Exhibit 10.24

 

Technology License Agreement
 
between
 
The Research Foundation of State University of New York
 
for and on behalf of University at Buffalo
 
and
 
Medi-Hut Co., Inc.

This Technology License Agreement (this “Agreement”) is entered into this 10th
day of November, 2006 (the “Effective Date”) by and between The Research
Foundation of State University of New York, for and on behalf of University at
Buffalo, a non-profit corporation organized and existing under the laws of the
State of New York (the “Foundation”), Donald D. Hickey, M.D. (“Hickey”) and Clas
E. Lundgren, M.D., Ph.D. (a/k/a Claes Lundgren and referenced herein as
“Lundgren”) and Medi-Hut Co., Inc., a corporation duly organized under the laws
of the State of Nevada, and having its principal place of business at 215 Morris
Avenue, Spring Lake, New Jersey 07762 (“Licensee”). Foundation, Hickey and
Lundgren will be collectively referenced herein as “Licensor”.
 
WHEREAS, Licensor and Licensee wish to enter into an exclusive license agreement
to facilitate the development and commercialization of certain technology owned
by Licensor so that this technology may be utilized to the fullest extent for
the benefit of Licensee, Licensor, the inventor(s) and the public;
 
NOW, THEREFORE, in consideration of the terms and considerations hereinafter set
forth, the parties agree as follows:
 
1.    DEFINITIONS

All capitalized terms used in this Agreement will have the meanings stated below
or defined elsewhere in the Agreement.
 
1.1    “Affiliate” means every corporation or entity which, directly or
indirectly, or through one or more intermediaries, controls, is controlled by,
or is under common control with Licensee.
 
1.2    “Copyrights” means Licensor’s copyrights in any software (the “Software”)
developed and/or owned by Licensor to embody or enable the technology claimed in
the Patent Rights and any manuals, protocols or any other documentation, whether
in electronic or print format, relating to the Software.

1.3    “Derivatives” means Licensee created computer software and any
documentation, whether in electronic or print format, relating thereto which
will include, or be based in whole or in part on, Software.

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1.4    “Field” means all fields of use.

1.5    “Licensor Improvements”means any further technological developments of
the Technology developed by Dr. Donald D. Hickey during the term of this
Agreement and owned or controlled by Licensor and/or the Foundation, Hickey or
Lundgren individually, that is not filed as a continuation-in-part application
claiming priority to any patent applications listed in Exhibit A.

1.6    “Licensee Improvements” means any further technological developments of
the Technology developed by Licensee during the term of this Agreement and owned
or controlled by Licensee.

1.7    “Intellectual Property” means all know-how, experimentation
documentation, lab notebooks, patient documentation, source code, and any and
all trade secrets relating to the Patent Rights.

1.8    “Licensed Product” means all products that incorporate, utilize, or are
made with the use of the Technology, Licensee Improvements, Licensor
Improvements licensed to Licensee after the Effective Date, Software, or any
part thereof and products that incorporate, utilize or are made with the use of
a Derivative or Source Code.

1.9    “Net Sales” means the gross revenues actually received by Licensee,
Affiliates and Sublicensees in the Field and Territory during the Term from the
manufacture, use, sale, lease or other transfer of Licensed Product to
non-sublicensee third parties, less: (a) sales and/or use taxes actually paid,
import and/or export duties actually paid, excise taxes and other compulsory
payments to governmental authorities, (b) outbound transportation paid, prepaid
or allowed, including shipping, freight, transportation and insurance for the
Licensed Product to the extent such costs are included in Licensee’s or
Sublicensees’ invoice price to its customers for the Licensed Product, and (c)
all bona fide allowances for returns, rebates, chargebacks, provisions for bad
debts determined in accordance with U.S. G.A.A.P., and discounts actually given
to and taken by non-sublicense third parties, such allowances to be adjusted to
actual on a periodic basis, no less frequently than annually. In this context,
gross revenues will also include the fair market value of any non-cash
consideration actually received by Licensee, Affiliates and Sublicensees for the
manufacture, use, sale, lease, or other transfer of Licensed Product. Net Sales
does not include the transfer price paid by a Sublicensee to the Licensee for
Licensed Product.

1.10    “Patent Costs” means all reasonable costs incident to filing,
prosecuting and maintaining the patents associated with the Patent Rights in the
United States and elected foreign countries, and any and all reasonable costs
incurred in filing continuations, divisional applications or related
applications thereon and any re-examinations or reissue proceedings thereof.

1.11    “Patent Rights” means Licensor’s patent rights to any subject matter
claimed in or covered by (a) any pending or issued United States or foreign
patent or any patent application listed in Exhibit A attached hereto, including
any reissues, reexaminations, renewals, substitutions, or extensions thereof;
(b) any continuation, continuation-in-part or divisional applications of the
patents and patent applications listed in Exhibit A; and (c) any patents issued
on continuation or divisional applications, including reissues and
reexaminations, of the patents and patent applications listed in Exhibit A.

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1.12    “Source Code” means the source code for the Software and/or any
Derivative.

1.13    “Sublicensing Revenue” means any payments that Licensee or an Affiliate
receives from a Sublicensee in consideration of the sublicense of the rights
granted Licensee and Affiliates under Article 5, including without limitation,
license fees, milestone payments, license maintenance fees, and other payments,
but specifically excluding royalties on Net Sales, development grants
specifically for the development of Licensed Products, equity or debt sold to
Sublicensee, reimbursed patent costs and expenses (may only be deducted once and
for the first time collected), any payment made pursuant to the indemnification
obligations of the parties, and any payment made to Licensee in connection with
a cross-license of technology or similar in-kind technology transfers or
exchanges directly related to the development, manufacture and sale of Licensed
Product.

1.14    “Sublicensee” means any non-Affiliate sublicensee of the rights granted
Licensee under Article 5, specifically excluding those non-Affiliate entities to
which a sublicense is granted only in connection with a distribution agreement
with the Licensee and no royalty is paid to Licensee under such distribution
agreement; provided, however, that a royalty is paid by Licensee or an Affiliate
to Licensor for Licensed Products sold under such distribution agreement.

1.15    “Technology” means (a) confidential and/or proprietary Information and
materials in which Licensor has a legal interest and which involves the
Technology and/or UB IPD File Nos. S-409, R-5421 and R-6013 and which was
developed by Donald D. Hickey, M.D. at the University at Buffalo on or before
the Effective Date and which Licensor is free to disclose to Licensee
(“Know-How”), (b) the Patent Rights, (c) the Copyrights, and (d) the
Intellectual Property.

1.16    “Term” means the period of time beginning on the Effective Date and
ending on the later of (i) the expiration date of the last to expire Patent
Right, or (ii) ten (10) years from the sale of the first Licensed Product.

1.17    “Territory” means worldwide.

2.     GRANT OF RIGHTS AND RETAINED RIGHTS

2.1    Exclusive License. Licensor grants to Licensee an exclusive license under
its Technology rights to (a) develop, make, have made, use, sell and offer for
sale or otherwise exploit the Licensed Products, and (b) use and reproduce
Software, create Derivatives, and distribute Software to end-users through the
normal channels of distribution, in the Field and Territory during the Term.
Licensees will have the unrestricted right to develop Licensee Improvements
relating to the Licensed Products in the United States for distribution and
exploitation of the Licensed Products either in the United States or outside of
the United States. Licensee will also have the unrestricted right to develop
Licensee Improvements relating to the Licensed Products in any foreign country
for distribution and exploitation of the Licensed Products in any other country,
including the U.S.

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2.2    Retained Rights. Licensor retains the right to use and reproduce the
Technology and Software and to create derivatives of the Software for
educational purposes and internal research and development only. Unless Licensor
has complied with the ‘First Look’ provision set forth in Section 2.3, Licensor
will not have the right to use and reproduce the Technology and create and
exploit such derivatives of the Software for any other purpose. Unless Licensor
has complied with the ‘First Look’ provision set forth in Section 2.3, Licensor
will not use the Technology and/or Software to create any product that competes
or has the potential to compete with the Licensed Products in the Territory.
Hickey and Lundgren each will execute a restrictive covenant agreement, attached
hereto as Exhibit D for Hickey and Exhibit E for Lundgren and incorporated by
reference herein.

2.3    “First Look" Right. Subject to any existing obligations to third parties
and so long as Licensee is not in default of any of its obligations hereunder,
Licensor hereby grants to Licensee a "first look" right as to any Licensor
Improvements. "First Look" right means the exclusive right to negotiate a
definitive license agreement for an exclusive, royalty bearing, worldwide
license to use and otherwise commercially exploit Licensor’s intellectual
property rights to any Improvements. This "first look" right will commence on
the date that Licensor discloses the Improvements to Licensee, and Licensee has
sixty (60) days (“Notice Period”) to provide Licensor written notice (“First
Look Notice”) of its interest in entering into negotiations for a license under
Licensor’s intellectual property rights to make, have made, use, sublicense,
sell, offer for sale products that make use of the Improvements. If and when
Licensor receives the First Look Notice, the parties will promptly and in good
faith commence license negotiations. The first look right will terminate (1) at
the end of the Notice Period if Licensee has not notified Licensor of its
interest in negotiating a license, or (2) one hundred fifty (150) days after
Licensor receives the First Look Notice if the parties have not yet finalized a
definitive license agreement. In the event that the parties are unable to agree
on terms for a complete license agreement for the Licensor Improvement within
ninety (90) days of the notification of the “first look”, Licensee, may at its
discretion, refer any outstanding issues to a mutually agreed upon mediator. The
mediator will, based upon and consistent with the terms and conditions of this
Agreement, upon the parties’ prior offers to one another, and upon custom and
practice in transactions between medical device companies and universities, make
recommendations to both parties for resolution of any outstanding issues. If,
after thirty (30) days of mediation, the parties still have not reached
agreement, the “first look” right will expire. Disclosure to Licensee of any
confidential or proprietary information relating to any Improvements will be
considered “Confidential Information” subject to Section 16 of this Agreement.
Subject to any existing or hereafter incurred obligations to third parties,
Licensor will not undertake to negotiate entering into any exclusive license
under its intellectual property rights to make, have made, use, sell, offer for
sale products that make use of the Licensor Improvements with any other party
until after termination of Licensee’s “First Look” right.

