License Agreement - Novoste Corp. and Spencer B. King III
LICENSE AGREEMENT
LICENSE AGREEMENT made this 31st day of January, 1996 by and between Novoste
Corporation, a Florida Corporation located at 4350-C International Blvd.
Norcross, GA 30093 ("Novoste"), and Spencer B. King III, M.D. ("Dr. King").
RECITALS:
A. Novoste, a highly-reputed medical technology development company with a
successful track record of proprietary innovative devices, is developing a
system to treat restenosis with radiation ("Project Beta System") as defined
hereunder.
B. Novoste anticipates that the Project Beta System will yield a commercially
viable catheter system, Transfer Device and accessories to be used in the
field of Interventional Cardiology (the "Product").
C. Dr. King has agreed to allow Novoste to use his name in connection with the
Sales and Marketing of the Product, all in the terms hereinafter set forth.
Now Therefore, based on the foregoing recitals and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties agree as follows:
1. License. Dr. King hereby grants Novoste the exclusive right but not the
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obligation to utilize his name (the "Name") in connection with the marketing,
advertising, sales and distribution of the Product in the field of
Interventional Cardiology, and, to sublicense others to do so. Dr. King
represents and covenants that such grant does not conflict with any other
license rights heretofore granted any entity or person and that he will not in
the future license any entity or person in any manner that may conflict with the
rights hereby licensed to Novoste. Dr. King further represents and warrants
that this agreement does not conflict with any agreements with Emory University
or its policy.
2. Term. This agreement shall run for the life of the patent or ten (10) years
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from the date hereof (the "Term"), unless terminated earlier pursuant to Section
7 hereinbelow. The license granted hereunder is subject to Novoste's
obtaining Dr. King's written approval prior to Novoste's initial use of Dr.
King's name.
3. Royalties. Novoste agrees to pay Dr. King a sum equal to the greater of (a)
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XXXXX (XXXXX%) of all Net Sales (defined below) of the Product or (b) in the
event that Novoste sells the Product at a unit price less than five hundred
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Confidential treatment has been requested for portions of this exhibit. The
copy filed herewith omits the information subject to the confidentiality
request. Omissions are designated as "XXXXX".
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dollars ($500.00), XXXXX (XXXXX%) of Net Sales will be calculated as though the
sales price of each unit of the Product sold were five hundred dollars
($500.00). The royalty payment shall be paid to Dr. King within sixty (60) days
of the last day of each calendar quarter during the Term based on Net Sales for
the Calendar quarter then recently ended. Net Sales shall mean the gross invoice
price actually paid by a purchaser of a Royalty-bearing Product to Novoste, an
affiliate of Novoste, a sublicensee of Novoste, or any other party authorized by
Novoste to sell Royalty-bearing Products (net of rebates, refunds, replacements
or credits allowed to purchasers for return of Royaltybearing Products or as
reimbursement for damaged Royalty-bearing Products, discounts, sales, use or
value-added taxes, duties, shipping and transportation charges, insurance and
allowances, commissions paid to non-employee outside salesmen or distributors,
import and custom duties, and any separately itemized cost or expense for
handling or disposing of radioactive catheters, transfer devices or other
materials).
Notwithstanding "Net Sales Price" shall not in any event include any
consideration paid to Novoste, its Affiliates, sublicensees or authorized agents
for the sale, lease, use, service, acquisition, handling, or disposal of
radioactive isotopes or other radiation sources.
The royalty obligations described in this Section 3 shall apply even if Novoste
does not use Dr. King's name in association with the sale, marketing,
advertising and distribution of the Product, and shall be assumed by any
purchaser or licensee of the Project Beta System so that any sales of the
Product made by such purchaser or licensee shall result in the payment of
royalties to Dr. King. Unless Dr. King does not allow Novoste or asks Novoste
to remove his name from the Product, then Novoste will not be obligated to pay
any royalty on Products sold without the use of Dr. King's name. Novoste hereby
covenants that any purchase, sale or license agreement with respect to the
Project Beta System shall require the third party purchaser to assume all of
Novoste's royalty payment obligations under this Agreement. Royalties shall be
payable for the time period of the greater of the life of any patent issued on
the Product or ten (10) years from the date hereof (the Term).
