<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K/A
AMENDMENT NO. 2 TO
(Mark One)
/X/ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 (FEE REQUIRED)
For the fiscal year ended December 31, 1996
OR
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [NOT FEE REQUIRED]
For the transition period from _______________ to ______________
Commission file number: 0-11635
LASER PHOTONICS, INC.
-------------------------------------------------------
(Name of small business issuer specified in its charter)
Delaware 59-2058100
- -------------------------------- -------------------
(State or other jurisdiction (I.R.S Employer
of incorporation or organization Identification No.)
6865 Flanders Drive, Suite G. San Diego, California 92121
------------------------------------------------------------
(Address of principal executive offices, including zip code)
619-455-7030
-----------------------------------------------
(Issuer's telephone number, including area code)
12351 Research Parkway, Orlando, Florida 32826 - (407) 281-4103
-----------------------------------------------------------------
(Former name, former address and former fiscal year,
if changed since last report)
Securities registered under Section 12(b) of the Exchange Act:
Name of each exchange
Title of each class on which registered
------------------- ---------------------
None None
Securities registered under Section 12(g) of the Exchange Act:
Common Stock, $0.01 par value per share
------------------------------------------------
(Title of Class)
The undesigned registrant hereby amends the following items, financial
statements, exhibits or other portions of the Annual Report on Form 10-KSB for
the fiscal year ended December 31, 1996, as set forth in the pages attached
hereto:
1. ITEM 14 - EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM
8-K.
(a)(3) Exhibits 10.5-10.7.
<PAGE>
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K.
(a)(3) EXHIBITS REQUIRED TO BE FILED BY ITEM 601 OF REGULATION S-K.
10.5 Master Technology Agreement between the Company and Baxter
Healthcare Corporation, dated July 28, 1997**
10.6 License Agreement between the Company and Baxter Healthcare
Corporation, dated August 19, 1998**
10.7 Manufacturing Agreement between the Company and Baxter Healthcare
Corporation, dated August 19, 1997**
- -------------------------
** These exhibits are the subject of a currently pending request for
Confidential Treatment with the Securities and Exchange Commission.
2
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities and
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
Dated: April 15, 1998 LASER PHOTONICS, INC.
BY: /s/ Raymond A. Hartman
-------------------------------------
Raymond A. Hartman
President, Chief Executive Officer
and Director
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated below.
LASER PHOTONICS, INC.
Dated: April 15, 1998 BY: /s/ Raymond A. Hartman
-------------------------------------
Raymond A. Hartman
President, Chief Executive Officer
and Director
Dated: April 15, 1998 BY: /s/ Chaim Markheim
-------------------------------------
Chaim Markheim
Director, Chief Operating Officer
and Chief Financial Officer(Principal
Financial Officer and Principal
Accounting Officer)
Dated: April 15, 1998 BY: /s/ Steven A. Qualls
-------------------------------------
Steven A. Qualls
Director and Executive Vice
President
Dated: April 15, 1998 BY: /s/ Alan R. Novak
-------------------------------------
Alan R. Novak
Director
Dated: April 15, 1998 BY: /s/ John J. McAtee, Jr.
-------------------------------------
John J. McAtee, Jr.
Director
3
<PAGE>
MASTER TECHNOLOGY AGREEMENT
This Master Technology Agreement ("the Agreement") is made and entered into
as of July 28, 1997, by and between Baxter Healthcare Corporation, a corporation
organized under the laws of the State of Delaware ("Baxter") and AccuLase, Inc.,
a corporation organized under the laws of the State of California ("AccuLase").
RECITALS
A. AccuLase is the owner of certain technology, patents and technical
know-how related to an excimer laser and laser delivery system for use in, among
other things, transmyocardial laser revascularization.
B. Simultaneously with the Closing of this Agreement, Baxter and
AccuLase will enter into that certain License Agreement, dated as of the Closing
date (the "License Agreement"), pursuant to which AccuLase shall grant an
exclusive license to Baxter of technology, patents, technical know-how and
products, among other things, related to transmyocardial laser
revascularization.
C. Baxter wishes to license from AccuLase the rights to develop,
manufacture, market and sell AccuLase's laser and laser delivery system for
cardiovascular and vascular applications upon the terms and conditions contained
in the License Agreement and herein.
D. Simultaneously with the Closing of this Agreement, Baxter and
AccuLase will enter into that certain Manufacturing Agreement (the
"Manufacturing Agreement") dated as of the Closing date, pursuant to which
AccuLase shall manufacture those excimer laser products defined therein.
E. Baxter wishes to purchase, and AccuLase desires to manufacture
excimer laser products pursuant to the terms and conditions defined in the
Manufacturing Agreement and herein.
F. Baxter and AccuLase desire to make certain representations,
warranties and other agreements in connection with this Agreement.
G. Baxter and AccuLase acknowledge and agree that the intended use and
value of the technical know-how, intellectual property, patents, and products
acquired, purchased and/or licensed under this Agreement, the License Agreement
and the Manufacturing Agreement are uncertain as a result of the recent and
continuing development of the field of transmyocardial revascularization and the
parties further acknowledge that based on the foregoing, the consideration paid
for the performance of AccuLase's obligations herein, in the License Agreement
and in the Manufacturing Agreement is adequate, sufficient and fair
consideration.
<PAGE>
NOW, THEREFORE, in consideration of the covenants and representations set
forth herein, the above recitals and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties agree
as follows:
ARTICLE I
DEFINITIONS
1.1 DEFINED TERMS. For the purposes of this Agreement, the following
terms shall have the definitions ascribed to them:
"AccuLase Certificate of Incorporation" shall have the meaning given it in
Section 4.1.
"AccuLase Confidential Information" shall have the meaning given it in
Section 4.11 (g).
"AccuLase Financial Statements" shall have the meaning given it in Section
4.4.
"Affiliate" shall mean (i) any Person directly or indirectly
controlling, controlled by, or under common control with AccuLase or (ii) any
Person that owns or controls twenty percent (20%) or more of any class of
equity securities of AccuLase or any of its subsidiaries or Affiliates. For
the purposes of this definition, "control" (including with correlative
meanings, the terms "controlling," "controlled by," and "under common control
with"), as applied to any Person means the possession, directly or indirectly
of the power to direct or cause the direction of the management and policies
of that Person, whether through the ownership of voting securities or by
contract or otherwise.
"Claim" shall have the meaning given it in Section 8.2.
"Closing" shall mean the consummation of the transactions contemplated
hereby at the time, date and place specified in Section 7.1 hereof.
"Confidentiality Agreement" shall mean that certain Confidentiality
Agreement, dated April 25, 1997, between Baxter and AccuLase.
"End User" shall mean any Person that orders a product who is a healthcare
provider or employs or is otherwise affiliated with healthcare providers.
"End User Price" shall mean the actual sales price (exclusive of taxes,
insurance and freight) received by Baxter from an End User of a product.
2
<PAGE>
"IDE" shall have the meaning given it in Section 2.3.
"Intellectual Property" shall mean, without restriction or limitation, the
list of patents identified in Schedule 4.11, the intellectual property rights
licensed to Baxter by AccuLase pursuant to the terms of the License Agreement
referred to in Section 2.2 and any and all devices, processes (including without
limitation processes of using devices or of manufacturing such devices),
compositions of matter, computer software, chemical formulations, ideas,
developments or inventions, whether patentable or unpatentable, and any and all
written materials or other works which may be subject to copyright, which are
conceived and/or reduced to practice relating to the Intellectual Property.
"Licensed Patent" shall mean the United States or foreign patents and
patent applications (including any continuation, continuation in part,
divisional, reissue or reexamination patent applications thereof and patents
issuing therefrom) listed in Schedule 4.11 hereto.
"Material Adverse Effect" shall mean any event, change or effect that is
materially adverse to the condition (financial or otherwise), properties, assets
(including intangible assets), liabilities, business, operations or results of
operations of such entity.
"New Developments" shall have the meaning given it in Section 2.10.
"Person" means an individual, a corporation, a partnership, an association,
a trust or any other entity or organization.
"Promissory Note" shall mean the promissory note for $100,000 issued by
AccuLase and payable to Baxter, dated as of July 7, 1997, and any advances
Baxter makes to AccuLase subsequent to July 7, 1997.
"Transferred Assets" shall mean the two AccuLase lasers identified by
serial numbers 004 and 005.
ARTICLE II
PROPERTY TRANSFER, LICENSE GRANT, CONSIDERATION,
AND OTHER AGREEMENTS
2.1 TRANSFER OF ASSETS. At the Closing, AccuLase agrees (a) to transfer
all of its right, title and interest in and to the Transferred Assets to Baxter
by executing and delivering the Assignment of Transferred Property in the form
attached as Exhibit A. Baxter shall be responsible for preparing and, as
necessary, filing and/or recording such forms and documents as are reasonably
necessary to transfer the Transferred Assets to Baxter, and shall bear all costs
and expenses in connection therewith.
3
<PAGE>
2.2 LICENSE OF CARDIOVASCULAR RIGHTS. At the Closing, AccuLase agrees
to license the Intellectual Property for cardiovascular and vascular
applications to Baxter by executing and delivering the form of License Agreement
attached as Exhibit B.
2.3 TRANSFER OF IDE. At the Closing, AccuLase agrees to assign all of
its rights, title and interest in and to its Investigational Device Exemption
for the excimer laser system (the "IDE") to Baxter by executing and delivering
the Assignment of Investigational Device Exemption in the form attached as
Exhibit C. In connection with the clinical studies set forth in the IDE: (a)
Baxter agrees to use reasonable commercial efforts to expediently and
competently complete the clinical studies; and (b) AccuLase agrees, at
AccuLase's expense, to maintain and service the lasers which are currently used
in the IDE until such time as the two new commercial lasers referred to in
Section 2.6 (c) are delivered to Baxter.
2.4 MANUFACTURING AGREEMENT. At the Closing, the parties agree to
execute and deliver the Manufacturing Agreement in the form attached as Exhibit
D and AccuLase agrees to manufacture the Product (as defined in the
Manufacturing Agreement) upon the terms and conditions contained therein.
