EXHIBIT 10.16
THE CONFIDENTIAL PORTIONS OF THIS EXHIBIT, WHICH HAVE
BEEN REMOVED AND REPLACED WITH AN ASTERISK, HAVE BEEN
OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL
TREATMENT UNDER RULE 406 PROMULGATED UNDER THE SECURITIES
ACT OF 1933 AND RULE 24b-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934.
LICENSE AGREEMENT
THIS LICENSE AGREEMENT (the "Agreement") is made and entered into as of
November 6, 2003, (the "Effective Date") between Wilson Greatbatch Technologies,
Inc. (as defined below, "WGT"), a Delaware corporation, and Medtronic, Inc. (as
defined below, "Medtronic"), a Minnesota corporation.
WITNESSETH:
WHEREAS, WGT has developed expertise and intellectual property in the field
of tantalum defibrillation capacitors used in implantable medical devices; and
WHEREAS, WGT desires to grant, and Medtronic desires to obtain, certain
license rights with respect to the Intellectual Property (as such term is
defined below) in accordance with the terms of this Agreement.
AGREEMENTS:
NOW THEREFORE, in consideration of the representations, warranties,
covenants and agreements contained herein, and for other valuable consideration,
the receipt and adequacy of which is hereby acknowledged, the parties mutually
agree as follows:
ARTICLE 1
DEFINITIONS
1.1 Specific Definitions. As used in this Agreement, the following
definitions and terms shall have the designated meanings:
"Affiliate" of a specified person (natural or juridical) means a person that
directly, or indirectly through one or more intermediaries, controls, or is
controlled by, or is under common control with, the person specified. "Control"
shall mean ownership of more than 50% of the shares of stock entitled to vote
for the election of directors in the ease of a corporation, and more than 50% of
the voting power in the case of a business entity other than a corporation.
"Confidential Information" means know-how, trade secrets, and unpublished
information disclosed (whether before or during the term of this Agreement) by
one of the parties (the "disclosing party") to the other party (the "receiving
party"), and which is marked as proprietary or confidential as provided below,
excluding information that:
(a) was already in the possession of the receiving party prior to its
receipt from the disclosing party (provided that the receiving party is able to
provide the disclosing party with reasonable documentary proof thereof);
(b) is or becomes part of the public domain by reason of acts not
attributable to the receiving party;
(c) is or becomes available to the receiving party from a source other than
the disclosing party which source, to the best of the receiving party's
knowledge, has rightfully obtained such information and has no obligation of
nondisclosure or confidentiality to the disclosing party with respect thereto;
(d) is made available by the disclosing party to a third party unaffiliated
with the disclosing party on an unrestricted basis;
(e) is independently developed by the receiving party completely without
reference to any Confidential Information of the disclosing party, as evidenced
by the receiving party's written records; or
(f) has been or must be publicly disclosed by reason of legal, accounting
or regulatory requirements beyond the reasonable control, and despite the
reasonable efforts, of the receiving party.
All Confidential Information disclosed by one party to the other under this
Agreement shall be in writing and bear a legend "Proprietary," "Confidential" or
words of similar import or, if disclosed in any manner other than writing, shall
be followed by confirmation that such information is confidential by the
disclosing party within thirty (30) days. All Licensed Know-How transmitted to
Medtronic hereunder shall be considered Confidential Information of WGT for
purposes of Article 5 and the other provisions of this Agreement whether or not
marked "Proprietary" or "Confidential."
"Contract Year" means a period of one year beginning on May 1 of a calendar year
and ending on April 30 of the next calendar year.
"Evans" means Evans Capacitor Company, a Delaware Company, and its Affiliates.
"Evans Patents" means the patents licensed from Evans to WGT under the license
agreement dated August 8, 1996, as amended and restated on or about the date
hereof.
"Expiration" or "Expired" means, with respect to a particular Patent, the
Patent's expiration, abandonment, cancellation, disclaimer, award to another
party other than WGT in an interference proceeding, or declaration of invalidity
or unenforceability by a court or other authority of competent jurisdiction
(including final rejection in a re-examination or re-issue proceeding).
"Unexpired" shall mean a Patent that has not Expired. If in any country there
should be two or more such decisions conflicting with respect to the validity of
the same claim, the decision of the higher or highest tribunal shall thereafter
control; however, should the tribunals be of equal rank, then the decision or
decisions invalidating the claim shall prevail when the conflicting decisions
are equal in number and the majority of decisions shall prevail when the
conflicting decisions are unequal in number.
"Field of Use" means medical applications.
"First Contract Period" means the five-year period commencing on May I, 2004 and
ending on April 30, 2009; provided however, if the date that Medtronic shall
have executed and delivered this Agreement to WGT is after May 1, 2004, then (a)
the First Contract Period shall commence on the first day of the month in which
such execution and delivery occurs (" Commencement Date") and continue for five
years thereafter; (b) the Second Contract Period shall commence on the fifth
anniversary of the Commencement Date and continue for five years thereafter; (c)
the term "Contract Year" shall be changed so as to mean a period beginning each
calendar year on the Commencement Date (and each year thereafter on the
anniversary thereof) and ending 12 months later; and (d) the Third Contract
Period, if any, shall commence on the tenth anniversary of the Commencement
Date.
"Initial Fee" means *.
"Intellectual Property" means U.S. and foreign Patent Rights, copyrights and
copyright registrations and applications, mask works and registrations thereof,
Know-How, Inventions, in each case, relating to Tantalum Capacitors or Tantalum
Defibrillation Capacitors.
"Intellectual Property Rights" means all rights in Intellectual Property.
"Interest Rate" means interest compounded quarterly at a per annum rate of
interest equal to the prime commercial lending rate quoted by Wells Fargo Bank
Minnesota, N.A. in effect from time to time plus *.
"Invention" means any invention, discovery, know-how, trade secret, data,
information, technology, process or concept, whether or not patented or
patentable, and whether or not memorialized in writing.
"Know-How" means all know-how, trade secrets, expertise, inventions, discoveries
and technical information now or hereafter owned by or licensed (with the right
to sublicense) which are necessary or useful for designing, developing,
processing, manufacturing, using or selling Licensed Products within the Field
of Use, including but not limited to information embodied in drawings, designs,
copyrights, copyright registrations and applications, patent applications,
material specifications, processing instructions, formulas, equipment
specifications, product specifications, confidential data, computer software,
electronic files, research notebooks, invention disclosures, research and
development reports and the like related thereto.
"Licensed Know-How" means the Know-How of WGT and/or its Affiliates as of the
date of this Agreement that is identified on Exhibit B attached to and made a
part of this Agreement, and any Know-How subsequently transmitted by WGT
pursuant to Section 2.4.
"Licensed Products" means Tantalum Capacitors and Tantalum Defibrillation
Capacitors.
"Medtronic" means Medtronic, Inc. and its Affiliates.
"Medtronic Competitor" means a third party whose primary business is the
manufacture or sale of one or more medical devices that are used to monitor,
diagnose, manage, deliver therapy to, or treat diseases and medical conditions
occurring within and around the cardiovascular system.
"Patent Rights" means (a) all patents or patent applications (including any
patents issued thereon) whether owned or licensed from a third party (with the
right to sublicense) (b) all continuation, divisional, re-issue, re-examination
and substitution applications that may be filed based on the foregoing
referenced patents or patent applications, together with any patents that may
issue based thereon; and (c) all foreign applications that may be filed based on
the foregoing referenced U.S. patents and patent applications, together with all
patents which may issue based thereon.
"Royalty Limitation Date" means the first date as of which both of the following
conditions have been satisfied: (a) Medtronic shall have paid cumulative
royalties to WGT under Section 3.3, 3.4 and/or 3.5 of * and (b) either (i) all
Evans Patents have been determined to be invalid or unenforceable or (ii) the
Second Contract Period shall have ended.
"Second Contract Period" means the five-year period commencing on May 1, 2009
and ending on April 30, 2014.
"Sublicense" means the Sublicense Agreement between the parties of even date
herewith under which WGT has granted to Medtronic certain sublicense rights
under the license agreement between WGT and Evan Capacitor Company dated August
8, 1996, as amended and restated.
"Tantalum Capacitor" means the electrolytic capacitor based on a porous tantalum
anode and a liquid electrolyte and whose manufacture, sale or use is covered by
one or more claims of a WGT Capacitor Patent or an Evans Patent.
