NSE 10-K 2004 Exhibit 10.65 Memo of Under UofU Caroderm Nutriscan






UNIVERSITY OF UTAH
RESEARCH FOUNDATION 



and 



NUTRISCAN, INC. 



AMENDED AND RESTATED 



PATENT LICENSE
AGREEMENT 



(EXCLUSIVE) 













TABLE OF CONTENTS 


		
	WITNESSETH	 	1	 
	 	 
	1 - DEFINITIONS	 	2	 
	 	 
	2 - GRANT	 	5	 
	 	 
	3 - DILIGENCE	 	7	 
	 	 
	4 - ROYALTIES	 	9	 
	 	 
	5 - REPORTS AND RECORDS	 	12	 
	 	 
	6 - PATENT PROSECUTION	 	14	 
	 	 
	7 - CONFIDENTIALITY	 	15	 
	 	 
	8 - INFRINGEMENT	 	16	 
	 	 
	9 - PRODUCT LIABILITY	 	18	 
	 	 
	10 - EXPORT CONTROLS	 	19	 
	 	 
	11 - NON-USE OF NAMES	 	20	 
	 	 
	12 - ASSIGNMENT	 	20	 
	 	 
	13 - DISPUTE RESOLUTION	 	20	 
	 	 
	14 - TERMINATION	 	21	 
	 	 
	15 - PAYMENTS, NOTICES AND OTHER COMMUNICATIONS	 	23	 
	 	 
	16 - MISCELLANEOUS PROVISIONS	 	23	 
	 	 
	APPENDIX A	 	25	 
	 	 
	APPENDIX B	 	26	 
















UNIVERSITY OF UTAH
RESEARCH FOUNDATION 



and 



NUTRISCAN, INC. 



AMENDED AND RESTATED 



PATENT LICENSE AGREEMENT 



        This Amended and Restated
Agreement is made and entered into effective as of the 7th day of March, 2002, (the
“EFFECTIVE DATE”) by and between the UNIVERSITY OF UTAH RESEARCH FOUNDATION,
having its principal office at 615 Arapeen Dr., Suite 110, Salt Lake City, UT 84108
(hereinafter referred to as “LICENSOR”), and Nutriscan, Inc., a corporation duly
organized under the laws of Utah, and having its principal office at 75 West Center
Street, Provo, Utah 84601 (hereinafter referred to as “LICENSEE”). 



WITNESSETH 



        WHEREAS,
LICENSOR is the owner of certain LICENSED TECHNOLOGY (as later defined herein) relating
to University of Utah Case No. U-2612, entitled NONINVASIVE DETECTION AND MAPPING OF
CHEMICAL SUBSTANCES IN THE SKIN AND SKIN-RELATED MALIGNANCIES by Werner Gellermann,
Robert W. McClane , Nikita B. Katz and Paul S. Bernstein and has the right to grant
licenses under said LICENSED TECHNOLOGY; 








        WHEREAS,
LICENSOR desires to have the LICENSED TECHNOLOGY developed and commercialized to benefit
the public and is willing to grant a license thereunder; 



        WHEREAS,
University of Utah inventors of the PATENT RIGHTS, were also original inventors/equity
participants in the company, the Conflict Avoidance Statements of Paul S. Bernstein,
Werner Gellermann and Robert W. McClane, are Appendix C hereto; the Waivers of Royalty of
Paul





1 











 S. Bernstein, Werner Gellermann and Robert W. McClane, inventors/equity participants
in company are Appendix D; 



        WHEREAS,
the LICENSOR originally granted a license to the LICENSEE pursuant to that certain License
Agreement dated June, 29, 2000 pursuant to which the LICENSOR accepted an equity interest
in LICENSEE in partial consideration for the license grant; 



        WHEREAS,
LICENSOR and the other original investors in LICENSEE have elected to sell all of their
interest in LICENSEE to Worldwide Nutritional Sciences, Inc.; and 



        WHEREAS,
in connection with such sale, LICENSEE and LICENSOR desire to amend and restate in its
entirety the LICENSE AGREEMENT . NOW, THEREFORE, in consideration of the premises and the
mutual covenants contained herein, the parties hereto agree as follows:  



1 - DEFINITIONS 



        For
the purposes of this Agreement, the following words and phrases shall have the following
meanings: 



        1.1
 "AFFILIATE" means any person or entity that controls, is controlled by, or is under
common control with LICENSEE, directly or indirectly. For purposes of this definition,
"control" and its various inflected forms means the possession, directly or indirectly,
of the power to direct or cause the direction of the management and policies of such
person or entity, whether through ownership of voting securities, by contract or
otherwise. 






        1.2
 "PATENT RIGHTS" shall mean all of the following LICENSOR intellectual property: 








	  	  	a.  	  	 the
     United  States  patents  listed in Appendix A;  














	  	  	b.  	  	the
United  States patent applications listed in Appendix A, and divisionals,  continuations
and claims of continuation-in-part  applications  which shall be  directed  to subject
 matter specifically  described in such patent applications,  and the resulting patents; 









	  	  	c.  	  	any
patents  resulting from reissues or  reexaminations  of the United States patents
 described in a. and b. above;  









	  	  	d.  	  	the
Foreign patents listed in Appendix A;  







2 










	  	  	e.  	  	the
Foreign  patent  applications  listed in Appendix A, and  divisionals, continuations and
claims of continuation-in-part applications
which shall be directed to subject matter specifically described in such Foreign patent
applications, and the resulting patents;   










               	f. 	  	
                    Foreign patent applications filed after the EFFECTIVE DATE, including those
                    applications filed in at least the countries listed in Appendix B and
                    divisionals, continuations and claims of continuation_in_part applications which
                    shall be directed to subject matter specifically described in such patent
                    applications, and the resulting patents; and 



                    



               	g. 	  	
                    any Foreign patents, resulting from equivalent Foreign procedures to United
                    States reissues and reexaminations, of the Foreign patents described in d., e.
                    and f. above. 



