throbber
•
`
`LICD'SB AGRBIOQNT
`
`• l
`
`'f
`
`This AGREEMENT, effective this 31st day of December, 1993, is
`
`by and between Sofamor Danek Group, Inc. (hereinafter referred to
`
`as "Danek•), a corporation organized and existing under the laws of
`
`the State of Indiana and with its principal offices located at
`
`38131,
`and Karlin
`3092 Directors Row, Memphis, Tennessee
`Technology, Inc. (hereinafter referred to as "KTI"), a corporation
`
`organized and existing under the laws of the State of California
`
`and with its principal offices located at 4929 Premier Avenue,
`
`Lakewood, California 90712.
`
`W I T N E S S E T H
`
`WHEREAS, Danek, by and through its subsidiaries, is in
`
`the business of researching, designing, developing and marketing
`
`medical devices used in connection with orthopedic and spinal
`
`surgery;
`
`WHEREAS, KTI has developed a Medical Device (as hereinafter
`
`defined) which utilizes certain Technology (as hereinafter defined)
`
`and has also obtained a
`
`license for third party patents for
`
`implants pursuant to a Prior Agreement (as hereinafter defined);
`
`WHEREAS, Danek desires to obtain from KTI a license for the
`
`Technology and the Medical Device and all rights licensed to KTI
`
`pursuant to the Prior Agreement and further desires to obtain from
`
`KTI an option to purchase the same from KTI; and
`
`-fighly Confidential
`
`MSD 0591384
`MSD0591384
`
`Confidential-Attorneys' Eyes Only
`
`MNUV0005676
`
`PX2338-0001
`
`PX2338
`
`WARSAW2009
`NuVasive, Inc. v. Warsaw Orthopedic, Inc.
`Case IPR2013-00208
`
`Page 1
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`

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`I
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`•
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`•
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`WHEREAS, KTI desires to grant such license and option to
`
`purchase the Technology and the Medical Device and all rights
`
`licensed to KTI under the Prior Agreement to Danek.
`
`NOW, THERBFORB, in consideration of the mutual covenants and
`
`promises
`
`contained herein,
`
`and other good
`
`and valuable
`
`consideration, and subject to the terms and conditi-one hereof,
`
`Danek and XTI agree as follows.
`
`1. Definitions.
`
`1.1
`
`Effective Date.
`
`Effective Date shall mean
`
`December 31, 1993.
`
`1.2
`
`Medical Deyice. Medical Device shall mean a
`
`threaded implant or threaded implants for use in spinal surgical or
`
`stabilization procedures and
`
`instruments and methods related
`
`thereto, which utilize the Technology and are Michelson's invention
`
`as disclosed in the patent and patent applications listed in
`
`Disclosure Schedule 3.2, whether cla~ed or not, or whether issued
`
`or not.
`
`1.3
`
`Net Sales.
`
`(a) Net Sales shall mean
`
`the
`
`invoice price
`
`charged for the Medical Device (aJ with respect to sales or leases
`
`made in the United States by Danek less (i) any refunds, credits or
`
`allowances actually given to customers for returns of the Medical
`
`Device, Cii) any discounts actually given or credited to third
`
`parties, and (iii) any commissions actually paid or credited to
`
`third parties; and (b) with respect to sales or leases made outside
`
`of the United States by Danek leas (i) any refunds, credits or
`
`BAM JMB%'113115l 7 JlW74 0009 OJ/I~
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`-2-
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`···--·- ··- ----------------------------------~
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`ighly Confidential
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`MSD0591385
`MSD0591385
`
`Confidential-Attorneys' Eyes Only
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`MNUV0005677
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`PX2338-0002
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`Page 2
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`. ,_
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`•
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`•
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`allowances actually given for returns of the Medical Device,
`
`(ii) any discounts actually given or credited to third parties,
`
`(iii) any commissions actually paid or credited to third parties;
`
`and
`
`( ivl extraordinary expenses relating to sales in foreign
`
`countries, such as import duties, taxes, transportation and the
`
`like. For purposes of this definition, a Medical Device shall be
`
`considered to have been sold or leased on the date of the invoice
`
`for the Medical Device.
`
`(b)
`
`In the event that a threaded spinal implant
`
`sold or leased by Danek is not within the definition of Medical
`
`Device (hereinafter •other Implant"), but nonetheless requires the
`
`use of covered KTI instruments licensed or assigned to Danek by KTI
`
`hereunder for both predistraction and performing
`
`the
`
`implant
`
`procedure through a fixed tubular member, then the invoice price
`
`charged by Danek for such Other Implant shall be included in Net
`
`Sales under this Agreement.
`
`1.4
`
`Technology.
`
`Technology shall mean any United
`
`States and foreign patente and patent applications and future
`
`applications,
`
`including, without
`
`limitation,
`
`any amendment,
`
`continuation, division, reissue and reexamination thereof, and any
`
`know-how, trade secrets or confidential information, proprietary
`
`rights, processes, engineering/design/technical information and
`
`data pertaining to the Medical Device which KTI has heretofore
`
`developed,
`
`acquired or
`
`licensed as
`
`listed on Disclosure
`
`Schedule 3.2, or which ~I may develop, acquire or license after
`
`BAM ,JMB2U:Sl1SJ 1 $0914 0009 01111194
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`-3-
`
`Highly Confidential
`
`MSD 0591386
`MSD0591386
`
`Confidential-Attorneys' Eyes Only
`
`MNUV0005678
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`PX2338-0003
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`Page 3
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`

