LICENSE AGREEMENT
LICENSE
AGREEMENT
This Patent License Agreement (“the
Agreement”) is effective this 28th day of September, 2009 between:
Xxxx Enterprises, LLC (“Owner”), having
an address at X.X. Xxx 0000, Xxxxxxxxx, XX 00000; and
Xxxxxxx Corp. (“Licensee”), a Delaware
corporation, having an office at X.X. Xxx 00, Xxxxxxx Xxxxxx, XX
00000.
The parties intending to be legally
bound agree as follows.
ARTICLE 1
— GRANTS OF LICENSES
1.1
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Grant. Subject
to the terms of this Agreement, Owner grants to Licensee exclusive,
nontransferable licenses for the Applications and any non-provisionals,
continuations, continuations-in-part, divisions, reissues, re-examinations
or extensions thereof, and in and to any and all patents of the United
States and foreign countries that may be issued and claim priority to the
Applications..
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1.2
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Duration. Subject
to the terms of this Agreement, all licenses granted herein under any
Patents or Applications shall continue for the entire unexpired term of
such patent or for as much of such term as the Owner has the right to
grant.
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1.3
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Scope. The
licenses granted herein are licenses
to:
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a)
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make,
have made, use, lease, sell and import Licensed Products for the legal
purposes of researching, developing, manufacturing, assembling,
distributing, and selling the Licensed
Products;
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b)
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make,
have made, use and import machines, tools, materials and other
instrumentalities, insofar as such machines, tools, materials and other
instrumentalities are involved in or incidental to the research,
development, manufacture, testing or repair of Licensed Products which are
or have been made, used, leased, owned, sold or imported by the Licensee;
and
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c)
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convey
to any customer of the Licensee, with respect to any Licensed Product
which is sold or leased to such customer, rights to use and resell such
Licensed Product as sold or leased by Licensee (whether or not as part of
a larger combination); provided, however, that no rights may be conveyed
to customers with respect to any Invention which is directed to (i) a
combination of such Licensed Product (as sold or leased) with any other
product, (ii) a method or process which is other than the inherent use of
such Licensed Product itself (as sold or leased), or (iii) a method or
process involving the use of a Licensed Product to manufacture (including
associated testing) any other
product.
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Licenses
granted herein are solely for products in the form sold by the Licensee and are
not to be construed either (i) as consent by the Owner to any act which may be
performed by the Licensee, except to the extent impacted by a patent licensed
herein to the Licensee, or (ii) to include licenses to contributorily infringe
or induce infringement under U.S. law or a foreign equivalent
thereof.
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19
The grant
of each license hereunder includes the right to grant sublicenses to a Related
Company for so long as it remains a Related Company. Any such
sublicense may be made effective retroactively, but not prior to the effective
date hereof, nor prior to the sublicensee's becoming a Related
Company.
1.4
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Ability
to Provide Licenses. Owner warrants that, upon execution hereof
by him and as of the effective date hereof, there are no known commitments
or restrictions which limit the licenses and rights which are purported to
be granted hereunder by him.
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1.5
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Publicity. Nothing
in this Agreement shall be construed as conferring upon either party or
its Related Companies any right to include in advertising, packaging or
other commercial activities related to a Licensed Product, any reference
to the other party (or any of its Related Companies), its trade names,
trademarks or service marks in a manner which would be likely to cause
confusion or to indicate that such Licensed Product is in any way
certified by the other party hereto or its Related
Companies.
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1.6
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Good
Faith. Licensee understands that this Agreement is not
predicated on any specific grant of patent. Owner shall have no
liability for a failure to pursue or obtain any specific
patent.
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ARTICLE 2
— ROYALTY AND PAYMENTS
2.1
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Royalty
Calculation. Licensee shall pay a royalty to
Owner.
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a)
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Within
five (5) business days of the Effective
Date:
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Licensee
shall issue to Owner 617,037 shares of its Series A Convertible Preferred Stock
on the Effective Date. Licensee’s duly
executed Certificate of Designation of the Rights, Preferences, Privileges and
Restrictions of the Series A Convertible Preferred Stock of XXxxxxx Corp. is
attached hereto as Exhibit A.
b)
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At the
end of every calendar quarter, Licensee shall pay Owner a royalty of 5% of
Fair Market Value of:
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i.
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Licensed
Product that is sold, leased or put into use by the Licensee or any of its
Related Companies in the preceding calendar quarter;
and
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ii.
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any
service performed by Licensee or any of its Related Companies that
directly or indirectly uses Licensed
Product.
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c)
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This
License does not include a minimum annual royalty payable by Licensee to
Owner.
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2.2
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Accrual.
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a)
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Obligations
to pay royalties shall survive termination of this License and the
expiration of any Patent. The accrual of royalties shall cease
upon termination of this License or the expiration of the subject
Intellectual Property.
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b)
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When
a company ceases to be a Related Company of the Licensee, royalties which
have accrued with respect to any products of such company, but which have
not been paid, shall become payable with the Licensee's next scheduled
royalty payment.
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c)
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Notwithstanding
any other provisions, royalty shall accrue and be payable only to the
extent that enforcement of the Licensee's obligation to pay such royalty
would not be prohibited by applicable
law.
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2.3
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Records
and Adjustments.
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a)
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The
Licensee shall keep full, clear and accurate records with respect to all
Licensed Products and shall furnish any information which Owner may
reasonably request from time to time to enable Owner to ascertain the
proper royalty due on account of (a) Licensed Products sold, leased and
put into use by the Licensee or any of its Related Companies, and (b)
services performed by Licensee or any of its Related Companies that
directly or indirectly uses Licensed Product. Owner shall have
the right through its accredited auditors to make an examination, during
normal business hours, of all records and accounts bearing upon the amount
of royalty payable to him. Prompt adjustment shall be made to
compensate for any errors or omissions disclosed by such
examination.
