UNITED
STATES DISTRICT COURT
FOR
THE EASTERN DISTRICT OF PENNSYLVANIA
BroTech
Corporation, et al.,
Plaintiffs,
-against-
White
Eagle International Technologies Group, Inc. et al.,
Defendants.
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Civil
Action No. 03-232
STIPULATED
ORDER AND SETTLEMENT
AGREEMENT
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STIPULATED
ORDER AND SETTLEMENT AGREEMENT
by
and
between
BRO-TECH
CORPORATION and PUROLITE INTERNATIONAL LTD.
AND
MEDASORB
CORPORATION
Effective
August 7, 2006
THIS
STIPULATED ORDER AND SETTLEMENT AGREEMENT is made and deemed effective this
7th
day of August, 2006, by and between Bro-Tech Corporation (“Bro-Tech”), a
Delaware corporation, and Purolite International Ltd. (“PIL”), a United Kingdom
corporation, and any Affilates (collectively, “Purolite”), and MedaSorb
Corporation, successor to MedaSorb Technologies, LLC, a Delaware limited
liability company formerly known as RenalTech International, LLC, together
with
White Eagle International Technologies Group and any Affiliates and successors
to any of the foregoing (collectively, “MedaSorb”).
WHEREAS,
Purolite, through its various affiliates, manufactures polymeric resin,
particularly ion exchange products; and
WHEREAS,
MedaSorb is the owner of the MedaSorb Patents (as hereafter defined) and of
proprietary Know-How (as hereafter defined) relating to certain adsorbent
polymers (the “Products,” as hereafter defined) and the use thereof, and is in
the process of seeking FDA approval for certain uses of such Products; and
WHEREAS,
both PIL and MedaSorb have entered into agreements with Vadim Davankov for
the
performance of certain services; and
WHEREAS,
Purolite has instituted a civil action in the United States District Court
for
the Eastern District of Pennsylvania, Civil Action No. 03-232, against MedaSorb,
inter alia, challenging ownership rights in certain of the MedaSorb patents
and
for other complained of actions; and
WHEREAS,
MedaSorb has denied any wrongdoing; and
WHEREAS,
the Parties wish to settle the aforementioned litigation on mutually agreeable
terms without any admission of liability or wrongdoing; and
NOW,
THEREFORE, in consideration of the mutual promises herein contained and
intending to be legally bound, the Parties agree as follows:
As
used
in this Agreement, the following words and phrases shall have the following
meanings:
“Affiliate”
shall mean, with respect to any Person, any other Person which directly or
indirectly through one or more intermediaries controls, is controlled by, or
is
under common control with, such Person. A Person shall be deemed to control
another Person if such Person possesses, directly or indirectly, the power
to
direct or cause the direction of the management and policies of such Person,
whether through the ownership of voting securities, by contract or otherwise.
“Agreement”
shall mean the present Stipulated Order and Settlement Agreement including
all
Exhibits.
“Civil
Action” shall mean Civil Action No. 03-232 now pending in the United States
District Court for the Eastern District of Pennsylvania.
“Competitive
Product” shall mean a product incorporating a hemocompatible porous polymer
designed or formulated to be used in connection with blood, and intended to
be
used in the medical treatment of a patient involving the extra-corporeal
perfusion of the blood of that patient to remove toxic compounds from the blood
of the patient, which product has been approved or applied for use with the
US
Food and Drug Administration for a specified indication. “Competitive Product”
shall exclude any product currently under development by Purolite with any
Third
Party. To Purolite’s knowledge, they are not currently developing any product
with a third party intended for the medical treatment of a patient for sepsis
or
renal disease.
“Dale
and
Nikitin Assignment” shall mean the assignment to MedaSorb of Dale’s and
Nikitin’s interests, if any, in certain inventions as specified in Section 2(a)
below.
“Governmental
Authority” shall mean any court, agency, authority, department, regulatory body
or other instrumentality of any government or country or of any national,
federal, state, provincial, regional, county, city or other political
subdivision of any such government or any supranational organization of which
any such country is a member, including, without limitation, the Food and Drug
Administration, the Securities and Exchange Commission and any other regulatory
agency that now regulates or may regulate MedaSorb.
“Know-How”
shall mean any and all proprietary technical information, know-how, data, test
results, knowledge, techniques, discoveries, inventions, specifications,
designs, trade secrets, regulatory filings, and other information (whether
or
not patentable or patented) which is now or hereafter during the Term of this
Agreement owned or controlled (for purposes of licensing) by, or is otherwise
licensable by, MedaSorb, its predecessors, successors or assigns or its
Affiliates.
“Licensee
Sales” shall mean all arm’s length royalties, fees or other consideration paid,
equitably attributable to or recognized by MedaSorb (or any successors or
assigns) for licensing, sublicensing or continuing a license (other than any
implied agreement by MedaSorb incident to the sale of Products) to permit a
licensee or sublicensee to use the MedaSorb Patents or MedaSorb’s Know-How to
make Products. Licensee Sales shall exclude revenue recognized and value
received by such licensee or sublicensee in connection with sales of Product
by
such licensee or sublicensee but shall include, among other things, any
royalties paid to MedaSorb in connection with such sales. Licensee Sales shall
exclude revenue recognized and value received for the arm’s length sale, lease,
distribution or other disposition of Products to a licensee or sublicensee.
