Exhibit 10.2
Execution Version
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
LICENSE AGREEMENT
     This License Agreement (the “Agreement”) dated as of June 1, 2007 (the
“Effective Date”) is made by and between DSU Medical Corporation, a Nevada
corporation (“Licensor”), and Medisystems Corporation, a Washington corporation
(“Licensee”).
INTRODUCTION
     A. Prior to the merger of Medisystems Technology Corporation (“MTC”) into
Licensor, Licensor and MTC entered into that certain License and Royalty
Agreement dated as of October 1, 1998 (as amended, the “1998 License”) and MTC
sublicensed certain of the rights granted thereunder to Licensee pursuant to
that certain revocable Sub-License and Royalty Agreement dated as of October 1,
1998, (as amended, the “1998 Sublicense,” and together with the 1998 License,
the “Existing Licenses”).
     B. Licensor, as successor in interest to MTC’s rights under the Existing
Licenses has elected to revoke the 1998 Sublicense, terminate the 1998 License,
and grant Licensee a new license on the terms and conditions set forth herein.
     In consideration of the receipt by Licensor of U.S. [**] Dollars ($[**])
and the mutual covenants and promises contained in this Agreement, and other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Licensee and Licensor hereby agree as follows:
I. DEFINITIONS
     As used in this Agreement, the following terms, whether used in the
singular or plural, shall have the following meanings:
     1.1 “Affiliate” means, with respect to any Person, any corporation,
company, partnership, joint venture and/or firm which controls, is controlled
by, or is under common control with such Person. For purposes of this Section,
“control” shall mean (a) in the case of corporate entities, direct or indirect
ownership of at least fifty percent (50%) of the stock or shares having the
right to vote for the election of directors, and (b) in the case of
non-corporate entities, direct or indirect ownership of at least fifty percent
(50%) of the equity interest with the power to direct the management and
policies of such non-corporate entities.
     1.2 “[**]” means that certain [**].
     1.3 “Covered Business Methods” means the methods and processes claimed in
the Licensed Class B Patents for developing, testing, training, using,
supplying, selling, manufacturing, storing, servicing, supporting, distributing
and otherwise commercializing the Covered Products or Covered Treatment Methods.

 

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     1.4 “Covered Methods” means the Covered Treatment Methods and the Covered
Business Methods.
     1.5 “Covered Products” means Electro-Mechanical Equipment, Tubing Sets, Bag
Sets, Blood Access Devices, Fluid Filters and Fluid Preparation Devices for the
preparation, transport, containment or treatment of blood, dialysate or
replacement fluids in Covered Treatments, as well as the Needle Safety Devices,
Securement Devices and Components used in connection therewith, each as defined
below:
(i) “Blood Access Devices” mean AVF, Apheresis, Buttonhole needles and similar
products and angiograph and central venous catheters and other similar
catheters. Blood Access Devices are deemed to include 10 gauge to 18 gauge
winged needle sets and to exclude 19 gauge to 30 gauge winged needle sets.
(ii) “Components” mean the connectors, chambers, clamps, tubing, injection
sites, LockSite needle-less valves (only to the extent such valves are covered
by the claims of the LockSite Patents), caps, filters, used in connection with
the Covered Products.
(iii) “Electro-mechanical Equipment” means dialysis machines, fluid preparation
machines, dialysate preparation machines, CHF-type machines, fluid warmers and
other similar machines.
(iv) “Fluid Filters” mean hemodialyzers, hemofilters, final filters, Water
treatment filters, immuno-absorption filters and other similar filters.
(v) “Needle Safety Devices” means the Medic Product and similar needle safety
devices, provided, however that “Needle Safety Devices” shall not include
needle-bearing syringes with an attachable dull or safety needle component.
(vi) “Securement Devices” mean the products currently referred to as
“MasterLock™”, “Wedgie™” and other similar products.
(vii) “Tubing Sets” mean blood tubing sets, peritoneal dialysis sets, dialysate
sets, apheresis sets and other similar tubing sets.
     1.6 “Covered Treatments” means Extracorporeal Fluid Treatments and/or Renal
Insufficiency Treatments.
     1.7 “Covered Treatment Methods” means the methods and processes claimed in
the Licensed Class B Patents for developing, testing, using, supplying, selling,
manufacturing, storing, servicing, supporting, distributing, training and
otherwise commercializing the Covered Products and/or performing Extracorporeal
Fluid Treatment or Renal Insufficiency Treatment.

