Exhibit 99.1
SETTLEMENT AND LICENSE AGREEMENT
PARTIES
This Agreement (the "AGREEMENT"), entered into as of this 1st day of May,
2005 (the "Effective Date"), is between CYTOMEDIX, INC. ("CYTOMEDIX" or
"Licensor"), a Delaware corporation having a principal place of business at 416
Hungerford Drive, Suite 330, Rockville, Maryland 20850, and MEDTRONIC, INC.
("MEDTRONIC" OR "LICENSEE"), a Minnesota corporation having a principal place of
business at 710 Medtronic Parkway, Minneapolis, Minnesota 55432.
RECITALS
WHEREAS, CYTOMEDIX filed an action (hereinafter, the "Maryland Action") on
November 10, 2004, Case No. RWT-04-CV-3593, in the United States District Court
for the District of Maryland, relating to a controversy between the parties
arising in connection with claims of infringement of U.S. Patent No. 5,165,938
("the `938 Patent"), based upon MEDTRONIC's manufacture, use, offer to sell,
and/or sale of certain products ; and
WHEREAS, the parties hereto desire, on the terms and conditions contained
herein, to settle the claims that have been filed or asserted in their
respective pleadings in the Maryland Action and to enter into a mutually
agreeable licensing arrangement;
NOW, THEREFORE, in consideration of the following terms, covenants and
conditions, CYTOMEDIX and MEDTRONIC hereby agree as follows:
TERMS OF AGREEMENT
1. Definitions.
1.1. "Affiliate" shall mean:
(a) any individual who or Entity that is in whatever
country organized or resident, directly or indirectly through one or
more intermediaries, is controlled by, or is under common control
with, or controls a Party; or
(b) any Entity in which any individual or Entity
recited in the preceding sub-paragraph (a) directly or indirectly
through one or more intermediaries has at least a forty percent (40%)
ownership or voting rights interest (whether through stock ownership,
stock power, voting proxy, or otherwise), or has the maximum
ownership interest it is permitted to have in the country where such
Entity exists.
1.2. "CYTOMEDIX" means CYTOMEDIX, INC., its parent companies or
subsidiaries (whether foreign or domestic), or any other entity in
which CYTOMEDIX, INC. (a) directly or indirectly owns 50% or more of
the capital, assets, voting securities, partnership or other
ownership interest, or (b) has the power to direct or cause the
direction of, either directly or indirectly, the management and
policies of such entity, whether through ownership of voting
securities, interlocking management, contract, or otherwise.
1.3. "PARTY" shall mean, as applicable, either: (a) Licensor; or (b)
Medtronic, Inc.
1.4. "DISTRIBUTOR" means an entity which contracts with MEDTRONIC to
either a) provide promotion, sales and distribution services of
MEDTRONIC branded Royalty-Bearing Products, or b) buy
Royalty-Bearing Products from MEDTRONIC for resale under a
trademark, tradename or brand name of MEDTRONIC.
1.5. "Disposable Product(s)" shall mean either Medtronic branded
disposable equipment or disposable equipment purchased from
Medtronic for resale under a trademark, tradename or brand name of
Medtronic having instructions for use primarily intended for
producing (in conjunction with Hardware Products) or applying
compositions consisting of platelets or platelet releasate (which
includes, but is not limited to, platelet concentrate or platelet
rich plasma ("PRP")) to facilitate the healing of wounds or other
damaged tissue. Disposable Products do not include, for example,
items such as syringes, needles, cell washing bowls, catheters,
gauze or other forms of dressing, gloves, etc. that are not sold
within a platelet or PRP-related kit. Any Licensee product which is
marketed by Licensee without direct or indirect reference to
platelets or platelet releasate, and which is not otherwise covered
by the Licensed Patents, shall not be considered a Disposable
Product. For the term of this Agreement, the items listed in Exhibit
B will be considered Disposable Products irrespective of the
Licensee's marketing activities thereon. Licensee reserves the right
to add to the items listed in Exhibit B.
1.6. "Earned Royalty" shall mean royalties payable under this Agreement
on Royalty-Bearing Products actually sold (in countries where
Licensee has a license identified in Exhibit A) by Licensee or its
Affiliates or Distributors to third parties and paid for by those
third parties, and as to which sale(s) Medtronic recognizes as
revenue pursuant to Medtronic's standard finance and accounting
policies. Earned Royalty does not apply to items which have been
returned to Medtronic or its Affiliates or Distributors and a refund
has been made, nor to items which are not sold but are provided on
loan, as free or at no cost, as no-cost replacement items for
warranty or other purposes, for demonstration purposes, for
training, education or clinical trial purposes, or to the University
of Minnesota (or other academic institution) in connection with
not-for-profit research or teaching.
1.7. "Entity" shall mean any corporation, firm, partnership,
proprietorship, or other form of business organization.
