FORM 8-K
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of The
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) December 5, 2006
Electro-Optical Sciences, Inc.
(Exact name of registrant as specified in its charter)
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Delaware
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000-51481
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13-3986004 |
(State or other jurisdiction
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(Commission
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(IRS Employer |
of incorporation)
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File Number)
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Identification No.) |
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3 West Main Street, Suite 201,
Irvington, New York
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10533
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(Address of principal executive offices)
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Registrants telephone number, including area code (914) 591-3783
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 (see General Instructions
A.2. below):
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
TABLE OF CONTENTS
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Item 1.01 Entry into a Material Definitive Agreement |
Item 7.01 Regulation FD Disclosure |
Item 9.01 Financial Statements and Exhibits |
SIGNATURES |
EXHIBIT INDEX |
EX-10.1: Licensing Agreement |
EX-99.1: Press Release |
Item 1.01 Entry into a Material Definitive Agreement
On December 5, 2006, the Registrant entered into an exclusive licensing agreement with KaVo Dental
GmbH (KaVo), a leading dental equipment manufacturer, to further develop and commercialize
DIFOTI®, a U.S. Food and Drug Administration-cleared non-invasive imaging device
developed by the Registrant for the detection of dental caries. In accordance with the terms of
the agreement, KaVo will pay the Registrant an undisclosed upfront sum, as well as up to a double digit annual royalty based on
the number of systems sold per calendar year. KaVo has made a multi-million dollar commitment to
refine the DIFOTI product for commercial launch.
A copy of the licensing agreement is filed herewith as Exhibit 10.1.
Item 7.01 Regulation FD Disclosure
On December 11, 2006, the Registrant issued a press release announcing it had entered into an
exclusive licensing agreement with KaVo. A copy of the press release is furnished as Exhibit 99.1
to this report. Exhibit 99.1 is furnished to, but not filed with, the Securities and Exchange
Commission. Registration statements or other documents filed with the Securities and Exchange
Commission shall not incorporate this information by reference, except as otherwise expressly
stated in such filing.
Item 9.01 Financial Statements and Exhibits
(b) Exhibits.
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Exhibit |
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Number |
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Description |
10.1
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Licensing Agreement between the Registrant and KaVo Dental GmbH dated as of December 5, 2006 |
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99.1
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Press Release of the Registrant dated December 11, 2006 Announcing Licensing Agreement with
KaVo Dental GmbH to Commercialize DIFOTI® |
SIGNATURES
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.
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Electro-Optical Sciences, Inc.
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Date: December 11, 2006 |
By: |
/s/ Joseph V. Gulfo
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President & Chief Executive Officer |
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(Principal Executive Officer) |
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EXHIBIT INDEX
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EXHIBIT NO. |
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DESCRIPTION |
10.1
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Licensing Agreement between the Registrant and KaVo Dental GmbH dated as of December 5, 2006 |
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99.1
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Press Release of the Registrant dated December 11, 2006 Announcing Licensing Agreement with
KaVo Dental GmbH to Commercialize DIFOTI® |
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EX-10.1
Exhibit 10.1
Certain portions of this Exhibit have been omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment. Such omitted portions are
marked with brackets [ ] and an asterisk*.
EXCLUSIVE LICENSE AGREEMENT
This Exclusive License Agreement (the Agreement) is made and entered into as of December 1,
2006 (the Effective Date) by and between Electro-Optical Sciences, Inc., a Delaware corporation,
having its principal place of business at 3 West Main Street, Suite 201, Irvington, New York
(EOS), and KaVo Dental GmbH, a corporation incorporated under the laws of the Federal Republic of
Germany with its principal place of business at Bismarckring 39, 88400 Biberach an der Riss
(Licensee). EOS and Licensee are sometimes referred to herein individually as a Party and
collectively as the Parties.
RECITALS
WHEREAS, EOS owns or controls certain intellectual property relating to the EOS Technology (as
defined below) and has obtained 510(k) approval from the FDA for use of the EOS Technology for the
early detection of coronal tooth decay and fractures, using light rather than X-ray; and
WHEREAS, Licensee has considerable expertise in the development, marketing and sale of dental
diagnostic products, and has in place the large and experienced development and marketing staff
needed to develop and distribute such products effectively and expeditiously; and
WHEREAS, EOS desires to grant a license to Licensee, and Licensee desires to obtain a license,
to develop and commercialize the EOS Technology in accordance with the terms and conditions set
forth below;
NOW, THEREFORE, in consideration of the foregoing premises, the mutual promises and covenants
of the Parties contained therein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Parties hereto, intending to be legally bound, do
hereby agree as follows:
ARTICLE I
DEFINITIONS
Unless otherwise specifically provided herein, the following terms shall have the following
meanings:
1.1 510(k) Notification shall mean a 510(k) Notification within the meaning of FFDCA and the
regulations promulgated thereunder.
1.2 Additional Patents shall mean any Patents, other than the Core Patents, that are
Controlled by EOS as of the Effective Date or at any time during the term of this Agreement and, in
the absence of a license from EOS, would necessarily be infringed by the practice in the Field of
the technology claimed by the Core Patents.
1.3 Affiliate shall mean, with respect to a Party, any Person that, directly or indirectly,
through one or more intermediaries, controls, is controlled by or is under common control with such
Party. For purposes of this definition, control and, with correlative meanings, the terms
controlled by and under common control with shall mean (a) the possession, directly or
indirectly, of the power to direct the management or policies of a business entity, whether through
the ownership of voting securities, by contract relating to voting rights or corporate governance,
or otherwise, or (b) the ownership, directly or indirectly, of at least fifty percent (50%) of the
voting securities or other ownership interest of a business entity (or, with respect to a limited
partnership or other similar entity, its general partner or controlling entity).
1.4 Agreement shall have the meaning set forth in the preamble to this Agreement.
1.5 Applicable Law shall mean applicable laws, rules and regulations, including any rules,
regulations, guidelines or other requirements of the Regulatory Authorities, that may be in effect
from time to time.
1.6 Arbitration Rules shall have the meaning set forth in Section 14.6.3.
1.7 Audit Referee shall have the meaning set forth in Section 6.11.
1.8 Breaching Party shall have the meaning set forth in Section 13.2.
1.9 Business Day shall mean a day other than a Saturday or Sunday on which banking
institutions in New York, New York are open for business.
1.10 Calendar Quarter shall mean each successive period of three (3) calendar months
commencing on January 1, April 1, July 1 and October 1.
1.11 Calendar Year shall mean each successive period of twelve (12) calendar months
commencing on January 1 and ending on December 31.
1.12 Change of Control shall mean, with respect to a Person, any of the following
transactions with a Third Party (a Third Party Acquirer), whether accomplished in one or a series
of related transactions: (a) a merger or consolidation of such Person with the Third Party Acquirer
which results in the holders of the voting securities of such Person outstanding immediately prior
thereto (other than the Third Party Acquirer, its affiliates and associates (as such terms are
used in the Exchange Act)) ceasing to represent at least fifty percent (50%) of the combined voting
power of the surviving entity (or, if applicable, its parent company) immediately after such merger
or consolidation; (b) the sale to the Third Party Acquirer of all or substantially all of the
business of such Person to which this Agreement relates (whether by merger, consolidation, sale of
stock, sale of assets or other similar transaction); or (c) the Third Party Acquirer (which shall
not be any trustee or other fiduciary holding securities under an employee benefit plan of such
Person, or any corporation owned directly or indirectly by the stockholders of such Person, in
substantially the same proportion as their ownership of stock of such Person), together with any of
the Third Party Acquirers affiliates or associates, as such terms are used in the Exchange
Act, becoming the beneficial owner of fifty percent (50%) or more of the combined voting power of
the outstanding securities of such Person or by contract or otherwise having the
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right to control the Board of Directors or equivalent governing body of such Person or the
ability to cause the direction of management of such Person. Notwithstanding the foregoing, a
Change of Control shall not be deemed to occur on account of the acquisition of securities of a
Party by any institutional investor, or affiliate thereof, that acquires the Partys securities in
a transaction or series of related transactions that are primarily a private financing transaction
for the Party.
1.13 Clinical Data shall mean all information with respect to the Licensed Product made,
collected or otherwise generated under or in connection with any Clinical Studies of the Licensed
Product, including any data, reports and results with respect thereto.
1.14 Clinical Studies shall mean, with respect to a Licensed Product, any clinical trials
required by the FDA for Regulatory Approval of such product in the United States, or equivalent
trials required by Regulatory Authorities for Regulatory Approval of such product outside the
United States.
1.15 Combination Product shall mean a product that contains (a) one or more components that
constitute a Licensed Product and (b) one or more other proprietary components, whether sold as a
single device or as separate devices in a single package.
1.16 Commercialization shall mean any and all activities (whether conducted before or after
Regulatory Approval) directed to the marketing, detailing and promotion of the Licensed Product
after Regulatory Approval has been obtained, and shall include post-launch marketing, promoting,
detailing, marketing research, distributing, and commercially selling the Licensed Product,
importing, exporting or transporting the Licensed Product for commercial sale and regulatory
affairs with respect to the foregoing, but shall not include Manufacturing. When used as a verb,
Commercializing means to engage in Commercialization and Commercialize and Commercialized
shall have a corresponding meanings.
1.17 Commercially Reasonable Efforts shall mean, with respect to the Development or
Commercialization of the Licensed Product, that level of efforts and resources commonly dedicated
in the medical device industry to the development or commercialization, as the case may be, of an
internally-developed device of similar commercial potential at a similar stage in its lifecycle.
Commercially Reasonable Efforts shall be determined on a market-by-market basis for the Licensed
Product without regard to the particular circumstances of a Party, including any other product
opportunities of such Party and, with respect to Licensee, without regard to any payments owed to
EOS hereunder.
1.18 Complaining Party shall have the meaning set forth in Section 13.2.
1.19 Confidential Information shall have the meaning set forth in Section 10.1.
1.20 Consumable shall mean a product, or a part or component of a product, which product,
part or component thereof (a) is intended to be depleted by consumer use (e.g., mouth pieces), (b)
requires periodic replacement, or (c) is a replacement part for any Licensed Product.
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1.21 Control shall mean, with respect to any item of Information, Regulatory Documentation,
Patent or Intellectual Property Right, possession of the right, whether directly or indirectly, and
whether by ownership, license or otherwise (other than by operation of the licenses and other
grants in Article V and Article XIII of this Agreement), to assign or grant a license, sublicense
or other right to or under, such Information, Regulatory Documentation, Patent or Intellectual
Property Right as provided for herein without violating the terms of any written agreement or other
formal arrangement with any Third Party.
1.22 Core Patents shall mean (a) the Patents set forth on Exhibit A, (b) any Patents issuing
from any Patent application claiming priority from any Patent described in the foregoing clause
(a), (c) any foreign equivalents of any Patents described in the foregoing clauses (a) and (b), and
(d) any Patents Controlled by EOS as of the Effective Date or at any time during the term of this
Agreement that relate solely to the Existing Products or any Improvements thereto.
1.23 Corporate Names shall mean (a) in the case of EOS, the EOS corporate logo or such
other names and logos as EOS may designate in writing from time to time and (b) in the case of
Licensee, Licensees corporate logo or such other names and logos of Licensee, in each case ((a)
and (b)) together with any variations and derivatives thereof.
1.24 Development shall mean all activities related to research, preclinical and other
non-clinical testing, test method development, process development, manufacturing scale-up,
qualification and validation, quality assurance/quality control and Clinical Studies, including
manufacturing in support thereof, statistical analysis and report writing, the preparation and
submission of any application for Regulatory Approval, regulatory affairs with respect to the
foregoing and all other activities necessary or reasonably useful or otherwise requested or
required by a Regulatory Authority as a condition or in support of obtaining or maintaining a
Regulatory Approval. When used as a verb, Develop shall mean to engage in Development.
1.25 Development Agreement shall have the meaning set forth in Section 2.1.3.
1.26 Dispute shall have the meaning set forth in Section 14.6.1.
1.27 Distributor shall mean a Person, other than a Sublicensee or an Affiliate of Licensee,
in one or more countries in the Territory that (a) purchases the Licensed Product from the
Licensee, its Affiliate or Sublicensee for such country(ies), (b) assumes responsibility from the
Licensee for all or a portion of the Commercialization of the Licensed Product in such country(ies)
and (c) sells the Licensed Product in such country(ies).
1.28 Effective Date shall have the meaning set forth in the preamble to this Agreement.
1.29 EOS shall have the meaning set forth in the preamble to this Agreement.
1.30 EOS Know-How shall mean all Information that is Controlled by EOS as of the Effective
Date or during the term of this Agreement that (a) is not generally known and (b) is reasonably
necessary or useful for the Exploitation of the Licensed Product
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in the Field in the Territory, but excluding any Information to the extent covered or claimed
by EOS Patents.
1.31 EOS Patents shall mean the Core Patents and the Additional Patents, collectively.
1.32 EOS Technology shall mean the EOS Patents and the EOS Know-How, collectively.
1.33 Exchange Act shall mean the United States Securities Exchange Act of 1934, as amended.
1.34 Existing Products shall mean the products listed in Exhibit B.
1.35 Exploit shall mean to make, have made, import, use, sell or offer for sale, including
to research, Develop, Commercialize, register, Manufacture, have Manufactured, hold or keep
(whether for disposal or otherwise), have used, export, transport, distribute, promote, market or
have sold or otherwise dispose of.
1.36 Exploitation shall mean the act of Exploiting a product or process.
1.37 Field shall mean all dental applications.
1.38 FDA shall mean the United States Food and Drug Administration and any successor agency
thereto.
1.39 FFDCA shall mean the United States Food, Drug, and Cosmetic Act, as amended from time
to time.
1.40 First Commercial Sale shall mean the first bona fide sale of any Licensed Product by
Licensee, its Affiliates, Sublicensees or Distributors (other than a sale or other distribution
without consideration and, solely for the purpose of marketing, alpha or beta testing, or product
demonstration) occurring after the grant of the first Regulatory Approval for such Licensed
Product.
1.41 IDE shall mean an investigational device exemption as defined in the regulations
promulgated by the FDA for the authorization to commence human clinical trials, and its equivalent
in other countries or regulatory jurisdictions in the Territory.
1.42 Improvement shall mean any modification, variation, enhancement or revision to the
design, operation or method of any EOS Technology, the result of which would remain covered by one
or more Valid Claims of any EOS Patent.
1.43 Incorporating Patents shall mean any Patent the Valid Claims of which are primarily
related to the incorporation of the EOS Technology into an Incorporating Product.
1.44 Incorporating Product shall mean any Combination Product developed by Licensee wherein
the EOS Technology is incorporated into a product (unrelated to the EOS Technology) currently
existing or separately developed by Licensee, and in which Licensee has in the past or may in the
future Manufacture, Develop or Exploit alternate versions of such product which do not incorporate
the EOS Technology (e.g. Licensee
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manufactures a camera, the general design of which is Controlled by Licensee, and as a feature
of the camera offers a version which incorporates the EOS Technology).
1.45 Indemnification Claim Notice shall have the meaning set forth in Section 12.3.
1.46 Indemnified Party shall have the meaning set forth in Section 12.3.
1.47 Information shall mean all commercial, technical, scientific and other know-how and
information, trade secrets, knowledge, technology, means, methods, processes, practices, formulae,
instructions, skills, techniques, procedures, experiences, ideas, technical assistance, designs,
drawings, assembly procedures, computer programs, apparatuses, specifications, data, results and
other material (whether or not confidential, proprietary, patented or patentable) in written,
electronic or any other form now known or hereafter developed, but excluding the Regulatory
Documentation.