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b)
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Independent
of any such examination, Owner will credit to the Licensee the amount of
any overpayment of royalties made in error which is identified and fully
explained in a written notice to Owner delivered within twelve (12) months
after the due date of the payment which included such alleged overpayment,
provided that Owner is able to verify, to its own satisfaction, the
existence and extent of the
overpayment.
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c)
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No
refund, credit or other adjustment of royalty payments shall be made by
Owner except as provided in this Section 2.3. Rights conferred
by this Section 2.3 shall not be affected by any statement appearing on
any check or other document, except to the extent that any such right is
expressly waived or surrendered by a party having such right and signing
such statement.
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2.4
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Reports
and Payments.
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a)
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Within
thirty (30) days after the end of each quarterly period ending on March
31st,
June 30th,
September 30th,
or December 31st,
commencing with the quarterly period during which this Agreement becomes
effective, the Licensee shall furnish to Owner at the address specified by
Section 7.5 a statement certified by a responsible official of the
Licensee showing in a manner acceptable to
Owner:
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i.
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all
Licensed Products which were sold, leased or put into use during such
quarterly period by the Licensee or any of its Related Companies, the
gross sales received for the Licensed Products, and the Fair Market Values
of such Licensed Products;
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ii.
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all
services performed by Licensee or any of its Related Companies that
directly or indirectly used Licensed Product, the gross sales received by
the services, and the Fair Market Value of such
services;
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iii.
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the
amount of royalty payable thereon,
and
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iv.
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if
no Licensed Product has been so sold, leased or put into use or if no
services have been performed, the statement shall show that
fact.
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b)
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Within
such thirty (30) days the Licensee shall pay in United States dollars to
Owner at the address specified by Section 7.5 the royalties payable in
accordance with such statement. Any conversion to United States dollars
shall be at the prevailing rate for bank cable transfers as quoted for the
last day of such quarterly period by leading United States banks in New
York City dealing in the foreign exchange
market.
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c)
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Overdue
payments hereunder shall be subject to a late payment charge calculated at
an annual rate of three percent (3%) over the prime rate or successive
prime rates (as posted in New York City) during delinquency. If the amount
of such charge exceeds the maximum permitted by law, such charge shall be
reduced to such maximum.
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2.5
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Intellectual
Property Rights. Owner shall have no obligation to license or
assign any future patents, trademarks, or trade secrets except as
specifically and explicitly granted by this
Agreement.
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2.6
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Return
of Royalty. Owner shall have no duty to return to Licensee any
prior payments, royalties, stock, stock options, or reimbursements unless
such payments were made in error. Error means a mutual mistake
of fact, and shall not include the failure to obtain a patent,
cancellation of a Patent for any reason, or a successful challenge to the
Intellectual Property by a third
party.
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ARTICLE 3
– INTELLECTUAL PROPERTY PROSECUTION AND COSTS
3.1
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Costs. Licensee
shall reimburse Owner for all IP Costs incurred on behalf of
Licensee. Licensee shall also be liable for pre-paid IP Costs
incurred prior to the Effective Date of this Agreement, including the
costs of provisional and non-provisional applications that are filed to
preserve Intellectual Property. Reimbursement for pre-paid IP Costs shall
occur within 12 months of the Effective
Date.
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3.2
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Extension
of Application. By written notice to Owner and at least ninety
(90) days before the non-extendable due date for the filing of a national
phase application of an Application, Licensee shall elect those countries
or authorities in which it desires to file a patent application based on
the Application. Intellectual Property rights in an unelected
country shall revert to Owner.
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3.3
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Notice
to Licensee. Before payment of any IP Cost, Owner shall notify
Licensee for a time period being the lesser of (i) at least sixty (60)
days before the IP Cost is due or (ii) as soon as is practicable after
receiving knowledge of the IP Cost. The notice will identify
(i) the Application or Patent, (ii) the country, (iii) the reason for the
IP Cost, and (iv) the Due Date for payment. Licensee shall then
affirm or deny payment. Affirmation of payment must be received
by Owner within fourteen (14) days of the mailing date of the notice or
the Licensee shall be deemed to have denied
payment.
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a)
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If
Licensee affirms a payment, Licensee shall reimburse Owner for all IP
Costs arising from the payment and shall then retain its license for the
Application or Patent in that
country.
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b)
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If
Licensee denies payment, License shall have no obligation to pay IP Costs
associated with the Application or Patent in that country, but
the license and all associated rights for that Application or Patent shall
revert to Owner.
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3.4
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Reimbursement
by Licensee. Licensee shall prepay Owner for any affirmed IP
Cost before payment is to be made by Owner. Owner shall have no
duty to pay an IP Cost for which Owner does not receive
prepayment. If Licensee does not pay Owner by the Due Date, the
Application or Patent shall revert to Owner as if Licensee had denied
payment under section 3.3(b).
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3.5
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Reversion
of License. If a reversion occurs under this Article, the
license in that country in which reversion has occurred will be
terminated, and Licensee shall have no further right in the Application or
Patent for that country. The right shall revert to Owner who
will then have the right to pursue protection for the reverted Application
or Patent. Owner has no further duty to Licensee for a reverted
Application or Patent.
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ARTICLE 4
– DELETED
ARTICLE 5
– INDEMNIFICATION AND VALIDITY
5.1
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Validity. Licensee
agrees that the Patents are valid and
enforceable.
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5.2
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Enforceability. Licensee
and its Related Companies shall take no action, directly or indirectly,
that challenges, contests, impairs, invalidates, or
tends to impair or invalidate any of Owner's rights in the
Patents.
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5.3
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Indemnification. Licensee
shall indemnify and hold harmless Owner, its managers, officers,
directors, members, employees, agents, successors and assigns to the
fullest extent permitted by law in any Lawsuit by Licensee, Related
Company, or a third party. Indemnification shall include any
and all Litigation Costs.
