ASSIGNMENT AND SALE AGREEMENT
This
Agreement is made this 4th
day of
November, 2003 by and between Drexel University, a Pennsylvania nonprofit
corporation, with offices located at ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, and its predecessors, successors, related parties and
affiliated entities (collectively “Drexel”), and Noninvasive Medical
Technologies, LLC, a Michigan Limited Liability Company, with its principal
offices at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇ and its
predecessors, successors, related parties and affiliated entities (collectively
“NMT”).
BACKGROUND
A. Drexel
owns certain intellectual property developed by Drs. ▇▇▇▇▇ ▇▇▇▇ and Hun H.
Sun,
relating to a cardiac monitoring system, as described more fully in the patents
listed in Exhibit A to this Agreement, the intellectual property including
not
only said patents, but also drawings, plans, computer source code, and other
unpatented confidential information, data, and/or know-how (collectively
the
“Intellectual Property”);
B. NMT
desires to purchase the Intellectual Property from Drexel;
and
C. Drexel
desires to sell the Intellectual Property to NMT.
NOW
THEREFORE, in consideration of the promises and covenants contained in this
Agreement, the sufficiency of which is acknowledged by the parties, the parties
agree as follows:
ARTICLE
1
- Definition
“Affiliate”
means any legal entity directly or indirectly controlling, controlled by or
under common control with NMT that has executed (a) this Agreement or (b) a
written joinder agreement in a form satisfactory to Drexel, agreeing to be
bound
by all of the terms and conditions of this Agreement as if such Affiliate were
an original party to this Agreement.
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For
purposes of this Agreement, “control” means the direct or indirect ownership or
more than fifty percent (50%) of the outstanding voting securities of a legal
entity, or the right to receive more than fifty percent (50%) of the profits
or
earnings of a legal entity, or the right to control the policy decisions of
a
legal entity.
“Covered
Product(s)” means products that are made, made for, used or sold by NMT or any
of its sublicensees and that: (a) in the absence of this Agreement would
infringe at least one claim of Patent Rights; (b) use a process or machine
covered by a claim of Patent Rights; or (c) use, at least in part, any Technical
Information.
“Patent
Rights” means all patent rights represented by or issuing from the United States
or foreign patents listed in Appendix A of this Agreement or the patents issuing
from the United States or foreign patent applications listed in Appendix A
thereof, and their foreign counterparts and extensions, including continuation,
divisional and re-issue applications and continuation-in-part
applications.
“Net
Sales” means the consideration attributable to the Sale of any Covered
Product(s), less qualifying costs directly attributable to such Sale and
actually identified on the invoice and borne by NMT or its sublicensees. Such
qualifying costs shall be limited to the following:
| (i) |
Discounts,
in amounts customary in the trade, for quantity purchases, for prompt
payments and for wholesalers and
distributors;
|
| (ii) |
Credits
or refunds, not exceeding the original invoice amount, for claims
or
returns;
|
| (iii) |
Prepaid
outbound transportation expenses and transportation insurance premiums;
and
|
| (iv) |
Sales
and use taxes and other fees imposed by a governmental
agency.
|
“Sale”
means any bona fide transaction for which consideration is received for the
sale, use, lease, transfer or other disposition of Covered Product(s). A Sale
of
Covered Product(s) shall be deemed completed at the time NMT or its sublicensee
receives payment for such Covered Product(s).
“Technical
Information” means all the information contained in the patents and the patent
applications listed in Appendix A of this Agreement and any other technical
information disclosed or referenced in Appendix A.
ARTICLE
2
-
Assignment,
Sale and Transfer of Intellectual Property
For
and
in consideration of the payments of the fees and royalties provided in Article
3
of this Agreement, Drexel hereby sells, assigns and transfers to NMT, its entire
right, title and interest, in the Intellectual Property, for the United States
of America, its territories and possessions, and for all foreign countries.
This
sale includes all patents identified in Exhibit A, and all divisions,
continuations, continuations-in-part, reissues, reexaminations, and/or
extensions pertaining to any of such patents. This sale also includes all
unpatented know how and confidential information, developed by Drs. Wang and/or
Sun for Drexel, including, but not limited to, the drawings, plans, and computer
source code mentioned above. As a result of this sale, NMT shall own the
Intellectual Property and be entitled to exercise all rights of ownership,
including, without limitation, the right to develop further and different
applications and products which shall be beyond the scope of this Agreement,
including combining the Intellectual Property with other technologies which
may
be patented in such combinations which shall be free of any interest or claim
of
Drexel.
