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THIS AGREEMENT, made this 1st day of April, 2000, by and between:
HYDROMER, INC., a New Jersey Corporation with its office located at 00
Xxxxxxxxxx Xxxxxxx, Xxxxxxxxxx, Xxx Xxxxxx 00000 ("HYDROMER");
and
TP Orthodontics, Inc., an Indiana Corporation with its offices at 000 Xxxxxx
Xxxxx, Xxxxxxx, Xxxxxxx 00000-0000 ("LICENSEE").
WHEREAS, HYDROMER owns patent rights and possesses know-how relating to the
production of articles based on the art taught in certain patents, PRODUCTS,
hereinafter defined; and
WHEREAS, LICENSEE desires to obtain a license from HYDROMER under those
patent rights and access to the know-how to enable LICENSEE to make use, sell,
offer for sale or import the PRODUCTS as defined herein below.
NOW, THEREFORE, in consideration of the premises and the performance of
the mutual covenants herein contained, the parties hereto agree to as follows:
1.0 Definitions. For the purpose of this AGREEMENT, the following shall
apply:
1.1 "PRODUCTS" means urethane orthodontic ligatures, PET-G lip
retractors and disposable plastic casting trays for use in the oral
cavities of humans.
1.2 "COATINGS" means lubricous chemical made using the PATENT RIGHTS
and applied to the PRODUCTS using the KNOW-HOW resulting in COATED
PRODUCTS.
1.3 "PATENT RIGHTS" means United States Patent Nos. 4,642,267 and
4,769,013 patent applications based thereon and any division, continuation,
continuation-in-part, patent of addition, confirmation or reissue of said
patents and applications, and any improvements thereto, as provided in
Article 5.0 hereinbelow.
1.4 "KNOW-HOW" means all of HYDROMER'S trade secrets, technical data
and information, and other technical accumulated information, including,
but not limited to, any devices, processes, methods, control procedures,
formulas, clinical tests, and use intelligence, drawings, specifications,
research and development reports, processed data or special equipment which
are useful to assist LICENSEE to manufacture and use the PATENT RIGHTS to
sell COATED PRODUCTS, which HYDROMER is free to disclose.
1.5 "COMMERCIALIZATION" means the date on which PRODUCTS are first
billed to a third party, including any limited market release of PRODUCTS,
in the "TERRITORY"
1.6 "NET SALES PRICE" shall mean the gross invoice price at which
PRODUCTS are sold, less discounts allowed to distributors, discounts
allowed dealers, refunds, replacements or credits allowed to purchasers for
return of PRODUCTS or as reimbursement for damaged PRODUCTS, freight,
postage, insurance and other shipping charges, sales and use taxes, customs
duties and any other governmental charges imposed on the production,
importation, use or sale of PRODUCTS except income taxes. Should LICENSEE
sell PRODUCTS in combination with other components or products, then the
net sales price computation shall be based on the average net sales price
charged during the applicable quarter by LICENSEE for the PRODUCTS when
separately invoiced or priced. In the event the PRODUCTS has not been
separately invoiced or priced during the applicable quarterly period, net
sales computation shall be based on the fair market price which the seller
would charge for the PRODUCTS to an unrelated purchaser in an arms length
transaction, FOB plant of manufacture thereof.
1.7 "TERRITORY" means the United States and its territories.
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2.0 Grant.
2.1 HYDROMER hereby grants LICENSEE a non-exclusive license to use the
PATENT RIGHTS and KNOW-HOW to apply a lubricous coating on the PRODUCTS and
thereafter, sell or offer to sell COATED PRODUCTS in the TERRITORY.
2.2 On or before June 1, 2000, LICENSEE shall have commercialized the
PRODUCTS or lieu of COMMERCIALIZATION, LICENSEE shall begin paying the
minimum royalty set forth in exhibit A. If PRODUCTS are not commercialized,
or the parties hereto shall not have agreed to a plan of COMMERCIALIZATION
for such PRODUCTS, on or before said date, then HYDROMER may elect to
cancel this AGREEMENT upon thirty (30) days advance written notice to
LICENSE.
2.3 LICENSEE shall use best efforts to exploit the PATENT RIGHTS and
other rights granted hereunder. Failure to do so is a material breach of
this AGREEMENT.
2.4 HYDROMER hereby grants to LICENSEE a fully paid right to use the
HYDROMER trademark on PRODUCTS and in association with the marketing and
promotion thereof. The following credit must appear on all advertisements,
packaging and literature for PRODUCTS which use the HYDROMER trademark --
"HYDROMER is a trademark of Hydromer, Inc.".
