exv10w26



 



Exhibit 10.26


TECHNICAL SERVICES AGREEMENT



     This Technical Services Agreement (“Agreement”) is entered into this 27th
day of August 2002 between United Therapeutics Corporation on behalf of its
wholly owned subsidiary Medicomp, Inc. (together referred to as “United
Therapeutics”), and Kurzweil Technologies, Inc. (“KTI”).


     In consideration of the mutual promises and covenants herein contained and
for other good and valuable consideration, the receipt and sufficiency of which
is hereby acknowledged, the parties to this Agreement agree as follows:


1.     Services. KTI shall use KTI’s best efforts, skills and knowledge to
provide such services and perform such work as described in the July 15, 2002
Proposal and the August 24, 2002 Addendum contained at the Statement of Work
attached hereto at Schedule A (the “Work”), with the initial priorities of the
project in three areas: (i) creation of a new Diogenes ECG analysis program,
(ii) strengthening of Medicomp’s intellectual property program, and (iii)
consulting on business and other new technology development. The Work shall be
performed by the team of KTI employees and consultants designated in Schedule
A, personally led by Raymond Kurzweil, with KTI reporting to Ricardo Balda.
All Work shall be conducted in compliance with FDA guidelines, including FDA 21
CFR 8020.30 Design Controls, as interpreted in Medicomp’s Quality System
Manual. KTI shall not perform services beyond those identified in Schedule A
except at the express written request of Ricardo Balda. KTI shall provide
monthly reports describing the content and progress of all tasks, as well as
hourly breakdowns of the time expended by each individual.


     2.     Payment for Services. In full and complete compensation for all
services provided by KTI, and for all obligations assumed by KTI, United
Therapeutics shall make the following payments to KTI:


           a. Consulting Fees. United Therapeutics shall pay to KTI the consulting
fees identified in Schedule A not to exceed $40,000 in any calendar month.
Such compensation shall be paid within 30 days following receipt of a detailed
invoice with copies of expense receipts. Any amounts not paid within 30 days
after the date of the invoice are subject to an interest charge at the rate of
1.5% per month (18% per annum).


           b. Expense Reimbursement. United Therapeutics shall reimburse KTI on a
monthly basis for all necessary, reasonable and direct out-of-pocket expenses
incurred by KTI on behalf of United Therapeutics under this Agreement upon
receipt by United Therapeutics of all such receipts provided, however, that
such expenses shall not exceed $1,000 per month without advance written
permission of United Therapeutics.


           c. Royalties. United Therapeutics shall pay to KTI a five percent (5%)
royalty on Net Sales of Products reasonably attributed to and dependent upon
technology developed by KTI under this Agreement and which are covered by
claims of an issued and


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unexpired United States patent(s), all as provided in Schedule B. For
purposes of clarity, in the event that a given Product is covered by claims of
more than one issued and unexpired patent developed by KTI, the royalty to be
paid to KTI with respect to such Product shall be the same as if such Product
were covered by claims of only one issued and unexpired patent developed by
KTI.


     3.     Term. The term of this Agreement shall commence on August 27, 2002
and will continue until terminated as provided
herein.


           a. This Agreement may be terminated by United Therapeutics upon thirty
(30) days’ advance written notice to KTI.


           b. This Agreement may be terminated by KTI upon one hundred eighty (180)
days’ advance written notice to UT.


           c. This Agreement may be terminated immediately (i) by mutual written
agreement of the parties hereto; (ii) by either party upon breach by the other
party of a material provision of this Agreement which breach remains uncured
for more than ten (10) days following receipt of notice thereof from the
non-breaching party; or, for a breach which cannot be cured within ten (10)
days, for an additional period, reasonable in length, to allow the breaching
party to effect a cure, provided that said party diligently pursues such cure,
but in no event more than thirty (30) days following receipt of initial notice
from the non-breaching party, or (iii) by either party upon the insolvency of
the other party, or upon the filing of a voluntary petition in bankruptcy by
the other party or to have the other party declared a bankrupt, or upon the
appointment of a receiver or trustee for the other party, or upon the execution
by the other party of an assignment for the benefit of creditors.