"Tantalum Defibrillation Capacitor" means a bank of one or more Tantalum
Capacitors of appropriate size (or such other number of Tantalum Capacitors as
the parties may mutually agree in writing), connected electrically to give the
required energy and voltage that is capable of operating in an implantable
defibrillator to deliver a therapeutic electric charge and whose manufacture or
sale is covered by one or more claims of a WGT Capacitor Patent or an Evans
Patent.
"Target Amount" means * of Medtronic's requirements for Tantalum Capacitors
during the First Contract Period or, in reference to the Second Contract Period,
means * of Medtronic's requirements for Tantalum Capacitors during any single
calendar year during the Second Contract Period.
"Third Contract Period" means the period, if any, commencing on May 1, 2014 and
continuing until the earlier of the Royalty Limitation Date or the termination
of this Agreement.
"Third Party Patents" means the patent or patents described in the letter from
WGT to Medtronic of even date herewith.
"WGT" means Wilson Greatbatch Technologies, Inc. and its Affiliates.
"WGT Capacitor Patents" means all Patent Rights of WGT as of the date of this
Agreement that are necessary or useful for designing, developing, processing,
manufacturing, using or selling Tantalum Capacitors or Tantalum Defibrillation
Capacitors, other than the Evans Patents, and any Patent Rights that WGT may
obtain after the date hereof with respect to any of the Third Party Patents and
including any Intellectual Property Rights resulting from, related to, or
arising out of claims or causes of action held by WGT, in each case, relating to
Tantalum Capacitors or Tantalum Defibrillation Capacitors. A list of the WGT
Capacitor Patents is included as Exhibit A.
1.2 Other Terms. Other terms may be defined elsewhere in the text of this
Agreement and shall have the meaning indicated
throughout this Agreement.
1.3 Definitional Provisions.
The words "hereof," "herein," and "hereunder" and words of similar import,
when used in this Agreement, shall refer to this Agreement as a whole and not to
any particular provisions of this Agreement.
The terms defined in the singular shall have a comparable meaning when used
in the plural, and vice versa.
References to an "Exhibit" or to a "Schedule" are, unless otherwise
specified, to one of the Exhibits or Schedules attached to or referenced in this
Agreement, and references to an "Article" or a "Section" are, unless otherwise
specified, to one of the Articles or Sections of this Agreement.
The term "person" includes any individual, partnership, joint venture,
corporation, trust, unincorporated organization or government or any department
or agency thereof.
The term "dollars" or "$" shall refer to the currency of the United States
of America.
ARTICLE 2
LICENSE TO MEDTRONIC
2.1 Grant of License. Subject to the terms and conditions of this
Agreement, WGT hereby grants to Medtronic, and Medtronic hereby accepts, an
exclusive, perpetual, worldwide, royalty-bearing license to use to make, have
made, sell and import in the Field of Use Licensed Products covered by, or
manufactured by a process covered by, one or more claims of any Unexpired WGT
Capacitor Patent which has not been held invalid or unenforceable by a final
decision which has not been appealed and to use Licensed Know-How for such
purposes; provided that Medtronic shall not have the right under this license to
sell Licensed Products to any person separate from or independent of a medical
device.
2.2 Sublicensing. Medtronic may not sublicense any of its rights or
obligations under Section 2.1 except that Medtronic may grant sublicenses solely
for the purpose of obtaining contract manufacturing of Licensed Products covered
by, or manufactured by a process covered by, one or more claims of any Unexpired
WGT Capacitor Patent which has not been held invalid or
unenforceable by a final decision which has not been appealed, provided that (i)
Medtronic shall cause such sublicensee to comply with all of Medtronic's
obligations hereunder, and (ii) any such sublicense granted by Medtronic shall
terminate automatically upon termination of this Agreement.
2.3 Exclusivity. The exclusivity referred to in the grant of license in
Section 2.1 above is subject to the following: (i) WGT shall have the right to
exploit the WGT Capacitor Patents and Licensed Know How (including but not
limited to making and selling Tantalum Capacitors); and (ii) WGT shall have the
right to grant back-up licenses to WGT customers to make Tantalum Capacitors
which licenses are to be effective only if, and for as long as, WGT is unable
for force majeure or other reasons to supply any such customer with its
requirements of Tantalum Capacitors.
2.4 Licensed Know-How. WGT shall deliver copies of the Licensed Know-How to
Medtronic as soon as practicable after receipt of written request for such
copies from Medtronic. WGT shall, upon Medtronic's request from time to time
until *, use its reasonable commercial efforts to answer promptly and in writing
any written questions with respect to the Licensed Know-How of WGT, which exists
as of the date of this Agreement and which is relevant to the manufacture of
Licensed Products as is reasonably necessary or useful to enable Medtronic to
manufacture or have manufactured Licensed Products. Under no circumstances,
however, shall WGT be required to provide any training to Medtronic personnel
with respect to the manufacture of Licensed Products. Any Know-How provided by
WGT to Medtronic pursuant hereto shall become and be deemed to be Licensed
Know-How.
ARTICLE 3
ROYALTIES AND REPORTS
3.1 Royalties. As consideration for the licenses and other rights granted
hereunder and under the Sublicense Agreement, Medtronic shall pay to WGT the
initial license fee provided for in Section 3.2 and the royalties set forth in
Sections 3.3, 3.4 and, if applicable, Section 3.5 below during the First
Contract Period, the Second Contract Period and the Third Contract Period (if
any). After the Royalty Limitation Date, Medtronic shall owe no further
royalties to WGT under this License Agreement or the Sublicense, and the
licenses contained herein and in the Sublicense shall be deemed to be fully
paid.
3.2 Initial Fee. Medtronic shall pay to WGT an initial license fee in the
amount of * no later than ninety (90) days following the date on which Medtronic
first sells or commercially releases a medical device incorporating a Licensed
Product covered by, or manufactured by a process covered by, one or more claims
of any Unexpired patent included within a WGT Capacitor Patent or an Evans
Patent which has not been held invalid or unenforceable by a final decision
which has not been appealed ("First Sale") Medtronic shall not be deemed to have
sold or commercially released a medical device incorporating a Licensed Product
covered by, or manufactured by a process covered by, a WGT Capacitor Patent or
an Evans Patent if such medical device is in development, testing, or which has
yet to receive FDA approval for commercial sale. Medtronic shall not be
obligated to pay an Initial Fee if it first sells or commercially releases such
medical devices incorporating Licensed Products after WGT has failed to supply
Licensed Products under the terms of any supply agreement between WGT and
Medtronic for supply of such Licensed Products.
3.3 Royalties during First Contract Period.
(a) Within ninety (90) days following the end of each calendar year during
the First Contract Period, and within ninety (90) days following the end of the
First Contract Period, WGT will deliver to Medtronic a report listing the number
of Licensed Products purchased by Medtronic from WGT during such calendar year
or the First Contract Period, as the case may be.
(b) If Medtronic has purchased a total number of Licensed Products from WGT
during the First Contract Period equal to or greater than the Target Amount,
Medtronic shall have no obligation to pay WGT any royalty for any Licensed
Products manufactured by or for Medtronic.
(c) If Medtronic has not purchased a total number of Licensed Products from
WGT equal to or greater than the Target Amount by the completion of the First
Contract Period, Medtronic shall pay WGT within thirty (30) days following the
receipt of an invoice from WGT, a royalty equal to * per Tantalum Defibrillation
Capacitor manufactured by or for Medtronic and which are sold by Medtronic
during the First Contract Period.
3.4 Royalties during Second Contract Period.
(a) Within ninety (90) days following the end of each Contract Year during
the Second Contract Period, WGT will deliver to Medtronic a report listing the
number of Licensed Products purchased by Medtronic from WGT during the year.
(b) If Medtronic has purchased a number of Licensed Products from WGT equal
or greater than the Target Amount for such Contract Year, Medtronic shall have
no obligation to pay WGT any royalty for any Licensed Products manufactured by
or for Medtronic during such year.
(c) If Medtronic has not purchased a number of Licensed Products from WGT
equal to or greater than the Target Amount for such Contract Year, Medtronic
will pay WGT within thirty (30) days following the receipt of an invoice from
WGT a royalty equal to * per Tantalum Defibrillation Capacitor manufactured by
or for Medtronic and which are sold by Medtronic during such year.