Licensee Sales shall also exclude any fees, consideration or other value
recognized by MedaSorb in connection with the absolute and total sale of all
its
right and interests in the MedaSorb Patents and Know-How if MedaSorb assigns
this Agreement to the assignee and the assignee agrees that it is bound under
the terms of the Agreement in MedaSorb’s place.
“MedaSorb
Assignment” shall mean the assignment to Bro-Tech of equal, undivided interests
in certain of MedaSorb’s inventions as specified in Section 3(a) below.
“MedaSorb
License” shall mean the exclusive patent license granted by Purolite to MedaSorb
as specified in Section 4(a) below.
“Party”
shall mean MedaSorb, Purolite, and their respective Affiliates.
“Person”
shall mean and include an individual, shareholder, partnership, joint venture,
limited liability company, a corporation, a firm, a trust, an unincorporated
organization and a government or other department or agency thereof.
“Products”
shall mean biocompatible porous polymer or polymer based or derived product
used
in direct contact with blood, including, without limitation,
CytoSorb
Ô
and
BetaSorb
Ô
,
that
are manufactured by or for MedaSorb, its licensees, and sublicensees for the
use, application and/or treatment of medical conditions and/or use in such
applications including, without limitation, sepsis, the prevention of
post-operative complications of cardiac surgery, the harvesting of organs from
brain-dead donors, homeland security and battlefield applications, renal disease
and veterinary applications. For the avoidance of doubt, “Products” shall
include the porous polymer or polymer based or derived product which, if sold
as
part of an integral or unified device, shall include only the device which
incorporates or retains the polymer suitable for sale directly to end users
or
for incorporation into a larger device or kit.
“Purolite
Unpatented Technology” shall mean any of Purolite’s confidential or proprietary
information, if any, currently in MedaSorb’s possession and necessary for the
manufacture of a Product subject to payments to Purolite under Section 4 of
this
Agreement,
but
excluding
any
patents, trademarks, service marks, trade names, trade dress, domain names,
logos and other source indicators.
“MedaSorb
Patent Applications” shall mean the patent applications at issue in the Civil
Action, namely U.S. Pat. App. Ser. No. 11/255,132; U.S. Pat. App. Ser. No.
11/105,140; U.S. Pat. App. Ser. No.10/981,055; U.S. Pat. App. Ser.
No.10/980,510; U.S. Pat. App. Ser. No. 10/038,053.
“MedaSorb
Patents” shall mean the patents at issue in the Civil Action, namely U.S. Patent
No. 6,878,127; U.S. Patent No. 6,303,702; U.S. Patent No. 6,159,377; U.S. Patent
No. 6,156,851; U.S. Patent No. 6,153,707; U.S. Patent No. 6,136,424; U.S. Patent
No. 6,133,393; U.S. Patent No. 6,114,466; U.S. Patent No. 6,087,300; U.S. Patent
No. 5,904,663; U.S. Patent No. 6,127,311; and U.S. Patent No.
5,773,384.
“Replacement
Product” shall mean a Product that replaces or substitutes for a Product for
which there has already been a commercial sale, and that has been designed
or
formulated by MedaSorb and that is marketed and promoted by MedaSorb for the
use, application and/or treatment of the same medical condition and/or use
in
the same application (including, without limitation, sepsis, the prevention
of
post-operative complications of cardiac surgery, the harvesting of organs from
brain-dead donors, homeland security and battlefield applications, renal disease
and veterinary applications) as the Product that it replaces or for which it
substitutes. A new Product shall also be deemed a Replacement Product, even
if
it was not so intended, if at least 45% of the Sales of a Product for which
there has already been a commercial sale are replaced or substituted by Sales
of
such new Product.
“Sales”
shall mean all revenue recognized and value received by MedaSorb for the first
arm’s length sale, lease, distribution or other disposition of Products in the
Territory to an unrelated Third Party less sales and use taxes actually paid,
import or export duties actually paid, transportation prepaid or allowed, and
amounts allowed or credited due to returns, with such revenue recognized and
value received being determined in accordance with US GAAP consistently applied.
If MedaSorb recognizes revenue or receives value for the sale, lease,
distribution or other disposition of Products sold in combination with other
products, MedaSorb’s average selling price for the Products as actually sold on
a standalone basis will be used for purposes of calculating Sales revenue.
If
MedaSorb does not have an average selling price for a Product sold on a
standalone basis, then Sales revenue will be calculated by subtracting 120%
percent of the cost of goods of the other products with which the Products
are
sold in combination from the total revenue recognized or value received for
the
sale, lease, distribution or other disposition of Products combined with other
products.
“Sales
Reports” shall mean a written report showing MedaSorb’s revenue recognized in
connection with any Products for the for the applicable reporting period, broken
down by category/product, including a separate category for all Sales and
Licensee Sales.
The
“Term” of this Agreement shall commence as of the date hereof and, subject to
earlier termination in event of breach, shall continue in full force and effect
for a term of eighteen years from the Effective Date of this
Agreement.
“Territory”
shall be worldwide.
“Third
Party” shall mean any Person who is not a Party or an Affiliate, predecessor, or
successor.
“Unpatented
Technology License” shall mean the non-exclusive license to the Purolite
Unpatented Technology granted by Purolite to MedaSorb as specified in Section
4(b) below.
2.
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DALE
AND NIKITIN ASSIGNMENT
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a.
Assignment
.
Dr.
