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LICENSE AGREEMENT
AGREEMENT made this 30 day of June, 1999 between Xxxxxxxx-May Corporation,
("HamMay") a Nevada Corporation; Xxxxxxx X. Xxxxxxx, ("Xxxxxxx") an Individual;
Xxxxx Xxxxx, ("Zaias") an Individual and Diabetex International Corporation, a
Utah Corporation, ("Diabetex" or "Licensee").
WHEREAS:
The Parties hereto are aware of the activities of Advanced Metabolic
Systems, Inc., and wish to enter into an agreement for technology which is
believed to fill a specific need for equipment. Xxxxxxx X. Xxxxxxx is currently
the CEO of AMSys, and Xxxxx Xxxxx, M.D. having helped to open a clinic in
Florida, with the special ability to open clinics in Florida and South America;
is currently the sole officer and director of Xxxxxxxx-May Corporation; and,
Xxxxxxx and Zaias have been working together as a partnership under the
name "Xxxxxxxx-May Fluidics" without formal filing in any jurisdiction, and
together have taken their collective wisdom and experience to develop and invent
certain fluid pumping systems which are currently not being manufactured or used
by any entity or individuals, including Xxxxxxx and Zaias; and,
Whereas the date of their invention is prior to 1992, but there has been
no sale or disclosure of their act to any entity or person other than in a
confidential setting; and,
Whereas Xxxxxxx and Zaias desire to patent and develop for production a
pumping system which uses circular motion, and dual directional testing, and
which can be used with insulin to treat diabetes and other insulin requiring
therapies, including xxxxx, and even certain anticipated non-diabetic
conditions, all of which require exacting but rapid infusion, for which the
basic systems are ideal; and,
Whereas Xxxxxxxx-May, Xxxxxxx and Zaias desire to grant to Diabetex
International, or assigns, the worldwide exclusive right to use their systems,
in development, for the development, manufacture and sale of units delivering
insulin or a compound in conjunction with insulin;
NOW, THEREFORE, in consideration of the mutual covenants and conditions
contained in this Agreement, as well as other valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the parties further
agree as follows:
I. DEFINITIONS
The following terms (except as otherwise expressly provided or unless the
context otherwise requires) for all purposes of this Agreement shall have the
following respective meanings (it being understood that the terms defined in
this Agreement shall include in the singular number the plural, and in the
plural number the singular).
1.01 "Affiliate" shall mean any person, corporation or other entity which
either directly or indirectly controls a party to this Agreement, is
controlled by such party, or is under common control with such party. As
used herein, the term "control" means possession of the power to direct or
cause the direction of the management and policies of a corporation or
other entity, whether through the ownership of voting rights, or by
contract or otherwise, or the ownership of fifty-one percent of the equity
participation in such entity of any class of stock or interest.
License Agreement, Page 1
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1.02 "Agreement" shall mean this Agreement, including all exhibits and
schedules annexed to this Agreement.
1.03 "Licensees" shall mean Diabetex International Corp. and its assigns and
affiliates.
1.04 "Licensors" shall mean Xxxxxxxx-May, Gilbert, Zaias, and all those persons
working for same on Licensed Technology.
1.05 "Patents" shall mean the Patents and Applications for Patents,
improvements, technology, products and devices that are obtained by
Licensors, for which a patent may be pending or issued, and all foreign
counterparts and extensions thereof, whether now existing or hereinafter
conceived or acquired by or through Diabetex or its Affiliates, subject to
the limitations contained in this Agreement.
1.06 "Licensed Technology" shall mean the Patents and Applications for Patents,
described hereinabove, the improvements, technology, products, devices and
intellectual properties that are identified herein as circular pumping
systems with electronic and mechanical activation, alone, or coupled with
sensors for determination of fluids, both in the reservoir and in the
delivery line, using or labeled for insulin or insulin in connection with
other drugs delivery, and all foreign counterparts and extensions thereof,
as well as all other patents, know-how, inventions, ideas, methods,
processes, concepts, or intellectual properties, whether now existing or
hereinafter conceived or acquired by or through Xxxxxxxx-May, Gilbert,
Zaias, Diabetex, or its affiliates relating to, or using any part of, such
technology, subject only to the limitations contained in this Agreement.