1.8. "Hardware Product(s)" shall mean either Medtronic branded equipment
(other than Disposable Products) or equipment purchased from
Medtronic for resale under a trademark, tradename or brand name of
Medtronic (other than Disposable Products) having instructions for
use primarily for producing compositions consisting of platelets or
platelet releasate (which includes, but is not limited to, platelet
concentrate) to facilitate the healing of wounds or other damaged
tissue. Any Licensee product which is marketed by Licensee without
direct or indirect reference to platelets or platelet releasate, and
which is not otherwise covered by the Licensed Patents, shall not be
considered a Hardware Product. For the term of this Agreement, the
items listed in Exhibit C will be considered Hardware Products
irrespective of the Licensee's marketing or promotional activities
associated therewith. Licensee reserves the right to revise the
items listed in Exhibit C.
1.9. "Licensee" shall mean Medtronic, Inc. and its Affiliates,
Distributors and customers and any direct or indirect authorized
sub-licensee of Medtronic, Inc. under the rights herein provided, as
applicable.
1.10. "LICENSED FIELDS" means any and all fields of use, worldwide.
1.11. "LICENSED PATENTS" means the patents and patent applications listed
in Exhibit A and any related patent application (including any
continuation, continued prosecution, continuation-in-part,
divisional, foreign counterpart or substitution thereof) and any
patent (including any reissue or reexamination thereof), in any
country granted from, or claiming priority to, or for the benefit of
any of the aforementioned patent applications or patents, as well as
rights in any third-party patent acquired as a result of an
interference action involving any of the foregoing.
1.12. "LICENSED TERRITORIES" means the entire world.
1.13. "Net Sales Price" shall mean the amount that Medtronic (or any
sublicensee of Medtronic) actually receives in payment from a
third-party (eliminating transactions among Affiliates within
Medtronic, or within such sublicensee) for commercial sales
(excluding sales for use in clinical trials or other testing
purposes) of Royalty-Bearing Products, excluding the following
"Invoice Adjustments": (i) discounts and sales commissions, (ii)
credits or repayments due to rejections, defects or returns, (iii)
net of amounts previously included in the Net Sales Price of a
product that were written-off by Medtronic or such sublicensee of
Medtronic during such period as uncollectible, and (iv) charitable
donations of Royalty-Bearing Products. Net Sales which are
denominated in currencies other than U.S. Dollars shall be converted
into U.S. Dollars according to Medtronic's standard accounting
policy for conversion of foreign currencies.
1.14. "Royalty-Bearing Products" shall mean Hardware Product(s) and
Disposable Product(s) only.
1.15. "Quarter" shall mean the respective three-month accounting periods
ending in April, July, October and January of any year.
1.16. "Royalty Year" shall mean the year beginning with the first full
Quarter following the Effective Date, and each year thereafter until
November 24, 2009.
2. Settlements.
2.1. The parties agree that within two business days after the execution
of this Agreement, they will execute, through attorneys of record,
and cause to be filed with the United States District Court for
Maryland, a stipulated dismissal, with prejudice, of the Maryland
Action. This Agreement shall be of no force and effect unless and
until the Maryland Action is dismissed with prejudice. This
AGREEMENT shall only become enforceable according to its terms upon
entry in the Maryland Action of the Stipulated Dismissal, the form
of which is attached hereto as Exhibit D (hereinafter, the
"STIPULATED DISMISSAL"). In the event the Maryland Action is not so
dismissed, this Agreement will become null and void, but paragraph
6.1 shall survive.
3. License Grant/Covenant Not to Sue/Releases.
3.1. License Grant. Licensor hereby grants to Licensee a non-exclusive
license under the Licensed Patents to make, have made, use, import,
sell, promote, market, offer for sale or otherwise transfer
Royalty-Bearing Products in the Licensed Fields throughout the
world. This grant includes the right for Medtronic to grant
sublicenses to Distributors and Affiliates, either directly or
through one or more intermediaries. This grant also includes the
right for any customers (ultimate or in privity or other) of any
Licensee or sublicensee to use and/or sell (for further use or
resale) Royalty-Bearing Products subject to this Agreement without
payment of any additional royalty to Cytomedix, including, but not
limited to, the products listed in Exhibits B and C. In other words,
the license grant "runs with the Royalty-Bearing Product." Cytomedix
will only receive one royalty payment per licensed Royalty-Bearing
Product.
3.2. Distributor and Customer Immunity. The license set forth in Article
3.1 shall constitute a grant of immunity against any action for or
claim of infringement (whether based on a direct or contributory
infringement, inducement to infringe, or other theory) against the
Licensee's Distributors and authorized resellers, agents, employees,
customers and users relating to Royalty-Bearing Products sold or
otherwise disposed of by any Licensee or authorized sublicensee
prior to or after this Agreement.