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5.4
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At
the request of Owner, Licensee shall procure a comprehensive business
insurance policy for at least $5 million naming Owner as the
insured. Coverage shall protect at least against acts of
Licensee’s employees; injuries to members of the public resulting from
faulty products or services; contractual agreements under which liability
of others is assumed; and comprehensive liability. Licensee
understands that indemnification shall not be limited to the amount of
insurance.
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5.5
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Payment
of Litigation Costs. Owner may submit Litigation Costs to
Licensee when paid by Owner and Licensee shall pay Owner the Litigation
Costs within 30 days of receipt. In the event Litigation Costs
include a court ordered payment, Owner can submit the court order to
Licensee and Licensee shall pay the court ordered payment to
Owner.
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ARTICLE 6
— TERMINATION AND LEGAL FEES
6.1
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Breach. In
the event of a breach of this Agreement by either party, the other party
may, in addition to any other remedies that it may have, at any time
terminate all licenses and rights granted by it hereunder by not less than
one (1) month’s written notice specifying such breach, unless within the
period of such notice all breaches specified therein shall have been
remedied. The failure of a party to notify a breaching party
shall not be considered a
waiver.
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6.2
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Insolvency
or Dissolution. Owner, at its sole discretion, may terminate
this Agreement if:
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a)
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Licensee
becomes insolvent, declares bankruptcy, or fails to make any payment
required by this Agreement within thirty (30) days of its due date;
or
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b)
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Licensee
dissolves or attempts to dissolve either voluntarily or
involuntarily.
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6.3
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Devaluation
of Stock. Owner may terminate this Agreement if Licensee
devalues or attempts to devalue the stock or any stock options
(collectively, the “Stock”) derived from or issued under Article
2. Devalue means (a) cancelling the Stock, or (b) impairing the
right to sell or leverage the
Stock.
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6.4
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Effect
of Termination. Upon any termination of this
Agreement:
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a)
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all
rights shall immediately revert to Owner free of any lien, security
interest, or other encumbrance;
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b)
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Licensee
may, for up to 60 days continue to sell and offer for sale its remaining
inventory of Licensed Products, and on the 61st
day destroy or offer for sale to Owner such remaining
inventory;
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c)
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Licensee
shall pay royalties per Article 2, and shall pay all royalties within 90
days of the termination date;
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d)
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Licensee
shall provide Owner with all copies of research data, records, notes,
memorandum, and reports that were obtained from research or development
efforts arising from the Applications, Patents, Intellectual Property, or
Licensed Product.
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6.5
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Litigation
Costs. In the event of a dispute between Owner and Licensee,
Licensee shall pay all costs arising from the dispute. Dispute
costs can include, but are not limited to, attorneys’ fees, travel
expenses, court costs, expert witness fees, and any
settlement.
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6.6
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Public
Company. Owner has the option of terminating this Agreement if
Licensee’s stock is not publically traded by April 1,
2011. This termination option shall survive for so long as this
condition persists.
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6.7
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Duty
of Diligence. Licensee shall exercise reasonable diligence to
affect the introduction of Licensed Products into the commercial
market. Licensee further agrees to ensure proper, safe, fair,
lawful and reasonable development and exploitation of the commercial
market for Licensed Products. Failure of Licensee to materially
comply with the provisions of this paragraph shall be considered a
material breach of this Agreement.
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ARTICLE 7
— MISCELLANEOUS PROVISIONS
7.1
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Disclaimer. Neither
party makes any representations, extends any warranties of any kind,
assumes any responsibility or obligations whatever, or confers any right
by implication, estoppel or otherwise, other than the licenses, rights and
warranties herein expressly granted. Owner makes no warranties
whether express, implied or statutory, written or
oral.
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Owner
expressly DISCLAIMS ANY
WARRANTY OF MERCHANTABILITY OR OF FITNESS FOR A PARTICULAR
PURPOSE. Owner also disclaims any warranty arising from
(a) a claim against a Application, Patent or Trademark, or (b) a course of
dealing or trade usage.
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7.2
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Representations,
Warranties, and Agreements by
Licensee.
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a)
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Licensee
is a corporation duly organized, validity existing and in good standing
under the laws of Delaware, with full power and authority to own, lease,
use, and operate its properties and to carry on its business as and where
now owned, leased, used, operated and conducted. Licensee has
all requisite corporate power and authority to enter into and perform this
Agreement and to consummate and effect the transactions contemplated by
this Agreement.
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b)
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All
consents, approvals, orders, or authorizations of, or registrations,
qualifications, designations, declarations, or filings with, any
governmental authority required on the part of Licensee in connection with
the valid execution and delivery of this Agreement, the offer, sale or
issuance of the stock to Owner or the consummation of any other
transactions contemplated hereby shall have been obtained, except for
notices required or permitted to be filed with certain state and federal
securities commissions, which notices shall be filed within thirty (30)
days of the effective date of this
Agreement.
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c)
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The
shares of Licensee being issued to Owner pursuant to this Agreement will
be validly and legally issued and not subject to any security interests,
liens, pledges, charges, encumbrances or proxies of any
kind.
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d)
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Licensee
will support the removal, subject to and in accordance with SEC and other
legal regulations, of the restriction on all of Owner’s shares that are
issued to Owner by Licensee. Licensee will make a reasonable
effort to provide within ten business days of Owner’s request, an opinion
of corporate counsel and any other documentation required to remove the
restriction. Licensee will not in any way inhibit the lawful
transfer of the Licensee stock held by
Owner.