           d. Upon termination for any reason other than a breach of this Agreement
by KTI, KTI shall be entitled to payment for all consulting hours worked at the
contract bill rate for such hours, plus reimbursable expenses incurred through
the time of termination, plus the payment of royalties, if any, in accordance
with Section 2(b) above.


           e. KTI’s obligations under Sections 4, 6, 7, 8 and 9 shall survive
termination of this Agreement, and UT’s obligations under Section 2(b) shall
survive termination of this Agreement.


     4.     Warranty. UNITED THERAPEUTICS AND KTI AGREE THAT KTI WILL HAVE NO
LIABILITY OR RESPONSIBILITY UNDER THE FOREGOING WARRANTY WITH RESPECT TO THE
WORK INCLUDING, BUT NOT LIMITED TO ANY LIABILITY OR RESPONSIBILITY FOR ANY
PRODUCTION OR OTHER COSTS WHICH RESULT FROM THE USE OF THE WORK. THE FOREGOING
WARRANTY CONSTITUTES THE ONLY WARRANTY MADE BY KTI UNDER THIS AGREEMENT AND ALL
OTHER WARRANTIES, WHETHER EXPRESS OR IMPLIED, ARE DISCLAIMED, INCLUDING ANY
WARRANTY WITH RESPECT


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TO THE MERCHANTABILITY OF THE WORK OR THE FITNESS OF THE WORK FOR ANY
PARTICULAR PURPOSE.


     5.     Limitation of Liability. THE PARTIES AGREE THAT KTI’S TOTAL LIABILITY
TO UNITED THERAPEUTICS FOR ANY CLAIMS, LIABILITIES, DEMANDS, LOSSES, EXPENSES
OR DAMAGES WHATSOEVER, ARISING OUT OF OR IN ANY WAY RELATED TO WORK PERFORMED
BY KTI UNDER THIS AGREEMENT FROM ANY CAUSE OR CAUSES, IS LIMITED TO DIRECT
DAMAGES TO THE EXTENT CAUSED BY KTI’S NEGLIGENT PERFORMANCE OF SUCH WORK OR
KTI’S WILLFUL MISCONDUCT AND SHALL NOT INCLUDE LIABILITY FOR ANY (I) SPECIAL,
INDIRECT, INCIDENTAL OR CONSEQUENTIAL DAMAGES, (II) DAMAGES ARISING OUT OF LOSS
OF DATA, LOSS OF USE OR LOSS OF PROFITS, OR (III) COSTS ASSOCIATED WITH THE
CORRECTION OF ANY CONSTRUCTION OF THE PROJECT TO WHICH KTI’S WORK RELATES.


     6.     Indemnification and Insurance. Subject to the warranties and limits of
liability set forth in Sections 5 and 6 above, each party shall indemnify and
hold the other harmless from and against all costs and expenses, including
reasonable attorneys’ fees, arising out of (i) claims for bodily injury,
personal injury or property damage to the extent caused by the indemnifying
party’s negligence in its performance of this Agreement; or (ii) a breach of
the indemnifying party’s obligations under this Agreement. During the term of
this Agreement, KTI will maintain at least the following insurance coverages
and amounts:



	 	 	 	 	 
	Coverage	 	Amount
	
	 	

	(a)	 	
Worker’s Compensation in the State
where KTI personnel will be working
	 	Statutory
	(b)	 	
Employers’ Liability
	 	$1,000,000 each accident
	 	 	 	 	$1,000,000 disease — policy limit
	(c)	 	
Commercial General Liability including
	 	$1,000,000 combined single limit per occurrence
	 	 	
Bodily Injury and Property Damage	 	 
	(d)	 	
Business Automobile Insurance including
	 	$1,000,000 combined single limit each accident
	 	 	
