**Exhibit10.2**

 

**LICENSE AGREEMENT**

 

THIS LICENSE AGREEMENT (the “Agreement”) is made and entered into the25th day of July, 2008 to be effective as of the effective date (the “EffectiveDate”), between Artann Laboratories, Inc., (“Artann”) a Delaware corporation,and ProUroCare Medical Inc., (“ProUroCare”) a Nevada corporation.

 

**WITNESSETH:**

** **

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

 

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

 

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

 

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

 

**AGREEMENTS:**

** **

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

 

**ARTICLE 1**

**DEFINITIONS**

 

## 1.1           SpecificDefinitions.  As used in thisAgreement, the following terms shall have the meanings set forth or asreferenced below:

##  

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

 

“2008 OfferingPrice” means the weighted average price that ProUroCare shares have tradedover the forty five (45) day period prior to the date of the closing of the2008 ProUroCare Offering.

 

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

 

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“Agreement” means this Agreement and all Exhibits hereto.

 

“Artann” means Artann Laboratories, Inc.

 

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

 

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

 

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

 

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

 

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

 

### (a)           was already in thepossession of receiving party prior to its receipt from the disclosing party(provided that the receiving party is able to provide the disclosing party withreasonable documentary proof thereof);

###  

### (b)           is or becomes partof the public domain by reason of acts not attributable to the receiving party;

###  

### (c)           is or becomesavailable to receiving party from a source other than the disclosing partywhich source, to the best of receiving party’s knowledge, has rightfullyobtained such information and has no obligation of non-disclosure orconfidentiality to the disclosing party with respect thereto;

###  

### (d)           is made available bythe disclosing party to a third party unaffiliated with the disclosing party onan unrestricted basis;

###  

### (e)           has beenindependently developed by the receiving party without breach of this Agreementor use of any Confidential Information of the other party; or

 

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### (f)            has been or must bepublicly disclosed by reason of legal, accounting or regulatory requirementsbeyond the reasonable control, and despite the reasonable efforts of thereceiving party.

###  

All Confidential Information disclosed by one party to the other underthis Agreement with the exception of PMI Documentation and Artann Trade Secretsshall be in writing and bear a legend “Company Confidential” or words ofsimilar import or, if disclosed in any manner other than writing, shall bepreceded or followed by an oral statement indicating that the information is Companyproprietary or confidential, with an identification of the particularinformation that is Company proprietary or confidential.  PMI Documentation and Artann Trade Secretswill be considered Confidential Information by default.

 

“Effective Date” means ten (10) days after close of the2008 ProUroCare Offering or November 30, 2008, whichever is first tooccur.

 

“Expired” means, with respect to a particular patent, the patent’sexpiration, abandonment, cancellation, disclaimer, lapse due to the failure topay maintenance fees or annuities, award to another party other than Artann inan interference proceeding, or declaration of invalidity or unenforceability bya court or other authority of competent jurisdiction (including final rejectionin a re-examination or re-issue proceeding) in an unappealed or unappealabledecision.  “Unexpired” means apatent that has not Expired.

 

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

 

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

 

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

 

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

 

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

 

“Licensed Product” means the Product which:

 

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

 

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

 

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

 

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

 

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

 

“Net Sales” withrespect to a particular period means the amounts that ProUroCare, or itssublicensees invoice third parties for sales, lease or use (excluding use inclinical trials or prior to the time of FDA approval of the Product) of Productduring such period, less:  (a) anyrefunds, credits and any customer allowances actually granted to the customer; (b) discountsand rebates actually taken; (c) commissions actually paid to third partysales agents or representatives; (d) any sales, use, occupation or excisetaxes, duties or other governmental charges imposed on the sale of Products, tothe extent included in the invoice price and not reimbursed by a third party;and (e) any freight, postage or insurance included therein, in each caseas determined from the books and records of ProUroCare and sublicensees.

 

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

 

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

 

“PMI System” means the Artann’s prostate mechanical imagingsystem consisting of a 1) transrectal probe with pressure sensor arrays, 2)positioning system, 3) data processing unit, 4) real time imaging display, and5) operating system, as generally outlined in the journal article entitled “ProstateMechanical Imaging:  A New Method forQuantitative Prostate Assessment” by Weiss, et al.

