SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------------
FORM 8-K
Current Report Pursuant
to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported)
March 29, 2000
SPECIALIZED HEALTH PRODUCTS INTERNATIONAL, INC.
(Exact name of registrant as specified in its charter)
Delaware
(State or other jurisdiction of incorporation)
0-26694 93-0945003
(Commission file number) (IRS employer identification no.)
585 West 500 South, Bountiful, Utah 84010 84010
(Address of principal executive offices) (Zip code)
(801) 298-3360
(Registrant's telephone number, including area code)
This document contains a total of 24 pages.
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Item 5. Other Events
In November 1999, the Company and The Kendall Company, a division of
Tyco Healthcare Group LP ("Kendall") entered into a Development and License
Agreement (the "Kendall Agreement") relating to one application of the Company's
needle technology in the production of a line of safety medical needle products,
including six syringe products and five other safety needle products. The
effective date of the Kendall Agreement was subject to certain approvals that
were obtained on March 29, 2000. On April 12, 2000, the Company received a
$1,500,000 payment less $35,044 representing the Company's share of certain
patent filing costs. The Company will also receive an additional $1,000,000 upon
the sale of commercial quantities of products in exchange for the Company
assigning to Kendall the FlexLoc(R) and ReLoc(TM) trademarks and two related
patents. The assignment of the patent rights to Kendall is subject to a
preexisting license agreement and the retention by the Company of an exclusive,
royalty free worldwide license in a number of strategic product areas. The
Kendall Agreement also provides for the Company to receive development fees and
ongoing royalties, including a $500,000 advance royalty payment upon the sale of
commercial quantities of products. It is anticipated that Kendall will
manufacture all products that are subject to the Kendall Agreement. There can be
no assurance that products will be launched as anticipated or that the Company
will realize revenues under the Kendall Agreement.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
a. Financial Statements of Businesses Acquired.
Not applicable.
b. Pro Forma Financial Information.
Not applicable.
c. Exhibits.
Number Description
10.1 Development and License Agreement, effective date of March
29, 2000, by and among Safety Syringe Corporation, a
wholly owned subsidiary of Specialized Health Products
International, Inc., and Tyco Healthcare Group LP (certain
portions of the agreement were omitted from the exhibit
pursuant to a request for confidential treatment).
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
SPECIALIZED HEALTH PRODUCTS
INTERNATIONAL, INC.
By /s/ David A. Robinson
-----------------------------------
Date: May 1, 2000 David A. Robinson
President, Chief Executive Officer
and Director
2
DEVELOPMENT AND LICENSE AGREEMENT
THIS DEVELOPMENT AND LICENSE AGREEMENT (the "Agreement") is made by and
between TYCO HEALTHCARE GROUP LP, a Delaware Partnership having an office at 15
Hampshire Street, Mansfield, Massachusetts 02048 (hereinafter "Kendall") and
SAFETY SYRINGE CORPORATION (hereinafter "SSC"), a corporation of the State of
Utah and wholly owned subsidiary of Specialized Health Products International,
Inc. ("SHPI") having an office at 585 West 500 South, Bountiful, Utah 84010 is
to be effective as of the last date of approval by both the Boards of Directors
of SSC and Tyco International Ltd. (hereinafter "Effective Date"). Documents
evidencing the dates of approval of this Agreement by the Boards of Directors is
attached and incorporated hereto. Kendall and SSC shall from time to time be
referred individually as a Party or collectively as the Parties.
W I T N E S S E T H:
WHEREAS, SSC is the owner of certain patent rights and know-how related
to its FlexLoc(R) and ReLoc(TM) syringe products, and in particular, to the
product claimed in the patents listed on Exhibit 1.2;
WHEREAS, Specialized Health Products, Inc. ("SHP"), a wholly owned
subsidiary of SHPI, has granted certain license rights under the patents to
third parties;
WHEREAS, Kendall wishes to purchase and SSC desires to assign to
Kendall all interest to patents and know-how subject to such licenses to third
parties and as otherwise described herein;
WHEREAS, Kendall wishes to fund and desires that the Parties jointly
undertake the development of a commercially viable syringe products as described
herein; and
WHEREAS, SSC and Kendall desire that such syringe products be made
available to the commercial markets.
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, the Parties hereto agree as follows:
ARTICLE 1 - DEFINITIONS
Where used in this Agreement, the following terms shall have the
meanings attributed to them herein:
1.1 The term "Affiliate" of a Party, shall mean any company or other
legal entity, other than the Party, in whatever country organized, controlling,
controlled by, or under common control with the Party. The term "control"
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means the possession, direct or indirect, of the power to direct or cause the
direction of the management and policies of an entity, whether through the
ownership of voting securities, by contract, or otherwise, and the term "entity"
includes a corporation or other entity.