3.5 Royalties during Third Contract Period.
(a) After the Second Contract Period, Medtronic shall pay royalties only if
it shall not have paid WGT cumulative royalties during the First Contract Period
and Second Contract Period of *.
(b) Within sixty (60) days following the end of each Contract Year during
the Third Contract Period, Medtronic will pay WGT a royalty equal to * per
Tantalum Defibrillation Capacitor until Medtronic has paid cumulative royalties
equaling * under Section 3.3, Section 3.4 and this Section 3.5, after which time
no further royalty shall be owing by Medtronic and the license shall be deemed
to be fully paid.
3.6 Definition of "Sold". For purposes of Section 3.3, Section 3.4, and
Section 3.5, the term "sold" shall exclude any Tantalum Capacitors that are held
in inventory, used as sales samples,
used for purposes of regulatory submissions, provided in exchange for a damaged
or defective Tantalum Capacitor as part of a warranty program, or used for
testing or quality control purposes.
3.7 Payment Reductions.
a. The royalties payable under Sections 3.3, 3.4 and 3.5 shall be subject
to set off as described in Section 7.4 relating to indemnification of Medtronic
for breach of representations and warranties of WGT, and in Section 4.1 relating
to breach by WGT of its license agreements with third parties.
b. If Medtronic is required to pay to any party other than WGT any royalty
to allow Medtronic to make, have made, use or sell Licensed Products, WGT shall
reduce the royalty payments specified herein, or pay such sums to Medtronic,
together with interest at the Interest Rate accrued from the time Medtronic
makes such royalty payment to a party other than WGT (provided that WGT's
cumulative liability to pay sums to Medtronic under this section shall be
limited to the sum of all royalties paid to WGT under this License Agreement
plus Medtronic's out of pocket costs), such that the overall royalties paid to
any and all parties (including WGT) on Licensed Products for use in Medtronic
products will in no event exceed the royalties set forth in Sections 3.2, 3.3,
3.4 and 3.5 above.
c. In addition, if Medtronic pays any sums to Evans that Medtronic
reasonably deems necessary to preserve Medtronic's rights under the Sublicense
(including but not limited to curing any defaults by WGT under its license with
Evans or paying any additional royalties required to maintain WGT's exclusivity
rights under its license with Evans), WGT shall reduce the royalty payments
specified herein, or pay sums to Medtronic together with interest at the
Interest Rate accrued from the time Medtronic makes such payment to Evans
(provided that WGT's cumulative liability to pay sums to Medtronic under this
section shall be limited to the sum of all royalties paid to WGT under this
License Agreement plus Medtronic's out of pocket costs) such that the overall
royalties paid to any and all parties (including WGT) on Licensed Products for
use in Medtronic products, plus any additional sums paid to Evans on WGT's
behalf, will in no event exceed the royalties set forth in Sections 3.2, 3.3,
3.4 and 3.5 above.
d. If Medtronic's right to a set off under paragraphs (b) and (c) of this
Section 3.7 arises in connection with a claim subject to indemnification under
Article 7, the provisions of Article 7, including without limitation the
requirements for notice to WGT, shall govern the parties' rights and obligations
with respect to such claims. If Medtronic's right to a set off does not arise in
connection with a claim that is subject to indemnification under Article 7, and
if Medtronic intends to seek reimbursement with respect to such obligation under
Section 3.7(b) or (c), Medtronic shall promptly notify WGT of its obligation and
shall consult with WGT before agreeing to pay any royalty to a third party to
allow Medtronic to make, have made, use or sell Licensed Products.
Notwithstanding the foregoing, Medtronic shall have no obligation to consult
with WGT before making any payment to Evans that Medtronic reasonably deems
necessary to preserve Medtronic's rights under the Sublicense.
3.8 Records/Audits. WGT agrees to keep accurate written records sufficient
in detail to enable Medtronic to determine and verify the number of Licensed
Products purchased by
Medtronic and its Affiliates during the First Contract Period and during each
year of the Second Contract Period. Medtronic agrees to keep accurate written
records sufficient in detail to enable WGT to determine and verify the number of
Tantalum Capacitors used by Medtronic and its Affiliates (i.e. their
requirements) during the First Contract Period and during each year of the
Second Contract Period. WGT and Medtronic each shall maintain such records for
each relevant period for not less than three years after the end of such period.
Upon reasonable notice and during regular business hours, both parties shall
from time to time (but no more frequently than once annually) make available the
records referred to in Section 3.7 for audit at the requesting party's expense
by representatives from a nationally recognized independent certified public
accounting firm selected by the requesting party and reasonably acceptable to
the audited party to verify the accuracy of the records provided to the
requesting party. Such representatives shall execute a suitable confidentiality
agreement reasonably acceptable to the audited party prior to conducting such
audit. Such representatives may disclose to the requesting party only their
conclusions regarding the accuracy and completeness of royalty payments and of
records related thereto, and shall not disclose the audited party's confidential
business information to the requesting party without the prior written consent
of the audited party. No claim may be asserted by either party against the other
for errors discovered in the audit unless made within ninety (90) days following
completion of such examination or audit made pursuant to this Section 3.8.
ARTICLE 4
ADDITIONAL OBLIGATIONS
4.1 Maintain Licenses in Force. In addition to its obligations set forth in
the Evans Sublicense, WGT shall comply with all of the provisions of, and shall
maintain in full force and effect, all license agreements with third parties
pursuant to which WGT is licensee of intellectual property included in the
Intellectual Property. WGT shall promptly notify Medtronic if any such third
party alleges any breach by WGT of any such license agreement. Medtronic shall
be entitled, but not obligated, to cure any alleged breach by WGT of such
license agreement and set-off the cost of such cure against amounts otherwise
owed to WGT hereunder.
ARTICLE 5
INTELLECTUAL PROPERTY
5.1 Protect Know-How. WGT and Medtronic each agrees to maintain the
confidentiality of all non-public information regarding the WGT Capacitor
Patents and Licensed Know-How licensed under this Agreement, including but not
limited to the status of any patent applications included in the WGT Capacitor
Patents. Each party agrees not to disclose or use (except as permitted or
required for performance by the party receiving such Confidential Information of
its rights or duties hereunder) any Confidential Information of the other party
obtained during the term of this Agreement until the expiration of * after the
termination or expiration of this Agreement. Each party further agrees to take
appropriate measures to prevent any such prohibited disclosure by its present
and future employees, officers, agents, subsidiaries, or consultants during the
term of this Agreement and for a period of * thereafter.
5.2 Protection of Intellectual Property. WGT agrees to protect the WGT
Capacitor Patents licensed hereunder to Medtronic by obtaining and maintaining
appropriate patent rights as
recommended by reputable patent counsel, except for any patent applications
abandoned based on advice of such counsel, provided, however, that Medtronic
shall have the right to review and consult with WGT with respect to any filings
or other correspondence relating to the WGT Capacitor Patents licensed hereunder
to Medtronic with the appropriate patenting authority, including with respect to
any proposed abandonments. If Medtronic reasonably determines, in its sole
discretion, that any Invention conceived, reduced to practice or otherwise made,
developed or acquired by one or more employees or agents of WGT and having
application to Tantalum Capacitors as of the date of this Agreement is not being
adequately protected by patents, Medtronic may so inform WGT. If Medtronic
decides that WGT's response has been inadequate, Medtronic may take whatever
action it reasonably deems necessary at its expense to protect such Invention.
All patents and copyright registrations related thereto shall be applied for in
the names of the actual inventors or authors and shall be assigned to WGT,
subject to Medtronic's rights and license therein; each party shall execute and
deliver such forms of assignment, power of attorney and other documents which
are necessary to give effect to the provisions hereof.