 

“Product” means a PMI System including all improvements andmodifications applicable thereto, except for improvements and modificationsthat are developed for a different medical device which have only tangentialapplication to a PMI System and which were developed independently of anyactivities conducted under this Agreement and/or the Development andCommercialization Agreement.

 

“ProUroCare” means ProUroCare Medical, Inc.

 

“Territory” means anywhere and everywhere in the world.

 

“Valid Claim” means any claim in an issued, unexpired patentwhich has not been held unenforceable or invalid by a court of competentjurisdiction or an administrative agency having authority over patents, in afinal judgment that is unappealable or unappealed within the time allowed forapproval.

 

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## 1.2           Definitional Provisions.

##  

### (a)           The words “hereof,” “herein,”and “hereunder” and words of similar import, when used in this Agreement, shallrefer to this Agreement as a whole and not to any particular provisions of thisAgreement.

###  

### (b)           Terms defined in thesingular shall have a comparable meaning when used in the plural, andvice-versa.

###  

### (c)           References to an “Exhibit”or to a “Schedule” are, unless otherwise specified, to one of the Exhibits orSchedules attached to or referenced in this Agreement, and references to an “Article”or a “Section” are, unless otherwise specified, to one of the Articles orSections of this Agreement.

###  

### (d)           The term “person”includes any individual, partnership, joint venture, corporation, trust,unincorporated organization or government or any department or agency thereof.

###  

**ARTICLE 2**

**LICENSE**

 

## 2.1           Grant of License.

##  

### (a)           Subject to the termsand conditions of this Agreement, including but not limited to Sections 3.1 –3.10, 4.1(b) and 4.2(b), 6.1 – 6.3, Artann hereby grants to ProUroCare anexclusive, worldwide, sublicensable license to Artann Patents and Artann TradeSecrets to (i) make, have made, use, market, offer for sale, sell, havesold, distribute, have distributed, import, have imported and otherwise exploitProducts in the Field of Use, and (ii) practice methods covered by theArtann Patents and Artann Trade Secrets to make, have made, use, market, offerfor sale, sell, have sold, distribute, have distributed, import, have importedand otherwise exploit Products in the Field of Use.

###  

### (b)           Subject to the termsand conditions of this Agreement, including but not limited to Sections 3.1 –3.10, 4.1(b) and 4.2(b), 6.1 – 6.3, Artann hereby grants to ProUroCare anon-exclusive, worldwide, sublicensable license to the Artann Technology to (i) make,have made, use, market, offer for sale, sell, have sold, distribute, havedistributed, import, have imported and otherwise exploit Products in the Fieldof Use, and (ii) practice methods covered by the Artann Technology tomake, have made, use, market, offer for sale, sell, have sold, distribute, havedistributed, import, have imported and otherwise exploit Products in the Fieldof Use.

###  

## 2.2           Sublicenses.  The license under Section 2.1 includesthe right to sublicense within the scope thereof, subject to the right ofArtann to approve each such sublicense which right shall not be withheld exceptfor good and justifiable cause. ProUroCare shall promptly notify Artann of the grant of each sublicenseand provide Artann with a copy of the final executed sublicense agreement.  During the Term of this Agreement, ProUroCareshall be responsible for the failure by its sublicensees to comply with, andduring the Term of this Agreement ProUroCare shall have the obligation toguarantee the compliance by each of its sublicensees with all relevantrestrictions, limitations and obligations in this Agreement.  Any sublicense granted by 

 

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## ProUroCareshall survive any expiration or termination of this Agreement and beautomatically assigned to Artann, including the right of Artann to receivedirectly from the sublicensee(s), all compensation due under these respectivesublicenses.

##  

## 2.3           PatentApplications.  Unless otherwisespecified, Artann shall have the right to apply for, prosecute, or cause theissuance, amendment, abandonment, maintenance, re-examination or reissue of anypatents on or relating to Products and shall bear the expense relatedthereto.  In the event that Artanndeclines to apply for a patent upon an invention made by Artann, its employees,agents and/or representatives on or relating to Products that ProUroCarebelieves is patentable and should be patented, ProUroCare, upon provided 30days written notice, shall have the option of proceeding to obtain patent(s),upon such invention as its sole cost and expense.  Artann shall cooperate with ProUroCare andprovide such documentation and assistance and shall execute any documents asmay be reasonably necessary to facilitate obtaining such patent(s).  Any and all such patents whether obtained byArtann or ProUroCare shall be owned by Artann but shall be encompassed withinthe license grant of Section 2.1(a).