1.2 The term "Patent Rights" shall mean (i) all patent applications
filed in any country which claim the benefit of the filing date of any of the
patents or applications listed on Exhibit 1.2 including all continuing,
divisional, and renewal applications thereof, all patent applications, all
patents which may be granted thereon, and all reissues, re-examinations and
extensions thereof, and including all patents and patent applications which
later issue into patents that are owned, licensed currently or at some future
time become controlled by SSC having at least one Valid Claim (defined below)
which covers a Licensed Product (also defined below); and (ii) that portion of
Technical Information (defined below) which comprises all patents and
applications identified in Subparagraph 1.2 (i) containing one or more claims to
any invention that is part of the Licensed Products.
1.3 The term "Licensed Products" shall mean (a) syringe needle, (b)
needle/syringe connector, (c) integral needle/syringe (d) product types listed
under Included Product Types and Included Product Categories in Exhibits 1.3
hereto ("Included Products"), and (e) any syringe that product would, but for
the assignment made herein, infringe any Valid Claim (defined below) of an
issued patent included in Patent Rights.
1.4 The term "Net Sales" shall mean the revenue received by Kendall, a
sublicensee or an Affiliate from the sale of Licensed Products to independent
third parties less the following amounts: i) reasonable discounts, including
cash discounts, or rebates actually allowed or granted, ii) credits or
allowances actually granted upon claims or returns regardless of the Party
requesting the return, iii) freight charges paid for delivery, and iv) taxes or
other governmental charges levied on or measured by the invoice amount whether
absorbed by the billing or the billed Party.
1.5 The term "Technical Information" shall mean inventions, know-how,
and trade secrets relating to Licensed Products that are currently or at some
future time become owned, licensed or controlled by SSC as well as improvements
thereof.
1.6 The term "Valid Claim" shall mean a claim of an issued patent which
has not lapsed or become abandoned and which claim has not been declared invalid
or unenforceable by an unappealed or unappealable decision or judgment of a
court of competent jurisdiction.
1.7 The term "Term" of the Agreement shall mean the period of time
commencing on the Effective Date and ending on the date of the expiration or
termination of the last to expire issued patent included in the Patent Rights.
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ARTICLE 2 - ASSIGNMENT AND LICENSE
2.1 Concurrently with the payment of the $1,500,000 referenced in
Subparagraph 3.1 a), SSC shall execute an assignment using a copy of the forms
attached hereto as Exhibit 2.1, irrevocably transferring to Kendall all rights
title and interest to the Patent Rights and Technical Information.
2.2 Kendall acknowledges that the rights granted in Paragraph 2.1 are
subject to a pre-existing license agreement between SHP and Johnson & Johnson
Medical executed in December 1997, a copy of the publicly available version of
such agreement is attached as Exhibit 2.2 (the "JJM Agreement"). In the event
that the JJM Agreement terminates, Kendall will be given the right of first
refusal to negotiate in good faith an expansion of the rights granted herein to
cover the non-syringe products listed in the JJM Agreement.
2.3 After providing to SSC fifteen (15) days advanced written notice,
Kendall has the right to assign Patent Rights and Technical Information back to
SSC, canceling any further unaccrued payment obligations owed by Kendall after
that date. Such assignment shall not release Kendall from its obligation to pay
SSC any amounts that accrued prior to the assignment.
2.4 Kendall agrees to grant and hereby does grant to SSC, and any SSC
Affiliate designated in writing by SSC, an exclusive, royalty free, worldwide
license, with the right to sublicense others, to make, have made, use and sell
products identified under Excluded Product Categories in Exhibit 1.3 hereto
("Excluded Products"). In the event Kendall decides to develop any product
defined herein as Excluded Product, Kendall will notify SSC of its intent and
Kendall will be given the right to negotiate in good faith an expansion of the
rights granted herein to cover such product, assuming SSC has the rights to
grant.
2.5 In the event there is any dispute on as to whether a particular
products falls under the designations listed in Exhibit 1.3 as "Included
Product" or "Excluded Product", the Parties agree to attempt to resolve such
dispute by negotiations between executives who have authority to settle the
matter. Any Party may give the other Party written notice of any dispute not
resolved in the normal course of business together with a request that the
Parties meet and confer. Within twenty (20) days after delivery of the notice of
dispute, executives of both Parties shall meet at a mutually acceptable time and
place, and thereafter as often as they reasonably deem necessary, to exchange
relevant information and to attempt to resolve the dispute. If the matter has
not been resolved within sixty (60) days after delivery of the notice of
dispute, either Party may seek remedies at law.
