Exhibit 10.50

SETTLEMENT AGREEMENT AND MUTUAL RELEASE

 

This Settlement Agreement and Mutual Release (“Agreement”) is entered into as of
June 21, 2004 (the “Effective Date”) by and between, on the one hand, Ethicon
Endo-Surgery, Inc. (“Ethicon”) and Lubomyr I. Kuzmak, M.D. (“Dr. Kuzmak”), and
on the other hand, Inamed Corporation, Inamed Development Company, and
BioEnterics Corporation (collectively, “Inamed”).  Ethicon, Dr. Kuzmak and
Inamed are collectively referred to herein as the “Parties.”

 

This Agreement is made with respect to the following facts:

 

A.                                   Ethicon, Dr. Kuzmak and Inamed are parties
to a lawsuit captioned Inamed Corporation, Inamed Development Company, and
BioEnterics Corporation v. Ethicon Endo-Surgery, Inc. and Lubomyr I. Kuzmak,
Case No. 99-02160 MMM (MAXx), currently pending in the United States District
Court for the Central District of California (the “Action”).

 

B.                                     The following definitions shall apply in
this Agreement:

 

(i)                                     “‘429 patent” means United States Patent
No. 5,226,429, “Laparoscopic Gastric Band and Method.”

 

(ii)                                  “Licensed Products” means any instrument
the manufacture, use or sale of which would, but for the licenses granted under
this Agreement, infringe at least one Valid Claim of a Licensed Patent if such
instrument were sold in the U.S.  For purposes of this agreement, Inamed admits
that the Lap-Band® system and accessories manufactured and sold by Inamed, or
any similar future adjustable gastric band made, used or sold by Inamed is a
Licensed Product.

 

(iii)                               “Licensed Patents” means (a) the patents and
patent applications, listed on Attachment A hereto, including any other
counterparts worldwide, (b) all patents that have issued or in the future issue
from such patent applications, and (c) any and all related continuations,
continuations-in-part, divisions, renewals, reissues, reexaminations,
extensions, and patents of addition and patents of importation.

 

(iv)                              “Net Sales” means, with respect to any
Licensed Product, the invoiced sales price of such Licensed Product billed to
independent customers, less (a) credits, allowances, discounts, returns, and
rebates to, and chargebacks (but not offsets) from the account of, such
independent customers for spoiled, damaged, out-dated, rejected or returned
Licensed Product; (b) actual freight and insurance costs incurred in
transporting such Licensed Product to such customers if not otherwise paid or
reimbursed by the customer; (c) cash, quantity and trade discounts and other
price reductions; (d) sales, use, value-added and other direct taxes incurred if
not otherwise paid or reimbursed by the customer; and, (e) customs duties,
surcharges and other governmental charges incurred in connection with

 

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the exportation or importation of such Licensed Product if not otherwise paid or
reimbursed by the customer.

 

(v)                                 “‘604 patent” means U.S. Patent 5,601,604,
including any other counterparts worldwide, as well as any and all related
continuations, continuations-in-part, divisions, renewals, reissues,
reexaminations, extensions, and patents of addition and patents of importation.

 

(vi)                              “Claims” means any and all claims, actions,
causes of action, demands, costs, and charges of whatever nature, whether known
or unknown.

 

(vii)                           “First Commercial Sale” shall mean the first
commercial sale in an arms length transaction to an independent third party of
an adjustable gastric band by Ethicon in the U.S. after it receives PMA approval
by the FDA for such gastric band, and not in connection with any clinicals or
promotional activities.

 

(viii)                        “‘176 patent” means U.S. Patent RE 36,176,
including any other counterparts worldwide, as well as any and all related
continuations, continuations-in-part, divisions, renewals, reissues,
reexaminations, extensions, and patents of addition and patents of importation.