2.5 SECURITY AGREEMENT; INTERCREDITOR AGREEMENT. At the Closing, and in
order to secure AccuLase's performance of this Agreement, the License Agreement,
the Manufacturing Agreement, and the obligations of AccuLase arising hereunder
and thereunder, AccuLase agrees to execute and deliver to Baxter the form of
Security Agreement attached as Exhibit E. At the Closing, AccuLase agrees to
execute and deliver to Baxter the form of Intercreditor Agreement attached as
Exhibit G.
2.6 CASH CONSIDERATION PAID BY BAXTER. In consideration for the
transactions contemplated by the provisions of this Article II, Baxter agrees to
pay AccuLase $1,550,000, in cash, at the following times:
(a) $700,000 at Closing, provided, however, any and all advances made by
Baxter to AccuLase and due under the Promissory Note shall be credited against
such amount;
(b) $250,000 three (3) months after Closing; and
(c) $600,000 upon delivery of two (2) units of the new commercial excimer
laser referred to in Section 2.7 below which are manufactured in accordance with
the terms and conditions of the Manufacturing Agreement, provided, however,
$250,000 of such funds (or such lesser amount as AccuLase and Mr. Hartman may
thereafter jointly advise Baxter in a written notice) shall be paid jointly to
AccuLase and Mr. Raymond A. Hartman.
2.7 DEVELOPMENT OF NEW LASER. AccuLase agrees to undertake the
development of a new commercial excimer laser for Baxter; AccuLase represents
such new commercial laser is expected to be available within four months of the
Closing. In consideration of the payments by Baxter referred to in Section 2.6,
AccuLase hereby
4
<PAGE>
grants to Baxter an exclusive license pursuant to the terms of the License
Agreement defined in Section 2.2 covering the use of any and all new technology
so developed, in the making and sale of such new commercial laser. At Baxter's
discretion, Baxter may request AccuLase obtain CE mark designation of the new
commercial laser and, if so requested by Baxter, Baxter agrees to pay AccuLase
$100,000 upon issuance of the CE mark.
2.8 CONFIDENTIALITY. Except as required by law, neither party shall
disclose to third parties or use except as expressly permitted hereunder any
information or items it receives from the other party during the course of this
Agreement or the term of this Agreement. This restriction shall not apply to
information which:
(a) Is already publicly known;
(b) Becomes publicly known without a breach of this Agreement;
(c) Is disclosed to others without restrictions by the party who discloses
the information; or
(d) Is independently developed by employees or consultants of the
receiving party without access to the other parties' confidential information.
2.9 PUBLICITY. Except as required by law, neither party shall issue any
publicity about this Agreement or the parties' performance under this Agreement
without the prior written comment of the other.
2.10 ADDITIONAL OBLIGATIONS OF BAXTER AND ACCULASE. In the event Baxter
determines that new or additional intellectual or other property rights exist or
could exist in the Licensed Technology for cardiovascular and vascular
applications (the "New Developments"), all such rights shall be automatically
encompassed within the license to be granted by AccuLase to Baxter at the
Closing pursuant to the License Agreement. Baxter shall bear all costs and
expenses in connection with preparing, filing, recording and prosecuting all
such intellectual or other property rights for such New Developments and
AccuLase agrees to actively assist Baxter and, as appropriate, cause its
inventors and/or employees to actively assist Baxter by executing or delivering
such documents as are reasonably necessary for Baxter to prepare, file, record
or prosecute all such intellectual or other property rights.
2.11 USE OF CASH RECEIPTS BY ACCULASE. AccuLase agrees that the funds
received by AccuLase pursuant to Section 2.6 (a) hereof shall be used for, and
shall pay in full, all vendors of AccuLase who are current creditors of AccuLase
existing at Closing except for obligations to Affiliates.
2.12 NON-COMPETE. AccuLase agrees that neither it nor any of its
Affiliates shall, for a period equal to the earlier of (a) five (5) years after
Closing or (b) the date on
5
<PAGE>
which this Agreement terminates pursuant to Section 8.1 hereof, engage in any
business worldwide which develops, manufactures, supplies or distributes laser
products for cardiovascular or vascular applications.
2.13 PERCUTANEOUS DELIVERY SYSTEM. At any time, Baxter may undertake
one or more programs to develop the percutaneous delivery of excimer laser
systems for cardiovascular and vascular applications. AccuLase is hereby
granted the option, but not the obligation, to share twenty-five percent (25%),
but not less than twenty-five percent (25%), of the costs of such development
program(s) at such times and in such manner as Baxter may reasonably determine
from time to time. In the event AccuLase chooses to proceed to co-fund such
percutaneous development program(s) with Baxter, AccuLase shall be entitled to a
royalty equal to ten percent (10%) of the End User Price for each product to
which such development program applies, subject to such other terms and
conditions to which the parties may agree in such development agreement.
2.14 FINANCIAL STATEMENTS. AccuLase will deliver to Baxter, not later
than 45 days after the Closing, AccuLase's financial statements (balance sheet
and profit and loss statement, statement of stockholders' equity and statement
of changes in financial position) at December 31, 1996 and for the fiscal year
then ended and its reviewed financial statements (balance sheet and profit and
loss statement) at and for the six-month period ended June 30, 1997.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF BAXTER
Baxter represents and warrants to AccuLase as follows:
3.1 ORGANIZATION, STANDING AND POWER. Baxter is a corporation duly
organized, validly existing and in good standing under the laws of Delaware.
3.2 AUTHORITY. Baxter has all requisite corporate power and authority
to enter into this Agreement and to consummate the transactions contemplated
hereby. The execution and delivery of this Agreement and the consummation of
the transactions contemplated hereby have been duly authorized by all necessary
corporate action on the part of Baxter. This Agreement has been duly executed
and delivered by Baxter and constitutes the valid and binding obligation of
Baxter enforceable against Baxter in accordance with its terms.
3.3 BROKERS AND FINDERS' FEES. Baxter has not incurred, nor will it
incur, directly or indirectly, any liability for brokerage or finders' fees or
agents' commissions or investment bankers' fees or any similar charges in
connection with this Agreement or any transaction contemplated hereby.
6
<PAGE>
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF ACCULASE
AccuLase represents and warrants to Baxter as follows:
4.1 ORGANIZATION, STANDING AND POWER. AccuLase is a corporation duly
organized, validly existing and in good standing under the laws of California.
AccuLase has the corporate power to own its properties and to carry on its
business as now being conducted. AccuLase has delivered a true and correct copy
of its Certificate of Incorporation as amended (the "AccuLase Certificate of
Incorporation"), and bylaws, as amended or other charter documents, as
applicable, of AccuLase to Baxter. AccuLase is not in violation of any of the
provisions of the AccuLase Certificate of Incorporation or its bylaws or
equivalent organizational documents.
4.2 AUTHORITY. AccuLase has all requisite corporate power and authority
to enter into this Agreement and to consummate the transactions contemplated
hereby. The execution and delivery of this Agreement and the consummation of
the transactions contemplated hereby have been duly authorized by all necessary
corporate action on the part of AccuLase. This Agreement has been duly executed
and delivered by AccuLase and constitutes the valid and binding obligation of
AccuLase enforceable against AccuLase in accordance with its terms. No consent,
approval, order, authorization of, or registration, declaration or filing with
any governmental entity or any court is required by or with respect to AccuLase
in connection with the execution and delivery of this Agreement or the
consummation of the transactions contemplated hereby.
4.3 CAPITAL STRUCTURE. The authorized capital stock of AccuLase
consists of 10,000,000 shares of common stock, no par value, of which there were
issued and outstanding immediately prior to the transactions contemplated hereby
7,085,723 shares. Such shares of AccuLase common stock are owned of record as
set forth in Schedule 4.3. There are no other outstanding shares of capital
stock or voting securities and no outstanding commitments to issue any shares of
capital or voting securities.
4.4 FINANCIAL STATEMENTS. Subject to the provisions of Section 2.14
hereof, AccuLase will have delivered to Baxter AccuLase's financial statements
(balance sheet and profit and loss statement, statement of stockholders equity
and statement of changes in financial position) at December 31, 1996, and for
the fiscal year then ended and its reviewed financial statements of (balance
sheet and profit and loss statement) at and for the six-month period ended June
30, 1997 (collectively the "AccuLase Financial Statements"). To the best
knowledge of AccuLase's officers, the AccuLase Financial Statements are
complete and correct in all material respects.
4.5 ABSENCE OF CERTAIN CHANGES. Since December 31, 1996, AccuLase has
conducted its business in the ordinary course consistent with past practice and
there has not occurred:
7
<PAGE>
(a) any acquisition, sale, mortgage, pledge or transfer of the Transferred
Assets;
(b) any material change in accounting methods or practices by AccuLase;
(c) any indebtedness incurred by AccuLase except for indebtedness
evidenced by the Promissory Note;
(d) any loan made or agreed to be made by AccuLase, nor has AccuLase
become liable or agreed to become liable as a guarantor with respect to any
loan; or
(e) any negotiation or agreement by AccuLase to do any of the things
described in the preceding clauses (a) through (d) (other than negotiations with
Baxter and its representatives regarding the transactions contemplated by this
Agreement).
4.6 SUBSIDIARIES. AccuLase does not presently own or control, directly
or indirectly, an interest in any other corporation, association or business
entity.
4.7 ABSENCE OF UNDISCLOSED LIABILITIES. Except as set forth in Schedule
4.7, AccuLase has no material obligations or liabilities of any nature (matured
or unmatured, fixed or contingent) other than (a) those set forth or adequately
provided for in the AccuLase Financial Statements and (b) those incurred in
connection with the execution of this Agreement.
4.8 MATERIAL CONTRACTS. Except as set forth in Schedule 4.8, all
contracts, agreements and instruments to which AccuLase is a party which
comprise any part of the Technology are in full force and effect in all material
respects. With respect to any and all such contracts:
(a) AccuLase has no notice that any party to any such contract intends to
cancel, withdraw, modify, or amend such contract; and
(b) AccuLase is not in material default or breach and no event has occurred
or will occur by reason of the transactions contemplated in this Agreement which
would constitute a default or breach, where such default or breach would entitle
another party to this Agreement to accelerate or terminate AccuLase's rights or
otherwise impose a material penalty or forfeiture thereunder (whether with or
without notice, lapse of time or the happening or occurrence of any other
event).
