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`ASSIGNMENT AND LICENSE AGREEMENT
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`THIS ASSIGNMENT AND LICENSE AGREEMENT (“Agreement”) is entered into and effective this 31st day of December, 2008 (“Effective Date”), by and between The Foundry,
`Inc., a Delaware corporation, having a place of business at 199 Jefferson Drive, Menlo Park, CA 94025 (“The Foundry”), and Miramar Labs, Inc. (previously known as Foundry Newco X, Inc.),
`a Delaware corporation, having a place of business at 199 Jefferson Drive, Menlo Park, CA 94025 (“Miramar”).
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`The Foundry is the owner or co-owner of certain patent applications defined below as the Assigned Patents; and
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`The Foundry is the owner or co-owner of certain inventions, trade secrets and know-how, defined below as the Assigned Technology; and
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`RECITALS
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`The Foundry has certain obligations to Cabochon Aesthetics, Inc. a company having a place of business at 127 Independence Drive, Menlo Park, California (“Cabochon”); and
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`Miramar desires to obtain an assignment of the Assigned Patents and Assigned Technology, subject to a license back to The Foundry, the terms of which are set forth in the attached
`agreement; and
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`Miramar and The Foundry entered into a Technology Agreement dated April 18, 2006 (“Technology Agreement”) which was terminated by its terms on April 18th, 2008; and
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`Miramar and The Foundry entered into a Technology License and Royalty Agreement effective November 12, 2007 (“License and Royalty Agreement”); and
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`Miramar and The Foundry desire that, upon execution of this Agreement, the License and Royalty Agreement will be terminated along with all of the rights and obligations set forth
`therein; and
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`Miramar and The Foundry desire that that their rights and obligations with respect to the Assigned Patents (defined below) and Assigned Technology (defined below) shall be fully
`defined by the terms of this Agreement.
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`NOW, THEREFORE, in consideration of the assignments, licenses, premises, mutual promises and covenants contained herein, the parties agree as follows:
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`For purposes of this Agreement, the following terms shall have the meanings set forth below:
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`1.
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`DEFINITIONS
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`ATTORNEY CLIENT AND/OR WORK PRODUCT PRIVILEGED COMMUNICATION
`These materials are protected by the attorney-client and/or the work product privilege and should be treated as confidential.
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`1.1 “Affiliate” shall mean corporations and other legal entities that own or are at least 50% owned and/or controlled by a party hereto, its successors and/or assignees.
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`1.2 “Assigned Patents” shall mean the patents and patent applications listed in Exhibit A of this Agreement and other presently existing or subsequently obtained continuations,
`divisionals and continuations-in-part thereof, all patents issuing on any of the preceding applications, any reissue certificates or certificates of correction for the foregoing patents, any patents
`issuing from reexamination or interference of the foregoing patents and patent applications, and any foreign counterparts claiming priority to the foregoing.
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`1.3 “Assigned Technology” shall mean all Inventions, trade secrets and Know-How owned by or developed by or for The Foundry on or before November 9th, 2009, wherein such
`Assigned Technology is:
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`(a)
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`(b)
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`described or claimed in the Assigned Patents; or
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`in Miramar’s Field.
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`1.4 “Cabochon” is defined in the Recitals.
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`1.5 “Cellulite” (also known as adiposis edematosa, dermopanniculosis deformans, status protrusus cutis, and gynoid lipodystrophy) shall mean dimpling of the skin.
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`1.6 “Cellulite License” shall mean the license granted in Section 2.3(b).
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`1.7 “Cellulite Treatment” shall mean any treatment which would require approval by the FDA or other appropriate regulatory body, if used for the reduction of the appearance of
`Cellulite.
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`1.8 “Combination Element” shall mean any product, component or service that has independent value but for which no payment would be due hereunder if sold separately from a
`Covered Product.
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`1.9 “Combined Product” shall mean a Covered Product sold in combination with a Combination Element.
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`1.10 “Compensation Payment” is defined in Section 3.1.
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`1.11 “Confidential Information” is defined in Section 9.3(a).
