EXHIBIT 6.4
SOLUTIONMED VENTURES ROYALTY AGREEMENT
ROYALTY AGREEMENT
THIS AGREEMENT is between SolutionMed Ventures, Inc., ("SMTP") a to be formed
Maryland Business Development Corporation with principal place of business at
0000 Xxxxxx Xxxxxx Xxxxxxx, #000, Xxx Xxxxx, Xxxxxx 00000 and HeartSTAT
Technology, Inc. ("HeartSTAT"), a Delaware corporation with offices at 0000 Xxxx
Xxxxxxx, #000, Xxxxxxxxx, XX 00000, effective March 18, 2004 (the "Effective
Date"). SolutionMed ("SMED") is a party hereto solely insofar as expressly
admitted by the provisions herein below set forth.
WHEREAS, on February 6, 2004, TEC Factory, Inc. (now HeartSTAT Technology, Inc.)
entered into an Asset Purchase Agreement with the INTERESTHOLDERS, who own 100%
of the HEARTSTAT TECHNOLOGY AND RELATED ASSETS which is a medical technology for
the non invasive monitoring of blood pressure and blood flow that HeartSTAT
intends to develop and commercialize.
NOW, THEREFORE, in consideration of the foregoing premises, the PARTIES hereto,
intending to be legally bound, agree as follows:
1. ROYALTY PAYMENTS. As part of the consideration for SMTP's work and the
HeartSTAT Technology asset acquisition agreement, HeartSTAT will pay to SMTP in
perpetuity a royalty equal to one and 2/10ths percent (1.2%) of total net
revenues (net of product returns) and any third-party license royalties of
HeartSTAT.
2. REPORTING. Within 30 days after March 31, June 30, September 30, and December
31, beginning immediately after the Effective Date and the first product revenue
shipment or licensee royalty receipt of HeartSTAT, HeartSTAT shall deliver to
SMTP a true and accurate written report, even if no payments are due SMTP,
giving the particulars of the Product shipment and licensee royalty receipts of
HeartSTAT during the preceding 3 calendar months under this Agreement as are
pertinent to calculating payments hereunder. This report will include at least:
a. the quantity for each product model that were sold during the preceding
quarter;
b. the calculation of royalties thereon; and
c. the total royalties computed and due from HeartSTAT.
Simultaneously with the delivery of each report, HeartSTAT shall pay to SMTP the
amount, if any, due for the period of each report.
3. RECORDS/AUDIT. HeartSTAT agrees to keep complete and accurate records of its
revenues and its licensee royalty receipts in sufficient detail to enable the
royalties payable hereunder to be determined, and to permit verifying the
product revenues of any report required under this Agreement relative to
financially reported revenues of HeartSTAT. HeartSTAT agrees to permit SMTP or
its representatives, at SMTP's expense, to periodically examine its books,
ledgers, and records during regular business hours for the purpose of and to the
extent necessary to verify product revenues of any report required under this
Agreement relative to financially reported revenues of HeartSTAT. If the amounts
due to SMTP are determined to have been underpaid by more than five (3%) percent
and more than $5,000, then HeartSTAT will pay the cost of the examination.
4. TERMINATION. This Agreement will terminate, only at the option of SMTP, upon
written notice of termination from SMTP to HeartSTAT, pursuant to any breach or
default by HeartSTAT on any obligation under this Agreement, unless HeartSTAT
has cured the default or breach; or it will terminate at any time by mutual
written agreement of the parties. Nothing herein will be construed to release
HeartSTAT of any obligation matured prior to the effective date of the
termination.
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5. CONFIDENTIAL INFORMATION. SMTP and HeartSTAT shall treat proceedings and
details of payments, to the extent that such information is not required by law
to be disclosed, as Confidential Information that is not to be disclosed to
third parties without the mutual agreement of SMTP.