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ARTICLE 3 - PAYMENT
3.1 Kendall shall pay SSC:
a) one million five hundred thousand dollars ($1,500,000) within
ten (10) days of the Effective Date;
b) one million five hundred thousand dollars ($1,500,000) within
thirty days (30) of the earlier occurrence of the date
("Effective Commercial Sale Date") (i) on which Kendall sells
commercial quantities (e.g., 8,000,000 product units) of
Licensed Product which has been manufactured or (ii) thirty
(30) months from the Effective Date;
c) five hundred thousand dollars ($500,000) of the fee paid
pursuant to Paragraph 3.1 b) will be credited toward annual
royalty payment owed pursuant to Paragraph 3.1 d);
d) an annual royalty payment on Net Sales of Licensed Products by
Kendall and its Affiliates and licensees, in the amount of **
percent (**%) on Licensed Products.
3.2 Kendall shall have a minimum annual royalty obligation of five
hundred thousand dollars ($500,000) for year 1 ending on the first anniversary
of the Effective Commercial Sale Date and one million dollars per year
($1,000,000) for the subsequent two years (hereinafter "Minimum Royalty
Period").
3.3 In any year in which the royalty that is provided for in Paragraph
3.1 d) does not meet or exceed the amount of the minimum royalties set forth in
Paragraph 3.2, Kendall shall, with the payment made for that year, pay an amount
as additional royalty sufficient to bring the total royalties payable for such
year up to an amount equal to the minimum royalty required hereby. Any payments
pursuant to this Paragraph 3.3, shall be made within 60 days of the end of the
year in question.
3.4 No royalty shall be payable on sales of any Licensed Product
between Kendall and any Affiliate or licensee, and only one (1) royalty shall be
payable hereunder with respect to the sale of any one (1) Licensed Product no
matter how many patents or claims may cover the Product.
3.5 Kendall's obligation to pay royalties in any given country with
respect to the sale of Licensed Product shall terminate upon expiration of the
last to expire issued patent included in Patent Rights covering such Licensed
Product in given country. Unless otherwise mutually agreed in writing, the
parties will prosecute the patent applications identified in Exhibit 9.1.
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The "**" marks the location of information that has been omitted and filed
separately with the Securities and Exchange Commission pursuant to a request for
confidential treatment.
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3.6 Kendall shall keep accurate books and records of sales of Licensed
Products and of all payments due SSC hereunder. Kendall shall contractually
obligate all Kendall licensees of Licensed Products to keep accurate books and
records of sales of Licensed Products and of all data necessary for the
computation of royalties hereunder. Kendall shall deliver to SSC written reports
of Net Sales of Licensed Products for the calendar quarter in which the Licensed
Product was sold, on or before the sixtieth (60th) day following the end of the
calendar quarter. Such reports shall include a calculation of the royalties due
and be accompanied by payment of the monies due. For avoidance of doubt the
calendar quarters end on March 31, June 30, September 30 and December 31.
3.7 SSC shall have the right to nominate an independent accountant
acceptable to and approved by Kendall who shall have access to Kendall and/or
its Affiliates' and/or its sublicensees records during reasonable business
hours, upon executing an appropriate confidentiality agreement, for the purpose
of verifying the royalty payable as provided for in this Agreement for the two
(2) preceding years, but this right may not be exercised more than once in any
year, and the accountant shall disclose to SSC only information relating solely
to the accuracy of the royalty report and the royalty payments made in
accordance with this Agreement. Kendall shall impose similar contractual
obligations on its sublicensees to allow an independent public accountant to
inspect the sublicensee's books and records to verify payments under such
sublicense.
3.8 Royalty payments under this Agreement shall be made in United
States dollars.
3.9 Any sum required under United States tax laws, or the tax laws of
any other country, to be withheld by Kendall from payments shall be promptly
paid by Kendall to the appropriate tax authorities, and Kendall shall furnish
SSC with official tax receipts or other appropriate evidence issued by the
appropriate tax authorities sufficient to enable SSC to support a claim for
income tax credit in respect of any sum so withheld.
ARTICLE 4 - RESEARCH AND DEVELOPMENT
4.1 During the Term of this Agreement, SSC and Kendall shall each use
reasonable commercial efforts to develop the Licensed Products consistent with
the project funding, product requirement documents, the development schedule and
projected product launch dates found in Exhibits 4.1, 4.2, 4.3 and 1.3 or such
other specifications as may be mutually approved by the Parties. Kendall shall
fund SSC for its development of the Licensed Products relative to FlexLoc(R) and
ReLoc(TM) syringes up to a maximum amount of ** ($**) in accordance with the
development schedule and key project milestones found in Exhibit 4.1. The
Parties agree that the development funding may be amended by
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the mutual written agreement of the Parties. Kendall agrees to keep SSC apprised
of its development and marketing efforts.
4.2 SSC shall perform and be responsible for the design and development
of FlexLoc(R) and ReLoc(TM) products as described in the development schedule in
Exhibit 4.3 through the design input and design output phases of the project.