##  

## 2.4           Accessto PMI Documentation.  ProUroCareshall have full access and the right to use all PMI Documentation and shalltreat all such PMI Documentation as Confidential Information, whether or notmarked as Artann Property, Artann Confidential or words of similar import andshall not disclose such PMI Documentation to any third parties except as may beneeded or useful to Artann employees and agents and facilitate the development,refinement, use, manufacture or marketing and sale of Product and except underconditions under which these employees, agents or third parties are bound inwriting to maintain the confidentiality of such PMI Documentation or asrequired by law or FDA.

##  

## 2.5           Generation V PMI Systems.  Artann shall transfer possession of the five (5) fullyfunctional Generation V PMI Systems existing as of the Effective Date of the Agreementfor use in 1) the conduct of FDA approved clinical trials, 2) for inventorpresentations, and 3) contract manufacturer assessment.  The use of each of the five (5) GenerationV PMI Systems shall be mutually acceptable to Artann and ProUroCare and shallbe in accord with any NIH grant requirements applicable to the development ofthe Product.  Artann shall use bestefforts to effect the transfer of each of these five (5) Generation V PMISystems for the user specified above as quickly after the effective date of theAgreement as reasonably possible. Ownership to these five (5) Generation V PMI Systems shall transferfrom Artann to ProUroCare upon the date of first commercial sale of theGeneration V PMI System, subject to the inventory and accountabilityrequirements as specified by the Department of Health and Human Services.  It is understood that all choseninvestigational sites shall be acceptable to Artann, shall not conflict withthe NIH grant objectives.

##  

**ARTICLE 3LICENSE FEE, ROYALTIES AND OTHER CONSIDERATION**

 

## 3.1           UpFront License Fee.  At the Effective Date,ProUroCare shall pay to Artann an “Up Front License Fee” of Six HundredThousand Dollars ($600,000.00) and equity (i.e., shares of stock) in ProUroCarehaving a value of approximately Five Hundred Thousand Dollars ($500,000.00) asof the date such equity is provided to Artann. The exact number of shares of 

 

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## stock in ProUroCare provided to Artann herebyshall equal 500,000 divided by the 2008 Offering Price per share of ProUroCarestock in a 2008 ProUrocare Offering.  ThePMI Documentation possessed by Artann on the Generation V PMI System isprovided to ProUroCare upon confirmed receipt of the Up Front License Fee.

##  

## 3.2           LicenseRoyalty.  ProUroCare shall pay Artann aroyalty equal to the Licensed Product Royalty plus the Licensed TechnologyRoyalty.  Such royalty payments are to bemade within thirty (30) days following each calendar quarter end.

##  

### (a)           The Licensed ProductRoyalty shall apply to Licensed Product and shall equal four percent (4%) onthe first Thirty Million Dollars ($30,000,000.00) of Net Sales, three percent(3%) on the next Seventy Million Dollars ($70,000,000.00) of Net Sales and twopercent (2%) on Net Sales over One Hundred Million Dollars ($100,000,000.00) ofLicensed Product.

###  

### (b)           The LicensedTechnology Royalty shall apply from the date of first commercial sale ofProduct until the earlier of December 31, 2016 or the date of lastcommercial sale of Product and shall equal one percent (1%) of such Net Sales.

###  

## 3.3           MinimumRoyalties.  ProUroCare agrees that theminimum annual royalty payable under Section 3.2 shall be equal to FiftyThousand Dollars ($50,000.00) per year for each of the first two (2) yearsafter FDA approval for commercial sale and One Hundred Thousand Dollars($100,000.00) per year for each year thereafter until termination or expirationof this Agreement.  Each such minimumroyalty payment shall be made within thirty (30) days following the period forwhich such annual royalty payment is due. These minimum annual royalty payments are nonrefundable but fullycreditable against any royalty due and payable for that year pursuant to Section 3.2.