3.3. CYTOMEDIX, on behalf of itself, its predecessors and successors, and
each of their respective affiliates, officers, directors, employees
and agents, hereby irrevocably and unconditionally releases and
forever discharges MEDTRONIC and its officers, directors, employees,
agents, shareholders, representatives, parent companies,
subsidiaries, affiliated companies, partners, predecessors, and all
other persons acting by or on their behalf (collectively, the
"MEDTRONIC RELEASEES"), of and from any claims that CYTOMEDIX has
ever had or may now have against the MEDTRONIC RELEASEES related to
the claims, counterclaims and affirmative defenses that were or
could have been asserted in or in connection with the Maryland
Action. CYTOMEDIX also releases customers of MEDTRONIC as to any
claims that CYTOMEDIX has ever had against them based on their use
of a product sold to them by Medtronic.
3.4. MEDTRONIC, on behalf of itself, its predecessors and successors, and
each of their respective shareholders, affiliates, members,
officers, directors, employees and agents, hereby irrevocably and
unconditionally releases and forever discharges CYTOMEDIX, its
officers, directors, employees, agents, shareholders,
representatives, parent companies, subsidiaries, affiliated
companies, predecessors, and all other persons acting by or on
behalf of CYTOMEDIX (collectively, the "CYTOMEDIX RELEASEES"), of
and from any claims that MEDTRONIC has ever had or may now have
against CYTOMEDIX or any of the other CYTOMEDIX RELEASEES related to
the claims, counterclaims, and affirmative defenses that were or
could have been asserted in the Maryland Action. Except as it may
otherwise be compelled by a court of competent jurisdiction,
domestic or foreign governmental authority agency or tribunal, or in
connection with a valid subpoena, Medtronic and Medtronic Releasees
further agree not to challenge, cause to be challenged, or assist
others to challenge, directly or indirectly, the validity and/or
enforceability of the Licensed Patents in any court or other
tribunal, including the United States Patent and Trademark Office
and foreign patent offices. In the event Medtronic is served with a
subpoena, agency directive, or court order compelling it to testify
or provide documents or other information related to the Licensed
Patents or this Agreement, Medtronic shall promptly notify Cytomedix
of any such request pursuant to the notice provisions set forth in
Article 11.1 of this Agreement so as to allow Cytomedix to, at its
cost and expense, seek a protective order, file a motion to quash,
or seek other appropriate relief on behalf of Medtronic or Medtronic
Affiliate or Medtronic Distributor or Medtronic customer.
3.5. Covenant Not to Sue. Cytomedix, for itself and its Affiliates,
covenants during the term of this Agreement not to file or to
continue to prosecute any suit against Medtronic or Medtronic
Distributor or any customers of Medtronic or Medtronic's Affiliates
or Distributors, claiming that Medtronic's (or Medtronic Affiliates,
Distributors or customers) making, having made, using, selling, or
offering for sale any Royalty-Bearing Product infringes any Licensed
Patent.
3.6. No Implied Licenses. No other rights or licenses not expressly
granted herein with respect to the Licensed Patents or any other
intellectual property owned or controlled by Licensor are granted or
shall be deemed granted to Licensee or any other person.
3.7. Taxes and Authorizations. Licensee shall be solely responsible for
the payment and discharge of any taxes, duties, or withholdings
relating to any transaction in connection with the manufacture, use,
sale, or other commercialization of any Royalty-Bearing Product.
Licensee shall, at its own expense, be responsible for applying for
and obtaining any approvals, authorizations, or validations relative
to this Agreement under the appropriate federal, state, or local
laws.
4. Payment Terms.
4.1. License Payment. Within two months after the Effective Date,
Medtronic shall pay Licensor a license payment of Six Hundred and
Eighty Thousand U.S. Dollars $680,000.00.
4.2. Earned Royalties. Licensee shall pay an Earned Royalty on sales of
Royalty-Bearing Products that take place after the Effective Date
and prior to November 24, 2009 under the following conditions:
4.2.1. The Earned Royalty rate shall be one and one-half percent
(1.5%) of the Net Sales Price of Hardware Products sold in
countries where the sale of such Hardware Product is covered
by a granted, valid, unexpired patent within the Licensed
Patents.
4.2.2. The Earned Royalty rate shall be seven and one-half percent
(7.5%) of the Net Sales Price of Disposable Products sold in
countries where the sale of such Disposable Products is
covered by a granted, valid, unexpired patent within the
Licensed Patents.
4.2.3. No Earned Royalty shall be payable after November 24, 2009.
4.3. No Royalty Stacking. Only one Earned Royalty shall be payable in
respect to any Royalty-Bearing Product.
