**Exhibit 10.13**

 

**LICENSE AGREEMENT**

 

This Agreement is made and entered into as ofthe 13thday of February 2002, by and between theUNIVERSITY OF PITTSBURGH - OF THE COMMONWEALTH SYSTEM OF HIGHER EDUCATION, anon- profit corporation, organized and existing under the laws of theCommonwealth of Pennsylvania, having its principal office at 4200 Fifth Avenue,Pittsburgh, Pennsylvania 15260 (UNIVERSITY), and MEDQUEST PRODUCTS, INC havingits principal office at 825 North 300 West, Suite NE 107, Salt Lake City, UT84103 (LICENSEE),

 

WHEREAS, UNIVERSITY, Magnetic Moments, LLC (“MM”)and the National Aeronautics and Space Administration (“NASA” are the owners ofcertain PATENT RIGHTS, entitled “Magnetically Suspended Miniature Fluid Pumpand Method of Making the Same” developed by Dr. James F. Antaki and GregoryBurgreen of the UNIVERSITY faculty, Bradley Paden of MM and Nelson Groom ofNASA, and the UNIVERSITY has the right to grant licenses under such PATENTRIGHTS;

 

WHEREAS, UNIVERSITY and NASA have entered intoan Agreement Concerning Licensing of the Jointly Owned Invention “MagneticallySuspended Miniature Fluid Pump and Method of Making the Same,” dated July 20,1998 (“NASA Agreement”), pursuant to which NASA granted UNIVERSITY the right tonegotiate licenses to the PATENT RIGHTS on NASA’s behalf, subject to certainconditions;

 

WHEREAS, UNIVERSITY and Bradley Paden and MMhave entered into an Agreement dated April 24, 1998, assigning all of BradleyPaden’s and MM’s interest in the PATENT RIGHTS to UNIVERSITY;

 

WHEREAS, UNIVERSITY has a non-exclusivelicense to certain technology, entitled “Speed Control System for ImplantedBlood Pumps,” US. Patent No. 5,888,242 (filed November 1, 1996), and US. PatentNo. 6,066,086 Speed control system for implanted blood pumps (filed March 4,1998), including the right to sublicense such technology (“LICENSE RIGHTS”), asmore fully described below;

 

WHEREAS, UNIVERSITY desires to have the PATENTRIGHTS and LICENSE RIGHTS (collectively “TECHNOLOGY”) utilized in the publicinterest;

 

WHEREAS, LICENSEE or its principals areexperienced in the development, production, manufacture, marketing and sale ofPRODUCTS as defined below, and/or the use of technology similar to theTECHNOLOGY and that LICENSEE shall commit itself to a thorough, vigorous anddiligent program of exploiting the TECHNOLOGY primarily through the developmentand commercialization of PRODUCTS so that public utilization results therefrom;

 

WHEREAS, LICENSEE has obtained other licensesand has entered into agreements, such agreements being separate and distinctfrom this agreement, which give it exclusive ownership of, claims on, and/orrights to license related technology from other third parties, includingLICENSEE’S AFFILIATES as defined below, including those that have had orcontinue to have separate relationships and agreements with the UNIVERSITY;

 

and

 

WHEREAS, LICENSEE desires to obtain a licenseto the TECHNOLOGY upon the terms and conditions hereinafter set forth.

 

**ARTICLE1 - DEFINITIONS**

 

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

 

1.1           AFFILIATE shall mean, with respectto UNIVERSITY, any clinical or research entity in Pittsburgh which is operatedor managed as a facility under the UPMC Health System, whether or not owned byUNIVERSITY.

 

1.2           LICENSEE shall mean MEDQUESTPRODUCTS, INC. and all entities at least fifty percent (50%) owned orcontrolled by MEDQUEST PRODUCTS, INC.

 

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1.3           AFFILIATE shall mean, with respectto LICENSEE, any third party that is directly or indirectly under the controlof MedQuest, that is under common control with MedQuest, or that controlsMedQuest. As used herein, the term “control” shall mean possession, direct orindirect, of the power to direct or cause the direction of the management andpolicies of an entity, whether through the ownership of voting securities, bycontract, or otherwise, and the term “entity” shall include without limitationan individual, corporation, or other organization.

 

1.4           LICENSE RIGHTS shall mean the technologyentitled “Speed Control System for Implanted Blood Pumps,” U.S. Patent No.5,888,242 (filed November 1, 1996), and U.S. Patent No. 6,066,086 Speed controlsystem for implanted blood pumps (filed March 4, 1998) that are the subject ofthe Assignment of PATENT LICENSE AGREEMENT between UNIVERSITY and ArgonautMedical, Inc., dated August 20, 1998, plus any divisionals, continuations,continuations-in-part, re-examinations, re-issues, renewals or extensions ofthese patents.

