exh101.htm


    Exhibit
10.1

    


    EXECUTION
COPY

    


    LICENSE
AND COMMERCIALIZATION AGREEMENT

    


    


               This
License and Commercialization Agreement (“Agreement”)
is made as of September 11, 2009 (the “Effective
Date”), by and between ALR TECHNOLOGIES, INC., a Nevada corporation
having its principal office at 3350 Riverwood Pkwy., Suite 1900, Atlanta,
Georgia 30339 (“ALRT”),
and PARI RESPIRATORY EQUIPMENT, INC., a Delaware corporation having its
principal office at 2943 Oak Lake Boulevard, Midlothian, Virginia 23112 (“PARI”).

    


    RECITALS

    


    A. PARI is
engaged in the business of developing, manufacturing, and distributing medical
devices (the “PARI
Business”).

    


    B. ALRT is
in possession of certain technical information and proprietary software and
technologies relating to certain medical administration reminders and monitoring
that help optimize a medication's intended therapeutic benefit by improving
compliance.

    


    C. PARI has
an established sales network that promotes and markets medical devices to
physicians (the “PARI
Network”) and ALRT would like to increase its sales and expand its
technology applications through the PARI Network.

    


    D. ALRT is
willing to grant PARI an exclusive license to ALRT’s Intellectual Property
Rights (as hereinafter defined) on the terms and conditions set forth herein, in
order for PARI to further exploit such ALRT’s Intellectual Property Rights in
the development and commercialization of Products (as hereinafter defined). ALRT
is further willing to assist PARI with marketing the Products.

    


    AGREEMENT

    


               NOW,
THEREFORE, in consideration of the covenants, agreements, and representations
set forth herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as
follows:

    


    ARTICLE
1

    DEFINITIONS

    


               For
purposes of this Agreement:

    


               Section
1.1               
      Section 1.1Aspen” shall mean Damedco
S.A., Girardot 1449, (C1427AKE), Capital Federale, Republica Argentina,
manufacturers of "Aspen" products, including the "Aspen" nebuliser.


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    


               Section
1.2                      “Affiliate”
of a party to this Agreement shall mean any person or entity which, directly or
indirectly, through one or more intermediaries, controls, is controlled by, or
is under common control with such party.

    


               Section
1.3                      “CHC
Unit” shall mean ALRT’s device that reminds patients to take medication
or treatments at each prescribed time of day and monitors patient
compliance.  For purposes of this Agreement, the CHC Unit shall
include the device currently referred to as the “Constant Health Companion” as
well as any subsequent generation products based thereon or otherwise including
the Intellectual Property Rights, including any improvements
thereto.

    


               Section
1.4                      “Connectivity”
shall mean ALRT’s connection technology and materials that allows
interoperability between a particular medical device and/or system and the CHC
Unit and Software.

    


               Section
1.5                      “Intellectual
Property
Rights” means all of ALRT’s proprietary rights, privileges and priorities
provided under federal, state, foreign and multi-national law related to the
Connectivity, the CHC Unit and the Software, which may be necessary or useful
for the research, design, development, testing, use, manufacture or sale of
“Products” as hereinafter defined including, without limitation,
all:

    


    
      	
               
      

            	
              (i)

            	
              (A)

            	
              patents,
      patent applications, inventions, discoveries, machines, manufacturers,
      compositions or matter, processes, formulae, designs, methods, techniques,
      procedures, concepts, developments, technology, new and useful
      improvements thereof and know-how relating thereto, whether or not
      patented or patentable, specifically including the Patent Rights (as
      hereinafter defined);

            


    

    


    (B)           copyrights
and works of authorship, including all computer applications, programs,
software, hardware, files, mask works, compilations, databases, documentation
and related items, specifically including presentation materials, scientific
papers, or other works relating to the Products;

    


    (C)           trademarks,
service marks, trade names, domain names, URLs, e-mail addresses, brand names,
corporate names, logos and trade dress and the good will of any business
symbolized thereby (as hereinafter defined);

    


    (D)           trade
secrets, know-how, drawings, lists and other proprietary, non-public or
confidential information, documents or other materials in any
media;

    


    
      	
               
      

            	
              (ii)

            	
              all
      registrations, applications, recordings and other legal protections or
      rights related to any of the foregoing, and all rights to sue and recover
      damages and obtain appropriate injunctive relief for past and future
      infringement, dilution, misappropriation, violation or breach of such
      rights; and

            


    

    


    
      	 	
              (iii)  

            	
              all
      improvements to any of the
foregoing.

            


    

    



    
      
         


      

      
        2

        
          

        

      

      
         


      

    


    Provided
that notwithstanding the foregoing PARI shall have no  access
or  rights to or interest in any patient data transmitted from any CHC
Unit using the Connectivity  for the purpose of manipulating or
otherwise dealing with or exploiting such data, such rights being reserved
exclusively to ALRT or its assignees.

    
      	
               
      

            	 


    

               Section
1.6                      “Monitoring”
shall mean ALRT’s subscription-based remote monitoring service for use with the
Products and any improvements thereon, consisting of the base monitoring service
(“Option 1”) and the premium monitoring service pursuant to which another person will perform
the 30 minute monthly monitoring for the subscribing physician (“Option
2”).

    


               Section
1.7                      “Patent
Rights” shall mean all of the following related to the Connectivity, the
CHC Unit and the Software, which may be necessary or useful for the research,
design, development, testing, use, manufacture or sale of “Products” as
hereinafter defined:

    


    
      	
               
      

            	
              (a)

            	
              United
      States and foreign patents and patent applications listed in Schedule
      1;

            


    

    


    
      	
               
      

            	
              (b)

            	
              United
      States and foreign patents issued from the applications listed in Schedule
      1 and from divisionals and continuations of these
      applications;

            


    

    


    
      	
               
      

            	
              (c)

            	
              United
      States continuation-in-part applications and foreign continuation-in-part
      applications, and the resulting patents, based on the United States and
      foreign applications listed in Schedule
1;

            


    

    


    
            (d)
  any
reissues of United States and foreign patents described in (a), (b), or (c)
above.

    

    


               Section
1.8                      Section 1.8“PGB Medical” shall mean PGB
Medical LLC, a Delaware limited liability company, whose address is 1160 South
Michigan Avenue, Unit #4203, Chicago, Illinois 60605.

    


               Section
1.9                      “Products”
means aerosolized liquid medication delivery devices and/or systems and any
improvements thereon that:

    


    
      	
               
      

            	
              (a)

            	
              are
      manufactured by using a process, or is otherwise covered by, in whole or
      in part,  the Intellectual Property
  Rights;

            


    

    


    
      	
               
      

            	
              (b)

            	
              are
      derived, in whole or in part, from the Intellectual Property Rights;
      or

            


    

    


    
      	
               
      

            	
              (c)

            	
              are
      sold, manufactured or used in any country under this
      Agreement.

            


    

    


               Section
1.10                    “Software”
shall mean any type of computer code (whether in object code or source code
form), databases and their data, files, algorithms, notes, flow charts,
diagrams, authoring tools, development environments and other materials, and all
documentation, including user and technical manuals, related to the
Connectivity, the CHC Unit, the Monitoring or the Products.


    
      
         


      

      
        3

        
          

        

      

      
         


      

    


    


               Section
1.11                    “Trial
Period” shall
mean the period commencing on the Effective Date of this Agreement and ending on
the earlier to occur of (i) the date of the Initial Order (as defined
in Section 3.12) for CHC Units by PARI and (ii) the expiration of six (6) months from
the Effective Date.

    


    


    ARTICLE
2

    EFFECTIVE
DATE AND TERM

    


               Section
2.1                      Effective Date. This
Agreement shall be effective as of the Effective Date first set forth
above.

    


               Section
2.2                      Term. This Agreement
and the license granted herein shall become effective as of the Effective Date
and shall remain in effect until the later of (i) the last to expire patent
included in the Patent Rights, or (ii) eighteen  (18)
years, unless otherwise terminated hereunder (the “Term”).

    


    ARTICLE
3

    GRANT
OF LICENSE AND OBLIGATIONS OF THE PARTIES

    


               Section
3.1                 
    Grant of
License.  Subject to the terms and conditions of this
Agreement, ALRT grants to PARI and its Affiliates an exclusive (subject to
Section 3.2), sublicensable (subject to Section 3.5), transferable (subject to
Section 3.5), royalty-free right and
license under ALRT’s Intellectual Property Rights for the purpose of promoting,
assembling, making, having made, researching, testing, reproducing, modifying,
using, supporting, selling, distributing, having sold, offering for sale,
marketing, promoting, importing, exporting, displaying, distributing,
commercializing or otherwise disposing of the Products on a worldwide basis.
PARI shall be entitled to sublicense, assign, or transfer the rights granted
herein subject to Section 3.5 below.  Notwithstanding the foregoing, the parties acknowledge and
agree that PARI does not have the right to use the Connectivity, or any
Intellectual Property Rights associated therewith, for use with medical devices
or systems not manufactured by or on behalf of PARI.

