ASSET PURCHASE AGREEMENT
EFFECTIVE AS OF
JANUARY 17, 2014
BETWEEN
LUNA INNOVATIONS INCORPORATED
AND
INTUITIVE SURGICAL OPERATIONS, INC.
AND
INTUITIVE SURGICAL INTERNATIONAL LTD.
Confidential and Proprietary
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE COPY FILED HEREWITH OMITS THE INFORMATION SUBJECT TO A CONFIDENTIALITY REQUEST. OMISSIONS ARE DESIGNATED [***]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
ASSET PURCHASE AGREEMENT
This Asset Purchase Agreement (this
“Agreement”
) is entered as of January 17, 2013 (
“Agreement Date”
), by and between Luna Innovations Incorporated and Luna Technlogies, Inc., Delaware corporations having their principal place of business at 1 Riverside Circle, Suite 400, Roanoke, VA 24016 (collectively, “
Seller”
), and Intuitive Surgical Operations, Inc., a Delaware corporation having its principal place of business at 1266 Kifer Road, Sunnyvale, California 94086 (“
Purchaser”
), and Intuitive Surgical International, Ltd, a Cayman Islands company and an indirect and wholly-owned subsidiary of Purchaser (“ISIL”). Each of Seller, Purchaser, and ISIL shall be referred to herein as a
“Party”
and shall be collectively referred to as the
“Parties”
. Capitalized terms that are used, whether in the singular or plural, shall have the meanings set forth in
Section 1
(Definitions) or, if not set forth in
Section 1
, the meaning designated in places throughout the Agreement.
W I T N E S S E T H:
WHEREAS, Seller and Purchaser are Parties to a License Agreement dated effective January 10, 2010 (the “
2010 License Agreement
”) and a Development and Supply Agreement dated June 11, 2007 and its associated amendments dated May 20, 2008, Jan. 12, 2010, April 27, 2010, Sept. 2, 2010, March 23, 2011, March 19, 2012, Dec. 15, 2012, and Jan. 1, 2013 (the “
Development and Supply Agreement
”).
WHEREAS, Seller wishes to sell, and Purchaser wishes to purchase, all of Seller’s
Luna Healthcare
(as defined below) assets related to
FOSSL Technology
(as defined below), including employees and intellectual property, as more particularly described herein, all upon the terms and subject to the conditions set forth below.
WHEREAS, Purchaser agrees to concurrently enter into a cross-license agreement attached as
Exhibit A
(the “
2014 License Agreement
”) to grant back to Seller, to the extent Purchaser is empowered, an exclusive license (except Purchaser shall reserve for itself a worldwide right to practice on a non-exclusive basis) to the FOSSL Technology outside the Field of Medical Healthcare and an non-exclusive license to the FOSSL Technology in the Field of Non-Robotics Medical Devices (as defined below) strictly limited to applications involving S/T Sensing (as defined below), both licenses subject to the terms and conditions set forth in the 2013 License Agreement.
WHEREAS, further to the 2014 License Agreement, Seller wishes to grant ISIL, and ISIL wishes to accept, certain perpetual, fully paid-up, royalty free rights in and to the intellectual property included in Seller’s
Luna Healthcare
(as defined below) assets related to
FOSSL Technology
(as defined below), upon the terms and subject to the condition set forth below.
WHEREAS, [***]
Confidential and Proprietary
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE COPY FILED HEREWITH OMITS THE INFORMATION SUBJECT TO A CONFIDENTIALITY REQUEST. OMISSIONS ARE DESIGNATED [***]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
WHEREAS, Seller wishes to affirm its obligation under the 2010 License Agreement under which it grants, to the extent Seller is empowered, Purchaser a worldwide co-exclusive license to all Intellectual Property related to FOSSL Technology Controlled by Seller after the Effective Date in the Field of Medical Robotics.
NOW, THEREFORE, in consideration of the mutual covenants and other good and valuable consideration described herein, the receipt and sufficiency of which are hereby acknowledged, the Parties hereto covenant and agree as follows.
1.
Definitions
.
|
|
1.1.
|
Certain Definitions
. For purposes of this Agreement, in addition to the terms that are defined parenthetically elsewhere in this Agreement, the following terms shall have the following meanings:
|
(a)
“Acquisition Agreements”
shall mean, collectively, this Agreement; the IP Assignment Agreement attached hereto as
Exhibit B
; the 2014 License Agreement; [***]
Exhibit H
; and any and all other release, transfer, assignment, and assumption documents and all certificates delivered in connection with this Agreement
.
(b)
“Act”
shall mean the U.S. Federal Food, Drug, and Cosmetic Act, as amended, and the rules and regulations promulgated thereunder.
(c)
“Action”
shall mean any claim, dispute, action (including any action seeking injunctive or other equitable relief), arbitration, mediation, litigation, proceeding, suit, or governmental investigation, and any appeal therefrom.
(d)
“Affiliate”
shall mean, an entity that, directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with, a Party, as the case may be, as of or after the Agreement Date and only for the period of such control. For purposes of this definition only, the term “control” means the possession of the power to direct or cause the direction of the management and policies of an entity, whether by ownership of voting stock or partnership interest, by contract or otherwise, including direct or indirect ownership of more than fifty percent (50%) of the voting interest in the entity in question.
(e)
“Assumed Contracts”
shall mean all FOSSL Technology related manufacturing, supply, development, consultant, and license obligations and/or agreements of Luna Healthcare,
excluding
[***]
(f)
“Books and Records”
shall mean all books, records, files, documents (including finance documents, regulatory materials/documents, submissions, communications, ownership of approvals from any regulatory agency or approval body, engineering documents and related software), data and information (including regulatory data/information, engineering information and related software), customer lists, supplier lists, distributor lists, wholesaler lists, cost and pricing data, market research reports, reference
Confidential and Proprietary
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE COPY FILED HEREWITH OMITS THE INFORMATION SUBJECT TO A CONFIDENTIALITY REQUEST. OMISSIONS ARE DESIGNATED [***]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
catalogs and, to the extent not originals, true and complete copies of all files relating to the filing, prosecution, issuance, ownership, maintenance, enforcement, and/or defense of any patents, patent applications, trademarks, copyrights, or other intellectual property rights, whether on paper or in electronic format, Controlled by the Seller and materially relating to the design, manufacturing, developing, packaging, labeling, and storing of Luna Healthcare products for sale or the distribution, marketing, sale, promotion, importation, or use of Luna Healthcare products.
(g)
“Commercialize”
(or any form thereof, e.g., “
Commercialization
”) shall mean to sell, offer for sale, import for sale, export for sale, distribute for sale, promote, and/or market.
(h)
“Confidential Information”
shall mean all information and materials received by any Party from another Party pursuant to this Agreement (including the terms of this Agreement) and Non-Disclosure Agreement between Seller and Purchaser dated May 24, 2013, other than that portion of such information or materials that (i) is publicly disclosed by the disclosing Party, either before or after it becomes known to the receiving Party; (ii) was known to the receiving Party, without obligation to keep it confidential, prior to when it was received from the disclosing Party; (iii) is subsequently disclosed to the receiving Party by a Third Party lawfully in possession thereof without obligation to keep it confidential; (iv) has been publicly disclosed other than by the receiving Party and without breach of an obligation of confidentiality with respect thereto; or (v) has been independently developed by the receiving Party without the aid, application or use of, or reference to, Confidential Information of the disclosing Party.
(i)
“Control”
or
“Controlled”
shall mean, with respect to any particular assets described in this Agreement to which this term is applied, that the Seller owns or has a license to such asset pursuant to an executed, written agreement with a third party but excluding any “shrink-wrap” or similar off-the-shelf software licenses and licenses obtained in connection with the acquisition or use of products, equipment or materials.
(j)
“Closing”
shall mean the consummation of delivery of the Transferred Assets, delivery of the fully executed Acquisition Agreements and payment of the First Installment under
Section 2.5(a)
of this Agreement.
(k)
“Closing Date”
shall mean January 21, 2014 or such earlier date as the Parties shall mutually agree, if the obligations described in
Sections 5
and
6
hereof have been fully satisfied or waived by the appropriate Party or Parties hereto on or prior to such date (other than those conditions that by their terms are to be satisfied at the Closing, but subject to the satisfaction or waiver of those conditions) or, if the obligations described in
Sections 5
and
6
have not been fully satisfied or waived by the appropriate Party or Parties hereto on or prior to such date (other than those conditions that by their terms are to be satisfied at the Closing, but subject to the satisfaction or waiver of those conditions), as promptly as practicable, but in no event later than two (2) business days thereafter.
Confidential and Proprietary
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE COPY FILED HEREWITH OMITS THE INFORMATION SUBJECT TO A CONFIDENTIALITY REQUEST. OMISSIONS ARE DESIGNATED [***]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
(l)
“Effective Time”
shall mean 12:01 a.m., Pacific Time on the Closing Date.
(m)
“Executive Officers”
shall mean any of My Chung and Scott Graeff.
(n)
“
Field of Colonoscopy Non-robotics
” [***]
(o)
“
Field of Endoluminal Non-robotics
” [***]
(p)
“Field of Medical Healthcare”
[***]
(q)
“Field of Medical Robotics”
[***]
(r)
“Fiber Optic Shape Sensing/Localization Technology “ or FOSSL Technology”
[***]
(s)
“
Field of Non-robotics Medical Devices
” or “
Non-robotics Medical Devices Field
” [***]
(t)
“
Field of Orthopedics
” [***]
(u)
“
Field of Vascular Non-robotics
” [***]
(v)
“Governmental Authority”
shall mean any nation, territory, or government (or union thereof), foreign, domestic, or multinational, any state, local, or other political subdivision thereof, and any bureau, court, tribunal, board, commission, department, agency, or other entity exercising executive, legislative, judicial, regulatory, or administrative functions of government, including all taxing authorities, and all other entities exercising regulatory authority over manufacture, testing, marketing, use, sale, handling, storage, or distribution of medical products or devices.
(w)
“Intellectual Property”
or
“IP”
shall include (i) United States and foreign patents and patent applications including all divisionals, continuations, reissues, and continuations-in-part, shown in
Schedule 1.1(w)
and all inventions; (ii) trademarks (and goodwill associated therewith) and other trade names, labels, trade dress, advertising, and package designs, and other trade rights, whether or not registered, and all applications therefore, shown in
Schedule 1.1(w)
; (iii) copyrights, whether or not registered, and all applications therefor (including copyrights in computer software, computer software documentation, systems documentation, and source code); (iv) Know-How, trade secrets, research and results thereof, technology, techniques, data, methods, processes, instructions, drawings and specifications, inventions, discoveries, improvements, designs, manufacturing plans, processes, formulae, whether patented or patentable or not (whether or not such items have been reduced to written, computer-readable, or other tangible form); (v) all claims, proceedings, and cause of actions relating to any of the foregoing; and (vi) any similar, corresponding, or equivalent rights to any
Confidential and Proprietary
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE COPY FILED HEREWITH OMITS THE INFORMATION SUBJECT TO A CONFIDENTIALITY REQUEST. OMISSIONS ARE DESIGNATED [***]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
of the foregoing anywhere in the world; to the extent that each of the foregoing are Controlled by Seller and are used or useful in the practice of FOSSL Technology.
(x)
“IP Assignment Agreement”
shall mean the agreement transferring to the Purchaser the Seller’s right, title and interest in and to the IP, in the form to be mutually agreed upon by the Parties prior to the Effective Time as attached hereto as
Exhibit B
.
(y)
“Key Employees”
shall mean Seller employees who have been identified by Purchaser and Seller as key individuals, [***] from a list of all employees associated with
Luna Healthcare
and a list of all employees associated with
FOSSL Technology
.
(z)
“Know-How”
shall mean all data and information owned or Controlled by Seller and maintained in confidence by Seller, including all processes, plans, designs, research, operating manuals, methods, compounds, formulae, discoveries, developments, designs, drawings, technology, techniques, procedures, specifications, inventions, computer programs, and any other scientific or technical data or information conceived, memorialized, developed, and/or reduced to practice, in each case whether or not patentable in any jurisdiction. Until such time as any particular patent has been published in accordance with the terms of a patent application or such patent application has been published, the term “Know-How” shall be deemed to include all inventions disclosed in such patent application.
(aa)
“Laws”
shall mean all applicable laws, statutes, rules, regulations, guidelines, ordinances, and other pronouncements having the effect of law in any nation, state, province, county, city, or other political subdivision, domestic or foreign.
(bb)
“Liability”
shall mean any debt, liability, commitment, indemnification, or obligation of any kind, character, or nature whatsoever, whether known or unknown, secured or unsecured, accrued, fixed, absolute, potential, contingent, or otherwise, and whether due or to become due, including any liability for Taxes. An existing contractual obligation that is to be fulfilled or discharged after the Effective Time shall be treated as a Liability arising after the Effective Time under the Assumed Contracts.
(cc)
“Lien”
shall mean any lien, statutory lien, pledge, mortgage, deed of trust, security interest, charge, real estate covenant, claim, restriction, right, option, conditional sale, or other title retention agreement or encumbrance of any kind or nature.
(dd)
“Luna Healthcare”
shall mean the business portion (and its assets) of Seller that develops, manufactures, and/or Commercializes products and services using FOSSL Technology for shape sensing in the
Field of Medical Healthcare
.