Bodily Injury and Property Damage	 	 
	(e)	 	
Excess Liability
	 	$1,000,000 each occurrence



     7.     Confidentiality and Non-Disclosure.


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           a. All information and know-how that KTI in any way learns from United
Therapeutics and all inventions, discoveries, materials, authorship,
derivatives and results and proceeds which shall become the property of United
Therapeutics pursuant to Section 8 below, shall be deemed to be the
confidential property of United Therapeutics (hereinafter “Confidential
Information”). KTI shall take all reasonable, necessary and appropriate
security precautions to safeguard the Confidential Information from disclosure.
KTI shall use the Confidential Information only for the purpose of performing
services hereunder, and shall not use the Confidential Information for the
benefit of KTI or any other person or business in any manner directly or
indirectly. KTI shall not use, disclose or make available to any third parties
any Confidential Information received by KTI without the prior written consent
of United Therapeutics.


           b. KTI’s obligations of confidentiality and non-disclosure under this
section shall not apply to the extent that KTI can demonstrate that such
confidential information: (i) was known to KTI prior to disclosure; (ii) was
not acquired directly or indirectly from United Therapeutics and which KTI
lawfully had in his or her possession prior to disclosure; (iii) hereafter,
through no act or omission by KTI, becomes information generally available to
the public; (iv) corresponds in substance to information furnished to KTI on a
non-confidential basis by any third party having a legal right to do so; or (v)
was required by law to be disclosed, which disclosure shall not be made prior
to notice to United Therapeutics in order to permit United Therapeutics to
oppose such disclosure.


           c. KTI agrees to promptly return all Confidential Information provided
under this Agreement, and any copies, reproductions, or descriptions thereof,
to United Therapeutics upon request or upon expiration or termination of this
Agreement.


           d. The obligation to hold information confidential under this Section
7 of this Agreement shall remain in force for a period of four (4) years
following expiration or termination of this Agreement, notwithstanding the
earlier expiration or termination of this Agreement.


           e. KTI shall obtain written agreements with each KTI employee, consultant,
agent or contractor prior to each such individual performing services on the
Work that contains terms at least as stringent as the terms in the foregoing
Sections 7(a)-(d) and expressly identifies United Therapeutics as an intended
third party beneficiary of the employee’s confidentiality and non-disclosure
obligations to KTI in accordance with this Agreement.


     8.     Ownership of Intellectual Property Rights.


           a. The entire right, title and interest in and to all inventions,
discoveries, materials, authorship, derivatives and results and proceeds of
KTI’s efforts, and the efforts of its agents and contractors, in any form or
media that relate to the Work in any manner, and that are in the area of
technology of the Work, including without limitation, all patents, trade


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secrets and copyrights, shall be solely and exclusively owned by United
Therapeutics, its successors licensees and assigns, and no other individual or
entity shall have any interest therein of any kind or nature.


           b. Patents and Trade Secrets.


                 1. KTI shall promptly disclose and shall and hereby does assign and
transfer to United Therapeutics all right, title and interest in and to any
patentable or unpatentable inventions, discoveries, and ideas which are made or
conceived in whole or in part by or on behalf of KTI in the course of or as a
result of the services performed hereunder, or that relate directly to, or
involve the use of Confidential Information and the Work, and that are in the
area of technology of the Work. In the event that KTI has any right in the
Work which cannot be assigned, KTI agrees to waive enforcement worldwide of
such right against United Therapeutics, its successors, distributors, licensees
and assigns or, if necessary, hereby grants a fully-paid up worldwide exclusive
license to United Therapeutics with the right to sublicense and assign.