    


    
      	
               
      

            	
              (a)

            	
              License
      Territory.  The license granted to PARI pursuant to this Section
      3.1 extends worldwide.  Notwithstanding the foregoing, both PARI
      and ALRT acknowledge that the Patent Rights identified on Schedule 1
      specifically cover the corresponding country(ies) noted
      thereon.

            


    

    


    
      	
               
      

            	
              (b)

            	
              Patent
      Prosecution and Maintenance.

            


    

    


    
      	
               
      

            	
              (i)

            	
              Patent
      Rights in Protection Countries.  During the term of this
      Agreement ALRT shall take all steps necessary to apply for, seek issuance
      of, and maintain during the term of this Agreement, Patent Rights for the
      Products in the countries set forth in Schedule 2 attached hereto and
      incorporated by reference herein (the “Protection
      Countries”); provided, however, that ALRT shall not be required to
      file for the Patent Rights in the
countries

            


    


    
      
         


      

      
        4

        
          

        

      

      
         


      

    


    
      	
               
      

            	
              listed
      on Schedule 2 (except for the United States) until the expiration of the
      Trial Period and PARI has not terminated this Agreement prior to
      the end of the Trial Period.  Prior to filing for a Patent Right
      in a country listed on Schedule 2, PARI and ALRT agree to
      review PARI’s commercialization plan for such country to ensure PARI plans
      to commercialize.  In the event PARI does not yet have a
      commercialization plan for the Products in a country listed on Schedule 2,
      no filing for a Patent Right will then be required in that
      country.  However, PARI may nevertheless request ALRT to file
      for a Patent Right without a current commercialization plan, upon which
      time PARI and ALRT shall split the costs of filing for a Patent Right in
      that country until such time as PARI finalizes its commercialization plan
      for that country and ALRT shall then cover all associated
      costs.  Such filing for a Patent Right will not need to take
      place immediately, but must proceed in a manner and within a time period
      to ensure rights are not lost based on priority of related US applications
      (for example, filing at least a PCT patent application with the US
      Receiving Office within one year of the filing of the US application and
      subsequent filing of national applications within 30 months of the filing
      of the US application).  Following such filings for a Patent
      Right, PARI shall be responsible for 50% of all maintenance fees related
      to the Patent Rights in such other countries for the period from the
      issuance of such Patent Rights in a country listed on Schedule 2 until the
      commercial launch of the Products by, or on behalf of, PARI in such
      country.  The prosecution, filing and maintenance of all
      Patent Rights for Products in the Protection Countries shall be the
      primary responsibility of ALRT.  ALRT shall keep PARI timely
      advised with respect to the progress and status of such Patent Rights and
      shall supply to PARI copies of all material correspondence and papers
      received in connection therewith.  ALRT shall take all steps to
      provide such correspondence to and advise PARI in a timely manner in order
      to permit PARI to comment on all actions before they are taken by patent
      counsel.  Any additional countries that PARI agrees with ALRT to
      be included in Schedule 2 in accordance with (b)(ii) below, and the Patent
      Rights therein, shall be governed by the terms and conditions of this
      Agreement.  All final decisions with respect to prosecution of
      the Patent Rights shall be reasonably made by ALRT, taking into account
      PARI’s comments.  Notwithstanding anything to the contrary in
      this Agreement, if PARI reasonably believes that ALRT may fail to make any
      required payments or take any action required for the preparation, filing,
      prosecution or maintenance of the Patent Rights within a reasonable time,
      PARI shall provide ALRT with written notice of such
      deficiency.  If ALRT fails to take the required action within 30
      days of the date of such notice, PARI shall have the right to thereafter
      make any such required payments or take any such required action and ALRT
      shall promptly reimburse PARI for any costs and expenses incurred with
      respect to the foregoing.

            


    

    



    
      
         


      

      
        5

        
          

        

      

      
         


      

    


    
      	
               
      

            	
              (ii)

            	
              Additional
      Countries.  The parties may, by mutual written agreement, amend
      Schedule 2 from time to time during the term of this Agreement to add
      additional countries to the list of Protection Countries as (i) ALRT
      applies for protection in such additional countries, and (ii) needed by
      the parties for commercialization of Products.  In the event
      that PARI proposes that one or more countries be added to the list of
      Protection Countries in Schedule 2 and ALRT fails or refuses to agree to
      the addition of the country(ies) proposed by PARI within thirty (30) days
      of its receipt of such proposal, then PARI shall have the  right
      to require ALRT to apply for, seek issuance of, and maintain Patent Rights
      in such country(ies) at PARI’s expense, and ALRT shall promptly comply
      with the foregoing.  In all cases, the license and rights
      granted to PARI hereunder shall include the rights to all such additional
      country(ies).

            


    

    


    
      	
               
      

            	
              (iii)

            	
              Expenses
      of Patent Rights Prosecution.  Subject to Section 3.1 (ii),
      during the term of this Agreement ALRT shall pay all fees and costs
      incurred by ALRT in connection with the Patent Rights, including, without
      limitation, attorney fees relating to the filing, prosecution, and
      maintenance of such Patent Rights.  In addition to any other
      rights or remedies that PARI may have, in the event that ALRT fails to pay
      for the filing, prosecution or maintenance of such Patent Rights or any
      portion thereof, or otherwise fails to prosecute the Patent Rights in the
      United States or in any country included in the Protection Countries, PARI
      shall have the right, but not the obligation, to do so, and ALRT shall
      reimburse PARI for all costs and expenses incurred in connection
      therewith.

            


    

    


    Section
3.2                      Section 3.2Exceptions to
Exclusivity.  ALRT will only market, distribute, sell, license,
divest, transfer rights with respect to the Products (i) for or with PGB Medical
LLC ("PGB")  in connection with the Monitoring/Marketing Agreement
dated as of April 18, 2009  between ALRT and PGB  whereby
PGB will market ALRT's  Monitoring services  using the CHC
Units and the Connectivity for use only with compressor nebulizers manufactured
solely by Vega Technologies Inc. in China, to medical dealers, dealer networks
and other persons  on a worldwide basis and will negotiate
reimbursement for health care providers utilizing
ALRT's  Monitoring  services  and (ii) for or with
Aspen in connection with the rights granted to it to market ALRT's Monitoring
services utilizing the Connectivity, together with an "Aspen"
nebuliser  compatible with the CHC Unit, in Argentina, Bolivia,
Brazil, Mexico, Peru, Paraguay and Uruguay.  The activities of PGB
Medical and Aspen set forth in the previous sentence shall not be deemed a
violation of Section 3.1 of this Agreement.  ALRT acknowledges and
agrees that neither PGB Medical’s rights nor Aspen’s rights shall be renewed
upon their expiration or sooner termination or expanded in
scope.

    


    Section
3.3                     Due Diligence; Cooperative Marketing
Efforts.  PARI agrees to use commercially reasonable efforts to
bring the Products to market through the PARI Network and attain maximum
commercialization of the Products. PARI shall be responsible for promoting and
marketing the Products in accordance with the terms and conditions herein at its
own expense.


    
      
         


      

      
        6

        
          

        

      

      
         


      

    


    Notwithstanding
the foregoing, ALRT shall assist PARI with the marketing of the Products as
follows:

    


    
      	
               
      

            	
              (a)

            	
              Presentations.  Upon
      PARI’s request from time to time during the Term, a principal officer or a
      knowledgeable employee of ALRT shall make himself/herself available to
      make four (4) formal presentations per year concerning the Products, the
      Intellectual Property Rights and any research findings related thereto at
      no charge, provided that PARI shall pay all reasonable travel expenses
      relating thereto that have been pre-approved by PARI prior to such
      expenses being incurred.  To the extent PARI desires ALRT to
      make more than four presentations, ALRT shall do so on the same basis
      provided that if ALRT does not have the staff available for such
      presentations it may use qualified and knowledgeable consultants and its
      reasonable out of pocket expenses, including the fees and expenses of such
      consultants, each of which will require pre-approval from PARI in writing,
      shall be reimbursed to ALRT by
PARI.

            


    

    


    
      	
               
      

            	
              (b)

            	
              Scientific
      Papers.  ALRT and PARI shall work together concerning any
      materials that are to be published that relate to the Products or the
      Intellectual Property Rights. 

            


    

    


    
      	
               
      

            	
              (c)

            	
              Miscellaneous.  Upon
      PARI’s request, from time to time during the term of this Agreement, ALRT
      shall assist PARI, at PARI’s expense, with any marketing, advertising, or
      promotional matters that relate to the Products or the Intellectual
      Property Rights.

            


    

    
 

    Section
3.4                     Marketing
Plan.  All marketing efforts shall be the sole responsibility
of PARI, provided, however, ALRT shall provide reasonable assistance to PARI
during the term to formulate and execute an appropriate plan and timeline for
marketing efforts relating to the Products. 

    


               Section
3.5                      Sublicensees.  PARI
shall have the right to grant sublicenses under this Agreement to Affiliates but
not to any Affiliate that is in the business of providing remote health
monitoring services in competition with ALRT; provided that such sublicenses
shall comply with the terms of this Agreement.  Otherwise, all such
sublicenses shall only be allowed with the prior written consent of ALRT, which
consent shall not unreasonably be withheld.

