LICENSE AGREEMENT
This License Agreement (the "Agreement") is made and entered into on
October 28, 1999 by and between Non-Invasive Monitoring Systems, Inc., a Florida
corporation whose business address is 0000 Xxxx Xxxxxx, Xxxxx Xxxxx, Xxxxxxx
00000 ("NIMS" or "Licensor") and XxxxXxxxx.xxx, Inc., a Delaware corporation,
whose business address is P. O., Xxx 000, Xxxxx, Xxxxxxxxxx 00000 ("Licensee").
WHEREAS, Licensor possesses certain technology and owns valuable
know-how which pertains to the design, manufacture, assembly, sale,
distribution, servicing, installation, use, leasing and testing of devices for
online vital sign monitoring devices and specifically, related to the
development, manufacturing and marketing of a garment with embedded sensors that
records and transmits data over the Internet for respiration,) ECG, and over 35
other physical and emotional xxxxx xxxxx into a small digital recorder (the
"LifeShirt System"); and
WHEREAS, Licensee desires to obtain the right to use such technology
and know-how for the development, manufacture, marketing and sale of certain
products relating to the LifeShirt System; and
WHEREAS, Licensee and Licensor have entered into that certain Research
and Consulting Agreement by and between Licensee and Licensor, dated as of the
date hereof and attached hereto as Exhibit "A"; and
WHEREAS, Licensee has entered into that certain Consulting Agreement
with Xxxxxx Xxxxxxx, a principal of NIMS, dated as of the date hereof and
attached hereto as Exhibit "B".
NOW, THEREFORE, in consideration of the premises and mutual promises,
terms and conditions hereinafter set forth, and other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the
parties do hereby agree as follows:
1. Definitions.
As used herein, the following terms shall have the following
definitions.
1.1 Affiliates, "Affiliates" shall mean any business entity controlled
by, controlling or under common control with any party hereto, with "control"
being interpreted broadly, including any entities with which such party may
merge, acquire or be acquired by.
1.2 Business. Day. "Business Day" shall mean a day on which banks are
open for business in Los Angeles, California.
1.3 Dollars. "Dollars" or "$" shall mean lawful money of the United
States of America in immediately available funds.
1.4 Effective Date. "Effective Date" shall mean the date of this
Agreement.
1.5 Force Majeure. "Force Majeure" shall mean any of the following
events or conditions, acts of state or governmental action, orders, legislation,
regulations, restrictions, priorities or rationing, riots, disturbance, war,
strikes, lockouts, slowdowns, prolonged shortages of energy supply, interruption
of transportation, embargo, fire, earthquake, flood, hurricane, typhoon.
explosion and accident.
1.6 Payment Period. "Payment Period" shall commence on March 31, June
30, September 30 or December 31, whichever first follows the initial sale of and
service related to the Product, any Derivative Product and any Reserved Product,
and continue for each of March 31, June 30, September 30 and December 31 for as
long as Licensee sells the Products and any Derivative Product and Licensor
sells any Reserved Products.
1.7 Products. "Products" shall mean the products, and only the
products, described in Exhibit "C" attached hereto and made a part hereof
1.8 Reserved Products. "Reserved Products" shall mean the products, and
only the products, described in Exhibit "D" attached hereto and made a part
hereof.
1.9 Technology. "Technology" shall mean any and all inventions and
discoveries, whether patentable or not (including without limitation any and all
patents and patent applications and extensions resulting therefrom), processes,
trade secrets, trade names, copyrights, mask work rights, know-how, computer
programs and software and hardware relating thereto, computer source codes,
methods, contrivances, plans, processes, specifications, experiments, circuit
descriptions. suggested circuit board layouts, parts, lists, test fixtures and
procedures, manuals, instruction devices, layouts, schematics, drawings,
prototypes, system operating maintenance and instruction manuals and other
intellectual property rights which have been created by or at the direction of
Licensor or any person or entity on behalf of Licensor or directly or indirectly
engaged by Licensor (including without limitation all subcontractors,
consultants and research and development partners or team members) which have
been, are or will be used to develop, design, manufacture, assemble, sell,
distribute, use, install, service or test the Products or any of them, A
description of the Products is set forth in Exhibit "C" attached hereto and made
a part hereof.
2. Grants of Rights.
2.1 Ownership of Technology and Products.
(a) Licensor represents and warrants to Licensee that all rights,
title and interest in and to the Technology and the Products are currently owned
by Licensor free and clear of any encumbrances or liens.
(b) Licensor hereby represents and warrants to Licensee that
Licensor has and shall maintain full power and authority to use, license, grant
rights to or otherwise dispose of the Technology and the Products without
infringing a third party's patent or other rights in the Technology and the
Products.
(c) Licensor shall deliver to Licensee an opinion of Licensor's
patent counsel that Licensor has the right to grant the licenses granted
hereunder.
Page 2
(d) The failure of Licensor to comply with any of the
representations or warranties in section 11(a) (b) or (c) hereof at any time
after the Effective Date shall constitute a material breach of this Agreement.
2.2 Exclusive license of Technology_and Products,
---------------------------------------------
(a) As of the Effective Date, Licensor grants to Licensee, during
the Term of this Agreement the exclusive, world-wide right and license to use
and practice the Technology in order to develop, design, make, use, sell and
service the Products other than the Reserved Products, This right and license
includes, without limitation, the rights: (i) to develop, design, manufacture,
assemble, sell, distribute, lease, install, test, repair, service and use any
and all Products incorporated within the LifeShirt System; (ii) to maintain the
Products incorporated within the LifeShirt System; (iii) to practice the methods
and processes involved in the use of the Products incorporated within the
LifeShirt System; (iv) to make and have made, to use and have used and to
maintain and have maintained, machines, tools, instrumentality's and materials
in connection with the development, design, manufacture, assembly, installation,
testing, repair, servicing and use of the Products incorporated within the
LifeShirt System; and (v) to use and have used methods and processes insofar as
such machines, tools, instrumentality's, materials, methods and processes are
involved in or incidental to the development, design, manufacture, installation,
testing or repair of the Products incorporated within the LifeShirt System. All
rights granted herein shall be exclusive to Licensee, but Licensor shall have
full right and license to use and practice the Technology and any improvements
and to make, use and sell the Reserved Products.
(b) Licensee agrees that Licensor shall retain title and interest
in and to any and all derivative patents related to the Products incorporated
within the LifeShirt System and Technology discovered by Licensor following the
signing of this Agreement (the "Derivative Patents"); provided that in the
event Licensor, within a reasonable time after the invention of any Derivative
Patent, fails to notify Licensee in writing that Licensor intends to apply for
said Derivative Patents at Licensor's expense, then Licensee, at Licensee's
sole, exclusive and irrevocable option (the "Option"), may apply for the
Derivative Patents on behalf of and in the stead of Licensor, as Licensor's
attorney-in-fact, at Licensee's expense, and thereafter, upon obtaining said
Derivative Patent(s), Licensor shall assign any and all right, title and
interest in and to any and all Derivative Patent(s) to Licensee; and Licensor
hereby irrevocably appoints Licensee as its attorney-in-fact (which appointment
is coupled with an interest) with full power of substitution to execute, verify,
acknowledge and deliver any documents necessary to apply for, prosecute, obtain
and maintain such Derivative Patents, which Licensor may fail to promptly
execute, verify, acknowledge and/or deliver after Licensee's request therefor.
In the event Licensor gives Licensee written notice of its intention to proceed
with any Derivative Patent, as set forth herein, and does proceed within a
reasonable time to apply for, prosecute, obtain and maintain the Derivative
Patents at Licensor's expense, then Licensor shall retain and own all right,
title and interest in and to the Derivative Patents; and Licensor shall license
the Derivative Patents to Licensee on the same terms as are set forth in this
Agreement for the Products and Technology related to the LifeShirt System
(c) Licensee agrees that Licensor shall retain all patent rights
for the Technology and the Products, except for the events contemplated in
Sections 2.2(b) above (License's Option re: Derivative Patents) and 7.2 (re:
Licensor's going out of business).