4.9 LITIGATION. Except as set forth in Schedule 4.9, there is no
private or governmental judgment, decree, order, action, suit, proceeding,
claim, arbitration or investigation pending before any agency, court or
tribunal, foreign or domestic or, to the knowledge of AccuLase, threatened
against AccuLase or any of its properties or any of its officers or directors
(in their capacities as such) that, individually or in the aggregate, could
reasonably be expected to have a Material Adverse Effect on AccuLase.
8
<PAGE>
4.10 RESTRICTIONS ON BUSINESS ACTIVITIES. There is no material
agreement, judgment, injunction, order or decree binding upon AccuLase which has
the effect of prohibiting or materially impairing any current or future ability
of AccuLase to fulfill its obligations under this Agreement or the Manufacturing
Agreement.
4.11 RIGHTS TO TRANSFERRED ASSETS.
(a) AccuLase owns, or is licensed or otherwise possesses legally
enforceable rights to use, all Transferred Assets free and clear of all liens,
encumbrances and rights of third parties.
(b) Schedule 4.11 lists (i) Intellectual Property, including all patents
and patent applications and all registered and unregistered trademarks, trade
names and service marks, registered and unregistered copyrights, and maskworks,
which AccuLase considers to be material to its excimer laser business, including
the jurisdictions in which each such intangible right has been issued or
registered or in which any application for such issuance and registration has
been filed, (ii) all material licenses, sublicenses and other agreements as to
which AccuLase is a party and pursuant to which any person is authorized to use
any of the Transferred Assets, and (iii) all material licenses, sublicenses and
other agreements as to which AccuLase is a party and pursuant to which AccuLase
is authorized to use any third party patents, trademarks or copyrights,
including software which are incorporated in, are, or form a part of any
Transferred Assets.
(c) To the knowledge of AccuLase, there is no material unauthorized use,
disclosure, infringement or misappropriation of any of the Intellectual Property
by any third party, including any employee or former employee of AccuLase.
AccuLase has not entered into any agreement to indemnify any other person
against any charge of infringement of any intellectual property, other than
indemnification provisions contained in purchase orders arising in the ordinary
course of business.
(d) AccuLase is not, nor will it be as a result of the execution and
delivery of this Agreement or the performance of its obligations under this
Agreement, in breach of any license, sublicense or other agreement relating to
the Intellectual Property.
(e) To AccuLase's knowledge, all patents, registered trademarks, service
marks and copyrights held by AccuLase are valid and subsisting. AccuLase (i)
has not been sued in any suit, action or proceeding which involves a claim of
infringement of any patents, trademarks, service marks, copyrights or violation
of any trade secret or other proprietary right of any third party; (ii) has no
knowledge that the manufacturing, marketing, licensing or sale of products using
the Intellectual Property infringes any patent, trademark, service mark,
copyright, trade secret or other proprietary right of any third party, which
such infringement would have a Material Adverse Effect on AccuLase; and (iii)
has not brought any action, suit or proceeding for infringement of the
Intellectual Property or breach of any license or agreement involving the
Intellectual Property against any third party.
9
<PAGE>
(f) AccuLase has secured valid written assignments from all consultants
and employees who contributed to the creation or development of the Intellectual
Property of the rights to such contributions that AccuLase does not already own
by operation of law.
(g) AccuLase has taken all reasonable and appropriate steps to protect and
preserve the confidentiality of all of the Intellectual Property not otherwise
protected by patents, or patent applications or copyright (the" AccuLase
Confidential Information"). To the knowledge of AccuLase, all use, disclosure
or appropriation of AccuLase Confidential Information by or to a third party has
been pursuant to the terms of a written agreement between AccuLase and such
third party. To the knowledge of AccuLase, all use, disclosure or appropriation
of AccuLase Confidential Information not owned by AccuLase has been pursuant to
the terms of a written agreement between AccuLase and the owner of such AccuLase
Confidential Information, or is otherwise lawful.
4.12 INSURANCE. AccuLase has policies of insurance and bonds of the type
and in amounts customarily carried by persons conducting businesses or owning
assets similar to those of AccuLase as identified in Schedule 4.12. There is no
material claim pending under any of such policies or bonds as to which coverage
has been questioned, denied or disputed by the underwriters of such policies or
bonds.
4.13 BROKERS' AND FINDERS' FEES. AccuLase has not incurred, nor will it
incur, directly or indirectly, any liability for brokerage or finders' fees or
agents' commissions or investment bankers' fees or any similar charges in
connection with this Agreement or any transaction contemplated hereby.
4.14 COMPLETE COPIES OF MATERIALS. AccuLase has delivered or made
available to Baxter true and complete copies of each document evidencing the
Intellectual Property and the Transferred Assets.
4.15 BOARD APPROVAL. The Board of Directors of AccuLase has approved
this Agreement.
ARTICLE V
CONDITIONS PRECEDENT TO BAXTER'S OBLIGATIONS
The performance of Baxter under this Agreement is subject, at the election
of Baxter, to the fulfillment of each of the following conditions by AccuLase on
or before the Closing:
5.1 CONTINUATION AND TRUTH OF REPRESENTATIONS AND WARRANTIES. The
representations and warranties of AccuLase contained in this Agreement or in any
certificate, document or other Agreement delivered to Baxter pursuant hereto
shall be true
10
<PAGE>
and correct in all material respects on the date hereof and shall be deemed to
have been made again at the Closing and shall then also be true and correct in
all material respects.
5.2 OPINION OF COUNSEL. Baxter shall have been furnished with an
opinion of Donald G. Davis, Esq., counsel for AccuLase, in the form attached
hereto as Exhibit F-1 and the letter from Paul Couchot, Esq. in the form
attached hereto as Exhibit F-2.
5.3 BANKRUPTCY COURT APPROVAL. The United States Bankruptcy Court in
the matter of IN RE HELIONETICS, INC. shall have approved the subordination by
Helionetics of its security interest in AccuLase's assets to a new security
interest to be granted by AccuLase to Baxter as contemplated by this Agreement.
5.4 INTERCREDITOR AGREEMENT. Baxter shall have received the
Intercreditor Agreement, duly executed and delivered by Helionetics, Inc.
ARTICLE VI
CONDITIONS PRECEDENT TO ACCULASE'S OBLIGATIONS
The performance of the obligations of AccuLase under this Agreement is
subject, at the election of AccuLase, to the fulfillment of each of the
following conditions on or before the Closing:
6.1 CONTINUATION AND TRUTH OF REPRESENTATIONS AND WARRANTIES. The
representations and warranties of Baxter contained in this Agreement or in any
certificate, document or other Agreement delivered to AccuLase pursuant hereto
shall be true and correct in all material respects on the date hereof and shall
be deemed to have been made again at the Closing and shall then also be true and
correct in all material respects.
SECTION VII
CLOSING
7.1 TIME AND PLACE OF CLOSING. The Closing of the transactions
contemplated by this Agreement shall be held at Baxter Healthcare Corporation,
17221 Red Hill Avenue, Irvine, California 92614 at 10:00 a.m. on the business
day immediately following the date on which the letter from Paul Couchot, Esq.
(as referred to in Section 5.2 hereof) may be delivered to Baxter, or at such
other place or date as may be fixed by mutual agreement of Baxter and AccuLase.
7.2 DOCUMENTS TO BE DELIVERED BY BAXTER AT THE CLOSING. At the Closing,
Baxter shall deliver to AccuLase the following:
(a) The License Agreement referred to in Section 2.2;
11
<PAGE>
(b) The Manufacturing Agreement referred to in Section 2.4; and
(c) That portion of the cash consideration due at Closing referred to in
Section 2.6.
7.3 DOCUMENTS TO BE DELIVERED BY ACCULASE AT THE CLOSING. At the
Closing, AccuLase shall deliver to Baxter the following:
(a) The Assignment of Transferred Property referred to in Section 2.1;
(b) The License Agreement referred to in Section 2.2;
(c) The Assignment of Investigational Device Exemption referred to in
Section 2.3;
(d) The Manufacturing Agreement referred to in Section 2.4;
(e) The Security Agreement referred to in Section 2.5; and
(f) The Intercreditor Agreement referred to in Section 2.5.
7.4 FURTHER ASSURANCES. Each party hereto, at the reasonable request of
the other party hereto, shall execute and deliver such other instruments and to
perform such other acts and things as may be reasonably necessary or desirable
for effecting completely the consummation of this Agreement and the transactions
contemplated hereby.
ARTICLE VIII
TERMINATION, INDEMNITY AND OFFSETS
8.1 TERMINATION BY BAXTER. Baxter shall have the right at any time, in
its sole discretion and without payment or penalty of any kind, to terminate
this Agreement, but only provided it concurrently terminates both the License
Agreement and the Manufacturing Agreement, and any obligations hereunder and
thereunder, provided five (5) days prior written notice is given to AccuLase.
8.2 INDEMNITY AND OFFSET.
(a) Subject to the provisions of Section 8.2 (b), AccuLase agrees to
defend and hold Baxter harmless from and against any cost, expense, claim, cause
of action (whether actual or threatened) or any other liability resulting from
the Intellectual Property or Licensed Products (as such term is defined in the
License Agreement) infringing any third party patent or other intellectual
property claim or right relating to lasers (a "Claim"), provided that Baxter
promptly notifies AccuLase of any such Claim of which it is aware,
12
<PAGE>
reasonably assists AccuLase (at AccuLase's expense) in defending such Claim, and
provides AccuLase with the opportunity to assume sole control over any
litigation and/or settlement relating to such Claim. In any such Claim, Baxter
may retain its own counsel (at Baxter's expense ) to assist in the defense of
any such Claim and to counsel Baxter with respect to its strategy in such Claim.
(b) For the purposes of Sections 8.2 (a) and 8.2 (c) only, and consistent
with the parties' desires that Claims which relate specifically to
transmyocardial laser revascularization shall be borne seventy-five percent
(75%) by Baxter and twenty-five percent (25%) by AccuLase, the parties agree
that (i) a Claim which relates specifically to transmyocardial laser
revascularization shall be borne seventy-five percent (75%) by Baxter and
twenty-five percent (25%) by AccuLase, and (ii) Baxter shall have the
opportunity to assume sole control over any litigation and/or settlement
relating to such Claim notwithstanding any contrary provision in Section 8.2 (a)
hereof.