James Dale and Mr. Nikita Nikitin (who are currently employed by Purolite)
and
Purolite hereby irrevocably sell, assign, and transfer to MedaSorb all their
right, title and interest, if any, for the United States and its territorial
possessions and in all foreign countries to (and the right to claim priority
of)
the inventions which are claimed in the MedaSorb Patents and to the inventions
which are the subject of the MedaSorb Patent Applications.
a.
Assignment
.
MedaSorb hereby irrevocably sells, assigns, and transfers to Bro-Tech an equal,
undivided ownership interest for the United States and its territorial
possessions and in all foreign countries to the inventions which are claimed
in
the MedaSorb Patents and to the inventions which are disclosed in the MedaSorb
Patent Applications.
a.
Exclusive
Patent License.
Bro-Tech
hereby grants to MedaSorb and its Affiliates an exclusive license in, under
and
to all of Purolite’s right, title and interest in the MedaSorb Patents and the
MedaSorb Patent Applications, with the right to sublicense. Such license shall
be exclusive even as to Purolite, and, subject to the provisions of Section
6,
shall continue for the Term of this Agreement. During such period as
the MedaSorb License is exclusive, MedaSorb shall have the sole right to
enforce the MedaSorb Patents and any patents issuing from the MedaSorb Patent
Applications
,
and
Purolite shall provide any further assurances as may be needed to confirm
MedaSorb’s sole right. The Court, having retained jurisdiction, shall be
empowered to order Purolite to provide such further assurances.
b.
Unpatented
Technology License.
Subject
to payment of amounts owed under subsection (c) below, Purolite hereby grants
to
MedaSorb a perpetual, worldwide, irrevocable, non-exclusive license to practice
under the Purolite Unpatented Technology for manufacture of Products. This
license may be sublicensed only to a Person manufacturing Product solely on
MedaSorb’s behalf for commercial sale by MedaSorb or otherwise with Purolite’s
consent. Purolite acknowledges that the disclosures in the MedaSorb Patents
and
in the MedaSorb Patent Applications shall not be included within the definition
of Purolite Unpatented Technology, and that MedaSorb shall not require a license
from Purolite to use any or all of the information and other disclosures in
the
MedaSorb Patents and in the MedaSorb Patent Applications for all
purposes.
c.
Know-How
License.
Effective only upon the conditions set forth in Section 6(f) below, Purolite
is
hereby granted an irrevocable, fully paid-up, worldwide, non-exclusive license
to use and practice under all of MedaSorb’s Know-How for the manufacture or sale
of Products as it then exists on the date of a final order of a court rejecting
or terminating this Agreement. In furtherance of this grant MedaSorb agrees
that
upon Purolite’s receipt of the notice specified in Section 6(f) below of
MedaSorb’s intention to file a voluntary petition under the Bankruptcy Code
Purolite shall have the right to demand that MedaSorb fully disclose its
Know-How. Within thirty (30) days of the notice specified in Section 6(f) below
or before the filing of the voluntary petition (whichever is earlier), MedaSorb
shall fully disclose to an Escrow Agent reasonably acceptable to the parties
and
take such other further steps as reasonably necessary to make available to
such
Escrow Agent the Know-How necessary or useful for the manufacture of Products.
If MedaSorb fails to provide the notice required under Section 6(f) below,
the
Know-How shall immediately and automatically be considered held by the United
States District Court for the Eastern District of Pennsylvania as a substitute
escrow agent so as to permit it to effectuate the purposes of this Stipulated
Order and Settlement Agreement and to the extent such occurs, shall not be
considered a breach by MedaSorb. The Escrow Agent shall be instructed that
upon
a termination or rejection specified in Section 6(f) and the effectiveness
of
the license granted in this Section, the escrow agent shall deliver such
Know-How to Purolite. If no such termination or rejection occurs, the Escrow
Agent shall return all information relating to the Know-How to MedaSorb. If,
in
providing the Know-How to Purolite under this license, MedaSorb identifies
certain Know-How as confidential, then Purolite will maintain such Know-How
in
strictest confidence for so long as MedaSorb continues to identify that Know-How
as confidential.
d.
Royalties
for Sales
.
MedaSorb will pay Purolite a royalty on all Sales by MedaSorb during the Term
of
this Agreement as follows:
i.
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2.5%
of Sales of each Product for three (3) years beginning with the first
commercial Sale of each defined
Product;
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ii.
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4%
of Sales of each Product for the two (2) years after the completion
of the
period defined in (i) above for each defined
Product;
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iii.
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5%
of Sales of each Product for the six (6) years after the completion
of the
period defined in (ii) above for each defined
Product;
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iv.
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4%
of Sales of each Product for the four (4) years after the completion
of
the period defined in (iii) above for each defined
Product;
and
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v.
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2.5%
of Sales of each Product for the remainder of the Term after the
completion of the period defined in (iv) above for each
defined
Product.
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e.
Royalties
for Replacement Products.
Upon
Purolite first becoming aware of a first commercial sale of any new Product
or
Replacement Product, Purolite shall have the right to request and obtain from
MedaSorb sufficient details concerning the Product and its intended marketing
and promotion to evaluate whether or not it is a Replacement Product. The
royalty rate for a Replacement Product shall be the same as the royalty rate
for
the Product that it replaces or for which it substitutes. Upon the first
commercial sale of a Replacement Product, that Replacement Product shall be
deemed to be a Product for all other purposes under this Agreement. If Purolite
is of the reasonable opinion that a new Product should be deemed a Replacement
Product, then it shall provide notice to MedaSorb as provided in Section 12(f)
below, and the parties shall meet and confer in good faith to seek to amicably
resolve the matter. If the parties are unable to resolve the matter, the dispute
shall be submitted exclusively by motion to the United States District Court
for
the Eastern District of Pennsylvania (or a Magistrate Judge in that District)
for a binding, non-appealable determination.
f.
