Exclusive License And Development Agreement

EXCLUSIVE LICENSE AND DEVELOPMENT AGREEMENT


THIS EXCLUSIVE LICENSE AND DEVELOPMENT AGREEMENT (the "Agreement") is entered into as of June 29, 2000 ("Effective Date") by and among ABBOTT LABORATORIES, an Illinois corporation, having a principal place of business at 100 Abbott Park Road, Abbott Park, Illinois, 60064-3500 ("Abbott"), Rubicon Medical, Inc., a Utah corporation, having a principal place of business at 2064 West Alexander, Salt Lake City, Utah 84119 ("Rubicon") and Guardian RJL, Inc., a Delaware corporation, having a principal place of business at 218 West 12650 South, Draper, Utah 84020 ("Contractor").


BACKGROUND
----------


WHEREAS, Rubicon Medical, LC, a Utah Limited Liability Company also known as Rubicon Medical, LLC, and Rubicon Medical, a Limited Liability Company (the "Original Licensee"), obtained an option to an exclusive license to USC Patent Rights (as defined below), with the right to sublicense, from the University of Southern California ("USC") under that certain Option & License Agreement dated March 12, 1998 ("USC Agreement"), which USC Patent Rights relate to a catheter product including a balloon protection device and associated components;


WHEREAS, pursuant to that certain Option Exercise and License Amendment Agreement between Original Licensee and USC dated March 31, 1999 ("Option Exercise Agreement") (collectively the USC Agreement and the Option Exercise Agreement shall be referred to herein as the "USC License"), the Original Licensee exercised its option under the USC Agreement;


WHEREAS, under the terms of an Assignment, Assumption and Consent Agreement dated June 8, 2000, Original Licensee, with the written consent of USC, transferred and assigned all of its right, title and interest in and to the USC Patent Rights under the USC License to Rubicon effective June 8, 2000; as a result Rubicon became the licensee under the USC License;


WHEREAS, Rubicon has developed Other Patent Rights, Rubicon Know-how and Trademark Rights (all as defined below) relating to, among other areas, a catheter product;


WHEREAS, Abbott is interested in developing, manufacturing and selling such a catheter product;


WHEREAS, Abbott has expertise regarding research and development, clinical development, marketing and sale of medical devices;


WHEREAS, Abbott desires to obtain from Rubicon an exclusive sublicense to the USC Patent Rights and an exclusive license under the Other Patent Rights, Rubicon Know-how and Trademark Rights to manufacture, use and sell such catheter products and to develop further such catheter products and to obtain regulatory and marketing approvals worldwide, and Rubicon desires to grant Abbott such sublicense and license; and


WHEREAS, Rubicon and Abbott have identified Contractor as the party to be responsible to direct certain development activities with respect to Product (as defined below);


NOW, THEREFORE, in consideration of the recitals and the mutual covenants and


2


obligations contained herein, Rubicon, Contractor and Abbott agree as follows:


1. DEFINITIONS
-----------
1.1 "Abbott Know-how" shall mean all non-patented and unpublished documentation, information and data relating to Products owned or controlled by Abbott or its Affiliates, as of the Effective Date or at any time during the Term (as defined below), including, but not limited to, research, clinical and manufacturing data.


1.2 "Abbott Trademarks" shall mean those trademarks that Abbott develops for any Product, including, but not limited to, trademarks, trade names and trade dress.


1.3 "Affiliate" of an entity shall mean any entity that controls, is controlled by, or is under common control with such entity. An entity shall be deemed to be in control of another entity if it owns or controls, directly or indirectly, more than fifty percent (50%) of the outstanding voting equity of the other entity (or other equity or ownership voting interest in the event that such entity is other than a corporation).


1.4 "CE Approval" shall mean approval from the applicable Regulatory Authority (as defined below) to market and distribute Product for either saphenous vein graft or carotid applications throughout the European Union.


1.5 "Competitive Product" shall mean a balloon protection catheter product that is being, or is contemplated to be, developed, manufactured or sold by Rubicon, its Affiliates or a Third Party (as defined below) and that is structurally and/or functionally equivalent to Product.