                    



        1.3
“LICENSED TECHNOLOGY” means and includes the PATENT RIGHTS and other technology
and intellectual property, including inventions, whether patentable or unpatentable,
technical data, software, apparatus, know-how and trade secrets relating to University of
Utah Case No. U-2612 entitled NONINVASIVE DETECTION AND MAPPING OF CHEMICAL SUBSTANCES IN
THE SKIN AND SKIN-RELATED MALIGNANCIES owned and known by LICENSOR upon the EFFECTIVE
DATE. 



        1.4
A “LICENSED PRODUCT” shall mean any product or part thereof which: 



               	a. 	  	
                    is covered in whole or in part by an issued, unexpired claim or a pending claim
                    contained in the PATENT RIGHTS in the country in which any such product or part
                    thereof is made, used or sold; or 



                    



               	b. 	  	
                    is manufactured by using a process or is employed to practice a process which is
                    covered in whole or in part by an issued, unexpired claim or a pending claim
                    contained in the PATENT RIGHTS in the country in which any LICENSED PROCESS is
                    used or in which such product or part thereof is used or sold; and 



                    



               	c. 	  	
                    is covered by or incorporates any LICENSED TECHNOLOGY. 



                    



        1.5
A “LICENSED PROCESS” shall mean any process which is covered in whole or in part
by an issued, unexpired claim or a pending claim contained in the PATENT RIGHTS or is
covered by or incorporates any LICENSED TECHNOLOGY. 





3 









        1.6
“NET SALES” shall mean LICENSEE’S, its AFFILIATES’ (except as
described below) and its SUBLICENSEES’ billings for LICENSED PRODUCTS and LICENSED
PROCESSES less the sum of the following: 






	  	  	a.  	  	discounts allowed
in amounts customary in the trade for quantity purchases,                     cash
payments, prompt payments, wholesalers and distributors;








	  	  	 	  	 





	  	  	b..  	  	sales,
tariff                     duties and/or use taxes directly imposed and with reference to
particular sales; 










	  	  	c.  	  	outbound
transportation prepaid or allowed; and  








	  	  	d.  	  	amounts
allowed or                     credited on returns.  









	  	  	e.  	  	commissions
paid to independent sales representatives or                     agencies.  











        No
deductions shall be made for commissions paid to individuals regularly employed by
LICENSEE, or for cost of collections. NET SALES shall occur: 



               	 	(i)
                     with respect to NET SALES of LICENSED PRODUCTS and LICENSED PROCESSES in the
                    United States, when a LICENSED PRODUCT or LICENSED PROCESS shall be invoiced by
                    LICENSEE, or an AFFILIATE of LICENSEE, or a SUBLICENSEE, to a third party that
                    is not an AFFILIATE, or if not invoiced, when delivered to or performed for a
                    third party that is not an AFFILIATE (and no royalty shall be payable on
                    intercompany billings to AFFILIATES); 


                    



	  	
(ii) with
respect to NET SALES of LICENSED PRODUCTS outside of the United States
               through AFFILIATES, the date that is six months following the receipt of
the                LICENSED PRODUCT by an AFFILIATE and the royalty on such NET SALES
shall be                based on the published U.S. retail price rather than the transfer
price invoiced                to such AFFILIATES (and no royalty shall be payable on
billings by the AFFILIATE                for the LICENSED PRODUCTS);  






	  	
     (iii) with respect to NET SALES of LICENSED PROCESSES outside of the United
States, when such LICENSED PROCESS shall be invoiced by LICENSEE, a SUBLICENSEE,
or an AFFILIATE of LICENSEE to a third party that is not an AFFILIATE;










	  	
(iv) with
respect to NET SALES of LICENSED PRODUCTS by LICENSEE or SUBLICENSEE to
                    persons or entities outside of the UNITED STATES that are not










4 










	  	
AFFILIATES, the                     date the LICENSED PRODUCT shall be invoiced by
LICENSEE to such third party, or                     if not invoiced, when delivered to
such third party.  







In the event a Licensed Product is
leased, licensed or sold on an installment basis the royalties due hereunder shall be
calculated and paid on the amount of each installment as it is invoiced. 



        1.7
“OTHER REVENUE” shall mean LICENSEE’S gross revenues from the sale of
services (e.g. fees for consulting, research and development, and training) in connection
with: 



	  	  	a. 	  	the
sublicensing of the LICENSED TECHNOLOGY; and/or  






	  	b. 	  	the
     use or sale,  lease or other  transfer  of  LICENSED  PRODUCTS  or LICENSED
PROCESSES.  1.8  “TERRITORY”  shall mean worldwide.  






        1.9 “FIELD OF
USE”  shall mean the use of the LICENSED  TECHNOLOGY  for the  non-invasive
measurement of carotenoids and similar or relatedcompounds, and anti-oxidant status
and other compounds in human skin for the promotion and sale of nutritional supplements
and other carotenoid-containing products, but specifically excluding marketing the
LICENSED TECHNOLOGY to the professional medical community (e.g., pharmaceuticals, medical
doctors, medical clinics, medical research centers, medical schools and hospitals). 





2-GRANT 




        2.1
LICENSOR hereby grants to LICENSEE the right and license in the TERRITORY for the FIELD OF
USE to practice under the LICENSED TECHNOLOGY and, to the extent not prohibited by other
patents, to make, have made, use, lease, license, sell and export LICENSED PRODUCTS and to
practice the LICENSED PROCESSES, until the expiration of the last to expire of any of
LICENSOR’S rights in the LICENSED TECHNOLOGY, unless this Agreement shall be sooner
terminated according to the terms hereof. 







        LICENSEE
shall have the right to enter into sublicensing agreements for the rights, privileges and
licenses granted hereunder only during the EXCLUSIVE PERIOD (defined below) of this
Agreement. Upon any termination of this Agreement, SUBLICENSEES’ rights shall also
terminate, subject to Section 14.6 hereof. 