1.07 "New Technology" shall mean all technology of every kind, including ideas,
concepts, know-how, inventions, methods, processes and intellectual
properties of any kind, which are NOT included in the Licensed Technology
but which are used to better or further the Licensed Technology.
1.08 "Products" means any and all products, devices, supplies, compounds,
fluids, drugs or consumables, manufactured, distributed or sold by or
through Diabetex or its Affiliates attached to or made for or in
conjunction with any products using the Licensed Technology.
1.09 "Territory" shall mean the whole world, whether or not a patent is issued,
as a trade secrete territory where no patent can be or is issued.
II. GRANT OF LICENSE
The following grant of rights shall apply for all Licensed Technology
which is subject to the terms of this Agreement, including both that technology
which currently exists, as well as that which is developed in the future
relating to Licensed Technology:
2.01 Licensed Technology. Licensors hereby grant and agrees to grant to
Licensees, and Licensees hereby accept, under the terms of this Agreement,
an exclusive license, even as to Xxxxxxxx-May, of the Licensed Technology,
with the right to grant approved sublicenses, and to use, manufacture,
develop, sell, market and distribute the Licensed Technology and products
relating thereto, in the Territory. The License shall include, but not be
limited to, all Products and devices presently known or in the future
conceived and developed by Licensors, as well as all improvements on the
existing or related devices and products, and shall be limited only as
contained in this Agreement.
License Agreement, Page 2
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4.02 Stock Participation. In consideration for the work previously completed by
Zaias, three hundred thousand shares of Diabetex shall be paid to Zaias,
or his order, to pay for certain previous activities.
4.03 Prototypes and Regulatory Affairs. The out of pocket costs of prototypes,
regulatory affairs and patent costs in obtaining needed approvals shall be
jointly obtained by Licensors and Licensees, with the costs of same not
reducing the monthly amount of Advance Royalties herein.
V. PRODUCT DEVELOPMENT
5.01 Product Development Cooperation. Xxxxxxxx-May shall offer to help Diabetex
use its best efforts in developing commercially viable products using and
extending License Technology, New Technology and new Patents. Licensors
shall provide all reasonable cooperation and coordination with Licensees
in the development, including the design, manufacture and marketing of
Products.
5.02 Manufacturing. Licensees shall have the right to manufacture, use, sell
and distribute products using the Licensed Technology, and Xxxxxxxx-May
shall disclose to Licensees all information concerning product development
which may aid or help Licensees to embody the technology in the best
modality, including the best features and attributes in its products. All
information which is related to, might aid, or tend to aid Licensees in
Product Development shall be disclosed to the agent of Licensees,
including, but not limited to proprietary engineering, design, clinical
and technical data, methods, know-how, concepts, ideas and intellectual
property and processes which is reasonably helpful for the production of
Products using Licensed Technology, whether presently in the knowledge or
possession of Licensors, and its employees, or which comes within the
knowledge and possession of Licensors, and its employees so long as
Licensees shall retain licenses in full force and effect. All such agents
receiving such information shall execute non-use and non-disclosure
agreements, and shall be subject to reasonable objection by Licensors as
to the propriety of such disclosure. When Licensees test or submit for
governmental approval any of its Products or product prototypes developed
using the Licensed Technology, Licensors shall fully cooperate with
Licensees and provide all available technical assistance in the testing,
designing, manufacturing, and governmental approval processes. All
information in the use of such properties shall be disclosed to Licensors
which will allow Licensors to jointly develop systems which are not
included in the use granted under this agreement.