(ee)
“Material Adverse Effect”
means any change, effect, event or occurrence or state of facts that is, or would reasonably be expected to be, materially adverse to the business, properties, assets, financial condition or results of operation of a party.
Confidential and Proprietary
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE COPY FILED HEREWITH OMITS THE INFORMATION SUBJECT TO A CONFIDENTIALITY REQUEST. OMISSIONS ARE DESIGNATED [***]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
(ff)
[
***
]
(gg)
“Person”
shall mean an individual, corporation, partnership, limited partnership, limited liability company, unincorporated association, trust, joint venture, union, or other organization or entity, including a Governmental Authority.
(hh)
[
***
]
(ii)
[
***
]
(jj)
“S/T Sensing”
[***]
(kk)
“Technology”
shall mean any technical information, Know-How, processes, procedures, methods, formulae, protocols, techniques, software, computer code (including both object and source code), documentation, works of authorship, data, designations, designs, devise, prototypes, substances, components, Intellectual Property, inventions (whether or not patentable), mask works, ideas, trade secrets, and other information or materials, in tangible or intangible form.
(ll)
“Transfer”
shall mean any sale, transfer, conveyance, assignment, grant, delivery or other disposition, and
“Transfer”
or
“Transferred”
, used as a verb, shall each have a correlative meaning.
2.
Purchase and Sale of Assets; Purchase Price
.
2.1.
Purchase and Sale of Assets
. Subject to the terms and conditions of this Agreement, and on the basis of the covenants, representations, and warranties set forth herein, at and as of the Effective Time, the Seller shall Transfer to the Purchaser, and the Purchaser shall purchase and accept from the Seller, all of the Seller’s right, title, and interests in and to the following assets, free and clear of all Liens, subject to the
Recognized Seller Licenses
and excluding the Excluded Assets (collectively, the
“Transferred Assets”
):
(a)
subject to perpetual licenses and sublicenses in the Field of Medical Healthcare, as well as, to the knowledge of the Executive Officers, licenses and sublicenses outside the Field of Medical Healthcare,
granted by the Seller prior to the Agreement Date (collectively, as listed under
Schedule 5
) (collectively, the
“Recognized Seller Licenses”
), all FOSSL Technology including Intellectual Property set forth on but not limited to those set forth on
Schedule 1.1(w)
;
(b)
all marketing materials, development plans, market researches, and technical presentations on FOSSL Technology made to
Executive Officers
or
Seller’s board of directors
over the last two (2) years, except those (i) outside the
Field of Medical Healthcare,
(ii) [***], and (iii) those limited to the
Field of Non-Robotics Medical Devices
applications involving S/T Sensing, which are required for the Seller’s Commercialization of the products and services related to FOSSL Technology and set forth on
Schedule 2.1(b)
;
Confidential and Proprietary
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE COPY FILED HEREWITH OMITS THE INFORMATION SUBJECT TO A CONFIDENTIALITY REQUEST. OMISSIONS ARE DESIGNATED [***]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
(c)
all
Luna Healthcare
Books and Records, except those outside the
Field of Medical Healthcare
and those limited to the
Field of Non-Robotics Medical Devices
applications involving S/T Sensing, which are related to the products and services related to FOSSL Technology and set forth on
Schedule 2.1(c)
and except any that constitute the confidential information of a third party and to the extent that the disclosure made to Purchaser would violate applicable confidentiality restrictions;
(d)
all FOSSL Technology related assets (except (i) those used outside the
Field of Medical Healthcare
and (ii) those used for applications in the
Field of Non-Robotics Medical Devices
involving S/T Sensing), including parts and product inventories (e.g., interrogators, connectors, sensors), equipment, tooling, fixtures, computers, digital data, software design tools, displays, furniture, software environment, prototypes, design history files, and CAD models, used for day-to-day work in development, testing, and/or manufacturing activities set forth on
Schedule 2.1(d)
;
(e)
all written Books and Records related to
Phoenix Lasers
;
(f)
any claims and causes of action against a third party arising out of those items set forth in
subsections (a)
through
(d)
immediately above as such claims and causes of action exist as of the Closing Date (whether known or unknown, whether asserted or unasserted, whether absolute or contingent, whether accrued or unaccrued, whether liquidated or unliquidated, and whether due or to become due), including escrows relating to the foregoing, as shown in
Schedule 4
; and
(g)
all Assumed Contracts.
2.2.
Excluded Assets
. Notwithstanding anything to the contrary contained herein, including
Section 2.1
above, the Seller and its Affiliates shall retain all of its right, title, and interest in and to, and shall not Transfer to the Purchaser, all the assets of the Seller not listed as Transferred Assets in
Section 2.1
, including without limitation the assets of the Seller set forth below (collectively, the
“Excluded Assets”
):
(a)
any accounts receivable of the Seller;
(b)
any cash, cash equivalents, investments, or bank accounts;
(c)
any inventory, equipment, office furniture, real property interests and/or obligations, fixtures, or other tangible personal property not expressly set forth in
Section 2.1
as a Transferred Asset:
(i)
Seller and Purchaser recognize that certain parts inventory maintained by Seller may be applicable to interrogators used in Seller products not conveyed in this transaction. In this case, Seller will provide to Purchaser those parts necessary to complete production of any prototype shape sensing units currently in process and Seller will retain the remainder;
Confidential and Proprietary
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE COPY FILED HEREWITH OMITS THE INFORMATION SUBJECT TO A CONFIDENTIALITY REQUEST. OMISSIONS ARE DESIGNATED [***]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
(ii)
In the event an asset is a dual-use asset (i.e., used by both
Luna Healthcare
products as well as other Seller’s products, but other than the parts inventory covered above) and Seller wants to retain the asset (a list of such desired dual-use assets, if any, is set forth on
Schedule 2.2(c)(ii)
), Seller will purchase at its own costs a duplicate asset for transfer to Purchaser, unless the asset is only used by Purchaser for a temporary period of up to 90 days after Closing.
(d)
agreements, purchase orders and terms and conditions related to [***], and any other contract not explicitly included in the Assumed Contracts (collectively the
“Excluded Contracts”
);
(e)
registered trademarks LUNA INNOVATIONS®, MOTH®, TRIMETASPHERE®, EN-TACT®, and EDAC®.
(f)
all minute books, stock records and general corporate documents;
(g)
all personnel records for employees retained by Seller and other records Seller is required by law to retain in its possession;
(h)
all insurance policies and rights thereunder;
(i)
all claims for refund of taxes and other governmental charges of whatever nature; and
(j)
all rights of Seller under the Acquisition Agreements.
2.3.
Assumption of Liabilities
. Subject to the terms and conditions of this Agreement, the Purchaser shall assume only those Liabilities expressly accepted by Purchaser and arising out of ownership or Control of any of the Transferred Assets (including in-process or outstanding POs associated with Transferred Assets) (the
“Assumed Liabilities”
), but only to the extent such Liabilities arise after the Effective Time.
2.4.
Excluded Liabilities
. Except for the Assumed Liabilities, the Purchaser shall not assume any, and shall have no liability, responsibility, or obligation whatsoever, at any time, for (and the Seller and its Affiliates shall retain and pay, perform, and discharge when due) any and all other Liabilities of the Seller or any of its Affiliates arising prior to, as of, or after the Effective Time (the
“Excluded Liabilities”
), including but not limited to:
(a)
all accounts payable and other Liabilities of the Seller and its Affiliates for materials and services provided to Seller;
(b)
any Liability arising from or relating to, the operation by the Seller or any of its Affiliates of any activity, or the occupancy, use, or operation by the Seller or any of its Affiliates of any real properties at any time prior to or after the Effective Time;
Confidential and Proprietary
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE COPY FILED HEREWITH OMITS THE INFORMATION SUBJECT TO A CONFIDENTIALITY REQUEST. OMISSIONS ARE DESIGNATED [***]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
(c)
any Liability arising from or relating to the use/performance or operation by the Seller or any of its Affiliates of any of the Excluded Assets at any time prior to or after the Effective Time or any of the Transferred Assets at any time prior to the Effective Time.
(d)
any Liability of the Seller to any of its Affiliates, shareholders, and/or stakeholders;
(e)
any Liability for any violation of, or failure to satisfy, any Law by the Seller or any of its Affiliates;
(f)
any Liability based on tortious or criminal conduct by the Seller or any of its Affiliates;
(g)
all contractual Liabilities, if any, of the Seller or any of its Affiliates, except for Liabilities arising after the Effective Time under the Assumed Contracts;
(h)
all indebtedness of the Seller or any of its Affiliates for money, equities, and or other interest promised to, owed to, or borrowed from creditors, shareholders, warrant holders, and option holders;
(i)
all Liabilities for product liability claims and recalls arising out of products sold or to be sold by Seller or its Affiliates or their respective licensees (but expressly excluding product liability claims and recalls arising out of products sold or to be sold by Purchaser, its Affiliates, and their respective licensees pursuant to the Transferred Assets or Assumed Contracts);
(j)
all Liabilities for returns, rebates, and chargebacks relating to, or arising as a result of, any sale of any of products sold by Seller;
(k)
all broker, Closing, and legal fees, costs, expenses, and Liabilities incurred by Seller or any of its Affiliates in connection with the Closing, execution, and delivery of this Agreement and the other Acquisition Agreements.
(l)
all Liabilities arising from the Excluded Assets;
(m)
all Liabilities with respect to the Seller’s employees or former employees, or their dependents; provided that such Liabilities with respect to the Key Employees are limited to those that arise prior to the Effective Time;
(n)
all tax Liabilities of the Seller and/or its Affiliates or taxes arising out of or relating to the Transferred Assets for any period prior to the Closing; and
(o)
all Liabilities with respect to any Action pending or known to be threatened against the Seller or any of its Affiliates as of the Effective Time.
Confidential and Proprietary
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE COPY FILED HEREWITH OMITS THE INFORMATION SUBJECT TO A CONFIDENTIALITY REQUEST. OMISSIONS ARE DESIGNATED [***]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
2.5.
Consideration; Payment; Royalty
. The consideration for the Seller’s Transfer to the Purchaser of the Transferred Assets and the Seller’s performance of its obligations under this Agreement and the other Acquisition Agreements (including the cross licenses under the 2014 License Agreement and [***]) shall equal a total of up to Thirty Million Dollars (US $30,000,000) (the
“Purchase Price”
), to be paid out [***] by ISIL and [***] by Purchaser to Seller except where noted otherwise over a series of payments as follows:
(a)
A payment of Twelve Million Dollars (US $12,000,000) to be made in two installments:
(i)
a first installment of Six Million Dollars (US $6,000,000) to be made at Closing (the
“First Installment”
);
(ii)
a second installment of Six Million Dollars (US $6,000,000) to be paid to Seller on the earlier of (a) the date that Seller has completed its obligations under
Section 9.7
or (b) Ninety (90) days after the Closing, except to the extent Seller materially breaches its obligations under such
Section 9.7
of this Agreement.
(b)
A Technical Requirements Payment of up to Eight Million Dollars (US $8,000,000) to be paid to Seller according to the terms and conditions set forth in
Exhibit F
(
the
“
Technical Requirements Milestones Payment Conditions
”)
.
(c)
Up to Ten Million Dollars (US $10,000,000) in royalty payment, at Ten Thousand Dollars ($10,000) fee for each commercially-sold
Medical Robotics
system that incorporates FOSSL Technology (the
“Commercially-Sold System Royalty”
), to be paid on a quarterly basis. [***]
The Commercially-Sold System Royalties shall be paid to Seller by ISIL for sales of
Medical Robotics
systems that incorporate FOSSL Technology to non-US buyers, and by Purchaser for sales of systems to US buyers.
(d)
[***]
(e)
Purchaser shall be jointly and severally liable for all payments due from ISIL in this
Section 2.5
.
2.6.
Transfer Taxes
. Notwithstanding anything herein to the contrary, the Seller and its Affiliates shall be solely liable for, and shall pay when due, any transfer, gains, documentary, sales, use, registration, stamp, value-added, or other similar taxes payable by reason of the transactions contemplated under this Agreement, and the Seller or its Affiliates shall file, at their expense, all necessary tax returns and other documentation with respect to all taxes.
2.7.
Allocation of Purchase Price
. By mutual agreement of the Parties, the Purchase Price will be allocated to broad categories constituting components of the Transferred Assets (according applicable tax laws) as set forth in
Schedule 2.7
(the
“Allocation”
), the first
Confidential and Proprietary
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE COPY FILED HEREWITH OMITS THE INFORMATION SUBJECT TO A CONFIDENTIALITY REQUEST. OMISSIONS ARE DESIGNATED [***]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
draft of which shall be provided by Purchaser within forty five (45) days following the Effective Date. Each Party will report the transactions consummated hereby in accordance with the agreed upon Allocation (except to the extent modifications are necessary to reflect changes in the Transferred Assets and Assumed Liabilities between the Closing Date and the date of the Allocation) for all federal, state, local and other tax purposes, but such allocation will not constrain reporting for other purposes.
3.