Page 3
(d) As soon as practicable after the Effective Date, but in no
event later than sixty (60) days after the Effective Date, Licensor shall
provide to Licensee, at no additional cost to Licensee, specific and necessary
information with respect to the LifeShirt System and with respect to the
Technology and the Products.
(e) Licensee shall have the right to sublicense the LifeShirt
System and related services (i) so long as each sublicensee or assignee agrees
to be bound by all of the terms and conditions included in this Agreement; and
(ii) so long as Licensor is given prior written notice of any such sublicense or
assignment and has a meaningful right of consultation regarding the sublicense
or assignment.
(f) The exclusivity of this license shall survive any sale,
merger, acquisition or other reorganization of Licensor and any assignment,
hypothecation or other transfer of any of the rights licensed hereunder by
Licensor to any third party and Licensor specifically agrees to obligate any
such third parties to assume Licensor's duties to Licensee hereunder.
3. Compensation Payable to Licensor/Licensee.
3.1 Royalty.
--------
(a) Licensee agrees to transfer or pay to Licensor, for granting
the rights and licenses described in Section 2 hereof:
(1) Licensee agrees to issue shares of common stock of
Licensee (the "Common Stock") to Licensor, valued equally with the founders'
shares, equal to twenty-three and one-half percent (23.5%) of the total shares
or 235,000 shares of Licensee's Common Stock. Licensee agrees to grant piggyback
registration rights in the Common Stock if and when Licensee makes an initial
public offering of its securities.
(2) A royalty which shall be computed as three percent (3%)
of Licensee's gross revenues from sales of the Product and any Derivative
Product licensed by Licensee from Licensor and services related to the Product
and any Derivative Product licensed by Licensee from Licensor, as such shall be
computed in accordance with generally accepted accounting principles; and paid
following the end of each quarterly Payment Period as set forth in Section 12
hereinbelow (the "Quarterly Royalty Payments").
(3) Subject to events of Force Majeure, Licensee agrees to
pay Licensor minimum Quarterly Royalty Payments that shall, in the aggregate,
total not less than Two Hundred Fifty Thousand Dollars ($250,000) (the "Minimum
Royalty") for the "Minimum Royalty Year". The Minimum Royalty Year is defined as
the second year of a two-year period, with such two-year period commencing on
the first day of any commercial sales of the Product or licensed Derivative
Product.
(b) Licensor agrees to transfer or pay to Licensee, for permitting
Licensor to retain the rights and licenses to the Reserved Products described in
Section 2 hereof:
(1) A royalty which shall be computed as five percent (5%) of
Licensor's gross revenues from sales of Reserved Products and services related
to the Reserved Products, as
Page 4
set forth on Exhibit "D", which incorporate or utilize any of the Product,
Derivative Product or TechnoLogy, as such shall be computed in accordance with
generally accepted accounting principles; and paid following the end of each
quarterly Payment Period as set forth in Section 3.2 hereinbelow.
3.2 Payments of Fees and Royalties.
(a) All royalty payments under Section 3.1(a)(2), 3.1(a)(3)
and 3.l(b)(l) hereof shall be made by check payable to the respective party
entitled to such royalty payments not later than thirty (30) days following the
Payment Period.
(b) Whenever any payment hereunder shall be due on a day,
which is not a Business Day, such payment shall be made on the immediately
preceding Business Day.
4. Prosecution and Maintenance of Patents.
4.1 Licensor represents and warrants that all of the patents for the
Products on the attached Exhibit "C" are in force as set forth on Exhibit "C"
and Licensor will continue to prosecute and maintain, amend, update, extend or
otherwise take any and all actions required for such patents for the Products
and shall take any and all other actions, legal or otherwise, which it considers
necessary or desirable to do so. Licensee shall have the right to be kept
informed of the status and progress of all actions instituted by Licensor
pursuant to this Section 4.1. Licensor shall support all such efforts by
Licensee.
5. Protection of Technology and Products.
5.1 lnfringements.
--------------
(a) Licensor shall take any and all actions, legal or
otherwise, which, in its sole discretion, it considers necessary or desirable to
terminate infringements of the Technology or any Product or any unfair
competition with any Product and/or against any individual(s) or entity(ies)
which Licensor deems, in its sole discretion, to be acting in contravention of
Licensor's intellectual property or proprietary rights. Licensee shall have the
right to be kept informed of the status and progress of all actions instituted
by Licensor pursuant to this Section. Licensor shall support all motions and
other efforts by Licensee to become a party jointly with Licensor to such
action.
(b) Each party hereto shall pay all the fees and expenses of
their respective legal counsel incurred in connection with actions initiated
pursuant to this Section. If the parties hereto agree to use the same legal
counsel in any such action they shall also agree on their respective
responsibilities with respect to payment of the fees and expenses of such
counsel.
(c) If Licensor does not institute an action within one
hundred twenty (120) days after receiving notice from Licensee of any
infringement of the Technology or any Product or any unfair competition with any
Product and/or against any individual(s) or entity(ies) which Licensee deems, in
its sole discretion, to be acting in contravention of Licensor's intellectual
property or proprietary rights, Licensee may institute any action with respect
thereto. Licensor shall have the right to be kept informed of the status and
progress of all such actions instituted by Licensee pursuant to this Section and
discussions between the parties must be held as to the advisability of
Page 5
such action. Licensee shall support all motions and other efforts by Licensor to
become a party jointly with Licensee to such action. Licensee shall not be under
any obligation to institute any such action,
(d) Any recoveries or settlement proceeds (or parts thereof)
received from suits or settlements involving an action initiated pursuant to
this Section by either party or agreed to relating to the Technology or Products
shall be applied first to reimbursing each party for such fees, expenses and
other costs as it may have incurred in connection with such action or
settlement, and then the balance, if any, to be divided between Licensor, on the
one hand, and Licensee, on the other hand, according to a fair determination of
each party's actual and potential losses and damages to which. the recovery
relates. In the event Licensor and Licensee cannot agree on the division between
them, the issue shall be decided by arbitration pursuant to section 8.3 of this
Agreement.
5.2 Use of Name in Suit. Where, in the judgment of the party
prosecuting an action under section 5.1 hereof, it is necessary to use the other
party's name to prosecute such action, such other party agrees to allow the
prosecuting party to so use the name of such other party, provided, however,
that the prosecuting party agrees to hold such other party harmless against any
court costs, attorney's fees, or damages resulting solely from the use of such
other party's name by the prosecuting party in such action and to indemnify the
non-prosecuting party.
5.3 Detect and Report Infringements. Each party agrees to keep watch to
detect any actual or suspected unauthorized use of the Technology or any Product
and any attempted passing-off by imitation of any product, and shall notify the
other party in writing of any such actual or suspected unauthorized use and any
such attempted passing-off within thirty (30) calendar days after receiving
knowledge of the actual or suspected unauthorized use or the attempted
passing-off.
6. Defensive Litigation.
6.1 Actions Brought by Third Parties.
---------------------------------
(a) Licensor shall indemnify and hold Licensee harmless from
and against any adverse final monetary judgment rendered against Licensee in any
action brought against any party asserting the infringement by Licensee or any
licensee or assignee of Licensee of rights of a third party (including without
limitation patent rights) due to the use or practice by Licensee or any licensee
or assignee of Licensee of the Technology or the Product
(b) Licensor shall, at its own expense, defend Licensee from
and against any such claim, provided, however, that Licensor shall not settle
any action without the prior written consent of Licensee, which consent shall
not be unreasonably withheld.
(c) Each party hereto will indemnify and hold harmless the
other party against any losses, claims, damages, expenses or liabilities to
which the indemnified party may become subject, under federal or state law,
insofar as such losses, claims, damages, expenses or liabilities (or actions in
respect thereof) arise out of or are based upon any untrue statement or alleged
untrue statement of a material fact made by the indemnifying party, its
officers, shareholders, agents, employees, and representatives in the use and
marketing of the Product, Derivative Product or
Page 6
Technology (so long as such untrue statement or alleged untrue statement of a
material fact has not been provided to the indemnified party by the indemnifying
party).