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`1.12 “Contingent Net Sales” shall mean gross receipts derived by Miramar its Affiliates, Covered Licensees, successor(s) and/or assigns from sales of products or services less:
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`(a)
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`any discounts, rebates or allowances to customers;
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`ATTORNEY CLIENT AND/OR WORK PRODUCT PRIVILEGED COMMUNICATION
`These materials are protected by the attorney-client and/or the work product privilege and should be treated as confidential.
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`(b)
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`(c)
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`(d)
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`(e)
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`any refunds for returned goods;
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`any retroactive price reductions;
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`any excise, sales, use, value added and similar taxes and duties; and
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`any packaging costs, handling fees and prepaid freight.
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`Sales of products or services between or among Miramar, its Affiliates and Covered Licensees shall be excluded from the computation of Contingent Net Sales if such sales are not
`intended for end use, but Contingent Net Sales shall include the subsequent final sales to third party customers or end users by Miramar or any such Affiliates or Covered Licensees.
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`1.13 “Contingent Payment(s)” is defined in Section 3.4.
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`1.14 “Covered Licensees” shall mean any entity authorized by Miramar, its successors and/or assigns to make, have made, sell or offer to sell a Covered Product. For clarity, a Covered
`Licensee shall not include any entity that distributes Covered Products, but Contingent Net Sales shall include amounts received from such a distributing entity upon the sale of Covered Products
`to such distributing entity for resale.
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`1.15 “Covered Product(s)” shall mean, except as expressly set forth herein: (a) all Patented Products and (b) any product or service intended for application in Miramar’s Field. Except
`as expressly set forth in the next sentence, in no event shall Covered Product be interpreted or construed to include a product or service acquired from a third party unless such product or service
`is also a Patented Product. Notwithstanding the foregoing, products and services developed by third party developers, consultants or design contractors under contract to Miramar or any Miramar
`Affiliate shall be Covered Products.
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`1.16 “Designee” is defined in Section 3.8(b).
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`1.17 “Early Payment” is defined in Section 3.2.
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`1.18 “Effective Date” is defined in the Preamble.
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`1.19 “Exclusive Cellulite License” shall mean the license granted in Section 2.3(b)(ii).
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`1.20 “Exclusive Grantback License” shall mean the license granted in Section 2.3
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`(a)(ii).
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`1.21 “Exclusive Ultrasound License” shall mean the license granted in Section
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`2.3(a)(iii).
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`1.22 “Grantback License” shall mean the license granted in Section 2.3(a).
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`ATTORNEY CLIENT AND/OR WORK PRODUCT PRIVILEGED COMMUNICATION
`These materials are protected by the attorney-client and/or the work product privilege and should be treated as confidential.
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`1.23 “Invention(s)” shall mean, collectively and individually, any idea, design, concept, technique, apparatus, method, discovery or improvement, whether or not patentable, that is
`conceived or reduced to practice.
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`1.24 “Know-How” shall mean data, instructions, processes, formulas, expert opinions and information.
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`1.25 “Licensed Applications” shall mean US Provisional Application Serial Number 60/912,899, Methods and Apparatus for Sweat Reduction and US Provisional Application Serial
`Number 61/013,274, Methods, Devices and Systems for Non-Invasive Delivery of Microwave Therapy.
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`1.26 “Licensed Claim(s)” shall mean any claim of the Assigned Patents which is fully supported by the disclosure of the Licensed Applications.
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`1.27 “Licensed Technology” shall mean Assigned Technology which is fully described in the Licensed Applications.
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`1.28 “License and Royalty Agreement” is defined in the Recitals.
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`1.29 “Microwave Energy” shall mean electromagnetic energy having a fundamental frequency between 100MHz and 30GHz.
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`1.30 “Miramar” is defined in the Preamble.
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`1.31 “Miramar’s Field” shall mean Miramar’s Alternate Field and/or Miramar’s Microwave Field.
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`1.32 “Miramar’s Alternate Field” shall mean energy-based treatments, other than Ultrasonic Energy or Microwave Energy, for sweat reduction, acne, hair removal, skin tightening and
`spider veins.
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`1.33 “Miramar’s Microwave Field” shall mean the delivery of Microwave Energy to epidermal, dermal and subdermal tissue, including, without limitation, microwave based
`treatments for sweat reduction, acne, hair removal, skin tightening and spider veins.
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`1.34 “Miramar Product” is defined in Section 2.3(a).