    


               Section
3.6                      Use of
Names.  Except as otherwise authorized in writing by the
parties, nothing contained in this Agreement shall be construed as granting any
right to either party or any of its Affiliates to use in advertising, publicity
or other promotional materials the other party’s name or logo without prior
written  consent, which consent shall not unreasonably be
withheld.

    


               Section
3.7                      Disclosure of Intellectual
Property Rights.   Following the execution of this
Agreement by the parties, ALRT shall promptly deliver to PARI, or provide PARI
with copies of: (i) any and all Intellectual Property Rights requested by PARI,
and (ii) any and all ALRT know-how requested by PARI in sufficient detail in
order for a reasonably-skilled person


    
      
         


      

      
        7

        
          

        

      

      
         


      

    


    to
practice such know-how included in the Intellectual Property Rights as
contemplated in this Agreement.

    


               Section
3.8                      Trademark
Licenses.  ALRT agrees to and hereby grants to PARI, its
Affiliates and permitted sublicensees a limited license to the ALRT trademarks
and goodwill used in connection with the Connectivity, the CHC Unit and the
Software for no additional consideration as needed to support the
commercialization of Products contemplated hereunder.

    


               Section
3.9                      Development and
Commercialization Obligations.  As between the parties, PARI
shall solely control and retain final decision-making authority with respect to
the product requirements for Products and all other development and
commercialization activities relating to the Products, including, without
limitation, all packaging, colors, labeling and promotional
materials.  To facilitate communication between the parties with
respect to the foregoing, each party will assign at least one (1) of its
employees involved in the development and commercialization of the Products
and/or Intellectual Property Rights as contemplated hereunder to serve as a
regular member of a Joint Development and Commercialization Committee (the
“Committee”).
The Committee shall discuss the general development activities for Products
and/or the Intellectual Property Rights; provided, however, the parties
acknowledge that PARI shall retain the control and final decision-making
authority. At meetings of the Committee the representative of ALRT shall be kept
updated as to the progress of PARI in carrying out its mandate as described in
sec 3.3 above.  Notwithstanding anything to the contrary in this
Agreement, ALRT shall be responsible to use commercial reasonable efforts to
determine and obtain insurance Reimbursement for its Monitoring, provided,
however, that, subject to the provisions of Section 3.2, ALRT shall be permitted
to contract for such obligations to be performed with PGB or with another
expert selected after consultation with PARI.

    


               Section
3.10                    Regulatory
Matters.

    


    
      	
               
      

            	
              (a)

            	
              With
      respect to the Connectivity, the CHC Unit and the Software, ALRT shall
      control all regulatory activities in accordance with this Section 3.10;
      provided that ALRT shall (v) consult with PARI with respect to the
      regulatory strategy related to any Product or any component thereof and
      otherwise keep PARI reasonably involved in good faith discussions with
      respect to such activities, (w) provide PARI with copies of correspondence
      received from and to be provided to, regulatory authorities concerning any
      Product or any component, (x) consider in good faith all reasonable
      suggestions and comments provided by PARI with respect to such
      correspondence and other communications with regulatory authorities, and
      specifically, use best efforts to allow PARI reasonable advance
      opportunity to comment on those portions of the initial submissions and
      subsequent amendments with respect to the regulatory approvals related to
      any Product or any component thereof, (y) use best efforts to respond to
      all requests for information received from regulatory authorities with
      respect to any Product or any component thereof in a timely and complete
      manner, and (z) not voluntarily take any action or fail to take any action
      which would be reasonably likely to have an adverse effect on the
      development of any Product and related approvals.  ALRT hereby
      gives PARI the full right to access, use and
  reference

            


    


    
      
         


      

      
        8

        
          

        

      

      
         


      

    


    
      	
               
      

            	
              (and
      provide PARI with copies of) all regulatory applications and approvals
      that ALRT obtains, directly or indirectly, with respect to the
      Connectivity, the CHC Unit and the Software, including, but not limited
      to, 510(k) approvals.

            


    

    
      	
               
      

            	 


    

    
      	
               
      

            	
              (b)

            	
              PARI
      shall control all regulatory activities relating to its medical devices
      and systems and shall own all regulatory approvals relating to the
      forgoing.

            


    

    


               Section
3.11                    Software Associated with
Products.  Provided that  the USB - Serial adapter
used in connection with the  Products and the  Software is
either (x) commercially available, (y) as described on Schedule 4, or (z)
prescribed  or approved by ALRT, such approval not to be unreasonably
withheld, delayed or conditioned, ALRT shall provide the following support to
PARI, the PARI Network, the physicians and patients who have purchased or
obtained a CHC Unit and/or the Monitoring, and PARI’s customers with respect to
all Software associated with the Products:

    


    
      	
               
      

            	
              (a)

            	
              Implementation.  ALRT
      agrees to provide personnel, its expertise and the professional, technical
      and project management services as are necessary to manage the
      administration and operation of the Software as used in connection with
      Products, including offering a complete hosting environment for the
      Software (from servers to backup technology).  All Software
      shall at all times comply with all applicable laws and regulations,
      including, but not limited to HIPPA, COPPA and similar requirements. To
      the extent PARI recommends any modifications to the Software as used in
      connection with the CHC Unit and/or the Connectivity, ALRT shall use
      commercially reasonable efforts to implement such recommended
      modifications.

            


    

    


    
      	
               
      

            	
              (b)

            	
              Product
      Developments. ALRT shall from time to time provide PARI with such
      up-to-date information concerning the Software as ALRT has available and
      as PARI may from time to time reasonably
  request.

            


    

    


    
      	
               
      

            	
              (c)

            	
              Support
      and Training. Upon request, ALRT shall make available to PARI (at such
      time and place as agreed to by the parties) one or more suitably qualified
      employees of ALRT for training PARI employees in matters relating to the
      Software, including without limitation installation, support and operation
      with Products. The duration, location, and other aspects of the training,
      as well as the number of PARI employees to be trained, shall be determined
      by mutual agreement.

            


    

    


    
      	
               
      

            	
              (d)

            	
              Maintenance.  ALRT
      agrees to provide bug-fixes, patches and other updates with respect to the
      Software for so long as a subscription for Monitoring activated through
      the physicians and/or patients to whom PARI sells the CHC Unit via the
      PARI Network endures and otherwise as PARI may from time to time
      reasonably request.  ALRT shall further correct any errors or
      defects in the Software that cause it not to operate properly with the
      Products, as well as any errors or defects in the documentation that
      render such documentation inaccurate, erroneous or
    unreliable.

            


    


    
      
         


      

      
        9

        
          

        

      

      
         


      

    


    


    
      	
              (e)  

            	
              Warranty.
      ALRT shall warrant the operation of the Software, in its original
      unaltered form, against system failures, error or bugs. This warranty
      shall include, with respect to system failures, errors or bugs, ALRT using
      its best efforts to promptly correct any such failures, errors or bugs, to
      supply the correction in a timely fashion, and to answer all questions
      that any physician, patient, any person in the PARI Network or PARI may
      have regarding such failures, errors or
bugs.

            


    

    


    Section
3.12                   Trial
Period.  As soon as practicable after the Effective Date, ALRT
will supply PARI, upon request, up to 150 CHC Units and
modems, without charge except for shipping costs.  At any time
thereafter, in PARI’s sole discretion, PARI may place an order (the “Initial
Order”) for the
manufacture of CHC Units pursuant to Section 6.1.  The placement of
such Initial Order shall indicate the end of the Trial Period.

    


    Section
3.13                   Monitoring.  ALRT
agrees to provide the Monitoring at no charge for up to
90 days until
reimbursement for the Monitoring is provided. To that extent, if a physician,
patient or customer does not receive reimbursement within such 90 day period after
having filed for reimbursement and such physician, patient or customer has paid
the Monitoring services fee to ALRT or its agents, ALRT agrees, and shall cause
its agents, to promptly refund the payment of any Monitoring services fee made
by any such physician, patient or customer, as applicable, and, upon
confirmation from the physician, patient or customer, as applicable, that there
is no reimbursement and after consultation with PARI, ALRT shall be permitted to
cancel the Monitoring services for such physician, patient or customer, as
applicable. PARI shall be permitted to make statements and representations
regarding the foregoing to physicians, patients and customers.

    


    ARTICLE
4

    LICENSE
FEE AND PAYMENTS

    


               Section
4.1                      License
Fee.  PARI shall pay to ALRT a non-refundable up-front payment
of Five Thousand
Dollars ($5,000) within thirty (30) days from
the Effective Date of this Agreement.

