LICENSE AGREEMENT
THIS AGREEMENT is made and
entered into as of the date last entered below (“the Effective Date”), by and
between Xxxx X. Xxxxxx, Ph.D. , an individual having an address of 000 Xxxxxxxxx
Xxx, Xxxxxxxxxx , Xxxxxxx 00000 (“XX. XXXXXX”) and Biofield Corp., a
Delaware corporation having an office at 0000 Xxxxxx Xxxxxx, 0xx Xxxxx,
Xxxxxxxxxxxx, XX 00000 (“BZEC”).
WHEREAS, XX. XXXXXX owns
rights in and to technology relating to electrical and ionic methods, apparatus,
and devices for the in vivo and in vitro screening and diagnosis of disease
states, including the technology described in more detail below.
AND WHEREAS, BZEC desires to
obtain the exclusive right to utilize the technology described
herein.
NOW THEREFORE, for and in
consideration of the foregoing and the mutual covenants and agreements contained
herein, the parties hereto agree as follows:
1. Definitions
As used herein:
1.1 “Licensed
Technology” means any technology pertaining to the utilization of electrical,
electropotential, electrical impedance, ionic or otherwise electrically charged
organic species for the screening, detection, or diagnosis of disease states in
an organism, including but not limited to:
(a) The
patent application which describes the invention of utilizing extremely low
frequency electromagnetic fields for the screening and diagnosis of disease
states in an organism.
(b) All
divisionals, continuations, reissues, extensions, and foreign counterparts of
the Licensed Intellectual Property.
1.2 “Licensed
Territory” means the entire world.
1.3 “Licensed
Method” means any method which is claimed in a patent application.
1.4 “Licensed
Product(s)” means any product, including devices and disposable components of
the device system, which are claimed in a patent application.
1.5 “Affiliate
means an entity of which BZEC has at least 20% ownership, or an entity having at
least 20% ownership of BZEC.
1.6 “Net
Selling Price” of a Licensed Product means the gross selling price to an
unrelated purchaser of such Licensed Product from BZEC or and affiliate or
sublicensee.
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1.7
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“Net
Sales” of Licensed Products means the sum of the Net Selling Price of each
Licensed Product, including devise and disposable components of a Licensed
Product system sold by BZEC or an Affiliate
or
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sublicensee
to an unrelated purchaser.
1.8 “Agreement”
means this Agreement including all Exhibits attached to this Agreement together
with any written amendments of any of the foregoing.
2. Grant of
License
2.1 License. Subject
to the exceptions of paragraph 11.2, XX. XXXXXX hereby grants to BZEC the
exclusive right and license to use and exploit the Licensed Technology to make,
have made, use, market, lease, and sell Licensed Products and to practice
Licensed Methods in the Licensed Territory during the term of this Agreement
unless sooner terminated as provided in this Agreement. The license
granted herein with respect to the Licensed Patents listed in paragraph 11.2 is
subject to the prior agreement between XX. XXXXXX and Biofield Corp., referred
to in paragraph 11.2
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2.2
Sublicenses. BZEC shall be allowed to grant sublicenses
under this Agreement.
2.3 Development
Information. Upon execution of this agreement, XX.
XXXXXX shall provide BZEC or its nominees with the Licensed Technology and all
information relating to the development of the Licensed Technology, including
but not limited to blueprints, working drawings, and data and information
relating to manufacture of Licensed Products.
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3.
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Royalties, Payments
and Reimbursement
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3.1 Timing of Royalty
Payments. Royalties shall be paid quarterly, within
thirty (30) days after each calendar quarter ending March 31, June 30, September
30, and December 31 of each year this Agreement is in force.
3.2 Calculation of Royalty
Payments. For a particular calendar quarter, the royalty
payment due pursuant to paragraph 3.1 shall be the sum of five (5) percent of
the Net Sales of Licensed Products if the Licensed Product is based exclusively
on Licensed Technology or three (3) percent of the Net Sales of Licensed
Products if the Licensed Product is used in conjunction with technology licensed
to BZEC from sources other than XX. XXXXXX.