5 










        2.2
In order to establish a period of exclusivity for LICENSEE, LICENSOR hereby agrees that it
shall not grant any other license to make, have made, use, lease, sell and import LICENSED
PRODUCTS or to utilize LICENSED PROCESSES, in the TERRITORY for the FIELD OF USE or the
promotion and sale of nutritional supplements during the period of time commencing with
the EFFECTIVE DATE and terminating upon the last to expire of the PATENT RIGHTS
(hereinafter the “EXCLUSIVE PERIOD”). 



        2.3
The University of Utah reserves the right to practice under the LICENSED TECHNOLOGY for
noncommercial internal research purposes. 







        2.4
LICENSEE agrees to incorporate terms and conditions substantively similar to Articles 2,
5, 8.1-6, 9, 10, 11, 12, 13, and 16 of this Agreement into its sublicense agreements, so that these Articles shall be binding upon such
SUBLICENSEES as if they were parties to this Agreement. 







        2.5
LICENSEE agrees to forward to LICENSOR a copy of any and all sublicense agreements
promptly upon execution by the parties.  









        2.6
LICENSEE shall not receive from SUBLICENSEES anything of value in lieu of cash payments
or publicly traded securities in consideration for any sublicense under this Agreement,
without the express prior written permission of LICENSOR, which prior written permission
shall not be unreasonably withheld.  





        2.9
Nothing in this Agreement shall be construed to confer any rights upon LICENSEE by
implication, estoppel or otherwise as to any technology or patent rights of LICENSOR or
any other entity other than the LICENSED TECHNOLOGY, regardless of whether such rights
shall be dominant or subordinate to any LICENSED TECHNOLOGY. 



3 - DILIGENCE 



        3.1
LICENSEE shall use its commercially reasonable best efforts to bring one or more LICENSED
PRODUCTS or LICENSED PROCESSES to market and to continue active, diligent marketing
efforts for one or more LICENSED PRODUCTS or LICENSED PROCESSES throughout the life of
this Agreement. 



        3.2
 In addition, LICENSEE shall adhere to the following milestones: 






	  	  	                        a.  	  	LICENSEE
shall: 






  
6










     	(i) 	  	
          deliver to LICENSOR within 90 days of the execution of this agreement, a
          business plan relating to the commercialization of the LICENSED TECHNOLOGY in
          the FIELD OF USE; and 



          



     	(ii) 	  	
          provide similar reports to LICENSOR on January 31 of each year. 



          



               	b. 	  	
                    LICENSEE shall make a first commercial sale, lease, or license of a LICENSED
                    PRODUCT or LICENSED PROCESS on or before September 30, 2003. 



                    



        3.3 LICENSEE’S failure to
perform in accordance with either Paragraph 3.1 or 3.2 above shall be grounds for LICENSOR
to terminate this Agreement pursuant to Paragraph 14.3 hereof. Notwithstanding the
foregoing, if there is a major unanticipated research, development, marketing or
regulatory problem, the parties will meet to renegotiate revised due diligence deadlines. 



4 - ROYALTIES 



        4.1
For the rights, privileges and license granted hereunder, LICENSEE shall pay royalties to
LICENSOR in the manner hereinafter provided to the end of the term of the PATENT RIGHTS or
until this Agreement shall be otherwise terminated, which ever first occurs: 





               	a. 	  	
                    License Issue Fee of Twenty-Five Thousand Dollars ($25,000), receipt of Twenty
                    Thousand Dollars ($20,000) is hereby acknowledged and confirmed. An additional
                    payment of Five Thousand Dollars ($5,000) shall be made on or before June, 29,
                    2002. 



                    



               	b. 	  	
                    An ownership interest in the new company formed by LICENSEE equal to Five
                    Percent (5%) of the total ownership interest of the LICENSEE on the EFFECTIVE
                    DATE. LICENSOR acknowledge receipt of such five percent ownership, which it has
                    elected to sell pursuant to that certain Reconstituted Stock Purchase Agreement
                    dated March__, 2002. Following such sale, LICENSOR shall have no further
                    ownership interest in LICENSEE and shall



                    




7









               	 	  	
                    have no further right to any ownership
                    interest in LICENSEE or any entity formed by LICENSEE. 



                    





               	c. 	  	
                    License Maintenance Fees of Five Thousand Dollars ($5,000) for the year in which
                    the first NET SALES occurs, Ten Thousand Dollars ($10,000) the second year,
                    Twenty-five Thousand Dollars ($25,000) the third year and Fifty Thousand Dollars
                    ($50,000) each year thereafter; provided, however, License Maintenance Fees may
                    be credited to Running Royalties subsequently due on NET SALES or OTHER REVENUE
                    for each said year, if any. License Maintenance Fees paid in excess of Running
                    Royalties shall not be creditable to Running Royalties for future years. 



                    



               	d. 	  	
                    Running Royalties in an amount equal to Three and a half Percent (3.5%)
                    of NET SALES of the LICENSED PRODUCTS and LICENSED PROCESSES used, leased or
                    sold by and/or for LICENSEE and/or its SUBLICENSEES. Should LICENSEE assign its
                    right and obligations under this License Agreement to a party other than an
                    AFFILIATE, the Running Royalty shall be Four and a half Percent (4.5%) for NET
                    SALES made by the Assignee and its SUBLICENSEES. 



                    





               	e. 	  	
                    LICENSOR hereby grants to LICENSEE the right to enter into sublicensing
                    agreements with third parties (hereinafter referred to as
                    “SUBLICENSEES”) to the extent of LICENSEE’S rights under the
                    grant provided in Section 2.1 and provided that LICENSEE has current exclusive
                    rights thereto in the TERRITORY being sublicensed pursuant to Section 3.3.
                    LICENSEE may only enter into sublicensing agreements during the EXCLUSIVE PERIOD
                    of this AGREEMENT. Upon any termination of this AGREEMENT, SUBLICENSEES’
                    rights shall also terminate. 



                    



               	f. 	  	
                    Any sublicense granted by LICENSEE to a SUBLICENSEE shall incorporate all of the
                    terms and conditions of this AGREEMENT, which shall be binding upon each
                    SUBLICENSEE as if such SUBLICENSEE were a party to this AGREEMENT. 