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e)
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Licensee
agrees that Licensee will be and remain a reporting company to the
Securities and Exchange Commission (SEC) that is current in all
of its reporting obligations at all times. As of April 1, 2011
and thereafter, Licensee agrees that Licensee will have filed with the
SEC, and will continue to file with the SEC, all reports required under
the Exchange Act for the preceding twelve months that meet the
requirements under SEC Rule 144(i)(2) to cure its shell status or blank
check company status, and Licensee will have filed with the SEC at least
twelve months prior, and continue to file as necessary with the SEC,
current “Form 10 information”, as defined in current SEC Rule 144(i)(3),
reflecting that Licensee has ceased being a shell company and reflecting
its status as an entity that is no longer an issuer as described in
current SEC Rule 144 paragraph (i)(1)(i). As of April 1, 2011 and
continuing thereafter, Licensee (a) must have ceased being a shell
company, (b) must be subject to the 1934 Exchange Act, (c) must have filed
Form 10-like information at least 12 months prior, (d) must have
filed all reports required by Rule 144(c) during the prior 12 months, and
(e) must have fulfilled all SEC requirements, in effect, on the part of
Licensee, necessary to make the use of Rule 144 available. See Exhibit B
attached for Rule 144(i).
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Licensee
will not file any form with the SEC that terminates Licensee’s registration
under Section 12(g) of the Securities Exchange Act of 1934 or
suspends Licensee’s duty to file reports under Sections 13 and 15(d) of the
Securities Exchange Act of 1934, such as a Form 15.
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f)
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In order to
prioritize the obligation of Licensee to remain a reporting company
with the SEC and to remain current in its reporting obligations, Licensee
agrees that as of the Effective Date of this Agreement, Licensee
will not pay any monetary salaries or other monetary compensation to any
of its Officers, Directors, consultants, or managers or to anyone or
any business entity with an affiliation or a family relationship to such
Officer(s), Director(s), manager(s), or consultant(s) unless Licensee
first meets its obligation to remain a reporting company with the SEC that
is current in its reporting obligations as described in Section 7.2 e) of
the Agreement or unless provided for within the herein Agreement..
Licensee agrees that upon request Licensee will provide Owner with all
documentation and financial information necessary to assure that this
stipulation is complied with.
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g)
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The
authorized share capital of Licensee consists of 100 million shares of
common stock, of which 47,864,883 are issued and outstanding, and 20
million shares of preferred stock, none of which are issued and
outstanding, and no other share capital of Licensee is issued and
outstanding.
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h)
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The
representations and warranties of Licensee, contained in this Agreement,
shall have been true in all material respects when made, and, in addition,
shall be true and correct in all material respects as of the Effective
Date, and except for changes contemplated and permitted by this Agreement,
with the same force and effect as if made as of the Effective
Date.
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7.3
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Representations
by Owner.
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a)
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Owner
is aware of Licensee’s business affairs and financial condition and has
acquired sufficient information about Licensee to reach an informed and
knowledgeable decision to acquire such shares of
stock.
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b)
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Owner
has consulted with its own legal, accounting, and tax advisors with
respect to the tax treatment, merits, and risks associated with the
issuance of shares of stock by Licensee to
Owner.
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c)
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Owner
acknowledges that an investment in the shares of Licensee’s common stock
involves a high degree of risk.
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d)
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Owner
further acknowledges that the shares of stock are restricted securities
under Rule 144 of the Securities Act of 1933 (the “Act”), and therefore,
if Licensee, issues any certificates reflecting the ownership interest in
the shares, those certificates will contain a restrictive legend
substantially similar to the
following:
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THESE
SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE “ACT”). THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR
HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO THE
SECURITIES UNDER THE ACT OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY
THAT SUCH REGISTRATION IS NOT REQUIRED.
e)
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Owner
is acquiring the shares solely for its own account and beneficial interest
and not for sale, has no present intention of selling (in connection with
a distribution or otherwise) or otherwise distributing the shares,
granting any participation in, or otherwise distributing the same, and
does not presently have reason to anticipate a change in such
intention.
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7.4
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Nonassignability. The
parties have entered into this agreement in contemplation of personal
performance, each by the other, and intend that the licenses and rights
granted hereunder to a party not be extended to entities other than such
party's Related Companies without the other party's express written
consent. All of Owner's rights, title and interest in this agreement and
any licenses and rights granted to it hereunder may be assigned to any
direct or indirect successor to the business of Owner, which successor
shall thereafter be deemed substituted for Owner as the party hereto,
effective upon such assignment; but neither this agreement nor any
licenses or rights hereunder shall be otherwise assignable or transferable
(in insolvency proceedings, by reason of a corporate merger, or otherwise)
by either party without the express written consent of the other
party.
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7.5
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Addresses/Accounts. Any
notice, payments, or other communication shall be sufficiently given to a
party when sent by:
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a)
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Certified
mail or overnight courier to the address written
above.
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b)
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Facsimile
to Owner at ______________ or to Licensee at
___________________.
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c)
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Email
to Owner at ______________ or to Licensee at
___________________.
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A party may change its address,
facsimile number, or email address only by express written notice to the other
party.
7.6
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Taxes. Licensee
shall pay any tax and any related interest or penalty, however designated,
imposed as a result of the existence or operation of this Agreement,
including any tax which the Licensee is required to withhold or deduct
from payments to Owner, except any income tax imposed upon Owner by the
United States or any governmental entity within the United States. Licensee shall
furnish Owner with such evidence as may be required by United States
taxing authorities to establish that any such tax has been
paid.
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7.7
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Choice
of Law. Any dispute arising with respect to this
Agreement shall be construed according to the law, exclusive of its
conflict of law provisions, of the state in which the Owner is domiciled
at the time the complaint is filed. If such state cannot be
determined, the law of the Commonwealth of Pennsylvania, exclusive of
conflict of law provisions, shall govern this
Agreement.
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7.8
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Integration. This
Agreement sets forth the entire agreement and understanding between the
parties as to the subject matter hereof and merges all prior discussions
between them. Neither party shall be bound by any warranties,
understandings or representations with respect to such subject matter
other than as expressly provided herein or in a writing signed with or
subsequent to execution hereof by an authorized representative of the
party to be bound
thereby.
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7.9
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Outside
the United States
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a)
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There
are countries in which the owner of an invention is entitled to
compensation, damages or other monetary award for another's unlicensed
manufacture, sale, lease, use or importation involving such invention
prior to the date of issuance of a patent for such invention but on or
after a certain earlier date, hereinafter referred to as the invention's
“protection commencement date.” For the purposes of this
agreement, an invention which has a protection commencement date in any
such country shall be deemed to have had a patent issued therefor in such
country on such date.