 

(ix)                                “Valid Claim” means a claim of an issued and
unexpired patent within the Licensed Patents, which has not been held
permanently revoked, unenforceable or invalid by a decision of a court or other
governmental agency of competent jurisdiction, unappealable or unappealed within
the time allowed for appeal, and which has not been admitted to be invalid or
unenforceable through reissue or disclaimer or otherwise.

 

C.                                     The Parties wish to resolve the Action,
and all other pending disputes between them, in the manner set forth below.

 

NOW THEREFORE, in consideration of all the terms and conditions of this
Agreement, the Parties agree as follows:

 

1.                                      CONSENT JUDGMENT.  ON OR BEFORE THE
EFFECTIVE DATE, THE PARTIES SHALL CAUSE THEIR COUNSEL TO EXCHANGE SIGNATURES ON
A CONSENT JUDGMENT SUBSTANTIALLY IN THE FORM ATTACHED HERETO AS EXHIBIT A.

 

2.                                      LICENSE.  ETHICON HEREBY GRANTS TO
INAMED A WORLDWIDE, NON-EXCLUSIVE LICENSE, WITH NO RIGHT TO SUBLICENSE OR
ENFORCE, UNDER THE LICENSED PATENTS, TO MAKE, USE, SELL, OFFER FOR SALE AND
IMPORT LICENSED PRODUCTS; PROVIDED, HOWEVER, THAT THE LICENSE GRANTED HEREIN
SHALL BECOME EFFECTIVE ONLY UPON RECEIPT OF THE COMPENSATION SPECIFIED IN
PARAGRAPH 3 OF THIS AGREEMENT.

 

3.                                      COMPENSATION.  WITHIN FIVE (5) BUSINESS
DAYS OF THE EFFECTIVE DATE, AS SOLE AND EXCLUSIVE COMPENSATION FOR, AND IN LIEU
OF, ANY AND ALL DAMAGES ETHICON MAY HAVE SUFFERED AS OF THE EFFECTIVE DATE IN
CONNECTION WITH ANY ACTS BY OR ON BEHALF OF INAMED OR ANY INAMED AFFILIATE
STIPULATED TO BY INAMED IN THE CONSENT JUDGMENT UNDER SECTION 1 OF THIS
AGREEMENT, INAMED

 

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SHALL PAY TO ETHICON, BY WIRE TRANSFER IN ACCORDANCE WITH WRITTEN INSTRUCTIONS
TO BE PROVIDED BY ETHICON, THE SUM OF $17,250,000.00 (SEVENTEEN MILLION TWO
HUNDRED FIFTY THOUSAND DOLLARS) IN IMMEDIATELY AVAILABLE U.S. FUNDS.

 

4.                                      RUNNING ROYALTY.  ON SALES OF LICENSED
PRODUCTS BETWEEN JULY 1, 2004 AND JUNE 20, 2011 (THE EXPIRATION DATE OF THE ‘429
PATENT) INAMED SHALL PAY ETHICON A RUNNING ROYALTY OF:

 

A.                                   7.5% OF NET SALES OF LICENSED PRODUCTS
WITHIN THE UNITED STATES, UNTIL THE FIRST COMMERCIAL SALE, AT WHICH TIME THE
ROYALTY RATE SHALL REDUCE TO 5.5% OF NET SALES OF LICENSED PRODUCTS.

 

B.                                     3.5% OF NET SALES OF LICENSED PRODUCTS
OUTSIDE THE UNITED STATES.

 

5.                                      STEP-DOWN.  IN FURTHER CONSIDERATION FOR
ETHICON RESOLVING THE ACTION HEREIN, ON SALES OF LICENSED PRODUCTS DURING THE
REMAINDER OF THE TERM OF THIS AGREEMENT (AS DESCRIBED IN SECTION 6.1 BELOW)
AFTER THE EXPIRATION OF THE ‘429 PATENT ON JUNE 20, 2011, INAMED AGREES TO PAY
ETHICON 2% OF NET SALES OF LICENSED PRODUCTS.