3.3 Minimum Royalty
Payments. Commencing September 30th, 2008
and subject to the provisions of paragraph 10.4 (b) and Appendix A, BZEC shall
be obligated to make minimum royalty payments to XX. XXXXXX as provided in
paragraph 3.5.
3.4 Calculation of Minimum
Royalty Payments. In the event the sum of the royalties
due pursuant to paragraphs 3.2 and 3.6 for the calendar year commencing Year 1
and each subsequent year does not exceed eighty thousand dollars (US$80,000.00),
BZEC shall also pay XX. XXXXXX, at the appropriate time under paragraph 3.2, the
difference between the royalties due for such years pursuant to paragraphs 3.2
and 3.6 and eighty thousand dollars (US$80,000.00). The effect of
this provision is to provide XX. XXXXXX a minimum royalty payment of
eighty thousand dollars (US$80,000.00) for each year or twenty
thousand dollars (US$20,000) per calendar quarter this agreement is in
effect. The minimum royalty will be adjusted annually using the
consumer price index. The minimum royalty payment under this
Agreement for the initial calendar quarter shall be paid in accordance with the
payment schedule in Appendix A attached hereto.
3.5 No Multiple
Royalties. No multiple royalties shall be payable
because any Licensed Product covered by more than one patent within the Licensed
Patents.
3.6 Royalty
Cap. The maximum total royalties paid to XX. XXXXXX will not
exceed five million dollars (US$5,000,000).
3.7. Royalties Paid by
Sublicenses for Licensed Technology. If BZEC sublicenses
Licensed Technology pursuant to paragraph 2.2, for sales under such sublicense
of Licensed Products which are not manufactured by or for BZEC or an Affiliate,
BZEC shall pay to XX. XXXXXX, at the appropriate time under paragraph 3.2, fifty
(50) percent of the royalties actually received by BZEC from the sublicensee
rather than any royalties calculated under paragraph 3.2.
4. Improvements in Licensed
Technology
4.1 Notification of
Improvements. XX. XXXXXX shall promptly inform BZEC of
any improvements to the Licensed Technology developed or acquired by XX. XXXXXX
during the term of this Agreement.
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5. Records
5.1 Records of
Sales. BZEC shall at all times during the term of this
agreement keep at its principal place of business true and accurate records of
all sales subject to Section 3 of this Agreement in such form and manner that
royalties to XX. XXXXXX may be readily and accurately determined.
5.2 Inspection. Once
annually, an independent certified public accountant, acceptable to BZEC shall
have the right, at XX. XXXXXX’x expense, during normal business hours and after
providing at least five business days’ notice, during the period of this
Agreement to examine those records of BZEC which may reasonably be needed for
the purpose of verifying the amounts owed to XX. XXXXXX hereunder and the
accuracy of the reports furnished by BZEC under Section 6 of this
Agreement. Such certified public accountant shall maintain the
confidentiality of all confidential information obtained by it from examination
of BZEC’s records and shall use such information only for the purposes of this
Agreement.
6. Reports
6.1 Quarterly
Reports. When making each royalty payment pursuant to
Xxxxxxx 0, XXXX shall prepare and deliver to XX. XXXXXX a true and accurate
report, giving such particulars of the business conducted by BZEC and its
sublicensees during the preceding calendar quarter as is required to calculate
the royalties due XX. XXXXXX hereunder. If no payment is due for a
particular calendar quarter, BZEC shall so report.
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7.
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Patent
Maintenance
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7.1 Responsibility. BZEC
shall be responsible for the payment of all fees, costs and expenses paid or
incurred connected with filing patent applications, research of prior art, legal
opinions, maintenance fees or annuities to maintain the Licensed Intellectual
Property licensed to BZEC during the term of this Agreement. XX.