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b)
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There
may be countries in which the Licensee may have, as a consequence of this
Agreement, rights against an infringer of a Licensed Product. Licensee
hereby waives any such right it may have by reason of any third party’s
infringement or alleged infringement of Intellectual
Property.
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c)
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Licensee
agrees to register or cause to be registered, to the extent required by
applicable law, and without expense to Owner, any agreements wherein
sublicenses are granted by it under the Applications or
Patents. Licensee waives any and all claims or defenses,
arising by virtue of the absence of such registration, that might
otherwise limit or affect its obligations to
Owner.
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7.10
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Counterparts. This
Agreement is executed in one or more counterparts as the parties deem
desirable, each of which shall be deemed an original, but all of which
shall constitute the same instrument. No action or suit shall
require the production of all such
copies.
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7.11
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Export
Control Laws. Licensee shall observe all applicable United
States and foreign laws with respect to the transfer of Licensed
Product(s), and related technical data, to foreign countries, including,
without limitation, export administration
regulations.
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7.12
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Licensee
Able to Perform. Licensee has had full disclosure and had
opportunity to do due diligence to the extent it determined to be
necessary and reasonable in regard to the Owner's Applications, Patent(s),
Licensed Product(s), technology and business. Licensee
acknowledges that Owner has made no representation other than is contained
herein. Licensee represents that it is capable of researching,
developing, obtaining regulatory approvals, and manufacturing the Licensed
Products, and is aware of the difficulties inherent in the regulatory
aspects, research, development, manufacturing, sale and distribution
of the licensed products. Licensee acknowledges that
Owner shall have no liability in regard to Licensee's success or failure
of the anticipated sales or
sublicense.
|
7.13
|
Confidentiality. Except
as otherwise agreed in writing or as required by government statute or
court order, Licensee shall not appropriate, use or disclose, directly or
indirectly, for its own benefit or otherwise, any information, materials,
trade secrets, documents, correspondence, or other tangible or intangible
property of Owner, to which it shall have obtained access hereunder or in
contemplation of this Agreement, or which shall otherwise in any way
relate to the Intellectual Property. Any of the aforesaid which
is or comes into the possession of Licensee shall be held in trust for
Owner and remain the sole and exclusive property of Owner, subject to the
rights of License by Licensee as provided herein. The provisions of this
Paragraph shall survive the termination of this
Agreement.
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Page 10
of 19
7.14
|
No
Joint Venture. The parties acknowledge that nothing set forth
in this Agreement nor the transactions contemplated herein shall
constitute a joint venture, partnership, agency or any relationship other
than Licensee as a licensee and Owner as a licensor of the Intellectual
Property.
|
7.15
|
Unauthorized
Use. Licensee agrees to notify Owner immediately and in writing
of all circumstances surrounding the unauthorized possession or use of the
Intellectual Property by any entity including, but not limited to, an
individual, governmental authority, corporation, limited liability
company, partnership, or trust. Owner shall have the sole right
and discretion to institute and prosecute a claim against any third party
for infringement of Intellectual Property. This Agreement
imposes no duty on Owner to file any
claim.
|
7.16
|
Severability. If
any term or provision of this Agreement is held invalid or unenforceable
by a court of competent jurisdiction, the remainder of the provisions
shall continue in full force and effect as if this Agreement had been
executed with the invalid or unenforceable portion thereof eliminated and
the parties shall endeavor to replace such invalid or unenforceable
portion with a similar but valid and enforceable
provision.
|
7.17
|
Force
Majeure. No party shall be deemed to be in default of any
provision of this Agreement, or for any failure in performance, resulting
from acts or events beyond the reasonable control of such party, including
acts of God, acts of civil or military authority, civil disturbance, war,
strikes, natural catastrophes or other “force majeure”
events.
|
IN
WITNESS WHEREOF, each of the parties has caused this agreement to be executed in
duplicate originals by its duly authorized representatives on the Effective Date
written above.
Xxxx
Enterprises LLC
|
Xxxxxxx
Corp.
|
|||
Signature:
|
Signature:
|
|||
Name:
|
Name:
|
Xxxxxxx X. Xxxxxxx
|
||
Title:
|
Title:
|
President
|
Page 11
of 19
APPENDIX
“Applications”
means US provisional applications:
|
1.
|
US
61/113,809, entitled Utilization of Stents for the Treatment of Blood
Borne Carcinomas; and
|
|
2.
|
US
61/160,755, entitled Sequential Extracorporeal Treatment of
Blood.
|
“Due
Date” means a date set by the Owner that would permit it a reasonable time
period to respond to an official action. The Due Date will be at
least two (2) business days before any official due date exclusive of any
permitted extensions of time.
“Effective
Date” means the date indicated as the effective date at the top of page 1 of
this Agreement.
“Fair
Market Value” means, with respect to any Licensed Product sold, leased or put
into use, the Selling Price actually obtained in an arm’s length transaction for
a product comprising a Licensed Product in the form in which the product is
sold, whether or not assembled and without excluding any components or
subassemblies thereof which are included in such Selling
Price. “Selling price" shall exclude:
(a) usual
trade discounts actually allowed to unaffiliated persons or
entities;
(b) packing
costs;
(c) costs
of transportation and transportation insurance; and
(d) import,
export, excise, sales and value added taxes, and custom duties.
“Intellectual
Property” means any and all Applications, Patents, and any and all copyrights
and trade secrets owned in whole or in part by Owner and arising from the
Applications or Patents.
“IP Cost”
means any and all expenses arising from obtaining or maintaining Intellectual
Property in the U.S. and foreign countries, including, but not limited to,
government fees, attorneys’ fees, translation fees, maintenance fees, annuities,
penalties, and interests.