    


               Section
4.2                      Payments.  In
partial consideration for PARI’s efforts to commercialize the CHC Units through
the PARI Network in the United States, ALRT shall pay, or cause a third party
such as Health ALRT, LLC to pay on its behalf to, PARI the following amount (the
“Individual Subscription Amount”) for each month of active subscription for
Monitoring that has been activated through the physicians and/or patients to
whom PARI sells the CHC Units in the United States and in respect of whom ALRT,
directly or indirectly, receives a Monitoring service fee for such month: Option
1 - five
United States dollars (USD$5.00) and Option 2 - three
United States Dollars and fifty cents (USD$3.50) as long as there is no
reimbursement code established for the CHC Unit by a governmental agency and
once such reimbursement code has been established, the amount shall be three United States Dollars
(USD$3.00).  All payments of the Individual Subscription
Amounts shall continue for the entire duration of such active subscription,
including with respect to any renewals of subscriptions after the expiration or
termination date of this Agreement provided the CHC Unit being used was
originally sold by the


    
      
         


      

      
        10

        
          

        

      

      
         


      

    


    PARI
Network (or a replacement unit in case of defect or warranty
issues).  As to each other country, the payment amount shall be
determined by mutual agreement of the parties on a country by country basis
based on PARI’s role and support but in no event shall payment be less than the
Individual Subscription Amount applicable for the United States.

    


    Section
4.3.                    Adjustments to Individual
Subscription Amounts.  The payment by ALRT of the Individual
Subscription Amounts to PARI is based on the assumption that ALRT or its agent
will receive a Monitoring services fee of  $30 per month per
patient (or the equivalent if such fee is based on a frequency other than
monthly). The payment of the Individual Subscription Amounts to PARI shall be
subject to adjustment as follows:

     
 

    
      	
               
      

            	
              (a)

            	
              if
      the Monitoring services fee charged by ALRT (or its agent) is more than
      $30 per
      month per patient (or the equivalent if the Monitoring services fee is
      based on a different frequency), then, in the case of Option 1, the
      Individual Subscription Amount shall be 16.67% of the
      Monitoring services fee, and in the case of Option 2, the Individual
      Subscription Amount shall be the sum of (i) 10% of the
      Monitoring services fee plus (ii) $0.50 as long as
      no reimbursement code for the CHC Unit has been established by a
      governmental agency; provided, however, that any increase in the
      Monitoring services fee as a direct result solely of (x) the increased
      cost of the outsourcing in case of Option 2 in excess of $5.00 or (y) any
      add-ons to the Services, such as dial-up modems or other disbursements or
      out-of-pocket expenses of ALRT requested and agreed to by PARI or
      (y), shall not give right to an increase of the Individual Subscription
      Amount; and

            


    

    
      	
               
      

            	 


    

    
      	
               
      

            	
              (b)

            	
              if  the
      Monitoring services fee charged by ALRT (or its agent) is less than $30 per patient
      per month (or equivalent if the  Monitoring services fee is
      based on a different frequency), then the Individual Subscription Amount
      shall be as set forth in Section 4.2, unless otherwise agreed to by the
      parties in writing.

            


    

    
Further,
if any Monitoring services fee received by ALRT or its agent shall be cancelled
and recovered by the payer from ALRT or its agent, as applicable, then ALRT
shall have the right to recover from PARI the payment made to PARI in respect of
such cancelled fee.

     

    Section
4.4. Frequency of
Payments. If ALRT's  Monitoring services fee is based on
a  payment frequency of services by ALRT other than monthly, then the
payment to PARI shall be adjusted and calculated based on the same frequency as
applies to ALRT's Monitoring services and in an amount equiva  lent to the
monthly Individual Subscription Amounts payment provided herein to be paid to
PARI, provided, however, that notwithstanding the foregoing, payments of the
Individual Subscription Amounts shall be made by (or on behalf of) ALRT to PARI
no less frequently than quarterly even if the payment frequency of the
Monitoring services fee is for a longer period of time.

     

     

    
 

    
      
         


      

      
        11

        
          

        

      

      
         


      

    


    


    Section
4.5                     Recognition of Payments,
Statements, and Audit Rights.  The payment of the Individual
Subscription Amounts set forth herein shall accrue upon the activation of an
individual patient’s and/or physician’s subscription to Monitoring through the
physicians to whom PARI sells the CHC Unit via the PARI Network, and shall be
paid monthly to PARI on the fifteenth (15th) day of the month following the end
of each preceding calendar month or on the 15th day after the end of the period
in respect of which the payment is being made pursuant to Section 4.4 above (but
in such case no less frequently than quarterly). Each payment hereunder shall be
accompanied by a written report certified by an executive officer with respect
to the payments due to PARI pursuant to this Agreement in respect of the
preceding calendar month, which shall set forth the following
information:

    


    
      	
               
      

            	
              (i)

            	
              number
      of subscriptions for Monitoring activated through the physicians and/or
      patients to whom PARI sells the CHC Units via the PARI
      Network;

            


    

    


    
      	
               
      

            	
              (ii)

            	
              total
      billing for subscriptions for Monitoring activated through the physicians
      and/or patients to whom PARI sells the CHC Units via the PARI Network;
      and

            


    

    


    
      	
               
      

            	
              (iii)

            	
              total
      payment due.

            


    

    


    Furthermore,
ALRT agrees to maintain detailed and accurate records sufficient to substantiate
the calculation of payments made hereunder during the Term and otherwise for so
long as a subscription for Monitoring activated through the physicians and/or
patients to whom PARI sells the CHC Unit via the PARI Network
endures.  During such time period, PARI or its designee may, from time
to time, inspect such records and all other books and records of ALRT (and its
agents) related to the Intellectual Property Rights to verify the accuracy of
payments made hereunder; provided, however, that ALRT shall receive at least two
(2) business days prior written notice of such inspections, and such inspections
shall take place at ALRT’s offices during ALRT’s regular business
hours.  In addition, PARI and its representatives shall at all times
be granted access to appropriate portions, subject to compliance with all
applicable laws, of ALRT’s (and its agents’) database to verify usage of the
Monitoring.  PARI or its designee shall bear all costs of such
inspections, unless a particular audit reveals an underpayment of 5.0% or more
of the amount that should have been paid to PARI for the period audited, in
which case ALRT shall bear the expense of such audit.  In the event of
any underpayment, ALRT shall promptly remit to PARI all amounts due plus
interest at a rate of the lesser of (i) one-and-one-half percent (1 1⁄2%) per
month from the date the discrepancy occurred; or (ii) the maximum amount allowed
by applicable law.

     
 

    ARTICLE
5

    OWNERSHIP
AND PROTECTION OF

    INTELLECTUAL
PROPERTY RIGHTS

    


               Section
5.1                     Ownership.  Nothing
in this Agreement or in PARI’s use of the Intellectual Property Rights shall
grant PARI any rights other than the rights expressly licensed
hereunder.  PARI acknowledges ALRT’s ownership in the Intellectual
Property Rights.  The


    
      
         


      

      
        12

        
          

        

      

      
         


      

    


    parties
acknowledge and agree that PARI shall retain ownership of its medical devices,
systems and technologies and all improvements thereto, and that nothing in this
Agreement or in the use of such devices, systems and technologies as
contemplated by this Agreement shall grant ALRT any rights other than the rights
expressly granted hereunder. Each of the parties hereto agrees to execute all
necessary documents to effect the other’s ownership in rights granted or arising
under this Agreement, if necessary.

    


               Section
5.2                      Infringement by Third
Parties.  If either party learns of any activity by a third
party that might constitute infringement or unauthorized use of the Intellectual
Property Rights, or if any third party asserts that PARI’s, an Affiliate of
PARI’s, or a sublicensee’s use or manufacture of the Products constitutes
unauthorized use or infringement, such party shall so notify the other party in
writing within thirty (30) days of its discovery and the parties will discuss
appropriate causes of action. ALRT shall have the first right to bring, at its
own expense, an infringement action against any third party, holding PARI
harmless in such event.  If ALRT does not file an infringement action
with respect to such third party activity within thirty (30) days of the written
notice, then PARI shall be entitled to bring such infringement action at its own
expense.  The party conducting an action hereunder shall control the
conduct of the infringement litigation.  Each party hereto shall make
reasonable efforts to assist the other party, at such other party’s expense,
with any action or litigation resulting from such activity, including providing
such evidence and expert assistance as each party may have within its
control.

    


               Section
5.3                      Claims by Third
Parties. If:
(a) claims or suits are made against PARI or ALRT by a party asserting ownership
of rights in the Intellectual Property Rights and/or Product(s), or any portion
thereof; (b) use of a particular element of the Intellectual Property Rights
and/or Products by PARI, its Affiliates or sublicensees infringes the rights of
such party; or (c) the parties learn that another party has or claims such
ownership rights that would or might conflict with the proposed or actual use of
the Intellectual Property Rights and/or Product(s), PARI and ALRT will, in any
such case, consult with each other on a suitable course of action and agree in
writing on how to proceed.

    


               Section
5.4                      Additional
Rights.  Notwithstanding anything to the contrary in this
Agreement, if a party reasonably believes that the other party may fail to take
any action required with respect to an infringement action described in Section
5.2 or a claim by a third party set forth in Section 5.3 within a reasonable
time, then such party shall provide the other party with written notice of such
deficiency.  If the party receiving such deficiency notice fails to
take the required action within 30 days of the date of such notice, the
notifying party shall have the right to thereafter take any such required action
and the party having received the notice shall promptly reimburse the notifying
party for any costs and expenses incurred with respect to the
foregoing.