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`the Effective Date hereof, whether or not subject to the Prior
`
`-
`
`Agreement.
`
`2.
`
`License; Option to pyrcbase Techqology.
`
`2.1
`
`Grant of License. KTI hereby grants to Danek
`
`worldwide, sole and exclusive right and license, subject only to
`
`the limitation in section 2.3 below,
`
`to use and practice the
`
`Technology and to make, have made, use and sell the Medical Device
`
`which utilizes the Technology.
`
`2. 2
`
`Right to Grant Sublicenses. The rights granted to
`
`Danek under the terms of this Agreement shall include the right of
`
`Danek to grant a sublicense to any company or legal entity which is
`
`acting in concert with Danek to the full extent permitted by the
`
`Prior Agreement.
`
`2.3
`
`scope of Lic~nee.
`
`The scope of the sole and
`
`exclusive license, and all other rights granted to Danek under the
`
`terms of this Agreement, is limited only by the May 10, 1992
`
`license agreement between KTI, G. Karlin Michelson, M.D.
`
`(hereinafter referred to as "Michelson") and Spine-Tech, Inc. of
`
`Minneapolis, Minnesota {hereinafter referred to as the "Prior
`
`Agreement~), a copy of which has been provided to Danek but with
`
`the financial terms and drawings attached thereto deleted. Danek
`
`agrees to assume all of the obligations set forth in the Prior
`
`Agreement which are necessary condition precedents to the right of
`
`KTI to grant the license to Danek under the Prior Agreement. To
`
`the extent
`
`that
`
`the Prior Agreement
`
`is interpreted, amended
`
`or modified so that greater or additional rights can be
`
`BAiol JMm\lliUJ 7 Kl9'74 OOW OJ 112194
`
`·4-
`
`lighly Confidential
`
`MSO 0591387
`MSD0591387
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`Confidential-Attorneys' Eyes Only
`
`MNUV0005679
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`PX2338-0004
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`Page 4
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`

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`·.
`
`granted to Danek by KTI,
`
`those rights will automatically be
`
`included within the scope of the license granted to Danek under
`
`this Agreement without additional consideration, including without
`
`limitation the license becoming, either in whole or in part, solely
`
`exclusive to Danek, provided, however, that the Prior Agreement
`
`shall not be interpreted, amended or modified in any way to limit
`
`the rights granted to Danek herein and further, provided, that
`
`Danek shall be notified in writing in advance of any re-negotiat:ion
`
`with respect to the Prior Agreement and Danek shall have the right
`
`to participate in any such negotiation with respect to any such
`
`interpretation, amendment or modification. KTI and Michelson shall
`
`have the sole right to agree to the terms of such modification,
`
`subject to the limitations above. Except as provided herein, KTI
`
`and Michelson shall control and be responsible for any disputes
`
`between KTI, Michelson and Spine-Tech.
`
`2. 4
`
`Qpt iop to Purchase. KTI hereby further grants to
`
`Danek the right to purchase the Technology and the Medical Device
`
`on or after December 31, 1996, owned by KTI for the sum of One
`
`Thousand Dollars ($1,000), which option Danek can exercise upon
`
`written notice to KTI at any time on or after December 31, ~996.
`
`In the event that Danek exercises tbis option to purchase the
`
`Techno1ogy and the Medical Device, it is understood and agreed to
`
`by Danek that any funds due KTI, and any records related thereto,
`
`under the Prior Agreement shall continue to be paid or given by
`
`spine-Tech directly to KTI, and Danek shall have no right of any
`
`kind in ouch funds and records.
`
`-s-
`
`iighly Confidential
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`MSD 0591388
`MSD0591388
`
`Confidential-Attorneys' Eyes Only
`
`MNUV0005680
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`PX2338-0005
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`Page 5
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`

