
Section 8.1, or (c) arising out of LICENSOR's negligence, tortious conduct or
willful misconduct hereunder; and (ii) pay any final and non-appealable judgment
entered or settlement against LICENSEE thereon; provided, however, that LICENSOR
shall not be responsible for any compromise or settlement made without its
consent. LICENSOR shall have no obligation to LICENSEE unless: (1) LICENSEE
gives LICENSOR prompt written notice of the claim; (2) LICENSOR is given the
right to control and direct the investigation, preparation, defense and
settlement of the claim; and (3) LICENSEE fully cooperates with LICENSOR, at
LICENSOR's expense, in such defense and settlement.
(a) Exclusions. LICENSOR's indemnification obligations shall not apply
to any claim relating to: (a) the IMPROVEMENTS or any element of the
LICENSED TECHNOLOGY that has been changed, abused or not used as authorized
hereunder; (b) the bundling of LICENSED TECHNOLOGY with software, hardware
or other materials of LICENSEE and third parties; (c) use of the LICENSED
TECHNOLOGY that exceeds the scope of the licenses expressly granted in this
Agreement; and/or (d) LICENSEE's failure to use the LICENSED TECHNOLOGY or
any portion thereof in accordance with the provisions of this Agreement.
(b) Additional Rights. If the use, sale or distribution of the OEM
PRODUCTS or the VISTA PRODUCTS by LICENSEE, or its AFFILIATES or
sublicensees is enjoined due to infringement of the LICENSED TECHNOLOGY in
the Unites States, or if LICENSOR wishes to minimize its potential
liability in connection therewith, LICENSOR may, at its option and expense,
either: (a) substitute functionally equivalent non-infringing LICENSED
TECHNOLOGY; (b) modify the infringing LICENSED TECHNOLOGY so that the OEM
PRODUCTS or VISTA PRODUCTS no longer infringe, but remain functionally
equivalent; (c) obtain for LICENSEE the right to continue to use such
LICENSED TECHNOLOGY; or (d) if none of the foregoing is feasible, refund to
LICENSEE a pro rata portion of the royalties paid hereunder (as depreciated
on a straight line basis over five (5) years from the EFFECTIVE DATE).
6.2 Indemnification By LICENSEE. LICENSEE, at its own expense, shall: (i)
defend, or at its option settle, any claim, suit or proceeding against LICENSOR
arising from or in connection with (x) LICENSEE's breach of any of its
warranties, representations or obligations in Section 8.2, 12.10, 12.11 and
12.12, (y) any LICENSEE modification, combination, adaptation, integration,
incorporation, reproduction, sale, lease, rental or other commercialization,
distribution or performance of the LICENSED PRODUCTS, or (z) LICENSEE's
negligence, tortious conduct or willful misconduct; and (ii) pay any final
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judgment entered or settlement against LICENSOR thereon, provided, however, that
LICENSEE shall not be responsible for any compromise or settlement made without
its consent. LICENSEE shall have no obligation to LICENSOR pursuant to this
Section 6.2 unless: (a) LICENSOR gives LICENSEE prompt written notice of the
claim; (b) LICENSEE is given the right to control and direct the investigation,
preparation, defense and settlement of the claim; and (c) LICENSOR fully
cooperates with LICENSEE, at LICENSEE's expense, in such defense and settlement.
6.3 In the event the provisions of this Article VI conflict with similar
provisions contained in the Asset Purchase Agreement, the provisions of the
Asset Purchase Agreement shall control.
VII. CONFIDENTIAL INFORMATION
7.1 Nondisclosure. RECIPIENT shall not, except as otherwise expressly
provided herein, disclose, disseminate or otherwise allow access to the
CONFIDENTIAL INFORMATION of DISCLOSER to anyone other than RECIPIENT's employees
that have a need to know such CONFIDENTIAL INFORMATION to implement this
AGREEMENT and who are bound by written confidentiality obligations with
provisions no less stringent than those contained in this Section VII. RECIPIENT
shall prevent unauthorized disclosure or use of the CONFIDENTIAL INFORMATION of
DISCLOSER. DISCLOSER and RECIPIENT shall execute any documents and otherwise
shall take all necessary steps to ensure that DISCLOSER and RECIPIENT shall each
be able to enforce DISCLOSER's rights hereunder against RECIPIENT, its employees
and all other third parties to whom RECIPIENT discloses DISCLOSER's CONFIDENTIAL
INFORMATION, under the laws of each jurisdiction in which DISCLOSER's
CONFIDENTIAL INFORMATION is disclosed by RECIPIENT. RECIPIENT shall be
responsible for any breach of this Section VII by RECIPIENT's employees,
contractors or agents.