 

1.5           PATENT RIGHTS shall mean UNIVERSITYintellectual property described below:

 

(a)           The United States and foreignpatents and/or patent applications listed in Exhibit A;

 

(b)           United States and foreign patentsissued from the applications listed in Exhibit A and from divisionals, continuations,continuations-in-part, re-examinations, re-Issues, renewals or extensions ofthese applications issued from such applications;

 

(c)           Claims of U.S. and foreigncontinuation-in-part applications, and of the resulting patents, which aredirected to subject matter specifically described in the U.S. and foreignapplications listed in Exhibit A; and

 

(d)           Claims of all foreign patentapplications, and of the resulting patents, which are directed to subjectmatter specifically described in the United States patents and/or patentapplications described in (a), (b) or (c) above

 

1.6           PRODUCT OR PRODUCTS shall mean animplantable blood pump using rotation means to pump blood and its supportingcomponents.

 

1.7           NET SALES shall mean LICENSEE’s andany sublicensee’s invoice price for products or processes included inTECHNOLOGY and produced hereunder less the sum of the following:

 

(a)           Actual cost of freight charges orfreight absorption, separately stated in such invoice;

 

(b)           Actual trade, quantity or cash discountsallowed, if any;

 

(c)           Sales taxes, tariff duties, excisetaxes, and/or use taxes separately stated on each invoice;

 

(d)           Allowances, credits, and write-offsfor rejections or returns.

 

1.8           FIELD shall mean implantable bloodpumps.

 

**ARTICLE2 - GRANT**

 

2.1           UNIVERSITY hereby grants toLICENSEE, to the extent it may lawfully do so, the right and worldwideexclusive license to make, have made, use, sell, offer for sale or importPRODUCTS in the FIELD under the PATENT RIGHTS to the end of the term for whichthe PATENT RIGHTS are granted, and the worldwide nonexclusive sublicense tomake, have made, use, sell, offer for sale or import PRODUCTS under the LICENSERIGHTS, to the end of the term for which the LICENSE RIGHTS are granted, ineach case unless this Agreement is terminated sooner as provided herein. Thelicense granted hereby is subject to the rights of the United Statesgovernment, if any, as set forth in 35 U.S.C. Section 200, et seq.

 

2.2           Rights to AFFILIATES. The rights licensed to LICENSEE hereundershall extend to its AFFILIATES designated in writing by LICENSEE, provided eachsuch AFFILIATE agrees in writing to be bound by the terms and conditions ofthis Agreement except that AFFILIATE will only have any right to make and/orsell the TECHNOLOGY to 

 

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serve the development andcommercialization milestones of MedQuest, which right can be withdrawn byMedQuest. MedQuest agrees to be fully responsible for the performance of suchauthorized AFFILIATES hereunder.

 

2.3           UNIVERSITY shall not grant anyother license to the PATENT and/or LICENSE RIGHTS.

 

2.4           UNIVERSITY and NASA reserve theroyalty-free, non-exclusive right to practice under the PATENT RIGHTS and touse the TECHNOLOGY for their own non-commercial education and researchpurposes. UNIVERSITY reserves the royalty-free, non-exclusive right to practiceunder the LICENSE RIGHTS for its own non-commercial education and researchpurposes.

 

2.5           The license granted hereunder shallnot be construed to confer any rights upon LICENSEE by implication, estoppel orotherwise as to any technology not specifically set forth in Exhibit A hereof.

 

2.6           Sublicensing. LICENSEE shall have the exclusiveright under PATENT RIGHTS and the nonexclusive right under LICENSE RIGHTS togrant sublicenses to third parties other than AFFILIATES (“Sublicensees”) inits discretion. Any such sublicenses shall incorporate all of the terms andconditions of this Agreement. Termination of this Agreement or the Licenseshall act to terminate any such sublicenses; except that any Sublicensee whosesublicense is in good standing with MedQuest may elect to maintain itssublicense by advising UNIVERSITY, within sixty (60) days of such Sublicensee’sreceipt of written notice from LICENSEE or UNIVERSITY of such termination, ofits election and agreement to assume with respect to UNIVERSITY all theobligations contained in its sublicense with LICENSEE.

 

**ARTICLE3 - DUE DILIGENCE**

 

3.1           LICENSEE shall use its best effortsto bring PRODUCTS to market through a thorough, vigorous and diligent programfor exploitation of the PATENT RIGHTS and LICENSE RIGHTS throughout thependency of this Agreement.

 

3.2           In addition, LICENSEE shall adhereto each of the following milestones:

 

(a)           Finalization of first PRODUCTdesign by no later than December 31,2003;

 

(b)           Commence a human clinical trialwith first PRODUCT by no later than December 31, 2004;

 

(c)           Obtain regulatory approval forcommercial sale of first PRODUCT by no later than December 31, 2006.

