U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8 - K
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): July 3,
1996
BSD MEDICAL CORPORATION
Commission file number 0-10783
DELAWARE 75-1590407
(State of Incorporation)(IRS Employer Identification Number)
2188 West 2200 South
Salt Lake City, Utah 84119
(Address of principal executive offices)(Zip Code)
Registrant's telephone number, including area code: (801)
972-5555
<PAGE>
CURRENT EVENTS ON FORM 8-K
ITEM 5. OTHER EVENTS
BSD Medical Corporation ("Registrant") recently notified
Urologix, Inc. that Urologix was in breach of the parties'
license agreement because of unauthorized disclosures of its
terms and that the agreement was terminated. Urologix
disputed the basis for Registrant's action and, on July 30,
1996, filed suit against Registrant in a federal district
court in Minneapolis, Minnesota, requesting the court to
find Urologix was not in breach of the license agreement and
seeking injunctive and other relief against Registrant.
Registrant has only recently received copies of all of the
papers in the aforementioned suit and is continuing to study
the matter. However, Registrant continues to believe
Urologix is in material violation of the license agreement.
Registrant intends to vigorously defend its position in the
lawsuit brought by Urologix and to seek affirmative relief
against Urologix, including a declaration that the license
agreement is no longer in effect.
In an unrelated matter, Registrant has recently entered
into a license agreement with EDAP Technomed, Inc. for a
license of certain rights to technology to that company. As
a result of this transaction, Registrant will receive a cash
license fee in the amount of $1,500,000, as well as the
right to receive royalties on the sale of certain products.
BSD Medical Corporation, Urologix, and EDAP Technomed
manufacture and supply equipment to treat Benign Prostate
Disease (BPH) with microwave energy.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(c) Exhibits:
The following exhibit (numbered in accordance with Item
601 of Regulation S-B) is filed as part of this report.
Exhibit Number Description
- -------------- -------------
10 License Agreement between BSD Medical Corporation
and EDAP Technomed, Inc.
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act
of 1934, the registrant has duly caused this report to be
signed on its behalf by the undersigned thereunto duly
authorized.
BSD MEDICAL CORPORATION
Date: August 7, 1996 By: /s/ Paul F. Turner
Paul F. Turner
Chairman of the Board, Acting
President, and Senior Vice
President of Research
LICENSE AGREEMENT
This Agreement, entered this 3rd day of July,
1996, is between BSD Medical Corporation ("BSD"), a Delaware
corporation having its principal place of business at 2188 West
2200 South, West Valley City, Utah 84119, and EDAP Technomed,
Inc. ("EDAP"), a corporation having its principal place of
business at 179 Sidney Street, Cambridge, MA 02139.
WHEREAS, BSD is the owner of U.S. Patent number
4,967,765; and
WHEREAS, EDAP desire to obtain a non-exclusive, non-
transferable license under U.S. Patent number 4,967,765.
NOW, THEREFORE, it is agreed:
1. The term "LICENSED
PATENT" shall mean:
a. U.S. Patent No. 4,967,765 which is
assigned to and owned by BSD. It shall
further include all claims of other US
patent(s) and patent applications which
claims derive priority from and are fully
supported by the above listed patent,
including all reissues, reexaminations,
divisionals, continuations and continuations-
in-part.
2. The term "LICENSED PRODUCTS" shall mean
applicators for insertion into the urethra and the related
microwave treatment systems, which are covered by the LICENSED
PATENT: including the EDAP Prostatron systems and associated
parts, accessories, and applicators.
3. The term "LICENSED COUNTRY" shall mean the United
States.
4. The term "Subsidiary" shall mean a corporation,
company, of other entity over 50% of the voting stock of which is
directly or indirectly owned or controlled by EDAP.
5. The term, "Controlled Company" shall mean any
corporation, company or other entity, not a Subsidiary, which is
directly or indirectly owned or controlled by EDAP, provided that
EDAP also had either:
a. The irrevocable right to name a majority of
the members of the governing board of such corporation, company
or entity, or
b. Effective managerial control by virtue of a
management agreement entered into with such corporation, company
or entity.
6. The term "Affiliate" shall mean any person or
legal entity which controls, has a controlling interest in or is
under a common control with EDAP.
7. The term "net selling price" shall mean EDAP's
invoice price, free on board (f.o.b.) factory, after deduction of
taxes and regular trade and quantity discounts actually allowed.
"Net selling price" for sales or other transfers to a Subsidiary,
Controlled Company or an Affiliate shall be calculated based on
prices applicable to arm's-length transactions with unrelated
parties. This should not apply to PRODUCTS until these PRODUCTS
receive marketing approval from the United States Food and Drug
Administration (FDA), until such time as these PRODUCTS receive
marketing approval from the FDA.
8. BSD grants to EDAP a non-transferable, non-
exclusive license to make, have made, use and sell LICENSED
PRODUCTS covered by LICENSED PATENT in LICENSED COUNTRIES.
9. BSD represents and warrants to EDAP in respect to
the LICENSED PATENT that it has the legal power to extend the
rights granted in this license agreement and that it has not made
and will not make any commitments to others inconsistent with or
in derogation of such rights.
10. EDAP shall pay BSD $1,500,000 as non-refundable
license fee as follows:
a. $1,000,000.00 on the signing date
of this Agreement.
b. $500,000.00 within 60 days of
signing date of this Agreement, which will be
guaranteed by a official bank letter of
credit securing such payment 60 day from the
signing date.
All payments described above will be made by either check and
delivered via Federal Express or a similar courier mail service
or be directly wired to the bank account of BSD Medical
Corporation. Payment of the $1,000,000 first installment for the
license fee and receival of the $500,000 letter of credit shall
be made by EDAP to BSD within 7 calendar days from the signing of
this Agreement. The nonpayment shall cause this Agreement to not
come into force, where BSD will have no obligation to offer the
same Agreement to EDAP after such nonpayment.