XXXXXX shall cooperate as reasonably requested by BZEC in any such filings and
prosecutions, such cooperation to include executing or supplying without
additional compensation all papers and other instruments, information, or
testimony deemed appropriate by BZEC for such filings and
prosecutions.
7.2 Notification. BZEC
shall, within fourteen (14) days of the event, advise XX. XXXXXX of the filing
of any patent application under paragraph 7.1 and, as appropriate, advise XX.
XXXXXX of the prosecution of such application and maintenance of any patent
issuing thereon.
7.3 Inventions Made by
BZEC. Inventions made by BZEC relating to the subject
matter of the Licensed Technology, and any patents based thereon, shall belong
to BZEC.
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8.
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Patent
Infringement
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8.1 Notice of
Infringement. BZEC and XX. XXXXXX shall take all
reasonable steps to protect the Licensed Patents in all parts of the Licensed
Territory, and each of XX. XXXXXX and BZEC shall give prompt notice to the other
of any infringement or threatened or suspected infringement
thereof that shall at any time come to his or its knowledge together
with such detailed information as shall from time to time be available to such
party relating to such infringement or threatened or suspected
infringement.
8.2 Defense. In
the event that a declaratory judgment action, cancellation, opposition or
similar proceeding alleging invalibility, unenforceability, or noninfringement
of any of the Licensed Patents shall be brought by a third party against XX.
XXXXXX involving the Licensed Patents, BZEC shall assume
the responsibility of defending or settling such action or
proceeding.
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8.3 Infringement
Suits. BZEC shall be responsible for instituting legal
action against infringers of the Licensed Patents, if it is of the opinion that
such infringement will seriously affect its business. The decision to
institute or settle legal action will be solely that of BZEC. If XX.
XXXXXX disagrees with BZEC’s decision not to institute legal action against
infringers, XX. XXXXXX shall have the option to institute legal action for
patent infringement at his own expense and the right to retain all damages
(including attorneys’ fees) obtained as a result of such legal
action. If BZEC chooses to institute legal action against infringers,
it shall be entitled to deduct its costs relating to each such legal action from
any damages (including attorneys’ fees) obtained as a result of the
action. Should any moneys then remain of the damages, BZEC shall
retain seventy-five (75) percent of such remaining monies and shall pay to XX.
XXXXXX the other twenty-five (25) percent of such remaining moneys.
8.4 Cooperation. In
any suit either party may commence or defend against a third party pursuant to
its rights under this Agreement in order to enforce or defend the validity or
enforceability of the Licensed Patents, the other party shall, at the request
and expense of the party initiating or defending such suit, cooperate in all
respects and, to the extent possible, have its or his employees testify when
requested and make available relevant records, papers, information, samples,
specimens and the like.
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9.
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Confidentiality
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9.1 Agreement
Terms
(a) During
the term of this Agreement and for five (5) years thereafter, BZEC shall not
divulge to any third party (excluding its employees, counsel, Affiliates, and
sublicensees) any written information provided by XX. XXXXXX pursuant to
paragraph 2.3 and prominently marked “CONFIDENTIAL” when so provided; provided,
however, that BZEC shall not be obligated to maintain as confidential any
information now or hereafter in the public domain through no fault of BZEC, any
information in BZEC’s possession prior to January 1, 1998 or any
information ordered to be divulged by a court of competent
jurisdiction.
(b) During
the term of this Agreement and for five (5) years thereafter, XX. XXXXXX shall
not divulge to any third party any written information provided by BZEC and
prominently marked “CONFIDENTIAL” when so provided; provided, however, that XX.
XXXXXX shall not be obligated to maintain as confidential any information now or
hereafter in the public domain through no fault of XX. XXXXXX or any information
ordered to be divulged by a court of competent jurisdiction.
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10.
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Term and
Termination
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10.1 Duration. The
term of this Agreement shall commence upon the Effective Date and, unless sooner
terminated as otherwise provided in this Agreement, shall continue for ten (10)
years or until all patents for Licensed Technology licensed to BZEC under this
Agreement have expired, whichever is later.