##  

## 3.4           Recordsand Accounting.  ProUroCare shall keep completeand accurate records of the latest three (3) years that this Agreement isin effect.  Artann shall have the rightannually at its own expense to have an independent, certified publicaccountant, review such records upon reasonable notice and during reasonablebusiness hours for the purposes of verifying the royalties payable to Artannunder Section 3.2.  Results of suchreview shall be made available to both parties. If the review reflects an underpayment of royalties to Artann, suchunderpayment shall be promptly remitted to Artann with interest at one andone-half percent (1.5%) per month.  Ifthe underpayment is equal to or greater than five percent (5%) of the royaltyamount that was otherwise due, ProUroCare shall pay all of the costs of suchreview.

##  

## 3.5           Currency of Payments.  All royalty payments under this Agreementshall be made in U.S. dollars by wire transfer to such bank account or bankaccounts as Artann shall designate from time to time.  Any payments due hereunder on sales outsideof the United States shall be payable in U.S. dollars at the rate of exchangeof the currency of the country in which the sales are made as reported in theNew York edition of The Wall Street Journal for the last business day ofthe quarter for which the royalties are payable.

##  

## 3.6           NoPatent challenge.  ProUroCare agrees not tochallenge the validity of any Patent on Exhibit A in any court oradministrative proceeding before the Patent and Trademark Office.

 

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## 3.7           GrantBack.  Subject to the terms andprovisions hereof, ProUroCare hereby grants to Artann a royalty-freenonexclusive, worldwide patent license to make, use, sell, import, haveimported and otherwise exploit devices outside the Field of Use on inventionsmade and patented by ProUroCare on the Product.

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## 3.8           SublicenseIncome.  ProUroCare agrees to payArtann twenty-five percent (25%) of the net proceeds of any compensation itreceives from any sublicense granted under this Agreement.

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## 3.9           Observation Rights.  Noune or Armen Sarvazyan shall be granted theright to observe meetings of ProUroCare’s Board of Directors in person or viatelephone conference through calendar year 2011 and thereafter as mutuallyagreed by the parties.  It shall beArtann’s option as to which individual sits in on any Board meeting.  Notice of upcoming Board meetings shall beprovided to Artann at the same time that notice is given to members ofProUroCare’s Board of Directors.

##  

## 3.10         Future Patent Licenses.  ProUroCare shall have a “right of firstnegotiation” with Artann regarding the grant of any patent or trade secretlicense on the Product in the Field of Use that is not encompassed within thelicense set forth in Section 2.1(a). The “right of first negotiation” means the right of ProUroCare tonegotiate exclusively with Artann for a period of ninety (90) days (the “periodof exclusivity”) from the date of first notice to ProUroCare by Artann.  If an agreement is not reached during this “periodof exclusivity”, Artann may provide a license to a third party, but only uponterms which are better than those offered by ProUroCare during the “period ofexclusivity”.

##  

**ARTICLE 4CERTAIN REPRESENTATIONS, WARRANTIES AND INDEMNITIES**

 

## 4.1           Representationsand Warranties.

##  

### (a)           Artann representsand warrants to ProUroCare that the execution and delivery by Artann of thisAgreement and the performance by Artann of its obligations hereunder have beenduly authorized by all requisite corporate action and will not violate anyprovision of law, any order of any court or other agency of government, theArticles of Incorporation or Bylaws of Artann, as amended, or any provision ofany indenture, agreement or other instrument to which Artann or any of itsproperties or assets is bound, or conflict with, result in a breach of orconstitute (with due notice or lapse of time or both) a default under any suchindenture, agreement or other instrument, or result in the creation orimposition of any lien, charge, restriction, claim or encumbrance of any naturewhatsoever upon any of the properties or assets of Artann.  This Agreement has been duly executed anddelivered by Artann and constitutes the legal, valid and binding obligation ofArtann, enforceable in accordance with its terms, subject, as to theenforcement of remedies, to the discretion of the courts in awarding equitablerelief and to applicable bankruptcy, reorganization, insolvency, moratorium andsimilar laws affecting the rights of creditors generally.