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     1.8 “Excluded Patents” means any and all (a) patents and patent
applications set forth in Exhibit C hereto, (b) continuations, divisionals,
re-examinations, substitutions, renewals, extensions, foreign counterparts and
reissues of the patents and patent applications set forth in Exhibit C,
(c) patents and patent applications, other than continuations in part, claiming
priority from one or more of any of the foregoing, and (d) all continuations in
part that include at least one patent claim that is entitled to claim the
benefit of the filing date of one or more of any of the foregoing.
     1.9 “Existing Customers” shall mean the following entities that purchased
the Medic Products and/or the Blood Access Devices products from MDS as of the
Effective Date: Henry Schein, Inc., [**], and B. Braun Inc. (and their
successors and assigns).
     1.10 “Extracorporeal Fluid Treatments” mean therapies, treatments or
procedures consisting of the withdrawal of a patient’s bodily fluid for the
purpose of treating, collecting, separating, modifying or otherwise acting upon
such fluid extracorporeally, followed by return of all or a portion of such
fluid to the body. Extracorporeal Fluid Treatments include, but are not limited
to hemodialysis, hemofiltration, ultrafiltration, hemodiafiltration, therapeutic
removal or collection of plasma and/or cellular components, phresis and
apheresis.
     1.11 “Field” means the development, manufacture, use, importation and sale
of Covered Products for use in Covered Treatments and the practice of Covered
Methods in Covered Treatments.
     1.12 “KL Sublicense” means that certain Sublicense Agreement for [**] Gauge
Field of Use entered into between Licensee and Kawasumi Laboratories, Inc. dated
February 1, 2001.
     1.13 “Licensed Class A Patents” means, whether existing now or in the
future anywhere in the world, any and all (a) patents and patent applications
set forth in Exhibit A hereto, (b) continuations, divisionals, re-examinations,
substitutions, renewals, extensions, foreign counterparts and reissues of the
patents and patent applications set forth in Exhibit A, (c) patents and patent
applications, other than continuations in part, claiming priority from one or
more of any of the foregoing, and (d) all continuations in part that include at
least one patent claim that is entitled to claim the benefit of the filing date
of any of the foregoing.
     1.14 “Licensed Class B Patents” means, whether existing now or in the
future anywhere in the world, any and all (a) patents and patent applications
set forth in Exhibit B hereto, (b) continuations, divisionals, re-examinations,
substitutions, renewals, extensions, foreign counterparts and reissues of the
patents and patent applications set forth in Exhibit B, (c) patents and patent
applications, other than continuations in part, claiming priority from one or
more of any of the foregoing, and (d) all continuations in part that include at
least one patent claim that is entitled to claim the benefit of the filing date
of any of the foregoing. For purposes of clarity, Licensed Class B Patents
include the LockSite Patents.

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     1.15 “Licensed Patents” means the Licensed Class A Patents and the Licensed
Class B Patents.
     1.16 “Licensed Trademarks” means the trademarks, service marks and designs
as set forth on Exhibit E.
     1.17 “LockSite Patents” means any and all (a) patents and patent
applications set forth in Exhibit D hereto, (b) continuations, divisionals,
re-examinations, substitutions, renewals, extensions, foreign counterparts and
reissues of the patents and patent applications set forth in Exhibit D,
(c) patents and patent applications, other than continuations in part, claiming
priority form one or more of any of the foregoing, and (d) continuations in part
that include at least one patent claim that is entitled to claim the benefit of
the filing date of one or more of any of the foregoing.
     1.18 “Medic Product” means the product currently known as the MedicTM
Anti-stick plastic needle.
     1.19 “Party” means Licensee or Licensor; “Parties” means Licensee and
Licensor. As used in this Agreement, references to “third parties” do not
include a Party or its Affiliates.
     1.20 “Person” means a natural person, sole proprietorship, corporation,
general partnership, limited partnership, limited liability partnership, limited
liability company, joint venture, unincorporated organization, joint stock
company, trust, estate, governmental entity or other legally-recognized entity.
     1.21 “Renal Insufficiency Treatments” mean therapies, treatments or
procedures for chronic or acute renal insufficiency. Renal Insufficiency
Treatments include, but are not limited to, peritoneal dialysis hemodialysis,
ultrafiltration, hemodiafiltration and hemofiltration.
II. EFFECT ON EXISTING LICENSES
          Upon the Effective Date, hereof, the Existing Licenses shall be
superceded and replaced in their entirety by this Agreement and shall be of no
further force or effect.
III. LICENSE
     3.1 Exclusive License. As of the Effective Date, Licensor hereby grants to
Licensee, a worldwide, exclusive (even as to Licensor), royalty-free, fully-paid
up, perpetual, irrevocable, sub-licensable and non-terminable right and license
(a) under all of the Licensed Class A Patents to develop, make, have made, use,
import, offer for sale, sell, and have sold products of any type and to practice
the methods and processes claimed therein for any purpose; and (b) under all of
the Licensed Class B Patents to develop, make, have made, use, import, offer for
sale, sell, and have sold Covered Products for use in the Covered Treatments and
to practice Covered Methods in the Covered Treatments. In addition, as of the
Effective Date, Licensor also hereby grants to Licensee, a worldwide, exclusive
(even as to Licensor), royalty-free, fully paid-up, perpetual,