6.2 Notification of Suits.
----------------------
(a) Licensee shall give Licensor written notice of any suit or
action described in section 5.1 hereof wherein Licensee is named as a party.
Licensee shall give such written notice within ten (10) days after acquiring
such knowledge or prior to the expiration of time which is reasonably necessary
to prepare a response for filing with a court, whichever occurs first,
(b) Licensor shall give Licensee written notice of any suit or
action brought against Licensor with respect to the Technology or any Product
asserting the infringement on rights of a third party (including, without
limitation, patent rights) due to the use or practice of the Technology or any
Product. Licensor shall give such written notice within ten (10) days after
acquiring such knowledge or prior to the expiration of time which is reasonably
necessary to prepare a motion to intervene for filing with a court or other
judicial body, whichever is first to occur.
7. Termination
-----------
7.1 Term of Agreement. Unless it is terminated on an earlier
date pursuant to Section 2.2 or Section 7,2 herein, the license granted
hereunder shall be for a period of ten (10) years, commencing on the Effective
Date hereof (the "Term"). XxxxXxxxx.xxx, at its sole option and with thirty (30)
days notice, may extend this Agreement beyond the Term for additional periods of
ten (10) years under the same terms and conditions (the "Additional Term"), for
as many successive ten (l0-year Additional Terms as it so elects. The
obligations of Licensee and Licensor to pay royalties on any Product and any
Reserved Product, respectively, shall terminate on the date this Agreement
terminates. Royalties accrued to that date shall be paid in accordance with this
Agreement.
7.2 Notice of Termination.
----------------------
(a) Upon the occurrence of a material breach or default as to
any obligation hereunder by either party and the failure of such party, within
sixty (60) days after receiving written notice thereof from the other party, to
cure (or to provide adequate assurance of cure of) such material breach or
default, this Agreement may be terminated by the other party by giving written
notice to the breaching party of such termination, such termination being
immediately effective upon the giving of such notice of termination to the
breaching party.
(b) In the event of a material breach of any of the provisions
hereof by either party, the other party may seek to recover monetary damages
against the breaching party in accordance with the provisions of section 7.3
hereof.
(c) Notwithstanding anything to the contrary herein, Licensee
shall be entitled to prevent termination by Licensor hereunder by providing such
adequate assurance of its performance of any prospective award for damages in
favor of Licensor in such amount and in such manner, including but not limited
to the posting of a bond, as shall be determined by the arbitrator pursuant to
section 7.3 acting on an expedited preliminary basis prior to actual full
arbitration proceedings.
Page 7
(d) In the event of any of the following, any and all right,
title and interest in and to the Technology and Products will automatically (and
with no further action required on behalf of Licensor or Licensee) be assigned
to Licensee to allow Licensee to maintain its exclusive rights to the Technology
and Products per this Agreement (i) Licensor files in any court pursuant to any
statute of the United States or of any individual state, a petition in
bankruptcy or insolvency or for reorganization or for an arrangement or at the
appointment of a receiver or trustee of the party of its assets, (ii) Licensor
proposes a written agreement of composition or extension of its debts, (iii)
Licensor is served with an involuntary petition against it, filed in any
insolvency proceeding, and such petition shall not be dismissed within ninety
(90) days after filing thereof; (iv) Licensor proposes or is a party to any
dissolution or liquidation, (v) Licensor makes an assignment for the benefit of
creditors, or (vi) Licensor discontinues its operations for any reason
whatsoever.
(e) In the event of any of the following, any and all right,
title and interest in and to the Technology and Products will automatically (and
with no further action required on behalf of Licensor or Licensee) be assigned
to Licensor to allow Licensor to recover its rights to the Technology and
Products per this Agreement: (i) Licensee files in any court pursuant to any
statute of the United States or of any individual state, a petition in
bankruptcy or insolvency or for reorganization or for an arrangement or at the
appointment of a receiver or trustee of the party of its assets, (ii) Licensee
proposes a written agreement of composition or extension of its debts, (iii)
Licensee is served with an involuntary petition against it, filed in any
insolvency proceeding, and such petition shall not be dismissed within ninety
(90) days after filing thereof; (iv) Licensee proposes or is a party to any
dissolution or liquidatIon, (v) Licensee makes an assignment for the benefit of
creditors, or (vi) Licensee discontinues its operations for any reason
whatsoever.
8. Miscellaneous.
8.1 Assignments.
------------
(a) Except as is permitted under Section 2.2 above, this
Agreement and any and all of the rights and obligations of either party
hereunder shall not be assigned, delegated, sold, transferred, sublicensed or
otherwise disposed of, by operation of law or otherwise, without the prior
written consent of the other party which consent shall not be unreasonably
withheld; provided, however, that (i) Licensor's consent shall not be required
with respect to any assignment, delegation, sale, transfer, sublicense or other
disposition by Licensee to any of its Affiliates; and (ii) withholding one's
consent because the proposed assignee, delegate, transferee, sublicensee or
disposee is a competitor of such party shall not be deemed to be unreasonable,
for the purposes of this Section. Any attempted assignment, delegation, sale,
transfer, sublicense, or other disposition, by operation of law or otherwise, of
this Agreement or any rights or obligations hereunder contrary to this Section
8.1 shall be a material breach of this Agreement by the attempting party, shall
be void and shall be of no force or effect
(b) This Agreement shall be binding upon, and inure to the
benefit of, Licensor and Licensee and their respective successors and assigns,
to the extent such assignments are in accordance with this Section 8.1.
8.2 Governing Law. This Agreement shall be governed, interpreted and
construed in accordance with the laws of the State of California.
Page 8
8.3 Arbitration.
------------
(a) Any dispute, controversy or claim arising out of or
relating to this Agreement or to a breach thereof, including its interpretation,
performance and termination, shall be submitted to and finally resolved by
arbitration. The arbitration shall be conducted in accordance with the
commercial rules of the American Arbitration Association, which shall administer
the arbitration and act as appointing authority. The arbitration, including the
rendering of the award, shall take place in Los Angeles, California, and shall
be the exclusive forum for resolving such dispute, controversy or claim. For the
purposes of this arbitration, the provisions of this Agreement and all rights
and obligations thereunder shall be governed and construed in accordance with
the laws of the State of California. The decision of the arbitrators shall be
executory, final and binding upon the parties hereto, and the expense of the
arbitration (including, without limitation, the award of attorneys' fees to the
prevailing party) shall be paid as the arbitrator determines. Judgment based on
the decision of the arbitrator may be entered by any court of competent
jurisdiction. Notwithstanding this, judgment upon the award of the arbitration
may be entered in any court where the arbitration takes place or any court
having jurisdiction thereof, and application may be made to any court for a
judicial acceptance of the award or order of enforcement.
(b) Notwithstanding anything contained in sub-section (a)
above to the contrary, each party shall have the right to institute judicial
proceedings against the other party or anyone acting by, through or under such
other party in order to enforce the instituting party's rights hereunder through
reformation of contract, specific performance, injunction or similar equitable
relief.
8.4 Waiver. A waiver of any breach of any provision of this Agreement
shall not be construed as a continuing waiver of other breaches of the same or
other provisions of this Agreement.
8.5 No Other Relationship. Nothing herein contained shall be deemed to
create an agency, joint venture or partnership relationship between the parties
hereto. At no time shall either party make commitments or incur any charges or
expenses for or in the name of the other party.
8.6 Notice. Unless otherwise specifically provided in this Agreement,
all notices, demands, requests, consents, approvals or other communications
(collectively and severally called "Notices") required or permitted to be given
hereunder, or which are given with respect to this Agreement, shall be in
writing, and shall be given by: (a) personal delivery (which form of Notice
shall be deemed to have been given upon delivery), (b) by telegraph or by
private airborne/overnight delivery service (which forms of Notice shall be
deemed to have been given upon confirmed delivery by the delivery agency), (c)
by electronic or facsimile or telephonic transmission, provided the receiving
party has a compatible device or confirms receipt thereof (which forms of Notice
shall be deemed delivered upon confirmed transmission or confirmation of
receipt), or (d) by mailing in the United States mail by registered or certified
mail, return receipt requested, postage prepaid (which forms of Notice shall be
deemed to have been given upon the fifth (5th) business day following the date
mailed). Notices shall be addressed to the addresses set forth in the
introductory paragraph of this Agreement, or to such other address as the
receiving party shall have specified most recently by like Notice, with a copy
to the other parties hereto.
