Intuitive Surgical Inc. 8-K 9-7-2005
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
DC 20549
______________
FORM
8-K
______________
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of the
Securities
Exchange Act of 1934
Date
of Report: September 7, 2005
(Date
of Earliest Event Reported)
______________
INTUITIVE
SURGICAL, INC.
(Exact
Name of Registrant as Specified in Its Charter)
______________
Delaware
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Commission
File:
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77-0416458
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(State
or Other Jurisdiction
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000-30713
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(I.R.S.
Employer
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of
Incorporation or Organization)
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Identification
No.)
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950
Kifer Road
Sunnyvale,
California 94086
(Address
of Principal Executive Offices)
(408)
523-2100
(Registrant’s
Telephone Number, Including Area Code)
N/A
(Former
Name or Former Address, if Changed Since Last Report)
Check
the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions:
|
¨
|
Written
communications pursuant to Rule 425 under the Securities Act (17
CFR
230.425)
|
|
¨
|
Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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¨
|
Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17
CFR
240.14d-2(b))
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¨
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17
CFR
240.13e-4(c))
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ITEM
1.01.
|
Entry
into a Material Definitive
Agreement.
|
On
September 1, 2005, Intuitive Surgical, Inc. (the “Company”) entered into a Cross
License Agreement, dated as of September 1, 2005 (the “Agreement”), by and
between the Company and Hansen Medical, Inc. (“Hansen”). Set forth below is a
brief description of the terms and conditions of the Agreement, which summary
is
qualified in its entirety by reference to the full text of the underlying
Agreement which has been filed as an exhibit hereto.
Pursuant
to the Agreement, the Company granted to Hansen a co-exclusive, worldwide,
non-assignable, royalty-bearing license to the Company’s patents and patent
applications that have a filing date on or prior to the date of the Agreement
in
the field of intravascular approaches for the diagnosis and treatment of
cardiovascular, neurovascular and peripheral vascular diseases. Hansen granted
to the Company a co-exclusive, worldwide, fully paid, non-assignable and
royalty-free license to Hansen’s patents and patent applications that have a
filing date on or prior to the date of the Agreement in the fields of
endoscopic, laparoscopic, thoracoscopic or open diagnosis and/or surgical
procedures, including endoluminal applications in gastrointenstinal,
respiratory, ENT, urologic and gynecologic surgery. Hansen is required to pay
royalties on future Hansen product sales and issue shares of Hansen’s Series B
Preferred Stock to the Company. Each party retains full rights to practice
its
own technology for all purposes.
ITEM
9.01
|
Financial
Statements and Exhibits.
|
|
10.1(*)
|
Cross
License Agreement, dated as of September 1, 2005, by and between
Intuitive
Surgical, Inc. and Hansen Medical,
Inc.
|
(*) Confidential
treatment has been requested with respect to certain portions of this Exhibit.
The omitted portions have been separately filed with the SEC.
SIGNATURE
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant
has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
Dated:
September 7, 2005
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INTUITIVE
SURGICAL, INC.
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By: |
/s/
Lonnie M. Smith
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Name:
Lonnie M. Smith
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Title:
President and Chief Executive Officer
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EXHIBIT
INDEX
|
10.1(*)
|
Cross
License Agreement, dated as of September 1, 2005, by and between
Intuitive
Surgical, Inc. and Hansen Medical,
Inc.
|
(*)
Confidential
treatment has
been requested with respect to certain portions of this Exhibit. The omitted
portions have been separately filed with the SEC.
Exhibit 10.1
CONFIDENTIAL
CERTAIN
INFORMATION HAS BEEN REDACTED
CONFIDENTIAL
TREATMENT REQUESTED
Exhibit
10.1
CROSS
LICENSE AGREEMENT
This
CROSS LICENSE AGREEMENT (“Cross License”), dated as of September 1, 2005
(“Effective Date”), is made by and between Intuitive Surgical, Inc., a Delaware
corporation having its principal place of business at 950 Kifer Road, Sunnyvale,
California 94086, (“ISI”), and Hansen Medical, Inc., a Delaware corporation
having its principal place of business at 380 North Bernardo Avenue, Mountain
View, California 94043 (“Hansen”). Hansen and ISI may be referred to herein
individually as a “Party”, and collectively as the “Parties”.
R
E C I T A L S
WHEREAS,
ISI and Hansen each owns or controls rights under various patents, utility
models and applications therefor in various countries of the world with respect
to the medical devices industry; and
WHEREAS,
each Party desires to acquire licenses under such patents, utility models and
applications therefor of the other Party and to grant licenses under such
patents and utility models and applications therefor to the other Party, all
for
specific purposes and as provided in and subject to the terms of this Cross
License.
NOW,
THEREFORE, in consideration of the mutual covenants and premises contained
herein, the Parties agree as follows:
As
used
in this Cross License, the following capitalized terms shall have the following
meanings:
1.1 “Acquisition”
means
(A) any consolidation or merger of a Party with or into any other corporation
or
other entity or person, or any other corporate reorganization, other than any
such consolidation, merger or reorganization in which the stockholders of a
Party immediately prior to such consolidation, merger or reorganization,
continue to hold at least a majority of the voting power of the surviving entity
in substantially the same proportions (or, if the surviving entity is a wholly
owned subsidiary, its parent) immediately after such consolidation, merger
or
reorganization; or (B) any transaction or series of related transactions to
which a Party is a party in which in excess of fifty percent (50%) of such
Party’s voting power is transferred; provided that an Acquisition shall not
include any transaction or series of transactions principally for bona fide
equity financing purposes in which cash is received by such Party or any
successor or indebtedness of such Party is cancelled or converted or a
combination thereof.
[*]
Confidential information in this Exhibit has been omitted and filed separately
with the Commission. Confidential treatment has been requested with respect
to
the omitted portions.
CONFIDENTIAL
CERTAIN
INFORMATION HAS BEEN REDACTED
CONFIDENTIAL
TREATMENT REQUESTED
1.2 “Affiliate”
means,
with respect to a Party, any entity that controls, is under common control
with,
or is controlled by, such Party. For the purposes of this definition, the term
“control” (with correlative meanings for the terms “controlled by” and “under
common control with”) means that the applicable entity: (a) has beneficial
ownership of greater than fifty percent (50%) of the voting securities of the
subject corporation or other business organization with voting securities,
(b)
has greater than a fifty percent (50%) interest in the net assets or profits
of
the subject partnership or other business organization without voting
securities, or (c) has the actual ability (through contract or otherwise) to
direct and control the management and general business activities of the subject
corporation, partnership or other business organization.
1.3 “Applicable
Law”
means,
as to any Person, any statute, law, rule, regulation, directive, treaty,
judgment, order, decree or injunction of any Governmental Authority that is
applicable to or binding upon such Person or any of its properties.
1.4 “Asset
Transfer”
shall
mean a sale, lease, exclusive license or other disposition of all or
substantially all of the assets of a Party.
1.5 “CIP”
means
a
continuation-in-part patent application as defined in Section 201.08 of the
Manual of Patent Examining Procedures.
1.6 “Co-exclusive”
means,
with respect to the grant of license rights in a specified field of use and
under identified intellectual property owned or controlled by the licensor,
(a)
that such license is the sole license under such intellectual property in such
field of use, (b) that the licensor covenants that it and its Affiliates shall
not grant to any other entity or party, any license or similar rights in such
field of use under such licensor intellectual property (or any part thereof),
including any license under such intellectual property to make, have made,
use,
offer for sale, sell, distribute and import products within the specified field
of use (but provided that the foregoing shall not prevent licensor from granting
(or impliedly granting) such rights solely to customers of licensor products
that are covered by the applicable patent rights and solely to the extent
required for such customers to use, re-sell, export and/or import such
products), and (c) that the licensor retains the rights to use and practice
such
intellectual property in such field of use for its own account (i.e., despite
the grant to the licensee, the licensor is not prevented from making, having
made, using, marketing, offering for sale, selling, importing, distributing
(directly or indirectly) or otherwise exploiting its products or services in
the
specified field of use under such intellectual property.)
[*]
Confidential information in this Exhibit has been omitted and filed separately
with the Commission. Confidential treatment has been requested with respect
to
the omitted portions.
CONFIDENTIAL
CERTAIN
INFORMATION HAS BEEN REDACTED
CONFIDENTIAL
TREATMENT REQUESTED
1.7 “Effective
Date”
shall
have the meaning set forth in the Preamble of this Cross License.
1.8 “Governmental
Authority”
means
any domestic or foreign government, governmental authority, court, tribunal,
agency or other regulatory, administrative or judicial agency, commission or
organization, and any subdivision, branch or department of any of the
foregoing.
1.9 “Hansen
Disposable”
has
the
meaning set forth in Section 3.3(b).
1.10 “Hansen
Field of Use”
means
the research, development, manufacture, use, sale, promotion, distribution
and
importation of medical devices and systems for intravascular approaches for
the
diagnosis and/or treatment of cardiovascular, neurovascular and peripheral
vascular diseases.
1.11 “Hansen
Know-How”
means
the information disclosed to ISI by Hansen prior to the Effective Date, but
excluding all information disclosed in the Hansen Patents.