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irrevocable, sub-licensable and non-terminable right and license under all of
the Licensed Class B Patents to sell, have sold and offer for sale the Medic
Products and the Blood Access Devices products solely to Existing Customers for
use in any field, and to make, have made and import Medic Products for such
permitted sales.
     3.2 Existing Sublicenses. The Parties acknowledge that notwithstanding the
termination of the Existing Licenses, the [**] and the KL Sublicense remain in
effect in accordance with their terms, including, without limitation, those set
forth in Section 2.6 of the [**].
     3.3 Reservation of Rights. All rights with respect to the Licensed Patents
not granted herein are expressly reserved by the Licensor, including without
limitation all rights with respect to the practice of the Licensed Class B
Patents outside of the Field. Licensee shall acquire no ownership interest in or
to the Licensed Patents. Licensee shall have the right to grant one or more
sublicenses under any or all of its rights granted in Section 3.1, however,
Licensee shall not grant any sublicense under the Licensed Patents that exceeds
the scope of the rights granted in Section 3.1. Notwithstanding any other
provision of this Agreement, no right or license in or to any of the Excluded
Patents or any inventions claimed therein is granted to Licensee hereunder.
     3.4 Trademark License. As of the Effective Date, Licensee hereby grants to
Licensor, a worldwide, exclusive (even as to Licensee), royalty-free, and
fully-paid up, perpetual, irrevocable, sub-licensable right and license to use
the Licensed Trademarks in connection with the development and commercialization
of medical products and related services. Licensor shall annually provide to
Licensee examples of Licensor’s use of the Licensed Trademarks. Licensee shall
be responsible for prosecuting and maintaining all of the Licensed Trademarks;
provided that Licensee’s sole obligations with respect to such prosecution and
maintenance shall be to follow the reasonable and explicit written instructions
of Licensor with respect thereto. Licensor shall bear all reasonable costs and
expenses incurred by Licensee in connection with the prosecution and maintenance
of the Licensed Trademarks. Prior to Licensee electing to cease to prosecute or
maintain any Licensed Trademark, Licensee shall provide written notice to
Licensor of such election at least [**] months before such Licensed Trademark
expires or becomes abandoned. Licensor shall have the right at its own cost and
expense to assume the prosecution and maintenance of such Licensed Trademarks.
Each of Licensee and Licensor agrees to provide written notice to the other
party promptly after becoming aware of any infringement or challenge to the
validity or enforceability of the Licensed Trademarks. Licensor shall have the
exclusive right and option under its own control and at its own expense to
prosecute any third party infringement of the Licensed Trademarks. Licensee
shall cooperate with Licensor, at Licensor’s expense, in the enforcement of the
Licensed Trademarks. If required by law, Licensee shall permit any action under
this Section to be brought in its name, including being joined as a
party-plaintiff; provided that Licensor shall hold Licensee harmless from, and
indemnify Licensee against, any costs, expenses, or liability that Licensee
incurs in connection with such action. Any recovery obtained in an action
brought by Licensor under this Section shall be retained solely by Licensor.
Licensee shall provide to Licensor copies of all correspondence related to the
prosecution, maintenance and enforcement of the Licensed Trademarks. Licensor
shall have the