Payments
to Purolite for Licensee Sales.
MedaSorb
will pay Purolite 20% of all Licensee Sales received by MedaSorb for the
duration of the Term, and 20% of all Licensee Sales owed to but not received
by
MedaSorb before the expiration or termination of this Agreement when received
by
MedaSorb provided that MedaSorb uses commercially reasonable efforts to collect
such monies owed.
g.
Payment
Terms.
The
royalties and payments payable under Sections 4(c) and (d) above shall be paid
in arrears by MedaSorb to Purolite by wire transfer of immediately available
funds to an account specified by Purolite within forty-five (45) days of the
end
of every calendar quarter for the Term of this Agreement beginning with the
end
of the first calendar quarter in which MedaSorb first makes a commercial Sale
of
any Product. MedaSorb shall also submit a Sales Report to Purolite within
forty-five (45) days of the end of each such calendar quarter.
h.
Yearly
Audits.
During
the Term of this Agreement and for such period reasonably necessary to conduct
the final audit for examination, after the close of each fiscal year, Purolite’s
auditors may, within forty-five (45) days of the close of each fiscal year
provide reasonable prior written notice identifying the date, time and scope
of
the audit, audit MedaSorb’s books and records relating to Sales of Products,
Licensee Sales and any other revenue relating to Products to verify MedaSorb’s
Sales Reports. Each such audit shall be limited to the immediately preceding
fiscal year, shall be strictly limited in scope to that necessary to accomplish
the stated objective of verifying MedaSorb’s Sales Reports, and shall be
completed promptly with the least disruption to MedaSorb as is reasonable under
the circumstances. If Purolite does not provide the required notice within
forty-five (45) days of any given fiscal year, it shall not be entitled to
audit
MedaSorb’s books and records for that fiscal year, provided however, that in the
event any audit uncovers an understatement of Sales of Licensee Sales of more
than 7.5%, Purolite shall have the right to audit any previously un-audited
years books. In no event shall Purolite have the right to contact, involve
or
interfere with MedaSorb’s customers as part of such audit or examination.
i.
Audit
Costs.
All
costs of any such audit shall be borne by Purolite, provided that if any audit
reveals an understatement of Sales of more than 7.5% of the correct amount,
MedaSorb shall reimburse Purolite’s reasonable costs of such audit.
5.
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PUROLITE’S
NON-COMPETITION
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a.
Non-Competition
Agreement.
During
the term of the Agreement, Purolite will not sell or offer for sale any
Competitive Product to any Third Party intended for use in the approved or
applied for indication: For the thirty-six month period beginning with the
Effective Date of this Agreement, Purolite will not sell or offer for sale
a
Competitive Product to any Third Party. If, by the expiration of that thirty-six
month period, MedaSorb has paid Purolite Two Million Five Hundred Thousand
($2,500,000) Dollars in royalties or other payments, then Purolite will not
sell
or offer for sale any Competitive Product to any Third Party intended for use
in
the approved or applied for indication for the succeeding twelve month period
between the third and fourth anniversaries of the Effective Date of this
Agreement. If, by the end of each twelve month period thereafter MedaSorb has
paid Purolite Two Million Five Hundred Thousand ($2,500,000) Dollars for that
twelve month period, then Purolite will not sell or offer for sale Competitive
Product to any Third Party intended for use in the approved or applied for
indication for the succeeding twelve month period. For the purpose of
determining whether MedaSorb has paid Purolite Two Million Five Hundred Thousand
($2,500,000) Dollars in any twelve month period after the fourth anniversary
of
the Effective Date of this Agreement, there shall be added to the amount
actually paid to Purolite in that twelve month period the difference, if any,
between what MedaSorb actually paid Purolite in the immediately preceding twelve
month period and Two Million Five Hundred Thousand ($2,500,000) Dollars. For
example, if in the twelve month period between the fourth and fifth
anniversaries of the Effective Date of this Agreement MedaSorb actually paid
Purolite Three Million ($3,000,000) Dollars, MedaSorb can satisfy the Two
Million Five Hundred Thousand ($2,500,000) Dollar requirement for the twelve
month period between the fifth and sixth anniversaries of the Effective Date
of
this Agreement by adding a Five Hundred Thousand ($500,000) credit from the
prior twelve month period ($3,000,000 minus $2,500,000) to Two Million
($2,000,000) Dollars in actual payments to Purolite in the twelve month period
between the fifth and sixth anniversaries of the Effective Date of this
Agreement.
b.
Termination
of Non-Competition Agreement.
Purolite
can terminate its non-competition obligation at any time by notifying MedaSorb
as provided in Section 12(f) below of such termination. Upon delivery of such
notice by Purolite, MedaSorb will owe no further royalties under Section 4(c)
above or payments specified in Section 4(d) above, and subject to payment of
any
amounts owed and outstanding at the date of delivery of the notice, the MedaSorb
License and Unpatented Technology License will be deemed fully paid-up. All
other terms of this Agreement will remain in force, unchanged. Without prejudice
to MedaSorb’s rights in the event of a material breach, no other termination of
Purolite’s covenant not to compete, for any reason, shall in any way relieve
MedaSorb’s payment obligations hereunder.
c.