 

6.                                      TERM AND TERMINATION.

 

6.1                               THIS AGREEMENT SHALL TERMINATE UPON THE
EXPIRATION OF THE LAST TO EXPIRE OF THE VALID CLAIMS. INAMED’S ROYALTY
OBLIGATIONS UNDER SECTIONS 4 AND 5 OF THIS AGREEMENT SHALL TERMINATE NO LATER
THAN MAY 12, 2013 (THE EXPIRATION DATE FOR THE ‘176 PATENT).

 

6.2                               EITHER PARTY MAY TERMINATE THIS AGREEMENT UPON
120 DAYS WRITTEN NOTICE FOR ANY MATERIAL BREACH OR DEFAULT OF THE OTHER PARTY. 
SUCH TERMINATION SHALL BECOME EFFECTIVE AT THE END OF THE 120 DAY PERIOD UNLESS
DURING SUCH PERIOD THE PARTY IN BREACH OR DEFAULT CURES SUCH BREACH OR DEFAULT. 
NOTWITHSTANDING THE PRECEDING SENTENCE, FROM THE DATE EITHER PARTY NOTIFIES THE
OTHER PARTY THAT IT WISHES TO COMMENCE A PROCEEDING IN ACCORDANCE WITH THE
DISPUTE RESOLUTION PROCEDURES SET FORTH IN ATTACHMENT B UNTIL THE DATE SUCH
PROCEEDING HAS BEEN CONCLUDED, THE RUNNING OF THE TIME PERIOD REFERRED TO IN
THIS PARAGRAPH FOR CURING A BREACH SHALL BE SUSPENDED WITH RESPECT TO THE
SUBJECT MATTER OF THE DISPUTE, CLAIM OR CONTROVERSY.

 

7.                                      NO CHALLENGES.  INAMED AGREES NOT TO
DIRECTLY OR INDIRECTLY CHALLENGE OR CAUSE TO BE CHALLENGED THE VALIDITY OR
ENFORCEABILITY OF ANY LICENSED PATENT, OR ETHICON’S OWNERSHIP OF ANY LICENSED
PATENT, BEFORE ANY COURT, AGENCY OR TRIBUNAL, UNLESS INAMED IS CHARGED WITH
INFRINGEMENT OF ANY LICENSED PATENT BY ETHICON, DR. KUZMAK OR THEIR RESPECTIVE
AFFILIATES.

 

8.                                      REPORTS, PAYMENTS AND AUDITS.

 

8.1                               REPORTS AND PAYMENTS.  WITHIN NINETY (90) DAYS
AFTER THE CLOSE OF EACH CALENDAR QUARTER, INAMED SHALL DELIVER TO ETHICON A
REPORT CERTIFIED BY AN OFFICER OF INAMED OF THE AMOUNT OF NET SALES OF LICENSED
PRODUCTS SOLD BY INAMED DURING SUCH CALENDAR QUARTER, AND THE AMOUNT OF
ROYALTIES OWED TO ETHICON UNDER SECTION 4 OF THIS AGREEMENT.  IF A PAYMENT IS
DUE, INAMED SHALL REMIT SUCH PAYMENT WITH THE REPORT.

 

8.2                               AUDIT RIGHTS.  INAMED SHALL MAINTAIN ACCURATE
BOOKS AND RECORDS IN SUFFICIENT DETAIL TO ENABLE THE PAYMENTS DUE HEREUNDER TO
BE DETERMINED.  SUCH RECORDS SHALL BE AVAILABLE

 

