Document:

ex1019.htm

Exhibit 10.19

 

MASTER LICENSE AGREEMENT

 

THIS AGREEMENT is by and between SurModics, Inc., a Minnesota corporation, which has an office at 9924 West 74th Street, Eden Prairie, MN 55344 (hereinafter referred to as SURMODICS), and Cardima, Inc., a Delaware corporation, which has an office at 47266 Benicia Street, Fremont, CA 94538 (hereinafter referred to as CARDIMA).

 

WHEREAS, SURMODICS is engaged in research and has developed a body of technology and know-how relating to the surface treatment of medical devices, including chemical compositions, processes, and equipment which the parties believe will improve the performance of various products and processes of CARDIMA;

 

WHEREAS, the technology of SURMODICS includes confidential information (including trade secrets and other know-how), which is proprietary to SURMODICS, and SURMODICS is in the process of securing patent coverage for certain technology and continues to maintain the confidentiality of other portions of its technology; and

 

WHEREAS, CARDIMA wishes to acquire certain licenses under SURMODICS' Know-how and Patent Rights pursuant to this Agreement and may desire to acquire additional licenses under SURMODICS' know-how and patent rights, such licenses to be added to this Agreement.

 

NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth below and for other good and valuable consideration of which receipt is acknowledged, the parties agree as follows:

 

1. DEFINITIONS

 

The following definitions (in addition to the capitalized terms defined elsewhere in the Agreement), apply to this Agreement and to all attachments thereto:

 

a. "Affiliate" means any entity which owns at least 50% of, is at least 50% owned by, or is under common (at least 50%), ownership with CARDIMA.

 

b. "Effective Date" means July 1, 2005.

 

c. "Know-how" means SURMODICS' trade secrets and other technical information relating to the surface treatment of medical devices and which SURMODICS has the right to transmit to others. Know-how includes but is not limited to information contained in pending, unpublished patent applications of Patent Rights and information that is Confidential Information as defined in Paragraph 13. Following the Licensed Product Effective Date, SURMODICS will promptly provide CARDIMA with a written Know-how document that describes equipment, process parameters, and techniques for applying SURMODICS' proprietary coating technologies to Medical Products.

 

d. "Licensed Products" means each of the separately sold Medical Products specifically described in Attachment B, and which:

 

i. but for the license granted herein the manufacture, use or sale would infringe (or a surface treatment process employed to produce a product or a reagent used in such process would infringe) any claim of Patent Rights, or

 

ii. are produced through the use of SURMODICS' Know-how.

 

  

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e. "Licensed Product Effective Date" for each license granted herein shall mean the date specified in the respective Attachment B.

 

f.  "Medical Products" means products that are specifically defined in Attachment B.

 

g. "Net Sales" means the total actual billing for sales of Licensed Products, less the following deductions where they are applicable with respect to such billings and when separately shown on invoices:

 

i. discounts actually allowed and taken;

 

ii. any customs duties, taxes, or other governmental excise or charge upon or measured by the production, sale, transportation, delivery, or use of Licensed Product and actually paid by CARDIMA;

 

iii. amounts allowed or credited on rejections or returns; 

 

iv. transportation charges prepaid or allowed.

 

Notwithstanding the above, if any Licensed Product is sold both separately and as an integral part of a combination product containing one or more integral components in addition to that Licensed Product, then Net Sales of that Licensed Product resulting from sales of that combination product will be calculated by multiplying the Net Sales for the combination product as calculated above by the fraction A/B where A is the invoice price of the Licensed Product as sold separately and B is the invoice price of the combination product.

 

A Licensed Product shall be considered sold when it is shipped or when it is invoiced, whichever is earlier. To assure SURMODICS the full royalty payment contemplated in this Agreement, CARDIMA agrees that if any Licensed Product is sold to an Affiliate for purposes of resale, Earned Royalties for that Licensed Product shall be computed upon the selling price at which such Licensed Product would ordinarily be sold to a non-Affiliate, rather than on the selling price of CARDIMA to the Affiliate.

 

h. "Patent Rights" means the patent application(s) and patent(s) identified in Attachment

 

A hereof, together with all foreign counterparts, divisions, and continuation applications based thereon, any patent issuing on any of said applications, and any reissues or extensions based on any of such patents.

 

i. "Valid Claim" means a claim of Patent Rights that has not been held invalid by a court of competent jurisdiction beyond possibility of appeal.

 

  

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2. LICENSE

 

a. With respect to the Licensed Product defined in Attachment B, SURMODICS grants to CARDIMA, a separate worldwide license under SURMODICS' Patent Rights and Know-how to make, use, and sell that Licensed Product. The license granted herein is expressly limited to the specific Licensed Products defined herein, and does not include the right to sublicense. All licenses granted by SURMODICS to CARDIMA under this Agreement are non-exclusive. Additional terms of each license are set out in the respective Attachment B. To the extent of any inconsistency between the terms set forth in the body of this Agreement and the terms set forth in Attachment B, the terms set forth in the body of each Attachment B shall be controlling with respect to the Licensed Product defined in each Attachment B; however, the terms set forth in the body of this Agreement shall otherwise control. Each such license shall be effective as of its Licensed Product Effective Date.

 

b. Subject to the limited license granted herein, SURMODICS shall retain all rights to the Patent Rights and Know-how. SURMODICS shall retain the right to use Patent Rights and Know-how for its own research purposes.

 

c. CARDIMA shall notify SURMODICS in advance and in writing of the location of the production of a Licensed Product or any new location to be used for the production of a Licensed Product.

 

d. If any governmental agency in a jurisdiction materially alters, hinders, or prevents enforcement of the terms or provisions of any license granted herein, SURMODICS may, at its sole discretion, immediately terminate that license with respect to such jurisdiction.

 

3. Intentionally Omitted.

 

4.ROYALTIES

 

For each license granted herein, CARDIMA shall pay SURMODICS a royalty for each quarter calendar year during the term of this Agreement that will be the greater of the royalties of Paragraphs 4(a) or 4(b).

 

a. Earned Royalties shall be calculated as provided for in the respective Attachment B. No more than one Earned Royalty shall be paid by CARDIMA for any Licensed Product. However, if any Licensed Product is covered by more than one Attachment B, then the Earned Royalty rate shall be the highest rate specified for such Licensed Product.

 

b. Minimum Royalties shall be paid for each Licensed Product as provided for in the respective Attachment B.

 

5. ROYALTY PAYMENTS, REPORTS, RECORDS

 

a. Quarterly Royalty Reports. During the teen of this Agreement, and for each license granted hereunder, CARDIMA will make written reports and payments to SURMODICS within sixty (60) days after the last day of each calendar quarter ending March 31, June 30, September 30, and December 31. Such quarterly written reports shall include an itemized account by CARDIMA's product tradename (or model description), and product code (or model number), of (i) unit volumes of Licensed Product sales, (ii) gross billings, (iii) the permitted deductions from sales of Licensed Product set forth in the definition of Net Sales in Paragraph 1, and (iv) Net Sales, and applicable Earned Royalty. Each such report shall also include corrections of error in prior royalty payments, data, and calculations used by CARDIMA to determine such payments for each of the licenses corresponding to the respective Attachments B. Each report shall be accompanied by payment in full of the royalty due SURMODICS for that quarter. Annual Sales Forecasts. The December 31 quarterly report shall also include a non-binding, summary forecast of projected sales of Licensed Products and a nonbinding forecast of reagent usage for the next calendar year. Reports provided to SURMODICS under this Paragraph 5(a) shall be considered Confidential Information.

 

  

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b.Records. CARDIMA will maintain, for a period of five (5) years following each sale of Licensed Product, true and accurate records supporting the reports and payments made under this Agreement. Report Confirmations. CARDIMA will provide written confirmation to SURMODICS with each quarterly report that CARDIMA's royalty and payment report (under Paragraph 5(a) above), to SURMODICS for the respective calendar quarter, includes and reports all sales of Licensed Products for the respective period. CARDIMA's written confirmation to SURMODICS will be signed by a representative of CARDIMA who has oversight, control, and responsibility within CARDIMA's organization for identifying, recording, and reporting sales of Licensed Products to SURMODICS. Audits. SURMODICS shall have the right to carry out an audit of such records no more frequently than once per calendar year at the beginning of CARDIMA's fiscal year by an independent certified public accountant of its choice. During CARDIMA's notmat office hours, and at times mutually agreed upon within fifteen (15)

 

business days of SURMODICS' audit notice to CARDIMA, such accountant shall have reasonable access to CARDIMA's offices and the relevant records, files and books of account to determine the accuracy of the calculations provided by CARDIMA under Paragraph 5(a). The accountant shall be required to sign a suitable confidentiality agreement reasonably acceptable to CARDIMA prior to conducting such audit. Such audit shall be at SURMODICS' expense except that if an underpayment error is found for any twelve month period that exceeds 5% of the payment made to SURMODICS for that period, then CARDIMA will bear the cost of such audit.

 

c. All royalties on sales of each Licensed Product to be paid to SURMODICS by CARDIMA under this Agreement shall be paid in U.S. Dollars to SURMODICS in the United States. For the purpose of calculating Earned Royalties on sales outside the United States for any calendar quarter, CARDIMA shall utilize the average rate of exchange on the last business day of that calendar quarter as quoted in the Wall Street Journal.

 

d. Any sum required under U.S. tax laws (or the tax laws of any other government), to

 

be withheld by CARDIMA from payment for the account of SURMODICS shall be promptly paid by CARDIMA for and on behalf of SURMODICS to the appropriate tax authorities. CARDIMA's permitted deductions for such taxes from its actual billing of sales of Licensed Products shall be made in accordance with Paragraph 1(g). CARDIMA shall furnish SURMODICS with official tax receipts or other appropriate evidence issued by the appropriate tax authorities sufficient to enable SURMODICS to support a claim for income tax credit in respect to any sum so withheld.

 

e. If any amount owing SURMODICS is not paid when due, each unpaid amount shall bear interest after its due date at the rate of one and one-half percent (1.5%) per month. SURMODICS shall be entitled to recover all of its documented costs and expenses incurred in any action to collect amounts owing, including attorneys' fees.

 

6. TECHNICAL SUPPORT FEES

 

CARDIMA agrees to pay SURMODICS for technical support that SURMODICS provides to CARDIMA for CARDIMA's Licensed Products ("Technical Support Fees"), if such technical support is provided to CARDIMA under a mutually agreed upon written project plan. SURMODICS shall charge CARDIMA for such support at SURMODICS' then-standard rates. As of January 1, 2006, SURMODICS' standard rates for Technical Support Fees are $125 per-hour for standard-testing coating work, $150 per-hour for coating parts used in human clinical trials, and $250 per-hour for SURMODICS' analytical chemistry services. SURMODICS may change its Technical Support Fees with thirty (30) days advance written notice to CARDIMA. SURMODICS shall additionally charge direct materials plus fifteen percent (15%). Other expenses such as travel and special equipment shall be reimbursed at cost, but only as mutually agreed upon in writing. SURMODICS shall invoice CARDIMA monthly for such Technical Support Fees, and CARDIMA shall make payment to SURMODICS within thirty (30) days after the date of the invoice.

 

7. TERM

 

a. Unless earlier terminated, each license herein granted shall begin upon the Licensed Product Effective Date set out in the respective Attachment B, and shall extend for each Licensed Product so licensed until expiration of the last to expire patent of Patent Rights that covers that product or for a period of fifteen (15) years from the Licensed Product Effective Date, whichever is longer.