7.2 Ownership. Except as set forth herein, RECIPIENT acknowledges and
agrees that DISCLOSER (or its licensors) owns all rights, title and interests,
including INTELLECTUAL PROPERTY RIGHTS, in and to DISCLOSER's CONFIDENTIAL
INFORMATION.
7.3 Notification. If RECIPIENT learns or believes that any person who has
had access to the CONFIDENTIAL INFORMATION of DISCLOSER has violated or intends
to violate this AGREEMENT, RECIPIENT shall immediately notify DISCLOSER and
shall cooperate with DISCLOSER in seeking injunctive or other equitable relief
against any such person.
7.4 Exceptions. RECIPIENT may disclose the CONFIDENTIAL INFORMATION of
DISCLOSER, if such disclosure is required by law, provided that RECIPIENT
promptly notifies DISCLOSER to allow intervention by DISCLOSER (prior to the
disclosure), cooperates with DISCLOSER to contest or minimize the disclosure
(including application for a protective order) at RECIPIENT's expense and limits
such disclosure to the party entitled to receive the CONFIDENTIAL INFORMATION
and to the scope of the legal requirement. Notwithstanding the foregoing, any
CONFIDENTIAL INFORMATION disclosed pursuant to this Section 7.4 shall otherwise
continue to be treated as CONFIDENTIAL INFORMATION hereunder.
7.5 Confidentiality of AGREEMENT. Neither party will publicly disclose any
term of this AGREEMENT or announce the existence of this AGREEMENT without the
prior written consent of the other party, except that each party may reveal the
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terms of this AGREEMENT (a) to its accountants, banks, financing sources,
lawyers and other professional advisors, provided that such parties undertake in
writing to keep such information confidential, or (b) as required by applicable
laws and regulations including those of the U.S. Securities and Exchange
Commission on the notification. Each party may also disclose the tax treatment
and tax structure of the transactions contemplated by this AGREEMENT and all
materials of any kind (including opinions or other tax analyses) that are
provided to it relating to such tax treatment and tax structure.
7.6 Reproduction of CONFIDENTIAL INFORMATION. CONFIDENTIAL INFORMATION
shall not be reproduced except as required to implement this AGREEMENT. Any
reproduction or derivative of any CONFIDENTIAL INFORMATION of DISCLOSER by
RECIPIENT shall remain the property of DISCLOSER and shall contain all
confidential or proprietary notices or legends which appear on the original.
VIII. REPRESENTATIONS AND WARRANTIES
8.1 Representations and Warranties by LICENSOR: LICENSOR represents,
warrants and covenants to LICENSEE:
(a) Corporate Power. LICENSOR is duly organized and validly existing
under the laws of Delaware and has full corporate power and authority to
enter into this AGREEMENT and to carry out the provisions hereof.
(b) Due Authorization. LICENSOR is duly authorized to execute and
deliver this AGREEMENT and to perform its obligations hereunder. The person
executing this AGREEMENT on LICENSOR's behalf has been duly authorized to
do so by all requisite corporate action.
(c) Binding Agreement. This AGREEMENT is a legal and valid obligation
binding upon LICENSOR and enforceable in accordance with its terms. The
execution, delivery and performance of this AGREEMENT by LICENSOR does not
conflict with any agreement, instrument or understanding, oral or written,
to which it is a party or by which it may be bound, nor violate any
material law or regulation of any court, governmental body or
administrative or other agency having jurisdiction over it.
(d) Grant of Rights. LICENSOR has not, and will not during the term of
this AGREEMENT, grant any right to any third party that would conflict with
the rights granted to LICENSEE hereunder.
(e) Validity. LICENSOR is aware of no action, suit or inquiry or
investigation instituted by any governmental agency that questions or
threatens the validity of this AGREEMENT.
(f) Ownership. To LICENSOR's knowledge, it owns or holds valid and
enforceable licenses to the LICENSED PATENTS and LICENSED TECHNICAL
INFORMATION and has sufficient rights and power to grant the licenses to
LICENSEE that it purports to grant herein.
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(g) Third Party Rights. LICENSOR has no knowledge of any third party
INTELLECTUAL PROPERTY RIGHT that is infringed by the use or
commercialization of the LICENSED PRODUCTS as contemplated hereby.