5.03 Continued Use. Licensors reserve the right to engage in outside research
in the field of the Licensed Technology with respect to all aspects
thereof. Licensors shall, with the prior written approval of Licensees, be
entitled to grant a limited number of non-commercial educational or
research licenses to institutions engaged in research or consulting
activities which support Licensors. Licensors shall inform Licensees of
any such limited licenses, and Licensees shall be entitled to reasonably
object to any such license. Any and all such limited licenses shall be
preceded by a written non-disclosure and non-use confidentially agreement
acceptable to the corporate parties hereto.
5.04 Sales Following Ready Products. Licensees shall commercially sell Products
subject to this license after a commercially ready unit has been developed
and approved for sale in the United States and Canada within one year of
approval. As to Western Europe and Japan, sales shall commence within two
years of Untied States FDA approval or one year after regulatory approval
in such country, whichever is later. As to all other markets, a reasonable
time after regulatory approval in such markets, or one year after such
additional time as would be reasonable. If sales do not commence, then
Licensors shall have the right to give a notice so Licensees that it must,
within ninety (90) days of said notice, require sales to commence, or
Licensors may elect to terminate the
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with a copy of all patent applications under strict confidentiality
agreement acceptable to the parties.
7.02 Infringement Actions.
7.02.1 The parties shall each promptly notify the other following the
discovery of any infringement of the Licensed Technology Patents
or unauthorized use of the Products, which may come to their
attention. Licensors shall promptly take all steps necessary to
obtain a discontinuance of the infringement and, if not
successful, Licensors shall bring suit against the infringer with
or without the consent of Licensees.
7.02.2 If Licensors fail to obtain a discontinuance of such
infringement, or unauthorized use and/or fails to bring an
infringement suit within 90 days of discovery of such
unauthorized use ("Initial Period"), then Licensors shall give
notice to the Licensees within 15 days following the Initial
Period, and Licensees may, but are not required to, obtain a
discontinuance of the alleged infringements or unauthorized use,
or bring an infringement suit. Any infringement suit brought by
Licensees shall be in the name of Licensors or Licensees, or
jointly in the name of both, as Licensees shall elect, or as may
be required by applicable law.
7.02.3 With respect to any suit for infringement of the Licensed
Technology, Patents or unauthorized use of the Products, the
party which did not institute suit shall render all reasonable
assistance to the party which did institute suit, including, but
not limited to, executing all documents as may be reasonably
required by the Party which did institute suit. In the event
Licensors do not institute suit, Licensees shall be entitled to
reimbursement from Licensors for all of its attorneys fees,
costs and expenses, including the expenses of any expert
witnesses that may be incurred, which Licensors shall pay by
Licensees deducting up to one half of the royalty due until
fully paid.
7.02.4 Infringement of Third Party Patent. Each party shall notify the
other promptly in the event of the receipt of notice of any
action, suit or claim alleging of infringement by the manufacture,
use or sale of Products, or of any patent or proprietary right
held or alleged to be held by a third party. The parties hereto
will cooperate in the defense of such claims, each bearing his or
its own costs.
7.02.5 Offset. In the event it is necessary in the reasonable judgment
of Licensees for them or either of them to make royalty or other
payments to a third party in order for Licensees to exercise or
continue to exercise any rights granted to Licensees pursuant to
the terms of this Agreement, in relation to the Licensed
Technology and Products, Licensees shall be entitled to offset
any amounts, up to one-half (1/2) of the total paid to any third
party from the amounts due or which may become due to Licensee
under this Agreement.
VIII. CONFIDENTIALITY
8.01 Mutual confidentiality. Licensees and Licensors realize that some
information received by one party from the other pursuant to this
Agreement shall be confidential. It is therefore agreed that any
information received by one party from the other, and clearly designated
in writing as "CONFIDENTIAL", or in any other manner which indicates its
confidential nature (hereinafter referred to as "Confidential
Information"), shall not be disclosed by the other party for purposes
other than those contemplated by this Agreement, and shall be kept within
a reasonably secure system for the retention and control of same.
Confidential Information includes, without limitation, information as to
any invention, formula, apparatus, equipment, trade secrets, research,
report and
License Agreement, Page 6
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license as to that geographic country or market. These provisions shall
not apply after such time as over twenty million dollars in sales shall
have taken place.