1.48 Intellectual Property Rights shall mean Trademarks, service marks, trade names,
Internet domain names, registered designs, design rights, copyrights (including rights in computer
software), database rights, trade secrets and any rights or property similar to any of the
foregoing (other than Patents) in any part of the Territory whether registered or not registered,
together with the right to apply for the registration of any such rights.
1.49 Invoiced Sales shall have the meaning set forth in Section 1.62.
1.50 Knowledge shall mean the collective good faith understanding of each of the vice
presidents, senior vice presidents, president and chief executive officer of a Party of the facts
and information then in their possession without any duty to conduct any specific investigation
with respect to such facts and information.
1.51 Licensed Product shall mean any product (a) the Exploitation of which infringes any EOS
Patent, or (b) that incorporates, embodies, comprises, is comprised of, in whole or in part, or is
manufactured using, any EOS Know-How, including the Existing Products and any Improvements thereto,
including any Incorporating Product, but expressly excluding any Next Generation Products.
1.52 Licensed Product System shall mean any Licensed Product that is not a Consumable.
1.53 Licensed Trademarks shall mean (a) the Trademarks set forth on Exhibit C, and (b) any
Corporate Name of EOS that Licensee is required to use hereunder.
1.54 Licensee shall have the meaning set forth in the preamble to this Agreement.
1.55 Licensee Know-How shall mean all Information Controlled (other than pursuant to this
Agreement) or developed by Licensee or any of its Affiliates during the term of this Agreement that
is not generally known and is reasonably necessary or useful for the Exploitation of the Licensed
Product, but excluding any Information to the extent claimed by Licensee Patents.
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1.56 Licensee Patents shall mean all Patents Controlled (other than pursuant to this
Agreement) by Licensee and any of its Affiliates developed during the term of this Agreement that
claim any technology that is reasonably necessary or useful for the Exploitation of the Licensed
Product, including any Patents that claim any Licensed Product or its Exploitation.
1.57 Licensee Technology shall mean the Licensee Patents and the Licensee Know-How,
collectively.
1.58 Losses shall have the meaning set forth in Section 12.1.
1.59 Manufacture and Manufacturing shall mean all activities related to the production,
manufacture, packaging, labeling, shipping and holding of the Licensed Product or any component
thereof, including process development, process qualification and validation, scale-up,
pre-clinical, clinical and commercial manufacture, quality assurance and quality control.
1.60 Manufacturing Process shall mean any process or step thereof that is necessary or
useful for Manufacturing any Licensed Product or any Improvement thereto.
1.61 Minimum Royalty Payment shall mean the amount set forth in Section 6.2.2.
1.62 Net Sales shall mean, for any period, the gross amount invoiced by Licensee and its
Affiliates, or Sublicensees for the sale, rental, lease, use on a fee-per-patient basis or other
disposal of the Licensed Product (the Invoiced Sales), less the following, with respect thereto:
(a) sales and use taxes, and tariff duties, invoiced and actually paid to the applicable
governmental entity, (b) transportation costs, including insurance and shipping, freight and
handling charges, to the extent billed separately to customers; (c) any trade discounts and
allowances actually granted, including, but not limited to, discounts pursuant to patient discount
programs, rebates and administrative fees paid to medical health care organizations in line with
approved contract terms, rebates resulting from government-mandated rebate programs or chargeback
programs, and rebates paid to wholesalers for inventory management programs or distribution
management agreements; (d) sales commissions paid to Distributors or selling agents (excluding any
commissions paid to inside sales representatives); (e) any credits actually given for returned or
defective Licensed Products, (f) any Third Party Royalty Payments; and (g) any Recall Expenses
incurred by Licensee in the Calendar Quarter for which the royalties payable are calculated.
Notwithstanding the foregoing, in the case of any sale, rental, lease, use on a fee-per-patient
basis or other disposal of Licensed Product that occurs other than in an arms length transaction
exclusively for money, Net Sales shall mean the fair market value of such Licensed Product in the
relevant country of disposal. For purposes of determining Net Sales, the Licensed Product shall be
deemed to be sold when invoiced.
Notwithstanding the foregoing, in the event that the Licensed Product is sold in conjunction with
another proprietary component so as to be a Combination Product, Net Sales shall be calculated by
multiplying the Net Sales of such Combination Product by a fraction, the numerator of which shall
be the fair market value of the Licensed Product if sold separately (determined in accordance with
the local generally accepted accounting principles) and the denominator of which shall be the
aggregate fair market value of all the proprietary components of such Combination Product,
including the Licensed Product, if sold separately.
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In the event that no such separate sales are made by Licensee or its Affiliates, Sublicensees or
Distributors, Net Sales of the Combination Product shall be calculated in a manner to be negotiated
and agreed upon by the Parties, reasonably and in good faith, prior to any sale of such Combination
Product, which shall be based upon the relative estimated commercial values of the proprietary
components of such Combination Product.
Licensees or any of its Affiliates or Sublicensees transfer of Licensed Product to an Affiliate
of Licensee or a Sublicensee shall not result in any Net Sales, unless such Affiliate or
Sublicensee is the end user of such Licensed Product.
1.63 Next Generation Patents shall mean any Patents Controlled by Licensee which may,
directly or indirectly, relate to the design, operation or method of the EOS Technology, but are
not covered by one or more Valid Claims of the EOS Patents.
1.64 Next Generation Products shall mean any products the Manufacture, Commercialization or
Exploitation of which infringes any Next Generation Patent, but expressly excluding any
Incorporating Product.
1.65 Notice Date shall have the meaning set forth in Section 13.9.
1.66 Notice Period shall have the meaning set forth in Section 13.2.
1.67 Party and Parties shall have the meaning set forth in the preamble to this Agreement.
1.68 Patents shall mean (a) all national, regional and international patents and patent
applications, including provisional patent applications, (b) all patent applications filed either
from such patents, patent applications or provisional applications or from an application claiming
priority from either of these, including divisionals, continuations, continuations-in-part,
provisionals, converted provisionals and continued prosecution applications, (c) any and all
patents that have issued or in the future issue from the foregoing patent applications ((a) and
(b)), (d) any and all extensions or restorations by existing or future extension or restoration
mechanisms, including revalidations, reissues, re-examinations and extensions (including any
supplementary protection certificates and the like) of the foregoing patents or patent applications
((a), (b) and (c)) and (e) any similar rights, including so-called pipeline protection or any
importation, revalidation, confirmation or introduction patent or registration patent or patent of
additions to any of such foregoing patent applications and patents.
1.69 Payments shall have the meaning set forth in Section 6.7.
1.70 Person shall mean an individual, sole proprietorship, partnership, limited partnership,
limited liability partnership, corporation, limited liability company, business trust, joint stock
company, trust, unincorporated association, joint venture or other similar entity or organization,
including a government or political subdivision, department or agency of a government.
1.71 PMA Product shall mean a product, the sale of which requires the filing with and
approval by the FDA of a PMA.
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1.72 Premarket Approval or PMA shall mean a premarket approval as defined in the FFDCA and
the regulations promulgated thereunder.
1.73 Product Labeling shall mean, with respect to a country, (a) the full information
relating to use of the Licensed Product approved by the relevant Regulatory Authority for such
country, including any required patient information, and (b) all labels and other written, printed
or graphic matter utilized with the Licensed Product, including the instructions for use.
1.74 Promotional Materials shall mean all sales representative training materials with
respect to the Licensed Product and all written, printed, graphic, electronic, audio or video
matter, including journal advertisements, sales visual aids, direct mail, medical
information/education monographs, direct-to-consumer advertising, Internet postings, broadcast
advertisements and sales reminder aids (e.g., scratch pads, pens and other such items) intended for
use or used by Licensee, or its Affiliates, Sublicensees or Distributors, in connection with any
promotion of the Licensed Product (but excluding Product Labeling).
1.75 Recall Expenses shall have the meaning set forth in Section 9.2.
1.76 Regulatory Approval shall mean, on a country-by-country basis, the right to
commercially distribute, sell or market the Licensed Product in such country, including in the case
of the United States, a determination by the FDA of substantial equivalence (within the meaning of
21 C.F.R. § 807.100) following the filing with the FDA of a 510(k) Notification, or in the event
that a PMA is required, the approval by the FDA of such PMA, and in the case of any other country
or territory, any necessary approvals in such country or territory.
1.77 Regulatory Authority shall mean any supra-national, federal, national, regional, state,
provincial or local regulatory agencies, departments, bureaus, commissions, councils or other
government entities regulating or otherwise exercising authority with respect to the Exploitation
of the Licensed Product.
1.78 Regulatory Documentation shall mean all applications, registrations, licenses,
authorizations and approvals (including all Regulatory Approvals), all correspondence submitted to
or received from Regulatory Authorities (including minutes and official contact reports relating to
any communications with any Regulatory Authority) and all supporting documents and all results of
clinical studies and tests, in each case relating to any Licensed Product, and all data contained
in any of the foregoing, including all IDEs, 510K Notifications, PMA Notifications, Regulatory
Approvals, advertising and promotion documents, adverse event files, complaint files and
Manufacturing records.
1.79 Sublicensee shall mean any Person, other than an Affiliate of Licensee, that is granted
a sublicense by Licensee as provided in Section 5.2.
1.80 Territory shall mean all countries in the world.
1.81 Third Party shall mean any Person other than EOS, Licensee and their respective
Affiliates.
1.82 Third Party Acquirer shall have the meaning set forth in Section 1.12.
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Certain
portions of this Exhibit have been omitted and filed separately with
the Securities and Exchange Commission pursuant to a request for
confidential treatment. Such omitted portions are marked with
brackets [ ] and an asterisk*.
1.83 Third Party Claims shall have the meaning set forth in Section 12.1.
1.84 Third Party Royalty Payments shall have the meaning set forth in Section 7.4.1.
1.85 Trademark shall include any word, name, symbol, color, designation or device or any
combination thereof, including any trademark, trade dress, brand mark, service mark, trade name,
brand name, logo or business symbol, whether or not registered.
1.86 Valid Claim shall mean, with respect to a particular country, (a) any claim of an
issued and unexpired Patent in such country that (i) has not been held permanently revoked,
unenforceable or invalid by a decision of a court or governmental agency of competent jurisdiction,
which decision is unappealable or unappealed within the time allowed for appeal and (ii) has not
been abandoned, disclaimed, denied or admitted to be invalid or unenforceable through reissue or
disclaimer or otherwise in such country; or (b) a claim of a pending Patent application, which
claim has not been abandoned or finally disallowed without the possibility of appeal or re-filing
of the application.
ARTICLE II
DEVELOPMENT AND REGULATORY MATTERS
2.1 Development of the Licensed Product.
2.1.1 In General. Subject to the terms and conditions of this Agreement, Licensee shall have
the sole right to Develop the Licensed Product in the Field in the Territory. Any such Development
shall be conducted in good scientific manner and in compliance with this Agreement and Applicable
Law. Except as otherwise expressly provided herein, Licensee shall be solely responsible for all
costs and expenses in connection with such Development activities.
2.1.2 Diligence. Licensee agrees to (a) use Commercially Reasonable Efforts achieve the First
Commercial Sale of the Licensed Product in the Field in the Territory by July 1, 2008 (provided
that failure to meet such deadline shall not be considered a material breach entitling EOS to
terminate this Agreement under Section 13.2) and (b) except as expressly limited by Section 13.8.9
shall incur costs and expenses (including internal costs reasonably allocable to the Licensed
Product program under GAAP) of at least [*] by July 1, 2009 in support of the Development of, and
market preparation for, the Licensed Product.
2.1.3 EOS Development Activities. The Parties acknowledge that they may enter into one or
more separate agreements (each, a Development Agreement) pursuant to which Licensee would engage
EOS to perform certain Development activities relating to the Licensed Product, at Licensees sole
cost and expense, on terms and conditions to be mutually agreed by the Parties in writing. Except
as expressly provided herein or in any Development Agreement, EOS shall have no obligation to
perform any Development activities with respect to the
Licensed Product. Except to the extent expressly provided otherwise in a Development
Agreement, the respective rights of the Parties with respect to any intellectual property developed
thereunder shall be as set forth in Section 7.1.2 of this Agreement.
- 10 -
2.1.4 Know-How Disclosure. EOS shall, and shall cause its Affiliates to, without additional
compensation, disclose and make available to Licensee all EOS Know-How and any Information claimed
by any unpublished EOS Patent within ten (10) Business Days after the Effective Date, including,
but not limited to, lab work papers and other research documentation relating to the Existing
Products or any Improvements thereto; any testing and test protocol documentation relating to the
efficacy, validation, or manufacturing thereof; and research study documentation, incidence
reports and other manufacturing history documentation, parts lists and supplier information
(including any pricing information and contracts) relating thereto.
2.1.5 Audit. Licensee shall keep complete and accurate books and financial records (in
accordance with generally accepted accounting principles) pertaining to the costs and expenses it
incurs in connection with the Development of the Licensed Product in connection with its
obligations under Section 2.1.2, which books and financial records shall be retained by Licensee
until three (3) years after the end of the period to which such books and records pertain, or such
longer period as Applicable Law may require. EOS shall have the right, at its expense, to have
certified public accountants, who shall be reasonably acceptable to Licensee, audit the books and
financial records of Licensee relating to such expenses incurred in connection with the Development
of the Licensed Product for the sole purpose of assessing compliance with Section 2.1.2; provided,
however, that EOS shall not have the right to audit a Calendar Quarter more than three (3) years
after the end of such Calendar Quarter, to conduct more than one such audit in any twelve (12)
month period, or to audit any Calendar Quarter more than once. Any Information obtained by the
certified public accountant from Licensee, other than the aggregate amount of costs and expenses
incurred by Licensee, shall be maintained in strict confidence by the certified public accountant.
The certified public accountant shall be obligated to execute a written undertaking with respect to
such confidentiality prior to the commencement of the audit.
2.2 Regulatory Matters.
2.2.1 Assignment and Transfer of Regulatory Documentation and Approvals. EOS shall transfer
to Licensee all of EOS and its Affiliates right, title and interest in and to all Regulatory
Documentation, including, to the extent permitted by Applicable Law, all IDEs and Regulatory
Approvals, Controlled by EOS or its Affiliates, as of a date to be mutually agreed by the Parties,
which date shall not be later than thirty (30) days after the Effective Date. In connection with
the foregoing, EOS shall execute and deliver to the FDA (and any other Regulatory Authority as
reasonably requested by Licensee in writing) a letter in a form approved by Licensee transferring
ownership to Licensee of any and all such Regulatory Approvals filed with the FDA or such other
Regulatory Authority in the Territory by or on behalf of EOS. The costs and expenses associated
with the performance of EOSs obligations under this Section 2.2.1 shall be borne by EOS.
2.2.2 Regulatory Responsibilities. Licensee shall have sole responsibility for preparing and
maintaining all regulatory submissions and responding to all
inquiries from Regulatory Authorities with respect to (a) Regulatory Approvals for the
Licensed Product in the Field in the Territory and (b) Development activities for the Licensed
Product that are conducted in support of Regulatory Approvals for the Licensed Product or
Commercialization of the Licensed Product in the Field in the Territory, and for complying with all
requirements of Applicable Law with respect thereto. Subject to Article XIII, all Regulatory
Approvals with respect to the Licensed Product, and related submissions by or on
- 11 -
behalf of License,
in the Field in the Territory shall be the property of Licensee and held in the name of Licensee.