Kendall shall be responsible for design verification, design validation,
regulatory submissions and activities and bringing the product to market. SSC,
at Kendall's expense, shall assist and cooperate with Kendall through the design
verification, design validation, regulatory submission and activities and
bringing the products to market. It is recognized that the product funding and
project development schedules set forth in Exhibit 4.1 and 4.3 are for ** for
each of FlexLoc(R) and ReLoc(TM) syringe needles. This includes preparation of
all applications to the United States Food and Drug Administration, whether by
application for premarket approval or 510(k) notification, or otherwise.
4.3 Projected product launch dates for other Included Products are set
forth in Exhibit 1.3. In the event an Included Product is not launched within
one year of the projected launch date listed in Exhibit 1.3, then such product
shall become an Excluded Product unless otherwise agreed in writing by the
parties.
4.4 When ReLoc(TM)is launched, Kendall agrees to provide **.
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The "**" marks the location of information that has been omitted and filed
separately with the Securities and Exchange Commission pursuant to a request for
confidential treatment.
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4.5 The Parties shall attempt in good faith to resolve any dispute
relating to the development effort by negotiations between executives who have
authority to settle the controversy. Any Party may give the other Party written
notice of any dispute not resolved in the normal course of business together
with a request that the Parties meet and confer. Within twenty (20) days after
delivery of the notice of dispute, executives of both Parties shall meet at a
mutually acceptable time and place, and thereafter as often as they reasonably
deem necessary, to exchange relevant information and to attempt to resolve the
dispute. If the matter has not been resolved within sixty (60) days after
delivery of the notice of dispute, either Party may seek remedies at law.
ARTICLE 5 - FUNDING OF DEVELOPMENT
5.1 Funding under the development of the Licensed Products shall be
paid for by Kendall within 45 days of the date Kendall has reasonably determined
that SSC has met the monthly milestones objectives set forth in Exhibit 4.1 and
has been invoiced by SSC or has otherwise been mutually agreed to by the Parties
in writing.
5.2 Changes to the development schedule found in Exhibit 4.3 or the key
project milestones and funding schedule found in Exhibit 4.1 shall be proposed
in writing by either Party and adopted as an amendment to the respective
Exhibits only after receipt of written approval.
ARTICLE 6 - RESEARCH REPORTS AND OVERSIGHT
6.1 The Parties shall each furnish to the other written monthly
informal reports on the progress of the development of the Licensed Products.
6.2 The Parties shall each name a key Research and Development and
marketing contact through which day-to-day contact and decision-making may be
made and to facilitate communication between the Parties. Each Party will make
reasonable effort to timely respond to all questions and requests from the other
Party. A key contact person may be changed from time-to-time by notifying the
other Party of the change in its key contact person.
ARTICLE 7 - PROPRIETARY INFORMATION
All proprietary information of any Party to this Agreement disclosed to
another party in connection with the development of the Licensed Products and
identified in writing and marked by the disclosing Party as confidential will be
treated by the receiving Party and its employees as confidential throughout the
Term of this Agreement and for an additional five (5) years. The above-mentioned
obligation of confidentiality shall not apply to information which: (i) at
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the time of the disclosure was known to the receiving Party as evidenced by
written records and was not previously subject to any obligation of
confidentiality; or (ii) was generally available to the public or otherwise part
of the public domain at the time of its disclosure; or (iii) becomes generally
available to the public or otherwise part of the public domain after its
disclosure other than through an act of omission or commission of the receiving
Party in breach of this Agreement; or (iv) becomes known to the receiving Party
by disclosure of a third party under no obligation of confidentiality to the
disclosing Party; or (v) was independently developed by a Party, its agent or
Affiliate without reliance on the disclosed proprietary information.
ARTICLE 8 - OWNERSHIP OF TECHNICAL INFORMATION
8.1 Each Party shall own title to all technical information and
inventions created solely by its employees and/or contractors after the
Effective Date of this Agreement, except as provided in Paragraphs 1.2, 1.5, 2.1
and 8.2 below.
8.2 Kendall and SSC will jointly own title to any and all technical
information and inventions first conceived jointly or discovered jointly by
Kendall's employees and SSC's employees or personnel during the performance of
the development of the Licensed Products. SSC agrees to grant to Kendall an
exclusive worldwide license on all rights to its jointly conceived inventions
relating to Licensed Products on terms to be negotiated in good faith, so long
as Kendall maintains ownership of the Patent Rights. Kendall agrees to grant to
SSC an exclusive worldwide license on all rights to its jointly conceived
inventions relating to Licensed Products on terms to be negotiated in good
faith, on inventions relating to Excluded Products.