11. EDAP shall pay BSD, in addition to the license fee
set forth in paragraph 10, a royalty of 2.5% on the net selling
price received by EDAP of all sales of LICENSED PRODUCTS. In no
case shall a royalty be assessed more than once on the same
LICENSED PRODUCT. The total royalties EDAP is obligated to pay
BSD over the life of this Agreement is limited not to exceed
$3,500,000.00 after which the license shall be a paid-up license.
EDAP shall pay BSD royalties on LICENSED PRODUCTS, previously
sold, within 30 days after the date of this Agreement. EDAP
shall pay BSD royalties on PRODUCTS sold prior to FDA marketing
approval within 30 days after the date of such approval from the
FDA.
12. EDAP shall keep, at the listed principal place of
business, true and accurate records, files, and books of account
containing all the information reasonably required for the full
computation and verification of the royalties to be paid as
discussed above. EDAP shall also permit its books and records to
be examined from time to time to the extent necessary to verify
such data, such examination to be made at the expense of BSD by
an independent certified public accountant appointed by BSD and
accepted by EDAP. If the examination shows that EDAP has under-
reported or under-paid royalties by more than 10%, the expense of
the examination will be paid by EDAP and a 10% penalty fee of the
royalty due will be paid by EDAP to BSD within 10 working days of
such written notice to EDAP by the accountant. All reports of
the independent certified public accountant shall be confidential
to the parties hereto.
13. EDAP shall make written reports to BSD quarterly
within thirty (30) days after the first day of July, October,
January and April during the life of the agreement and as of such
dates, separately listing by product in each such report all EDAP
LICENSED PRODUCTS which are sold in the LICENSED COUNTRY, and a
description and aggregate net selling price received for LICENSED
PRODUCTS during the preceding three (3) calendar months and upon
which royalty is due. The above-mentioned written reports shall
be signed and certified to by an officer of EDAP and be
accompanied by the royalties due BSD, if any, and shall be
confidential to the parties hereto.
14. Any notice, report or payment provided for in this
Agreement, excluding the payment set forth in paragraph 10 above,
shall be deemed sufficiently given when sent by certified or
registered mail addressed to the party for whom intended at the
address given at the outset of this Agreement or at such changed
address as the party shall have specified by written notice.
15. The existence of and terms of this Agreement shall
not be disclosed by EDAP except for such disclosure as required
by law (including in response to subpoena or discovery in any
action or proceeding) or as required to enforce the provisions of
this Agreement. Any disclosure of any terms of this Agreement by
EDAP requires prior notice and written approval by BSD when not
required by law. When required by law, EDAP may disclose any
terms of this Agreement without prior notice. Any terms publicly
released by BSD shall be exempt from this non-disclosure
requirement for EDAP. It will be the obligation of EDAP to affix
the patent number of the LICENSED PATENT to all LICENSED PRODUCTS
or their packaging sold in the LICENSED COUNTRY.
16. Upon any breach or default of this Agreement by
either party, the non-breaching party may terminate this
Agreement if, within thirty (30) days after written notice by the
non-breaching party, the breaching party fails to remedy any such
breach or default. Upon termination of this Agreement by the non-
breaching party, all existing duties and obligations of the
breaching party shall be performed immediately.
17. EDAP's obligations under this Agreement relating
to the LICENSED PATENT, including the obligation to pay royalties
as defined in paragraph 11, shall continue only as long as a
valid claim from a LICENSED PATENT in a LICENSED COUNTRY covers
LICENSED PRODUCTS made, used or sold by EDAP in the LICENSED
COUNTRY.
18. The license granted hereby is personal to EDAP and
is assignable only to EDAP's successor in business. This
Agreement shall inure to the benefit of and be binding upon the
successors, assigns, or other legal representatives of BSD, so
long as this transfer does not impair any right of EDAP under
this Agreement.
19. If BSD grants a non-exclusive license under the
LICENSED PATENT, after the signing of this Agreement, to any
third party, not previously licensed, with terms and conditions
which are in any respect (fee, royalty, cap, or scope) more
favorable than the terms and conditions embodied in this
Agreement, BSD shall promptly notify EDAP of such other license
and shall grant to EDAP, if EDAP so requests, the benefit of such
other license, in its entirety, including all terms which are
less favorable to EDAP. However, the funds which have been paid
to BSD by EDAP in connection with this Agreement are not
refundable. Any other licenses disclosed to EDAP will be
confidential to EDAP.
20. This instrument contains the entire and only
agreement between the parties and supersedes all preexisting
agreements between them respecting its subject matter. Any
representation, promise, or condition in connection with such
subject matter which is not incorporated in this agreement shall
not be binding upon either party. No modification, renewal,
extension, or waiver of this Agreement or any of its provisions
shall be binding upon the party against whom enforcement of such
modification, renewal, extension, waiver is sought, unless made
in writing and signed on behalf of such party by one of its
executive officers.
21. This Agreement shall be construed, interpreted,
and applied in accordance with the laws of the State of Utah.
22. The individuals signing this Agreement in their
representative capacities represent and warrant by signing below
that it is their intent to bind their principal to the terms
contained in this Agreement, that the individual's signing below
in their representative capacity are expressly authorized to bind
their principal to these terms, and that it is each principal's
intent to be so bound.
EDAP TECHNOMED, INC.
Dated: July 3, 1996 By: /s/ Eric Simon
Eric Simon
Its: Acting CEO and Treasurer
BSD MEDICAL CORPORATION
Dated: July 3, 1996 By: /s/ Paul F. Turner
Paul F. Turner
Its: Acting President and Chairman
