Exhibit 10.2

 

LICENSE AGREEMENT

 

THIS LICENSE AGREEMENT (the “Agreement”) is made and entered into the 25th day
of July, 2008 to be effective as of the effective date (the “Effective Date”),
between Artann Laboratories, Inc., (“Artann”) a Delaware corporation, and
ProUroCare Medical Inc., (“ProUroCare”) a Nevada corporation.

 

WITNESSETH:

 

WHEREAS, ProUroCare has expertise and intellectual property in the field of
urologic products and applications; and

 

WHEREAS, Artann has developed expertise and intellectual property in the area of
a prostate mechanical imaging system; and

 

WHEREAS,  ProUroCare and Artann desire to enter into (i) this Agreement and
(ii) a Development and Commercialization Agreement of even date herewith (the
“Development and Commercialization Agreement”) whereby ProUroCare and Artann
will develop and commercialize various prostate mechanical imaging systems (the
“PMI Systems”); and

 

WHEREAS, Artann desires to grant to ProUroCare certain patent and technology
license rights with respect to the PMI System.

 

AGREEMENTS:

 

NOW THEREFORE, in consideration of the representations, warranties, covenants
and agreements contained herein, and for other valuable consideration, the
receipt and adequacy of which is hereby acknowledged, the parties mutually agree
as follows:

 

ARTICLE 1

DEFINITIONS

 

1.1           SPECIFIC DEFINITIONS.  AS USED IN THIS AGREEMENT, THE FOLLOWING
TERMS SHALL HAVE THE MEANINGS SET FORTH OR AS REFERENCED BELOW:

 

“2008 ProUroCare Offering” means one or more public or private equity offerings
that raises at least Four Million Dollars ($4,000,000.00) by ProUroCare after
the date of signing of this Agreement.

 

“2008 Offering Price” means the weighted average price that ProUroCare shares
have traded over the forty five (45) day period prior to the date of the closing
of the 2008 ProUroCare Offering.

 

“510K” means an application filed with FDA pursuant to § 510(k) of the Medical
Device Amendments of 1976 to the Federal Food, Drug and Cosmetic Act to initiate
marketing and sales in the U.S.

 

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“Agreement” means this Agreement and all Exhibits hereto.

 

“Artann” means Artann Laboratories, Inc.

 

“Artann Patents” means patents listed on Exhibit A attached hereto (including
all additions, divisions, continuations, continuations-in-part, substitutions,
extensions, patent form extensions, reissues and renewals thereof) that are
owned by Artann or under which Artann has rights and patent applications listed
on Exhibit A attached hereto (including patents issued thereon) that are owned
by Artann or under which Artann has rights.

 

“Artann Technology” means all expertise, inventions, concepts, processes,
procedures, data, materials, know-how and information (other than the Artann
Patents and Artann Trade Secrets) which are used or useful in the use,
manufacture or sale of a PMI System and to which Artann has rights.

 

“Artann Trade Secrets” means the Confidential Information of Artann (e.g.,
software source code) that are used or useful in the use, manufacture or sale of
a PMI System and which provide a sustainable competitive technology and which
qualify fully as trade secret information within the normal and common meaning
of that term under the laws of the State of New Jersey.

 

“CE Mark Approval” means approval of the right to affix the CE Mark on Products
for their exploitation in the European Economic Area by performing all necessary
tasks under the then-current Medical Device Directive, as promulgated by the
European Union.

 

“Confidential Information” means know-how, trade secrets, and unpublished
information disclosed (whether before or during the term of this Agreement) by
one of the parties (the “disclosing party”) to the other party (the “receiving
party”) or generated under this Agreement, excluding information which:

 

(A)           WAS ALREADY IN THE POSSESSION OF RECEIVING PARTY PRIOR TO ITS
RECEIPT FROM THE DISCLOSING PARTY (PROVIDED THAT THE RECEIVING PARTY IS ABLE TO
PROVIDE THE DISCLOSING PARTY WITH REASONABLE DOCUMENTARY PROOF THEREOF);

 

(B)           IS OR BECOMES PART OF THE PUBLIC DOMAIN BY REASON OF ACTS NOT
ATTRIBUTABLE TO THE RECEIVING PARTY;

 

(C)           IS OR BECOMES AVAILABLE TO RECEIVING PARTY FROM A SOURCE OTHER
THAN THE DISCLOSING PARTY WHICH SOURCE, TO THE BEST OF RECEIVING PARTY’S
KNOWLEDGE, HAS RIGHTFULLY OBTAINED SUCH INFORMATION AND HAS NO OBLIGATION OF
NON-DISCLOSURE OR CONFIDENTIALITY TO THE DISCLOSING PARTY WITH RESPECT THERETO;

 

(D)           IS MADE AVAILABLE BY THE DISCLOSING PARTY TO A THIRD PARTY
UNAFFILIATED WITH THE DISCLOSING PARTY ON AN UNRESTRICTED BASIS;

 

(E)           HAS BEEN INDEPENDENTLY DEVELOPED BY THE RECEIVING PARTY WITHOUT
BREACH OF THIS AGREEMENT OR USE OF ANY CONFIDENTIAL INFORMATION OF THE OTHER
PARTY; OR

 

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(F)            HAS BEEN OR MUST BE PUBLICLY DISCLOSED BY REASON OF LEGAL,
ACCOUNTING OR REGULATORY REQUIREMENTS BEYOND THE REASONABLE CONTROL, AND DESPITE
THE REASONABLE EFFORTS OF THE RECEIVING PARTY.

 

All Confidential Information disclosed by one party to the other under this
Agreement with the exception of PMI Documentation and Artann Trade Secrets shall
be in writing and bear a legend “Company Confidential” or words of similar
import or, if disclosed in any manner other than writing, shall be preceded or
followed by an oral statement indicating that the information is Company
proprietary or confidential, with an identification of the particular
information that is Company proprietary or confidential.  PMI Documentation and
Artann Trade Secrets will be considered Confidential Information by default.

 

“Effective Date” means ten (10) days after close of the 2008 ProUroCare Offering
or November 30, 2008, whichever is first to occur.

 

“Expired” means, with respect to a particular patent, the patent’s expiration,
abandonment, cancellation, disclaimer, lapse due to the failure to pay
maintenance fees or annuities, award to another party other than Artann in an
interference proceeding, or declaration of invalidity or unenforceability by a
court or other authority of competent jurisdiction (including final rejection in
a re-examination or re-issue proceeding) in an unappealed or unappealable
decision.  “Unexpired” means a patent that has not Expired.

 

“FDA” means the United States Food and Drug Administration or any successor
entity thereto.

 

“FDA Approval” means approval by the FDA of a 510K or PMA to commercially sell a
Product.

 

“Field of Use” means diagnosis or treatment of urologic disorders of the
prostate, kidney or liver.

 

“Generation V PMI System” means the most current PMI System existing as of the
Effective Date of the Agreement.

 

“Invention” means any invention, discovery, know-how, trade secret, data,
information, technology, process or concept, whether or not patented or
patentable, and whether or not memorialized in writing.

 

“Licensed Product” means the Product which:

 

i)              but for the license granted herein, the manufacture, use or sale
would infringe any Valid Claim of an Artann Patent, or

 

ii)             is produced through the use of an Artann Trade Secret.

 

“Licensed Product Royalty” means the royalty payable under Section 3.2 for the
license set forth in Section 2.1(a) to Artann Patents and Artann Trade Secrets.

 

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“Licensed Technology Royalty” means the royalty payable under Section 3.2 for
the license set forth in Section 2.1(b) to Artann Technology.