Page 9
8.7 Entire Understanding. This Agreement and all exhibits hereto
together embody the entire understanding between the parties relating to the
subject matter hereof, whether written or oral, and there are no prior
representations, warranties or agreements between the parties not contained in
this Agreement.
8.8 Invalidity. If any provision of this Agreement is declared invalid
or unenforceable by a court having competent jurisdiction, it is mutually agreed
that this Agreement shall endure except for the part declared invalid or
unenforceable by order of such court. The parties shall consult and use their
best efforts to agree upon a valid and enforceable provision, which shall be a
reasonable substitute for such invalid or unenforceable provision in light of
the intent of this Agreement.
8.9 Amendments. Any amendment or modification of any provision of this
Agreement must be in writing, dated and signed by each party hereto.
8.10 Fees Payable, Licensor and Licensee acknowledge that there is no
broker's commission, finder's fee or other amount payable with regard to this
transaction, and Licensor and Licensee agree to indemnify and hold the other
harmless from and against all liability, claims. demands, damages or costs of
any kind arising from or connected with any broker's or finder's fee,
commission or charge claimed to be due any person arising from the indemnitor's
conduct with respect to this Agreement and the transactions contemplated herein
8.11. Attorneys' Fees. In the event there is any dispute arising out
of or related to this Agreement, the prevailing party shall be entitled to its
reasonable attorneys' fees and other costs and expenses incurred in resolving
such dispute including, but not limited to, all fees and costs through
arbitration or any appeals.
8.12 Survival of Contents. Notwithstanding anything else in this
Agreement to the contrary, the parties agree that sections 2.1, 2.2, 3.1. 3.2,
4.1, 5.1, 5.2, 5.3, 7.2, 8.1, 8.2, 8.3, 8.4, 8.5, 8.6. 8.7, 8.8, 8.10, 8.11,
8.12, 8.15, and 8,16 shall survive the termination of this Agreement to the
extent required thereby for the full observation and performance by one or both
of the parties hereto.
8.13 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be an original. Such counterparts shall
together constitute but one and the same instrument.
8.14 Table of Contents and Headings. Any table of contents accompanying
this Agreement and any headings contained herein are for directory purposes
only, do not constitute a part of this Agreement, and shall not be employed in
interpreting this Agreement.
8.15 Parties to Agreement. The parties to this Agreement are Licensor
and Licensee, and no other persons or entities
8.16 Cross-Breach. The parties acknowledge and agree that a material
breach of that certain Research and Development Agreement between the parties
dated the same date as this Agreement shall be deemed a breach of this
Agreement.
Page 10
IN WITNESS WHEREOF, the parties hereto have signed this Agreement.
"Licensor"
Non-Invasive Monitoring Systems. Inc., a
Florida corporation
By: /s/ Xxxxxx Xxxxxxx
------------------
Xxxxxx Xxxxxxx
Its: CEO
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"Licensee"
XxxxXxxxx.xxx, Inc., a Delaware corporation
By: /s/ Xxxxxx Xxxxx
------------------
Print Name: Xxxxxx Xxxxx
------------------
Title: Chief Operating Officer
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Page 11
EXHIBIT "C"
The following are the Products and Technology licensed hereunder:
The LifeShirt System
The LifeShirt system consists of any wearable garment that incorporates two or
more of the following sensor types: inductive plethysmographic sensors,
electrocardiographic electrodes and/or accelerometer. These wearable garments
may store and/or forward data for subsequent processing and analysis by
RespiEvents software or any software that uses RespiEvents as its basis.
The patents and pending patent listed below support the LifeShirt system.
LifeShirt Licensed Patents
This lists the pertinent patents for LifeShirt. Full details can be obtained by
going to the database of the U.S. Patent Office: xxxx://xxx.
xxxxx.xxx/xxxxxxxxxx.xxxx. These patents refer only to those incorporated in
LifeShirt, They do not refer to individual usage in current Nims' stand alone or
LAN products.
United States Patent 4,834,109
Xxxxxx May 30, 1989
================================================================================
Single position non-invasive calibration Technique
Abstract
An improved method for calibrating a non-invasive apparatus for measuring
respiration volume of the type wherein signals indicative of the rib cage and
abdomen contributions to respiration volume are provided, and wherein at least
one of the signals is multiplied by a predetermined weighting factor for
reflecting the relative contributions of the rib cage and abdomen to respiration
volume. The calibration method non-invasively determines the weighting factor
by: totaling, during a period of breathing, a plurality of values of a parameter
indicative of the relative amplitude, for each breath, of uncalibrated rib cage
and abdomen signals: and dividing the average variability of the means of the
total of the values of one of the rib cage and abdomen signals by the average
variability of the mean of the total of the values of the other signal. The
quotient so derived represents the weighting factor. An apparatus for
calibrating in accordance with the method is also disclosed.
Page 12
United States Patent 4,452,252
Sackner June 5, 1984
================================================================================
Non-invasive Method for monitoring Cardiopulmonary Parameters
Abstract
A method for monitoring cardiopulmonary events is disclosed. The basic method
comprises looping an extensible conductor (14) in close encircling relation
about the neck (12) of the subject (10), providing a signal indicative of the
inductance of the loop, and monitoring the signal. This signal contains both
qualitative and quantitative cardiopulmonary information In accordance with
another aspect of the method, an extensible conductive loop (14) is disposed in
close encircling relation about the head such that the plane defined by the loop
extends through the mouth. By providing a signal indicative of changes in the
inductance of the loop, qualitative and quantitative information for mouth
volume may be obtained.
United States Patent 4,456,015
Sackner June 26, 1984
================================================================================
Non-invasive method for semiquantitative measurement of neck volume changes
Abstract
A method of semiquantitatively measuring a, subject's neck volume includes the
steps of providing an extensible conductor in the form of a loop having a
predetermined height; providing a signal variably responsive in value to changes
in the inductance of the conductor; calibrating the signal by determining
reference signal values obtained with the conductor disposed about at least two
known volumes and using the reference signal values to establish the
relationship between signal value and the volume enclosed by the conductor;
disposing the conductor in close encircling relationship about the subject's
neck; calibrating the signal for intrapleural pressure by using an invasive
technique as a reference for determining a plurality of intrapleural pressures
for the subject and simultaneously determining the signal value for each such
intrapleural pressure measurement, thereby establishing the relationship between
intrapleural pressure and signal value; discontinuing the reference technique;
determining the signal value with the subject's airway closed, correlating the
closed airway signal value with intrapleural pressure based on the established
relationship between intrapleural pressure and signal value; and correlating
intrapleural pressure obtained in accordance with the previous correlating step
with the volume enclosed by the conductor based on the established relationship
between signal value and enclosed volume.
United States Patent 4,777,962
Xxxxxx October 18, 1988
================================================================================
Method and apparatus for distinguishing central obstructive and mixed apneas by
external monitoring devices which measure rib cage and abdominal compartmental
excursions during respiration
Page 13
United States Patent 5,588,425
Sackner, et al. December 31, 1996
================================================================================
Method and apparatus for discriminating between valid and artifactual pulse wave
forms in pulse oximetry
Abstract
A method and apparatus for use in pulse oximetry for discriminating between
valid pulse waveforms and artifactual pulse waveforms. Systolic upstroke times
for valid pulse waveforms are in a consistent, narrow range which varies only
slightly from subject to subject. This narrow range, which may be defined
empirically for each subject or established by a default setting applicable to
all subjects, defines a predetermined range of systolic upstroke times
indicative of valid pulse waveforms. The systolic upstroke time of each pulse
waveform is compared against the predetermined range, and pulse waveforms are
deemed valid only if their systolic upstroke times are within the predetermined
range. Only arterial oxygen saturation levels based on validated pulse waveforms
are accepted. The present invention may also be used to validate the heart rate
and/or RR, intervals of an ECG, and for discriminating between sleep and
wakefulness in a monitored subject.