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`1.35 “Net Selling Price” shall mean the selling price of an individual product or service after taking into account the deductions set forth in the definition of Contingent Net Sales and
`the calculation for Combined Products set forth in Section 3.6, if applicable.
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`1.36 “New Owner” is defined in Section 9.6(a).
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`ATTORNEY CLIENT AND/OR WORK PRODUCT PRIVILEGED COMMUNICATION
`These materials are protected by the attorney-client and/or the work product privilege and should be treated as confidential.
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`1.37 “Non-Exclusive Cellulite License” shall mean the license granted in Section
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`2.3(b)(i).
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`1.38 “Non-Exclusive Grantback License” shall mean the license granted in Section 2.3(a)(i).
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`1.39 “Original Notice” is defined in Section 2.4(a).
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`1.40 “Patented Product Payment” is defined in Section 3.4(b).
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`1.41 “Patented Products” shall mean any product or service, the sale of which would, but for the licenses thereto or Miramar’s ownership thereof, infringe one or more Valid Claim(s)
`of the Assigned Patents in the United States, its territories and possessions and any other countries in which Valid Claims are granted under the Assigned Patents, including export sales
`originating in the United States.
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`1.42 “Related Documentation” shall mean notebooks (or relevant portions thereof), Confidential Information, and other similar documentation owned or controlled by The Foundry
`and relating to, or reasonably necessary for the practice of any service, process, product or method which is in Miramar’s Field and is covered by or described in the Assigned Patents or the
`Assigned Technology.
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`1.43 “Retained Technology” shall mean all patents, patent applications, Inventions, trade secrets, Know-How or documentation owned or controlled by The Foundry, but excluding the
`Assigned Patents and Assigned Technology, as of the Effective Date or developed by or for The Foundry on or before November 9th, 2009, wherein use of such patents, patent applications,
`Inventions, trade secrets, Know-How or documentation is reasonably necessary for the practice of any service, process, product or method which is in Miramar’s Field and is covered by or
`described in the Assigned Patents or Assigned Technology. Retained Technology shall further include any patents or patent applications assigned to The Foundry pursuant to Section 5.3.
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`1.44 “Settlement Date” shall mean the date Miramar fully satisfies the payment obligations set forth in Section 3.1 below.
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`1.45 “Technology Agreement” is defined in the Recitals.
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`1.46 “The Foundry” is defined in the Preamble.
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`1.47 “Ultrasonic Energy” shall mean acoustic energy having a frequency between 10 Kilohertz and 200 Megahertz .
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`1.48 “Valid Claim” shall mean any issued claim of a patent included within the Assigned Patent(s). Notwithstanding the foregoing, the term “Valid Claim” shall not include:
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`ATTORNEY CLIENT AND/OR WORK PRODUCT PRIVILEGED COMMUNICATION
`These materials are protected by the attorney-client and/or the work product privilege and should be treated as confidential.
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`(a)
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`(b)
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`(c)
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`(d)
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`any claim that has been declared or rendered invalid or has otherwise become unenforceable by reissue, or a decision or judgment of a court of competent jurisdiction;
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`any claim that has expired;
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`any claim that has been rejected by the appropriate patent office in a final action from which all available appeals have been taken; or
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`any claim that, with the written consent of The Foundry, which consent shall not be unreasonably withheld, has been disclaimed, lapsed, or abandoned.
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`2. GRANT OF RIGHTS
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`2.1 Assignment. The Foundry hereby agrees to assign and hereby does assign to Miramar, its entire right, title and interest in and to the Assigned Patents, Assigned Technology and
`Related Documentation. The Foundry agrees to execute a patent assignment substantially in the form of the document attached as Exhibit B. The Foundry further agrees to execute and to require
`its employees, contractors and agents to execute and deliver all documentation which may be reasonably necessary to effectuate the assignment(s) set forth herein. Without limiting the foregoing,
`The Foundry shall be entitled to retain copies of such Related Documentation.
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`2.2 Miramar License. The Foundry hereby grants to Miramar, and Miramar hereby accepts, a non-exclusive, worldwide, irrevocable, royalty-free license under the Retained Technology
`to make, have made, use, import, offer for sale and sell any and all products, and to practice any and all methods in Miramar’s Field. Miramar shall have the right to sublicense any of the rights
`provided to it by the terms of this Section 2.2. Miramar shall, subject only to its obligations under Section 9.6(a), have the right to transfer or assign any of the rights granted under this Section
`2.2.