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right to terminate the license set forth herein solely with respect to one or
more of the Licensed Trademarks upon [**] days’ prior written notice to
Licensee, and, as of the effective date of such termination, all rights and
obligations under this Section 3.4 with respect to such Licensed Trademarks
shall terminate.
IV. REPRESENTATIONS; COVENANTS
     4.1 Authority. Each Party hereby represents and warrants to the other that
the execution and delivery of this Agreement by or on behalf of such Party and
its performance and grant of rights hereunder have been duly and validly
authorized by all necessary corporate action on and will not conflict with,
result in a breach of, violate, result in a default under, or result in the
acceleration of obligations under, or create in any party the right to
terminate, modify or cancel, any provision of any contract, agreement, document,
instrument, arrangement, judgment, order, statute, or rule or regulation to
which such Party is a party or any court order to which such Party is subject.
     4.2 Ownership. Licensor hereby represents and warrants to Licensee that as
of the Effective Date (a) the Licensed Class A Patents, Licensed Class B Patents
and Excluded Patents constitute all of the patents and patent applications
(including any and all continuations, divisionals, reissues, substitutions,
renewals, extensions, foreign counterparts, and continuations-in-part) that are,
in each case, owned or controlled, individually or jointly, by Licensor, any
Affiliate of Licensor or David S. Utterberg with claims that cover the Field;
and (b) Licensor has all necessary rights to grant the rights and licenses
granted herein.
     4.3 No Representations or Warranties. Except as set forth in Sections 4.1
and 4.2 hereof, Licensor makes no representations or warranties hereunder.
Nothing herein shall be construed as: (a) a representation or warranty as to the
validity, scope or enforceability of the Licensed Patents; or (b) a
representation or warranty that exercise of the rights granted herein, or
anything made, used, sold or otherwise disposed of under this Agreement is or
will be free from infringement of patents of third parties; or (c) granting to
Licensee by implication, estoppel or otherwise any licenses or rights under any
patents of Licensor other than the Licensed Patents; or (d) a representation or
warranty as to the merchantability or fitness of purpose of any product
utilizing the technology or inventions claimed in any the Licensed Patents.
     4.4 Transfers. Licensor shall not transfer or assign (whether by sale,
merger, assignment, transfer, license, reorganization, spin-off, will, trust,
devise or other transaction or occurrence of any kind) its right, title or
interest in and to the Licensed Patents and/or Licensed Trademarks unless such
transferee, licensee, assignee, beneficiary, or acquiror agrees in writing to be
bound in the same manner as Licensor by Sections 3.1, 3.2, 3.4, 4.4, and
Article VI hereof.
V. TERM
     This Agreement shall remain in effect until the expiration of the last to
expire patent included in the Licensed Patents. This Agreement, and the rights
and licenses granted hereunder, may not be terminated for any reason.

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VI. PATENT PROSECUTION, MAINTENANCE AND ENFORCEMENT
     6.1 Patent Prosecution.
(a) Responsibility. Licensor shall be responsible for preparing, filing,
prosecuting, and maintaining all of the Licensed Patents. Each Party shall bear
fifty percent (50%) of all costs and expenses of prosecution of the Licensed
Patents. Except as set forth in Section 6.1(c) below, Licensor shall not abandon
(i) any claim in a Licensed Class A Patent and that has not been twice rejected
during examination by the Patent and Trademark Office, or (ii) any claim in a
Licensed Class B Patent that would cover a Covered Product or Covered Method in
the Field and that has not been twice rejected during examination by the Patent
and Trademark Office; provided, however, that solely with respect to Licensed
Class A Patents, in the event that Licensor wishes to abandon any such patent
claim that has not been finally rejected following exhaustion of all applicable
appeals, the provisions of Section 6.1(c) shall apply.
(b) Cooperation; Information. Licensee or its counsel shall have reasonable
opportunities to advise Licensor or its counsel in respect of any filing in the
U.S. Patent & Trademark Office (or similar office in a foreign jurisdiction)
regarding (i) the claims of a Licensed Class A Patent or (ii) the claims of a
Licensed Class B Patent that would cover a Covered Product or Covered Method in
the Field. Licensor shall reasonably consider Licensee’s requests in respect of
such filing, prosecution and maintenance of such claims of Licensed Patents,
and, solely with respect to the Licensed Class A Patents, shall either comply
with Licensee’s requests or permit Licensee the right to proceed with the
filing, prosecution and maintenance of such claims at its sole expense. Licensor
shall copy Licensee on all correspondence regarding patent filing, prosecution
and maintenance of such claims of Licensed Patents so long as, with respect to
any patent application, Licensee holds such information in strict confidence.
(c) Step-In Right. If Licensor elects to cease prosecuting or maintaining any
(i) patent or patent application (or claim thereof), as applicable, included in
the Licensed Class A Patents or (ii) patent or patent application included in
the Licensed Class B Patent that would claim or cover a Covered Product or
Covered Method in the Field, Licensor shall provide written notice to Licensee
of such election at least [**] months before either the patent or patent
application expires or becomes abandoned. Upon receipt of such notice, the
Licensee shall have the right, at its own cost, to assume the prosecution and
maintenance with respect to such Licensed Patent, or claim thereof, as
applicable, and Licensor shall assign all of its right, title and interest in
and to such Licensed Patent, or claim thereof, as applicable, to Licensee.
     6.2 Enforcement.