 

3.3           LICENSEE’s failure to perform inaccordance with Section 3.1 or to fulfill on a timely basis any one of themilestones set forth in Section 3.2 hereof shall be grounds for UNIVERSITY toterminate this Agreement, pursuant to Article 11, and upon termination allrights and interest to the TECHNOLOGY, PATENT RIGHTS, and LICENSE RIGHTS shallrevert to UNIVERSITY.

 

**ARTICLE4 - ROYALTIES AND OTHER LICENSE CONSIDERATION**

 

4.1           In consideration of the rights,privileges and license granted by UNIVERSITY hereunder, LICENSEE shall payroyalties and other monetary consideration as follows:

 

(a)           Initial license fees,non-refundable and non-creditable against royalties, of Fifty Thousand Dollars($50,000) due as follows:

 

(i)            $10,000 immediately upon executionof this Agreement;

 

(ii)           $20,000 on or before June 1, 2002;and

 

(iii)          $20,000 on or before December 1,2002.

 

(b)           Royalties in an amount equal toone-tenth of one percent (0.1%) of NET SALES of PRODUCTS utilizing orincorporating TECHNOLOGY, payable per calendar quarter; and

 

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(c)           Annual maintenance fees, non-refundableand non-creditable against royalties, will paid as follows:

 

(i)            $15,000 on or before May 1,2003;

 

(ii)           $20,000 on or before May 1, 2004;

 

(iii)          $40,000 on or before May 1,2005;

 

(iv)          $50,000 on or before May 1, 2006;and

 

(v)           $75,000 on or before May 1, 2007,and annually thereafter, until gross sales of PRODUCTS utilizing orincorporating TECHNOLOGY during the preceding twelve (12) month period isgreater than Five Hundred Thousand Dollars ($500,000).

 

4.2           Ninety percent (90%) of allpayments due hereunder shall be paid to UNIVERSITY in United States dollars andten percent (10%) of such royalty payments shall be paid to NASA, to the extentNASA has rights in the TECHNOLOGY, and directed to the addresses set forth inSection 12 hereof. Royalty payments, pursuant to Section 4.1(b), shall be paidwithin thirty (30) days after each March 31, June 30, September 30 and December31. The maintenance payments, pursuant to Section 4.1(c) above, shall be paidin like manner by the respective dates set forth in Section 4.1(c) above.

 

4.3           Payments pursuant to thisAgreement, which are overdue shall bear interest calculated from the due dateuntil payment is received at the rate of eight percent (8%) per annum.

 

4.4           Licensee shall sell PRODUCTS and/orprocess resulting from TECHNOLOGY to UNIVERSITY and is AFFILIATES upon requestat such price(s) and on such terms and conditions as such PRODUCTS and/orproceses are made available to LICENSEE’s most favored customer.

 

**ARTICLE5 – REPORTS**

 

5.1           Within (3) days after each march31, June 30, September 30 and December 31 of each year during the term of thisagreement and starting with the calendar year in which NET SALES first occur,LICENSEE shall deliver to UNIVERSITY and to NASA true, accurate and detailedreports of the following information in a form acceptable to UNIVERSITY:

 

(a)           Number of PRODUCTS utilizing orincorporating TECHNOLOGY manufactured and sold by LICENSEE and allsublicensees;

 

(b)           Total billings for all suchproducts;

 

(c)           Accounting for all TECHNOLOGYprocesses used or sold by LICENSEE and all sublicensees;

 

(d)           Deductions set forth in Section1.5;

 

(e)           Total royalties due; and

 

(f)            Name and addresses of sublicensees.

 

5.2           If no royalties shall be duehereunder once NET SALES occur, LICENSEE shall so advise UNIVERSITY and NASA inwriting within thirty (30) days after the end of any calendar quarter for whichno royalties are due

 

5.3           LICENSEE shall keep full, true andaccurate books of account, in accordance with generally accepted accountingprinciples, containing all information that may be necessary for the purpose ofshowing the amounts payable to UNIVERSITY and NASA hereunder. Such books ofaccount shall be kept at LICENSEE’s principal place of business. 

 

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Such books and the supportingdata related thereto shall be open from time to time, at reasonable intervals,during normal business hours, and upon reasonable notice for three (3) yearsfollowing the end of the calendar year to which they pertain to inspection bytile UNIVERSITY or its agents for tile purpose of verifying LICENSEE’s royaltystatement or compliance in other respects with this Agreement. The fees andexpenses of UNIVERSITY’s representatives shall be borne by UNIVERSITY; however,if an error of more than five percent (5%) of the total payments due or owingfor any year is discovered then LICENSEE shall bear the fees and expenses ofUNIVERSITY’s representatives.