3.0 Royalties.
3.1. As consideration for this grant of rights, and the transfer of
the KNOW-HOW, LICENSEE will pay to HYDROMER the non-refundable sum of
$50,000 due in full upon execution of this AGREEMENT. Said sum will not
become a credit against any royalties payable hereunder.
3.2 In addition to the payment provided in Paragraph 3.1 hereof ,a
running royalty payable quarterly will accrue from LICENSEE to HYDROMER for
each PRODUCTS sold or for each quarter this license is in effect (whichever
is greater), as set forth in Schedule A.
The obligation to pay royalties to HYDROMER is imposed only once with
respect to the same unit of PRODUCTS regardless of the number of licensed
patents covering the same. There shall be no obligation to pay HYDROMER
under this Article on sales of PRODUCTS between LICENSEE and its
subsidiaries but in such instances the obligation to pay royalties shall
arise upon the sale by LICENSEE or its subsidiaries to unrelated third
parties. Payments due under this Article shall be deemed to accrue when
PRODUCTS is shipped or billed, whichever event shall first occur or at the
end of each quarter if the unit royalty is less then the quarterly royalty.
3.3 The grant of rights under this AGREEMENT shall be dependent on
COMMERCIALIZATION of PRODUCTS and the payment by LICENSEE to HYDROMER of
royalties for each calendar quarter.
4.0 Accounting. For accounting purposes, quarters will start on the
first day of each January, April, July, and October, following the date of
execution of this AGREEMENT and end on the last day of the next succeeding
March, June, September, and December, respectively. Within forty-five (45) days
after the close of each quarter hereof, LICENSEE shall render to HYDROMER a
written accounting with respect to all royalty payments due hereunder, and with
such accounting, pay in full in United States dollars all amounts due in respect
of such quarter. The rate of exchange to be used in computing the amount of
local currency equivalent to the United States Dollars due to HYDROMER as
royalty shall be the commercial exchange rate in effect in New York, New York,
on the date on which payment is due. Such report shall indicate for such quarter
the number of units, the NET SALES PRICE, and the amount of sales by LICENSEE
product code of PRODUCTS sold by LICENSEE with respect to which royalty payments
are due. In case no payment is due for any quarter, LICENSEE shall so report.
LICENSEE shall keep accurate records in sufficient detail to enable the
aforesaid payments to be determined. At HYDROMER'S request, LICENSEE, shall
permit an independent certified public account acceptable to LICENSEE to have
access once in each calendar year, during regular business hours and upon
reasonable notice to LICENSEE, to such of the records of LICENSEE as may be
necessary to verify the accuracy of the reports required under this AGREEMENT;
provided, however said accountant shall keep all information of LICENSEE
confidential and shall disclose to HYDROMER only the amount of any deficiency
found. In the event the deficiency exceeds 2% of royalty payments audited,
LICENSEE shall bear the full costs of the audit.
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5.0 Improvement. During the term of this AGREEMENT, HYDROMER shall
promptly and fully disclose to LICENSEE any development or improvement relating
to the use or practicing of the PATENT RIGHTS or related KNOW-HOW as applied to
PRODUCTS conceived and/or reduced to practice by an officer, director, employee,
agent, consultant, etc. of HYDROMER which HYDROMER is free to disclose
("HYDROMER IMPROVEMENT"). HYDROMER shall automatically add such HYDROMER
IMPROVEMENT to this AGREEMENT.
LICENSEE shall promptly and fully disclose to HYDROMER any development or
improvement relating to the PRODUCTS conceived and/or reduced to practice by an
officer, director, employee, agent, consultant, etc. of LICENSEE ("LICENSEE
IMPROVEMENT"). LICENSEE IMPROVEMENTS shall automatically become the property of
HYDROMER and shall be added to this AGREEMENT.
6.0 Secrecy. Each party undertakes to keep secret and confidential and not
to disclose to any third party, except as it is necessary in carrying out the
purposes of this AGREEMENT, during the term of this AGREEMENT and for a period
of ten (10) years thereafter any information, data or KNOW-HOW disclosed to it
by the other party except:
6.1 Information, data and KNOW-HOW which at the time of disclosure is
in the public domain or publicly known or available;
6.2 Information, data or KNOW-HOW which, after disclosure, becomes
part of the public domain or publicly known or available by publication or
otherwise, except by breach of this AGREEMENT by the receiving party;
6.3 Information, data or KNOW-HOW which the receiver receives from a
third party; provided, however, that such information was not obtained by
said third party from the other party; and
6.4 Information, data and KNOW-HOW which the receiver derives
independently of such disclosure.