2.2.3 Communications with Regulatory Authorities. Licensee shall be responsible for all
communications with the Regulatory Authorities relating to the Licensed Product in the Field in the
Territory.
2.2.4 Regulatory Records. Licensee shall maintain, or cause to be maintained, records of
Development activities conducted by or on behalf of Licensee with respect to the Licensed Product
in sufficient detail and in good scientific manner appropriate for patent and regulatory purposes,
which shall be complete and accurate and shall fully and properly reflect all work done and results
achieved in the performance of such Development activities, and which shall be retained for at
least three (3) years after the termination of this Agreement, or for such longer period as may be
required by Applicable Law.
2.3 Reports. Upon the request of EOS, which request may not be made more than once every
calendar quarter, Licensee shall provide to EOS a brief summary of any material Development
activities with respect to Licensed Products that Licensee has performed, or has caused to be
performed, to date.
ARTICLE III
MANUFACTURING AND SUPPLY
3.1 Manufacturing. Subject to the terms and conditions of this Agreement, Licensee shall have
the sole right, at its expense, to Manufacture the Licensed Product, including performing
manufacturing process development and scale-up with respect thereto, for clinical and commercial
use in the Field in the Territory. Licensee may elect to Manufacture supplies of the Licensed
Product itself or through Third Party suppliers. In the event that Licensee elects to use Third
Party suppliers, (a) all payment obligations to such Third Party suppliers shall be the sole
responsibility of Licensee, and (b) Licensee shall have sole responsibility for supervising any
Manufacturing activities conducted by such Third Party suppliers.
3.2 Transfer of Manufacturing-Related Materials and Documentation. Without limitation of
Section 2.1.4 or Section 2.2.1, EOS hereby assigns and transfers to Licensee all of EOSs right,
title and interest in and to the tooling, manufacturing drawings and other materials and
documentation with respect to the Licensed Product described in Exhibit D. Promptly following
Licensees request, and in no event later than two (2) weeks thereafter, EOS shall cause such
materials and documentation to be delivered to Licensee at such location designated by Licensee, at
Licensees expense. For the avoidance of doubt, subject to Section 13.6.l and the other terms of
this Agreement, any tooling and manufacturing drawings developed by or on behalf of Licensee shall
be owned by Licensee.
ARTICLE IV
COMMERCIALIZATION
4.1 Generally; Diligence. Subject to the terms and conditions of this Agreement, Licensee
shall have the sole right, at its expense, to Commercialize the Licensed Product in the Field in
the Territory. Any such Commercialization shall be in compliance with this Agreement and
Applicable Law.
- 12 -
4.2 Promotional Materials and Activities. Licensee shall be responsible, at its sole expense,
for preparing all Promotional Materials used to support the Commercialization of the Licensed
Product in the Field in the Territory. All Promotional Materials shall be consistent with
Applicable Law and with the Product Labeling approved by Licensee for the Licensed Product.
Licensee shall be responsible for obtaining any approvals from the Regulatory Authorities required
for the use of any Promotional Materials in the Field in the Territory and shall submit all
applicable Promotional Materials to such Regulatory Authorities as required by Applicable Law.
4.3 Statements and Compliance with Applicable Law.
4.3.1 Sales Force Compliance. Licensee shall use Commercially Reasonable Efforts to train and
monitor its sales representatives to (a) use only Promotional Materials (without any addition,
deletion or other modification) approved for use by Licensee for the promotion of the Licensed
Product in the Field in the Territory, (b) limit claims of efficacy and safety for the Licensed
Product to those that are consistent with Applicable Law and with approved (by the appropriate
Regulatory Authority) promotional claims in Product Labeling and Promotional Materials for the
Licensed Product, and not add, delete or otherwise modify claims of efficacy and safety in the
promotion of the Licensed Product in any respect from those claims of efficacy and safety that are
contained in such approved Product Labeling and Promotional Materials and (c) Commercialize the
Licensed Product in adherence in all material respects with Applicable Law.
4.3.2 Medical and Other Inquiries. Licensee shall be responsible for responding to all
medical questions or inquiries relating to the Licensed Product sold in the Field in the Territory.
Licensee shall keep such records and make such reports as are reasonably necessary to document
such communications in compliance with all Applicable Law.
4.3.3 Compliance with Laws. Licensee shall use Commercially Reasonable Efforts to, and shall
use Commercially Reasonable Efforts to cause its Affiliates, employees, representatives, agents,
Sublicensees and Distributors to, avoid taking, or failing to take, any actions that Licensee knows
or reasonably should know would jeopardize the goodwill or reputation of the Licensed Product or
any Trademark associated therewith. Licensee shall in all material respects conform its practices
and procedures relating to educating the dental community in the Territory with respect to the
Licensed Product to any applicable industry association regulations, policies and guidelines, as
the same may be amended from time to time, and shall comply with Applicable Law with respect
thereto.
4.4 Sales and Distribution in the Territory. Licensee shall be solely responsible for
invoicing and booking sales of the Licensed Product in the Territory, establishing all terms of
such sales (including pricing and discounts), and warehousing and distributing the Licensed Product
in the Territory and shall perform all related activities, in each case in a manner consistent with
the terms and conditions of this Agreement. Licensee shall also be solely responsible for handling
all returns, order processing, invoicing and collection, distribution and inventory and receivables
with respect to the Licensed Product in the Field in the Territory. If EOS receives any orders for
the Licensed Product in the Field in the Territory, it shall refer such orders to Licensee.
4.5 Customer Notification. Promptly after the Effective Date, the Parties shall mutually
agree on the manner, timing and form of notification to be sent to existing
- 13 -
customers of the
Licensed Product concerning this Agreement and the related transfer of customer support functions
and regulatory compliance responsibilities from EOS to Licensee.
ARTICLE V
GRANT OF RIGHTS
5.1 License Grant. Subject to the terms and conditions of this Agreement, EOS hereby grants
to Licensee an exclusive (including with respect to EOS and its Affiliates), royalty-bearing
license, with the right to grant sublicenses in accordance with Section 5.2, under the EOS
Technology and the Licensed Trademarks to Exploit the Licensed Product in the Field in the
Territory; provided, however, that such license shall be non-exclusive with respect to the
Additional Patents.
5.2 Sublicenses. The rights and licenses granted to Licensee under Section 5.1 shall include
the right to grant sublicenses to any Person, subject to the consent of EOS, such consent not to be
unreasonably withheld or delayed. Any such permitted sublicenses shall be the subject of a written
agreement between Licensee and such Person, which agreement shall be consistent with and subject to
the terms and conditions of this Agreement. Licensee agrees (a) to use all commercially reasonable
efforts to procure the performance by each Sublicensee, if any, of the terms of each such
sublicense agreement and (b) to cause each Sublicensee, if any, to comply with the applicable terms
and conditions of this Agreement. The grant of any such sublicense shall not relieve the Licensee
of its obligations under this Agreement, except to the extent they are satisfactorily performed by
such Sublicensee. A copy of any sublicense agreement executed by Licensee and a Sublicensee shall
be provided to EOS within fourteen (14) days of its execution.
5.3 Use of Trademarks and Corporate Names.
5.3.1 Subject to this Section 5.3, Licensee shall have the sole right to determine the
Trademarks to be used with respect to the Commercialization of the Licensed Product in the Field in
the Territory. Licensee shall not, and shall not permit its Sublicensees, Distributors or
Affiliates to use in connection with the Exploitation of the Licensed Product, any Trademark (other
than the Licensed Trademarks to the extent licensed hereunder) that is confusingly similar to,
misleading or deceptive with respect to or that dilutes any (or any part) of the Trademarks owned
or Controlled by EOS. Licensee shall execute any documents required, in the reasonable opinion of
EOS, for Licensee to be entered
as a registered user or recorded licensee of the Licensed Trademarks or (in the case of
termination of this Agreement) to be removed as a registered user or licensee thereof.
5.3.2 With respect to any Licensed Trademarks, Licensee agrees to comply with the customary
guidelines of EOS with respect to manner of use (as provided in writing by EOS from time to time),
and to maintain the quality standards of EOS with respect to the goods sold and services provided
in connection with such Trademarks.
5.3.3 EOS agrees to transfer to Licensee, promptly after the Effective Date, all right, title
and interest of EOS in and to the domain name www.difoti.com; provided, however,
that Licensee shall transfer to EOS all right, title and interest of Licensee in and to such domain
name promptly after the effective date of any termination of this Agreement pursuant to Article
XIII.
- 14 -
Certain
portions of this Exhibit have been omitted and filed separately with
the Securities and Exchange Commission pursuant to a request for
confidential treatment. Such omitted portions are marked with
brackets [ ] and an asterisk*.
5.4 EOS Covenant Not to Compete. From the Effective Date of this Agreement until the earlier
of (a) termination of this Agreement, or (b) the last to expire of the Core Patents (whichever
occurs first), EOS shall not Develop, Manufacture or Commercialize, directly or indirectly, in the
Field any technology or product that competes with any Licensed Product or Combination Product in
the Field.
5.5 Retention of Rights; No Implied Rights. Notwithstanding anything to the contrary in this
Agreement and subject to the limitations in Section 5.4, EOS retains all right, title and interest
in and to the EOS Technology, EOSs Corporate Name and any Regulatory Documentation Controlled by
EOS to Exploit any product outside the Field. For the avoidance of doubt, Licensee and its
Affiliates, Sublicensees and Distributors shall have no right, express or implied, with respect to
any EOS Technology, any Regulatory Documentation Controlled by EOS, or any of EOSs Corporate Names
or Trademarks, except as expressly provided herein, and EOS and its Affiliates and sublicensees
shall have no right, express or implied, with respect to any Licensee Patents, Licensee Know-How,
Incorporating Patents, or Next Generation Patents, except as expressly provided herein.
ARTICLE VI
PAYMENTS AND RELATED MATTERS
6.1 Payments to EOS. In partial consideration of the licenses and other rights granted herein
and subject to the terms and conditions set forth in this Agreement, Licensee shall make the
following payments to EOS:
6.1.1 Initial Payment. Licensee shall pay to EOS a non-refundable, non-creditable payment of
[*] upon execution of this Agreement.
6.1.2 Second Payment. Licensee shall pay to EOS a non-refundable, non-creditable payment of
[*] within ten (10) Business Days following the earlier of (a) the First Commercial Sale of the
Licensed Product, or (b) July 1, 2008. Licensee shall notify EOS promptly of the occurrence of
such First Commercial Sale.
6.2 Royalties. In partial consideration of the licenses and other rights granted herein,
Licensee shall pay
to EOS royalties based on worldwide aggregate Net Sales of Licensed Products at the rates set
forth in Section 6.2.1.
6.2.1 Rate. The royalty rate applicable to Net Sales of any Licensed Product, whether or not
such Licensed Product is a Licensed Product System, shall be determined based on the aggregate
number of Licensed Product Systems that have been sold throughout the Territory during such
Calendar Year, by or on behalf of Licensee, and its Affiliates and Sublicensees, on or before the
date on which such Licensed Product is sold, as set forth in the chart below:
|
|
|
Royalty |
|
Aggregate Units of Licensed Product Systems |
Rate |
|
Previously Sold in the Calendar Year |
[*] |
|
Between 0 and 2,500 units |
[*] |
|
Between 2,501 and 3,500 units |
[*] |
|
Between 3,501 and 4,500 units |
[*] |
|
Between 4,501 - 5,500 units |
[*] |
|
Between 5,501 - 6,500 units |
[*] |
|
6,501 units or greater |
- 15 -
Certain
portions of this Exhibit have been omitted and filed separately with
the Securities and Exchange Commission pursuant to a request for
confidential treatment. Such omitted portions are marked with
brackets [ ] and an asterisk*.
6.2.2 Minimum Royalty Payments. Commencing with the Calendar Year 2008 or, in the event the
First Commercial Sale of the Licensed Product in the Territory occurs prior to July 1, 2008, the
Calendar Year in which such First Commercial Sale occurs, Licensee shall pay to EOS an amount equal
to the positive difference, if any, between the Minimum Royalty Payment for such Calendar Year and
the amounts paid by Licensee pursuant to Section 6.2.1 for such Calendar Year. Such payment shall
be due as of the date on which the royalty payment for the last Calendar Quarter of such Calendar
Year is due pursuant to Section 6.5. The Minimum Royalty Payment shall be equal to [*] per
Calendar Year; provided, however, that the Minimum Royalty Payment shall be pro-rated with respect
to the Calendar Year in which the First Commercial Sale occurs. In the event that Licensee pays
any amount pursuant to this Section 6.2.2 with respect to a Calendar Year, such amount paid shall
be creditable against royalties due pursuant to Section 6.2.1 with respect to any of the three (3)
Calendar Years immediately following such Calendar Year.
6.3 Royalty Term; Royalty Reduction. Licensees obligations to pay royalties under this
Article VI shall terminate, on a country-by-country basis, with respect to each Licensed Product,
on the later to occur of (a) the tenth (10th) anniversary of the First Commercial Sale of such
Licensed Product in such country, and (b) the expiration date in such country of the last to expire
of the EOS Patent(s), if any, that includes at least one Valid Claim covering the Manufacture, use
or sale of such Licensed Product in such country, whereupon Licensee shall own a fully paid-up
exclusive license to the Licensed Product in the Field in such country; provided, however, that the
applicable royalty rate shall be reduced to one-third of the rate set forth in Section 6.2.1, on a
country-by-country basis, upon the expiration in such country of the last to expire of any EOS
Patent that includes at least one Valid Claim covering the Manufacture, use or sale of the Licensed
Product in such country, which reduced royalty shall be payable through the tenth anniversary of
the First Commercial Sale of such Licensed Product in such country. For clarity, in the event that
there is no such EOS Patent in a country, then such reduced royalty rate shall apply in such
country from the First Commercial Sale of each Licensed Product in such country through the tenth
anniversary thereof.
6.4 Royalty Payments. Running royalties based upon the Net Sales during a Calendar Quarter
due pursuant to Section 6.2 or 6.4 shall be payable by Licensee on a Calendar-Quarter basis, within
thirty (30) days after the end of such Calendar Quarter. Royalties shall be calculated in
accordance with United States generally accepted accounting principles and the terms of this
Article VI. Only one royalty payment shall be due hereunder on Net Sales, even though the
Manufacture, sale or use of the Licensed Product may be covered by more than one Patent in a
country.
6.5 Royalty Statements. Licensee shall provide to EOS within fifteen (15) days after the end
of each Calendar Quarter, a statement showing, at a minimum (a) Net Sales during the relevant
Calendar Quarter by country, (b) the currency exchange rates, if any, used in the calculation of
such royalty payment, (c) the number of units of Licensed Product Systems sold, and (d) the amount
of royalties due on such Net Sales.
6.6 Mode of Payment. All payments to EOS under this Agreement shall be made by wire transfer
of United States Dollars to such bank account as EOS may from time to time designate by notice to
Licensee. With respect to sales outside the United States, payments shall be calculated based on
currency exchange rates for the relevant Calendar
- 16 -
Quarter, as follows. For each Calendar Quarter
and each currency, such exchange rate shall equal the arithmetic average of the daily exchange
rates for each Business Day in such Calendar Quarter as set forth in The Wall Street Journal,
Eastern Edition or, if not available, as otherwise agreed by the Parties.