“Lawsuit”
means any action at law or equity arising from (a) the manufacture, use,
license, research, sale, offer for sale, or regulatory action involving the
Intellectual Property, or (b) any challenge by a third party to the ownership or
other rights of Owner in the Intellectual Property.
“Licensed
Product” means any product that incorporates the Intellectual
Property.
“Litigation
Cost” means any and all expenses and business losses arising from a Lawsuit,
including, but not limited to, prosecution fees, attorneys’ fees, loss of
anticipated royalties or profits, any other business losses, litigation fees,
fines, penalties, interests, travel expenses, court costs, expert witness fees,
settlements, personal injuries, and government fees.
“Patents”
means all patents (including utility models but excluding design patents and
design registrations) issued in any country that (a) claim substantially the
same subject matter as at least one Application and (b) claim priority to that
Application.
Page 12
of 19
“Related
Company” means (a) a subsidiary of the Licensee that Licensee owns more than 80%
of the subsidiary’s outstanding common stock, and (b) any other company so
designated in a writing signed by Owner and the Licensee.
Page 13
of 19
Exhibit
A
CERTIFICATE
OF DESIGNATION
OF
THE RIGHTS, PREFERENCES, PRIVILEGES
AND
RESTRICTIONS, WHICH HAVE NOT BEEN SET
FORTH
IN THE CERTIFICATE OF INCORPORATION
OR
IN ANY AMENDMENT THERETO,
OF
THE
SERIES
A CONVERTIBLE PREFERRED STOCK
OF
XXXXXXX
CORP.
(Pursuant
to Section 151 of the General Corporation Law of Delaware)
The undersigned Directors, Xxxxxxx
Xxxxxxx, Xxxxxx Xxxxxxx, and Xxxxx Xxxx, hereby certify that:
A.
We are the duly elected and acting Directors of XXxxxxx Corp., a Delaware
corporation (the “Corporation”).
B.
Pursuant to the Unanimous Written Consent of the Board of Directors of the
Corporation dated May 5, 2009, the Board of Directors duly adopted the following
resolutions:
WHEREAS, the Certificate of
Incorporation of the Corporation, as amended, authorizes a class of stock
designated as Preferred Stock, with a par value of $0.001 per share (the
“Preferred Class”), comprising Twenty Million (20,000,000) shares, none of which
have been designated in a series or issued, and provides that the Board of
Directors of the Corporation may fix the terms, including any dividend rights,
dividend rates, conversion rights, voting rights, rights and terms of any
redemption, redemption, redemption price or prices, and liquidation preferences,
if any, of the Preferred Class;
WHEREAS, the Board of Directors
believes it in the best interests of the Corporation to create a series of
preferred stock consisting of Four Million (4,000,000) shares and designated as
the “Series A Convertible Preferred Stock” having certain rights, preferences,
privileges, restrictions and other matters relating to the Series A Convertible
Preferred Stock.
NOW, THEREFORE, BE IT RESOLVED, that
the Board of Directors does hereby fix and determine the rights, preferences,
privileges, restrictions and other matters relating to the Series A Convertible
Preferred Stock as follows:
1.
Definitions. For
purposes of this Certificate of Designation, the following definitions shall
apply:
1.1 “Board”
shall mean the Board of Directors of the Corporation.
Page 14
of 19
1.2 “Corporation”
shall mean XXxxxxx Corp., a Delaware Corporation.
1.3 “Common
Stock” shall mean the common stock, $0.001 par value per share, of the
Corporation.
1.4 “Common
Stock Dividend” shall mean a stock dividend declared and paid on the Common
Stock that is payable in shares of Common Stock.
1.5 “Conversion
Date” shall have the meaning set forth in Section 4(b).
1.6 “Distribution”
shall mean the transfer of cash or property by the Corporation to one or more of
its stockholders without consideration, whether by dividend or otherwise (except
a dividend in shares of Corporation's stock).
1.7 “Holder”
shall mean a holder of the Series A Convertible Preferred Stock.
1.8 “Original Issue Date”
shall mean the date on which the first share of Series A Convertible
Preferred Stock is issued by the Corporation.
1.9 “Original
Issue Price” shall mean $1.00 per share for the Series A Convertible Preferred
Stock.
1.10 “Person”
shall mean an individual, a corporation, a partnership, an association, a
limited liability company, an unincorporated business organization, a trust or
other entity or organization, and any government or political subdivision or any
agency or instrumentality thereof.
1.11 “Series
A Convertible Preferred Stock” shall mean the Series A Convertible Preferred
Stock, $0.001 par value per share, of the Corporation.
1.12 “Subsidiary”
shall mean any corporation or limited liability company or corporation of which
at least fifty percent (50%) of the outstanding voting stock or membership
interests, as the case may be, is at the time owned directly or indirectly by
the Corporation or by one or more of such subsidiary corporations.
2.
Dividend
Rights.
2.1 In
each calendar year, the holders of the then outstanding Series A Convertible
Preferred Stock shall be entitled to receive, when, as and if declared by the
Board, out of any funds and assets of the Company legally available therefore,
noncumulative dividends in an amount equal to any dividends or other
Distribution on the Common Stock in such calendar year (other than a Common
Stock Dividend). No dividends (other than a Common Stock Dividend)
shall be paid, and no Distribution shall be made, with respect to the Common
Stock unless dividends in such amount shall have been paid or declared and set
apart for payment to the holders of the Series A Convertible Preferred Stock
simultaneously. Dividends on the Series A Convertible Preferred Stock
shall not be mandatory or cumulative, and no rights or interest shall accrue to
the holders of the Series A Convertible Preferred Stock by reason of the fact
that the Company shall fail to declare or pay dividends on the Series A
Convertible Preferred Stock, except for such rights or interest that may arise
as a result of the Company paying a dividend or making a Distribution on the
Common Stock in violation of the terms of this Section 2.