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(a) Notice. Licensor agrees to provide written notice to Licensee promptly after
becoming aware of (i) any infringement or challenge to the validity or
enforceability of the Licensed Class A Patents or (ii) any infringement or
challenge to the validity or enforceability of the Licensed Class B Patents in
the Field. Licensee agrees to provide written notice to Licensor promptly after
becoming aware of any infringement or challenge to the validity or
enforceability of the Licensed Patents.
(b) Infringement of Licensed Class A Patents. Licensee shall have the exclusive
right and option (but not the obligation), under its own control and at its own
expense, to prosecute any third party infringement (including as a defendant in
a declaratory judgment action) and defend the validity and enforceability, of
the Licensed Class A Patents. If required by law, Licensor shall permit any
action under this Section to be brought in its name, including being joined as a
party-plaintiff, provided that Licensee shall hold Licensor harmless from, and
indemnify Licensor against, any costs, expenses, or liability that Licensor
incurs in connection with such action. Any recovery obtained in an action
brought by Licensee under this Section 6.2(b) shall be retained solely by
Licensee.
(c) Infringements of Licensed Class B Patents Solely in the Field. Licensee
shall have the exclusive right and option (but not the obligation), under its
own control and at its own expense, to prosecute any third party infringement of
the Licensed Class B Patents occurring solely in the Field, including as a
defendant in a declaratory judgment action. If required by law, Licensor shall
permit any action under this Section to be brought in its name, including being
joined as a party-plaintiff, provided that Licensee shall hold Licensor harmless
from, and indemnify Licensor against, any costs, expenses, or liability that
Licensor incurs in connection with such action. Any recovery obtained in an
action brought by Licensee under this Section 6.2(b) with respect to activity
occurring solely in the Field shall be retained solely by Licensee.
(d) Infringements of Licensed Class B Patents Solely Outside the Field. Licensor
shall have the exclusive right and option (but not the obligation), under its
own control and at its own expense, to prosecute any third party infringement
(including as a defendant in a declaratory judgment action), and defend the
validity and enforceability, of the Licensed Class B Patents occurring solely
outside of the Field. If required by law, Licensee shall permit any action under
this Section to be brought in its name, including being joined as a
party-plaintiff, provided that Licensor shall hold Licensee harmless from, and
indemnify Licensee against, any costs, expenses, or liability that Licensee
incurs in connection with such action. Any recovery obtained in an action
brought by Licensor under this Section 6.2(c) with respect to activity occurring
solely outside of the Field shall be retained solely by Licensor.
(e) Infringements of Licensed Class B Patents Inside and Outside Field.