Nothing
in Sections 5(a) or (b) above which may otherwise permit Purolite to sell or
offer for sale Competitive Products without violation of its covenant not to
compete shall be construed as granting any right or permission for Purolite
to
practice under any patent that is otherwise enforceable by MedaSorb (including
the MedaSorb Patents and any patents that issue from the MedaSorb Patent
Applications).
a.
No
Termination.
This
Agreement cannot be terminated before the end of the Term defined in Section
1
above, except with the consent of both Parties or as provided in this Section
6.
b.
Bankruptcy.
All
rights and licenses granted under or pursuant to this Agreement are, and shall
otherwise be deemed to be, for purposes of Section 365(n) of the U.S. Bankruptcy
Code and any similar laws in any other country in the Territory, licenses of
rights to “intellectual property” as defined under Section 101(35A) of the U.S.
Bankruptcy Code. The Parties agree that all intellectual property rights
licensed hereunder, including, without limitation, any patents or patent
applications in any country of a Party covered by the license grants under
this
Agreement, are part of the “intellectual property” as defined under Section
101(35A) of the Bankruptcy Code subject to the protections afforded the
non-terminating Party under Section 365(n) of the Bankruptcy Code, and any
similar law or regulation in any other country.
c.
Material
Breach.
In the
event either Party materially breaches this Agreement, the non-breaching Party
may terminate this Agreement upon 30 days notice if during such notice period
the breach has not been fully cured.
d.
Willful
Non-Payment.
If,
after the expiration of any cure period as specified in Section 6(c) above,
the
Parties disagree whether there has been a default in payment by MedaSorb which
has failed to be cured in a timely manner (regardless of the cause for
disagreement or non-payment), Purolite shall have the right to bring a legal
action in the United States District Court for the Eastern District of
Pennsylvania seeking an award of damages and remedies that would be available
to
it for breach of contract under Pennsylvania law as well as an order that the
“exclusive” Patent License grant of Section 4(a) be converted to a
“non-exclusive” grant.
i.
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If,
as a result of a final ruling of that Court, MedaSorb is found to
have
willfully failed to pay Purolite amounts due under this Agreement
and that
such failure to pay was not as a result of a good faith disagreement
concerning whether one Party has materially breached and failed to
cure in
a timely manner one or more obligations of this Agreement, then,
in
addition to all the remedies which may otherwise be available under
applicable law, the exclusivity provision in the MedaSorb License
shall be
cancelled. If the exclusivity provision in the MedaSorb License is
cancelled under this Section 6(d)(i), Purolite will not offer to
license
or license any rights in, under or to the MedaSorb Patents or the
MedaSorb
Patent Applications to any existing licensee of MedaSorb with whom
there
is an existing, valid license, nor to any Third Party for any product
that
competes with any Product manufactured, sold or offered for sale
by any
Third Party under an existing and subsisting exclusive license from
MedaSorb, so long as any such MedaSorb Third Party licensee pays
directly
to Purolite the payments to which Purolite would otherwise be entitled
from MedaSorb under this Agreement as a result of such license from
MedaSorb to such Third Party. The provisions of this Section 6(d)(i)
shall
apply only if MedaSorb willfully fails to pay Purolite amounts due
under
this Agreement, and shall not apply if there is a good faith dispute
between MedaSorb and Purolite about the amounts due under this Agreement,
even if the Court should find that MedaSorb owes Purolite additional
amounts as a result of that good faith dispute. Nothing in this Section
6(d)(i) shall grant or be construed to grant Purolite any license
in or
other right to use MedaSorb’s Know-How nor is anything in this Section
6.d. intended to limit or restrict Purolite from enforcing this Stipulated
Order and Settlement Agreement .
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ii.
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The
remedies available to Purolite under this Section shall not include
terminating the MedaSorb License and Purolite shall not be entitled
to
terminate the MedaSorb License even if, as a result of a final ruling
of
the Court, MedaSorb is found to have willfully failed to pay Purolite
amounts due under this Agreement.
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iii.
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If,
in the course of a legal action pursuant to Section 6(d)(i), the
Court
finds a Party’s conduct to be sanctionable, then the Parties agree that
the Court could award as a sanction an upward or downward prospective
adjustment in the royalties specified in Section 4(d) above or the
payments specified in Section 4(f)
above.
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e.
Effect
of Termination.
Subject
to the provisions of Section 6(d), upon termination or expiration of this
Agreement all rights and licenses granted hereunder terminate, with the
exception only of the Purolite Unpatented Technology License under Section
4(b)
and the license to Know-How provided for in Section 4(c), which shall not
terminate. Upon such termination the Parties shall immediately cease using
any
patented or proprietary technology belonging entirely to the other Party
which
is no longer the subject of a license granted hereunder.
f.
MedaSorb’s
Bankruptcy.