6.7 Taxes. The royalties and other amounts payable by Licensee to EOS pursuant to this Article VI
(Payments) shall not be reduced on account of any taxes unless required by Applicable Law.
Licensee shall deduct or withhold from the Payments any taxes that it is required by Applicable Law
to deduct or withhold. Notwithstanding the foregoing, if EOS is entitled under any applicable tax
treaty to a reduction of rate of, or the elimination of, applicable withholding tax, it may deliver
to Licensee or the appropriate governmental authority (with the assistance of Licensee to the
extent that this is reasonably necessary) the prescribed forms necessary to reduce the applicable
rate of withholding or to relieve Licensee of its obligation to withhold tax, and Licensee shall
apply the reduced rate of withholding, or dispense with withholding, as the case may be, provided
that Licensee has received evidence, in a form reasonably satisfactory to Licensee, of EOSs
delivery of all applicable forms (and, if necessary, its receipt of appropriate governmental
authorization) at least fifteen (15) days prior to the time that the Payments are due. If, in
accordance with the foregoing, Licensee withholds any amount, it shall pay to EOS the balance when
due, make timely payment to the proper taxing authority of the withheld amount and send to EOS
proof of such payment within sixty (60) days following that payment.
6.8 Interest on Late Payment. If any payment due to either Party under this Agreement is
overdue then the delinquent Party shall pay interest thereon (before and after any judgment) at an
annual rate (but with interest accruing on a daily basis) of three hundred basis points above the
prime rate as reported in The Wall Street Journal, Eastern Edition, such interest to run from the
date upon which payment of such sum became due until payment thereof in full together with such
interest.
6.9 Financial Records. Licensee shall, and shall cause its Affiliates and Sublicensees to,
keep complete and accurate books and records pertaining to the Commercialization the Licensed
Product, including books and records of the Invoiced Sales (including any deductions therefrom) and
Net Sales, in sufficient detail to calculate the royalties payable under this Agreement. Such
books and records shall be retained by Licensee, and its Affiliates and Sublicensees, until the
later of (a) three (3) years after the end of the period to which such books and records pertain
and (b) the expiration of the applicable tax statute of limitations (or any extensions thereof), or
for such longer period as may be required by Applicable Law.
6.10 Audit. At the request of EOS, Licensee shall, and shall cause its Affiliates and
Sublicensees, to permit EOS to have a certified public accountant, at reasonable times and upon
reasonable notice, to examine the books and records maintained pursuant to Section 6.9 . Such
examinations may not (a) be conducted for any Calendar Quarter more than three (3) years after the
end of such Calendar Quarter, (b) be conducted more than once in any twelve (12) month period or
(c) be repeated for any Calendar Quarter. Except as provided below, the cost of this examination
shall be borne by EOS, unless the audit reveals a variance of more than ten percent (10%) from the
reported amounts, in which case Licensee shall bear the cost of the audit. Unless disputed
pursuant to Section 6.11 below, if such audit concludes that additional amounts were owed by
Licensee or that excess
- 17 -
payments were made by Licensee during such period, Licensee shall pay the
additional royalties or EOS shall reimburse such excess payments, with interest from the date
originally due as provided in Section 6.8, within sixty (60) days after the date on which such
auditors written report is delivered to the Parties, unless either Party disputes such report
pursuant to Section 6.11.
6.11 Audit Dispute. In the event of a dispute regarding the results of an audit conducted
pursuant to Section 6.10, including the amount of royalties owed to EOS under this Article VI , EOS
and Licensee shall work in good faith to resolve the disagreement. If the Parties are unable to
reach a mutually acceptable resolution of any such dispute within thirty (30) days after receipt of
the auditors written report delivered pursuant to Section 6.10, the dispute shall be submitted for
arbitration to a certified public accounting firm selected by each Partys certified public
accountants or to such other Person as the Parties shall mutually agree (the Audit Referee). The
decision of the Audit Referee shall be final and the costs of such arbitration as well as the
initial audit shall be allocated between the Parties in such manner as the Audit Referee shall
determine. Not later than ten (10) days after such decision, Licensee shall pay to EOS any
additional amounts owed to EOS or EOS shall reimburse excess payments, in each case in accordance
with such decision.
6.12 Confidentiality. Any Information obtained by the certified public accountant under
Section 6.10 or the Audit Referee under Section 6.11 from Licensee, other than the aggregate amount
of Net Sales and royalties due under Section 6.2, shall be maintained in strict confidence by the
certified public accountant or the Audit Referee. The receiving Party shall treat all information
subject to review under this Article VI in accordance with the confidentiality provisions of
Article X and the Parties shall cause any certified public accountant, auditor or the Audit Referee
to enter into a reasonably acceptable confidentiality agreement with the audited Party obligating
such auditor or Audit Referee, as the case may be, to keep all such financial information
confidential, subject to the reporting obligations of the auditor or Audit Referee under
Section 6.10 or 6.11, respectively.
ARTICLE VII
INTELLECTUAL PROPERTY
7.1 Ownership of Intellectual Property.
7.1.1 Ownership of Existing Intellectual Property. Subject to the terms of this Agreement,
including the licenses granted in Section 5.1, as between the Parties, each Party shall retain
ownership of any Regulatory Documentation (other than, in the case of EOS, the Regulatory
Documentation transferred and assigned to Licensee pursuant to Section 2.2.1), Information, Patents
and Intellectual Property Rights owned or Controlled by such Party, its Affiliates, its licensees
or its sublicensees prior to execution of this Agreement, including in the case of EOS as the
retaining Party, all right, title and interest in and to all EOS Technology and the Licensed
Trademarks, and in the case of Licensee, all right, title and interest in and to the Licensee
Technology.
7.1.2 Ownership of Developed Intellectual Property. Subject to the terms of this Agreement,
including the licenses granted in Section 5.1, as between the Parties, each Party shall own and
retain all right, title and interest in and to any and all Information that is conceived,
discovered, developed or otherwise made, by or on behalf of such Party, its Affiliates, its
licensees or its sublicensees under or in connection with this Agreement, whether or not patented
or patentable, and any and all Patent and Intellectual
- 18 -
Property Rights with respect thereto, except
that Licensee shall own all right title and interest in and to any Information (and any and all
Patent and Intellectual Property Rights with respect thereto) conceived, reduced to practice,
developed or otherwise made (i) by or on behalf of either Party in the course of performing
activities under any Development Agreement, and (ii) in connection with any Next Generation
Patents, Incorporating Patents, or Improvements to the Licensed Products (but only those portions
of any Improvements not covered by any Valid Claims of the EOS Patents) which are conceived,
reduced to practice, developed or otherwise made by Licensee, its Affiliates, employees or agents,
or are funded by Licensee pursuant to its obligations under Section 2.1.2.
7.2 Maintenance and Prosecution of Patents and Trademarks.
7.2.1 EOS Patents. Subject to Section 7.2.4, EOS, through patent attorneys or agents of its
choice and at EOSs expense, shall have the sole right to obtain, prosecute and maintain the EOS
Patents throughout the world. EOS shall not abandon any application for any such Patent or permit
any Patent issuing therefrom to lapse in any such country without first notifying Licensee and
permitting Licensee to continue the prosecution of such applications or pay any required fees in
the name of EOS, at Licensees expense and through patent attorneys of its choice. In this case
Licensee will become an assignee of any application for Patent or Patent as a result of its
continuing the prosecution of an application for Patent or paying any fees according to this
Section 7.2.1.
7.2.2 Licensee Patents. Subject to Section 7.2.4, Licensee, through patent attorneys or
agents of its choice and at its sole cost and expense, shall have the sole right to obtain,
prosecute and maintain the Licensee Patents, Incorporating Patents, and Next Generation Patents
throughout the world.
7.2.3 Trademarks. EOS shall have the sole right to register and maintain the Licensed
Trademarks, at its sole cost and expense. Licensee shall have the sole right to register and
maintain any Trademarks, other than the Licensed Trademarks, used in Commercializing the Licensed
Product in the Field in the Territory, at its sole cost and expense.
7.2.4 Cooperation. EOS shall keep Licensee currently informed of all steps to be taken in the
preparation and prosecution of all Patent applications filed by it according to this Section 7.2
and shall furnish Licensee with copies of such applications for Patents, amendments thereto and
other related correspondence to and from patent offices and, to the extent reasonably practicable,
permit Licensee an opportunity to offer its comments thereon before making a submission to a patent
office which could materially affect the scope or validity of the patent coverage that may result.
The Parties shall cooperate with each other in obtaining any patent term restoration or
supplemental protection certificates or their equivalent for the EOS Patents. In the event that
elections with respect to patent term restoration are to be made for any EOS Patent, EOS shall have
the right to make the election, and for any Licensee Patent, Licensee shall have the right to make
the election.
7.3 Enforcement of Patents and Trademarks.
7.3.1 Notice. In the event that either Party reasonably believes that a Third Party may be
infringing any EOS Patent, Licensee Patent, Next Generation Patent, Incorporating Patent or
Licensed Trademark in the Field, such Party shall promptly notify the
- 19 -
other Party in writing,
identifying the alleged infringer and the alleged infringement complained of and furnishing the
information upon which such determination is based.
7.3.2 Patents. With respect to the EOS Patents, other than the Additional Patents, and the
Licensee Patents, Next Generation Patents, and Incorporating Patents, Licensee shall have the first
right, but not the obligation, through counsel of its choosing and at its sole cost and expense, to
take any measures it deems appropriate to stop such infringing activities by such Third Party in
any part of the Territory. In the event that Licensee fails within ninety (90) days following
notice of such infringement, or earlier notifies EOS in writing of its intent not, to take
commercially appropriate steps to remove any infringement of any such Patent, then EOS shall have
the right, but not the obligation, to do so at EOSs sole cost and expense; provided, however, that
if the Licensee has commenced negotiations with an alleged infringer for discontinuance of such
infringement within such ninety (90) day period, then Licensee shall have an additional ninety (90)
days to conclude its negotiations before EOS may bring suit for such infringement. During the
period in which any Third Party is infringing the EOS Patents, so long as Licensee is pursuing
action against such Third Party in connection with its infringing activities, Licensee may suspend
the payment of royalties, with no loss of any rights by Licensee under this Agreement, during which
time, however, Licensee shall still provide EOS with royalty statements under Section 6.5 and shall
accrue the payment of such royalties which would otherwise be payable to EOS (in the absence of the
application of this Section 7.3.2). If Licensee is successful in its action against such Third
Party, after the conclusion of such action, Licensee shall make a payment
to EOS of all royalty payments accrued in accordance with this Section 7.3.2 within thirty
(30) days of the final adjudication of such action.
7.3.3 Trademarks. EOS shall have the sole right to enforce the Licensed Trademarks, at its
sole cost and expense. Licensee shall have the sole right to enforce any Trademarks, other than
the Licensed Trademarks, used in Commercializing the Licensed Product in the Field in the
Territory, at its sole cost and expense.
7.3.4 Cooperation. Upon reasonable request by the enforcing Party, the other Party shall give
the enforcing Party all reasonable information and assistance, including allowing the enforcing
Party access to the other Partys files and documents and to the other Partys personnel who may
have possession of relevant information and, if necessary for the enforcing Party to prosecute any
legal action, joining in the legal action as a party.
7.3.5 Costs and Expenses. Any damages or other amounts collected in an enforcement action
pursuant to this Section 7.3 shall be used to reimburse the Parties for their costs and expenses in
making such recovery (which amounts shall be allocated pro rata if insufficient to cover the
totality of such expenses), with any remainder being retained by the Party that pursued such
enforcement action; provided, however, with respect to any amount received by Licensee that is
attributable to lost profits (or sales) of Licensed Products in the Territory, Licensee shall pay a
royalty to EOS pursuant to Section 6.2 with respect to the imputed loss in Net Sales.
7.4 Potential Third Party Rights.
7.4.1 Third Party Licenses. Licensee shall be solely responsible for securing, and shall use
reasonable efforts to secure, any Third Party licenses that it deems necessary or desirable in
connection with the Exploitation of the Licensed Product in the
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Territory, and for any associated
license fees, milestones, royalties or other payments due to such Third Party (Third Party Royalty
Payments).
7.4.2 Third Party Litigation. In the event of any actual or threatened suit against Licensee
or its Affiliates, Sublicensees, Distributors or customers alleging that the Development,
Manufacture, marketing, sale, use or other Commercialization of the Licensed Product in the
Territory infringes the Patent or Intellectual Property Rights of any Person, Licensee shall assume
direction and control of the defense of claims arising therefrom (including the right to settle
such claims); provided, however, that Licensee shall obtain the written consent of EOS prior to
ceasing to defend, settling or otherwise compromising such claims as they relate to any EOS Patents
or Intellectual Property Rights owned or Controlled by EOS (collectively, EOS Technology Claims),
such consent not to be unreasonably withheld or delayed. EOS agrees that Licensee may set off any
costs and expenses (including any damages, royalties or other payments resulting therefrom)
incurred by Licensee in assuming such defense of EOS Technology Claims against any royalties
payable to EOS by Licensee pursuant to Section 6.2; provided, however, that Licensee shall have no
other recourse against EOS with respect to any such costs and expenses.
7.4.3 Cooperation. In the event that a Third Party institutes a Patent, trade secret or other
infringement suit against EOS, Licensee or their respective Affiliates or, in the case of Licensee,
Sublicensees or Distributors, during the term of this
Agreement, each Party shall, at its own cost and expense, use all reasonable efforts to assist
and cooperate with the other Party in connection with the defense of such suit.
ARTICLE VIII
COMPLAINTS AND ADVERSE EVENT REPORTING
8.1 Complaints. Each Party shall maintain a record of any and all complaints it receives with
respect to the Licensed Product as required by Applicable Law. Each Party shall notify the other
Party in reasonable detail of any complaint received by it relating to any Licensed Product within
thirty (30) days after receiving the complaint, and in any event in sufficient time to allow such
other Party to comply with any and all regulatory and other requirements imposed upon it in any
jurisdiction in which the Licensed Product is being marketed.
8.2 Adverse Event Reporting. Each Party shall provide the other Party with all information
necessary or desirable for such other Party to comply with all Applicable Law with respect to the
Licensed Product. In the event that the Licensed Product is a PMA Product, Licensee shall (a)
develop appropriate adverse experience reporting procedures; (b) provide any material information
on the Licensed Product from pre-clinical or clinical laboratory studies, as well as serious or
unexpected adverse experience reports from clinical studies with respect to the Licensed Product;
and (c) report and provide such information in such a manner and time so as to comply with all
Applicable Law in countries for which Regulatory Approval is or will be sought.
ARTICLE IX
PRODUCT RECALLS
9.1 Notification and Recall. In the event that any Regulatory Authority issues or requests a
recall or takes similar action in connection with any Licensed Product or in the event either Party
determines that an event, incident or circumstance has occurred that
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may result in the need for a
recall or market withdrawal, the Party notified of or desiring such recall or similar action shall,
within twenty-four (24) hours, advise the other Party thereof by telephone (and confirmed by email
or facsimile), email or facsimile. Licensee shall have the sole right to decide, in its
discretion, whether to conduct a recall, at its expense, of the Licensed Product in the Field in
the Territory, and the manner in which any such recall shall be conducted.