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`2.3 Foundry Licenses. Miramar hereby grants to The Foundry, and The Foundry hereby accepts the following licenses.
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`(a) Grantback License. Miramar hereby grants to The Foundry, and The Foundry hereby accepts a worldwide, royalty-free license under the Licensed Claims and under the
`Licensed Technology to make, have made, use, import, offer for sale and sell any and all services, processes or products outside Miramar’s Field. Miramar hereby grants to The Foundry, and The
`Foundry hereby accepts a worldwide, royalty-free license under the Licensed Claims and under the Licensed Technology to practice any and all methods included within Miramar’s Field so long
`as such methods are practiced solely outside Miramar’s Field. The Foundry shall, subject to the restrictions set forth herein, have the right to transfer or sublicense any of the rights provided to it
`by the terms of this Section 2.3(a) to any third party. In no event shall anything in this Section 2.3(a) be interpreted or construed to grant The Foundry a license to make, have made, use, import,
`offer for sale and sell any service, process, product or practice any method within Miramar’s Field (each, a “Miramar Product”) solely because such a service, process,
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`ATTORNEY CLIENT AND/OR WORK PRODUCT PRIVILEGED COMMUNICATION
`These materials are protected by the attorney-client and/or the work product privilege and should be treated as confidential.
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`product or method licensed under this Section 2.3(a) is included as a component of such Miramar Product.
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`(i) Non-Exclusive Grantback License. Except as expressly set forth in Section 2.3(a)(iii), The Foundry’s license to make, have made, use, import and practice under this
`Section 2.3(a) shall be non-exclusive. Notwithstanding the foregoing, aside from conducting research, development and clinical trials for Miramar and its Affiliates, Miramar shall not have the
`right to grant to any third party, but excluding any Affiliate, any license under the Licensed Claims or under the Licensed Technology (a) to make, have made, use, or import any services,
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`processes or products outside Miramar’s Field, or (b) to practice outside Miramar’s Field any methods included within Miramar’s Field.
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`(ii) Exclusive Grantback License. The Foundry’s license to offer for sale and sell under this Section 2.3(a) shall be exclusive. The Foundry’s license under this Section
`2.3(a) shall include the exclusive right to advertise and promote services, processes and products outside Miramar’s Field.
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`(iii) Exclusive Ultrasound License. The Foundry’s license to make, have made, use, import, offer for sale and sell services, processes, and products using Ultrasonic
`Energy for the treatment of biological tissue and to practice methods using Ultrasonic Energy for the treatment of biological tissue under Section 2.3(a) shall be exclusive, transferable, and
`irrevocable. In no event shall this Section 2.3(a)(iii) be interpreted or construed to preclude Miramar from incorporating any ultrasonic visualization technology into its services, processes,
`products or methods.
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`(b) Cellulite License. Miramar hereby grants to The Foundry, and The Foundry hereby accepts, a worldwide, royalty-free license in Miramar’s Microwave Field under the
`Licensed Claims and under the Licensed Technology (i) to make, have made, use, import, offer for sale and sell services, processes or products for Cellulite Treatment, and (ii) to practice
`methods for Cellulite Treatment. The Foundry shall, subject to the restrictions set forth herein, have the right to sublicense any of the rights provided under this Section 2.3(b) to Cabochon or to
`any entity acquiring substantially all of the assets of Cabochon to which this license pertains, whether by merger, reorganization, acquisition, operation of law or otherwise.
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`(i) Non-Exclusive Cellulite License. The Foundry’s license to make, have made, use, import and practice under this Section 2.3(b) shall be non-exclusive.
`Notwithstanding the foregoing, aside from conducting research, development and clinical trials for Miramar and its Affiliates, Miramar shall not have the right to grant to any third party, but
`excluding any Affiliate, any license in Miramar’s Microwave Field under the Licensed Claims or under the Licensed Technology (a) to make, have made, use, or import any services, processes or
`products for Cellulite Treatment, or (b) to practice any methods for Cellulite Treatment.