4. Statements and Payments. Novoste agrees to keep complete and accurate
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records and books of accounts relating to sales of the Product for five years
and, within sixty (60) days after the end of each calendar quarter, to furnish
Dr. King at his address designated in Section 18 hereinbelow, a statement in
writing showing in reasonable detail: (a) the gross sales of the Product, if
any, for such calendar quarter and, on a cumulative basis, (b) a computation of
Net Sales showing the amount of each allowable deduction from the gross sales of
the Product; and (c) the payment, if any due to Dr. King at such time. The
foregoing statement shall accompany the royalty payment payable pursuant to
Section 3 hereinabove.
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Confidential treatment has been requested for portions of this exhibit. The
copy filed herewith omits the information subject to the confidentiality
request. Omissions are designated as "XXXXX".
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5. Audit. Novoste hereby grants Dr. King the right, exerciseable once per year
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(non-cumulatively), to inspect, audit, investigate accounts and records of
Novoste relating only to the sale and/or distribution of the Product for the
purpose of determining the sufficiency and accuracy thereof and the correctness
of the statements and payments made by Novoste. Such inspection, investigation
and/or audit of such books, accounts and records shall be at Dr. King's expense
and take place during normal business hours upon reasonable notice by Dr. King,
provided, however, that if such audit indicates that Novoste underpaid Dr. King
by five percent (5%) or more for any quarter, Novoste shall be responsible for
the cost of such audit. All books and records relating to the sales of the
Product shall be kept available by Novoste for at least five (5) years after the
date of sale.
6. Lifetime Cap. The maximum total royalty payment payable to Dr. King
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hereunder shall be five million dollars ($5,000,000.00) cumulatively. Once all
royalty payments reach the maximum amount, the provisions of Sections 3, 4 and 5
shall terminate and no further royalties are due on the sale of the Product.
7. Termination. Dr. King may terminate this agreement upon the occurrence of
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any one of the following events:
(a) if Novoste shall have failed to make any payment due hereunder on the
date such payment is due;
(b) if Novoste shall fail to deliver any of the statements required to be
delivered hereunder or to make available for inspection, investigation
and/or audit its books and records pursuant to the provisions hereof;
(c) if upon one or more inspections, investigations and/or audits, it is
determined that for each of two (2) consecutive calendar quarters, the
royalty amounts paid by Novoste were less than ninety percent (90%) of the
amounts due to Dr. King in such periods; or
(d) if Novoste shall:
(i) file a petition in bankruptcy or for reorganization or for the
adoption of the arrangement under any bankruptcy or insolvency act, or
an answer or other pleading admittance of failing to deny the material
allegations of such a petition or seeking, consenting to or acquiescing
in the relief therein provided;
(ii) make an assignment for the benefit of its creditors;
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(iii) consent to the appointment of a receiver or trustee or
custodian for all or a substantial part of its property or to the
filing of a petition against it under any bankruptcy or insolvency
act; or
(iv) be adjudicated a bankrupt organization.
In the event any of such events occur, Dr. King, if he desires to terminate this
agreement, shall give notice of termination in writing to Novoste as provided
hereunder. If Novoste shall fail to cure such event of default within ninety
(90) days of receipt of such notice, then this agreement shall terminate.
Novoste may terminate this Agreement for "cause". Cause means (a) willful
misconduct on the part of Dr. King with respect to the business and affairs of
Novoste, (b) Dr. King's conviction of any felony or any act involving fraud or
moral turpitude, or (c) the suspension, revocation or cancellation of Dr. King's
right to practice his profession in Georgia. If Novoste terminates for any of
the above reasons, the provisions of Sections 3, 4, and 5 shall also terminate.
8. Rights of Novoste Upon Termination or Expiration. Upon the expiration or
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termination of this agreement for any reason, neither Novoste nor its receivers,
representatives, trustees, agents, successors and/or assignees shall have any
right to exploit or in any way use the Name in connection with the advertising,
marketing, promotion, sales or distribution of the Product except in connection
with the distribution and sale of remaining inventory, for which Novoste shall
be responsible for the payment of all royalties in accordance with the terms
hereof.
9. Confidentiality Covenant. Dr. King acknowledges that the trade secrets,
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information, ideas, research, methods, improvements and materials owned,
licensed or developed by Novoste are and shall remain the sole and exclusive
strictly confidential property of Novoste. All information and knowledge about
Novoste and its products, services, methods, standards, specifications,
procedures and techniques which are not public knowledge and such other data as
Novoste may designate as confidential shall be kept strictly confidential by Dr.