###  

### (b)           ProUroCarerepresents and warrants to Artann that the execution and delivery by ProUroCareof this Agreement and the performance by ProUroCare of its obligationshereunder 

 

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### have been dulyauthorized by all requisite corporate action and will not violate any provisionof law, any order of any court or other agency of government, the Articles ofIncorporation or Bylaws of ProUroCare, as amended, or any provision of anyindenture, agreement or other instrument to which ProUroCare or any of itsproperties or assets is bound, or conflict with, result in a breach of orconstitute (with due notice or lapse of time or both) a default under any suchindenture, agreement or other instrument, or result in the creation orimposition of any lien, charge, restriction, claim or encumbrance of any naturewhatsoever upon any of the properties or assets of ProUroCare.  This Agreement has been duly executed anddelivered by ProUroCare and constitutes the legal, valid and binding obligationof ProUroCare, enforceable in accordance with its terms, subject, as to theenforcement of remedies, to the discretion of the courts in awarding equitablerelief and to applicable bankruptcy, reorganization, insolvency, moratorium andsimilar laws affecting the rights of creditors generally.

###  

(c) Artann represents and warrants to ProUroCare that Artann isthe owner, or exclusive licensee with the right to sublicense, of all right,title and interest in and to the Artann Patents, Artann Trade Secrets andArtann Technology free and clear of any liens, charges, security interests,mortgages, or adverse claims.  Artannrepresents and warrants that it shall not grant any further licenses toLicensed Product in the Field of Use and will not itself practice under theArtann Patents in the Field of Use; Artann is not aware of any written thirdparty claims asserted against it alleging that the Licensed Product infringesthe intellectual property rights of any third party or that the Artann Patentsare invalid or unenforceable.  Artann hasno reasonable basis for believing that the Artann Patents, Artann Trade Secretsor Artann Technology are invalid or unenforceable.  Artann represents and warrants that thepatents and patent applications on Exhibit A include all the patents andpatent applications on or for the Generation V PMI System owned by Artann orunder which Artann has rights and the PMI Documentation to which ProUroCare isgranted the right to use for the Generation V PMI System.

 

## 4.2           Warranty Disclaimers andLimitation of Liability.  EXCEPT AS EXPRESSLYPROVIDED FOR HEREIN, ARTANN MAKES NO WARRANTY OF ANY KIND, WHETHER EXPRESS,IMPLIED, STATUTORY OR OTHERWISE, INCLUDING WITHOUT LIMITATION ANY WARRANTIES OFMERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NONINFRINGEMENT, VALIDITY,ENFORCEABILITY OR SCOPE OF THE ARTANN PATENTS OR THAT ARTANN HAS PROVIDED TOPROUROCARE ALL ARTANN TRADE SECRETS AND/OR ARTANN TECHNOLOGY AND ANY WARRANTIESTHAT MAY ARISE DUE TO COURSE OF PERFORMANCE, COURSE OF DEALING OR USAGE OFTRADE.

##  

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

 

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## 4.3           Indemnity.

##  

### (a)           Purposely leftblank.

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### (b)           Subject to the termsand conditions of this Agreement, ProUroCare shall indemnify and hold Artann,and each of its officers, directors, employees, agents or consultants harmlessfrom and against any third-party liability, losses, damages, claims, costs andexpenses (including reasonable fees of attorneys and other professionals andcourt costs) (collectively “Liabilities”) arising out of or connected with (a) anybreach of this Agreement by ProUroCare or (b) the use by or administrationof the ProUroCare Product to any person that arises out of the use, manufacture,sale, import or other exploitation of a ProUroCare Product by ProUroCare or aProUroCare sublicensee (except to the extent such liability resulted from anygross negligence or willful misconduct of Artann in the design, specificationor manufacture of the Product). Additionally, ProUroCare shall obtain, maintain and provide Artann witha copy of  commercially reasonableproduct liability insurance, with such insurance being effective as of a dateno later than the date of first clinical use independently directed byProUroCare or commercial sale of Product, and shall have Artann listed as anadditional insured party on such policy.

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### (c)           Purposely leftblank.