                    



8









               	g. 	  	
                    LICENSEE shall pay to LICENSOR Thirty-five Percent (35% ) of any lump-sum fee or
                    advance payment received by LICENSEE from any SUBLICENSEE. However, that amount
                    may be reduced by an amount equal to the portion of the lump-sum fee or advance
                    payment re-invested by LICENSEE in further research and development of the
                    LICENSED TECHNOLOGY, but in no event shall LICENSEE pay LICENSOR less than
                    Fifteen Percent (15%) of any lump-sum fee or advance payment. LICENSEE shall not
                    receive from SUBLICENSEES anything of value in lieu of cash payments in
                    consideration for any sublicense under this AGREEMENT, without the express prior
                    written permission of LICENSOR. In addition, LICENSEE shall pay to LICENSOR a
                    royalty on NET SALES under any sublicense which royalty rate shall be the
                    greater of: (a) Fifty Percent (50.0%) of the royalty rate charged by LICENSEE on
                    NET SALES by such SUBLICENSEE, or; (b) the same rate that would be due to
                    LICENSOR from NET SALES by LICENSEE. 



                    




               	h. 	  	
                    LICENSEE shall promptly (a) provide LICENSOR with a copy of each sublicense
                    granted by LICENSEE hereunder and any amendments thereto or terminations
                    thereof; (b) collect and guarantee payment of all royalties due LICENSOR from
                    SUBLICENSEES; and (c) summarize and deliver copies of all reports due to
                    LICENSEE from SUBLICENSEES. 



                    



        4.2
All payments due hereunder shall be paid in full, without deduction of taxes or other fees
which may be imposed by any government, except as otherwise provided in Paragraph 1.6(b). 



        4.3
No multiple royalties shall be payable because any LICENSED PRODUCT, its manufacture, use,
lease or sale are or shall be covered by more than one LICENSED TECHNOLOGY, PATENT RIGHTS
patent application or PATENT RIGHTS patent licensed under this Agreement. 



        4.4
Royalty payments shall be paid in United States dollars in Salt Lake City, Utah, or at
such other place as LICENSOR may reasonably designate consistent with the laws and
regulations controlling in any foreign country. If any currency conversion shall be
required in connection with the payment of royalties hereunder, such conversion shall be
made by using the exchange rate prevailing at the Chase Manhattan Bank (N.A.) or its
successor on the last business day of the calendar quarterly reporting period to which
such royalty payments relate. 



9










5 - REPORTS AND RECORDS 



        5.1
LICENSEE shall keep full, true and accurate books of account containing all particulars
that may be necessary for the purpose of showing the amounts payable to LICENSOR
hereunder. Said books of account shall be kept at LICENSEE’S principal place of
business or the principal place of business of the appropriate division of LICENSEE to
which this Agreement relates. Said books and the supporting data shall be open at all
reasonable times for five (5) years following the end of the calendar year to which they
pertain, to the inspection of LICENSOR or its agents for the purpose of verifying
LICENSEE’S royalty statement or compliance in other respects with this Agreement.
Should such inspection lead to the discovery of a greater than Five Percent (5%)
discrepancy in reporting to LICENSOR’S detriment, LICENSEE agrees to pay the full
cost of such inspection. 



        5.2
LICENSEE shall deliver to LICENSOR true and accurate reports, giving such particulars of
the business conducted by LICENSEE and its SUBLICENSEES under this Agreement as shall be
pertinent to diligence under Article 3 and royalty accounting hereunder: 



	  	  	a. 	  	before
the first commercial sale of a LICENSED PRODUCT or LICENSED PROCESS,
               annually, on January 31 of each year; and  






	  	  	b. 	  	after
the first commercial sale of a LICENSED PRODUCT or LICENSED PROCESS,
               quarterly, within sixty (60) days after March 31, June 30, September 30
and                December 31, of each year.  






        5.3
 These reports shall include at least the following: 






	  	  	a.  	  	 number of
LICENSED PRODUCTS manufactured, leased and sold by and/or for           LICENSEE and all
SUBLICENSEES;  









	  	  	b.  	  	accounting
for all LICENSED PROCESSES used or           sold by and/or for LICENSEE and all
SUBLICENSEES;  










	  	  	c.  	  	accounting
for NET SALES,           noting the deductions applicable as provided in Paragraph 1.6;  







	  	  	d.  	  	Royalties
due           under Paragraph 4.1(c);  







	  	  	e.  	  	Running
Royalties due under Paragraph 4.1(d);  







	  	  	f.  	  	royalties
due on other payments from SUBLICENSEES and assignees under paragraph           4.1(e),
and (f);  







	  	  	g.  	  	total
royalties due;  







	  	  	h.  	  	names
and addresses of all           SUBLICENSEES of LICENSEE;  






10









	  	  	i. 	  	Copies
of all sublicenses executed;  






	  	  	j. 	  	 the
amount spent on product development; and  






	  	  	k. 	  	the
number of full time equivalent employees working on the LICENSED TECHNOLOGY.  






        5.4
With each such report submitted, LICENSEE shall pay to LICENSOR the royalties due and
payable under this Agreement. If no royalties shall be due, LICENSEE shall so report. 



        5.5
On or before the ninetieth (90th) day following the close of LICENSEE’S fiscal year,
LICENSEE shall provide LICENSOR with LICENSEE’S consolidated financial statements for
the preceding fiscal year including, at a minimum, a balance sheet and an income
statement. Certified financial statements shall be provided after the company goes public. 



        5.6
The amounts due under Articles 4 and 6 shall, if overdue, bear interest until payment at a
per annum rate Two Percent (2%) above the prime rate in effect at the Chase Manhattan Bank
(N.A.) or its successors on the due date. The payment of such interest shall not foreclose
LICENSOR from exercising any other rights it may have as a consequence of the lateness of
any payment. 



6 - PATENT PROSECUTION 



        6.1
LICENSOR shall diligently prosecute and maintain PATENT RIGHTS with legal counsel of its
choice, after consultation with LICENSEE. LICENSOR shall provide LICENSEE with copies of
all relevant documentation and keep LICENSEE informed and apprized of the continuing
prosecution. LICENSEE shall keep any such documentation and information confidential. 