4.4. Reports, Payments and Currency Conversions. Within two months after
the end of each Quarter, Medtronic shall furnish Licensor with a
written report setting forth the sales of Royalty-Bearing Products
upon which a royalty is payable under this Article 4 during such
Quarter and the computation of the royalties payable with respect
thereto. Each report shall be accompanied by the amount due in U.S.
Dollars, less any taxes required to be withheld by governmental
agencies in respect to royalties payable to Licensor for that
Quarter. Each report and any accompanying payment shall be sent to
the address specified for the Licensor according to Paragraph 11.1.
If Medtronic is precluded because of the laws or any governmental
decree of a particular country from obtaining royalties from any
Licensee in such country or can do so only at great expense and
effort, Medtronic shall have the right to pay or have paid royalties
applicable to such country in the currency of such country at a
banking institution of Licensor's selection in such country and
Licensor shall cooperate with Medtronic in preparing appropriate
documents to accomplish the aforesaid. Whenever a conversion from
one currency to another is involved in making or crediting an Earned
Royalty the exchange rate shall be the monthly financial rate used
by Licensee in the ordinary course of business for which the royalty
is being paid or credited.
4.5. Records. The Licensees shall keep accurate records in sufficient
detail to enable Earned Royalties payable hereunder to be determined
and shall, upon written notice by Licensor to Medtronic, permit such
records to be inspected (but only to the extent necessary to verify
the amount of Earned Royalty payable hereunder or financial data
provided to Cytomedix by Medtronic before or after the Effective
Date) once annually during normal business hours by a certified
public accountant or firm of certified public accountants reasonably
acceptable to Medtronic and appointed by Licensor at Licensor's
expense. The accountants making such inspection shall report to
Licensor only the amount of Earned Royalty due and payable and shall
be bound by the provisions of Paragraph 6.1 (confidentiality).
Records inspected under this Paragraph 4.5 shall be retained by the
Licensees until Licensor and Medtronic have agreed upon the amount
of Earned Royalty payable thereon. Except as aforesaid, no Licensee
shall be required to retain any records longer than three (3) years
after the end of the Quarter in which such records were prepared.
4.6. Royalty-Bearing Product Dispute.
4.6.1. In the event of any dispute between the Parties as to whether
or not a product sold by a Licensee or sublicensee is a
Royalty-Bearing Product for which an Earned Royalty is due,
Medtronic shall have the right to submit the dispute to
binding arbitration, as provided in Article 9 hereof.
Medtronic shall be entitled to withhold Earned Royalties in
dispute during the pendency of such arbitration and for one
(1) month thereafter. During the pendency of the arbitration
and the said one (1) month period, Medtronic shall not be
deemed in default of this Agreement for nonpayment of
royalties.
4.6.2. In the event the product in dispute is determined not to be a
Royalty-Bearing Product, Licensor shall pay to Medtronic the
costs, expenses, and fees paid by Medtronic associated with
such arbitration.
4.6.3. In the event the product in dispute is determined to be a
Royalty-Bearing Product, in addition to paying any amount
unpaid for past royalties, and taking any action required as a
result of the determination to thereby maintain the Agreement
in force, Medtronic shall pay to Licensor the costs, expenses,
and fees paid by Licensor associated with such arbitration.
4.7. Medtronic Right to Inspect. In order to confirm whether grants of
other licenses to the Licensed Patents contain a more favorable
Hardware Product royalty rate or a more favorable Disposable Product
royalty rate, Medtronic or its duly authorized agent shall be
permitted, at its own expense, to inspect records of Cytomedix
reflecting license royalty rates payable by medical device
manufacturers in respect of the Licensed Patents and to make copies
of or extracts from such records during regular business hours
throughout the term of this Agreement and for a reasonable period of
not less than three (3) years thereafter.
5. Most Favored Licensee
5.1. Most Favored Licensee. If Licensor enters or has entered into a
license agreement involving any Licensed Patent with any Entity
other than Medtronic or DePuy Inc., ("Other License"), then Licensor
will, within one (1) month after the effective date of the Other
License agreement or this Agreement (whichever is later), provide
Medtronic with a confidential copy of the Other License agreement.
Medtronic shall, at its option, be entitled at any time during the
life of any said Other License to substitute, effective as of the
effective date of the Other License, the royalty rate terms and
conditions of said Other License agreement for the royalty rate
terms and conditions of this Agreement. The Parties shall cooperate
in good faith in making any refund or payment adjustment required in
the event of such royalty rate substitution.
6. Confidentiality
6.1 Confidentiality. The Parties agree to keep the terms of this
AGREEMENT confidential, as well as any information exchanged between
the Parties that is designated or agreed to be held as confidential,
and shall not disclose them without the express written permission
of the other Party, except in response to a court order (for which
the other Party shall be provided reasonable advance notice), in any
action concerning the enforcement of this AGREEMENT, as otherwise
permitted or required by the terms of this Agreement, or as
otherwise required by law (including, without limitation,
CYTOMEDIX's obligations in connection with its requirements under
federal or state securities laws, for which no notice need be
provided to the other Party).