8.2 Representations and Warranties by LICENSEE: LICENSEE represents,
warrants and covenants to LICENSOR:
(a) Corporate Power. LICENSEE is duly organized and validly existing
under the laws of the State of Nevada and has full corporate power and
authority to enter into this AGREEMENT and to carry out the provisions
hereof.
(b) Due Authorization. LICENSEE is duly authorized to execute and
deliver this AGREEMENT and to perform its obligations hereunder. The person
executing this AGREEMENT on LICENSEE's behalf has been duly authorized to
do so by all requisite corporation action.
(c) Binding Agreement. This AGREEMENT is a legal and valid obligation
binding upon LICENSEE and enforceable in accordance with its terms. The
execution, delivery and performance of this AGREEMENT by LICENSEE does not
conflict with any agreement, instrument or understanding, oral or written,
to which it is a party or by which it may be bound, nor violate any
material law or regulation of any court, governmental body or
administrative or other agency having jurisdiction over it.
8.3 EXCEPT FOR ANY EXPRESS WARRANTY GIVEN IN SECTION 8.1 OR 8.2, NEITHER
PARTY MAKES ANY WARRANTY, AND EACH PARTY EXPRESSLY DISCLAIMS ALL OTHER
WARRANTIES WHATSOEVER, EXPRESS OR IMPLIED OR ARISING OUT OF A COURSE OF CONDUCT
OR COURSE OF DEALING, INCLUDING ALL WARRANTIES OF TITLE, PERFORMANCE, USE,
MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE OR NON-INFRINGEMENT.
IX. ASSIGNMENT
9.1 Neither this AGREEMENT nor any right or obligation hereunder is
assignable in whole or in part by any party without the prior written consent of
the other party. Notwithstanding the foregoing, either party may assign this
AGREEMENT, without such consent to a third party in connection with any merger,
acquisition, consolidation, reorganization (in which a change of control
occurs), CHANGE OF CONTROL of or by the assigning party, or the sale of all,
substantially all or a majority of such parties' assets or voting securities. A
"CHANGE OF CONTROL" occurs when over fifty percent (50%) of a party's then
outstanding securities are acquired by a third party. This AGREEMENT shall inure
to the benefit of each of the party's successors and assignees provided that
such successors or assignees assume the party's obligations under this
AGREEMENT.
X. TERM AND TERMINATION
10.1 Term. Subject to Sections 10.2 and 10.3 hereinbelow, the term of this
AGREEMENT is from the EFFECTIVE DATE until the five (5) year anniversary of the
EFFECTIVE DATE (the "TERM").
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10.2 Termination for Breach. Each party shall have the right to terminate
this AGREEMENT if the other party breaches this AGREEMENT and fails to cure such
breach within thirty (30) days following the date the breaching party receives a
written breach notice from the non-breaching party describing the breach;
provided, however, that the foregoing cure right shall not apply for a breach of
Sections II, IV and VII, whereupon the non-breaching party may terminate this
AGREEMENT immediately upon written notice to the breaching party without
granting the breaching party the right to cure such breach.
10.3 Termination for Bankruptcy. Each party shall have the right to
terminate this AGREEMENT immediately upon written notice if the other party
files a petition, action or other proceeding seeking relief or protection under
any bankruptcy laws, whether voluntary or involuntary; or the other party
becomes insolvent, or is unable to pay its debts as due or ceases to conduct
business in the normal course (however, if such petition, action or proceeding
is involuntary, then only if such petition, action or proceeding is not
dismissed within sixty (60) days of filing);
10.4 Post-Termination Obligations. Upon termination or expiration of this
AGREEMENT:
(a) nothing herein will be construed to release either party of any
obligation or liability maturing prior to the effective date of the
termination or expiration of this AGREEMENT;
(b) Any outstanding payments and the provisions of Sections I, V, VI,
VII, VIII, IX, XI, XII and Sections 3.4, 3.5, 3.6, 3.7, 4.1, 4.2 and 10.4
shall survive any termination or expiration of this AGREEMENT by their
terms for any reason.
(c) Each party shall cease to use or exploit in any manner the
CONFIDENTIAL INFORMATION of the other party or any elements thereof in
accordance with Section VII and shall return to the other party all
CONFIDENTIAL INFORMATION (including all copies and derivatives, in any
form, thereof) disclosed by the other party, and LICENSEE shall cease to
use the CONFIDENTIAL INFORMATION of LICENSOR, provided that LICENSEE shall
not be prohibited from using such CONFIDENTIAL INFORMATION in providing
support services for the LICENSED PRODUCTS and selling all LICENSED
PRODUCTS and parts therefor that it has on hand at the date of termination;
and
(d) Except as set forth in Section 3.4, LICENSEE shall immediately
cease the manufacture of LICENSED PRODUCTS.