(c) Baxter may withhold from, reserve against and/or offset against any
and all amounts due or to become due (or estimated to be due or to become due)
to AccuLase whether pursuant to the terms of this Agreement or otherwise, any
and all amounts as may be reasonably necessary or expected to be incurred by
Baxter in connection with the full and final resolution of any Claim.
ARTICLE IX
GENERAL PROVISIONS
9.1 NOTICES. All notices and other communications hereunder shall be in
writing and shall be deemed given if delivered personally or by commercial
delivery service, or mailed by registered or certified mail (return receipt
requested) or sent via facsimile (with confirmation of receipt) to the parties
at the following address (or at such other address for a party as shall be
specified by like notice):
(a) if to Baxter, to:
Baxter Healthcare Corporation
17221 Red Hill Avenue, m/s 98
Irvine, California 92614
Attention: Vice President, Business Development
Facsimile No.: (714) 474-6445
Telephone No.: (714) 474-6424
13
<PAGE>
(b) if to AccuLase, to:
6865 Flanders Drive, Suite G
San Diego, CA 92121
Attention: Mr. Raymond A. Hartman
President and Chief Executive Officer
Facsimile No.: (619) 455-0946
Telephone No.: (619) 455-7030
with a copy to:
Donald G. Davis, Esq.
833 Via Del Monte, Suite 100
Palos Verdes Estates, CA 90274
Facsimile No.: (310) 373-5410
Telephone No.: (310) 378-8968
9.2 INTERPRETATION. When a reference is made in this Agreement to
Exhibits, such reference shall be to an Exhibit to this Agreement unless
otherwise indicated. The words "include, " "includes" and "including" when used
herein shall be deemed in each case to be followed by the words, "without
limitation." The phrase "made available" in this Agreement shall mean that the
information referred to has been made available if requested by the party to
whom such information is to be made available. The phrases "the date of this
Agreement", "the date hereof", and terms of similar import, unless the context
otherwise requires, shall be deemed to refer to date of Closing. The headings
contained in this Agreement are for reference purposes only and shall not affect
in any way the meaning or interpretation of this Agreement.
9.3 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same Agreement and
shall become effective when one or more counterparts have been signed by each of
the parties and delivered to the other parties, it being understood that all
parties need not sign the same counterpart.
9.4 ENTIRE AGREEMENT; NONASSIGNABILITY; PARTIES IN INTEREST. This
Agreement and the documents and instruments and other Agreements specifically
referred to herein or delivered pursuant hereto, including the Exhibits and the
Schedules:
(a) Constitute the entire agreement among the parties with respect to
the subject matter hereof and supersede all prior agreements and understandings,
both written and oral, among the parties with respect to the subject matter
hereof, except for the Confidentiality Agreement, which shall continue in full
force and effect, and shall survive any termination of this Agreement or the
Closing, in accordance with its terms;
14
<PAGE>
(b) Are not intended to confer upon any other person any rights or
remedies hereunder, except as set forth in Section 2.6 (c); and
(c) Shall not be assigned by operation of law or otherwise except as
otherwise specifically provided; however, Baxter may assign its rights or
delegate its duties hereunder to its affiliates, or in connection with a
transfer of substantially all of its transmyocardial laser business.
9.5 SEVERABILITY. In the event that any provision of this Agreement, or
the application thereof, becomes or is declared by a court of competent
jurisdiction to be illegal, void or unenforceable, the remainder of this
Agreement will continue in full force and effect and the application of such
provision to other persons or circumstances will be interpreted so as reasonably
to effect the intent of the parties hereto. The parties further agree to
replace such void or unenforceable provision of this Agreement with a valid and
enforceable provision that will achieve, to the extent possible, the economic,
business and other purposes of such void or unenforceable provision.
9.6 AMENDMENT. This Agreement may not be altered or amended except by
writing signed by the parties hereto.
9.7 REMEDIES CUMULATIVE. Except as otherwise provided herein, any and
all remedies herein expressly conferred upon a party will be deemed cumulative
with and not exclusive of any other remedy conferred hereby, or by law or equity
upon such party, and the exercise by a part of any one remedy will not preclude
the exercise of any other remedy.
9.8 GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of California (without regard to its
principles of conflicts of law).
9.9 RULES OF CONSTRUCTION. The parties hereto agree that they have been
represented by counsel during the negotiation, preparation and execution of this
Agreement and, therefore, waive the application of any law, regulation, holding
or rule of construction providing that ambiguities in an agreement or other
document will be construed against the party drafting such agreement or
document.
9.10 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The representations and
warranties contained in this Agreement shall survive for three (3) years
following the Closing.
15
<PAGE>
9.11 EXPENSES. All costs and expenses incurred in connection with this
Agreement and the transactions contemplated by this Agreement will be paid by
the party incurring such expenses.
9.12 ATTORNEYS' FEES. In the event of any dispute arising under the
terms of this Agreement (including the breach thereof), the prevailing party in
such action shall be entitled to recover its attorneys' fees and costs in
addition to such other relief as may be awarded by a court or by an arbitrator.
16
<PAGE>
IN WITNESS WHEREOF, Baxter and AccuLase have caused this Agreement to be
executed and delivered by their respective officers thereunto duly authorized
all as of the date first written above.
Baxter Healthcare Corporation,
a corporation
By: /s/ John H. Kehl, Jr.
---------------------------------------------
John H. Kehl, Jr.
Vice President, Business Development
AccuLase, Inc., a corporation
By: /s/ Raymond A. Hartman
----------------------------------------------
Raymond A. Hartman
President and Chief Executive Officer
ATTACHMENTS:
Schedule 4.3 Capital Structure of AccuLase
Schedule 4.7 Certain Liabilities
Schedule 4.8 Material Contracts
Schedule 4.9 Litigation
Schedule 4.11 Intellectual Property
Schedule 4.12 Insurance
EXHIBITS:
A - Assignment of Transferred Property
B - License Agreement
C - Assignment of Investigational Device Exemption
D - Manufacturing Agreement
E - Security Agreement
F-1 - AccuLase Legal Opinion
F-2 - Helionetics' Counsel's Letter
G - Intercreditor Agreement
17
<PAGE>
LICENSE AGREEMENT
This License Agreement (this "Agreement") is made effective as of
August 19, 1997 (the "Effective Date") by and between Baxter Healthcare
Corporation, a Delaware corporation ("Baxter"), and AccuLase, Inc., a
California corporation ("AccuLase").
RECITALS
WHEREAS, AccuLase is the owner of technical know-how, patents and patent
applications relating to the use of lasers to treat cardiovascular or vascular
disease, as defined below; and
WHEREAS, Baxter and AccuLase are entering into the Master Technology
Agreement of even date (the "Master Technology Agreement") whereby, among other
things, AccuLase is agreeing to license certain technology and intellectual
property relating to excimer lasers to Baxter; and
WHEREAS, Baxter and AccuLase are entering into the Manufacturing Agreement
of even date (the "Manufacturing Agreement") whereby, among other things,
AccuLase is agreeing to manufacture excimer lasers utilizing Technical Know-How
(as hereinafter defined) upon the terms and conditions contained therein.
WHEREAS, Baxter desires to acquire and AccuLase desires to grant to Baxter
an exclusive license in and to the Technical Know-How, patents and patent
applications for use in the treatment of cardiovascular or vascular disease.
WHEREAS, Baxter and AccuLase acknowledge and agree that the intended use
and future value of the licensed Technical Know-How (as hereinafter defined),
the Licensed Patents (as hereinafter defined) and the Licensed Products (as
hereinafter defined) are uncertain as a result of the recent and continuing
development of the field of transmyocardial revascularization and the parties
further acknowledge that based on the foregoing, the consideration paid for
AccuLase's performance of its obligations as set forth herein is adequate,
sufficient and fair consideration.
NOW, THEREFORE, in consideration of the covenants and representations set
forth herein, the above recitals and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties agree
as follows:
<PAGE>
EXHIBIT B
ARTICLE I
DEFINITIONS
Defined terms in this Agreement have and bear the meanings established for
such terms in the succeeding paragraphs of this Article I.
1.1 "ACCULASE INVENTIONS" shall mean those Inventions or Discoveries
determined to have been conceived and/or reduced to practice pursuant to
standard patent law and regulation practice solely by AccuLase employees,
consultants, agents, representatives or others obligated to assign their rights
to such Inventions or Discoveries to AccuLase. For the purposes of this section
only unpatentable Inventions and Discoveries shall be treated as if patentable
under the relevant patent law and regulation practice.
1.2 "AFFILIATE" in respect of any one of Baxter and AccuLase as used
herein shall mean any person or entity controlling, controlled by or under
common control with Baxter or with AccuLase as the case may be.
1.3 "BAXTER INVENTIONS" shall mean those Inventions or Discoveries
determined to have been conceived and/or reduced to practice pursuant to
standard patent law and regulation practice solely by Baxter employees,
consultants, agents, representatives or others obligated to assign their rights
to such Inventions or Discoveries to Baxter. For the purposes of this section
only unpatentable Inventions and Discoveries shall be treated as if patentable
under the relevant patent law and regulation practice.
1.4 "DISPOSABLES" shall mean one or more products intended for single
use which comprise part of the Product.
1.5 "EFFECTIVE DATE" shall mean the date referred to in the
introductory clause of this Agreement.
1.6 "END USER" shall mean any person (including business entities) that
orders a Product who is a healthcare provider or employs or is otherwise
affiliated with healthcare providers.
1.7 "END USER PRICE" shall mean the actual sales price (exclusive of
taxes, insurance and freight) received by Baxter from an End User of the
Product.
1.8 "FIELD OF TECHNOLOGY" shall mean the use of lasers to treat
cardiovascular or vascular disease.
1.9 "IMPROVEMENT(s)" shall mean any modification or further development
of any of the Licensed Products, or any modification of or further development
of a product or
2
<PAGE>
process described in Patents, or any new Invention or Discovery, technical data,
designs, devices, plans, specifications, methods, processes, systems, clinical
data and any other information or documentation, whether patentable or not,
falling within the Field of Technology.
1.10 "INVENTIONS" OR "DISCOVERIES" shall mean, without restriction or
limitation, any and all devices, processes (including without limitation
processes of using devices or of manufacturing such devices and standard
operating procedures (SOP's) and other laboratory procedures), compositions of
matter, computer software, chemical formulations or compositions or products
whether patentable or unpatentable, and any and all written materials or other
works that may be subject to copyright, conceived or reduced to practice prior
to or during the term of this Agreement and for 90 days thereafter, and which
relate to the Field of Technology.