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`(ii) Exclusive Cellulite License. The Foundry’s license to offer for sale and sell under this Section 2.3(b) shall be exclusive. The Foundry’s license under this Section 2.3
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`ATTORNEY CLIENT AND/OR WORK PRODUCT PRIVILEGED COMMUNICATION
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`(b)(ii) shall include the exclusive right to advertise and promote services, processes and products which are covered by the Licensed Claims or described in the Licensed Technology for Cellulite
`Treatment. In no event shall the license granted in this Section 2.3(b)(ii) be interpreted or construed to preclude Miramar from offering for sale, selling, advertising or promoting any services,
`processes or products or practicing any methods for any indication other than Cellulite Treatment.
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`2.4 Right of First Negotiation and Reversion. With respect to the licenses set forth in Section 2.3 above Miramar and The Foundry hereby agree as follows:
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`(a) Right of First Negotiation. Except with respect to the Exclusive Ultrasound License set forth in Section 2.3(a)(iii), in the event that The Foundry wishes to transfer or
`sublicense all or a portion of its rights under the Grantback License set forth in Section 2.3(a) to any third party, including, without limitation, any Affiliate of The Foundry, The Foundry shall
`provide Miramar with written notice (“Original Notice”) of its intention to transfer or sublicense such rights and the proposed scope of such sublicense or transfer. Miramar shall, thereafter, have
`forty-five (45) days to notify The Foundry of its desire to negotiate for the return of such rights. Miramar and The Foundry shall, thereafter have forty-five (45) days to negotiate in good faith
`mutually agreeable terms for such rights. In the event that Miramar and The Foundry are unable to negotiate mutually agreeable terms with in ninety (90) days of the date Miramar receives such
`Original Notice, The Foundry shall have the right, subject to its obligations under this Agreement, to transfer or sublicense the rights identified in the Original Notice to any such third party.
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`(b) Reversion. The Foundry shall, subject to the restrictions set forth herein, have the right to sublicense any of the rights set forth in Section 2.3(b) to Cabochon or any entity
`acquiring substantially all of the assets of Cabochon to which this license pertains, whether by merger, reorganization, acquisition, operation of law or otherwise. The Foundry shall have no right
`to sublicense any of the rights set forth in Section 2.3(b) to any company other than Cabochon or any entity acquiring substantially all of the assets of Cabochon. The Foundry shall have no right
`to transfer the rights set forth in Section 2.3(b). In the event that Cabochon has not used Microwave Energy for Cellulite Treatment in patients in a clinical trial setting wherein such clinical trial
`is approved by an appropriate ethics committee or investigational review board (IRB) on or before May 1, 2010, the Cellulite License granted under Section 2.3(b) shall be terminated and all
`rights granted to The Foundry under Section 2.3(b) shall revert to Miramar. Notwithstanding the achievement of the milestone set forth in the preceding sentence, in the event that Cabochon has
`not obtained either CE approval or FDA clearance for Cellulite Treatment using Microwave Energy in patients on or before three (3) years from the Effective Date, the Cellulite License granted
`under Section 2.3(b) shall be terminated and all rights granted to The Foundry under Section 2.3(b) shall revert to Miramar.
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`2.5 Option. Miramar shall, at any time during the term of this Agreement, have the right to terminate the Grantback License upon payment of a one time fee, such fee to be determined
`by mutual agreement of The Foundry and Miramar at the time of Miramar’s exercise of such right. Such termination shall not result in the revocation of the Exclusive Ultrasound
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`ATTORNEY CLIENT AND/OR WORK PRODUCT PRIVILEGED COMMUNICATION
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`License, the Cellulite License or any rights previously sublicensed or transferred by The Foundry pursuant to the procedure set forth in Section 2.4. In the event that Miramar exercises its option
`under this Section 2.5, Miramar’s Field shall be expanded to include all fields not previously sublicensed or transferred by The Foundry pursuant to the procedure set forth in Section 2.4. For
`avoidance of doubt, upon Miramar’s exercise of the option in this Section 2.5, any Covered Products within such expanded field shall be subject to Contingent Payments in accordance with
`Section 3.4. In no event shall anything in this Section 2.5 be interpreted or construed to expand Miramar’s Field to include the use of Ultrasonic Energy for the treatment of biological tissue.