10.2 Termination of Exclusivity
or Agreement.
(a) If BZEC
defaults in any payment or in rendering any report to XX. XXXXXX required by
this Agreement and remains in default for thirty (30) days after receiving
written notice from XX. XXXXXX pursuant to paragraph 12.4, XX. XXXXXX may
convert the exclusive license granted in paragraph 2.1 to a nonexclusive license
and reduce by twenty-five (25) percent all annual minimum royalties to be paid
pursuant to paragraphs 3.4 and 3.5 and all annual maintenance fees to be paid
pursuant to paragraph 3.1, without prejudice to moneys previously due to XX.
XXXXXX.
(b) If
BZEC defaults in performing any other material obligation under this Agreement
and remains in default for sixty (60) days after receiving written notice from
XX. XXXXXX pursuant to paragraph 12.4, or if BZEC is adjudicated bankrupt or
insolvent, or if BZEC enters into a composition with its creditors, or if a
receiver is appointed for any portion of BZEC’s assets, then XX. XXXXXX may
terminate this Agreement upon giving written notice to BZEC at least thirty (30)
days prior to the effective date of the termination.
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(c) If during
the year following the Effective Date BZEC fails to make reasonable effort to
commercialize or sublicense the Licensed Technology or Licensed Products, then
XX. XXXXXX may, upon thirty (30) days written notice to BZEC, terminate this
Agreement, without prejudice to moneys previously due to XX.
XXXXXX. For purposes of this provision, BZEC’s expenditure of three
hundred thousand dollars (US$300,000.00) in attempting to commercialize or
sublicense the Licensed Technology or Licensed Products during this period is
per se reasonable effort.
10.3 Termination by
BZEC. BZEC may terminate this Agreement at any time by
giving XX. XXXXXX thirty (30) days’ prior written notice of BZEC’s election to
terminate. Alternatively, upon thirty (30) days’ prior written
notice, BZEC may convert the exclusive license granted in paragraph 2.1 to a
non-exclusive license and reduce by twenty-five (25) percent all annual minimum
royalties to be paid pursuant to paragraphs 3.3 and 3.4 without prejudice to
moneys previously due to XX. XXXXXX.
10.4 Events Following
Termination. If this Agreement is terminated by XX.
XXXXXX under paragraph 10.2 or by BZEC under paragraph 10.3, then,
(a) All
rights and obligations in relation to the Licensed Technology and improvements
thereto made solely by and/or assigned solely to XX. XXXXXX shall revert to XX.
XXXXXX and may be exploited by XX. XXXXXX as his unencumbered
beneficially owned property.
(b) The
provisions of Section 3 pertaining to the payment of royalties shall continue to
bind the parties until all royalties payable under this Agreement are paid;
provided, however, that no minimum royalty under paragraph 3.1 shall be due to
XX. XXXXXX or any year commencing on or after the anniversary of the Effective
Date of this Agreement most immediately following the date of
termination.
(c) The
termination of this Agreement shall not affect any right of action which may
have accrued to either party in respect of any breach prior to the date of such
termination.
11.0 Warranties
11.1 XX. XXXXXX’x
Warranties. XX. XXXXXX hereby makes the following
representations and warranties to BZEC, which representations and warranties are
true and correct on the date hereof:
(a) Except as
expressly set forth to the contrary in paragraph 11.2 of this Agreement, XX.
XXXXXX is the sole inventor of the Intellectual Property covered by this
Agreement;
(b) XX.
XXXXXX has the right to grant and the rights to license granted in this
Agreement and has executed no agreement in conflict herewith;
(c) XX.
XXXXXX has not filed, caused to be filed, or participated in filing any
applications for patent, nor has he obtained in his name, or caused to be
obtained in the name of another, any patent based on or covering the Licensed
Technology;
(d) There are
no claims (relating to patent infringement or any other matters), actions,
suits, agreements, proceedings, arbitrations, or investigations existing or
pending or, to the best of XX. XXXXXX’x knowledge, threatened against XX. XXXXXX
or others which if adversely determined would adversely affect the Licensed
Technology (or the patentability thereof) or XX. XXXXXX’x ability to enter into
or carry out this Agreement or license Licensed Technology.