ARTICLE
3
- Fees and Royalties
The
parties agree that NMT’s obligations to made payments due under this Agreement
shall cease when it has paid to Drexel a cumulative total of four million
dollars ($4,000,000.00) in royalty payments, sublicense initiation fees and
any
other such consideration due to Drexel under the terms of this Agreement (the
“Total Payment”). Upon payment of the Total Payment as provided herein, all
residual and security interests of Drexel in the Intellectual Property shall
cease and terminate.
a) In
partial consideration for the sale of the assignment of the Intellectual
Property, NMT shall
pay, to Drexel, the sum of Eighty-six Thousand Five Hundred Sixty-five
($86,565.00) Dollars
as an advance against royalties due Drexel. This sum shall be paid concurrent
with the
execution of this Agreement.
b) In
further consideration for the sale of the Intellectual Property, NMT shall
pay
to Drexel:
| a) |
A
non-refundable minimum quarterly royalty of twelve thousand five
hundred
dollars ($12,500) beginning on January 1, 2004 and continuing on
the first
day of each calendar quarter thereafter (April 1, July 1, October
1,
January 1). The minimum quarterly royalty payment paid hereunder
shall
serve as an advance payment against the Total
Payment.
|
| b) |
In
further consideration for this Agreement to be applied to the Total
Payment, NMT shall pay to Drexel a royalty of two and one-half percent
(2.5%) of the Net Sales of Covered Products made, made for, used
or sold
by NMT, its affiliates and/or sublicensees. Payments are due to Drexel
during the calendar quarter in which NMT receives payment from its
customer, affiliate and/or
sublicensees.
|
| c) |
In
addition, NMT shall pay to Drexel ten percent (10.0%) of any Sublicense
initiation fee paid by each Sublicensee of the Assignment Agreement
to be
credited towards the Total Payment. Payments are due to Drexel during
the
calendar quarter in which NMT receives payment from its sublicensee.
If
any of the sublicense fee paid by the sublicensee shall be in the
form of
non-publicly traded equity, the parties agree that they shall place
Drexel’s portion of the sublicense initiation fee into escrow. All
dividends and sale proceeds relating to the holdings of the escrow
agreement shall be paid to Drexel as they are converted to cash or
a
readily marketable security.
|
c) No
Covered Product shall be subject to more than one assessment of the royalty
set
forth above.
d) Royalty
Reports and Records. NMT shall deliver to Drexel, within forty-five (45)
days
after the end of each calendar quarter, a written report, setting forth the
number of Covered Products sold in the applicable quarter, and accompanied
by
payment of the royalty due. The obligation to provide such reports shall
continue until NMT shall have paid the Total Payment.
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e)
NMT
shall
maintain complete and accurate books and records that enable the royalties
payable under this Agreement to be verified. Upon reasonable prior notice
to
NMT, NMT shall provide Drexel with access to all books and records relating
to
the sales of Covered Products by NMT, to conduct a review or audit of those
books and records. Access to NMT’s books and records shall be made available not
more than once each calendar year, during normal business hours. If it
is
determined that NMT has underpaid any royalty due by ten percent (10%)
or more,
then NMT shall pay to Drexel promptly the costs and expenses of Drexel
and its
accountants in connection with their review or audit, in addition to such
underpayment. The obligation to provide access to books and records shall
expire
at the time NMT shall have paid the Total Payment.
g)
All
dollar amounts referred to in this Agreement are expressed in United States
dollars. All payments to Drexel under this Agreement shall be made in United
States dollars by check or wire transfer payable to Drexel
University.
h)
Amounts
that are not paid when due shall accrue interest from the due date until
paid,
at a rate equal to one and one-half percent (1.5%) per month or part thereof
(or
the maximum allowed by law, if less).
ARTICLE
4
- Limited Warranties and Representations
Except
as
otherwise provided in this Agreement, Drexel is selling and NMT is buying the
Intellectual Property on an “as is” basis, without warranty of any kind, express
or implied. Drexel shall not be liable for any direct, consequential, punitive
or other damage suffered by NMT resulting from the Intellectual
Property.