1.11 "JOINT INVENTIONS" shall mean those Inventions or Discoveries
determined to have been conceived and/or reduced to practice pursuant to
standard patent law and regulation practice by AccuLase and Baxter employees,
consultants, agents, representatives or others
obligated to assign their rights to such Inventions or Discoveries to AccuLase
or Baxter. For the purposes of this section only unpatentable Inventions and
Discoveries shall be treated as if patentable under the relevant patent law and
regulation practice.
1.12 "LICENSED PATENTS" shall mean any United States or foreign patents
and patent applications (including any continuation, continuation-in-part,
divisional, reissue or reexamination patent applications thereof and patents
issuing therefrom) relating to AccuLase Inventions and/or Joint Inventions,
or other Inventions or Improvements relating to the Field of Technology in
which AccuLase has a present interest, or hereafter acquires an interest,
including but not limited to the patents and patent applications listed in
Exhibit A.
1.13 "LICENSED PRODUCTS" shall mean Patented Licensed Products and
Unpatented Licensed Products and shall include single use, disposable products
as well as the related laser hardware.
1.14 "PATENTED LICENSED PRODUCTS" shall mean any product made, used, or
sold by Baxter which comes within one or more claims of a Valid and Enforceable
Patent.
1.15 "TECHNICAL KNOW-HOW" shall mean Inventions or Discoveries, technical
data, designs, devices, plans, specifications, methods, processes, systems,
clinical data and any other information or documentation, whether patentable or
not, falling within the Field of Technology which is in the possession of or
acquired hereinafter by AccuLase including but not limited to any new Inventions
or Discoveries derived from AccuLase's development of the new excimer laser
pursuant to Section 2.7 of the Master Technology Agreement.
3
<PAGE>
Technical Know-How shall not include any information, and/or documentation which
was previously known by Baxter or which is publicly known.
1.16 "UNPATENTED LICENSED PRODUCTS" shall mean any product made, used, or
sold by Baxter which utilizes Technical-Know-How, but which does not come within
one or more claims of a Valid and Enforceable Patent.
1.17 "VALID AND ENFORCEABLE PATENT" shall mean a Licensed Patent that has
issued in the United States or has been published in another country so as to
create an enforceable right and that has not (i) expired or been abandoned, or
(ii) been finally adjudicated or determined to be invalid or unenforceable by a
court of competent jurisdiction.
ARTICLE II
GRANT OF LICENSE
2.1 LICENSE GRANT. In consideration for the payments made by Baxter
pursuant to Section 2.2 below, AccuLase hereby grants to Baxter an exclusive,
worldwide right and license, including the right to grant sublicenses, under the
Technical Know-How, Licensed Patents and Improvements to practice methods and to
manufacture, have manufactured, import, use, offer to sell, sell and otherwise
dispose of Licensed Products within the Field of Technology.
2.2 ROYALTY. During the term of this Agreement, Baxter shall pay
AccuLase a royalty equal to ten percent (10%) of (a) the End User Price for each
Disposable or (b) if the Disposable is sold on a "per procedure" basis, the
imputed price of the Disposable based on the worldwide average sales price of
such Disposable not sold on a "per procedure" basis, calculated quarterly for
such Disposables, adjusted to amortize and recapture over a 36-month period
Baxter's cost of the Product (as such term is defined in the Manufacturing
Agreement). Disposables may be manufactured by Baxter or be manufactured by
others for Baxter. The parties further agree that in the event Baxter grants
a sublicense to a third party pursuant to its rights under Section 2.1 above,
the royalties payable to AccuLase in connection with such sublicense shall be
calculated in accordance with the foregoing terms notwithstanding whether the
Baxter and any such sublicensee agree to different royalty terms.
4
<PAGE>
ARTICLE III
DISCLOSURE
3.1 INITIAL TRANSFER OF INFORMATION. Within two (2) months after the
Effective Date of this Agreement, AccuLase shall furnish to Baxter all
Technical-Know-How and Inventions in the possession of AccuLase on the Effective
Date of this Agreement which are necessary to practice the License under Article
II of this Agreement. The manner in which said Know-How and Inventions shall be
furnished shall be agreed to between the parties.
3.2 CONTINUOUS DISCLOSURE OBLIGATIONS OF ACCULASE. In addition to other
obligations of AccuLase set forth in this Agreement, AccuLase agrees to the
following continuous obligations:
(a) Throughout the term of this Agreement, AccuLase shall promptly
notify and promptly furnish to Baxter all Technical Know-How and AccuLase
Inventions developed or acquired by AccuLase, subsequent to the date of this
Agreement, which are necessary to practice the License granted by AccuLase under
this Agreement; and
(b) Throughout the term of this Agreement, AccuLase shall promptly
disclose to Baxter the existence of all Improvements discovered by, granted to,
or developed by AccuLase together with a precise description and demonstration
of the nature and manner of applying and utilizing the improvements.
3.3 CONTINUOUS DISCLOSURE OBLIGATIONS OF BAXTER. In addition to other
obligations of Baxter set forth in this Agreement, Baxter agrees to the
following continuous obligations:
(a) Baxter shall promptly provide written notice to AccuLase of all
sublicensing agreements executed into by and between Baxter and any third-party.
Baxter shall state in such notice the name of the sublicensee, the scope of the
sublicense, the payment terms of the sublicense and the term of the sublicense.
(b) Baxter shall provide AccuLase (upon Baxter receiving the prior
written request of AccuLase) with copies of all necessary documentation and
records in its possession in order for AccuLase to verify that the amount of
royalties paid to AccuLase hereunder comply with the terms set forth in
Section 2.2 above. The parties hereto agree that (i) all costs and expenses
incurred by both Baxter and AccuLase in connection with such request and
verification shall be borne, in full, by AccuLase and (ii) the right granted
to AccuLase under this Section 3.3(b) may be exercised by AccuLase only one
time during each six (6) month period that this Agreement is in effect.
5
<PAGE>
ARTICLE IV
CONFIDENTIALITY
4.1 CONFIDENTIALITY. Baxter and AccuLase realize that some information
received by one party from the other pursuant to this Agreement will be
confidential. It is therefore agreed that any information received by one party
from the other which is in writing, or reduced to writing or other tangible
medium within ninety (90) days of the date of disclosure, and clearly designated
as "Confidential," shall not be disclosed by the receiving party to any third
party and shall not be used by the receiving party for purposes other than those
contemplated by this Agreement, for a period of five (5) years from the date of
disclosure.
However, nothing in this Agreement shall prevent the receiving party from
disclosing any such information:
(a) which is or becomes publicly known through no fault of the receiving
party;
(b) which the receiving party rightfully had in its possession prior to the
disclosure to the receiving party, as evidenced by written documentation;
(c) which the receiving party lawfully obtained without restriction from a
third party with no secrecy or confidentiality obligation to the disclosing
party;
(d) which is independently developed by the receiving party, as evidenced
by written documentation; or
(e) which is approved in writing by the disclosing party for disclosure by
the receiving party.
4.2 NON-DISCLOSURE. Baxter and AccuLase agree not to disclose to
third parties the terms of this Agreement except as required by law.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
5.1 MUTUAL REPRESENTATIONS AND WARRANTIES. Baxter and AccuLase each
represent and warrant to the other that they have full power and authority to
enter into this Agreement and carry out the transactions contemplated hereby and
that all necessary corporate action has been duly taken in this regard.
6
<PAGE>
5.2 ACCULASE REPRESENTATIONS. AccuLase represents and warrants that it
is the sole and exclusive owner of the entire right, title, and interest in and
to AccuLase's Technical Know-How and AccuLase's Inventions and that apart from
Baxter's interest it is the sole and exclusive owner of the entire right, title,
and interest in and to Joint Inventions, and that it has the right to grant the
rights and license hereby granted to Baxter.
ARTICLE VI
TERM AND TERMINATION
6.1 TERM OF THE AGREEMENT. Unless sooner terminated pursuant to Section
8.1 of the Master Technology Agreement, this Agreement shall remain in full
force and effect until expiration of the last to expire Licensed Patent.
6.2 MILESTONES OF PERFORMANCE. Upon sixty (60) days prior written
notice to Baxter by AccuLase, and subject to Baxter's right to cure any
obligation of performance which AccuLase has provided Baxter with written demand
to perform such obligation, AccuLase may terminate this Agreement if Baxter has
failed to meet any obligation in this Section 6.2:
(a) Baxter shall either continue the protocol set forth in the IDE being
transferred to Baxter pursuant to the Master Technology Agreement or, in the
event Baxter elects to suspend
said protocol, (i) Baxter shall promptly give AccuLase written notice of such
suspension of work and (ii) Baxter shall use commercially reasonable efforts to
initiate a new protocol and apply for a new investigational device exemption
within ninety (90) days thereafter.
(b) At Baxter's sole discretion and based upon clinical outcomes, Baxter
may pursue new protocols and apply for any one or more investigational device
exemptions.
(c) Baxter shall commence reasonable marketing efforts outside the United
States of the Licensed Product within a reasonable time, based upon clinical
outcomes.
(d) Baxter agrees to purchase the required quantity of Products (as
defined in the Manufacturing Agreement) pursuant to Section 2 (b) of the
Manufacturing Agreement upon terms and conditions contained therein.
(e) Baxter agrees to purchase the required quantity of Products (as
defined in the Manufacturing Agreement) pursuant to Section 2 (c) of the
Manufacturing Agreement upon the terms and conditions contained therein.
7
<PAGE>
ARTICLE VII
PATENTING AND MAINTENANCE
7.1 PATENT PROSECUTION BY ACCULASE. Baxter agrees to assume the expense
of filing and prosecuting patent applications for Licensed Patents on AccuLase
Inventions and Joint Inventions of its choice in the countries of its choice,
and the expense of maintaining the Licensed Patents on AccuLase Inventions and
Joint Inventions of its choice in the countries of its choice. AccuLase shall
have the right to review and comment on all such patent applications and
Licensed Patents, and any documents relating to the prosecution thereof, and
agrees to provide full assistance in their preparation and prosecution. If
Baxter chooses not to file, prosecute, or maintain any of such patent
applications or Licensed Patents, AccuLase shall have the right to do so at its
own expense.
