Exhibit 10.36
TECHNOLOGY TRANSFER AGREEMENT
THIS TECHONOLOGY TRANSFER AGREEMENT ("Agreement") is made this _____day of
September, 1997, by and among United Medical and Dental Schools of St. Guy's and
St. Thomas's Hospitals ("UMDS"), ▇▇. ▇▇▇▇ ▇▇▇▇▇, and Longport, Inc.
("Longport").
WHEREAS, UMDS entered into a written agreement with Longport, Inc.
("Longport") dated May 19, 1995, together with and addendum thereto, pursuant to
which Longport agreed to support research by UMDS to develop a high frequency
ultrasound skin scanner and UMDS agreed to grant to Longport certain rights to
sell commercially viable scanners developed by UMDS as a result of such
research;
WHEREAS, UMDS and ▇▇. ▇▇▇▇ ▇▇▇▇▇ (collectively "UMDS Parties"), in
conjunction with ▇▇▇▇ ▇▇▇▇▇ d/b/a Square Wave, Ltd., developed a high frequency
ultrasound skin scanner ("UMDS Scanner");
WHEREAS, Quality Medical Imaging, Ltd. (a corporation registered in the
United Kindgom, hereafter "QMI"), UMDS, and ▇▇▇▇ ▇▇▇▇▇ applied for a patent
pertaining to the UMDS Scanner, entitled "Apparatus for Ultrasonic Tissue
Investigation," bearing International Application No. PCT/GB96/00566 ("the
Patent Application");
WHEREAS, QMI has sold and assigned its rights and interests in the Patent
Application to UMDS;
WHEREAS, Supra Medical Corp. has filed a civil action in the United States
District Court for the Eastern District of Pennsylvania, captioned Supra Medical
Corp. v. ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, et al., Civil Action No. 96-3737, against, among
others, UMDS ▇▇. ▇▇▇▇ ▇▇▇▇▇ and Longport (the "Supra Action");
WHEREAS, the parties to the Supra Action desire to settle and dismiss the
action;
WHEREAS, as a part of that settlement and resolution, UMDS is willing to
transfer to Longport, and Longport is willing to receive from UMDS, such rights,
with certain execptions set forth herein, as UMDS may own in and to the
technology embodied in the UMDS Scanner;
NOW, THEREFORE, in consideration of the promises and agreements set forth
herein, UMDS, ▇▇. ▇▇▇▇ ▇▇▇▇▇ and Longport agree as follows:
1. UMDS hereby quitclaims, assigns and transfers to Longport its entire,
right, title and interest in and to the Intellectual Porperty Rights in the UMDS
Scanner, except for the Fractal Analysis Software and Third-Party Technology
used in the UMDS Scanner.
2. As used herein:
"Intellectual Property Rights" shall mean patents, patent applications,
copyrights, trade secrets, and know how, but shall expressly exclude any rights
under trademark.
-----------Longport
-----------UMDS
-----------▇▇. ▇▇▇▇▇
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"Fractal Analysis Software" shall mean a series of software modules used
within the UMDS Scanner that was developed by a unit of UMDS other than the
Tissue Repair Research Unit and that analyze, determine and graphically display
the fractal nature of a reflected image.
"Thirt-Party Technology" shall mean computer hardware and software used in
the UMDS Scanner that is developed and commercially marketed by third parties,
including without limitation "off-the-shelf" hardware and operating system
software.
3. UMDS hereby assigns and transfers to Longport its right, title, and
interest in and to the Patent Application and in a certain patent issued by The
Republic of Sourth Africa regarding the same invention having reference number
9504751.0, lodged on 11/3/96.
4. Longport shall be solely responsible for renewing and prosecuting the
Patent Application, including paying any and all costs associated with renewing
and prosecuring the Patent Application, and for renewing or maintaining any
other patent or patent applciation applicable ot he UMDS Scanner;
5. UMDS hereby grants to Longport an exclusive paid-up right and license
throughout the world to use, reproduce and distribute solely in object code form
the Fractal Analysis Software solely for use in high frequency ultrasound skin
scanner products, without any further payments beyond the payments described
herein. Longport shall not use the Fractal Analysis Software for any purpose
other than in high frequency ultrasound skin scanners without the prior written
consent of UMDS.
-----------Longport
-----------UMDS
-----------▇▇. ▇▇▇▇▇
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6. Longport acknowledges and agrees that, subject ot the exclusive license
granted to Longport in Paragraph 5, ownership of the Fractal Analysis Software
shall remain with UMDS. In addition, UMDS shall retain the right to use the
Fractal Analysis Software in high frequency ultrasound skin scanners as well as
other products or applications as UMDS may determine.
