EXHIBIT 10.108
LICENSE AGREEMENT
THIS AGREEMENT is made as of the 6th day of May, 1996 by and between
BIOMUNE SYSTEMS, INC., a Nevada corporation ("Licensor"), and BIOMED PATENT
DEVELOPMENT L.L.C., a New York limited liability company ("Licensee").
RECITALS:
A. Licensor owns a 90% interest in certain technology relating to the
sterilization and decontamination of medical devices and waste, as further
described on Exhibit "A" attached hereto and incorporated herein.
B. Licensee desires to obtain from Licensor and Licensor is willing to
grant to Licensee a license which will enable Licensee to manufacture, market
and sell products incorporating Licensor's technology.
C. The parties desire to enter into this agreement in order to set forth
the terms and conditions of such license.
AGREEMENT:
NOW, THEREFORE, in consideration of the foregoing Recitals and the mutual
covenants and promises set forth herein, together with other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties agree as follows:
1. Definitions. As used in this Agreement, the following terms shall
have the meanings set forth below:
1.1 "Gross Sales" means the gross revenues actually received by
Licensee from the sale of Products and Services.
1.2 "Improvements" means all technology, inventions,
developments, know-how, trade secrets, engineering data and similar information,
whether subject to patent, copyright or other protection, which is based upon
the Technology and which is acquired, created or invented for use in conjunction
with the Products and/or the Services by Licensor, Licensee or its sublicensees,
if any, subsequent to the effective date of this Agreement.
1.3 "Licensed Technology" means the Technology and the
Improvements.
1.4 "Products" means those medical devices which are manufactured
and sold by Licensee, and/or its sublicensees, and which use and incorporate the
Licensed Technology.
1.5 "Services" means services related to the prevention,
treatment, or cure of disease in humans, sterilization of medical devices,
medical waste and water, which are performed by Licensee, and/or its
sublicensees, and utilize the Licensed Technology.
1.6 "Technology" means the trade secrets and unpatented
technology described on Exhibit "A," as well as all other trade secrets,
know-how, designs, data, notebooks, engineering information and similar
confidential and proprietary information, of Licensor, whether subject to
patent, copyright or other protection, which may be necessary or helpful to
enable Licensee to develop, manufacture and sell Products and Services.
2. Grant of License.
2.1 Licensor hereby grants to Licensee an exclusive, worldwide,
royalty-bearing License in and to the Licensed Technology, pursuant to which
Licensee shall have the right to use, and to grant sublicenses to others to use,
the Licensed Technology for the purpose of manufacturing, marketing and selling
the Products and providing the Services.
2.2 Licensor shall deliver to Licensee, promptly upon execution
of this Agreement, or as soon as they may thereafter come to hand, such
technical information, engineering data, processes, know-how, trade secrets,
confidential information, documents and reports possessed or obtained by
Licensor which relate to the Licensed Technology and which shall be required or
necessary to enable Licensee to utilize the Licensed Technology to manufacture,
market and sell the Products and Services.
2.3 Licensee shall have the right to grant sublicenses to the
Licensed Technology or to assign this Agreement to Bioxide Corporation, a Nevada
corporation, without Licensor's approval, and to other persons, firms or
entities approved by Licensor, for the sole purpose of enabling such
sublicensees to market and sell Products. Licensor shall not unreasonable
withhold its approval of any proposed sublicensee.
2.4 No sublicense shall lessen or in any way diminish the
obligations of Licensee hereunder, or reduce the royalties to which Licensor is
entitled regardless of whether sales are made by Licensee or a sublicensee. As a
condition to any sublicense, the sublicensee must agree to be bound to the terms
hereof (and Licensee shall be responsible to Licensor for the performance of the
sublicensee).
3. Improvements.
If, during the term of this Agreement, either party develops or
otherwise acquires an Improvement, that party shall promptly disclose the
Improvement to the other party. Each Improvement, together with all know-how,
trade secrets and other intellectual property associated with it, shall be and
shall remain property of Licensor, but Licensee shall have the right to
incorporate the Improvement into Products and use it in connection with the
Services, and all such Products and Services which are sold by Licensee shall be
subject to the provisions of this Agreement.
4. Royalty Payments to Licensor.
4.1 In consideration of the license granted in paragraph 2 above,
Licensee shall pay Licensor a royalty (the "Royalty") as follows:
(a) For the first year: The greater of (i) seven and
one-half percent (7.5%) of Licensee's Gross Sales, or (ii) Forty-Five Thousand
Dollars ($45,000), which shall be payable within one hundred eighty (180) days
from the date of this Agreement.