1.6 "Confidential Information" shall mean all written information and data provided by one Party (as defined below) to the other hereunder and marked "Confidential" or a reasonable equivalent thereof or, if disclosed orally, visually or in some other form, is summarized in a writing identified as "Confidential" or a reasonable equivalent thereof and provided to the other Party within thirty (30) days of such disclosure, except any portion thereof which:
(a) is known to the recipient, as evidenced by its written records, before receipt thereof under this Agreement;
(b) is disclosed to the recipient without restriction after acceptance of this Agreement by a Third Party who has the right to make such disclosure;
(c) is or becomes part of the public domain through no breach of this Agreement; or
(d) is independently developed, as evidenced by its written records, by or for the recipient by individuals or entities who have not had access to the information disclosed hereunder.


1.7 "Contract Quarter" shall mean a period of three (3) consecutive months ending on March 31, June 30, September 30 or December 31; provided, however, that each of the first and last Contract Quarters may be less than three (3) full consecutive months.


1.8 "Contract Year" shall mean a period of four (4) consecutive Contract Quarters; provided, however, that the first and last Contract Years may be less than four (4) consecutive Contract Quarters in that such Contract Year shall begin on the first day of the month following the month in which Abbott obtains CE Approval of Product.


3


1.9 "Development Plan" shall mean the Product Development Plan to be developed by the Parties under Section 3.1, as the same may be modified from time to time.


1.10 "FDA" shall mean the United States Food and Drug Administration or its successor entity.


1.11 "Field of Use" shall mean diagnostic and/or therapeutic devices used in the treatment or management of patients via the carotid artery or other arteries or veins.


1.12 Sales" shall mean:
(a) the gross invoiced price of Products sold by Abbott or its Affiliates to a Third Party, less the following:
(i) credits, allowances, discounts and rebates to, and chargebacks from the account of, Third Parties for damaged, out-dated, rejected, returned, withdrawn or recalled Products;
(ii) actual freight, postage, transportation and insurance costs incurred in delivering Products;
(iii) cash, quantity and trade discounts actually given to Third Parties;
(iv) rebates and administrative fees actually paid to group purchasing organizations;
(v) sales, use, value-added, excise and other similar taxes to the extent billed to and paid by the Third Party;
(vi) wholesaler chargebacks; and
(vii) custom duties, surcharges and other governmental charges incurred in connection with the exportation or importation of Products.
(b) Net Sales shall not include any Products used in clinical trials, for research or other non-commercial uses, or supplied as commercial samples or as charitable or humanitarian donations, so long as Abbott receives no compensation in any form (other than tax benefits) for such use/donation.


1.15 "Other Patent Rights" shall mean all United States and foreign patents and patent applications including, but not limited to, the patents and patent applications listed in Exhibit 1.15, and all substitutions, extensions, re-examinations, reissues, renewals, divisions, continuations, improvements or continuations-in-part therefor or thereof, and all foreign counterparts of the foregoing, relating to or supportive of the Development Plan, which are owned by, controlled by or exclusively licensed to (with the right to sublicense) Rubicon or Contractor or their respective Affiliates during the Term, other than USC Patent Rights.


1.16 "Party" shall mean either Abbott or Rubicon and "Parties" shall mean both Abbott and Rubicon.


1.17 "Patent Rights" shall mean Other Patent Rights and USC Patent Rights, collectively.


1.18 "Product" shall mean any article, component, apparatus, substance, chemical, material, method or service which is made, used, distributed or sold by Abbott or its Affiliates which:
(a) is covered in whole or in part by one (1) or more Valid Claims (as defined below) in a country in which the Product is made, used, distributed or sold;
(b) is manufactured using a method or process which is covered in whole or in part by one (1) or more Valid Claims in the country in which (i) the Product is made, used, distributed or sold, or (ii) the method or process is used; or


4


(c) the use of which is covered in whole or in part by one (1) or more Valid Claims in the country in which (i) the Product is made, used, distributed or sold, or (ii) the method or process is used.