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`•
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`•
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`3. Representations. Warranties and Covenants of KTI. KTI
`
`represents, warrants and covenants to Danek as follows:
`
`3 .1
`
`Power and Authority.
`
`Subject
`
`to
`
`the Prior
`
`Agreement, KTI has all requisite legal and corporate power and
`
`authority to execute and deliver this Agreement,
`
`to grant the
`
`license and the option to purchase the Technology and the Medical
`
`Device to Danek as done hereby, and to carry out and perform its
`
`obligations under this Agreement. This Agreement, when executed
`
`and delivered by KTI, will constitute the valid and binding
`
`obligation of KTI,
`
`specifically enforceable against KTI
`
`in
`
`accordance with ita terms, except aa
`
`limited by applicable
`
`bankruptcy, insolvency, reorganization, moratorium, or the laws of
`
`general application relating to or affecting creditors• rights or
`
`as may be limited by the availability of equitable remedies.
`
`3.2
`
`Technology and Medical Devi~. KTI has legal and
`
`)
`
`equitable title to, ownership of. and the right to license the
`
`Technology and the Medical Device {as listed on Disclosure Schedule
`
`3.2), free and clear of any and all liens, encumbrances, pledges or
`
`claims of any third party and, to the best of its knowledge, has
`
`the right to use, and ie without any conflict with or infringement
`
`of the rights of any third party under any patent,
`
`trademark,
`
`service mark,
`
`trade name, copyright,
`
`trade secret, or other
`
`proprietary right. KTI and its sole shareholder Michelson have
`
`complied in all respects witb the terms and conditions of the Prior
`
`Agreement. Except as disclosed in the opinion letter required by
`
`Section 9.1, KTI has not received any communications alleging that
`
`-6-
`
`ighly Confidential
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`MSD 0591369
`MSD0591389
`
`Confidential-Attorneys' Eyes Only
`
`MNUV0005681
`
`PX2338-0006
`
`Page 6
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`

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`the Technology or the Medical Device or that the grant of the
`
`•
`
`license and option to purchase by Danek has violated or would
`
`violate any of the patents, trademarks, service marks, trade names,
`
`copyrights or trade secrets or other proprietary or contract rights
`
`of any other person or entity. There are no outstanding options,
`
`licenses, or agreements of any kind related in any- way to the
`
`Technology or the Medical Device, except as listed on Disclosure
`
`Schedule 3. 2. Except as listed on Disclosure Schedule 3. 2 and
`
`with respect to the Technology and the Medical Device, KTI is not
`
`bound by, or a party to, any options, licenses or a~reements with
`
`respect to any patents, patent applications, licenses, trademarks,
`
`service marks, trade names, inventions, franchises, and copyrights.
`
`trade secrets, information, proprietary rights and processes of any
`
`other person or entity. KTI will not grant or attempt to grant any
`
`right or license to any third party to make, have made, use,
`
`promote, sell, or have sold the Medical Device or in any way to
`
`practice
`
`the Technology.
`
`KTI will not, either directly or
`
`indirectly, compete with Danek in any way with respect to the
`
`Technology and the Medical Device. KTI agrees to provide Danek with
`
`access
`
`to all
`
`information and documents pertaining
`
`to
`
`the
`
`Technology and the Medical Device and further agrees to cooperate
`
`in all respects with Danek to ensure Danek 1 s quiet enjoyment of the
`
`Technology and the Medical Device under the license granted hereby.
`
`3.3
`
`Disclosure
`
`to Panek.
`
`No
`
`representation or
`
`warranty of KTI contained in this Agreement or in any other
`
`document,
`
`instrument or agreement disclosed by KTI to Danek in
`
`IIAU JMB1U311D 7 ,0974 11009 0111~
`
`-7-
`
`iighly Confidential
`
`MSD 0591390
`MSD0591390
`
`Confidential-Attorneys' Eyes Only
`
`MNUV0005682
`
`PX2338-0007
`
`Page 7
`
`