Issued July 1999: Final Copy of Claims Unavailable
PATENT APPLICATION: MEANS FOR ANALYZING BREATH WAVEFORMS AS TO
THEIR NEUROMUSCULAR RESPIRATORY IMPLICATiONS
by Xxxxxx X. Xxxxxxx and D. Xxxxxxx Xxxxx
Claims for Measurement of Respiratory Drive from Breath Waveforms
1. During tidal breathing, peak inspiratory flow and acceleration
derived from breath waveforms of the respiratory inductive plethysmograph serve
as indicators of drive from the respiratory center in the brain. Since sensors
of this device can be placed separately over the rib cage and abdomen
compartments and their values summed to give tidal volume, peak inspiratory flow
and acceleration values can be obtained from tidal volume, rib cage and abdomen
waveforms.
2. The peak inspiratory flow and acceleration parameters from the
respiratory inductive plethysmograph are improvements over current methods in
that the technology is non-invasive, has capability for discrete or continuous
monitoring, and analyzes breath waveforms with a simple algorithm to obtain
these drive parameters.
3. The measurement of breath by breath peak inspiratozy flow and
acceleration, and breath by breath ventilation as the product of respiratory
rate and tidal volume of the breath described in this patent application also
permit simultaneous computation of the ratio of respiratory drive to ventilation
on a breath by breath or time average.
4. The ratio of peak inspiratory flow to ventilation is a dimensionless
number and is not affected by errors in volume calibration of the measurement
device: the ratio of peak inspiratory
Page 14
acceleration to ventilation yields a time value and is not subject to errors in
volume calibration of the measurement device.
5. The peak inspiratory acceleration values should be measured during
the early part of inspiration, nominally within a window approximately + 300
msec. near the beginning detection of initial inspiration from breath waveforms.
6, The ratio of drive to ventilation provides an objective measure of
breathlessness.
7. Peak inspiratory flow and acceleration values can be obtained from
all instruments capable of collecting solely tidal volume or airflow; these
instruments include spirometers, pneumotachographs, body plethysmographs,
nasa-oral thermistors and naso-oral thermocouples among others.
8. Peak inspiratory acceleration values can be obtained from
instruments measuring respiration that are applied externally to the body
surface such as the respiratory inductive plethysmograph, jerkin
plethysmograph, linear differential transformers, magnetometers, bellows
pneumograph, strain gauges, piezoelectric devices, and inductance
circumferential transformers among others. Other external respiratory monitoring
devices such as the impedance pneumograph and video transformation of torso
movements into a waveform display currently provide estimates of solely tidal
volume.
9. Peak acceleration values can also be obtained from airway pressure.
intrapleural pressure, transdiaphragmatic pressure, neck inductive
plethysmography and breath sound measurements.
10. The basis for the assertion that values of peak inspiratory flow
and acceleration measure respiratory drive is their good statistical correlation
to parameters derived from the moving time average diaphragmatic
electromyogram. Measures from the latter are considered as the standard by
which other methods such as the respiratory based peak inspiratory and
acceleration parameters in this patent application must he compared.
11. Measurement of peak inspiratory flow and/or acceleration from the
aforementioned devices has diagnostic importance in the following situations in
which measurements of respiratory drive are affected.
12. Assessment of integrity of the respiratory center in the brain by
the breathing of CO2 and/or low O2 gas mixtures -~ respiratory drive normally
increases with such stimulation.
13. To assess baseline respiratory center activity across wake and
sleep stares and ascertain abnormalities; normally, drive is the highest in the
wake state, intermediate in Active or REM state, and lowest in Quiet or NREM
state.
14. To assess respiratory center drive during obstructive
apneas/hypopneas where tidal volume may be absent or negligible but in which
peak inspiratory flow and acceleration values from rib cage and abdomen
compartments can provide a measure of respiratory drive.
Page 15
15. To detect the presence of external expiratory resistive loading
during sleep such as snoring and/or "upper airway resistance syndrome."
16. To serve as a set-point for manual or servo titration of positive
airway pressure of patients with snoring and/or "upper airway resistance
syndrome."
17. To monitor for presence of bronchoconstriction which increases
drive in patients at risk such as patients with asthma, chronic obstructive
pulmonary disease, cystic fibrosis, etc.
18. To gauge effect of anesthetic, sedative and analgesic agents that
usually depresses respiratory drive.
19. To categorize respiratory drive in various disease as a measure of
status.
20. To assess status of drive during mechanical ventilation--if
patient is completely controlled by the mechanical ventilator, then drive would
be virtually absent whereas if the patient is making efforts against the
ventilator, peak inspiratory flow and acceleration values would reflect this
situation. In the former, peak inspiratory flow or acceleration would be
equivalent to ventilator peak inspiratory flow or acceleration alone whereas in
the latter circumstance, the values would be greater.
21. To assess status of respiratory muscles during potentially
fatiguing tasks such as 1) elastic loading as in pulmonary edema or Adult and
Infant Respiratory Distress Syndromes, 2) resistive loading as in asthmatic
attacks, COPD, and upper airway resistance syndromes, and 3) during cardiogenic
and non-cardiogenic shock states.
22. As an indirect means to signal hypoxemic events in
newborns--respiratory drive increase.
23. As a means to signal retained tracheobronchial secretions since
drive may increase under these circumstances,
24. As a means to diagnose nocturnal brochospasm during sleep.
25. As a means to detect respiratory center depression after
administration of narcotics to depress excessively high respiratory drive.
26. As a means to monitor for presence of intrinsic PEEP positive end
expiratory pressure).
27. As a means to detect respiratory distress in workers or military
personnel working in hazardous gaseous environments.
Rapid Response Inductive Plethysmographic System.
------------------------------------------------
Although results from analysis of peak inspiratory acceleration
paralleled those from peak inspiratory flow, acceleration values were more
variable than flow values. This was due to the relatively slow digital sampling
rate of the proprietary inductive plethysmographic hardware. The
Page 16
current hardware samples the transducer signal at 50 points/s, thereby filtering
out some of the true peak values of acceleration. Recently, new electronic
circuitry was developed to allow digital sampling rates to 200 points/s in order
to obviate this problem. This improves the measurement accuracy of peak
inspiratory flow and acceleration values. The rapid sampling rate is necessary
for accurate display of inductive plethysmography monitored breath waveforms
during high frequency ventilation (respiratory strokes between 4 and 15 Hz). The
system can serve as a rapid response trigger to initiate inspiratory inflation
by mechanical ventilator devices. The system improves timing accuracy or
inductive plethysmographic measurements of ventricular volume, systolic time
intervals, and carotid and internal jugular venous pulses. (6;7;47)
The base frequencies of inductive plethysmographic transducers are
determined by inductance of transducer and the resistance and capacitance in the
oscillator circuitry. All these can be changed independently. For example.
increasing the number of turns of the transducer around the body part being
monitored, e.g., RC, AB or neck changes the oscillatory frequency of the signal
and improves the signal to noise ratio. By maximizing differences in oscillatory
signal frequencies between transducers, one can minimize electrical cross talk
between transducers thereby also increasing the signal to noise ratio between
adjacent inductive plethysmographic sensors. Another source of electrical noise
in the inductive plethysmographic signal is the cable carrying the
undermodulated signal to the demodulator module. This noise is minimized by
locating the oscillators directly on the transducer band with the inductive
plethysmographic hardware capable of accepting any number of oscillator
generated signals. Preliminary studies confirm greater consistency of peak
inspiratory flow and acceleration values by these hardware and transducer
operation modifications.