7. UMDS, Dr. ▇▇▇▇▇▇▇ ▇▇▇▇▇ and Mr. ▇▇▇▇ ▇▇▇▇▇▇ shall have the right to
retain such UMDS Scanners as they currently have in their possession, and to
continue to use them for research, to improve or modify them, and to build other
UMDS Scanners for their noncommercial use.
8. UMDS shall not directly or indirectly market or sell any UMDS Scanners
to others in competition with Longport.
9. UMDS hereby represents to Longport, and Longport acknowledges, that Dr.
▇▇▇▇▇▇ ▇▇▇▇▇ and Mr. ▇▇▇▇ ▇▇▇▇▇▇ are not employees of UMDS, and that UMDS cannot
control their activities. UMDS shall, however,notify them of this Agreement and
encourage them not to market or sell UMDS Scanners in competition with Longport.
Longport agrees that UMDS shall have no liability hereunder for the activities
of ▇▇. ▇▇▇▇▇ or ▇▇. ▇▇▇▇▇▇ that are independent of UMDS.
-----------Longport
-----------UMDS
-----------▇▇. ▇▇▇▇▇
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10. Any and all agrements between UMDS and Longport, Inc., including
without limitation the agreement and addendum of May 19, 1995 set forth herein
above, will be terminated and concluded in their entirety upon each party's
executing this Technology Transfer Agreement, the fulfillment of all of the
conditions set forth herein, and the Court's approval of the Release and
Settlement Agreement, of which this Technology Transfer Agreement is a part;
thereafter neither party will have any further rights or obligations pursuant to
any previously existing contract(s) between Longport and the UMDS Parties, or
either of them, whatsoever.
11. In consideration of all of the agreements set forth herein, Longport
shall, for five (5) years, commencing with Longport's fiscal year following the
year in which the United States Food and Drug Administration classifies and
approves the UMDS Scanner (or such other high frequency ultrasound skin, scanner
that incorporates any of the Intellectual Property Rights in the UMDS Scanner
and that is marketed by Longport in lieu of the UMDS Scanner) in accordance with
the 1976 Medical Device Amendments to the Food, Drug and Cosmetic Act, pay to
UMDS one percent (1%) of Longport's annual gross revenues stated in its audited
financial statements. Longport shall make each such payment to UMDS upon the
sooner of thirty (30) days after preparation of its audited financial statement
or ninety (90) days after the conclusion of its fiscal year.
12. Longport shall bear sole responsibility to make whatever applications
may be required to obtain classification and approval of the UMDS Scanner in
accordance with the 1976 Medical Device Amendments to the Food, Drug and
Cosmetic Act and to pay any and all costs associated therewith.
-----------Longport
-----------UMDS
-----------▇▇. ▇▇▇▇▇
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13. If Longport fails to make any payment to UMDS in accordance with
Paragraph 11 above, and Longport fails to cure such failure within thirty (30)
days of written notice thereof from UMDS, then the UMDS Parties shall,
notwithstanding the transfer of Intellectual Property Rights to the UTMDS
Scanner herein, have the right to market and sell UMDS Scanners directly and
indirectly in competition with Longport.
14. If Longport acquires or obtains, by any means, any other company, or
the assets or property of any other entity, Longport will remain obligated to
pay UMDS full consideration calculated in accordance with this Agreement at
Paragraphs 11 above and 15 below.
15. In the event that Longport acquires assets and Paragraph 14 above
applies, or is acquired by or merged into another company or entity (whether by
transfer of shares or the sale of assets) (the "Acquiring Party"), or transfers
to a third party the Intellectual Property Rights in the UMDS Scanner, then
Longport, as the case may be, shall: a) promptly notify UMDS of such acquisition
and/or technology transfer; b) require by written agreement that the Acquiring
party or such third party honor and fully comply with the terms of this
Agreement; and c) create a subsidiary, or require by written agreement that the
Acquiring Party or such third party create a subsidiary consisting solely of
Longport or its scanner technology for the remainder of the five-year term
during which Longport is obligated to make payments to UMDS in accordance with
-----------Longport
-----------UMDS
-----------▇▇. ▇▇▇▇▇
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Paragraph 11 above, without transferring or diluting the income and/or assets of
Longport for the remainder of such term. The payment obligations of Longport
with respect to such subsidiary shall be only as to revenues received from the
use of such acquired assets or by such subsidiary in the business in which high
frequency ultrasound is used.