5.3 Ownership of Intellectual Property. Subject to the rights and licenses
granted to Medtronic by this Agreement, (a) any Intellectual Property conceived,
reduced to practice or otherwise made, developed or acquired by one or more
employees or agents of WGT shall be the property of WGT, (b) any Intellectual
Property conceived, reduced to practice or otherwise made, developed or acquired
by one or more employees or agents of Medtronic shall be the property of
Medtronic, and (c) WGT shall and hereby does assign in full to Medtronic all
rights arising in any Joint Invention (defined below), to permit Medtronic to
hold sole ownership rights in and to any Joint Invention. Medtronic hereby
grants WGT a nonexclusive, worldwide fully-paid license to any Joint Invention
to make, use, or sell Tantalum Capacitors for any use, provided, however, that
WGT shall not make, use, or sell Tantalum Capacitors incorporating any Joint
Invention to a Medtronic Competitor for a period of * following such time as the
Joint Invention was first jointly conceived, reduced to practice or otherwise
made, developed or acquired by one or more employees or agents of WGT and one or
more employees or agents of Medtronic. For purposes of this Section,
Intellectual Property shall be deemed to have been developed jointly by
employees or consultants of Medtronic and WGT, and thus be a "Joint Invention",
if in connection with any patent application therefor (whether or not any such
application is to be made or trade secret protection is to be relied upon), at
least one employee or consultant of each of Medtronic and WGT would be required
to be named as an inventor in such application in order for a patent to be
valid.
5.4 Prosecution of Infringement of Intellectual Property Other Than By
Third Party Patents.
(a) Medtronic and WGT shall each promptly notify the other if it knows or
has reason to believe that rights to any Intellectual Property licensed
hereunder are being infringed or misappropriated by a third party within the
Field of Use or that such infringement or misappropriation is threatened. In the
event such alleged infringement relates to a Third Party Patent, the parties
shall treat such alleged infringement as set forth in Section 5.5. In all other
instances, WGT shall, after learning of and investigating such alleged
infringement or misappropriation, send notice to Medtronic (i) offering
Medtronic the choice of participating in such prosecution or (ii) declining to
prosecute such alleged infringement or misappropriation.
(b) In the event WGT offers Medtronic the choice to participate in the
prosecution pursuant to (a) (i) above, Medtronic shall have thirty (30) days in
which to notify WGT in writing of Medtronic's election to participate in the
prosecution of such alleged infringement or misappropriation. If Medtronic
elects to participate, Medtronic shall be obligated to pay its own costs and
expenses incurred by it in connection with such prosecution and shall be
entitled to receive fifty percent (50%) of the net proceeds realized from WGT's
and Medtronic's prosecuting of such matter and remaining after reimbursement of
Medtronic's and WGT's costs and expenses out of the proceeds of such matter. In
the event Medtronic elects not to participate in such alleged infringement or
misappropriation (a) above, WGT shall be solely responsible for payment of all
of its own costs of prosecution and of negotiating settlement, and shall retain
all proceeds from such prosecution.
(c) In the event WGT sends notice declining to prosecute such alleged
infringement or misappropriation pursuant to (a)(ii) above, Medtronic shall have
the option of prosecuting the alleged infringement or misappropriation for its
own account, in which event Medtronic shall be solely responsible for all costs
of prosecution and of negotiating settlement and shall retain all proceeds from
such prosecution. In the event Medtronic elects to prosecute, WGT shall, at
Medtronic's expense, cooperate in connection with the initiation and prosecution
by Medtronic of such suit. Medtronic shall have the right to join WGT as a party
plaintiff to any such proceeding if Medtronic believes it is necessary to
successfully prosecute such infringement or misappropriation.
5.5 Prosecution of Infringement of Intellectual Property By Third Party
Patents.
(a) Medtronic and WGT shall each promptly notify the other if it knows or
has reason to believe that rights to any Intellectual Property licensed
hereunder are being infringed or misappropriated by a Third Party Patent or that
such infringement or misappropriation is threatened. Medtronic shall, after
learning of and investigating such alleged infringement or misappropriation,
send notice to WGT electing to do one of the following: (i) prosecute such
alleged infringement or misappropriation for Medtronic's own account; (ii) offer
WGT the choice of participating in such prosecution, or (iii) decline to
prosecute such alleged infringement or misappropriation.
(b) In the event Medtronic elects to prosecute such alleged infringement or
misappropriation for its own account pursuant to (a)(i) above, Medtronic shall
be solely responsible for payment of all of its own costs of prosecution and of
negotiating settlement, and shall retain all proceeds from such prosecution.
Medtronic shall have the right to join WGT as a party plaintiff to any such
proceeding if Medtronic believes it is necessary to successfully prosecute such
infringement or misappropriation. WGT shall cooperate in connection with the
initiation and prosecution by Medtronic of such suit.
(c) In the event Medtronic offers WGT the choice of participating in such
prosecution pursuant to (a) (ii) above, upon receipt of Medtronic's notice, WGT
shall have thirty (30) days in which to notify Medtronic in writing of WGT's
election to participate in the prosecution of such alleged infringement or
misappropriation. If WGT elects to participate, WGT shall be obligated to pay
its own costs and expenses incurred by it in connection with such prosecution
and shall be entitled to receive fifty percent (50%) of the net proceeds
realized from WGT's and Medtronic's
prosecuting of such matter and remaining after reimbursement of Medtronic's and
WGT's costs and expenses out of the proceeds of such matter.
(d) In the event Medtronic elects not to prosecute pursuant to (a)(iii)
above, WGT shall be responsible for prosecuting such alleged infringement or
misappropriation for its own account, in which event WGT shall be solely
responsible for all costs of prosecution and of negotiating settlement and shall
retain all proceeds from such prosecution.
5.6 Extension of WGT Capacitor Patents. Medtronic may request that WGT
apply to have the normal term of any WGT Capacitor Patents extended or restored
under a country's procedure of extending life for time lost in government
regulatory approval processes, and the expense of same shall be borne by WGT.
Medtronic at its own expense shall assist WGT to take whatever action is
necessary to apply for any such extension. In the event that WGT does not elect
to extend the WGT Capacitor Patents, Medtronic may, at its own expense, effect
the extension of such WGT Capacitor Patent(s) and any sales of Licensed Products
under such extended patents shall not be subject to the royalty requirements of
Section 3 herein.
ARTICLE 6
REPRESENTATIONS AND WARRANTIES
6.1 Representations of WGT. WGT represents, warrants and covenants to
Medtronic that:
(a) WGT is a corporation duly organized, validly existing, and in good
standing under the laws of the State of Delaware and has full corporate power to
conduct the business in which it is presently engaged and to enter into and
perform its obligations under this Agreement.
(b) WGT has taken all necessary corporate action under the laws of the
state of its incorporation and its certificate of incorporation and bylaws to
authorize the execution and consummation of this Agreement and, when executed
and delivered by WGT, this Agreement shall constitute the valid and legally
binding agreement of WGT enforceable against WGT in accordance with the terms
hereof, subject to bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws of general applicability relating to or affecting
creditors' rights and to general equity principles.
(c) Neither the execution and delivery of this Agreement nor the
consummation of the transactions contemplated herein will violate any provision
of the certificate of incorporation or bylaws of WGT or any law, rule,
regulation, writ, judgment, injunction, decree, determination, award or other
order of any court or governmental agency or instrumentality, domestic or
foreign, or conflict with or result in any breach of any of the terms of or
constitute a default under or result in termination of or the creation or
imposition of any mortgage, deed of trust, pledge, lien, security interest or
other charge or encumbrance of any nature pursuant to the terms of any contract
or agreement to which WGT is a party or by which WGT or any of its assets is
bound.
(d) WGT exclusively owns, or has valid and subsisting exclusive license
rights (with the right to sublicense) to, all of the WGT Capacitor Patents and
Licensed Know-How, subject to no lien, charge, security interest, mortgage,
pledge, restriction, adverse claim or any other
encumbrance whatsoever (and without any obligation to any person or entity for
royalties, fees or commissions). No current or former stockholder, employee or
consultant of WGT has any rights in or to any of the WGT Capacitor Patents and
Licensed Know-How. The patents within the WGT Capacitor Patents are valid and
enforceable and have not been challenged in any judicial or administrative
proceeding. Except for the Third Party Patents, WGT's execution and performance
of this Agreement, the transactions contemplated herein and Medtronic's use of
the WGT Capacitor Patents and Licensed Know-How in the Field of Use will not
infringe, misappropriate, misuse or conflict with the rights, including
Intellectual Property Rights of third parties. WGT has the right and authority
to enter into this Agreement and to grant the license granted herein. Except for
the Third Party Patents, to the knowledge of WGT within the Field of Use, no
person nor such person's business or products has infringed, misused,
misappropriated or conflicted with the WGT Capacitor Patents and Licensed
Know-How or currently is infringing, misusing, misappropriating or conflicting
with such WGT Capacitor Patents and Licensed Know-How.