    


               Section
5.5                      Recovery of Damages for
Infringement by Third Parties.  Any sum recovered in such
action or litigation referenced in Section 5.2 or 5.3, whether by way of
judgment, settlement or otherwise, shall be used first to reimburse PARI for all
direct, out-of-pocket costs and expenses, including reasonable attorney fees,
expert witness fees, court costs and the like, incurred in the prosecution or
defense of such action or litigation.  If, after such


    
      
         


      

      
        13

        
          

        

      

      
         


      

    


    reimbursement,
any funds shall remain from such recovery, ALRT shall be entitled to twenty
percent (20%) of such funds and PARI shall be entitled to eighty percent (80%)
of such funds.

     
 

    


    ARTICLE
6

    MANUFACTURING
AND SUPPLY ACTIVITIES

    


               Section
6.1                      Manufacturing. During
the Term, PARI, its Affiliates and permitted sublicensees shall have the right
to manufacture or cause to be manufactured such quantities of the CHC Unit as it
requires in connection with its rights under this Agreement. ALRT shall provide
such assistance to PARI, its Affiliates and permitted sublicensees in connection
with specifications and other terms as PARI shall reasonably
request.

    


               Section
6.2                      Price and
Payment.  ALRT agrees to make available ALRT’s proprietary
integrated circuit Version 1.13 (" ALR Chip") for
manufacture of CHC
Units to PARI, its Affiliates and permitted sublicensees.  PARI will
order the ALR Chip directly from ALRT’s supplier at a cost as described on
Schedule 3, provided, however, that if the CHC Unit receives a reimbursement
code from a governmental agency then the parties shall discuss in good faith a
reasonable profit margin on the ALR Chip for ALRT taking into account the cost
of the ALR Chip and the reimbursement amount. ALRT agrees to sign the
authorizations and any and all other documents as may reasonably be required for
PARI to order the ALR Chip directly from the supplier.

    


    ARTICLE
7

    REPRESENTATIONS,
WARRANTIES, DISCLAIMERS,

    INDEMNIFICATION,
AND LIMITATION OF LIABILITY

    


               Section
7.1                      ALRT Representations and
Warranties.  ALRT represents and warrants to PARI
that:

    


    
      	
               
      

            	
              (a)

            	
              ALRT
      is duly authorized to enter into this Agreement and perform its
      obligations hereunder and the performance of its obligations hereunder
      does not conflict with or result in a breach of any other agreement to
      which ALRT, its shareholders, directors or employees is a
      party;

            


    

    


    
      	
               
      

            	
              (b)

            	
              Schedule
      1 sets forth a true, correct and complete list of (i) all of the
      Intellectual Property Rights related to the Products that have been filed
      with the United States Patent and Trademark Office, the United States
      Copyright Office, or any other national or foreign agency administering
      formal protection for proprietary rights, and (ii) all material
      unregistered rights related to the Intellectual Property
      Rights;

            


    

    


    
      	
               
      

            	
              (c)

            	
              ALRT
      exclusively owns the entire right, title, and interest in and to all of
      the Intellectual Property Rights relating to the Products free and clear
      from all encumbrances including, without limitation, the exclusive right
      to use and license the same.  ALRT further represents and
      warrants that the Intellectual
Property

            


    


    
      
         


      

      
        14

        
          

        

      

      
         


      

    


    
      	
               
      

            	
              Rights
      do not infringe or otherwise constitute an unauthorized use of the
      proprietary rights of any third
party;

            


    

    


    
      	
               
      

            	
              (d)

            	
              the
      Intellectual Property Rights constitute all of the intellectual property
      necessary to promote, make, have made, use, distribute and sell the
      Products, on a worldwide basis;

            


    

    


    
      	
                         
      (f)  

            	
              no
      third party has any right, title or interest in or to any of the
      Intellectual Property Rights relating to the Products with the sole
      exceptions of PGB Medical and
Aspen;

            


    

    


    
      	
                         
      (g)  

            	
              ALRT
      has taken commercially reasonable measures to protect the secrecy,
      confidentiality and value of the trade secrets and know-how included in
      the Intellectual Property Rights.  ALRT is not nor has it
      received any notice that it is, in default (or with the giving of notice
      or lapse of time or both, would be in default) under any license with
      respect to the Intellectual Property
Rights;

            


    

    


    
      	
                  
      (h)  

            	
              neither
      ALRT nor its Affiliates have never received any Claim alleging that ALRT’s
      development or use of the Intellectual Property Rights interferes with,
      infringes, or misappropriates any intellectual property rights of any
      third party (including any claim that ALRT must license or refrain from
      using any intellectual property rights of any third party in order to
      exploit the Connectivity, CHC Unit and/or the
  Software).

            


    

    


    
      	
                 
      (i)  

            	
              no
      third party has interfered with, infringed upon, or misappropriated the
      Intellectual Property Rights and there are no facts which would form a
      reasonable basis for any claim of such interference, infringement, or
      misappropriation;

            


    

    


    
      	
                 
      (j)  

            	
              no
      claim is pending or, to the knowledge of ALRT, threatened which challenges
      the legality, validity, enforceability, use, or ownership of any
      Intellectual Property Rights, and there are no facts which would form a
      reasonable basis for any such claim;
and

            


    

    


    
      	
                  
      (k)  

            	
              the
      exploitation of the Products does not interfere with, infringe upon, or
      misappropriate, any intellectual property rights of any third
      party

            


    

    


               Section
7.2                      PARI Representations and
Warranties.  PARI represents and warrants to ALRT that (i) PARI
is duly authorized to enter into this Agreement and perform its obligations
hereunder and the performance of its obligations hereunder does not conflict
with or result in a breach of any other agreement to which PARI, its
shareholders, directors or employees are a party, and (ii) the PARI Network
shall consist of individuals having the proper skill, training and background so
as to be able to perform in a competent and professional manner.

    



    
      
         


      

      
        15

        
          

        

      

      
         


      

    


    Section
7.3                      Indemnification.

    


    
      	
               
      

            	
              (a)

            	
              PARI
      agrees to be responsible for, and to defend, indemnify, and hold ALRT, and
      any of its parents, successors, shareholders, officers, directors and
      Affiliates, harmless against any and all claims, actions, suits,
      liabilities, demands, expenses (including reasonable attorney fees and
      disbursements), losses, costs, or damages (collectively, “Claims”)
      actually incurred by ALRT, and any of its parents, successors,
      shareholders, officers, directors or Affiliates, whether such Claim exists
      directly between the parties hereto or relates to a third party, arising
      out of or in connection with:

            


    

    


    
      	
               
      

            	
              (i)

            	
              the
      use of the Intellectual Property Rights in a manner that is inconsistent
      with the terms and conditions of this
Agreement;

            


    

    


    
      	
               
      

            	
              (ii)

            	
              any
      breach of PARI’s obligations hereunder;
and

            


    

    


    
      	
               
      

            	
              (iii)

            	
              any
      breach by PARI of its representations and warranties set forth in Section
      7.2.

            


    

    


    
      	
               
      

            	
              (b)

            	
              ALRT
      agrees to be responsible for, and to defend, indemnify, and hold PARI, and
      any of its parents, successors, shareholders, officers, directors and
      Affiliates harmless, against any and all Claims actually incurred by PARI,
      and any of its parents, successors, shareholders, officers, directors or
      Affiliates, whether such Claim exists directly between the parties hereto
      or relates to a third party, arising out of or in connection
      with:

            


    

    


    
      	
               
      

            	
              (i)

            	
              the
      use of the Intellectual Property Rights in a manner that is consistent
      with the terms and conditions of this
Agreement;

            


    

    


    
      	
                            (ii)  

            	
              any
      breach of ALRT’s obligations
hereunder;

            


    

    


    
      	
                             (iii)  

            	
              any
      failure of or breach by ALRT of the representations and warranties set
      forth in Section 7.1.;

            


    

    


    
      	
                             (iv)  

            	
              any
      product liability claim relating to the Connectivity, CHC Unit or
      Software; and

            


    

    


    
      	
                            
      (v)  

            	
              a
      claim of infringement or misappropriation of the proprietary rights of any
      third party by ALRT or its
Affiliates.

            


    

    


               Section
7.4                      Insurance.  Each
party shall obtain and carry in full force and effect, commercial product
liability insurance which shall protect both parties from any and all claims
against them, arising out of or in connection with the Products.  Such
insurance shall be underwritten by a reputable insurance company, shall list the
other party hereto and its Affiliates as additional named insureds thereunder,
and shall require thirty (30) days written notice to be given to the other party
prior to any cancellation or material change thereof.  The limits of
such


    
      
         


      

      
        16

        
          

        

      

      
         


      

    


    insurance
shall be in an amount sufficient to satisfy any such claims against the parties,
but in no event shall be less than $2,000,000 per occurrence with an aggregate
limit of liability of $4,000,000 for personal injury, and a like amount for
property damage.  Each party shall provide the other party with a copy
of such policy evidencing the same upon request.