6. MISCELLANEOUS ITEMS:
6.1 Except as expressly permitted hereby, HeartSTAT may not assign or transfer
any obligations, duties, or rights hereunder without the prior written consent
of SMTP. This Agreement is binding upon and will inure to the benefit of the
successors, assigns, executors, and personal representatives of the parties
hereto.
6.2 Both parties shall comply with all applicable Federal laws in connection
with the performance of each's respective obligations hereunder.
6.3 The laws of the State of Connecticut shall apply to the interpretation and
performance of this Agreement. Any controversy or claim arising out of or
relating either to this Agreement, or any purchase order issued hereunder, or
the breach thereof, which cannot be settled by agreement of the parties shall be
settled by mandatory arbitration in the State of Delaware.
6.4 Headings contained herein are for convenience only and shall not be used in
construing any term of this Agreement.
6.5 Failure by either party hereto to enforce any of the provisions of this
Agreement or any rights with respect thereto, or failure to exercise any
election provided herein shall in no way be considered a waiver of such
provisions, rights, or elections or in any way affect the validity of this
Agreement. The failure by any party to enforce any of said provisions, rights,
or elections shall not prejudice such party from later enforcing or exercising
the same or any other provisions, rights, or elections it may have under this
Agreement.
6.6 SMTP and HeartSTAT acknowledge and agree that this Agreement would be, were
SMTP to become the subject of a bankruptcy case under Title 11, United States
Code (the "Bankruptcy Code"), within the scope of is Section 365 (n) of said
Title 11. SMTP further acknowledges that if it becomes a debtor in possession or
a trustee in Bankruptcy in a case under the Bankruptcy Code rejects this
Agreement, HeartSTAT may elect to retain its rights under this Agreement and
this Agreement as provided in Section 365 (n) of the Bankruptcy Code. Upon
written request of HeartSTAT to SMTP or the Bankruptcy Trustee, SMTP or such
Bankruptcy Trustee shall not interfere with the rights of HeartSTAT as provided
in this Agreement, which may be exercised to the fullest extent permitted by
said Section 365 (n).
6.7 Nothing in this Agreement is intended to, or shall be construed to
constitute HeartSTAT and SMTP as partners or joint venturers; it being intended
that the relationship of SMTP to HeartSTAT shall at all times be that of an
independent contractors.
6.8 If any provision of this Agreement shall be held invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining
provisions shall not be affected or impaired thereby.
6.9 This Agreement may not be modified except pursuant to a written instrument
executed by a duly authorized representative of each of the parties hereto.
7. NOTICES. All notices which are required to be given by either party to the
other hereunder shall be deemed to have been duly given when made in writing
three days after having been deposited in the United States mails, postage
prepaid, certified or registered mail return receipt requested and addressed to
the other party at the address provided below, or to such other address as the
other party shall, by like notice, specify from time to time. Should either
party wish they may use a form of express delivery service such as Federal
Express in order to give notice, in which case notice is deemed to have been
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given one business day after such a missive is actually received. The parties
may also use FAX transmissions to give notice but a confirmatory copy shall be
required to be sent by registered or certified return receipt mail and shall be
deemed to have been given one business day after it is actually received. All
notices provided for herein shall be addressed as follows.
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In the case of HeartSTAT: In the case of SMTP:
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Chief Executive Officer SolutionMed Ventures, Inc.
HeartSTAT Technology Inc. Attn: Managing Partner
0000 Xxxx Xxxxxxx, #000 0000 Xxxxxx Xxxxxx Xxxxxxx, #000
Xxxxxxxxx, XX 00000 Xxx Xxxxx, Xxxxxx 00000
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IN WITNESS WHEREOF, parties hereto have caused their duly authorized
representatives to execute this Agreement.
SOLUTIONMED VENTURES, INC. HeartSTAT Technology, Inc.
By: By:
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Xxx X. Xxxxxxx, Chief Executive Officer
Date: March 18, 2004. Date: March 18, 2004.
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