(e) There are no actions, suits, claims, disputes or proceedings or
governmental investigations pending or, to the knowledge of WGT, threatened
against WGT or any of its Affiliates with respect to the Patents and Licensed
Know-How or the use thereof by WGT, either at law or in equity, before any court
or administrative agency or before any governmental department, commission,
board, bureau, agency or instrumentality, or before any arbitration board or
panel whether located in the United States or a foreign country. To WGT's
knowledge, WGT has not failed to comply with any law, rule, regulation, writ,
judgment, injunction, decree, determination, award or other order of any court
or other governmental agency or instrumentality, domestic or foreign, which
failure in any case would in any material respect impair any rights of Medtronic
under this Agreement. This Paragraph (e) is subject to Paragraph (g) of this
Section 6.1.
(f) The issued patents included in the WGT Capacitor Patents are still
pending in good standing and have not been abandoned. The patents listed on
Exhibit A constitute all of the WGT Capacitor Patents having applicability to
Tantalum Capacitors as of the date of this Agreement. WGT has made all
statutorily required filings, if any, to record its interests and taken
reasonable actions to protect its rights in the WGT Capacitor Patents under the
laws of the nations identified on said Exhibit A.
(g) WGT has informed Medtronic about certain Third Party Patents in a
letter dated November 5, 2003.
6.2 Representations of Medtronic. Medtronic represents, warrants and
covenants to WGT that:
(a) Medtronic is a corporation duly organized, validly existing, and in
good standing under the laws of the State of Minnesota and has full corporate
power to conduct the business in which it is presently engaged and to enter into
and perform its obligations under this Agreement.
(b) Medtronic has taken all necessary corporate action under the laws of
the state of its incorporation and its articles of incorporation and bylaws to
authorize the execution and consummation of this Agreement and, when executed
and delivered by Medtronic, this Agreement shall constitute the valid and
legally binding agreement of Medtronic enforceable against
Medtronic in accordance with the terms hereof, subject to bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium and similar laws of
general applicability relating to or affecting creditors' rights and to general
equity principles.
(c) Neither the execution and delivery of this Agreement nor the
consummation of the transactions contemplated herein will violate any provision
of the articles and bylaws of Medtronic or any law, rule, regulation, writ,
judgment, injunction, decree, determination, award or other order of any court
or governmental agency or instrumentality, domestic or foreign, or conflict with
or result in any breach of any of the terms of or constitute a default under or
result in termination of or the creation or imposition of any mortgage, deed of
trust, pledge, lien, security interest or other charge or encumbrance of any
nature pursuant to the terms of any contract or agreement to which Medtronic is
a party or by which Medtronic or any of its assets is bound.
ARTICLE 7
INDEMNIFICATION
7.1 Indemnification by WGT. Subject to Section 7.4, 7.5 and Section 7.6,
WGT agrees to defend, indemnify and hold harmless Medtronic and its Affiliates,
and their respective officers, directors, employees, shareholders, agents and
representatives, from and against and in respect of any and all demands, claims,
actions or causes of action, assessments, losses, damages, liabilities, interest
and penalties, costs and expenses (including, without limitation, reasonable
legal fees and disbursements incurred in connection therewith and in seeking
indemnification therefore, and any amounts or expenses required to be paid or
incurred in connection with any action, suit, proceeding, claim, appeal, demand,
assessment or judgment) resulting from, arising out of, or imposed upon or
incurred by any person to be indemnified hereunder by reason of: (a) any breach
of representation, warranty, or agreement on the part of WGT under this
Agreement; (b) any act or omission of WGT, its agents, employees or its
suppliers hereunder except to the extent that injury or damage is due to
Medtronic's negligence or fault; (c) any allegation that the WGT Capacitor
Patents are not valid and enforceable; and (d) any allegation that WGT's
execution and performance of this Agreement, the transactions contemplated
herein and Medtronic's use of the WGT Capacitor Patents and Licensed Know-How in
the Field of Use infringe, misappropriate, misuse or conflict with the rights of
third parties. An amount for which Medtronic is entitled to indemnification
pursuant hereto is referred to as an "Indemnified Amount."
7.2 Indemnification by Medtronic. Subject to Section 7.4 and Section 7.5,
Medtronic shall indemnify, defend and hold harmless WGT and its Affiliates and
their respective officers, directors, employees, shareholders, agents and
representatives, from and against and in respect of any and all demands, claims,
actions or causes of action, assessments, losses, damages, liabilities, interest
and penalties, costs and expenses (including, without limitation, reasonable
legal fees and disbursements incurred in connection therewith and in seeking
indemnification therefore, and any amounts or expenses required to be paid or
incurred in connection with any action, suit, proceeding, claim, appeal, demand,
assessment or judgment) resulting from, arising out of, or imposed upon or
incurred by any person to be indemnified hereunder by reason of: (a) any breach
of representation, warranty, or agreement on the part of Medtronic under this
Agreement; and (b) any act or omission of Medtronic, its agents, employees or
its suppliers hereunder except to the
extent that injury or damage is due to WGT's negligence or fault. An amount for
which WGT is entitled to indemnification pursuant hereto is referred to as an
"Indemnified Amount".
7.3 Third Party Claims. If a claim by a third party is made against any
indemnified party, and if the indemnified party intends to seek indemnity with
respect thereto under this Article 7, such indemnified party shall promptly
notify the indemnifying party of such claim; provided, however, that failure to
give timely notice shall not affect the rights of the indemnified party so long
as the failure to give timely notice does not adversely affect the indemnifying
party's ability to defend such claim against a third party. The indemnifying
party shall be entitled to settle or assume the defense of such claim, including
the employment of counsel reasonably satisfactory to the indemnified party. If
the indemnifying party elects to settle or defend such claim, the indemnifying
party shall notify the indemnified party within thirty (30) days (but in no
event less than twenty (20) days before any pleading, filing or response on
behalf of the indemnified party is due) of the indemnifying party's intent to do
so. If the indemnifying party elects not to settle or defend such claim or fails
to notify the indemnified party of the election within thirty (30) days (or such
shorter period provided above) after receipt of the indemnified party's notice
of a claim of indemnity hereunder, the indemnified party, subject to the
following sentence and after consultation with the indemnifying party, shall
have the right to contest, settle or compromise the claim without prejudice to
any rights to indemnification hereunder. Regardless of which party is
controlling the settlement of defense of any claim, (a) both the indemnified
party and indemnifying party shall act in good faith, (b) the indemnifying party
shall not thereby permit to exist any lien, encumbrance or other adverse charge
upon any asset of any indemnified party or of its subsidiaries, (c) the
indemnifying party shall permit the indemnified party to participate in such
settlement or defense through counsel chosen by the indemnified party, with all
fees, costs and expenses of such counsel borne by the indemnified party, (d) no
entry of judgment or settlement of a claim may be agreed to without the written
consent of the indemnified party, and (e) the indemnifying party shall promptly
reimburse the indemnified party for the full amount of such claim and the
related expenses as incurred by the indemnified party pursuant to the Article 7.
So long as the indemnifying party is reasonably contesting any such third party
claim in good faith and the foregoing clause (b) is being complied with, the
indemnified party shall not pay or settle any such claim. The controlling party
shall upon request deliver, or cause to be delivered, to the other party copies
of all correspondence, pleadings, motions, briefs, appeals or other written
statements relating to or submitted in connection with the settlement or defense
of any such claim, and timely notices of any hearing or other court proceeding
relating to such claim.
7.4 Set-Off. In the event Medtronic is entitled to indemnification under
this Article 7, Medtronic shall be entitled in its discretion, without
limitation of any other rights or remedies of Medtronic, to set-off all or any
part of the Indemnified Amount against any amounts which are then owed or
thereafter become owed by Medtronic to WGT. Medtronic shall be entitled to
setoff an Indemnified Amount when such "Costs" are threatened, whether or not
yet incurred and whether or not the amount thereof has been finally determined.