 

“Liens” means liens, mortgages, charges, security interests, claims, voting
trusts, pledges, encumbrances, assessments, restrictions or spousal interests of
any nature.

 

“Net Sales” with respect to a particular period means the amounts that
ProUroCare, or its sublicensees invoice third parties for sales, lease or use
(excluding use in clinical trials or prior to the time of FDA approval of the
Product) of Product during such period, less:  (a) any refunds, credits and any
customer allowances actually granted to the customer; (b) discounts and rebates
actually taken; (c) commissions actually paid to third party sales agents or
representatives; (d) any sales, use, occupation or excise taxes, duties or other
governmental charges imposed on the sale of Products, to the extent included in
the invoice price and not reimbursed by a third party; and (e) any freight,
postage or insurance included therein, in each case as determined from the books
and records of ProUroCare and sublicensees.

 

“PMA” means a pre-market approval application filed with the FDA as more fully
defined under 21 U.S.C. Section 360(e), to obtain permission to initiate
marketing and sales in the U.S.

 

“PMI Documentation” means software and software source code (if, and to the
extent such code is not maintained as an Artann Trade Secret); any and all
drawings, schematics, assembly information, methods, specifications, know how,
procedures, processes, designs, technical data and engineering reports necessary
and/or useful in the development, use and manufacture of a PMI System.

 

“PMI System” means the Artann’s prostate mechanical imaging system consisting of
a 1) transrectal probe with pressure sensor arrays, 2) positioning system, 3)
data processing unit, 4) real time imaging display, and 5) operating system, as
generally outlined in the journal article entitled “Prostate Mechanical
Imaging:  A New Method for Quantitative Prostate Assessment” by Weiss, et al.

 

“Product” means a PMI System including all improvements and modifications
applicable thereto, except for improvements and modifications that are developed
for a different medical device which have only tangential application to a PMI
System and which were developed independently of any activities conducted under
this Agreement and/or the Development and Commercialization Agreement.

 

“ProUroCare” means ProUroCare Medical, Inc.

 

“Territory” means anywhere and everywhere in the world.

 

“Valid Claim” means any claim in an issued, unexpired patent which has not been
held unenforceable or invalid by a court of competent jurisdiction or an
administrative agency having authority over patents, in a final judgment that is
unappealable or unappealed within the time allowed for approval.

 

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1.2           DEFINITIONAL PROVISIONS.

 

(A)           THE WORDS “HEREOF,” “HEREIN,” AND “HEREUNDER” AND WORDS OF SIMILAR
IMPORT, WHEN USED IN THIS AGREEMENT, SHALL REFER TO THIS AGREEMENT AS A WHOLE
AND NOT TO ANY PARTICULAR PROVISIONS OF THIS AGREEMENT.

 

(B)           TERMS DEFINED IN THE SINGULAR SHALL HAVE A COMPARABLE MEANING WHEN
USED IN THE PLURAL, AND VICE-VERSA.

 

(C)           REFERENCES TO AN “EXHIBIT” OR TO A “SCHEDULE” ARE, UNLESS
OTHERWISE SPECIFIED, TO ONE OF THE EXHIBITS OR SCHEDULES ATTACHED TO OR
REFERENCED IN THIS AGREEMENT, AND REFERENCES TO AN “ARTICLE” OR A “SECTION” ARE,
UNLESS OTHERWISE SPECIFIED, TO ONE OF THE ARTICLES OR SECTIONS OF THIS
AGREEMENT.

 

(D)           THE TERM “PERSON” INCLUDES ANY INDIVIDUAL, PARTNERSHIP, JOINT
VENTURE, CORPORATION, TRUST, UNINCORPORATED ORGANIZATION OR GOVERNMENT OR ANY
DEPARTMENT OR AGENCY THEREOF.

 

ARTICLE 2

LICENSE

 

2.1           GRANT OF LICENSE.

 

(A)           SUBJECT TO THE TERMS AND CONDITIONS OF THIS AGREEMENT, INCLUDING
BUT NOT LIMITED TO SECTIONS 3.1 – 3.10, 4.1(B) AND 4.2(B), 6.1 – 6.3, ARTANN
HEREBY GRANTS TO PROUROCARE AN EXCLUSIVE, WORLDWIDE, SUBLICENSABLE LICENSE TO
ARTANN PATENTS AND ARTANN TRADE SECRETS TO (I) MAKE, HAVE MADE, USE, MARKET,
OFFER FOR SALE, SELL, HAVE SOLD, DISTRIBUTE, HAVE DISTRIBUTED, IMPORT, HAVE
IMPORTED AND OTHERWISE EXPLOIT PRODUCTS IN THE FIELD OF USE, AND (II) PRACTICE
METHODS COVERED BY THE ARTANN PATENTS AND ARTANN TRADE SECRETS TO MAKE, HAVE
MADE, USE, MARKET, OFFER FOR SALE, SELL, HAVE SOLD, DISTRIBUTE, HAVE
DISTRIBUTED, IMPORT, HAVE IMPORTED AND OTHERWISE EXPLOIT PRODUCTS IN THE FIELD
OF USE.

 

(B)           SUBJECT TO THE TERMS AND CONDITIONS OF THIS AGREEMENT, INCLUDING
BUT NOT LIMITED TO SECTIONS 3.1 – 3.10, 4.1(B) AND 4.2(B), 6.1 – 6.3, ARTANN
HEREBY GRANTS TO PROUROCARE A NON-EXCLUSIVE, WORLDWIDE, SUBLICENSABLE LICENSE TO
THE ARTANN TECHNOLOGY TO (I) MAKE, HAVE MADE, USE, MARKET, OFFER FOR SALE, SELL,
HAVE SOLD, DISTRIBUTE, HAVE DISTRIBUTED, IMPORT, HAVE IMPORTED AND OTHERWISE
EXPLOIT PRODUCTS IN THE FIELD OF USE, AND (II) PRACTICE METHODS COVERED BY THE
ARTANN TECHNOLOGY TO MAKE, HAVE MADE, USE, MARKET, OFFER FOR SALE, SELL, HAVE
SOLD, DISTRIBUTE, HAVE DISTRIBUTED, IMPORT, HAVE IMPORTED AND OTHERWISE EXPLOIT
PRODUCTS IN THE FIELD OF USE.

 

2.2           SUBLICENSES.  THE LICENSE UNDER SECTION 2.1 INCLUDES THE RIGHT TO
SUBLICENSE WITHIN THE SCOPE THEREOF, SUBJECT TO THE RIGHT OF ARTANN TO APPROVE
EACH SUCH SUBLICENSE WHICH RIGHT SHALL NOT BE WITHHELD EXCEPT FOR GOOD AND
JUSTIFIABLE CAUSE.  PROUROCARE SHALL PROMPTLY NOTIFY ARTANN OF THE GRANT OF EACH
SUBLICENSE AND PROVIDE ARTANN WITH A COPY OF THE FINAL EXECUTED SUBLICENSE
AGREEMENT.  DURING THE TERM OF THIS AGREEMENT, PROUROCARE SHALL BE RESPONSIBLE
FOR THE FAILURE BY ITS SUBLICENSEES TO COMPLY WITH, AND DURING THE TERM OF THIS
AGREEMENT PROUROCARE SHALL HAVE THE OBLIGATION TO GUARANTEE THE COMPLIANCE BY
EACH OF ITS SUBLICENSEES WITH ALL RELEVANT RESTRICTIONS, LIMITATIONS AND
OBLIGATIONS IN THIS AGREEMENT.  ANY SUBLICENSE GRANTED BY

 

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PROUROCARE SHALL SURVIVE ANY EXPIRATION OR TERMINATION OF THIS AGREEMENT AND BE
AUTOMATICALLY ASSIGNED TO ARTANN, INCLUDING THE RIGHT OF ARTANN TO RECEIVE
DIRECTLY FROM THE SUBLICENSEE(S), ALL COMPENSATION DUE UNDER THESE RESPECTIVE
SUBLICENSES.

