RESEARCH AND LICENSE AGREEMENT
THIS AGREEMENT is made and entered into effective as of September 23,
1988 by and between Hypertension Diagnostics, Inc., a Minnesota corporation,
having offices at 0000 Xxxxx Xxxxxx X.X., Xxxxxxxxxxx, Xxxxxxxxx 00000 (the
"COMPANY") and the Regents of the University of Minnesota, a Minnesota
nonprofit corporation, having an office at 000 Xxxxxx Xxxxxx, X.X.,
Xxxxxxxxxxx, Xxxxxxxxx 00000 (the "UNIVERSITY").
RECITALS
WHEREAS, UNIVERSITY possesses certain information, knowledge and
intellectual property rights relating to the Technology (as hereinafter
defined);
WHEREAS, UNIVERSITY desires that such information, knowledge and devices
be developed and utilized in the public interest and is willing to enter into
a development and license agreement for those purposes;
WHEREAS, COMPANY desires to collaborate with the UNIVERSITY in the
development of such information, knowledge and devices and to obtain a
license to manufacture and sell products and provide services utilizing such
information and knowledge;
NOW, THEREFORE, in consideration of the mutual covenants and promises
hereinafter set forth, the parties agree as follows:
ARTICLE I. - DEFINITIONS
A. "Technology" shall mean any knowledge, information, know-how software, and
devices, whether patentable or not, in the possession of the UNIVERSITY at
the time of execution of this
Agreement specifically relating to diagnostic, therapeutic, monitoring and
related uses of arterial compliance (an arterial compliance index) and
arterial impedance (an arterial impedance index) developed by or under the
direction of either Xx. Xxx X. Xxxx, Professor of Medicine and Head of the
Cardiovascular Division, University of Minnesota Medical School ("Xxxx")
or Xx. Xxxxxxx X. Xxxxxxxxxxx, Associate Professor of Laboratory Medicine
within the Division of Health Computer Sciences, University of Minnesota
Medical School ("Xxxxxxxxxxx") or both. "Technology" shall not include
any knowledge, information, know-how, software or devices relating to
arterial compliance and arterial impedance developed under the direction
of either Xxxx or Xxxxxxxxxxx or both in the course of a project
concerning the pulmonary artery in humans and dogs and the femoral artery
in dogs pursuant to that certain Donation Agreement between UNIVERSITY and
Medtronic, Inc. dated October 30, 1987, as amended and supplemented.
B. "Improvements" shall mean any development, modification, alteration or
improvement of any kind of the Technology, whether patentable or not,
including improvements of a device or method incorporating the Technology,
that (i) UNIVERSITY develops through the direction of either Xxxx or
Xxxxxxxxxxx or both within five (5) years of the date of this Agreement,
(ii) results from research conducted by UNIVERSITY relating to the
Technology and funded by COMPANY regardless of when such research occurred,
(iii) UNIVERSITY and COMPANY develop jointly, or (iv) COMPANY develops
solely. "Improvements" shall
2
not include any improvement or development of the Technology made by the
UNIVERSITY which is the result of funded research under an agreement with
a third party (other than the United States government) that grants rights
in such improvement or development to that third party, provided that
COMPANY has been given not less than 60 (sixty) days' prior written notice
of the intent of the UNIVERSITY to enter into such agreement and an
opportunity of first refusal to enter into an agreement on substantially
equivalent terms. Nothing herein shall be construed to limit the right of
either Xxxx or Xxxxxxxxxxx or both to seek and obtain private or federal
or state government funding in order to conduct research relating to the
Technology, provided that the terms of such funding do not violate the
terms of this Agreement including, without limitation, the license granted
under this Agreement.
C. "Subject Patent Application(s)" shall mean any patent application in the
United States or in a foreign country that covers all or any portion of
either the Technology or Improvements or both made solely by the UNIVERSITY
or jointly by the UNIVERSITY and COMPANY.
D. "Subject Patent(s)" shall mean any patent that issues on a Subject Patent
Application.
E. "Licensed Product(s)" shall mean any manufactured product or service that
(i) incorporates the Technology or Improvements, or (ii) is covered by a
Subject Patent. "Licensed Product(s)" shall not mean any manufactured
product or service that incorporates only Improvements developed solely by
COMPANY.