8.3 Each Party who retains the services of a consultant to provide
technical services in accordance with the development effort should require
their consultants to execute agreements protecting the proprietory information
of the other Party and assign all rights to intellectual property in accordance
with the terms of this Agreement.
ARTICLE 9 - PATENT FILINGS
9.1 Kendall shall prosecute and maintain the Patent Rights unless it
elects to assign all rights and title of interest of the Patent Rights back to
SSC pursuant to Paragraph 2.3. For those patents and patent applications listed
in Exhibits 2.1 and 9.1, which forms the basis of SSC's preexisting license
grants, SSC shall reimburse Kendall for one half (1/2) of the patent filings,
prosecution and maintenance costs associated therewith. With respect to
attorneys fees
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owing pursuant to this Article 9, SSC shall be liable only for reasonable
attorneys fees that are assessed on an hourly rate (not including overhead).
9.2 Unless otherwise agreed, the parties agree that they will prosecute
the patent applications identified in Exhibit 9.1 and SSC shall pay one-half of
Kendall's patent filing, prosecution and maintenance costs in such
jurisdictions. SSC shall identify those additional jurisdictions outside the
United States where it would like Kendall to file, prosecute and maintain patent
protection with regard to patents and patent applications that are not listed in
Exhibit 9.1. If Kendall plans to sell Licensed Products in such jurisdictions,
then SSC shall pay one-half (1/2) of Kendall's patent filings, prosecution and
maintenance costs in those foreign jurisdictions approved by Kendall. Such
applications shall be filed and prosecuted utilizing patent counsel selected by
Kendall. Should Kendall elect not to file such patent application or
applications in jurisdictions other than those identified in Exhibit 9.1, SSC
may elect to have Kendall file and prosecute such patent application or
applications in Kendall's name wherein SSC will reimburse Kendall for all
related costs. Due to SSC experience in prosecuting the patent applications
described Exhibit 9.1, SSC agrees, at Kendall's sole election, to provide patent
prosecution support, the cost of which shall be paid for in the ratios described
above.
9.3 With respect to all patent applications referred to above, and to
the extent the Parties are able to do so, the Parties shall provide each other
with reasonable opportunity to advise the other and shall cooperate with each
other in the prosecution of all patent applications and claims relating thereto.
ARTICLE 10 - INFRINGMENT
10.1 In the event that there is infringement of the Patent Rights or
Technical Information assigned to Kendall, the Parties shall notify each other
in writing to that effect. During the ninety (90) day period after such notice,
Kendall will have the right, but not the obligation to bring suit against the
alleged infringer. Kendall shall bear the expenses of any suit brought by it and
shall retain all damages or other monies awarded or received in settlement of
such suit. Kendall shall have the final decision on all matters relating to
litigation and any settlement discussions. SSC will use reasonable efforts to
cooperate with Kendall in any such suit and shall have the right to consult with
Kendall and be represented by its own counsel at its own expense. All reasonable
costs incurred by SSC associated with providing such cooperation to Kendall will
be paid by Kendall.
If, after the expiration of said ninety (90) days from the date of such
notice, Kendall has not brought suit against a third party infringer, then SSC
shall have the right after such ninety (90) day notice period, but not the
obligation, to bring suit against such infringer and join Kendall as a party
plaintiff provided that SSC shall bear all expenses of such suit. SSC shall
retain all damages or other monies awarded or received in settlement of such
suit. Kendall will reasonably attempt to cooperate with SSC in any suit for
infringement of the subject patent brought by SSC against a third party and
shall have the right to consult with SSC and to participate in and be
represented by independent counsel in such litigation at its own expense. All
reasonable costs incurred by Kendall associated with providing cooperation to
SSC shall be paid by SSC. Where it is necessary for SSC to have standing to file
the suit, Kendall shall assign limited concurrent rights to the licensed Patent
Rights for the terms of the suit.
10.2 In the event SSC has decided to bring suit against an infringer,
it shall use reasonable commercial efforts to abate such infringement. It is
understood that the term best efforts under this Paragraph 10.2 shall include
the filing for injunctive relief and all other actions which could bring about
an early abatement of the infringing activity. Notwithstanding the foregoing,
SSC shall not enter into any settlement agreement, or take any position in
litigation which adversely impacts Kendall's rights under this Agreement without
written consent by Kendall.
During the period commencing with Kendall's filing of a complaint for
infringement of the licensed Patent Rights or Technical Information (or the
Parties' receipt of a filed complaint from a third party) and ending on a
court's issuance of a final non-appealable decision or other termination of the
proceeding, Kendall's royalty obligation under Paragraph 3.1 d) shall be reduced
by fifty percent (50%) and Kendall's obligation to pay a minimum annual royalty
under Paragraph 3.2 shall terminate. Notwithstanding the foregoing, Kendall's
obligation to pay minimum royalties and any reduction in the royalty obligation
shall not be effective until and unless Kendall has determined in its sole
discretion and in good faith that it's ability to market and sell Licensed
Product is materially affected by the alleged infringement.