 

b. Upon expiration of the full term of the license granted herein for any Licensed Product, and upon full payment by CARDIMA to SURMODICS of all monies due under this Agreement, the license with respect to Know-how licensed herein for that Licensed Product shall be deemed paid up.

 

  

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8. PATENTS

 

a. Intentionally omitted.

 

b. SURMODICS recognizes that it is an objective of CARDIMA to obtain patents on technology that CARDIMA develops. CARDIMA recognizes that a vital part of SURMODICS' business includes licensing SURMODICS' technology to others under SURMODICS' patents and know-how to make, use, and sell products, and that it is an objective of SURMODICS to enable its present and future licensees to exploit patent licenses from SURMODICS to produce and sell products without interference from any related patent that CARDIMA might obtain. A purpose of this Paragraph 8 is to establish a system under which each party may accomplish its respective objective.

 

c. Title to all developed technology which is conceived or first reduced to practice during the term of this Agreement and which is solely an invention of employees or agents of SURMODICS shall be in SURMODICS. SURMODICS shall have the right to determine whether patent or other intellectual property protection will be sought for any such invention and shall be solely responsible for all costs associated with obtaining and maintaining such patent or other intellectual property protection.

 

d. Title to all developed technology which is conceived or first reduced to practice during the term of this Agreement and which is solely an invention of employees or agents of CARDIMA shall be in CARDIMA. CARDIMA shall have the right to determine whether patent or other intellectual property protection will be sought for any such invention and shall be solely responsible for all costs associated with obtaining and maintaining such patent or other intellectual property protection.

 

e. "SURMODICS' Technology" means (i) chemical species that include photoactivatable chemical groups for bonding synthetic polymers and/or biologically active materials onto surfaces, into matrices and to other molecules, (ii) processes and methods used to apply or place synthetic polymers and/or biologically active materials onto surfaces, into matrices and to other molecules through the use of such photoactivatable chemical species, and (iii) processes and methods used to manufacture and test such photoactivatable chemical species.

 

f. "CARDIMA/SURMODICS Technology Patent" means a patent issued subsequent to the Effective Date which contains a claim that (A) claims an invention conceived or first reduced to practice , solely by one or more CARDIMA employees or others who are required to assign inventions to CARDIMA, and (B) is drawn to an invention for SURMODICS' Technology, or its use, or products or processes arising from such use. Any claim that meets the criteria of both (A) and (B) above shall be considered a "CARDIMA/SURMODICS Technology Patent Claim." With respect to a CARDIMA/SURMODICS Technology Patent:

 

i. Determination of Rights. At such time as SURMODICS becomes aware of a patent that may reasonably be construed as a CARDIMA/SURMODICS Technology Patent, SURMODICS will send written notice to CARDIMA, identify the patent in question, and request a review of such patent by the parties to determine (A) if such patent contains a CARDIMA/SURMODICS Technology Patent Claim, and, if so, (B) whether SURMODICS had substantial knowledge of the claimed invention as of the date of its conception by CARDIMA, or (C) whether the alleged CARDIMA/SURMODICS Technology Patent contained any Confidential Information of SURMODICS at the time of filing. As used in this Paragraph 8(f), "substantial knowledge" shall mean, as demonstrated by written records, the possession of knowledge which, if available as prior art to the claimed invention, would render the invention so claimed unpatentable under U.S. patent laws. CARDIMA will not bring or maintain any legal action against SURMODICS or a SURMODICS licensee alleging infringement of such CARDIMA/SURMODICS Technology Patent until issues (A), (B), and (C) of this paragraph have been determined and agreed upon between CARDIMA and SURMODICS. In the event the parties cannot determine and agree on such issues, either party may seek resolution through arbitration under Paragraph 24.

 

 .Grant of License. SURMODICS shall have and is hereby granted a noncancelable, nonexclusive, worldwide license, with the right to sublicense, to make, have made for it, use, and sell products and processes covered by each CARDIMA/SURMODICS Technology Patent Claim, in conjunction with the use of SURMODICS' Technology, but only to the extent that (A) such product or its manufacture or use, as of the date of issuance of such CARDIMA/SURMODICS Technology Patent, is also covered by any Valid Claim, or (B) SURMODICS can demonstrate that SURMODICS had substantial knowledge of the claimed invention as of the date of its conception by CARDIMA. In addition, if CARDIMA discloses Confidential Information of SURMODICS in a patent application, SURMODICS shall have and is hereby granted a noncancelable, nonexclusive, worldwide license, with the right to sublicense, to make, have made for it, use, and sell products and processes covered by the resulting patent.

 

If SURMODICS did not have substantial knowledge of the invention of a CARDIMA/SURMODICS Technology Patent Claim as of the date of CARDIMA's conception of the invention so claimed, and if no Confidential Information of SURMODICS is disclosed in the application for the CARDIMA/SURMODICS Technology Patent, then SURMODICS' right to sublicense shall exclude the right to manufacture, use, or sell Medical Products as "Medical Products" are defined in this Agreement at the date of issuance of that CARDIMA/SURMODICS Technology Patent. However, if the application for the CARDIMA/SURMODICS Technology Patent is filed containing SURMODICS' Confidential Information without the advance written permission of SURMODICS, SURMODICS' right to sublicense shall include the right to manufacture, use, or sell Medical Products as "Medical Products" are defined in this Agreement.

 

 .Royalties Payable by SURMODICS. In return for the license granted under Paragraph 8(f)(ii), SURMODICS will pay CARDIMA a total of five percent (5%) of the royalties (regardless of the number of CARDIMA/SURMODICS Technology Patent Claims that are licensed to SURMODICS or the number of licenses involved), that SURMODICS receives from its sublicensees based on sales by its sublicensees of products that but for such sublicenses would infringe any CARDIMA/SURMODICS Technology Patent Claim. Notwithstanding the above, if SURMODICS had substantial knowledge of the invention of a CARDIMA/SURMODICS Technology Patent Claim as of the date of conception of the invention, or the application for the CARDIMA/SURMODICS Technology Patent is filed containing SURMODICS' Confidential Information, then the license granted to SURMODICS for such CARDIMA/SURMODICS Technology Patent Claim shall be considered paid-up.

 

  

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g. With respect to inventions made jointly by one or more employees of each party operating under this Agreement ("Joint Inventions"), the parties agree that mutually acceptable patent counsel shall be retained at the mutual cost and expense of the parties to render an opinion as to the patentability thereof and to prepare, file, and prosecute such patent applications as may reasonably be required to provide protection for such inventions. The joint inventors each shall be required to assign their Joint Inventions, including all patent applications therefore and the resulting patents, if any ("Joint Patents"), to SURMODICS. SURMODICS shall immediately reassign to CARDIMA an undivided one-half interest to the Joint Inventions, including all patent applications thereof and resulting Joint Patents. Either party may choose at any time, upon written notice to the other, to forego any further expense of obtaining or maintaining a Joint Patent for a Joint Invention, and will offer to assign its interest in such Joint Invention, patent application and/or Joint Patent to the other. If the prospective assignee party accepts such offer, thereafter it shall at its own expense prepare and file the necessary assignments and shall be solely responsible for obtaining and/or maintaining Joint Patent(s) for such Joint Invention. With respect to Joint Patents:

 

(i) Except as provided in Paragraphs 8(g)(iii) and 8(g)(iv) below, each party shall have the right to operate under Joint Patents and grant nonexclusive licenses to others, as they may desire without accounting to the other party.

 

(ii) Should either party choose to bring suit for infringement by a third party of any Joint Patents, the party bringing suit shall have the right to join the other party as a party to the suit to the extent required by law.

 

(iii) SURMODICS agrees it will not grant licenses for the manufacture, use, or sale of any products to the extent that the products are Medical Products as defined in any Attachment B to this Agreement.

 

(iv) CARDIMA agrees it will not grant any licenses for the manufacture, use, or sale of any products relating to SURMODICS' Technology for the purpose of bonding chemicals such as synthetic polymers and biologically active materials onto surfaces or into matrices or to other molecules, the use of such chemical species, or the products resulting from such use.

 

h. The parties agree to execute and exchange upon request such documents as may be necessary or desirable to carry out the provisions of Paragraphs 8(f) and 8(g).

 

i.  Other than as set forth herein, nothing in this Agreement shall be construed as granting either party any rights under or to any patents, know-how or other rights of the other.

 

j. To the extent that any dispute arises with respect to patents under this Paragraph 8, the disputing party shall promptly inform the other party of the nature of the dispute and the provisions of Paragraph 24 shall apply. The parties shall execute appropriate amendments or assignment for the application if necessary to resolve the dispute.

 

9. ALLOCATION OF ROYALTIES

 

The Earned Royalty rate with respect to any Licensed Product shall be prospectively reduced to eighty-five percent (85%) of the Earned Royalty rate set out in the respective Attachment B to the extent that and during the the term that neither the manufacture, nor the use, nor the sale of that specific Licensed Product (or a surface treatment process or a reagent used in such process), is covered by any Valid Claim of Patent Rights. The provisions of this Paragraph 9 shall not apply to payment of Minimum Royalties as provided in Paragraph 4(b) and the respective Attachment B.

 

10. TERMINATION

 

a. For each license granted herein:

 

CARDIMA's Right to Terminate for Convenience & Without Cause

 

i. CARDIMA shall have the right to terminate each license granted with respect to Attachment B under which such license was granted, but only in its entirety, at any time upon ninety (90) days advance written notice. Upon termination of any such license, CARDIMA shall have no further rights under Patent Rights or Know-how with respect to the Licensed Product of that license. However, CARDIMA shall be allowed to sell any inventory of Licensed Products existing at the time of teimination for a period of six (6) months thereafter (thereafter destroying any remaining inventory), provided CARDIMA accounts for such sales of inventory and pays SURMODICS the appropriate Earned Royalty for such sales as set out in Paragraph 4(a) of this Agreement.

 

SURMODICS' Right to Terminate for Cause

 

ii. SURMODICS may terminate this Agreement in whole or with respect to any license granted herein upon thirty (30) days written notice for any material breach or default by CARDIMA, including without limitation, failure to comply with the confidentiality provisions of Paragraph 13, failure to make reports and payments when due, failure to pay Minimum Royalties, and withholding or notice of intent to withhold any royalties provided for in this Agreement. Said termination under this Paragraph l0(a)(ii) shall become effective at the end of the thirty (30) day period unless during that period CARDIMA shall first cure such breach or default.

 

iii. Upon termination of any license under any of the provisions of this Paragraph 10, but subject to the provisions of Paragraph 10(a)(i), referring to the sale of inventory, CARDIMA shall cease making, using, and selling the Licensed Products of such license that are produced through the use of SURMODICS' Know-how. SURMODICS shall have the right to seek equitable relief to enforce the provisions of this Paragraph 10(a)(iii).

 

b. Either party may terminate this Agreement if the other party hereto is involved in insolvency, dissolution, bankruptcy or receivership proceedings affecting the operation of its business.

 

c. Notwithstanding the provisions of Paragraph 20, failure of CARDIMA to initiate bona fide commercial sales of any Licensed Product by the date set out for that Licensed Product in the respective Attachment B to this Agreement shall permit SURMODICS to terminate the license for that Licensed Product upon thirty (30) days written notice at any time prior to the date CARDIMA begins bona fide commercial sales of that Licensed Product.

 

d. In the event that all licenses granted herein are terminated, SURMODICS shall have the right to terminate this Agreement in its entirety upon written notice.