 

2.3           PATENT APPLICATIONS.  UNLESS OTHERWISE SPECIFIED, ARTANN SHALL
HAVE THE RIGHT TO APPLY FOR, PROSECUTE, OR CAUSE THE ISSUANCE, AMENDMENT,
ABANDONMENT, MAINTENANCE, RE-EXAMINATION OR REISSUE OF ANY PATENTS ON OR
RELATING TO PRODUCTS AND SHALL BEAR THE EXPENSE RELATED THERETO.  IN THE EVENT
THAT ARTANN DECLINES TO APPLY FOR A PATENT UPON AN INVENTION MADE BY ARTANN, ITS
EMPLOYEES, AGENTS AND/OR REPRESENTATIVES ON OR RELATING TO PRODUCTS THAT
PROUROCARE BELIEVES IS PATENTABLE AND SHOULD BE PATENTED, PROUROCARE, UPON
PROVIDED 30 DAYS WRITTEN NOTICE, SHALL HAVE THE OPTION OF PROCEEDING TO OBTAIN
PATENT(S), UPON SUCH INVENTION AS ITS SOLE COST AND EXPENSE.  ARTANN SHALL
COOPERATE WITH PROUROCARE AND PROVIDE SUCH DOCUMENTATION AND ASSISTANCE AND
SHALL EXECUTE ANY DOCUMENTS AS MAY BE REASONABLY NECESSARY TO FACILITATE
OBTAINING SUCH PATENT(S).  ANY AND ALL SUCH PATENTS WHETHER OBTAINED BY ARTANN
OR PROUROCARE SHALL BE OWNED BY ARTANN BUT SHALL BE ENCOMPASSED WITHIN THE
LICENSE GRANT OF SECTION 2.1(A).

 

2.4           ACCESS TO PMI DOCUMENTATION.  PROUROCARE SHALL HAVE FULL ACCESS
AND THE RIGHT TO USE ALL PMI DOCUMENTATION AND SHALL TREAT ALL SUCH PMI
DOCUMENTATION AS CONFIDENTIAL INFORMATION, WHETHER OR NOT MARKED AS ARTANN
PROPERTY, ARTANN CONFIDENTIAL OR WORDS OF SIMILAR IMPORT AND SHALL NOT DISCLOSE
SUCH PMI DOCUMENTATION TO ANY THIRD PARTIES EXCEPT AS MAY BE NEEDED OR USEFUL TO
ARTANN EMPLOYEES AND AGENTS AND FACILITATE THE DEVELOPMENT, REFINEMENT, USE,
MANUFACTURE OR MARKETING AND SALE OF PRODUCT AND EXCEPT UNDER CONDITIONS UNDER
WHICH THESE EMPLOYEES, AGENTS OR THIRD PARTIES ARE BOUND IN WRITING TO MAINTAIN
THE CONFIDENTIALITY OF SUCH PMI DOCUMENTATION OR AS REQUIRED BY LAW OR FDA.

 

2.5           GENERATION V PMI SYSTEMS.  ARTANN SHALL TRANSFER POSSESSION OF THE
FIVE (5) FULLY FUNCTIONAL GENERATION V PMI SYSTEMS EXISTING AS OF THE EFFECTIVE
DATE OF THE AGREEMENT FOR USE IN 1) THE CONDUCT OF FDA APPROVED CLINICAL TRIALS,
2) FOR INVENTOR PRESENTATIONS, AND 3) CONTRACT MANUFACTURER ASSESSMENT.  THE USE
OF EACH OF THE FIVE (5) GENERATION V PMI SYSTEMS SHALL BE MUTUALLY ACCEPTABLE TO
ARTANN AND PROUROCARE AND SHALL BE IN ACCORD WITH ANY NIH GRANT REQUIREMENTS
APPLICABLE TO THE DEVELOPMENT OF THE PRODUCT.  ARTANN SHALL USE BEST EFFORTS TO
EFFECT THE TRANSFER OF EACH OF THESE FIVE (5) GENERATION V PMI SYSTEMS FOR THE
USER SPECIFIED ABOVE AS QUICKLY AFTER THE EFFECTIVE DATE OF THE AGREEMENT AS
REASONABLY POSSIBLE.  OWNERSHIP TO THESE FIVE (5) GENERATION V PMI SYSTEMS SHALL
TRANSFER FROM ARTANN TO PROUROCARE UPON THE DATE OF FIRST COMMERCIAL SALE OF THE
GENERATION V PMI SYSTEM, SUBJECT TO THE INVENTORY AND ACCOUNTABILITY
REQUIREMENTS AS SPECIFIED BY THE DEPARTMENT OF HEALTH AND HUMAN SERVICES.  IT IS
UNDERSTOOD THAT ALL CHOSEN INVESTIGATIONAL SITES SHALL BE ACCEPTABLE TO ARTANN,
SHALL NOT CONFLICT WITH THE NIH GRANT OBJECTIVES.

 

ARTICLE 3
LICENSE FEE, ROYALTIES AND OTHER CONSIDERATION

 

3.1           UP FRONT LICENSE FEE.  AT THE EFFECTIVE DATE, PROUROCARE SHALL PAY
TO ARTANN AN “UP FRONT LICENSE FEE” OF SIX HUNDRED THOUSAND DOLLARS
($600,000.00) AND EQUITY (I.E., SHARES OF STOCK) IN PROUROCARE HAVING A VALUE OF
APPROXIMATELY FIVE HUNDRED THOUSAND DOLLARS ($500,000.00) AS OF THE DATE SUCH
EQUITY IS PROVIDED TO ARTANN.  THE EXACT NUMBER OF SHARES OF

 

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STOCK IN PROUROCARE PROVIDED TO ARTANN HEREBY SHALL EQUAL 500,000 DIVIDED BY THE
2008 OFFERING PRICE PER SHARE OF PROUROCARE STOCK IN A 2008 PROUROCARE
OFFERING.  THE PMI DOCUMENTATION POSSESSED BY ARTANN ON THE GENERATION V PMI
SYSTEM IS PROVIDED TO PROUROCARE UPON CONFIRMED RECEIPT OF THE UP FRONT LICENSE
FEE.

 

3.2           LICENSE ROYALTY.  PROUROCARE SHALL PAY ARTANN A ROYALTY EQUAL TO
THE LICENSED PRODUCT ROYALTY PLUS THE LICENSED TECHNOLOGY ROYALTY.  SUCH ROYALTY
PAYMENTS ARE TO BE MADE WITHIN THIRTY (30) DAYS FOLLOWING EACH CALENDAR QUARTER
END.

 

(A)           THE LICENSED PRODUCT ROYALTY SHALL APPLY TO LICENSED PRODUCT AND
SHALL EQUAL FOUR PERCENT (4%) ON THE FIRST THIRTY MILLION DOLLARS
($30,000,000.00) OF NET SALES, THREE PERCENT (3%) ON THE NEXT SEVENTY MILLION
DOLLARS ($70,000,000.00) OF NET SALES AND TWO PERCENT (2%) ON NET SALES OVER ONE
HUNDRED MILLION DOLLARS ($100,000,000.00) OF LICENSED PRODUCT.

