EXCLUSIVE LICENSE AND ROYALTY AGREEMENT
This
Agreement is entered into this 6th day of March, 2006, by and between Life
Signs
Detection Systems, Inc., its officers, directors, shareholders, members,
predecessors, successors, parent, subsidiary and all related entities or
entities owned in common therewith (collectively the “LSDS”), with its principal
place of business at 0000 XX 00xx
Xx.,
Xxxxxxxxx, XX 00000 and Noninvasive Medical Technologies LLC, its officers,
directors, shareholders, members, predecessors and successors, parent,
subsidiary and all related entities or entities owned in common therewith
(collectively “NMT”), whose principal place of business, is 0000 Xxxxx Xxxxxxx
Xxxxxx, Xxx Xxxxx, Xxxxxx 00000 .
RECITALS
NMT
and
LSDS entered into Confidentiality Agreement dated September 21, 2005 whereby
the
parties agree to share certain confidential information pursuant to the terms
and conditions stated therein (“Confidentiality Agreement”).
LSDS
represents that it is the owner of certain technology which will provide
heartbeat waveform and respiration waveform through two layers of normal wear
clothing as more fully defined in Paragraph 2 below (the “LSDS
Technology”).
NMT
has
entered into a contract with the U.S. Military whereby it is developing what
is
known as the Xxxxx Xxxx project E-Tag system in connection with its desire
to
attempt to utilize LSDS’s xxxxx xxxxx monitoring technology.
NMT
and
LSDS entered into a License Agreement Term Sheet (“LATS”)in December of 2005
pursuant to which the parties have facilitated a transfer of the LSDS Technology
to NMT with the understanding that each would enter into this Agreement to
more
fully set forth their agreement concerning NMT’s use of the LSDS Technology.
NOW,
THEREFORE, for good and valuable consideration, the adequacy of which is hereby
acknowledged by both parties, the parties agree as follows:
1. For
and
in consideration of the payment of Three Hundred Thousand ($300,000) Dollars
(“Initial Payment”) and the royalty payments specified herein by NMT to LSDS,
LSDS hereby grants to NMT and/or its successors and assigns a perpetual license
to use and further develop the LSDS Technology and acknowledges NMT’s full
ownership of any derivative, related or spin-off technologies which directly
utilize LSDS’s RF technology for xxxxx xxxxx monitoring (collectively the
“Derivative Technologies”). NMT’s perpetual license to use the LSDS technology
shall remain in full force and effect and may not be canceled by LSDS or anyone
acting on its behalf as long as NMT fulfills its obligations under this
Agreement. The Initial Payment will be paid as follows:
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| a. |
LSDS
will be paid Twenty Five Thousand ($25,000.00) Dollars upon NMT’s receipt
of the signed original of this Agreement at NMT’s Las Vegas, Nevada
office.
|
| b. |
A
second payment of Twenty Five Thousand ($25,000.00) Dollars will
be paid
to LSDS upon NMT’s receipt of the components of the LSDS Technology as
specified in Paragraph 2 which shall occur not later than January
10,
2006.
|
| c. |
NMT
will make three (3) additional payments to LSDS of Fifty Thousand
($50,000.00) Dollars, one on February 15, 2006, one on March 15,
2006 and
one on April 15, 2006, (for a total of $150,000) so long as LSDS
remains
in full compliance with this Agreement.
|
| d. |
On
May 30, 2006, NMT will make a final payment in the amount of One
Hundred
Thousand Dollars ($100,000.00) to LSDS representing the balance of
the
Initial Payment.
|
2.
If not
already delivered to NMT pursuant to the LATS, immediately upon the execution
of
this agreement, LSDS will deliver to NMT one working unit plus three complete
sets of components, including design schematics in electronic form, examples
of
the current “board” and prototype antenna/transducers and related miscellaneous
components, algorithms, schematics, circuit descriptions, a xxxx of materials
including suppliers, supplier contact information, ‘PCB’ layout files, and
source code for a non-contact xxxxx xxxxx device and all other items necessary
to develop the LSDS technology for the Xxxxx Xxxx project. LSDS hereby consents
to have its suppliers who are associated with the LSDS Technology engaged by
NMT
and agrees to take all reasonable steps to facilitate NMT’s relationship with
those suppliers.
3. (a)
Within 21 days of NMT’s receipt of the items specified in Paragraph 2, LSDS will
provide at NMT’s request free of charge 16 hours of engineering support in the
person of Xxxx Xxxx at NMT’s office in Las Vegas, Nevada to assist with the
transfer of the LSDS technology to NMT. NMT will arrange and pay for travel
expenses. (b) After this date and through May 30, 2006, LSDS will make
reasonable efforts to provide itself or identify additional engineering support
at NMT’s request. Support by LSDS will be charged at $125 per hour plus travel
expenses to be performed at times, places and for a duration to be mutually
agreed upon. Other engineering resources are subject to the market rates
governing those resources. LSDS’s invoice for any additional engineering support
will be payable at the end of each month in which the support services were
provided. LSDS’s obligation to provide such engineering support as NMT requires
as agreed to in this paragraph is a material condition of this
Agreement.