Representations and Warranties of the Seller
. Except as set forth on the Schedule of Exceptions delivered to the Purchaser at the Closing and attached hereto as
Exhibit G
(the
“Schedule of Exceptions”
), the Seller hereby represents and warrants to the Purchaser and ISIL as of the date hereof and as of the Closing Date as follows:
3.1.
Organization and Good Standing
. The Seller is a corporation duly organized, validly existing, and in good standing under the laws of the jurisdiction in which it is incorporated and is in material compliance with all Laws. Seller has corporate power to own its properties and to conduct its business as currently owned and conducted. The Seller does not have any subsidiaries that own Intellectual Property.
3.2.
Power and Authority
. The Seller has the corporate power and authority to execute and deliver this Agreement and all other Acquisition Agreements to which it is a party, perform its obligations hereunder and thereunder, and consummate the transactions contemplated hereby and thereby. The execution and delivery by the Seller of this Agreement and all other Acquisition Agreements, the performance by it of its obligations hereunder and thereunder, and the consummation by it of the transactions contemplated hereby and thereby have been duly authorized by all necessary corporate actions on the part of the Seller and its Affiliates. This Agreement and all other Acquisition Agreements to which the Seller or any of its Affiliates is a party constitutes (or will constitute upon the execution thereof) the legal, valid, and binding obligation of the Seller or its Affiliates, as applicable, enforceable against the Seller or its Affiliates in accordance with its terms, subject to bankruptcy, insolvency, reorganization, fraudulent conveyance, moratorium, or similar Laws relating to or affecting the rights and remedies of creditors generally. This Agreement has been duly executed and delivered by the Seller.
3.3.
No Violation
. Neither the execution and delivery by the Seller of this Agreement or any other Acquisition Agreements to which the Seller or its Affiliates is a party, nor the performance by the Seller or its Affiliates, as applicable, of its obligations hereunder or thereunder, nor the consummation by the Seller of the transactions contemplated hereby or thereby, will (i) contravene any provision of the certificate of incorporation and bylaws of the Seller, (ii) contravene any provision of the certificate of incorporation, bylaws, or similar organizational documents of any Affiliate of the Seller; (iii) with or without the giving of notice or the lapse of time or both, violate, be in conflict with, constitute a default under, permit the termination of, cause the acceleration of the maturity of any debt or obligation of the Seller related to the Transferred Assets (other than debts or obligations paid at Closing), (iv) require the consent of any other party to, constitute a breach of, create a Liability or loss of a benefit under,
Confidential and Proprietary
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE COPY FILED HEREWITH OMITS THE INFORMATION SUBJECT TO A CONFIDENTIALITY REQUEST. OMISSIONS ARE DESIGNATED [***]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
or result in the creation or imposition of any Lien upon any of the Transferred Assets under, any agreement to which the Seller or its Affiliates is a party or by which it is bound; and (v) violate or conflict with, any Law or any judgment, decree, or order of any Governmental Authority to which the Seller or its Affiliates is subject or by which the Seller or any of its assets or properties is bound.
3.4.
Intellectual Property
.
Schedule 1.1(w)
contains a true and complete list of all worldwide patents, pending patent applications, trademark registrations, and trademark applications included in the Intellectual Property to be transferred to Purchaser as part of the Transferred Assets. Such Intellectual Property and the Intellectual Property set forth on
Schedule 2.1(d)
constitutes all the Intellectual Property covering FOSSL Technology. The Seller Controls and has the right to Transfer such Intellectual Property free and clear of all Liens. Other than the items listed in
Schedule 1.1(w)
and the subject matter of the Excluded Contracts, to the knowledge of Seller, there are no additional patents, trademark registrations or pending patent applications or pending trademark applications Controlled by Seller related to the FOSSL Technology based products and naming as an inventor any Seller employee who was an employee of Seller at the time of invention or any consultant/contractor who performed work for Seller at the time of invention and who was obligated to assign such invention to Seller. The Seller has no knowledge of any adversarial proceedings or any claims that are currently being asserted or threatened by any Person involving or challenging the Seller’s Control of any Intellectual Property included within the Transferred Assets. To Seller’s knowledge, all Assumed Contracts are in full force and effect as of the Closing Date and Seller is not in breach of any of its obligations under the Assumed Contracts.
3.5.
Actions
.
(a)
To the knowledge of the Seller, there is no Action pending or
threatened against the Seller or any of its Affiliates, that (i) questions or challenges the validity of this Agreement or the other Acquisition Agreements or any action taken or proposed to be taken by the Seller or any of its Affiliates pursuant hereto or thereto or in connection with the transactions contemplated hereby or thereby, or (ii) relates to any of the Transferred Assets that if adversely determined, could reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect;
(b)
To the knowledge of the Seller, there is no outstanding judgment, order, decree, writ, award, stipulation, or injunction of any Governmental Authority against the Seller or any of its Affiliates or any of their respective assets or businesses, which, if adversely determined, could reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.
3.6.
Taxes
.
(a)
All sales, use, payroll withholding, unemployment compensation and similar taxes, and any other taxes the nonpayment of which would result in a tax Lien on any Transferred Asset have been paid or will be paid when due, or adequate deposits have been made
Confidential and Proprietary
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE COPY FILED HEREWITH OMITS THE INFORMATION SUBJECT TO A CONFIDENTIALITY REQUEST. OMISSIONS ARE DESIGNATED [***]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
with the appropriate taxing authorities with respect thereto, and there are no Liens for taxes on any Transferred Asset.
(b)
The Seller has not received any written notice from any Governmental Authority of any pending examination or any proposed tax deficiency, addition, assessment, demand for payment, or adjustment the nonpayment of which could result in a tax Lien on any Transferred Asset.
3.7.
Title to Property
. Seller has good title to or otherwise Controls all of the Transferred Assets (whether personal, mixed, tangible, or intangible), to the Seller’s knowledge, free and clear of all Liens, and, to the Seller’s knowledge, upon Transfer of the Transferred Assets pursuant hereto, the Purchaser will have good title to and Control of all of the Transferred Assets (whether personal, mixed, tangible, or intangible), to the Seller’s knowledge, free and clear of all Liens, but subject to the
Recognized Seller Licenses
.
3.8.
Approvals
. No Approval of any Governmental Authority or any third party is required to be made, obtained, or given by or with respect to the Seller in connection with the execution or delivery by the Seller or any of its Affiliates, as applicable, of this Agreement and the other Acquisition Agreements, the performance by Seller or any of its Affiliates of its obligations hereunder or thereunder, or the consummation by Seller or any of its Affiliates of the transactions contemplated hereby or thereby, including without limitation the Transfer of the Transferred Assets to the Purchaser, except where the failure to make, obtain, or give such Approval could not reasonably be expected to have a material adverse effect on the Transferred Assets.
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3.9
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Material Information
. No Executive Officer of Seller is aware of any material information that he reasonably believes will cause a material adverse effect on the value of the Transferred Assets
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3.10
|
Substantially All of Seller’s Assets
. Transferred Assets constitute substantially all of Seller’s assets related to Luna Healthcare.
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3.11
|
True and Accurate Lists
. Lists provided by Seller under
Section 7.4(b)
-
(g)
are true and accurate in all material respects to Seller’s knowledge.
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4.
Representations and Warranties of the Purchaser and ISIL
. Each of the Purchaser and ISIL hereby represents and warrants to the Seller as of the date hereof and as of the Closing Date as follows:
4.1.
Organization and Good Standing
. Each of the Purchaser and ISIL is a corporation duly organized, validly existing, and in good standing under the laws of the jurisdiction in which it is incorporated and is in material compliance with all Laws. Each of
Confidential and Proprietary
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE COPY FILED HEREWITH OMITS THE INFORMATION SUBJECT TO A CONFIDENTIALITY REQUEST. OMISSIONS ARE DESIGNATED [***]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
Purchaser and ISIL has corporate power to own its properties and to conduct its business as currently owned and conducted.
4.2.
Power and Authority
. The Purchaser and ISIL have the corporate power and authority to execute and deliver this Agreement and all other Acquisition Agreements to which they are parties, perform their respective obligations hereunder and thereunder, and consummate the transactions contemplated hereby and thereby. The execution and delivery by the Purchaser and ISIL of this Agreement and all other Acquisition Agreements, their performance of their obligations hereunder and thereunder, and their consummation of the transactions contemplated hereby and thereby have been duly authorized by all necessary corporate actions on the part of the Purchaser and ISIL. This Agreement and all other Acquisition Agreements to which the Purchaser and ISIL are parties constitute (or will constitute upon the execution thereof) the legal, valid, and binding obligations of the Purchaser and ISIL, as applicable, enforceable against the Purchaser and ISIL in accordance with their terms, subject to bankruptcy, insolvency, reorganization, fraudulent conveyance, moratorium, or similar Laws relating to or affecting the rights and remedies of creditors generally. This Agreement has been duly executed and delivered by the Purchaser and ISIL.
4.3.
No Violation
. Neither the execution and delivery by the Purchaser and ISIL of this Agreement or any of the other Acquisition Agreements to which they are parties, nor their performance of their obligations hereunder or thereunder, nor their consummation of the transactions contemplated hereby or thereby, will (i) contravene any provision of the certificate of incorporation or bylaws of the Purchaser and ISIL; (ii) with or without the giving of notice or the lapse of time or both, violate, be in conflict with, constitute a default under, permit the termination of, cause the acceleration of the maturity of any debt or obligation of the Purchaser or ISIL under, require the consent of any other party to, constitute a breach of, create a Liability or loss of a benefit under, or result in the creation or imposition of any Lien upon any of the properties or assets of the Purchaser or ISIL under, any contract to which they are parties or by which they or any of their assets or properties are bound, other than such violations, conflicts, defaults, terminations, accelerations, breaches, Liabilities, or loss of benefits which could not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect; or (iii) violate, conflict with, or require any approval under, any Law or any judgment, decree, or order of any Governmental Authority to which the Purchaser or ISIL is subject or by which it or any of its assets or properties are bound, other than such violations, conflicts, or noncompliance with such requirements which could not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.
4.4.
Actions
.
(c)
To Purchaser’s knowledge, there is no Action pending or
threatened against the Purchaser or any of its Affiliates, that (i) questions or challenges the validity of this Agreement or the other Acquisition Agreements or any action taken or proposed to be taken by the Purchaser or any of its Affiliates pursuant hereto or thereto or in connection
Confidential and Proprietary
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE COPY FILED HEREWITH OMITS THE INFORMATION SUBJECT TO A CONFIDENTIALITY REQUEST. OMISSIONS ARE DESIGNATED [***]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
with the transactions contemplated hereby or thereby that if adversely determined, could reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect;
(d)
To Purchaser’s knowledge, there is no outstanding judgment, order, decree, writ, award, stipulation, or injunction of any Governmental Authority against the Purchaser or any of its Affiliates or any of their respective assets or businesses, which, if adversely determined, could reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.
4.5.
Approvals
. Except as may be set forth on
Exhibit G
, no Approval of any Governmental Authority or other third party is required to be made, obtained, or given by or with respect to the Purchaser or ISIL in connection with the execution or delivery by it of this Agreement and the other Acquisition Agreements, the performance by it of its obligations hereunder or thereunder, or the consummation of the transactions contemplated hereby or thereby, except where the failure to make, obtain, or give such Approvals could not have, individually or in the aggregate, a Material Adverse Effect.
4.6.
Financing
. The Purchaser and ISIL will have available funds sufficient to pay the Purchase Price and related expenses of the transactions contemplated by the Acquisition Agreements.
5.
Seller’s Obligations Prior to and at Closing
. The Seller hereby covenants that, except as otherwise consented to in writing by the Purchaser or as otherwise contemplated by this Agreement, hereto and until the Closing or for the period specified below:
5.1.
Release of Security Interests
5.2.
Conduct of Business
. Except as provided herein, Seller shall: (i) maintain its Books and Records in the ordinary course of business in a manner consistent with its past practices; (ii) maintain its properties and assets (to the extent they are material to the Transferred Assets) in the same condition as they are on the date hereof, except for reasonable wear and tear arising in the ordinary course of business; and (iii) comply in all material respects with all Laws applicable to the Transferred Assets.
5.3.
Restricted Activities and Transactions
. Notwithstanding
Section 5.2
hereof and except as provided in this Agreement, the Seller shall not, and shall not permit any of its Affiliates to, engage, or agree to engage, in any one or more of the following activities or transactions without the prior written consent of the Purchaser, which consent shall not be unreasonably withheld: (i) cause to arise or permit to exist any Lien (other than Liens currently held by Silicon Valley Bank) upon any of the Transferred Assets; (ii) enter into any agreement or perform any act detrimental to the interest of Purchaser that is related to the Transferred Assets; (iii) destroy any Books or Records maintained in connection with the Transferred Assets; (iv) settle any Action if such settlement imposes any continuing Liability or non-monetary obligation on or with respect to any of the Transferred Assets; (v) initiate any litigation, suit, mediation, or arbitration relating to the Transferred Assets; (vi) enter into or become bound by
Confidential and Proprietary
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE COPY FILED HEREWITH OMITS THE INFORMATION SUBJECT TO A CONFIDENTIALITY REQUEST. OMISSIONS ARE DESIGNATED [***]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
any contract or commitment relating to the Transferred Assets; (vii) cancel, compromise, release, or waive any right of material value to the Seller or any of its Affiliates related to the Transferred Assets; (viii) except as required by Law, make or change any tax election affecting the Transferred Assets, or take any position with respect to the Transferred Assets on any Tax Return filed after the date of this Agreement, in each case that is inconsistent with the elections made or positions taken in preparing or filing similar Tax Returns in prior taxable periods; or (ix) take any action or omit to take any action that would knowingly cause the representations and warranties of the Seller contained in
Section 3
hereof to be untrue or inaccurate in any material respect.