 

**ARTICLE6 - PATENT PROSECUTION**

 

6.1           UNIVERSITY has or shall apply for,seek prompt issuance of and maintain during the term of this Agreement thePATENT RIGHTS in the United States and in such foreign countries as may bedesignated by LICENSEE in a written notice to UNIVERSITY within a reasonabletime in advance of the required foreign filing dates. LICENSEE shall have the opportunityto advise and cooperate with UNIVERSITY in the prosecution, filing andmaintenance of such patents.

 

6.2           All fees and costs, includingattorneys’ fees, relating to the filing, prosecution and maintenance of thePATENT RIGHTS incurred prior to the date of this Agreement shall be theresponsibility of LICENSEE. LICENSEE shall reimburse the UNIVERSITY for thesecosts as follows:

 

(a)           $5,000 immediately upon executionof this Agreement;

 

(b)           $30,000 on or before June 1, 2002;

 

(c)           $30,000 on or before December1,2002;

 

(d)           $30,000 on or before May 1,2003;

 

(e)           $30,000 on or before November1,2003; and

 

(f)            $7,387 on or before May 1, 2004.

 

6.3           All fees and costs incurred afterthe date of this Agreement, including attorneys’ fees, relating to the filing,prosecution and maintenance of the PATENT RIGHTS shall be the responsibility ofLICENSEE. Prior approval of LICENSEE must be obtained prior to UNIVERSITYincurring fees to be paid by LICENSEE. UNIVERSITY shall consult with LICENSEEin the selection of patent counsel for performing such prosecution andmaintenance. Approved fees and costs incurred after the date of this Agreementshall be paid by LICENSEE within thirty (30) days after receipt of UNIVERSITY’sinvoice. Payments pursuant to Sections 6.2 and 6.3 are nonrefundable andnon-creditable against royalties.

 

6.4           The UNIVERSITY Office of TechnologyManagement warrants that it has no knowledge of any pending litigation relatedto the PATENT RIGHTS or LICENSE RIGHTS.

 

**ARTICLE7 - INFRINGEMENT ACTIONS**

 

7.1           LICENSEE shall inform UNIVERSITYpromptly in writing of any alleged infringement of the PATENT RIGHTS by a thirdparty and of any available evidence thereof.

 

7.2           During the term of this Agreement,LICENSEE shall have the right, but shall not be obligated, to prosecute at itsown expense all infringements of the PATENT RIGHTS if LICENSEE has notifiedUNIVERSITY in writing of its intent to prosecute; provided, however, that suchright to bring such an infringement action shall remain in effect only for so longas the license granted herein remains exclusive. In furtherance of such right,UNIVERSITY hereby agrees that LICENSEE may include UNIVERSITY as a partyplaintiff in any such suit, without expense to UNIVERSITY. The total cost ofany such infringement action commenced or defended solely by LICENSEE shall beborne by LICENSEE and UNIVERSITY shall receive a percentage of any recovery ordamages for past infringement derived therefrom which is equal to thepercentage royalty due UNIVERSITY under Article 4. LICENSEE shall indemnifyUNIVERSITY against any order for costs that may be made against UNIVERSITY insuch proceedings.

 

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7.3           If within six (6) months afterhaving been notified of any alleged infringement, LICENSEE shall have beenunsuccessful in persuading the alleged infringer to desist and shall not havebrought and shall not be diligently prosecuting an infringement action, or ifLICENSEE shall notify UNIVERSITY at any time prior thereto of its intention notto bring suit against any alleged infringer, then, and in those events only,UNIVERSITY shall have the right, but shall not be obligated, to prosecute atits own expense any infringement of the PATENT RIGHTS, and UNIVERSITY may, forsuch purposes, use the name of LICENSEE as party plaintiff. UNIVERSITY shallbear all costs and expenses of any such suit. In any settlement or otherconclusion, by litigation or otherwise, UNIVERSITY shall keep any recovery ordamages for past infringement derived therefrom.

 

7.4           In the event that a declaratoryjudgment action alleging invalidity or infringement of any of the PATENT RIGHTSshall be brought against UNIVERSITY, LICENSEE, at its option, shall have theright, within thirty (30) days after commencement of such action, to interveneand take over the sole defense of the action at its own expense.

 

7.5           In any infringement suit eitherparty may institute to enforce the PATENT RIGHTS pursuant to this Agreement,the other party shall, at the request and expense of the party initiating suchsuit, cooperate in all respects and, to the extent possible, have its employeestestify when requested and make available relevant records, papers,information, samples, specimens, and the like.