If Medtronic defers payment of any amount to WGT past the scheduled payment date
because there exists a pending indemnification claim by Medtronic pursuant to
this Article the amount of which has not then been finally determined, the
excess, if any, of such deferred amount over the finally determined amount of
the indemnification claim shall be promptly paid upon such final determination,
together with interest at the Interest Rate accrued from the originally
scheduled payment date for such deferred amount.
7.5 Limitations on Indemnification. For purposes of Section 7.1 and Section
7.2, except as set forth in Section 7.6 below, Indemnified Amounts shall be
limited to amounts paid or payable by an indemnified party to Persons who are
not Affiliates of the indemnified party and expenses incurred by the indemnified
party as contemplated by said Sections 7.1 and 7.2.
7.6 Abatement. Medtronic and WGT hereby stipulate and agree that the
license fee and royalty obligations of Medtronic under this Agreement constitute
among other things, consideration for the licensing of the various rights
included in the WGT Capacitor Patents, the Licensed Know How and the Evans
Patents licensed under the Sublicense, taken as a whole, as well as the
competitive advantage gained by Medtronic in having the Licensed Know How at the
commencement of this Agreement. If any of the WGT Capacitor Patents shall be
held invalid or if WGT shall abandon any WGT Capacitor Patent (other than as
contemplated by Section 5.2), (a) the royalty payments that were paid by
Medtronic from the effective date of this Agreement on account of such patent
through the date that the patent was held invalid or was abandoned shall be
promptly refunded by WGT to Medtronic, together with interest at the Interest
Rate on such refund accrued from the original date of payment by Medtronic of
such royalty; and (b) the royalty payments which would be otherwise payable
during the remainder of the Term after such finding of invalidity or abandonment
shall be abated. The amount of the refund or abatement shall be established by
the mutual written agreement of Medtronic and WGT or, if the parties are unable
to reach such agreement within a reasonable period of time, the amount of such
refund or abatement, if any, shall be determined by arbitration as provided for
in Section 10.3 and Exhibit C of this Agreement. The amount of refund or
abatement under this Section 7.6, if any, shall be determined taking into
account: (i) whether any Person other than Medtronic and WGT could manufacture
(or have manufactured for it) and sell (or use for itself) Tantalum Capacitors
without violating any WGT Capacitor Patent or any Evans Patent that are
Unexpired; (ii) whether any Person who is a Medtronic Competitor has commenced
manufacturing Tantalum Capacitors or announced plans to do so; and (iii) any
competitive advantage that Medtronic shall have otherwise obtained by, or is
continuing to benefit from, having a license for the entire set of WGT Capacitor
Patents, Licensed Know How and Evans Patents. The refund or abatement of
royalties provided for herein, if any, shall be Medtronic's only remedy under
this Agreement, or otherwise if any of the WGT Capacitor Patents is declared
invalid or is unenforceable.
ARTICLE 8
TERM AND TERMINATION
8.1 Term of License. Unless otherwise terminated under provisions of
Section 8.2, this Agreement and the license granted under Section 2.1 shall
continue in perpetuity.
8.2 Termination.
(a) If either party breaches any of the material terms, conditions or
agreements of this Agreement, then the other party may terminate this Agreement,
at its option and without prejudice to any of its other legal and equitable
rights and remedies, by giving the breaching party sixty (60) days notice in
writing, particularly specifying the breach. Such notice of termination shall
not be effective if the other party cures the specified breach within such sixty
(60) day period, or, in the
case of breaches not reasonably curable within such sixty (60) days, if such
party commences the cure thereof within such sixty (60) days and diligently
thereafter prosecutes such cure.
(b) Either party may, by written notice to the other party (which notice
shall be effective upon dispatch), terminate this Agreement in the event that
such other party becomes insolvent, makes an assignment for the benefit of
creditors, goes into liquidation or receivership or otherwise loses legal
control of its business.
(c) Either party may, by written notice to the other party terminate this
Agreement if such other party's performance has been suspended by an event of
Force Majeure, as defined in Article 9 below, for more than * in any consecutive
twelve (12) month period.
8.3 Effect of Termination.
(a) In the event of termination of this Agreement, Medtronic shall be
entitled to complete all work-in-process and sell its remaining inventory of
Licensed Products, subject to the payment of royalties on such Licensed Products
pursuant to Article 3 herein.
(b) The rights and obligations of the parties under Section 2.1 and
Articles 5, 6, 7 and 10 shall survive any termination of this Agreement.
(c) Upon termination of this Agreement, each party will within thirty (30)
days return to the other all tangible Confidential Information of the other
party (except one copy which may be retained by legal counsel solely for
evidentiary purposes in the event of a dispute).
ARTICLE 9
FORCE MAJEURE
9.1 Force Majeure/Notice. If either party is prevented from performing its
obligations hereunder solely as a result of a strike, riot, war, invasion, act
of God, fire, explosion, flood, delay of common carrier, act of government
agency or instrumentality, judicial action, or similar event or condition, in
each case which is outside the reasonable control of such party and which did
not exist and was not reasonably foreseeable as of the date hereof (a "Force
Majeure"), such party's performance hereunder will be temporarily excused, only
by the degree affected and after reasonable efforts by the party to avoid being
so affected; provided, that such party delivers to the other party written
notice promptly upon learning of such event or condition, which notice shall
include a detailed description of the event or condition and the anticipated
effect on such party's ability to perform its obligations hereunder.
9.2 Performance Excused. Upon giving notice to the other party, a party
affected by a Force Majeure shall be excused from the performance of its
obligations under this Agreement as described in Section 9.1, except for the
obligation to pay any amounts due and owing hereunder, but only to the extent
and only for the period that its performance of such obligations is prevented by
such Force Majeure. During the period that the performance by one of the parties
of its obligations under this Agreement has been suspended by reason of an event
of Force Majeure, the
other party may likewise suspend the performance of all or part of its
obligations hereunder to the extent that such suspension is commercially
reasonable.
ARTICLE 10
MISCELLANEOUS
10.1 Assignment. Neither party shall have the right to assign or otherwise
transfer its rights and obligations under this Agreement (whether by merger,
share exchange, combination or consolidation of any type, operation of law,
purchase or otherwise) except with the prior written consent of the other party,
provided that, Medtronic or any Medtronic Affiliate may assign its rights
pursuant to this Agreement to any person who, by merger, share exchange,
combination or consolidation of any type, purchase, operation of law, asset
purchase or otherwise, acquires substantially all of the business of Medtronic
or such Affiliate to which this Agreement relates. Any prohibited assignment
shall be null and void.
10.2 Entire Agreement. This Agreement and the Schedules and Exhibits
hereto, together with the Sublicense, constitute the entire agreement between
the parties with respect to the subject matter hereof and supersede all prior
agreements whether written or oral relating hereto.
10.3 Alternative Dispute Resolution. Any dispute arising under this
Agreement shall be referred first to the President of WGT and the President of
Medtronic's Cardiac Rhythm Management group or his or her designee (each a
"Relationship Manager") within three (3) business days after receipt of a notice
from either Party specifying the nature of the dispute and referencing this
Section. Each Relationship Manager shall make a good faith attempt to begin
discussions regarding such dispute in person or by telephone with the other
Relationship Manger within ten (10) business days of a dispute being referred to
him or her. The Relationship Managers shall meet as often as the Parties
reasonably deem necessary in order to gather and furnish to the other all
information with respect to the matter in issue which the Parties believe to be
appropriate and germane in connection with its resolution. The Relationship
Managers shall discuss the problem and negotiate in good faith in an effort to
resolve the dispute without the necessity of any formal proceeding. Should the
Relationship Managers fail to reach agreement within thirty (30) days of the
initiation of the dispute resolution process (or such longer period as such
representatives may agree in writing), then formal proceedings for the
resolution of a dispute may be commenced in accordance with Exhibit C. The
results of such arbitration proceedings shall be binding upon the parties, and
judgment may be entered upon the arbitration award in any court having
jurisdiction thereof.