6.2 Press Release: The Parties may state, in whole or in part, the
following (the exact words need not be used, provided the substance
is the same): "(1) The Parties have resolved the dispute related to
the litigation to their mutual satisfaction, (2) the lawsuit has
been dismissed, and/or (3) a license has been granted as part of the
settlement."
6.3 Notwithstanding Articles 6.1 and 6.2 of this Agreement, in the event
any third party, Medtronic agent, Medtronic Distributor or customer
(the "Inquiring Party") inquires whether its use of any product sold
by Medtronic (including the products set forth in Exhibits B and C)
is covered by or infringes any Licensed Patent, Medtronic may
disclose this Agreement to the Inquiring Party only, provided that
the Inquiring Party has agreed in writing to maintain the
confidentiality of this Agreement and its terms. Notwithstanding
Articles 6.1, 6.2, and the preceding provisions of this Article 6.3,
Medtronic may state to its customers and Distributors that it is
licensed under one or more of the Licensed Patents and that such
customer or Distributor shall have no royalty obligation to
Medtronic or Licensor, without requiring a confidentiality agreement
between the customer or Distributor and Medtronic.
7. Subsequent Review
7.1 Medtronic shall be entitled to discontinue any Earned Royalty
payments under Article 4.2 of this Agreement in respect to any
country or non-US foreign territory where a Licensed Patent exists
immediately upon the occurrence of:
7.1.1 in any reexamination, reissue or court proceeding of the
Licensed Patent applicable to that country or foreign
territory, entry of a judgment, order, decree or decision to
the effect that: (A) all of the claims of such Licensed Patent
are invalid, or; (B) the use of human platelet releasate (or
the sale or offering for sale of products substantially
equivalent to the Royalty-Bearing Products) to facilitate
healing of human wounds or human tissue infringes none of the
valid and enforceable claims of such Licensed Patent, or
7.1.2 Licensor expressly and in writing disclaims or abandons any
independent claim in any Licensed Patent applicable to that
country or foreign territory, or
7.1.3 claims in any Licensed Patent applicable to that country or
foreign territory are disallowed or so substantially narrowed
in any reexamination proceeding, such that the Royalty-Bearing
Products would be rendered non-infringing.
7.1.4 In the event Licensor obtains reversal of any adverse
determination in Article 7.1.1 or 7.1.3 hereof that enabled
Medtronic to discontinue any Earned Royalty payments, then
Medtronic shall resume Earned Royalty payments affected
thereby, and pay Licensor any Earned Royalties which accrued
between suspension and resumption of Earned Royalty payments.
Under no circumstances shall Medtronic's obligation to
Licensor to make Earned Royalty payments extend beyond the
term of this Agreement set forth in Article 4.2.3.
8. Representations and Warranties.
8.1 Authorization. Each Party hereby represents and warrants that it (a)
has the power and authority and the legal right to enter into this
Agreement on behalf of itself and all Affiliated Entities and to
perform its obligations hereunder, and (b) has taken all necessary
action on its part to authorize the execution and delivery of this
Agreement and the performance of its obligations hereunder. This
Agreement has been duly executed and delivered on behalf of such
Party, and constitutes a legal, valid, binding obligation,
enforceable against such Party in accordance with its terms.
8.2 Limitation of Warranties. Nothing in this Agreement shall be
construed as: (a) a warranty or representation by CYTOMEDIX as to
the validity or scope of any LICENSED PATENTS; (b) a warranty or
representation that anything made, used, sold, or otherwise disposed
of under any license granted in this Agreement is or will be free
from infringement of patent or from suits by third parties for
infringement of patent; (c) except as otherwise provided in Article
6 herein, conferring the right to use in advertising, publicity or
otherwise any trademark, trade name, or names, or any contraction,
abbreviation, simulation or adaptation thereof, of either Party; or
(d) an obligation to furnish any know-how associated with the
Licensed Patents.
8.3 Ownership and Right to Grant License. CYTOMEDIX herein represents,
covenants, and warrants that it is co-owner of the entire right,
title, and interest in the LICENSED PATENTS with the University of
Minnesota. The University of Minnesota has assigned all rights to
the LICENSED PATENTS but has retained a non-exclusive perpetual
license to the LICENSED PATENTS solely in connection with
not-for-profit research and teaching. CYTOMEDIX further warrants
that no existing prior agreement or assignment presently conflicts
in any manner with this AGREEMENT or otherwise prevents CYTOMEDIX
from fulfilling all of its obligations under this AGREEMENT.
CYTOMEDIX further covenants, warrants and represents that it has the
sole right to grant licenses to the LICENSED PATENTS.