7.0 Technical Assistance. With regard to the PRODUCTS defined herein,
promptly following the execution of this AGREEMENT and on a continuing basis
during the term of this AGREEMENT, HYDROMER shall:
7.1 Furnish to LICENSEE all KNOW-HOW;
7.2 Furnish the services of HYDROMER employees having knowledge of the
KNOW-HOW as may be necessary or appropriate in order to fully (1) to
disclose to LICENSEE all details and particulars of the KNOW-HOW, and in
particular, but without limitation, the manufacturing methods contained
therein, (2) to consult with LICENSEE technical personnel concerning the
manufacture, assembly, raw material purchase and other tasks required for
the production and applications of PRODUCTS covered by the PATENT RIGHTS,
including subsequent improvements thereto for the PRODUCTS; provided
LICENSEE shall reimburse HYDROMER for the reasonable travel and living
expenses incurred by such technical personnel for travel requested by
LICENSEE hereunder.
8.0 Warranty.
8.1 HYDROMER warrants that it is the owner of all right, title and
interest in and to the PATENT RIGHTS and has the unrestricted power and
authority to grant the licenses and give access to the KNOW-HOW as provided
herein. HYDROMER represents that as of the date of this AGREEMENT it has no
knowledge of any pending or threatened litigation against HYDROMER which
might impair the rights licensed hereunder.
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9.0 Effective Date and Term.
9.1 This AGREEMENT will become effective on the day and year first
written above and expire upon the expiration of the last to expire of the
PATENT RIGHTS, except that after expiration of the U.S. PATENT RIGHTS,
royalties will continue to be paid only on sales of PRODUCTS in countries
in which unexpired patents are in effect. After such expiration of this
AGREEMENT, LICENSEE shall have the right to make, use, sell, offer for sale
or import PRODUCTS without the further payment of royalty or otherwise
accounting to HYDROMER.
9.2 If either party hereto shall commit any breach of the provisions
of this AGREEMENT, and shall not, within thirty (30) days' written notice
of such breach by the other party hereto, correct such breach then such
other party may, by written notice to the breaching party, immediately
terminate this AGREEMENT. The right of either party to take such action
shall not be affected in any way by its failure to take any action with
respect to any previous breach. In the event that LICENSEE ceases to
manufacture, have manufactured, use and sell PRODUCTS for a period
exceeding 180 days, such cessation shall be considered a breach of this
AGREEMENT.
9.3 LICENSEE shall have the right to terminate this AGREEMENT on sixty
(60) days advance written notice to HYDROMER.
9.4 If either party should exercise its right to terminate this
AGREEMENT, under any applicable provision of this AGREEMENT, then
LICENSEE'S rights and licenses under Section 2.0 hereof shall immediately
terminate, including its right to make further use of the KNOW-HOW acquired
from HYDROMER under this AGREEMENT, and which LICENSEE is obliged to hold
in confidence pursuant to Section 6.0 of this AGREEMENT. Termination of
this AGREEMENT shall not relieve either party of obligations incurred prior
to termination.
10.0 Infringement.
10.1 Should any patent infringement action be brought against LICENSEE
in any country of the TERRITORY as a result of LICENSEE'S exercising of
rights granted to it hereunder, then in respect of such country, LICENSEE
shall have the right to suspend payment of royalties due to HYDROMER until
such time as the action is resolved, although such royalties shall continue
to accrue. If the action is resolved favorably to LICENSEE, all accrued
royalties shall immediately be paid to HYDROMER. If the action is resolved
unfavorably to LICENSEE, then accrued royalties shall be applied to costs
of litigation and damages, if any, incurred by LICENSEE. Any excess shall
be paid to HYDROMER. The foregoing shall be HYDROMER'S sole and exclusive
liability to LICENSE in the event of such an infringement suit.
11.0 Indemnification/Insurance. Licensee will indemnify, defend and
indemnify HYDROMER against all claims of third parties unless a court of
competent jurisdiction finds that the licensed art or any goods supplied by
HYDROMER is causally connected to the claim of said third party. LICENSEE will
maintain at least $10,000,000 in general liability insurance and name HYDROMER
as an additional insured. Said policy shall provide a 30 days advanced notice to
HYDROMER before it is terminated or expires.