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(i) Control by Licensor. In respect of any third party infringement of the
Licensed Class B Patents occurring both inside and outside of the Field,
Licensor shall consider in good faith, any request by Licensee to control the
action, however, Licensor shall have the first right and option (but not the
obligation), under its own sole control and at its own expense, to prosecute
such infringement. In the event the Licensor elects to prosecute such
infringement. Licensee shall have the option, exercisable within [**] days after
the filing of the suit or institution of other action to elect to share in the
expenses and recovery from such suit or action. If Licensee elects to share in
the costs of prosecuting such case, Licensee shall bear fifty percent (50%) of
the prosecution costs of the action and shall reimburse Licensor for such
portion of the out-of-pocket direct costs on an ongoing basis and shall be
entitled to fifty percent (50%) of any damages or settlement amounts recovered
if such action is successful.
(iii) Control By Licensee. In the event Licensor elects to permit Licensee to
control any action with respect to third party infringement of the Licensed
Class B Patents occurring both inside and outside of the Field, Licensor shall
bear fifty percent (50%) of the prosecution costs of the action and shall
reimburse Licensee for such portion of the out-of-pocket direct costs on an
ongoing basis and shall be entitled to fifty percent (50%) of any damages or
settlement amounts recovered if such action is successful.
(iv) Step in Right. In the event that Licensor elects not to prosecute such
infringement nor authorize Licensee to bring the action against the infringement
occurring both inside and outside of the Field, Licensee shall have the right
and option, but not the obligation, upon [**] days written notice to Licensor,
to prosecute, at Licensee’s sole expense, the portion of such infringement
occurring inside the Field. If required by law, Licensor shall permit any action
under this Section to be brought in its name, including being joined as a
party-plaintiff, provided that Licensee shall hold Licensor harmless from, and
indemnify Licensor against, any costs, expenses, or liability that Licensor
incurs in connection with such action. Any recovery obtained in an action
brought by Licensee under this Section 6.2(d)(iv) with respect to activity
occurring solely in the Field shall be retained solely by Licensee.
(v) Defensive Rights. Licensee shall not assert any one or more of the Licensed
Class B Patents in response to any suit or claim initiated

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by a third party; provided that Licensee may assert any one or more of the
Licensed Class B Patents in response to any suit or claim in the Field initiated
by a third party with the prior written consent of Licensor, which shall not be
unreasonably withheld. In the event Licensor permits Licensee to assert any one
or more of the Licensed Class B Patents under this subsection (v), Licensor
shall have the right, but not the obligation, to control such suit or claim.
(f) Procedures.
(i) Consultation. Each party shall give the other party advance notice of its
intent to file any suit as set forth in Section 6.2(b) through (e) above.
Licensee shall keep Licensor informed of, and shall from time to time consult
with the Licensor regarding, the status of any such suit. Licensor shall keep
Licensee informed of, and shall from time to time consult with the Licensee
regarding, the status of any such suit, in the case of the Licensed Class B
Patents to the extent relating to the Field. In connection with any such suit
with respect to infringement of the Licensed Class B Patents both inside and
outside of the Field, the parties shall (A) consider in good faith entering into
a joint defense agreement, and (B) promptly provide the other party with copies
of all material documents, communications and drafts to the extent permitted
under any applicable obligations of confidentiality or protective orders.
(ii) Cooperation. The non-asserting party agrees to reasonably cooperate in any
action under this Section which is controlled by the other party, provided that
the asserting party reimburses the non-asserting party promptly for any
reasonable, out-of-pocket costs and expenses incurred by the non-asserting party
in connection with providing assistance requested by the asserting party.
(iii) Settlement; Recovery. If a non-asserting party is a named party in any
action brought under this Section 6.2, the asserting party shall not enter into
any settlement, consent judgment, or other voluntary final disposition of any
infringement action under this Section 6.2 unless such settlement, consent
judgment or other final disposition contains an unconditional release in favor
of the non-asserting party. Further, the asserting party in any action brought
under this Section 6.2 shall not enter into any settlement, consent judgment or
other voluntary final disposition of any infringement action under this
Section 6.2 without the consent of the non-asserting party that (A) restricts
any right or action of the non-asserting party by injunction, (B) imposes upon
the non-asserting party any affirmative duty or obligation, or (C) materially
compromises the rights of the non-asserting party with respect to the applicable
field of the