2.4    Consulting Obligation. Hickey and Lundgren will each individually provide
up to fifty (50) hours of consulting services to Licensee regarding the
Technology. Such consulting services will be provided at no additional cost to
Licensee at such times and places to be determined by the parties. Such
consulting services will only be for consulting that can reasonably be expected
to be within Hickey’s and Lundgren’s respective areas of knowledge and expertise
with respect to the Technology, but will not include the performance of research
and development projects, animal studies, or clinical studies. Any consulting
services requested by Licensee in excess of the fifty (50) hours will be
provided for a consulting fee to be determined by the parties. Licensee will be
responsible for and advance or promptly reimburse Hickey and Lundgren for any
out-of-pocket costs associated with the consulting services, such as travel,
food and lodging.

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2.5    No Compulsory Package License. The parties agree and acknowledge that
Licensor requested that Licensee license all of the licensed patents together
under a single license and that the Licensor did not request that Licensee
license any patent individually.

2.6    Transfer of Tangible Assets. Within fifteen (15) days of the Effective
Date of this Agreement, Licensor will deliver or otherwise provide to Licensee
all of Licensor’s tangible assets relating to the Licensed Products,
Intellectual Property, Software, Source Code, Licensor Improvements and
Derivatives, including but not limited to those items set forth on Exhibit B
attached hereto and incorporated herein. Title ownership of the items listed in
Exhibit B will remain with Licensor. Licensor may request that any item listed
in Exhibit B be returned to Licensor by Licensee for Licensor’s use under
Section 2.2 Retained Rights according to a mutually agreeable schedule, and any
such item must be returned upon termination of this Agreement for any reason.

3.    COMPENSATION AND PAYMENT TERMS

3.1    Royalties on Net Sales. Licensee will pay Licensor a royalty of 5%
(“Royalty Rate”) on annual Net Sales. Earned royalties due on Net Sales made in
the United States will be paid to Foundation, and earned royalties on Net Sales
made outside of the United States will be paid to Hickey and Lundgren.

3.2    Reduction in Royalty Rate. Notwithstanding the foregoing, Licensee will
have the right to reduce the Royalty Rate owed to Licensor hereunder Section 3.1
in the following circumstances and in accordance with the following
calculations:

(a)    Licensee will have the right to reduce the Royalty Rate paid to Licensor
for a Licensed Product in the event that Ethox International, Inc. or its
employees (collectively “Ethox”) has any intellectual property right or claim or
any other legal right with respect to the Technology and such right(s) were
developed, owned, assigned or originated by Ethox prior the execution of this
Agreement and such right(s) prevent or otherwise limit Licensee’s ability to
exploit the Technology. The royalty rate payable to Ethox may be deducted from
the Royalty Rate specified under Section 3.1 but in no case will the Royalty
Rate specified in Section 3.1 be reduced by more than one percent (1%). For
example, if the royalty rate payable to Ethox is 1%, the Royalty Rate specified
in Section 3.1 will be reduced to 4%.

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(b)    In the event that a competitor of Licensee or Sublicensee sells a product
in a country where there is no patent protection, which is competitive with a
Licensed Product and captures twenty-five percent (25%) or more of the market in
such country for esophageal balloon catheter-based cardiac performance
measurement, then the royalties otherwise payable in such country as set forth
in this section after any adjustments made under 3.2 (a), (b) or (c) will be
reduced by 35%. In order to make such an adjustment to the royalty for sales in
a country where there is no patent protection, Licensee must provide to Licensor
i) evidence of sales of the competitive product in that country and ii)
reasonably demonstrate the capture of twenty-five percent (25%) of the market by
providing to Licensor third party market tracking service data, if available. If
third party market tracking service data is not available, the licensee will
make reasonable efforts to demonstrate the capture of twenty-five percent (25%)
of the market through other means.

(c)    The Royalty Rate payable by Licensee on Net Sales by Sublicensees may be
reduced according to the adjustments provided in this Section 3.2, provided that
any incremental royalty rate paid by a Sublicensee to Licensee is similarly
reduced under the same circumstances and in accordance with the same
calculations provided for in this Section 3.2.

Each such Royalty Rate or payment reduction will be indicated in the quarterly
and annual reports provided to Licensor pursuant to Section 7.2, below.

3.3    Annual Minimum Royalty. Beginning with the first full calendar year of
sales of Licensed Product in the United States and for two years thereafter,
Licensee will pay Licensor an Annual Minimum Royalty payment of $100,000 against
which any Royalty on Net Sales paid in the same calendar year for sales in the
United States will be credited. Subject to Section 10.3, beginning with the
first full year of sales of Licensed Product outside of the United States (“Non
U.S.”) and for two years thereafter, Licensee will pay Licensor an Annual
Minimum Royalty payment of $100,000 against which any Royalty on Net Sales paid
in the same calendar year for sales outside the United States will be credited.
The Annual Minimum Royalty for a given year will be due at the time payments are
due for the calendar quarter ending on December 31.

Annual Minimum Royalty due on sales made in the United States will be paid to
Foundation and Annual Minimum Royalty due on sales made outside of the United
States will be paid to Hickey and Lundgren.  
 
3.4    Sublicensing Fees. Licensee will pay Hickey and Lundgren 18.75% of
Sublicensing Revenue, and Licensee will pay Foundation 6.25% of Sublicensing
Revenue (Licensor will in the aggregate receive 25% of the Sublicensing Revenue,
and such amount will be considered “Sublicensing Fees”).

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3.5    Milestone Payments. Licensee will pay Licensor milestone payments
according to the following schedule or events (each payable one time only):

Milestone
 
One Time Payment
Owed to Foundation
 
One Time Payment Owed
to Hickey and Lundgren
 
First insertion of a catheter utilizing the Technology in a human clinical
trial.
 
$18,750
 
$56,250
 
First submission for regulatory approval in any country
 
$25,000
 
$75,000
 
First notice of regulatory approval to market in any country.
 
$37,500
 
$112,500

3.6    Payment Terms. All dollar amounts referenced herein will refer to U.S.
Dollars. Payments with designated payment dates are due and payable on or before
those dates. Earned royalty payments will be made within thirty (30) days after
the end of each calendar quarter for the calendar quarter. All invoiced payments
will be paid within thirty (30) days of Licensee’s receipt of invoice. When
Licensed Products are sold for currencies other than U.S. Dollars, earned
royalties will first be determined in the foreign currency of the country in
which the Licensed Products were sold and then converted into equivalent U.S.
Dollars. The exchange rate is that rate quoted in the Wall Street Journal on the
last business day of the reporting period and is quoted as local currency per
U.S. Dollar.

3.7    Payment Address for Foundation. All payments due Foundation will be made
payable to “The Research Foundation of State University of New York” and will be
sent to the below address:

UB Office of Science, Technology Transfer & Economic Outreach
Intellectual Property Division
UB Technology Incubator
Baird Research Park
1576 Sweet Home Road
Amherst, NY 14228
Attn: Licensing Specialist

3.8    Payment Address for Hickey and Lundgren. All payments due Hickey and
Lundgren will be made payable to the Client Trust Account reference of “Lundgren
& Hickey 01378.00019” and will be wired to the below address:
 
Account Name:
Hodgson Russ LLP
Account Number:
10-314-3
Bank Name:
Manufacturers and Traders Trust Co.
Bank ABA Number:
022000046
Foreign Wire:
M&T Swift Code MANTUS 33
Contact :
Sandy Pulli, Extension 1378
Please Reference :
Lundgren & Hickey 01378.00019

 
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3.9    Foreign Charges. Royalties due on Net Sales that occur in any country
outside the United States may not be reduced by any deduction of withholding,
value-added taxes, fees, or other charges imposed by the government of such
country, except as permitted in the definition of Net Sales. Licensee is
responsible for all bank transfer charges.

4.0    DUE DILIGENCE
 
4.1    Licensee will use commercially reasonable efforts to commercialize and
market Licensed Products as soon as practicable and in accordance with the
milestone events set forth herein.

4.2    Unless there is “good reason” that such milestones cannot be reached with
commercially reasonable efforts, Licensee undertakes to reach the following
milestones in the timeframes set forth below:

(a)  
Within nine (9) months of the Effective Date, Licensee will:

i.  
Make contact with and engage in an initial meeting with the FDA and the EMEA to
seek guidance on approval of the device,

ii.  
Engage a manufacturer and seek completion of the prototype devices necessary to
conduct clinical trials, should such trials be required by FDA or EMEA,

iii.  
Design the required clinical trials and define the endpoints sought from such
clinical trials.

 

(b)  
Within fifteen (15) months from the Effective Date, Licensee will:

i.  
Make application for approval to market the device in the U.S. and EU with the
respective governing agencies,

ii.  
Make contact with and engage in an initial meeting with the governing agencies
in Japan and India to seek guidance on approval of the device,

iii.  
Negotiate a manufacturing contract for the production of the device to be
marketed commercially.

 

(c)  
Within twenty-four (24) months from the Effective Date, Licensee will:

i.  
Gain approval to market the device in at least one jurisdiction,

ii.  
Be capable of manufacturing, or having manufactured, commercial versions of the
device for sale,

iii.  
Have developed a sales force, either internally or per a third party service or
distributor, in the U.S. and the EU.

iv.  
Have established a service agent to provide customer service for the device in
each jurisdiction in which the device may be marketed.

 

(d)  
Within thirty-six (36) months from the date that the Licensed Product is
approved by the FDA for marketing in the U.S., Licensee will on its own or
through a Sublicensee, gain approval to market the device in Japan.