7.2. COOPERATION IN PATENT PROSECUTION. Each party agrees to make
available to the other party, data, records, samples or the like in its
possession or under its control which are required for the preparation,
prosecution, maintenance or defense of any Licensed Patent, and that it will
sign oaths, affidavits or other documents as may be required for the
preparation, prosecution, maintenance or defense of such Licensed Patents.
ARTICLE VIII
INDEMNIFICATION
8.1 INFRINGEMENT INDEMNIFICATION. AccuLase reconfirms and agrees to the
indemnification and other obligations set forth in Section 8.2 of the Master
Technology Agreement.
ARTICLE IX
MISCELLANEOUS
9.1 FORCE MAJEURE. If either party fails to fulfill its obligations
hereunder, including, but not limited to, royalty obligations, when such failure
is due to an act of God, or other action such as fire, flood, civil commotion,
riot, war (declared and undeclared), revolution, action by government including
delays in obtaining government approvals, embargoes, then said failure shall be
excused for the duration of said event.
9.2 GOVERNING LAW AND ATTORNEYS' FEES. This Agreement shall be
interpreted in accordance with the laws of the State of California. In the
event of any dispute arising
8
<PAGE>
under the terms of this Agreement (including the breach thereof), the prevailing
party in such action shall be entitled to recover its attorneys' fees and costs
in addition to such other relief as may be awarded by a court or by an
arbitrator.
9.3 NOTICES. All notices and other communications hereunder shall be in
writing and shall be deemed given if delivered personally or by commercial
delivery service or mailed by registered or certified mail (return receipt
requested) or sent via facsimile (with confirmation of receipt) to the parties
at the following address (or at such other address for a party as shall be
specified by like notice):
(a) If to Baxter to:
Baxter Healthcare Corporation
17221 Red Hill Avenue, m/s 98
Irvine, California 92614
Attention: Vice President, Business Development
Facsimile No.: (714) 474-6445
Telephone No.: (714) 474-6424
(b) If to AccuLase to:
6865 Flanders Drive, Suite G
San Diego, CA 92121
Attention: Mr. Raymond A. Hartman
President and Chief Executive Officer
Facsimile No.: (619) 455-0946
Telephone No.: (619) 455-7030
with a copy to:
Donald G. Davis, Esq.
833 Via Del Monte, Suite 100
Palos Verdes Estates, CA 90274
Facsimile No.: (310) 373-5410
Telephone No.: (310) 378-8968
9.4 COMPLETE AGREEMENT. This Agreement including the other documents
referred to herein which form a part hereof represents the entire agreement
between the parties hereto with respect to the subject matter hereof. There are
no understandings, representations or warranties of any kind except as expressly
set forth herein.
9
<PAGE>
9.5 SEVERABILITY. If any of the provisions of this Agreement are held
void or unenforceable, the remaining provisions shall nevertheless be effective,
the intent being to effectuate this Agreement to the fullest extent possible.
9.6 MODIFICATION. Any modification of this Agreement shall be in
writing and shall be signed by both AccuLase and Baxter. Any attempt to modify
this Agreement orally or in writing not executed by all parties hereto shall be
void.
9.7 CONFIDENTIALITY. The parties agree that the terms of this Agreement
are confidential and each party shall use the same degree of care to prevent
disclosure of the terms of this Agreement to third parties as it uses to protect
its own confidential information of similar nature. Any advertising or
publicity concerning this Agreement, including press releases, which mentions
the other party by name shall be agreed upon by both parties in writing prior to
any release.
9.8 COUNTERPARTS. This Agreement may be executed in one or more
counterparts all of which shall be considered one and the same Agreement and
shall become effective when one or more counterparts have been signed by each of
the parties and delivered to the other parties. It is understood that all
parties need not sign the same counterpart.
9.9 SECURITY INTEREST. AccuLase's performance of this Agreement and the
obligations of AccuLase arising hereunder shall be secured by that certain
Security Agreement, dated as of the date hereof, as described in Section 2.5 of
the Master Technology Agreement, upon the terms and conditions herein and
therein.
** The remainder of this page has been intentionally left blank.
10
<PAGE>
IN WITNESS THEREOF, the parties have caused this Agreement to be executed
by their duly authorized representatives as of the day and year first above
written.
Baxter Healthcare Corporation,
a corporation
By: /s/ John H. Kehl, Jr.
-----------------------------------------
Name: /s/ John H. Kehl, Jr.
----------------------------
Its: /s/ Vice President, Business
Development Cardiovascular Group
--------------------------------------
AccuLase, Inc., a corporation
By: /s/ Raymond A. Hartman
-----------------------------------------
Name: /s/ Raymond A. Hartman
----------------------------
Its: /s/ President & CEO
-----------------------------
ATTACHMENTS:
Exhibit A - Licensed Patents
11
<PAGE>
EXHIBIT D
MANUFACTURING AGREEMENT
This Manufacturing Agreement ("this Agreement") is made and entered into as
of August 19, 1997 by and between Baxter Healthcare Corporation, Inc., a
corporation organized under the laws of the State of Delaware ("Baxter") and
AccuLase, Inc., a corporation organized under the laws of the State of
California ("AccuLase").
RECITALS
A. AccuLase and Baxter have entered into that certain Master Technology
Agreement, dated as of July 28, 1997 (the "Master Technology Agreement"),
pursuant to which, among other things, AccuLase has agreed to manufacture the
Product (as defined herein).
B. AccuLase and Baxter are entering into the License Agreement, dated as
of the date hereof (the "License Agreement"), simultaneously with the execution
and delivery of this Agreement, pursuant to which, among other things, AccuLase
agrees to license certain technical know-how, patents and products related to
the Product (as hereinafter defined).
C. AccuLase and Baxter wish to describe the terms and conditions by which
AccuLase manufactures the excimer laser for Baxter, Baxter retains rights to
manufacture the laser in the event AccuLase is unwilling or unable to
manufacture lasers and Baxter pays certain royalties to AccuLase on certain
products manufactured by Baxter.
D. Baxter and AccuLase acknowledge and agree that the intended use and
future value of the Product are uncertain as a result of the recent and
continuing development of the field of transmyocardial revascularization and the
parties further acknowledge that based on the foregoing, the consideration paid
for AccuLase's performance of its obligations set forth herein is adequate,
sufficient and fair consideration.
AGREEMENT
NOW, THEREFORE, in consideration of the covenants and representations
contained herein, the above recitals and other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties agree
as follows:
1. DEFINED TERMS. For the purposes of this Agreement, the following
terms shall have the definitions ascribed to them:
<PAGE>
"Engineering Change" shall have the definition given it in Section 4 (c).
"Product" shall mean the excimer laser system having the specifications
attached as Exhibit A, solely for use for cardiovascular and vascular disease.
"Technology" shall mean the Specifications and the other proprietary
information referred to herein.
"Specifications" shall mean the drawings, schematics and detailed
specifications set forth in the Exhibit A, solely for the use of cardiovascular
and vascular disease.
2. MANUFACTURING RIGHTS, ORDERS, PRICES AND PAYMENTS.
(a) In consideration for the payments made by Baxter pursuant to Section
2.6 of the Master Technology Agreement, AccuLase agrees to manufacture the
Product for the exclusive use of Baxter in accordance with all of the terms and
conditions set forth within this Agreement, at the following prices:
(i) $ [*] per laser for the first eight (8) lasers,
(ii) After the first eight (8) lasers have been purchased
by Baxter and subject to Section 2(a)(iii) below, the
following prices shall apply:
<TABLE>
<CAPTION>
Price
[*] Per Unit
------- ------------
<S> <C>
[*] $75,000
[*] $[*]
[*] $[*]
[*] $45,000
</TABLE>
(iii) Prices for Product shall be adjusted annually after three (3)
years, based upon changes in costs of materials (but not
overhead or profit margin).
(iv) Unless otherwise specified or required by law, all prices will
be quoted and billed exclusive of federal, state or local
excise, sales or other similar taxes. Such taxes, when
applicable, will appear as additional items on invoices.
(v) AccuLase shall be ready and able to timely supply all
quantities of the Product ordered by Baxter.
2
<PAGE>
(vi) Terms of payment are net thirty (30) days from receipt of the
Product at Baxter's designated destination.
(b) Baxter agrees to purchase a minimum of eight units of the Product from
AccuLase, pursuant to the terms and conditions stated herein, within 12 months
of the date of receipt of the two units of the Product referred to in Section
2.6 (c) of the Master Technology Agreement.
(c) Baxter agrees to purchase a minimum of twenty units of the Product
from AccuLase, pursuant to the terms and conditions state herein, in the second
12 month period following the date of receipt of the two units referred to in
Section 2.6 (c) of the Master Technology Agreement.
(d) In addition to and subsequent to the purchases set forth in
subparagraphs (b) and (c) of this Section 2, Baxter agrees to purchase units of
the Product as it deems necessary for Baxter's operations from AccuLase
throughout the term of this Agreement, and AccuLase agrees to manufacture the
Product to fill such purchase orders as defined in this subparagraph (d).
(e) Baxter shall issue purchase orders for the Product not less than
ninety (90) days prior to anticipated delivery dates. Baxter agrees to use
reasonable commercial efforts to give AccuLase ninety (90) days' notice
should schedule or quantity revisions become necessary. AccuLase shall
acknowledge promptly each subsequent Baxter purchase order in writing and
confirm delivery dates to destinations specified by Baxter. All sales of
Product shall be subject to the terms and conditions of this Agreement and,
to the extent they specify quantities, destinations and delivery dates, to
Baxter's purchase orders. If there is any conflict or difference in
interpretation between any Baxter purchase order and this Agreement, the
terms and conditions of this Agreement shall supersede those of such purchase
order. AccuLase shall not be liable for failure or delay in filling Baxter
orders because of any cause beyond the control of and occurring without the
fault of AccuLase; provided, however, that AccuLase (i) shall in all
circumstances be considered to control its relationships with its suppliers
and its internal allocation of manufacturing capacity, and (ii) shall notify
Baxter promptly of anticipated delays and shall use its reasonable commercial
efforts to fill such orders as soon as possible. Without limiting its other
available remedies, Baxter may cancel any order, in whole or in part, which
is delayed more than 60 days.