 

  

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11. CONTINUING OBLIGATIONS SUBSEQUENT TO TERMINATION

 

a. Upon any termination of this Agreement or any of the licenses granted herein, the following rights and obligations shall continue to the degree necessary to permit their complete fulfillment or discharge:

 

i. SURMODICS' right to receive and CARDIMA's obligation to pay royalties and all Technical Support Fees to the extent owed; and

 

ii. CARDIMA's obligation to maintain records and SURMODICS' right to audit under Paragraph 5, with respect to sales made and to be made under Paragraph l0(a)(i); and

 

iii. Any cause of action or claim of either party, accrued or to accrue, because of any breach or default by the other party; and

 

iv. The parties' obligations to maintain confidentiality under Paragraph 13; and

 

v. CARDIMA's obligation to forebear from use of SURMODICS' Know-how as provided in Paragraph 10(a)(iii); and

 

vi. The parties' obligations under Paragraph 8.

 

b. Within thirty (30) days of the date of termination of this Agreement, each party shall return all copies of Confidential Information of the other, except one archival copy which may be retained by the receiving party for purposes of determining its on-going obligations under this Agreement.

 

12. REPRESENTATIONS AND WARRANTIES

 

a. Each party warrants to the other that its execution and delivery of this Agreement and

 

the performance of its obligations hereunder has not and will not conflict with or result in a violation or breach of any agreement or other instrument or obligation to which such party is bound.

 

b. Each party warrants to the other that it has the full and unrestricted right to enter into this Agreement and carry out the obligations hereunder.

 

c. SURMODICS represents and warrants that as of the Effective Date, it is the owner of the patents and patent applications listed in Attachment A hereto or otherwise has the right to grant the licenses granted to CARDIMA in this Agreement.

 

d. Except as expressly stated in Paragraphs 12(a) through 12(c), nothing in this Agreement shall be construed as:

 

i. A warranty or representation by SURMODICS as to the validity or scope of any Patent Rights; or

 

ii. A warranty or representation that anything made, used, sold, or otherwise disposed of, or any process practiced, under any license granted in this Agreement is or will be free from infringement of patents of third persons; or

 

iii. A requirement that SURMODICS file any patent application, secure any patent, or maintain any patent in force; or

 

iv. An obligation to bring or prosecute actions or suits against third parties for infringement of any patent; or

 

v. An obligation to furnish any manufacturing or technical information not encompassed within Know-how; or

 

vi. Conferring any right on either party to use in advertising, publicity, or otherwise any trademark or trade name of the other; or

 

vii.         Granting by implication, estoppel, or otherwise any licenses or rights under patents or other proprietary information of SURMODICS other than those included within Patent Rights and Know-how.

 

e. EXCEPT AS EXPRESSLY PROVIDED IN PARAGRAPH 25(d) BELOW, WITH RESPECT TO REAGENTS SUPPLIED AT ANY TIME BY SURMODICS, SURMODICS DISCLAIMS ALL WARRANTIES, EXPRESS OR IMPLIED, INCLUDING BUT NOT LIMITED TO WARRANTIES OF MERCHANTABILITY, NON-INFRINGEMENT AND FITNESS FOR A PARTICULAR PURPOSE. NOTWITHSTANDING ANYTHING TO THE CONTRARY, WITH RESPECT TO REAGENTS SUPPLIED BY SURMODICS AND THE USE OF SUCH REAGENTS, SURMODICS SHALL NOT BE LIABLE FOR INCIDENTAL, CONSEQUENTIAL, SPECIAL, EXTRAORDINARY OR PUNITIVE DAMAGES OF ANY DESCRIPTION, WHETHER FOR DAMAGE TO REPUTATION OR GOODWILL, LOST PROFITS, CLAIMS OF THIRD PARTIES OR OTHERWISE, WHETHER SUCH ASSERTED DAMAGE PURPORTS TO BE BASED ON WARRANTY OR GUARANTEE, INDEMNITY OR OTHER CONTRACT, CONTRIBUTION, NEGLIGENCE OR OTHER TORT, OR OTHERWISE.

 

  

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f. SURMODICS does not make any representations, extend any warranties of any kind, either express or implied, or assume any responsibilities whatsoever with respect to use, sale, or other disposition by CARDIMA or its vendees or transferees of Licensed Products incorporating or made by use of the Patent Rights and Know-how licensed under this Agreement.

 

g. CARDIMA represents and warrants that the Licensed Products are medical devices or device-drug combination products subject to regulation under the U.S. Food, Drug, and Cosmetic Act.

 

h. CARDIMA will reimburse SURMODICS for all costs and expenses, including reasonable attorneys' fees and commercial hourly rates for SURMODICS' employees, incurred by SURMODICS that are associated with SURMODICS' efforts to comply with a subpoena by CARDIMA or a third party (a person or entity other than SURMODICS or CARDIMA), and such subpoena is (i) related to Licensed Products, and (ii) served on SURMODICS as part of an action in which SURMODICS is neither a plaintiff nor a defendant.

 

13. CONFIDENTIALITY

 

a. Each party agrees to retain in confidence all know-how and other information received from the other, including without limitation, information required to be maintained in confidence under prototype development or manufacturing scale-up or post scale-up relationships between the parties ("Confidential Infomation"), for a period of fifteen (15) years from the date of disclosure or five (5) years from the date of termination of this Agreement, whichever is longer. Confidential Infomation shall be limited to information that is transmitted in writing and is marked confidential, proprietary, or by similar legend. Any infoiniation that is transmitted orally or visually, in order to be protected hereunder, shall be identified as such by the disclosing party at the time of disclosure, and identified in writing to the receiving party, as Confidential Information, within thirty (30) days after such oral or visual disclosure. Each party agrees that it will not use Confidential Information of the other for any purpose other than in accordance with this Agreement. Further, each party agrees that it will not disclose Confidential Infomation of the other to any third party without the advance written approval of the other party. Confidential Information shall not include information that:

 

i.  at the time of its disclosure to the receiving party is available to the public; or

 

ii. after disclosure becomes available to the public through no fault of the receiving party; or

 

iii. the receiving party can show was in its possession at the time of disclosure to it

by the other and that information was not subject to a prior obligation of confidentiality; or

 

iv. the receiving party can show was received by it from a third party without breach of a confidential obligation.

 

b. If the receiving party is compelled by application of law or legal process to divulge Confidential Information, the receiving party shall provide the disclosing party with advance written notice before divulging the information to enable the disclosing party to seek a protective order or employ other means to preserve the confidential nature of that information.

 

c. SURMODICS shall assist CARDIMA's regulatory compliance efforts by maintaining and updating Reagent Device Master Files with the FDA. SURMODICS will, at CARDIMA's request, provide similar information to regulatory agencies of competent jurisdiction outside the United States, but SURMODICS shall not be obligated to disclose confidential information to any such foreign agencies except to the extent such agencies verify, to SURMODICS' satisfaction, that such information shall be maintained in secrecy. It is agreed that the information in SURMODICS' Device Master Files with the FDA and information provided to foreign regulatory agencies is SURMODICS Confidential Information.

 

d. For the purpose of this entire Paragraph 13, Confidential Information which is specific shall not be deemed to be within any of the specified exceptions merely because it is embraced by more general information in such exception. In addition, any combination of features shall not be deemed to be within any of the specified exceptions merely because individual features are in such exception, but only if the combination itself and its principle of operation are in such exception.

 

e. Notwithstanding the above, CARDIMA specifically agrees that it will not disclose to any Affiliates or other third party any of SURMODICS' Know-how relating to the manufacture of SURMODICS' chemical reagents, the precise chemical composition of such reagents, how such reagents are tested, how they are quality controlled, and any other specific information concerning the production of such reagents.

 

f. The provisions of this entire Paragraph 13 shall survive termination of this Agreement for any reason.

 

g. Nothing herein shall in any way affect the confidentiality obligations of the parties under any prior and now terminated agreements, which obligations shall continue in accordance with the termination tennis of each such agreement. However, this Agreement supersedes all prior agreements between the parties with respect to disclosures made between the parties after the Effective Date of this Agreement.

 

  

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14. ASSIGNMENT

 

This Agreement shall be binding upon and inure to the benefit of the parties hereto and their successors and permitted assigns. Either party may assign its rights and obligations under this Agreement to a financially responsible third party, but only in connection with a complete transfer to the third party of the business to which this Agreement pertains. The assigning party will so inform the other party to this Agreement without delay of any assignment made in accordance with the conditions of this Agreement. Except as expressly set forth in an Attachment B assignment provision with respect to the license granted under such Attachment B, this Agreement and the licenses hereunder shall not otherwise be assignable by either party without the prior written consent of the other party.

 

15.GOVERNMENT APPROVAL

 

CARDIMA shall have the sole responsibility, at CARDIMA's sole expense, for obtaining any government approvals that may be required for the investigation or marketing of Licensed Products.

 

16.PRODUCT LIABILITY

 

CARDIMA will defend and indemnify SURMODICS against all losses, liabilities, lawsuits, claims, expenses (including attorney's fees), costs, and judgments incurred through personal injury, property damage, or other claims of third parties, arising from the design, manufacture, use, or sale of Licensed Products.

 

17.NO WAIVER

 

Any waiver of any term or condition of this Agreement by either party shall not operate as a waiver of any other or continued breach of such term or condition, or any other term or condition, nor shall any failure to enforce a provision hereof operate as a waiver of such provision or of any other provision hereof.

 

18.NOTICES

 

All communications or other notices required or permitted under this Agreement shall be in writing and shall be deemed to be given (i) when personally delivered, (ii) five days after mailing when mailed by registered or certified mail, postage prepaid, (iii) on the day of sending when sent by facsimile (with recorded transmission completion), or (iv) two days after sending when sent by reputable express courier, and addressed as follows:

 

If to SURMODICS:

License Administration

SurModics, Inc.

9924 West 74th Street

Eden Prairie, MN 55344

FAX Number: (952) 829-2743

 

If to CARDIMA:

Cardima, Inc.

47266 Benicia Street

Fremont, CA 94538

FAX Number: (510) 657-4476

 

Either party shall have the right to change the person and/or address to which notices hereunder shall be given, by notice to the other party in the manner set out above.

 

19. CAPTIONS

 

The captions and headings of this Agreement are for convenience only and shall in no way limit or otherwise affect any of the terms or provisions contained herein. This Agreement shall be construed without regard to any presumption or other rule requiring construction hereof against the party drafting this Agreement.

 

20.FORCE MAJEURE

 

Neither party shall be liable for failure to perform as required by any provisions of this Agreement where such failure results from a cause beyond such party's reasonable control such as acts of God, regulation or other acts of civil or military authority, required approval(s) of government bodies, fires, strikes, floods, epidemics, quarantine restrictions, riot, delays in transportation and inabilities to obtain necessary labor, materials, or manufacturing facilities. In the event of any delay attributable to any of the foregoing causes, the time for performance affected thereby shall be extended for a period equal to the time lost by reason of such delay. The cumulative effect of all such delays under this Paragraph 20 shall not exceed one (1) year.

 

  

9

  

 

21.NO AGENCY

 

Nothing in this Agreement authorizes either SURMODICS or CARDIMA to act as agent for the other as to any matter, or to make any representations to any third party indicating or implying the existence of any such agency relationship. SURMODICS and CARDIMA shall each refrain from any such representations. The relationship between SURMODICS and CARDIMA is that of independent contractors.

 

22.SEVERABILITY

 

The provisions of this Agreement shall be deemed separable. If any provision in this Agreement shall be found or held to be invalid or unenforceable, then the meaning of that provision shall be construed, to the extent feasible, to render the provision enforceable. However, if no feasible interpretation would save such provision, it shall be severed from the remainder of this Agreement, which shall remain in full force and effect unless the provisions that are invalid or unenforceable substantially impair the value of the entire Agreement to either party. In such event, the parties shall use their respective reasonable efforts to negotiate a substitute, valid, and enforceable provision which most nearly effects the parties' intent in entering into this Agreement.