5.4.
Cooperation
. The Seller shall, and shall cause its Affiliates to, use their commercially reasonable efforts to cause the transactions contemplated by this Agreement to be consummated, including, without limitation, (i) obtaining, making, and causing to become effective all Approvals of such Governmental Authorities and other Persons as may be necessary or reasonably requested by the Purchaser in order to consummate the transactions contemplated by this Agreement, and (ii) giving prompt notice to the Purchaser of (A) any notice of, or other communication relating to, any default, or any event which, with the giving of notice or the lapse of time or both, would become a default, under any contract relating to the Transferred Assets, and (B) any notice or other communication from any Person alleging that the consent of such Person is or may be required in connection with the execution and delivery of this Agreement or the other Acquisition Agreements or the consummation of the transactions contemplated hereby or thereby. The Seller shall use its commercially reasonable efforts to bring about the satisfaction of the Conditions Precedent to the Obligations of the Purchaser that are applicable to the Seller set forth in
Section 7
hereof.
5.5.
Confidentiality
. Each Party shall hold in confidence any Confidential Information disclosed by another (disclosing) Party as a result of this Agreement, and such receiving Party shall protect the confidentiality thereof with the same degree of care that it exercises with respect to its own information of a like nature, but in no event less than reasonable care. Each receiving Party shall have the right to provide Confidential Information to its Affiliates and third parties who have a right or need to know such information, subject to the confidentiality obligations imposed by this
Section 5.5
. Without the prior written consent of the disclosing Party, a receiving Party shall not use, disclose, or distribute any Confidential Information, in whole or in part, except as required to perform such receiving Party’s obligations under this Agreement or as necessary to exercise or further its rights under this Agreement. Access to the disclosing Party’s Confidential Information shall be restricted to the receiving Party’s employees, agents, and consultants, who, in each case, need to have access to carry out a permitted use and are bound in writing to maintain the use and confidentiality restrictions of such Confidential Information. The rights and obligations set forth in this
Section 5.5
shall survive the Closing or any termination of this Agreement.
5.6.
Certain Notifications
. From the Agreement Date until the date two weeks following the Agreement Date, the Seller shall have the right to add to, amend, and/or correct the Schedules and Schedule of Exceptions based upon any additional information that becomes available to the Seller, and such additional disclosures (
“Additional Disclosures”
) shall be
Confidential and Proprietary
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE COPY FILED HEREWITH OMITS THE INFORMATION SUBJECT TO A CONFIDENTIALITY REQUEST. OMISSIONS ARE DESIGNATED [***]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
deemed to amend and supplement the Schedule and Schedule of Exceptions for all purposes of this Agreement as if so amended immediately prior to the Agreement Date, provided that Purchaser reasonably agrees to any such Additional Disclosures. In the event that Purchaser reasonably believes that any such Additional Disclosure made by the Seller pursuant to this
Section 5.6
prior to the date two weeks following the Agreement Date results in a material and quantifiable change to the valuation of the Transferred Assets, the Seller and the Purchaser agree to negotiate in good faith to determine if such additional disclosure results in a material and quantifiable change to the valuation of the Transferred Assets. If the Parties so agree, the Purchase Price shall be adjusted to account for such valuation change.
5.7.
Engineering Reviews
. From the Agreement Date and until the end of the 90-day period set forth in
Section 2.5(a)(ii)
, Seller shall jointly with Purchaser plan, design, and complete a series of in-depth engineering reviews between Seller and Purchaser personnel to transfer from Seller to Purchaser working knowledge of Transferred Assets related to engineering, development systems, document tracking systems, subsystems, software (including software environment and source codes), prototypes, engineering designs, engineering processes, manufacturing tooling and processes. The engineering reviews shall accomplish the goal of providing Purchaser all Know-How necessary to develop, use, manufacture, and sell the FOSSL interrogator, fiber sensors, and connectors (
“Engineering Reviews”
).
5.8.
Other Customary Conditions.
Seller agrees to perform all reasonably necessary tasks to meet other conditions that are customary in transactions of this type.
6.
Purchaser’s Obligations Prior to Closing
. The Purchaser hereby covenants that, except as otherwise consented to in writing by the Seller, from and after the date hereof until the Closing or termination of this Agreement:
6.1.
Cooperation.
The Purchaser shall use its commercially reasonable efforts to cause the transactions contemplated by this Agreement to be consummated, including, without limitation, giving prompt notice to the Seller of any notice or other communication from any Person alleging that the consent of such Person is or may be required in connection with the execution and delivery by Purchaser or ISIL of this Agreement or the other Acquisition Agreements or the consummation by Purchaser of the transactions contemplated hereby. The Purchaser shall use its commercially reasonable efforts to bring about the satisfaction of the Conditions Precedent to the Obligations of the Seller that are applicable to the Purchaser set forth in
Section 6
hereof. In addition, the Purchaser shall not intentionally take any action or omit to take any action that would cause the representations and warranties of the Purchaser contained in
Section 4
hereof to be untrue or inaccurate in any material respects.
6.2.
Confidentiality
. Purchaser and ISIL shall hold in confidence any Confidential Information disclosed by Seller as a result of this Agreement, and Purchaser shall protect the confidentiality thereof with the same degree of care that it exercises with respect to its own information of a like nature, but in no event less than reasonable care. Purchaser shall have the right to provide Confidential Information to its Affiliates and third parties who have right or
Confidential and Proprietary
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE COPY FILED HEREWITH OMITS THE INFORMATION SUBJECT TO A CONFIDENTIALITY REQUEST. OMISSIONS ARE DESIGNATED [***]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
need to know such information, subject to the confidentiality obligations imposed by this
Section 6.2
. Without the prior written consent of the disclosing Party, a receiving Party shall not use, disclose, or distribute any Confidential Information, in whole or in part, except as required to perform such Party’s obligations under this Agreement or as necessary to exercise or further its rights under this Agreement. Access to the disclosing Party’s Confidential Information shall be restricted to the receiving Party’s employees, agents, and consultants, who, in each case, need to have access to carry out a permitted use and are bound in writing to maintain the use and confidentiality restrictions of such Confidential Information. The rights and obligations set forth in this
Section 6.2
shall survive the Closing or any termination of this Agreement.
1.
Conditions Precedent to the Obligations of the Purchaser
. The obligation of the Purchaser and ISIL to consummate the transactions contemplated by this Agreement shall be subject to the satisfaction, at the Closing, of each of the following conditions, unless waived by the Purchaser and ISIL (subject to the Law), in their sole and absolute discretion, at or prior to the Closing:
1.2.
Representations and Warranties True.
All representations and warranties of the Seller contained in this Agreement or any Acquisition Agreement shall be true and correct as of the Agreement Date and as of the Closing Date as though given on and as of such date (or, with respect to such representations and warranties which expressly speak as of an earlier date, as of the earlier date as of which such representations and warranties speak), except for failures of such representations and warranties to be so true and correct that have not had and could not reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect
on the Transferred Assets.
1.3.
Performance.
The Seller and its Affiliates shall have performed and complied in all material respects with all agreements, covenants, obligations, and conditions required by this Agreement or any of the other Acquisition Agreements to be performed or complied with by the Seller and/or its Affiliates at or prior to the Closing.
1.4.
No Material Adverse Change
. No changes or events that have had or could reasonably be expected to have, individually or in the aggregate,
Material Adverse Effect
on the Seller or the Transferred Assets, shall have occurred since the Agreement Date.
1.5.
Deliveries
. The Seller and/or its Affiliate shall have given, tendered and/or delivered to the Purchaser and its Affiliates, at or prior to the Closing, and against the deliveries referred to in
Section 7.3
, the following:
(p)
Transferred Assets;
(q)
a list of all Seller employees associated with Luna Healthcare as of the Agreement Date as attached hereto as
Schedule 7.4
;
(r)
a list of Seller employees who, since 2010, have been associated with FOSSL Technology development as attached hereto as
Schedule 7.4
;
Confidential and Proprietary
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE COPY FILED HEREWITH OMITS THE INFORMATION SUBJECT TO A CONFIDENTIALITY REQUEST. OMISSIONS ARE DESIGNATED [***]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
(s)
a list of all outstanding purchase orders and payment obligations associated with Luna Healthcare as attached hereto as
Schedule 7.4
;
(t)
a list of all expired and on-going Luna Healthcare related manufacturing, supply, development, consultant, and license obligations and/or agreements (other than the Excluded Contracts and Recognized Seller Licenses) as attached hereto as
Schedule 7.4
;
(u)
a list of all inventory and WIP associated with Luna Healthcare as attached hereto as
Schedule 7.4
;
(v)
reasonable access to, upon reasonable prior notice and at such scheduled times and places during normal business hours as shall be reasonably approved by the Seller (but without any interference with the business operations of the Seller), for reasonable business purposes, to all the Books and Records, Assumed Contracts, and the properties, facilities, employees of the Seller and its Affiliates relating to Luna Healthcare business, to all relevant documents and materials contained in the lists provided in this
Section 7.4
.
(w)
an executed counterpart signature page to the IP Assignment Agreement;
(x)
an executed signature page to the
2014 License Agreement
;
(y)
[***] and
(z)
an executed (with counterpart signature page) release document from all secured debtholders and/or secured creditors, including the entity known as Silicon Valley Bank, that covenant to remove all Liens and/or Liabilities associated with the Transferred Assets upon payment to such debtholders and/or secured creditors of the amounts set forth in such release documents;
1.6.
Absence of Litigation
. There shall be no outstanding court order, injunction, or Action pending or, to the knowledge of the Seller, the Purchaser, or ISIL as of the Agreement Date, threatened before any court or other Governmental Authority which seeks to (i) invalidate or set aside, in whole or in part, this Agreement or any of the other Acquisition Agreements, or (ii) restrain, prohibit, invalidate, or set aside, in whole or in part, the consummation of the transactions contemplated hereby and thereby.
2.
Conditions Precedent to the Obligations of the Seller
. The obligation of the Seller to consummate the transactions contemplated by this Agreement shall be subject to the satisfaction, at the Closing, of each of the following conditions, unless waived (subject to Law) by the Seller, in its sole and absolute discretion, at or prior to the Closing:
2.8.
Representations and Warranties True
. All representations and warranties of the Purchaser and ISIL contained in this Agreement or any Acquisition Agreement shall be
Confidential and Proprietary
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE COPY FILED HEREWITH OMITS THE INFORMATION SUBJECT TO A CONFIDENTIALITY REQUEST. OMISSIONS ARE DESIGNATED [***]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
true and correct as of the date of this Agreement and as of the Closing Date as though given on and as of such date (or, with respect to such representations and warranties which expressly speak as of an earlier date, as of the earlier date as of which such representations and warranties speak), except for failures of such representations and warranties to be so true and correct that have not had and could not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.
2.9.
Performance
. The Purchaser and ISIL shall have performed and complied in all material respects with all agreements, covenants, obligations, and conditions required by this Agreement and the other Acquisition Agreements to be performed or complied with by it at or prior to the Closing.
2.10.
Deliveries
. The Purchaser and ISIL shall have tendered to the Seller, at or prior to the Closing, and against the deliveries referred to in
Section 7.4
, the following:
(a)
the first installment of Six Million Dollars (US $6,000,000) in accordance with
Sections 2.5(a)(i)
; and
(b)
an executed counterpart signature page to the IP Assignment Agreement, [***] and the 2014 License Agreement.
3.
Additional Covenants and Agreements
.
3.9.
[***]
3.10.
Exit Duration.
For a period from
Closing
until 15 years after Closing, Seller shall exit and shall not develop, use, and/or Commercialize products and services related to FOSSL Technology in the
Field of Medical Healthcare
for itself or any third party except Seller shall be allowed to continue to perform and fulfill any of its obligations under the Hansen Agreements, and to develop, use, and/or Commercialize products and services incorporating FOSSL Technology only in the
Field of Non-Robotics Medical Devices
applications involving S/T Sensing.
3.11.
Non-Compete with Seller’s Non-Medical Business
. For a period from Closing until 10 years after Closing, Purchaser shall not use the Transferred Assets to compete with Seller’s Commercialization of FOSSL Technology outside the Field of Medical Healthcare for shape, strain and/or temperature sensing in the aerospace, automotive, and energy markets and for strain sensing in the civil structural monitoring and composite material markets.
3.12.
Approach to Assumed Contracts
. To the extent relevant considering the skill sets and knowledge remaining at Seller after Closing, Seller shall diligently work with Purchaser to outline a mutually agreed requirements and approach to properly service and/or support third parties involved in the Assumed Contracts as contractually required.