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As used herein, the term “good reason” will include:

1.  
Events of force majeure bearing on the ability of Licensee to make, use or sell
the device in the respective jurisdiction(s);

 

2.  
The performance of the device in such a fashion that it is deemed to be
dangerous or to incur undo risk for the user or patient or is medically
unreliable;

 

3.  
A determination by a governmental agency that the device will require clinical
trials that reasonably cannot be completed before the milestone is reached;

 

4.  
A challenge, claim, suit or interference to the Patent Rights or division of a
patent that raises a significant commercial risk unless resolved;

 

5.  
A determination that the device will require the filing of a PMA (by FDA in the
U.S., or by similar determination by a governing agency in another
jurisdiction);

 

6.  
The revelation of facts concerning the state of development of the device, the
clinical or biological results pertaining thereto, the ownership of the device
or other significant facts bearing on the commercial viability of the device,
which are contrary to or in conflict with the statements and/or representations
of the Licensor or its agents concerning the device; or

 

7.  
Adverse events or other clinical results suggesting a change in design or
manufacture.

Except with respect to the occurrence of the events set forth in either 4 or 6
above, in the event of failure to meet the milestones for “good reason”,
Licensee and Licensor will negotiate in good faith to amend the milestones,
taking into account the “good reason” event that has occurred, in order to
establish a revised set of commercially reasonable milestones and timeframes to
be met by Licensee going forward.

In the event that: (i) a challenge, claim, suit interference to the Patent
Rights that raises a significant commercial risk unless resolved, or is
incapable of being resolved, or (ii) the revelation of facts concerning the
state of development of the device, the clinical or biological results
pertaining thereto, the ownership of the device or other significant facts
bearing on the commercial viability of the device, which are contrary to or in
conflict with the statements and/or representations of the Licensor or its
agents concerning the device, Licensee will have the right to terminate this
Agreement in accordance with Section 10.3.

5.0    SUBLICENSING

The license granted in this Agreement includes the right of Licensee to grant
sublicenses to third parties during the Term. With respect to sublicenses
granted pursuant to Article 5, Licensee will:

(a)
not receive, or agree to receive, anything of value in lieu of cash as
considerations from a third party under a sublicense granted pursuant to Article
5 without the express written consent of Licensor, unless such consideration is
a cross-license of technology by Sublicensee to Licensee for Licensee’s
exploitation of the Patent Rights;

 
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(b)
to the extent applicable, include all of the rights of and obligations due to
Licensor and contained in this Agreement;

 

(c)
promptly provide Licensor with a copy of each sublicense issued; and

 

(d)
use commercially reasonable efforts to collect all payments due, directly or
indirectly, to Licensor from Sublicensees and summarize and deliver all reports
due, directly or indirectly, to Licensor from Sublicensees.

Upon termination of this Agreement for any reason, Licensor, at its sole
discretion, will determine whether Licensee will cancel or assign to Licensor
any and all sublicenses. 

6.    PATENT PROSECUTION AND PATENT COSTS

6.1    Patent Costs Incurred Pre-Effective Date. Licensee will reimburse
Licensor $264,300 for actual Patent Costs incurred by Licensor prior to the
Effective Date in accordance with the following payment schedule:

Payment Due Date
 
Payment Amount to
the Foundation
 
Payment Amount to
Hickey and Lundgren
         
Within Five (5) Days of
the Effective Date
 
 
$ 9,435
 
 
$ 31,465
November 1, 2007
 
$ 18,870
 
$ 61,130
November 1, 2008
 
$ 33,822
 
$ 109,578

6.2    Patent Rights Management. Licensor will control and manage all future
preparation, filing, prosecution and maintenance of the Patent Rights; provided
however, that Licensor will (a) cause its patent counsel to timely copy Licensee
on all official actions and written correspondence with, and received from, any
patent office, and (b) allow Licensee a reasonable opportunity to comment and
advise Licensor on all filings and communications to be made with any patent
office and Licensor will consider and reasonably incorporate all comments and
advice, provided they are consistent with Licensor’s interests. In the event
that Licensor’s patent counsel fails to perform legal services in accordance
with professional standards or performs services in a manner that may jeopardize
the Patent Rights, Licensee will notify Licensor that new patent counsel should
be selected and the parties will cooperate in the joint selection of new patent
counsel acceptable to both parties. If Licensee is not satisfied with the
services performed by Licensor’s patent counsel for any reason other than those
stated above, Licensee may notify Licensor of the issue with patent counsel and
Licensor will seek to resolve the issue in a timely manner, not to exceed thirty
(30) days from the date of such notice. If the issue is not resolved to the
satisfaction of Licensee within said time period, then Licensee may request the
selection of new patent counsel. The parties will cooperate in the selection of
new patent counsel, which counsel will be mutually acceptable to both parties.
The selection of the new counsel will be made within thirty (30) days of the
date Licensee requests new patent counsel. Both parties agree to be reasonable
in the selection of new patent counsel. When the new counsel is agreed upon by
the parties, Licensor will dismiss the original patent counsel and request a
transfer of all legal files to the new patent counsel with as much speed as is
reasonable, but in not more than fifteen (15) days.

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6.3    Post-Effective Date Patent Costs. Licensee will be directly responsible
for payment of all Patent Costs incurred after the Effective Date. Licensor will
instruct respective patent counsels to set up direct billing arrangements with
Licensee under terms and conditions satisfactory to the Licensee and consistent
with industry practices between similar entities. Licensee will directly
negotiate billing terms and legal fees with Licensor’s patent counsel. Licensor
will request copies of all invoices from patent counsel and Licensee will copy
Licensor on all payments to patent counsel.
 
6.4    Declinations. Licensee may elect to terminate its payment obligations
with respect to any patent application or patent in Patent Rights upon three (3)
months written notice to Licensor. Licensor will use reasonable efforts to
curtail further Patent Costs for such application or patent when such notice of
termination is received from Licensee. Licensee is responsible for paying any
Patent Cost incurred prior to the end of the three (3) month notice period.
Licensor, in its sole discretion and at its sole expense, may continue
prosecution and maintenance of said application or patent, in which case
Licensee’s license under such Patent Rights and other rights related to
Technology in such country or territory will terminate. Non-payment of any
portion of Patent Costs with respect to any application or patent may be deemed
by Licensor as an election by Licensee to terminate its payment obligations with
respect to such application or patent. The failure of Licensee to pay any such
fee or costs within one-hundred twenty (120) days of receipt of an invoice for
same will cause Licensee to, upon receipt of notice from Licensor, lose all
rights in the country or territory for which fees or costs were due, unless
Licensor receives notice from Licensee that such invoice is in dispute. In the
event of a dispute regarding an invoice, Licensee’s rights will not be subject
to termination for non-payment of the disputed invoice in accordance with this
section. Licensor and Licensee will make good faith efforts to resolve any such
dispute with the respective patent counsel. Following the loss of rights in any
country or territory by Licensee, Licensor will be free to exploit or contract
with third parties to exploit the Technology rights to (a) make, have made, use,
sell and offer for sale Licensed Products, and (b) use and reproduce Software,
create Derivatives, and distribute Software to end users in such jurisdiction.
Nothing herein will obligate Licensor to apply for, prosecute or maintain any
patent or copyright registration in any jurisdiction other than those set forth
in Exhibit A (List of Patents).
 
7.    BOOKS, RECORDS AND REPORTS

7.1    Books and Records. Licensee will keep complete, true and accurate books
of account containing reasonable particulars that may be necessary for the
purpose of showing the amounts payable to Licensor hereunder and for the purpose
of showing compliance with all other obligations under this Agreement. Licensee
will use reasonable efforts to require any Affiliate and Sublicensee to comply
with this Section. Said books and the supporting data will be available at all
reasonable times for five (5) years following the end of the calendar year to
which they pertain, to confidential inspection (subject to Foundation’s
obligations relating to internal reporting and accounting requirements) by
Licensor or its agents, upon reasonable notice to Licensee, for the purpose of
verifying Licensee’s royalty statement or compliance in other respects with this
Agreement. Licensor and its agents may make copies of relevant information
during the course of an inspection. In addition, Licensee agrees to provide
copies to Licensor of relevant records upon request of Licensor. Each party will
promptly pay or credit the other for any underpayment or overpayment discovered
during an inspection. Should such inspection lead to the discovery of a greater
than 5% discrepancy in reporting to Licensor’s detriment, Licensee will pay (a)
the full cost of the inspection, and (b) accrued interest at the lesser of the
maximum rate allowed by law or 1 ½ % per month.
 
11

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7.2    Reports. After an initial sale of Licensed Product by Licensee, Affiliate
or Sublicensee in a given country, within sixty (60) days after the end of each
calendar quarter during the term of the Agreement, Licensee will provide reports
containing the following information relating to the quarter: (a) number and
type of Licensed Products made by or for Licensee and any Sublicensees; (b)
number and type of Licensed Products sold by Licensee, Affiliates and
Sublicensees; (c) Net Sales (and the calculation of Net Sales); (d) royalties
due under Section 3.1; (e) Sublicensing Revenue (and the calculation of
Sublicensing Revenue, including documentation of any allowed exclusions under
Section 1.14); (f) Sublicensing Fees due under Section 3.3, (g) the total amount
(royalties and Sublicensing Fees) due for such quarter; and (h) justification
for any reduction in Royalty Rate under Section 3.2 . Within ninety (90) days
after the end of each calendar year during the term of the Agreement, Licensee
will also provide reports containing the following information relating to the
calendar year: (a) progress on the commercialization of the Technology and the
development of Licensed Products (i.e., new product development, product
evaluation and testing, marketing plans, sales forecasts, significant
commercialization events and progress related to completion of the milestones
set forth in Section 4.2); and (b) any Net Sales adjustments for allowances
according to Section 1.9. The foregoing will be provided on a country-by-country
basis.

7.3    Report Certification. Each report will be signed by an officer of
Licensee, and all reports will be prepared in accordance with U.S. G.A.A.P. If
no royalties are due for a fiscal quarter, Licensee will submit a report to
Licensor that states this.