 

23. GOVERNING LAW

 

This Agreement shall for all purposes be governed and interpreted in accordance with the laws of the State of Minnesota, except for its conflict of laws provisions. Each of the parties hereto consents to the exclusive jurisdiction and venue of the courts having jurisdiction within the State of Minnesota.

 

24. ARBITRATION

 

a. In the event of any dispute concerning this Agreement, including its interpretation, performance, breach or termination, the procedures of this Paragraph 24 shall apply; provided, however, that either party shall have the unrestricted right at any time to seek a court injunction prohibiting the other party from making unauthorized disclosure or use of Confidential Information as provided for in Paragraph 13 or unauthorized use of SURMODICS' Know-how as provided for in Paragraph 10(a)(iii).

 

b. Both parties will use good faith and reasonable efforts to resolve any dispute informally and as soon as practical. If any such dispute is not resolved informally within a reasonable period, then an officer from each party, having authority to resolve the dispute, will meet at a mutually agreeable time and place to attempt to resolve the dispute.

 

c. If the parties are unable to resolve a dispute as provided immediately above, either party may submit the dispute for resolution by mandatory, binding arbitration in the city of Minneapolis, MN (or such other place as the parties may mutually agree) under the auspices of the American Arbitration Association and its Commercial Arbitration Rules. Each party shall select one independent, qualified arbitrator and the two arbitrators so selected shall then select a third arbitrator in accordance with the Commercial Rules. Each party reserves the right to object to any individual arbitrator (no matter by whom chosen), who has been employed by or affiliated with a competing organization.

 

d. The arbitrators, who shall act by majority vote, shall be empowered to decree any and all relief of an equitable nature, including but not limited to temporary restraining orders, temporary injunctions, and/or permanent injunctions, and shall also be able to award damages, with or without an accounting of costs. Judgment on the award rendered by the arbitrator(s) may be entered into any court having jurisdiction thereof. Each party shall bear its own costs and divide other reasonable arbitrator costs equally.

 

25. TERMS OF ORDERS/REAGENTS

 

a. SURMODICS agrees to supply reasonable quantities of its proprietary photoreactive reagents ("Reagents"), to CARDIMA (taking into consideration CARDIMA's actual needs for coating Medical Products), pursuant to mutually agreed upon purchase orders. SURMODICS shall not unreasonably withhold acceptance of a purchase order.

 

b. SURMODICS will take reasonable steps to adequately stock Reagents. Delivery by SURMODICS of Reagents to Federal Express, or to another reputable carrier in the United States, shall constitute delivery to CARDIMA.

 

c. Each SURMODICS invoice for Reagents shall be payable in full within thirty (30) days after the date of the invoice.

 

d. SURMODICS warrants that each shipment of Reagents supplied to CARDIMA shall, at the time of shipment, conform to the respective specifications for those Reagents contained in master files submitted by SURMODICS to the FDA and maintained by SURMODICS for purposes of premarket approval of medical devices. SURMODICS' sole obligation and CARDIMA's sole remedy, if any shipment of Reagents does not conform to such specifications, shall be (i) the replacement of the defective shipment of Reagents, or (ii) at CARDIMA's option, a refund of the price paid by CARDIMA for the defective Reagents. CARDIMA shall provide SURMODICS with the evidence CARDIMA has regarding the condition of the Reagents to enable SURMODICS to determine whether the Reagents were defective at the time of shipment.

 

e. The terms and conditions in this Agreement, together with additional teitiis and conditions which may appear in SURMODICS' written acceptance of orders from time to time, shall be the exclusive contract terms between the parties with respect to the purchase of Reagents. In the event of inconsistencies between the terms of this Agreement and the teinis of any order or acceptance document, the terms of this Agreement shall govern. SURMODICS objects to any terms set forth in orders for Reagents which are different from or additional to the provisions of this Agreement, and no such terms shall be binding upon SURMODICS unless SURMODICS specifically consents thereto in writing.

 

  

10

  

 

26. ENTIRE AGREEMENT

 

Nothing herein shall in any way affect the continuing obligations of the parties under their prior and now terminated agreements including (without limitation), the May 1994 Electrophysiology Catheter License Agreement, which obligations shall continue in accordance with the termination terms of each such agreement. Except for the foregoing, this Agreement, together with all attachments specifically referred to herein, constitutes the entire agreement between the parties with respect to the licenses granted herein, and no party shall be liable or bound to the other in any manner by any warranties, representations or guarantees except as specifically set forth herein. This Agreement shall not be altered or otherwise amended except by an instrument in writing signed by both parties.

 

IN WITNESS WHEREOF, the parties have executed this Agreement, effective as of July 1, 2005.

 

	
Accepted by: 

SurModics, Inc.

 

	 	 	
Accepted by: 

Cardima, Inc.

	 
	
/s/ Charlie Olson

	 	 	
/s/ Victor Barajas

	 
	
Signature

	 	 	

Signature

	 
	 	 	 	 	 
	 	 	 	 	 
	Charlie Olson 	 	 	Victor Barajas 	 
	Printed Name 	 	 	Printed Name 	 
	 	 	 	 	 
	 	 	 	 	 
	VP/GM - Hydrophilic Technologies 	 	 	V.P. Operations 	 
	Title 	 	 	Titles 	 
	 	 	 	 	 
	 	 	 	 	 
	April 12, 2006 	 	 	April 12. 2006 	 
	
Date

	 	 	
Date

	 

 

 

  

11

  

 

 

Attachment A

 

SurModics, Inc. U.S. Patents

 

	
1.  

	
METHOD OF IMPROVING THE BIOCOMPATIBILITY OF SOLID SURFACES 

U.S. Patent No. 4,973,493 issued 11/27/1990

 

	
2.  

	
BIOCOMPATIBLE COATINGS FOR SOLID SURFACES 

U.S. Patent No. 4,979,959 issued 12/25/1990

 

	
3.  

	
PREPARATION OF POLYMERIC SURFACES VIA COVALENTLY ATTACHING POLYMERS

U.S. Patent No. 5,002,582 issued 3/26/1991

 

	
4.  

	
BIOCOMPATIBLE DEVICE WITH COVALENTLY BONDED BIOCOMPATIBLE AGENT

U.S. Patent No. 5,263,992 issued 11/23/1993

 

	
5.  

	
RESTRAINED MULTIFUNCTIONAL REAGENT FOR SURFACE MODIFICATION 

U.S. Patent No. 5,414,075 issued 5/9/1995

 

	
6.  

	
SUBSTRATE SURFACE PREPARATION 

U.S. Patent No. 5,512,329 issued 4/30/1996

 

	
7.  

	
RESTRAINED MULTIFUNCTIONAL REAGENT FOR SURFACE MODIFICATION 

U.S. Patent No. 5,637,460 issued 6/10/1997

 

	
8.  

	
PHOTOACTIVATABLE WATER SOLUBLE CROSSLINKING AGENTS CONTAINING AN ONIUM GROUP

U.S. Patent No. 5,714,360 issued 02/03/1998

 

	
9.  

	
PHOTOACTIVATABLE CROSS-LINKING AGENTS CONTAINING CHARGED GROUPS FOR WATER SOLUBILITY

U.S. Patent No. 6,077,698 issued 06/20/2000

 

	
10.  

	
SURFACE COATING AGENTS 

U.S. Patent No. 6,278,018 B1 issued 08/21/2001

 

	
11.  

	
SURFACE COATING AGENTS

U.S. Patent No. 6,603,040 B1 issued 8/5/2003

 

 

  

12

  

 

Attachment A continued

Foreign Equivalents

 

	
US 4979959

	
WO 8802623                 Application

	
US 5263992

	
Designated States (National): AU DK JP NO

	  	
Designated States (Regional): AT BE CH DE FR GB IT LU NL SE

	  	
JP 2981488                     Issued

	  	
Div ex application JP 87506895

	  	
Previous Publ. patent JP 10179726

	  	
EP 326579                       Application

	  	
Designated States (Regional): AT BE CH DE FR GB IT LI LU NL SE

	  	
EP 326579                       Issued

	  	
Based on patent WO 8802623

	  	
Designated States (Regional): AT BE CH DE FR GB IT LI LU NL SE

	  	
DE 3750989                      Issued

	  	
Based on patent EP 326579

	  	
Based on patent WO 8802623

	  	
JP 2741378                     Issued

	  	
Previous Publ. patent JP 2500250

	  	
Based on patent WO 8802623

	  	
JP 10179726 Application

	  	
Div ex application JP 87506895

	  	
CA 1305068                     Issued

	
US 5512329

	
WO 9000887                  Application

	
US 4973493

	
Designated States (National): DK JP NO

	
US 5002582

	
Designated States (Regional): AT BE CH DE FR GB IT LU NL SE

	  	
EP 425485                       Application

	  	
Designated States (Regional): AT BE CH DE FR GB IT LI LU NL SE

	  	
JP 2855224                    Issued

	  	
Previous Publ. patent JP 3505979

	  	
Based on patent WO 9000887

	  	
CA 1340345                   Issued

	  	
EP 425485                       Issued

	  	
Based on patent WO 9000887

	  	
Designated States (Regional): AT BE CH DE FR GB IT LI LU NL SE

	  	
DE 3856430                     Issued

	  	
Based on patent EP 425485

	  	
Based on patent WO 9000887

	
US 5414075

	
WO 9411032

	
US 5637460

	
Designated States (National): AU CA JP

	  	
Designated States (Regional): AT BE CH DE DK ES FR GB GR IE IT LU MC NL

	  	
PT SE

	  	
AU 9454567 Application

	  	
Based on patent WO 9411032

	  	
EP 669837                       Application

 

  

13

  

	  	
Based on patent WO 9411032

	  	
Designated States (Regional): AT BE CH DE DK ES FR GB GR IE IT LI LU MC NL PT SE

	  	
JP 8505839                       Application

	  	
Based on patent WO 9411032

	  	
AU 688286

	  	
Previous Publ. patent AU 9454567

	  	
Based on patent WO 9411032

	  	
CA 2148801                        Patent

	  	
Based on patent WO 9411032

	  	
EP 669837                       Patent

	  	
Based on patent WO 9411032

	  	
Designated States (Regional): AT BE CH DE DK ES FR GB GR IE IT LI LU MC

	  	
NL PT SE

	  	
DE 69332858 Application

	  	
Based on patent EP 669837

	  	
Based on patent WO 9411032

	  	
ES 2196011                       Application

	  	
Based on patent EP 669837

	
US 5714360 A

	
WO 9716544

	
US 6077698 A

	
Designated States (National): AU CA JP MX

	
Cont of

	
Designated States (Regional): AT BE CH DE DK ES Fl FR GB GR IE IT LU

	
application

	
MC NL PT SE

	
US

	  
	
95552758

	
AU 9675531

	  	
Based on patent WO 9716544

	
Cont of patent US

	
EP 862624

	
5714360

	
Designated States (Regional): DE ES FR GB IT

	  	
JP 2000500440 W

	  	
Based on patent WO 9716544

	  	
AU 731249

	  	
Previous Publ. patent AU 9675531                                                         

Based on patent WO 9716544

	  	
MX 9803444

	  	
EP 862624

	  	
Based on patent WO 9716544

	  	
Designated States (Regional): DE ES FR GB IT

	  	
DE 69632541

	  	
Based on patent EP 862624

	  	
Based on patent WO 9716544

	  	
CA 2236588

	  	
Based on patent WO 9716544

	
US 6278018

	
WO 200144174 Application

	    US 6603040 	Designated States (National): AE AG AL AM AT AU AZ BA BB BG BR BY BZ 

CA CH CN CR CU CZ DE DK DM DZ EE ES FI GB GD GE GH GM HR HU ID IL 

IN IS JP KE KG KP KR KZ LC LK LR LS LT LU LV MA MD MG MK MN MW 

MX MZ NO NZ PL PT RO RU SD SE SG SI SK SL TJ TM TR TT TZ UA UG US 

UZ VN YU ZA ZW

Designated States (Regoinal): AT BE CH CY DE DK EA ES FI FR GB GH GM GR

IE IT KE LS LU MC MW MZ NL OA PT SD SE SL SZ TR TZ UG ZW

AU 200119593 

Application Based on patent WO 200144174 

EP 1250319 Application

JP 2003517083 Application 

Based on patent WO 200144174 MX 2002005858 

Application Based on patent WO 200144174 

US 20040030159 Application

  

14

  

 

Attachment B

Microcatheter-Based Mapping and Ablation

 

I.    MEDICAL PRODUCTS

 

"Medical Products" means the following components of a microcatheter-based system designed to (a) locate and access arryhythmia-causing tissue, (b) diagnose the arrhythmia, and (c) restore normal heart rhythms by isolating and/or blocking the arrhythmia-causing tissue using radio frequency energy: (i) single use, multi-electrode ablation microcatheters, with or without an electrically active tip, and (ii) guide catheter.