 

**ARTICLE8 - INDEMNIFICATION/INSURANCE/LIMITATION OF LIABILITY**

 

8.1           LICENSEE shall at all times duringthe term of this Agreement and thereafter indemnify, defend and holdUNIVERSITY, its trustees, officers, employees and AFFILIATES and shallindemnify but not defend NASA harmless against all claims and expenses,including legal expenses and reasonable attorneys’ fees, arising out of thedeath of or injury to any person or persons or out of any damage to property orthe environment, and against any other claim, proceeding, demand, expense andliability of any kind whatsoever resulting from the production, manufacture,sale, use, lease, consumption or advertisement of the TECHNOLOGY or arisingfrom any obligation of LICENSEE hereunder. LICENSEE shall at all times duringthe term of this Agreement and thereafter indemnify and hold the U.S. Governmentand its officers, agents, and employees harmless against all claims andexpenses, including costs and reasonable attorneys’ fees, arising out of thedeath of or injury to any person or persons or out of any damage to property orthe environment, and against any other claim, proceeding, demand, expense andliability of any kind whatsoever resulting from the production, manufacture,sale, use, lease, consumption or advertisement of the TECHNOLOGY or arisingfrom any obligation of LICENSEE hereunder.

 

8.2           LICENSEE shall obtain and carry infull force and effect liability insurance which shall protect LICENSEE inregard to events covered by Section 8.1 above, as provided below: 

 
| **COVERAGE**                   | ** ** | **LIMITS** |
|--------------------------------|------------|------------|
|                           |       |       |
| a. Workers’  Compensation |       | Statutory  |
|                           |       |       |
| b. Employer’s  Liability  |       | $100,000   |

 

8.3           LICENSEE shall obtain and carry inf1111 force and effect liability insurance which shall protect both LICENSEEand UNIVERSITY in regard to events covered by Section 8.1 above, as providedbelow: 

 
| **COVERAGE**                                                                                                | ** ** | **LIMITS**                                                               |
|-------------------------------------------------------------------------------------------------------------|------------|--------------------------------------------------------------------------|
|                                                                                                        |       |                                                                     |
| a. Commercial General Liability, including,  but not limited to, Contractual, Fire Legal, and Bodily Injury |       | $1,000,000  Combined Single Limits for Bodily Injury and Property Damage |
|                                                                                                        |       |                                                                     |
| b. Umbrella and Products Liability                                                                          |       | $3,000,000*                                                              |

 

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*LICENSEE shall not be required to purchasethis insurance until it commences its first clinical trial.

 

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The University of Pittsburgh is to be named asan additional insured with respect to insurance policies identified in Sections8.3(a) and 8.3(b) above.

 

Certificates of insurance evidencing thecoverage required above shall be filed with the University’s Office of RiskManagement, 1817 Cathedral of Learning, Pittsburgh, P A 15260, no later thanfifteen (15) days after execution of this Agreement and annually thereafter.Such certificates shall provide that the insurer will give the University notless than thirty (30) days advance written notice of any material changes in orcancellation of coverage.

 

8.4           EXCEPT AS OTHERWISE EXPRESSLY SETFORTH IN THIS AGREEMENT, UNIVERSITY AND NASA MAKE NO REPRESENTATIONS AND EXTENDNO WARRANTIES OF ANY KIND, EITHER EXPRESS OR IMPLIED, INCLUDING BUT NOT LIMITEDTO WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, ANDVALIDITY OF PATENT RIGHTS CLAIMS, ISSUED OR PENDING. NOTHING IN THIS AGREEMENTSHALL BE CONSTRUED AS A REPRESENTATION OR WARRANTY GIVEN BY UNIVERSITY AND NASATHAT THE PRACTICE BY LICENSEE OF THE LICENSE GRANTED HEREUNDER SHALL NOTINFRINGE THE PATENT RIGHTS OF ANY THIRD PARTY.

 

**ARTICLE9 - ASSIGNMENT**

 

9.1           This Agreement is not assignablewithout the prior written consent of UNIVERSITY and LICENSEE, and any attemptto do so shall be null and void.

 

**ARTICLE10 - ARBITRATION**

 

10.1         Except as to issues relating to thevalidity, enforceability or final determination of infringement of any patentcontained in the PATENT RIGHTS or LICENSE RIGHTS licensed hereunder, any andall claims, disputes or controversies arising under, out of, or in connectionwith this License Agreement, which have not been resolved in good faith negotiationsbetween the parties, shall be resolved by a board of three (3) arbitrators inPittsburgh, Pennsylvania, in accordance with the rules, then in effect, of theAmerican Arbitration Association. Such independent board shall be composed ofthree (3) panelists of sufficient education, scientific experience and nationalreputation to address such issues. The board shall be composed of onearbitrator selected by UNIVERSITY, one selected by LICENSEE and one selected byLICENSEE and UNIVERSITY. If LICENSEE and UNIVERSITY cannot agree upon the thirdarbitrator within fourteen (14) days after the notice of arbitration, the thirdarbitrator shall be selected by the American Arbitration Association inaccordance with its rules. The decision of such panel shall be final andbinding upon the parties and enforceable in any court of competentjurisdiction.