The current, commercially available inductive plethysmographic hardware
(61) translated changes in transducer inductance to a signal that corresponded
linearly to changes in cross sectional area underneath the band (60), at a rate
of 50 Hz, with a signal to noise ratio of approximately 100 to 1, when the
"signal" was a normal breath,
To increase data sampling rate from 50 points/s to 200 points/s, the
band frequency divider was reduced from 4096 cycles to 1024 cycles; band
oscillation frequency remained the same. To preserve and actually improve the
signal to noise ratio, two steps were taken. First, the oscillation period
counter was increased from 1O MHz to 40 MHz; keeping the oscillation period
resolution the same as in the 50 points/s hardware, Second, the isolation pot
cores used in the initial inductive plethysmographic hardware were replaced with
high performance toroids. The response of the pot cores was found to be
insufficient to allow accurate sampling to be accomplished in the new 5ms
(200Hz) window, but the new toroids yielded a better signal to noise ratio at
200Hz than the pot cores achieved, even at 50Hz.
The current commercially available inductive plethysmographic hardware
utilizes Xxxxxxxx 14O8PLOO-3B9 pot cores; in this rapid responsive system, these
were changed to Xxxxxxxx 768XT188-3F3 toroids. The change in material (from 3B9
to 3F3) was a tradeoff - yielding increased bandwidth for reduced gain. The
change in configuration from pot core to toroid yielded a more than offsetting
increase in gain in exchange for slightly more manufacturing difficulty.
The digital circuitry of the hardware was also modernized, changing from
discrete 74 series CMOS logic to an integrated FPGA (Xxxxxxxx PZ5128-Sl0A84).
This single FPGA contains all the digital logic of two inductive
plethysmographic channels and also has leftover capacity that serves as glue
Page 17
logic for the microcontroller. The microcontroller is now integrated onto the
same printed circuit card as the inductive plethysmographic channels, realizing
a single card QDC calibratable (58) inductive plethysmographic solution for the
first time. Utilization of surface mount technology and integrated FPGA reduced
the size of this single card to approximately half the size of the previous
inductive plethysmographic hardware card, which did not include the
microprocessor, a component that is necessary for QDC calibration and generation
of analog outputs. The two channel inductive plethysmographic channel system is
expanded to four to eight channels by keeping each oscillator on a separate base
frequency to avoid electrical crosstalk. This is implemented by replicating the
two-channel system, or using a higher density FPGA along with a higher
performance microcontroller such that additional inductive plethysmographic
channels are placed on a single card.
Claims for Rapid Response Inductive Plethysmograph System
----------------------------------------------------------
1. We have invented a rapid response inductive plethymographic system
that increases signal sampling rate by a factor of four. It hinges on reducing
the band frequency divider from 4096 cycles to 1024 cycles, increasing the
oscillation period counter from 10MHz to 40MHz and replacing isolation pot
cores used in current system with high performance toroids.
2. This system improves the ratio of signal to electrical noise.
3. Additional electronic improvements have been made to reduce the size
of the system and allow capability for additional inductive plethysmographic
channels on the same card that currently allows only two channels.
4. This system improves the measurement accuracy of peak inspiratory
flow and acceleration values.
5. The rapid sampling rate is necessary for accurate inductive
plethysmography breath waveform displays of breaths during high frequency
ventilation (respiratory strokes between 4 and 15 Hz).
6. The rapid response system is needed for rapid triggering of the
initiation of inspiratory inflation by mechanical ventilator devices.
7. The rapid system is required for timing accuracy of inductive
plethysmographic measurements of ventricular volume, systolic time intervals,
and carotid and internal jugular venous pulses.
The signal to noise ratio from the inductive plethysmographic system is
increased by increasing the turns of the transducer around the body part being
monitored.
9. The signal to noise ratio is also improved by mounting the
oscillator module directly on the transducer and hooking it to a demodulator
system on the body to eliminate the long recorder electrical cable, a major
source for the electrical noise.
Rapid Trigger System for Initiating Mechanical Ventilator Inflation
-------------------------------------------------------------------
Breaths
-------
Page 18
Introduction
In recent years, attention has been directed toward methods for
triggering initiation of inspiratory inflations by mechanical ventilators. For
babies, the concern has related to the delay and desynchronization owing to the
rapid breathing rates, intrinsic airway resistance, and transmission of the
pressure trigger (PT) or flow trigger (FT) pulse from the measurement site of
the trigger to the respirator. This delay that leads to asynchrony between
spontaneously breathing mechanically ventilated infants and the ventilator has
been associated with pneumothorax, intracranial hemorrhage, arid hemodynamic
instability. (38) To minimize trigger delay in babies, trigger pulses obtained
from sensors placed on the body surface such as the Grasby capsule, an
applanation device on the abdominal wall, and the impedance pneumograph have
been utilized as alternatives to devices on the airways. In adults, the major
concern dealing with triggering the effects of intrinsic PEEP and delay in
initiation the ventilator breath for overcoming such pressure with consequence
increase in work of breathing. Measurements of trigger effectiveness in terms of
delay, failure to trigger, and work of breathing have been made in models and
patients. The figure below illustrates the considerations in computing the delay
in the presence of intrinsic PEEP. below is reproduced from Figure 1 in the
paper by Xxxx et al. (36) From top to bottom, flow, esophageal pressure, and
airway pressure. The two solid lines identify on the esophageal pressure trace,
the inspiratory effort during pre-triggering. The initial portion of esophageal
pressure. between the onset of the negative deflection and the point
corresponding to the crossing of zero flow (dashed line) represents the effort
to overcome intrinsic PEEP. The second portion of the esophageal pressure trace,
between zero flow crossing and the point of its abrupt rise (and maximum
negative airway pressure), represents the effort to open the inspiratory valve
of the mechanical ventilator.
Page 19
EXHIBIT D
The following are the Reserved Products reserved and cross-licensed hereunder:
NIMS shall have the right to use the 1) LifeShirt garment or individual
Respibands and 2) LifeShirt module and/or 3) HandSpring PDA processor, and 4)
supporting software in stand-alone products that have monitoring and/or alarming
(if 510(k) approval is obtained by NIMS) functions. A "stand-alone product"
monitors a single patient and is connected to a nearby PC or polygraph recorder
for display of real-time physiological waveforms with cable or wireless links.
Monitoring of several stand-alone systems can only be accomplished with LAN to a
central PC station located within the facility, not off-site, This product will
be sold by NIMS only to hospital accounts, Any other facility that requests such
a device will be referred to XxxxXxxxx.xxx who may sell them the LifeShirt
System or refer the account back to NIMS for sale. These additional features,
when they become available, will be licensed to XxxxXxxxx.xxx under this
licensing agreement.
Page 20
RESEARCH AND CONSULTING AGREEMENT
This Research and Consulting Agreement (the "Agreement") is made and
entered into as of October 28, 1999 by and between XxxxXxxxx.xxx, Inc., a
Delaware corporation, whose business address is P. X. Xxx 000, Xxxx, Xxxxxxxxxx
00000 (hereinafter referred to as "XxxxXxxxx.xxx") and Non-Invasive Monitoring
Systems, Inc., a Florida corporation whose business address is 0000 Xxxx Xxxxxx,
Xxxxx Xxxxx, Xxxxxxx 00000 (hereinafter referred to as "NIMS").
RECITALS
WHEREAS, XxxxXxxxx.xxx, in connection with its business, has acquired certain
inventions, patents and patent rights, confidential information, proprietary
information and trade secrets from NIMS pursuant to that certain license
agreement between XxxxXxxxx.xxx and NIMS dated as of even date herewith (the
"License Agreement"); and
WHEREAS, XxxxXxxxx.xxx acknowledges that NIMS has expertise and confidential and
proprietary information of its own; and
WHEREAS, to enable NIMS to effectively perform its services under this
Agreement, it may be necessary for XxxxXxxxx.xxx to disclose to NIMS certain of
its inventions, proprietary or confidential information, and/or trade secrets
which may not be disclosed to other persons or entities by NIMS and NIMS may
need to divulge proprietary or confidential information to XxxxXxxxx.xxx which
may not be disclosed to other persons or entities by XxxxXxxxx.xxx.
NOW, THEREFORE, in consideration of the premises and mutual covenants of the
parties, it is agreed as follows:
AGREEMENT
1. Statement of Work. The services to be performed by NIMS are in support of
XxxxXxxxx.xxx's garment with embedded sensors that records and transmits data
over the Internet for respiration, ECG, and over 35 other physical and emotional
xxxxx xxxxx into a small digital recorder products and associated technology
(the "LifeShirt System"). The services generally shall consist of offering
expert advice, research support, hardware and software design, and direction of
testing for safety and effectiveness in the development and technical support of
the LifeShirt System. The design specifications, details and milestones
associated with these goals are set forth in the Statement of Work, attached and
incorporated as if fully set forth herein as Appendix A.