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F. "Net Sales" shall mean the gross amount invoiced for sales, leases or other
dispositions of Licensed Product(s) by COMPANY, its Affiliates or its
sublicensees less (i) all trade, quantity, and cash discounts actually
allowed, (ii) all credits and allowances actually granted on account of
rejection, returns, billing errors, or retroactive price reductions, (iii)
duties, and (iv) excise sale and use taxes, and equivalent taxes.
G. "Affiliate(s)" shall mean any present or future domestic or foreign
corporation which shall be at the pertinent time owned or controlled,
directly or indirectly by COMPANY.
ARTICLE II. - RESERVED
ARTICLE III. - INVENTIONS AND PATENT APPLICATIONS
A. Title in the Technology and Improvements developed solely by the UNIVERSITY
and jointly by UNIVERSITY and COMPANY shall rest solely and exclusively
with the UNIVERSITY, subject to the license grant of Article IV. Title in
Improvements developed solely by COMPANY shall rest solely and exclusively
with COMPANY, subject to the license grant of Article IV. Any Improvement
developed by any employee of
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UNIVERSITY (including, but not limited to, Xxxx and Xxxxxxxxxxx) while
working at non-UNIVERSITY facilities that results from any work performed
under any consulting agreement between COMPANY and that UNIVERSITY
employee, shall be deemed developed solely by COMPANY. Any Improvement
developed by any employee of UNIVERSITY (including, but not limited to,
Xxxx and Xxxxxxxxxxx) while working at UNIVERSITY facilities, whether or
not the Improvement results from work performed under any consulting
agreement between that employee and COMPANY, shall be deemed developed
solely by UNIVERSITY.
B. Each party shall promptly disclose to the other party any Improvements
conceived or reduced to practice by the first party. COMPANY shall
promptly disclose to UNIVERSITY any Improvement made solely by the COMPANY,
subject to the confidentiality provisions of this Agreement.
C. The UNIVERSITY shall file and prosecute Subject Patent Application(s) and
maintain Subject Patent(s) in the United States, at its own expense. If
UNIVERSITY in good faith determines not to file and prosecute any Subject
Patent Application(s) and maintain Subject Patent(s) in the United States,
COMPANY shall have the right to file and prosecute Subject Patent
Application(s) and maintain Subject Patent(s) in the United States, at its
own expense. Thereafter, UNIVERSITY shall have no right to royalties for
Licensed Product(s) that use only Improvements or inventions that are the
subject of such Subject Patent Application(s) and Subject Patent(s)
obtained by COMPANY at its own expense.
D. The UNIVERSITY shall, upon request of COMPANY, file and prosecute Subject
Patent Application(s) and maintain Subject Patent(s) in such foreign
countries as COMPANY requests. COMPANY shall reimburse the UNIVERSITY for
all reasonable out of pocket expenses incurred by the UNIVERSITY for
COMPANY
5
requested foreign filing, prosecution and maintenance. Such expenses
shall not include any salaries or benefits of employees of the UNIVERSITY.
COMPANY may credit all reimbursements it makes to the UNIVERSITY under
the obligation of this paragraph against royalties owing the UNIVERSITY as
a result of sales of Licensed Product(s) in the country where filing or
prosecuting Subject Patent Application(s), or maintaining Subject
Patent(s) gave rise to the reimbursed costs.
E. In the event that the UNIVERSITY notifies COMPANY of its intent to file
Subject Patent Application(s) in specified countries other than the United
States of America and COMPANY does not desire to have Subject Patent
Application(s) filed or prosecuted, or does not desire to have Subject
Patent(s) maintained, COMPANY shall promptly notify the UNIVERSITY. No
such notice may be given by the UNIVERSITY less than six months from the
date such an applications is filed in the United States of America, or less
than three (3) years following the execution of this Agreement if filed
only in foreign countries and not in the United States of America.
Subsequent to this notice, such application(s), patent(s) issuing on such
applications and such patent(s) as COMPANY does not desire to be maintained
shall no longer be considered Subject Patent Application(s) or Subject
Patent(s). The UNIVERSITY, upon such notice, may file or prosecute such
patent applications or maintain such patent(s) at its sole option and
expense.