If
MedaSorb voluntarily files a petition for reorganization under the Bankruptcy
Code, it will do so only in the United States District Court for the Eastern
District of Pennsylvania, and only upon at least twenty-four (24) hours prior
notice to Purolite of its intention to do so. MedaSorb or its receiver or
trustee shall have the absolute right to assume this Agreement and all its
provisions in accordance with the applicable bankruptcy laws for the assumption
of executory contracts, and Purolite hereby consents to such assumption by
MedaSorb or its receiver or trustee. If this Agreement is terminated or rejected
by MedaSorb or its receiver or trustee under applicable bankruptcy laws in
whole
or in part in any respect that substantially impairs Purolite’s material rights
under this Agreement by a final order of a court of competent jurisdiction
in
connection with MedaSorb’s bankruptcy following a filing by MedaSorb of a
voluntary petition for reorganization under Chapter 11 of the Bankruptcy Code,
then in addition to all other remedies that it might have under applicable
state
or federal law, Purolite’s right and license under Section 4(c) above shall
become fully and automatically effective.
7.
|
EXPANDED
DEFINITION OF PRODUCTS.
|
a.
At
any
time after the Effective Date of this Agreement, MedaSorb may, at its option
and
in its sole discretion, provide Purolite with notice as provided in Section
12(f) below of its intention to revise the definition of “Products” to that
stated in Section 7(c) below. Effective immediately upon the notice having
been
deemed given as provided in Section 12(f) below, the revised definition of
“Products” as stated in Section 7(c) shall be deemed to be the applicable
definition of “Products” for all purposes under this Agreement for the remainder
of the Term of this Agreement.
b.
If
MedaSorb’s first commercial sale to a Third Party is of a product that would
otherwise fall within the definition of “Product” except that it is used in
direct contact with a physiological fluid other than blood, then the revised
definition of “Products” as stated in Section 7(c) shall be deemed to be the
applicable definition of “Products” for all purposes under this Agreement for
the remainder of the Term of this Agreement.
c.
The
revised definition of “Products” as provided in Sections 7(a) or 7(b) above
shall be:
“Products”
shall mean biocompatible porous polymer or polymer based or derived product
or
device used in direct contact with physiological fluids, including, without
limitation, CytoSorb
Ô
and
BetaSorb
Ô
,
that
are manufactured by or for MedaSorb, its licensees, and sublicensees for the
use, application and/or treatment of medical conditions and/or use in such
applications including, without limitation, sepsis, the prevention of
post-operative complications of cardiac surgery, the harvesting of organs from
brain-dead donors, homeland security and battlefield applications, renal disease
and veterinary applications.
For the
avoidance of doubt, “Products” shall include the porous polymer or polymer based
or derived product which,if sold as part of an integral or unified device,
shall
include only the device which incorporates or retains the polymer suitable
for
sale directly to end users or for incorporation into a larger device or
kit.
a.
Due
Organization, Valid Existence and Due Authorization.
Each
Party hereto represents and warrants to the other Party as follows: (a) it
is
duly organized and validly existing under the laws of its place of organization;
(b) it has full power and authority and has taken all action necessary to enter
into and perform this Agreement; (c) the execution and performance by it of
its
obligations hereunder will not constitute a breach of, or conflict with, its
organizational documents nor any other material agreement or arrangement,
whether written or oral, by which it is bound; (d) it has complied in all
respects with all laws applicable to it; (e) this Agreement is its legal, valid
and binding obligation, enforceable in accordance with the terms and conditions
hereof; and (f) no broker, finder or investment banker is entitled to any
brokerage, finder’s or other fee in connection with this Agreement or the
transactions contemplated hereby based on arrangements made by it or on its
behalf.
b.
Purolite’s
and MedaSorb’s Current Activity.
Purolite
represents and warrants that it is not currently developing any product with
any
Third Party which, to Purolite’s knowledge, is related to the treatment of
sepsis or renal dialysis. MedaSorb represents and warrants that it is not
currently developing any product which, to MedaSorb’s knowledge, is intended to
be used in connection with physiological fluids other than blood.
c.
Disclaimer.
Except
as expressly set forth herein, no Party makes any express or implied warranties,
statutory or otherwise, concerning the value, adequacy, freedom from fault
of,
quality, efficiency, stability, characteristics or usefulness of, or
merchantability, or fitness for a particular purpose of the Products or the
Unpatented Purolite Technology.
a.
Confidentiality.
This
Agreement and each of its terms, the Unpatented Purolite Technology and the
Know-How are confidential, and will be kept strictly confidential by the
parties.
b.
Exceptions.
The
foregoing obligations of confidentiality shall not prevent the
disclosure:
i.
|
of
the Unpatented Purolite Technology by Purolite or of MedaSorb’s Know-How
by MedaSorb;
|
ii.
|
of
information in order to defend or enforce any of its rights or of
information required by any Governmental Authority;
|
iii.
|
of
any amount directly payable by a Third Party to Purolite under Section
6(d)(i); or
|
iv.
|
of
information that is or becomes available to the public through no
fault of
the party seeking to disclose or was known to a party prior to its
disclosure by the other Party or an Affiliate.
|
c.
Survival.
The
obligations of confidentiality set forth in this Section shall survive the
termination of this Agreement.
d.
General
Statement of End of Dispute.
The
Parties shall have the right to publicly disclose that they have achieved an
amicable resolution to the Civil Action.
10.
|
THE
RUSSIAN SCIENTISTS
|
a.