If, in the first year of this Agreement, the accrued 7.5%
Royalty exceeds $45,000, further Royalty payments shall be made as provided in
subparagraph 4.2 below.
(b) For subsequent years: Licensee shall pay Licensor a
Royalty equal to the greater of (i) nine-tenths percent (.9%) of Gross Sales or
(ii) Ninety Thousand Dollars ($90,000), which royalty payments shall continue
for as long as this Agreement is in effect. Such payments shall be made in
accordance with the provisions of paragraph 4.2 below. If the .9% Royalty is
less than $90,000 for any year, then the licensee shall pay the difference
between such percentage Royalty and $90,000 with its last quarterly payment.
4.2 Licensee shall submit to Licensor within thirty (30) days
after the close of each calendar quarter during which Gross Sales have been
generated from the Licensed Technology a report showing the amount of Gross
Sales for each such calendar quarter. Such quarterly reports shall be
accompanied by the payment of the applicable Royalty due from Licensee.
4.3 Licensee shall keep and maintain accurate books and records
concerning its sales of Products and Services (including purchase orders,
shipping invoices, records of returned goods and records detailing the costs
incurred by Licensee in making such sales) and of all payments received by
Licensee as a result of its sale of Products and Services. Such books and
records shall be sufficiently detailed to enable Licensee to calculate the Gross
Sales received by Licensee and to determine the amount of the Royalty. Licensor
shall have access to and the right upon reasonable notice to inspect and audit
such books and records in order to verify the correctness of any Royalty paid by
Licensee.
4.4 If Licensor causes the books and records of Licensee to be
audited, and such audit establishes that Licensee did not pay the full amount of
the Royalty actually due Licensor for the period in question, Licensee shall
immediately pay Licensor all additional amounts due, plus interest thereon at
the rate of 1.5 percent per month or major portion thereof. Technology a report
showing the amount of Gross Sales for each such calendar quarter. Such quarterly
reports shall be accompanied by the payment of the applicable Royalty due from
Licensee.
4.5 If, during the term of this Agreement, Licensee discovers
that Licensor does not own the Licensed Technology, then, in addition to any
other remedies available to Licensee, Licensee shall not be required to pay the
Royalty for subsequent years described in paragraph 4.1(b) hereof.
5. Governmental Approval of the Products.
Licensee shall not market, sell or distribute any Product or perform
any services in the United States, or in any foreign country, until all required
registrations, authorizations and approvals necessary for the marketing, sale or
distribution of such Product have been obtained from all appropriate
governmental agencies, if necessary. It shall be the obligation and duty of
Licensee, at its sole cost and expense, to diligently seek and obtain all
governmental registrations, authorizations and approvals, if any, required for
the manufacture, marketing, distribution and sale of the Products or Services.
Licensor shall cooperate with and assist Licensee in its efforts to obtain such
registrations, authorizations, and approvals.
6. Infringement Claims.
6.1 If either party learns that any claim or suit has been made
or brought for infringement as a result of Licensee's use of the Licensed
Technology in accordance with this Agreement, such party shall promptly notify
the other party of the Claim (a "Claim"). If reasonable investigation of such
Claim by the parties indicates that the utilization of Licensed Technology by
Licensee, in accordance with this Agreement, does not form the basis for such
Claim, then Licensee shall have no obligation or responsibility to Licensor in
connection with or as a result of the Claim. If, however, the investigation of
the Claim reveals that the use by Licensee of the Licensed Technology does form
the basis for the Claim, Licensee shall have the first right, but not the
obligation, to defend and control, at its expense, the defense of the Claim.