6
F. COMPANY agrees to cooperate with the UNIVERSITY in connection with the
filing and prosecution of Subject Patent Application(s). Patent counsel
shall be chosen by the UNIVERSITY subject to the approval of the COMPANY,
which shall not be unreasonably withheld. UNIVERSITY shall consult with
COMPANY on all major decisions involving filing and prosecuting Subject
Patent Application(s) and maintaining Subject Patent(s). The UNIVERSITY
shall keep COMPANY promptly apprised of developments in the filing and
prosecution of Subject Patent Application(s). This appraisal shall include
providing COMPANY with a copy of the applications and all correspondence
relating thereto. The COMPANY shall have a right to consult directly with
patent counsel concerning the prosecution of Subject Patent Application(s),
but the UNIVERSITY shall be solely responsible for directing patent counsel
provided that all decisions concerning foreign Subject Patent
Application(s) and foreign Subject Patent(s) are approved by COMPANY.
ARTICLE IV. - LICENSE GRANT AND COMMERCIAL EFFORTS
A. Subject to the terms and conditions herein, the UNIVERSITY hereby grants to
COMPANY and its Affiliates and COMPANY hereby accepts an exclusive,
worldwide license under the Technology, Improvements, and the Subject
Patent(s), with a right to grant sublicenses, to make, have made, use,
lease and sell Licensed Product(s). Notwithstanding this license grant,
the UNIVERSITY retains a nonexclusive and nontransferable right to
7
use solely for educational and research purposes the Technology or
Improvements made solely by the UNIVERSITY or jointly by the UNIVERSITY
and COMPANY. COMPANY hereby grants and the UNIVERSITY hereby accepts a
nonexclusive, nontransferable and irrevocable license to use solely for
educational and research purposes any Improvements made solely by COMPANY.
The license grant from UNIVERSITY to COMPANY is subject to any rights
retained by the United States Government in the Technology, Improvements
and Subject Patent(s) that are set forth in 37 C.F.R. Section 401 (1987),
due to the fact that the United States Government has funded UNIVERSITY
research related to the Technology.
B. COMPANY and Affiliates shall have the right to grant sublicenses to others
with respect to any rights conferred upon COMPANY under this Agreement,
provided, however, that any such sublicense shall be subject in all
applicable respects to the provisions contained in this Agreement, and
further provided that COMPANY shall give the UNIVERSITY an opportunity to
review and comment on any sublicense prior to its execution. COMPANY shall
not be responsible to the UNIVERSITY for the payment of royalties due with
respect to sales made by sublicensees (other than Affiliates) that are not
actually received by COMPANY, if the COMPANY has made a good faith, best
effort attempt to collect payments for sales.
C. COMPANY shall use all reasonable efforts to effect commercial sales of
Licensed Product(s) as soon as practicable and to maximize these sales,
consistent with sound and reasonable
8
business practices and judgment. In addition, within two (2) years of the
date of this Agreement, COMPANY shall (i) conduct or cause to be conducted
clinical trials of the Technology, Improvements and Subject Patent(s) on a
minimum of 200 subjects and (ii) use its best efforts to develop
noninvasive Licensed Product(s). COMPANY shall provide the UNIVERSITY
with brief written reports of COMPANY'S efforts to effect
commercialization. COMPANY shall provide these reports quarterly
beginning with the first full calendar quarter following the execution of
this Agreement and at the same time that it provides reports required by
Article V.
D. COMPANY shall sell Licensed Product(s) at a fair and reasonable price, to
be determined by COMPANY in its sole discretion, and shall refrain from
making any false or misleading claims in its advertising or otherwise.
E. COMPANY shall not use the names of the UNIVERSITY nor of any UNIVERSITY
employees in any manner associated with promotion of a commercial product
without prior written approval from the UNIVERSITY and such employees.
COMPANY shall have the right, to the extent it is advised by counsel that
it is required to do so, to use the name of the UNIVERSITY or any
UNIVERSITY employees in any prospectus or private offering document,
provided that a copy thereof shall have been provided to the UNIVERSITY at
or about the same time as such documents are provided to other investors.
F. COMPANY, its Affiliates, and its sublicensees shall alone have the
obligation to ensure that any Licensed Product(s) they
9
sell is not defective and meets all applicable regulations, including
approval by the United States Food and Drug Administration. COMPANY shall
pay for all costs and expenses associated with such approvals, and
UNIVERSITY shall cooperate with COMPANY and provide and execute any
documentation necessary for COMPANY to obtain such approvals.