12.0 Obligation to Supply. HYDROMER shall supply coating solutions
manufactured by HYDROMER using the PATENT RIGHTS pursuant to the price in
Schedule B. In the event HYDROMER is unable or unwilling to supply said coating
solutions for a period of more then 90 days, then this AGREEMENT shall convert
to a LICENSE to make, use, COATINGS using the PATENT RIGHTS. In the event
HYDROMER is thereafter, willing and able to supply the COATINGS, then this
AGREEMENT shall revert back to an agreement to use COATINGS under the PATENT
RIGHTS.
13.0 General.
13.1 Assignment. This AGREEMENT and all rights and obligations
hereunder shall be binding upon and shall inure to the benefit of the
respective successors of HYDROMER and LICENSEE. Neither LICENSEE nor
HYDROMER shall have the right to assign any or all of its rights and
obligations under this AGREEMENT without the prior written consent of the
other party, except that HYDROMER's consent shall not be required in the
event of an assignment or transfer of the AGREEMENT by LICENSEE to an
affiliate of LICENSEE, who undertakes to accept all terms and conditions
hereof and carry out all obligations of LICENSEE hereunder.
13.2 Entire Agreement. This AGREEMENT contains the entire agreement
between the parties hereto in respect of the subject matter hereof. This
AGREEMENT may not be released, discharged, abandoned, changed or modified
in any manner except by an instrument in writing signed by a duly
authorized officer or representative of each of the parties hereto.
13.3 Waiver and Severability. The waiver by either of the parties of
any breach of any provision hereof by the other party shall not be
construed to be a waiver of any succeeding breach of such provision of a
waiver of the provision itself.
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13.4 Collection. In the event Hydromer must employee or retain a
collection agency and/or an attorney to aid in the collection of royalties,
LICENSEE agrees to compensate HYDROMER for any fees/costs paid to such
party.
Subject to the prior paragraph, in the event either party must employ or
retain an attorney to aid in the enforcement of this Agreement, the court may
apportion the cost of such action as it deems fit.
13.5 Governing Law. This AGREEMENT shall be construed and interpreted
in accordance with the laws of the State of New Jersey and the courts of
the State of New Jersey shall have jurisdiction over the parties hereto and
all matters arising hereunder.
13.6 Invalidity. If any of the provisions of this AGREEMENT, or part
thereof, is held to be invalid or unenforceable, such invalidity or
unenforceability shall not affect any other provision of this AGREEMENT.
13.7 Notice. Any notice required or to be given hereunder shall be
considered delivered when deposited, postage prepaid, in the United States
mail, registered mail, to the address of the other party as specified below
or as subsequently modified in writing by the parties.
IF TO HYDROMER:
Hydromer, Inc.
00 Xxxxxxxx Xxxx
Xxxxxxxxxx, Xxx Xxxxxx 00000
Attn: Xxxxxxx X. Xxxx, President
IF TO LICENSEE:
TP Orthodontics, Inc.
000 Xxxxxx Xxxxx
Xxxxxxx, Xxxxxxx 0000-0000
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IN WITNESS WHEREOF, the parties hereto have caused this AGREEMENT to be
executed effective the day and year set forth above.
_________________________________________
By:______________________________________
Title:___________________________________
Date:____________________________________
HYDROMER, Inc.
By:______________________________________
Title:___________________________________
Date:____________________________________
non_ex00.lic
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Schedule A:
PRODUCTS enumerated in Section 1.1
The quarterly royalty is the greater of the minimum or the royalty calculated
pursuant to section 3.2
Quarter Royalty % M inimum amount
2000/3 5 $5000.00 4/1/2000-6/30/2000
2000/4 " "
2001/1 " $5000.00
2001/2 " "
2001/3 " (1)
and each quarter
thereafter " (1)
(1) beginning 7/1/2001 and or each quarter thereafter, the quarterly minimum
royalty shall be increased in proportion to the increase in the Cost of Living
for Northern New Jersey with 7/1/2000 being the base.
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Schedule B
Price for Hydromer Coating 2MHS24 on July 1, 2000 $400.00 per gallon with
minimum order of 5 gallons. Price is FOB Branchburg, NJ.
Hydromer may adjust this price once each year by adjusting the price in
proportion to the increase in the Cost of Living for Northern New Jersey with
7/1/2000 being the base, provided however, if Hydromer can show by competent
documentation that a raw materials supplier has increase their price greater
then the change in cost of living, then Hydromer may pass this additional
increase to LICENSEE.
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