1.12 “Hansen
Investors Rights Agreement”
shall
have the meaning set forth in Section 3.2
1.13 “Hansen
Patent”
means:
(a) any patent or patent application that has a filing date on or prior to
the
Effective Date and that is either (i) owned by Hansen or an Affiliate of
Hansen, or (ii) licensed to Hansen or an Affiliate of Hansen, with the
right to grant sublicenses under such patents and patent applications; (b)
any
divisional, continuation, or continuation-in-part (but
only to
the
extent of claims in such CIP that are based on and enabled by the subject matter
disclosed in a patent or patent application meeting the criteria of subclause
(a) above) application that is based upon the patents or patent applications
in
subclause (a) above, and all foreign patent applications claiming priority
from
any of the foregoing patents and patent applications; and (c) any patent issuing
on any of the foregoing applications, and including any reissue, re-examination,
renewal, extension, or supplementary protection certificate (or the like) of
any
such patent. Notwithstanding the foregoing, if a patent or patent application
that would otherwise qualify as a Hansen Patent under this Section 1.13 is
subject to an agreement between Hansen (or a Hansen Affiliate) and a third
party
requiring Hansen (or a Hansen Affiliate) to pay a royalty, net sales payment,
or
other consideration to such third party as a result of the practice of the
licensed rights, then such patent or patent application shall be included in
the
Hansen Patents only if ISI agrees to bear the cost of such royalty, net sales
payment, or other consideration that Hansen (or a Hansen Affiliate) is obligated
to pay under such agreement based on ISI’s use or practice of such patent
rights. For
clarity, the term “Hansen Patent” shall not include any patent or application
(x) that is owned or controlled by an entity that is not an Affiliate of Hansen
as of the Effective Date and that subsequently becomes an Affiliate of Hansen;
or (y) rights to which Hansen
acquires from a third party after the Effective Date, whether by merger,
acquisition, asset purchase, license or otherwise.
[*]
Confidential information in this Exhibit has been omitted and filed separately
with the Commission. Confidential treatment has been requested with respect
to
the omitted portions.
CONFIDENTIAL
CERTAIN
INFORMATION HAS BEEN REDACTED
CONFIDENTIAL
TREATMENT REQUESTED
1.14 “Hansen
Royalty Product”
means
either a Hansen System Product or a Hansen Disposable.
1.15 “Hansen
System Product”
has
the
meaning set forth in Section 3.3(a).
1.16 “Hansen
Trade Secret”
means
any particular, identifiable Hansen
Know-How
that is and remains, at the applicable time, an actual trade secret of
Hansen,
but
excluding any
Hansen Know-How that is retained in the unaided memory of an ISI employee.
1.17 “Insolvent
Party”
has
the
meaning set forth in Section 5.3
1.18 “ISI
Field of Use”
means
(a) the research, development, manufacture, use, sale, promotion,
distribution and importation of medical devices and systems for use in
endoscopic, laparoscopic, thoracoscopic or open diagnosis and/or surgical
procedures, including, without limitation, urologic surgery, ENT surgery,
gynecologic surgery, general surgery, thoracic and cardiovascular surgery;
and
(b) the research, development, manufacture, use, sale, promotion,
distribution and importation of medical devices and systems for
gastrointestinal, respiratory, ENT, urologic and gynecologic endoluminal
diagnosis and/or surgery. For clarity, the research, development, manufacture,
use, sale, promotion, distribution and importation of medical devices and
systems for intravascular approaches for the diagnosis and/or treatment of
cardiovascular, neurovascular and peripheral vascular diseases are expressly
excluded from the “ISI Field of Use”.
1.19 “ISI
Know-How”
means
the information disclosed to Hansen by ISI prior to the Effective Date
(including without limitation information retained in the unaided memory of
[*],
obtained during their prior employment by ISI), but excluding all information
disclosed in the ISI Patents.
1.20 “ISI
Licensed Product”
means
a
product or service manufactured or sold by ISI that embodies, falls within
the
scope of, or is made using a method described in, any Valid Claim of a Hansen
Patent.
1.21 “ISI
Patent”
means:
(a) any patent or patent application that has a filing date on or prior to
the
Effective Date, is either (i) owned by ISI or an Affiliate of ISI, or
(ii) licensed to ISI or an Affiliate of ISI, with the right to grant
sublicenses under such patents and patent applications; (b) any divisional,
continuation, or continuation-in-part (but
only to
the
extent of claims in such CIP that are based on and enabled by the subject matter
disclosed in a patent or patent application meeting the criteria of subclause
(a) above) application that is based upon the patents or patent applications
in
subclause (a) above, and all foreign patent applications claiming priority
from
any of the foregoing patents and patent applications; and (c) any patent issuing
on any of the foregoing applications, and including any reissue, re-examination,
renewal, extension, or supplementary protection certificate (or the like) of
any
such patent. Notwithstanding the foregoing, if a patent or patent application
that would otherwise qualify as an ISI Patent under this Section 1.18 is
subject to an agreement between ISI (or an ISI Affiliate) and a third party
requiring ISI (or an ISI Affiliate) to pay a royalty, net sales payment, or
other consideration to such third party as a result of the practice of the
licensed rights, then such patent or patent application shall be included in
the
ISI Patents only if Hansen agrees to bear the cost of such royalty, net sales
payment, or other consideration that ISI (or an ISI Affiliate) is obligated
to
pay under such agreement based on Hansen’s use or practice of such patent
rights. For clarity, the term “ISI Patent” shall not include any patent or
application (x) that is owned or controlled by an entity that is not an
Affiliate of ISI as of the Effective Date and that subsequently becomes an
Affiliate of ISI; or (y) rights to which ISI
acquires from a third party after the Effective Date, whether by merger,
acquisition, asset purchase, license or otherwise.
[*]
Confidential information in this Exhibit has been omitted and filed separately
with the Commission. Confidential treatment has been requested with respect
to
the omitted portions.
CONFIDENTIAL
CERTAIN
INFORMATION HAS BEEN REDACTED
CONFIDENTIAL
TREATMENT REQUESTED
1.22 “ISI
Trade Secret”
means
any particular, identifiable ISI Know-How that is and remains, at the applicable
time, an actual trade secret of ISI, but
excluding any
ISI
Know-How that is retained in the unaided memory of a Hansen employee.
1.23 “Materials
Cost”
means
the sum of the following amounts paid by Hansen to a third party, all of which
shall be calculated in accordance with U.S. generally accepted accounting
principles consistently applied:
(a) raw
materials and packaging materials for producing the Hansen
Products,
(b) manufacturing,
packaging, and/or sterilizing Hansen Products or any component thereof,
and
(c) with
respect to the foregoing, all taxes (other than income taxes) and customs duty
charges imposed by governmental authorities with respect thereto, to the extent
paid by Supplier and not reimbursed or refunded by a third party.
1.24 “Net
Sales,”
with
respect to a Hansen Royalty Product, means the actual amounts invoiced by Hansen
or its distribution Affiliates to its respective customers or non-Affiliate
distributors (excluding internal sales or transfers to Hansen’s distribution
Affiliates that further distribute the product) on
the
sale or other commercial disposition of such Hansen Royalty Product (and
including any amounts of installation charges that are in excess of normal
and
customary installation charges for similar products), less the sum of the
following deductions: (a) discounts, returns, promotional allowances,
volume and incentive rebates, chargebacks, retroactive price reductions and
other similar adjustments or allowances actually given to such customers in
the
normal course of business; (b) sales or use taxes, excise taxes,
value-added taxes, and customs duties and other governmental charges included
in
the invoiced amount; and (c) normal and customary outbound transportation,
shipping, and insurance, prepaid or allowed, if separately itemized on the
invoice to the customer, all of the foregoing accounted for under U.S. Generally
Accepted Accounting Principles as included in Hansen’s audited financial
statement. Notwithstanding the foregoing, in the case of disposition of the
product to an Affiliate of Hansen (excluding internal sales or transfers to
Hansen’s distribution Affiliates that further distribute such product), Net
Sales will be the sales price of such product generally available to an
unaffiliated third party in an arms length transaction making similar quantity
commitments at similar times.
[*]
Confidential information in this Exhibit has been omitted and filed separately
with the Commission. Confidential treatment has been requested with respect
to
the omitted portions.
CONFIDENTIAL
CERTAIN
INFORMATION HAS BEEN REDACTED
CONFIDENTIAL
TREATMENT REQUESTED
1.25 “Person”
means
a
natural individual, Governmental Authority, partnership, firm, corporation
or
other entity.
1.26 “Valid
Claim”
means
a
claim of an issued or granted unexpired patent, which claim has not been
declared invalid or unenforceable by an un reversed decision or judgment of
a
court of competent jurisdiction or other appropriate governmental authority
from
which no further appeal can be taken, and which claim has not been admitted
to
be invalid through disclaimer, or found to be unenforceable or no longer
patentable through reissue, reexamination, interference, or
opposition.
1.27 “Year”
shall
mean each twelve (12) month period beginning on the Effective Date and
thereafter on the anniversary date thereof.
1.28 “Share
Transfer Agreement”
has
the
meaning set forth in Section 3.1.
1.29 “Term”
has
the
meaning set forth in Section 5.1.
2.1 Cross
Licenses.
(a) From
ISI
to Hansen. Subject to the terms and conditions of this Cross License, ISI hereby
grants to Hansen a Co-exclusive, worldwide, perpetual (except as provided in
Article 5 herein), royalty-bearing, and non-assignable (except as provided
in
Section 9.1 herein) license under the ISI Patents to use and practice all
inventions claimed therein solely in the Hansen Field of Use, including to
make,
have made, use, promote, offer for sale, import and sell Hansen Royalty Products
in the Hansen Field of Use. Hansen will have the right to sublicense such rights
solely in accordance with Section 2.4.
[*]
Confidential information in this Exhibit has been omitted and filed separately
with the Commission. Confidential treatment has been requested with respect
to
the omitted portions.
CONFIDENTIAL
CERTAIN
INFORMATION HAS BEEN REDACTED
CONFIDENTIAL
TREATMENT REQUESTED
(b) From
Hansen to ISI. Subject to the terms and conditions of this Cross License, Hansen
hereby grants to ISI a Co-exclusive, worldwide, perpetual (except as provided
in
Article 5 herein), fully paid and royalty-free (except as provided in Section
1.11 herein), and non-assignable (except as provided in Section 9.1 herein)
license under the Hansen Patents to use and practice all inventions claimed
therein solely in the ISI Field of Use, including to make, have made, use,
promote, offer for sale, import and sell ISI Licensed Products solely in the
ISI
Field of Use. ISI will have the right to sublicense such rights solely in
accordance with Section 2.4.
2.2 Know-How
License From ISI to Hansen.