        6.2
LICENSEE shall pay in advance (Total to be forthcoming but approximately $12K — $15K)
for patent expenses already incurred by LICENSOR. Further LICENSEE shall pay in advance an
amount estimated by patent counsel for each step in the patent process to include all
costs and legal fees incurred by LICENSOR in the preparation, prosecution and maintenance
of PATENT RIGHTS, including without limitation, any taxes on such patent rights, however,
LICENSEE shall have the right to: 



	  	  	a. 	  	to
receive copies of all patent correspondence;  






	  	  	b. 	  	to
solicit, review and approve estimates and final billings from said patent
               attorneys for the above listed services;  






	  	  	c. 	  	to
review and provide comment on all correspondence from and all applications
               and draft responses to the patent office;  







11 









	  	  	d. 	  	 to
select the foreign countries in which patent applications shall be filed,
               prosecuted, and maintained, provided, however, that LICENSOR, at its own
cost                and expense, shall have the right to file, prosecute, maintain, and
license                patent applications/patents in a foreign country or countries in
which LICENSEE                does not elect to file;  






	  	  	e. 	  	to
elect whether and when to file divisionals, continuations, and
               continuations-in-part provided, however, that LICENSOR, at its own cost
and                expense, shall have the right to file, prosecute, maintain, and
license said                divisionals, continuations, and continuations-in-part if
LICENSEE does not elect                to file said divisionals, continuations, and/or
continuations-in-part, in which                case LICENSEE shall have no license rights
or otherwise to those patents.  






        6.3
Except at otherwise provided herein, payment of all fees and costs relating to the filing,
prosecution and maintenance of the PATENT RIGHTS shall be the responsibility of LICENSEE,
whether such fees and costs were incurred before or after the EFFECTIVE DATE. LICENSEE
shall pay such fees and costs to LICENSOR within thirty (30) days of invoicing; late
payments shall accrue interest and shall be subject to Paragraph 5.6. 



        6.4
In the event the PATENT RIGHTS are licensed to an independent third party for a different
field of use, LICENSEE’S will subsequently be responsible only for its pro-rata share
of patent prosecution expenses as described in this Section 6. For example, if the total
number of Licensees for PATENT RIGHTS is two, LICENSEE shall be obligated to pay 1/2 of
all patent expenses. 



7 —
CONFIDENTIALITY 



        7.1 LICENSEE and LICENSOR
acknowledge that either party may provide certain information to the other about the
LICENSED TECHNOLOGY that is considered to be confidential. LICENSEE and LICENSOR shall
take reasonable precautions to protect such confidential information. Such precautions
shall involve at least the same degree of care and precaution that LICENSEE customarily
uses to protect its own confidential information. 



        7.2
LICENSEE acknowledges that LICENSOR is subject to the Utah Governmental Records Access and
Management Act (“GRAMA”), Section 63-2-101 et seq., Utah Code Ann.
(1953), as amended. Licensor shall keep confidential any information provided to Licensor
by Licensee that Licensee considers confidential, to the extent allowable under GRAMA and
as provided in Section 53B-




12 











16-301 et seq., Utah Code Ann. In order to be
eligible for such protection under GRAMA, confidential information of Licensee disclosed
to Licensor must be in written or other tangible form, marked as proprietary, and
accompanied by a written claim by Licensee stating the reasons that such information must
be kept confidential. 






8 - INFRINGEMENT 








        8.1
LICENSEE shall inform LICENSOR promptly in writing of any alleged infringement of the
LICENSED TECHNOLOGY by a third party and of any available evidence thereof. 



        8.2
LICENSOR shall have the right, but shall not be obligated, to prosecute at its own expense
all infringements of the LICENSED TECHNOLOGY and, in furtherance of such right, LICENSEE
hereby agrees that LICENSOR may include LICENSEE as a party plaintiff in any such suit,
without expense to LICENSEE. The total cost of any such infringement action commenced or
defended solely by LICENSOR shall be borne by LICENSOR. Any recovery of damages by
LICENSOR for such suit shall be applied first in satisfaction of any unreimbursed expenses
and legal fees of LICENSOR relating to such suit, and next toward reimbursement of
LICENSOR for any payments under Article 4 past due or withheld and applied pursuant to
this Article 8. The balance remaining from any such recovery shall be divided with
Seventy-Five Percent (75%) going to the LICENSOR and Twenty-Five Percent (25%) going to
LICENSEE. 



        8.3
If within six (6) months after having been notified of an alleged infringement, LICENSOR
shall have been unsuccessful in persuading the alleged infringer to desist and shall not
have brought and shall not be diligently prosecuting an infringement action, or if
LICENSOR shall notify LICENSEE at any time prior thereto of its intention not to bring
suit against any alleged infringer in the TERRITORY for the FIELD OF USE, then, and in
those events only, LICENSEE shall have the right, but shall not be obligated, to prosecute
at its own expense any infringement of the LICENSED TECHNOLOGY in the TERRITORY for the
FIELD OF USE, and LICENSEE may, for such purposes, use the name of LICENSOR as party
plaintiff; provided, however, that such right to bring such an infringement action shall
remain in effect only during the EXCLUSIVE PERIOD. No settlement, consent judgment or
other voluntary final disposition of the suit may be entered into without the consent of
LICENSOR, which consent shall not unreasonably be withheld. LICENSEE shall indemnify
LICENSOR against any order for costs that may be made against LICENSOR in such
proceedings. 



        8.4
In the event that LICENSEE shall undertake litigation for the enforcement of the LICENSED
TECHNOLOGY, or the defense of the LICENSED TECHNOLOGY under Paragraph 8.5, LICENSEE 





13 












may
withhold up to Fifty Percent (50%) of the Running Royalty payments otherwise thereafter
due LICENSOR under Article 4 hereunder and apply the same toward reimbursement of up to
half of LICENSEE’S expenses, including reasonable attorneys’ fees, in connection
therewith. Any recovery of damages by LICENSEE for each such suit shall be applied first
in satisfaction of any unreimbursed expenses and legal fees of LICENSEE relating to such
suit, and next toward reimbursement of LICENSOR for any payments under Article 4 past due
or withheld and applied pursuant to this Article 8. The balance remaining from any such
recovery shall be divided with Twenty-five percent (25%) going to LICENSOR and
Seventy-five percent (75%) going to LICENSEE. 