 

(B)           THE LICENSED TECHNOLOGY ROYALTY SHALL APPLY FROM THE DATE OF FIRST
COMMERCIAL SALE OF PRODUCT UNTIL THE EARLIER OF DECEMBER 31, 2016 OR THE DATE OF
LAST COMMERCIAL SALE OF PRODUCT AND SHALL EQUAL ONE PERCENT (1%) OF SUCH NET
SALES.

 

3.3           MINIMUM ROYALTIES.  PROUROCARE AGREES THAT THE MINIMUM ANNUAL
ROYALTY PAYABLE UNDER SECTION 3.2 SHALL BE EQUAL TO FIFTY THOUSAND DOLLARS
($50,000.00) PER YEAR FOR EACH OF THE FIRST TWO (2) YEARS AFTER FDA APPROVAL FOR
COMMERCIAL SALE AND ONE HUNDRED THOUSAND DOLLARS ($100,000.00) PER YEAR FOR EACH
YEAR THEREAFTER UNTIL TERMINATION OR EXPIRATION OF THIS AGREEMENT.  EACH SUCH
MINIMUM ROYALTY PAYMENT SHALL BE MADE WITHIN THIRTY (30) DAYS FOLLOWING THE
PERIOD FOR WHICH SUCH ANNUAL ROYALTY PAYMENT IS DUE.  THESE MINIMUM ANNUAL
ROYALTY PAYMENTS ARE NONREFUNDABLE BUT FULLY CREDITABLE AGAINST ANY ROYALTY DUE
AND PAYABLE FOR THAT YEAR PURSUANT TO SECTION 3.2.

 

3.4           RECORDS AND ACCOUNTING.  PROUROCARE SHALL KEEP COMPLETE AND
ACCURATE RECORDS OF THE LATEST THREE (3) YEARS THAT THIS AGREEMENT IS IN
EFFECT.  ARTANN SHALL HAVE THE RIGHT ANNUALLY AT ITS OWN EXPENSE TO HAVE AN
INDEPENDENT, CERTIFIED PUBLIC ACCOUNTANT, REVIEW SUCH RECORDS UPON REASONABLE
NOTICE AND DURING REASONABLE BUSINESS HOURS FOR THE PURPOSES OF VERIFYING THE
ROYALTIES PAYABLE TO ARTANN UNDER SECTION 3.2.  RESULTS OF SUCH REVIEW SHALL BE
MADE AVAILABLE TO BOTH PARTIES.  IF THE REVIEW REFLECTS AN UNDERPAYMENT OF
ROYALTIES TO ARTANN, SUCH UNDERPAYMENT SHALL BE PROMPTLY REMITTED TO ARTANN WITH
INTEREST AT ONE AND ONE-HALF PERCENT (1.5%) PER MONTH.  IF THE UNDERPAYMENT IS
EQUAL TO OR GREATER THAN FIVE PERCENT (5%) OF THE ROYALTY AMOUNT THAT WAS
OTHERWISE DUE, PROUROCARE SHALL PAY ALL OF THE COSTS OF SUCH REVIEW.

 

3.5           CURRENCY OF PAYMENTS.  ALL ROYALTY PAYMENTS UNDER THIS AGREEMENT
SHALL BE MADE IN U.S. DOLLARS BY WIRE TRANSFER TO SUCH BANK ACCOUNT OR BANK
ACCOUNTS AS ARTANN SHALL DESIGNATE FROM TIME TO TIME.  ANY PAYMENTS DUE
HEREUNDER ON SALES OUTSIDE OF THE UNITED STATES SHALL BE PAYABLE IN U.S. DOLLARS
AT THE RATE OF EXCHANGE OF THE CURRENCY OF THE COUNTRY IN WHICH THE SALES ARE
MADE AS REPORTED IN THE NEW YORK EDITION OF THE WALL STREET JOURNAL FOR THE LAST
BUSINESS DAY OF THE QUARTER FOR WHICH THE ROYALTIES ARE PAYABLE.

 

3.6           NO PATENT CHALLENGE.  PROUROCARE AGREES NOT TO CHALLENGE THE
VALIDITY OF ANY PATENT ON EXHIBIT A IN ANY COURT OR ADMINISTRATIVE PROCEEDING
BEFORE THE PATENT AND TRADEMARK OFFICE.

 

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3.7           GRANT BACK.  SUBJECT TO THE TERMS AND PROVISIONS HEREOF,
PROUROCARE HEREBY GRANTS TO ARTANN A ROYALTY-FREE NONEXCLUSIVE, WORLDWIDE PATENT
LICENSE TO MAKE, USE, SELL, IMPORT, HAVE IMPORTED AND OTHERWISE EXPLOIT DEVICES
OUTSIDE THE FIELD OF USE ON INVENTIONS MADE AND PATENTED BY PROUROCARE ON THE
PRODUCT.

 

3.8           SUBLICENSE INCOME.  PROUROCARE AGREES TO PAY ARTANN TWENTY-FIVE
PERCENT (25%) OF THE NET PROCEEDS OF ANY COMPENSATION IT RECEIVES FROM ANY
SUBLICENSE GRANTED UNDER THIS AGREEMENT.

 

3.9           OBSERVATION RIGHTS.  NOUNE OR ARMEN SARVAZYAN SHALL BE GRANTED THE
RIGHT TO OBSERVE MEETINGS OF PROUROCARE’S BOARD OF DIRECTORS IN PERSON OR VIA
TELEPHONE CONFERENCE THROUGH CALENDAR YEAR 2011 AND THEREAFTER AS MUTUALLY
AGREED BY THE PARTIES.  IT SHALL BE ARTANN’S OPTION AS TO WHICH INDIVIDUAL SITS
IN ON ANY BOARD MEETING.  NOTICE OF UPCOMING BOARD MEETINGS SHALL BE PROVIDED TO
ARTANN AT THE SAME TIME THAT NOTICE IS GIVEN TO MEMBERS OF PROUROCARE’S BOARD OF
DIRECTORS.

 

3.10         FUTURE PATENT LICENSES.  PROUROCARE SHALL HAVE A “RIGHT OF FIRST
NEGOTIATION” WITH ARTANN REGARDING THE GRANT OF ANY PATENT OR TRADE SECRET
LICENSE ON THE PRODUCT IN THE FIELD OF USE THAT IS NOT ENCOMPASSED WITHIN THE
LICENSE SET FORTH IN SECTION 2.1(A).  THE “RIGHT OF FIRST NEGOTIATION” MEANS THE
RIGHT OF PROUROCARE TO NEGOTIATE EXCLUSIVELY WITH ARTANN FOR A PERIOD OF NINETY
(90) DAYS (THE “PERIOD OF EXCLUSIVITY”) FROM THE DATE OF FIRST NOTICE TO
PROUROCARE BY ARTANN.  IF AN AGREEMENT IS NOT REACHED DURING THIS “PERIOD OF
EXCLUSIVITY”, ARTANN MAY PROVIDE A LICENSE TO A THIRD PARTY, BUT ONLY UPON TERMS
WHICH ARE BETTER THAN THOSE OFFERED BY PROUROCARE DURING THE “PERIOD OF
EXCLUSIVITY”.