16. Longport shall use its best efforts to maximize the use of the UMDS
Scanner in medical care. Upon request, it will advise ▇▇. ▇▇▇▇ ▇▇▇▇▇ of those
efforts. ▇▇. ▇▇▇▇▇ shall maintain in confidence, and shall not disclose to any
third party, any information included within such reports from Longport that
constitutes proprietary and confidential information of Longport, and that is
not in the public domain or previously known by ▇▇. ▇▇▇▇▇.
17. Longport shall not use the names of, or otherwise refer to, UMDS (or
its constituent hospitals), its current or past officers, employees or agents or
any of them, in any advertising or promotional materials or in any manner which
may be construed as an endorsement of Longport or the UMDS Scanner or the manner
in which it is or may be used in medical diagnosis or care, without the prior
express written consent of UMDS. Should Longport wish to similarly use the name
of ▇▇. ▇▇▇▇ ▇▇▇▇▇ in any such manner, separately from the name of UMDS, it may
only do so subject to ▇▇. ▇▇▇▇▇'▇ written approval.
18. In further consideration fo the agreeement set forth herein, UMDS
shall, within thirty (30) days of the date of this Agreement, return any and all
stock certificates representing shares in Longport, Inc., issued in the name of
UMDS, which UMDs now holds.
-----------Longport
-----------UMDS
-----------▇▇. ▇▇▇▇▇
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19. ALL OF THE RIGHTS AND LICENSES ASSIGNED OR LICENSED BY UMDS TO LONGPORT
IN THIS AGREEMENT ARE TRANSFERRED OR LICENSED SOLELY ON AN "AS IS" BASIS. UMDS
WARRANTS TO LONGPORT THAT, EXCEPT FOR SUCH RIGHTS IN THE UMDS SCANNER AS ARE
OWNED BY ▇▇▇▇ ▇▇▇▇▇, UMDS OWNS THE RIGHTS LICENSED TO LONGPORT IN THIS
AGREEMENT. UMDS MAKES NO OTHER WARRANTIES, EXPRESS OR IMPLIED, WITH RESPECT TO
THE INTELLECTUAL PROPERTY RIGHTS IN THE UMDS SCANNER OR THE FRACTAL ANALYSIS
SOFTWARE, INCLUDING WITHOUT LIMITATION THE IMPLIED WARRANTIES OF MERCHANTABILITY
AND FITNESS FOR PARTICULAR PURPOSE. WITHOUT LIMITING THE FOREGOING, UMDS MAKES
NO WARRANTY THAT THAT THE UMDS SCANNER, THE INTELLECTUAL PROPERTY RIGHTS
THEREIN, OR THE FRACTAL ANALYSIS SOFTWARE DO NOT INFRINGE OR VIOLATE THE
PROPRIETARY RIGHTS OF A THIRD PARTY.
20. TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, AND EXCEPT FOR
MATTERS TO BE INDEMNIFIED HEREUNDER, IN NO EVENT SHALL ANY PARTY BE LIABLE FOR
ANY SPECIAL, INCIDENTAL, CONSEQUENTIAL, INDIRECT OR PUNITIVE DAMAGES, EVEN IF
SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. IN NO EVENT
SHALL THE LIABILITY OF UMDS OR ▇▇. ▇▇▇▇ ▇▇▇▇▇ EXCEED THE SUMS RECEIVED FROM
LONGPORT PURSUANT TO PARAGRAPH 11 HEREUNDER..
21. Longport agrees, at its expense, to carry and maintain in force
Commercial General Liability Insurance (including products liability and
contractual liability coverages) with minimum limits of $1 million combined
single limit and combined bodily injury and property damage per occurrence,
which policy of insurance shall include UMDS as an additional insured. Longport
shall also defend and hold UMDS, its officers, directors, employees and agents
harmless from any losses, damages, injuries, suits, claims, actions or
proceedings, (hereafter "Claim") arising from a claim or allegation that the
UMDS Scanner (or the rights granted herein to Longport) (a) violates any
applicable safety or regulatory standard, or (b has caused injury or damage
(including death) to the person or property of another arising from defects in
-----------Longport
-----------UMDS
-----------▇▇. ▇▇▇▇▇
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materials, design or construction thereof, or (c) infringes any patents,
utility models, copyrights, trade secrets, or any other intellectual property
rights of a third party, provided that (a) Longport's idemnification obligation
hereunder shall apply only to the amounts by which the costs of defense, losses,
damages, and injuries incured by UMDS exceed, in any calendar year, the
royalties actually received by UMDS from Longort under this Agreement during
such calendar year, and (b) Longport is promptly notified of any Claim, given
all reasonable assistance required, and permitted to direct the defense. Absent
a conflict which renders joint representation unfeasible, Longport shall retain
legal counsel to represent UMDs and ▇▇. ▇▇▇▇ ▇▇▇▇▇. Longport shall have no
liability for settlement or costs incurred without its ocnsent.
