ASSIGNMENT AGREEMENT
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This Agreement, effective as of February 11, 1996, is made and entered into
this 5th day of June, 1997, between International Isotopes, Inc. ("International
Isotopes") (formerly named Applied Isotope Products Corp.), a Texas corporation
and Hospital Financial Corporation, a Delaware corporation d/b/a Hospital
Finance Corporation ("HFC"):
WHEREAS, HFC, CTX Systems Corporation ("CTX"), a Delaware Corporation and
wholly-owned subsidiary of HFC, and SKM, Incorporated ("SKM") entered into an
Agreement dated November 3, 1977 ("the Original Agreement"), relating to the
allocation of intellectual property rights arising out of a research and
development program by SKM partially funded by HFC relating to the construction
of an x-ray tomographic scanning prototype;
WHEREAS, the Original Agreement granted CTX an irrevocable, royalty-free
exclusive license to make, use or sell throughout the world in the Medical Field
x-ray scanner systems, or parts thereof, embodying the Project Inventions or
using the Project Data resulting from the research and development program;
WHEREAS, the Original Agreement granted CTX an irrevocable, royalty-free,
non-exclusive license to make, use or sell throughout the world in the Medical
Field x-ray scanner systems, or parts thereof, embodying SKM Inventions or using
SKM Proprietary Data;
WHEREAS, U.S. Patent No. 4,284,895 issued on August 18, 1981, and U.S.
Patent No.
4,437,006 issued on March 13, 1984, cover inventions within the scope
of the Project Inventions licensed to CTX pursuant to the Original Agreement;
WHEREAS, CTX changed its name to Healthscan Corporation pursuant to the
Unanimous Consents and Certificate of Amendment dated March 5, 1981;
WHEREAS, CTX was merged into HFC on September 30, 1981 pursuant to a
Certificate of Ownership and Merger;
WHEREAS, HFC now holds CTX's rights under the Original Agreement, including
the exclusive licenses under U.S. Patent Nos. 4,284,895 and 4,437,006 to the
Medical Field, and desires to assign such rights and licenses to International
Isotopes;
WHEREAS, International Isotopes desires to obtain HFC's rights in the
Original Agreement, including the licenses previously described, and agrees to
assume all liabilities of HFC under the Original Agreement.
NOW, THEREFORE, in consideration of the mutual covenants contained herein
and other good and valuable consideration, the parties agree as follows:
I. DEFINITIONS
A. "Patents" licensed hereunder means inventions claimed in United States
Letters Patent No.
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U.S. Patent Nos. 4,284,895 and 4,437,006.
B. "Scanners" subject to royalties hereunder means any apparatus or method
corresponding to a claim of "Patents".
C. "Licensee" means any entity to whom International Isotopes grants a license
to manufacture, use, or sell Scanners.
D. "Net Sales" means:
(1) If a Scanner is sold to a person not affiliated with International
Isotopes, Net Sales means the net proceeds received by International
Isotopes and/or Licensees for the sale or lease of Scanners, f.o.b.
factory, after deduction of standard discounts. If such Scanner is sold as
a subcomponent of a larger device or system, the "net selling price" of
said Scanner shall be calculated by multiplying the net selling price of
the larger device or system by the ratio of the sum of the costs of the
component parts and cost of assembly of said Scanner to the sum of the
costs of the component parts and cost of assembly of said larger device or
system. Such ratio shall be determined in accordance with generally
accepted accounting practices.
(2) The fair market value in all other cases of sale or use of a Scanner.
The fair market value for any Scanner used by International Isotopes and/or
Licensees shall be based, if possible, on average net selling prices for
equivalent Scanners sold during the same calendar six-month period in which
the Scanner is first used.
E. Scanners shall be deemed to have been sold or leased when billed out, when
shipped, or when paid for, whichever shall occur first.
F. "International Isotopes" means International Isotopes, Inc., its successors
and assigns,
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including the resultant of any merger or consolidation or the purchasers of all
or any substantial part of its assets and any affiliated company. "Affiliated
company" means any company of which International Isotopes, Inc. owns or
controls, directly or indirectly, fifty percent (50%) of the stock having the
right to vote for directors.
II. ASSIGNMENT
HFC agrees to sell, assign, transfer, set over and convey to International
Isotopes all of HFC's rights, title and interest in and to said Original
Agreement, including the exclusive licenses under U.S. Patent Nos. 4,284,895 and
4,437,006 in the Medical Field.
III. INITIAL PAYMENT AND ROYALTY
A. In consideration for the assignment to it of rights under the Original
Agreement, International Isotopes agrees to issue to HFC 10,000 shares as of the
effective date of this Agreement (which stock has subsequently split into 25,000
shares) in the common stock of International Isotopes.
B. During the term of this Agreement, International Isotopes also agrees to
pay to HFC a royalty of one percent (1%) of Net Sales of Scanners manufactured,
used, or sold by International Isotopes which are covered by a claim of one or
more Patents licensed to International Isotopes pursuant to this Agreement.