10.3 SSC warrants that it is presently aware of no patent or patent
applications owned by a third party which would present any issue of
infringement by reason of the manufacture, use or sale of the Licensed Products.
In the event Kendall is charged with such infringement by a third party, Kendall
shall have the right to defend against such charge of infringement, and during
the period in which such litigation is pending, Kendall shall have the right to
apply up to fifty percent (50%) of the royalties due SSC on sales of the
allegedly infringing Licensed Product against its litigation expenses. If, as a
result of judgment in the litigation or settlement with a third party without
litigation, Kendall is required to pay royalties or other monies to such third
party, Kendall may thereafter deduct from the amount of royalties due SSC on
unit sales of the Licensed Product charged to infringe, an amount which is the
lesser of all
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sums paid by Kendall to such third party, or fifty percent (50%) of all royalty
payments otherwise payable to SSC on the Net Sales of such Licensed Product.
10.4 With respect to SSC, nothing in this Agreement shall be construed
as:
(a) A warranty or representation that any patent applications
filed or that may be filed disclosing and claiming any aspect
of the Included Products will mature into issued patents;
or
(b) An obligation to bring, defend or prosecute actions or suits
against third parties for infringement of any Patent Rights.
10.5 In the event of such infringement, Kendall's remedies against SSC
shall be limited to those remedies expressly set forth in this Article 10.
ARTICLE 11 - INDEMNIFICATION
11.1 SSC agrees to indemnify Kendall, for all costs associated with any
claims, liabilities, suits or judgments arising out of SSC's preexisting license
of Patent Rights and Technical Information to the thirds parties identified in
Paragraph 2.2.
11.2 Kendall agrees to indemnify SSC, for all costs associated with any
claims, liabilities, suits or judgments arising out of Kendall's use of Patent
Rights and Technical Information.
11.3 Kendall assumes complete liability for and will indemnify and hold
SSC and its Affiliates harmless against all liabilities, demands, damages,
expenses, or losses, including, without limitation, reasonable fees for
attorneys, expert witnesses and litigation costs, and including costs incurred
in the settlement or avoidance of any such claim, which result from or are in
connection with any claims of or in connection with any bodily injury (including
death) or property damage, by whomsoever such claim is made, arising out of any
manufacture, use, sale, or other disposition by Kendall or its sublicensees or
its Affiliates of Included Products or processes.
11.4 The indemnification and assumptions of liability contained in
Paragraphs 11.1 and 11.2 shall continue in full force and effect after the
termination of this Agreement.
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ARTICLE 12 - TERMINATION
12.1 Upon any material breach of or material default under this
Agreement by a Party, the other Party may terminate this Agreement by sixty (60)
days' written notice to the breaching Party. Said notice shall become effective
at the end of such period unless during such period the Party shall cure such
breach or default. Upon such termination, Kendall shall transfer to SSC all
right, title and interest to the Patent Rights and Technical Information only if
Kendall terminates.
12.2 Failure to terminate this Agreement following breach or failure to
comply with this Agreement shall not constitute a waiver of the Party's
defenses, rights or causes of action arising from such or any future breach or
non-compliance.
12.3 The provisions hereof relating to the Parties' obligation of
confidentiality shall survive the termination of this Agreement by five years.
ARTICLE 13 - NOTICE
Any notices given under this Agreement shall be in writing and shall be
deemed delivered and effectively made as of the delivery date if hand-delivered,
or it by telecopy or over night airmail, courier the business day the sender has
written confirmation such telecopy or overnight package was received, or when
sent by First Class mail, postage prepaid, addressed to the Parties as follows
(or at such other addresses as the Parties may notify each other in writing four
business days following deposit in the mail:
To Kendall
Tyco Healthcare Group LP
Attn: Vice President Intellectual Property
15 Hampshire Street
Mansfield, MA 02048
To SSC
Safety Syringe Corporation
Attn: President
585 West 500 South
Bountiful, Utah 84101
With a copy to:
Eric L. Robinson
Blackburn & Stoll, LC
77 West 200 South, Suite 400
Salt Lake City, Utah 84101
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ARTICLE 14 - GENERAL
14.1 No Party to this Agreement shall employ or use the name of the
other Party in any promotional materials or advertising without the prior
express written permission of such other party. Nothing herein, however, shall
limit the Parties' right to disclose material information or to make such
disclosures as are required by applicable law.
14.2 SSC and Kendall each for all purposes related to this Agreement,
shall be deemed an independent contractors of the other, and nothing in this
Agreement shall be deemed to create a relationship of employment or agency, or
to constitute SSC and Kendall as partners or joint ventures.