A Product is covered by a Valid Claim if, in the course of manufacture, use, distribution or sale, it would, in the absence of this Agreement, infringe one (1) or more Valid Claims.


1.19 "Reasonable Commercial Efforts" shall mean a level of effort by a Party comparable to efforts that such Party would use with its own products having a comparable proprietary position, market potential and commercial significance in the applicable region.


1.20 "Regulatory Authority" shall mean any federal, state, local or international regulatory agency, department, bureau or other governmental entity, including the FDA, which is responsible for issuing approvals, licenses, registrations or authorizations necessary for the manufacture, use, storage, import, transport or sale of Products in a regulatory jurisdiction.


1.21 "Rubicon Know-how" shall mean all non-patented and unpublished documentation, information and data relating to Products owned or controlled by Rubicon or its Affiliates, as of the Effective Date or at any time during the Term, including, but not limited to, research, clinical and manufacturing data and documentation and prototype and pre-production units of Products but excluding any documentation, information or data that would be considered an improvement under Section 2.2.


1.22 "Technology Transfer Plan" shall mean the Technology Transfer Plan to be developed pursuant to Section 2.1 as the same may be modified from time to time. The plan shall include a timeline for transferring Rubicon Know-how to Abbott including, but not limited to, clinical studies, data management, process development and non-clinical research and all other Rubicon Know-how related to Product and Patent Rights.


1.23 "Term" shall have the meaning set forth in Section 14.1 of this Agreement.


1.24 "Territory" shall mean the entire world.


1.25 "Third Party" shall mean a natural person, corporation, partnership, joint venture, trust, any governmental authority or other business entity or organization, and any other recognized organization other than the Parties and/or their Affiliates.


1.26 "Trademark Rib" shall mean the unregistered trademark Guardian and all goodwill associated therewith.


1.27 "USC Patent Rights" shall mean all United States and foreign patents and patent applications including, but not limited to, the patents and patent applications listed in Exhibit 17, and all extensions, reissues, renewals, divisions, continuations, or continuations-in-part therefor thereof, and all foreign counterparts of the foregoing, licensed pursuant to the USC License.


1.28 "Valid Claim" shall mean a claim of an issued or granted and unexpired patent included in Patent Rights, which claim has not been held invalid or unenforceable by a court or agency of competent jurisdiction from which no further appeal can be taken, or which has not been admitted by the patentee to be invalid or unenforceable.


5


2. TECHNOLOGY TRANSFER
-------------------


2.1 Technology Transfer by Rubicon. Within thirty (30) days of the Effective Date, the Parties shall finalize the Technology Transfer Plan and commence activities described therein. Abbott shall consider Rubicon Know-how to be Confidential Information and shall treat Rubicon Know-how in accordance with the terms and conditions in Section 13.1 of this Agreement.


2.2 Technology Improvements. In the event Abbott or its Affiliates conceives, reduces to practice or develops improvements to Products, Abbott shall own exclusively all such improvements. In the event Rubicon or any of its Affiliates conceives, reduces to practice or develops improvements to Products during the period up to and including the one (1) year anniversary of completion of the Technology Transfer Plan, Rubicon, and its Affiliates, as the case may be, shall assign to Abbott all rights to such improvements, including all data and documentation relating to such improvements. In the event Contractor or any entity with whom Contractor contracts pursuant to Section 3.1 conceives, reduces to practice or develops improvements to Products during the term of Contractor's activities pursuant to Section 3.1, and for one additional year thereafter Contractor and such entities with whom Contractor contracts, as the case may be, shall assign to Abbott all rights to such improvements, including all data and documentation relating to such improvements.


2.3 Non-Compete. For a period of [CONFIDENTIAL] after the Effective Date, or for a reasonable period, if any, less than [CONFIDENTIAL] in any jurisdiction that determines [CONFIDENTIAL] to be inappropriate, neither Rubicon, Contractor nor any of their Affiliates shall perform in the Territory, directly or indirectly, any research, development or manufacturing activities for itself or for any Third Party with respect to a Competitive Product.