ARTICLE V. - EQUITY, ROYALTIES, REPORTS AND RECORDS
A. In consideration for the license granted hereunder, COMPANY shall pay or
cause to be paid to the UNIVERSITY a royalty of one (1) percent of Net
Sales of Licensed Product(s) during the two (2) years immediately after the
effective date of this Agreement; one and one-half (1-1/2) percent of Net
Sales of Licensed Product(s) beginning 2 years and ending four years after
the effective date of this Agreement, and two (2) percent of Net Sales of
Licensed Product(s) beginning four years after the effective date of this
Agreement and continuing until this Agreement is terminated or the Subject
Patent(s) expire. In the event that the UNIVERSITY obtains a United States
Subject Patent(s) for the use of the Technology and Improvements in the
diagnosis, treatment and monitoring of hypertension, then, upon written
notification by the UNIVERSITY of the issuance of such Subject Patent(s),
COMPANY will pay or cause to be paid to the UNIVERSITY a royalty of three
(3) percent of Net Sales of Licensed Product(s) (in lieu of the two (2)
percent of Net Sales of Licensed Product(s) stated above) beginning four
years after the effective date of
10
this Agreement and continuing until this Agreement is terminated or the
Subject Patent(s) expire.
B. In furtherance of the relationship between the parties, but not in
consideration of the license granted hereunder, the UNIVERSITY shall
purchase 35,000 shares of the COMPANY's common stock, $.0l par value, at
$.02 per share for a total cost of $700, which shall represent as of the
date of purchase not less than five (5) percent of the total number of
shares of common stock outstanding following such purchase. Said shares of
common stock shall be subject to the terms of the Subscription Agreement
and Investment Letter (the "Subscription Agreement") attached as Exhibit A.
The parties shall execute the Subscription Agreement within five (5) days
of the date of execution of this Agreement, and UNIVERSITY shall deliver a
check to COMPANY for said common stock within 30 days of the date of this
Agreement.
C. Royalties shall be payable only once with respect to the same unit of a
Licensed Product regardless of the number of patented or nonpatented
portions of the Technology or Improvements incorporated in such product and
regardless of the country in which such product is sold.
D. Royalty payments based on Net Sales as hereinabove required to be made by
COMPANY to the UNIVERSITY shall be made in United States dollars within
ninety (90) days following each calendar quarter in which sales occurred.
Any currency translations that are necessary to calculate payments shall be
made at the exchange rate used by COMPANY for financial accounting
11
purposes in accordance with generally accepted accounting principles.
Each such payment shall include the royalties which shall have accrued
during the calendar quarter immediately preceding and shall be accompanied
by a report setting forth separately the Net Sales of Licensed Product(s)
sold during that quarter. Royalty checks shall be made payable to the
Regents of the University of Minnesota and mailed to the address specified
in Article XI.
E. COMPANY, its Affiliates and its sublicensees shall keep and maintain
records of sales of Licensed Product(s) that are subject to royalty
payments under this Agreement. COMPANY shall provide reports of Net Sales
and commercialization efforts for each full calendar quarter following the
effective date of this Agreement, whether or not any sale of Licensed
Product(s) occurred. Such records shall be open to inspection at
reasonable times by a certified public accountant chosen by the UNIVERSITY
and acceptable to COMPANY, at the UNIVERSITY's expense. The records
required by this paragraph shall be maintained and available for inspection
for a period of three (3) years following the calendar quarter to which
they pertain.
ARTICLE VI. - INFRINGEMENT
A. In the event that the UNIVERSITY or COMPANY determines that a third party
is making, using or selling a product that may infringe a Subject
Patent(s), it will promptly notify the other party in writing. COMPANY
may, at its sole option and
12
expense, bring suit against such alleged infringer. In the event COMPANY
decides to bring suit, it shall give prompt written notice to the
UNIVERSITY of that fact. If COMPANY determines that it is necessary or
desirable for UNIVERSITY to join any such suit, action or proceeding,
UNIVERSITY shall execute all papers and perform such other acts as may be
reasonably required, at no expense to UNIVERSITY. All recoveries in such
suit shall inure to the benefit of COMPANY, except that the UNIVERSITY
shall have the right to elect to pay up to fifty percent (50%) of the
litigation costs and receive a percentage of any recovery equal to the
percentage of litigation costs paid. The UNIVERSITY must make such
election within thirty (30) days of its receipt of notice that COMPANY has
decided to bring suit. The UNIVERSITY shall also have the right to choose
to be represented by separate counsel in any such suit at its own expense.