Confidential and Proprietary
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE COPY FILED HEREWITH OMITS THE INFORMATION SUBJECT TO A CONFIDENTIALITY REQUEST. OMISSIONS ARE DESIGNATED [***]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
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9.5
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Specific Performance; Injunctive Relief.
Each of the Parties hereto acknowledges, understands, and agrees that any breach or threatened breach by it or any of its Affiliates of any of their respective obligations hereunder or under the Acquisition Agreements may cause irreparable injury to another Party and that money damages may not provide an adequate remedy therefor. Accordingly, in the event of any such breach or threatened breach, the non-breaching Party or Parties shall have the right and remedy (in addition to any other rights or remedies available at law or in equity) to seek to have the provisions of such sections specifically enforced by, and to seek injunctive relief and other equitable remedies in, any court having competent jurisdiction.
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3.13.
Further Assurances.
In addition to the actions, documents, and instruments specifically required to be taken or delivered by this Agreement or the other Acquisition Agreements, whether on or before or from time to time after the Effective Time, and without further consideration, each Party hereto shall take such other actions, and execute and deliver such other documents and instruments, as the other Party hereto or its counsel may reasonably request and at the expense of the requesting Party in order to effectuate and perfect the transactions contemplated by this Agreement and the other Acquisition Agreements, including without limitation such actions as may be necessary to Transfer to the Purchaser and to place the Purchaser in possession or control of all of the Transferred Assets intended to be Transferred hereunder.
3.14.
Post-Closing Obligations.
(a)
Seller shall conduct and complete all the
Engineering Reviews
with Purchaser which had been initiated prior to Closing under
Section 5.7
.
(b)
Seller shall complete transfer all remaining Books and Records in its possession to Purchaser within 30 calendar days after the Closing.
(c)
Seller shall provide Purchaser with physical possession of all remaining tangible Transferred Assets (e.g., software, firmware, physical assets in inventory, WIP, prototypes, tooling). Alternatively, Seller shall facilitate and provide information (e.g., from whom, where, etc.) to allow Purchaser to gain possession of all Transferred Assets. If Purchaser believes that Seller are in possession of FOSSL Technology Related Assets that should have been included in Schedule 2.1(d) but were not, Seller shall disclose all information related to these FOSSL Technology Related Assets for the Parties to determine whether Purchaser’s assertion is reasonable. If Purchaser’s assertion is reasonable, Seller shall immediately transfer these FOSSL Technology Related Assets to Purchaser within 7 business days.
(d)
Seller agrees to shut down all of its Luna Healthcare operations (including sales, marketing, engineering) and inventory and operations related to
FOSSL Technology,
except those outside the
Field of Medical Healthcare
, those related to the
Field of Non-Robotics Medical Devices
applications involving S/T Sensing, and [***] within ten (10)
Confidential and Proprietary
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE COPY FILED HEREWITH OMITS THE INFORMATION SUBJECT TO A CONFIDENTIALITY REQUEST. OMISSIONS ARE DESIGNATED [***]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
days after the Closing Date. Seller shall provide Purchaser written notice as to when such shut down is completed.
(e)
The Parties shall maintain all trade secrets within the Transferred Assets and shall protect the Know-How transferred to the Purchaser as confidential information.
3.15.
Technical Requirements Milestones Payment Conditions.
Purchaser shall use all commercially reasonable efforts to achieve the Technical Requirements Milestones Payment Conditions in a timely manner.
3.16.
Cooperation
. If Seller inadvertently neglects to make copies of any information included in the Transferred Assets needed in connection with its remaining business, then Purchaser will cooperate with Seller and provide copies of any such information to Seller.
3.17.
Supply Agreement
. At Closing, Purchaser and Seller shall enter into the form of [***] attached hereto as
Exhibit H
with respect to the [***].
3.18.
[***]
4.
Survival; Indemnification
.
4.7.
Survival
.
(a)
The assurances, covenants and agreements of the parties hereto contained in this Agreement shall survive and the representations and warranties of the Parties hereto contained in this Agreement shall survive for so long as Purchaser and ISIL continues to have any obligation to make payments in
Section 2.5
.
(b)
Action for indemnification pursuant to this Section 10 alleging an inaccuracy in or a breach of the representations, warranties, assurances, covenants and agreements contained in this Agreement may be brought after a party hereto has notified the other party hereto in writing of a claim for indemnification hereunder based on a breach thereof
4.8.
[***]
4.9.
[***]
4.10.
[***]
4.11.
[***]
4.12.
Matters Involving Third Parties.
(a)
If any third party shall commence a third party Action against any indemnified Party with respect to any matter which may give rise to a claim for indemnification against any indemnifying Party under this
Section 10
, the indemnified Party shall notify the
Confidential and Proprietary
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE COPY FILED HEREWITH OMITS THE INFORMATION SUBJECT TO A CONFIDENTIALITY REQUEST. OMISSIONS ARE DESIGNATED [***]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
indemnifying Party thereof in writing as soon as practicable, but in no event more than ten days after the indemnified Party shall have been served with legal process or otherwise received notice of the commencement of such Action; provided, however, that the right of the indemnified Party to indemnification shall be reduced in the event of its failure to give timely notice only to the extent the indemnifying Party is prejudiced thereby.
(b)
The indemnifying Party shall have the right to defend the indemnified Party against the third party Action with counsel and other representatives of its choice so long as (i) the indemnifying Party shall notify the indemnified Party in writing (within the 10-day period after its receipt of notice of the third party Action) that it will indemnify the indemnified Party from and against any damages the indemnified Party may suffer arising out of the third party Action; and (ii) the indemnifying Party diligently conducts the defense of the third party Action in the reasonable opinion of the indemnified Party. In the event the indemnifying Party does not comply with clauses (i) or (ii) of the preceding sentence, the indemnified Party may defend against the third party Action preserving its rights to indemnification hereunder including, without limitation, for the reasonable cost of such defense.
(c)
So long as the indemnifying Party is diligently conducting the defense of the third party Action in accordance with
Section 10.6(b)
above, (i) the indemnified Party may retain separate co-counsel, at its sole cost and expense, and participate in the defense of the third party Action, (ii) the indemnified Party shall not consent to the entry of any judgment or enter into any settlement with respect to the third party Action without the prior written consent of the indemnifying Party, which consent shall not be unreasonably withheld or delayed, [***]
(d)
[***]
4.13.
[***]
4.14.
[***] actually receives under insurance policies (net of any related increase in insurance premiums).
5.
Miscellaneous
.
5.9.
Public Announcement
. Except as required by applicable Law or any Governmental Authority with competent jurisdiction, Seller or any of its respective Affiliates and representatives shall not issue any press release or make any public announcement or disclosure with respect to this Agreement or the transactions contemplated hereby without the prior written approval and consent of Purchaser hereto, which consent shall not be unreasonably withheld, except as required under applicable SEC and NASDAQ rules.
5.10.
Amendment; Waiver
. Neither this Agreement, nor any of the terms or provisions hereof, may be amended, modified, supplemented, or waived except by a written instrument signed by all of the Parties hereto (or, in the case of a waiver, by the Party granting such waiver). No waiver of any of the terms or provisions of this Agreement shall be deemed to
Confidential and Proprietary
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE COPY FILED HEREWITH OMITS THE INFORMATION SUBJECT TO A CONFIDENTIALITY REQUEST. OMISSIONS ARE DESIGNATED [***]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
be or shall constitute a waiver of any other term or provision hereof (whether or not similar), nor shall such waiver constitute a continuing waiver. No failure of a Party hereto to insist upon strict compliance by another Party hereto with any obligation, covenant, agreement, or condition contained in this Agreement shall operate as a waiver of, or estoppel with respect to, any subsequent or other failure. Whenever this Agreement requires or permits consent by or on behalf of a Party hereto, such consent shall be given in a manner consistent with the requirements for a waiver of compliance as set forth in this
Section 11.2
.
5.11.
Fees and Expenses
. Each of the Parties hereto shall bear and pay all fees, costs, and expenses incurred by it or any of its Affiliates in connection with the origin, preparation, negotiation, execution, and delivery of this Agreement and the other Acquisition Agreements and the transactions contemplated hereby or thereby (whether or not such transactions are consummated), including, without limitation, any fees, expenses, or commissions of any of its representatives.
5.12.
Notices
. All notices, requests, demands, and other communications required or permitted under this Agreement shall be in writing and mailed or facsimiled or delivered by hand or courier service:
(f)
If to the Seller:
Luna Innovations Inc.
1 Riverside Circle, Suite 400
Roanoke, VA 95014
Attention: Talfourd Kemper
Facsimile No.: 540-581-0951
(g)
If to Purchaser or ISIL:
Intuitive Surgical Operations, Inc.
1266 Kifer Road, Building 101
Sunnyvale, CA 94086-5304
Attention: General Counsel
Facsimile No.: 408-523-1390
5.13.
Assignment.
[***]
5.14.
[***]
(a)
[***]
(b)
[***]
Confidential and Proprietary
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE COPY FILED HEREWITH OMITS THE INFORMATION SUBJECT TO A CONFIDENTIALITY REQUEST. OMISSIONS ARE DESIGNATED [***]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
(c)
[***] shall select a mediation firm in the Chicago, IL area [***] then the dispute shall be resolved by [***] arbitration in Chicago, IL [***]
5.15.
Headings
. The headings contained in this Agreement and the schedules hereto are for convenience of reference only and shall not constitute a part hereof or define, limit, or otherwise affect the meaning of any of the terms or provisions hereof.
5.16.
Entire Agreement
. Other than as set forth in this
Section 11.8
or any other Acquisition Agreements, the 2010 License Agreement, the Development and Supply Agreement and the Non-Disclosure Agreement dated May 24, 2013 embody the entire agreement and understanding between the Parties hereto with respect to the subject matter hereof and supersede all prior agreements, commitments, arrangements, negotiations or understandings, whether oral or written, between the Parties hereto, their respective Affiliates or any of the representatives of any of them with respect thereto, except as specifically referenced. There are no agreements, covenants, or undertakings with respect to the subject matter of the Acquisition Agreements other than those expressly set forth or referred to herein or therein and no representations or warranties of any kind or nature whatsoever, express or implied, are made or shall be deemed to be made herein by the Parties hereto except those expressly made in the Acquisition Agreements.
5.17.
Severability
. Each term and provision of this Agreement constitutes a separate and distinct undertaking, covenant, term, and/or provision hereof. In the event that any term or provision of this Agreement shall be determined by a court of competent jurisdiction to be unenforceable, invalid or illegal in any respect, such unenforceability, invalidity or illegality shall, to the fullest extent permitted by law, not affect any other term or provision hereof, but this Agreement shall be construed as if such unenforceable, invalid or illegal term or provision had never been contained herein. Moreover, if any term or provision of this Agreement shall for any reason be held by a court of competent jurisdiction to be excessively broad as to time, duration, activity, scope or subject, the Parties request that it be construed, by limiting and reducing it, so as to be enforceable to the fullest extent permitted under applicable law.
5.18.
No Third Party Beneficiaries
. Except as and to the extent otherwise provided herein, nothing in this Agreement is intended, nor shall anything herein be construed, to confer any rights, legal or equitable, in any Person other than the Parties hereto and their respective successors and permitted assigns.
5.19.
Counterparts
. This Agreement may be executed in one or more counterparts by original, facsimile or PDF signature, each of which shall be deemed an original, but all of which, when taken together, shall constitute one and the same instrument.
6.
Termination
. The Acquisition Agreements may be terminated and the other transactions contemplated by this Agreement may be abandoned at any time prior to the Closing Date, notwithstanding any requisite approval and adoption of this Agreement and the transactions contemplated by this Agreement if the Closing did not occur on or before Jannuary 17, 2014. In the event of termination of this Agreement pursuant to this
Section 12
, this Agreement shall forthwith become void, there shall be no liability under this Agreement on the
Confidential and Proprietary
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE COPY FILED HEREWITH OMITS THE INFORMATION SUBJECT TO A CONFIDENTIALITY REQUEST. OMISSIONS ARE DESIGNATED [***]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
part of Seller or Purchaser or any of their respective officers or directors, and all rights and obligations of each party hereto shall cease; provided, however, that the Parties shall continue to be subject to the Non-Disclosure Agreement between Seller and Purchaser dated May 24, 2013.
* * * * *
Confidential and Proprietary
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE COPY FILED HEREWITH OMITS THE INFORMATION SUBJECT TO A CONFIDENTIALITY REQUEST. OMISSIONS ARE DESIGNATED [***]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
IN WITNESS WHEREOF
, the Parties have executed, or caused their duly authorized representatives to execute, this Asset Purchase Agreement as of the date first written above.
LUNA INNOVATIONS INCORPORATED
By:
/s/ My E. Chung
Name:
My E. Chung
Title:
CEO
INTUITIVE SURGICAL OPERATIONS, INC.
By:
/s/ Gary S. Guthart
Name:
Gary S. Guthart
Title:
CEO
INTUITIVE SURGICAL INTERNATIONAL LTD.