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### (d)           As a condition toProUroCare’s obligation to indemnify, defend and hold harmless hereunderagainst a claim arising out of a third party claim, Artann will (i) provideprompt written notice of any claim giving rise to any Liability and (ii) tendercontrol of the defense and settlement of any such claim to ProUroCare.

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**ARTICLE 5INFRINGEMENT AND INVENTIONS**

 

## 5.1           Prosecutionof Infringement of Artann Patents, Artann Trade Secrets and Artann Technologyby Third Party.

##  

### (a)           Each of ProUroCareand Artann shall promptly notify the other if it knows or has reason to believethat rights to the Artann Patents, Artann Trade Secrets or Artann Technologyare being infringed or misappropriated by a third party or that suchinfringement or misappropriation is threatened.

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### (b)           Prior to andsubsequent to the expiration of one hundred twenty (120) days from the date ofsuch notice, the obligation of ProUroCare to pay royalties or other fees, ifany, under this Agreement, shall continue unabated.  If Artann bring suit against a third partyinfringer, Artann shall bear all the expenses of any suit brought by Artann andshall retain all damages or other monies awarded or received in settlement ofsuch suit.  ProUroCare will cooperatewith Artann in any such suit as reasonably requested by Artann and shall havethe right to consult with Artann and be represented by its own counsel at itsown expense.

###  

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

 

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bring suit against such infringer and joinArtann as a party plaintiff, provided that ProUroCare shall bear all expensesof such suit.  Artann will cooperate withProUroCare in any suit as reasonably requested by ProUroCare for infringementof the Artann Patents, Artann Trade Secrets and Artann Technology brought byProUroCare against the third party, and shall have the right to consult withProUroCare and to participate in and be represented by independent counsel insuch litigation at its own expense.  ProUroCareshall have the right to retain any damages or other monies awarded or receivedin settlement of such suit provided, however, that ProUroCare shall have noright to settle such suit without the written consent of Artann.

 

## 5.2           Protectionof Intellectual Property and Improvements. During the term of thisAgreement, Artann shall promptly inform ProUroCare of any Invention,improvement, upgrading or modification relating to the Product in the Field ofUse.  If Artann obtains patents on anysuch Inventions, it may, in its discretion, add them to Exhibit A and havethem included as Artann Patents for license and royalty purposes.

##  

## 5.3           Mechanical Imaging of the Breast.  ProUroCare grants Artann a non-exclusivefully paid up, sub-licensable, royalty free and worldwide license to thepatents owned by ProUroCare or under which ProUroCare has rights and that arelisted on Exhibit B attached hereto to make, use or sell any mechanicalimaging system for the diagnosis or treatment of disorders of the breast.

##  

**ARTICLE 6TERM AND TERMINATION**

 

## 6.1           Term.  Subject to earlier termination as provided inSection 6.2 of this Agreement, this Agreement shall commence upon theEffective Date and shall terminate upon the expiration of all royaltyobligations under Section 3.2.

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## 6.2           Termination.  Notwithstanding the provisions of Section 6.1above, this Agreement may be terminated in accordance with the followingprovisions:

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### (a)           A party mayterminate this Agreement by giving notice in writing to the other party if theother party is in breach of any material representation, warranty or covenantof this Agreement and shall have failed to cure such breach within sixty (60)days of receipt of written notice thereof from the first party;

###  

### (b)           In addition to theright to terminate the Agreement pursuant to Section 6(a), if ProUroCarefails to make a payment to Artann as specified in Sections 3.1 or 3.3 hereofand Sections 3.1, 3.2 and 3.3 of the Development Agreement and such failure isnot cured within thirty (30) days of receipt of written notice thereof fromArtann, all licenses granted to ProUroCare shall automatically terminate andProUroCare shall immediately return all Artann Trade Secrets, ArtannTechnology, and PMI Documentation to Artann. Additionally, if ProUroCare fails to make a payment to Artann asspecified in Sections 3.1 or 3.3 hereof and Sections 3.1, 3.2 and 3.3 of theDevelopment Agreement and such failure is not cured within five (5) daysof receipt of written notice thereof from Artann, the exclusive licensesgranted to ProUroCare shall immediately and automatically convert tonon-exclusive licenses.  If ProUroCarepays the deficient funds to Artann within a sixty (60) day cure period, thenon-

 

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### exclusivelicenses shall convert back to exclusive licenses.  Neither party, Artann or ProUroCare, cangrant a license or sublicense to a third party during the sixty (60) day cureperiod.