Irrespective of whether the UNIVERSITY elects to participate in any such
litigation, COMPANY shall have the right to determine the strategy of such
litigation and any settlement. If COMPANY elects not to bring a suit
against or to otherwise enter into a settlement agreement with the alleged
infringer, it shall promptly notify the UNIVERSITY of that fact and the
UNIVERSITY shall have the right to commence such action at its own cost
and expense, in which case any recoveries shall inure to the benefit of
the UNIVERSITY. If UNIVERSITY determines that it is necessary or
desirable for COMPANY to join any such suit, action or proceeding, COMPANY
shall execute all papers and perform such
13
other acts as may be reasonably required, at no expense to COMPANY.
B. In the event that COMPANY, an Affiliate or a sublicensee is sued by a third
party charging patent infringement for the manufacture, use or sale of a
Licensed Product(s), COMPANY shall promptly notify the UNIVERSITY. COMPANY
shall be entitled to withhold up to fifty percent (50%) of the royalties
otherwise payable to the UNIVERSITY, and use that withheld royalty to
reimburse itself for legal defense costs incurred in such infringement
suits, provided, however, that the infringement suit is based on a
particular feature of a Licensed Product(s) that is within the claims of a
Subject Patent or which is included within the claims of Subject Patent
Application(s). If COMPANY avails itself of the provisions of this
paragraph, COMPANY agrees to supply the UNIVERSITY with proof of the legal
costs incurred.
C. If COMPANY, any of its Affiliates or any of its sublicensees is required to
pay a royalty to other than the UNIVERSITY as a result of a final judgment
or settlement in order to make, have made, use, lease or sell a Licensed
Product(s), then in that event, the royalty payable to the UNIVERSITY shall
be reduced by the amount of royalty that COMPANY, the Affiliate or the
sublicensee shall be required to pay to other than the UNIVERSITY, but in
no event shall the royalty payable to the UNIVERSITY be reduced by more
than fifty percent (50%) from the royalty rate specified in Article V. If
COMPANY avails itself of the provisions of this paragraph, COMPANY agrees
to
14
provide the UNIVERSITY with proof of such royalties paid to the third
party.
D. The UNIVERSITY represents and warrants that it has, and at all times during
the term of this Agreement will have, complete title to the Technology, the
Subject Patent Application(s), any Subject Patents and any Improvements
made by the UNIVERSITY or jointly by the UNIVERSITY and COMPANY free of any
liens or encumbrances of any kind and that it has and will have the
complete right to grant the license described herein free of any rights of
third parties, except for any rights which might be retained by the United
States Government pursuant to 37 C.F.R. Section 401 (1987). The UNIVERSITY
further represents and warrants that it has not made and will not make any
commitments to third parties that are inconsistent with or in violation of
this Agreement. The UNIVERSITY further represents and warrants that
UNIVERSITY, its employees and agents have complied with and during the term
of this Agreement will comply with the requirements of 37 C.F.R. Section
401 (1987).
E. Within thirty (30) days of the date of this Agreement, UNIVERSITY shall
obtain a signed assignment from Xxx. Xxxxxx Xxxxxxxxxxx under which she
agrees to assign all of her right, title and interest in software related
to the Technology and all copyrights and other forms of legal protection
available for said software to UNIVERSITY.
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ARTICLE VII. - TERM AND TERMINATION
A. This Agreement's term shall end with the expiration of the last to expire
of any Subject Patents, or, in the event no such patent issues, ten (10)
years after the date of first commercial sale of a Licensed Product by
COMPANY, its Affiliate(s), or its sublicensee(s).
B. COMPANY shall be deemed to be in default of its obligations under this
Agreement if any of the following shall occur and be continuing sixty (60)
days following receipt by COMPANY of written notice by certified mail
specifying in detail the nature of the alleged default:
(1) if royalties due the UNIVERSITY are unpaid;
(2) if there is a material breach or default of this Agreement by COMPANY;
(3) if COMPANY fails to develop a commercially saleable Licensed
Product(s) within 2 years of the effective date of this Agreement; or
(4) if COMPANY fails to use all reasonable efforts to effect commercial
sales of Licensed Product(s) in accordance with Article IV paragraph
E.
