exv10w2



 





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.



 









 





     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
“MasterLockTM”, “WedgieTM” 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.



- 2 -









 





     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.



- 3 -









 





     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,



- 4 -









 




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



- 5 -









 




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.



- 6 -









 





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.



- 7 -









 






(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.



- 8 -









 






(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



- 9 -









 






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



- 10 -









 






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



- 11 -









 




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






- 12 -









 






	 	 	 
	 

	 	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.



- 13 -









 





     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.



- 14 -









 





     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	 



- 15 -









 






	 	 	 	 	 



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.



- 16 -









 








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.



- 17 -









 








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.



- 18 -









 








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.



- 19 -









 








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





- 20 -