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FOR INSPECTION AT THE EXPENSE AND ON REQUEST BY ETHICON DURING NORMAL BUSINESS
HOURS, BY ETHICON’S INDEPENDENT CERTIFIED PUBLIC ACCOUNTANT, FOR THREE YEARS
AFTER THE CALENDAR YEAR TO WHICH THEY PERTAIN, FOR PURPOSES OF VERIFYING THE
ACCURACY OF THE REPORTS AND PAYMENTS MADE TO ETHICON.  SUCH PUBLIC ACCOUNTANT
SHALL DISCLOSE TO ETHICON WHETHER SUCH AUDIT REVEALS ANY UNDERPAYMENT OF
ROYALTIES AND THE AMOUNT OF ANY SUCH UNDERPAYMENT, AND NO OTHER INFORMATION.  IF
SUCH INSPECTION REVEALS AN UNDERPAYMENT TO ETHICON GREATER THAN 5%, THEN INAMED
AGREES TO PAY ETHICON INTEREST ON SUCH UNDERPAYMENT OF THE LESSER OF (A) 10%,
AND (B) THE MAXIMUM RATE PERMITTED BY LAW.

 

8.3                               CURRENCY.  EARNED ROYALTIES BASED ON SALES IN
ANY COUNTRY SHALL BE PAID IN UNITED STATES DOLLARS.  THE RATE OF EXCHANGE FOR
SUCH PAYMENTS FROM SALES IN A FOREIGN COUNTRY SHALL BE THE OFFICIAL RATE OF
EXCHANGE OF THE CURRENCY OF THE COUNTRY FROM WHICH ROYALTIES ARE PAYABLE AS
QUOTED BY THE WALL STREET JOURNAL, NEW YORK EDITION, ON THE LAST BUSINESS DAY OF
THE CALENDAR QUARTER FOR WHICH THE EARNED ROYALTIES ARE PAYABLE.

 

9.                                      ORDER RE CLAIM 41 OF ‘176 PATENT. 
CONCURRENT WITH THE PRESENTATION OF THE CONSENT JUDGMENT REFERENCED IN
PARAGRAPH 1 OF THIS AGREEMENT, THE PARTIES SHALL LODGE A STIPULATION WITH THE
COURT VACATING IN ITS ENTIRETY THE COURT’S ORDER DATED APRIL 26, 2004 ENTITLED
“ORDER GRANTING IN PART AND DENYING IN PART PLAINTIFF’S MOTION FOR SUMMARY
JUDGMENT REGARDING PATENT INVALIDITY.”

 

10.                               NO CONTEST CLAUSE.  ETHICON AGREES NOT TO
CONTEST THE OWNERSHIP, VALIDITY OR INVENTORSHIP OF THE ‘604 PATENT OR ANY OF ITS
FOREIGN COUNTERPARTS.  INAMED AGREES NOT TO CONTEST THE OWNERSHIP, VALIDITY OR
INVENTORSHIP OF THE ‘176 PATENT AND ANY OF ITS FOREIGN COUNTERPARTS.  THE
PARTIES MUTUALLY COVENANT NOT TO BRING ANY ACTION OF ANY KIND AGAINST THE OTHER
PARTY RELATING TO THE OWNERSHIP, VALIDITY, INVENTORSHIP, OR INFRINGEMENT OF THE
‘176 AND ‘604 PATENTS, AND TO CAUSE ANY SUCH PENDING ACTIONS, WHEREVER IN THE
WORLD THEY MAY BE PENDING, TO BE PROMPTLY ABANDONED AND/OR WITHDRAWN.

 

11.                               RELEASES.

 

11.1                        RELEASE BY ETHICON.  ETHICON, ON BEHALF OF ITSELF
AND ITS PREDECESSORS, SUCCESSORS, ASSIGNS, AND AFFILIATES, DOES HEREBY NOW AND
FOREVER RELEASE AND DISCHARGE INAMED, AND ITS PREDECESSORS, SUCCESSORS, ASSIGNS,
AND AFFILIATES, AND EACH OF THEIR RESPECTIVE CURRENT AND FORMER OFFICERS,
DIRECTORS, EMPLOYEES, AGENTS, ATTORNEYS, AND REPRESENTATIVES, FROM ANY AND ALL
CLAIMS THAT WERE, OR COULD HAVE BEEN, ASSERTED IN THE ACTION.