 

2.            LICENSED PRODUCT

 

"Licensed Products" means Medical Products that are surface-treated with photoreactive polyvinylpyrrolidone copolymer and non-photoreactive polyvinylpyrrolidone, and may contain one or more of the photoreactive crosslinking agents known to the parties as PRO1, PRO3, and PRO4, or any combination of these compounds, for the purpose of providing a lubricious surface to the Medical Products.

 

3.            GRANT OF LICENSE  

 

The license granted under this Attachment B is non-exclusive.

 

4.            ASSIGNMENT  

 

The provisions of assignment are set forth in Paragraph 14 of the Agreement.

 

5.            ROYALTY PAYMENTS

 

CARDIMA shall pay SURMODICS a royalty for the Patent Rights and Know-how license granted in this Attachment B, which will be the greater of Paragraphs 5(a) and 5(b) as follows:

 

a. Earned Royalties of two and one-half percent (2.5%) on Net Sales ($U.S.) of Attachment B1 Licensed Products sold in each calendar quarter.

 

b. Quarterly Minimum Royalties for all Attachment B Licensed Products during the periods specified as follows:

 

	
Minimum Royalty Periods

	
Quarterly Minimum Royalty

	
Beginning with the calendar quarter that includes the Licensed Product Effective Date to December 31, 2007

	
$7,500

	
January 1, 2008 to December 31, 2008

	
$10,000

	
January 1, 2009 to December 31, 2009

	
$15,000

 

For the quarter calendar year commencing with January 1, 2010, and each year thereafter, the quarter calendar year Minimum Royalty shall be the prior year's quarterly Minimum Royalty adjusted by a percentage equal to the percentage change in the "Consumer Price Index For All Urban Consumers" for the prior calendar year as reported by the U.S. Department of Labor.

 

  

15

  

 

6.    PERFORMANCE

 

If there are four (4) consecutive quarters after January 1, 2008 in which CARDIMA fails to generate Earned Royalties under Paragraph 5(a) of this Attachment B, then SURMODICS may teiniinate the license granted herein upon thirty (30) days written notice.

 

The Licensed Product Effective Date of this Attachment B is July 1, 2005.

 

	
Accepted by: 

SurModics, Inc.

 

	 	 	
Accepted by: 

Cardima, Inc.

	 
	
/s/ Charlie Olson

	 	 	
/s/ Victor Barajas

	 
	
Signature

	 	 	

Signature

	 
	 	 	 	 	 
	 	 	 	 	 
	Charlie Olson 	 	 	Victor Barajas 	 
	Printed Name 	 	 	Printed Name 	 
	 	 	 	 	 
	 	 	 	 	 
	VP/GM - Hydrophilic Technologies 	 	 	V.P. Operations 	 
	Title 	 	 	Titles 	 
	 	 	 	 	 
	 	 	 	 	 
	April 12, 2006 	 	 	April 12. 2006 	 
	
Date

	 	 	
Date

	 

 

 

17ex1020.htm

Exhibit 10.20

 

 

 

 

 

Medtronic*

 

	
INTER-OFFICE MEMO

Law Department - m. s. 300

7000 Central Avenue N.E.

Minneapolis, MN 55432

Tel No. 763.514.8121

Fax No. 763.514.3074

E-mail: todd.n.sheldon(d)rnedtronic.corn

 

	
TO:

	
Ron Bourquin

 

	
FROM:

	
Todd Sheldon

 

	
DATE:

	
January 8, 2001

 

 

SUBJECT: Final Agreement

 

Attached are 4 copies of the final fully-executed version of the Acquisition Agreement. Page 11 and Exhibit B have been initialed by Mike Ellwein and need to be initialed by Gabe. We changed the notice provision on Page 11 to include a direct copy to me and Exhibit B was changed to "None." Please have Gabe initial all 4 of the enclosed copies and return 2 to my attention.

 

 

Thanks,

Todd

 

  

  

  

 

ACQUISITION AGREEMENT

 

This ACQUISITION AGREEMENT (the "Agreement") is made and entered into this 19th day of December, 2000 between MEDTRONIC, INC. ("Medtronic"), a Minnesota corporation, and CARDIMA, INC. ("Cardima"), a Delaware corporation.

 

WITNESSETH:

 

WHEREAS, Cardima has developed and owns certain technology relating to cardiac access to the left side chambers of the heart; and

 

WHEREAS, Medtronic desires to acquire from Cardima and Cardima desires to sell and assign to Medtronic, all of the "Intellectual Property" (as defined below) upon the terms and conditions set forth in this Agreement.

 

AGREEMENTS:

 

NOW THEREFORE, in consideration of the representations, warranties, covenants and agreements contained herein, and for other valuable consideration described herein, the receipt and adequacy of which is hereby acknowledged, the parties mutually agree as follows:

 

ARTICLE 1

Definitions

 

1.1)  Specific Definitions. As used in this Agreement, the following capitalized terms shall have the meanings set forth below:

 

"Affiliate" of any entity means any other entity that directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, the first entity. "Control" shall mean owning more than fifty percent (50%) of the total voting power of the entity.

 

"Agreement"  means this Agreement and all Exhibits hereto.

 

"Cardima Field of Use" means systems and methods directly related to temporary placement of catheter within the human vascular system for a duration of time that does not exceed twenty-four hours to perform mapping of electrical currents and to create tissue lesions using RF energy, drug infusions or other means.

 

"Intellectual Property"  means (i) all patents and patent applications, together with any patents that may issue based thereon, listed on Exhibit A attached hereto and all reissues, re-examinations and renewals thereof (ii) all foreign applications based on the foregoing referenced U.S. patents and patent applications, together with all patents which may issue based on the foregoing referenced U.S. patents and patent applications, together with all patents which may issue based thereon; (iii) copyrights, trademarks and service marks which are applicable to, or utilized in connection with, cardia access to the left side chambers of the heart or related delivery devices and which are listed on Exhibit B attached hereto and (iv) all know-how, trade secrets, formulas, inventions, invention disclosures, discoveries, ideas, data, processes, draw inks. and LicsiLms now owned or controlled by Cardima hick are specifically related to the matters referenced in (ii) and (iii) above.

 

  

1

  

 

 

"Liens" means liens, mortgages, charges, security interests, pledges, encumbrances, assessments, restrictions, or third party ownership interests of any nature.

 

1.2)  Definitional Provisions.

 

(a) The words "hereof," "herein," and "hereunder" and words of similar import, when used in this Agreement, shall refer to this Agreement as a whole and not to any particular provisions of this Agreement.

 

(b) Terms defined in the singular shall have a comparable meaning when used in the plural, and vice-versa.

 

(c) References to an "Exhibit" are, unless otherwise specified, to one of the Exhibits attached to or referenced in this Agreement, and references to an "Article" or a "Section" are, unless otherwise specified, to one of the Articles or Sections of this Agreement.

 

(d) The term "person" includes any individual, partnership, joint venture, corporation, trust, unincorporated organization or government or any department or agency thereof.

 

ARTICLE 2

 

Acquisition of Assets

 

2.1)  Purchase of Assets. Upon the terms and provisions set forth herein, Medtronic hereby purchases from Cardima, and Cardima hereby sells, conveys, transfers and assigns to Medtronic, all of the Intellectual Property, subject to the license back to Cardima as provided in Section 3.1. Cardima represents and warrants that the Intellectual Property is sold, conveyed, transferred and assigned to Medtronic free and clear of all Liens whatsoever, whether fixed or contingent, known or unknown. determined or determinable. due or not yet due.

 

2.2)  Purchase Price.  The purchase price for the Intellectual Property (the "Purchase Price") shall be as follows:

 

(a)    Medtronic shall pay Cardima Four Million Dollars ($4,000,000) by wire transfer to a bank account designated by Cardima upon the:

 

(i)     execution of this Agreement;

 

(ii)    delivery to Medtronic of duly executed assignments from Cardima to Medtronic of the patents and patent applications set forth on Exhibit A in form and substance acceptable to Medtronic (the"Assignments"); and

 

 

  

2

  

(iii)   delivery to Medtronic of the duly executed Bank Release (defined below) and all other third party approvals releases or consents as provided in Section 5.1 in form and substance acceptable to Medtronic.

 

(b)    Medtronic shall submit the Assignments for recordation to the U.S Patent and

 

Trademark Office within five (5) business days of delivery by Cardima. Within five (5) business days following the latest to occur of: (i) such submission of the Assignments, (ii) delivery of the copies required to be delivered pursuant to Section 2.3 hereof. (iii) ) completion of the meetings with Cardima personnel pursuant to Section 2.3 hereof and (iv) delivery to Medtronic of all duly executed approval, releases or consents required to be delivered under Section 2.2(a) but, with Medtronic's written waiver, were allowed to be delivered after such Section 2.2(a) payment, Medtronic shall pay Cardima Four Million Dollars (S-1,000,000) by wire transfer to a bank account designated by Cardima, provided that at such time Cardima is otherwise in compliance with the terms of this Agreement..

 

No payment or other remuneration, other than the Purchase Price set forth in this Section 22 and the reasonable costs of copying the documents to be provided by Cardima pursuant to Section 2.3, shall be due Cardima from Medtronic relating to the transfer of the Intellectual Property.

 

2.3)  Transfer of Intellectual Property. Promptly after execution of this Agreement, Cardima shall transfer to Medtronic all of the Intellectual Property. Such transfer shall include providing to Medtronic copies of any and all writings, drawings and materials that document the Intellectual Property, including copies of the patents, patent applications and documents representing embodiments of the Intellectual Property, and reasonable access to Cardima's employees and facilities to facilitate the transfer of the Intellectual Property. Cardima may retain a copy of all such writings, drawings and materials and use the same in carrying out its business within the Cardima Field of Use, In addition, Cardima will provide any explanation and assistance to Medtronic as Medtronic may request to assure the full and complete understanding and transfer to Medtronic of all of the Intellectual Property, including, but not limited to the opportunity to review any and all formulas, inventions, invention disclosures, discoveries, ideas, data, processes, drawings. and designs related to cardiac access to the left side chambers of the heart that are not included within the Intellectual Property. Such assistance shall include Cardima making its personnel designated by Medtronic and listed on Exhibit C attached hereto available a a maximum of thirty (30) hours each between the date of this Agreement and January 31, 2001, to meet with Medtronic personnel. The parties shall use commercially reasonable efforts to complete the transfer of the Intellectual Property to Medtronic on or before January 31, 2001.