        8.5
In the event that a declaratory judgment action alleging invalidity or noninfringement of
any of the LICENSED TECHNOLOGY shall be brought against LICENSOR or LICENSEE, LICENSOR, at
its option, shall have the right, within thirty (30) days after commencement of such
action, to take over the sole defense of the action at its own expense. If LICENSOR shall
not exercise this right, LICENSEE may take over the sole defense at LICENSEE’S sole
expense, subject to Paragraph 8.4. 



        8.6
In any infringement suit as either party may institute to enforce the LICENSED TECHNOLOGY
pursuant to this Agreement, the other party hereto shall, at the request and expense of
the party initiating such suit, cooperate in all respects and, to the extent possible,
have its employees testify when requested and make available relevant records, papers,
information, samples, specimens, and the like. 



        8.7
LICENSEE, during the EXCLUSIVE PERIOD, shall have the sole right in accordance with the
terms and conditions herein to sublicense any alleged infringer in the TERRITORY for the
FIELD OF USE for future use of the LICENSED TECHNOLOGY. Any upfront fees as part of such a
sublicense shall be shared equally between LICENSEE and LICENSOR; other revenues shall be
treated per Article 4. 



9 - PRODUCT LIABILITY 



        9.1
LICENSEE shall at all times during the term of this Agreement and thereafter, indemnify,
defend and hold LICENSOR, its trustees, directors, officers, employees and affiliates,
harmless against all claims, proceedings, demands and liabilities of any kind whatsoever,
including legal expenses and reasonable attorneys’ fees, arising out of the death of
or injury to any person or persons or out of any damage to property, resulting from the
production, manufacture, sale, use, lease, consumption or advertisement of the LICENSED
PRODUCT(s) and/or LICENSED PROCESS(es) or arising from any obligation of LICENSEE
hereunder. 





14 










        9.2
LICENSEE shall obtain and carry in full force and effect commercial, general liability
insurance which shall protect LICENSEE and LICENSOR with respect to events covered by
Paragraph 9.1 above. Such insurance shall be written by a reputable insurance company
authorized to do business in the State of Utah, shall list LICENSOR as an additional named
insured thereunder, shall be endorsed to include product liability coverage and shall
require thirty (30) days written notice to be given to LICENSOR prior to any cancellation
or material change thereof. The limits of such insurance shall not be less than Five
Hundred Thousand ($500,000) per occurrence with an aggregate of One Million Dollars
($1,000,000) for personal injury including death; Five Hundred Thousand Dollars ($500,000)
per occurrence with an aggregate of One Million Dollars ($1,000,000) for property damage;
and Five Hundred Thousand Dollars ($500,000) per occurrence with an aggregate of One
Million Dollars ($1,000,000) for errors and omissions. LICENSEE shall provide LICENSOR
with Certificates of Insurance evidencing the same. 



        9.3
 EXCEPT AS EXPRESSLY PROVIDED IN THIS AGREEMENT, THE PARTIES ACKNOWLEDGE AND AGREE THAT
LICENSOR HAS MADE NO REPRESENTATIONS OR WARRANTIES, EXPRESS OR IMPLIED, INCLUDING BUT NOT
LIMITED TO, WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE. IN NO EVENT
SHALL LICENSOR BE HELD RESPONSIBLE FOR ANY SPECIAL, INDIRECT OR CONSEQUENTIAL DAMAGES
ARISING OUT OF THE USE OF PATENT RIGHTS, EVEN IF LICENSOR IS ADVISED IN ADVANCE OF THE
POSSIBILITY OF SUCH DAMAGES. 



10 - EXPORT CONTROLS 



        LICENSEE
acknowledges that it is subject to United States laws and regulations controlling the
export of technical data, computer software, laboratory prototypes and other commodities
(including the Arms Export Control Act, as amended and the United States Department of
Commerce Export Administration Regulations). The transfer of such items may require a
license from the cognizant agency of the United States Government and/or written
assurances by LICENSEE that LICENSEE shall not export data or commodities to certain
foreign countries without prior approval of such agency. LICENSOR neither represents that
a license shall not be required nor that, if required, it shall be issued. 





15 











11- NON-USE OF NAMES 



        LICENSEE
shall not use the names or trademarks of the University of Utah, LICENSOR, nor any
adaptation thereof, nor the names of any of their employees, in any advertising,
promotional or sales literature without prior written consent obtained from LICENSOR, or
said employee, in each case, except to the extent permitted by University Policy and
Procedures # 8-12.4(D)(3) or the University policy in effect at the time, and except that
LICENSEE may state that it is licensed by LICENSOR under one or more of the patents and/or
applications or rights comprising the LICENSED TECHNOLOGY. 






12 - ASSIGNMENT 



        With
the prior written consent of LICENSOR, which shall not be unreasonably withheld, LICENSEE
may assign this Agreement, so long as the assignee shall agree in writing to be bound by
the terms and conditions hereof prior to such assignment. A written assignment and consent
to that assignment by LICENSOR shall be also required in the event of merger or other
business combination with LICENSEE or a sale by LICENSEE of all or substantially all of
LICENSEE’s assets. Failure of such assignee to so agree shall be grounds for
termination by LICENSOR under Paragraph 14.3. 