If such a default occurs and is continuing within sixty (60) days following
receipt of such notice, the UNIVERSITY may terminate this Agreement
effective upon receipt of a written notice of such termination by COMPANY.
C. COMPANY may terminate this Agreement at any time upon thirty (30) days
notice by certified mail to the UNIVERSITY.
16
D. Upon termination of this Agreement for any reason, including the end of
term as specified above, nothing herein shall be construed to release
either party from any obligation which matured prior to the effective date
of termination. COMPANY, its Affiliates or its sublicensees may after the
effective date of such termination sell all Licensed Product(s) in stock
and complete construction of all Licensed Product(s) in the process of
manufacture at the time of termination and sell the same, provided that
COMPANY pay to the UNIVERSITY royalties on such Licensed Product(s) as
specified in this Agreement.
ARTICLE VIII. - CONFIDENTIAL INFORMATION
Subject to the provisions of Article IX below, each party agrees to keep
confidential by use of the same degree of care it exercises towards its own
confidential information and to not disclose or provide to any third party, any
information, data, or research product received from the other party which
constitutes trade secrets ("Trade Secrets") and has been clearly designated as
confidential or proprietary, unless such Trade Secrets:
(1) Were in the public domain at the time of disclosure to the third
party; or
(2) Were known to or independently developed by either party prior to the
time of disclosure; or
(3) Are later received without restriction by either party from a third
party authorized to disclose such information; or
(4) Are required to be disclosed or provided to a government entity, in
which case the party whose information is to be
17
disclosed will be provided with adequate written notice and given every
reasonable opportunity to protect or contest such governmental disclosure
and the parties will cooperate in their judgment with each other; or
(5) Are reasonably required to be disclosed by the COMPANY in the conduct
of its business.
The UNIVERSITY shall, and shall cause its employees to, maintain in confidence
all Trade Secrets, except as provided in Article IX.
ARTICLE IX. - PUBLICATION
It is the policy of the UNIVERSITY to promote and safeguard free and open
inquiry by faculty, students and others. To further this policy, the UNIVERSITY
shall retain the right to publish the Technology and Improvements made solely by
the UNIVERSITY or jointly by the UNIVERSITY and COMPANY, subject to the
provisions of this Article IX. The UNIVERSITY shall provide COMPANY with a copy
of all proposed publications, papers, and any other oral or written copies of
any of the Technology or Improvements at the earlier of the date of submission
or 90 days prior to publication for the purpose of review and comment. If the
COMPANY believes that any information constitutes a COMPANY Trade Secret or
patentable subject matter, the COMPANY shall notify the UNIVERSITY within 30
days of its receipt thereof. Prosecution of patents on patentable subject
matter shall proceed in accordance with Article III above. In no event shall
UNIVERSITY publish COMPANY Trade Secrets without COMPANY'S prior written
consent. If the COMPANY determines that
18
the proposed disclosure does not include Trade Secrets or patentable
subject matter, it shall so notify the UNIVERSITY.
ARTICLE X. - INDEMNIFICATION AND INSURANCE
A. COMPANY agrees to indemnify the UNIVERSITY and hold the UNIVERSITY harmless
against all liabilities, demands, damages, expenses, or losses arising from
(i) the manufacture, use, lease or sale of a Licensed Product by COMPANY,
an Affiliate or a sublicensee of COMPANY, (ii) a third party's use of a
Licensed Product purchased or leased from COMPANY, an Affiliate or a
sublicensee of COMPANY, or (iii) a third party's manufacture of a Licensed
Product at the request of COMPANY.
B. The provisions of paragraph A of this Article shall require COMPANY to
indemnify the UNIVERSITY and hold the UNIVERSITY harmless even though the
UNIVERSITY's own negligence may have given rise to the liability, demand,
damage, expense or loss. However, these provisions shall not require
COMPANY to indemnify the UNIVERSITY or hold the UNIVERSITY harmless against
any liabilities, demands, damages, expenses, or losses where the deliberate
or grossly negligent acts of the UNIVERSITY caused such liabilities,
demands, damages, expenses, or losses.