                 2. KTI shall timely assist United Therapeutics in the filing and
prosecution of patent applications covering such inventions, discoveries or
ideas and will promptly execute and furnish any and all documents as may be
required to establish United Therapeutics’ sole and exclusive ownership
thereof. KTI hereby grants United Therapeutics the exclusive right, and
appoints United Therapeutics as KTI’s attorney-in-fact (such power of attorney
being coupled with an interest therein) to execute and prosecute an application
for domestic and/or foreign patent or other statutory protection, and KTI shall
execute and deliver to United Therapeutics, without charge to United
Therapeutics but at United Therapeutics’ expense, such other documents of
registration and recordation, and do such other acts, such as give testimony in
support of KTI’s inventorship, as may be necessary in the opinion of United
Therapeutics to vest in United Therapeutics or any other party nominated by
United Therapeutics, or otherwise to protect, the exclusive rights conveyed
and/or granted to United Therapeutics pursuant to this Agreement.


                 3. In the event that United Therapeutics decides not to pursue patent
protection for any discovery or creation made by KTI, and instead decides to
protect the discovery or creation pursuant to the trade secret laws of any
jurisdiction, such decision shall not be construed as a waiver of United
Therapeutics’ rights pursuant to this Agreement. At United Therapeutics’
expense, KTI shall also take whatever steps are necessary to sustain United
Therapeutics’ claim to such trade secrets, including but not limited to: (i)
maintaining the confidential nature of any such discoveries or creations; and
(ii) testifying and providing other support and substantiation for United
Therapeutics’ claims with regard to the discovery or creation.


                 4. With respect to discoveries made by KTI, KTI employees, consultants,
agents and contractors shall maintain notebooks and other records adequate


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to describe such discovery to others conversant in the subject of the
technology and to establish the date and circumstances of such discovery. KTI
employees, agents and contractors shall notify United Therapeutics of any such
discoveries and shall make copies of all documents or reports relating to such
discoveries available to United Therapeutics. Any discovery shall be reported
to United Therapeutics regardless of whether, in KTI’s opinion, a given
discovery is of value to United Therapeutics, or is protectable under patent,
copyright or the laws of any jurisdiction.


           c. Copyrights.


                 1. All materials, authorship, derivatives and other work prepared by KTI,
its employees, agents and contractors, in any form or media that relate to the
Work, and that are in the area of the technology of the Work (“Authorship”)
shall be considered as “Works Made for Hire” (as that term is defined under
U.S. Copyright Laws) and, as such shall be owned solely and exclusively by and
for the sole and exclusive benefit of United Therapeutics.


                 2. In the event that it should be determined that (i) any of such
Authorship shall not be considered as a Work Made for Hire for any reason, or
(ii) KTI acquires any right, title or interest in or to any Authorship prepared
by KTI, its employees, agents and contractors, in any such Authorship, then in
either such event, KTI will and hereby does assign and transfer to United
Therapeutics all right, title and interest possessed by KTI, its employees,
agents and contractors, in all such Authorship and will promptly execute and
furnish any and all documents as may be required to establish United
Therapeutics’ sole and exclusive ownership thereof. For the purpose of
producing such documentation KTI hereby irrevocably appoints United
Therapeutics as its attorney in fact to execute such documents on its behalf,
such power of attorney being coupled with an interest therein. In the event
that KTI has any right in the Work which cannot be assigned, KTI agrees to
waive enforcement worldwide of such right against United Therapeutics, its
successors, distributors, licensees and assigns or, if necessary, hereby grants
a fully-paid up worldwide exclusive license to United Therapeutics with the
right to sublicense and assign.


           d. Original Work. KTI agrees that KTI, its employees, agents and
contractors, shall not include any material owned by a third party in any
written, copyrightable or patentable material furnished or delivered by KTI
under this Agreement without the unconditional written consent of the owner of
such intellectual property rights unless specific advance written approval is
obtained from United Therapeutics for inclusion of such material including
third party intellectual property rights. KTI also agrees that all work (or
tangible expression of an idea) that KTI, its employees, agents and
contractors, create or contribute to United Therapeutics in the course of the
services hereunder will be created solely by KTI, its employees, agents and
contractors, will be original to employees, agents and contractors, and will be
free of any third party claims or interests.