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non-asserting party. Except as set forth above in this Section 6.2(f)(iii), and
subject to Section 6.2(f)(iv), the asserting party shall be free to enter into
any settlement, consent judgment or other voluntary final disposition of any
infringement action under this Section 6.2.
(iv) Shared Recoveries. In the event that the infringement action involves
infringement of a Licensed Class B Patent inside and outside the Field, and
recoveries are shared pursuant to Section 6.2(e)(ii) above, then regardless of
whether the non-asserting party is a named party in such action, the asserting
party must obtain the non-asserting party’s consent to any settlement offer
before accepting such offer. In the event that non-asserting party refuses to
accept any settlement offer in contravention of the reasonable written
recommendation of the asserting party and the recovery amount received at trial
or by later settlement is less than the amount of the rejected settlement offer,
the non-asserting party shall be responsible for payment of all legal fees and
other related expenses accrued from the time the non-asserting party was
notified of the settlement offer as well as the portion of the settlement amount
lost by the asserting party when the settlement offer was rejected. In the event
that non-asserting party refuses to accept any settlement offer in contravention
of the reasonable written recommendation of the asserting party and the recovery
amount received at trial or by later settlement is equal to the amount of the
rejected settlement offer, the non-asserting party shall be responsible for
payment of all legal fees and other related expenses accrued from the time the
non-asserting party was notified of the settlement offer. The foregoing
consequences shall not apply in a case where a settlement offer for damages is
rejected by the non-asserting party and (A) such settlement offer contemplates
the imposition of any material non-monetary burden on either of the parties, or
(B) a permanent injunction is all or a portion of the relief granted at trial.
(v) Nothing in this Section is intended to authorize a Party to grant a license
under the intellectual property rights of the other Party (including, without
limitation, the rights licensed exclusively to Licensee under Section 3.1).
VII. MISCELLANEOUS
     7.1 No Third Party Beneficiaries. Except as expressly set forth herein,
this Agreement shall not confer any rights or remedies upon any person other
than the Parties, and their respective successors and permitted assigns.
     7.2 Entire Agreement; Attachments. This Agreement (including Exhibit A,
Exhibit B, Exhibit C, Exhibit D and Exhibit E hereto) represents the entire
understanding and agreement between the Parties hereto with respect to the
subject matter hereof and supersedes all prior oral

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and written and all contemporaneous oral negotiations, commitments and
understandings between such Parties. All rights and licenses hereunder shall be
deemed to be cumulative with, and in addition to, all other rights and remedies
to which a Party is entitled at law, by contract, in equity or otherwise.
Exhibit A, Exhibit B, Exhibit C, Exhibit D and Exhibit E attached hereto or to
be attached hereafter are hereby incorporated as an integral part of this
Agreement.
     7.3 Section 365(n) of the Bankruptcy Code. All rights and licenses granted
under or pursuant to any section of this Agreement are, and shall otherwise be,
deemed to be, for purposes of Section 365(n) of the Bankruptcy Code, licenses of
rights to “intellectual property” as defined under Section 101(35A) of the
Bankruptcy Code. The Parties shall retain and may fully exercise all of their
respective rights and elections under the Bankruptcy Code.
     7.4 Succession and Assignment. This Agreement shall bind the successors and
assigns of each Party, and inure to the benefit of each Party. Each Party shall
have the right to assign this Agreement to any Affiliate or in connection with a
merger, acquisition, reorganization or consolidation of such Party or any
Affiliate to which this Agreement is assigned.
     7.5 Notices. All notices, requests, demands, claims, and other
communications hereunder shall be in writing sent by registered or certified
mail, return receipt requested, postage prepaid, or via a reputable nationwide
overnight courier service, in each case to the intended recipient as set forth
below:

     
To the Licensee:
  NxStage Medical, Inc.
 
  439 South Union Street, 5th Floor
Lawrence, MA 01843
 
  Attention: Chief Executive Officer
 
   
 
  With a copy to:
 
   
 
  NxStage Medical, Inc.
 
  439 South Union Street, 5th Floor
 
  Lawrence, MA 01843
 
  Attention: General Counsel;
 
   
 
  and
 
   
 
  Wilmer Hale LLP
 
  60 State Street
 
  Boston, MA 02109
 
  Attention: Susan Murley

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  DSU Medical Corporation
 
  P.O. Box 50401
 
  Henderson, NV 89016
 
   
To the Licensor:
  With a copy to:
 
   
 