4. LSDS
acknowledges that this Agreement provides NMT a perpetual license to use the
LSDS Technology and further acknowledges that NMT shall have exclusive ownership
and title to all Derivative Technologies. LSDS agrees that it will not make
any
use of, develop, sell, transfer, pledge, encumber or create any rights or
interests in the LSDS Technology on the part any third party without the express
written consent of NMT. LSDS expressly agrees and acknowledges that in the
event
of its insolvency or bankruptcy, no title or interest in or to the LSDS
Technology will be considered to be part of the bankruptcy estate of LSDS,
such
having been fully conveyed and transferred to NMT by this Agreement in the
event
of LSDS’s insolvency or bankruptcy.
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5. In
addition to use with the Xxxxx Xxxx project, NMT will attempt to commercialize
the Derivative Technologies to the fullest commercially reasonable extent in
both military and civilian markets. In further consideration for this Agreement,
LSDS will be identified as a co-inventor of any Derivative Technologies
developed by NMT which directly utilize the LSDS Technology, provided, however,
that NMT shall exclusively own title and all rights to such Derivative Products.
LSDS will receive a royalty of 5% of the actually paid gross sales of any
Derivative Products that incorporate LSDS’s RF technology for xxxxx xxxxx
monitoring which are based on LSDS’s hardware, software, technology, trade
secrets and intellectual property conveyed in Paragraph 2, from commercial
sales
(“Commercial Royalty”). The Commercial Royalty will be payable annually on June
30 based on actual receipts during the 12 months prior to the royalty payment
and the amount of the Commercial Royalty payment shall in no event exceed 50%
of
the actual net profits on annual commercial sales. LSDS will also receive a
royalty of 5% of the actually paid annual gross sales of the E/Tag device as
defined above in connection with sales to the military/government, not to exceed
50% of the actual net annual profits defined as actual sales as defined above,
minus manufacturing costs, shipping and handling, 7% of the gross for service
and 10% of the gross for G &A (“Military Royalty”). The Military Royalty
will also be payable annually on June 30 based on gross sales and net profits
aggregated over the 12 months prior to the royalty payment. All royalty payments
shall be payable at the address in the first paragraph of this agreement. LSDS
shall have the right to examine all relevant NMT financial records upon 30
day’s
written notice to NMT of its intent to do so for the purpose of auditing and
verifying the royalties due and payable. NMT shall provide LSDS a statement
of
the calculation of the Commercial Royalty and the Military Royalty on May 15
of
each year specifying the number of units sold, and gross sales revenue and
total
profits in the case of Commercial Royalties and the calculation of actual
received annual gross sales, manufacturing costs, shipping and handling costs,
gross service and G&A costs for Military Royalties. LSDS acknowledges that
these statements are to be considered confidential within the meaning of the
Non-Disclosure Agreement referred to in the first paragraph under the heading
“Recitals.”
6. Nothing
in this Agreement shall be deemed to create any obligations or relationships
between the parties which are not expressly stated herein. Neither party shall
be considered the agent or co-venturer of the other and neither shall represent
to any third party that such relationships exist. NMT shall have no obligation
to enter into any other agreement with LSDS nor shall it have any liability
whatsoever if it fails to produce civilian or military sales through the use
of
the LSDS Technology pursuant to this Agreement. NMT has no obligation to utilize
the LSDS Technology in connection with the development of any products or other
technologies.
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7. Both
parties acknowledge and agree that the terms and requirements of the
Confidentiality Agreement shall remain in full force and effect as though fully
incorporated into this Agreement and that such shall remain in force for the
life of this Agreement.
8. No
waiver
or modification of this Agreement or any of its terms shall be valid or
enforceable unless it has been reduced to writing and been signed by the party
against whom such waiver or modification is asserted. Neither Party shall assign
or otherwise transfer any rights conferred upon it by this Agreement without
the
prior written consent of the other Party. Any such attempt to assign or transfer
by such Party without consent shall be null and void, provided, however, that
NMT may assign this Agreement or its rights under it to a related or affiliated
entity in connection with any sale of all or part of the assets of NMT or in
connection with a securities offering. This agreement shall be binding on LSDS
and NMT and their respective successors and assigns without
limitation.
9. This
Agreement contains the full and complete understanding of the Parties with
respect to the subject matter of this Agreement and supersedes all prior
representations, agreements and understandings whether oral or written. This
Agreement shall be governed by and enforced according to the laws of the State
of Michigan, U.S.A and both parties consent to jurisdiction and venue in the
Circuit Court for the County of Oakland, Michigan
Accepted
and agreed:
Life
Signs Detection Systems, Inc. (LSDS) Noninvasive
Medical Technologies LLC
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/s/
Xxxx Xxxxx
|
/s/
Xxxxxx XxXxxxxxx
|
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By:
Xxxx Xxxxx
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By:
Xxxxxx XxXxxxxxx, Ph.D.
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|
Title:
President
|
Title:
President
|
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Date:
March 8, 2006
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Date:
March 9, 2006
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