 

**ARTICLE11- TERMINATION**

 

11.1         UNIVERSITY shall have the right toterminate this Agreement if:

 

(a)           LICENSEE shall default in theperformance of any of the obligations herein contained and such default has notbeen cured within sixty (60) days after receiving written notice thereof fromUNIVERSITY; or

 

(b)           LICENSEE shall cease to carry outits business, become bankrupt or insolvent, apply for or consent to the appointmentof a trustee, receiver or liquidator of its assets or seek relief under any lawfor the aid of debtors.

 

11.2         LICENSEE may terminate thisAgreement upon SIX (6) months prior written notice to UNIVERSITY and uponpayment of all amounts due UNIVERSITY through the effective date oftermination.

 

11.3         Upon termination of this Agreement,neither party shall be released from any obligation that matured prior to theeffective date of such termination. LICENSEE and any sublicensee may, however,after the effective date of such termination, sell all products under theTECHNOLOGY which LICENSEE produced prior to the effective date of suchtermination, provided that LICENSEE shall pay to UNIVERSITY and NASA theroyalties thereon as required by Article 4 hereof and submit the reportsrequired by Article 5 hereof.

 

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**ARTICLE12 - NOTICES**

 

12.1         Any notice or communicationpursuant to this Agreement shall be sufficiently made or given if sent bycertified or registered mail, postage prepaid, or by overnight courier, withproof of delivery by receipt, addressed to the address below or as either partyshall designate by written notice to the other party.

 

In the case of UNIVERSITY:

 

Director

Office of Technology Management

University of Pittsburgh

200 Gardner Steel Conference Center

Thackeray & O’Hara Streets

Pittsburgh, PA 15260

 

In the case of LICENSEE:

 

Mr. Pratap Khanwilkar,

President and Chairman

Medquest Products, Inc.

North 300 West, Suite NE 107

Salt Lake City, UT 84103

 

In the case of NASA:

 

Patent Counsel Office

NASA Langley Research Center

Mail Stop 212

Hampton, VA 23681

 

**ARTICLE13 - AMENDMENT, MODIFICATION**

 

13.1         This Agreement may not be amendedor modified except by the execution of a written instrument signed by theparties hereto.

 

**ARTICLE14 - MISCELLANEOUS**

 

14.1         The parties acknowledge that thisAgreement sets forth the entire understanding and intentions of the partieshereto as to the subject matter hereof and supersedes all previousunderstandings between the parties, written or oral, regarding such subjectmatter.

 

14.2         Nothing contained in this Agreementshall be construed as conferring upon either party any right to use inadvertising, publicity or other promotional activities any name, trade name,trademark, or other designation of the other party, including any contraction,abbreviation, or simulation of any of the foregoing. Without the expresswritten approval of the other party, neither party shall use any designation ofthe other party in any promotional activity associated with this Agreement orthe TECHNOLOGY. Neither party shall issue any press release or make any publicstatement in regard to this Agreement without the prior written approval of theother party. LICENSEE may state in its fund-raising documents, includingbusiness plans and related presentations, that it is licensed by UNIVERSITYunder one or more of the patents and/or applications comprising the TECHNOLOGY,and LICENSEE may disclose to its potential funders and legal counsel, thisAgreement and its relevant terms as requested or desired by such entities.

 

14.3         If one or more of the provisions ofthis Agreement shall be held invalid, illegal or unenforceable, the remainingprovisions shall not in any way be affected or impaired thereby. In the eventany provision is held illegal or unenforceable, the parties shall usereasonable efforts to substitute a valid, legal and enforceable provisionwhich, insofar as is practical, implements purposes of the provision heldinvalid, illegal or unenforceable.

 

14.4         Failure at any time to requireperformance of any of the provisions herein shall not waive or diminish a party’sright thereafter to demand compliance therewith or with any other provision.Waiver of any default shall not waive 

 

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any other default. A partyshall not be deemed to have waived any rights hereunder unless such waiver isin writing and signed by a duly authorized officer of the party making suchwaiver.

 

14.5         LICENSEE acknowledges thatUNIVERSITY is free to publish the results of the research activities of itsfaculty, staff and students, even though such publication may involve thePATENT RIGHTS or LICENSE RIGHTS. UNIVERSITY agrees to submit to LICENSEE anyproposed publication or presentation regarding the subject matter specificallydescribed in the PATENT RIGHTS for prior review by LICENSEE at least sixty (60)days before its submittal for publication or its presentation. LICENSEE may,within thirty (30) days after receipt of such proposed publication, requestthat such proposed publication be delayed not more than ninety (90) days inorder to allow for protection of intellectual property rights.

 

IN WITNESS WHEREOF, the parties have set theirhands and seals as of the date set forth on the first page hereof.