9.2 Recall Expenses. Licensee shall bear the expenses of any recall of the Licensed Product
in the Field in the Territory (the Recall Expenses).
ARTICLE X
CONFIDENTIALITY AND NON-DISCLOSURE
10.1 Confidentiality Obligations. At all times during the term of this Agreement and for a
period of five (5) years following termination or expiration of this Agreement, each Party shall,
and shall cause its officers, directors, employees and agents to, keep completely confidential and
not publish or otherwise disclose and not use, directly or indirectly, for any purpose, any
Confidential Information furnished or otherwise made known to it, directly or indirectly, before or
after the Effective Date, by the other Party, except to the extent such disclosure or use is
expressly permitted by the terms of this Agreement. Confidential Information means any
information provided by one Party to the other Party relating to the following: the terms of this
Agreement; the Licensed Product (including the EOS Technology, the Licensee Technology, the
Regulatory Documentation and Regulatory Approvals and any information or data contained therein);
any Development or Commercialization of the Licensed Product; or the scientific, regulatory or
business affairs or other activities of a Party. Notwithstanding the foregoing, Confidential
Information shall not include any information that:
10.1.1 is or hereafter becomes part of the public domain by public use, publication, general
knowledge or the like through no wrongful act, fault or negligence on the part of the receiving
Party;
10.1.2 can be demonstrated by documentation or other competent proof to have been in the
receiving Partys possession prior to disclosure by the disclosing Party without any obligation of
confidentiality with respect to said information;
10.1.3 is subsequently received by the receiving Party from a Third Party who is not bound by
any obligation of confidentiality with respect to said information; or
10.1.4 can be demonstrated by documentation or other competent evidence to have been
independently developed by or for the receiving Party without reference to the disclosing Partys
Confidential Information.
Specific aspects or details of Confidential Information shall not be deemed to be within the public
domain or in the possession of the receiving Party merely because the Confidential Information is
embraced by more general information in the public domain or in the possession of the receiving
Party. Further, any combination of Confidential Information shall not be considered in the public
domain or in the possession of the receiving Party merely because individual elements of such
Confidential Information are in the public domain or in
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the possession of the receiving Party
unless the combination and its principles are in the public domain or in the possession of the
receiving Party.
10.2 Permitted Disclosures. Each Party may disclose Confidential Information received from
the other Party to the extent that such disclosure is:
10.2.1 Made in response to a valid order of a court of competent jurisdiction or other
supra-national, federal, national, regional, state, provincial and local governmental or regulatory
body of competent jurisdiction or, if in the reasonable opinion of the receiving Partys legal
counsel, such disclosure is otherwise required by law; provided, however, that the receiving Party
shall first have given notice to the disclosing Party and given the disclosing Party a reasonable
opportunity to quash such order and to obtain a protective order requiring that the Confidential
Information and documents that are the subject of such order be held in confidence by such court or
agency or, if disclosed, be used only for the purposes for which the order was issued; and provided
further that if a disclosure order is not quashed or a protective order is not obtained, the
Confidential Information
disclosed in response to such court or governmental order shall be limited to that information
which is legally required to be disclosed in response to such court or governmental order;
10.2.2 Made by the receiving Party to the Regulatory Authorities as required in connection
with any filing, application or request for Regulatory Approval permitted hereunder; provided,
however, that reasonable measures shall be taken to assure confidential treatment of such
information;
10.2.3 Made by the receiving Party or its Affiliates or sublicensees to Third Parties as may
be necessary or useful in connection with the performance of its obligations or exercise of its
rights as contemplated by this Agreement, including any permitted subcontracting and sublicensing
transactions in connection therewith; provided, however, that such disclosure may be made only to
such Persons as are subject to written obligations of confidentiality and non-use with respect to
such Confidential Information substantially similar to the obligations of confidentiality and
non-use of the receiving Party set forth in this Article X; or
10.2.4 Made by the receiving Party as otherwise required to comply with Applicable Law,
including any disclosures required under securities laws, provided that the receiving Party
provides written notice of such disclosure to the disclosing Party as soon as reasonably possible
and takes reasonable and lawful actions to avoid and/or minimize the degree of such disclosure.
10.3 Use of Name. Except as expressly permitted or required herein, neither Party shall
mention or otherwise use the name, insignia, symbol, Trademark, trade name or logotype of the other
Party (or any abbreviation or adaptation thereof) in any publication, press release, promotional
material or other form of publicity without the prior written approval of such other Party in each
instance. The restrictions imposed by this Section 10.3 shall not prohibit either Party from
making any disclosure identifying the other Party that is required by Applicable Law.
10.4 Press Releases. The Parties agree to issue the joint press release attached as Exhibit E
promptly following the Effective Date. Any other press releases or other similar public
communications by either Party relating to this Agreement shall be subject to a right of reasonable
prior review and approval by the other Party, which approval
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shall not be unreasonably withheld or
delayed; provided, however, that such right shall not apply to communications required by
Applicable Law, disclosures of information for which consent has previously been obtained, or
information that has been previously disclosed publicly.
10.5 Patient Information. The Parties agree to abide (and to cause their respective
Affiliates and sublicensees) and to take (and to cause their respective Affiliates and sublicensees
to take) all reasonable and appropriate actions to ensure that all Third Parties conducting or
assisting with any clinical development activities hereunder in accordance with, and subject to the
terms of, this Agreement, shall abide, to the extent applicable, by all Applicable Law concerning
the confidentiality or protection of patient identifiable information and/or patients protected
health information, including the regulations at 45 C.F.R. Parts 160 and 164 and where relevant,
the applicable national laws implementing the European Union Directive 95/46/EC on the protection
of individuals with respect to the processing of personal data and on the free
movement of such data of 24 October 1995 and any other Applicable Law, in the course of their
performance under this Agreement.
10.6 Publications. Each Party recognizes that the publication of papers regarding results of
and other information regarding activities under this Agreement, including oral presentations and
abstracts, may be beneficial to both Parties, provided such publications are subject to reasonable
controls to protect Confidential Information. In particular, it is the intent of the Parties to
maintain the confidentiality of any Confidential Information included in any Patent application
until such Patent application has been filed. Accordingly, each Party shall have the right to
review and approve any paper proposed for publication by the other Party, including any oral
presentation or abstract, which pertains to results of any clinical studies or other studies with
respect to the Licensed Product or includes other data generated under this Agreement or any
Development Agreement or the Confidential Information of such first Party. Before any such paper
is submitted for publication or an oral presentation is made, the publishing or presenting Party
shall deliver a complete copy of the paper or materials for oral presentation to the other Party at
least thirty (30) days prior to submitting the paper to a publisher or making the presentation.
The other Party shall review any such paper and give its comments to the publishing Party within
fifteen (15) days of the delivery of such paper to the other Party. With respect to oral
presentation materials and abstracts, the other Party shall make reasonable efforts to expedite
review of such materials and abstracts, and shall return such items as soon as practicable to the
publishing or presenting Party with appropriate comments, if any, but in no event later than
fifteen (15) days from the date of delivery to the other Party. Failure to respond within such
fifteen (15) days shall be deemed approval to publish or present. The publishing or presenting
Party shall comply with the other Partys request to delete references to such other Partys
Confidential Information in any such paper and will withhold publication of any such paper or any
presentation of same for an additional sixty (60) days in order to permit the Parties to obtain
patent protection if either Party deems it necessary. Any publication shall include recognition of
the contributions of the other Party according to standard practice for assigning scientific
credit, either through authorship or acknowledgement, as may be appropriate. Each Party shall use
commercially reasonable efforts to cause investigators and institutions participating in any
clinical studies for the Licensed Product with which it contracts to agree to terms substantially
similar to those set forth in this Section, which efforts shall satisfy such Partys obligations
under this Section with respect to such investigators and institutions.
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ARTICLE XI
REPRESENTATIONS AND WARRANTIES
11.1 Representations, Warranties and Covenants. Each Party hereby represents, warrants and
covenants to the other Party as follows:
11.1.1 Corporate Authority. Such Party (a) has the power and authority and the legal right to
enter into this Agreement and perform its obligations hereunder and (b) has taken all necessary
action on its part required to authorize the execution and delivery of this Agreement and the
performance of its obligations hereunder. This Agreement has been duly executed and delivered on
behalf of such Party and constitutes a legal, valid and binding obligation of such Party and is
enforceable against it in accordance
with its terms subject to the effects of bankruptcy, insolvency or other laws of general
application affecting the enforcement of creditor rights and judicial principles affecting the
availability of specific performance and general principles of equity, whether enforceability is
considered a proceeding at law or equity.
11.1.2 Litigation. Such Party is not aware of any pending or threatened litigation (and has
not received any communication) that alleges that such Partys activities related to this Agreement
have violated, or that by conducting the activities as contemplated herein such Party would
violate, any of the Patent or Intellectual Property Rights of any other Person.
11.1.3 Consents and Approvals. All necessary consents, approvals and authorizations of all
regulatory and governmental authorities and other Persons required to be obtained by such Party in
connection with the execution and delivery of this Agreement have been obtained. All necessary
consents, approvals and authorizations of all regulatory and governmental authorities and other
Persons required to be obtained by such Party in connection the performance of its obligations
hereunder have been obtained or will be obtained prior to such performance.
11.1.4 Conflicts. The execution and delivery of this Agreement and the performance of such
Partys obligations hereunder (a) do not conflict with or violate any requirement of Applicable Law
or any provision of the articles of incorporation or bylaws or any similar instrument of such
Party, and (b) do not conflict with, violate or breach or constitute a default or require any
consent under, any contractual obligation or court or administrative order by which such Party is
bound.
11.2 Additional Representations, Warranties and Covenants of Licensee. Licensee represents,
warrants and covenants to EOS that:
11.2.1 Good Standing. Licensee (a) is a corporation duly organized and in good standing under
the laws of the Federal Republic of Germany and (b) has full power and authority and the legal
right to own and operate its property and assets and to carry on its business as it is now being
conducted and as it is contemplated to be conducted by this Agreement.
11.2.2 No Debarment. Neither Licensee nor any of its Affiliates has been debarred or is
subject to debarment. Neither Licensee nor any of its Affiliates will use in any capacity, in
connection with the performance of its obligations or the exercise of its rights under this
Agreement or any Development Agreement, any Person who has been
- 25 -
debarred pursuant to Section 306 of
the FFDCA or who is the subject of a conviction described in such section. Licensee will inform
EOS in writing immediately if it or any Person who is performing any such activities is debarred or
is the subject of a conviction described in Section 306 or if any action, suit, claim,
investigation or legal or administrative proceeding is pending or, to the best of Licensees
Knowledge, is threatened, relating to the debarment or conviction of Licensee, any of its
Affiliates or any other Person performing such activities.
11.3 Additional Representations, Warranties and Covenants of EOS. EOS represents, warrants and
covenants to Licensee that:
11.3.1 Good Standing. EOS is a corporation duly organized and in good standing under the laws
of the State of Delaware and has full power and authority and the legal right to own and operate
its property and assets and to carry on its business as it is now being conducted and as is
contemplated to be conducted by this Agreement.
11.3.2 No Debarment. Neither EOS nor any of its Affiliates has been debarred or is subject to
debarment. Neither EOS nor any of its Affiliates will use in any capacity, in connection with the
performance of its obligations or the exercise of its rights under this Agreement or any
Development Agreement, any Person who has been debarred pursuant to Section 306 of the FFDCA or who
is the subject of a conviction described in such section. EOS will inform Licensee in writing
immediately if it or any Person who is performing any such activities is debarred or is the subject
of a conviction described in Section 306 or if any action, suit, claim, investigation or legal or
administrative proceeding is pending or, to the best of EOSs Knowledge, is threatened, relating to
the debarment or conviction of EOS, any of its Affiliates or any other Person performing such
activities.
11.3.3 Right to Grant Licenses. EOS Controls the Patents listed on Exhibit A and is entitled
to grant the licenses granted to Licensee herein.
11.3.4 No Encumbrances. All materials and documentation transferred to Licensee by EOS
pursuant to Section 3.2 will be conveyed free from any lawful security interest, lien or
encumbrance.
11.4 DISCLAIMER OF WARRANTY. EXCEPT FOR THE EXPRESS WARRANTIES SET FORTH IN SECTIONS 11.1,
11.2 AND 11.3, NEITHER PARTY MAKES ANY REPRESENTATIONS OR GRANTS ANY WARRANTIES, EXPRESS OR
IMPLIED, EITHER IN FACT OR BY OPERATION OF LAW, BY STATUTE OR OTHERWISE, AND EACH PARTY
SPECIFICALLY DISCLAIMS ANY OTHER WARRANTIES, WHETHER WRITTEN OR ORAL, OR EXPRESS OR IMPLIED,
INCLUDING ANY WARRANTY OF QUALITY, MERCHANTABILITY OR FITNESS FOR A PARTICULAR USE OR PURPOSE OR
ANY WARRANTY AS TO THE VALIDITY OF ANY PATENTS OR THE NON-INFRINGEMENT OF ANY INTELLECTUAL PROPERTY
RIGHTS OF THIRD PARTIES.
ARTICLE XII
INDEMNITY
12.1 Indemnification of EOS. Licensee shall indemnify EOS, its Affiliates and their
respective directors, officers, employees, licensors and agents, and defend and save each of them
harmless, from and against any and all losses, damages, liabilities, costs and
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expenses (including
reasonable attorneys fees and expenses) (collectively, Losses) in connection with any and all
suits, investigations, claims or demands of Third Parties (collectively, Third Party Claims)
arising from or occurring as a result of: (a) the breach by Licensee of any term of this Agreement
or any Development Agreement; (b) any gross negligence or willful misconduct on the part of
Licensee or any other Person in performing Licensees obligations under this Agreement or under any
Development Agreement; (c) the Development, Manufacture, Commercialization or other Exploitation by
or on behalf of Licensee or any of its Affiliates, Sublicensees or Distributors of the Licensed
Product on or after the Effective Date; or (d) the Development, Manufacture, Commercialization or other Exploitation by or on behalf of Licensee
or any of its Affiliates, Sublicensees or Distributors of the Licensed Product prior to the
Effective Date, in each case except for those Losses which EOS has an obligation to indemnify
Licensee pursuant to Section 12.2, as to which Losses each Party shall indemnify the other to the
extent of their respective liability; provided, however, that Licensee shall not be obligated to
indemnify EOS for any Losses to the extent that such Losses arise as a result of gross negligence
or willful misconduct on the part of EOS or any other Person entitled to indemnification pursuant
to Section 12.2.
12.2 Indemnification of Licensee. EOS shall indemnify Licensee, its Affiliates and their
respective directors, officers, employees and agents, and defend and save each of them harmless,
from and against any and all Losses in connection with any and all Third Party Claims arising from
or occurring as a result of: (a) the breach by EOS of any term of this Agreement or any Development
Agreement; (b) any gross negligence or willful misconduct on the part of EOS or any other Person in
performing EOSs obligations under this Agreement or any Development Agreement; or (c) the
Development, Manufacture, Commercialization or other Exploitation by EOS or any of its Affiliates
of the Licensed Product on or after the Effective Date pursuant to Section 13.8, in each
case except for those Losses for which Licensee has an obligation to indemnify EOS pursuant to
Section 12.1, as to which Losses each Party shall indemnify the other to the extent of their
respective liability for the Losses; provided, however, that EOS shall not be obligated to
indemnify Licensee for any Losses to the extent that such Losses arise as a result of gross
negligence or willful misconduct on the part of Licensee or any other Person entitled to
indemnification pursuant to Section 12.1.