14.3 Each Party hereto acknowledges and agrees: (i) that no
representation or promise not expressly contained in this Agreement has been
made by the other Party hereto or by any of its agents, employees,
representatives or attorneys concerning the subject matter of this Agreement;
(ii) that this Agreement is not being entered into on the basis of or in
reliance on, any promise or representation, express or implied, covering the
subject matter hereof other than those which are set forth expressly in this
Agreement; and (iii) that each Party has had the opportunity to be represented
by counsel of its own choice in this matter, including during the negotiations
which preceded the execution of this Agreement.
14.4 SSC warrants and represents that is has the full right and power
to make the promises and grant the licenses set forth in this Agreement, and
that there are no outstanding agreements, assignments or encumbrances in
existence inconsistent with the provisions of this Agreement. SSC further
warrants and represents that, to the best of its knowledge, the Patent Rights
are valid and SSC has followed all material and applicable patent rules,
procedures and laws in countries where one or more of the Patent Rights have
been filed or have issued.
Kendall warrants and represents that it has the full right and power to
make the promises set forth in this Agreement, and that there are no outstanding
agreements, assignments or encumbrances in existence inconsistent with the
provisions of this Agreement.
14.5 No Party shall be liable for any failure to perform as required by
this Agreement, to the extent such failure to perform is caused by any reason
beyond the Party's control, or by reason of any of the following: labor
disturbances or disputes of any kind, accidents, failure of any required
governmental approval, civil
Page 12 of 22
<PAGE>
disorders, acts of aggression, acts of God, energy or other conversation
measures, failure of utilities, mechanical breakdowns, material shortages,
disease, or similar occurrences.
14.6 No Party hereto shall assign this Agreement to any other person
without the prior written consent of the other Party, and any purported
assignment without such consent shall be void; provided, however, that either
party may assign this Agreement to a successor in ownership of all or
substantially all of its business assets to which this Agreement pertains
whether by sale of assets, merger, consolidation or otherwise. Any other
purported assignment shall be void. This Agreement shall be a binding obligation
of the heirs, successors and permitted assigns of all the right, title and
interest of each party hereto. Notwithstanding the foregoing, the Parties shall
have the right to assign the Agreement to an Affiliate of such Party without
written consent.
14.7 In the event that a court of competent jurisdiction holds any
provision of this Agreement to be invalid, such holding shall have no effect on
the remaining provisions of this Agreement, and they shall continue in full
force and effect.
14.8 This Agreement and the Exhibits hereto contain the entire
Agreement between the Parties. No amendments or modifications to this Agreement
or the attached Exhibits shall be effective unless made in writing and signed by
an authorized representative of both parties.
14.9 This Agreement shall be governed by and construed in accordance
with the laws of the State of Delaware. IN WITNESS WHEREOF, the Parties hereto
have executed this Agreement by their duly authorized officers or
representatives.
SAFETY SYRINGE CORPORATION TYCO HEALTHCARE GROUP LP
By /s/ David A. Robinson By /s/
------------------------ --------------------------------
Its: President Its: President of Kendall Co
Date November 5, 1999 Date November 10,1999
Page 13 of 22
<PAGE>
EXHIBIT 1.2
FlexLoc(R) Technology Patents
SHP File #: SHP002.CP9
Patent #: 5,823,997
Issue Date: 10/20/98
SHP File #: SHP002.C9C
Patent Application Serial #: 5,823,997
Date of Allowance 02/03/99
Page 14 of 22
<PAGE>
EXHIBIT 1.3
Included Product Types
**
Included Product Categories Product Launch Date
** **
The following trademarks are included in Licensed Products:
Included Trademarks
o FlexLoc(R)
o ReLoc(TM)
The following is a exclusive list of products that are specifically excluded
from Licensed Products:
Excluded Product Categories
**
- ---------------
The "**" marks the location of information that has been omitted and filed
separately with the Securities and Exchange Commission pursuant to a request for
confidential treatment.
Page 15 of 22
<PAGE>
EXHIBIT 2.1
ASSIGNMENT
SAFETY SYRINGE CORPORATION (the Assignor), a corporation of the State
of Utah and wholly owned subsidiary of Specialized Health Products
International, Inc. having an office at 585 West 500 South, Bountiful, Utah
84010 currently is assigned the entire right, title and interest to MEDICAL
NEEDLE SAFETY APPARATUS AND METHODS, U.S. Patent Number 5,823,997, Issued
October 20, 1999, hereinafter called the "invention."
TYCO HEALTHCARE GROUP LP (the Assignee), a Delaware Partnership having
an office at 15 Hampshire Street, Mansfield, Massachusetts 02048, desires to
secure the entire right, title and interest in said invention.