Licensor will assist Licensee, without cost to Licensee, in the defense of the
Claim by providing information and fact witnesses as needed. Licensor shall have
the right to be represented in any proceeding involving the Claim by its own
legal counsel, at Licensor's own expense, provided that such legal counsel will
act only in an advisory capacity. If Licensee initially elects not to defend
the Claim, it shall promptly so notify Licensor in writing, and Licensor shall,
thereafter, have the right and option, but not the obligation, to defend and
control the defense of such suit and may recover from Licensee the costs and
expenses of such defense. If Licensor elects to so defend the Claim, Licensee
will assist Licensor, without cost to Licensor, in such defense by providing
information and fact witnesses as needed. Licensee shall also have the right to
be represented in any proceeding involving the Claim by its own legal counsel,
at Licensee's expense, provided that such legal counsel will act only in an
advisory capacity. If Licensor elects for any reason not to defend the Claim, it
shall promptly so notify Licensee in writing, and Licensee shall again have the
right and option, but not the obligation to assume and control the defense of
such lawsuit. If Licensee so elects to defend the lawsuit, Licensee shall bear
the costs of such defense and Licensor shall provide Licensee with assistance,
and shall have the right to be represented by counsel, as though Licensee had
exercised its first right to assume the defense of the Claim. No Claim referred
to in this paragraph shall be settled without the written consent of Licensor,
which consent shall not be unreasonably withheld or delayed. Any and all costs
and expenses incurred by Licensee in connection with the defense of a Claim
shall offset and reduce, on a dollar for dollar basis, one-half of any Royalty
then due or which thereafter becomes due and owing to Licensor under this
Agreement.
6.2 (a) If either party learns of any infringement of the
Licensed Technology by a third party, or of an other improper or illegal use of
the Licensed Technology(an "Infringement"), such party shall promptly notify the
other of the Infringement. Licensee shall have the first right to settle with or
to institute legal action against the alleged infringer, subject to Licensor's
approval, which will not be unreasonably withheld. Any monies or other benefits
which are recovered through such settlement or legal action shall first be used
by Licensee to reimburse it for all of its expenses incurred in connection with
such settlement or legal action, with any remaining balance to be divided
equally between the parties.
(b) If Licensee does not initiate settlement or legal action
within 60 days after its receipt of notice of the Infringement, then Licensor
shall have the right to settle with or to institute legal action against the
alleged infringer. All monies or other benefits which are recovered through such
settlement or legal action shall be retained by Licensor.
(c) The parties shall keep one another fully informed as to
the progress of any legal action or settlement discussions or other proceedings
undertaken pursuant to this paragraph 6.2 and shall fully cooperate with one
another in the pursuit of an infringer and their defense of an alleged
Infringement. Such cooperation shall include a party permitting itself to be
joined in a suit and the furnishing by a party of all pertinent data and
evidence in its possession which may be helpful in any settlement discussion or
legal proceeding.
7. Term. The term of this Agreement, unless sooner terminated pursuant
to paragraph 8 hereof, shall commence upon the effective date hereof and shall
continue until the expiration of fifteen (15) years from the effective date
hereof.
8. Termination.
8.1 Licensee may, at its option, terminate this Agreement prior
to the expiration of its term for any of the following reasons:
(a) If Licensor shall be in material breach of any of the
provisions of this Agreement, which breach shall continue uncured for a period
of thirty (30) days after written notice thereof by Licensee; or
(b) If Licensor shall be adjudicated bankrupt or insolvent
by any court of competent jurisdiction or shall make an assignment for the
benefit of creditors or shall consent to the appointment of a receiver,
liquidator or trustee for itself or for a major part of its assets, or shall
file any pleading, petition or other instrument in any court seeking protection
from its creditors under any bankruptcy or insolvency act, or shall admit in
writing its inability to pay its debts as they mature.
8.2 Licensor may, at its option, terminate this Agreement prior
to the expiration of its term for any of the following reasons:
(a) If Licensee shall be in material breach of any of the
provisions of this Agreement, including its obligations to pay the Royalty in
accordance with paragraph 4 hereof, which breach shall continue uncured for a
period of thirty (30) days after written notice thereof by Licensor; or
(b) If Licensee shall be adjudicated bankrupt or insolvent
by any court of competent jurisdiction or shall be voluntarily or involuntarily
placed in reorganization under any bankruptcy laws or shall make an assignment
for the benefit of creditors or shall consent to the appointment of a receiver,
liquidator or trustee for itself in any court whatsoever, seeding to take
advantage of any bankruptcy or insolvency act, or shall admit in writing its
inability to pay its debts as they mature; or
(c) If Licensee fails to pay defense costs as required by
paragraph 6.1, which failure continues for thirty (30) days after demand for
payment thereof.
8.3 The expiration or termination of this Agreement for any
reason shall not release either party from any obligation matured prior to the
effective date of such expiration or termination, and the continuing covenants
of the parties, including the confidentiality obligations of paragraph 13
hereof, shall continue.