8.    PATENT RIGHTS INFRINGEMENT

Upon either Party becoming aware of any potential infringement of the Patent
Rights, Software, Technology, Derivatives, Licensor Improvements, or other
intellectual property relating to the Licensed Products in the Territory, such
Party will promptly give notice thereof to the other Party which notice will
contain all information possessed by the Party, giving such notice relating to
such potential infringement. Licensee will have the right but not the
obligation, in its own name, to institute infringement proceedings against third
parties based on any such potential or actual infringement. If Licensee does not
institute infringement proceedings against such third parties within thirty (30)
days after its knowledge of such potential infringement, Licensor will have the
right, but not the obligation, to institute such proceedings. The expenses of
such proceedings, including legal fees, will be borne by the Party instituting
suit. Each Party will execute all necessary and proper documents and take all
other appropriate action to allow the other Party to institute and prosecute
such proceedings. Any award paid by third parties as a result of such
proceedings (whether by way of settlement or otherwise) will be applied as
follows:
 
12

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(a)  
 first, toward reimbursement for the legal fees and expenses incurred by the
Party or Parties that instituted and prosecuted suit;

 

(b)  
 second, after payment of the amount set forth in clause (a) above, thirty
percent (30%) of any remainder may be retained by the Party or Parties that
instituted and prosecuted the suit; and

 

(c)  
 third, after payment of the amount set forth in clauses (a) and (b) above, any
remainder will be treated as Net Sales under this Agreement. In the event that
Licensor receives an award, Licensor will deduct the appropriate royalty payment
in accordance with Section 3.3 and pay Licensee the balance of the award within
thirty (30) days of Licensor’s receipt of such award.

 
The indemnifications obligations under this Section 8 will be applicable to any
counterclaims of infringement asserted in connection with any legal proceeding
arising under Section 9.

9.    INDEMNIFICATION
 
9.1    Licensee will defend, indemnify and hold Licensor, its officers,
trustees, employees and agents harmless from and against any and all claims,
actions, suits, loss, injury, expenses, damages, liability, cost and expenses
(including reasonable attorneys’ fees) of any kind or nature arising out of, or
resulting from, the exercise or practice of the license granted under this
Agreement, including without limitation, liabilities arising from the
production, manufacture, sale, use, lease, or advertisement of Licensed
Products, Technology and/or Software provided that Licensor provides prompt
written notice to Licensee of such claim. Any settlement will require Licensor’s
prior written approval, which approval will not be unreasonably withheld.
Licensee will carry product liability insurance which covers Licensed Product
having such coverage limits appropriate to the risk involved in marketing the
Licensed Products and will list Foundation, Hickey and Lundgren as additional
named insured. Licensee will provide written evidence of such insurance upon
request of Licensor and will provide Licensor with at least thirty (30) days
prior written notice of any material change in or cancellation of the insurance
coverage.

9.2    Foundation will defend, indemnify and hold Licensee, Hickey, Lundgren and
their respective officers, trustees, employees and agents harmless from and
against any and all claims, actions, suits, loss, injury, expenses, damages,
liability, cost and expenses (including reasonable attorneys’ fees) of any kind
or nature arising out of, or resulting from, any production, manufacture, sale,
use, lease, advertisement, development, testing and/or clinical trial of the
Technology or Software or any product created from the Technology prior to the
Effective Date, including without limitation any product liability claim or
other claim of any kind relating to the use of a device that was manufactured
using the Technology prior to this Agreement and used prior to the Effective
Date of this Agreement. Foundation will also indemnify and hold Licensee,
Hickey, Lundgren and their respective officers, trustees, employees and agents
harmless from and against any and all claims, actions, suits, loss, injury,
expenses, damages, liability, cost and expenses (including reasonable attorneys’
fees) of any kind or nature arising out of, or resulting from its use of the
Technology or Software under Section 2.2 Retained Rights.

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10.    TERMINATION

10.1    Termination for Licensee Breach. If Licensee should (a) materially
violate or fail to perform any covenant, condition or undertaking of the
Agreement, or (b) have a bankruptcy action filed against it, or (c) have a
receiver appointed for it; then Licensor may give written notice of such default
to Licensee. If Licensee should fail to cure such default within ninety (90)
days of notice of such default, then this Agreement may, at Licensor’s option,
be terminated by a second written notice to Licensee.

10.2    Automatic Termination. If Licensee (a) will cease to attempt to carry on
its business with respect to the rights granted in the Agreement for a period of
sixty (60) days, (b) has filed a bankruptcy action seeking liquidation, (c)
becomes financially unable to continue operations as a going concern, or (d)
makes an assignment for the benefit of creditors, this Agreement will terminate
upon thirty (30) days prior written notice to Licensee.

10.3    Termination by Country. If either party materially breaches its
obligations under this Agreement, only in respect of a particular country or
particular countries within the Territory, then the non-breaching party may
terminate the obligations of the parties under this Agreement with respect to
each such country, in accordance with the notice procedure set forth in Section
10.1 above, provided that the non-breaching party will expressly identify, in
the notice of termination, the country or countries subject to such termination.
Upon a termination of this Agreement solely with respect to a particular country
pursuant to this Section 10.3, the Agreement will continue in full force and
effect, provided that the definition of the term “Territory” will be deemed to
exclude the country or countries in respect of which the Agreement was
terminated. Additionally, Licensee will immediately assign or cause to be
transferred to Licensor, at Licensor’s cost and expense, all regulatory
approvals and all licenses and all registered user, distributor and other rights
Licensee may have acquired with respect to the Licensed Products, in such
country, and Licensee will cease to use and have no further rights thereto in
such country. To the extent assignment or transfer of approvals, licenses,
registered user, distribution and other rights is not permitted under local law
in such country, Licensee will co-operate in their cancellation or abandonment,
and in their reissuance to Licensor.

10.4    Termination for Licensor Breach. If Licensee discovers (i) a challenge,
claim, suit interference to the Patent Rights that raises a significant
commercial risk unless resolved, or is incapable of being resolved, or (ii) the
revelation of facts concerning the state of development of the device, the
clinical or biological results pertaining thereto, the ownership of the device
of other significant facts bearing on the commercial viability of the device,
which are contrary to or in conflict with the statements and/or representations
of the Licensor or its agents concerning the device, Licensee will have the
right to terminate this Agreement upon written notice to Licensor. At Licensee’s
option, such termination can be for the entire Agreement or only in respect of
certain countries or territories, as set forth in Section 10.3, above. Upon such
termination, any and all obligations of Licensee in respect of the Licensed
Products and Technology will cease, including but not limited to Licensee’s
obligations to pay Annual Minimum Royalties, and any and all Technology rights
granted to Licensee by Licensor will also cease.

14

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10.5    New Intellectual Property. Any new intellectual property related to the
Technology (including Licensee Improvements and Derivatives) developed by or
owned by Licensee will be assigned by Licensee to Licensor if the entire
Agreement (i.e. does not include Section 10.3 Termination By Country) is
terminated for any reason prior to its scheduled expiration; provided however,
that if Licensee challenges a termination by Licensor before a court or
arbitrator of competent jurisdiction, the assignment will only be made if such
court or arbitrator determines that Licensee is in breach of this Agreement. Any
manufacturing, engineering or technical consulting contracts entered into by
Licensee or its Affiliates related to the Technology and the development of
Licensed Products will include terms requiring that the contracted party must
assign all intellectual property rights to Licensee such that Licensee may
fulfill its obligations under this Section.

10.6    Technology Related Property. Documentation, technical information and
property of any kind relating to the Technology and developed by or for Licensee
during the Term (collectively, “Technology Related Property”) will be provided
to and become the property of Licensor if the Agreement is terminated for any
reason prior to its scheduled expiration; provided however, that if Licensee
challenges a termination by Licensor before a court or arbitrator of competent
jurisdiction, the assignment will be made only if such court or arbitrator
determines that Licensee is in breach of this Agreement. Technology Related
Property includes, but is not limited to, product designs and specifications,
software, test data, laboratory and clinical trial data, market research
results, and dies for making Licensed Products.

10.7    Accrued Obligations. Termination of this Agreement will not relieve
either party of any obligation or liability accrued hereunder prior to such
termination, or rescind or give rise to any right to rescind any payments made
or other consideration given to Licensor hereunder prior to the time such
termination becomes effective. Such termination will not affect in any manner
any rights of Licensor arising under this Agreement prior to the date of such
termination. Licensee will pay all attorneys’ fees and costs incurred by
Licensor in enforcing any obligation of Licensee or accrued right of Licensor.

10.8    Disposition of Licensed Products. Upon expiration or termination of this
Agreement by either party, Licensee will provide Licensor with a written
inventory of all Licensed Products in process of manufacture, in use or in
stock. Licensee may dispose of any such Licensed Products within the one hundred
and fifty (150) day period following such expiration or termination, provided,
however, that Licensee will pay royalties and render reports to Licensor thereon
in the manner specified herein.

10.9    Survival. The provisions Section 1 (Definitions), Section 7 (Books,
Records and Reports), Section 9 (Indemnification), Section 10.3 (New
Intellectual Property), Section 10.4 (Technology Related Property), Section 10.6
(Disposition of Licensed Products), Section 10.7 (Survival), Section 11
(Warranty and Liability), Section 14 (Non-Use of Names), Section 16
(Confidentiality) and Section 17 (Miscellaneous) will survive termination of
this Agreement.
 
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11.    WARRANTY AND LIABILITY
 
11.1    Authority. As of the Effective Date, each party represents and warrants
to the other that (a) it has the corporate power and authority to enter into
this Agreement and perform its obligations hereunder; (b) it has taken all
necessary corporate action on its part required to authorize the execution and
delivery of this Agreement and the performance of its obligations hereunder; and
(c) the Agreement has been duly executed and delivered on behalf of such party,
and constitutes a legal, valid and binding obligation of such party and is
enforceable against it in accordance with its terms.