XI. LIMITATION OF LIABILITY
11.1 TO THE MAXIMUM ALLOWED BY APPLICABLE LAW, IN NO EVENT SHALL LICENSOR
BE LIABLE FOR ANY LOSS, INABILITY TO USE, INTERRUPTION OF BUSINESS, OR ANY
INDIRECT, SPECIAL, INCIDENTAL, OR CONSEQUENTIAL DAMAGES OF ANY KIND (INCLUDING
LOST PROFITS) ARISING OUT OF THE LICENSED TECHNOLOGY, THE LICENSED PRODUCTS, OR
OTHERWISE UNDER THIS AGREEMENT, REGARDLESS OF THE FORM OF ACTION, WHETHER IN
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CONTRACT, TORT (INCLUDING NEGLIGENCE), STRICT PRODUCT LIABILITY, OR OTHERWISE,
EVEN IF LICENSEE HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.
11.2 TO THE MAXIMUM EXTENT ALLOWED UNDER APPLICABLE LAW, IN NO EVENT SHALL
LICENSOR'S AGGREGATE LIABILITY TO LICENSOR, OR ANY THIRD PARTY FOR ANY AND ALL
CLAIMS ARISING FROM OR RELATING TO THIS AGREEMENT, WHETHER IN CONTRACT, TORT OR
ANY OTHER THEORY OF LIABILITY, EXCEED THE AMOUNTS PAID BY LICENSEE TO LICENSOR
HEREUNDER PRIOR TO THE DATE OF THE EVENT GIVING RISE TO SUCH LIABILITY. THIS
LIMITATION SHALL APPLY NOTWITHSTANDING ANY FAILURE OF ESSENTIAL PURPOSE OF ANY
LIMITED REMEDY PROVIDED HEREIN.
XII. GENERAL
12.1 Integration, Amendments. This AGREEMENT and Exhibits A and B attached
hereto, represent and constitute the sole, final and entire agreement between
the parties with respect to the subject matter hereof, may only be amended in
writing signed by the duly authorized officers of both parties, and supersedes
all prior agreements and understandings with respect to the matters covered by
this AGREEMENT.
12.2 Notices. Any notice, waivers or consents required by this AGREEMENT
must be given by prepaid, first class, certified mail, return receipt requested,
and addressed in the case of LICENSOR to:
Vista Medical Technologies, Inc.
2101 Faraday Avenue
Carlsbad, CA 92008
Facsimile: (760) 603-9170
Attention: John R. Lyon
or in the case of LICENSEE to:
Viking Systems, Inc.
7514 Girard Ave., Suite 1509
La Jolla, CA 92037
Facsimile No.: (619) 839-3793
Attention: Thomas B. Marsh
or other addresses as may be given from time to time under the terms of
this notice provision.
12.3 Governing Law. This AGREEMENT is entered into in and shall be
governed, construed and enforced in all respects solely and exclusively under
the laws of the State of California, USA without giving effect to any law which
would result in the application of a different body of law. Any and all suits
hereunder shall be brought and resolved solely and exclusively in, and the
parties hereby irrevocably consent to the exclusive jurisdiction and proper
venue of, the state and federal courts located in the County of San Diego, State
of California, USA, and waive any objections thereto based on any ground
including improper venue or Forum Non-Conveniens. The parties agree that any
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process directed to any of them in any such litigation may be served outside the
State of California, USA, with the same force and effect as if the service had
been made within the State of California, USA, and that service of process may
be effected in accordance with Section 12.2 hereof. Any decision rendered by
such court shall be binding, final and conclusive upon the parties, and a
judgment thereon may be entered in, and enforced by, any court having
jurisdiction over the party against which an award is entered or the location of
such party's assets.
12.4 Injunctive Relief. Notwithstanding anything to the contrary herein,
each party shall be entitled to seek injunctive or other equitable relief,
wherever such party deems appropriate in any jurisdiction, in order to preserve
or enforce such party's rights for any breach or threatened breach of the other
party of Sections II, IV or VII. Each party agrees that: (i) Section II, IV and
VII are necessary and reasonable to protect the other party and its business,
(ii) any violation of these provisions could cause irreparable injury to the
other party for which money damages would be inadequate, and (iii) as a result,
the other party will be entitled to seek and obtain injunctive relief against
the breach or threatened breach of the provisions of Section II, IV or VII
without the necessity of posting bond or proving actual damages. The parties
agree that the remedies set forth in this Section 12.4 are in addition to and in
no way preclude any other remedies or actions that may be available at law or
under this AGREEMENT.