By:
/s/ Marshall L. Mohr
Name:
Marshall L. Mohr
Title:
SRVP and CFO
Confidential and Proprietary
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE COPY FILED HEREWITH OMITS THE INFORMATION SUBJECT TO A CONFIDENTIALITY REQUEST. OMISSIONS ARE DESIGNATED [***]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
CROSS-LICENSE AGREEMENT
This Cross-License Agreement (this “
2014 License Agreement
”) is made as of January 17, 2014 (“
Agreement Date
”), by and among Luna Innovations Incorporated and Luna Technologies, Inc., Delaware corporations having their principal place of business at 1 Riverside Circle, Suite 400, Roanoke, VA 24016 (collectively, “
Luna
”
), and Intuitive Surgical Operations, Inc., a Delaware corporation having its principal place of business at 1266 Kifer Road, Sunnyvale, California 94086 (“
ISOI
”
), and Intuitive Surgical International, Ltd, a Cayman Islands company and an indirect and wholly-owned subsidiary of ISOI (“
ISIL
”). Luna, ISIL, and ISOI shall each be referred to herein as a “
Party
” and shall be collectively referred to as the “
Parties
.” Capitalized terms that are used, whether in the singular or plural, shall have the meanings set forth in Section 1 (Definitions) or, if not set forth in Section 1, the meaning designated in places throughout the Agreement.
RECITALS
WHEREAS, Luna and ISOI are Parties to a License Agreement effective January 10, 2010 (the “
2010 License Agreement
”) and a Development and Supply Agreement dated June 11, 2007 and its associated amendments dated May 20, 2008, Jan. 12, 2010, April 27, 2010, Sept. 2, 2010, March 23, 2011, March 19, 2012, Dec. 15, 2012, and Jan. 1, 2013, (the “
Development and Supply Agreement
”).
WHEREAS, Luna wishes to sell, and ISOI and ISIL wish to purchase, all of Luna’s Luna Healthcare (as defined below) assets related to FOSSL Technology (as defined below), including employees and intellectual property, all upon the terms and subject to the conditions set forth in the Asset Purchase Agreement among Luna, ISOI and ISIL, dated January 17, 2014 (the “
Asset Purchase Agreement
”).
WHEREAS, ISOI and ISIL wish to concurrently enter into this 2014 License Agreement to grant back to Luna, to the extent ISOI and ISIL are empowered, a worldwide, exclusive license (except ISOI and ISIL shall reserve for themselves a worldwide right to practice on a non-exclusive basis) to use and exploit the FOSSL Technology outside the Field of Medical Healthcare, and a worldwide, non-exclusive license to use and exploit the FOSSL Technology in the Field of Non-Robotics Medical Devices (as defined below), but strictly limited to applications involving the S/T Sensing, upon the terms and subject to the conditions set forth below.
WHEREAS, further to the 2014 License Agreement, Luna wishes to grant ISIL, and ISIL wishes to accept, certain perpetual, fully paid-up, royalty-free rights in and to the intellectual property included in Luna’s Luna Healthcare (as defined below) assets related to FOSSL Technology (as defined below), upon the terms and subject to the conditions set forth below.
WHEREAS, Luna wishes to affirm its obligation under the 2010 License Agreement under which it grants ISOI a worldwide, co-exclusive license under the Licensed IP (as this
Confidential and Proprietary
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE COPY FILED HEREWITH OMITS THE INFORMATION SUBJECT TO A CONFIDENTIALITY REQUEST. OMISSIONS ARE DESIGNATED [***]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
capitalized term is defined in the 2010 License Agreement) solely within the Medical Robotics Field (as this capitalized term is defined in the 2010 License Agreement).
NOW, THEREFORE, in consideration of the mutual covenants and other good and valuable consideration described herein, the receipt and sufficiency of which are hereby acknowledged, the Parties hereto covenant and agree as follows:
1.
Definitions
.
1.1.
Certain Definitions
. For purposes of this Agreement, in addition to the terms that are defined on first use in this Agreement, and terms not defined herein that are defined in the Asset Purchase Agreement, the following terms shall have the following meanings:
(a)
“
Affiliate
” shall mean a Person that directly or indirectly, through one or more intermediaries, controls, or is controlled by, or is under common control with, the Person specified. For purposes of this definition, the terms “control”, “controlled by”, and “under common control with” shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of such Person and, in the case of an entity, shall require (i) in the case of a corporate entity, direct or indirect ownership of more than 50 percent of the securities having the right to vote for the election of directors, and (ii) in the case of a non-corporate entity, direct or indirect ownership of more than 50 percent of the equity interests with the power to direct the management and policies of such non-corporate entity.
(b)
“
Change of Control
” shall mean, with respect to each Party, the sale of all or substantially all of the assets of Luna or of ISOI, ISIL and/or Intuitive Surgical, Inc., or a merger or consolidation involving Luna or ISOI, ISIL and/or Intuitive Surgical, Inc., in which stockholders of Luna or Intuitive Surgical, Inc., immediately before such merger or consolidation do not own immediately after such merger or consolidation capital stock or other equity interests of the surviving corporation or entity representing more than fifty percent of the voting power of the outstanding capital stock or other equity interests of such surviving corporation or entity immediately after such merger or consolidation
.
(c)
“
Commercialize
” (or any form thereof, e.g., “Commercialization”) shall mean to sell, offer for sale, import for sale, export for sale, distribute for sale, promote, and market.
(d)
“
Commercially Reasonable Efforts
” shall mean timely application of efforts and resources, consistent with the exercise of prudent business judgment by a company with similar financial resources, and commercially appropriate prioritization with respect to other company projects and products.
(e)
“
Confidential Information
” shall mean all ideas and information of any kind that are held in confidence by one Person and transferred, disclosed, or made available by such Person to a receiving Person and are identified at the time of disclosure as being
Confidential and Proprietary
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE COPY FILED HEREWITH OMITS THE INFORMATION SUBJECT TO A CONFIDENTIALITY REQUEST. OMISSIONS ARE DESIGNATED [***]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
proprietary or confidential, or would reasonably be regarded as proprietary or confidential by a reasonable Person in like circumstances. Information shall not be deemed to be Confidential Information to the extent the receiving Person can demonstrate (i) now or hereafter, through no act or failure to act on the part of the receiving Person, is or becomes public; (ii) is known to the receiving Person or one of its Affiliates at the time such person receives such Confidential Information from the disclosing Person; (iii) is hereafter furnished to the receiving Person by an unrelated third Person without violating any agreement with the disclosing Person; or (iv) is independently developed by the receiving Person or one of its Affiliates without use of any Confidential Information received from the other Person.
(f)
“
Control
” or “
Controlled
” shall mean the ability of a Person to grant a license, sublicense, and/or enforce under Intellectual Property and without violating the terms of any agreement or other arrangement with any third party.
(g)
“
Field of Colonoscopy Non-robotics
” [***]
(h)
“
Field of Endoluminal Non-robotics
” [***]
(i)
“
Field of Medical Healthcare
” [***]
(j)
“
Field of Medical Robotics
” [***]
(k)
“
Field of Non-robotics Medical Devices
” or “
Non-robotics Medical Devices Field
” [***]
(l)
“
Field of Orthopedics
” [***]
(m)
“
Field of Vascular Non-robotics
” [***]
(n)
“
FOSSL Technology
” [***]
(o)
“
Governmental Authority
” shall mean any nation, territory, or government (or union thereof), foreign, domestic, or multinational, any state, local, or other political subdivision thereof, and any bureau, court, tribunal, board, commission, department, agency, or other entity exercising executive, legislative, judicial, regulatory, or administrative functions of government, including all taxing authorities and all European notified bodies, including notified bodies within the sense of Article 16 of the European Union Medical Device Directive 93/42/EEC, and all other entities exercising regulatory authority over medical products or devices.
(p)
“
Intellectual Property
” or “
IP
” shall mean: technology, know-how, trade secrets, contract and licensing rights, goodwill, and patent rights (including, without limitation, (i) any patents, patent applications, any patents issuing therefrom, and all provisional rights with respect to patent applications, and (ii) any improvements, substitutions, divisionals, patents of addition, continuations, continuations-in-part, reissues, renewals, registrations,
Confidential and Proprietary
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE COPY FILED HEREWITH OMITS THE INFORMATION SUBJECT TO A CONFIDENTIALITY REQUEST. OMISSIONS ARE DESIGNATED [***]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
confirmations, re-examinations, extensions, supplementary protection certificates, term extensions (under applicable patent law or regulation or other law or regulation), and certificates of invention of any patents or patent applications, regardless of whether such rights arise under the law of the United States or any other state, country, region, or jurisdiction.
(q)
“
Licensed Product
” shall mean, as the context requires, (i) if outside the Field of Medical Healthcare, a Luna product or service that embodies Licensed Technology, and (ii) if in the Field of Non-robotics Medical Devices, a Luna product or service that embodies Licensed Technology but strictly limited to applications involving S/T Sensing.
(r)
“
Licensed Technology
” shall mean only the Technology within the Transferred Assets acquired by ISOI and ISIL from Luna under the Asset Purchase Agreement, which but for the license granted herein to Luna, would be infringed, exploited, practiced or otherwise used by Luna (and/or its assignees and sublicensees) in its efforts to Commercialize, develop, use, and manufacture products and services, and shall exclude any derivatives of FOSSL Technology, improvements of FOSSL Technology, or new FOSSL Technology, that are developed, invented, created, reduced to practice, licensed and/or acquired by ISOI and/or ISIL but shall include any derivatives of FOSSL Technology, improvements of FOSSL Technology, or new FOSSL Technology, that are reduced to practice (which is intended to include constructive or actual reduction to practice and include the filing of an invention disclosure form) solely by any of the Key Employees or jointly by any of them with any other persons prior to the first anniversary of the Agreement Date.
(s)
“
Litigation Matter
” shall mean any claim, investigation, arbitration, grievance, litigation, action, suit, or proceeding, administrative or judicial, to which a Party is (or, to such Party’s knowledge, is threatened in writing to be made) a party, and relating to the Licensed Patents or this Agreement (whether such Party is a plaintiff, defendant, or otherwise), at law or in equity or otherwise, or before any Governmental Authority.
(t)
“
Luna Healthcare
” shall mean the business portion (and its assets) of Luna that develops, manufactures, and/or Commercializes products and services using
FOSSL Technology for shape sensing
in the Field of Medical Healthcare.
(u)
“
Patent Costs
” shall mean the costs and expenses paid to outside legal counsel, Governmental Authorities, and other third parties incurred in connection with preparing, filing, prosecuting, obtaining, and maintaining patents and patent applications included within the Licensed Technology, or taking any Patent Prosecution Action, including costs and expenses of patent interference, re-examination, reissue, protest, opposition, nullification, and similar proceedings (and any appeal thereof in any court or administrative agency).
(v)
“
Patent Prosecution Action
” shall mean any and all actions that may be taken in connection with preparing, filing, prosecuting, obtaining, and maintaining throughout the world patent protection for the IP included within the Licensed Technology, including patent applications and other related material submissions and correspondence with
Confidential and Proprietary
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE COPY FILED HEREWITH OMITS THE INFORMATION SUBJECT TO A CONFIDENTIALITY REQUEST. OMISSIONS ARE DESIGNATED [***]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
any patent authorities, and including with regard to any patent interference, re-examination, reissue, protest, opposition, nullification, and similar proceedings (and any appeal thereof in any court or administrative agency).
(w)
“
Person
” shall mean an individual, corporation, partnership, limited partnership, limited liability company, unincorporated association, trust, joint venture, union or other organization or entity, including a Governmental Authority.
(x)
“
Sublicensee
” shall mean any Person to whom (i) Luna sublicenses its rights under this 2014 License Agreement in the manner provided in Section 2.2 or (ii) grants a covenant not to sue with respect to its rights under the Licensed Technology.
(y)
“
S/T Sensing
” [***]
(z)
“
Technology
”
shall mean any technical information, know-how, processes, procedures, methods, formulae, protocols, techniques, software, computer code (including both object and source code), documentation, works of authorship, data, designations, designs, devise, prototypes, substances, components, Intellectual Property, inventions (whether or not patentable), mask works, ideas, trade secrets, and other information or materials, in tangible or intangible form.
(aa)
“
Term
” shall have the meaning as set forth in Section 9.1.
(bb)
“
Third Party License
” shall mean
an IP license that ISOI Controls pursuant to an agreement with a third party, which license or agreement is executed and/or in effect during the Term
.
2.
License and Other Rights.
2.1.
License and Other Rights
.
(a)
[***]
(b)
Upon the execution of the Asset Purchase Agreement [***], ISOI and ISIL shall grant an exclusive license to Luna [***] under the Licensed Technology [***]outside the Field of Medical Healthcare. The exclusive license [***] will be [***] revocable [***]
(c)
[***]
(d)
ISOI, ISIL, and Luna will not, and will ensure that their Affiliates do not, during the Term assign, transfer, convey, or otherwise dispose of any Licensed Technology other than to an Affiliate (an “
IP Transfer
”) unless such IP Transfer shall have been made subject to the license grant and exclusivity requirements set forth in this Section 2.1 and to the other express terms of this Agreement.
Confidential and Proprietary
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE COPY FILED HEREWITH OMITS THE INFORMATION SUBJECT TO A CONFIDENTIALITY REQUEST. OMISSIONS ARE DESIGNATED [***]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
(e)
ISOI, ISIL, and Luna will not, and will ensure that their Affiliates do not, during the Term, utilize or practice, or grant any rights to any third party with respect to, the Licensed Technology that are in any way inconsistent with the rights granted by ISOI and ISIL to Luna and the rights granted by Luna to ISIL under this Agreement.