VI. INSPECTIONS
6.01 Inspection. Licensors shall have the right to inspect the premises of
Licensees as may be reasonably necessary to determine the general progress
of same toward a commercial product. Licensors shall conduct such
inspection only with fifteen (15) prior days notice, and at reasonable
business hours.
VII. REPRESENTATIONS AND WARRANTIES
6.02 Representations and Warranties. The parties hereto hereby represent the
following facts
6.02.1 The entity parties are corporations duly organized and validly
existing and in good standing under the laws of the State of
incorporation.
6.02.2 The entity parties currently have power and authority to enter
into and perform under the terms of the Initial Agreement and this
Agreement. A Board of Directors resolution approving the
execution, delivery and performance of this Agreement has been
signed.
6.02.3 The entities represent to the best of their knowledge, that they
are owners of all rights, titles and interests in and to the
Licensed Technology to grant the rights and licenses set forth
herein.
6.02.4 The entities represent that there are no known actions, suits, or
claims pending against them or their Affiliates, or any court
order before any governing body or agency with respect to the
Licensed Products, the Patents or matters relating to this
License, and that there are no known claims or threats of
litigation against the entities hereto.
6.02.5 The entities represent that no other person or entity presently
has any effective assignment, option, license or sublicense of the
Licensed Technology with respect to the manufacture, use, sale or
distribution of the Products.
6.02.6 The entities represent that to the best of their knowledge they
are in compliance with all governmental regulations, and has all
necessary permits to conduct operations with the exception of
governmental requirements for marking as required by the Food and
Drug Administration of each locality.
6.02.7 Survival of Representations, Agreements of Non-Disclosure. The
foregoing representations, together with the Non-Disclosure
provisions hereof shall survive the termination of this Agreement
for the maximum period of law allowed.
VII. PATENT PROSECUTION AND INFRINGEMENT OF LICENSED TECHNOLOGY
7.01 Prosecution. Licensors shall keep Licensees currently advised of all steps
taken or to be taken in the prosecution of all applications for patents,
improvements, continuation in part, or other patent office applications or
actions, related to the Licensed Technology. Licensees shall be
responsible for all reasonable fees and costs, including attorneys' fees
by attorneys acceptable to Licensees, relating to the filing of patent
applications and fees required for maintenance in the Territory. Any
Territory where Licensors fail or refuse to seek patent protection shall
allow Licensees to file for such protection under a direct invention or
work for hire patent. Any Territory where Licensees fail or refuse to pay
for the actual, reasonable patent costs shall allow Licensors to terminate
the license for such area after 90 days demand for payment. Licensors
shall provide the agent for Licensees
License Agreement, Page 5
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technical data, as well as information relating to business practices,
costs, users or purchasers of either party's services, research or
products. Confidential Information is intended to be given the widest and
most all encompassing possible definition allowed by law.
8.02 During the term of this Agreement, and for an additional period of fifteen
(15) years thereafter, each of the parties and their respective employees,
agents, directors, officers, Affiliates and sublicensees shall hold in
strict confidence all Confidential Information except to the extent that
such Information (i) is or becomes generally available to the public
through no fault of the receiving party; (ii) can be demonstrated in
writing to have been known by the receiving party at the time of its
disclosure by the other party or is independently developed after the date
of disclosure by the receiving party without the application or use of
Confidential Information, (iii) becomes known to the other party from a
source other than the disclosing other, without breach of this Agreement
by such party and with such other source having received the information
by lawful means and having the right to disclose such Confidential
Information, or (iv) is disclosed pursuant to a final, binding,
non-appealable order or requirement of court, administrative agency or
other body.