 

ARTICLE 3

License Back

 

3.1 License Back.  Medtronic hereby grants Cardima a perpetual, fully paid-up, worldwide license under the Intellectual Property to make, have made, use, offer to sell and sell products or systems and to carry out methods within the Cardima Field of Use. Such license shall be co-exclusive with Medtronic, within the Cardima Field of Use; provided, however that Medtronic agrees not to sublicense the Intellectual Property within the Cardima Field of Use to any party that is not an Affiliate of Medtronic.

 

  

3

  

 

3 2)  Sublicensing and Assignment, Cardima may sublicense its rights under the license granted it in Section 3.1, and may assign its rights and obligations under this Agreement, provided. how ever, that Cardima may not sublicense any of its rights and obligations under this Agreement to a non-Affiliate of Cardima (a "Sublicensee") if the Sublicensee or any Affiliate of the Sublicensee is involved in the design, development, manufacture, marketing, sale or distribution of any product that could be used for cardiac access to the left side chambers of the heart other than products related solely to the Cardima Field of Use. Any sublicense granted by Cardima shall automatically terminate if Cardima or the Sublicensee or an Affiliate or successor of Cardima or the Sublicensee is or becomes involved in the design, development, manufacture, marketing, sale or distribution of any product that could be used for cardiac access to the left side chambers of the heart other than products related solely to the Cardima Field of Use. Additionally, any permitted sublicense or assignment of Cardima's rights and obligations under this Agreement shall only be valid if the Sublicensee or assignee, as the case may be, agrees to be bound by the terms of this Agreement, including, specifically, the restrictions set forth in this Section 3.2 and in Section 3.3. Cardima shall give Medtronic advance written notice of any sublicenses or assignments to be granted by Cardima, including a copy of such sublicense or assignment agreement and Medtronic shall have ten (10) days to review such agreement for the purpose of determining whether such agreement complies with this Section 3.2. No such sublicense or assignment shall contravene the terms and provisions of this Agreement.

 

3.3)  Restrictions on Use. Cardima agrees, for itself and for its Affiliates, not to manufacture, market, sell or distribute any products that could be used for cardiac access to the left side chambers of the heart other than products in the Cardima Field of Use. All products that could be used for cardiac access to the left side chambers of the heart that are manufactured, marketed, sold or distributed by Cardima, its Affiliates, or its Sublicensees, shall be packaged, labeled, advertised, marketed and otherwise identified and promoted in such manner in order to attempt to avoid such products being used in an application outside of the Cardima Field of Use. Upon the request of Medtronic Cardima shall provide Medtronic with reasonable access to any documents or information necessary for Medtronic to verify compliance with such requirements by Cardima, its Affiliates and its Sublicensees. If Medtronic determines that such products have been used outside of the Cardima Field of Use Cardinm shall cooperate with Medtronic in order to attempt to prevent an' any further violations of this Section 3.3. Cardima shall use all reasonable commercial efforts to insure that the restrictions of this Section 3.3 shall be complied with by its Sublicensees, agents and distributors.

 

3.4)  Covenant Regarding Claims.  Cardima agrees, for itself and for its Affiliates, successors and assigns not to sue or otherwise assert any claim against Medtronic or any of its Affiliates, successors, assigns, sublicensees, customers, vendors or others in contractual privity with any of the foregoing, on the ground that Medtronic or any of its Affiliates, or any such other party infringes U.S. Patent Number 5,882,333, or any addition, division, continuation, continuation in part, substitution, extension, reissue, re-examination or renewal that Cardima or its Affiliates has as of the date of this Agreement, solely by reason of or with respect to Medtronic's activities relating to cardiac access to the left side chambers of the heart.

 

  

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ARTICLE 4

Protection of Intellectual Property

 

4.1)  Control of the Intellectual Property.  Medtronic shall have the sole and exclusive right, in Medtronic's absolute discretion, to exercise complete control over the Intellectual Property, including, but not limited to, the right to (i) prosecute any alleged infringement, misappropriation or misuse of the Intellectual Property, and (ii) apply for, prosecute, or cause the issuance, amendment, abandonment, maintenance, re-examination or reissue of any patents or patent applications included within the Intellectual Property.

 

4.2)      Infringement by Third Party. Each party shall promptly notify the other party in writing if the notifying part) knows or has reason to believe that the rights of Medtronic or Cardima relating to the Intellectual Property arc being infringed by a third party.

 

4.3)      Licensee's Right to Protect. In the event that Medtronic (i) determines to abandon, (ii) fails to maintain, (iii) determines to not prosecute or (iv) fails to prosecute any patent or patent application included within the Intellectual Property which relates to the Cardima Field of Use, Cardima shall have the right to exercise complete control, at Cardima's expense and upon written notice to Medtronic, over such patent or patent application and, thereafter, such patent or patent application shall be assigned by Medtronic to Cardima. Medtronic shall copy Cardima on all correspondence with respect to Medtronic's maintenance or prosecution of any patent or patent application included within the Intellectual Property such that Cardima has the reasonable opportunity to take such action as may be necessary to protect such patent or patent application in the event Medtronic intends to abandon, not prosecute or not maintain such patent or patent application. In the event of the assignment of a patent or patent application to Cardima pursuant to this Section 4.3, Medtronic shall be given the option to obtain a royalty free, perpetual, non-exclusive license to such patent or patent application effective upon the payment of one half of the prosecution costs incurred by Cardima related to such patent or patent application. Further, Cardima shall have the right, at Cardima's expense and upon the prior written consent of Medtronic (which consent shall not be unreasonably withheld), to prosecute (in Medtronic's name, if required) any alleged infringement, misappropriation or misuse of the Intellectual Property within the Cardima Field of Use.

 

ARTICLE 5

Representations and Warranties of Cardima

 

 

Cardima hereby represents and warrants to Medtronic as follows, and acknowledges that the same shall be deemed to have been relied upon by Medtronic and shall survive as provided in Section 9.6 of this Agreement:

 

5.1)   Authority.  Cardima has the corporate power and authority to execute and deliver this Agreement and to perform its obligations under this Agreement and no additional actions are required on the part of Cardima, including shareholder approval. Cardima has taken all corporate actions of its board that are required to authorize and approve the execution and performance of this Agreement and there are no other actions required of it including, but not limited to, shareholder action required of any type to approve or authorize the Agreement or its performance. This Agreement has been duly executed and delivered by Cardima, and constitutes, and such other agreements and 

 

 

  

5

  

instruments contemplated hereby. when duly executed and delivered by Cardima, will constitute, valid and binding obligations of Cardima, enforceable in accordance with their respective terms except as may be Hunted by laws affecting creditors' rights generally or by judicial limitations on the right to specific performance. Neither the execution nor the delivery of this Agreement or such other agreements, nor the consummation of the transactions contemplated hereby or thereby nor compliance with or fulfillment of the terms and provisions hereof or thereof by Cardima will: (a) conflict with or result in a breach of the terms, conditions or provisions of or constitute a default under any instrument, agreement, mortgage, security agreement, lease, judgment, order, award, decree or other instrument or restriction to which Cardima is a party or by which Cardima or any of the Intellectual Property is bound or affected; (b) require any affirmative approval, consent, authorization or other order or action of any court, governmental authority, regulatory body, creditor or any other person; or (c) give any party with rights under any such agreement, mortgage, security agreement, judgment, order, award, decree or other instrument or restriction the right to terminate, modify or otherwise change the rights or obligations of Cardima thereunder, except such will require the approval, release or consent of Transamerica Business Credit Corporation (the "Bank Release") and such other approvals, releases or consents as are described on Schedule 5.1, all of which have been fully and unconditionally obtained.

 

5.2)       Absence of Material Undisclosed Liabilities. There are no debts, liabilities, claims against or obligations of Cardima, or any reasonable legal basis therefor, which may adversely affect the ownership of the Intellectual Property or the use thereof by Medtronic, whether accrued, absolute, contingent or otherwise, and whether due or to become due, including but not limited to liabilities on account of taxes, other governmental charges, duties, penalties, interest or fines.

 

5.3)       Assets. The Intellectual Property includes all intellectual property, owned or used by Cardima as of the date of this Agreement, which are necessary to the research, design, development, manufacture or sale of pacing leads for the left side chambers of the heart and related delivery devices. As of the date of this Agreement, there are no additions, divisions, continuations, continuations in part, substitutions or extensions or any patent or patent application that claims priority from or are the parent or any of the patents or patent applications listed on Exhibit A. As of the date of this Agreement. Cardima has good and marketable title to, and exclusive ownership of, all of the Intellectual Property, free and clear of all Liens other than the Liens covered by the Bank Release. Cardima has not granted any license right or options with respect to the Intellectual Property.

 

5.4)  Intellectual Property.  To the knowledge of Cardima after due inquiry, the Intellectual Property does not infringe upon any intellectual property rights of any third parties. No current or former stockholder, employee or consultant of Cardima has any rights in or to any the Intellectual Property. Cardima has made all statutorily required filings, if any, to record its interests and taken reasonable actions to protect its rights in such Intellectual Property; and, to the knowledge of Cardima after due inquiry, no person or entity nor such person's or entity's business or products has infringed, misused, misappropriated or conflicted with intellectual property rights included within such Intellectual Property or currently is infringing, misusing, misappropriating or conflicting with such intellectual property rights included within such Intellectual Property.United States Patent Number 5,645,064 filed with the United States Patent Office on _________, __________, was abandoned by Cardima on __________, 2000.

  

6

  

 

      5.5)       Compliance with Laws. Regulations. Etc. Cardima has complied, and is in compliance, in all material respects, with all applicable laws, statutes, orders, rules, regulations and requirements promulgated by governmental or other authorities relating to the Intellectual Property and Cardima has not received any notice of any sort of alleged violation of any such law, statute, order, rule, regulation or requirement.

 

5.6)       Litigation. There is no action, lawsuit, claim, proceeding, or investigation of any kind pending or threatened against, by or affecting Cardima which if decided adversely against Cardima would have an adverse effect upon the Intellectual Property. Cardima is not in default with respect to any order, writ, injunction, or decree of any court or of any federal, state, municipal or other governmental department, commission, board, bureau, agency or instrumentality, domestic or foreign, affecting or relating to the Intellectual Property.

 

5.7)       No Finders. No act of Cardima has given or will give rise to any claim against any of the parties hereto for a brokerage commission, finder's fee or other like payment in connection with the transactions contemplated by this Agreement, except the payment to Lehman Brothers which is the sole responsibility of Cardima.

 

ARTICLE 6

Representations and Warranties of Medtronic

 

Medtronic represents and warrants to Cardima as follows, and acknowledges that the same shall be deemed to have been relied upon by Cardima and shall survive as provided in Section 9.6 of this Agreement:

 

6.1)       Organization of Medtronic. Medtronic is a corporation duly organized, validly existing and in good standing under the laws of the State of Minnesota.