Page 15
of 19
2.2 Participation
Rights. Dividends shall be declared pro rata on the Common Stock and the Series
A Convertible Preferred Stock on a pari passu basis according to the number of
shares of Common Stock held by such holders, where each holder of shares of
Series A Preferred Stock is to be treated for this purpose as holding the number
of shares of Common Stock to which the holders thereof would be entitled if they
converted their shares of Series A Convertible Preferred Stock at the time of
such dividend in accordance with Section 4 hereof.
2.3 Non-Cash
Dividends. Whenever a dividend or Distribution provided for in this Section 2
shall be payable in property other than cash (other than a Common Stock
Dividend), the value of such dividend or Distribution shall be deemed to be the
fair market value of such property as determined in good faith by the
Board.
3. Liquidation
Rights. In the event of any liquidation, dissolution or
winding up of the Company; whether voluntary or involuntary, the funds and
assets of the Company that may be legally distributed to the Company’s
shareholders (the “Available Funds and Assets”) shall be distributed to
shareholders in the following manner:
3.1 Series
A Convertible Preferred Stock. The holders of each share of Series A Convertible
Preferred Stock then outstanding shall be entitled to be paid, out of the
Available Funds and Assets, and prior and in preference to any payment or
distribution (or any setting apart of any payment or distribution) of any
Available Funds and Assets on any shares of Common Stock or subsequent series of
preferred stock, an amount per share equal to the Original Issue Price of the
Series A Convertible Preferred Stock plus all declared but unpaid dividends on
the Series A Convertible Preferred Stock. If upon any liquidation,
dissolution or winding up of the Company, the Available Funds and Assets shall
be insufficient to permit the payment to holders of the Series A Convertible
Preferred Stock of their full preferential amount as described in this
subsection, then all of the remaining Available Funds and Assets shall be
distributed among the holders of the then outstanding Series A Convertible
Preferred Stock pro rata, according to the number of outstanding shares of
Series A Convertible Preferred Stock held by each holder thereof.
3.2
Participation Rights. If there are any Available Funds and Assets
remaining after the payment or distribution (or the setting aside for payment or
distribution) to the holders of the Series A Convertible Preferred Stock of
their full preferential amounts described above in this Section 3, then all such
remaining Available Funds and Assets shall be distributed among the holders of
the then outstanding Common Stock and Preferred Stock pro rata according to the
number and preferences of the shares of Common Stock and Preferred Stock (as
converted to Common Stock) held by such holders.
Page 16
of 19
3.3 Merger
or Sale of Assets. A reorganization or any other consolidation or
merger of the Company with or into any other corporation, or any other sale of
all or substantially all of the assets of the Company, shall not be deemed to be
a liquidation, dissolution or winding up of the Company within the meaning of
this Section 3, and the Series A Convertible Preferred Stock shall be entitled
only to (i) the right provided in any agreement or plan governing the
reorganization or other consolidation, merger or sale of assets transaction,
(ii) the rights contained in the General Corporation Law of the State of
Delaware and (iii) the rights contained in other Sections hereof.
3.4 Non-Cash
Consideration. If any assets of the Company distributed to
shareholders in connection with any liquidation, dissolution or winding up of
the Company are other than cash, then the value of such assets shall be their
fair market value as determined by the Board
4.
Conversion
Rights.
(a)
Conversion of
Preferred Stock. Each share of Series A Convertible Preferred
Stock shall be convertible, at the option of the holder thereof, at any time which the holder may
elect, in whole or in part, into One Hundred (100) shares of Common Stock
of the Company.
(b)
Procedures for Exercise of Conversion Rights. The holders of any
shares of Series A Convertible Preferred Stock may exercise their conversion
rights as to all such shares or any part thereof by delivering to the Company
during regular business hours, at the office of any transfer agent of the
Company for the Series A Convertible Preferred Stock, or at the principal office
of the Company or at such other place as may be designated by the Company, the
certificate or certificates for the shares to be converted, duly endorsed for
transfer to the Company (if required by the Company), accompanied by written
notice stating that the holder elects to convert such
shares. Conversion shall be deemed to have been effected on the date
when such delivery is made, and such date is referred to herein as the
“Conversion Date.” As promptly as practicable after the Conversion
Date, but not later than ten (10) business days thereafter, the Company shall
issue and deliver to or upon the written order of such holder, at such office or
other place designated by the Company, a certificate or certificates for the
number of full shares of Common Stock to which such holder is
entitled. The holder shall be deemed to have become a shareholder of
record on the Conversion Date.
(c)
No Fractional Shares. No fractional shares of Common Stock or scrip
shall be issued upon conversion of shares of Series A Convertible Preferred
Stock. The number of full shares of Common Stock issuable upon
conversion thereof shall be computed on the basis of the aggregate number of
shares of Series A Convertible Preferred Stock. Any fractional shares
of Common Stock which would otherwise be issuable upon conversion of the shares
of Series A Convertible Preferred Stock will be rounded up to the next whole
share.
(d)
Payment of Taxes for Conversions. The Company shall pay any and all issue and
other taxes that may be payable in respect of any issue or delivery of shares of
Common Stock on conversion pursuant hereto of Series A Convertible Preferred
Stock. The Company shall not, however, be required to pay any tax
which may be payable in respect of any transfer involved in the issue and
delivery of shares of Common Stock in a name other than that in which the shares
of Series A Convertible Preferred Stock so converted were registered, and no
such issue or delivery shall be made unless and until the person requesting such
issue has paid to the Company the amount of any such tax, or has established, to
the satisfaction of the Company, that such tax has been paid.
Page 17
of 19
(e)
Status of Common Stock Issued Upon Conversion. All shares of Common
Stock which may be issued upon conversion of the shares of Series A Convertible
Preferred Stock will upon issuance by the Company be validly issued, fully paid
and nonassessable and free from all taxes, liens and charges with respect to the
issuance thereof.
(f)
Status of Converted Preferred Stock. In case any shares of Series A
Convertible Preferred Stock shall be converted pursuant to this Section 4, the
shares so converted shall be canceled and shall not be issuable by the
Company.