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11.2 Licensed Patents Subject to
Other Agreement. Inventions which are subject to XX.
XXXXXX’x previous employment agreement with Biofield Corp. are not the property
of XX. XXXXXX and are not included in the Licensed Technology.
12. Miscellaneous and
General
12.1 Patent
Marking. BZEC agrees to xxxx the Licensed Products sold
in the United States with all applicable United States patent
numbers. All Licensed Products shipped to or sold in other countries
shall be to the extent practical marked in such manner as to conform with the
patent laws and practice of the country of sale.
12.2 Interpretation. The
parties are equally responsible for the preparation of this Agreement, and in
any judicial proceeding the terms hereof shall not be more strictly construed
against one party than the other.
12.3 Resolution of
Disputes. In the event the parties have a dispute or claim of
any kind arising under this Agreement that they are unable to resolve through
direct communications, such dispute shall be resolved through arbitration
pursuant to the rules of the American Arbitration Association; provided,
however, that (1) the Federal Rules of Evidence shall apply during any such
arbitration, (2) any discovery permitted during such arbitration shall be
completed within ninety (90) days of commencement of such arbitration, (3) such
arbitration shall be held in Atlanta, GA if either party asserts a claim against
the other.
12.4 Notices. All
notices, statements and reports required or contemplated herein by
one party to the other shall be in writing and shall be deemed to have been
given upon delivery in person or upon the expiration of seven (7) days after
deposit in a lawful mail depository, registered or certified mail postage
prepaid, and addressed as follows:
If to BZEC:
Biofield Corp.
0000 Xxxxxx Xxxxxx, 0xx
Xxxxx
Xxxxxxxxxxxx, XX 00000
ATTN: CEO
Facsimile: 000-000-0000
E-mail:
xxxx@xxxxxxxx.xxx
With a
copy to:
Xxxxxxx X.X. Xxxxx, Xx.,
Esquire
Obermayer Xxxxxxx Xxxxxxx & Hippel
LLP
One Penn Center, 19th
Floor
0000 Xxxx X. Xxxxxxx
Xxxxxxxxx
Xxxxxxxxxxxx, XX
00000-0000
Facsimile: 000-000-0000
E-mail:
Xxxxxxx.xxxxx@xxxxxxxxx.xxx
If to XX. XXXXXX:
Xxxx X. Xxxxxx, Ph.D.
000 Xxxxxxxxx Xxx
Xxxxxxxxxx,
XX 00000
Facsimile: 000-000-0000
Email:
xxxxxxx@xxxxxxx.xxx
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Either
party hereto may change the address to which notices to such party are to be
sent by giving notice to the other party at the address and in the manner
provided above. Any notice herein required or permitted to be given
may be given, in addition to the manner set forth above, by telex, facsimile or
cable, provided that the party giving such notice obtains acknowledgement by
telex, facsimile or cable that such notice has been received by the party to be
notified. Notice made in this manner shall be deemed to have been
given when such acknowledgement has been transmitted.
12.6 Assignments and
Inurement. Except to the extent otherwise herein
provided, neither party shall grant, transfer, convey, sublicense or otherwise
assign any of its rights or delegate any of its obligations under this Agreement
without the prior written consent of the other, which consent shall not be
unreasonably withheld, except in connection with the reorganization or sale of
substantially all of the assets of the party’s business or as otherwise
explicitly permitted in this Agreement, and any attempt to do so shall be of no
effect. This Agreement shall be binding upon and inure to the benefit
of the successors and permitted assigns of the parties hereto.
12.7 Entire
Agreement. This Agreement constitutes the entire
Agreement among XX. XXXXXX and BZEC with respect to the subject matter hereof
and shall not be modified, amended or terminated except as herein provided or
except by another agreement in writing executed by the parties
hereto.