C. UNIVERSITY agrees to defend, indemnify and hold harmless COMPANY, its
Affiliates and sublicensees against and from all liability, demands,
damages, expenses or losses arising from any claim that (i) COMPANY'S
manufacture, use or sale of the
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Technology, Improvements or Licensed Product(s) infringes on the rights of
Medtronic, Inc., Xxx. Xxxxxx Xxxxxxxxxxx, Xxxxxxx Xxxxxxx, M.D., or any
person who claims to have created or developed the Technology or
Improvements while being directed by UNIVERSITY, (ii) UNIVERSITY has
granted to a third party any of the rights that UNIVERSITY has granted
COMPANY under this Agreement or (iii) UNIVERSITY has misappropriated any
rights belonging to a third party that UNIVERSITY has granted COMPANY
under this Agreement.
D. The UNIVERSITY and COMPANY agree to maintain liability insurance (in such
reasonable amounts as they shall respectively determine) at their own
individual expense to insure against any liability for personal injury
arising out of the subject matter of this Agreement. The UNIVERSITY and
COMPANY shall provide each other with certification of such insurance.
E. The provisions of this Article shall survive termination of this Agreement.
ARTICLE XI. - MISCELLANEOUS PROVISIONS
A. This Agreement shall be binding upon and inure to the benefit of the
parties hereto and their heirs, successors and assigns.
B. This Agreement shall be governed by the laws of the State of Minnesota.
C. For purposes of mailings of notices, payments, or other communications, the
addresses of the parties are given below.
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In the case of the UNIVERSITY:
Regents of the University of Minnesota
Office of Patents and Licensing
5th Floor, Administrative Services Center
0000 Xxxxxxxxxx Xxxxxx
Xx. Xxxx, Xxxxxxxxx 00000
In the case of the COMPANY:
Hypertension Diagnostics, Inc.
University Technology Center Suite #208-C
0000 Xxxxx Xxxxxx X.X.
Xxxxxxxxxxx, Xxxxxxxxx 00000
D. No term or provision of this Agreement shall be waived and no breach
excused, unless such waiver or consent shall be in writing and signed by
the party claimed to have waived or consented. No waiver of a breach shall
be deemed to be a waiver of a different or subsequent breach.
E. This Agreement may not be modified, changed or terminated orally. No
change, modification, addition or amendment shall be valid unless in
writing and signed by the parties hereto.
F. This Agreement constitutes and contains the entire Agreement of the parties
respecting the subject matter hereof and supersedes any and all prior
negotiations, correspondence, understanding, and agreements, whether
written or oral, between the parties respecting the subject matter hereof.
G. The captions used in this Agreement are for convenience only and are not to
be used in interpreting this Agreement.
H. In case any one or more of the provisions of this Agreement shall for any
reason be held to be invalid, illegal or unenforceable in any respect, such
invalidity, illegality or unenforceability shall not affect any other
provision of this Agreement, but this Agreement shall be construed as if
such
21
invalid, illegal or enforceable provisions had never been contained herein.
I. Nothing contained in this Agreement shall be deemed to constitute the
parties partners with each other or any third party or to constitute either
party an agent of the other.
IN WITNESS WHEREOF, the UNIVERSITY and COMPANY have caused this Agreement to be
executed by their duly authorized officers as of the date first above written.
HYPERTENSION DIAGNOSTICS, INC., a
Minnesota corporation
By /s/ Xxxxxxx X. Xxxxxxx
---------------------------------
Xxxxxxx X. Xxxxxxx
Its President
REGENTS OF THE UNIVERSITY
OF MINNESOTA, a Minnesota
nonprofit corporation
By /s/ Xxxx X. Xxxxxxx
---------------------------------
Xxxx X. Xxxxxxx
Title: Director, Patents &
Licencing
By signing below, Xxxx and Xxxxxxxxxxx acknowledge and agree that they (i)
have read and understand this Agreement; (ii) have no objections to the terms
of this Agreement; and (iii) are personally bound by the provisions of
Article I.B., Article VIII and Article X of this Agreement.
/s/ Xxx X. Xxxx /s/ Xxxxxxx X. Xxxxxxxxxxx
---------------------------- -----------------------------
Xxx X. Xxxx, M.D. Xxxxxxx X. Xxxxxxxxxxx, Ph.D.
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EXHIBIT A
SUBSCRIPTION AGREEMENT
AND
INVESTMENT LETTER
Hypertension Diagnostics, Inc.