Subject
to the terms and conditions of this Cross License, ISI hereby grants to Hansen
a
non-exclusive, worldwide, perpetual (except as provided in Article 5 herein),
fully-paid, royalty-free, and non-assignable (except as provided in Section
9.1
herein) license (a) to use and practice all the ISI Know-How (including ISI
Trade Secrets (if any)) solely in connection with the research, development,
manufacture, promotion, use, import and sale of Hansen products in the Hansen
Field of Use, and (b) to use and practice any ISI Know-How that are not ISI
Trade Secrets in connection with the research, development, manufacture,
promotion, use, import and sale of Hansen products outside the Hansen Field
of
Use. Hansen shall have the right to sublicense such rights solely to customers
of Hansen products solely in connection with the sale and use of such products,
and to collaborators of Hansen assisting in developing Hansen products in the
Hansen Field of Use provided such collaborators have a need to know such ISI
Know-How for the purposes of such collaboration and who execute a
confidentiality agreement with terms at least as protective as the terms of
Section 6.5.
2.3 Know-How
License From Hansen to ISI.
Subject
to the terms and conditions of this Cross License, Hansen hereby grants to
ISI a
non-exclusive, worldwide, perpetual (except as provided in Article 5 herein),
fully-paid, royalty-free, and non-assignable (except as provided in Section
9.1
herein) license (a) to use and practice all the Hansen Know-How (including
Hansen Trade Secrets (if any)) solely in connection with the research,
development, manufacture, promotion, use, import and sale of ISI products in
the
ISI Field of Use, and (b) to use and practice any Hansen Know-How that are
not
Hansen Trade Secrets in connection with the research, development, manufacture,
promotion, use, import and sale of ISI products outside the ISI Field of Use.
ISI shall have the right to sublicense such rights solely to customers of ISI
products solely in connection with the sale and use of such products, and to
collaborators of ISI assisting in developing ISI products in the ISI Field
of
Use provided such collaborators have a need to know such Hansen Know-How for
the
purposes of such collaboration and who execute a confidentiality agreement
with
terms at least as protective as the terms of Section 6.5.
2.4 Sublicensing.
Neither
Party may sublicense any of the rights and licenses granted to it under Section
2.1 to any third party without the prior written consent of the other party.
Either Party may request the other Party’s consent to grant it the right to
sublicense the rights and licenses granted in Section 2.1 to such Party’s
partners with whom such Party is involved in joint product development, and
the
Party receiving such request will reasonably consider it and will not
unreasonably withhold such consent. Notwithstanding any of the foregoing, ISI’s
consent shall not be required for Hansen to sublicense any of the rights and
licenses granted to it under Section 2.1 solely to customers of Hansen products
that are covered by the applicable patent rights and solely to the extent
required for such customers to use, re-sell, export and/or import such products,
and Hansen’s consent shall not be required for ISI to sublicense any of the
rights and licenses granted to it under Section 2.1 solely to customers of
ISI
products that are covered by the applicable patent rights and solely to the
extent required for such customers to use, re-sell, export and/or import such
products.
[*]
Confidential information in this Exhibit has been omitted and filed separately
with the Commission. Confidential treatment has been requested with respect
to
the omitted portions.
CONFIDENTIAL
CERTAIN
INFORMATION HAS BEEN REDACTED
CONFIDENTIAL
TREATMENT REQUESTED
2.5 Retained
Rights.
For
clarity, none of the licenses granted in Sections 2.1 through 2.4 shall restrict
(a) Hansen from itself using and practicing all inventions claimed in the Hansen
Patents in any field of use and (b) ISI from itself using and practicing all
inventions claimed in the ISI Patents in any field of use.
2.6 Disclosure
of Patent Files.
Each
Party shall, to the extent such disclosure has not already been made, provide
to
the other Party within [*] days after the Effective Date complete and accurate
copies of all unpublished patent applications as filed owned or licensed by
such
Party as of the Effective Date. Further, each Party shall respond accurately
to
reasonably requests by the other Party to provide updates as to the status
of
the prosecution of applications in the ISI Patents or Hansen Patents (as
applicable) and to provide copies of any newly filed applications in the ISI
Patents or Hansen Patents (as applicable).
2.7 Compliance
with Sublicense Obligations.
Hansen
covenants that it shall comply with any applicable terms of any license
agreement between ISI and a third party that grant to ISI license rights under
the third party’s patents, which patents are ISI Patents that sublicensed to
Hansen under the terms of this Cross License. ISI covenants that it shall comply
with any applicable terms of any license agreement between Hansen and a third
party that grant to Hansen license rights under the third party’s patents, which
patents are Hansen Patents that sublicensed to ISI under the terms of this
Cross
License.
3.1 Stock
Transfer.
In
consideration of the rights and licenses granted by ISI to Hansen under this
Cross License, Hansen will issue to ISI Five Hundred Thousand
(500,000) shares
of
Hansen’s Series B Preferred Stock pursuant to and in accordance with the terms
of the Share Transfer Agreement entered into by the Parties, the form of which
is set forth in Exhibit A.
[*]
Confidential information in this Exhibit has been omitted and filed separately
with the Commission. Confidential treatment has been requested with respect
to
the omitted portions.
CONFIDENTIAL
CERTAIN
INFORMATION HAS BEEN REDACTED
CONFIDENTIAL
TREATMENT REQUESTED
3.2 Investor
Rights.
ISI
shall within five (5) business days after the Effective Date, enter into an
Amended and Restated Investor Rights Agreement among Hansen, ISI and the other
preferred stockholders of Hansen (the “Hansen Investor Rights Agreement”) in
substantially the form attached as Exhibit B.
3.3 Royalty.
In
consideration of the rights and licenses granted by ISI to Hansen under Section
2.1(a) of this Cross License, Hansen shall pay ISI:
(a) Royalties
of [*] of the Net Sales of all Hansen hardware products (including proprietary
Hansen software components) comprising imaging, guidance or catheter control
systems for use in the Hansen Field of Use (collectively, “Hansen System
Products”) during the Term; and
(b) Royalties,
at a royalty rate of ranging from [*] to [*] on the Net Sales of all [*] used
in
the Hansen Field of Use [*], including, without limitation, [*]
(c) The
Parties hereby acknowledge and agree that the foregoing method of calculating
royalties due under this Cross License shall apply to all Hansen Royalty
Products as specified in this Section 3.3, without regard to whether such
any such Hansen Royalty Product embodies or practices any of the claims of
the
ISI Patents. The Parties further agree that this method of calculating royalties
is more convenient for the Parties than attempting to resolve the question
of
whether each particular Hansen Royalty Product sold does, or does not, embody
or
practice any claim of the ISI Patents.
3.4 Minimum
Royalties.
Hansen
will pay ISI yearly license minimum royalties as follows:
[*]
Confidential information in this Exhibit has been omitted and filed separately
with the Commission. Confidential treatment has been requested with respect
to
the omitted portions.
CONFIDENTIAL
CERTAIN
INFORMATION HAS BEEN REDACTED
CONFIDENTIAL
TREATMENT REQUESTED
The
minimum royalty payments are nonrefundable, but they are creditable against
royalty payments due pursuant to Section 3.3 until the entire credit is
exhausted. The [*] minimum royalties will be paid in equal [*]
installments.
|
4.
|
ACCOUNTING
AND REPORTS
|
4.1 Payments
and Royalty Reports.
Hansen
shall make royalty payments to ISI in accordance with Section 3 above on a
quarterly basis. Within [*] days after the end of each calendar quarter during
the Term, after commercial sales of Hansen Royalty Products has commenced,
Hansen shall deliver to ISI a written report setting forth the total number
of
units of the Hansen Royalty Products sold or otherwise commercially disposed
(or, if appropriate, indicating that no Hansen Royalty Product was sold during
such calendar quarter) and a calculation of the royalties owed to ISI hereunder
for the applicable quarterly period. If no royalties are due hereunder in any
calendar quarter, Hansen shall so indicate in its written report. Hansen shall
accompany such written report with an appropriate payment of royalty due for
such quarterly period.
4.2 Overdue
Payments.
If
payment of any amount due to ISI becomes overdue, ISI may, without prejudice
to
its other rights or remedies, charge interest on a day to day basis from the
due
date until the payment has been paid in full, at the rate of one percent (1.0%)
per month or, if less, such other rate as may be the maximum permitted by law.
Hansen shall not be entitled to withhold payment in whole or in part on the
grounds that it has a claim, counterclaim or set off against ISI.
4.3 Taxes.
Hansen
shall be permitted to deduct from payments made by Hansen to ISI under this
Cross License any foreign or domestic governmental taxes or charges of any
kind
that Hansen may be required by law to withhold from such payments. Hansen shall
use commercially reasonable efforts to minimize any such taxes or charges.
Hansen shall provide ISI with official receipts issued by the appropriate taxing
authority, or such other evidence as is reasonably requested by ISI to establish
that such taxes or charges have been paid. If, on the other hand, ISI has the
legal obligation to collect such taxes, then ISI alone shall be responsible
for
paying such amount.
4.4 Books
And Records; Audit.
Hansen
will keep complete and accurate books and records showing the information by
which Hansen arrived at a royalty determination and shall, during the Term
and
for a period of three (3) years after termination of this Cross License, permit
a mutually agreed auditor from a nationally recognized firm to inspect and
copy
said records as such auditor may deem necessary to complete the inspection
(but
not to exceed one (1) inspection per year and no more than one (1) inspection
of
records covering any particular time period) solely to verify the accuracy
of
Hansen’s royalty reports. Such inspection may be made by ISI hereunder at any
time and from time to time during regular business hours upon at least five
(5)
business days’ advance written notice. The fees and expenses of such inspection
shall be borne by ISI, except that, if an underpayment in royalties of more
than
five percent (5%) of the total royalties due to ISI hereunder for any payment
period is discovered, then such fees and expenses shall be borne by Hansen.