(f) In the event that Baxter reasonably determines that AccuLase is
unwilling or unable to produce the Product in compliance with all the terms of
this Agreement or one or more purchase orders subsequently issued to AccuLase,
(i) Baxter may terminate AccuLase's manufacturing rights under this Agreement
without payment or penalty to AccuLase, and (ii) Baxter may either manufacture
the Product directly or have the Product manufactured for Baxter without payment
or penalty to AccuLase.
3
<PAGE>
(g) AccuLase shall ship the Product F.O.B. AccuLase's San Diego,
California, plant via mutually agreed upon carriers. Normal cost of shipping
shall be prepaid by AccuLase and added to AccuLase's invoice to Baxter.
AccuLase shall ship Product by air freight if necessary to meet confirmed
delivery dates or to replace Product recalled or otherwise found by Baxter to
not conform to the Specifications and warranties, and AccuLase shall bear the
expense of the excess cost of air freight over normal shipping charges.
3. TERM AND TERMINATION.
(a) Unless sooner terminated pursuant to Section 8.1 of the Master
Technology Agreement, this Agreement shall remain in full force and effect until
expiration of the last to expire the Licensed Patent (as defined in the License
Agreement).
4. PRODUCT CHANGES.
(a) AccuLase shall make available to Baxter all developments or
enhancements to the Product or to other products that accomplish the same or
similar functions as the Product, provided that AccuLase shall not be required
to make available any development, enhancements, or other products which use
proprietary information of third parties. If Baxter agrees in writing to accept
such development, enhancement, or other product, it shall be added as an
amendment to the Specifications in a timely manner.
(b) AccuLase shall notify Baxter in advance and in writing of any proposed
change by AccuLase in the following aspects of the Product or its components:
(i) the composition, specifications, or source of any part, material, component
or assembly; (ii) the method of manufacture, assembly, or testing; (iii) the
specific subcontractors utilized by AccuLase; (iv) site of manufacture; or (v)
labeling. AccuLase shall not depart from or make any change to the
Specifications or the Product design or performance without prior written
consent of Baxter.
(c) Should Baxter want to make any change to the mechanical or electrical
design or Specifications which would affect the schedule, performance,
reliability, availability, appearance, dimensions, or safety of the Product, or
AccuLase's costs of manufacture, testing, labeling, or packaging ("Engineering
Change"), Baxter shall give AccuLase notice of the proposed Engineering Change.
AccuLase shall respond by giving Baxter a written evaluation of the Engineering
Change stating AccuLase's price increase or decrease, if any, to implement the
Engineering Change. If the parties agree to the Engineering Change, both
parties shall execute an amendment to the Specifications and, if a price change
is applicable, an amendment to the prices stated in Section 2 of this Agreement.
If the parties do not agree to the Engineering Change, Baxter may have the
Product manufactured by an alternative manufacturer in accordance with Section 2
(f) hereof.
4
<PAGE>
(d) By execution of the License Agreement, AccuLase hereby grants to
Baxter an exclusive license to all developments, enhancements and improvements
of the Product and to all discoveries, inventions, enhancements and improvements
of any and all technical know-how and intellectual property used in the
development of the Product, pursuant to the terms of the License Agreement, and
as further defined therein.
5. TRADEMARKS, LABELING, PATENTS, AND EXCLUSIVITY.
(a) As part of the Product and included in the prices set forth in this
Agreement, AccuLase, at its expense, shall produce and provide all artwork,
labeling, product inserts, and packaging for the Product as provided in the
Specifications. All such artwork, labels, inserts, and packaging and any use of
any trademark, trade name or logo owned or used by Baxter must be approved in
advance in writing by Baxter. If a trademark, trade-name or logo owned or used
by Baxter or its parent corporation is used in connection with the Product, the
labeling shall state "Distributed by Baxter Healthcare Corporation". AccuLase
shall obtain prior written authorization from Baxter for all changes to the
artwork, labels, inserts or packaging for the Product. Each use of a trademark,
trade name or logo owned or used by Baxter on or in connection with the Product
shall inure to the benefit of Baxter and its parent company. Should any such
use vest in AccuLase any rights in a trademark, trade name or logo used by
Baxter, AccuLase shall transfer such rights to Baxter or its designee upon
request of Baxter. Except as provided in this Agreement, AccuLase shall not use
any trademark, trade name or logo used or claimed by Baxter or any confusingly
similar trademark, trade name or logo during or after the term of this
Agreement.
(b) AccuLase shall manufacture and sell the Products exclusively for and
to Baxter unless an exception is expressly authorized by Baxter in a writing
signed by Baxter. AccuLase acknowledges that the Product is protected by one or
more patents and that this Agreement does not give AccuLase any right,
permission, or license to manufacture or sell the Product or any patented
invention which is a part of the Product except as authorized by Baxter within
this Agreement. AccuLase shall not design, sell, develop, or manufacture any
other excimer laser system for cardiovascular applications other than the
Product for any entity other than Baxter at any time during the term of this
Agreement unless an exception is expressly authorized by Baxter in a writing
signed by Baxter.
6. MANUFACTURE AND QUALITY CONTROL.
(a) For each shipment of Product, AccuLase shall conform to the
requirements set forth in Baxter's Supplier Quality Standard attached hereto as
Exhibit B and any other incoming quality standards which are agreed to by the
parties.
(b) All Product shall meet the Specifications. All product shall be
manufactured in accordance with Good Manufacturing Practices for Medical Devices
established by the United States Food and Drug Administration ("FDA") as
provided in 21 U.S.C. 360j (f) and as promulgated by regulations in 21 CFR 820.
Product shall be subjected to quality control inspection by AccuLase in
accordance with Baxter's quality control standards and the
5
<PAGE>
quality control system to be developed by AccuLase prior to production of any
Product. AccuLase shall permit Baxter to review periodically AccuLase's
production and quality control procedures and records and to visit AccuLase's
facilities at reasonable times with a representative of AccuLase present in
order to assure satisfaction of the requirements of this Agreement.
(c) Baxter may inspect or audit the product for integrity and adherence to
the Specifications. If any of the Product fails to meet AccuLase's warranties
or to conform to the Specifications, Baxter may return such lot at AccuLase's
expense for repair. If any customer of Baxter rejects or returns Product to
Baxter as a result of Product performance problems covered under AccuLase's
guaranty or warranty, Baxter shall notify AccuLase in writing within 30 days.
AccuLase shall repair or replace such Product or credit Baxter for the purchase
price of such Product. If AccuLase so requests, Baxter will return any such
Product to AccuLase at AccuLase's expense.
(d) AccuLase shall manufacture Product in such a manner that in the event
of a recall, the Product can be traced by serial number to a production run.
(e) In the event that Baxter receives any serious complaint regarding the
Product (i.e., that it is likely to cause death or serious injury), Baxter shall
notify AccuLase by facsimile within two (2) business days. In the event that
Baxter receives any other complaint regarding the Product, Baxter shall notify
AccuLase by first class mail within five (5) business days. In the event that
AccuLase receives any complaint regarding the Product, but in no event later
than 48 hours after receipt, AccuLase shall notify Baxter by facsimile,
telephone, and first class mail within 48 hours after AccuLase's receipt of the
complaint, in order to permit Baxter to comply with FDA regulatory requirements.
Baxter will make an evaluation of each complaint it receives and will conduct
all follow-up and communication which it deems appropriate to comply with
regulatory requirements.
(f) In the event that AccuLase becomes aware of any quality problem that
may render the Product unsafe for human use, misbranded, or adulterated,
AccuLase shall notify Baxter immediately by facsimile, telephone, and first
class mail and shall take corrective action as directed by Baxter.
(g) AccuLase represents that it is and will remain in compliance with all
applicable federal, state, and local laws, regulations, and orders. AccuLase
shall execute, on request of Baxter, contractor certification forms certifying
compliance with certain laws, regulations, and orders.
(h) In the event of any inspection of AccuLase's facilities by a federal,
state or local regulatory agency which inspection yields information or report
which is material to the manufacture, inspection, storage, or other handling of
the Product by AccuLase, AccuLase shall immediately notify Baxter in writing and
by telephone of such information or report.
6
<PAGE>
(i) AccuLase represents that it now has FDA and ISO 9002 certifications.
AccuLase shall maintain those certifications throughout the term of this
Agreement.
(j) Within thirty (30) days after execution of this Agreement, AccuLase
shall provide Baxter with a written list of the names and addresses of all of
the direct suppliers of parts and all subcontractors whom AccuLase will be using
in the manufacture, inspection, and testing of the Product.
7. GUARANTEE, WARRANTIES, AND INDEMNIFICATIONS.
(a) The Product is hereby guaranteed by AccuLase, as of the date of
shipment or delivery, to be on such date not adulterated or misbranded within
the meaning of the United States Federal Food, Drug and Cosmetics Act (the
"Act") and any similar federal, state, or local laws or regulations, and not an
article which may not, under the provisions of the Act, be introduced into
interstate commerce.
(b) ACCULASE WARRANTS THAT IT POSSESSES GOOD AND MARKETABLE TITLE TO THE
PRODUCT SOLD TO BAXTER AND THAT THE PRODUCT IS IN COMPLIANCE WITH THE
SPECIFICATIONS AND IS MANUFACTURED IN ACCORDANCE WITH GOOD MANUFACTURING
PRACTICES. ACCULASE WARRANTS THAT NO CHANGES WILL BE MADE IN THE SPECIFICATIONS
WITHOUT BAXTER'S PRIOR WRITTEN APPROVAL. AccuLase hereby indemnifies and agrees
to defend and to hold Baxter, its successors, affiliates, assigns, customers,
and users of the Product harmless from and against all claims, liabilities,
losses and expenses arising out of or in connection with the use of any Product
or allegedly caused by any Product, to the extent resulting from AccuLase's
negligence or the Product's failure to meet the Specifications or warranties.