11.2    Intellectual Property. As of the Effective Date, Licensor represents and
warrants to Licensee that to the best of its knowledge (a) it owns, free and
clear of any liens, all right, title and interest in the Technology, patents,
trade secrets, know-how, copyrights, and other intellectual property that are
licensed to Licensee under this Agreement, (b) it has all rights and licenses
necessary to enable it to grant the licenses granted hereunder, (c) it is not
aware of any pending or threatened litigation (and has not received any
communication relating thereto) which alleges that Licensor’s activities with
respect to the Patent Rights, Technology or otherwise related to this Agreement
have infringed or misappropriated, or that by conducting the activities as
contemplated herein Licensor would infringe or misappropriate, any of the
intellectual property rights of any other third party, (d) none of the licensed
Patents have been subject to a judicial or administrative judgment, order or
decree holding any of the licensed Patents to be invalid or unenforceable, (e)
all maintenance fees and/or annuity payments required to prevent abandonment of
any of the licensed Patents have been paid as of the date of this Agreement, (f)
it has no knowledge of any charges that the licensed Patents infringe on any
rights of any third parties, and (g) it has no knowledge of any infringement of
any of the licensed Patents.

11.3    No Consents or Approvals. Except as otherwise described in this
Agreement, each party represents and warrants to the other that all necessary
consents, approvals and authorizations of all governmental authorities and other
persons or entities required to be obtained by such party in connection with
entry into this Agreement have been obtained.

11.4    Clinical Trials. Licensor represents and warrants, to the best of its
knowledge and understanding, that Exhibit C, attached hereto, is a true and
accurate list of all of the clinical trials that were conducted worldwide by
Licensor, its agents or subcontractors or third parties in respect of the
Technology.

11.5    No Conflict. Each party represents and warrants to the other that the
execution and delivery of this Agreement by such party and the performance of
such party's obligations hereunder (a) do not conflict with or violate any
requirement of applicable law or regulation or any provision of articles of
incorporation or bylaws of such party in any material way, and (b) do not
conflict with, violate, breach, constitute a default or require any consent
under, any contractual obligation or court or administrative order by which such
party is bound.

11.6    EXCEPT AS OTHERWISE EXPRESSLY SET FORTH HEREIN, LICENSOR MAKES NO
ADDITIONAL REPRESENTATIONS AND EXTENDS NO WARRANTIES OF ANY KIND, EITHER EXPRESS
OR IMPLIED, INCLUDING, BUT NOT LIMITED TO, WARRANTY OF MERCHANTABILITY, FITNESS
FOR A PARTICULAR PURPOSE, AND VALIDITY OF PATENT RIGHTS CLAIMS, ISSUED OR
PENDING.

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11.7    Other than the provisions of Sections 11.1, 11.2, 11.3, 11.4 and 11.5
above, Licensor makes no further warranty or representation that anything made,
used, sold or commercially transferred under the terms of this Agreement will be
free from infringement of any third party patents, copyright or other
intellectual property claims.

11.8    EXCEPT WITH RESPECT TO THE INDEMNITY OBLIGATIONS SET FORTH IN SECTION
9.2, IN NO EVENT WILL LICENSOR BE LIABLE FOR ANY INCIDENTAL, SPECIAL PUNITIVE OR
CONSEQUENTIAL DAMAGES RESULTING FROM THE EXERCISE OF THIS LICENSE OR THE USE OF
THE TECHNOLOGY, SOFTWARE, LICENSED PRODUCT OR LICENSED METHOD, INCLUDING FOR
LOST PROFITS, OR FOR LOST DATA OR DOWNTIME, WHETHER OR NOT LICENSOR HAS BEEN
ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.

11.9    THIS AGREEMENT DOES NOT CONFER BY IMPLICATION, ESTOPPEL, OR OTHERWISE
ANY LICENSE OR RIGHTS TO ANY OTHER LICENSOR PROPERTY OTHER THAN THOSE RIGHTS
EXPRESSLY STATED HEREIN.

11.10    Each party to this Agreement, by execution hereof, acknowledges,
covenants and agrees that it has not been induced in anyway by one or more of
the other parties, or any of their employees, to enter into this Agreement, and
further warrants and represents that (i) it has conducted sufficient due
diligence with respect to all items and issues pertaining to this Article 11 and
all other matters pertaining to this Agreement; and (ii) has adequate knowledge
and expertise, or has utilized knowledgeable and expert consultants, to
adequately conduct due diligence, and agrees to accept all risks inherent
herein.

12.    ASSIGNMENT
 
This Agreement will not be assignable by a party hereto without the express
written consent of the other party, except that either party may assign or
otherwise transfer this Agreement and the rights and obligations hereunder,
without the other party’s consent, to a successor to all or substantially all of
its business or assets to which this Agreement pertains, whether by merger,
sale, operation or law or otherwise. This Agreement will be binding upon and
inure to the benefit of the permitted successors and assigns of the parties. The
foregoing will not be construed to preclude either party from retaining
subcontractors or distributors in connection with each party’s performance under
this Agreement, without notice or consent of the other party, provided, however,
that each party will be responsible for the performance of its subcontractors to
the same extent as if such performance had been made by such party.
 
13.    OBLIGATIONS TO FEDERAL GOVERNMENT AND OTHER SPONSORS
 
The Agreement will be subject to the rights of the United States Government, if
any, resulting from any funding of the Technology by the United States
Government. This Agreement will also be subject to the rights of any other
entities that may have contributed funding to development of the Technology, if
any. Licensee acknowledges that such rights, if applicable to Technology, may
reserve to the United States Government, a royalty-free, non-exclusive,
non-transferable license to practice or have practiced on it’s behalf any
government-funded invention claimed within any associated patents or patent
applications as well as other rights.

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14.    NON-USE OF NAMES

Licensee agrees that it will not use any Licensor name or State University of
New York, or University at Buffalo, adaptation thereof (including logos and
symbols associated with Foundation and “State University of New York, and
“University at Buffalo”) (collectively “SUNY”), or the names of the scientists,
researchers or others employed at or with SUNY in any advertising, promotional
or sales literature without first obtaining Licensor’s prior written consent, or
in the case of the names of such researchers, scientists or employees the prior
written consent of the individuals, except that Licensee may state that it is a
licensee of the Licensor.

15.    COMPLIANCE WITH LAWS

15.1    General Compliance. Licensee will ensure compliance with all applicable
county, state, federal or foreign laws, rules, and regulations governing the
production, use, marketing, sale, and distribution of Licensed Products.

15.2    Registration of this Agreement. When required by local or national law,
Licensee will register this Agreement, pay all costs and legal fees connected
therewith, and otherwise insure that the local/national laws affecting this
Agreement are fully satisfied.

15.3    Export Control Laws. The Export Administration Regulations of the U.S.
Department of Commerce (15 CFR Parts 770 and 785) prohibit, except under a
special validated license, the exportation from the United States of technical
data relating to certain commodities (listed in the Regulations), unless the
exporter has received certain written assurance from the foreign importer. In
order to facilitate the exchange of technical information under this Agreement,
therefore, Licensee gives its assurance to Licensor that Licensee will not
knowingly, unless prior authorization is obtained from the U.S. Office of Export
Controls, re-export directly or indirectly any technical data received from
Licensor under this Agreement and will not export directly Licensed Product or
technical data to any restricted country in each case, except in compliance with
all U.S. laws and regulations. Licensor neither represents that a license is or
is not required nor that, if required, it will be issued by the U.S. Department
of Commerce.
 
16.    CONFIDENTIALITY

16.1    Confidential Information. As used in this Agreement, “Confidential
Information” will mean confidential or proprietary information exchanged between
the parties hereunder and relating to the Technology Rights or the performance
of the obligations set forth herein. Confidential Information will include, but
not be limited to: (a) written or other tangible information marked as
confidential or proprietary, (b) orally disclosed information that is identified
as confidential and summarized in a notice delivered within thirty (30) days of
the disclosure, and (c) information that should reasonably be considered
confidential under the context in which the disclosure is made including but not
limited to, Improvements information disclosed pursuant to Section 2.3
hereunder, reports provided to Licensor pursuant to Section 7.2, information
relating to payments made by Licensee in respect of the Licensed Products,
nonpublic patenting information and nonpublic infringement information.

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16.2    Confidentiality Obligations. Each party agrees to (a) maintain the other
party’s Confidential Information in confidence, and (b) not disclose the other
party’s Confidential Information to any other party, without the prior written
consent of the disclosing party. Each party agrees to limit its use of the other
party’s Confidential Information to the purposes permitted by this Agreement. To
the extent that either party is required to disclose the Confidential
Information of the other party pursuant to interrogatories, requests for
information or documents in legal proceedings, subpoena, civil investigative
demand or other similar process, such party will provide the other party with
prompt written notice of any such request. The owner of the Confidential
Information may then seek a protective order or other appropriate remedy and/or
waive compliance with Section 16 of this Agreement. Nothing in this
confidentiality obligation will restrict Licensee’s ability to disclose
information required by the SEC or other governmental regulatory agency.

16.3    Termination and Expiration of Confidentiality Obligations. The
obligations of Section 16.2 will terminate with respect to any particular
portion of the Confidential Information which (a) was in the receiving party’s
possession prior to disclosure to it by the disclosing party; (b) is or
hereafter becomes, through no fault of the receiving party, part of the public
domain by publication or otherwise; (c) is furnished to the receiving party by a
third party after the time of disclosure hereunder as a matter of right and
without restriction on its disclosure; or (d) is independently developed by
employees or agents of the receiving party independently of and without
reference to Confidential Information received from the disclosing party.

17.    MISCELLANEOUS

17.1    Arbitration. The parties agree that in the event of a dispute between
them arising out of, concerning or in any way relating to this Agreement,
including its interpretation, but specifically excluding disputes involving
ownership of Technology, which can not be settled by a good faith effort by the
parties to resolve such issue, will be submitted to binding arbitration under
the Federal Arbitration Act as amended and in accordance with the Commercial
Arbitration Rules then prevailing of the American Arbitration Association
(“AAA”). The arbitration will be held in New York County, New York by a panel of
three (3) arbitrators appointed pursuant to the AAA rules and judgment upon the
award rendered by the arbitrators may be entered into any court having
jurisdiction thereof. The parties agree that any dispute with respect to the
ownership of the Technology will be brought in the Southern District of New York
and the parties hereby consent and agree to the exclusive jurisdiction of that
court.