13 - DISPUTE RESOLUTION 



        13.1
Except for the right of either party to apply to a court of competent jurisdiction for a
temporary restraining order, a preliminary injunction, or other equitable relief to
preserve the status quo or prevent irreparable harm, any and all claims, disputes or
controversies arising under, out of, or in connection with the Agreement, including any
dispute relating to patent validity or infringement, which the parties shall be unable to
resolve within sixty (60) days shall be mediated in good faith. The party raising such
dispute shall promptly advise the other party of such claim, dispute or controversy in a
writing which describes in reasonable detail the nature of such dispute. By not later than
five (5) business days after the recipient has received such notice of dispute, each party
shall have selected for itself a representative who shall have the authority to bind such
party, and shall additionally have advised the other party in writing of the name and
title of such representative. By not later than ten (10) business days after the date of
such notice of dispute, the party against whom the dispute shall be raised shall select a
mediator in the Salt Lake City area and such representatives shall schedule a date with
such mediator for a mediation hearing. The parties shall enter into good faith mediation
and shall share the costs equally. If the representatives of the parties have not been
able to resolve the dispute within fifteen (15) business days after such mediation
hearing, then any and all claims, disputes or controversies arising under, out of, or in
connection with this




16 











Agreement, including any dispute relating to patent validity or
infringement, shall be resolved by final and binding arbitration in Salt Lake City, Utah
under the rules of the American Arbitration Association, or the Patent Arbitration Rules
if applicable, then obtaining. The arbitrators shall have no power to add to, subtract
from or modify any of the terms or conditions of this Agreement, nor to award punitive
damages. Any award rendered in such arbitration may be enforced by either party in either
the courts of Utah or in the United States District Court for the District of Utah, to
whose jurisdiction for such purposes LICENSOR and LICENSEE each hereby irrevocably
consents and submits. All costs and expenses, including reasonable attorneys’ fees,
of the prevailing party in connection with arbitration of such controversy or claim shall
be borne by the other party. 




        13.2
Notwithstanding the foregoing, nothing in this Article shall be construed to waive any
rights or timely performance of any obligations existing under this Agreement. 



14 - TERMINATION 



        14.1
If LICENSEE shall cease to carry on its business, this Agreement shall terminate upon
notice by LICENSOR. 



        14.2
Should LICENSEE fail to make any payment whatsoever due and payable to LICENSOR hereunder,
LICENSOR shall have the right to terminate this Agreement effective on sixty (60)
days’ notice, unless LICENSEE shall make all such payments to LICENSOR within said
sixty (60) day period. Upon the expiration of the sixty (60) day period, if LICENSEE shall
not have made all such payments to LICENSOR, the rights, privileges and license granted
hereunder shall automatically terminate. 



        14.3
Upon any breach or default of this Agreement by LICENSEE (including, but not limited to,
breach or default under Paragraph 3.3), other than those occurrences set out in Paragraphs
14.1 and 14.2 hereinabove, which shall always take precedence in that order over any
breach or default referred to in this Paragraph 14.3, LICENSOR shall have the right to
terminate this Agreement and the rights, privileges and license granted hereunder
effective on sixty (60) days’ notice to LICENSEE. Such termination shall become
automatically effective unless LICENSEE shall have cured any such material breach or
default prior to the expiration of the sixty (60) day period. 



        14.4
LICENSEE shall have the right to terminate this Agreement at any time on six (6)
months’ notice to LICENSOR, and upon payment of all amounts due LICENSOR through the
effective date of the termination. 



        14.5
Upon termination of this Agreement for any reason, nothing herein shall be construed to
release either party from any obligation that matured prior to the effective date of such
termination; and 



17 










Articles 1, 2.1, 4.2, 4.4, 9, 10, 11, 13, 14.5, 14.6, and 16 shall
survive any such termination. LICENSEE and any SUBLICENSEE thereof may, however, after the
effective date of such termination, sell all LICENSED PRODUCTS, and complete LICENSED
PRODUCTS in the process of manufacture at the time of such termination and sell the same,
provided that LICENSEE shall make the payments to LICENSOR as required by Article 4 of
this Agreement and shall submit the reports required by Article 5 hereof. 








        14.6
Upon termination of this Agreement for any reason, any SUBLICENSEE not then in default
shall have the right to seek a license from LICENSOR, LICENSOR agrees to negotiate such
licenses in good faith under reasonable terms and conditions. 



15 - PAYMENTS, NOTICES
AND OTHER COMMUNICATIONS 



        Any
payments, notice or other communication pursuant to this Agreement shall be sufficiently
made or given on the date of mailing if sent to such party by certified first class mail,
return receipt requested, postage prepaid, addressed to it at its address below or as it
shall designate by written notice given to the other party:  



In the case of LICENSOR:

 

Director

Technology Transfer Office

University of Utah

615 Arapeen Dr., Suite 110

Salt Lake City, UT 84108



With a copy to: 




OFFICE OF GENERAL COUNSEL

University of Utah

309 Park Building

Salt Lake City, Utah 84112




In
the case of LICENSEE: 




General Counsel

Nutriscan, Inc.

75 West Center Street

Provo, UT 84601





18 











16 - MISCELLANEOUS
PROVISIONS 



        16.1
All disputes arising out of or related to this Agreement, or the performance, enforcement,
breach or termination hereof, and any remedies relating thereto, shall be construed,
governed, interpreted and applied in accordance with the laws of the State of Utah,
U.S.A., except that questions affecting the construction and effect of any patent shall be
determined by the law of the country in which the patent shall have been granted. 



        16.2
The parties hereto acknowledge that this Agreement sets forth the entire Agreement and
understanding of the parties hereto as to the subject matter hereof, and shall not be
subject to any change or modification except by the execution of a written instrument
signed by the parties. 



        16.3
The provisions of this Agreement are severable, and in the event that any provisions of
this Agreement shall be determined to be invalid or unenforceable under any controlling
body of the law, such invalidity or unenforceability shall not in any way affect the
validity or enforceability of the remaining provisions hereof. 



        16.4
LICENSEE agrees to mark the LICENSED PRODUCTS sold in the United States with all
applicable United States patent numbers. All LICENSED PRODUCTS shipped to or sold in other
countries shall be marked in such a manner as to conform with the patent laws and practice
of the country of manufacture or sale. 



        16.5
The failure of either party to assert a right hereunder or to insist upon compliance with
any term or condition of this Agreement shall not constitute a waiver of that right or
excuse a similar subsequent failure to perform any such term or condition by the other
party. Any waiver must be in writing acknowledged by both parties. 