8.03 Each party agrees that it will use reasonable measures to implement the
provisions of this Article with its subparagraphs, including the
following: (i) limiting access of Confidential Information to employees or
contractors who have a need for such access for the purposes of this
Agreement, (ii) advising all persons having access to Confidential
Information of the obligations set forth herein; (iii) adopting and
maintaining appropriate measures to safeguard documents and other media
containing Confidential Information; (iv) returning to the originating
party, upon termination of this Agreement, all documents and copies
thereof which contain Confidential Information; and (v) in the event of
any breach of security relating to Confidential Information coming to its
attention, promptly notifying the other party and cooperating with such
party in seeking to minimize the effects of such breach.
IX. MISCELLANEOUS
9.01 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Nevada, wherein such Agreement is
made in the city of Reno, and wherein venue shall lie except as to all
questions of the enforcement of Patent or Intellectual Properties rights.
All questions concerning the construction or effect of any patent
applications or patents shall be decided in accordance with the laws of
the country or territory in question.
9.02 Arbitration of All Disputes. Any and all disputes which might arise
between the parties hereto, except as otherwise expressly provided for
herein, shall be submitted to binding arbitration in the city of Reno,
which arbitration shall be before a person or panel selected by the
parties, and if no agreement can be obtained on the appointment of such
person or panel, then any party may elect to submit the matter to binding
arbitration under the commercial rules of the American Arbitration
Association, with the prevailing party being entitled to receive all costs
of arbitration, but not including attorneys fees. Any arbitration shall be
final, binding, and not appealable, and judgment may be entered thereon in
the enforcement thereof.
9.03 Integration of Agreement. This Agreement constitutes the entire
understanding of the parties hereto, and supersedes any and all prior
agreements, commitments and understandings, whether oral or written,
between the parties hereto, and may not be modified, amended or
supplemented except by way of a writing signed by the duly authorized
representative of the party to be charged.
License Agreement, Page 7
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9.04 Assignment. This Assignment may not be assigned, and no sublicense or
other transfer made without the prior written permission of the Licensor
if by a Licensee, and by one Licensee if by Licensors. The withholding of
permission of assignment or sublicense shall not be unreasonably withheld.
It is expressly understood that Licensors may object to any assignment or
sublicense if the issue of "shelving" or non-use of said rights, if the
same is not reasonably addressed in such assignment or sublicense.
9.05 Notices. Any notice, formal request, instruction or other document
required to be given hereunder shall be given in writing by hand delivery,
or by posting by certified or registered mail, postage prepaid, and by
facsimile, receipt confirmed by personal contact of the noticed party, as
follows:
Xxxxxxx X. Xxxxxxx
0000 Xxxxxxx, Xxxxx 000
Xxxxxxxxxx, XX 00000
Fax Copy to: (000) 000-0000
With a second fax and hard paper copy (must be FedEx) to:
Xxxxx Xxxxx, M.D.
Address to be provided.
And to Diabetex International
Xxxxxx X. Xxxxxxxxx, 0000 Xx. Xxxx Xxxxxx, Xxxx Xxxx Xxxx,
XX 00000.
And copies to: Xxxxx X. Xxxx, 000 Xxxx Xxxxxx Xx, Xxxxxxx Xxxx, XX 00000
Xxxxxx Xxxxx, Esq. 0000 Xx. Xxxxx Xxxx Xxxxxx, Xxxxxxx, XX
00000
or to such other addresses as any party hereto may specify by written
formal notice to all parties.
9.06 Successors and Authorized Assigns. This Agreement shall be binding upon
and inure to the benefit of, the parties and their duly authorized and
permitted successors, legal representatives and assigns, provided the same
shall be verified in writing.
9.07 Severability. If and to the extent that any court or arbitration panel of
competent jurisdiction holds that any provision or part of this Agreement
shall be invalid or unenforceable, such holding shall in no way affect the
validity of the remainder of this Agreement, which shall be construed as
if such provision had been enforced, to the extent possible, and if not,
construed as if such provision were not part of this Agreement.
9.08 Independent Contracting Parties. The relationship of the parties under the
terms of this Agreement is that independent contracting parties, and no
partnership, joint venture, or other representative capacity is conferred
hereby. No party shall be authorized to act on behalf of, or shall be
deemed to be the agent of any other party, and no party may take any
action or act for, or on the account of any other party, or bind any other
party to any agreement, or waive any provision or term on behalf of any
other party without the written consent thereto.