If
ISI agrees to pay a Hansen licensor royalty or other amounts for the sublicense
to ISI of Hansen Patents that are licensed to Hansen, then the above records
and
audit provisions will apply to ISI mutatis
mutandis as
to ISI
products covered by such Hansen Patents.
[*]
Confidential information in this Exhibit has been omitted and filed separately
with the Commission. Confidential treatment has been requested with respect
to
the omitted portions.
CONFIDENTIAL
CERTAIN
INFORMATION HAS BEEN REDACTED
CONFIDENTIAL
TREATMENT REQUESTED
5.1 Term.
This
Cross License shall commence on the Effective Date and shall continue in effect
until the expiration of the last to expire of the ISI Patents and the Hansen
Patents, (“Term”), unless earlier terminated in accordance with the following
provisions of this Section 5. Upon such expiration, the license rights granted
in Sections 2.3 and 2.4 shall survive.
5.2 Material
Breach.
(a) If
either
Party believes that the other Party is in material breach of this Agreement,
then such Party may deliver notice of such alleged breach to the other Party.
In
such written notice, the noticing Party shall identify the actions or conduct
that such Party would consider to be an acceptable cure of such breach. The
Party receiving such notice shall use diligent efforts to cure such breach
as
soon as practicable after receiving such written notice to cure such breach,
unless such Party believes that it is not in breach, in which case the Parties
shall meet promptly thereafter and discuss in good faith the issue and seek
to
reach a resolution mutually acceptable to both Parties. If the allegedly
breaching Party fails to cure such noticed breach, then, except as otherwise
provided in subsection (b) or in Section 5.3 below, the noticing Party shall
not
be permitted to terminate this Agreement (and each Party covenants and agrees
that the Party shall not seek, in any court or other proceeding, to terminate
the Agreement as a remedy except as permitted in subsection (b) or Section
5.3
below), but may seek and obtain all other remedies as are available to such
Party at law or in equity pursuant to Section 5.7 below, if such breach is
proved to have occurred and not have been cured.
(b) If
Hansen
breaches its obligation to pay royalties as required in Section 3.3, or to
pay
royalties to a licensor of ISI as contemplated in Section 1.18 for patent rights
sublicensed to ISI, then ISI may deliver notice of such breach to Hansen,
specifying the amount that is owed and the basis for ISI’s belief that such
amounts are owed and past-due. If ISI breaches its obligation to pay royalties
to a licensor of Hansen as contemplated in Section 1.13 for patent rights
sublicensed to ISI, then Hansen may deliver notice of such breach to ISI,
specifying the amount that is owed and the basis for Hansen’s belief that such
amounts are owed and past-due. If Hansen or ISI disputes that such amount is
actually owed, such dispute shall be resolved (a) by the auditor selected
pursuant to Section 4.4, if such dispute is solely as to the amount of royalties
owed, and not as to whether there is a royalty obligation for particular
products at issue, or (b) by litigation in court in accordance with Section
9.3.
The following sentence shall not apply unless and until such dispute is resolved
in the non-breaching Party’s favor, and the breaching Party does not pay the
amount determined to be owed within [*] days of such determination. If the
breaching Party’s failure to pay when due royalty amounts owed that are in
excess of [*], and such Party does not cure such failure to pay the owed
royalties by the date [*] days after such notice, then such breach will be
deemed to be a “Material Breach,” for which the non-breaching Party may
terminate this Agreement within 30 days by written notice to the Party in
breach, provided if such dispute is resolved in litigation in court, such
termination will be effective at such time no appeal is or can be taken from
the
court’s decision.
[*]
Confidential information in this Exhibit has been omitted and filed separately
with the Commission. Confidential treatment has been requested with respect
to
the omitted portions.
CONFIDENTIAL
CERTAIN
INFORMATION HAS BEEN REDACTED
CONFIDENTIAL
TREATMENT REQUESTED
5.3 Infringement
Outside Licensed Field; Termination for Willful Infringement.
(a) Each
Party acknowledges and agrees that the license rights granted under this
Agreement to it by the other Party are limited to the specific, identified
fields of use. Hansen covenants that it shall not knowingly practice any issued
ISI Patents outside of the Hansen Field of Use in a manner that infringes the
ISI Patents, and ISI covenants that it shall not knowingly practice any issued
Hansen Patents outside the ISI Field of Use in a manner that infringes the
Hansen Patents.
(b) If
ISI
believes that Hansen is violating its covenant in subsection (a) above and
is
infringing the ISI Patents by actions outside the Hansen Field of Use, ISI
may
give Hansen notice of such belief (the “Belief of Infringement”), which notice
shall include all details that are the basis for such belief and ISI’s proposal
to cure such violation, and the Parties shall then meet promptly thereafter
under Section 5.7(a) to discuss the noticed Belief of Infringement and ISI’s
proposed resolution and to seek to reach a resolution of such
Dispute.
If
Hansen does not cease the violation that is the basis for such Belief of
Infringement within [*] days of the date Hansen receives such notice, and if
the
Parties do not reach a mutually acceptable other resolution to such matter
within [*] days after the receipt of the notice, then either Party may have
the
matters relating to the Dispute and claim arising out of this Section 5.3(b)
settled by litigation in court in accordance with Section 9.3, to determine
if
Hansen in fact has infringed one or more valid and enforceable issued ISI
Patents outside the Hansen Field of Use. For the avoidance of doubt, Hansen
may
raise as affirmative defenses to any infringement action brought by ISI, or
as a
basis for declaratory relief action brought by Hansen, any and all defenses,
available at law or equity, that are available in patent actions. If
such
litigation results in a judgment of infringement from which no appeal can be
or
is taken, and Hansen,
despite such infringement judgment by the court, fails to cease conducting
the
actions that were determined by the court to be infringing the ISI Patents
by
the date [*] days after the date after which no appeal can be or is taken (the
“Determination Date”), then such failure shall be a “Material Breach,” for which
ISI may terminate this Agreement within 30 days by written notice to
Hansen.
[*]
Confidential information in this Exhibit has been omitted and filed separately
with the Commission. Confidential treatment has been requested with respect
to
the omitted portions.
CONFIDENTIAL
CERTAIN
INFORMATION HAS BEEN REDACTED
CONFIDENTIAL
TREATMENT REQUESTED
(c) If
Hansen
believes that ISI is violating its covenant in subsection (a) above and is
infringing the Hansen Patents by actions outside the ISI Field of Use, Hansen
may give ISI notice of such belief (the “Belief of Infringement”), which notice
shall include all details that are the basis for such belief and Hansen’s
proposal to cure such violation, and the Parties shall then meet promptly
thereafter under Section 5.7(a) to discuss the noticed Belief of Infringement
and Hansen’s proposed resolution and to seek to reach a resolution of such
Dispute. If ISI does not cease the violation that is the basis for such Belief
of Infringement within [*] days of the date ISI receives such notice, and if
the
Parties do not reach a mutually acceptable other resolution to such matter
within [*] days after the receipt of the notice, then either Party may have
the
matters relating to the Dispute and claim arising out of this Section 5.3(c)
settled by litigation in court in accordance with Section 9.3, to determine
if
ISI in fact has infringed one or more valid and enforceable issued Hansen
Patents outside the ISI Field of Use. For the avoidance of doubt, ISI may raise
as affirmative defenses to any infringement action brought by Hansen, or as
a
basis for declaratory relief action brought by ISI, any and all defenses,
available at law or equity, that are available in patent actions. If such
litigation results in a judgment of infringement from which no appeal can be
or
is taken, and ISI, despite such infringement judgment by the court, fails to
cease conducting the actions that were determined by the court to be infringing
the Hansen Patents by the date [*] days after the Determination Date (as to
such
judgment), then such failure shall be a “Material Breach,” for which Hansen may
terminate this Agreement within 30 days by written notice to ISI.
5.4 Termination
for Bankruptcy.
(a) Notice
of Bankruptcy Event.
If
either of the following events (a “Bankruptcy Event”) occurs with respect to a
Party (the “Bankrupt Party”), such Insolvent Party shall immediately notify the
other Party of the occurrence of such event:
(i)
Any
application, petition or action for relief is submitted by such Bankrupt Party
for commencement of proceedings under bankruptcy, corporate reorganization,
insolvency or moratorium law or any other law for the relief of, or relating
to,
debtors, now or hereafter in effect, or makes any assignment for the benefit
of
creditors covering all or substantially all of its assets; or
(ii)
An
involuntary petition is filed against such Bankrupt Party under any bankruptcy
statute now or hereafter in effect, or a custodian, receiver, trustee, assignee
for the benefit of creditors (or other similar official) is appointed to take
possession, custody or control of any property of such Insolvent
Party.
[*]
Confidential information in this Exhibit has been omitted and filed separately
with the Commission. Confidential treatment has been requested with respect
to
the omitted portions.
CONFIDENTIAL
CERTAIN
INFORMATION HAS BEEN REDACTED
CONFIDENTIAL
TREATMENT REQUESTED
(b) Right
to Terminate.
If the
Bankruptcy Event is not cured or otherwise terminated within 90 days following
occurrence the Bankruptcy Event, the Party that is not the Bankrupt Party shall
have the right to terminate this Cross License by giving notice in writing
to
the Bankrupt Party.
5.5 Effect
of Termination.
In the
event of termination of this Cross License by one Party (“Terminating Party”)
pursuant to Section 5.2 or 5.3 or 5.8 or paragraph 7 of Exhibit C, all
licenses and rights granted hereunder by the Terminating Party to the other
Party (“Terminated Party”), shall automatically terminate as of the date of such
termination of this Cross License (except as otherwise provided in Section
5.8),
but the licenses and rights granted hereunder by the Terminated Party to the
Terminating Party shall survive such termination, subject to the terms and
conditions of this Cross License. In the event of termination of this Cross
License by one Party pursuant to Section 5.4, all licenses and rights
granted hereunder by the each Party to the other Party shall automatically
terminate as of the date of such termination of this Cross License. Termination
or expiration of the Cross License shall not relieve any Party of any obligation
or liability accrued under this Cross License prior to termination or
expiration.