17.2    Governing Law. This Agreement will be construed, governed, interpreted
and applied in accordance with the laws of the State of New York, except that
questions affecting the construction and effect of any patent will be determined
by the law of the country in which the patent was granted.

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17.3    Entire Agreement. This Agreement, including any Exhibits or attachments
hereto, embodies the entire agreement and understanding among the parties to
this Agreement and supersedes all prior agreements and understandings relating
to the subject matter of this Agreement. None of the terms or provisions of this
Agreement may be altered, modified, or amended except by the execution of a
written instrument signed by the parties hereto.

17.4    Severability. The provisions of this Agreement are severable, and in the
event that any provisions of this Agreement are determined to be invalid or
unenforceable under any controlling body of law, such invalidity or
unenforceability will not in any way affect the validity or unenforceability of
the remaining provisions hereof.

17.5    Notices. All notices, requests, consents and other communications to be
provided under this Agreement must be in writing and will be delivered in person
or sent overnight delivery by a nationally recognized courier or by certified or
registered mail, return receipt requested to the addresses provided below, and
will be deemed to have been given when hand delivered, one (1) day after mailing
when mailed by overnight courier or five (5) days after mailing by registered or
certified mail:

If to Licensee, to:

Medi-Hut Co., Inc.
215 Morris Avenue 
Spring Lake, New Jersey 07762
Attn: Thomas S. Gifford, Executive Vice President and Chief Financial Officer

and

Giordano, Halleran and Ciesla
125 Half Mile Road
P.O. Box 190
Middletown, New Jersey 07748
Attn: Paul T. Colella

If to Licensor, to:

UB Office of Science, Technology Transfer and Economic Outreach (STOR)
Intellectual Property Division
University at Buffalo Technology Incubator Baird Research Park
1576 Sweet Home Road
Amherst, NY 14228
Attn: Director of Intellectual Property Division

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and

Donald D. Hickey, M.D.
33 Burbank Drive
Snyder, New York 14226
and
 
Clas Lundgren, M.D., Ph.D.
42 Burroughs Drive
Snyder, New York 14226

17.6    Waiver. No waiver by either party hereto of any breach or default of any
of the covenants or agreements herein set forth will be deemed a waiver as to
any subsequent and/or similar breach or default.

17.7    Patent Marking. Licensee will mark all Licensed Products made, used or
sold under the terms of this Agreement, or their containers, in accordance with
all applicable patent marking laws.

IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by
their duly authorized representatives.

MEDI-HUT CO., INC.     THE RESEARCH FOUNDATION OF
STATE UNIVERSITY OF NEW YORK                         By: /s/ David R. LaVance  
  By: /s/ Robert J. Genco  

--------------------------------------------------------------------------------

David R. LaVance      

--------------------------------------------------------------------------------

Robert J. Genco, D.D.S., Ph.D.  
 
Title: President and Chief Executive Officer

Date: November 10, 2006
     
 
Title: Vice Provost, Director, STOR

Date: November 10, 2006

 

DONALD D. HICKEY, M.D.     CLAS E. LUNDGREN, M.D., Ph.D.                        
By: /s/ Donald D. Hickey     By: /s/ Clas E. Lundgren  

--------------------------------------------------------------------------------

Donald D. Hickey, M.D.      

--------------------------------------------------------------------------------

Clas E. Lundgren, M.D., Ph.D.  
Date: November 10, 2006      
Date: November 10, 2006

21

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EXHIBIT A - PATENTS
 

Patent or Application Number
Location
Title (RF Docket Number)
 
Filed
Issued
 
 
Expires
Assignee
Inventor
Sponsor
5,048,532
U.S. Patent
Method and Apparatus for Measuring Blood Pressure (S-409)
9/18/1989
9/17/1991
9/18/2009
Research Foundation
Hickey
None
5,181,517
U.S. Continuation in Part Patent
Method and Apparatus for the Measurement of Atrial Pressure (S-409)
6/25/1991
1/26/1993
1/26/2010
Research Foundation
Hickey
None
PCT/US
91/04504
Corresponds to U.S. 5,181,517
Method and Apparatus for the Measurement of Atrial Pressure (S-409)
6/24/1991
N/A
N/A
Hickey and Lundgren
Hickey
None
2,111,094
Canada
Method and Apparatus for the Measurement of Atrial Pressure (S-409)
6/24/1991
5/4/1999
6/24/2011
Hickey and Lundgren
Hickey
None
615,422
Netherlands, France, United Kingdom, Italy
Method and Apparatus for the Measurement of Atrial Pressure (S-409)
6/24/1991
1/19/2000
6/24/2011
Hickey and Lundgren
Hickey
None
69131931.6
Germany
Method and Apparatus for the Measurement of Atrial Pressure (S-409)
6/24/1991
1/19/2000
6/24/2011
Hickey and Lundgren
Hickey
None
3289898
Japan
Method and Apparatus for the Measurement of Atrial Pressure (S-409)
6/24/1991
1/10/2002
6/24/2011
Hickey and Lundgren
Hickey
None
665747
Australia
Method and Apparatus for the Measurement of Atrial Pressure (S-409)
6/24/1991
7/18/1996
6/24/2011
Hickey and Lundgren
Hickey
None
180459
Mexico
Method and Apparatus for the Measurement of Atrial Pressure (S-409)
7/30/1991
1/3/1996
7/30/2011
Hickey and Lundgren
Hickey
None
NI-59518
Taiwan
Method and Apparatus for the Measurement of Atrial Pressure (S-409)
7/5/1991
2/1/1992
7/4/2011
Hickey and Lundgren
Hickey
None
184,960
India
Method and Apparatus for the Measurement of Atrial Pressure (S-409)
7/8/1991
7/6/2001
7/8/2011
Hickey and Lundgren
Hickey
None

A-1

--------------------------------------------------------------------------------

Patent or Application Number
Location
Title (RF Docket Number)
 
Filed
Issued
 
 
Expires
Assignee
Inventors
Sponsor
5,263,485
U.S. Continuation in Part Patent
Combination Esophageal Catheter for the Measurement of Atrial Pressure (S-409)
11/23/1992
11/23/1993
11/23/2010
Research Foundation
Hickey
None
5,398,692
U.S. Continuation in Part Patent
Combination Esophageal Catheter for the Measurement of Atrial Pressure (S-409))
8/31/1993
3/21/1995
9/17/2008
Research Foundation
Hickey
None
5,551,439
U.S. Continuation in Part Patent
Method of Determining a Mean Pressure from a Source within a Body (S-409)
2/24/1995
9/3/1996
9/3/2013
Research Foundation
Hickey
None
5,570,671
U.S. Continuation in Part Patent
Method for Positioning Esophageal Catheter for Determining Pressures Associated
with the Left Atrium (S-409)
6/7/1995
11/5/1996
11/5/2013
Research Foundation
Hickey
None
5,697,375
U.S. Continuation in Part Patent
Method and Apparatus Utilizing Heart Sounds for Determining Pressure Associated
with the Left Atrium (S-409)
1/24/1995
12/16/1997
12/16/2014
Research Foundation
Hickey
None
5,921,935
U.S. Divisional Patent
Method and Apparatus for Utilizing Heart Sounds For Determining Pressures
Associated with the Left Atrium (S-409)
9/2/1997
7/13/1999
9/18/2009
Research Foundation
Hickey
None
PCT/US
96/17617
Corresponds to U.S. ‘671, ‘375, ‘935
Method and Apparatus for Determining Pressures Associated with the Left Atrium
(S-409)
11/4/1996
N/A
N/A
Hickey and Lundgren
Hickey
None
2,270,978
Canada
Apparatus for Determining Pressures Associated with the Left Atrium (S-409)
11/4/1996
N/A
11/14/2016
(if granted)
Hickey and Lundgren
Hickey
None

 
A-2

--------------------------------------------------------------------------------

 
Patent or Application Number
Location
Title (RF Docket Number)
 
Filed
Issued
 
 
Expires
Assignee
Inventors
Sponsor
69635830
Germany
Apparatus for Determining Pressures Associated with the Left Atrium (S-409)
11/4/1996
2/15/2006
11/4/2016
Hickey and Lundgren
Hickey
None
957,755
France
Apparatus for Determining Pressures Associated with the Left Atrium (S-409)
11/4/1996
2/15/2006
11/4/2016
Hickey and Lundgren
Hickey
None
957,755
Italy
Apparatus for Determining Pressures Associated with the Left Atrium (S-409)
11/4/1996
2/15/2006
11/4/2016
Hickey and Lundgren
Hickey
None
957,755
Netherlands
Apparatus for Determining Pressures Associated with the Left Atrium (S-409)
11/4/1996
2/15/2006
11/4/2016
Hickey and Lundgren
Hickey
None
957,755
United Kingdom
Apparatus for Determining Pressures Associated with the Left Atrium (S-409)
11/14/1996
2/15/2006
11/4/2016
Hickey and Lundgren
Hickey
None
H10-521,324
Japan
Apparatus for Determining Pressures Associated with the Left Atrium (S-409)
11/4/1996
6/5/2006
11/4/2016
Hickey and Lundgren
Hickey
None
2005-375167
Japan
(Divisional of H10-521,324)
Apparatus for Determining Pressures Associated with the Left Atrium (S-409)
12/27/2005
N/A
11/4/2016
Research Foundation
Hickey
None
6,120,442
U.S. Patent
Method and Apparatus for Noninvasive Determination of Cardiac Performance
Parameters (R-5421)
6/12/1998
9/19/2000
6/12/2018
Research Foundation
Hickey
None
6,238,349
U.S. Divisional Patent
Method and Apparatus for Noninvasive Determination of Cardiac Performance
Parameters (R-5421)
7/25/2000
5/29/2001
6/12/2018
Research Foundation
Hickey
None