The performance of this Agreement and the Statement of Work pertaining
thereto shall be coordinated with the director of research and development (to
be hired) of XxxxXxxxx.xxx with concurrence from Xxxxxx Xxxxx, Chief Operating
Officer, except where mutually agreed upon in writing by XxxxXxxxx.xxx and NIMS.
Page 21
Attainment of the task completion milestones described in Appendix A
shall constitute the only performance obligations required to be achieved by
NIMS pursuant to this Agreement. NIMS acknowledges that XxxxXxxxx.xxx may raise
capital through debt or equity financing and that the task completion milestones
described in Appendix A may need to be revised to accommodate the requests of
any investors in XxxxXxxxx.xxx. NIMS will negotiate any modification in the
task completion milestones or request for additional services in good faith.
Additional services related or unrelated to the task completion
milestones included on Appendix A shall constitute an amendment to this
Agreement and shall be effective only if authorized in writing by the designated
representatives of both XxxxXxxxx.xxx and NIMS. Costs for such additional
services shall be calculated and billed separately and shall be in addition to
the compensation outlined hereinafter for this Agreement.
The parties acknowledge and agree that research projects which may or
may not be related to the LifeShirt System may be undertaken by NIMS either
during the term of this Agreement or in the future and that the compensation and
payment due to NIMS for such research projects shall be negotiated on a good
faith basis by the parties as such opportunities arise.
2. Transfer Of Intellectual Property. XxxxXxxxx.xxx shall retain all licensing
rights to the LifeShirt System technology pursuant to the terms and conditions
of the License Agreement. In addition, any and all rights to the inventions or
technologies related to the LifeShirt System which are developed by NIMS
pursuant to this Agreement or which arise from or are created by information
used in providing services under this Agreement (the "Derivative Patents") shall
be pursuant to the terms and conditions of the License Agreement.
3. Compensation and Payment. In consideration for the services and performance
milestones described in Appendix A, XxxxXxxxx.xxx agrees to pay NIMS a total of
two hundred sixty-eight thousand dollars ($268,000) in U.S. funds according to
the following schedule:
(i) Ten thousand dollars ($10,000) shall be payable within ten
(10) days of the execution of this Agreement;
(ii) Forty-three thousand dollars ($43,000) shall be due on
November 1, 1999 but payable by November 19, 1999 (the "Initial Installment
Payment"). NIMS agrees that the November 19, 1999 date can be reasonably delayed
provided that XxxxXxxxx.xxx notifies NIMS of such a delay prior to November 19,
1999 and such a delay is the result of a delay in the receipt of funds arising
from the private placement of the securities of XxxxXxxxx.xxx. Thereafter,
forty-three thousand Dollars ($43,000) is due and payable on the first day of
each mouth following the initial Installment Payment for a total of five months
(the "R&D Period"). At the end of the R&D Period, the LifeShirt System will be
submitted by NIMS for FDA approval (the "Submission") or if this is deemed
unnecessary by XxxxXxxxx.xxx and NIMS acting together, a letter to file in lieu
of a 501(k) Submission will be employed in order to release the Products for
marketing.
Page 22
Time is of the essence in this Agreement. If the attainment of the
Submission is delayed due to factors under the (i) sole control of
XxxxXxxxx.xxx; or (ii) requirements by FDA; or (iii) third parties responsible
for drafting the 501(k) Submission; or (iv) vendor(s) that supplies components
of the LifeShirt System (garment, electronics, HandSpring computer); or (v)
testing service(s) for meeting electrical safety requirements according to FDA
regulations; or (vi) any other Factor beyond NIMS' control, then NIMS shall have
a period of time equal to the length of any such delay (the "Cure Period") to
change or correct those circumstances so that NIMS can continue to perform
pursuant to the terms of this Agreement.
4. Reimbursable Expenses, NIMS shall make any necessary travel and hotel
reservatIons, if and only if such travel is pre-approved in writing by
XxxxXxxxx.xxx and XxxxXxxxx.xxx shall pay or reimburse NIMS for automobile
rental, hotel/motel rooms, air travel (tourist class domestically and business
class for overseas travel) and all other related expenses for any travel beyond
200 miles that NIMS must undertake in discharging its obligations under this
Agreement. XxxxXxxxx.xxx shall furnish at its facility, for NIMS's use in
conjunction with the services performed pursuant to this Agreement, office
space, telephone, fax, postage, online and other communications equipment. At
the beginning of the term of this Agreement and, thereafter, from time-to-time
(including, without limitation, in the event of any unforeseen changes in need
for such resources). NIMS will advise XxxxXxxxx.xxx on a "best efforts" basis in
writing of the equipment, materials, software, personnel and any other resources
necessary to discharge its obligations under this Agreement in accordance with
the design specifications set forth in the Statement of Work and XxxxXxxxx.xxx
will either purchase the materials directly or reimburse NIMS for such
expenditures, so long as all such purchases are pre-approved in writing by
XxxxXxxxx.xxx, with such approval not to be unreasonably withheld. All costs
shall be reimbursed to NIMS within thirty (30) days from invoicing.
5. 510(k), XxxxXxxxx.xxx agrees to advance (in the form of direct payment to
said parties) all costs of any third party consultants (pre-approved by
XxxxXxxxx.xxx in writing whose approval will not be unreasonably withheld),
required for providing templates and review of the 510(k) Submission
documentation which is prepared by NIMS under Good Manufacturing Practice
("GMP") and ISO 9001 guidelines and assisting with any related submission
policies and procedures (the "Submission Advances"). Any such Submission
Advances advanced by XxxxXxxxx.xxx will be recouped by XxxxXxxxx.xxx in the form
of a deduction from any royalty payments to be made by XxxxXxxxx.xxx to NIMS
pursuant to the License Agreement (the "Submission Recoupment"). However, under
no circumstances shall the Submission Recoupment exceed ten percent (10%) of the
total NIMS Royalties payable by XxxxXxxxx.xxx to NIMS for any annual period per
the License Agreement. Any Submission Recoupment remaining unpaid during such
annual period shall be carried forward to the next annual period up to a maximum
of ten percent (10%) and for each subsequent annual period until paid in full.
6. Equipment and Data. XxxxXxxxx.xxx will furnish to NIMS, without cost to NIMS,
use of equipment and data owned by XxxxXxxxx.xxx that XxxxXxxxx.xxx deems
reasonably necessary for NIMS performance of services under this Agreement. Upon
completion of the services or expiration of this Agreement, NIMS shall return to
XxxxXxxxx.xxx all such equipment and written material furnished by
XxxxXxxxx.xxx.
Page 23
7. Technical Notebook. NIMS shall transmit information to XxxxXxxxx.xxx to
encompass and maintain a notebook at XxxxXxxxx.xxx's principal place of business
which shall contain notes, ideas, outlines and summaries of activities performed
on behalf of XxxxXxxxx.xxx; and this notebook shall be the exclusive property of
XxxxXxxxx.xxx. XxxxXxxxx.xxx agrees and acknowledges that the information
contained in the notebook is also the property of NIMS and is only to be used
for purposes of accomplishing the terms and conditions of the Licensing
Agreement. Failure to maintain this notebook shall be considered a material
breach of this Agreement.
8. Reports. NIMS agrees to prepare a written progress report on a monthly basis,
to be provided to the parties designated on Section 1 herein on or about the
first of each month during the term of this Agreement.
9. Confidentiality. XxxxXxxxx.xxx and NIMS mutually covenant to maintain in
confidence any inventions, confidential or proprietary information or trade
secrets which are disclosed to the other in the course of discharging each
party's obligations under this Agreement. Unless otherwise stated in writing,
all inventions and information transferred to the other party shall be deemed to
be proprietary, confidential and a trade secret and both XxxxXxxxx.xxx and NIMS
agree to take all reasonable precautions to prevent any unauthorized disclosure
of any such inventions and information and not to make use of such inventions
and information, except for the purposes of this Agreement and the License
Agreement.