9. Representations and Warranties of Licensor. Licensor hereby
represents and warrants to Licensee as follows:
9.1 Licensor is a corporation duly organized, validly existing
and in good standing under the laws of the State of Nevada, and has the full
legal right and corporate power and authority to enter into this Agreement and
to perform all of its obligations under this Agreement.
9.2 Except for the sale of a 10% interest in the Licensed
Technology to SZTP Technologies, a Canadian corporation, Licensor has made no
assignments, grants, licenses, encumbrances, obligations or agreements covering
or concerning the Licensed Technology which are inconsistent with this
Agreement.
9.3 This Agreement, when executed and delivered by Licensor,
shall constitute the valid and binding legal obligation of Licensor.
9.4 Licensor owns the licensed Technology and the Licensed
Technology does not infringe any patent rights, copyrights, mask work rights,
trade secret rights or other proprietary rights of others.
9.5 Except for the foregoing, Licensor makes no representations
or warranties with respect to the Licensed Technology.
10. Representations and Warranties of Licensee. Licensee hereby
represents and warrants to Licensor as follows:
10.1 Licensee is a limited liability company duly organized,
validly existing and in good standing under the laws of the State of New York,
and has the full legal right, power and authority to enter into this Agreement
and to perform all its obligations under this Agreement.
10.2 Licensee has taken all action which is necessary, required
or appropriate to authorize or enable it to enter into and perform this
Agreement.
10.3 This Agreement, when executed and delivered by Licensee,
shall constitute the valid and binding legal obligation of Licensee.
11. Survival of Representations and Warranties. The representations
and warranties of Licensor, as set forth in paragraph 9 hereof, and the
representations and warranties of Licensee, as set forth in paragraph 10 hereof,
shall be true and accurate as of the effective date of this Agreement, and shall
survive the execution of this Agreement for one year.
12. Relationship of the Parties. This Agreement shall not be deemed or
construed to create between Licensor and Licensee the relationship of principal
and agent, joint venturers, co-partners, employer or employee, master or
servant, or any other similar relationship. Neither party shall have the right
or authority to bind or to act for or on behalf of the other.
13. Confidentiality.
13.1 Licensee specifically acknowledges and agrees that the
Licensed Technology, together with all financial data and reports, business
plans, product development plans, marketing plans and manufacturing data and
information concerning Licensor and its business, constitute the confidential
and proprietary property of Licensor ("Licensor Confidential Information").
Licensee shall maintain Licensor Confidential Information in the strictest of
confidence and shall not disclose Licensor Confidential Information (either
during or after the term of this Agreement) to any person, firm or entity, for
any purpose whatsoever, except as specifically permitted by this Agreement, or
as specifically authorized by Licensor in writing. Licensee may disclose
Licensor Confidential Information to tits permitted sublicensees and assigns.
Every detail of Licensor Confidential Information shall be deemed confidential
unless and until Licensee can show it has become "public information" which
shall mean:
(a) Public disclosure as required by law,
(b) Any such detail becomes a matter of public knowledge
without the fault of Licensee, or
(c) Disclosure is made by Licensor or by a third party not
under any obligation of confidentiality.
13.2 Licensor specifically acknowledges and agrees that all
financial data and reports, business plans, product development plans, marketing
plans and other information concerning the business of Licensee constitute the
confidential and proprietary property of Licensee ("Licensee Confidential
Information"). Licensor shall maintain Licensee Confidential Information in the
strictest of confidence and shall not disclose Licensee Confidential Information
(either during or after the term of this Agreement) to any person, firm or
entity, for any purpose whatsoever, except as specifically permitted by this
Agreement, or as specifically authorized by Licensee in writing. Every detail of
Licensee Confidential Information shall be deemed confidential unless and until
Licensor can show it has become "public information" which shall mean:
(a) Public disclosure as required by law,
(b) Any such detail becomes a matter of public knowledge
without the fault of Licensor, or
(c) Disclosure is made by Licensee or by a third party not
under any obligation of confidentiality.
13.3 The obligations of confidentiality set forth in this
paragraph 13 shall survive the expiration or termination of this Agreement.
Licensee hereby acknowledges that Licensor may be required to disclose certain
Licensee Confidential Information in connection with an initial public offering
of Licensor's securities (an "IPO"), which is anticipated to occur prior to
termination of this Agreement. Any such disclosure shall not violate the
provisions of this paragraph 13. Licensor shall use its best efforts to limit
such disclosures and to protect the licensee Confidential Information to the
extent possible in connection with an IPO.