 

ARTICLE 4
CERTAIN REPRESENTATIONS, WARRANTIES AND INDEMNITIES

 

4.1           REPRESENTATIONS AND WARRANTIES.

 

(A)           ARTANN REPRESENTS AND WARRANTS TO PROUROCARE THAT THE EXECUTION
AND DELIVERY BY ARTANN OF THIS AGREEMENT AND THE PERFORMANCE BY ARTANN OF ITS
OBLIGATIONS HEREUNDER HAVE BEEN DULY AUTHORIZED BY ALL REQUISITE CORPORATE
ACTION AND WILL NOT VIOLATE ANY PROVISION OF LAW, ANY ORDER OF ANY COURT OR
OTHER AGENCY OF GOVERNMENT, THE ARTICLES OF INCORPORATION OR BYLAWS OF ARTANN,
AS AMENDED, OR ANY PROVISION OF ANY INDENTURE, AGREEMENT OR OTHER INSTRUMENT TO
WHICH ARTANN OR ANY OF ITS PROPERTIES OR ASSETS IS BOUND, OR CONFLICT WITH,
RESULT IN A BREACH OF OR CONSTITUTE (WITH DUE NOTICE OR LAPSE OF TIME OR BOTH) A
DEFAULT UNDER ANY SUCH INDENTURE, AGREEMENT OR OTHER INSTRUMENT, OR RESULT IN
THE CREATION OR IMPOSITION OF ANY LIEN, CHARGE, RESTRICTION, CLAIM OR
ENCUMBRANCE OF ANY NATURE WHATSOEVER UPON ANY OF THE PROPERTIES OR ASSETS OF
ARTANN.  THIS AGREEMENT HAS BEEN DULY EXECUTED AND DELIVERED BY ARTANN AND
CONSTITUTES THE LEGAL, VALID AND BINDING OBLIGATION OF ARTANN, ENFORCEABLE IN
ACCORDANCE WITH ITS TERMS, SUBJECT, AS TO THE ENFORCEMENT OF REMEDIES, TO THE
DISCRETION OF THE COURTS IN AWARDING EQUITABLE RELIEF AND TO APPLICABLE
BANKRUPTCY, REORGANIZATION, INSOLVENCY, MORATORIUM AND SIMILAR LAWS AFFECTING
THE RIGHTS OF CREDITORS GENERALLY.

 

(B)           PROUROCARE REPRESENTS AND WARRANTS TO ARTANN THAT THE EXECUTION
AND DELIVERY BY PROUROCARE OF THIS AGREEMENT AND THE PERFORMANCE BY PROUROCARE
OF ITS OBLIGATIONS HEREUNDER

 

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HAVE BEEN DULY AUTHORIZED BY ALL REQUISITE CORPORATE ACTION AND WILL NOT VIOLATE
ANY PROVISION OF LAW, ANY ORDER OF ANY COURT OR OTHER AGENCY OF GOVERNMENT, THE
ARTICLES OF INCORPORATION OR BYLAWS OF PROUROCARE, AS AMENDED, OR ANY PROVISION
OF ANY INDENTURE, AGREEMENT OR OTHER INSTRUMENT TO WHICH PROUROCARE OR ANY OF
ITS PROPERTIES OR ASSETS IS BOUND, OR CONFLICT WITH, RESULT IN A BREACH OF OR
CONSTITUTE (WITH DUE NOTICE OR LAPSE OF TIME OR BOTH) A DEFAULT UNDER ANY SUCH
INDENTURE, AGREEMENT OR OTHER INSTRUMENT, OR RESULT IN THE CREATION OR
IMPOSITION OF ANY LIEN, CHARGE, RESTRICTION, CLAIM OR ENCUMBRANCE OF ANY NATURE
WHATSOEVER UPON ANY OF THE PROPERTIES OR ASSETS OF PROUROCARE.  THIS AGREEMENT
HAS BEEN DULY EXECUTED AND DELIVERED BY PROUROCARE AND CONSTITUTES THE LEGAL,
VALID AND BINDING OBLIGATION OF PROUROCARE, ENFORCEABLE IN ACCORDANCE WITH ITS
TERMS, SUBJECT, AS TO THE ENFORCEMENT OF REMEDIES, TO THE DISCRETION OF THE
COURTS IN AWARDING EQUITABLE RELIEF AND TO APPLICABLE BANKRUPTCY,
REORGANIZATION, INSOLVENCY, MORATORIUM AND SIMILAR LAWS AFFECTING THE RIGHTS OF
CREDITORS GENERALLY.

 

(c) Artann represents and warrants to ProUroCare that Artann is the owner, or
exclusive licensee with the right to sublicense, of all right, title and
interest in and to the Artann Patents, Artann Trade Secrets and Artann
Technology free and clear of any liens, charges, security interests, mortgages,
or adverse claims.  Artann represents and warrants that it shall not grant any
further licenses to Licensed Product in the Field of Use and will not itself
practice under the Artann Patents in the Field of Use; Artann is not aware of
any written third party claims asserted against it alleging that the Licensed
Product infringes the intellectual property rights of any third party or that
the Artann Patents are invalid or unenforceable.  Artann has no reasonable basis
for believing that the Artann Patents, Artann Trade Secrets or Artann Technology
are invalid or unenforceable.  Artann represents and warrants that the patents
and patent applications on Exhibit A include all the patents and patent
applications on or for the Generation V PMI System owned by Artann or under
which Artann has rights and the PMI Documentation to which ProUroCare is granted
the right to use for the Generation V PMI System.

 

4.2           WARRANTY DISCLAIMERS AND LIMITATION OF LIABILITY.  EXCEPT AS
EXPRESSLY PROVIDED FOR HEREIN, ARTANN MAKES NO WARRANTY OF ANY KIND, WHETHER
EXPRESS, IMPLIED, STATUTORY OR OTHERWISE, INCLUDING WITHOUT LIMITATION ANY
WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE,
NONINFRINGEMENT, VALIDITY, ENFORCEABILITY OR SCOPE OF THE ARTANN PATENTS OR THAT
ARTANN HAS PROVIDED TO PROUROCARE ALL ARTANN TRADE SECRETS AND/OR ARTANN
TECHNOLOGY AND ANY WARRANTIES THAT MAY ARISE DUE TO COURSE OF PERFORMANCE,
COURSE OF DEALING OR USAGE OF TRADE.

 

                ARTANN WILL NOT BE LIABLE FOR ANY INDIRECT, SPECIAL, INCIDENTAL,
CONSEQUENTIAL, EXEMPLARY OR PUNITIVE DAMAGES, INCLUDING BUT NOT LIMITED TO LOST
PROFITS, BUSINESS INTERRUPTION, LOSS OF GOODWILL, OR COSTS OF PROCUREMENT OF
SUBSTITUTE PRODUCT OR SERVICES, OR OTHERWISE, HOWEVER CAUSED AND UNDER ANY
THEORY OF LIABILITY AND WHETHER OR NOT A PARTY WAS ADVISED OF THE POSSIBILITY OF
SUCH DAMAGES.

 

9

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4.3           INDEMNITY.

 

(A)           PURPOSELY LEFT BLANK.