12.3 Notice of Claim. All indemnification claims of a Party, its Affiliates or their
respective directors, officers, employees and agents shall be made solely by such Party to this
Agreement (the Indemnified Party). The Indemnified Party shall give the indemnifying Party
prompt written notice (an Indemnification Claim Notice) of any Losses or the discovery of any
fact upon which the Indemnified Party intends to base a request for indemnification under Section
12.1 or 12.2, but in no event shall the indemnifying Party be liable for any Losses that result
from any delay in providing such notice. Each Indemnification Claim Notice shall contain a
description of the claim and the nature and amount of such Loss (to the extent that the nature and
amount of such Loss is known at such time). The Indemnified Party shall furnish promptly to the
indemnifying Party copies of all papers and official documents received with respect to any Losses
and Third Party Claims.
12.4 Control of Defense. At its option, the indemnifying Party may assume the defense of any
Third Party Claim by giving written notice to the Indemnified Party within thirty (30) days after
the indemnifying Partys receipt of an Indemnification Claim Notice. The assumption of the defense
of a Third Party Claim by the indemnifying Party shall not be construed as an acknowledgment that
the indemnifying Party is liable to
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indemnify the Indemnified Party with respect to the Third Party
Claim, nor shall it constitute a waiver by the indemnifying Party of any defenses it may assert
against the Indemnified Partys claim for indemnification. Upon assuming the defense of a Third
Party Claim, the indemnifying Party may appoint as lead counsel in the defense of the Third Party
Claim any legal counsel selected by the indemnifying Party. In the event the indemnifying Party
assumes the defense of a Third Party Claim, the Indemnified Party shall immediately deliver
to the indemnifying Party all original notices and documents (including court papers) received
by the Indemnified Party in connection with the Third Party Claim. Should the indemnifying Party
assume the defense of a Third Party Claim, except as provided in Section 12.4.1, the indemnifying
Party shall not be liable to the Indemnified Party for any legal expenses subsequently incurred by
such Indemnified Party in connection with the analysis, defense or settlement of the Third Party
Claim. In the event that it is ultimately determined that the indemnifying Party is not obligated
to indemnify, defend or hold harmless the Indemnified Party from and against the Third Party Claim,
the Indemnified Party shall reimburse the indemnifying Party for any and all costs and expenses
(including attorneys fees and costs of suit) and any Losses incurred by the indemnifying Party in
its defense of the Third Party Claim.
12.4.1 Right to Participate in Defense. Without limiting Section 12.4, any Indemnified Party
shall be entitled to participate in, but not control, the defense of such Third Party Claim and to
employ counsel of its choice for such purpose; provided, however, that such employment shall be at
the Indemnified Partys own expense unless (a) the employment thereof has been specifically
authorized by the indemnifying Party in writing, (b) the indemnifying Party has failed to assume
the defense and employ counsel in accordance with Section 12.4 (in which case the Indemnified Party
shall control the defense) or (c) the interests of the Indemnified Party and the indemnifying Party
with respect to such Third Party Claim are sufficiently adverse to prohibit the representation by
the same counsel of both Parties under Applicable Law, ethical rules or equitable principles.
12.4.2 Settlement. With respect to any Third Party Claims relating solely to the payment of
money damages in connection with a Third Party Claim and that shall not result in the Indemnified
Partys becoming subject to injunctive or other relief or otherwise adversely affecting the
business of the Indemnified Party in any manner, and as to which the indemnifying Party shall have
acknowledged in writing the obligation to indemnify the Indemnified Party hereunder, the
indemnifying Party shall have the sole right to consent to the entry of any judgment, enter into
any settlement or otherwise dispose of such Third Party Claim, on such terms as the indemnifying
Party, in its sole discretion, shall deem appropriate. With respect to any other Third Party
Claims, where the indemnifying Party has assumed the defense of the Third Party Claim in accordance
with Section 12.4.1, the indemnifying Party shall have authority to consent to the entry of any
judgment, enter into any settlement or otherwise dispose of such Third Party Claim; provided the
indemnifying Party obtains the prior written consent of the Indemnified Party (which consent shall
not be unreasonably withheld or delayed). The indemnifying Party shall not be liable for any
Losses incurred in connection with any settlement or other disposition of any Third Party Claim by
an Indemnified Party that is reached without the written consent of the indemnifying Party.
Regardless of whether the indemnifying Party chooses to defend or prosecute any Third Party Claim,
no Indemnified Party shall admit any liability with respect to or settle, compromise or discharge,
any Third Party Claim without the prior written consent of the indemnifying Party, such consent not
to be unreasonably withheld or delayed.
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12.4.3 Cooperation. Regardless of whether the indemnifying Party chooses to defend or
prosecute any Third Party Claim, the Indemnified Party shall, and shall cause each other Person
entitled to indemnification under Section 12.1, in the case of EOS as the Indemnified Party, or
Section 12.2, in the case of Licensee as the Indemnified Party, to, cooperate in the defense or
prosecution thereof and shall furnish such records, information and testimony, provide such
witnesses and attend such conferences, discovery proceedings,
hearings, trials and appeals as may be reasonably requested in connection therewith. Such
cooperation shall include access during normal business hours afforded to indemnifying Party to,
and reasonable retention by the Indemnified Party of, records and information that are reasonably
relevant to such Third Party Claim, and making Indemnified Parties and other employees and agents
available on a mutually convenient basis to provide additional information and explanation of any
material provided hereunder, and the indemnifying Party shall reimburse the Indemnified Party for
all its reasonable out-of-pocket expenses in connection therewith.
12.4.4 Expenses. Except as provided above, any costs and expenses reimbursable by the
indemnifying Party pursuant to this Section 12, including fees and disbursements of counsel,
incurred by the Indemnified Party in connection with any claim shall be reimbursed on a Calendar
Quarter basis by the indemnifying Party, without prejudice to the indemnifying Partys right to
contest the Indemnified Partys right to indemnification and subject to refund in the event the
indemnifying Party is ultimately held not to be obligated to indemnify the Indemnified Party.
12.5 Limitation on Damages and Liability. EXCEPT IN CIRCUMSTANCES OF GROSS NEGLIGENCE OR
INTENTIONAL MISCONDUCT BY A PARTY OR ITS AFFILIATES (OR WITH RESPECT TO LICENSEE, ITS SUBLICENSEES
OR DISTRIBUTORS), OR WITH RESPECT TO THIRD PARTY CLAIMS UNDER SECTION 12.1 OR 12.2, NO PARTY OR ANY
OF THEIR RESPECTIVE AFFILIATES SHALL BE LIABLE FOR SPECIAL, INDIRECT, INCIDENTAL OR CONSEQUENTIAL
DAMAGES, OR FOR LOST PROFITS, MILESTONES OR ROYALTIES, WHETHER IN CONTRACT, WARRANTY, NEGLIGENCE,
TORT, STRICT LIABILITY OR OTHERWISE, ARISING OUT OF (a) THE DEVELOPMENT, MANUFACTURE, USE OR SALE
OF THE LICENSED PRODUCT UNDER THIS AGREEMENT, (b) THE PRACTICE OF THE EOS TECHNOLOGY OR THE
LICENSEE TECHNOLOGY, (c) THE USE OF, OR REFERENCE TO, ANY REGULATORY DOCUMENTATION OR (d) ANY
BREACH OF OR FAILURE TO PERFORM ANY OF THE PROVISIONS OF THIS AGREEMENT.
12.6 Insurance. Each Party shall have and maintain such types and amounts of liability
insurance covering the Manufacture, use and sale of the Licensed Product as is normal and customary
in the medical device industry generally for parties similarly situated, and shall upon request
provide the other Party with a copy of its policies of insurance in that regard, along with any
amendments and revisions thereto. The Parties acknowledge that a self insured retention or the like
is sufficient to fulfill a Partys obligations under this Section 12.6.
ARTICLE XIII
TERM AND TERMINATION
13.1 Term. This Agreement shall take effect upon the Effective Date and shall continue in
each country in the Territory until such time as Licensee no longer owes
- 29 -
EOS any royalty payments
under this Agreement with respect to such country, unless earlier terminated by mutual agreement of
the Parties or otherwise in accordance with this Article XIII.
13.2 Termination for Material Breach. In the event that either Party (the Breaching Party)
shall be in default in the performance of any of its material obligations under this Agreement, in
addition to any other right and remedy the other Party (the Complaining Party) may have, the
Complaining Party may terminate this Agreement, in its entirety upon sixty (60) days (or in the
case of a payment default, ten (10) days) prior written notice (the Notice Period) to the
Breaching Party, specifying the breach and its claim of right to terminate, provided that the
termination shall not become effective at the end of the Notice Period if the Breaching Party cures
the breach during the Notice Period. Without limitation of the generality of the foregoing, the
Parties acknowledge and agree that a default by Licensee of any of its obligations under Section
2.1.2 shall constitute a material breach of this Agreement.
13.3 Other Termination by EOS.
13.3.1 In the event that the aggregate cumulative number of units of Licensed Product Systems
sold by or on behalf of Licensee pursuant to this Agreement by the later of the fifth (5th)
anniversary of the First Commercial Sale of Licensed Product and January 1, 2013 is fewer than
twenty-five hundred (2,500) units, EOS may terminate this Agreement upon thirty (30) days written
notice to Licensee.
13.3.2 In the event that Licensee or any of its Affiliates, Sublicensees or Distributors,
anywhere in the Territory, institutes, prosecutes or otherwise participates in (or in any way aids
any Third Party in instituting, prosecuting or participating in), at law or in equity or before any
administrative or regulatory body, including the U.S. Patent and Trademark Office or its foreign
counterparts, any claim, demand, action or cause of action for declaratory relief, damages or any
other remedy or for an enjoinment, injunction or any other equitable remedy, including any
interference, re-examination, opposition or any similar proceeding, alleging that any claim in a
EOS Patent is invalid, unenforceable or otherwise not patentable or would not be infringed by
Licensees activities absent the rights and licenses granted hereunder, EOS shall have the right to
immediately terminate this Agreement, including the rights of any Affiliates, Sublicensees or
Distributors, by written notice to Licensee.
13.4 Other Termination by Licensee In the event that it turns out that (a) the Core Patents
are finally adjudicated by a court of competent jurisdiction to be invalid, unenforceable or
otherwise not patentable, (b) a Third Party Develops, Manufactures or Exploits a product which is
a work-around of the EOS Technology, or (c) Licensee may not successfully Exploit or market any
Licensed Products because Licensee reasonably concludes from conducting scientific studies that
the EOS Technology is inefficient in detecting occlusal decay, smooth virgin surface decay or
interproximal decay, Licensee shall have the right to immediately terminate this Agreement by
written notice to EOS.
13.5 Termination Upon Insolvency. Either Party may terminate this Agreement if, at any time,
the other Party shall file in any court or agency pursuant to any statute or regulation of any
state, country or jurisdiction, a petition in bankruptcy or insolvency or for reorganization or for
an arrangement or for the appointment of a receiver or trustee of that Party or of its assets, or
if the other Party proposes a written agreement of
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composition or extension of its debts, or if the
other Party shall be served with an involuntary petition against it, filed in any insolvency
proceeding, and such petition shall not be dismissed within sixty (60) days after the filing
thereof, or if the other Party shall propose or be a Party to any dissolution or liquidation, or if
the other Party shall make an assignment for the benefit of its creditors.
13.6 Rights in Bankruptcy. All rights and licenses granted under or pursuant to this
Agreement by Licensee or EOS are, and shall otherwise be deemed to be, for purposes of Section
365(n) of the U.S. Bankruptcy Code, licenses of right to intellectual property as defined under
Section 101 of the U.S. Bankruptcy Code. The Parties agree that the Parties, as licensees of such
rights under this Agreement, shall retain and may fully exercise all of their rights and elections
under the U.S. Bankruptcy Code. The Parties further agree that, in the event of the commencement
of a bankruptcy proceeding by or against either Party under the U.S. Bankruptcy Code, the Party
hereto that is not a Party to such proceeding shall be entitled to a complete duplicate of (or
complete access to, as appropriate) any such intellectual property and all embodiments of such
intellectual property, which, if not already in the non-subject Partys possession, shall be
promptly delivered to it (a) upon any such commencement of a bankruptcy proceeding upon the
non-subject Partys written request therefor, unless the Party subject to such proceeding elects to
continue to perform all of its obligations under this Agreement or (b) if not delivered under (a)
above, following the rejection of this Agreement by or on behalf of the Party subject to such
proceeding upon written request therefor by the non-subject Party.
13.7 Consequences of Expiration of Term. Upon any expiration of this Agreement under Section
13.1, EOS shall grant to Licensee as of the effective date of such expiration a sole and exclusive
(including with respect to EOS and its Affiliates), perpetual, irrevocable, worldwide, royalty-free
license, under the EOS Technology, to the extent incorporated in any Licensed Product, or used in
the Manufacture of any Licensed Product, to Exploit any and all Licensed Products. Upon such
expiration, Licensee shall retain any and all rights, title and interest to any (i) Incorporating
Patents, Next Generation Patents, or Improvements (to the extent Licensee is entitled thereto under
Section 7.1.2), (ii) all Regulatory Approvals, Regulatory Documentation and Trademarks.
13.8 Consequences of Termination.
13.8.1 Assignment to EOS. Upon any termination of this Agreement, other than a termination by
Licensee for a material breach by EOS under Section 13.2, for other reason under Section 13.4 or
for insolvency of EOS under Section 13.5, Licensee shall without any further consideration transfer
and assign, and cause its Affiliates and Sublicensees to transfer and assign to EOS without further
compensation therefor, all of its and their respective right, title and interest, if any, in and to
any and all Licensee Technology (to the extent relating specifically to the Licensed Products),
Regulatory Approvals, Regulatory Documentation, and any Trademarks used in the Commercialization of
the Licensed Product in the Territory (other than the Corporate Names of Licensee).
Notwithstanding the foregoing, Licensee shall retain, and shall not be obligated to transfer to EOS
under this Section 13.8.1, any or all rights, title and interest to any (i) Incorporating Patents,
Next Generation Patents, or Improvements (to the extent Licensee is entitled thereto under Section
7.1.2), or (ii) Regulatory Approvals, Regulatory Documentation and Trademarks related solely to any
Incorporating Products, Next Generation Products, or Improvements (to the extent Licensee is
entitled to such Improvement under Section 7.1.2). In connection with any and all transfers and
assignments contemplated by this Section 13.8.1,
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Licensee shall execute and deliver, and shall
cause its Affiliates and Sublicensees to execute
and deliver such instruments and take such actions as may be necessary or desirable to effect
such transfers and assignments.