  David S. Utterberg
 
  2033 First Avenue, #3
 
  Seattle, WA 98121

Each notice, request, demand, claim or other communication shall be deemed to
have been duly given on the date it is actually received by the party for whom
it is intended. Any Party may change the address to which notices, requests,
demands, claims, and other communications hereunder are to be delivered by
giving the other Parties notice in the manner herein set forth.
     7.6 Governing Law. All matters arising out of or relating to this Agreement
and the transactions contemplated hereby (including without limitation its
interpretation, construction, performance and enforcement) shall be governed by
and construed in accordance with the internal laws of the State of Delaware
without giving effect to any choice or conflict of law provision or rule
(whether of the State of Delaware or any other jurisdiction) that would cause
the application of laws of any jurisdictions other than those of the State of
Delaware.
     7.7 Amendments and Waivers. The Licensee and Licensor may amend or modify
this Agreement, in such manner as may be agreed upon, by a written instrument
executed by the Licensee and Licensor. No failure or delay on the part of either
party hereto in exercising any power, right, privilege, or remedy hereunder
shall preclude any other or further exercise thereof or of any other power,
right, privilege or remedy. No waiver of any power, right, privilege or remedy
hereunder shall be valid unless the same shall be in writing and signed by the
Party giving such waiver.
     7.8 Severability. Any term or provision of this Agreement that is invalid
or unenforceable in any situation in any jurisdiction shall not affect the
validity or enforceability of the remaining terms and provisions hereof or the
validity or enforceability of the offending term or provision in any other
situation or in any other jurisdiction. If the final judgment of a court of
competent jurisdiction declares that any term or provision hereof is invalid or
unenforceable, the Parties agree that the court making the determination of
invalidity or unenforceability shall have the power to limit the term or
provision, to delete specific words or phrases, or to replace any invalid or
unenforceable term or provision with a term or provision that is valid and
enforceable and that comes closest to expressing the intention of the invalid or
unenforceable term or provision, and this Agreement shall be enforceable as so
modified.

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     7.9 Submission to Jurisdiction. Each Party (a) submits to the jurisdiction
of any state or federal court sitting in the State of Delaware in any action or
proceeding arising out of or relating to this Agreement, (b) agrees that all
claims in respect of such action or proceeding may be heard and determined in
any such court, (c) waives any claim of inconvenient forum or other challenge to
venue in such court, (d) agrees not to bring any action or proceeding arising
out of or relating to this Agreement in any other court and (e) waives any right
it may have to a trial by jury with respect to any action or proceeding arising
out of or relating to this Agreement. Each Party agrees to accept service of any
summons, complaint or other initial pleading made in the manner provided for the
giving of notices in Section 7.5, provided that nothing in this Section 7.9
shall affect the right of any Party to serve such summons, complaint or other
initial pleading in any other manner permitted by law.
     7.10 Section Headings. The section headings are for the convenience of the
Parties and in no way alter, modify, amend, limit, or restrict the contractual
obligations of the Parties.
     7.11 Counterparts and Facsimile Signature. This Agreement may be executed
in two or more counterparts, each of which shall be deemed an original but all
of which together shall constitute one and the same instrument. This Agreement
may be executed by facsimile signature.
     7.12 Construction. The language used in this Agreement shall be deemed to
be the language chosen by the Parties hereto to express their mutual intent, and
no rule of strict construction shall be applied against any Party. Any reference
to any federal, state, local or foreign statute or law shall be deemed also to
refer to all rules and regulations promulgated thereunder, unless the context
requires otherwise.

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     IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be
executed in their names by their properly and duly authorized officers or
representatives as of the date first above written.

            DSU MEDICAL CORPORATION
      By:    /s/ David S. Utterberg     Name:         David S. Utterberg    
Title:         President    

            MEDISYSTEMS CORPORATION
      By:    /s/ David S. Utterberg     Name:         David S. Utterberg    
Title:         President  

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Exhibit A
Licensed Class A Patents
[**]
Confidential Materials omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote omissions.
[**]
A total of 11 pages have been omitted pursuant to a request for confidential
treatment.

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Exhibit B
Licensed Class B Patents
[**]
Confidential Materials omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote omissions.
[**]
A total of 11 pages have been omitted pursuant to a request for confidential
treatment.

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Exhibit C
Excluded Patents
[**]
Confidential Materials omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote omissions.
[**]
A total of 3 pages have been omitted pursuant to a request for confidential
treatment.

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Exhibit D
LockSite Patents
[**]
Confidential Materials omitted and filed separately with the Securities and
Exchange Commission. Asterisks denote omissions.
[**]
A total of 2 pages have been omitted pursuant to a request for confidential
treatment.

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Exhibit E
Licensed Trademarks
Mark: MASTERSEAL
Jurisdiction: United States
Serial No.: 75/492,635
Filed: 5/28/98
Reg. No. : 2,492,985
Registered: 9/25/01
Mark: MASTERSEAL
Jurisdiction: European Community
Reg. No. 000994962
Registered: January 31, 2000
Mark: MASTERSEAL
Jurisdiction: Mexico
Appln No. 355767
Filed: 11/27/98
Reg. No. 606679
Registered: April 23, 1999
Mark: MASTERGEL
Jurisdiction: United States
Serial No. 78/458,430
Filed: July 28, 2004
Reg. Date: Not Registered

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