 

11.2                        RELEASE BY DR. KUZMAK.  DR. KUZMAK, ON BEHALF OF
HIMSELF AND HIS PREDECESSORS, SUCCESSORS, ASSIGNS, AND AFFILIATES, DOES HEREBY
NOW AND FOREVER RELEASE AND DISCHARGE INAMED, AND ITS PREDECESSORS, SUCCESSORS,
ASSIGNS, AND AFFILIATES, AND EACH OF THEIR RESPECTIVE CURRENT AND FORMER
OFFICERS, DIRECTORS, EMPLOYEES, AGENTS, ATTORNEYS, AND REPRESENTATIVES, FROM ANY
AND ALL CLAIMS THAT WERE, OR COULD HAVE BEEN, ASSERTED IN THE ACTION.

 

11.3                        RELEASE BY INAMED OF ETHICON.  INAMED, ON BEHALF OF
ITSELF AND ITS PREDECESSORS, SUCCESSORS, ASSIGNS, AND AFFILIATES, DOES HEREBY
NOW AND FOREVER RELEASE AND DISCHARGE ETHICON AND ITS PREDECESSORS, SUCCESSORS,
ASSIGNS, AND AFFILIATES, AND EACH OF THEIR RESPECTIVE CURRENT AND

 

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FORMER OFFICERS, DIRECTORS, EMPLOYEES, AGENTS, ATTORNEYS, AND REPRESENTATIVES,
FROM ANY AND ALL CLAIMS THAT WERE, OR COULD HAVE BEEN, ASSERTED IN THE ACTION.

 

11.4                        RELEASE BY INAMED OF DR. KUZMAK.  INAMED, ON BEHALF
OF ITSELF AND ITS PREDECESSORS, SUCCESSORS, ASSIGNS, AND AFFILIATES, DOES HEREBY
NOW AND FOREVER RELEASE AND DISCHARGE DR. KUZMAK AND HIS PREDECESSORS,
SUCCESSORS, ASSIGNS, AND AFFILIATES, AND EACH OF THEIR RESPECTIVE CURRENT AND
FORMER OFFICERS, DIRECTORS, EMPLOYEES, AGENTS, ATTORNEYS, AND REPRESENTATIVES,
FROM ANY AND ALL CLAIMS THAT WERE, OR COULD HAVE BEEN, ASSERTED IN THE ACTION.

 

11.5                        WAIVER OF CIVIL CODE SECTION 1542.  THE PARTIES
HEREBY WAIVE AND RELINQUISH ALL RIGHTS AND BENEFITS THEY MAY HAVE UNDER
SECTION 1542 OF THE CALIFORNIA CIVIL CODE, WHICH PROVIDES AS FOLLOWS:

 

A general release does not extend to claims which the creditor does not know or
suspect to exist in his favor at the time of executing the release, which if
known by him must have materially affected his settlement with the debtor.

 

11.6                        ACKNOWLEDGEMENT.  THE PARTIES AGREE AND ACKNOWLEDGE
THAT EACH PARTY’S PERFORMANCE OF ITS OBLIGATION UNDER SECTIONS 1 AND 9 SHALL BE
FULFILLED UPON PERFORMANCE OF THE PARTIES OF THE ACTS SPECIFIED THEREIN, AND ALL
RELEASES SET FORTH IN THIS SECTION 11 AND ALL OTHER RIGHTS AND OBLIGATIONS OF
THE PARTIES SET FORTH IN THIS AGREEMENT SHALL CONTINUE IN FULL FORCE AND EFFECT
REGARDLESS OF WHETHER THE COURT ELECTS TO ADJUDICATE AS THE PARTIES CONTEMPLATE
UNDER SECTION 9 (BUT NOT IF THE COURT DECLINES TO SO ADJUDICATE UNDER SECTION 1)
AND THAT INAMED AGREES TO TAKE ALL REASONABLE STEPS TO PERSUADE THE COURT TO SO
ADJUDICATE UNDER BOTH SECTIONS 1 AND 9.