13.8.2 Non-Exclusive License to EOS. Upon any termination of this Agreement, other than a
termination by Licensee for a material breach by EOS under Section 13.2, for other reason under
Section 13.4 or for insolvency of EOS under Section 13.5, Licensee shall grant to EOS as of the
effective date of such termination a sole and non-exclusive (including with respect to Licensee and
its Affiliates, Sublicensees and Distributors), perpetual, irrevocable, worldwide, royalty-free
license, but not with the right to grant sublicenses (through multiple tiers of sublicensees),
under the Licensee Technology (other than any Licensee Technology assigned to EOS pursuant to
Section 13.8.1), to the extent incorporated in any Licensed Product or used in the Manufacture of
any Licensed Product, to Exploit any and all Licensed Products. Notwithstanding the foregoing,
Licensee shall retain, and shall not be obligated to transfer to EOS under this Section 13.8.1, any
or all rights, title and interest to any (i) Incorporating Patents, Next Generation Patents, or
Improvements (to the extent Licensee is entitled thereto under Section 7.1.2), or (ii) Regulatory
Approvals, Regulatory Documentation and Trademarks related solely to any Incorporating Products,
Next Generation Products, or Improvements (to the extent Licensee is entitled to such Improvement
under Section 7.1.2).
13.8.3 Transfer of Materials. Upon any termination of this Agreement, Licensee shall
cooperate with EOS in transferring to EOS or a Third Party, as EOS may direct, within sixty (60)
days of the termination hereof, all data, files and other materials that are assigned to EOS
pursuant to Section 13.8.1 or licensed to EOS pursuant to Section 13.8.2, in each case if
applicable, and all Confidential Information of EOS, except that Licensee may retain one copy of
such data, files or materials, to the extent that Licensee requires such data, files and materials
for the purpose of performing any obligations under this Agreement that may survive such
termination.
13.8.4 Assistance. In the event of any termination of this Agreement, other than a
termination by Licensee for a material breach by EOS under Section 13.2, for other reason under
Section 13.4, or for insolvency of EOS under Section 13.5, Licensee shall, and shall cause its
Affiliates, Sublicensees and Distributors to, at the request of EOS, provide EOS with such
assistance as is reasonably necessary to effectuate a smooth and orderly transition of any
Development and Commercialization of the Licensed Product, including any ongoing clinical studies
with respect to the Licensed Product, to EOS or its designee so as to minimize any disruption of
such activities, including the assignment of any contracts with respect thereto, in each case that
is the subject of such obligation. In performing its obligations under this Section 13.8.4,
Licensee shall, and shall cause its Affiliates, Sublicensees and Distributors to, cooperate with
EOS (at Licensees expense) to effect such transfers and assignments in an orderly fashion and
shall provide to EOS or its designee any copies of relevant documents and rights of reference or
access necessary to allow EOS to Exploit the Licensed Product and any Improvements thereto.
13.8.5 Ceasing Exploitation of Licensed Product. Upon termination of this Agreement, other
than a termination by Licensee for a material breach by EOS under Section 13.2, for other reason
under Section 13.4 or for insolvency of EOS under Section 13.5, Licensee shall, and shall cause its
Affiliates, Sublicensees and Distributors to cease all Exploitation of the Licensed Product in the
Territory as of the date of such termination (other than such Exploitation as is permitted pursuant
to Section 13.8.6). Within
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thirty (30) days of the effective date of such termination (or in the
case of termination by
Licensee pursuant to Section 14.2, of the last day on which Licensee has the right to dispose
of Licensed Products (excluding any Incorporating Products) pursuant to Section 13.8.6, Licensee
shall destroy or return to EOS (at EOSs election), any and all unsold quantities of the Licensed
Product. EOS will reimburse Licensee its cost for any Licensed Products destroyed or returned to
EOS under this Section 13.8.5.
13.8.6 Sale of Inventory. Upon termination of this Agreement by Licensee under Section 13.2,
Licensee shall have the right for six (6) months after the effective date of such termination to
dispose of all Licensed Product then in its inventory, as though this Agreement had not terminated.
For the avoidance of doubt, Licensee shall continue to make payments in connection with any such
disposal as provided in Article VII.
13.8.7 Incorporating Products. After the period of time for the sale of inventory expires
pursuant to Section 13.8.6, Licensee agrees to cease the Manufacture, Development and Exploitation
of any Incorporating Products.
13.8.8 Remedies. Except as otherwise expressly provided herein, termination of this Agreement
in accordance with the provisions hereof shall not limit remedies which may otherwise be available
in law or equity.
13.8.9 Payment Obligation by Licensee Upon termination of this Agreement by the Licensee
(i) prior to July 1, 2009 Licensee shall have no obligation to invest further development cost in
accordance with Section 2.1.2 and (ii) at any time, Licensee shall have an unconditional obligation
to pay to EOS any amounts not yet paid under Section 6.1, in accordance with its terms. Any
amounts invested pursuant to Section 2.1.2 or any payments to EOS pursuant to Article VI by
Licensee through the effective date of any such termination are non-refundable.
13.9 Change of Control Buy-Out Right. EOS shall notify Licensee within ten (10) days of its
receipt of any bona fide offer which would result in a Change of Control of EOS (Notice Date).
Licensee shall notify EOS within ten (10) days after the Notice Date whether Licensee wishes to
purchase the EOS Technology (other than the Additional Patents) from EOS. In the event Licensee so
notifies EOS, the Parties agree to negotiate the terms and conditions of such acquisition in good
faith. The purchase price with respect to the sale of such EOS Technology to Licensee shall be
determined by mutual agreement of the Parties based on a value equal to two times the trailing
twelve (12) month royalty payments paid to EOS pursuant to Section 6.2 herein. EOS may not
consummate such transaction for which notices was provided while such negotiations are pending. In
the event that the Parties are unable to agree in principle on mutually acceptable, material terms
and conditions of such acquisition (specifically including the proposed purchase price thereof)
within thirty (30) days after the Notice Date, EOS shall no longer be obligated to negotiate with
Licensee pursuant to this Section 13.9 and may consummate the Change of Control.
13.10 Accrued Rights; Surviving Obligations.
13.10.1 Accrued Rights. Termination or expiration of this Agreement for any reason shall be
without prejudice to any rights that shall have accrued to the benefit of a Party prior to such
termination or expiration. Such termination or expiration
shall not relieve a Party from obligations that are expressly indicated to survive the
termination or expiration of this Agreement.
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13.10.2 Survival. Without limiting the foregoing, Sections 2.1.5, 2.2.4, 5.3.3, 6.9, 6.10,
6.11, 7.1, 10.1, 10.2, 10.3, 12.1, 12.2, 12.3, 12.4, 12.5, 13.6, 13.7, 13.8, 13.10, 14.5,
14.6, 14.7, and 14.10 shall survive the termination or expiration of this Agreement for any reason.
ARTICLE XIV
MISCELLANEOUS
14.1 Force Majeure. Neither Party shall be held liable or responsible to the other Party or
be deemed to have defaulted under or breached this Agreement for failure or delay in fulfilling or
performing any term of this Agreement when such failure or delay is caused by or results from
events beyond the reasonable control of the non-performing Party, including fires, floods,
earthquakes, embargoes, shortages, epidemics, quarantines, war, acts of war (whether war be
declared or not), terrorist acts, insurrections, riots, civil commotion, strikes, lockouts or other
labor disturbances (whether involving the workforce of the non-performing Party or of any other
Person), acts of God or acts, omissions or delays in acting by any governmental authority. The
non-performing Party shall notify the other Party of such force majeure within thirty (30) days
after such occurrence by giving written notice to the other Party stating the nature of the event,
its anticipated duration, and any action being taken to avoid or minimize its effect. The
suspension of performance shall be of no greater scope and no longer duration than is necessary and
the non-performing Party shall use commercially reasonable efforts to remedy its inability to
perform. In the event that such force majeure event lasts for more than ninety (90) days, such
other Party shall have the right to terminate this Agreement upon sixty (60) days written notice
to the non-performing Party.
14.2 Export Control. This Agreement is made subject to any restrictions concerning the export
of products or technical information from the United States or other countries that may be imposed
on related to the Parties from time to time. Each Party agrees that it will not export, directly
or indirectly, any technical information acquired from the other Party under this Agreement or any
products using such technical information to a location or in a manner that at the time of export
requires an export license or other governmental approval, without first obtaining the written
consent to do so from the appropriate agency or other governmental entity in accordance with
Applicable Law.
14.3 Assignment. Neither Party shall sell, transfer, assign, delegate, pledge or otherwise
dispose of, whether voluntarily, involuntarily, by operation of law or otherwise, this Agreement or
any of its rights or duties hereunder without the prior written consent of the other Party;
provided, however, that such consent shall not be unreasonably withheld or delayed with respect to
assignment of this Agreement by a Party to an Affiliate, or to a successor entity or Third Party
Acquirer in the event of a Change of Control. In the event of an assignment to an Affiliate of a
Party, the assigning Party shall remain responsible for the performance by such Affiliate of the
rights and obligations hereunder. In the event that a Party assigns this Agreement to a successor
entity or Third Party Acquirer in the event of a Change of Control, the assignee or transferee
shall assume all obligations of the assignor Party hereunder. Any attempted assignment or
delegation in violation of the preceding sentence shall be void and of no effect. All validly
assigned and delegated rights and obligations of the Parties hereunder shall be binding upon
and inure to the benefit of and be enforceable by and against the successors and permitted assigns
of EOS or Licensee, as the case may be.
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14.4 Severability. If any provision of this Agreement is held to be illegal, invalid or
unenforceable under any present or future law, and if the rights or obligations of either Party
under this Agreement will not be materially and adversely affected thereby, (a) such provision
shall be fully severable, (b) this Agreement shall be construed and enforced as if such illegal,
invalid or unenforceable provision had never comprised a part hereof, (c) the remaining provisions
of this Agreement shall remain in full force and effect and shall not be affected by the illegal,
invalid or unenforceable provision or by its severance herefrom and (d) in lieu of such illegal,
invalid or unenforceable provision, there shall be added automatically as a part of this Agreement
a legal, valid and enforceable provision as similar in terms to such illegal, invalid or
unenforceable provision as may be possible and reasonably acceptable to the Parties. To the
fullest extent permitted by applicable law, each Party hereby waives any provision of law that
would render any provision hereof illegal, invalid or unenforceable in any respect.
14.5 Governing Law. This Agreement shall be governed by and construed in accordance with the
laws of the State of Delaware, excluding any conflicts or choice of law rule or principle that
might otherwise refer construction or interpretation of this Agreement to the substantive law of
another jurisdiction. The Parties agree to exclude the application to this Agreement of the United
Nations Convention on Contracts for the International Sale of Goods.
14.6 Dispute Resolution.
14.6.1 General. If a dispute arises between the Parties in connection with or relating to
this Agreement or any document or instrument delivered in connection herewith (a Dispute), then
either Party shall have the right to refer such dispute to the Chief Executive Officer of EOS and
the Chief Executive Officer of Licensee who shall confer in order to resolve such Dispute. Any
final decision mutually agreed to by such representatives shall be conclusive and binding on the
Parties. Except as provided in Section 14.6.2, if such officers are not able to agree on the
resolution of an issue within thirty (30) days after such issue was first referred to them, then
either Party may, by written notice to the other Party, elect to initiate arbitration pursuant to
Section 14.6.3 to the extent that the Dispute relates to or arises out of the validity,
interpretation or construction of, or the compliance with or breach of, this Agreement.
14.6.2 Intellectual Property Disputes. In the event that a Dispute arises with respect the
validity, scope, enforceability, inventorship or ownership of any Patent or Intellectual Property
Rights, and such Dispute cannot be resolved in accordance with Section 14.6.1, unless otherwise
agreed by the Parties in writing, such Dispute shall not be submitted to arbitration in accordance
with Section 14.6.3 and instead, either Party may initiate litigation in a court of competent
jurisdiction in the country in which such rights apply.
14.6.3 Arbitration. Any arbitration under this Agreement shall take place at a location to be
agreed by the Parties; provided, however, that in the event that the Parties are unable to agree on
a location for an arbitration under this Agreement within five (5) days of the demand therefor,
such arbitration shall be held in New York, New York. Any
arbitration under this Agreement shall be administered under the Commercial Arbitration Rules
of the American Arbitration Association then in effect (the Arbitration Rules). The Parties
shall appoint an arbitrator by mutual agreement. If the Parties cannot agree on the appointment of
an arbitrator within thirty (30) days of the demand for arbitration, an
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arbitrator shall be
appointed in accordance with the Arbitration Rules. The arbitrator shall have the authority to
grant any equitable and legal remedies that would be available in any judicial proceeding
instituted to resolve the Dispute submitted to such arbitration in accordance with this Agreement;
provided, however, that the arbitrator shall not have the power to alter, amend or otherwise affect
the terms or the provisions of this Agreement. Judgment upon any award rendered pursuant to this
Section may be entered against the applicable Party by any court having jurisdiction over such
Partys other assets. The arbitrator shall have no authority to award punitive or any other type
of damages not measured by a Partys compensatory damages. Each Party shall bear its own costs and
expenses and attorneys fees and an equal share of the arbitrators fees and any administrative
fees of arbitration, unless the arbitrator shall otherwise allocate such costs, expenses and fees
between the Parties. The Parties agree that all arbitration awards shall be final and binding on
the Parties and their Affiliates. Each Party hereby waive the right to contest any award pursuant
to this Section 14.6.3 in any court or other forum. Except to the extent necessary to confirm or
enforce an award or as may be required by law, neither a Party nor an arbitrator may disclose the
existence, content or results of an arbitration without the prior written consent of both Parties.
14.6.4 Interim Relief. Notwithstanding anything herein to the contrary, nothing in this
Section shall preclude either Party from seeking interim or provisional relief, including a
temporary restraining order, preliminary injunction or other interim equitable relief concerning a
dispute, if necessary to protect the interests of such Party, from any court of competent
jurisdiction. This Section 14.6.4 shall be specifically enforceable.
14.7 Notices.
14.7.1 Notice Requirements. Any notice, request, demand, waiver, consent, approval or other
communication permitted or required under this Agreement shall be given in writing, shall refer
specifically to this Agreement and shall be deemed given only if delivered by hand or sent by
facsimile transmission (with transmission confirmed) or by internationally recognized delivery
service that maintains records of delivery, addressed to the Parties at their respective addresses
specified in Section 14.7.2 or to such other address as the Party to whom notice is to be given may
have provided to the other Party in accordance with this Section 14.7. Such Notice shall be deemed
to have been given as of the date delivered by hand or transmitted by facsimile (with transmission
confirmed) or on the second business day (at the place of delivery) after deposit with an
internationally recognized overnight delivery service. Any notice delivered by facsimile shall be
confirmed by a hard copy delivered as soon as practicable thereafter. This Section 14.7 is not
intended to govern the day-to-day business communications necessary between the Parties in
performing their obligations under the terms of this Agreement.
14.7.2 Address for Notice.
If to Licensee, to:
KaVo Dental GmbH
Bismarckring 39
D-88400 Biberach an der Riss
Attention: Chief Executive Officer
Facsimile:
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with a copy to:
Interdent Holding SA
Steinbruchstrasse 11
CH-5200 Brugg
Attention: Dr. Hans Bättig
Facsimile: 0041 56 460 78 89
If to EOS, to:
Electro-Optical Sciences, Inc.
3 West Main Street, Suite 201
Irvington, New York
Attention: Chief Executive Officer
with copies to:
Covington & Burling
One Front Street, 35th Floor
San Francisco, California 94111
Facsimile: (415) 591-6091
14.8 Entire Agreement. This Agreement, together with the Exhibits attached hereto, sets forth
and constitutes the entire agreement and understanding between the Parties with respect to the
subject matter hereof and all prior agreements, understandings, promises and representations,
whether written or oral, with respect thereto are superseded hereby. Each Party confirms that it
is not relying on any representations or warranties of the other Party except such representations
and warranties as are specifically set forth herein. No amendment, modification, release or
discharge shall be binding upon the Parties unless in writing and duly executed by authorized
representatives of both Parties.