 

 
|   | UNIVERSITY OF PITTSBURGH - OF THE   COMMONWEALTH SYSTEM OF HIGHER  EDUCATION |
|--------|------------------------------------------------------------------------------|
|   |                                                                         |   |
|   | By                                                                           | “Jerome Cochran” |   |
|   |                                                                         | Jerome Cochran |   |
|   |                                                                         | Executive Vice Chancellor |   |
|   |                                                                         |   |
|   |                                                                         |   |
|   | MEDQUEST PRODUCTS, INC.                                                      |
|   |                                                                         |   |
|   | By                                                                           | “Pratap Khanwilkar” |   |
|   |                                                                         | Pratap Khanwilkar |   |
|   |                                                                         | President |   |

 

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**EXHIBIT A TO LICENSE AGREEMENT BETWEEN**

**MEDQUEST PRODUCTS, INC.**

**AND UNIVERSITY OF PITTSBURGH**

 

Patent Rights 

 

1.             Magnetically Suspended Fluid Pump and Method of Making Same. U.S. PatentNo. 6,015,272 issued January 18, 2001.

 

2.             Magnetically Suspended Miniature Fluid Pump and Method of DesigningSame. U.S. Patent Application no. 09/398,878 filed September 20, 1999. Allowed.Issue fee paid.

 

3.             An Improved Blood Pump Having a Magnetically Suspended Rotor. U.S.Patent Application No. 60/142,354 filed July 1, 1999.

 

4.             Blood Pump Having a Magnetically Suspended Rotor. U. S. Patent No.6,244,835 issued June 25, 2001.

 

5.             Blood Pump Having a Magnetically Suspend Rotor. U.S. Patent Application09/841,223 filed April 24, 2001.

 

6.             Patent Cooperation Treaty and Foreign Filings corresponding to Items 1through 5 above.

 

License Rights 

 

1.             “Speed Control System for Implanted Blood Pumps,” U.S. Patent No.5,888,242 (filed November 1, 1996)

 

2.             U.S. Patent No. 6,066,086 Speed control system for implanted blood pumps(filed March 4, 1998),

 

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Lead Time PmisFor Pump Build