 

(B)           SUBJECT TO THE TERMS AND CONDITIONS OF THIS AGREEMENT, PROUROCARE
SHALL INDEMNIFY AND HOLD ARTANN, AND EACH OF ITS OFFICERS, DIRECTORS, EMPLOYEES,
AGENTS OR CONSULTANTS HARMLESS FROM AND AGAINST ANY THIRD-PARTY LIABILITY,
LOSSES, DAMAGES, CLAIMS, COSTS AND EXPENSES (INCLUDING REASONABLE FEES OF
ATTORNEYS AND OTHER PROFESSIONALS AND COURT COSTS) (COLLECTIVELY “LIABILITIES”)
ARISING OUT OF OR CONNECTED WITH (A) ANY BREACH OF THIS AGREEMENT BY PROUROCARE
OR (B) THE USE BY OR ADMINISTRATION OF THE PROUROCARE PRODUCT TO ANY PERSON THAT
ARISES OUT OF THE USE, MANUFACTURE, SALE, IMPORT OR OTHER EXPLOITATION OF A
PROUROCARE PRODUCT BY PROUROCARE OR A PROUROCARE SUBLICENSEE (EXCEPT TO THE
EXTENT SUCH LIABILITY RESULTED FROM ANY GROSS NEGLIGENCE OR WILLFUL MISCONDUCT
OF ARTANN IN THE DESIGN, SPECIFICATION OR MANUFACTURE OF THE PRODUCT). 
ADDITIONALLY, PROUROCARE SHALL OBTAIN, MAINTAIN AND PROVIDE ARTANN WITH A COPY
OF  COMMERCIALLY REASONABLE PRODUCT LIABILITY INSURANCE, WITH SUCH INSURANCE
BEING EFFECTIVE AS OF A DATE NO LATER THAN THE DATE OF FIRST CLINICAL USE
INDEPENDENTLY DIRECTED BY PROUROCARE OR COMMERCIAL SALE OF PRODUCT, AND SHALL
HAVE ARTANN LISTED AS AN ADDITIONAL INSURED PARTY ON SUCH POLICY.

 

(C)           PURPOSELY LEFT BLANK.

 

(D)           AS A CONDITION TO PROUROCARE’S OBLIGATION TO INDEMNIFY, DEFEND AND
HOLD HARMLESS HEREUNDER AGAINST A CLAIM ARISING OUT OF A THIRD PARTY CLAIM,
ARTANN WILL (I) PROVIDE PROMPT WRITTEN NOTICE OF ANY CLAIM GIVING RISE TO ANY
LIABILITY AND (II) TENDER CONTROL OF THE DEFENSE AND SETTLEMENT OF ANY SUCH
CLAIM TO PROUROCARE.

 

ARTICLE 5
INFRINGEMENT AND INVENTIONS

 

5.1           PROSECUTION OF INFRINGEMENT OF ARTANN PATENTS, ARTANN TRADE
SECRETS AND ARTANN TECHNOLOGY BY THIRD PARTY.

 

(A)           EACH OF PROUROCARE AND ARTANN SHALL PROMPTLY NOTIFY THE OTHER IF
IT KNOWS OR HAS REASON TO BELIEVE THAT RIGHTS TO THE ARTANN PATENTS, ARTANN
TRADE SECRETS OR ARTANN TECHNOLOGY ARE BEING INFRINGED OR MISAPPROPRIATED BY A
THIRD PARTY OR THAT SUCH INFRINGEMENT OR MISAPPROPRIATION IS THREATENED.

 

(B)           PRIOR TO AND SUBSEQUENT TO THE EXPIRATION OF ONE HUNDRED TWENTY
(120) DAYS FROM THE DATE OF SUCH NOTICE, THE OBLIGATION OF PROUROCARE TO PAY
ROYALTIES OR OTHER FEES, IF ANY, UNDER THIS AGREEMENT, SHALL CONTINUE UNABATED. 
IF ARTANN BRING SUIT AGAINST A THIRD PARTY INFRINGER, ARTANN SHALL BEAR ALL THE
EXPENSES OF ANY SUIT BROUGHT BY ARTANN AND SHALL RETAIN ALL DAMAGES OR OTHER
MONIES AWARDED OR RECEIVED IN SETTLEMENT OF SUCH SUIT.  PROUROCARE WILL
COOPERATE WITH ARTANN IN ANY SUCH SUIT AS REASONABLY REQUESTED BY ARTANN AND
SHALL HAVE THE RIGHT TO CONSULT WITH ARTANN AND BE REPRESENTED BY ITS OWN
COUNSEL AT ITS OWN EXPENSE.

 

If after the expiration of said one hundred twenty days (120) days from the date
of such notice, Artann has not overcome the prima facie case of infringement,
obtained a discontinuance of such infringement, or brought suit against the
third party infringer, then ProUroCare shall have the right after such one
hundred twenty (120) day notice period, but not the obligation, to

 

10

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bring suit against such infringer and join Artann as a party plaintiff, provided
that ProUroCare shall bear all expenses of such suit.  Artann will cooperate
with ProUroCare in any suit as reasonably requested by ProUroCare for
infringement of the Artann Patents, Artann Trade Secrets and Artann Technology
brought by ProUroCare against the third party, and shall have the right to
consult with ProUroCare and to participate in and be represented by independent
counsel in such litigation at its own expense.  ProUroCare shall have the right
to retain any damages or other monies awarded or received in settlement of such
suit provided, however, that ProUroCare shall have no right to settle such suit
without the written consent of Artann.

 

5.2           PROTECTION OF INTELLECTUAL PROPERTY AND IMPROVEMENTS. DURING THE
TERM OF THIS AGREEMENT, ARTANN SHALL PROMPTLY INFORM PROUROCARE OF ANY
INVENTION, IMPROVEMENT, UPGRADING OR MODIFICATION RELATING TO THE PRODUCT IN THE
FIELD OF USE.  IF ARTANN OBTAINS PATENTS ON ANY SUCH INVENTIONS, IT MAY, IN ITS
DISCRETION, ADD THEM TO EXHIBIT A AND HAVE THEM INCLUDED AS ARTANN PATENTS FOR
LICENSE AND ROYALTY PURPOSES.

 

5.3           MECHANICAL IMAGING OF THE BREAST.  PROUROCARE GRANTS ARTANN A
NON-EXCLUSIVE FULLY PAID UP, SUB-LICENSABLE, ROYALTY FREE AND WORLDWIDE LICENSE
TO THE PATENTS OWNED BY PROUROCARE OR UNDER WHICH PROUROCARE HAS RIGHTS AND THAT
ARE LISTED ON EXHIBIT B ATTACHED HERETO TO MAKE, USE OR SELL ANY MECHANICAL
IMAGING SYSTEM FOR THE DIAGNOSIS OR TREATMENT OF DISORDERS OF THE BREAST.

 

ARTICLE 6
TERM AND TERMINATION

 

6.1           TERM.  SUBJECT TO EARLIER TERMINATION AS PROVIDED IN SECTION 6.2
OF THIS AGREEMENT, THIS AGREEMENT SHALL COMMENCE UPON THE EFFECTIVE DATE AND
SHALL TERMINATE UPON THE EXPIRATION OF ALL ROYALTY OBLIGATIONS UNDER
SECTION 3.2.

 

6.2           TERMINATION.  NOTWITHSTANDING THE PROVISIONS OF SECTION 6.1 ABOVE,
THIS AGREEMENT MAY BE TERMINATED IN ACCORDANCE WITH THE FOLLOWING PROVISIONS:

 

(A)           A PARTY MAY TERMINATE THIS AGREEMENT BY GIVING NOTICE IN WRITING
TO THE OTHER PARTY IF THE OTHER PARTY IS IN BREACH OF ANY MATERIAL
REPRESENTATION, WARRANTY OR COVENANT OF THIS AGREEMENT AND SHALL HAVE FAILED TO
CURE SUCH BREACH WITHIN SIXTY (60) DAYS OF RECEIPT OF WRITTEN NOTICE THEREOF
FROM THE FIRST PARTY;

 