Until
the
earlier of the termination or breach giving rise to termination of this
Agreement or the expiration of the Term, and notwithstanding any conflicting
contractual rights that Purolite might have (but subject to any other Third
Party contractual rights and any existing or future obligations of
confidentiality owed to Purolite), MedaSorb is free to engage the Russian
Scientists (Vadim Davankov, Maria Tsyurupa, Ludmilla Pavlova and Dzidra Tur)
as
consultants restricted to the area of Products, and Purolite will not seek
to
enter into any arrangement with the Russian Scientists that would preclude
MedaSorb from working with them in the area of Products. Purolite acknowledges
that MedaSorb is free to engage
the
A. N.
Nesmeyanov Institute of Element-Organic Compounds (known as “INEOS”) without
restriction (but subject to any other Third Party contractual rights and any
existing or future obligations of confidentiality owed to Purolite), other
than
for
the
services of the Russian Scientists, who may be engaged by MedaSorb, directly
or
through INEOS, only as provided in the preceding sentence.
b.
Purolite
shall not claim any right, title or interest in any MedaSorb Know-How solely
because MedaSorb has engaged the Russian Scientists or INEOS as consultants
as
provided in Section 10(a) above.
c.
Purolite
and MedaSorb each acknowledge that there is a risk that the Russian Scientists
may, as a result of their consulting work for both parties, transfer
confidential or proprietary technology belonging to one party to the other
party. The parties shall put reasonable safeguards in place to minimize the
transfer of any such confidential or proprietary technology. Notwithstanding
the
above, each party reserves their rights to their existing contractual
relationships with the Russian Scientists and INEOS to protect confidentiality
and trade secrets in all areas of non-Products.
11.
|
DISMISSAL
OF CIVIL ACTION
|
a.
Dismissal
With Prejudice.
Upon the
execution of this Agreement, the Parties shall instruct their outside counsel
to
execute and file a dismissal of the Civil Action with prejudice, substantially
in the form of Attachment A hereto.
a.
Waiver.
The
failure of either Party to insist upon the performance of any of the provisions
of this Agreement shall not be considered a waiver with respect to any breach
or
relinquishment of future compliance therewith; nor shall a waiver by either
Party of any breach at one time of any provision operate as a waiver of any
other provision or as a continuing waiver of such provision.
b.
Written
Changes.
This
Agreement may not be altered, modified, changed or amended, or waived, in whole
or in part, except in writing signed by the Parties and except as expressly
set
forth herein.
c.
Governing
Law and Jurisdiction.
i.
|
This
Agreement and the performance hereof shall be governed by and construed
in
accordance with the laws of the Commonwealth of Pennsylvania, USA
which
would be applicable to transactions executed and to be wholly performed
in
the Commonwealth of Pennsylvania, USA, among residents of the Commonwealth
of Pennsylvania, USA.
|
ii.
|
This
Agreement upon stipulation and adoption by the Court will be deemed
entered as a final, binding, non-appealable order of the Court, and
the
United States District Court for the Eastern District of Pennsylvania
will
retain exclusive jurisdiction of the Parties and of this Agreement
to
enforce its terms and to resolve any dispute arising under this Agreement.
The Parties agree that they will not begin any legal action relating
to or
arising from this Agreement, its enforcement or the resolution of
any
dispute except in the United States District Court for the Eastern
District of Pennsylvania.
|
d.
Entire
Agreement.
This
Agreement constitutes the entire agreement and understanding between the Parties
with respect to its subject matter and supersedes any prior agreement,
statement, representation, warranty or understanding with respect thereto.
e.
Force
Majeure.
Neither
Party shall be held responsible for any failure of performance hereunder or
for
damages caused by any delay or default due to any contingency beyond its control
preventing performance hereunder, including, without limitation, war, laws,
embargoes, export, shipping or remittance restrictions implemented by
governmental authorities, strikes, lockouts, accidents, fires, delays or
defaults caused by carriers, floods or seizure, or control or rationing imposed
by Governmental Authorities; provided, however, that such Party shall
immediately notify the other Party hereto in writing of the occurrence of the
event of force majeure (with reasonable particulars); provided further, that
such Party shall thereafter take all commercially reasonable efforts with a
view
to its performance hereunder being resumed within the shortest possible time.
f.
Notices.
Notices
required hereunder shall be in writing and shall be deemed to be given one
business day after delivery to an overnight courier service (such as Federal
Express) or upon transmission by telefax (provided that in each instance there
is written evidence of delivery or transmission) to the following addresses
or
to such other address as either Party may designate by notice given in
accordance herewith:
If
to
Purolite:
Bro-Tech
Corporation
150
Monument Road
Bala
Cynwyd, PA 19004
Attention:
Mr. Steve Brodie
Fax
No.:
(610) 688-8139
With
copies (which shall not constitute notice) to:
White
& Case, LLP
1155
Avenue of the Americas
New
York,
NY 10036-2787
Attention:
Steven M. Betensky, Esq.
Fax
No.:
(212) 354-8113
If
to
MedaSorb:
MedaSorb
International, LLC
7
Deer
Park Drive
Suite
K
Monmouth
Junction, NJ 08852
Attention:
Mr. Al Kraus
Fax:
(732) 329-8650
With
copies (which shall not constitute notice) to:
Rubin,
Bailin, Ortoli, Mayer, Baker & Fry LLP
405
Park
Avenue, 15th Floor
New
York,
New York 10022-4405
Attention:
Joseph Rubin, Esq.
Fax:
(212) 826-9307
g.
Binding
Effect; Assignment.