 
| ** **    | ** ** | ** **                                                 | ** ** | **QTY/Pump** | ** ** | **QTY needed** | ** ** | **In Stock** | ** ** | **On Order** | ** ** | **Place Order** | ** ** | **Est. Delivery** | ** ** |
|---------------|------------|------------------------------------------------------------|------------|--------------|------------|---------------------|------------|-------------------|------------|-------------------|------------|----------------------|------------|------------------------|------------|
| 8800-0003     |       | ALIGNMENT PIN                                              |       | 2            |       | 16                  |       | 100               |       |              |       |                 |       |                   |       |
| 8800-7000     |       | SCREW, SOCKET HD CAP (#2-56 X 3/16”, 6AL-4V TITANIUM) |       | 26           |       | 208                 |       | 150               |       | 150               |       |                 |       | 27-Feb                 |       |
| 0807-0025     |       | BACK COVER                                                 |       | 1            |       | 8                   |       | 18                |       |              |       |                 |       |                   |       |
| 8800-0001     |       | O-RING, BACK COVER OUTER                                   |       | 1            |       | 8                   |       | 50                |       |              |       |                 |       |                   |       |
| 0807-0006     |       | SKEWER ADJUSTMENT SCREW                                    |       | 1            |       | 8                   |       | 17                |       |              |       |                 |       |                   |       |
| 0807-0026     |       | UPPER HOUSING                                              |       | 1            |       | 8                   |       | 5                 |       | 3                 |       |                 |       | 24-Feb                 |       |
| 0807 -0028-01 |       | PORT ALIGNMENT CLAMP RING (GOLD)                           |       | 1            |       | 8                   |       | 12                |       |              |       |                 |       |                   |       |
| 0807-0028-02  |       | PORT ALIGNMENT CLAMP RING (BLUE)                           |       | 1            |       | 8                   |       | 12                |       |              |       |                 |       |                   |       |
| 8800-0015-02  |       | BELLEVILLE WASHER                                          |       | 4            |       | 32                  |       | 55                |       |              |       |                 |       |                   |       |
| 0700-0302     |       | SENSOR BOARD, DUAL COIL, PCB ASSEMBLY                      |       | 1            |       | 8                   |       | 8                 |       |              |       |                 |       |                   |       |
| 1700-0301     |       | SENSOR COIL TERIMINATION, PCB                              |       | 1            |       | 8                   |       | 8                 |       |              |       |                 |       |                   |       |
| 0807-0012     |       | SENSOR BOBBIN                                              |       | 1            |       | 8                   |       | 9                 |       |              |       |                 |       |                   |       |
| 6700-0002-05  |       | WIRE, COPPER :MAGNET (38 A WG)                             |       |         |       |                |       |              |       |              |       |                 |       |                   |       |
| 0807-0003     |       | SKEWER                                                     |       | 1            |       | 8                   |       | 9                 |       |              |       |                 |       |                   |       |
| 2550-0001     |       | SKEWER RADIAL PM RING                                      |       | 4            |       | 32                  |       | 30                |       | 17                |       |                 |       | 13-Mar                 |       |
| 0807-0029     |       | SKEWER PM STACK CLAMP RING                                 |       | 1            |       | 8                   |       | 12                |       |              |       |                 |       |                   |       |
| 0807-0007     |       | INLET COVER                                                |       | 1            |       | 8                   |       | 4                 |       |              |       | 8                    |       | 1 a-Mar                |       |
| 0807-0027     |       | INLET CAP                                                  |       | 1            |       | 8                   |       | 5                 |       |              |       |                 |       | 24-Feb                 |       |
| 8800-0017     |       | O-RING, .414 ID X .077 W                                   |       | 1            |       | 8                   |       | 8                 |       |              |       |                 |       |                   |       |
| 0807-0014     |       | LOWER HOUSING                                              |       | 1            |       | 8                   |       | 5                 |       | 3                 |       |                 |       | 24-Feb                 |       |
| 0807-0004     |       | UNIBODY                                                    |       | 1            |       | 8                   |       | 0                 |       | 10                |       |                 |       | 1 a-Mar                |       |
| 2550-0005     |       | STATOR MOMENT PM RING                                      |       | 2            |       | 16                  |       | 71                |       |              |       |                 |       |                   |       |
| 0807-0005     |       | LOWER VOICE COIL SPACER                                    |       | 1            |       | 8                   |       | 7                 |       |              |       | 10                   |       | 1 a-Mar                |       |
| 6700-0002-03  |       | WIRE, COPPER MAGNET (28 A WG)                              |       |         |       |                |       |              |       |              |       |                 |       |                   |       |
| 6700-0002-01  |       | WIRE, COPPER MAGNET (25 A WG)                              |       |         |       |                |       |              |       |              |       |                 |       |                   |       |
| 6700-0002-02  |       | WIRE, COPPER MAGNET (26 A WG)                              |       |         |       |                |       |              |       |              |       |                 |       |                   |       |
| 0807-0008     |       | ROTOR SHELL                                                |       | 1            |       | 8                   |       | 0                 |       | 8                 |       |                 |       | 24-Feb                 |       |
| 0807-0009     |       | IMPELLER HUB                                               |       | 1            |       | 8                   |       | 13                |       |              |       |                 |       |                   |       |
| 0807-0013     |       | MOTOR RETURN IRON                                          |       | 1            |       | 8                   |       | 5                 |       | 5                 |       |                 |       | 10-Mar                 |       |
| 2550-0003     |       | MOTOR PM SEGMENT                                           |       | 12           |       | 96                  |       | 145               |       |              |       |                 |       |                   |       |
| 0807-0002     |       | VOICE COIL IRON WEDGE                                      |       | 1            |       | 8                   |       | 8                 |       |              |       |                 |       |                   |       |
| 2550-0004     |       | ROTOR MOMENT PM RING                                       |       | 2            |       | 16                  |       | 22                |       |              |       |                 |       |                   |       |
| 2550-0002     |       | ROTOR RADIAL PM RING                                       |       | 4            |       | 32                  |       | 73                |       |              |       |                 |       |                   |       |
| 0807-0075     |       | PERC CABLE HOUSING                                         |       | 1            |       | 8                   |       | 9                 |       |              |       |                 |       |                   |       |

 

----

 
| 0807-0074 |   | PERC CABLE RETAINER           |   | 1      |   | 8      |   | 8      |   |   |   |   |   |   |   |
|-----------|--------|-------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
| 6700-0001 |   | PERCUTANEOUS CABLE            |   |   |   |   |   |   |   |   |   |   |   |   |   |
| 0807-0073 |   | PERC CABLE HOUSING SEAL       |   | 1      |   | 8      |   |   |   |   |   |   |   |   |   |
| 0807-0072 |   | PERC CABLE BEND RELIEF        |   | 1      |   | 8      |   | 8      |   |   |   |   |   |   |   |
| 0807-0071 |   | PERC CABLE CRIMP SLEEVE       |   | 1      |   | 8      |   | 27     |   |   |   |   |   |   |   |
| 2185-0019 |   | CONNECTOR,/INLINESTRAIGHTPLUG |   |   |   |   |   |   |   |   |   |   |   |   |   |
| 1700-0303 |   | MOTOR COIL BOARD, PCB         |   | 1      |   | 8      |   | 8      |   |   |   |   |   |   |   |
| 0807-0087 |   | MOTOR COIL                    |   | 9      |   | 72     |   | 90     |   |   |   |   |   |   |   |

 

----