 
A-3

--------------------------------------------------------------------------------

 
Patent or Application Number
Location
Title (RF Docket Number)
 
Filed
Issued
 
 
Expires
Assignee
Inventors
Sponsor
PCT/US
98/12505
Corresponds to U.S. ‘442 and ‘349
Method and Apparatus for Noninvasive Determination of Cardiac Performance
Parameters (R-5421)
6/12/1998
N/A
N/A
Hickey and Lundgren
Hickey
None
2,294,998
Canada
Non-Invasive Monitoring of Cardiac Performance (‘442 and ‘349 Patents)
6/12/1998
Pending
Will expire 6/12/18, if granted.
Hickey and Lundgren
Hickey
None
98932763.0
Europe designating Germany, United Kingdom, France, Italy, Spain, Switzerland,
Liechtenstein
Non-Invasive Monitoring of Cardiac Performance (‘442 and ‘349 Patents)
6/12/1998
Pending
Will expire 6/12/18, if granted.
Hickey and Lundgren
Hickey
None
742481
Australia
Non-Invasive Monitoring of Cardiac Performance (‘442 and ‘349 Patents)
6/12/1998
4/18/2002
6/12/2018
Hickey and Lundgren
Hickey
None
6,432,059
U.S. Continuation in Part Patent
Method and Apparatus for More Precisely Determined Mean Left Atrial Pressure
(R-5421)
5/15/2001
8/13/2002
6/12/2018
Research Foundation
Hickey
None
60/691,561
U.S. Provisional Application
Esophageal Catheter for Monitoring Cardiac Performance (R-6013)
6/17/2005
N/A
N/A
Research Foundation
Hickey
None
11/471,145
U.S. Non-Provisional Application
Method of Determining Cardiac Indicators (R-6013)
6/19/2006
N/A
N/A
Research Foundation
Hickey
None
TBD
U.S. Provisional Application
Method for Positioning Esophogeal Catheter (Docket TBD)
TBD
N/A
Research Foundation
TBD
NYS CAT
TBD

A-4

--------------------------------------------------------------------------------

 
EXHIBIT B - TANGIBLE PROPERTY
 

1.  
One prototype two-balloon esophogeal catheter.

 

2.  
One prototype system control box.

 

3.  
One copy of Source Code.

 

4.  
One laptop with operational Source Code, which will be returned to Licensor
within ninety (90) days of the transfer, unless otherwise mutually agreed to by
the parties.

 

5.  
One Dynamap Blood Pressure Monitor, which will be returned to Licensor within
ninety (90) days of the transfer, unless otherwise mutually agreed to by the
parties.

 

6.  
One ECG device compatible with the system, which will be returned to Licensor
within ninety (90) days of the transfer, unless otherwise mutually agreed to by
the parties.

 
B-1

--------------------------------------------------------------------------------

 
EXHIBIT C - CLINICAL TRIALS WORLDWIDE TO DATE
 

1.  
Lab subjects. Healthy volunteers used for testing and development of device at
University at Buffalo physiology lab. 21 individuals. Testing from 1986 to 2001.
No sponsor.

2.  
Intensive care unit patients in Millard Fillmore Hospital, Buffalo, N.Y. 25
individuals from July 1991 to April 1992. No sponsor.

3.  
Open heart surgery patients in Millard Fillmore Hospital, Buffalo, N.Y. 16
individuals from November 1993 to July 1994. Sponsored by Cobe Cardiovascular.

4.  
Cobe Cardiovascular conducted catheter experiments in patients in Florida
sometime around 1994 under a license agreement then in effect. Neither Dr.
Hickey or, to the best of Licensor’s knowledge, any other employee or agent of
the Licensor was privy to the protocol, had anything to do with the conduct of
the experiments or has knowledge of the patient enrollment, results or outcomes
of the study. The study may have been done in open heart surgery.

C-1

--------------------------------------------------------------------------------

EXHIBIT D

RESTRICTIVE COVENANT AND CONFIDENTIALITY AGREEMENT
 
THIS RESTRICTIVE COVENANT AND CONFIDENTIALITY AGREEMENT (hereinafter referred to
as the “Agreement”) is made and entered into this ____ day of November 2006, by
and between Donald D. Hickey, M.D. (“Hickey”) and Medi-Hut Co., Inc., a
corporation duly organized under the laws of the State of Nevada, and having its
principal place of business at 215 Morris Avenue, Spring Lake, NJ 07762
(“Licensee”). This Agreement is incorporated by reference and is part of the
Technology License Agreement, dated November ___, 2006 by and among Licensee,
Hickey and The Research Foundation of State University of New York, for and on
behalf of University at Buffalo (the “Foundation”). Defined terms have the same
meaning as in the Technology License Agreement unless they are otherwise defined
herein.
 
AGREEMENT
 
WHEREAS, pursuant to the terms and conditions of the Technology License
Agreement, Licensee wishes to obtain the exclusive license to the Technology,
Licensed Product and related Intellectual Property (as used herein, the terms
“Technology”, “Licensed Product” and “Intellectual Property” will have the
meaning ascribed to such terms in the Technology License Agreement),
 
WHEREAS, Dr. Hickey has developed and has had access to the Technology, Licensed
Product and Intellectual Property relating to the Technology;
 
NOW THEREFORE, in consideration of the foregoing, of the mutual promises herein
contained, and of other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto, intending
legally to be bound, hereby agree as follows:
 
1.    Non-compete. Except as provided for below, Dr. Hickey agrees that during
the term of the Technology License Agreement, he will not knowingly own,
operate, franchise or become employed by, or be under contract with, or
otherwise assist any person or entity which markets or distributes any product
that competes or has the potential to compete with the Licensed Products in the
Territory (as defined in the Technology License Agreement). Dr. Hickey agrees
that he will not have the right to use, create, duplicate, or otherwise exploit
the Technology, Software or Derivatives to engage in, or assist any person or
entity to engage in, the commercial exploitation of the Technology, Software,
Derivatives or Licensed Products.
 
Nothing herein will be construed as prohibiting Dr. Hickey from continuing to
perform (a) services incident to his position at the University of Buffalo,
including, for example and without limitation, educational research, internal
research and development for educational purposes of the Technology, Software
and Derivatives. Dr. Hickey will have the right to create derivatives of the
Software for internal and educational purposes only. Nothing set forth in this
Section 1 will be construed to grant Dr. Hickey a license or otherwise permit
Dr. Hickey to copy, create derivative works from, publish, reproduce or
otherwise use or reuse any of the items subject to the Technology License
Agreement for any purpose whatsoever, without complying with the ‘First Look’
provisions of the Technology License Agreement. Dr. Hickey hereby waives and
agrees not to assert any moral rights against Licensee in respect of such items.
 
D-1

--------------------------------------------------------------------------------

 
2.    Non-Disclosure of Confidential Information. Dr. Hickey agrees that he will
not, in any fashion, form or manner, either directly or indirectly, use, sell,
divulge, communicate, furnish or disclose to any person, firm, partnership,
company, corporation, or other entity, any Know How, Intellectual Property
and/or trade secrets, including without limitation any and all confidential
information relating to the Technology. Nothing herein will be construed as
prohibiting Dr. Hickey from disclosing the Know How, Intellectual Property
and/or trade secrets and/or other confidential information relating to the
Technology or software as it existed as of the date of this Agreement to his
research and/or teaching collaborators and graduate assistants who have been
made aware of and have agreed to undertake this confidentiality obligation.
Moreover, this obligation will not extend to information which, through no fault
of Dr. Hickey, becomes part of the public domain by publication or otherwise; is
received from third parties on a non-confidential basis, or is independently
developed by Dr. Hickey, his collaborators and/or graduate assistants subsequent
to the date of this Agreement, provided that the ‘First Look’ provisions of the
Technology License Agreement have been satisfied.
 
3.    Remedies
 
(a) Dr. Hickey agrees that the remedy at law for any breach or threatened breach
of the requirements of paragraph 1 or 2 of this Agreement may be inadequate and
that any breach or attempted breach may cause immediate and permanent damage to
the Licensee in an amount which would be difficult to ascertain and, therefore,
Dr. Hickey agrees and consents that in the event of any breach or threatened
breach of said paragraphs, in addition to any and all other legal and equitable
remedies available to the Licensee for such breach or threatened breach,
including a recovery of damages, the Licensee will be entitled to seek
preliminary or permanent injunctive relief without the necessity of proving
actual damages by reason of such breach, and, to the extent permissible under
the applicable statutes and rules of procedure, Dr. Hickey also agrees that a
temporary restraining order may be sought upon commencement of such an action.
 
(b) In the event that any action, suit or proceeding at law or in equity is
brought pursuant to this Agreement to construe, interpret, or enforce any
provision of this Agreement or to seek money damages for the threatened breach
or breach thereof, the prevailing party will be entitled, upon demand, to
reimbursement from the other party of any and all expenses incurred in
connection therewith, including without limitation, attorney’s fees and
disbursements actually incurred.
 
4.    Reasonableness of Restrictions. Dr. Hickey has carefully read and
considered the provisions hereof and, having done so, agrees that the
restrictions set forth herein are fair and reasonable and are reasonably
required for the protection of the interests of the Licensee.
 
5.    Severability. If any one or more of the provisions of this Agreement will
be determined to be invalid, illegal, or unenforceable in any respect for any
reason, the validity, legality, and enforceability of any such provision in
every other respect and the remaining provisions of this Agreement will not in
any way be impaired. Dr. Hickey acknowledges and agrees that if any of the
restrictive covenants in this Agreement are found by any court having
jurisdiction to be too broad or too restrictive, then the covenant will
nevertheless remain effective, but will be considered amended to a point
considered by said court as reasonable and, as so amended, will be fully
enforceable.
 
D-2

--------------------------------------------------------------------------------

 
6.    Assignment. In the event that the Licensee will at any time be merged or
consolidated with any other person, corporation or entity or will sell or
otherwise transfer a substantial portion of its assets to any person,
corporation or entity and assign this Agreement in connection with such sale,
the provisions of this Agreement will be binding upon and inure to the benefit
of the Licensee or other entity surviving or resulting from such merger or
consolidation or to which such assets will be sold or transferred, as the case
may be. This Agreement will be binding upon the parties and their heirs,
administrators, successors and permitted assigns.
 