12.8 Headings. The
section and paragraph headings are for convenience and are not a part of this
Agreement.
12.9 Severability. All
rights and restrictions contained herein may be exercised and shall be
applicable and binding only to the extent that they do not violate any
applicable laws and are intended to be limited to the extent
necessary so that they will not render this Agreement illegal, invalid or
unenforceable. If any provision or portion of any provision of this
Agreement not essential to the commercial purpose of this Agreement shall be
held to be illegal, invalid or unenforceable by a court of competent
jurisdiction, it is the intention of the parties that the remaining provisions
or portions thereof shall constitute their agreement with respect to the subject
matter hereof, and all such remaining provisions or portions thereof shall
remain in full force and effect. To the extent legally permissible,
any illegal, invalid or unenforceable provision of this Agreement shall be
replaced by a valid provision which will implement the commercial purpose of the
illegal, invalid or unenforceable provision. In the event that any provision
essential to the commercial purpose of this Agreement is held to be illegal,
invalid or unenforceable and cannot be replaced by a valid provision which will
implement the commercial purpose of this Agreement, this Agreement and rights
granted herein shall terminate.
12.10 Choice of
Law. This Agreement is acknowledged to have been made in
and shall be construed in accordance with the laws of the State of Georgia,
United States of America; provided that all questions concerning the
construction or effect of Licensed Patents shall be decided in accordance with
the laws of the country in which the particular patent application concerned has
been filed or granted, as the case may be.
12.11 Indemnification. BZEC
shall indemnify, hold harmless and defend (including paying reasonable
attorneys’ fees) XX. XXXXXX from and against any and all losses, including but
not limited to, injury to persons, property, and the environment, caused by the
Licensed Products or arising out of the manufacture, use, sale, promotion, or
possession of the Licensed Products or any intermediate activity thereof or by
the performance of any activities by BZEC as a result of this Agreement, except
where caused by the fraudulent actions or omissions of XX. XXXXXX.
12.12 Use of
Names. BZEC shall not use XX. XXXXXX’x name, or the
name of any entity affiliated with XX. XXXXXX, in any advertisement or sales
material unless it obtains the prior written consent of such
person or entity proposed to be named.
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IN WITNESS WHEREOF, XX. XXXXXX
has executed this Agreement and BZEC has caused this Agreement to be executed by
duly authorized representative as of the day and year first above
written.
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X. XXXXXX, PH.D.
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Date: August
21, 2008
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By:
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Date: August
21, 2008
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BIOFIELD
CORP.
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By:
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Xxxxxxx
X. Xxxxxxxxxx, CEO
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By:
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Xxxxx
XxxXxx, Director
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APPENDIX
A
TO
LICENSE
AGREEMENT BETWEEN XXXX X. XXXXXX, PH.D. AND BIOFIELD
CORP.
A-1. The
minimum royalty payment under this Agreement for the initial calendar quarter
only shall be paid to XX. XXXXXX as follows:
(a). $10,000
by August 30, 2008; and
(b). $10,000
by September 30, 2008, or when funds are received by BZEC by a third party for
the express purpose of making this portion of the minimum royalty payment,
whichever occurs first.
A-2. XX.
XXXXXX agrees to extend reasonable efforts to answer inquiries from any funder
of BZEC or its representatives, counsel or consultant regarding the provisional
and final patent application which XX. XXXXXX shall prepare for BZEC in
accordance with this Agreement. In the event that XX. XXXXXX
reasonably believes that by September 15, 2008 or other date mutually agreed by
the Parties, BZEC has not sufficiently and reasonably advanced efforts to fund
the payments required under this Agreement or to fund the efforts needed for
BZEC to set the foundation required to commercialize any product resulting from
the intellectual property related to this Agreement, XX. XXXXXX shall invoice
Biofield and Biofield shall pay XX. XXXXXX at the rate of $200.00 per hour for
the time and effort he works relative to this Agreement.
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