###  

### (c)           A party mayterminate this Agreement at any time by giving notice in writing to the otherparty, which notice shall be effective upon dispatch, should the other partybecome insolvent, make an assignment for the benefit of creditors, go intoliquidation or receivership or otherwise lose legal control of its business.

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## 6.3           Effect ofTermination

##  

### (a)           Upon termination ofthis Agreement for any reason, nothing herein shall be construed to releaseeither party from any obligation that matured prior to the effective date ofsuch termination.

###  

### (b)           The provisions of Section 3.4(Records and Accounting); Article 4 (Certain Representations, Warranties,and Indemnities); Section 5.3 (Mechanical Imaging of the Breast); Section 6.2(b) (Returnof PMI Documentation) and Section 7.1 (Non-Disclosure) shall survive atermination under Section 6.2.

###  

**ARTICLE 7MISCELLANEOUS**

 

## 7.1           Non-Disclosure.  Each party agrees not to disclose or use(except as permitted or required for performance by the party receiving suchConfidential Information of its rights or duties hereunder or under theDevelopment Agreement or Supply Agreement) any Confidential Information of theother party obtained during the term of this Agreement until (i) the endof 2015; or (ii) the expiration of four (4) years after thetermination or expiration of this Agreement, whichever is last to occur.  Each party further agrees to take appropriatemeasures to prevent any such prohibited disclosure by its present and futureemployees, officers, agents, subsidiaries, or consultants during the term ofthis Agreement and for a period of four (4) years thereafter or the end of2015, whichever is last to occur.  ArtannTrade Secrets shall be kept confidential perpetually.

##  

## 7.2           Assignment.  This Agreement shall be binding upon andinure to the benefit of the parties hereto and the successors or assigns of theparties hereto; provided, that (i) the rights and obligations of Artannherein may not be assigned except in the case of a merger or sale ofsubstantially all of Artann’s assets or to any person who succeeds tosubstantially all of Artann’s business, and (ii) the rights andobligations of ProUroCare herein may not be assigned except in the case of amerger or sale of substantially all of ProUroCare’s assets or to any person whosucceeds to all or a substantial portion of ProUroCare’s business to which thisAgreement relates.  Any attempted assignmentof this Agreement in violation of this Section 7.2 shall be null and void.

##  

## 7.3           EntireAgreement.  This Agreement and theDevelopment and Commercialization Agreement, and the agreements contemplatedherein and therein constitute the entire agreements of the parties with respectto the subject matter of such agreements and supersede all previous 

 

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## proposalsor agreements, oral or written, and all negotiations, conversations ordiscussions heretofore had between the parties related to the subject matter ofsuch agreements.

##  

## 7.4           GoverningLaw.  This Agreement shall begoverned by, and interpreted and construed in accordance with, the laws of theState of New Jersey, without giving effect to principles of conflicts oflaws.  The parties hereby agree to submitall disputes arising hereunder to the Federal District Court for New Jerseywhere Artann is a resident.

##  

## 7.5           Amendment,Waiver, Discharge, etc.  ThisAgreement may not be amended, released, discharged, abandoned, changed ormodified in any manner, except by an instrument in writing signed on behalf ofeach of the parties to this Agreement by their duly authorizedrepresentatives.  The failure of eitherparty to enforce at any time any of the provisions of this Agreement shall inno way be construed to be a waiver of any such provision, nor in any way toaffect the validity of this Agreement or any part of it or the right of eitherparty after any such failure to enforce each and every such provision.  No waiver of any breach of this Agreementshall be held to be a waiver of any other or subsequent breach.

##  

## 7.6           Executionin Counterparts.  This Agreement maybe executed in one or more counterparts, all of which shall be considered oneand the same agreement, and shall become a binding agreement when one or morecounterparts have been signed by each party and delivered to the other party.

##  

## 7.7           Titlesand headings; Construction.  Thetitles and headings to Sections herein are inserted for the convenience of referenceonly and are not intended to be a part of or to affect the meaning orinterpretation of this Agreement.  ThisAgreement shall be construed without regard to any presumption or other rule requiringconstruction hereof against the party causing this Agreement to be drafted.