Notwithstanding
the foregoing, and as an inducement to NMT to enter into this Agreement, Drexel
warrants and represents that it is the sole owner of the Intellectual Property
and that it has not encumbered, pledged, assigned or sold the Intellectual
Property to any other party such that no party other than Drexel has any
interest in the Intellectual Property. Drexel further represents and warrants
that it has the right to enter into this Agreement and that all necessary
approvals and actions have been given, taken and obtained such that full
unencumbered title to the Intellectual Property is hereby conveyed to NMT.
Drexel agrees to indemnify, defend and hold NMT harmless from and against any
claims of any nature, including attorney fees and costs, arising from any breach
of the foregoing warranties and representations. These representations and
warranties do not apply to any transactions or occurrences involving Wantagh,
Inc., Renaissance Technologies, Inc., New Renaissance Technologies, Inc, or
Renaissance SET, LLC.
NMT
agrees to obtain product liability insurance, relating to the sale of Covered
Products, and to maintain such insurance in force as long as such products
are
sold. NMT agrees that it will obtain a product liability policy having a limit
of $2,000,000 per occurrence, and that it will name Drexel as an additional
insured party on its product liability insurance policy. NMT shall not be liable
to Drexel beyond the coverage of such product liability insurance
policy.
ARTICLE
5
- Use of Technology for Research Purposes
NMT
hereby grants a nonexclusive limited license to Drexel to use the Intellectual
Property for educational and research purposes only. Drexel hereby grants NMT
a
first right of refusal for the purchase of any additional technologies, patents
or other intellectual properties that are developed as a result of this
license.
ARTICLE
6
- Recordable Version of Assignment
Drexel
agrees to contemporaneously execute an assignment and sale document in a form
acceptable to NMT which refers to this Agreement but which does not repeat
all
of its contents, which document shall be suitable for recording in the U.S.
Patent & Trademark Office or in any foreign patent office.
ARTICLE
7
- Termination
| a) |
Drexel
may terminate this Agreement if any of the following events of default
(“Default”) occur:
|
| 1) |
NMT
is more than thirty (30) days late in paying to Drexel royalties
as
defined in Article 3, NMT does not pay Drexel undisputed amounts
in full
within Thirty (30) days after receipt of a written demand for payment
from
Drexel;
|
| 2) |
NMT
breaches this Agreement and does not cure the breach within sixty
(60)
days after written notice of the breach, providing the breach has
not been
stayed by a court of competent
jurisdiction.
|
b) Effect
of Termination.
In the
event of a termination under Article 7.a hereof, all duties
of
Drexel and all rights (but not duties) of NMT under this Agreement shall
immediately terminate without the necessity of any action being taken by
Drexel.
Upon and after any termination of this Agreement, NMT shall immediately convey
its entire right, title and interests
c) Security
Interest in the Intellectual Property.
To
secure the complete and timely payment
and satisfaction of all royalty obligations of NMT under this Agreement,
NMT
hereby grants to Drexel a security interest, effective immediately, in NMT’s
entire right, title and interest in and to the Intellectual Property. In
addition to any rights or remedies provided for under this Agreement, Drexel
shall have all of the rights and remedies of a secured party under the Uniform
Commercial Code. NMT shall execute and deliver to Drexel such UCC-1 and UCC-3
or
other documents as may be reasonably necessary to perfect Drexel’s security
interest in such. Upon the payment of the Total Payment as specified in Article
3, Drexel’s security interest (and all other interests of any kind, if any) in
the Intellectual Property shall terminate and cease and Drexel shall execute
any
documents deemed necessary by NMT to effectuate a release and termination
of any
such security or other interest. Drexel hereby grants to NMT its irrevocable
power of attorney to execute in Drexel’s name all such documents as NMT deems
reasonably necessary to so terminate and such security or other interest
in any
jurisdiction.
ARTICLE
8
- Assignments and Sales
NMT
shall
have the right without the approval of Drexel to sublicense the Intellectual
Property as it deems fit. However, NMT shall not pledge, mortgage, grant a
security interest in or otherwise encumber its titles, rights and interests
in
the patents or under this Agreement to any third party while the Total Payments
remain unpaid without Drexel’s prior written approval which cannot be withheld
providing that Drexel remains in the first lien position, and will not be
unreasonably withheld under circumstances wherein Drexel does not remain in
the
first lien position. Once the Total Payment has been paid, Drexel’s right to
approve any sale or transfer of the Intellectual Property shall
terminate.