(c) AccuLase further warrants for a period of one (1) year from the date
of delivery to Baxter's customer or eighteen (18) months from the date of
shipment by AccuLase, whichever is less, that the product is free from defects
in workmanship, materials and handling. AccuLase shall repair or replace, at
AccuLase's option and free of charge, any Product with any defect in workmanship
or materials which is returned to AccuLase's factory packaged, insured, and
freight pre-paid within the warranty period. AccuLase shall return the Product,
repaired or replaced, to the shipper packaged, insured, and with freight
pre-paid by AccuLase at AccuLase's expense. This warranty shall not apply to:
(i) Any modification or alteration of the Product made by anyone
other than AccuLase after shipment by AccuLase;
(ii) Any defect, loss, or damage resulting from theft, loss, fire,
misuse, abuse, vandalism, negligence, acts of God, power failures or
surges, alterations, modifications, or failure to following
installation, operations, and maintenance instructions; and
7
<PAGE>
(iii) Any other equipment, supplies, software, or data used with the
Product.
(d) Baxter hereby indemnifies and agrees to defend and to hold AccuLase ,
and its successors, affiliates and assigns harmless from and against all claims,
liabilities, losses and expenses, but not consequential damages, to AccuLase
arising out of for injury to any person or damage to property or in connection
with the use of any Product or any misrepresentation by Baxter concerning any of
the characteristics, proper manner of usage or the performance of the Product,
except to the extent resulting from the Product's failure to meet the
Specifications or AccuLase's warranties. Baxter shall not be liable for
any loss incurred by AccuLase, including any consequential damages suffered by
AccuLase, whether or not such damages are foreseeable or Baxter is given notice
of them.
8. INSURANCE. AccuLase shall obtain and keep in force during the term of
this Agreement general comprehensive liability insurance covering each
occurrence of bodily injury and property damage in an amount of not less than
$3,000,000 combined single limit with special endorsements providing coverage
for:
(i) Product and Completed Operations Liability; and
(ii) Blanket Broad Form Contractual Liability.
The insurance policy shall be endorsed to provide for written notification
to Baxter by the insurer not less than 30 days prior to cancellation, expiration
or modification. A certificate of insurance evidencing compliance with this
Section 8 and referencing this Agreement shall be furnished to Baxter by
AccuLase within 60 days of this Agreement's effective date and thereafter within
60 days after each renewal or replacement of the policy or change in the
information contained on the certificate of insurance.
9. PRODUCT RECALL. In the event that Baxter or AccuLase recalls, either
during or after the expiration or other termination of this Agreement, any of
the Product sold or distributed by Baxter because the Product is believed to
violate any provision of applicable law or fails to conform to the
Specifications or AccuLase's warranty, AccuLase shall bear all costs and
expenses of such recall, including, without limitation, expenses or obligations
to third parties, the cost of notifying customers and costs associated with the
shipment of recalled Product from customers to Baxter or AccuLase. This
obligation shall survive the expiration or other termination of this Agreement.
Baxter shall maintain complete and accurate records, for such periods as may be
required by applicable law, of all the Product sold by it. The parties will
cooperate fully with each other in effecting any recall of the Product,
including communications with any purchasers or users. If Baxter or AccuLase
elects any repair or replacement of the Product as part of a recall, AccuLase
shall complete the repair or replacement of all recalled Product within 60 days
of the announcement of the recall.
8
<PAGE>
10. LICENSE AND RESTRICTED USE OF TECHNOLOGY.
(a) AccuLase acknowledges Baxter's exclusive license of the Technology for
cardiovascular and vascular applications, and agrees that AccuLase will do
nothing inconsistent with such license. Throughout the term of this Agreement,
Baxter agrees to allow AccuLase access to the Technology solely for the purpose
of manufacturing the Product. AccuLase shall not reproduce, duplicate, copy or
otherwise disclose, distribute, or disseminate the Technology in any form except
to the extent consistent with this Agreement or otherwise approved by Baxter.
(b) AccuLase shall keep confidential and shall not disclose to anyone,
other than suppliers as needed by AccuLase in the manufacture of the Product,
the Specifications, the Product quantities, forecasts, or shipping destinations
specified by Baxter, or Baxter's customer data, such as the names, addresses,
telephone numbers, or quantities of Products owned or held by Baxter's
customers.
(c) Other than concerning warranty-covered repairs or replacements as
provided by this Agreement, AccuLase shall not communicate with any user of the
Product concerning the Product, including, but not limited to, any offer of an
extended warranty, maintenance or repair services, Product enhancements, Product
use, maintenance, or repair training, or the availability of associated or
competitive products or services.
11. ACCULASE'S EMPLOYEES. Disclosure and access to the Technology shall
be restricted to those of AccuLase's employees who are required to use the
Technology in the course of their employment, for purposes consistent with this
Agreement.
12. SUBLICENSES. AccuLase shall not grant sublicenses to use the
Technology or any part thereof in any manner to any third party, without
Baxter's prior written consent.
13. RETURN OF TECHNOLOGY. Within thirty (30) days following a termination
of this Agreement, or upon notification by Baxter that Baxter is terminating
AccuLase's manufacturing rights under this Agreement, AccuLase shall at its
expense promptly cause to be delivered to Baxter all documents related to the
Technology including, without limitation, all drawings, blueprints, manuals,
design and specification documents, lists, documentation, source or object
codes, tapes, disks, or other storage media, letters, notes, notebooks, reports,
flow charts, and all other materials in its possession or under its control
related to the Technology.
14. NOTICES. All notices and other communications hereunder shall be in
writing and shall be deemed given if delivered personally or by commercial
delivery service, or mailed by registered or certified mail (return receipt
requested) or sent via facsimile (with confirmation of receipt) to the parties
at the following address (or at such other address for a party as shall be
specified by like notice):
9
<PAGE>
(a) if to Baxter, to:
Baxter Healthcare Corporation
17221 Red Hill Avenue, m/s 98
Irvine, California 92614
Attention: Vice President, Business Development
Facsimile No.: (714) 474-6445
Telephone No.: (714) 474-6424
(b) if to AccuLase, to:
6865 Flanders Drive, Suite G
San Diego, CA 92121
Attention: Mr. Raymond A. Hartman
President and Chief Executive Officer
Facsimile No.: (619) 455-0946
Telephone No.: (619) 455-7030
with a copy to:
Donald G. Davis, Esq.
833 Via Del Monte, Suite 100
Palos Verdes Estates, CA 90274
Facsimile No.: (310) 373-5410
Telephone No.: (310) 378-8968
15. INTERPRETATION. When a reference is made in this Agreement to
exhibits, such reference shall be to an exhibit to this Agreement unless
otherwise indicated. The words "include, " "includes" and "including" when used
herein shall be deemed in each case to be followed by the words, "without
limitation." The phrase "made available" in this Agreement shall mean that the
information referred to has been made available if requested by the party to
whom such information is to be made available. The phrases
"the date of this Agreement", "the date hereof", and terms of similar import,
unless the context otherwise requires, shall be deemed to refer to the date
referred to in the introductory paragraph of this Agreement. The headings
contained in this Agreement are for reference purposes only and shall not affect
in any way the meaning or interpretation of this Agreement.
16. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same Agreement and
shall become effective when one or more counterparts have been signed by each of
the parties and delivered to the other parties, it being understood that all
parties need not sign the same counterpart.
10
<PAGE>
17. ENTIRE AGREEMENT; RESTRICTIONS ON ASSIGNABILITY. This Agreement and
the documents and instruments and other agreements specifically referred to
herein or delivered pursuant hereto constitute the entire Agreement among the
parties with respect to the subject matter hereof and supersede all prior
Agreements and understandings, both written and oral, among the parties with
respect to the subject matter hereof. AccuLase may not assign its rights,
duties or obligations under this Agreement without the prior written consent of
Baxter.
18. SEVERABILITY. In the event that any provision of this Agreement, or
the application thereof, becomes or is declared by a court of competent
jurisdiction to be illegal, void or unenforceable, the remainder of this
Agreement will continue in full force and effect and the application of such
provision to other persons or circumstances will be interpreted so as reasonably
to effect the intent of the parties hereto. The parties further agree to
replace such void or unenforceable provision of this Agreement with a valid and
enforceable provision that will achieve, to the extent possible, the economic,
business and other purposes of such void or unenforceable provision.
19. AMENDMENT. This Agreement may not be altered or amended except by
writing signed by the parties hereto.
20. REMEDIES CUMULATIVE. Except as otherwise provided herein, any and all
remedies herein expressly conferred upon a party will be deemed cumulative with
and not exclusive of any other remedy conferred hereby, or by law or equity upon
such party, and the exercise by a part of any one remedy will not preclude the
exercise of any other remedy.
21. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of California (without regard to its
principles of conflicts of law).
22. RULES OF CONSTRUCTION. The parties hereto agree that they have been
represented by counsel during the negotiation, preparation and execution of this
Agreement and, therefore, waive the application of any law, regulation, holding
or rule of construction providing that ambiguities in an agreement or other
document will be construed against the party drafting such agreement or
document.
23. EXPENSES. All costs and expenses incurred in connection with this
Agreement and the transactions contemplated by this Agreement will be paid by
the party incurring such expenses.
24. ATTORNEYS' FEES. In the event of any dispute arising under the terms
of this Agreement (including the breach thereof), the prevailing party in such
action shall be entitled to its attorneys' fees and costs in addition to such
other relief as may be awarded by a court or by an arbitrator.
11
<PAGE>
25. SECURITY INTEREST. AccuLase's performance of this Agreement and the
obligations of AccuLase arising hereunder shall be secured by that certain
Security Agreement, dated as of the date hereof, as described in Section 2.5 of
the Master Technology Agreement, upon the terms and conditions contained
therein.
** The remainder of this page has been intentionally left blank **
12
<PAGE>
IN WITNESS WHEREOF, Baxter and AccuLase have caused this Agreement to be
executed and delivered by their respective officers thereunto duly authorized
all as of the date first written above.
Baxter Healthcare Corporation,
a corporation
By: /s/ John H. Kehl, Jr.
-------------------------------------
Name: /s/ John H. Kehl, Jr.
------------------------------
Its: /s/ Vice President, Business Development
Cardiovascular Group
-------------------------------
AccuLase, Inc., a corporation
By: /s/ Raymond A. Hartman
-------------------------------------
Name: /s/ Raymond A. Hartman
------------------------------
Its: /s/ President & CEO
-------------------------------
ATTACHMENTS:
Exhibit A - Excimer Laser Product Specifications
Exhibit B - Baxter Supplier Quality Standards writing and by telepone of such
information or report as well as the results of such insepction.