8.4 Disclaimer. EACH PARTY makes no representations other than those
expressly set forth in this Article 8. Each Party expressly
disclaims all other representations, warranties and conditions,
express, implied, statutory, or otherwise, regarding the LICENSED
PATENTS, including without limitation, any warranty of
merchantability, fitness for a particular purpose, or
non-infringement.
8.5 Complete List of Patents. Licensor represents and warrants that
Exhibit A sets forth all patents and applications for patent that
are owned by, controlled by, or licensed to Licensor as of the
Effective Date that relate to the Royalty-Bearing Products,
including their design, features, composition, manufacture, use or
sale.
8.6 Representation regarding Disposable Products and Hardware Products
and Related Financial Data. Licensee represents that (a) all
products currently marketed or promoted by Licensee that constitute
Disposable Products are included on Exhibit B, (b) all products
currently marketed or promoted by Licensee that constitute Hardware
Products are included on Exhibit C, and (c) all financial data
regarding sales of Hardware Products and Disposable Products
provided to Cytomedix before or after the Effective Date are and
shall be true and accurate representations of such data as reflected
on Medtronic's financial statements.
9. Dispute Resolution.
9.1 Except as specified elsewhere in the Agreement, any dispute arising
out of or relating to the formation or performance of this
Agreement, including the breach, termination or validity thereof,
which has not been resolved by good faith negotiation between
representatives of Medtronic and Licensor who have authority to
fully and finally resolve the dispute within thirty (30) days after
initiation of a negotiation procedure, shall be finally resolved by
binding arbitration by three arbitrators in accordance with the
American Arbitration Association ("AAA") Commercial Arbitration
Rules then currently in effect; provided, however, that if one Party
fails to participate in the negotiation as agreed herein, the other
Party can commence binding arbitration prior to the expiration of
the time period set forth above. The three arbitrators' award shall
be binding on the Parties. One arbitrator shall be selected by each
Party. The third arbitrator shall be chosen by agreement of the
Parties. The arbitrators shall have no jurisdiction or authority to
award punitive or exemplary damages against either Party. The
prevailing Party in any arbitration hereunder shall be awarded its
reasonable attorneys fees and costs in addition to any other relief
to which it may be entitled under this Agreement, but such attorney
fees and costs shall not exceed 50% of the amount in dispute. The
binding arbitration shall be governed by the Federal Arbitration
Act, 9 U.S.C. ss.ss.1-16, and judgment upon the award rendered by
the arbitrators, or a majority thereof, may be entered by any court
having jurisdiction thereof. If a Party is forced into court to
enforce an arbitration award, it shall be entitled to recover its
reasonable attorney fees and costs. In any arbitration, the parties
shall be entitled following initiation of the action to the same
discovery that they would be allowed under the Federal Rules of
Civil Procedure; provided, however, that the parties shall cooperate
in good faith to cause such discovery to be completed within ninety
(90) days following initiation of the arbitration action.
9.2 Damages. Medtronic and Licensor each agree to waive any right to
receive punitive, consequential, special or indirect damages
relating in any way to this Agreement.
10. Termination.
10.1 Expiration/Termination. If this Agreement is not terminated sooner
as provided for herein, it shall terminate with the expiration of
the last to expire of the Licensed Patents.
10.2 Termination Upon Default. Upon default by any Party in the
performance of any obligation hereunder to be performed by such
Party, the Party aggrieved by such default shall give notice in
writing to the Party in default specifying the thing or matter in
default. Unless such default be cured within one (1) month following
the giving of such notice (or if such cure cannot be completed
within such one (1) month period, if the cure thereof be not
undertaken promptly upon receipt of such notice, and diligently
pursued thereafter), then the Party giving such notice may give
further written notice to the Party in default terminating this
Agreement; in such event, this Agreement shall terminate on the date
specified in such further notice, which date shall be no earlier
than one (1) month from the date of such further notice.
10.3 Prior Obligations and Liability; Non-waiver. No expiration or
termination of this Agreement shall relieve any Party of any
obligation accrued prior to the date of expiration or termination or
relieve a Party in default from liability for damages for breach of
this Agreement.
10.4 Survival. Upon termination of this Agreement, the confidentiality
provisions of Article 6.1 shall remain in force, and the dispute
resolution provisions of Article 9 shall survive.
11. Miscellaneous.
11.1 Notices. Any consent, notice or report required or permitted to be
given or made under this LICENSE AGREEMENT by one of the Parties
hereto to the other Party shall be in writing and delivered to such
other Party at its address indicated below, or to such other address
as the addressee shall have last furnished in writing to the
addressor. Said notice shall be deemed to have been given on the
date of its receipt by the addressee.
If to MEDTRONIC: MEDTRONIC, Inc.