ARTICLE
9
- General Provisions
a) No
waiver
of any breach or condition of this Agreement shall be deemed to be a waiver
of
any other subsequent breach or condition, whether of like or different
nature.
b) All
communications between the parties shall be delivered in person or
sentovernight
delivery by overnight courier or by certified or registered mail, return
receipt
requested, and shall be deemed to have been given when hand-delivered one
(1)
day after mailing when mailed by overnight courier, or five (5) days after
mailing by registered or certified mail, as follows (provided that notice
of
change of address shall be deemed given only when received):
If
to
Drexel:
Office
of
Technology Development
Drexel
University
▇▇▇▇
▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention:
Vice President for Research
With
a
required copy to:
Office
of
the General Counsel
▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention:
General Counsel
If
to
NMT:
▇▇▇▇
▇▇▇▇▇▇▇▇, Esq.
Vice
President and General Counsel
Noninvasive
Medical Technologies, LLC
In
care
of:
McAlpine
& ▇▇▇▇▇▇▇▇, PC
▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇
▇▇▇
▇▇▇▇▇▇
▇▇▇▇▇, ▇▇ ▇▇▇▇▇
or
to
such other names or addresses as NMT or Drexel, as the case may be, shall
designate.
c) This
Agreement shall be construed and governed in accordance with the laws of
the
Commonwealth of Pennsylvania, without giving effect to conflict of law
provisions of any jurisdiction.
d) Any
dispute arising out of or in connection with this Agreement shall be resolved
by
binding arbitration in accordance with the then current commercial arbitration
rules of the American Arbitration Association (“AAA”), the arbitration to be
held in Philadelphia, Pennsylvania. The parties agree to first mediate their
dispute under the AAA’s then current mediation rules as a precondition to
proceeding into arbitration. The cost of arbitration, as well as any attorney
fees incurred by the parties, shall be borne as determined by the arbitrators
to
be just and reasonable. The decision of the arbitrators shall be final and
binding and enforceable by any court of competent
jurisdiction.
e) This
Agreement shall be binding upon and inure to the benefit of the
parties
hereto
and their respective heirs, personal representatives, successors and
assigns.
f) This
Agreement may be executed in two or more counterparts, each of which
shall
be
deemed an original, but all of which together shall constitute one and the
same
instrument. The headings used in this Agreement are for convenience only
and are
not to be considered in construing or interpreting any term or provision
of this
Agreement. The attached Exhibit A is hereby incorporated in this Agreement
and
made a part hereof.
g) This
Agreement embodies the entire agreement and understanding among the parties
hereto and thereto and supersedes all prior agreements and understandings
relating to the subject matter hereof. This Agreement may not be changed,
modified, extended or terminated except by written amendment executed by
an
authorized representative of each party.
h) If
any
provision of this Agreement shall be held to be illegal, invalid
or unenforceable,
then such illegality, invalidity or unenforceability shall attach only to
such
provision and shall not in any manner affect or render illegal, invalid or
unenforceable any other provision of this Agreement, and this Agreement shall
be
carried out as if any such illegal, invalid or unenforceable provision were
not
contained herein.
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i) In
computing the number of days for purposes of this Agreement, all days shall
be counted,
including Saturdays, Sundays and holidays; provided that if the final day
of any
time period falls on a Saturday, Sunday or holiday on which Federal banks
are or
may elect to be closed, then the final day shall be deemed to be the next
day
which is not a Saturday, Sunday or such holiday.
IN
WITNESS WHEREOF, the parties, intending to be legally bound, have caused this
Agreement to be executed by their duly authorized representatives.
| Drexel University | ||
| |
|
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| By: | /s/ ▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇▇ | |
|
|
||
| Noninvasive Medical Technologies, LLC | ||
| |
|
|
| By: | /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ | |
|
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, Chief Executive Officer |
||
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Exhibit
A
Patents:
5443073
issued 8/22/95
5423326
issued 6/13/95
5309917
issued 5/10/94
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