    


               Section
7.5                      Limitation of
Liability. NEITHER PARTY SHALL BE LIABLE TO THE OTHER PARTY UNDER ANY
CIRCUMSTANCES OR ANY LEGAL OR EQUITABLE THEORY, WHETHER IN CONTRACT, STRICT
LIABILITY OR OTHERWISE, FOR ANY INDIRECT, INCIDENTAL OR CONSEQUENTIAL DAMAGES OR
DAMAGES FOR LOST PROFITS ARISING OUT OF OR RELATED TO THE INTELLECTUAL PROPERTY
RIGHTS OR TO THIS AGREEMENT, EVEN IF ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.
THESE LIMITATIONS SHALL APPLY NOTWITHSTANDING ANY FAILURE OF ESSENTIAL PURPOSE
OR ANY LIMITED REMEDY.  NOTWITHSTANDING THE FOREGOING, THESE
LIMITATIONS SHALL NOT APPLY TO ANY THIRD PARTY CLAIM THAT IS THE SUBJECT OF
SECTION 7.3 (INDEMNIFICATION), TO THE EXTENT SUCH THIRD PARTY HAS BEEN AWARDED
SUCH DAMAGES.

    


    ARTICLE
8

    TERMINATION
AND DEFAULT

    


               Section
8.1                      Termination.

    


    
      	
               
      

            	
              (a)

            	
              Termination
      for Cause.  If either PARI or ALRT is in breach of any of its
      obligations under this Agreement and fails to remedy such breach within
      thirty (30) days after receipt of written notice thereof from the other
      party, the party not in breach shall have the option of terminating this
      Agreement by giving written notice of termination in accordance with
      Section 10.8.

            


    

    


    
      	
               
      

            	
              (b)

            	
              Termination
      of Agreement by PARI.  PARI may terminate this Agreement for any
      reason or no reason (i) at any time during the Trial Period by giving
      written notice to ALRT, in which case this Agreement shall immediately
      terminate, and (ii) following the Trial Period, upon not less than ninety
      (90) days’ written notice to ALRT, in which case this Agreement shall
      terminate on the 90th
      day.

            


    

    


    Section
8.2                     Effect of
Termination.  Termination of this Agreement for any reason
shall not affect the obligations of the parties accrued prior to the effective
date of termination.  In addition, the following obligations of the
parties shall survive termination:

    


    
      	
               
      

            	
              (a)

            	
              PARI’s
      right to receive or recover and ALRT’s obligation to make payments accrued
      as of the effective date of termination or as may become due and payable
      after the effective date of termination as set forth in Article 4
      above;

            


    

    


    
      	
               
      

            	
              (b)

            	
              Each
      party’s indemnification rights and obligations set forth in Article 7
      above;

            


    

    



    
      
         


      

      
        17

        
          

        

      

      
         


      

    


    
      	
               
      

            	
              (c)

            	
              ALRT’s
      obligation to maintain records hereunder as set forth in Section 4.3
      above;

            


    

    


    
      	
               
      

            	
              (d)

            	
              Each
      party’s obligation to maintain insurance on behalf of the other party
      hereto.  Such obligation shall extend for so long as a
      subscription for Monitoring activated through the physicians to whom PARI
      sells the CHC Unit via the PARI Network
endures.

            


    

    


    
      	
               
      

            	
              (e)

            	
              The
      confidentiality obligation of both parties set forth in Article 9;
      and

            


    

    


    (f)           The
obligations of both parties set forth in Section 8.5.

    


    Section
8.3                     Events of
Default.  Any one of the following shall constitute an Event of
Default:

    


    
      	
               
      

            	
              (a)

            	
              Either
      party filing a voluntary petition for bankruptcy, reorganization, or an
      arrangement under any bankruptcy or insolvency law, or an involuntary
      petition under any such law being filed against a party hereto and not
      dismissed within ninety (90) days;
and

            


    

    


    (b)           Either
party making an assignment for the benefit of its creditors.

    


    Section
8.4                     Remedies.  Without
limiting other remedies available to the parties at law or equity, upon the
occurrence of an Event of Default, either party may, at it option, terminate
this Agreement by giving written notice to the other party hereto in accordance
with Section 10.8.

    


    Section
8.5                     Discontinuation of Use and
Exhaustion of Inventory.  Following the expiration or
termination of this Agreement, PARI shall cease making, using, selling or
importing, the Products.  Notwithstanding anything to the contrary
herein, PARI shall have the right for a period of nine (9) months
following the effective date of the termination or expiration of this Agreement
to sell from its inventory, any of the Products existing as of the date of
expiration or termination, and all payments due PARI hereunder shall be paid in
accordance with this Agreement.  In addition, following termination or
expiration of this Agreement, PARI shall return all records relating or
referring to the Intellectual Property Rights that are in its possession,
custody or control.

    


    ARTICLE
9

    CONFIDENTIALITY

    


    Section
9.1                     Confidential
Information.  During the term of this Agreement, ALRT and PARI
may each disclose confidential and/or proprietary information including, but not
limited to, each party’s materials, as the case may be, other proprietary
materials and technologies, economic information, business or research
strategies, trade secrets, know-how and material embodiments thereof (each
party’s “Confidential
Information”), to the other solely for the purpose of fulfilling each
party’s obligations under this Agreement.


    
      
         


      

      
        18

        
          

        

      

      
         


      

    


    


    Section
9.2                     Confidentiality and Non
Use.  During the term of this Agreement, and for a period of
five (5) years from the expiration or termination of this Agreement, the
recipient shall maintain the disclosing party’s Confidential Information in
confidence.  The recipient shall use the disclosing party’s
Confidential Information solely for its performance of the obligations
hereunder, unless otherwise mutually agreed in writing.

    


               Section
9.3                      Exceptions to
Confidentiality Obligations.  The recipient’s obligations of
confidentiality and non-use shall not apply to any information
that:

    


    
      	
               
      

            	
              (a)

            	
              was
      in recipient’s rightful possession on a non-confidential basis prior to
      receipt from the disclosing party;

            


    

    


    
      	
               
      

            	
              (b)

            	
              is
      or becomes, through no fault of the recipient, publicly
    known;

            


    

    


    
      	
               
      

            	
              (c)

            	
              is
      furnished to the recipient by a third party without breach of a duty to
      the disclosing party;

            


    

    


    
      	
               
      

            	
              (d)

            	
              is
      independently developed by the recipient without access to the disclosing
      party’s Confidential Information;
or

            


    

    


    
      	
               
      

            	
              (e)

            	
              such
      disclosure is required by applicable law, provided that the recipient
      shall apply for confidential treatment of this Agreement and/or the
      proposed disclosure to the fullest extent permitted by law, shall provide
      the disclosing party a copy of the confidential treatment request far
      enough in advance of its filing, if reasonably practical, to give the
      disclosing party a meaningful opportunity to comment thereon, and shall
      use reasonable efforts to incorporate in such confidential treatment
      request any reasonable comments of the disclosing
  party.

            


    

    


               Section
9.3                      Return of Confidential
Information.  Upon the expiration or termination of this
Agreement, each party hereto shall return to the other party, as applicable, all
materials or items that contain, embody, or relate to any Confidential
Information belonging to the other party, including, without limitation,
documents, drawings, software, hardware, databases, electronic information,
storage media, samples, and models.  Each party shall return all such
materials to the other party within fifteen (15) days of the date of expiration
or termination of this Agreement.

    


               Section
9.4                      Publicity.  Except
as required by law or court order, all publicity, press releases and other
announcements or disclosures relating to the existence and terms of this
Agreement or the transactions contemplated hereby shall be reviewed in advance
by, and shall be subject to the written approval of, both parties; provided that
such publicity, press releases and other announcements shall not disclose any
Confidential Information of the other party hereunder and shall give appropriate
attribution to the Product(s) and the other party’s role(s) in the projects
contemplated herein. Each party shall provide the other party an opportunity to
review and comment on the language of such attribution prior to first use
thereof in a press release or other public disclosure. PARI’s contribution to
the Products shall be acknowledged in


    
      
         


      

      
        19

        
          

        

      

      
         


      

    


    all press
releases and any presentations and publications. Either party may disclose the
existence of this Agreement and the terms and conditions hereof, without the
prior written consent of the other party, as may be required by applicable law
(including, without limitation, disclosure requirements of the SEC, NYSE, or any
other stock exchange or NASDAQ), in which case the party seeking to disclose the
information shall give the other party reasonable advance notice and review of
any such disclosure and shall seek confidential treatment of such information to
the extent possible under applicable law.  Notwithstanding anything to
the contrary, ALRT shall not issue and press release or other public statement
prior to the end of the Trial Period, except with the prior written consent of
PARI.

    


    ARTICLE
10

    GENERAL
PROVISIONS

    


               Section
10.1                    No Third party
Beneficiaries.  This Agreement shall not confer any rights or
remedies upon any person or entity other than the parties and their respective
successors and permitted assigns.