2.2.
Sublicenses
. To the extent Luna is granted the right to sublicense, any sublicense by Luna is subject to the following requirements:
(a)
Sublicense Agreement
. Luna shall execute a written sublicense agreement with each Sublicensee which shall be subject to Luna’s rights and obligations under the terms of this Agreement. Luna shall report the granting of all such sublicenses to ISOI within thirty (30) days of the granting of the same, and along with such notification shall provide a copy of the sublicense agreement (redacted as appropriate to fulfill Luna’s obligations of confidentiality to third parties, but not sections required for ISOI to understand the relevant field and scope of the sublicense agreement). Each such sublicense agreement will contain terms that are at least as protective of the Licensed Technology and Confidential Information as trade secrets, and no less restrictive than, the terms set forth in this 2014 License Agreement, and shall not include provisions that would be in violation of the license grant set forth in this 2014 License Agreement. Luna shall be obligated to use Commercially Reasonable Efforts in monitoring the performance of its Sublicensees and shall indemnify and hold harmless ISOI, ISIL and its Affiliates, and their respective officers, directors, employees, agents, attorneys, representatives, sucessors, and assigns for any breach by a Sublicensee of Luna’s obligations under this 2014 License Agreement.
(b)
Performance of Other Obligations by Sublicensees
. Luna shall, and by this 2014 License Agreement hereby does, agree to cause any Sublicensee to assume and agree to perform all of the covenants and obligations of Luna to ISOI contained in this 2014 License Agreement as fully and to the same extent as if such person were Luna under this 2014 License Agreement but with such modifications as may be appropriate to reflect the extent, if any, to which the sublicense is narrower in scope than the license grant contained this 2014 License Agreement.
(c)
Distributors
. Luna may exercise its rights and obligations under this 2014 License Agreement through wholesalers, distributors and sub-distributors through multiple tiers. Such exercise shall not constitute or require a sublicense by Luna.
2.3.
[***]
3.
Enforcement Rights and Settlement/Royalty Payments
.
Confidential and Proprietary
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE COPY FILED HEREWITH OMITS THE INFORMATION SUBJECT TO A CONFIDENTIALITY REQUEST. OMISSIONS ARE DESIGNATED [***]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
3.1.
Rights to Enforce
.
[***]
3.2.
Enforcement Proceedings Records; Audits
.
Each Party shall maintain complete and accurate records in sufficient detail to confirm the Primary Enforcing Party’s payment obligations provided under Section 3.1 of this Agreement (the “
Audit Purpose
”). For a period of three (3) years from the creation of individual records, such records shall be available during regular business hours, upon reasonable prior notice and not more often than once each calendar year, for examination by an independent accounting firm selected by a Party and reasonably acceptable to the other Party, for the sole purpose of the Audit Purpose.
The accounting firm shall disclose to the auditing Party only such information as is necessary for the Audit Purpose
. Any undisputed amounts shown to be owed but unpaid shall be paid within thirty (30) days from the accountant’s report (which shall be provided to both Parties), plus interest from the original due date. Any undisputed amounts shown to have been overpaid shall be paid within forty-five (45) days from the accountant’s report (which shall be provided to both Parties), plus interest from the original due date. [***]
3.3.
Enforcement Action by Third Party
.
(a)
If a Party receives notice by counterclaim,
declaratory judgment
action or otherwise, alleging the invalidity, unenforceability,
non-infringement, misuse, or misappropriation
outside the Field of Medical Healthcare
with respect to any
Licensed Technology
, it shall bring such fact to the attention of the other Party in writing, including all relevant information related to such claim. Where such allegation is made in the form of a patent opposition, patent reexamination, patent interference or other patent office proceeding or otherwise in connection with any Patent Prosecution Action, the provisions of Section
4 hereof
shall apply. Where such allegation is made in a counterclaim to, or otherwise in connection with, a suit or other action brought under Section 3.1, the provisions of Section 3.1 shall apply. In all other cases (e.g., declaratory judgment action filed by a third party), for
Licensed Technology
, ISOI shall have the first right to defend such action at its own expense; provided, if a Party has brought an Infringement action or elects to bring an Infringement counterclaim pursuant to Section 3.1, the provisions of Section 3.1 shall apply.
(b)
[***]
4.
Prosecution of Patent Rights
.
4.1.
Prosecution and Maintenance of Patent Rights
. ISOI shall use Commercially Reasonable Efforts to prepare, file, prosecute, obtain, and maintain the Licensed Technology patents. ISOI shall otherwise take all Patent Prosecution Actions as it shall deem to be commercially reasonable, in its discretion, to protect and preserve the value of such Licensed Technology, and shall pay all Patent Costs in connection with the foregoing activities.
Confidential and Proprietary
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE COPY FILED HEREWITH OMITS THE INFORMATION SUBJECT TO A CONFIDENTIALITY REQUEST. OMISSIONS ARE DESIGNATED [***]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
4.2.
Cooperation with Respect to Licensed Technology Patents
. Upon request from Luna, ISOI shall provide Luna with copies of all related material submissions and correspondence proposed to be submitted to, as well as actually submitted to, any patent authorities dealing with actual or potential Licensed Technology patents outside the Field of Medical Healthcare, in sufficient time to allow for review and comment by Luna. In addition, ISOI shall provide Luna and its counsel with an opportunity to consult with ISOI regarding Patent Prosecution Actions relating to the Licensed Technology patents and any decisions by ISOI not to take any Patent Prosecution Actions, and ISOI shall reasonably take into consideration, in good faith, the reasonable requests of Luna regarding the same (and if Luna requests foreign patent filing, maintenance, and prosecution in any given country(ies) that ISOI and ISIL would not otherwise pursue, then ISOI will reasonably comply with such requests at Luna’s sole expense).
4.3 [***]
5.
Confidentiality
.
5.1.
Limited Disclosure and Use
. Each of ISOI and Luna shall hold in confidence any Confidential Information (including trade secrets) disclosed by the other or otherwise obtained by such Party from the other Party as a result of this Agreement, and each of ISOI and Luna shall protect the confidentiality thereof with the same degree of care that it exercises with respect to its own information of a like nature, but in no event less than reasonable care. Luna shall have the right to provide Confidential Information to its Affiliates and Sublicensees, subject to the confidentiality obligations imposed by this Section 5.1. Without the prior written consent of the disclosing Party, a receiving Party shall not use, disclose, or distribute any Confidential Information, in whole or in part, except as required to perform such Party’s obligations under this 2014 License Agreement or in exercise or furtherance of its rights under this 2014 License Agreement. Access to the disclosing Party’s Confidential Information shall be restricted to the receiving Party’s and its Affiliates’ employees, agents, auditors and business, financial, and legal advisers, who, in each case, need to have access to carry out a permitted use and are bound in writing to maintain the use and confidentiality restrictions of such Confidential Information. The obligations set forth in this Section 5.1 shall survive any termination or expiration of this Agreement in perpetuity (with respect to trade secrets and confidential financial information) and for a period of five (5) years (with respect to all other Confidential Information).
5.2.
Exceptions
. Each receiving Party may disclose Confidential Information, without prior approval from the other Party, to the extent such disclosure is reasonably necessary to protect Intellectual Property rights to which such Party has a right or license under this Agreement, to prosecute or defend litigation, to comply with applicable law or regulations (for example, Unites States Securities and Exchange Commission filings), to obtain necessary or desirable regulatory approvals or concurrences, or to respond to a valid order of a Governmental Authority,
provided that
, other than with respect to disclosure for protecting Intellectual Property rights in connection with a Patent Prosecution Action in which such
Confidential and Proprietary
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE COPY FILED HEREWITH OMITS THE INFORMATION SUBJECT TO A CONFIDENTIALITY REQUEST. OMISSIONS ARE DESIGNATED [***]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
disclosure is required by applicable law, the receiving Party shall (a) use Commercially Reasonable Efforts to secure confidential treatment of such Confidential Information required to be disclosed, (b) use Commercially Reasonable Efforts to protect the financial terms of this Agreement, and (c) unless precluded by applicable law from doing so, give advance written notice to the disclosing Party reasonably in advance of the proposed disclosure so as to permit the disclosing Party the opportunity to object to such disclosure or otherwise protect its Confidential Information.
5.3.
Use of Name; Disclosure of Terms of the Agreement
. Except as required by applicable law or regulation, neither Party shall use the name of the other Party or any Affiliate or Sublicensee of the other Party in any advertising without the prior written approval of the other Party. Except as may be required by applicable law or regulation, neither Party shall disclose any terms or conditions of this Agreement without the prior written consent of the other,
provided that
(a) either Party may disclose such terms and conditions to comply with law or the rules of any stock exchange on which its securities are listed; and (b) either Party may disclose such terms and conditions to existing and potential bona fide lenders, material investors, and buyers who have agreed in writing to keep such information confidential in accordance with provisions at least as protective as those contained herein.
5.4.
Termination.
Each receiving Party shall, upon termination of this 2014 License Agreement, immediately discontinue use of the other’s Confidential Information (except to the extent that such receiving Party retains a right or license to use such Confidential Information, or requires such Confidential Information to complete the transactions and purposes of this Agreement). Within thirty (30) days after termination of this Agreement, or upon receipt of written request by the disclosing Party, if earlier, all materials containing such Confidential Information shall be returned by the receiving Party or (at the receiving Party’s election) destroyed,
provided, however,
that each receiving Party may retain copies of Confidential Information in which such receiving Party has a proprietary or licensed interest that survives termination, and the receiving Party shall be entitled to retain a file copy of the Confidential Information under the control of its general counsel or its outside counsel for archival purposes and for monitoring its obligations under this Agreement, and in connection with any related obligations under law
6.
Representations and Warranties
.
5.5.
Mutual Representations and Warranties
. Each Party hereby represents and warrants to the other Party as follows:
(a)
It is a corporation duly organized, validly existing, and in good standing under the laws of the jurisdiction in which it is incorporated. It has corporate power to own its properties and to conduct its business as currently owned and conducted.
(b)
It has the full legal right and power to enter into and perform the transactions contemplated by this 2014 License Agreement, without need for any consent, approval, authorization, license or order of, or notice to or filing with, any Governmental
Confidential and Proprietary
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE COPY FILED HEREWITH OMITS THE INFORMATION SUBJECT TO A CONFIDENTIALITY REQUEST. OMISSIONS ARE DESIGNATED [***]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
Authority or other Person. The execution, delivery, and performance by such Party of this 2014 License Agreement and the consummation by it of the transactions contemplated hereby have been duly and validly authorized and approved by all necessary corporate action of such Party. This 2014 License Agreement evidences the legal, valid, and binding obligations of such Party, enforceable against it in accordance with its terms, subject to bankruptcy, insolvency, reorganization, fraudulent conveyance, moratorium, or similar laws relating to or affecting the rights and remedies of creditors generally. This 2014 License Agreement has been duly executed and delivered by such Party.
(c)
The execution, delivery, and performance by it of this 2014 License Agreement does not and will not violate any applicable law or regulation, breach, create any liability, or loss of a benefit under any agreement to which it is a party or by which it is bound.
(d)
The execution, delivery, and performance by it of this Agreement does not require the approval of any Governmental Authority nor the application for or filing of or for any license, permit, approval, waiver, no-action, or similar permission from any Governmental Authority.
5.6.
Representations and Warranties of Luna
. Luna hereby represents and warrants, as at the Agreement Date, as follows:
(a)
Rights to License
. To the best of its knowledge, Luna (i) owns, holds, and/or Controls right, title, and interest in the Licensed Technology licensed to ISIL in Section 2.1(a); (ii) has the right to grant the license to ISIL under Sections 2.1(a); (iii) until the execution of the Asset Purchase Agreement, has the exclusive right to bring actions for the Infringement of the issued Licensed Technology (i.e., issued patents and copyrights); (iv) is empowered and has sufficient rights to grant the rights contemplated by this 2014 License Agreement.
(b)
Acknowledgement
. ISOI and ISIL acknowledge that the license rights granted to ISOI and ISIL hereunder may not provide ISOI and ISIL with all the intellectual property or other rights needed to perform the activities contemplated by ISOI and ISIL in entering into this 2014 License Agreement to Commercialize products and services.
(c)
No Intellectual Property Warranty
. Nothing in this Agreement shall be construed as: (i) a warranty or representation by Luna that anything made, used or sold or otherwise disposed of under any license granted in this 2014 License Agreement is or will be free of infringement of any intellectual property right of third parties; (ii) a representation that Luna has or shall file any patent application, secure any patent, pursue any pending patent application, except as expressly provided herein; or (iii) an obligation of Luna to bring or prosecute any action or suit against a third party for infringement of the licensed technology.
5.7.