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           e. Use. United Therapeutics and its respective successors, licensees, and
assigns shall have the sole and exclusive right to practice, or to make, use or
sell products, processes or services derived from any discoveries or creations
within the scope of this Agreement, whether or not patentable or copyrightable
under the laws of any jurisdiction, or protected by the trade secret laws of
any jurisdiction.


           f. Infringement Actions. In the event that United Therapeutics shall
bring an infringement suit against any third parties or shall be sued by any
third parties as a result of KTI’s authorship or creation, including without
limitation any addition and/or modification of the aforementioned items of
Confidential Information, KTI agrees to cooperate reasonably without charge to
United Therapeutics, but at its request and expense, in defending against or
prosecuting any such suit. This right shall be cumulative to any other rights
of United Therapeutics hereunder.


           g. Deliverables. All works to be delivered to United Therapeutics by KTI
shall be delivered according to a schedule mutually agreed upon, or else
promptly after expiration or termination of this Agreement, together with all
written information, drawings, documents and materials, if any, furnished by
United Therapeutics to KTI in connection with KTI’s services hereunder, and not
consumed by KTI in the performance of such services.


           h. Agreements. KTI shall obtain written agreements with each KTI
employee, consultant, agent or contractor prior to each such individual
performing services on the Work that contains terms at least as stringent as
the terms in the foregoing Sections 8(a)-(g) and expressly identifies United
Therapeutics as an intended third party beneficiary of the employee’s, agent’s
and contractor’s intellectual property rights ownership obligations to KTI in
accordance with this Agreement.


     9.     Miscellaneous.


           a. Independent Contractor. KTI acknowledges that KTI is an independent
contractor providing services to United Therapeutics. KTI acknowledges that
KTI may not enter into agreements on behalf of United Therapeutics or otherwise
obligate United Therapeutics in any manner and that KTI will not represent that
KTI has authority to do so. KTI shall be solely responsible for the payment of
all applicable taxes associated with the compensation paid under this
Agreement.


           b. Assignment or Subcontracting. KTI may not assign, delegate or
subcontract any of KTI’s duties except with the prior written consent of United
Therapeutics.


           c. Compliance with Laws. Both parties agree to comply with all applicable
laws, government regulations and government orders in the performance of this
Agreement, including without limitation, compliance with relevant FDA
guidelines and HIPAA.


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           d. Entire Agreement and Amendment. This Agreement and its attachments
constitute the entire agreement of the parties with respect to the subject
matter hereof, supersedes all prior agreements and understandings, written or
oral, between United Therapeutics and KTI. This Agreement and may be amended
only by a written agreement signed by both parties that expressly amends,
terminates or supersedes this Agreement.


           e. Waiver. No waiver of any provisions of this Agreement shall be valid
unless the same is in writing and signed by the party against whom such waiver
is sought to be enforced. No valid waiver of any provision of this Agreement
at any time shall be deemed a waiver of any other provision of this Agreement.
No delay or omission by either party in exercising any right under this
Agreement will operate as a waiver of that or any other right.


           f. Successors and Assigns. This Agreement, and all rights and powers
granted hereby, will bind and inure to the benefit of the parties hereto and
their respective successors and assigns.


           g. Governing Law. The terms of this Agreement shall be governed and
construed in accordance with the laws of the State of New York. The parties
agree that any dispute under this Agreement shall be decided in the federal or
state courts of the State of New York and each party hereby expressly consents
and submits to the exclusive personal jurisdiction and exclusive venue of the
courts in the State of New York.


IN WITNESS WHEREOF, each of the parties has caused this Agreement to be signed
by its duly authorized representatives on the dates indicated below






	 	 	 
	UNITED THERAPEUTICS CORPORATION	 	KURZWEIL TECHNOLOGIES, INC.
	 	 	 
	By: /s/ Paul Mahon
	 	By: /s/ Ray Kurzweil

	Printed:	 	
Printed:
	 
	Date: September 9, 2002
	 	Date: September 4, 2002

	 
	 
	 	 	


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