`
`•
`
`connection with this Agreement, contains any untrue Btatement of a
`
`fact or omits to state a fact necessary in order to make
`
`the
`
`statements, representations and warranties contained herein or
`
`therein not misleading in light of the circumstances under which
`
`they were and are made.
`
`3. 4
`
`Non-Contravention; Material Consents.- Neither the
`
`execution and delivery of this Agreement, nor the consummation of
`
`the transactions contemplated hereby will with respect to KTI
`
`violate any provision of the KTI Articles of Incorporation or the
`
`KTI By-Laws or will result in the acceleration of or entitle any
`
`party to accelerate (whether after the giving of notice or lapse of
`
`time or both) any obligation under, or entitle any party to
`
`terminate any or all of the provisions of any agreement or
`
`contract. All authorizations, permits, consents, waivers, orders,
`
`reissuances or approvals of, or filings with any public body or
`
`. _)
`
`authority or any third party, if any, which are necessary for the
`
`consummation by KTI of the transactions contemplated by this
`
`Agreement will have been obtained prior to the Effective Date,
`
`except for authorizations, permits, consents, waivers, orders,
`
`reisauances, approvals or filings, the failure of which to obtain
`
`would not prevent the consummation of the transactions contemplated
`
`by this Agreement.
`
`4. Representations. Warranties and Coyenants of Danek.
`
`Danek represents, warrants and covenants to ~I as followe:
`
`4.1
`
`Corporate Power and Authority.
`
`Danek bas all
`
`requisite legal and corporate power and authority to execute and
`
`BAM JMBN:JliSJ 7 S09'7.f 0009 01/ll/91
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`-8-
`
`lighly Confidential
`
`MSD 0591391
`MSD0591391
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`Confidential-Attorneys' Eyes Only
`
`MNUV0005683
`
`PX2338-0008
`
`Page 8
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`