Cardiac Surgery Legal Counsel
710 Medtronic Parkway
Minneapolis, Minnesota 55432
Attention: Vice President, Legal
If to CYTOMEDIX: CYTOMEDIX,
Inc. 416 Hungerford Drive, Suite 330
Rockville,
Maryland 20850
Attention: Kshitij Mohan, Ph.D, CEO
11.2 Governing Law. This AGREEMENT shall be governed by and construed in
accordance with the laws of the State of Delaware, without regard to
the conflicts of law principles thereof.
11.3 Assignment. This Agreement and any of the rights and obligations
thereof are fully assignable by both Parties.
11.4 Force Majeure. No Party shall be considered in default or be liable
for any delay in performance or for any non-performance caused by
circumstances beyond the reasonable control of such Party, including
but not limited to acts of God, explosion, fire, flood, accident,
strike or other labor disturbance, war (whether declared or not),
sabotage, order or decree of any court or action of any governmental
authority, or other causes, whether similar or dissimilar to those
specified, that cannot reasonably be controlled by the Party who
failed to perform.
11.5 Waiver. Failure by any Party to insist upon strict compliance with
any of the terms, covenants, or conditions of this Agreement shall
not be deemed a continuing waiver of such term, covenant, or
condition, nor shall any waiver or relinquishment of any right or
power herein at any time be deemed a waiver or relinquishment of the
same or any other right or power, whether or not similar. Waiver of
a breach hereunder may be effected only by a writing signed by the
waiving Party and such waiver shall not constitute a waiver of any
other breach not specified in said writing. The Parties hereby
acknowledge that they have been advised by legal counsel and are
familiar with section 1542 of the California Civil Code, which
provides as follows:
A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR
DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF
EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE
MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR
The Parties acknowledge in that connection that they may have
sustained damage, loss, cost or expense that are presently unknown
and unsuspected, and that such damage, loss, cost or expense as may
have been sustained may give rise to additional damage, loss, cost
or expense in the future. Nevertheless, the Parties acknowledge that
this Agreement has been negotiated and agreed upon in light of this
situation and expressly waive any and all rights which they may have
under Section 1542 of the California Civil Code, or any other state
or federal statute or common law principle of similar
effect.11.6Entire Agreement. This Agreement and its Exhibits
explicitly referenced herein embody the entire agreement between the
parties and supersede any prior representations, understandings and
agreements between the parties regarding the subject matter hereof.
There are no representations, understandings or agreements, oral or
written, between the parties regarding the subject matter hereof
that are not fully expressed herein.
11.7 Severability. The parties agree that if any part, term, or provision
of this AGREEMENT shall be found illegal or in conflict with any
valid controlling law, the validity of the remaining provisions
shall not be affected thereby.
11.8 Independence of the Parties. This AGREEMENT shall not constitute the
designation of any Party as the representative or agent of the
other, nor shall any Party by this AGREEMENT have the right or
authority to make any promise, guarantee, warranty, or
representation, or to assume, create, or incur any liability or
other obligation of any kind, express or implied, against or in the
name of, or on behalf of, the other, except as expressly provided
herein.
11.9 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
Facsimile signatures transmitted by telefax shall have the same
import and effect as if originally delivered.
IN WITNESS WHEREOF, the parties have executed this Agreement on the date
indicated below.
CYTOMEDIX, INC. MEDTRONIC, INC.
By: /s/ Kshitij Mohan By: /s/ Bill Hawkins
------------------------------ -----------------------
Kshitij Mohan, Ph.D, CEO Bill Hawkins, President
and Chief Operating Officer
Medtronic, Inc.