10.4 Jurisdiction/Choice of Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Minnesota without
reference to the choice of law principles thereof. Notwithstanding the
provisions in Section 10.3, either party may seek injunctive relief from any
court of competent jurisdiction. Without limiting the rights of the parties to
pursue in any appropriate jurisdiction their respective rights with respect to
any judgment obtained in respect hereof, the parties hereby irrevocably consent
to the exclusive jurisdiction and venue of any United States court of competent
jurisdiction located in the State of Minnesota and/or the state courts located
in Anoka County therein to adjudicate any legal action seeking injunction relief
commenced in respect of this Agreement and waive any objections either may have
at any time to
such jurisdiction and venue. The parties agree to the personal jurisdiction of
such courts and agree that service of process may be made pursuant to notice
sent in accordance with Section 10.6.
10.5 Consents; Waivers. Any approval, authorization, waiver or consent
required by this Agreement must be in writing, duly signed by an authorized
representative of the granting party. The withholding of an approval,
authorization, waiver or consent for regulatory, quality, or competitive reasons
shall not be deemed unreasonable. The failure of either party to enforce at any
time any of the provisions of this Agreement shall in no way be construed to be
a waiver of any such provision, nor in any way to affect the validity of this
Agreement or any part of it or the right of either party after any such failure
to enforce each and every such provision. No waiver of any breach of this
Agreement shall be held to be a waiver of any other or subsequent breach.
10.6 Notices. All notices or other communications to a party required or
permitted hereunder shall be in writing and shall be delivered personally or by
facsimile (receipt confirmed electronically) to such party or shall be sent by a
reputable express delivery service or by certified mail, postage prepaid with
return receipt requested, addressed as follows:
if to Medtronic, to;
Medtronic, Inc.
World Headquarters
Mail Stop LC400
710 Medtronic Parkway
Minneapolis, MN 55432-5604
Attention; General Counsel
Fax 763-572-5459
with a copy to;
Medtronic, Inc.
World Headquarters
Mail Stop LC400
710 Medtronic Parkway
Minneapolis, MN 55432-5604
Attention; President, Cardiac Rhythm Management
Fax 763-572-5400
if to WGT, to;
Wilson Greatbatch Technologies, Inc.
9645 Wehrle Drive
Clarence, New York 14031
Attention: President
FAX: 716.759.5672
with a copy to:
Hodgson Russ LLP
One M&T Plaza
Suite 2000
Buffalo, New York 14203
Attention: Robert B. Fleming, Jr.
FAX: 716.849.0349
Any party may change the above-specified recipient and/or mailing address by
notice to all other parties given in the manner herein prescribed. All notices
shall be deemed given on the day when actually delivered as provided above (if
delivered personally or by facsimile) or on the day shown on the return receipt
(if delivered by mail or delivery service).
10.7 Expenses. Except as expressly provided herein, WGT and Medtronic shall
each pay their own expenses incident to this Agreement and the preparation for,
and consummation of, the transactions provided for herein.
10.8 Titles and headings: Construction. The titles and headings to Sections
and Articles herein are inserted for the convenience of reference only and are
not intended to be a part of or to affect the meaning or interpretation of this
Agreement. This Agreement shall be construed without regard to any presumption
or other rule requiring construction hereof against the party causing this
Agreement to be drafted.
10.9 Severability. If any provision of this Agreement is held invalid by a
court of competent jurisdiction, the remaining provisions shall nonetheless be
enforceable according to their terms. Further, if any provision is held to be
overbroad as written, such provision shall be deemed amended to narrow its
application to the extent necessary to make the provision enforceable according
to applicable law and shall be enforced as amended.
10.10 No Joint Venture. Nothing contained in this Agreement will be deemed
to create a joint venture, partnership, agency or similar endeavor between the
parties hereto. Each party will act solely as an independent contractor and
neither party will have any power or authority to direct or indirectly bind or
act on behalf of the other.
10.11 Benefit. Nothing in this Agreement, expressed or implied, is intended
to confer on any person other than the parties to this Agreement or their
respective successors or permitted assigns, any rights, remedies, obligations or
liabilities under or by reason of this Agreement, except as set forth in Article
7.
10.12 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed as original and all of which
together shall constitute one instrument. For purposes hereof, a facsimile copy
of this Agreement, including the signature pages hereto, shall be deemed to be
an original. Notwithstanding the foregoing, the parties shall each deliver
original execution copies of this Agreement to one another as soon as
practicable following execution.
10.13 Execution of Further Documents. Each party agrees to execute and
deliver without further consideration any further applications, licenses,
assignments or other documents, and to
perform such other lawful acts as the other party may reasonably request to
fully secure and/or evidence the rights or interests herein.
10.14 Public Announcement. In the event either party proposes to issue any
press release or public announcement concerning any provisions of this Agreement
or the transactions contemplated hereby, such party shall so advise the other
party hereto, and the parties shall thereafter use their reasonable best efforts
to cause a mutually agreeable release or announcement to be issued. Neither
party will publicly disclose or divulge any provisions of this Agreement or the
transactions contemplated hereby without the other parties' written consent,
except as may be required by applicable law (including applicable SEC rules and
regulations) or stock exchange regulation; provided that, prior to disclosure of
any provision of this Agreement to any governmental agency or stock exchange,
the parties shall cooperate to seek confidential treatment or other applicable
limitations on the public availability of any information that either of the
parties considers sensitive or confidential.
10.15 Compliance with Laws. The parties, and any permitted sublicensees of
the parties, will comply with all applicable international, national, state,
regional and local laws and regulations, including all applicable import and
export control laws, in exercising their rights or performing their duties under
this Agreement.
10.16 Rights in Bankruptcy. All rights and licenses granted under or
pursuant to this Agreement by WGT to Medtronic are and shall be deemed to be
licenses to rights in "intellectual property" for purposes of Sections 365(n)
(or its successor) of the United States Bankruptcy Code. The parties agree that,
in the event of the commencement of bankruptcy proceedings by or against WGT,
Medtronic shall be entitled, at its option, to retain all of its rights under
this agreement pursuant to Section 365 of the United States Bankruptcy Code.
[BALANCE OF PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, each of the parties has caused this License Agreement
to be executed in the manner appropriate to each.
WILSON GREATBATCH TECHNOLOGIES, INC.
By: /s/ Edward F. Voboril
----------------------------------
Edward Voboril
Chief Executive Officer
MEDTRONIC, INC.