King, used only for the purposes authorized by Novoste. Dr. King covenants and
agrees that during and after the termination of this Agreement (for five 5
years) neither he nor anyone associated with him shall copy or disclose to
anyone or use for any purposes other than as authorized by Novoste any such
confidential information.
10. Assignment. This agreement shall be binding upon and shall inure to the
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benefit of the parties hereto and their respective successors and assignees.
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No assignment shall relieve any party from the responsibility for the
performance of any accrued obligations which such party then has hereunder.
11. Relationship of the Parties. The parties hereto agree that the status
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of Dr. King is that of an independent contractor and that Dr. King is not a
partner or legal representative of Novoste. Dr. King shall have no right or
authority to assume or create any obligation or responsibility, express or
implied, on behalf of or in the name of Novoste, or to bind Novoste in any
manner.
12. No Waiver of Rights. The failure of either party to enforce at any
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time any of the provisions of this agreement, or any rights in respect
thereto, or to exercise any election herein provided, shall in no way be
considered to be a waiver of said provisions, rights or election, or in any
way to affect the validity of this agreement.
13. Governing Law. This agreement shall be governed by and construed and
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enforced in accordance with the laws of the State of Georgia.
14. Legal Counsel. The parties hereto agree that they each have been
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represented by independent legal counsel in connection with the review and
negotiation of this Agreement and the subject matter contained herein.
15. Attorneys' Fees. In the event that either of the parties to this
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agreement commence arbitration against the other party to this Agreement to
enforce any of its or his rights hereunder, the prevailing party in such
action shall be entitled to recover from the other party all reasonable
costs thereof, including reasonable attorneys' fees.
16. Arbitration. In the event that there is any dispute between the parties
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hereto, the parties agree to submit the matter to binding arbitration in
Atlanta, Georgia in accordance with the commercial rules of the American
Arbitration Association then applicable before a panel of three arbitrators.
The decision of the panel of arbitrators shall be final, binding and
conclusive upon the parties hereto and judgment thereon may be entered in
any court having jurisdiction. The costs of such arbitration shall be paid
or reimbursed by the non-prevailing party.
17. Indemnification. Dr. King and Novoste shall indemnify, defend and
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hold the other harmless from and against any and all liabilities, suits,
proceedings, claims, demands, debts, costs (including legal costs),
obligations and actions of any kind by anyone allegedly arising from or
connected with (a) the indemnifying party's violations of any federal or
state law, rule or regulation, (b) the indemnifying party's actions or
inaction's in furtherance of this Agreement, (c) the indemnifying party's
breach or default in the performance of the obligations to be performed
under this Agreement, (d) the indemnifying party's negligence, or (e) the
indemnifying party's activities or
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operations. The provisions of this paragraph in the case of Novoste shall
extend to its executive management and authorized agents.
18. Communications. All notices under this agreement shall be in writing
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and (unless otherwise specifically provided for herein) shall be deemed to
have been given at the time when mailed, by registered mail, postage prepaid,
addressed to either party hereto at the following addresses:
Spencer B. King III, M.D.
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Novoste Corporation
4350-C International Blvd.
Norcross, GA 30093-3027
Attn: President
or to such changed address as such parties may have fixed by notice; provided,
however, that any notice of any change of address shall be effective only upon
receipt thereof.
19. Severability. If any provisions of this agreement shall be held to be
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invalid or unenforceable, such invalidity or unenforceability shall attach only
to such provision and shall not in any way affect or render invalid or
unenforceable any other provision of this agreement, and this agreement shall be
carried out as if such invalid or unenforceable provision were not contained
herein.
20. Further Assurances. The parties each agree to execute any and all
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documents and perform any and all acts which may be reasonably requested by the
other in furtherance of any of the provisions herein.
21. Entire Agreement. This agreement constitutes the entire final agreement
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between the parties with respect to, and supersedes any and all prior agreements
between the parties hereto both oral and written concerning the subject matter
hereof and may not be amended, modified or terminated except by a writing signed
by the parties hereto.
IN WITNESS WHEREOF, the parties have hereunto set their hands as of the date
first above written.
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NOVOSTE CORPORATION
By: /s/ Spencer B. King III M.D. By: /s/ Thomas D. Weldon
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Spencer B. King III M.D. Thomas D. Weldon, President
Date: 1-31-96 Date: 1/31/96
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Witness: /s/ Date: 1/31/96
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