(B)           IN ADDITION TO THE RIGHT TO TERMINATE THE AGREEMENT PURSUANT TO
SECTION 6(A), IF PROUROCARE FAILS TO MAKE A PAYMENT TO ARTANN AS SPECIFIED IN
SECTIONS 3.1 OR 3.3 HEREOF AND SECTIONS 3.1, 3.2 AND 3.3 OF THE DEVELOPMENT
AGREEMENT AND SUCH FAILURE IS NOT CURED WITHIN THIRTY (30) DAYS OF RECEIPT OF
WRITTEN NOTICE THEREOF FROM ARTANN, ALL LICENSES GRANTED TO PROUROCARE SHALL
AUTOMATICALLY TERMINATE AND PROUROCARE SHALL IMMEDIATELY RETURN ALL ARTANN TRADE
SECRETS, ARTANN TECHNOLOGY, AND PMI DOCUMENTATION TO ARTANN.  ADDITIONALLY, IF
PROUROCARE FAILS TO MAKE A PAYMENT TO ARTANN AS SPECIFIED IN SECTIONS 3.1 OR 3.3
HEREOF AND SECTIONS 3.1, 3.2 AND 3.3 OF THE DEVELOPMENT AGREEMENT AND SUCH
FAILURE IS NOT CURED WITHIN FIVE (5) DAYS OF RECEIPT OF WRITTEN NOTICE THEREOF
FROM ARTANN, THE EXCLUSIVE LICENSES GRANTED TO PROUROCARE SHALL IMMEDIATELY AND
AUTOMATICALLY CONVERT TO NON-EXCLUSIVE LICENSES.  IF PROUROCARE PAYS THE
DEFICIENT FUNDS TO ARTANN WITHIN A SIXTY (60) DAY CURE PERIOD, THE NON-

 

11

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EXCLUSIVE LICENSES SHALL CONVERT BACK TO EXCLUSIVE LICENSES.  NEITHER PARTY,
ARTANN OR PROUROCARE, CAN GRANT A LICENSE OR SUBLICENSE TO A THIRD PARTY DURING
THE SIXTY (60) DAY CURE PERIOD.

 

(C)           A PARTY MAY TERMINATE THIS AGREEMENT AT ANY TIME BY GIVING NOTICE
IN WRITING TO THE OTHER PARTY, WHICH NOTICE SHALL BE EFFECTIVE UPON DISPATCH,
SHOULD THE OTHER PARTY BECOME INSOLVENT, MAKE AN ASSIGNMENT FOR THE BENEFIT OF
CREDITORS, GO INTO LIQUIDATION OR RECEIVERSHIP OR OTHERWISE LOSE LEGAL CONTROL
OF ITS BUSINESS.

 

6.3           EFFECT OF TERMINATION

 

(A)           UPON TERMINATION OF THIS AGREEMENT FOR ANY REASON, NOTHING HEREIN
SHALL BE CONSTRUED TO RELEASE EITHER PARTY FROM ANY OBLIGATION THAT MATURED
PRIOR TO THE EFFECTIVE DATE OF SUCH TERMINATION.

 

(B)           THE PROVISIONS OF SECTION 3.4 (RECORDS AND ACCOUNTING); ARTICLE 4
(CERTAIN REPRESENTATIONS, WARRANTIES, AND INDEMNITIES); SECTION 5.3 (MECHANICAL
IMAGING OF THE BREAST); SECTION 6.2(B) (RETURN OF PMI DOCUMENTATION) AND
SECTION 7.1 (NON-DISCLOSURE) SHALL SURVIVE A TERMINATION UNDER SECTION 6.2.

 

ARTICLE 7
MISCELLANEOUS

 

7.1           NON-DISCLOSURE.  EACH PARTY AGREES NOT TO DISCLOSE OR USE (EXCEPT
AS PERMITTED OR REQUIRED FOR PERFORMANCE BY THE PARTY RECEIVING SUCH
CONFIDENTIAL INFORMATION OF ITS RIGHTS OR DUTIES HEREUNDER OR UNDER THE
DEVELOPMENT AGREEMENT OR SUPPLY AGREEMENT) ANY CONFIDENTIAL INFORMATION OF THE
OTHER PARTY OBTAINED DURING THE TERM OF THIS AGREEMENT UNTIL (I) THE END OF
2015; OR (II) THE EXPIRATION OF FOUR (4) YEARS AFTER THE TERMINATION OR
EXPIRATION OF THIS AGREEMENT, WHICHEVER IS LAST TO OCCUR.  EACH PARTY FURTHER
AGREES TO TAKE APPROPRIATE MEASURES TO PREVENT ANY SUCH PROHIBITED DISCLOSURE BY
ITS PRESENT AND FUTURE EMPLOYEES, OFFICERS, AGENTS, SUBSIDIARIES, OR CONSULTANTS
DURING THE TERM OF THIS AGREEMENT AND FOR A PERIOD OF FOUR (4) YEARS THEREAFTER
OR THE END OF 2015, WHICHEVER IS LAST TO OCCUR.  ARTANN TRADE SECRETS SHALL BE
KEPT CONFIDENTIAL PERPETUALLY.

 

7.2           ASSIGNMENT.  THIS AGREEMENT SHALL BE BINDING UPON AND INURE TO THE
BENEFIT OF THE PARTIES HERETO AND THE SUCCESSORS OR ASSIGNS OF THE PARTIES
HERETO; PROVIDED, THAT (I) THE RIGHTS AND OBLIGATIONS OF ARTANN HEREIN MAY NOT
BE ASSIGNED EXCEPT IN THE CASE OF A MERGER OR SALE OF SUBSTANTIALLY ALL OF
ARTANN’S ASSETS OR TO ANY PERSON WHO SUCCEEDS TO SUBSTANTIALLY ALL OF ARTANN’S
BUSINESS, AND (II) THE RIGHTS AND OBLIGATIONS OF PROUROCARE HEREIN MAY NOT BE
ASSIGNED EXCEPT IN THE CASE OF A MERGER OR SALE OF SUBSTANTIALLY ALL OF
PROUROCARE’S ASSETS OR TO ANY PERSON WHO SUCCEEDS TO ALL OR A SUBSTANTIAL
PORTION OF PROUROCARE’S BUSINESS TO WHICH THIS AGREEMENT RELATES.  ANY ATTEMPTED
ASSIGNMENT OF THIS AGREEMENT IN VIOLATION OF THIS SECTION 7.2 SHALL BE NULL AND
VOID.

 

7.3           ENTIRE AGREEMENT.  THIS AGREEMENT AND THE DEVELOPMENT AND
COMMERCIALIZATION AGREEMENT, AND THE AGREEMENTS CONTEMPLATED HEREIN AND THEREIN
CONSTITUTE THE ENTIRE AGREEMENTS OF THE PARTIES WITH RESPECT TO THE SUBJECT
MATTER OF SUCH AGREEMENTS AND SUPERSEDE ALL PREVIOUS

 

12

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PROPOSALS OR AGREEMENTS, ORAL OR WRITTEN, AND ALL NEGOTIATIONS, CONVERSATIONS OR
DISCUSSIONS HERETOFORE HAD BETWEEN THE PARTIES RELATED TO THE SUBJECT MATTER OF
SUCH AGREEMENTS.

 

7.4           GOVERNING LAW.  THIS AGREEMENT SHALL BE GOVERNED BY, AND
INTERPRETED AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
JERSEY, WITHOUT GIVING EFFECT TO PRINCIPLES OF CONFLICTS OF LAWS.  THE PARTIES
HEREBY AGREE TO SUBMIT ALL DISPUTES ARISING HEREUNDER TO THE FEDERAL DISTRICT
COURT FOR NEW JERSEY WHERE ARTANN IS A RESIDENT.