5.6 Survival.
Upon
the expiration or any termination of this Cross License, the provisions of
Sections 1, 2.2, 2.3, 4, 5.5, 5.6, 6.4, 6.5, 7.1, 7.2, 8 and 9 all shall survive
such expiration or termination.
5.7 Dispute
Resolution.
(a) If
any
dispute or issue arises between the Parties (a “Dispute”), including any alleged
breach of the terms or obligations of a Party (such as an allegation of breach
of the covenants under Section 5.3(a)), or the extent of a Party’s rights under
the terms hereof, then the Parties shall resolve such Dispute pursuant to the
terms of this Section 5.7. As to any such Dispute, either Party may give notice
to the other Party to seek to resolve such Dispute. Within ten days of giving
of
any such notice, the CEOs of the Parties shall meet to discuss the Dispute
and
seek to reach a mutually agreeable resolution to the Dispute, which resolution
shall be set forth in writing signed by the Parties. If the CEOs of the Parties
cannot reach agreement on a resolution to the Dispute that is subject of a
notice provided under this Section 5.7(a), within [*] days of commencing
discussions to resolve the matter, then either Party may have such Dispute
resolved by litigation in a court of applicable jurisdiction (subject to Section
9.3) except as provided in Section 5.7(b), and provided further that the
remedies available to the Parties in such litigation are expressly limited
by
the applicable terms of this Agreement (including Section 5.2(a)).
[*]
Confidential information in this Exhibit has been omitted and filed separately
with the Commission. Confidential treatment has been requested with respect
to
the omitted portions.
CONFIDENTIAL
CERTAIN
INFORMATION HAS BEEN REDACTED
CONFIDENTIAL
TREATMENT REQUESTED
(b) A
Party
shall have the rights to initiate, on written notice to the other Party, the
procedure set forth in Exhibit C at any time, for the Parties to discuss a
particular new product being developed by such Party that is intended to be
commercialized outside such Party’s licensed field (i.e.,
outside
the Hansen Field of Use as to a Hansen new product, or outside the ISI Field
of
Use as to an ISI new product) to determine if such new product would, if sold
in
such intended use, infringe any valid and enforceable issued patent in the
other
Party’s patent portfolio. Upon such notice, the parties shall proceed under the
terms of Exhibit C. For any dispute under Exhibit C that is to be resolved
by
arbitration, such dispute shall be heard and a resolution determined by an
arbitration conducted in San Francisco, California under the American
Arbitration Association Commercial Arbitration Rules and Supplementary
Procedures for Large Complex Disputes (together the “AAA Rules”) by three
arbitrators who are neutral and independent of the Parties and who have
expertise in the medical device field and in patents relating to medical
devices. Each Party shall select an arbitrator, and the selected arbitrators
will select a third arbitrator, provided
that each
such
selected arbitrator must meet the foregoing criteria to be empowered to serve
in
the arbitration. If the arbitrators selected by the Parties cannot agree on
a
third arbitrator within thirty (30) days, the third arbitrator will be selected
by the AAA. The arbitration shall be conducted in accordance with the AAA Rules,
as such rules and procedures are supplemented or modified by the terms of this
Section 5.7 and/or by written agreement of the Parties. The Parties shall have
such discovery rights as is reasonable in the case and as the arbitrators may
allow, consistent with the goal of providing for a full and fair hearing of
the
Dispute and an equitable resolution of the Dispute, but in no event broader
than
that discovery permitted under the Federal Rules of Civil Procedure. In
conducting the arbitration, the arbitrators shall apply the California Rules
of
Evidence and shall allow raising of all affirmative defenses to an infringement
action, available at law or in equity, in their analysis of whether a valid
and
enforceable issued patent is infringed. The arbitrators will hear each Party’s
case and positions as to the Dispute. In any event, such remedies cannot be
contrary to the terms of Exhibit C, and the arbitrators cannot award any Party
any punitive, special, indirect or consequential damages. The Parties will
keep
the arbitration and the results of the arbitration confidential.
(c) Notwithstanding
any other provision of this Section 5.7, each Party shall be entitled to seek
a
preliminary injunction or other temporary equitable remedy in court to protect
such Party from immediate, imminent harm by breach of this Agreement by the
other Party. Each Party acknowledges and agrees that the other Party hereto
would be irreparably damaged in the event of a continuing breach of Section
5.3(a).
5.8 Termination
by Hansen.
Twelve
and one-half (12.5) years after the Effective Date, Hansen shall have the right
to terminate the Cross License and all its obligations under Section 3.3 by
written notice to ISI. Upon such termination, all licenses granted by ISI to
Hansen shall terminate, except that the license granted under Section 2.2 shall
survive such termination indefinitely solely as to ISI Know-How that are not
ISI
Trade Secrets, and all licenses granted by Hansen to ISI under Section 2.1(b)
and 2.3 shall survive such termination, subject to all other applicable terms
of
the Cross License.
[*]
Confidential information in this Exhibit has been omitted and filed separately
with the Commission. Confidential treatment has been requested with respect
to
the omitted portions.
CONFIDENTIAL
CERTAIN
INFORMATION HAS BEEN REDACTED
CONFIDENTIAL
TREATMENT REQUESTED
6.1 No
Solicitation.
Each
Party agrees that it will not, directly or indirectly, solicit, recruit, retain,
hire or employ any person that such Party knows, or has reason to know, is
employed by the other Party. Notwithstanding the foregoing, nothing herein
shall
be construed to prohibit either Party from placing advertisements for employment
that are directed at the public at large in any newspaper, trade magazine,
journals or other periodical in general circulation.
6.2 Third
Party Infringement.
(a) ISI
Patents.
If a
Party becomes aware that any ISI Patent is infringed by a third party in the
Hansen Field of Use (a “Hansen Field Infringement”), such Party shall promptly
notify the other Party in writing, which notice shall set forth the facts known
to such Party regarding such believed infringement in reasonable detail. ISI
shall have the primary right, but not the obligation, to institute, prosecute,
and control any action or proceeding with respect to infringement of ISI Patents
Rights, by counsel of its own choice, and, if such action or proceeding is
brought by ISI, Hansen shall have the right, at its own expense, to be
represented in such action or proceeding by counsel of its own choice, and
also
to join such action as a plaintiff to assert claims for infringement if such
Hansen Field Infringement has resulted in lost profits by Hansen or its
Affiliates due to lost sales. For any infringement of the ISI Patents outside
of
the Hansen Field of Use, ISI shall have the sole and exclusive rights to take
action regarding such infringement, including enforcing the patents and settling
any such actions. Notwithstanding the foregoing, if ISI does not bring such
action or proceedings as to such Hansen Field Infringement within a period
of
one hundred twenty (120) days after receiving notice from Hansen, Hansen shall
have the right to bring and control (except as otherwise provided below) any
such action by counsel of Hansen’s own choice (a “Hansen Action”), [*]. For the
purpose of this Section 6.2(a), [*] shall require that [*], the following
factors, which the parties agree are [*], reasonably and in good faith: [*].
For
any Hansen Action, ISI has the right with counsel of its own choice, to defend
itself against, and to control the responses to, any claim or defense or
counterclaim raised in the Hansen Action against ISI or regarding the validity
or enforceability of any ISI Patents.. The Parties will reasonably cooperate
in
the prosecution and defense of claims concerning the defendant.
(b) Hansen
Patents.
If a
Party becomes aware that any Hansen Patent is infringed by a third party in
the
ISI Field of Use (an “ISI Field Infringement”), such Party shall promptly notify
the other Party in writing, which notice shall set forth the facts known to
such
Party regarding such believed infringement in reasonable detail. Hansen shall
have the primary right, but not the obligation, to institute, prosecute, and
control any action or proceeding with respect to such ISI Field Infringement
of
Hansen Patents Rights, by counsel of its own choice, and, if Hansen brings
such
action or proceeding, ISI shall have the right, at its own expense, to be
represented in such action or proceeding by counsel of its own choice, and
also
to join such action as a plaintiff to assert claims for infringement if such
ISI
Field Infringement has resulted in lost profits by ISI or its Affiliates due
to
lost sales. With respect to any ISI Field Infringement that is causing a
material, detrimental impact on ISI, Hansen agrees to meet with ISI to discuss
such infringement in good faith and to reasonably consider ISI’s requests
regarding Hansen taking action to cause the cessation of such infringement.
Notwithstanding the foregoing, if Hansen does not bring such action or
proceedings as to such ISI Field Infringement within a period of one hundred
twenty (120) days after receiving notice from ISI, ISI shall have the right
to
bring and control (except as provided below) any such action by counsel of
ISI’s
own choice (an “ISI Action”), [*]. For the purpose of this Section 6.2(b), [*]
shall require that [*], the following factors, which the parties agree are
[*],
reasonably and in good faith: [*]. For any ISI Action, Hansen has the right
with
counsel of its own choice, to defend itself against, and to control the
responses to, any claim or defense or counterclaim raised in the ISI Action
against Hansen or regarding the validity or enforceability of any Hansen
Patents.. The Parties will reasonably cooperate in the prosecution and defense
of claims concerning the defendant.
[*]
Confidential information in this Exhibit has been omitted and filed separately
with the Commission. Confidential treatment has been requested with respect
to
the omitted portions.
CONFIDENTIAL
CERTAIN
INFORMATION HAS BEEN REDACTED
CONFIDENTIAL
TREATMENT REQUESTED
(c) Cooperation.
If one
Party brings any action or proceeding as provided above, the other Party agrees,
if necessary, to give the first Party reasonable assistance to file and to
prosecute such suit, at the filing Party’s expense.
(d) Allocation
of Recoveries.