Date: April 25, 2005 Date: April 25, 2005
EXHIBIT A
U.S. Patent No. 5,165,938 entitled "Wound Healing Agents," issued 11/24/92
Australia Patent No. 596,954 entitled "Wound Healing Agents," issued 11/8/85
Canada Patent No. 1,261,259 entitled "Wound Healing Agents issued 9/26/89
Europe Patent No. 202,298 entitled "Wound Healing Agents," issued 7/15/92
(validated in Belgium, France, Germany, Great Britain, Netherlands, and Sweden)
Israel Patent No. 77,096 entitled "Wound Healing Agents," issued 11/19/85
Ireland Patent No. 57,894 entitled "Wound Healing Agents," issued 5/5/93
Japan Patent No. 1,986,949 entitled "Wound Healing Agents," issued 3/8/95
Exhibit B
Schedule of Disposable Products
Model Number Description UOM
- ----------------------------- --------------------------------------- --------------------------------------
MDK300 Disposable Kit 5/case
- ----------------------------- --------------------------------------- --------------------------------------
- ----------------------------- --------------------------------------- --------------------------------------
MDK305 Basic Platelet Separator Kit 5/case
- ----------------------------- --------------------------------------- --------------------------------------
- ----------------------------- --------------------------------------- --------------------------------------
MRD500 Ratio Dispenser Kit 5/case
- ----------------------------- --------------------------------------- --------------------------------------
- ----------------------------- --------------------------------------- --------------------------------------
BD309653 B-D 60 ml. Syringe 40/case
- ----------------------------- --------------------------------------- --------------------------------------
- ----------------------------- --------------------------------------- --------------------------------------
BD309604 B-D 10 ml. Syringe 100/case
- ----------------------------- --------------------------------------- --------------------------------------
- ----------------------------- --------------------------------------- --------------------------------------
MCT600 2" Cannula Tip 10/case
- ----------------------------- --------------------------------------- --------------------------------------
- ----------------------------- --------------------------------------- --------------------------------------
MCT604 4" Cannula Tip 10/case
- ----------------------------- --------------------------------------- --------------------------------------
- ----------------------------- --------------------------------------- --------------------------------------
MCT607 7" Cannula Tip 10/case
- ----------------------------- --------------------------------------- --------------------------------------
- ----------------------------- --------------------------------------- --------------------------------------
MST700 Spray Tip 10/case
- ----------------------------- --------------------------------------- --------------------------------------
- ----------------------------- --------------------------------------- --------------------------------------
COS310 Complete One Source Kit 1/case
- ----------------------------- --------------------------------------- --------------------------------------
- ----------------------------- --------------------------------------- --------------------------------------
BOS350 Basic One Source Kit 1/case
- ----------------------------- --------------------------------------- --------------------------------------
- ----------------------------- --------------------------------------- --------------------------------------
MSD400 Autologous Serum Dispenser 5/case
- ----------------------------- --------------------------------------- --------------------------------------
- ----------------------------- --------------------------------------- --------------------------------------
COS320 Complete One Source Kit 1/case
- ----------------------------- --------------------------------------- --------------------------------------
- ----------------------------- --------------------------------------- --------------------------------------
BOS360 Basic One Source Kit 1/case
- ----------------------------- --------------------------------------- --------------------------------------
- ----------------------------- --------------------------------------- --------------------------------------
MDK505 Ratio Dispenser Kit 5/case
- ----------------------------- --------------------------------------- --------------------------------------
- ----------------------------- --------------------------------------- --------------------------------------
MDK405 Autologous Serum Dispenser 5/case
- ----------------------------- --------------------------------------- --------------------------------------
- ----------------------------- --------------------------------------- --------------------------------------
MTG401 Autologous Serum Generator 10/case
- ----------------------------- --------------------------------------- --------------------------------------
- ----------------------------- --------------------------------------- --------------------------------------
BT 727SP Plasma Sequestration Kit 10/case
- ----------------------------- --------------------------------------- --------------------------------------
Exhibit C
Schedule of Hardware Products
- ----------------------------- --------------------------------------- --------------------------------------
MAG100 Magellan(TM) Platelet Separator NA
- ----------------------------- --------------------------------------- --------------------------------------
- ----------------------------- --------------------------------------- --------------------------------------
MAG200 Magellan(TM) Platelet Separator NA
- ----------------------------- --------------------------------------- --------------------------------------
- ----------------------------- --------------------------------------- --------------------------------------
(EXHIBIT D)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MARYLAND
CYTOMEDIX, INC., )
)
Plaintiff, )
)Civ. Action No.: RWT-04-CV-3593
v. )
)
MEDTRONIC, INC., )
)
Defendant. )
STIPULATED DISMISSAL WITH PREJUDICE
The parties have agreed to settle the above-captioned matter and
jointly request entry of this Stipulated Dismissal With Prejudice. It is,
therefore
ORDERED, ADJUDGED, AND DECREED as follows:
1. The above-captioned action is hereby dismissed, with prejudice, in
its entirety.
2. Each Party shall bear its own costs and attorneys' fees.
Date: , 2005
---------------------- -----------------------------------
UNITED STATES DISTRICT COURT JUDGE
The parties hereto, through counsel consent to entry of the above
Stipulated Dismissal With Prejudice.
Date: April ___, 2005 Date: April ___, 2005
- -------------------------------- ---------------------------------
Frank P. Porcelli Thomas Hamlin
FISH & RICHARDSON P.C. ROBINS, KAPLAN, MILLER & CIRESI
225 Franklin Street, Suite 3100 800 LaSalle Ave
Boston, Massachusetts 02110 Minneapolis, Minnesota 55402
Telephone: (617) 521-7800 Telephone: (612) 349-8500
Facsimile: (617) 542-8906 Facsimile: (612) 339-4181
Steven R. Jakubowski
ROBERT F. COLEMAN & ASSOCIATES
77 West Wacker Drive, Suite 4800
Chicago, Illinois 60601
Telephone: (312) 444-1000
Facsimile: (312) 444-1028
Attorneys for Plaintiff, CYTOMEDIX, INC. Attorneys for Defendant,
MEDTRONIC, INC.