2.4 Project Managers. Within thirty (30) days of the Effective Date, Abbott and Rubicon shall each appoint a project manager to coordinate the transfer of Rubicon Know-how from Rubicon to Abbott.


2.5 Costs . Each Party shall be responsible for any costs that it incurs in performing its responsibilities under this Article 2.


2.6 Disclosure of Abbott Know-how. During the Term, Abbott may disclose Abbott Know-how to Rubicon. Rubicon shall consider Abbott Know-how to be Confidential Information and shall treat Abbott Know-how in accordance with the terms and conditions in Section 13.1 of this Agreement.


3. PRODUCT DEVELOPMENT, CLINICAL TESTING, AND APPROVAL,
----------------------------------------------------
3.1 Development and Clinical Testing Activities.


(a) Within ninety (90) days after the Effective Date, Contractor shall contract with Abbott or any Third Party, but not including Rubicon, to develop the Product and to administrate all clinical testing for Products in accordance with the Development Plan, at a maximum cost to Contractor of [CONFIDENTIAL]. In consideration of Contractor's obligation, Abbott shall pay to Contractor within ten (10) business days after the Effective Date, [CONFIDENTIAL]. The Parties acknowledge that Contractor may contract with any


6


Third Party to perform the activities contemplated under this Section 3.1 and to reimburse that Third Party for its costs to perform such activities; provided that Abbott shall have the right to approve the use of any such Third Party based on that Third Party's ability to adequately perform such activities in a competent manner, to meet the necessary time lines and to appropriately transfer to Abbott any necessary information and work product after completion of such activities. Contractor shall reimburse the entity performing the activities described in this Section 3.1 for all costs incurred in developing Product and in administrating such clinical testing in an amount not to exceed [CONFIDENTIAL]. At the end of each Contract Quarter, the entity performing such activities shall submit invoices to Contractor for reimbursement of such entity's costs to perform such development and clinical activities.
(b) Upon completion of Contractor's work under Section 3.1 (a), Abbott, at Abbott's own cost, shall use Reasonable Commercial Efforts to undertake the development activities for the Product, including, but not limited to, conducting or having conducted, and completing or having completed, all clinical studies and other activities required for approvals from the applicable Regulatory Authorities. Abbott shall provide Rubicon, within a reasonable time, with access to information and data reasonably requested by Rubicon related to such development activities. Pursuant to the Development Plan, Rubicon shall use Reasonable Commercial Efforts to assist Abbott in performing development and registration activities for the Product. Abbott further agrees to use its Reasonable Commercial Efforts to file for all approvals from all Regulatory Authorities in the United States and the European Union for Products. Commencing as of the termination of Contractor's services under-Section 3.1 (a) above, and continuing for the remainder of the Term, Abbott shall bear the costs and expenses related to the development of the Products.
(c) The Parties shall in good faith agree upon and complete a plan for development activities for the Product (the "Development Plan") within ninety (90) days after the Effective Date. The Development Plan shall cover the detailed plans for various studies, including without limitation, costs, timing, data management, adverse event reporting, as well as including language for diligence, delays and remedies for potential problems, and shall at a minimum address the issues outlined in the checklist attached in Exhibit 3.1(c).
(d) Within thirty (30) days of the Effective Date, Contractor and Rubicon shall (and within thirty (30) days of Abbott assuming responsibility pursuant to Section 3.1(b), Abbott and Rubicon shall) each appoint a development manager which will primarily responsible to coordinate communications between the Parties and report on the progress of the Development Plan. The development managers shall meet when necessary, but at least every Contract Quarter during the term of the development of the Product, at such times and places as agreed to by the Parties. Abbott's development manager shall provide periodic written reports to Rubicon on the status of Abbott's product development, manufacturing and clinical testing activities concerning Products. As reasonably requested by Rubicon, Abbott shall also provide Rubicon with copies of related documentation and data. Any such information and data shall be handled in accordance with the terms and conditions of Section 13.1 of this Agreement.