The
costs and expenses of all suits brought by either Party under this Section
6.2
shall be reimbursed on a pro-rata basis to both Parties out of any damages
or
other monetary awards recovered in such actions in favor of either Hansen and/or
ISI. Any amounts of such damages or other monetary awards recovered in such
actions remaining after such reimbursement shall be paid first to each Party
according to the amounts of damages awarded to the Party for lost sales as
proved by the Party in such action (on a pro
rata basis
based on the amounts of lost sales damages awarded to each Party, if
applicable), and any remaining amounts of such damages or other awards to then
be divided between Hansen and ISI with [*] of the remainder to the Party
bringing and prosecuting such action or proceeding, and [*] to the other Party.
No settlement or consent judgment or other voluntary final disposition of a
suit
under this Section 6.2 may be entered into without the joint consent of Hansen
and ISI (which consent shall not be withheld unreasonably).
6.3 Patent
Marking.
Hansen
agrees to use reasonable efforts to mark to the extent required by applicable
law, statutes and regulations relating to patent marking all products that
Hansen is aware are claimed by claims of the ISI Patents (or the labels or
packaging therefor) that are made, used, imported, sold or distributed by or
on
behalf of Hansen and its distributors. ISI agrees to use reasonable efforts
to
mark to the extent required by applicable law, statutes and regulations relating
to patent marking all products that ISI is aware are claimed by claims of the
Hansen Patents (or the labels or packaging therefor) that are made, used,
imported, sold or distributed by or on behalf of ISI and its
distributors.
[*]
Confidential information in this Exhibit has been omitted and filed separately
with the Commission. Confidential treatment has been requested with respect
to
the omitted portions.
CONFIDENTIAL
CERTAIN
INFORMATION HAS BEEN REDACTED
CONFIDENTIAL
TREATMENT REQUESTED
6.4 Indemnification.
(a) By
Hansen.
Hansen
shall indemnify, defend and hold harmless ISI and its employees, officers,
directors and agents (each, an “ISI Indemnified Party”) from and against any and
all liability, loss, damage, cost, and expense (including reasonable attorneys’
fees) to any Third Party (collectively, a “Liability”) which the ISI Indemnified
Party may incur, suffer or be required to pay resulting from any suit, action,
claim or proceeding brought by the Third Party based on or arising out of:
(i)
the breach by Hansen of any representation, warranty, covenant or obligation
contained in this Cross License, or (ii) the manufacture, promotion, sale or
use
of any product by Hansen or its licensee (other than ISI). Notwithstanding
the
foregoing, Hansen shall have no obligation under this Cross License to
indemnify, defend or hold harmless any ISI Indemnified Party with respect to
any
Liabilities or claims, demands, costs or judgments to the extent that they
result from: (1) the willful misconduct or negligent acts or omissions of ISI
or
any of their respective employees, officers, directors or agents, or (2) the
manufacture, promotion, sale or use of any product by ISI or its licensee (other
than Hansen).
(b) By
ISI.
ISI
shall indemnify, defend and hold harmless Hansen and its employees, officers,
directors and agents (each, a “Hansen Indemnified Party”) from and against any
and all liability, loss, damage, cost, and expense (including reasonable
attorneys’ fees) to any Third Party (collectively, a “Liability”) which the
Hansen Indemnified Party may incur, suffer or be required to pay resulting
from
any suit, action, claim or proceeding brought by the Third Party based on or
arising out of: (i) the breach by ISI of any representation, warranty, covenant
or obligation contained in this Cross License, or (ii) the manufacture,
promotion, sale or use of any product by ISI or its licensee (other than
Hansen). Notwithstanding the foregoing, ISI shall have no obligation under
this
Cross License to indemnify, defend or hold harmless any Hansen Indemnified
Party
with respect to any Liabilities or claims, demands, costs or judgments to the
extent that they result from: (1) willful misconduct or negligent acts or
omissions of Hansen, or any of its employees, officers, directors or agents,
or
(2) the manufacture, promotion, sale or use of any product by Hansen or its
licensee (other than ISI).
(c) Procedures.
The
obligations of the indemnifying Party under Sections 6.4(a) and (b) are
conditioned upon the delivery of written notice to the indemnifying Party of
any
potential Liability promptly after the indemnified party becomes aware of such
potential Liability. The indemnifying Party shall have the right to assume
the
defense of any suit or claim related to the Liability if it has assumed
responsibility for the suit or claim in writing; however, if in the reasonable
judgment of the indemnified party, such suit or claim involves an issue or
matter which could have a materially adverse effect on the business operations
or assets of the indemnified Party, the indemnified Party may waive its rights
to indemnity under this Cross License and control the defense or settlement
thereof, but in no event shall any such waiver be construed as a waiver of
any
indemnification rights such Party may have at law or in equity. If the
indemnifying Party defends the suit or claim, the indemnified Party may
participate in (but not control) the defense thereof at its sole cost and
expense. Neither Party may settle a claim or action related to a Liability
without the consent of the other Party, if such settlement would impose any
monetary obligation on the other Party or require the other Party to submit
to
an injunction or otherwise limit the other Party’s rights under this Cross
License. Any payment made by a Party to settle any such claim or action shall
be
at its own cost and expense.
[*]
Confidential information in this Exhibit has been omitted and filed separately
with the Commission. Confidential treatment has been requested with respect
to
the omitted portions.
CONFIDENTIAL
CERTAIN
INFORMATION HAS BEEN REDACTED
CONFIDENTIAL
TREATMENT REQUESTED
(a) The
Parties recognize that, in connection with the performance of this Cross
License, each Party (in such capacity, the “Disclosing
Party”)
may
disclose “Confidential Information” (as defined below) to the other Party (the
“Receiving
Party”).
For
purposes of this Cross License, “Confidential
Information”
means
proprietary or confidential information (whether owned by the Disclosing
Party or a third party to whom the Disclosing Party owes a non-disclosure
obligation) regarding the Disclosing Party’s business or technology that is
disclosed to the Receiving Party and is marked as confidential at the time
of
disclosure to the Receiving Party, or if disclosed in oral form, is identified
as confidential at the time of oral disclosure and reduced in writing or other
tangible (including electronic) form including a prominent confidentiality
notice and delivered to the Receiving Party within thirty (30) days of
disclosure. “Confidential Information” shall not
include
the Cross License, the terms and conditions thereof and the transactions
contemplated hereby and thereby (which information shall be governed by Section
6.6 of this Cross License) and information that the Receiving Party can
demonstrate:
(i)
was
known
to the Receiving Party free of any obligation of confidence at the time of
the
disclosure by the Disclosing Party;
(ii)
has
become publicly known through no wrongful act of the Receiving Party;
(iii)
has
rightfully been received by the Receiving Party from a third party;
[*]
Confidential information in this Exhibit has been omitted and filed separately
with the Commission. Confidential treatment has been requested with respect
to
the omitted portions.
CONFIDENTIAL
CERTAIN
INFORMATION HAS BEEN REDACTED
CONFIDENTIAL
TREATMENT REQUESTED
(iv)
was
communicated by the Disclosing Party to an unaffiliated third party free of
any
obligation of confidence; or
(v)
has
been
independently developed by the Receiving Party without use or reference to
any
Confidential Information of the Disclosing Party.
(b) The
Receiving Party agrees (x) not
to use any such Confidential Information other than as permitted under this
Cross License (y) not
to disclose any such Confidential Information, except (1) to its employees
who are reasonably required to have the Confidential Information in connection
herewith or with any of the other Transaction Documents, (2) to its agents,
representatives, attorneys and other advisers that have a need to know such
Confidential Information, (3) pursuant to, and to the extent of, a request
or order by a Governmental Authority, or (4) or to the extent such disclosure
is
reasonably necessary in filing or prosecuting patent, copyright and trademark
applications, prosecuting or defending litigation, complying with applicable
governmental regulations, obtaining regulatory approvals, marketing Products,
or
otherwise required by law; provided,
however,
that if
a Receiving Party is required by law or regulation to make any such disclosure
of a Disclosing Party’s Confidential Information it will give reasonable advance
notice to the Disclosing Party of such disclosure requirement and, except to
the
extent inappropriate in the case of patent applications, will use its reasonable
efforts to secure confidential treatment of such Confidential Information
required to be disclosed. The Receiving Party agrees to take all reasonable
measures to protect the secrecy and confidentiality of, and avoid disclosure
or
unauthorized use of, the Disclosing Party’s Confidential
Information.
(c) Each
Party acknowledges and agrees that (i) its obligations under this
Section 6.5
are
necessary and reasonable to protect the other Party and its business, and
(ii) any violation of these provisions could cause irreparable injury to
the other Party for which money damages would be inadequate, and (iii) as a
result the other Party shall be entitled to obtain injunctive relief against
the
threatened or pending breach of the provisions of this Section 6.5
without
the necessity of proving actual damages. The Parties agree that the remedies
set
forth in this Section 6.5
are in
addition to and in no way preclude any other remedies or actions that may be
available at law or under this Cross License.
6.6 Confidentiality
of Cross License; Publicity.
(a) Each
Party agrees that the existence of the Cross License, the terms and conditions
thereof and the transactions contemplated hereby and thereby shall be treated
as
confidential information and that no reference thereto shall be made without
the
prior written consent of the other Party (which consent shall not be
unreasonably withheld or delayed) except (a) as required by Applicable Law
including, without limitation, by the SEC and the rules and regulations of
any
applicable securities exchange or automated quotation system, or to the extent
such disclosure is reasonably necessary in prosecuting or defending litigation;
provided,
however,
that if
a Party is required by law or regulation to make any such disclosure of such
information it will give reasonable advance notice to the other Party of such
disclosure requirement and will use its reasonable efforts to secure
confidential treatment of such information required to be disclosed, (b) to
such Party’s accountants, attorneys and other professional advisers, banks,
existing or potential financing sources, including to potential investors,
provided
that
such Persons undertake in writing (or are otherwise bound by rules of
professional conduct) to keep such information strictly confidential,
(c) in connection with the enforcement of this Cross License, (d) in
connection with an actual or proposed Acquisition or Asset Transfer of a Party
or the acquisition or proposed acquisition of stock or assets by a Party of
any
third party or the merger with or into any third party whether or not such
transaction constitutes an Acquisition, provided
that
such Persons undertake in writing to keep such information strictly confidential
(e) to a potential transferee of all or part of such Party’s Securities in
a Transfer made in accordance with this Cross License, provided
that
such transferee undertakes in writing to keep such information strictly
confidential, or (f) pursuant to a press release approved by the other Party.