19 












IN
WITNESS WHEREOF, the parties have duly executed this Agreement the day and year set forth
below. 


			
	UNIVERSITY OF UTAH
RESEARCH FOUNDATION	 	NUTRISCAN, INC.	 	 	 
	  	 
	  	 
	By         /s/ Raymond Gesteland	 	By         /s/ Truman Hunt	 
	Name    Raymond Gesteland	 	Name    Truman Hunt	 		 
	Title      President	 	Title      Chief Executive Officer	 		 
	Date      March 7, 2002	 	Date      March 7, 2002	 












APPENDIX A 



PATENT RIGHTS on the
EFFECTIVE DATE 



UNITED STATES PATENT
RIGHTS 



	University of
Utah Case No. U-2612:	  	
NONINVASIVE  DETECTION  AND  MAPPING  OF  CHEMICAL  SUBSTANCES  IN THE  SKIN AND
SKIN-RELATED MALIGNANCIES [Inventors:  Nikita B. Katz, Paul S. Bernstein, Robert
W. McClane and Werner Gellermann]











					
	Country	 	Appl. No.	 	File Date	 	Patent No.	 	Issue Date	 	Patent No.	 
	US	 	335,932	 	06/18/99	 	 	 	 	 	Pending	 
	PCT	 	PCT/US00/07745	 	03/22/00	 	 	 	 	 	Pending	 









INTERPRETIVE
MEMORANDUM OF UNDERSTANDING



        THIS
INTERPRETIVE MEMORANDUM OF UNDERSTANDING is made this November 30, 2001, by and
between the UNIVERSITY OF UTAH RESEARCH FOUNDATION (“Licensor”), CARODERM, INC.,
a Utah corporation (“Carodrem”) and NUTRISCAN, INC., a Utah corporation
(“Nutriscan”). 



RECITALS



        A.              The
     Licensor holds a patent, U.S. Patent No. 6,205,354,  issued March 20, 2001,
to certain  technology  involving a noninvasive  measurement  of  carotenoids in
human skin (the “Licensed Technology”). 



        B.    
     The Licensor  previously  granted an exclusive  license to Nutriscan,  L.C.
under that certain  Patent  License  Agreement  dated June 29, 2000, and amended
March 13, 2001 (the “Nutriscan  License”) and the exclusive license to
Spectrotek, L.C. under that certain Patent License Agreement dated June 29, 2000
(the “Spectrotek License”) for certain limited use and applications of
the  Licensed  Technology  ( the  license  are  collectively  referred to as the
“Licenses”). 



        C.
                The Spectrotek License subsequently has been assigned in its
entirety to Caroderm. The Nutriscan License subsequently has been assigned in its entirety to
               Nutriscan in connection with the conversion of Nutriscan, L.C. from a limited
               liability company to a corporation. 




        D.
                It has come to the attention of all parties hereto that there has
arisen                confusion regarding certain terms in the definition of the “Field
of                Use” in each of the Licenses.  



        E.
                It was the Licensor’s and each licensee’s intent
originally to:  



          	a. 	  	
               license to Spectrotek, L.C. under the Spectrotek License the clinical use of the
               Licensed Technology for medical diagnostic purposes, excluding the use of the
               Licenses Technology in connection with the promotion or sale of nutritional
               supplements and other carotenoid-containing products in any manner; 



               



          	b. 	  	
               license to Nutriscan under the Nutriscan License the non-clinical use of the
               Licensed Technology for the promotion and sale of nutritional supplements and
               other carotenoid-containing products; and 



               



          	c. 	  	
               make the Licenses mutually exclusive in that the use of the Licensed Technology
               (i) under the Spectrotek License does not include the use of the Licensed
               Technology in connection with the promotion or sale of nutritional supplements,
               and (ii) under the Nutriscan License does not include the use of the Licensed
               Technology for clinical medical diagnostics. 



               



1 






          	F. 	  	
               It is in the best business judgment of all the parties to encourage and permit
               the exploitation of the Licensed
Technology pursuant to each of the party’s respective Licenses and that in order to
do so, the confusion concerning the respective Fields of Use should be resolved.



               




        Now
Therefore, the parties interpret certain terms in the definition of the Fields of Use in
each License and agree as follows: 



	1. 	  	The
“Field of Use” of each License shall be construed in a mannerconsistent
with
the original intent of the Licensor and the respective licenses as set forth in the
recitals above. 







	  	  	 







	2. 	  	The
term “professional medical community” as used in both  







	  	
Licenses
means the use of the Licensed Technology only in a medical clinical setting for medical
diagnostic purposes. 






	3.  	  	The
term “the promotion and sale of nutritional supplements and other
               carotenoid-containing products to consumer and non-medical professionals”               as
used in both Licenses includes all promotion and sales, through all
               distribution channels whatsoever, of nutritional supplements and other
               carotenoid-containing products because, directly or indirectly, all such
               products are ultimately sold or distributed to consumers.  







	4.  	  	As
a further point of clarification, a doctor or other medical professional who
               also is a distributor of nutritional supplements or other
carotenoid-containing                products for Nutriscan, or its affiliates,
assignees, successors or                sublicensees, could utilize the Licensed
Technology under the Nutriscan License                in connection with the promotion or
sale of nutritional supplements and other                carotenoid- containing products
so long as the Licensed Technology was not used                by such doctor or other
medical professional for medical diagnostic purposes or                in a medical
clinic setting.  







        The
Parties hereto evidence their agreement to the above interpretations by executing this
Interpretive Memorandum of Understanding intending to be bounded thereby. In the event the
foregoing should be determined inconsistent with any of the terms of the Licenses, the
terms of this Interpretive Memorandum of Understanding shall govern and be deemed an
amendment of each of the Licenses. 





2 










NUTRISCAN, INC. 



By:
/s/ Werner Gellerman
Date: December 12, 2001



CARODERM, INC. 



By: /s/
Dallin Bagley

Date: December 12, 2001



UNIVERSITY
OF UTAH RESEARCH FOUNDATION 



By:
/s/ Raymond F. Gesteland
Date: December 14, 2001







3