By:
---------------------------------
Its:
---------------------------------
EXHIBIT A
- -------------------------------------------------------------------------------------------------------------------------
NAME COUNTRY NUMBER FILED ISSUED
- -------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------
1. Europe 99307733.8 9/30/99
Japan 11-281039 10/1/99
U.S. 6,231,993 9/29/99 5/15/2001
- -------------------------------------------------------------------------------------------------------------------------
2. Canada 2,383,084 4/23/02
Europe 02252782.4 4/19/02
Japan 2002-130312 5/2/02
U.S. 09/859,355 5/17/01
- -------------------------------------------------------------------------------------------------------------------------
3. Europe 00300977.6 2/8/00
Japan 2000-03034 2/8/00
- -------------------------------------------------------------------------------------------------------------------------
4. Europe 99306855.0 8/27/99
Japan 11-283335 8/27/99
U.S. 6,219,222 8/27/99 4/17/2001
- -------------------------------------------------------------------------------------------------------------------------
5. U.S. 10/354,324 1/30/03
Canada 2,418,225 1/31/03
Europe 03250603.2 1/31/03
Japan 2003- 1/31/03
062,496
- -------------------------------------------------------------------------------------------------------------------------
6. Europe 98303435.6 5/1/98
Japan 136,131 4/28/98
U.S. 5,926,362 5/1/97 7/20/1999
U.S. 6,334,879 3/18/99 7/1/2002
- -------------------------------------------------------------------------------------------------------------------------
7. U.S. 08/847,946 5/1/97
- -------------------------------------------------------------------------------------------------------------------------
8. Europe 99308131.4 10/15/99
Japan 11-293486 10/15/99
U.S. 6,096,391 10/16/98 8/1/2000
U.S. 09/628,174 7/28/00
- -------------------------------------------------------------------------------------------------------------------------
9. U.S. 10/294,146 11/14/02
Canada 2,411,765 11/14/02
Europe 02257865.2 11/14/02
Japan 2002-369007 11/14/02
- -------------------------------------------------------------------------------------------------------------------------
10. Europe 98303434.9 5/1/98
Japan 129,513 4/22/98
U.S. 5,920,455 5/1/97 7/6/1999
U.S. 6,224,985 5/4/99 7/7/1999
U.S. 6,468,605 3/14/01 7/8/1999
U.S. 10/277,533 10/22/02
- -------------------------------------------------------------------------------------------------------------------------
11. Canada 2,411,339 11/7/02
[Europe] [02257728.2] [11/7/02] Abandoned
Japan 2002-361475 11/7/02
[U.S.] 10,289,191 [11/6/02] Abandoned
- -------------------------------------------------------------------------------------------------------------------------
12. Japan 2000-030301 2/8/00
U.S. 6,332,900 2/7/00 7/18/1999
U.S. 10/012,987 12/10/01
U.S. 10/016,210 12/12/01
- -------------------------------------------------------------------------------------------------------------------------
13. Europe 98309396.4 11/17/98
Japan 31420 2/9/99
U.S. 09/621236 7/26/00 9/24/2002
- -------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------
NAME COUNTRY NUMBER FILED ISSUED
- -------------------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------------------
14. Europe 98303434.9 9/24/2002
Japan 131,131 4/28/98
U.S. 5,894,403 5/1/97
U.S. 09/872,110 6/1/01
U.S. 10/290,598 11/8/02
- -------------------------------------------------------------------------------------------------------------------------
15. U.S. 60,433,540 12/13/2002
- -------------------------------------------------------------------------------------------------------------------------
16. U.S. 60,443,684 12/16/2002
- -------------------------------------------------------------------------------------------------------------------------
17. U.S. 60,433,680 12/16/2002
- -------------------------------------------------------------------------------------------------------------------------
18. U.S. 60,433,681 12/16/2002
- -------------------------------------------------------------------------------------------------------------------------
19. U.S. 60,434,583 12/18/2002
- -------------------------------------------------------------------------------------------------------------------------
20. U.S. 60,434,797 12/18/2002
- -------------------------------------------------------------------------------------------------------------------------
21. U.S. 60,443,610 1/30/2003
- -------------------------------------------------------------------------------------------------------------------------
22. U.S. 60,447,604 2/13/2003
- -------------------------------------------------------------------------------------------------------------------------
23. U.S. 6,455,108 7/26/2000 9/24/2002
- -------------------------------------------------------------------------------------------------------------------------
EXHIBIT B
LICENSED KNOW-HOW
1. Bill(s) of Materials
2. Component Procurement Specifications
3. Material Specifications
4. Manufacturing Process Specifications
5. Qualification Protocols
6. Production Equipment Specifications
7. Reliability and Life Testing Protocols
8. Documents (Research, Development, Qualification)
EXHIBIT C
ALTERNATIVE DISPUTE RESOLUTION
1.0 Arbitration. In the event the Relationship Managers are unable to
resolve a dispute as set forth in Section 10.3, the Parties agree that any and
all disputes, claims or controversies arising out of or relating to this License
Agreement shall be resolved by binding arbitration conducted as follows:
1.1 Notice. Notice of demand for binding arbitration shall be delivered to
the other Party in accordance with the provisions of the License Agreement. In
no event may a notice of demand of any kind be filed more than one (I) year
after the date the claim, dispute, controversy, or other matter in question
arose, and if such demand is not timely filed, the claim, dispute, controversy,
or other matter in question referenced in the demand shall be deemed released,
waived, barred, and unenforceable for all time, and barred as if by statute of
limitations.
1.2 Binding Arbitration. Upon filing of a notice of demand for binding
arbitration by either party, arbitration shall be commenced and conducted as
follows:
a. Arbitrator. All claims, disputes, controversies, and other matters
(collectively "matters") in question shall be referred to and decided
and settled by an arbitrator selected with assistance from the CPR
Institute for Dispute Resolution (CPR). Selection of an arbitrator
shall be made within 60 days after the date of the first notice of
demand given pursuant to Section 1.1 and within 60 days after any
resignation, disability or other removal of such arbitrator.
b. Costs of Arbitration. The cost of arbitration proceedings,
including without limitation the arbitrator's compensation and
expenses, hearing room charges, court reporter transcript charges,
etc., shall be borne by the Parties equally or otherwise as the
arbitrator may determine. The arbitrator may award the party that
prevails substantially in its pre-hearing position part or all of its
reasonable attorneys' fees and costs incurred in connection with the
arbitration. The arbitrator is specifically instructed to award
attorneys' fees for instances of abuse of the discovery process.
c. Location of Proceedings. All arbitration proceedings shall be held
in Minneapolis, Minnesota, if the proceeding is initiated by WGT, or
in Buffalo, New York, if the proceeding is initiated by Medtronic, at
a location selected by the initiating Party in the applicable city.
d. Pre-hearing Discovery. The Parties shall have the right to conduct
and enforce pre-hearing discovery in accordance with the then current
Federal Rules of Civil Procedure subject to these limitations:
(1) Each party may serve no more than one set of interrogatories;
(2) Each party may depose the other party's expert witnesses who
will be called to testify at the hearing, plus three (3) fact
witnesses without regard to whether they will be called to
testify (each party will be entitled to a total of not more than
24 hours of depositions of the other party's witnesses); and
(3) Document discovery and other discovery shall: (i) be limited
to matters that are directly relevant and material to the
matters, and (ii) be under the control of and enforceable by the
arbitrator.
(4) Discovery disputes shall be decided by the arbitrator. The
arbitrator is empowered:
(i) To issue subpoenas to compel pre-hearing document or
deposition discovery;
(ii) To enforce the discovery rights and obligations of the
Parties;
(iii) To truncate discovery proceedings;
(iv) To further limit the number of witnesses involved in
the proceeding;
(v) Otherwise to control the scheduling and conduct of the
proceedings.
e. Conduct of Arbitration.
(1) Pre-hearing Conference. Within thirty (30) days after
appointment, the arbitrator shall hold a pre-hearing conference
to establish schedules for completion of discovery, for exchange
of exhibit and witness lists, for arbitration briefs, for the
hearing, and to decide procedural matters and all other questions
that may be presented.
(2) Hearing Procedures. The hearing shall be conducted to
preserve its privacy and to allow reasonable procedural due
process. Rules of evidence need not be strictly followed, and the
hearing shall be streamlined;
(i) Documents shall be self-authenticating, subject to valid
objection by the opposing party;
(ii) Expert reports, witness biographies, depositions, and
affidavits may be utilized, subject to the opponent's right
of a live cross-examination of the witness in person;
(iii) Charts, graphs, and summaries shall be utilized to
present voluminous data, provided (i) that the underlying
data was made available to the opposing party thirty (30)
days prior to the hearing, and (ii) that the preparer of
each chart, graph, or summary is available for explanation
and live cross-examination in person.
(iv) The hearing should be held on consecutive business days
without interruption to the maximum extent practicable.
(v) The arbitrator shall establish all other procedural
rules for the conduct of the arbitration in accordance with
the rules of arbitration of the Center for Public Resources.
f. Governing Law. This arbitration provision shall be governed by, and
all rights and obligations specifically enforceable under and pursuant
to, the Federal Arbitration Act (9 U.S.C. ss. 1, et seq.).
g. Consolidation. No arbitration shall include, by consolidation,
joinder, or in any other manner, any additional person not a party to
this License Agreement (other than Affiliates of any such party, which
Affiliates may be included in the arbitration), except by written
consent of both Parties containing a specific reference to this
License Agreement.
h. Award. The arbitrator is empowered to render an award of general
compensatory damages, but is not empowered to award equitable relief
(including, without limitation, injunctive relief), exemplary or
punitive damages, or any additional damage award in any patent dispute
for willful infringement, and each party agrees that it shall not seek
such an award from the arbitrator. The award rendered by the
arbitrator (1) shall be final; (2) shall not constitute a basis for
collateral estoppel as to any issue; and (3) shall not be subject to
vacation or modification.
i. Confidentiality. The Parties hereto will maintain the substance of
any proceedings hereunder in confidence and the arbitrator, prior to
any proceedings hereunder, will sign an agreement whereby the
arbitrator agrees to keep the substance of any proceedings hereunder
in confidence.
j. Time Frame. To the fullest extent practicable pre-hearing
discovery, pre-hearing conferences and hearing procedures shall be
expedited and the Parties shall use their best reasonable efforts to
conclude such alternate dispute resolution proceeding within ninety
(90) days to the event feasible and practicable under the
circumstances.