[*]
Confidential information in this Exhibit has been omitted and filed separately
with the Commission. Confidential treatment has been requested with respect
to
the omitted portions.
CONFIDENTIAL
CERTAIN
INFORMATION HAS BEEN REDACTED
CONFIDENTIAL
TREATMENT REQUESTED
(b) The
Parties will consult with each other, in advance, with regard to the terms
of
all proposed press releases, public announcements and other public statements
with respect to the transactions contemplated hereby. Any Party intending
to
disclose the terms of this Cross License shall provide the nondisclosing
Party
an opportunity to review and comment on the intended disclosure in reasonably
sufficient time (such time period to depend on the urgency of the intended
disclosure) prior to public release, and shall provide the other Party with
a
written copy thereof, in order to allow such other Party to comment upon
such
disclosure; provided however, such notice and opportunity to review shall
not be
required for a disclosure which is substantially in a form previously approved
where the underlying facts disclosed in that previously approved disclosure
are
still true, and where the circumstances surrounding the disclosure have not
changed.
(c) With
respect to complying with the disclosure requirements of the SEC or any
securities exchange or automated quotation system in connection with any
required filing of this Cross License, the filing Party shall seek confidential
treatment of this Cross License from the SEC or securities exchange or automated
quotation system and shall provide the other Party with at least forty-eight
(48) hours to review and comment on any such proposed filing. The filing Party
shall use reasonable efforts to incorporate the non-filing Party’s comments to
such confidential treatment request.
|
7.
|
WARRANTIES;
DISCLAIMERS.
|
7.1 No
Warranty.
Nothing
contained in this Cross License shall be construed as:
[*]
Confidential information in this Exhibit has been omitted and filed separately
with the Commission. Confidential treatment has been requested with respect
to
the omitted portions.
CONFIDENTIAL
CERTAIN
INFORMATION HAS BEEN REDACTED
CONFIDENTIAL
TREATMENT REQUESTED
(a) a
warranty or representation by either Party as to the validity, enforceability
or
scope of any Hansen Patents or ISI Patents;
(b) an
agreement by either Party to bring or prosecute actions or suits against third
parties for infringement, or conferring any right to the other Party to bring
or
prosecute actions or suits against third parties for infringement. It is
specifically agreed between the Parties that the existence of such alleged
infringement by any third party, if any, shall not be a ground for the refusal
to make or a ground for the request for the reduction of the payments to be
made
by Hansen under this Cross License;
(c) conferring
any right to either Party to use in advertising, publicity, or otherwise, any
trademark, trade name or names of the other Party, or any contraction,
abbreviation or simulation thereof;
(d) conferring
on either Party, by implication, estoppel or otherwise, any licenses or other
rights under any patent, copyright, trade secrets or trademarks of the other
Party, except the licenses and rights expressly granted hereunder;
(e) an
obligation of a Party to furnish to the other Party any technical information
or
know-how, including ISI Know-How or Hansen Know-How;
(f) a
warranty or representation that the exercise of any of the rights granted under
this Cross License will be free from infringement of or will not violate any
intellectual property rights or other proprietary rights of any third party;
or
(g) an
obligation on either Party to prosecute, maintain or obtain any patents or
utility models or applications therefor.
7.2 WARRANTY
DISCLAIMER.
EXCEPT
AS EXPRESSLY PROVIDED IN SECTION 7.3, NEITHER PARTY MAKES ANY REPRESENTATIONS
OR
WARRANTIES OF ANY KIND WITH RESPECT TO, AND HEREBY EXPRESSLY DISCLAIMS ALL
OTHER
WARRANTIES AS TO, THE PATENTS OR KNOW-HOW SUCH PARTY LICENSES TO THE OTHER
PARTY
UNDER THIS CROSS LICENSE OR ANY OTHER SUBJECT MATTER OF THIS CROSS LICENSE.
BOTH
PARTIES SPECIFICALLY DISCLAIM ANY IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS
FOR A PARTICULAR PURPOSE AND NONINFRINGEMENT WITH RESPECT TO THE ISI PATENTS,
THE HANSEN PATENTS OR ANY OTHER SUBJECT MATTER OF THIS CROSS LICENSE.
7.3 Limited
Warranties.
[*]
Confidential information in this Exhibit has been omitted and filed separately
with the Commission. Confidential treatment has been requested with respect
to
the omitted portions.
CONFIDENTIAL
CERTAIN
INFORMATION HAS BEEN REDACTED
CONFIDENTIAL
TREATMENT REQUESTED
(a) Each
Party represents and warrants to the other Party that: (i) it is duly
organized and validly existing under the laws of its jurisdiction of
incorporation or formation, and has full corporate or other power and authority
to enter into this Cross License and to carry out the provisions hereof;
(ii) it is duly authorized to execute and deliver this Cross License and to
perform its obligations hereunder, and the person or persons executing this
Cross License on its behalf has been duly authorized to do so by all requisite
corporate or partnership action; and (iii) this Cross License is legally
binding upon it, enforceable in accordance with its terms, and does not conflict
with any agreement, instrument or understanding, oral or written, to which
it is
a Party or by which it may be bound, nor violate any material law or regulation
of any court, governmental body or administrative or other agency having
jurisdiction over it.
(b) Hansen
represents and warrants to ISI that: (i) Hansen has disclosed in writing to
ISI
each patent or patent application (identifying the patent numbers or application
serial numbers and countries of prosecution) that is licensed to Hansen by
a
third party, and the specific terms of any and all payment amounts that Hansen
would be obligated pay to such third party licensor if Hansen sublicensed such
patent or patent application to ISI as a Hansen Patent under this Cross License;
(ii) Hansen has disclosed in writing to ISI each patent or patent application
(identifying the patent numbers or application serial numbers and countries
of
prosecution) that is licensed to Hansen by a third party and for which Hansen
does not have the right to grant ISI sublicenses under the terms of this Cross
License.
(c) ISI
represents and warrants to Hansen that: (i) ISI has disclosed in writing to
Hansen each patent or patent application (identifying the patent numbers or
application serial numbers and countries of prosecution) that is licensed to
ISI
by a third party, and the specific terms of any and all payment amounts that
ISI
would be obligated pay to such third party licensor if ISI sublicensed such
patent or patent application to Hansen as an ISI Patent under this Cross
License; (ii) ISI has disclosed in writing to Hansen each patent or patent
application (identifying the patent numbers or application serial numbers and
countries of prosecution) that is licensed to ISI by a third party and for
which
ISI does not have the right to grant Hansen sublicenses under the terms of
this
Cross License.
|
8.
|
LIMITATION
OF LIABILITY
|
NOTWITHSTANDING
ANYTHING ELSE IN THIS CROSS LICENSE OR OTHERWISE, NEITHER PARTY SHALL BE LIABLE
TO THE OTHER PARTY OR TO ANY OTHER PERSON OR ENTITY WITH RESPECT TO ANY SUBJECT
MATTER OF THIS CROSS LICENSE, UNDER ANY CONTRACT, NEGLIGENCE, STRICT LIABILITY
OR OTHER LEGAL OR EQUITABLE THEORY, FOR ANY (A) INCIDENTAL, SPECIAL,
PUNITIVE (OTHER THAN STATUTORY DAMAGES AVAILABLE FOR WILLFUL INFRINGEMENT)
CONSEQUENTIAL OR INDIRECT DAMAGES, (B) DAMAGES RESULTING FROM LOSS OF SALE,
BUSINESS, PROFITS OR GOODWILL, (C) COST OF PROCUREMENT OF SUBSTITUTE GOODS
OR
TECHNOLOGY, EVEN IF THE REMEDIES PROVIDED FOR IN THIS CROSS LICENSE FAIL OF
THEIR ESSENTIAL PURPOSE AND EVEN IF EITHER PARTY HAS BEEN ADVISED OF THE
POSSIBILITY OR PROBABILITY OF SUCH DAMAGES.
[*]
Confidential information in this Exhibit has been omitted and filed separately
with the Commission. Confidential treatment has been requested with respect
to
the omitted portions.
CONFIDENTIAL
CERTAIN
INFORMATION HAS BEEN REDACTED
CONFIDENTIAL
TREATMENT REQUESTED
9.1 Assignment.
This
Cross License and the rights and obligations hereunder may not be transferred
or
assigned by either party without the prior written consent of the other party;
provided that, either party may, without the other party’s prior written
consent, assign or transfer this Cross License and its rights and obligations
hereunder in connection with an Acquisition or Asset Transfer. Subject to the
foregoing, this Cross License shall be binding on, inure to the benefit of,
and
be enforceable by the Parties and their respective heirs, successors and
permitted assigns.
9.2 Amendment
and Waiver.
Except
as otherwise expressly provided herein, any provision of this Cross License
may
be amended and the observance of any provision of this Cross License may be
waived (either generally or in any particular instance and either retroactively
or prospectively) only with the written consent of the parties. The failure
of
either party to enforce its rights under this Cross License at any time for
any
period shall not be construed as a waiver of rights.
9.3 Governing
Law and Legal Actions.
This
Cross License shall be governed by and construed under the laws of California
without regard to the conflicts of law provisions thereof. The
state
and federal courts of the Northern District of California shall have exclusive
jurisdiction for disputes related to this Cross License, except as provided
in
Section 5.7, and the parties hereby consent to the personal jurisdiction of
the
court.
9.4 Headings.
Headings and captions are for convenience only and are not to be used in the
interpretation of this Cross License.