    


               Section
10.2                    Independent Contractor
Relationship.  At all times the parties to this Agreement will
be considered independent contractors and this Agreement will not create an
agency, partnership or employment relationship between the
parties.  Nothing contained in this Agreement will be construed so as
to make ALRT and PARI either partners or joint venturers, or to permit ALRT or
PARI to bind the other to any agreement.

    


               Section
10.3                   Succession and
Assignment.  This Agreement shall be binding upon and inure to
the benefit of the parties hereto and their respective successors and permitted
assigns.  Notwithstanding anything to the contrary
herein:

    


    
      	
               
      

            	
              (a)

            	
              Neither
      ALRT nor PARI shall assign this Agreement or its rights and obligations
      hereunder to a third party without the other party’s prior written
      consent; and

            


    

    


    
      	
               
      

            	
              (b)

            	
              Either
      ALRT or PARI may assign this Agreement, without the other party’s consent,
      to an Affiliate.

            


    

    


               Section
10.4                    Amendments.  No
amendment of any provision of this Agreement shall be valid unless the amendment
shall be in writing and signed by all parties hereto.

    


               Section
10.5                      Waivers.  No
waiver by any party of any default, misrepresentation, or breach of warranty or
covenant hereunder, regardless of whether intentional, shall be deemed to extend
to any prior or subsequent default, misrepresentation, or breach of warranty or
covenant hereunder or affect in any way any rights arising by virtue of any
prior or subsequent such occurrence.

    


               Section
10.6                      Severability.  Both
parties hereby expressly state that it is the intention of neither party to
violate any law.  If any of the provisions of this Agreement are held
to be void or unenforceable, then such void or unenforceable provisions shall be
replaced by valid and


    
      
         


      

      
        20

        
          

        

      

      
         


      

    


    enforceable
provisions which will achieve as far as possible the economic business
intentions of the parties.

    


               Section
10.7                    Construction.  The
parties have participated mutually in the negotiation and drafting of this
Agreement.  In the event an ambiguity or question of intent or
interpretation arises, this Agreement shall be construed as if drafted mutually
by the parties and no presumption or burden of proof shall arise favoring or
disfavoring any party by virtue of the authorship of any of the provisions of
this Agreement.

    


               Section
10.8                    Notices.  All
notices, requests, demands, claims, and other communications hereunder shall be
in writing.  Any notice, request, demand, claim, or other
communication hereunder shall be deemed duly given:

    


    (a)       
upon confirmation of receipt of facsimile or electronic mail;

    


    
      	
               
      

            	
              (b)

            	
              one
      (1) business day following the date sent when sent by overnight delivery;
      or

            


    

    


    
      	
               
      

            	
              (c)

            	
              three
      (3) business days following the date mailed when mailed by registered or
      certified mail return receipt requested and postage prepaid to the
      following address:

            


    

    


    If to
ALRT:

    


    ALR
Technologies, Inc.

    Attention:
Sidney Chan

    3350
Riverwood Pkwy, Suite 1900

    Atlanta,
Georgia 30339

    Facsimile:  (678)
881-1418

    


    If to
PARI:

    


    PARI
Respiratory Equipment, Inc.

    Attention:
Larry Weinstein

    2943 Oak
Lake Boulevard

    Midlothian,
Virginia 23112

    Facsimile:  (804)
639-7244

    


    Copy to:

    


    McGuireWoods
LLP

    Attention:
Patrick A. De Ridder, Esq.

    One James
Center

    901 E.
Cary Street

    Richmond,
Virginia 23219-4030

                           
Facsimile:  (804) 698-2221

    



    
      
         


      

      
        21

        
          

        

      

      
         


      

    


               Section
10.9                    Governing Law. This
Agreement, and all disputes arising out of or related thereto, shall be governed
by and construed under the laws of the Commonwealth of Virginia, without regard
to conflict of laws principles.  Any action arising from or relating
to this Agreement or the conduct of the parties pursuant hereto shall be
commenced and heard solely within a federal or state court of competent
jurisdiction found within the Eastern District of Virginia.

    


               Section
10.10                  Counterparts.  This
Agreement may be executed in one or more counterparts, each of which shall be
deemed an original but all of which together shall constitute one and the same
instrument.

    


               Section
10.11                  Headings.  The
Article and Section headings contained in this Agreement are inserted for
convenience only and shall not affect in any way the meaning or interpretation
of this Agreement.

    


               Section
10.12                  Survival.  Articles
1, 4, 5, 7, 8, 9 and 10 of this Agreement shall survive the termination of this
Agreement, regardless of the cause for termination.

    


               Section
10.13                  Entire
Agreement.  This Agreement shall constitute the entire
agreement between the parties and supersedes any prior understandings,
agreements, covenants, warranties, or representations by or between the parties,
written or oral.

    


               Section
10.14                  Legal
Counsel.  ALRT hereby acknowledges that it has had the
opportunity to seek and has obtained independent tax and legal advice from
attorneys of ALRT’s choice with respect to the advisability of executing this
Agreement.

    


    


    


    


    


    


    [Signatures
on following page]

     

     

     

     

     

     

    
 


    
      
         


      

      
        22

        
          

        

      

      
         


      

    


    


               IN
WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
Effective Date.

    


    ALR
TECHNOLOGIES, INC.

    


    


    By:           SIDNEY
CHAN                                           9/18/09

                    Name:           Sidney
Chan

                    Title:           President
& CEO

    


    


    PARI
RESPIRATORY EQUIPMENT, INC.

    


    


    By:           LAWRENCE
WEINSTEIN                          9/11/09

                   
Name:           Lawrence
Weinstein

                   
Title:           VP,
POA

     

     

     

     

     

    
 


    
      
         


      

      
        23

        
          

        

      

      
         


      

    


    SCHEDULE
1

    


    LIST
OF PATENT RIGHTS

     
 

    I.           PATENT
RIGHTS ASSOCIATED WITH THE CHC UNIT

    
      	
               

              Country

            	
               

              Title

               

            	
               

              Serial
      Number

            	
               

              Filing
      Date

            
	
              US

            	
              Medical
      Reminder Device Suited for Use with Nebulizers

            	
              11/351,432

            	
              02/10/2006

            
	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      


    

    


    II.           PATENT
RIGHTS ASSOCIATED WITH THE CONNECTIVITY

    
      	
               

              Country

            	
               

              Title

               

            	
               

              Serial
      Number

            	
               

              Filing
      Date

            
	
              US

            	
              Medical
      Reminder Device Suited for Use with Nebulizers

            	
              11/351,432

            	
              02/10/2006

            
	 
      	 
      	 
      	 
      
	 
      	
              US

            	
              Patient
      Care Coordination System Including Home Use of

            	
              Doc
      09041

            	
              07/27/2009

            
	 
      	 
      	
              Medical
      Apparatus  (Primarily the Software System, but
    some

            	 
      	 
      
	 
      	 
      	
              Coverage
      of connectivity may be possible)

            	 
      	 
      


    

    


    III.           PATENT
RIGHTS ASSOCIATED WITH THE SOFTWARE

    
      	
               

              Country

            	
               

              Title

               

            	
               

              Serial
      Number

            	
               

              Filing
      Date

            
	
              US

            	
              Patient
      Care Coordination System Including Home Use of

            	
              Doc
      09041

            	
              07/27/2009

            
	 
      	
              Medical
      Apparatus

            	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      


    

    


     

     

     

     

    
 

    


    


    



    
      
         


      

      
        24

        
          

        

      

      
         


      

    


    SCHEDULE
2

    


    LIST
OF COUNTRIES FOR PATENT PROTECTION

    


    


    


    Application
Serial Number 11/351,432 has all pending claims allowed and will issue in the
final quarter of 2009.  This application cannot be filed in any other
countries.

    


    The
application identified as Doc 09041 has been filed in the United States as a US
Provisional Patent Application.  This application can be filed as a
PCT application by 07/27/2010 and will be eligible for filing in other countries
thereafter

    


    Additional
countries where ALRT will seek for patent protection:

    


    -                      Australia

                               -Brazil

                               -Canada

                               -China

                               -France

                               -Germany

                               -Italy

                               -Japan

                               -United
Kingdom

    


     

     

     

     

     

    
 

    


    


    



    
      
         


      

      
        25

        
          

        

      

      
         


      

    


    SCHEDULE
3

    


    COST

    
      	
              Product: Constant
      Health Companion BOM

            	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      
	
              Item

            	
              Usage

            	
              USDe U/P with
      Scrap

            	
              USD
      Amount

            
	
              100 ohm
      (0805)

            	
              1

            	
              0.00107

            	
              0.00107

            
	 
      	
              150 ohm
      (0805)

            	
              2

            	
              0.00107

            	
              0.00213

            
	 
      	
              680 ohm
      (0805)

            	
              2

            	
              0.00107

            	
              0.00213

            
	 
      	
              4K7 ohm
      (0805)

            	
              4

            	
              0.00107

            	
              0.00426

            
	 
      	
              10K ohm
      (0805)

            	
              1

            	
              0.00107

            	
              0.00107

            
	 
      	
              15K ohm
      (0805)

            	
              1

            	
              0.00107

            	
              0.00107

            
	 
      	
              39K ohm
      (0805)