 

12.                               NO WARRANTIES.  OTHER THAN AS EXPRESSLY SET
FORTH HEREIN, NEITHER PARTY TO THIS AGREEMENT MAKES ANY WARRANTIES OR
REPRESENTATIONS, EXPRESS OR IMPLIED, AND EACH PARTY DISCLAIMS RELIANCE UPON ANY
REPRESENTATION OR WARRANTY NOT EXPLICITLY SET FORTH HEREIN.

 

13.                               ASSIGNABILITY.  THIS LICENSE IS NOT
TRANSFERABLE OR ASSIGNABLE OTHER THAN IN CONNECTION WITH: (I) A TRANSFER OR
ASSIGNMENT TO A PURCHASER OF ALL OR SUBSTANTIALLY ALL OF THE ASSETS OF INAMED;
OR, (II) A MERGER OF A PURCHASER WITH INAMED; OR, (III) AN ACQUISITION OF MORE
THAN A MAJORITY OF THE VOTING SHARES OF INAMED; OR, (IV) A PURCHASE BY THE
ASSIGNEE OF THE ENTIRE ADJUSTABLE GASTRIC BAND BUSINESS (SUBJECT TO PARAGRAPH 14
HEREOF); ***

 

14.                               ***

 

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***  Confidential portion omitted and filed separately with the Securities and
Exchange Commission.

 

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15.                               WARRANTIES AND REPRESENTATIONS.

 

15.1                        NO ASSIGNMENT OF CLAIMS.  EACH PARTY WARRANTS AND
REPRESENTS THAT IT HAS NOT, SOLD, ASSIGNED, CONVEYED, PLEDGED, ENCUMBERED OR IN
ANY WAY TRANSFERRED TO ANY PERSON OR ENTITY ANY CLAIM RELEASE BY SUCH PARTY
UNDER THIS AGREEMENT.

 

15.2                        INDEPENDENT ADVICE.  EACH PARTY WARRANTS AND
REPRESENTS THAT IT HAS RECEIVED INDEPENDENT LEGAL ADVICE FROM SUCH PARTY’S
ATTORNEYS WITH RESPECT TO THE RIGHTS AND OBLIGATIONS ARISING UNDER THIS
AGREEMENT, AND THE ADVISABILITY OF ENTERING INTO THIS AGREEMENT.

 

15.2        DUE AUTHORIZATION; BINDING OBLIGATION.  EACH PARTY WARRANTS AND
REPRESENTS THAT THE REPRESENTATIVE SIGNING BELOW IS DULY AUTHORIZED TO ENTER
INTO AND DELIVER THIS AGREEMENT, AND THAT IT IS FULLY ENTITLED TO GRANT THE
RELEASES, ENTER INTO THE COVENANTS, AND UNDERTAKE THE OBLIGATIONS SET FORTH
HEREIN.  FURTHER, EACH PARTY HEREBY WARRANTS AND REPRESENTS TO THE OTHER PARTY
THAT THIS AGREEMENT CONSTITUTES A LEGAL, VALID, BINDING OBLIGATION, ENFORCEABLE
AGAINST SUCH PARTY IN ACCORDANCE WITH ITS TERMS.

 

15.3                        LICENSED PATENTS.  ETHICON WARRANTS AND REPRESENTS
THAT ETHICON IS THE SOLE OWNER OR EXCLUSIVE LICENSEE OF THE LICENSED PATENTS.

 

15.4                        SURVIVAL OF WARRANTIES.  ALL WARRANTIES AND
REPRESENTATIONS SET FORTH IN THIS AGREEMENT SHALL SURVIVE THE EXECUTION AND
DELIVERY OF THIS AGREEMENT.