 

6.2)       Corporate Power and Authority.  Medtronic has the unrestricted corporate power and authority to execute and deliver this Agreement and to perform its obligations under this Agreement and no additional actions are required on the part of Medtronic, including shareholder approval. Medtronic has taken all corporate actions of its board that are required to authorize and approve the execution and performance of this Agreement and there are no other actions required of it including but not limited to, shareholder action required of any type of approve or authorize the Agreement or its performance. The execution, delivery and performance by Medtronic of this Agreement and the transactions contemplated hereby has been duly and validly authorized and approved, by all requisite corporate action on the part of Medtronic. This Agreement has been duly executed and delivered by Medtronic, and constitutes , and such other agreements and instruments contemplated hereby, when duly executed and delivered by Medtronic will constitute, valid and binding obligations of Medtronic, enforceable in accordance with their respective terms except as may be limited by laws affecting creditors' rights generally or by judicial limitations on the right to specific performance. Neither the execution nor the delivery of this Agreement or such other 

 

 

 

  

7

  

agreements, nor the consummation of the transactions contemplated hereby or thereby nor compliance with or  fulfillment of the terms and provisions hereby or thereof by Medtronic will: (a) conflict with or result in a breach of the terms and provisions of or constitute a default under any instrument. agreement. mortgage, security agreement, lease, judgment, order. award, decree or other instrument or restriction to which Medtronic is a party or by which Medtronic is bound or affected; (b) require any affirmative approval, consent, authorization or other order or action of any court, governmental authority, regulatory body. creditor or any other person; or (c) give any party with rights under any such agreement, mortgage, security agreement, judgment, order, award, decree or other instrument or restriction the right to terminate, modify or otherwise change the rights or obligations of Medtronic thereunder.

 

6.3)       No Finders. No act of Medtronic has given or will give rise to any valid claim against any of the parties hereto for a brokerage commission, finder's fee or other like payment in connection with the transactions contemplated by this Agreement.

 

ARTICLE 7

Indemnification

 

7.1)  Indemnification by Cardima. Cardima shall indemnify, defend and hold harmless Medtronic, its Affiliates and Medtronic's and its Affiliates' respective officers, directors, shareholders, employees and agents (collectively, all such indemnitees are referred to in this Section 7.1 as "Medtronic Indemnitees") against and in respect of any and all claims, demands, losses, obligations, liabilities, damages, deficiencies, actions, settlements, judgments, costs and expenses (including reasonable costs and legal fees incident thereto or in seeking indemnification therefore) ("Losses") which the Medtronic Indemnitees may incur or suffer or with which it may be faced arising out of or based upon (i) any product liability or other claims resulting from Cardima's past, present and or future development, manufacture, use, or sale of any device or product or the past, present and/or future conduct of Cardima's business, or (ii) any material breach of this Agreement by Cardima. Notwithstanding the foregoing, the indemnification provided for herein shall not apply to the extent that the Losses of an indemnified party are due to such party's negligence, recklessness or willful misconduct.

 

7.2)  Indemnification by Medtronic.  Medtronic shall indemnify and hold harmless Cardima, its Affiliates and Cardima's and its Affiliates' respective officers, directors, shareholders, employees and agents (collectively, all such indemnitees are referred to in this Section 7.2 as "Cardima Indemnitees") against and in respect of any and all demands, losses, obligations, liabilities, damages, deficiencies, actions, settlements, judgements, costs and expenses which the Cardima Indemnitees may incur or suffer or with which it may be faced (including reasonable costs and legal fees incident thereto or in seeking indemnification therefore) ("losses") arising out of or based upon (i) any product liability or other claims resulting from Medtronic's past, present and/or future development, manufacture, use or scale of any device or product or the past, present, and/or future conduct of Medtronic's business (ii) any material breach of this Agreement by Medtronic. Notwithstanding the foregoing, the indemnification provided for herein shall not apply to the extent that the Losses of an indemnified party are due to such party's negligence, recklessness or willful misconduct.

 

  

8

  

 

7.3)       Third Party Claims. If a claim by a third party is made against an indemnified party and if the indemnified party intends to seek indemnity with respect thereto under this Article 7, such indemnified party shall promptly notify the indemnifying party of such claim; provided, however, that failure to give timely notice shall not affect the rights of the indemnified party so long as the failure to give timely notice does not adversely affect the indemnifying party's ability to defend such claim against a third party. The indemnified party shall not settle such claim without the consent of the indemnifying party, which consent shall not be unreasonably withheld or delayed. The indemnifying party may participate at its own cost and expense in the settlement or defense of any claim for which indemnification is sought.

 

ARTICLE 8

[Intentionally Deleted]

 

ARTICLE 9

Other Provisions

 

9.1)       Approvals and Consents. Cardima will obtain all necessary third party consents, releases of Liens or other approvals which may be necessary on the part of Cardima to consummate the sale of Intellectual Property to Medtronic pursuant to this Agreement, including, but not limited to, the Bank Release as referenced in Section 5.1.

 

9.2)       Confidentiality. The parties acknowledge that the patent applications listed in Exhibit A hereto and included within-the Intellectual Property, the inventions claimed therein, and all trade secrets and know-how included within the Intellectual Property constitute "Confidential Information" of Medtronic. Cardima agrees not to disclose or use any Medtronic Confidential Information except as expressly permitted in connection with the exercise of its rights hereunder. Cardima shall not disclose Medtronic Confidential Information to any employee or consultant unless such employee or consultant is obligated under a confidentiality agreement to maintain such Medtronic Confidential Information in strict confidence, and not to use such information other than, in accordance with the terms of this Agreement. Cardima agrees to hold the Medtronic Confidential Information in strict confidence and treat it with not less than the same degree of care to avoid disclosure as Cardima employs with respect to Cardima's information of like importance. Nothing contained in this Section 9.2 shall be construed to limit or modify the terms of that certain Confidential Disclosure Agreement dated as of September 14, 2000 (the "CDA"), by and between Medtronic and Cardima and in the event of a conflict between the provisions of this Section 9.2 and the CDA, the terms of the CDA shall control.

 

9.3)  Successors and Assigns.  Cardima may assign or transfer its rights and obligations hereunder as set forth in Section 3.2. Any prohibited assignment or transfer shall be null and void. Medtronic may assign or otherwise transfer its rights and obligations under this Agreement to any successor in interest (by merger, share exchange, sale or issuance of stock, sale or other transfer of assets, combination or consolidation of any type, operation of law, purchase, assignment or otherwise), provided that such assignee or successor agrees to be bound by the terms hereof.

  

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9.4)        Further Assistance.  Cardima shall fully cooperate with Medtronic concerning identification and delivery to Medtronic or the Intellectual Property. In addition. Cardima shall, at the request or Medtronic and without further consideration, execute and deliver such further instruments or perform such acts as Medtronic may reasonably request in order more effectively to transfer, evidence, reduce to possession, record title to, protect. or prosecute Medtronic's rights in the Intellectual Property or under this Agreement.

 

9.5)        Complete Agreement. This Agreement and any Exhibits hereto, constitute the entire agreement between the parties hereto with respect to the subject matter hereof and supersede all previous proposals or agreements, oral or written, and all negotiations, conversations or discussions heretofore had between the parties related to the subject matter of such agreements.

 

9.6)        Survival of Representations and Warranties. The representations and warranties contained in this Agreement shall survive and remain in full force and effect for eighteen (18) months from the date of this Agreement, except with respect to the representations and warranties contained in Section 5.3 hereof which shall survive until the expiration of the life of the particular Intellectual Property right at issue. No independent investigation of Cardima by Medtronic, its counsel, or any of its agents or employees shall in any way limit or restrict the scope of the representations, warranties, and agreements made by Cardima in this Agreement.

 

9.7)        Waiver, Discharge, Amendment, Etc. The failure of any party hereto to enforce at any time any of the provisions of this Agreement shall in no way be construed to be a waiver of any such provision, nor in any way to affect the validity of this Agreement or any part thereof or the right of the party thereafter to enforce each and every such provision. No waiver of any breach of this Agreement shall be held to be a waiver of any other or subsequent breach. Neither this Agreement nor any term hereof may be amended, waived, discharged or terminated, nor may any waiver, permit, consent or approval of any kind or character on the part of any party be effective against such party, other than by a written instrument signed by the party against whom enforcement of such amendment, waiver, discharge, termination, permit, consent or approval is sought and expressly stating the extent to which such instrument shall be an amendment, waiver, discharge, termination, permit, consent or approval relating to this Agreement.

 

9.8)  Notices.  All notices or other communications to a party required or permitted hereunder shall be in writing and shall be delivered personally or by facsimile (upon appropriate electronic confirmation of successful transmission thereof to such party (or, in the case of an entity, to an executive officer of such party) or shall be given by certified mail, postage prepaid with return receipt requested addressed as follows:

 

If to Medtronic to:

 

Medtronic, Inc.

Corporate Center

7000 Central Avenue N.E.

Minneapolis, Minnesota 55432

 

  

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with separate copies thereof: addressed to:

 

Attention:  General Counsel. c/o Todd N. Sheldon

Fax: (763) 572-5459

 

and

Attention: Vice President and Chief Development Officer

Fax: (763) 572-5404

 

and if to Cardima. to:

 

Cardima, Inc.

47266 Benicia Street

Fremont, CA 94538

Attention: Chief Executive Officer

 

with a copy to:

 

Pillsbury Madison & Sutro LLP 50 Fremont Street

San Francisco, CA 94105

Attention: Thomas E. Sparks, Jr.

 

Any party may change the above-specified recipient and/or mailing address by notice to all other parties given in the manner herein prescribed: All notices shall be deemed given on the day when actually delivered as provided above (if delivered personally or by facsimile) or on the day shown on the return receipt (if delivered by mail).

 

9.9)   Public Announcement. In the event any party proposes to issue any press release or public announcement concerning any provisions of this Agreement or the transactions contemplated hereby, such party shall so advise the other parties hereto, and the parties shall thereafter use all commercially reasonable efforts to cause a mutually agreeable release or announcement to be issued. Except as otherwise required by law or applicable stock exchange regulations, neither party will publicly or privately disclose or divulge any provisions of this Agreement or the transactions contemplated hereby without the other party's written consent.

 

 

9.10)     Expenses.  Each party hereto shall pay its own expenses incident to the negotiations and preparation of this Agreement and the consummation of the transactions provided for herein.

 

9.11)     Governing Law.  This Agreement shall be governed by and interpreted in accordance with the laws of the State of Minnesota, including all matters of construction, validity, performance and enforcement, without giving effect to principles of conflict of laws.

 

9.12)    Arbitration.  Any dispute arising out of or relating to this Agreement, including the formation, interpretation or alleged breach hereof, shall be settled in accordance with the Alternative Dispute Resolution provisions in Exhibit D attached hereto. The results of such arbitration proceedings shall be binding upon the parties hereto, and judgment may entered upon the arbitration award in any court having jurisdiction thereof. Notwithstanding,,, the foregoing, either party may seek interim injunctive relief from any court of competent jurisdiction

  

11

  

 

arbitration proceedings shall be binding upon the parties hereto, and judgment may entered upon the arbitration award in any court having jurisdiction thereof. Notwithstanding the foregoing, either party may seek interim injunctive relief from any court of competent jurisdiction

 

9.13)    Titles and Headings; Construction. Titles and headings to Sections herein are inserted for convenience of reference only and are not intended to affect the meaning or interpretation of this Agreement. This Agreement shall be construed without regard to any presumption or other rule requiring construction hereof against the party causing this Agreement to be drafted.

 

9.14)    Benefit. Nothing in this Agreement, expressed or implied, is intended to confer on any person other than the parties hereto or their respective permitted successors or assigns, any rights, remedies, obligations or liabilities under or by reason of this Agreement.

 

9.15)     Independent Contractors. The parties hereto are independent contractors and nothing contained in this Agreement shall be deemed or construed to create the relationship of a partnership or joint venture or of any association or relationship between the parties. Medtronic and Cardima acknowledge that they do not have the authority to make and shall not make any representation to any third party, either directly or indirectly, indicating that they have the authority to act for or on behalf of the other party or to obligate the other party in any manner

whatsoever.