 

7.5           AMENDMENT, WAIVER, DISCHARGE, ETC.  THIS AGREEMENT MAY NOT BE
AMENDED, RELEASED, DISCHARGED, ABANDONED, CHANGED OR MODIFIED IN ANY MANNER,
EXCEPT BY AN INSTRUMENT IN WRITING SIGNED ON BEHALF OF EACH OF THE PARTIES TO
THIS AGREEMENT BY THEIR DULY AUTHORIZED REPRESENTATIVES.  THE FAILURE OF EITHER
PARTY TO ENFORCE AT ANY TIME ANY OF THE PROVISIONS OF THIS AGREEMENT SHALL IN NO
WAY BE CONSTRUED TO BE A WAIVER OF ANY SUCH PROVISION, NOR IN ANY WAY TO AFFECT
THE VALIDITY OF THIS AGREEMENT OR ANY PART OF IT OR THE RIGHT OF EITHER PARTY
AFTER ANY SUCH FAILURE TO ENFORCE EACH AND EVERY SUCH PROVISION.  NO WAIVER OF
ANY BREACH OF THIS AGREEMENT SHALL BE HELD TO BE A WAIVER OF ANY OTHER OR
SUBSEQUENT BREACH.

 

7.6           EXECUTION IN COUNTERPARTS.  THIS AGREEMENT MAY BE EXECUTED IN ONE
OR MORE COUNTERPARTS, ALL OF WHICH SHALL BE CONSIDERED ONE AND THE SAME
AGREEMENT, AND SHALL BECOME A BINDING AGREEMENT WHEN ONE OR MORE COUNTERPARTS
HAVE BEEN SIGNED BY EACH PARTY AND DELIVERED TO THE OTHER PARTY.

 

7.7           TITLES AND HEADINGS; CONSTRUCTION.  THE TITLES AND HEADINGS TO
SECTIONS HEREIN ARE INSERTED FOR THE CONVENIENCE OF REFERENCE ONLY AND ARE NOT
INTENDED TO BE A PART OF OR TO AFFECT THE MEANING OR INTERPRETATION OF THIS
AGREEMENT.  THIS AGREEMENT SHALL BE CONSTRUED WITHOUT REGARD TO ANY PRESUMPTION
OR OTHER RULE REQUIRING CONSTRUCTION HEREOF AGAINST THE PARTY CAUSING THIS
AGREEMENT TO BE DRAFTED.

 

7.8           BENEFIT.  NOTHING IN THIS AGREEMENT, EXPRESSED OR IMPLIED, IS
INTENDED TO CONFER ON ANY PERSON OTHER THAN THE PARTIES TO THIS AGREEMENT OR
THEIR RESPECTIVE SUCCESSORS OR PERMITTED ASSIGNS, ANY RIGHTS, REMEDIES,
OBLIGATIONS OR LIABILITIES UNDER OR BY REASON OF THIS AGREEMENT.

 

7.9           NOTICES.  ALL NOTICES OR OTHER COMMUNICATIONS TO A PARTY REQUIRED
OR PERMITTED HEREUNDER SHALL BE IN WRITING AND SHALL BE DELIVERED PERSONALLY OR
BY FACSIMILE (RECEIPT CONFIRMED) TO SUCH PARTY (OR, IN THE CASE OF AN ENTITY, TO
AN EXECUTIVE OFFICER OF SUCH PARTY) OR SHALL BE GIVEN BY CERTIFIED MAIL, POSTAGE
PREPAID WITH RETURN RECEIPT REQUESTED, ADDRESSED AS FOLLOWS:

 

if to ProUroCare to:

 

ProUroCare Medical, Inc.

5500 Wayzata Boulevard, #310

Golden Valley, MN  55416

Attention:  CEO

Phone:  952-476-9093

Fax:  763-591-5039

 

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if to Artann to:

 

Artann Laboratories, Inc.

1459 Lower Ferry Road

West Trenton, NJ  08618-1414

Fax:  (609) 333-0710

Phone:  (609) 333-0712

 

Artann or ProUroCare may change their respective above-specified recipient
and/or mailing address by notice to the other party given in the manner herein
prescribed.  All notices shall be deemed given on the day when actually
delivered as provided above (if delivered personally or by facsimile) or on the
day shown on the return receipt (if delivered by mail).

 

7.10         SEVERABILITY.  IF ANY PROVISION OF THIS AGREEMENT IS HELD INVALID
BY A COURT OF COMPETENT JURISDICTION, SUCH PROVISION SHALL BE ENFORCED TO THE
MAXIMUM EXTENT PERMISSIBLE AND THE REMAINING PROVISIONS SHALL NONETHELESS BE
ENFORCEABLE ACCORDING TO THEIR TERMS.

 

7.11         EXECUTION OF FURTHER DOCUMENTS.  EACH PARTY AGREES TO EXECUTE AND
DELIVER WITHOUT FURTHER CONSIDERATION ANY FURTHER APPLICATIONS, LICENSES,
ASSIGNMENTS OR OTHER DOCUMENTS, AND TO PERFORM SUCH OTHER LAWFUL ACTS AS THE
OTHER PARTY MAY REASONABLY REQUEST TO FULLY SECURE AND/OR EVIDENCE THE RIGHTS OR
INTERESTS HEREIN.

 

7.12         PURPOSELY LEFT BLANK.

 

7.13         COMPLIANCE WITH LAWS.  THE PARTIES WILL, AND PROUROCARE SHALL CAUSE
ANY PERMITTED SUBLICENSEES OF PROUROCARE TO, COMPLY WITH ALL APPLICABLE
INTERNATIONAL, NATIONAL, STATE, REGIONAL AND LOCAL LAWS AND REGULATIONS,
INCLUDING ALL APPLICABLE IMPORT AND EXPORT CONTROL LAWS, IN EXERCISING RIGHTS OR
PERFORMING THEIR DUTIES UNDER THIS AGREEMENT.

 

7.14         USE OF NAME.  EXCEPT WITH THE PRIOR EXPRESS WRITTEN PERMISSION,
PROUROCARE SHALL NOT USE OR REFERENCE ARTANN’S OR ARMEN SARVAZYAN’S NAME IN ANY
MARKETING, SALES OR PRODUCT DOCUMENTS OR MATERIALS.

 

14

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IN WITNESS WHEREOF, each of the parties has caused this License Agreement to be
executed in the manner appropriate to each.

 

 

ARTANN LABORATORIES, INC.

 

 

 

 

 

By:

/s/ Noune Sarvazyan

 

 

 

 

Its:

CEO

 

 

 

 

 

PROUROCARE MEDICAL, INC.

 

 

 

 

 

By:

/s/Richard C. Carlson

 

 

 

 

Its:

CEO

 

Exhibits:

 

Exhibit A:

Artann Patents

Exhibit B:

ProUroCare Patents

 

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Exhibit A:  Artann Patents

 

a.

Method and Device for Real Time Mechanical Imaging of Prostate, USA Patent
Application No 11/123,999, Filing Date: May 6, 2005.

 

 

b.

Method and Dual-Array Transducer Probe for Real Time Mechanical Imaging of
Prostate, USA Patent Application No 11/146,367, Filing Date: June 6, 2005.

 

 

c.

Prostate Mechanical Imaging probe, USA Patent Application No 29/320,480, Filing
Date: June 27, 2008.

 

 

d.

Calibration chamber for Prostate Mechanical Imaging probe, USA Patent
Application No 29/320.474, Filing Date: June 27, 2008.

 

16

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Exhibit B:  ProUroCare Patents

 

a.

Method and apparatus for elasticity imaging, USA Patent No 5,524,636.

 

 

b.

Device for breast haptic examination, USA Patent No 5,833,633.

 

 

c.

Method and device for mechanical imaging of breast, USA Patent No 5,860,934.

 

 

d.

Apparatus and Method for Mechanical Imaging of Breast, USA Patent 6,620,115.

 

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