 

16.                               CHOICE OF LAW.  THIS AGREEMENT SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL, SUBSTANTIVE LAW OF
THE STATE OF CALIFORNIA, WITHOUT REGARD TO ITS CHOICE OF LAWS PRINCIPLES.

 

17.                               NO ORAL MODIFICATION.  THIS AGREEMENT MAY BE
MODIFIED ONLY IN A WRITING SIGNED BY THE PARTIES.

 

18.                               NO CONSTRUCTION AGAINST DRAFTER.  ALL PARTIES
PARTICIPATED IN THE REVIEW, DRAFTING AND NEGOTIATION OF THIS AGREEMENT, AND NO
PRESUMPTION SHALL BE APPLIED AGAINST ANY PARTY IN CONNECTION WITH THE
INTERPRETATION OF THIS AGREEMENT.

 

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19.                               INTEGRATED AGREEMENT.  THIS AGREEMENT AND ITS
EXHIBITS AND SCHEDULES CONSTITUTES THE ENTIRE AGREEMENT OF THE PARTIES WITH
RESPECT TO THE SUBJECT MATTER HEREIN.

 

20.                               COUNTERPARTS.  THIS AGREEMENT MAY BE EXECUTED
AND DELIVERED IN ANY NUMBER OF COUNTERPARTS, INCLUDING COUNTERPART SIGNATURES
TRANSMITTED BY FACSIMILE.

 

21.                               NOTICE.  ANY NOTICE REQUIRED OR DESIRED TO BE
GIVEN UNDER THIS AGREEMENT SHALL BE IN WRITING AND SERVED BY AN OVERNIGHT AIR
COURIER SERVICE AS FOLLOWS:

 

If to Ethicon:

 

President

Ethicon Endo-Surgery, Inc.

4545 Creek Road

Cincinnati, Ohio 45242

 

With a copy to (which will not constitute notice):

 

Chief Patent Counsel

Johnson & Johnson

One Johnson & Johnson Plaza

Cincinnati, Ohio 08933

 

If to Dr. Kuzmak:

 

Dr. Lubomyr Kuzmak

30 Crest Drive

South Orange, N.J. 07079

 

If to Inamed:

 

Inamed Corporation

Chief Executive Officer

5540 Ekwill Street

Santa Barbara, California 93111

 

Telephone:(805)683-6761

Fax:  (805) 692-5432

 

22.                               DISPUTE RESOLUTION.  THE PARTIES AGREE TO BE
BOUND BY THE DISPUTE RESOLUTION PROVISIONS SET FORTH IN ATTACHMENT B HERETO.

 

23.                               SEVERABILITY.  ANY PROVISION HEREOF WHICH IS
PROHIBITED OR UNENFORCEABLE IN ANY JURISDICTION SHALL, AS TO SUCH JURISDICTION,
BE INEFFECTIVE ONLY TO THE EXTENT OF SUCH PROHIBITION OR UNENFORCEABILITY
WITHOUT INVALIDATING THE REMAINING PROVISIONS HEREOF OR AFFECTING THE VALIDITY
OR ENFORCEABILITY OF SUCH PROVISION IN ANY OTHER JURISDICTION.

 

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IN WITNESS WHEREOF, the Parties have approved and executed this Agreement as of
the Effective Date.

 

ETHICON ENDO-SURGERY INC.

 

By:

/s/ Jeffrey A. Maillen

 

 

Its:

VICE PRESIDENT, LICENSING; ACQUISITIONS

 

 

 

INAMED CORPORATION

 

By:

/s/ Joseph Newcomb

 

 

Its:

EXEC. V.P.

 

 

 

INAMED DEVELOPMENT COMPANY

 

By:

/s/ Joseph Newcomb

 

 

Its:

EXEC. V.P.

 

 

 

BIOENTERICS CORPORATION

 

By:

/s/ Joseph Newcomb

 

 

Its:

EXEC. V.P.