12.5 Attorneys' Fees. The prevailing party in any action or suit shall be
entitled to recover all costs it incurred in connection therewith, including,
without limitation, reasonable attorneys' fees.
12.6 No Waiver. The failure of either party to require performance by the
other party of any provision hereof shall not affect its right to require such
performance at any time thereafter; nor shall the waiver by either party of a
breach of any provision hereof be taken or held to be a waiver of the provision
itself. Any such waiver or any amendment of this AGREEMENT must be in writing
and signed by both parties to be effective.
12.7 Headings. Headings included herein are for convenience only and will
not be used to construe this AGREEMENT.
12.8 Severability. If one or more provisions in this AGREEMENT are ruled
entirely or partly invalid or unenforceable by any court or governmental
authority of competent jurisdiction, then: (i) the validity and enforceability
of all provisions not ruled to be invalid or unenforceable shall remain
unaffected; (ii) the effect of such ruling shall be limited to the body making
the ruling; (iii) the provision(s) held wholly or partly invalid or
unenforceable shall be deemed amended, and the parties shall reform the
provision(s) to the minimum extent necessary to render them valid and
enforceable in conformity with the parties' intent as manifested herein; and
(iv) if the ruling, or the controlling principle of law or equity leading to the
ruling, is subsequently overruled, modified, or amended, then the provision(s)
in question, as originally set forth in this AGREEMENT, shall be deemed valid
and enforceable to the maximum extent permitted by the new controlling principle
of law or equity.
12.9 Independent Contractors. The relationship between LICENSEE and
LICENSOR is solely that of independent contractors. Neither party nor its
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employees, agents or representatives shall be considered employees, agents,
partners, franchisees, joint venturers or representatives of the other party.
Neither party shall act or represent itself, directly or by implication, as
agent, party to a joint venture with the other party, partner or representative
of the other, or in any manner assume or attempt to assume or create any
obligation or liability of any kind, express or implied, on behalf of, or in the
name of, the other.
12.10 Export Controls. LICENSEE understands that the LICENSED TECHNOLOGY is
subject to the export control laws and regulations of the U.S. or other
applicable jurisdictions. LICENSEE agrees that it will not export or re-export
the LICENSED TECHNOLOGY in violation of such laws or regulations.
12.11 Corrupt Practices. LICENSEE shall not, directly or indirectly, make,
offer or agree to make or offer on behalf of LICENSOR, any loan, gift, donation
or other payment, directly or indirectly, whether in cash or in kind, for the
benefit of or at the direction of any candidate, committee, political party,
political function or government or government subdivision, or any individual
elected, appointed or otherwise designated as an employee or officer thereof,
for the purposes of influencing any act or decision of such entity or individual
or inducing such entity or individual to do or omit to do anything in order to
obtain or retain business or other benefits in violation of the United States
Foreign Corrupt Practices Act.
12.12 Boycott. LICENSEE shall not, directly or indirectly, take any action
that would cause LICENSOR to be in violation of United States anti-boycott laws
under the United States Export Administration Act or the United States Internal
Revenue Code, or any regulation thereunder.
12.13 Counterparts. This AGREEMENT may be executed in one or more
counterparts, each of which shall be an original and all of which shall
constitute together the same document.
12.14 Interpretation. This AGREEMENT has been negotiated by the parties and
their respective counsel. This AGREEMENT will be fairly interpreted in
accordance with its terms and without any strict construction in favor of or
against any party. Any ambiguity will not be interpreted against the drafting
party.
IN WITNESS WHEREOF, the parties hereto have caused their duly authorized
representatives to execute this AGREEMENT.
VIKING SYSTEMS, INC. VISTA MEDICAL TECHNOLOGIES, INC.
By: ______________________________ By: ______________________________
Thomas B. Marsh, President John R. Lyon, President
Date: ___________________________ Date: ___________________________
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EXHIBIT A
LICENSED TECHNOLOGY
All "Company Intellectual Property," as defined in the Asset Purchase Agreement.
EXHIBIT B
LICENSED PRODUCTS
VISTA PRODUCTS
OEM PRODUCTS