3.2 Regulatory Approvals; Reasonable Commercial Efforts. Abbott, at Abbott's own expense, shall use Reasonable Commercial Efforts to submit to and obtain acceptance from the applicable Regulatory Authorities of the appropriate regulatory filing for Products in each such jurisdiction. In the event Rubicon does not in good faith believe that Abbott and its Affiliates are using Reasonable Commercial Efforts to undertake development activities or obtain Product approval in any region in the Territory where USC Patent Rights


7


or Other Patent Rights have been filed except as otherwise agreed by the Parties, then Rubicon shall provide Abbott with written notice of such concerns. Abbott shall have sixty (60) days to address such concerns to the mutual satisfaction of the Parties. If Rubicon reasonably believes Abbott has not sufficiently addressed the concerns of Rubicon within such sixty (60)-day period, then the sublicense to the USC Patent Rights and the license to the Other Patent Rights that are granted to Abbott in the region in question shall revert to a non-exclusive sublicense and license, respectively, upon the written election of Rubicon, unless otherwise disputed by Abbott in accordance with Section 17.9. Further, upon such reversion to a non-exclusive sublicense and license, respectively, Abbott shall grant to Rubicon a royalty-free, non-exclusive license to all improvements that have been assigned to Abbott in such region pursuant to Section 2.2.


3.3 Alternative Regulatory Approach. With respect to both CE Approval and FDA approval of Product, Abbott shall use Reasonable Commercial Efforts to seek approval of Product for at least a saphenous vein graft or carotid application. In the event Abbott, at its sole discretion in accordance with Reasonable Commercial Efforts does not seek CE Approval and/or FDA approval of Product for either of the saphenous vein graft or carotid applications, and elects rather to seek approval for an alternative vascular application other than saphenous vein graft or carotid applications, then for purposes of Section 8.2, the condition of CE Approval and/or FDA approval as described in Section 8.2(a) or (b), as the case may be, shall be deemed to be satisfied and Abbott shall be obligated to make the appropriate milestone payment(s) under such sections, upon the CE Approval and/or FDA approval of such alternative vascular application. Abbott shall use Reasonable Commercial Efforts in making its determination and filings and seeking approvals for an alternative vascular application pursuant to this Section 3.3, or terminate this Agreement pursuant to Section 14.3, or take other action after review with Rubicon, provided that any other actions shall be mutually agreed upon.


4. PRODUCT MANUFACTURE AND DISTRIBUTION
------------------------------------
4.1 Product Manufacture and Distribution. Abbott shall use Reasonable Commercial Efforts to manufacture, market and distribute Products in all regions in the Territory where appropriate regulatory and marketing approvals have been obtained from the applicable Regulatory Authorities. Abbott, at Abbott's own expense, shall be responsible for all manufacturing and commercial activities related to undertaking the obligations pursuant to this Section 4.1. In the event Rubicon does not in good faith believe that Abbott and its Affiliates are using Reasonable Commercial Efforts to manufacture, market or distribute Products in a given region in the Territory where approval from the Regulatory Authority has been obtained, then Rubicon shall provide Abbott with written notice of such concerns. Abbott shall have sixty (60) days to address such concerns to the mutual satisfaction of the Parties. If Rubicon reasonably believes that Abbott has not sufficiently addressed the concerns of Rubicon within such sixty (60)-day period, then the sublicense to the USC Patent Rights and the license to the Other Patent Rights that are granted to Abbott in the region in question shall revert to a non-exclusive sublicense and license, respectively, upon the written election of Rubicon, unless otherwise disputed by Abbott in accordance with Section l 7.9. Further, upon such reversion to a nonexclusive sublicense and license, respectively, Abbott shall grant to Rubicon a royalty-free, nonexclusive license to all improvements that have been assigned to Abbott in such region pursuant to Section 2.2.