In consideration of $1.00 and other goods and valuable considerations
paid to the Assignor by the Assignee, the receipt and sufficiency of which is
hereby acknowledged, IT IS HEREBY ASSIGNED TO THE ASSIGNEE:
The entire right, title and interest in said invention and in the
above-identified United States Patent, and reissues or extension of Letters
Patent or Patents granted thereon, and in all corresponding applications filed
in countries foreign to the United States, and in all patents issuing thereon in
the United States and foreign countries.
It is hereby authorized and requested that the United States
Commissioner of Patents and such Patent Office Officials in foreign countries as
are duly authorized by their patent laws to issue patents, to issue any and all
patents of said invention to the Assignee as the owner of the entire interest,
for the sole use and behoof of the said Assignee, its successors, assigns and
legal representatives.
This assignment and agreement shall be binding upon the heirs and legal
representatives of the Assignor.
Signed _________________________(L.S.)
STATE OF _________ )
: ss.
COUNTY OF ________ )
On __________, 19____, before me personally appeared
________________________ known to me to be the person described and who signed
the annexed assignment in my presence and acknowledge under oath before me that
he has read the same and knows the contents thereof and that he executed the
same as his free act and deed and for the purposes set forth therein.
(SEAL) ________________________________
Notary Public
Page 16 of 22
<PAGE>
ASSIGNMENT
SAFETY SYRINGE CORPORATION (the Assignor), a corporation of the State
of Utah and wholly owned subsidiary of Specialized Health Products
International, Inc. having an office at 585 West 500 South, Bountiful, Utah
84010 currently is assigned the entire right, title and interest to MEDICAL
NEEDLE SAFETY APPARATUS AND METHODS, hereinafter called the "invention."
Preferred embodiments of said invention are disclosed in a United
States patent application heretofore executed, now identified as U.S. Patent
Application Number 09/118,624, filed July 17, 1998, and which was allowed
February 3, 1999 with issue fees having been duly in full paid April 5, 1999.
TYCO HEALTHCARE GROUP LP (the Assignee), a Delaware Partnership having
an office at 15 Hampshire Street, Mansfield, Massachusetts 02048, desire to
secure the entire right, title and interest in said invention.
In consideration of $1.00 and other goods and valuable considerations
paid to the Assignor by the Assignee, the receipt and sufficiency of which is
hereby acknowledged, IT IS HEREBY ASSIGNED TO THE ASSIGNEE:
The entire right, title and interest in said invention and in
the above-identified United States Patent application, and reissues or
extension of Letters Patent or Patents granted thereon, and in all
corresponding applications filed in countries foreign to the United
States, and in all patents issuing thereon in the United States and
foreign countries.
It is hereby authorized and requested that the United States
Commissioner of Patents and such Patent Office Officials in foreign countries as
are duly authorized by their patent laws to issue patents, to issue any and all
patents of said invention to the Assignee as the owner of the entire interest,
for the sole use and behoof of the said Assignee, its successors, assigns and
legal representatives.
This assignment and agreement shall be binding upon the heirs and legal
representatives of the Assignor.
Signed _________________________(L.S.)
STATE OF _________ )
: ss.
COUNTY OF ________ )
On __________, 19____, before me personally appeared
________________________ known to me to be the person described and who signed
the annexed assignment in my presence and acknowledge under oath before me that
he has read the same and knows the contents thereof and that he executed the
same as his free act and deed and for the purposes set forth therein.
(SEAL) ________________________________
Notary Public
Page 17 of 22
<PAGE>
EXHIBIT 2.2
(omitted)
Page 18 of 22
<PAGE>
EXHIBIT 4.1
FUNDING SCHEDULE FOR DEVELOPMENT OF FLEXLOC & RELOC
**
- ---------------
The "**" marks the location of approximately two pages of information that has
been omitted and filed separately with the Securities and Exchange Commission
pursuant to a request for confidential treatment.
Page 19 of 22
<PAGE>
EXHIBIT 4.2
PRODUCT REQUIREMENTS/DESIGN GOALS
**
- ---------------
The "**" marks the location of approximately two pages of information that has
been omitted and filed separately with the Securities and Exchange Commission
pursuant to a request for confidential treatment.
Page 20 of 22
<PAGE>
EXHIBIT 4.3
DEVELOPMENT SCHEDULE
**
- ---------------
The "**" marks the location of approximately two pages of information that has
been omitted and filed separately with the Securities and Exchange Commission
pursuant to a request for confidential treatment.
Page 21 of 22
<PAGE>
EXHIBIT 9.1
**
- ---------------
The "**" marks the location of approximately one page of information that has
been omitted and filed separately with the Securities and Exchange Commission
pursuant to a request for confidential treatment.
Page 22 of 22