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`deliver this Agreement, to accept the license and the option to
`
`purchase the Technology anCl the Medical Device and to carry out· and~
`
`perfonn its obligations under this Agreement. This Agreement, when
`
`executed and delivered by Danek will constitute the valid and
`
`binding obligation of Danek:, specifically enforceable against Danek
`
`in accordance with its terms, except as limited by applicable
`
`bankruptcy, insolvency, reorganization, moratorium, or other laws
`
`of general application relating to or affecting enforcement of
`
`creditors • rights or as may be limited by the availability of
`
`equitable remedies.
`
`4. 2
`
`Pisclosure to KTI. No representation or warranty
`
`of Danek. contained in this Agreement or in any other document,
`
`instrument or agreement disclosed by Danek to
`
`in connection with
`
`this Agreement, contains any untrue statement of a fact or omits to
`
`state
`
`a
`
`fact necessary
`
`in order
`
`to make
`
`the statements,
`
`representations and warranties contained herein or therein not
`
`misleading in light of the circumstances under which they were and
`
`are made.
`
`4. 3
`
`Non-Contravention; Material Consents. Neither the
`
`execution and delivery of this Agreement, nor the consummation of
`
`the transactions contemplated hereby, will violate any provision of
`
`the Articles of Incorporation or the By-Laws of Danek, or result in
`
`the acceleration of or entitle any party to accelerate (whether
`
`after the giving of notice or lapse of time or both) any oblig~tion
`
`under, or entitle any party to terminate any or all of
`
`the
`
`provisions of any agreement or contract. All authorizations,
`
`-9-
`
`-iighly Confidential
`
`MSD 0591392
`MSD0591392
`
`Confidential-Attorneys' Eyes Only
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`MNUV0005684
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`PX2338-0009
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`Page 9
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`-
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`permits, consents, waivers, orders, reissuances or approvals of, or
`
`filings with, any public body or authority or any third party which
`
`are necessary for the consummation by Danek of the transactions
`
`contemplated by this Agreement wi~l have been obtained prior to the
`
`Bffective Date, except for authorizations, permits, consents,
`
`waivers, orders, reissuances, approvals or filings, the failure of
`
`which
`
`to obtain would not prevent
`
`the consummation of
`
`the
`
`transactions contemplated by this Agreement.
`
`4.4
`
`Best Efforts. Danek will use its best efforts to
`
`obtain regulatory approval and to actively promote the sale of the
`
`Medical Device consistent with Danek's standards and in light of
`
`the then current market conditions; provided, however, that nothing
`
`in this section snall be interpreted or construed as requiring or
`
`imposing any obligation on Danek to assume what Danek, in its sole
`
`opinion, considers to be an unreasonable or unnecessary business,
`
`)
`
`regulatory, legal, financial or commercial risk or commitment in
`
`connection with the Medical Device. In the event that the Board of
`
`Directors of Danek makes the business decision not to use its best
`
`efforts in the United States or Europe to obtain regulatory
`
`approval and to actively promote the sale of the Medical Device
`
`consistent with Danek's standards and in light of the then current
`
`market conditions, then KTI's sole recourse sha1l be to nave the
`
`option of terminating the license or purchasing from Danek all
`
`rights
`
`to the Medical Device and
`
`the Technology licensed or
`
`assigned to Danek in this Agreement and any regulatory filings
`
`related thereto for the United States and/or Europe, whichever is
`
`BAM lMII2\01153 7 SIW74 IXIl'l 01/12.194
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`-10-
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`ighly Confidential
`
`MSD 0591393
`MSD0591393
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`Confidential-Attorneys' Eyes Only
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`MNUV0005685
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`PX2338-001 0
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`Page 10
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`)·'.
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`the subject of the Board's business decision referred to in this
`
`•
`
`sentence for the amount of one million dollars 1$1,000,000.00) for
`
`the United States and/or one million dollars ($1,000,000.00) for
`
`Europe as the case may be.
`
`4.5
`
`Notice and Markings. Danek shall identify in its
`
`literature that
`
`the Medical Device and
`
`the Technology were
`
`developed by Michelson. Proper patent notices shall be used by
`
`Danek.
`
`5.
`
`Royalty and AmoUnt.
`
`5.1
`
`Royalty. Danek shall pay KTI a royalty equal to
`
`Ten Percent
`
`(10\) of
`
`the Net Sales of
`
`the Medical Device
`
`(hereinafter "Royalty•); provided, however, that only one Royalty
`
`or Amount
`
`(as hereinafter defined) shall be due and payable by
`
`Danek to Michelson on the sale or lease of any Medical Device or
`
`Other Implant.
`
`5.2
`
`Pa.yment.
`
`The Royalty payable by Danek
`
`to KTI
`
`shall be made quarterly no later than forty-five (45) calendar days
`
`following the end of the applicable calendar quarter. Any payment
`
`required to be made pursuant to Section 5.1 shall be made in United
`
`States Dollars; provided, however, that in those instances when the
`
`laws or regulations of a foreign country prohibit payment for the
`
`Medical Device in U.S. Dollars or impose a fee on the payment in
`
`U.S. Dollars, the amount paid to KTI shall be reduced by the cost
`
`to exchange that foreign currency into U.S. Dollars or the amount
`
`of that fee. If Danek exercises its option under this Agreement to
`
`purchase the Technology and the Medical Device, Danek will continue
`
`-11-
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`-iighly Confidential
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`MSD 0591394
`MSD0591394
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`Confidential-Attorneys' Eyes Only
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`MNUV0005686
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`PX2338-0011
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`Page 11
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`•
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`•
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`to pay KTI, or the assignee of KTI pursuant to Paragraph 13.3(b),
`
`an amount equal to ten percent (10\) of the Net Sales (hereinafter
`
`the •Amount•) .
`
`6.
`
`Reports and Record.B. Danek shall submit to KTI a written
`
`report at the time that it makes any payment to KTI. The report
`
`shall set forth the following information with respect to the
`
`previous calendar quarter:
`
`the total sales of the Medical Device;
`
`the Net Sales; the amounts of the deductions and credits allowed in
`
`calculating the Net Sales as provided for in Section 1.3, and the
`
`calculations of the Royalty or the Amount.
`
`Danek shall keep and maintain complete and accurate
`
`records relating to this Agreement and the reports required by this
`
`Section 6. such records shall be maintained by Danek for a period
`
`of five (5) years from the dates of any transaction relating to
`
`this Agreement. At its own expense, KTI and its representatives
`
`shall have the right, upon reasonable notice and during normal
`
`business hours, to inspect, examine, audit and copy such records of
`
`Danek in order to verify Danek's compliance with the terms of this
`
`Agreement.
`
`7.
`
`Infringement; Patent Protection. Subject to the Prior
`
`Agreement, Danek shall have the right to defend or prosecute any
`
`and all claims of patent infringement that may be brought in
`
`connection with the Technology and/or the Medical Device. Danek
`
`and KTI shall i11111ediately notify each other in writing of any
`
`activity, of any type or nature whatsoever, which Danek or KTI
`
`believes to be an infringement of or a challenge to intellectual
`
`BAM IMBZ\llll$) 7 :IOP74 ()(109 0111 ~
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`ighly Confidential
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`MSD 0591395
`MSD0591395
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`Confidential-Attorneys' Eyes Only
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`MNUV0005687
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`PX2338-0012
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`Page 12
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`