`Notwithstanding the foregoing, Miramar may not exercise its option under this Section 2.5 during any time in which The Foundry is in negotiations with a potential sublicensee, transferee, or
`assignee of any of The Foundry’s rights under this Agreement, without the Foundry’s written consent.
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`2.6 Access to Related Documentation. In the event and to the extent necessary to exercise its rights or meet its obligations under this Agreement, The Foundry shall have the right,
`during normal business hours and at Miramar’s facilities, to inspect and copy Related Documentation and Miramar shall make such Related Documentation available to The Foundry, provided
`that The Foundry gives Miramar at least two (2) business days notice of its desire to review the Related Documentation and the purpose of that review. Nothing herein shall be interpreted or
`construed to require Miramar to retain any particular documents or documentation or to obtain The Foundry’s consent to discard or destroy any Related Documentation.
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`3. PAYMENT
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`3.1 Compensation Payment. Miramar shall pay The Foundry up to Thirty Million US Dollars ($30,000,000.00) in consideration for the assignment and other rights granted and
`obligations undertaken by The Foundry pursuant to the terms of this Agreement (“Compensation Payment”). Except as expressly set forth in Section 3.2, the Compensation Payment shall be
`made as a series of Contingent Payments in accordance with the provisions of Section 3.4.
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`3.2 Early Payment. Provided that Miramar fully complies with its obligations under Section 3.4, Miramar may, at any time and in its sole discretion, make a payment or series of
`payments (“Early Payment”) in full or partial satisfaction’ of its obligation to make the Compensation Payment set forth in Section 3.1 above.
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`3.3 Satisfaction. In the event that Early Payment(s) under Section 3.2 and Contingent Payments under Section 3.4 total Thirty Million US Dollars ($30,000,000.00), Miramar’s
`obligation to make the Compensation Payment set forth in Section 3.1 shall be fully satisfied. Except where Miramar chooses to exercise its rights under Section 2.5 or where interest is payable
`pursuant to Section 3.11, in no event shall Miramar’s total financial obligation under this Agreement exceed Thirty Million US Dollars ($30,000,000.00). For avoidance of doubt, any amounts
`paid pursuant to Section 2.5 or interest paid pursuant to Section 3.11 shall not apply towards satisfaction of the Compensation Payment otherwise due The Foundry.
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`ATTORNEY CLIENT AND/OR WORK PRODUCT PRIVILEGED COMMUNICATION
`These materials are protected by the attorney-client and/or the work product privilege and should be treated as confidential.
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`3.4 Contingent Payments. In satisfaction of its obligation under Section 3.1 hereinabove, Miramar agrees to pay The Foundry quarterly non-refundable Contingent Payments
`(“Contingent Payments”) equal to:
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`(a) one and one-half percent (1.5%) of Miramar’s Contingent Net Sales of Covered Products; and
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`(b) one and one-half percent (1.5%) of Miramar’s Contingent Net Sales of Patented Products (“Patented Product Payment”).
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`3.5 Patented Product Payment Reduction. Miramar’s obligation to pay any Patented Product Payment on a Patented Product under Section 3.4(b) shall be reduced by any reasonable
`and necessary royalties, patent licensing fees or other amounts Miramar, its Covered Licensees, Affiliates, successor(s) or assigns are obligated to pay any third party licensor on such Patented
`Product. For avoidance of doubt, any Patent Product Payment reductions permitted under this Section 3.5 shall not reduce the amount of Early Payments and/or Contingent Payments required for
`satisfaction of the Thirty Million US Dollars ($30,000,000.00) pursuant to Section 3.3 above.
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`3.6 Combined Product. Notwithstanding anything to the contrary herein, in the event that a Covered Product or Patented Product is sold as part of a Combined Product, Contingent Net
`Sales for the purposes of Sections 3.4(a) and 3.4(b) shall be calculated by multiplying the Contingent Net Sales of the Combined Product by the fraction A/(A+B), where A is the average gross
`selling price during the previous calendar quarter of the Covered Product and B is the average gross selling price during the previous calendar quarter of the Combination Element. In the event
`that a substantial number of separate sales of the Covered Product or the Combination Element were not made during the previous calendar quarter, then the Contingent Net Sales shall be
`reasonably allocated by Miramar Labs between such Covered Product and such Combination Element based upon their relative importance and proprietary protection.