##  

## 7.8           Benefit.  Nothing in this Agreement, expressed orimplied, is intended to confer on any person other than the parties to thisAgreement or their respective successors or permitted assigns, any rights,remedies, obligations or liabilities under or by reason of this Agreement.

##  

## 7.9           Notices.  All notices or other communications to aparty required or permitted hereunder shall be in writing and shall bedelivered personally or by facsimile (receipt confirmed) to such party (or, inthe case of an entity, to an executive officer of such party) or shall be givenby certified mail, postage prepaid with return receipt requested, addressed asfollows:

##  

if to ProUroCare to:

 

ProUroCare Medical, Inc.

5500 Wayzata Boulevard, #310

Golden Valley, MN  55416

Attention: CEO

Phone: 952-476-9093

Fax: 763-591-5039

 

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ifto Artann to:

 

Artann Laboratories, Inc.

1459 Lower Ferry Road

West Trenton, NJ 08618-1414

Fax:  (609)333-0710

Phone:  (609) 333-0712

 

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

 

## 7.10         Severability.  If any provision of this Agreement is heldinvalid by a court of competent jurisdiction, such provision shall be enforcedto the maximum extent permissible and the remaining provisions shallnonetheless be enforceable according to their terms.

##  

## 7.11         Executionof Further Documents.  Each partyagrees to execute and deliver without further consideration any furtherapplications, licenses, assignments or other documents, and to perform suchother lawful acts as the other party may reasonably request to fully secureand/or evidence the rights or interests herein.

##  

## 7.12         Purposelyleft blank.

##  

## 7.13         Compliancewith Laws.  The parties will, andProUroCare shall cause any permitted sublicensees of ProUroCare to, comply withall applicable international, national, state, regional and local laws andregulations, including all applicable import and export control laws, inexercising rights or performing their duties under this Agreement.

##  

## 7.14         Use of Name.  Except with the prior express writtenpermission, ProUroCare shall not use or reference Artann’s or Armen Sarvazyan’sname in any marketing, sales or Product documents or materials.

 

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

 
|   | ARTANN LABORATORIES, INC. |
|--------|---------------------------|
|   |                      |
|   |                      |
|   | By:                       | /s/ Noune Sarvazyan |
|   |                      |   |
|   | Its:                      | CEO |
|   |                      |
|   |                      |
|   | PROUROCARE MEDICAL, INC.  |
|   |                      |
|   |                      |
|   | By:                       | /s/Richard C. Carlson |
|   |                      |   |
|   | Its:                      | CEO |

 

Exhibits:

 
| Exhibit A: | Artann Patents     |
|-----------------|--------------------|
| Exhibit B: | ProUroCare Patents |

 

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**Exhibit A: Artann Patents**

 
| a.     | Method and Device for Real Time Mechanical Imaging of Prostate, USA  Patent Application No 11/123,999, Filing Date: May 6, 2005.                        |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                         |
| b.     | Method and Dual-Array Transducer Probe for Real Time Mechanical  Imaging of Prostate, USA Patent Application No 11/146,367, Filing Date:  June 6, 2005. |
|   |                                                                                                                                                         |
| c.     | Prostate Mechanical Imaging probe, USA Patent Application No  29/320,480, Filing Date: June 27, 2008.                                                   |
|   |                                                                                                                                                         |
| d.     | Calibration  chamber for Prostate Mechanical Imaging probe, USA Patent Application No  29/320.474, Filing Date: June 27, 2008.                          |

 

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**Exhibit B: ProUroCare Patents**

 
| a.     | Method and  apparatus for elasticity imaging, USA Patent No 5,524,636.        |
|--------|-------------------------------------------------------------------------------|
|   |                                                                          |
| b.     | Device for breast haptic examination, USA Patent No 5,833,633.                |
|   |                                                                          |
| c.     | Method and device for mechanical imaging of breast, USA Patent No  5,860,934. |
|   |                                                                          |
| d.     | Apparatus and  Method for Mechanical Imaging of Breast, USA Patent 6,620,115. |

 

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