10. Term. This Agreement shall become effective on execution and shall continue
in effect until the end of the R&D Period (the "Term"). This Agreement
automatically renews on a month-to-month basis, under the same terms and
conditions, including the monthly payment under Section 2(ii) herein, unless and
until terminated by written notice given by either party at least thirty (30)
days prior to the end of the Term or any monthly period, if extended,
thereafter.
11. Assignment NIMS's obligations, rights and benefits under this Agreement are
personal to it and therefore (i) no such obligation, right or benefit shall be
subject to voluntary or involuntary alienation, assignment or transfer; and (ii)
NIMS may not delegate its duties or obligations hereunder. XxxxXxxxx.xxx may
assign this Agreement in the event of any merger, reorganization or
consolidation or upon the sale or transfer of all or substantially all of its
assets.
12. Notices. Unless otherwise specifically provided in this Agreement, all
notices or other communications (collectively and severally called "Notices")
required or permitted to be given under this Agreement, shall be in writing, and
shall be given by: (A) personal delivery (which form of Notice shall be deemed
to have been given upon delivery), (B) by telegraph or by private
airborne/overnight delivery service (which forms of Notice shall be deemed to
have been given upon confirmed delivery by the delivery agency), or (C) by
electronic or facsimile or telephonic transmission, provided the receiving party
has a compatible device or confirms receipt thereof (which forms of Notice shall
be deemed delivered upon confirmed transmission or confirmation of receipt).
Notices shall be addressed to the address set forth in the introductory section
of this Agreement, or to such other address, as the receiving party shall have
specified most recently by like Notice, with a copy to the other party.
Page 24
13. Choice of Law. This Agreement shall be governed according to the laws of the
state of California.
14. Entire Agreement. This Agreement supersedes any and all other agreements,
either oral or in writing, between the parties hereto with respect to the
services to be rendered by NIMS to Company and contains all of the covenants and
agreements between the parties with respect to the services to be rendered by
NIMS to Company in any manner whatsoever. Each party to this agreement
acknowledges that no representations, inducements, promises, or agreements,
orally or otherwise, have been made by any party, or anyone acting on behalf of
any party, which are not embodied herein, and that no other agreement,
statement, or promise not contained in this Agreement shall be valid or binding
on either party.
15. Amendments. Any amendment or modification of any provision of this Agreement
must be in writing, dated and signed by each party hereto.
16. Arbitration.
------------
(a) The parties hereby agree that all controversies) claims and matters
of difference shall be resolved by binding arbitration before the American
Arbitration Association (the "AAA") according to the rules and practices of the
AAA from time-to-time in force: provided however that the parties hereto reserve
their rights to seek and obtain injunctive or other equitable relief from a
court of competent jurisdiction, without waiving the right to compel such
arbitration pursuant to this section.
(b) Notwithstanding anything contained in sub-section (a) above to the
contrary, each party shall have the right to institute judicial proceedings
against the other party or anyone acting by, through or under such other party
in order to enforce the instituting party's rights hereunder through reformation
of contract, specific performance, injunction or similar equitable relief.
17. Severability. If any term or provision of this Agreement or the application
thereof to any person or circumstance shall, to any extent, be determined to be
invalid, illegal or unenforceable under present or future laws effective during
the term of this Agreement, then and, in that event: (A) the performance of the
offending term or provision (but only to the extent its application is invalid,
illegal or unenforceable) shall be excused as if it had never been incorporated
into this Agreement, and, in lieu of such excused provision, there shall be
added a provision as similar in terms and amount to such excused provision as
may be possible and be legal, valid and enforceable, and (B) the remaining part
of this Agreement (including the application of the offending term or provision
to persons or circumstances other than those as to which it is held invalid,
illegal or unenforceable) shall not be affected thereby and shall continue in
full force and effect to the fullest extent provided by law.
18. Preparation of Agreement, it is acknowledged by each party that such party
either had separate and independent advice of counsel or the opportunity to
avail itself or himself of same. In light of these facts it is acknowledged that
no party shall be construed to be solely responsible for the drafting hereof,
and therefore any ambiguity shall not be construed against any party as the
alleged draftsman of this Agreement.
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19. Waiver. A waiver of any breach of any provision of this Agreement shall not
be construed as a continuing waiver of other breaches of the same or other
provisions of this Agreement.
20. Cross-Breach. The parties acknowledge and agree that a material breach of
the License Agreement shall be deemed a breach of this Agreement.
21. Counterparts. This Agreement may be executed manually or by facsimile
signature in two or more counterparts, each of which shall be deemed an
original, and all of which together shall constitute but one and the same
instrument.
WHEREFORE, the parties have executed this Agreement on the date
first written above.
"NIMS" "XxxxXxxxx.xxx"
Non-Invasive Monitoring Systems, Inc. XxxxXxxxx.xxx, Inc.
By: /s/ Xxxxxx X. Xxxxxxx By: /s/ [ILLEGIBLE]
----------------------- -------------------
Its: CEO Its: Chief Operating Officer
-------------- ------------------------
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Appendix "A"
Statement of Work
Non-Invasive Monitoring Systems, Inc. (NIMS)
Development for XxxxXxxxx.xxx, Inc.
NIMS shall complete the following engineering and software development tasks
within a six month time period: Development of miniature version of Respitrace
Plus Processor or equivalent of three Repitrace 200 units and Respitrace PT,
including; design work on existing boards preparatory to the miniaturization
process, consultation on selection of miniaturization vendor, supervision and
consultation of miniaturization process, consultation, supervision, and testing
of the miniaturization processor, consultation on selection of processor
manufacturer, supervision of manufacturer prior to commercial production, and
supervision of testing commercial product to be sure that it meets
specifications.
1. Development of a LifeShirt System Jersey, including: development o
prototype LifeShirt System jersey (the "LifeShirt System Jersey")
attendance at locus groups whose expenses and selection are
XxxxXxxxx.xxx's responsibility, for feedback as to the acceptability
of the patient-LifeShirt System interface, redesign based on consumer
testing, possible second round of consumer tests, consultation on
selection of manufacturer, supervision and consultation of a
production model garment, testing of commercial production units to be
sure that products meet specifications.
2. PalmPilot HandSpring,Windows CE, or other PDA or digital recorder
hardware and software development including; selection of most cost
effective off-the-shelf device, development of software to accept
input of trend and waveform data from LifeShirt System Jersey, module
connected to HandSpring PDA processor, development of customer
interface to input symptoms and record these symptoms against a
timeline to compare with physical signs, testing and debugging of
software. Software completion within the six-month time period of the
R&D agreement will be made at NIMS best efforts but cannot be
guaranteed owing to the limited availability of two programmers and
inexperience in translating RespiEvents software into PalmPilot
operating system.
3. RespiEvents software modifications for LifeShirt System monitoring
including: development of RespiEvents version to run at data hub with
multiple simultaneous technicians and physicians sharing data,
development of reporting formats that can be; emailed, faxed, posted
to a web page. Consultation with XxxxXxxxx.xxx hub personnel to
integrate software such that RespiEvents can be integrated seamlessly
with data hub customer tracking software for billing and security
verification among many other functions.
4. Cooperate and consult with XxxxXxxxx.xxx in their development of the
Internet portal for receiving LifeShirt System data.
5. Verification and validation of hardware and software suitable for
510(k) FDA submission including preparation of documentation and
supervision of prepuration of FDA submission, working in collaboration
with outside FDA consultants to expedite the approval of: LifeShirt
System Jersey, module connected to HandSpring PDA processor and
RespiEvents as needed depending on decision to be made by LifeShirt
management with NIMS consultation of whether to file or send letter to
file on specific products, also
Page 27
supervise electrical safety testing of LifeShirt System and any other
testing that is required for regulatory approval.
6. General consultation on the development of marketing strategy and
marketing plans for the LifeShirt System including review of draft
marketing and advertising materials to be sure that any claims made
are accurate and are not misrepresenting product capabilities.
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