 

 

 

LUBOMYR I. KUZMAK

 

By:

/s/ Roxana A. Kuzmak

 

 

Its Attorney in fact

 

 

and Agent for

 

 

Lubomyr I. Kuzmak

 

 

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ATTACHMENT A

 

Licensed Patents

 

COUNTRY

 

NUMBER

 

ISSUE DATE

 

TITLE

U.S.

 

4,592,339

 

03-Jun-86

 

Gastric Banding Device

U.S.

 

4,696,288

 

29-Sep-87

 

Calibrating Apparatus and Method of Using the Same for Gastric Banding Surgery

U.S.

 

5,074,868

 

24-Dec-91

 

Reversible Stoma-Adjustable Gastric

U.S.

 

5,226,429

 

13-Jul-93

 

Laparoscopic Gastric Band and Method

U.S.

 

5,222,788

 

04-Jun-96

 

Finger-like Laparoscopic Blunt Dissector Device

Canada

 

2,170,841

 

01-Mar-96

 

Finger-like Laparoscopic Blunt Dissector Device

U.S.

 

RE 36,176

 

30-Mar-99

 

Laparoscopic Adjustable Gastric Banding Device and Method for Implantation and
Removal Thereof

Canada

 

2,107,629

 

21-Dec-99

 

Laparoscopic Adjustable Gastric Banding Device

Mexico

 

188,317

 

19-Mar-98

 

Laparoscopic Adjustable Gastric Banding Device

EPO

 

0 611 561

 

02-Dec-98

 

Laparoscopic Adjustable Gastric Banding Device

US SN 09/205, 195 Division of Re. Application Serial No. 08/927,494

 

 

 

 

 

Laparoscopic Adjustable Gastric Banding Removal Thereof

US

 

5,910,149

 

08-Jun-99

 

Non-Slipping Gastric Band

 

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ATTACHMENT B

 

Dispute Resolution

 

Any controversy or claim arising out of or relating to this Agreement shall be
resolved by arbitration before a single arbitrator in accordance with the
Commercial Arbitration Rules of the American Arbitration Association (“AAA”)
then pertaining (available at www.adr.org), except where those rules conflict
with this provision, in which case this provision controls. Any court with
jurisdiction shall enforce this clause and enter judgment on any award. The
arbitrator shall be selected within twenty business days from commencement of
the arbitration from the AAA’s National Roster of Arbitrators pursuant to
agreement or through selection procedures administered by the AAA. Within 45
days of initiation of arbitration, the parties shall reach agreement upon and
thereafter follow procedures, including limits on discovery, assuring that the
arbitration will be concluded and the award rendered within no more than eight
months from selection of the arbitrator or, failing agreement, procedures
meeting such time limits will be designed by the AAA and adhered to by the
parties. The arbitration shall be held in Los Angles, CA and the arbitrator
shall apply the substantive law of California, except that the interpretation
and enforcement of this arbitration provision shall be governed by the Federal
Arbitration Act. Prior to commencement of arbitration, emergency relief is
available from any court to avoid irreparable harm. THE ARBITRATOR SHALL NOT
AWARD EITHER PARTY PUNITIVE, EXEMPLARY, MULTIPLIED OR CONSEQUENTIAL DAMAGES, OR
ATTORNEYS FEES OR COSTS.

 

Prior to commencement of arbitration, the parties must attempt to mediate their
dispute using a professional mediator from AAA, the CPR Institute for Dispute
Resolution, or like organization selected by agreement or, absent agreement,
through selection procedures administered by the AAA. Within a period of 45 days
after the request for mediation, the parties agree to convene with the mediator,
with business representatives present, for at least one session to attempt to
resolve the matter. In no event will mediation delay commencement of the
arbitration for more than 45 days absent agreement of the parties or interfere
with the availability of emergency relief.

 

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