Gentlemen:
The undersigned hereby subscribes to purchase 35,000 shares of the common
stock, par value $.01 per share, of Hypertension Diagnostics, Inc. (the
"Company"), a corporation organized under the laws of the State of Minnesota
(such number of shares hereinafter collectively referred to as the "Shares"),
and agrees to pay therefor the sum of $.02 per share, for a total purchase
price of $700.00 to be paid in cash.
The undersigned acknowledges that he or she is a promoter and organizer of
the Company and is therefore fully informed concerning its proposed business.
The business plan of the Company has not yet been formally established. The
undersigned also acknowledges his or her understanding that the purchase of
the Shares is a speculative investment and recognizes that the Company makes
no assurance whatever concerning the present or prospective value of the
Shares.
The undersigned understands that the Shares have not been registered (i)
under the Securities Act of 1933, as amended (the "Act"), on the ground that
the company believes the transaction is exempt from registration under the
Act by virtue of the provisions of Section 4(2) of the Act, and (ii) under
the Minnesota Securities Act on the basis that the transaction is exempt from
registration under Minnesota Statutes, Section 80A.15, Subd. 2(a). The
undersigned understands that the Company's reliance upon the foregoing
exemptions is predicated in part on the representations of the undersigned
contained herein.
By signing this Subscription Agreement, the undersigned agrees with and
represents and warrants to the Company that:
a. He or she is acquiring the Shares subscribed for hereby for his or her own
account and not on behalf of any other person or persons.
b. He or she is purchasing the Shares for investment purposes and not for
resale or other distribution.
c. The Shares may not be sold, transferred, assigned or otherwise disposed of
except pursuant to an effective registration statement or upon receipt of
an opinion of counsel satisfactory to the Company that the transfer is
exempt from
1
registration under the applicable state and federal securities laws. He
or she has been informed that the certificates representing the Shares
will bear the following or a substantially similar legend:
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ISSUED
WITHOUT REGISTRATION UNDER THE SECURITIES ACT OF 1933 OR UNDER
ANY STATE SECURITIES LAWS, AND MAY NOT BE SOLD, TRANSFERRED OR
PLEDGED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE APPLICABLE FEDERAL AND STATE SECURITIES LAWS OR AN
OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT THE TRANSFER
IS EXEMPT FROM REGISTRATION UNDER THE APPLICABLE FEDERAL AND
STATE SECURITIES LAWS.
d. He or she has been informed by the Company that it does not intend, nor is
it obligated now or at any future date, to register the Shares purchased
hereunder under either state or federal securities laws or to make publicly
available or provide the undersigned with the information required by Rule
144 of the Securities and Exchange Commission under the Act in order to
allow resale of the Shares under the provisions of such Rules.
e. The undersigned understands that he or she must bear the economic risk of
this investment for an indefinite period of time because the Shares have
not been registered and, therefore, cannot be sold unless they are
subsequently registered or an exemption from such registration is
available.
f. The undersigned has sufficient knowledge and experience in financial and
business matters to be capable of evaluating the merits and risks of a
prospective investment in the Shares; is experienced in making investments
which involve a high degree of risk, and is sophisticated in making
investment decisions; is familiar with the definition of "accredited
investor" under SEC Regulation D and as discussed below; and the
undersigned (is ____) (is not ____) an "accredited investor" within that
definition.
If you are an accredited investor, please indicate your basis for
qualification as an accredited investor by checking the box next to the
applicable item(s) below. The undersigned agrees to make available any
information requested by the Company to confirm such qualifications.
/ / The undersigned is a corporation with total assets in excess of
$5,000,000; or
/ / The undersigned is a director or executive officer of the Company; or
2
/ / The undersigned has an individual net worth, or joint net worth with
spouse, exceeding $1,000,000 as of the date of signature hereof; or
/ / The undersigned had an individual income exceeding $200,000 in each of
the two most recent years or joint income with spouse exceeding
$300,000 in each of the two most recent years and reasonably expects
an individual income exceeding $200,000 or joint income with spouse
exceeding $300,000 in this year.
Dated: , 1988
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Signature
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Name Typed or Printed
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Residence Address
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City, State and Zip Code
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Tax Identification or
Social Security Number
This Subscription Agreement and Investment Letter is accepted as
of , 1988.
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HYPERTENSION DIAGNOSTICS, INC.
By
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Its
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