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`property rights in the Technology and the Medical Device. Danek
`
`and KTI shall cooperate with each other {including, without
`
`limitation, joining in any litigation, if requested to do so) in
`
`all matters concerning any such infringement or challenge.
`
`From
`
`and after the Effective Date of this Agreement, Danek will uee all
`
`reasonable efforts to prepare, prosecute and maintain or continue
`
`the preparation, prosecution and maintenance of patent protection
`
`in the United States and foreign countries on the Technology and
`
`any Medical Device at ita sole cost and expense, provided, however,
`
`ICTI will provide assistance to Danek as may be reasonably necessary
`
`in Danek' a opinion to accomplish the same and without further
`
`consideration, at no cost to KTI.
`
`It is expressly agreed that
`
`Danek has no obligation to prosecute any third party. In the event
`
`monies are received by Danek as compensation for lost sales from a
`
`third party due to that third party's infringement of the rights
`
`licensed or transferred hereunder, KTr shall receive ten (10\)
`
`percent of the recovery after Danek has deducted from such recovery
`
`all coste and
`
`legal
`
`fees
`
`incurred
`
`in connection with
`
`the
`
`prosecution of the infringement action against that third party.
`a.
`
`If the laws of any country require
`
`Legal Regpiremente.
`
`that this Agreement or any document relating to the subject matter
`
`hereof to be legalized and/or notarized, or submitted, filed or
`
`registered with any government agency or ministry, KTI agrees to
`
`assist Danek in complying with those requirements without further
`
`consideration. Any such assistance shall be at Danek's sole cost
`
`BAM IMIUUJllD 7 30974 00119 01111194
`
`-13-
`
`iighly Confidential
`
`MSD 0591396
`MSD0591396
`
`Confidential-Attorneys' Eyes Only
`
`MNUV0005688
`
`PX2338-0013
`
`Page 13
`
`

`
`•
`
`•
`
`and expense. Any such submission. filing or registration shall be
`
`made in the name and for the benefit of Danek.
`
`9.
`
`Conditions of Qanet. Danek's obligation to accept the
`
`license and the option to purchase the Technology and the Medical
`
`Device from KTI pursuant to this Agreement ia, at the option of
`
`Danek. subject to the fulfillment as of and on the Effective Date
`
`of the following conditions:
`
`9.1
`
`Representations and Warranties Correct.
`
`The
`
`representations and warranties made by KTI in this Agreement shall
`
`be t:rue and correct when ma.de. and shall be true and correct on and
`
`shall survive the Effective Date. Danek shall have received the
`
`written opinion of KTI's patent attorney that the representations
`
`and warranties of KTI with respect to the Technology and
`
`the
`
`Medical Device are true and accurate in all respects as of the
`
`Effective Date.
`
`9.2
`
`Covenants.
`
`A11
`
`covenants.
`
`agreements
`
`and
`
`conditions contained in this Agreement to be performed by KTI on or
`
`prior to the Effective Date shall have been performed or complied
`
`with in all respects. All consents and waivers required to be
`
`obtained in connection with this Agreement and the transactions
`
`contemplated thereby from third persons shall have been obtained on
`
`or before the Effective Date and reported in writing to Danek.
`
`10. Conditions of KTI.
`
`KTI • s obligation to license the
`
`Technology and
`
`the Medical Device and to grant the option to
`
`purchase
`
`t.o Danek is, at
`
`the option of KTI, eubject
`
`to
`
`the
`
`BAM JMIIl\UllD 7 )0!17411l090ln%J'J4
`
`·14-
`
`ighly Confidential
`
`MSD 0591397
`MSD0591397
`
`Confidential-Attorneys' Eyes Only
`
`MNUV0005689
`
`PX2338-0014
`
`Page 14
`
`