8


4.2 Labeling. All packaging for Products shall display Abbott's trade dress and a trademark suitable to Abbott, at Abbott's sole discretion. Abbott shall make only claims, representations or warranties directly or indirectly to any Third Party about the Product that are consistent with the Product's approval from applicable Regulatory Authorities and other scientific literature.


4.3 Customer Service and Technical Support. Abbott, at Abbott's own expense, shall be responsible for and use Reasonable Commercial Efforts in providing training, customer service and technical support for Products.


4.4 Export Control Laws. Abbott shall comply with all applicable export laws, restrictions and regulations of the Department of Commerce or other United States or foreign agency or authority, and shall not export, or allow any export or re-export of any Confidential Information or Products in violation of any such restrictions, laws or regulations.


5. REGULATORY COMPLIANCE MATTERS AND COMPLAINTS
--------------------------------------------
5. l Regulatory Matters. In addition to the obligations set forth in Section 3.2 of this Agreement, Abbott, at Abbott's own expense, shall be responsible for and take all appropriate corrective or other actions regarding all regulatory matters in the Territory, including responses to inquiries from Regulatory Authorities in accordance with all applicable laws.


5.2 Complaints and Recalls.
(a) Product Complaints. Abbott, at Abbott's own expense, shall investigate, respond to and take all appropriate corrective or other actions regarding all complaints associated with the manufacture and/or distribution of Products in accordance with all applicable laws.
(b) Product Recalls. Abbott, at Abbott's own expense and, subject to an order or directive from a Regulatory Authority, at its sole discretion, shall be responsible to conduct and to pay for the costs of any recall or withdrawal of Products in accordance with all applicable laws. Promptly, in accordance with all applicable laws and if possible, prior to making such recall, Abbott shall advise Rubicon of the situation and any facts relating to the advisability of the recall, destruction or withholding from the market of the Product anywhere in the world.


5.3 Record keeping. Abbott shall keep records of its sales and customers and other records sufficient to adequately administer a recall of each such Product and reasonably cooperate in any decision to recall, retrieve and/or replace any Product, in accordance with all applicable laws and regulatory requirements.


5.4 Fines and Penalties. Any fines and/or penalties for failure by Abbott to comply with any requirement or regulation shall be the sole responsibility of Abbott, except to the extent caused by acts or omissions of Rubicon, Contractor, or their respective Affiliates.


6. RIGHTS GRANTED
--------------
6.1 Sublicense to USC Patent Rights. Rubicon hereby grants to Abbott and its Affiliates, upon the terms and subject to the conditions set forth herein, a worldwide, exclusive right and sublicense under USC Patent Rights in the Field of Use, with the right to further sublicense in accordance with this Agreement, to make, have made, use, offer for sale, sell and import Products; provided that Rubicon shall have the right to consent to any subsequent sublicense from Abbott, which consent shall not be unreasonably withheld. The


9


consent by USC to such sublicense to Abbott is expressly acknowledged in the Letter of Affirmation and Consent attached as Exhibit 6.1. Abbott acknowledges that it has received a copy of and is familiar with the USC License. Neither Party shall take any action or fail to take any actions which would give rise to a violation of the USC License. Any sublicensing permitted by this Section 6.1 shall be subject to the provisions of article 11 of the USC Agreement, as amended by the Option Exercise Agreement.


6.2 License to Other Patent Rights and Rubicon Know-how. Rubicon hereby grants to Abbott and its Affiliates, upon the terms and subject to the conditions set forth herein, a worldwide, exclusive right and license under Other Patent Rights and Rubicon Know-how, with the right to further sublicense in accordance with this Agreement, to make, have made, use, offer for sale, sell and import Products and any other product, Product improvement or technology identified in Section 2.2 of this Agreement; provided that Rubicon shall have the right to consent to any subsequent sublicense from Abbott, which consent shall not be unreasonably withheld.


7. ROYALTIES
---------
7.1 Royalty Obligation. In consideration of the sublicense and license rights granted to Abbott pursuant to Sections 6.1 and 6. ...