9.09 Counterparts and Headings. This Agreement may be executed in counterparts,
each of which shall be deemed to be an original, and together shall make
one and the same document. Heading are inserted for convenience only and
shall not affect the meaning or interpretation of the paragraphs hereof.
License Agreement, Page 8
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9.10 Waivers. Any waiver of any term or condition of or obligation under this
Agreement must be set forth explicitly in writing referring to the
provision being waived, and signed by the waiving party. A waiver of any
party of any of the terms and conditions or obligations of the other party
under this Agreement in any instance shall not be deemed or construed to
act as a waiver of such term, condition or obligation for the future.
9.11 Further Assurances and Documents. Licensors and Licensees each agree on
behalf of themselves and their respective assigns and sublicensees to
produce or execute such other documents or memorandums of agreement which
may be reasonably necessary or desirable for the execution and
implementation of this Agreement and the consummation of the transactions
contemplated hereby, including but not limited to individual license
documents for each Licensed Technology or any future licenses or New
Technology which may be licensed to Licensees under the terms of this
Agreement.
IN WITNESS WHEREOF, the Parties have caused this Agreement to be
executed by their duly authorized representatives as of the date first written
above.
Xxxxxxxx-May Corporation
/s/ Xxxxx Xxxxx Pres
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By: Xxxxx Xxxxx, M.D., Pres.
/s/ Xxxxx Xxxxx M.D.
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Xxxxx Xxxxx, M.D., an Individual
/s/ Xxxxxxx X. Xxxxxxx
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Xxxxxxx X. Xxxxxxx, an Individual
/s/ Xxxxxx X. Xxxxxxxxx
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Diabetex International Corp.
Please make initial share certificate in
name of Biophile USA, Inc.
/s/ Xxxxx Xxxxx
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Xxxxx Xxxxx
License Agreement, Page 9
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Resolution
DIABETEX INTERNATIONAL CORP
MINUTES OF THE BOARD OF DIRECTORS
A meeting of the Board of Directors of Diabetex International
Corp was held by waiver and consent on June 30, 1999, at the offices of the
Corporation. All parties were in attendance as required by law and consent and
resolved:
RESOLVED that the Corporation is hereby authorized to enter into a
License Agreement with Xxxxxxxx-May Corporation, Xxxxxxx X. Xxxxxxx and
Xxxxx Xxxxx, M.D., involving, inter alia, the licensing of certain of the
Corporation's technology, and to consummate the transactions contemplated
in the Agreement, in accordance with the terms and conditions set forth in
the Agreement;
RESOLVED FURTHER that the proper officers of the Corporation be, and
each of them is authorized to execute and deliver on behalf of the
Corporation the Agreement and any and all accompanying documents,
schedules, and exhibits, together with any and all amendments, revisions
and modifications as such officer may approve;
UPON MOTION DULY MADE AND SECONDED, the meeting was adjourned.
/s/ Xxxxxx X. Xxxxxxxxx
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Diabetex International Corp
License Agreement, Page 10
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UNANIMOUS CONSENT IN LIEU OF
SPECIAL MEETING OF THE BOARD OF DIRECTORS OF
DIABETEX INTERNATIONAL CORPORATION
The Undersigned, being all of the Directors of Diabetex International
Corporation, a Nevada corporation ("the Company"), hereby takes the following
action:
WHEREAS, the Company has acquired all of the shares of Advanced Metabolic
Technologies, Inc. from Advance Metabolic Systems, Inc. pursuant to an Agreement
and Plan of Reorganization; and
WHEREAS, the Agreement calls for the issuance of shares by the Company.
THEREFORE BE IT RESOLVED, that the Company issue 850,000 shares of
restricted common stock to Advanced Metabolic Systems, Inc.
Effective the 30th day of July, 1999.
/s/ Xxxxxx X. Xxxxxxxxx
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Xxxxxx Xxxxxxxxx