 

9.16)    Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed as original and all of which together shall constitute one instrument.

 

9.17)    Severability. If a court of competent jurisdiction holds any provision of this Agreement invalid, the remaining provisions shall nonetheless be enforceable according to their terms. Further, if any provision is held to be overbroad as written, such provision shall be deemed amended to narrow its application to the extent necessary to make the provision enforceable according to applicable Law and shall be enforced as amended.

 

[THE REMAINDER OF THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK]

 

 

  

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IN WITNESS WHEREOF. each of the parties has caused this Acquisition Agreement to be excecuted in the manner appropriate for each, as of the day and year first above written.

 

	 	MEDTRONIC, INC.	 
	 	 	 	 
	
 

	
By: 

	 	 
	 	Its: 	 	 
	 	 	 	 
	 	 	 	 

  

 

	 	CARDIMA, INC.	 
	 	 	 	 
	
 

	
By: 

	/s/ Gabriel B. Vegh	 
	 	Its: 	President and CEO	 
	 	 	 	 
	 	 	 	 

 

 

  

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Exhibit A

 

	
 

 

	
U.S. Patents

	  
	  

 

	
Patent No.

	
Issue Date

	
Title

	
Inventors

	
5.50941 1

	
April 23, 1996

	
Intravascular Sensing Device

	
Littman, Samson, Vegh

	
5,682,885

	
November 4, 1997

	
Intravascular Sensing Device

	
Littman, Samson, Vegh

	
5,967,978

	
October 19,1999

	
Intravascular Sensing Device

	
Littman, Samson, Vegh

	
6,141,576

	
October 31, 2000

	
Intravascular Sensing Device

	
Littman, Samson, Vegh

	
5,699,796

	
December 23, 1997

	
High Resolution Intravascular Signal Detection

	
Littman, Lau, Amirana

	
5,711,298

	
January 27, 1998

	
High Resolution Intravascular Signal Detection

	
Littman, Lau, Amirana

	
5,957,842

	
September 28, 1999

	
High Resolution Intravascular Signal Detection

	
Littman, Lau, Amirana

	
5,706,809

	
January 13, 1998

	
Method and System for using Multiple Intravascular Sensing Devices to detect Electrical Activity

	
Littman, Dickens

	
6,088,610

	
July 11, 2000

	
Method and System for using Multiple Intravascular Sensing Devices to detect Electrical Activity

	
Littman, Dickens

	
5,775,327

	
July 7, 1998

	
Guiding Catheter for the Coronary Sinus

	
 

	
6,021,340

	
February 1, 2000

	
Guiding Catheter for the Coronary Sinus

	
Randolph, Dickens

	 	 	 	 
	U.S. Patent Applications
	Serial No. 	Filing Date 	Title 	Inventors 
	 	12/30/97 	 Deflectable Guiding Catheter 	     J. Qin et al. 

 

	
U.S. Provisional Patent Applications

	
Serial No.

	
Filing Date

	
Title

	
Inventors

	 	
3/31/00

	
Intralumenal Visualization System With Deflectable Mechanism

	
 Seraj, et al

 

 

  

14

  

 

Exhibit B

 

COPYRIGHTS, TRADEMARKS AND SERVICE MARKS

 

None

 

 

  

15

  

 

DESIGNATED EMPLOYEES

 

Victor Barajas

Eric Chan

(and any 2 direct or indirect reports of each of the foregoing to be designated by Medtronic after

consulting with the foregoing prior to any visit to Cardima's facilities)

 

  

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Exhibit D

 

ALTERNATIVE DISPUTE RESOLUTION

 

I)           Negotiations. If any dispute arises between Medtronic and Cardima with respect to the Acquisition Agreement or any alleged breach thereof, any party may, by written notice to the other party, have such dispute referred to their respective designees listed below or their successors for attempted resolution by good faith negotiations within 30 days after such notice is received. Such designees are as follows:

 

For Cardima - the President of Cardima or his/her designee

 

For Medtronic - the President of Medtronic, Inc.'s business unit to which the Agreements relate, or his/her designee

 

Any settlement reached by the parties under this Section 1 shall not be binding until reduced to writing and signed by the above-specified designees of Cardima and Medtronic. When reduced to writing, such settlement agreement shall supersede all other agreements, written or oral, to the extent such agreements specifically pertain to the matters so settled. If the designees are unable to resolve such dispute within such 30-day period, any party may invoke the provisions of Section 2 below.

 

2)            Arbitration. All claims, disputes, controversies, and other matters in question arising out of or relating to the Acquisition Agreement, including claims for Indemnifiable Losses and disputes regarding the making of the Acquisition Agreement, including claims of fraud in the inducement, or to the alleged breach hereof, shall be settled by negotiation between the parties as described in Section 1 above or, if negotiation is unsuccessful, by binding arbitration in accordance with procedures set forth in Section 3 and 4 below.

 

3)            Notice. Notice of demand for binding arbitration shall be given in writing to the other party and shall be delivered personally or by facsimile (receipt confirmed) to an executive officer of such party or shall be sent by a reputable express delivery service or by certified mail, postage prepaid with return receipt requested, addressed as follows:

 

if to Medtronic to:

 

Medtronic, Inc.

Corporate Center

7000 Cetnral Avenue N.E.

Minneapolis, Minnesota 55432

 

With serparate copies thereof addressed to:

Attention:  General Counsel

Fax: (763) 572-5459

 

and

 

Attention:  Vice President and Chief Development Officer

Fax: (763) 572-5404

 

and if to Cardima, to:

 

Cardima, Inc.

47266 Benicia Street

Fremont, CA 94538

Attention: Chief Executive Officer

 

with a copy to:

 

Pillsbury Madison & Sutro LLP 50 Fremont Street

San Francisco, CA 94105

Attention: Thomas E. Sparks, Jr.

 

  

17

  

 

Any party may change the above-specified recipient and/or mailing address by notice to the other party given in the manner herein prescribed. All notices shall be deemed .6ven on the day when actually delivered as provided above (if delivered personally or by facsimile (upon appropriate electronic confirmation of successful transmission)) or on the day shown on the return receipt (if delivered by mail or delivery service). In no event may a notice of demand of any kind be filed more than two years after the date the claim, dispute, controversy, or other matter in question was asserted by one party against another, and if such demand is not timely filed, the claim, dispute, controversy, or other matter in question referenced in the demand shall be deemed released, waived, barred, and unenforceable for all time, and barred as if by statute of limitations.

 

4)             Binding Arbitration. Upon filing of a notice of demand for binding arbitration by any party hereto, arbitration shall be commenced and conducted as follows:

 

(a)             Arbitrators. All claims. disputes. controversies. and other matters (collectively "matters") in question shall he referred to and decided and settled by a standing panel of three independent arbitrators, one selected each of Cardima and Medtronic's representative and the third by the two arbitrators so selected. The third shall be a former judge of one of the U.S. District Courts or one of the U.S. Court of Appeals or such other classes of persons as the parties may agree. Selection of arbitors shall be made within 30 days after the date of the first notice of demand given pursuant to Section 3 and within 30 days after any resignation, disability or other removal of such arbitrator. Following appointment, each arbitrator shall remain a member of the standing panel, subject to removal for the just cause or resignation or disability; provided, however, an arbitrator can be removed by the party who appointed the arbitrator, or in the case of the third arbitrator, by either party for any reason at any time when no matter is in arbitration.

 

(b)   Cost of Arbitration.  The cost of each arbitration proceeding, including without limitation the arbitrators' compensation and expenses, hearing room charges, court reporter transcript charges etc., shall be borne by the party whom the arbitrator determine has not prevailed in such proceeding, or borne equally by the parties if arbitrators determine that neither party has prevailed. The arbitrators shall also ay. and the party that prevails substantially in its pre-hearing position its reasonable attorneys' and costs incurred in connection with the arbitration. The arbitrators are specifically instructed to award attorneys' fees for instances of abuse of the discovery process.

 

(c)          Location of Proceedings. All arbitration proceedings shall be held in Minneapolis, Minnesota unless the parties agree otherwise.

 

(d)          Pre-hearing Discovery. The parties shall have the right to conduct and enforce pre-hearing discovery in accordance with the then current Federal Rules of Civil Procedure, subject to these limitations: Document discovery and other discovery shall be under the control of and enforceable by the arbitrators. The arbitrators shall permit and facilitate such other discovery as they shall determine is appropriate under the circumstances, taking into account the needs of the parties and the desirability of making discovery expeditious and cost effective. The arbitrators shall decide discovery disputes. The arbitrators are empowered:

 

(i) to issue subpoenas to compel pre-hearing document or deposition discovery;

 

(ii) to enforce the discovery rights and obligations of the parties; and

 

(iii) to otherwise control the scheduling and conduct of the proceedings.

 

Notwithstanding any contrary foregoing provisions, the arbitrators shall have the power and authority to. and to the fullest extent practicable shall, abbreviate arbitration discovery in a manner that is fair to all parties in order to expedite the arbitration proceeding and render a final decision within six months after the pre-hearing conference.

 

(e)   Pre-hearing Conference.  Within 45 days after filing of notice of demand for binding arbitration, the arbitrators shall hold a pre-hearing conference to establish schedules for completion of discovery, for exchange of exhibit and witness lists, for arbitration briefs, for the hearing, and to decide procedural matters and all other questions that may be presented.

 

(f)   Hearing Procedures. The hearing shall be conducted to preserve its privacy and to allow reasonable procedural due process. Rules of evidence need not be strictly followed, and the hearing shall be steam lined as follows:

 

(i) Documents shall be self-authenticating, subject to valid objection by the opposing party;

 

  

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(ii) Expert reports, witness biographies, depositions, and affidavits may be utilized, subject to the opponent's right of a live cross-examination of the witness in pei-son;

 

(iii) Charts, graphs, and summaries shall be utilized to present voluminous data, provided (i) that the underlying data was made available to the opposing party 30 days prior to the hearing, and (ii) that the preparer of each chart, graph, or summary is available for explanation and live cross-examination in person;

 

(iv) The hearing should be held on consecutive business days without interruption to the maximum extent practicable; and

 

(v) The arbitrators shall establish all other procedural rules for the conduct of the arbitration in accordance with the rules of arbitration of the Center for Public Resources.

 

(g)             Governing Law. This arbitration provision shall be governed by, and all rights and obligations specifically enforceable under and pursuant to, the Federal Arbitration Act (9 U.S.C. § 1 et seq.)and the laws of the State of Minnesota shall be applied, without reference to the choice of law principles thereof, in resolving matters submitted to such arbitration.

 

(h)             Consolidation. No arbitration shall include, by consolidation, joinder, or in any other manner, any additional person not a party to this Agreement (other than affiliates of any such party, which affiliates may be included in the arbitration), except by written consent of the parties hereto containing a specific reference to this Agreement.

 

(i)             Award. The arbitrators shall be required to render their final decision within six months after the pre-hearing conference. The arbitrators are empowered to render an award of general compensatory damages and equitable relief (including, without limitation, injunctive relict), but are not empowered to award punitive or presumptive damages. The award rendered by the arbitrators (1) shall be final: (2) shall not constitute a basis for collateral estoppel as to any issue; and (3) shall not be subject to vacation or modification, except in the event of fraud and gross misconduct on the part of the arbitrators.

 

(j)   Confidentiality.  The parties hereto will maintain the substance of any proceedings hereunder in confidence and make disclosures to others only to the extent necessary to properly conduct the proceedings.

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