C. The royalty payments shall be made by International Isotopes to HFC within
sixty (60) days following the end of each calendar six-month period.
D. International Isotopes shall not be liable for royalties upon any Scanner
returned by a purchaser to International Isotopes for credit, and International
Isotopes shall have the right to deduct the amount of any such royalties already
paid from the amount of the royalties that may subsequently accrue. No royalty
shall be paid on the parts of Scanners that are sold as repairs or
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furnished as replacements to Scanners on which a royalty has previously been
paid.
IV. RECORDS AND REPORTS
A. International Isotopes shall keep, and shall require its Licensees to keep,
proper books of account with reference to all Scanners which it or they may
manufacture, sell, or use in accordance with the aforesaid Patents and shall
render semi-annual reports from such books to HFC, giving the number and net
selling prices of such apparatus as may have been manufactured, sold or used by
International Isotopes or its Licensees during the preceding six (6) months and
the amount of royalties payable to HFC, the said reports to be rendered at the
time of making the royalty payments designated in Article III. hereof.
B. International Isotopes shall also permit and require its Licensees to
permit HFC, through a duly accredited representative or certified public
accountant, to inspect such books of account as may be necessary to determine
the completeness and accuracy of the semi-annual reports and to make reasonable
extracts therefrom at reasonable times.
V. LITIGATION
If, during the continuation in force of this Agreement, litigation shall
result in a final court decision, from which no appeal or further review has or
may be taken, holding that a claim or claims of the Patents are invalid,
International Isotopes shall promptly notify HFC. If, as a result of any such
litigation, other claims of such Patents continue to provide protection for
Scanners, International Isotopes and HFC shall negotiate with each other in good
faith to establish a reduced minimum royalty rate based upon the reduced value
of such Patents. HFC, however, shall be entitled to retain the royalty payments
specified herein made to it up to the time of such decision.
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VI. WARRANTIES AND REPRESENTATIONS
A. HFC warrants that it has the right to convey its rights in and under the
Original Agreement described herein and that it has not executed, and will not
execute, any agreement in conflict herewith.
B. HFC makes no representation regarding whether any Scanners subject to this
Assignment Agreement infringe upon any other patent or other rights of any
person or entity not a party hereto. In addition, HFC makes no representation
that International Isotope will be successful in making, using and/or selling
Scanners.
C. HFC agrees to promptly execute and deliver to International Isotopes or its
legal representatives any and all papers, instruments or affidavits to which may
be necessary or desirable to carry out the purposes hereof.
D. International Isotopes agrees to assume HFC's obligations under the
Original Agreement.
VII. TERM
Unless previously terminated pursuant to this Agreement, this Agreement
shall terminate upon the expiration of the last of the patents subject to this
Agreement.
VIII. MISCELLANEOUS
A. The failure of either party to enforce at any time, or for any period of
time, a provision hereof shall not be construed to be a waiver of such provision
or the right of such party thereafter to enforce each and every such provision.
B. This Agreement represents the entire understanding and agreement between
the parties hereto relating to the assignment of the Patents referred to
hereinabove relating to tomographic scanning systems; and any and all prior
agreements, whether written or oral, that may exist between
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the parties regarding same are hereby superseded. In particular, this Agreement
supersedes the Assignment Agreement among the parties dated February 11, 1996.
C. No modification, renewal, extension and/or termination of this Agreement or
any provision herein contained shall be binding upon the parties against whom
enforcement of such modification, renewal, extension or termination is sought,
unless it is made in writing and signed on its behalf by its duly authorized
representative.
D. The invalidity or unenforceability of any provision hereof shall not affect
the validity or enforceability of any other provision.
E. This Agreement is to be interpreted in accordance with the substantive law
of the State of Texas in effect at the time of execution of this Agreement. This
Agreement is made and is to be performed in Xxxxxx County, Texas.
F. Any notice, communication or statement required or permitted to be given
hereunder shall be in writing and deemed to have been sufficiently given when
delivered in person or by U.S. certified mail, return receipt requested, to the
address of the respective parties:
Xxx X. Xxxxxx, Chairman and CEO
International Isotopes, Inc.
0000 Xxxxxxxx Xxxx., Xxxxx 000
Xxxxxx, Xxxxx 00000
X.X. Xxxxxxx, President
Hospital Financial Corporation
11330 Theo. Xxxxxxx Xxx
Xxxx Xxxxx, XX 00000
or to a different address when such different address is provided to the other
party in writing pursuant to the terms of this Agreement.
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IN WITNESS WHEREOF, the parties have executed this Agreement in
multiple originals as of the date and year first written above.
INTERNATIONAL ISOTOPES, INC.
/s/ Xxx X. Xxxxxx
Xxx X. Xxxxxx, Chairman and CEO
HOSPITAL FINANCIAL CORPORATION
/s/ X.X. Xxxxxxx
X.X. Xxxxxxx, President