14.9 English Language. This Agreement shall be written and executed in, and all other
communications under or in connection with this Agreement shall be in, the English language. Any
translation into any other language shall not be an official version thereof, and in the event of
any conflict in interpretation between the English version and such translation, the English
version shall control.
14.10 Equitable Relief. The Parties acknowledge and agree that the restrictions set forth in
Article X are reasonable and necessary to protect the legitimate interests of the other Party and
that such other Party would not have entered into this Agreement in the absence of such
restrictions, and that any breach or threatened breach of any provision of Article X may result in
irreparable injury to such
other Party for which there will be no adequate remedy at law. In the event of a breach or
threatened breach of any provision of Article X, the non-breaching Party shall be authorized and
entitled to obtain from any court of competent jurisdiction injunctive relief, whether preliminary
or permanent, specific performance and an equitable accounting of all earnings, profits and other
benefits arising from such breach, which rights shall be cumulative and in addition to any other
rights or remedies to which such non-breaching Party may be entitled in law or equity. Both
Parties
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agree to waive any requirement that the other (a) post a bond or other security as a
condition for obtaining any such relief and (b) show irreparable harm, balancing of harms,
consideration of the public interest or inadequacy of monetary damages as a remedy. Nothing in
this Section 14.10 is intended, or should be construed, to limit either Partys right to equitable
relief or any other remedy for a breach of any other provision of this Agreement.
14.11 Waiver and Non-Exclusion of Remedies. Any term or condition of this Agreement may be
waived at any time by the Party that is entitled to the benefit thereof, but no such waiver shall
be effective unless set forth in a written instrument duly executed by or on behalf of the Party
waiving such term or condition. The waiver by either Party hereto of any right hereunder or of the
failure to perform or of a breach by the other Party shall not be deemed a waiver of any other
right hereunder or of any other breach or failure by said other Party whether of a similar nature
or otherwise.
14.12 No Benefit to Third Parties. The representations, warranties, covenants and agreements
set forth in this Agreement are for the sole benefit of the Parties hereto and their successors and
permitted assigns, and they shall not be construed as conferring any rights on any other Persons.
14.13 Further Assurance. Each Party shall duly execute and deliver, or cause to be duly
executed and delivered, such further instruments and do and cause to be done such further acts and
things, including the filing of such assignments, agreements, documents and instruments, as may be
necessary or as the other Party may reasonably request in connection with this Agreement or to
carry out more effectively the provisions and purposes hereof, or to better assure and confirm unto
such other Party its rights and remedies under this Agreement.
14.14 Relationship of the Parties. It is expressly agreed that EOS and Licensee shall each be
independent contractors and that the relationship between the two Parties shall not constitute a
partnership, joint venture or agency. Neither EOS, on the one hand, nor Licensee, on the other
hand, shall have the authority to make any statements, representations or commitments of any kind,
or to take any action, which shall be binding on the other, without the prior written consent of
the other Party to do so. All persons employed by a Party shall be employees of such Party and not
of the other Party and all costs and obligations incurred by reason of any such employment shall be
for the account and expense of such Party.
14.15 Counterparts. This Agreement may be executed in two (2) or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute one and the same
instrument. This Agreement may be executed by facsimile signatures and such signatures shall be
deemed to bind each party hereto as if they were original signature.
14.16 References. Unless otherwise specified, (a) references in this Agreement to any
Article, Section or Exhibit shall mean references to such Article, Section or Exhibit of this
Agreement, (b) references in any section to any clause are references to such clause of such
section and (c) references to any agreement, instrument or other document in this Agreement refer
to such agreement, instrument or other document as originally executed or, if subsequently varied,
replaced or supplemented from time to time, as so varied, replaced or supplemented and in effect at
the relevant time of reference thereto.
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14.17 Construction. Except where the context otherwise requires, wherever used, the singular
shall include the plural, the plural the singular, the use of any gender shall be applicable to all
genders and the word or is used in the inclusive sense (and/or). The captions of this Agreement
are for convenience of reference only and in no way define, describe, extend or limit the scope or
intent of this Agreement or the intent of any provision contained in this Agreement. The term
including as used herein shall mean including, without limiting the generality of any description
preceding such term. The language of this Agreement shall be deemed to be the language mutually
chosen by the Parties and no rule of strict construction shall be applied against either Party
hereto.
THIS AGREEMENT IS EXECUTED by the authorized representatives of the Parties as of the date first
written above.
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ELECTRO-OPTICAL SCIENCES, INC. |
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KAVO DENTAL GMBH |
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By:
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/s/ Joseph V. Gulfo |
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By: |
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/s/ Christoph Gusenleitner |
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Name:
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Joseph V. Gulfo |
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Christoph Gusenleitner |
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Title:
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President & Chief Executive Officer |
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Title: |
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President Emea |
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By: |
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/s/ Michael Eidenschinck |
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Name: |
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Michael Eidenschinck |
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Title: |
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Business Unit Director Hightech |
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List of Exhibits
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Exhibit A
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EOS Patents |
Exhibit B
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Existing Product Line |
Exhibit C
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Licensed Trademarks |
Exhibit D
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Transferred Manufacturing-Related Materials and Documentation |
Exhibit E
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Press Release |
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Exhibit A
EOS Patents
U.S. Patents, Issue Fee Paid:
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Patent |
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Issue |
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Application |
|
|
|
Docket |
|
|
Number |
|
Date |
|
Title |
|
No. |
|
Date Filed |
|
No. |
|
Description |
6,201,880
|
|
13-Mar-01
|
|
Method and
Apparatus for
Electronically
Imaging a Tooth
Through
Transillumination
by Light
|
|
08 / 778,001
|
|
12/31/1996
|
|
EOS-003
|
|
Basic DIFOTI
patent, provides
repeatability (in
several senses) |
|
|
|
|
|
|
|
|
|
|
|
|
|
6,282,359
|
|
28-Aug-01
|
|
Injection Molded
Light Pipe
|
|
09 / 467,344
|
|
12/20/1999
|
|
999-024
|
|
For DIFOTI
mouthpieces |
|
|
|
|
|
|
|
|
|
|
|
|
|
6,341,957
|
|
29-Jan-02
|
|
Method of
Transillumination
Imaging of Teeth
|
|
09 / 722,248
|
|
11/24/2000
|
|
900-019
|
|
Elastomeric
positioner |
|
|
|
|
|
|
|
|
|
|
|
|
|
6,672,868
|
|
6-Jan-04
|
|
Method of
Transillumination
Imaging of Teeth
|
|
09 / 991,897
|
|
11/23/2001
|
|
901-002
|
|
Light blocking
(occlusal) |
|
|
|
|
|
|
|
|
|
|
|
|
|
6,714,657
|
|
30-Mar-04
|
|
Apparatus for
Holding Optical
Instruments in a
Reproducible
Position with
Respect to Teeth
|
|
09 / 467,345
|
|
12/20/1999
|
|
999-021
|
|
Generalizes
prong concepts of
DIFOTI |
U.S. Patent Applications Currently Pending:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Application |
|
|
|
Docket |
|
|
|
|
|
|
Title |
|
No. |
|
Date Filed |
|
No. |
|
Description |
|
|
|
|
Method of
Transillumination
of Teeth
|
|
11 / 199,568
60 / 601,035
|
|
8/8/05
8/12/04
|
|
904-011
904-011 (prov)
|
|
Source for
DIFOTI USB 2.0 |
International Patents Issued and Pending:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Patent |
|
Issue |
|
|
|
Application |
|
|
|
Docket |
|
|
Number |
|
Date |
|
Title |
|
No. |
|
Date Filed |
|
No. |
|
Description |
|
|
|
|
Method and
Apparatus for
Electronically
Imaging a Tooth
Through
Transillumination
by Light
|
|
PCT/US97/23953
|
|
31-Dec-97
|
|
EOS-003/PCT
|
|
Patent
Cooperation Treaty
counterpart to
basic U.S. DIFOTI
patent |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
0 950 228
|
|
19-May-04
|
|
Apparatus for
Electronically
Imaging a Tooth
Through
Transillumination
by Light**
|
|
|
97953471.6 |
|
|
31-Dec-97
|
|
EOS-003/EP;
FMS-11281,
E1501-WO-EP
|
|
European Patent
Organi- sation
counterpart (DIFOTI
apparatus claims) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
697 29 216.9-08
|
|
19-May-04
|
|
Geraet zum
Elektronischen
Darstellen eines
Zahnes durch
Transillumination
durch Licht
|
|
|
97953471.6 |
|
|
31-Dec-97
|
|
EOS-003/DE
E1501-WO-EP-DE
|
|
DE=Deutschland;
German national
filing of above |
- A-1 -
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Patent |
|
Issue |
|
|
|
Application |
|
|
|
Docket |
|
|
Number |
|
Date |
|
Title |
|
No. |
|
Date Filed |
|
No. |
|
Description |
0 950 228
|
|
19-May-04
|
|
Apparatus for Electronically Imaging a Tooth Through Transillumination
by Light
|
|
|
97953471.6 |
|
|
31-Dec-97
|
|
EOS-003/GB
|
|
GB=Great
Britain; UK
national filing of
above |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Apparatus for the
Transillumination
Imaging of Teeth***
|
|
PCT/US01/42966
|
|
20-Nov-01
|
|
900-019/PCT
|
|
Elastomeric
positioner for
DIFOTI mouthpieces |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Apparatus for the
Transillumination
Imaging of Teeth
|
|
|
01986985.8 |
|
|
as of 20-Nov-01
|
|
900-019/EP;
FMS-12371
|
|
European Patent Organi-sation counterpart (DIFOTI elastomeric claims) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Method of
Transillumination
of Teeth
|
|
PCT/US05/28465
|
|
10-Aug-05
|
|
904-011/PCT
|
|
Patent
Cooperation Treaty
counterpart to U.S.
Pat. Appl. No.
11/199,568 |
|
|
|
** |
|
German: Geraet zum Elektronischen Darstellen eines Zahnes durch
Transillumination durch Licht |
|
|
|
French: Appareil permettant de visualiser electroniquement une dent par
transillumination |
|
*** |
|
German: Vorrichtung fuer die Transilluminationsabbildung von Zaehnen |
- A-2 -
Exhibit B
Existing Product Line
1. DIFOTI System 19100 (Old DIFOTI)
2. DIFOTI USB System
3. DIFOTI Adult Proximal Mouthpiece 12005
4. DIFOTI Pediatric Mouthpiece 12105
5. DIFOTI Occlusal Mouthpiece 12205
6. DIFOTI Replacement Lamp 10101
7. DIFOTI Control Box Cable
8. DIFOTI Foot Pedal 15001
- B-1 -
Exhibit C
Licensed Trademarks
Trademarks on the Principal Register of the U.S. Patent and Trademark Office
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Date of First |
|
|
Registration |
|
Reg. |
|
Registered |
|
|
|
|
|
|
|
Use in |
|
|
No. |
|
Date |
|
Trademark |
|
Application S/N |
|
Date Filed |
|
Commerce |
|
Description |
2355483
|
|
6-Jun-00
|
|
DIFOTI
|
|
|
75043465 |
|
|
1/16/1996
|
|
12/16/1999
|
|
electro-optical
apparatus to
diagnose dental
conditions |
- C-1 -
Exhibit D
Transferred Manufacturing-Related Materials and Documentation
1. DIFOTI Mechanical Drawings for DIFOTI System 19100
2. DIFOTI Mechanical Drawings for DIFOTI USB System
3. DIFOTI Assembly Procedures
4. Production Drawings
5. Testing Drawings
6. Electronics Drawings
7. Q.C. Documents
- D-1 -
EX-99.1
Exhibit 99.1
For further information contact:
David Carey
Lazar Partners Ltd.
212-867-1762
dcarey@lazarpartners.com
Electro-Optical Sciences Announces Licensing Agreement with KaVo
Dental GmbH to Commercialize DIFOTI®
IRVINGTON, New York December 11, 2006 Electro-Optical Sciences, Inc. (EOS) [NASDAQ: MELA],
today announced that it has signed an exclusive licensing agreement with KaVo Dental GmbH (KaVo),
a leading dental equipment manufacturer, to further develop and commercialize DIFOTI®, a
U.S. Food and Drug Administration-cleared non-invasive imaging device developed by EOS for the
detection of dental caries.
In accordance with the terms of the agreement, KaVo will pay EOS an upfront sum, as well as annual
royalties based on the number of systems sold per calendar year. KaVo has made a significant
dollar commitment to refine the DIFOTI product for commercial launch.
We are excited to add DIFOTI to our product portfolio. DIFOTI presents an ideal addition to our
strategy for prophylactic and minimal invasive technologies. It visualizes dental caries, or tooth
decay in an X-Ray like image without exposing the patient to radiation with a sensitivity of up
to 10 times. We believe it will enable dentists to improve and accelerate diagnosis. It supports
the current trend towards Minimally Invasive Dentistry and fits very well with our other products
in the portfolio, said Bob Joyce, President of KaVo North America.
We are pleased that KaVo will be commercializing DIFOTI to realize its true value in the high-tech
dental arena. KaVo is known for its constant innovation and we believe that their marketing
expertise will allow for tremendous success with DIFOTI, said Joseph V. Gulfo, MD, MBA, president
and CEO of EOS. EOS remains focused on the development and commercialization of MelaFind, our
non-invasive, point-of-care instrument to assist in the early diagnosis of melanoma.
About Electro-Optical Sciences
EOS is a medical device company focused on designing and developing a non-invasive, point-of-care
instrument to assist in the early diagnosis of melanoma.
MelaFind, EOSs flagship product, features a hand-held imaging device that emits multiple
wavelengths of light to capture images of suspicious pigmented skin lesions and extract data. The
data are then analyzed against EOSs proprietary database of melanomas and benign lesions using
sophisticated algorithms in order to provide information to the physician and produce a
recommendation of whether the lesion should be biopsied.
Melanoma is the deadliest of skin cancers, responsible for approximately 80% of all skin cancer
deaths. Unless melanoma is detected early and excised with proper margins, the patient survival
rate is poor, as there is currently no cure for advanced stage melanoma.
For more information on EOS, visit www.eosciences.com.
About KaVo
KaVo is the premier technology oriented dental equipment manufacturer with a long history of
leading innovations. Originally known for its superior hand pieces and dental treatment units, KaVo
has systematically developed products in the last 30 years in the areas of prophylactic, minimal
invasive and aesthetic dentistry, serving dentists and dental labs. KaVo has extensive market
coverage world wide, with a focus in Europe, North America, and Asia Pacific.
For more information on KaVo, visit www.kavo.com
Safe Harbor
This press release includes forward-looking statements within the meaning of the Securities
Litigation Reform Act of 1995. These statements include but are not limited to our plans,
objectives, expectations and intentions and other statements that contain words such as expects,
contemplates, anticipates, plans, intends, believes and variations of such words or
similar expressions that predict or indicate future events or trends, or that do not relate to
historical matters. These statements are based on our current beliefs or expectations and are
inherently subject to significant uncertainties and changes in circumstances, many of which are
beyond our control. There can be no assurance that our beliefs or expectations will be achieved.
Actual results may differ materially from our beliefs or expectations due to economic, business,
competitive, market and regulatory factors.
# # #