Disclaimer
. EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT, NO PARTY MAKES ANY REPRESENTATIONS OR WARRANTIES,
Confidential and Proprietary
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE COPY FILED HEREWITH OMITS THE INFORMATION SUBJECT TO A CONFIDENTIALITY REQUEST. OMISSIONS ARE DESIGNATED [***]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
EXPRESS OR IMPLIED, INCLUDING WITHOUT LIMITATION ANY REPRESENTATIONS OR WARRANTIES OF MERCHANTABILITY, OR FITNESS FOR A PARTICULAR PURPOSE. NO PARTY WARRANTS THAT THE OTHER PARTY WILL RECEIVE ANY PARTICULAR AMOUNT, OR ANY, REVENUES OR PROFITS AS A RESULT OF ENTERING INTO THE BUSINESS ARRANGEMENTS DESCRIBED IN THIS AGREEMENT.
6.
[***]
7.
[***]
8.
Term and Termination
.
8.1.
Term
. Unless earlier terminated in accordance with this Section 9, the “
Term
” and the license grants set forth in this 2014 License Agreement shall take effect at the Agreement Date and shall continue until the later to occur of the following: (i) expiration of the last to expire of the Licensed Technology patents, including any extensions thereof, and (ii) the date when Luna (or its assignee or sublicensee) is no longer Commercializing Licensed Products and the Licensed Technology licensed to Luna hereunder.
8.2.
Termination for Cause by ISOI.
ISOI and ISIL shall have the right to terminate this 2014 License Agreement, including all license and rights granted to Luna: (i) effective within 10 business days upon written notice to Luna, if Luna or its Affiliates initiates or joins a proceeding to challenge the validity or enforceability of the patents or patent applications included in the Licensed Technology and such proceeding is not dropped within such 10-business day period; (ii) effective immediately upon written notice to Luna, if Luna or its Affiliates continues to Commercialize FOSSL Technology in the Field of Medical Healthcare (except for Licensed Products in the Field of Non-robotics Medical Devices and except pursuant to its fulfillment of obligations to Hansen Medical, Inc. as permitted under Section 9.2 of the Asset Purchase Agreement) ninety (90) days after written notice from ISOI or ISIL specifying the nature of Luna’s violation(s); (iii) upon written notice to Luna, if Luna or its Affiliates continues to sublicense, or attempts to sublicense, its rights hereunder in the Field of Medical Healthcare in violation of Section 2.2, such termination to be effective ninety (90) days after Luna’s receipt of written notice of such violation from ISOI or ISIL specifying the nature of Luna’s violation(s); and (iv) effective immediately upon written notice to Luna, if Luna or its Affiliates violates Section 5.1 of this Agreement in a manner that advantages a competitor in the Field of Medical Healthcare and such violation remains uncured ninety (90) days after Luna’s receipt of written notice specifying the nature of such violation from ISOI and ISIL.
9.3
[***]
.
9.4
[***]
9.5
After Termination
. [***], Sections 5 (Confidentiality), 7 (Indemnification), 9 (Termination), and 10 (General) shall survive.
Confidential and Proprietary
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE COPY FILED HEREWITH OMITS THE INFORMATION SUBJECT TO A CONFIDENTIALITY REQUEST. OMISSIONS ARE DESIGNATED [***]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
9.6
Section 365(n)
. 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 Title 11, U.S. Code (the “
Bankruptcy Code
”), licenses of rights to “intellectual property” as defined in the Bankruptcy Code. The Parties agree that Luna (as licensee under Section 2) shall retain and may fully exercise all of its respective rights and elections under the Bankruptcy Code. ISOI shall, during the Term, create and maintain current copies or, if not amenable to copying, detailed descriptions or other appropriate embodiments, of all such Intellectual Property. All rights, powers, and remedies of Luna provided under this Article 9 are in addition to and not in substitution for any and all other rights, powers, and remedies now or hereafter existing at law or in equity in the event of any such commencement of a bankruptcy proceeding by or against ISOI.
10
General
.
10.1
Waivers and Amendments
.
(a) This Agreement may be amended, modified, or supplemented only by a written instrument executed by the Parties to this 2014 License Agreement.
(e)
No waiver of any provision of this Agreement, or consent to any departure from the terms of this 2014 License Agreement, shall be effective unless the same shall be in writing and signed by the Party waiving or consenting thereto. No failure on the part of any Party to exercise, and no delay in exercising, any right or remedy under this Agreement shall operate as a waiver thereof, nor shall any single or partial exercise of any such right or remedy by such Party preclude any other or further exercise thereof or the exercise of any other right or remedy. The waiver by any Party to this Agreement of a breach of any provision of this Agreement shall not operate as a waiver of any subsequent breach.
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10.2
|
Entire Agreement
. This 2014 License Agreement constitutes the entire agreement between the Parties to this 2014 License Agreement with respect to the subject matter of this 2014 License Agreement and supersedes all prior agreements and understandings, whether written or oral, between the Parties, or any of the Parties, in connection with such subject matter. Any representation, promise, or condition in connection with such subject matter, which is not incorporated in this 2014 License Agreement, shall not be binding upon either Party.
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10.3
|
Severability
. If any provision of this 2014 License Agreement is found invalid or unenforceable by a court of competent jurisdiction, such provision shall be enforced to the maximum extent permissible by law and the other provisions of this 2014 License Agreement shall remain in full force and effect.
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10.4
|
Relationship of the Parties
. This 2014 License Agreement shall not constitute either Party the agent or legal representative of the other Party
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Confidential and Proprietary
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE COPY FILED HEREWITH OMITS THE INFORMATION SUBJECT TO A CONFIDENTIALITY REQUEST. OMISSIONS ARE DESIGNATED [***]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
for any purpose whatsoever, and neither Party shall hold itself
out as an agent of the other Party. This Agreement creates no relationship of joint venturers, partners, associates, employment, or principal and agent between the Parties, and both Parties are acting as independent contractors. Neither ISOI nor Luna is granted in this 2014 License Agreement any right or authority to, and shall not attempt to, assume or create any obligation or responsibility for or on behalf of the other. Neither ISOI nor Luna shall have any authority to bind the other to any contract, whether of employment or otherwise, and ISOI and Luna shall bear all of their respective expenses for their operations, including the compensation of their employees and the maintenance of their offices and service facilities. ISOI and Luna shall each be solely responsible for their own employees and salespeople and for their acts and the things done by them.
10.5
No Election of Remedies
. Except as otherwise specifically provided in this 2014 License Agreement, the rights and remedies accorded in this 2014 License Agreement to ISOI and to Luna are cumulative and in addition to those provided by law, and may be exercised separately, concurrently, or successively.
10.6
Costs and Expenses
. Except as expressly stated otherwise in this 2014 License Agreement, each Party shall bear its own costs and expenses of performance of this Agreement.
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10.7
|
Notice
. All notices, requests, demands, claims, and other communications under this Agreement shall be in writing. Any notice, request, demand, claim or other communication under this Agreement with respect to any alleged breach of this Agreement or the alleged termination of this Agreement shall be deemed duly delivered (a) four (4) business days after it is sent by registered or certified mail, return receipt requested, postage prepaid, or (b) one (1) business day after it is sent for next business day delivery via a reputable nationwide overnight courier service, in each case addressed to the intended recipient as set forth below. Any other form of notice, request, demand, or other communication between the Parties shall be deemed duly delivered one (1) business day after it is sent on a business day via electronic facsimile transmission, with confirmation of delivery, addressed to the intended recipient as set forth below:
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Confidential and Proprietary
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE COPY FILED HEREWITH OMITS THE INFORMATION SUBJECT TO A CONFIDENTIALITY REQUEST. OMISSIONS ARE DESIGNATED [***]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
(a) if to Luna, to:
Luna Innovations Incorporated
1 Riverside Circle, Suite 400
Roanoke, VA 24016
Attention: General Counsel—Legal Dept.
Facsimile No.: 540-581.0951
E-mail: kemperf@lunainc.com
(f)
if to ISOI, to:
ISOI Surgical Operations, Inc.
1266 Kifer Road
Building 101
Sunnyvale, CA 94086-5304
Attention: General Counsel—Legal Dept.
Facsimile No.: (408) 523-1390
E-mail: mark.meltzer@intusurg.com
(g)
if to ISIL, to:
Intuitive Surgical International, Ltd.
1266 Kifer Road
Building 101
Sunnyvale, CA 94086-5304
Attention: General Counsel—Legal Dept.
Facsimile No.: (408) 523-1390
E-mail: mark.meltzer@intusurg.com or at such other address for a Party as shall be specified by like notice.
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10.8
|
Counterparts
. This Agreement and all Exhibits, Schedules and Appendices may be executed in two or more counterparts, all of which shall be considered one and the same agreement and shall become effective when two or more counterparts have been signed by each Party and delivered to the other Party, it being understood that all Parties need not sign the same counterpart. Facsimile or PDF execution and delivery of this Agreement and any Exhibits, Schedules, and Appendices by any of the Parties shall be legal, valid, and binding execution and delivery of such document for all purposes.
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10.9
|
Benefits and Burdens; Assignments
. This 2014 License Agreement shall be binding upon and shall inure to the benefit of each of the Parties as well as their respective legal representatives, successors,
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Confidential and Proprietary
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE COPY FILED HEREWITH OMITS THE INFORMATION SUBJECT TO A CONFIDENTIALITY REQUEST. OMISSIONS ARE DESIGNATED [***]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
and permitted assigns. This 2014 License Agreement shall be assignable, by operation of law or otherwise, by the Parties;
provided
in each case of assignment the assignee agrees in writing to assume the assigning Party’s obligations under this 2014 License Agreement;
provided
further
that Luna may not assign its rights in the Field of Non-Robotics Medical Devices except pursuant to a Change of Control; and
provided further
that ISOI and ISIL may not assign this 2014 License Agreement to the extent the assignment would transfer their retained rights outside the Field of Medical Healthcare (as set forth in Section 2.1(b)) except pursuant to a Change of Control. Any attempt to assign or transfer this 2014 License Agreement or any portion thereof in violation of this Section 10.9 shall be void.
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10.10
|
Interpretation
. When a reference is made in this 2014 License Agreement to Sections or Exhibits, such reference shall be to a Section of or Exhibit to this Agreement unless otherwise indicated. References to Sections include subsections, which are part of the related Section (e.g., a section numbered “Section 5.1(a)” would be part of “Section 5.1”, and references to “Section 5.1” would also refer to material contained in the subsection described as “Section 5.1(a)”). The recitals to this 2014 License Agreement constitute an integral part of this 2014 License Agreement. Headings contained in this 2014 License Agreement are for convenience of reference only and shall not affect in any way the meaning or interpretation of this 2014 License Agreement. The language used in this Agreement shall be deemed to be the language chosen by the Parties to this 2014 License Agreement to express their mutual intent, and no rule of strict construction shall be applied against any Party (e.g., ambiguities, if any, in this Agreement shall not be construed by default against either Party simply because one or the other Party is deemed to have drafted the provision at issue). Whenever the context may require, any pronouns used in this Agreement shall include the corresponding masculine, feminine, or neuter forms, and the singular form of nouns and pronouns shall include the plural, and vice versa. Any reference to any federal, state, local, or foreign statute or law shall be deemed also to refer to all rules and regulations promulgated thereunder, unless the context requires otherwise. Whenever the words “include,” “includes” or “including” are used in this 2014 License Agreement, they shall be deemed to be followed by the words “but not limited to”. No summary of this 2014 License Agreement prepared by any Party shall affect the meaning or interpretation of this 2014 License Agreement. All references to dollars in this 2014 License Agreement shall be to United States Dollars.
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Confidential and Proprietary
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE COPY FILED HEREWITH OMITS THE INFORMATION SUBJECT TO A CONFIDENTIALITY REQUEST. OMISSIONS ARE DESIGNATED [***]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
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10.11
|
License Registration and Recordal
. Subject to the confidentiality provisions of Section 5, each Party shall have the right, at its sole cost and expense, to register, record, and otherwise document the license granted in Section 2 in any country where there are any pending or issued Licensed Technology patent rights. Each Party shall have the right, at its sole cost and expense, to register, record, and otherwise document any assignments of Licensed Technology patent rights provided for by this 2014 License Agreement.
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10.12
Public Announcement.
Neither ISOI nor Luna shall issue any press release or make any public announcement or disclosure with respect to this 2014 License Agreement or the transactions contemplated hereby, without the prior written permission of the other Party.
Confidential and Proprietary
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE COPY FILED HEREWITH OMITS THE INFORMATION SUBJECT TO A CONFIDENTIALITY REQUEST. OMISSIONS ARE DESIGNATED [***]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
IN WITNESS WHEREOF, the Parties have executed, or caused their duly authorized representatives to execute, this 2014 License Agreement under seal as of the date first written above.
LUNA INNOVATIONS INCORPORATED INTUITIVE SURGICAL OPERATIONS, INC.
By:
/s/ My Chung
By:
/s/ Gary S. Guthart
Name:
My Chung
Name:
Gary S. Guthart
Title:
CEO
Title:
CEO ______
INTUITIVE SURGICAL INTERNATIONAL, LTD.
By:
/s/ Marshall L. Mohr
Name:
Marshall L. Mohr
Title:
SRVP & CFO ______
Confidential and Proprietary
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR PORTIONS OF THIS EXHIBIT. THE COPY FILED HEREWITH OMITS THE INFORMATION SUBJECT TO A CONFIDENTIALITY REQUEST. OMISSIONS ARE DESIGNATED [***]. A COMPLETE VERSION OF THIS EXHIBIT HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.