9.5 Notices.
Any
notice or other communication required or permitted to be made or given to
either party under this Cross License shall be deemed sufficiently made or
given
on the date of delivery if delivered in person or by overnight commercial
courier service with tracking capabilities with costs prepaid, or five (5)
days
after the date of mailing if sent by certified first class mail, return receipt
requested and postage prepaid, to the address of the parties (and addressed
to
the representative) set forth below or such other address (or representative)
as
may be given from time to time under the terms of this notice
provision:
[*]
Confidential information in this Exhibit has been omitted and filed separately
with the Commission. Confidential treatment has been requested with respect
to
the omitted portions.
CONFIDENTIAL
CERTAIN
INFORMATION HAS BEEN REDACTED
CONFIDENTIAL
TREATMENT REQUESTED
If
to ISI:
|
If
to Hansen:
|
950
Kifer Road,
|
380
North Bernardo Avenue
|
Sunnyvale,
California 94086
|
Mountain
View, California 94043
|
Attention:
General Counsel
|
Attention:
Vice President of Intellectual
|
Telephone:
(408) 523-2100
|
Property
and Legal Affairs
|
Facsimile:
(408) 523-1390
|
Telephone:
(650) 406-5800
|
|
Facsimile:
(650) 404-5901
|
|
|
With
a copy (which shall not constitute notice) to:
|
With
a copy (which shall not constitute notice) to:
|
|
|
Wilson
Sonsini Goodrich & Rosati
|
Cooley
Godward LLP
|
650
Page Mill Road
|
Five
Palo Alto Square
|
Palo
Alto, California 94304-1050
|
3000
El Camino Real
|
Attention:
Casey McGlynn
|
Palo
Alto, California 94306
|
Telephone:
(650) 493-9300
|
Attention:
Barclay Kamb
|
Facsimile:
(650) 493-6811
|
Telephone:
(650) 843-5000
|
|
Facsimile:
(650) 849-7400
|
9.6 Severability.
If any
provision of this Cross License is held to be illegal or unenforceable, that
provision shall be limited or eliminated to the minimum extent necessary so
that
this Cross License shall otherwise remain in full force and effect and
enforceable.
9.7 Relationship
of Parties.
Each
party acknowledges and agrees that the other party is an independent contractor
in the performance of each and every part of this Cross License and is solely
responsible for all of its employees, contractors and agents and its labor
costs
and expenses arising in connection therewith. The parties are not partners,
joint venturers, franchiser-franchisee or otherwise affiliated, and neither
has
any right or authority to make any statements, representations or commitments
of
any kind, or to take any action, which shall be binding on the other party,
without the prior written consent of the other party. Without limiting the
foregoing, the parties agree that this Cross License is not intended to create
a
franchise within the meaning of any applicable statute.
9.8 Counterparts.
This
Cross License may be executed in counterparts, each of which shall be deemed
an
original but all of which together shall constitute one and the same instrument.
This Cross License may be executed by facsimile with the original signatures
following promptly by one of the methods of delivery or mailing set forth in
Section 9.5 above.
9.9 Entire
Agreement.
The
terms and conditions contained in this Cross License, the Share Transfer
Agreement and Hansen Investor Rights Agreement constitute the entire agreement
between the parties and supersede all previous agreements and understandings,
whether oral or written, between the parties with respect to the subject matter
hereof.
******
[*]
Confidential information in this Exhibit has been omitted and filed separately
with the Commission. Confidential treatment has been requested with respect
to
the omitted portions.
CONFIDENTIAL
CERTAIN
INFORMATION HAS BEEN REDACTED
CONFIDENTIAL
TREATMENT REQUESTED
IN
WITNESS WHEREOF the parties hereto have executed this Cross License as of the
Effective Date.
INTUITIVE
SURGICAL, INC.
|
|
HANSEN
MEDICAL, INC.
|
|
|
|
|
|
By:
|
/s/
Lonnie M. Smith
|
|
By:
|
/s/
Frederic H. Moll
|
Title:
|
President
and CEO
|
|
Title:
|
CEO
|
Date:
|
September
1, 2005
|
|
Date:
|
September
1, 2005
|
CONFIDENTIAL
CERTAIN
INFORMATION HAS BEEN REDACTED
CONFIDENTIAL
TREATMENT REQUESTED
EXHIBIT
A
Share
Transfer Agreement
CONFIDENTIAL
CERTAIN
INFORMATION HAS BEEN REDACTED
CONFIDENTIAL
TREATMENT REQUESTED
EXHIBIT
B
Investors
Rights Agreement
CONFIDENTIAL
CERTAIN
INFORMATION HAS BEEN REDACTED
CONFIDENTIAL
TREATMENT REQUESTED
EXHIBIT
C
New
Product Procedure
1. If
a
Party (the “Initiating Party”) initiates pursuant to Section 5.7 of the
Agreement the procedure under this Exhibit C as to a new product of such
Initiating Party that it plans to sell for a use outside its licensed field
(the
“Subject Product”), the Parties shall then proceed under the provisions of this
Exhibit C, cooperatively and in good faith. Such Initiating Party shall first
provide a demonstration of the Subject Product to the other Party (the
“Responding Party”) and its legal representatives, under an appropriate
confidential disclosure agreement entered into by the Parties (and any such
representatives).
2. Such
Responding Party then has up to [*] business days to provide to the Initiating
Party a list of written questions regarding the construction and operation
of
the Subject Product, and the Initiating Party shall provide its answers to
such
questions, in confidence under the confidential disclosure agreement, within
[*]
business days from its receipt of questions.
3. Within
[*] business days after timely receipt of the Initiating Party’s answers to the
written questions submitted under paragraph 2 above, or if no answers were
requested or timely received, then within [*] days after the demonstration,
the
Responding Party shall either: (a) provide the Initiating Party with written
notice (a “Non-Infringement Notice”) that such Responding Party concludes that
the Subject Product would not infringe any patents owned or controlled by such
Responding Party, or any claims or any claims in any patent applications owned
or controlled by such Responding Party were such applications to issue as
patents; or (b) provide the Initiating Party with written notice (an
“Infringement Notice”) that such Responding Party believes that the Subject
Product would infringe one or more of the patents owned or controlled by such
Responding Party, or any claims or any claims in any patent applications owned
or controlled by such Responding Party were such applications to issue as
patents, which notice shall include details of such allegation and copies of
the
asserted patents or patent applications and shall provide the detailed analysis
for the basis for such Party’s belief that the Subject Product infringes that
indicated patents or would infringe the indicated patent applications (if such
applications issued).
4. If
the
Responding Party provides an Infringement Notice as to the Subject Product,
then
the Parties shall meet promptly after such notice is received, and the Parties
shall discuss cooperatively and in good faith the infringement issue covered
by
the Infringement Issue for up to [*] business days and shall amicably and in
good faith resolve the infringement issue by [*].
5. If
the
Parties are unable to reach agreement after such [*] business day period, then
the Parties shall proceed under the provisions of Section 5.7(b) to resolve
the
question of whether the Subject Product infringes one or more claims of the
identified patents, including addressing and resolving any defenses that the
Initiating Party may have to the assertion of infringement (such as invalidity
or unenforceability).
[*]
Confidential information in this Exhibit has been omitted and filed separately
with the Commission. Confidential treatment has been requested with respect
to
the omitted portions.
CONFIDENTIAL
CERTAIN
INFORMATION HAS BEEN REDACTED
CONFIDENTIAL
TREATMENT REQUESTED
7. The
arbitrators may impose monetary sanctions (payable to the Responding Party)
if
the Initiating Party does not provide all relevant information relating to
the
Subject Product requested by the Responding Party or the arbitrators (including
demonstrations of the product), or otherwise cooperate fully with them.
Similarly, the arbitrators may impose monetary sanctions (payable to the
Initiating Party) if the Responding Party does not provide all relevant
information relating to the subject patents requested by the Initiating Party
or
the arbitrators, or otherwise cooperate fully with them. Such arbitration shall
determine whether the Subject Product would infringe the Responding Party’s
patents that are the subject of the Infringement Notice. The arbitrators will
set forth in writing their decision regarding infringement or non-infringement
of such patents by the Subject Product, including the specific patents and
claims analyzed by the arbitrators and an explanation of the bases for such
decision. Determinations made by the arbitrators are binding upon the Parties,
and cannot be appealed or litigated in federal court. Notwithstanding the
forgoing, if the arbitrators determine that the Subject Product infringes the
Responding Party’s patents and the Initiating Party does not cease the
infringement within [*] days after the arbitrators’ decision or in the future
sells the Subject Product, then the Responding Party may seek damages and other
remedies by litigation in court in accordance with Section 9.3, and to have
the
court determine if the Initiating Party is selling the Subject Product in
violation of the arbitrators’ determination of infringement. The Responding
Party may submit the arbitrators’ decision in such litigation. If such
litigation results in a judgment that the Initiating Party is selling the
Subject Product in violation of the arbitrators’ determination of infringement
from which no appeal can be or is taken, then the Initiating Party will have
committed a “Material Breach,” for which the Responding Party may terminate this
Agreement within 30 days by written notice to the Initiating Party.
8. In
the
case of an arbitration under paragraph 7 above, the Responding Party shall
pay
all arbitration expenses for the aspects of the arbitration that relate to
the
allegations of infringement, the Initiating Party shall pay all arbitration
expenses for the aspects of the arbitration that relate to any of the Initiating
Party’s asserted defenses, and each Party shall pay its own legal expenses
including deposition expenses and other discovery expenses related to these
proceedings. If the arbitration results in a determination that the Initiating
Party infringes the asserted patents, then the Responding Party shall be
entitled to reimbursement the arbitration expenses that it paid. If the
arbitration results in a determination that the Initiating Party does not
infringe the asserted patents (including because of defenses of the Initiating
Party or simply due to non-infringement), then the Initiating Party shall be
entitled to reimbursement the arbitration expenses that it paid.
[*]
Confidential information in this Exhibit has been omitted and filed separately
with the Commission. Confidential treatment has been requested with respect
to
the omitted portions.
-2-