14. Notices. All notices, requests, consents, approvals and other
communications given pursuant to this Agreement shall be in writing and shall be
deemed to have been given only when delivered either personally or by United
States Mail, with postage prepaid and return receipt requested to the
appropriate party as set forth below:
If to Licensor: Biomune Systems, Inc.
000 Xxxxxxx Xxxxx, Xxxxx 000
Xxxx Xxxx Xxxx, Xxxx 00000-0000
Attn: President
If to Licensee: Biomed Patent Development L.L.C.
00 Xxxx Xxxxxxxxx Xxxxxx
Xxxxx X-0, Xxxxxx Xxxxxx
New York, New York 11580
Attn: Xxxxxx Xxxxxx
Either party may change its address by giving notice of such change in
the manner set forth herein. Any notice given to either party by mail shall be
deemed delivered two days after the date it is deposited in the United States
Mail.
15. Remedies. In the event there is a dispute between the parties
which they cannot resolve through negotiation, such dispute shall be resolved
through binding arbitration in accordance with the Commercial Arbitration Rules
of the American Arbitration Association before a single arbitrator who has
experience in intellectual property law and the licensing of medical devices.
Such arbitration shall be held in Salt Lake City, Utah. The arbitrator shall
have the right to grant such relief as he or she deems appropriate, including
awarding legal and other costs of the proceeding. The award of the arbitrator
shall be final and binding upon all the parties, and may be enforced in any
court having jurisdiction over the parties. In addition to the right to seek
arbitration, either party shall be entitled to obtain an injunction from any
court having jurisdiction, compelling the party to perform in accordance with
terms of this Agreement.
16. Miscellaneous.
16.1 Waiver. Any waiver by either party of a breach of any term
or condition of this Agreement shall not constitute a waiver of any subsequent
breach of the same or any other term or condition of this Agreement.
16.2 Governing Law. This entire Agreement and its validity,
construction and performance shall be governed in all respects by the internal
laws of the State of Utah, without giving effect to principles of conflict of
laws.
16.3 Assignment. This Agreement shall not be assigned by either
party hereto without the prior written consent of the other party.
Notwithstanding the foregoing, however, it is specifically agreed that Licensee
may assign this Agreement to Bioxide Corporation, a Nevada corporation, and that
either party may assign this Agreement to any person, partnership, corporation
or other entity which succeeds to its business, or which purchases all or
substantially all of its assets, subject to a written undertaking by such
person, partnership, corporation or other entity to carry out and be bound by
the terms of this Agreement.
16.4 Saving Clause. Should any part or provision of this
Agreement be rendered or declared invalid by reason of any state or federal law,
or by decree of any court of competent jurisdiction, the invalidation of such
part or provision of this Agreement shall not invalidate the remaining portions
hereof and the remaining parts and provisions of this Agreement shall remain in
full force and effect.
16.5 Entire Agreement. This Agreement constitutes the entire
understanding of the parties hereto in regard to the subject matter hereof, and
this Agreement shall not be modified or amended orally, but only by an
agreement, in writing, executed by both of the parties hereto.
16.6 Binding Effect. This Agreement shall be binding upon and
shall inure to the benefit of the parties hereto, their successors and permitted
assigns.
16.7 Recordation. Licensee may record the grant of the license
provided for in this Agreement with the United States Patent Office, and
Licensor will execute any documents necessary to effect such recordation.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the day and year first above written.
LICENSOR:
BIOMUNE SYSTEMS, INC.
By: /s/ Xxxxx X. Xxxxxxx
Its: Chairman/CEO
LICENSEE:
BIOMED PATENT DEVELOPMENT L.L.C.
By: /s/ Xxxxxx Xxxxxx
Its: President
Exhibit A
Description of Technology
The technology is broke down into three areas as described below:
I. Sterilization of Infectious Medical Waste.
Sterilization of infectious waste and decontamination of hazardous waste is
accomplished by the use of a special chamber that uses a gas combined with
intense energy waves. (The two agents employed work better together than
each does alone). The microbes are killed or inactivated while many of the
chemicals are broken down to harmless by-products. These final products can
safely be sent to ordinary landfill sites. This technology is further
described in the patent pending attached hereto as Schedule I evidenced by
a Disclosure Notice dated December 10, 1992 on file at the US Patent
Office.