            	
              1

            	
              0.00107

            	
              0.00107

            
	 
      	
              56K ohm
      (0805)

            	
              9

            	
              0.00107

            	
              0.00959

            
	 
      	
              120K ohm
      (0805)

            	
              2

            	
              0.00107

            	
              0.00213

            
	 
      	
              270K ohm
      (0805)

            	
              1

            	
              0.00107

            	
              0.00107

            
	 
      	
              1.8M ohm
      (0805)

            	
              1

            	
              0.00107

            	
              0.00107

            
	 
      	
              CHIP CAP 20P
      (0805)

            	
              1

            	
              0.00386

            	
              0.00386

            
	 
      	
              CHIP CAP 820P
      (0805)

            	
              2

            	
              0.00386

            	
              0.00773

            
	 
      	
              CHIP CAP 0.1uF
      (0805)

            	
              10

            	
              0.00386

            	
              0.03864

            
	 
      	
              GOLD CAP
      0.33F

            	
              1

            	
              0.47969

            	
              0.47969

            
	 
      	
              1N4148

            	
              11

            	
              0.00799

            	
              0.08794

            
	 
      	
              CRYSTAL
      32.768KHZ

            	
              1

            	
              0.04131

            	
              0.04131

            
	 
      	
              TRAN.
      2222A

            	
              1

            	
              0.01599

            	
              0.01599

            
	 
      	
              TRAN.
      3906

            	
              2

            	
              0.01332

            	
              0.02665

            
	 
      	
              TRAN.
      3904

            	
              2

            	
              0.01332

            	
              0.02665

            
	 
      	
              BAR43FILM

            	
              5

            	
              0.04264

            	
              0.21320

            
	 
      	
              BU4325F

            	
              1

            	
              0.09994

            	
              0.09994

            
	 
      	
              74HC00N

            	
              1

            	
              0.09860

            	
              0.09860

            
	 
      	
              EEPROM
      24LC02

            	
              1

            	
              0.09194

            	
              0.09194

            
	 
      	
              OKI MCU MSM63188A-607
      (DICE)

            	
              1

            	
              0.00000

            	
              0.00000

            
	 
      	
              BSI SRAM 32K X 8
      (BS62LV256SC)

            	
              1

            	
              0.88343

            	
              0.88343

            
	 
      	
              PCB (OLD
      VERSION)

            	
              1

            	
              0.46903

            	
              0.46903

            
	 
      	
              DB9 FEMALE
      CONNECTOR

            	
              1

            	
              0.17589

            	
              0.17589

            
	 
      	
              BATTERY INSULATION
      RING

            	
              1

            	
              0.00666

            	
              0.00666

            
	 
      	
              T704 STN
      LCD

            	
              1

            	
              0.97137

            	
              0.97137

            
	 
      	
              TACT
      SWITCH

            	
              3

            	
              0.03065

            	
              0.09194

            
	 
      	
              RESET
      KEY

            	
              1

            	
              0.00933

            	
              0.00933

            
	 
      	
              SLIDE
      SWITCH

            	
              1

            	
              0.03864

            	
              0.03864

            
	 
      	
              CR2032 LITHIUM BATTERY
      - "SONY"

            	
              1

            	
              0.17589

            	
              0.17589

            
	 
      	
              ZEBRA
      CONNECTOR

            	
              1

            	
              0.01865

            	
              0.01865

            
	 
      	
              BUZZER 27
      MM

            	
              1

            	
              0.03331

            	
              0.03331

            
	 
      	
              TOP CABINET (3
      SILKSCREEN)

            	
              1

            	
              0.20387

            	
              0.20387

            
	 
      	
              BOTTOM
      CABINET

            	
              1

            	
              0.13724

            	
              0.13724

            
	 
      	
              BATTERY
      DOOR

            	
              1

            	
              0.03864

            	
              0.03864

            
	 
      	
              SLIDE SWITCH
      HOLDER

            	
              1

            	
              0.03864

            	
              0.03864

            
	 
      	
              SMALL KEY TOP (1
      SILKSCREEN)

            	
              2

            	
              0.06796

            	
              0.13591

            
	 
      	
              LARGE KEY TOP (2
      SILKSCREEN)

            	
              1

            	
              0.08661

            	
              0.08661

            
	 
      	
              BACK
      HOOK

            	
              1

            	
              0.03864

            	
              0.03864

            
	 
      	
              BACK
      BASE

            	
              1

            	
              0.06662

            	
              0.06662

            
	 
      	
              COVER FOR BACK
      BASE

            	
              1

            	
              0.03864

            	
              0.03864

            
	 
      	
              LENS

            	
              1

            	
              0.15856

            	
              0.15856

            
	 
      	
              BATTERY PLATE
      +

            	
              1

            	
              0.01865

            	
              0.01865

            


    


    
      
         


      

      
        26

        
          

        

      

      
         


      

    


    


    
      	 
      	
              BATTERY PLATE
      -

            	
              1

            	
              0.01732

            	
              0.01732

            	 
      
	 
      	
              WEIGHT

            	
              1

            	
              0.02132

            	
              0.02132

            	 
      
	 
      	
              CUSHION

            	
              4

            	
              0.00666

            	
              0.02665

            	 
      
	 
      	
              WIRE

            	
              2

            	
              0.00187

            	
              0.00373

            	 
      
	 
      	
              M2
      NUT

            	
              1

            	
              0.00613

            	
              0.00613

            	 
      
	 
      	
              SCREW 2 X 5.0
      PMT

            	
              1

            	
              0.00693

            	
              0.00693

            	 
      
	 
      	
              SCREW PA 1.7 x 5
      mm

            	
              9

            	
              0.00133

            	
              0.01199

            	 
      
	 
      	
              SCREW PB 2 x 6
      mm

            	
              4

            	
              0.00160

            	
              0.00640

            	 
      
	 
      	
              SCREW PB 2.3 x 4 mm 6.0
      HEAD

            	
              2

            	
              0.00133

            	
              0.00266

            	 
      
	 
      	
              USB
      CABLE

            	
              1

            	
              4.38000

            	
              4.38000

            	 
      
	 
      	
              BATTERY SEPARATOR
      SHEET

            	
              1

            	
              0.01079

            	
              0.01079

            	 
      
	 
      	
              GIFT BOX for
      CHC

            	
              1

            	
              0.29448

            	
              0.29448

            	 
      
	 
      	
              INSTRUCTION MANUAL (A4,
      1C+1C)

            	
              1

            	
              0.04131

            	
              0.04131

            	 
      
	 
      	
              TRAY - BOTTOM for
      CHC

            	
              1

            	
              0.10793

            	
              0.10793

            	 
      
	 
      	
              TRAY - TOP for
      CHC

            	
              1

            	
              0.10793

            	
              0.10793

            	 
      
	 
      	
              INNER CARTON for
      CHC

            	
              0.1

            	
              0.32379

            	
              0.03238

            	 
      
	
              OUTER CARTON for
      CHC

            	
              0.05

            	
              0.66624

            	
              0.03331

            	 
      
	 
      	 
      	
              Total

            	
              10.21

            	 
      
	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	
              Material Cost with
      Scarp

            	
              10.21

            	 
      	 
      	 
      
	
              Manufacturing Cost
      & Overhead

            	
              6.19

            	 
      	 
      	 
      
	
              Total Cost in USD FOB
      HK

            	
              16.40

            	
              (Testing jig and
      testing time cost not included)

            
	 
      	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      	 
      	 
      
	 
      	
              Remarks:

            	 
      	 
      	 
      	 
      
	 
      	
              1. Total cost DOES NOT
      include OKI IC Cost

            	 
      	 
      	 
      	 
      
	
              2. Total cost INCLUDES
      USB-Serial Adaptor & Cable Cost @ US$4.38

            	 
      	 
      	 
      
	
              3. CHC Minimum Order
      Quantity is 4,000pcs

            	 
      	 
      	 
      	 
      


    

    



    
      
         


      

      
        27

        
          

        

      

      
         


      

    


    SCHEDULE
4

    


    USB-SERIAL
ADAPTER

    


    


    
      	
              1.  

            	
               MCU
      Supplier

            


    

    


    Manufacturer:
OKI

    


    IC Part:
OKI MCU MSM63188A-XXXWA (DICE)

    


    Unit
Price:  First 50K: US$1.23/pc (include freight charge and
scrap)

                                    After
50K: US$1.41/pc (include freight charge and scrap)

    


    


    


    2.   
     USB-Serial Adaptor

    


    IC
Supplier: ALRT Custom Chip provided by Prolific Technology Inc.

    


    OS
support: WIN XP, Vista 32 & 64 bit, Win 7 32 & 64 bit

    


    Adaptor
Manufacturer: China

    


    Accessory:
Each USB-Serial Adaptor includes an extension USB cable

    


    Colour
and housing: White with ALRT and CHC wording engraved.

    


    Feature:  Connect
with CHC or other ALRT approved peripherals for data exchange.

    


    Order:  Minimum
4,000 per order.

    


    Unit
Price: USD5.72/pc

    


    


    


    



    
      
         


      

      
        28