This
Agreement and all the provisions hereof shall be binding upon and shall inure
to
the benefit of the Parties hereto and their respective successors and permitted
assigns. Neither this Agreement nor any of the rights, interests or obligations
hereunder shall be assigned, directly or indirectly, including, without
limitation, by operation of law, by any Party hereto without the prior written
consent of the other Party hereto, provided, however, that either Party may
(i)
assign any or all of its rights and interests hereunder to one or more of its
Affiliates; (ii) assign this Agreement in its entirety in connection with a
merger, consolidation or sale involving a transfer of all or substantially
all
of the assets of the business of MedaSorb, or the business of Bro-Tech; and
(iii) assign its rights under this Agreement to any of its or its Affiliates’
lenders as collateral security. Before any change in control (whether by merger,
sale, reorganization or otherwise), MedaSorb will obtain and provide to Purolite
the new owner’s written consent to assume the obligations under this Settlement
Agreement.
h.
Headings.
Headings
used in this Agreement are for reference purposes only and shall not in any
way
affect the meaning or interpretation of this Agreement.
i.
English.
This
Agreement is entered into the English language and all notices and
communications pursuant to this Agreement to be considered effective shall
be in
the English language. Should a translation of this Agreement into any other
language be made for any reason, all matters involving interpretation shall
be
governed by the English text, except to the extent required by applicable law.
j.
Severability.
If one
or more provisions of this Agreement are found by a court or arbitrator of
competent jurisdiction, or any Governmental Authority with competent
jurisdiction over the Parties hereto, to be illegal, invalid or unenforceable,
in whole or in part, the remaining terms and provisions of this Agreement shall
remain in full force and effect disregarding such illegal, invalid or
unenforceable portion and such court, arbitrator or Governmental Authority
shall
be empowered to modify such illegal, invalid or unenforceable provision to
the
extent necessary to make this Agreement enforceable in accordance with the
intent and purposes of the Parties expressed in this Agreement to the fullest
extent practicable and as permitted by applicable law.
k.
Joint
Drafting.
This
Agreement shall be deemed to have been drafted jointly by the Parties hereto
and
no presumption or rules of construction based upon drafting this Agreement
shall
be made in any legal proceedings arising in relation hereto.
l.
Expenses.
Except
as otherwise specifically provided herein or expressly agreed in writing by
the
Parties, each Party shall be responsible for its own costs and expenses related
to its performance of this Agreement.
m.
Counterparts.
This
Agreement may be executed in any number of counterparts, each of which shall
be
deemed to be an original, but all of which together shall constitute one and
the
same agreement.
n.
Attachments.
All
attachments attached hereto are incorporated into this Agreement, as such
exhibits and schedules may be amended in accordance with the terms hereof.
IN
WITNESS WHEREOF, the Parties have executed this Agreement as of the date first
above written.
BRO-TECH
CORPORATION
By:
__________________________
Name:
________________________
Title:
_________________________
|
PUROLITE
INTERNATIONAL LTD.
By:
__________________________
Name:
________________________
Title:
_________________________
|
MEDASORB
CORPORATION
By:
__________________________
Name:
________________________
Title:
_________________________
AS
TO
SECTION 2 ONLY:
__________________________
James
Dale
__________________________
Nikita
Nikitin
This
Stipulated Order and Settlement Agreement is approved by the Court and adopted
as a Final Order, this _____ date of , 2006
___________________________
U.S.D.J
UNITED
STATES DISTRICT COURT
FOR
THE EASTERN DISTRICT OF PENNSYLVANIA
BroTech
Corporation, et al.,
Plaintiffs,
-against-
White
Eagle International Technologies Group, Inc. et al.,
Defendants.
|
)
)
)
)
)
)
)
)
)
)
|
Civil
Action No. 03-232
STIPULATION
OF
DISMISSAL
WITH
PREJUDICE
|
Plaintiffs
BroTech Corporation and Purolite International, Ltd. and defendants White
Eagle
International Technologies Group, Inc., White Eagle International Technologies,
L.P. and RenalTech International, LLC (which has been succeeded by Medasorb
Corporation) hereby
stipulate,
by and through their undersigned counsel, to request the Court to enter the
attached
Stipulated
Order and Settlement Agreement, which has been executed by the parties. Upon
the
Court's
entry of the Stipulated Order as the Court's final judgment on the merits in
the
above-
captioned
action, the Court's dismissal of this action on July 24, 2006, under local
Rule
41.1 (b)
pursuant
to parties' settlement will now become final and with prejudice. Notwithstanding
the
dismissal
of the above-captioned action with prejudice, this Court retains jurisdiction
over this matter to enforce the Stipulated Order and Settlement Agreement
pursuant to the terms provided therein. The parties will bear their own
costs
EXHIBIT
A
.
________________________________
SPECTOR
GADON & ROSEN, P.C.
Paul
R. Rosen, Esquire
Bruce
Thall, Esquire
1635
Market Street, 7
th
Floor
Philadelphia,
PA 19103
(215)
241-8872
Attorneys
for Plaintiffs
________________________________
WHITE
& CASE
Steven
M. Betensky, Esquire
1155
Avenue of the Americas
New
York, NY 10036-2787
(212)
819-2497
Attorneys
for Plaintiffs
|
________________________________
ABELMAN,
FRAYNE & SCHWAB
Jeffrey
A. Schwab, Esquire
Richard
L. Crisona, Esquire
666
Third Avenue
New
York, New York 10017
(212)
949-9022
Attorneys
for Defendants
|
SO
ORDERED:
_____________________
U.S.D.J.
EXHIBIT
A