`
`•
`
`.,
`
`fulfillment as of and on the Effective Date of the following
`
`conditions:
`10.1 Representations and Warranties Correct.
`
`The
`
`representations and warranties made by Danek in this Agreement
`
`shall be true and correct when made, and shall be true and correct
`
`on and shall survive the Effective Date.
`
`10.2 Covenants.
`
`All
`
`covenants,
`
`agreements
`
`and
`
`conditions contained in this Agreement to be performed by Danek on
`
`or prior to the Bffective Date shall have been performed or
`
`complied with in all material respects. All consents and waivers
`
`required to be obtained in connection with this Agreement and the
`
`transactions contemplated thereby from third persons shall have
`
`been obtained on or before the Effective Date and reported in
`
`writing to KTI.
`
`11. Tenn. This Agreement and the license and the option
`
`granted hereby shall begin as of the Effective Date and shall
`
`continue until terminated pursuant to the terms of this Agreement.
`
`12.
`
`Indemnification.
`
`12.1
`
`Indemnification by Panek. Danek shall indemnify,
`
`defend and hold KTI harmless
`
`from and against any and all
`
`liabilities, claims, demands,
`
`judgments, costs and expenses
`
`(including court costs and reasonable attorneys' fees) arising in
`
`any way out of a breach by Danek of its warranties, representations
`
`and obligations contained in this Agreement.
`
`Danek shall indemnify, defend and hold KTI and
`
`Michelson hannless from and against any and all liabilities,
`
`BAN JMIIl\131lSJ 1 509'14 0009 0111 %194
`
`-15-
`
`ighly Confidential
`
`MSD 0591398
`MSD0591398
`
`Confidential-Attorneys' Eyes Only
`
`MNUV0005690
`
`PX2338-0015
`
`Page 15
`
`

`
`•
`
`..
`
`claims, demands.. judgments, costs and expenses (including court
`
`costs and reasonable attorneys• fees) arising in any way out of or
`
`on account of any injury, loss, claim, or damage, of any kind or
`
`nature, arising out of or in connection with or resulting from (a)
`
`the production, use or sale by Danek of the Medical Device, or (b)
`
`any advertising or other promotional activities undertaken solely
`
`by Danek with respect to the Medical Device; provided, however,
`
`that this indemnity shall not be applicable to or govern (1)
`
`the
`
`use of the Medical Device by KTI or Michelson in circumstances
`
`under which KTI or Michelson would otherwise not be entitled to an
`
`indemnity absent this Agreement, or (21 any promotion or comments
`
`concerning the Medical Device made by KTI or Michelson without the
`
`prior written approval of Danek. If written approval is not given,
`
`then KTI or Michelson shall have the burden of proving that Danek
`
`authorized said promotion or comments, or (3) the production or
`
`sale of the Medical Device by any third party not authorized in
`
`writing in advance by Danek.
`
`12.2
`
`Indemnification by KTI.
`
`KTI shall
`
`indemnify,
`
`defend and hold Danek harmless from and against any and all
`
`liabilities, claims, demands,
`
`judgments, costs and expenses
`
`(including court costs and reasonable attorneys• fees) arising in
`
`any way out of a breach by KTI of its warranties, representations
`
`and obligations contained in this Agreement.
`
`12.3
`
`conditions of Indemnification. As a condition of
`
`the indemnification contained in this Section 12, the party seeking
`
`indemnification
`
`(hereinafter referred
`
`to as
`
`the ~Indemnified
`
`JI.UIJMII.lUlliSJ 7 5~ 0009 01/12194
`
`-16-
`
`lighly Confidential
`
`MSD 0591399
`MSD0591399
`
`Confidential-Attorneys' Eyes Only
`
`MNUV0005691
`
`PX2338-0016
`
`Page 16
`
`