5.
Adjustment of
Conversion Price.
(a)
General Provisions. In case, at any time after the date hereof, of
any capital reorganization, or any reclassification of the stock of the Company
(other than a change in par value or as a result of a stock dividend or
subdivision, split-up or combination of shares), or the consolidation or merger
of the Company with or into another person (other than a consolidation or merger
in which the Company is the continuing entity and which does not result in any
change in the Common Stock), or of the sale or other disposition of all or
substantially all the properties and assets of the Company as an entirety to any
other person, the shares of Series A Convertible Preferred Stock shall, after
such reorganization, reclassification, consolidation, merger, sale or other
disposition, be convertible into the kind and number of shares of stock or other
securities or property of the Company or of the entity resulting from such
consolidation or surviving such merger or to which such properties and assets
shall have been sold or otherwise disposed to which such holder would have been
entitled if immediately prior to such reorganization, reclassification,
consolidation, merger, sale or other disposition it had converted its shares of
Series A Convertible Preferred Stock into Common Stock. The
provisions of this section 5(a) shall similarly apply to successive
reorganizations, reclassifications, consolidations, mergers, sales or other
dispositions. The provisions of this section 5 shall not affect the
conversion of the Class A Convertible Preferred Stock in the event of a forward
or reverse stock split.
(b)
No Impairment. The Company will not, through any reorganization,
transfer of assets, consolidation, merger, dissolution, issue or sale of
securities or any other voluntary action, including amending this Certificate of
Designation, avoid or seek to avoid the observance or performance of any of the
terms to be observed or performed hereunder by the Company, but will at all
times in good faith assist in the carrying out of all the provisions of this
section 5 and in the taking of all such action as may be necessary or
appropriate in order to protect the conversion rights of the holders of Series A
Convertible Preferred Stock against impairment. This provision shall
not restrict the Company from amending its Articles of Incorporation in
accordance with the General Corporation Law of
the State of Delaware and the terms
hereof.
Page 18
of 19
6.
Notices. Any
notices required by the provisions of this Certificate of Designation to be
given to the holders of shares of Series A Convertible Preferred Stock shall be
deemed given if sent via facsimile or reputable overnight courier with a
confirmation receipt and addressed to each holder of record at its address
appearing on the books of the Company.
7. Voting
Provisions. Each outstanding share of Series A Convertible
Preferred Stock shall be entitled to One Hundred (100) votes per share on all
matters to which the shareholders of the Company are entitled or required to
vote.
8. Protective
Provisions. The Company
may not take any of the following actions without the approval of a
majority of the holders of the outstanding Series A Convertible Preferred
Stock: (i) effect a sale of all or substantially all of the Company’s
assets or which results in the holders of the Company’s capital stock prior to
the transaction owning less than fifty percent (50%) of the voting power of the
Company’s capital stock after the transaction, (ii) alter or change the
rights, preferences, or privileges of the Series A Convertible Preferred Stock,
(iii) increase or decrease the number of authorized shares of Series A
Convertible Preferred Stock, (iv) authorize the issuance of securities having a
preference over or on par with the Series A Convertible Preferred Stock, or (v)
effectuate a forward or reverse stock split or dividend of the Company’s common
stock. Further, the
Company agrees to effectuate a reverse stock split as soon as reasonably
possible following the issuance of any shares of Series A Convertible Preferred
Stock so as to create enough authorized but unissued common stock to
allow for the conversion of the Series A Convertible Preferred
Stock.
IN WITNESS WHEREOF, the Corporation has
caused this Certificate of Designation of Series A Convertible Preferred Stock
to be duly executed by Board of Directors and attested to this 28th day of
September, 2009.
By:
|
Xxxxxxx
Xxxxxxx
|
By:
|
Xxxxxx
Xxxxxxx
|
|
Its:
|
Director
|
Its:
|
Director
|
By:
|
Xxxxx
Xxxx
|
|
Its:
|
Director
|
Page 19 of 19
Exhibit B
Rule
144 (i)
|
Unavailability
to securities of issuers with no or nominal operations and no or nominal
non-cash assets.
|
|
This
section is not available for the resale of securities initially issued by
an issuer defined below:
|
|
i.
|
An
issuer, other than a business combination related shell company, as
defined in Rule 230.405, or an asset-backed issuer, as defined in Item
1101(b) of Regulation AB (Item 229.1101(b) of this chapter), that
has:
|
|
No
or nominal operations; and
|
|
B.
|
Either:
|
|
No
or nominal assets;
|
|
Assets
consisting solely of cash and cash equivalents;
or
|
|
Assets
consisting of any amount of cash and cash equivalents and nominal other
assets; or
|
|
An
issuer that has been at any time previously an issuer described in
paragraph (i)(1)(i).
|
|
Notwithstanding
paragraph (i)(1), if the issuer of the securities previously had been an
issuer described in paragraph (i)(1)(i) but has ceased to be an issuer
described in paragraph (i)(1)(i); is subject to the reporting requirements
of section 13 or 15(d) of the Exchange Act; has filed all reports and
other materials required to be filed by section 13 or 15(d) of the
Exchange Act, as applicable, during the preceding 12 months (or for such
shorter period that the issuer was required to file such reports and
materials), other than Form 8-K reports (Rule 249.308 of this chapter);
and has filed current "Form 10 information" with the Commission reflecting
its status as an entity that is no longer an issuer described in paragraph
(i)(1)(i), then those securities may be sold subject to the requirements
of this section after one year has elapsed from the date that the issuer
filed "Form 10 information" with the
Commission.
|
|
The
term "Form 10 information" means the information that is required by Form
10 or Form 20-F (Rule 249.210 or Rule 249.220f of this chapter), as
applicable to the issuer of the securities, to register under the Exchange
Act each class of securities being sold under this rule. The issuer may
provide the Form 10 information in any filing of the issuer with the
Commission. The Form 10 information is deemed filed when the initial
filing is made with the
Commission.
|