7.    Governing Law. It is understood and agreed that the construction and
interpretation of this Agreement will, at all times and in all respects, be
governed by the internal laws of the State of New York, without giving effect to
the conflict of laws provisions thereof.
 
8.    Waiver. No delay or failure on the part of the Licensee in exercising any
right, power, or privilege under this Agreement will impair any such right,
power, or privilege or be construed as a waiver of any default or any
acquiescence therein. No single or partial exercise of any such right, power, or
privilege will preclude the further exercise of such right, power, or privilege,
or the exercise of any other right, power, or privilege. No waiver will be valid
against the Licensee unless made in writing and signed by the Licensee and then
only to the extent expressly specified therein.
 
9.    Headings. The headings of the paragraphs contained in this Agreement are
for reference purposes only and will not in any way affect the meaning or
interpretation of any provision of this Agreement.
 
10.    Pronouns. All pronouns used herein will be deemed to refer to the
masculine, feminine, or neuter gender as the context requires.
 
11.    Entire Agreement. This Agreement and the agreements referenced herein
constitute the entire among the parties with respect to the subject matter
hereof and supersede and replace all prior understandings and agreements among
the parties with respect to the subject matter hereof.
 
IN WITNESS WHEREOF, the Licensee and Dr. Hickey have duly executed this
Restrictive Covenant and Confidentiality Agreement as of the day and year first
written above.
 

Medi-Hut Co., Inc.                      

--------------------------------------------------------------------------------

By: David R. LaVance    

--------------------------------------------------------------------------------

Donald D. Hickey, M.D., individual Title: President and Chief Executive Officer
     

D-3

--------------------------------------------------------------------------------

EXHIBIT E
 
RESTRICTIVE COVENANT AND CONFIDENTIALITY AGREEMENT
 
THIS RESTRICTIVE COVENANT AND CONFIDENTIALITY AGREEMENT (hereinafter referred to
as the “Agreement”) is made and entered into this ____ day of November 2006, by
and between Clas E. Lundgren, M.D., Ph.D. (“Lundgren”) and Medi-Hut Co., Inc., a
corporation duly organized under the laws of the State of Nevada, and having its
principal place of business at 215 Morris Avenue, Spring Lake, NJ 07762
(“Licensee”). This Agreement is incorporated by reference and is part of the
Technology License Agreement, dated November __, 2006 by and among Licensee,
Lundgren and The Research Foundation of State University of New York, for and on
behalf of University at Buffalo (the “Foundation”). Defined terms have the same
meaning as in the Technology License Agreement unless they are otherwise defined
herein.
 
AGREEMENT
 
WHEREAS, pursuant to the terms and conditions of the Technology License
Agreement, Licensee wishes to obtain the exclusive license to the Technology,
Licensed Product and related Intellectual Property (as used herein, the terms
“Technology”, “Licensed Product” and “Intellectual Property” will have the
meaning ascribed to such terms in the Technology License Agreement),
 
WHEREAS, Dr. Lundgren has had access to the Technology, Licensed Product and
Intellectual Property relating to the Technology;
 
NOW THEREFORE, in consideration of the foregoing, of the mutual promises herein
contained, and of other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto, intending
legally to be bound, hereby agree as follows:
 
1.    Non-compete. Except as provided for below, Dr. Lundgren agrees that during
the term of the Technology License Agreement, he will not knowingly own,
operate, franchise or become employed by, or be under contract with, or
otherwise assist any person or entity which markets or distributes any product
that competes or has the potential to compete with the Licensed Products in the
Territory (as defined in the Technology License Agreement). Dr. Lundgren agrees
that he will not have the right to use, create, duplicate, or otherwise exploit
the Technology, Software or Derivatives to engage in, or assist any person or
entity to engage in, the commercial exploitation of the Technology, Software,
Derivatives or Licensed Products.
 
Nothing herein will be construed as prohibiting Dr. Lundgren from continuing to
perform (a) services incident to his position at the University of Buffalo,
including, for example and without limitation, educational research, internal
research and development for educational purposes of the Technology, Software
and Derivatives. Dr. Lundgren will have the right to create derivatives of the
Software for internal and educational purposes only. Nothing set forth in this
Section 1 will be construed to grant Dr. Lundgren a license or otherwise permit
Dr. Lundgren to copy, create derivative works from, publish, reproduce or
otherwise use or reuse any of the items subject to the Technology License
Agreement for any purpose whatsoever, without complying with the ‘First Look’
provisions of the Technology License Agreement. Dr. Lundgren hereby waives and
agrees not to assert any moral rights against Licensee in respect of such items.
 
E-1

--------------------------------------------------------------------------------

 
2.    Non-Disclosure of Confidential Information. Dr. Lundgren agrees that he
will not, in any fashion, form or manner, either directly or indirectly, use,
sell, divulge, communicate, furnish or disclose to any person, firm,
partnership, company, corporation, or other entity, any Know How, Intellectual
Property and/or trade secrets, including without limitation any and all
confidential information relating to the Technology. Nothing herein will be
construed as prohibiting Dr. Lundgren from disclosing the Know How, Intellectual
Property and/or trade secrets and/or other confidential information relating to
the Technology or software as it existed as of the date of this Agreement to his
research and/or teaching collaborators and graduate assistants who have been
made aware of and have agreed to undertake this confidentiality obligation.
Moreover, this obligation will not extend to information which, through no fault
of Dr. Lundgren, becomes part of the public domain by publication or otherwise;
is received from third parties on a non-confidential basis, or is independently
developed by Dr. Lundgren, his collaborators and/or graduate assistants
subsequent to the date of this Agreement, provided that the ‘First Look’
provisions of the Technology License Agreement have been satisfied.
 
3.    Remedies
 
(a) Dr. Lundgren agrees that the remedy at law for any breach or threatened
breach of the requirements of paragraph 1 or 2 of this Agreement may be
inadequate and that any breach or attempted breach may cause immediate and
permanent damage to the Licensee in an amount which would be difficult to
ascertain and, therefore, Dr. Lundgren agrees and consents that in the event of
any breach or threatened breach of said paragraphs, in addition to any and all
other legal and equitable remedies available to the Licensee for such breach or
threatened breach, including a recovery of damages, the Licensee will be
entitled to seek preliminary or permanent injunctive relief without the
necessity of proving actual damages by reason of such breach, and, to the extent
permissible under the applicable statutes and rules of procedure, Dr. Lundgren
also agrees that a temporary restraining order may be sought upon commencement
of such an action.
 
(b) In the event that any action, suit or proceeding at law or in equity is
brought pursuant to this Agreement to construe, interpret, or enforce any
provision of this Agreement or to seek money damages for the threatened breach
or breach thereof, the prevailing party will be entitled, upon demand, to
reimbursement from the other party of any and all expenses incurred in
connection therewith, including without limitation, attorney’s fees and
disbursements actually incurred.
 
4.    Reasonableness of Restrictions. Dr. Lundgren has carefully read and
considered the provisions hereof and, having done so, agrees that the
restrictions set forth herein are fair and reasonable and are reasonably
required for the protection of the interests of the Licensee.
 
5.    Severability. If any one or more of the provisions of this Agreement will
be determined to be invalid, illegal, or unenforceable in any respect for any
reason, the validity, legality, and enforceability of any such provision in
every other respect and the remaining provisions of this Agreement will not in
any way be impaired. Dr. Lundgren acknowledges and agrees that if any of the
restrictive covenants in this Agreement are found by any court having
jurisdiction to be too broad or too restrictive, then the covenant will
nevertheless remain effective, but will be considered amended to a point
considered by said court as reasonable and, as so amended, will be fully
enforceable.
 
E-2

--------------------------------------------------------------------------------

 
6.    Assignment. In the event that the Licensee will at any time be merged or
consolidated with any other person, corporation or entity or will sell or
otherwise transfer a substantial portion of its assets to any person,
corporation or entity and assign this Agreement in connection with such sale,
the provisions of this Agreement will be binding upon and inure to the benefit
of the Licensee or other entity surviving or resulting from such merger or
consolidation or to which such assets will be sold or transferred, as the case
may be. This Agreement will be binding upon the parties and their heirs,
administrators, successors and permitted assigns.
 
7.    Governing Law. It is understood and agreed that the construction and
interpretation of this Agreement will, at all times and in all respects, be
governed by the internal laws of the State of New York, without giving effect to
the conflict of laws provisions thereof.
 
8.    Waiver. No delay or failure on the part of the Licensee in exercising any
right, power, or privilege under this Agreement will impair any such right,
power, or privilege or be construed as a waiver of any default or any
acquiescence therein. No single or partial exercise of any such right, power, or
privilege will preclude the further exercise of such right, power, or privilege,
or the exercise of any other right, power, or privilege. No waiver will be valid
against the Licensee unless made in writing and signed by the Licensee and then
only to the extent expressly specified therein.
 
9.    Headings. The headings of the paragraphs contained in this Agreement are
for reference purposes only and will not in any way affect the meaning or
interpretation of any provision of this Agreement.
 
10.    Pronouns. All pronouns used herein will be deemed to refer to the
masculine, feminine, or neuter gender as the context requires.
 
11.    Entire Agreement. This Agreement and the agreements referenced herein
constitute the entire among the parties with respect to the subject matter
hereof and supersede and replace all prior understandings and agreements among
the parties with respect to the subject matter hereof. 
 
IN WITNESS WHEREOF, the Licensee and Dr. Lundgren have duly executed this
Restrictive Covenant and Confidentiality Agreement as of the day and year first
written above.
 

Medi-Hut Co., Inc.                      

--------------------------------------------------------------------------------

By: David R. LaVance    

--------------------------------------------------------------------------------

Clas E. G. Lundgren, M.D., PhD, individual Title: President and Chief Executive
Officer      

E-3

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