`
`. .. -
`
`•
`
`Party") shall give the other party (hereinafter referred to as the
`
`•Indemnifying party•) written notice within fifteen (15) days of
`
`the assertion of any such claim, proceeding, action or suit.
`
`13. Miscellaneous.
`
`13.1 Governing La}!. This Agreement shall be governed
`
`by and construed under the laws of the State of Tennessee, without
`
`regard to the laws of any other state, jurisdiction or country.
`
`13.2
`
`Survival.
`
`The
`
`representations, warranties,
`
`covenants and agreements made herein by KTI shall survive any
`
`investigation made by Danek in anticipation of entering into this
`
`Agreement and shall survive beyond the Effective Date.
`
`13.3
`
`Successors and Assigns.
`
`(a) Except as otherwise provided herein,
`
`the
`
`provisions of this Agreement shall inure to the benefit of, and be
`
`binding upon, the successors, heirs, executors and administratore
`
`of the parties hereto, except that Danek shall have the right on
`
`written notice to KTI to assign its rights, either before or after
`
`the Effective Date, in this Agreement, in the Technology, in the
`
`Medical Device and the obligation to make the payments required by
`
`Section 5.1 and 5.2 to a subsidiary: provided, however, in the
`
`event of any such assignment, Danek shall guarantee the compliance
`
`with this Agreement by its subsidiary.
`
`(b) KTI shall have the right to assign KTI 's
`
`right to receive any royalty or Amount due KTI under this Agreement
`
`except to any person or entity in competition with Danek, but shall
`
`not have the right to assign any of the obligations which KTI owes
`
`-17-
`
`Highly Confidential
`
`MSD 0591400
`MSD0591400
`
`Confidential-Attorneys' Eyes Only
`
`MNUV0005692
`
`PX2338-0017
`
`Page 17
`
`

`
`to Danek under this Agreement without the prior written approval of
`
`Danek.
`
`13.4 Entire Agreement; Bmendfi!ent.
`
`This Agreement
`
`constitutes the full and enti-re understanding and agreement between
`
`the parties with regard to the subject hereof, and no party shall
`
`be liable or bound to any other party in any manner by any
`
`warranties, representations or covenants except as specifically set
`
`forth herein.
`
`sxcept as expressly provided herein, neither this
`
`Agreement nor any term hereof may be amended, waived, discharged or
`
`terminated other than by a written instrument signed by the party
`
`against whom enforcement of any such amendment, waiver, discharge
`
`or termination is sought.
`
`13.5
`
`Impossibility of Performance. Except for a breach
`
`of any representation, warranty or covenant, neither party shall be
`
`liable to the other or to any third party due to the failure to
`
`perform any obligation pursuant to this Agreement, where such
`
`failure has been occasioned by any act of God, death, fire,
`
`inevitable accident, governmental action, court order or other
`
`cause beyond the reasonable control of the party who had the duty
`
`to perform.
`
`13.6 Notices. All notices and other communications
`
`required or per.mitted hereunder sball be in writing and shall be
`
`mailed by registered or certified mail, postage prepaid, or
`
`otherwise delivered by hand, by expedited delivery or courier
`
`service, or by messenger, addressed (a) if to Danek, 3092 Directors
`
`Row, Memphis, Tennessee 38131, to the attention of the President,
`
`BAt.lJMJ.%\131153 7JOm 000901/ltltl
`
`·18-
`
`ighly confidential
`
`MSD 0591401
`MS00591401
`
`Confidential-Attorneys' Eyes Only
`
`MNUV0005693
`
`PX2338-0018
`
`Page 18
`
`

`
`•
`
`and with a copy to the attention of the Company Secretary at the
`
`same address, or at such other address as Danek ehall have
`
`furnished to KTI in writing, or (b) if to KTI, at 4929 Premier
`
`Avenue, Lakewood, California 90712 or at such other address as KTI
`
`shall have furnished to Danek, with a copy to Lewis Anten, Esq.,
`
`16830 Ventura Boulevard, Suite 411, Encino, California 91435 or at
`
`such other address as Lewis Anten shall have furnished to Danek.
`
`Each such notice or other communication shall for all purposes of
`
`this Agreement be treated as effective or having been given when
`
`delivered if delivered personally, or, if sent by mail, at the
`
`earlier of its receipt or ten (10} days after the same has been
`
`deposited in a regularly maintained receptacle for the deposit of
`
`the United States mailed, addressed and mailed as aforesaid.
`
`13.7 Delays or Qn.liesions. Any waiver, permit. consent
`
`or approval of any kind or character on the part of any party of
`
`any breach or default under this Agreement, or any waiver on the
`
`p

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