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`3.7 Multiple Payment. In no event shall any Covered Product be subject to the payment of more than one Contingent Payment under Section 3.4(a). In no event shall any Patented
`Product be subject to the payment of more than one Contingent Payment under Section 3.4(b). In no event shall the total Contingent Payments payable on any product sold pursuant to the terms
`of this agreement exceed three percent (3.0%) of the Net Selling Price of such product. For avoidance of doubt, if a product is both a Covered Product and a Patented Product, Miramar shall,
`subject to any setoff allowed under Section 3.5, pay both Contingent Payments under Sections 3.4(a) and 3.4(b) for a total payment of three percent (3.0%).
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`3.8 Remittance of Contingent Payments and Early Payments.
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`(a) Payment Dates. Miramar shall, prior to the Settlement Date, pay to The Foundry all Contingent Payments due under Section 3.4 within sixty (60) days after the end of each
`calendar quarter of each year in which Covered Products or Patented Products are sold. For
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`ATTORNEY CLIENT AND/OR WORK PRODUCT PRIVILEGED COMMUNICATION
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`the purposes of this Section 3.8, the end of each calendar quarter shall take place on the following dates, respectively: March 31, June 30, September 30, and December 31.
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`(b) Payment Designees. The Foundry may, at any time, request in writing that Miramar remit Contingent Payments and Early Payments directly to third parties designated by
`The Foundry (each, a “Designee”), and Miramar shall, subject to all applicable laws, regulations (including applicable tax withholding) and court or administrative orders, distribute such
`Contingent Payments and/or Early Payments to such Designees. For avoidance of doubt, The Foundry shall have the right to add, delete or change Designees at any time upon written notice to
`Miramar.
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`3.9 Contingent Payment Accounting. Each Contingent Payment made hereunder will be accompanied by a statement, signed by an executive officer of Miramar, specifying the
`Contingent Net Sales on which Contingent Payments are based. Such a statement will be provided within sixty (60) days after the end of each calendar quarter (as defined above) of each year
`after the first commercial sale of a Covered Product, whether or not any Contingent Payments are due for that quarter. Miramar will keep books and records in sufficient detail to enable the
`Contingent Payments due hereunder to be adequately determined, and Miramar will permit such books and records to be examined on behalf of The Foundry, at The Foundry’s expense, from
`time to time, but in no event more than once annually, during normal business hours and upon reasonable notice, to the extent necessary to verify the computations of all Contingent Payments or
`other payments made or payable hereunder.
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`3.10 Payment Form. Except as expressly set forth herein or as required under applicable law, all amounts payable hereunder by Miramar or any successor or assignee, shall be payable
`in United States Dollars without deductions for taxes, assessments, fees, or charges of any kind attributable to The Foundry; provided that if any payment on account of Contingent Net Sales is
`received in a foreign currency, such amount shall be converted to United States Dollars at the buying rate for the transfer of such other currency as quoted by The Wall Street Journal (Internet
`edition available at www.wsj.com) on the last day of the applicable accounting period, or the next business day thereafter if such last day shall be other than a business day, and the Contingent
`Payment shall be computed on the net amount of United States funds received by Miramar after payment of the costs of conversion.
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`3.11 Interest on Late Payment. In the event that any payment due hereunder is not made when due, the payment shall accrue interest beginning on the first day following the calendar
`quarter to which such payment relates, calculated at the annual rate of the sum of (a) one percent (1%) plus (b) the prime interest rate quoted by The Wall Street Journal (Internet edition available
`at www.wsj.com) on the date said payment is due, or on the date the payment is made, whichever is higher, the interest being compounded on the last day of each calendar quarter, provided that
`in no event shall said annual rate exceed the maximum legal interest rate for corporations. Such delinquent Contingent Payment when made shall be accompanied by all interest so accrued.
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`ATTORNEY CLIENT AND/OR WORK PRODUCT PRIVILEGED COMMUNICATION
`These materials are protected by the attorney-client and/or the work product privilege and should be treated as confidential.
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`Ex.1031
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`3.12 Taxes. Any withholding or other tax that is required by law to be withheld on behalf of The Foundry with respect to payments owed by Miramar pursuant to this Agreement shall