22. UMDS hereby acknowledges receipt from Longport prior to September 9,
1997, the sum of 3993 Pounds for payment of the renewal fee for the Patent
Application.
23. This Agreement is expressly conditional upon (a) the execution and
delivery by all parties to the Supra action of the Release and Settlement
Agreement to which this Agreement is an addendum, and (b) the dismissal with
prejudice of the Supra Action.
24. This Technology Transfer Agreement contains the entire agreement
between UMDs and Longport, and the terms hererof are contractual and not a mere
recital. Any amendments, modifications or revisions to the terms of this
Technology Transfer Agreement must be set forth in a further writing, signed by
or on behalf of both UMDs and Longport.
-----------Longport
-----------UMDS
-----------▇▇. ▇▇▇▇▇
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25. The undersigned state that they have carefully read this Technology
Transfer Agreement in consultation with their respective attorneys. The
undersigned further represent, covenant, and warrant that in executing this
agreement on behalf of any entity, they are authorized to act on behalf of that
entity, and have signed the agreement with the full knowledge and approval of
the party for whom they have signed the agreement.
26. This Agreement may be signed in counterparts, each of which shall be
deemed to be an original, but all of which, taken together, shall constitute but
one and the same instrument.
27. This Agreement is being made and entered into solely for the benefit of
the parties hereto, and the parties do not intend hereby to create any rights in
favor of any other person as a third party beneficiary of this Agreement or
otherwies.
28. The parties shall attempt in good faith to resolve any dispute arising
out of or relating to this Agreement promptly by negotiations. If the parties
are unable to resolve the dispute by negotiations, and unless the sum in dispute
is less than twenty-five thousand dollars ($25,000)or unless the parties
otherwise agree to exempt such dispute from the requirement for mandatory
arbitration, such dispute shall be settled by binding arbitration, conducted on
-----------Longport
-----------UMDS
-----------▇▇. ▇▇▇▇▇
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a confidential basis, under the then current Commercial Arbitration Rules of the
American Arbitration Association ("th Association") strictly in accordance with
the terms of this Agreement and the substantive law of the Commonwealth of
Pennsylvania. The arbitration shall be held at a mutually agreeable location in
Philadelphia, Pennsylvania, and conducted in accordance with the Federal Rules
of Evidence by one arbitrator, which arbitrator shall be chosen from a list of
attorneys who are members of the Association's commercial arbitration panel. The
arbitrator chosen to arbitrate the dispute must be knowledgeable about
technology licensing. If the parties cannot promptly, within thirty (30) days,
agree on the selection of the arbitrator, the arbitrator(s) will be chosen
pursuant to the Commercial Arbitration Rules of the Association, no costs of the
arbitration, including the fees to be paid to the arbitrator(s), shall be shall
equally by the parties to the dispute. The Judgment upon the award rendered by
the arbitrator may be entered and enforced in any court of vompetent
jurisdiction. Neither party shall be precluded hereby from seeking provisional
remedies in the courts of any jurisdiction including, but not limited to,
temporary restraining orders and preliminary injunctions, to protect its rights
and interest, but such shall not be sought as a means to avoid or stay
arbitration. The arbitrator is not empowered to award any consequential,
incidental, punitive, or exemplary damages. The parties acknowledge that they
have voluntarily agreed to arbitrate their disputes in accordance with the
foregoing and each party hereby irrevocably waives any damages in excess of
compensatory damages.
29. This Agreement has been drafted jointly and is not to be construed
against one party more strictly than against another.
-----------Longport
-----------UMDS
-----------▇▇. ▇▇▇▇▇
[The remainder of this page in purposely blank.]
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IN WITNESS THEREOF, an dintending to be fully bound hereby, we have set
here unto our hand in seal.
WITNESSED BY: LONGPORT, INC.
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ [ SEAL ]
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▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, President
Dated:
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[S E A L]
UNITED MEDICAL & DENTAL
SCHOOLS OF BUY'S AND ST. ▇▇▇▇▇▇'▇
HOSPITALS
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
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▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇, Secretary
Dated:
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/s/ ▇. ▇▇▇▇▇▇▇▇
-----------------------------------
▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ (Principal)
/s/ ▇. ▇▇▇▇▇▇
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▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ (Dental ▇▇▇▇)
/s/ ▇. ▇. ▇▇▇▇▇ /s/ ▇▇. ▇▇▇▇ ▇▇▇▇▇ [SEAL]
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▇▇. ▇▇▇▇ ▇▇▇▇▇, in her own capacity
Dated:
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