Exhibit 6.7
Confidential
TECHNOLOGY LICENSE AGREEMENT
This Agreement is effective as of the date subscribed below, between
Xxxxxx X. Xxxx, an individual residing at 0000 Xxxxxxxxx, Xxxxxx Xxx, Xxxxx
00000 (hereinafter "LICENSOR"), and Retractable Technologies, Incorporated, a
corporation organized under the laws of the State of Texas, having a place of
business at 000 Xxxxx Xxxx Xxxxxx, Xxxxxxxxxx, Xxxxx 00000 (hereinafter
"LICENSEE"), who mutually agree as follows:
RECITALS
1. Licensor has spent a number of years developing and perfecting
retractable syringe technology to help solve the AIDS epidemic and prevent
accidental transmission of disease vectors. These activities have resulted in
possession of a substantial body of knowledge and know-how together with a
number of inventions which are reflected in a substantial portfolio of United
States and foreign patents and patent applications on retractable syringe
technology.
2. Licensor and his organization have devoted a considerable amount
of time, energy and expense in developing and perfecting prototype products,
conducting tests to establish feasibility and proceeding toward regulatory
approval and market acceptance.
3. Licensor is the owner of the know-how and patent properties
described herein and has the right to license the patent properties. Licensor
warrants that the patents and patent applications which are the subject of this
Agreement have not been licensed to others.
4. Licensee wishes to acquire an exclusive license to manufacture,
market, sell, distribute and otherwise exploit the retractable syringe
technology which is the subject of Licensor's patents and patent applications
described herein, and future improvements, together
Technology License Agreement Page 1
with all technical information and know-how which Licensor may now possess or
later obtain during the term of this Agreement with respect to the subject
matter of this Agreement.
SECTION ONE
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SUBJECT MATTER
1. The general subject matter of this Agreement is retractable
syringe technology including retractable fluid collection devices otherwise
known as blood samplers. These include syringes for injecting fluids which
retract after an injection is given and devices for collecting fluid samples
which can be retracted after the sample is taken.
2. The subject matter of this Agreement includes trade secrets,
technical information, marketing and regulatory information, and know-how
possessed by Licensor, hereinafter collectively referred to as "Information".
The Information includes, but is not limited to, knowledge collected or
developed by Licensor concerning technical features, design, construction,
materials, production and assembly techniques, molding requirements, knowledge
of what works and what does not work, regulatory requirements, and knowledge of
the competitive market, which Licensor has developed or obtained during the
course of developing the retractable syringe technology.
3. The subject matter of this Agreement includes all of Licensor's
patents and patent applications on retractable syringe technology, both domestic
and foreign, including any continuations, divisions, and reissues thereof, as
well as all foreign counterpart patent applications that can be filed and
improvements thereof. This Agreement specifically includes the following "Patent
Properties" which are set forth below:
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U.S. Patent 5,120,310, Issued June 9, 1992, entitled
Nonreusable Syringe;
U.S. Patent 5,188,613, Issued February 23, 1993,
entitled Nonreusable Syringe with Safety Clip;
U.S. Patent 5,267,961, Issued December 7, 1993, entitled
Nonreusable Syringe with Safety Clip;
Foreign Counterpart Patent Applications on the Nonreusable
Syringe with Safety Clip corresponding to U.S. Patents
5,120,310 and 5,188,613 for Europe (Serial No. 92910361.2),
China (Serial No. 92102245.X), India (Serial No. 186/CAL/92),
Mexico (Serial No. 92-01493), and Taiwan (Serial No.
82205282);
U.S. Patent 5,423,758, Issued June 13, 1995, Entitled
Retractable Fluid Collection Device and a Counterpart Patent
Cooperation Treaty Application Serial No. 94/13953, Entitled
Blood Sampler, Filed December 6, 1994 designating all PCT
countries;
U.S. Patent 5,385,551, Issued January 31, 1995, Entitled
Nonreusable Syringe with Front Retraction and a Counterpart
Patent Cooperation Treaty Application Serial No.
PCT/US94/10235, Filed September 7, 1994 designating all PCT
countries;
U.S. Patent 5,389,076, Issued February 14, 1995, Entitled
Single Use Medical Device with Retraction Mechanism and a
Counterpart Patent Cooperation Treaty Application Serial No.
PCT/US95/03953, Filed March 31, 1995 designating all PCT
countries;
U.S. Patent Application Serial No. 380107, Filed January 30,
1995, Entitled Syringe Plunger Seal and Locking Assembly, and
the right to file Patent Applications thereon in nearly any
foreign country until January 30, 1996; and
A new U.S. Patent Application filed in May, 1995, Entitled
Tamperproof Retractable Syringe with Serial No. 08/438,954,
and the right to file Patent Applications thereon in nearly
any foreign country until May, 1996.
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These patents and patent applications and the right to file additional foreign
regional and national counterpart applications are collectively referred to
herein as "Patent Properties".
4. It is understood and recognized by both parties that some, but not
all, of the "Patent Properties" are subject to Federal government rights under
Chapter 00, Xxxxx 00, Xxxxxx Xxxxxx Code, entitled "Patent Rights in Inventions
Made with Federal Assistance."
SECTION ONE
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DEFINITIONS
As used in this Agreement, the following terms shall have the meanings
stated.
1. "Invention" or "Inventions" shall mean the syringe technology
disclosed or claimed in the Patent Properties, and improvements thereon.
2. "Information" shall mean the trade secrets and other information
and know-how referred to in paragraph 2 under Subject Matter.
3. "Licensed Patents" shall mean patents now issued or hereafter
obtained under the subject matter of the "Patent Properties" set forth above,
and improvements thereof. Said improvements shall be deemed "Licensed Patent(s)"
whether made by Licensor or by Licensee or both, irrespective of the named
inventors or the date when conceived or reduced to practice during the term of
this Agreement.
4. "Products" and "Licensed Products" shall mean all retractable
syringes and retractable fluid sampling devices and components thereof,
assembled or unassembled, which comprise an invention described in "Licensed
Patents", and improvements thereof, including any and all Products which employ
the inventive concept disclosed or claimed in the Licensed Patents.
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5. "Improvements" comprise anything which performs the same function
as the invention disclosed or claimed in the Licensed Patents, in a better or
more economical way.
6. "Royalty" herein broadly shall mean constituting payments due from
Licensee to Licensor with respect to sales of Licensed Products and includes
consideration for Licensor's Information now possessed or hereafter acquired.
SECTION TWO
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GRANT OF LICENSE
1. Licensor hereby grants to Licensee a worldwide exclusive license
and right under the "Licensed Patents" and "Information", to manufacture,
market, sell, and distribute "Licensed Products" and "Improvements", without
right to sublicense and subject to such nonexclusive rights as may be possessed
by the Federal government, according to the terms and conditions of this
Agreement.
2. Licensor reserves the right to approve sublicensing by Licensee
upon specific request, provided Licensor approves in writing the terms and
conditions imposed upon the proposed sublicensee, such terms and conditions to
be set forth in a written sublicense agreement which shall be subject to the
terms and conditions of this Agreement.
SECTION THREE
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CONSIDERATION
1. Licensor will receive an initial licensing fee of $500,000.00 upon
full subscription of a concurrent stock offering of 5,000,000 shares of
preferred stock to be issued by Licensee, in addition to the royalty set forth
in the other paragraphs of this Section Three. Said initial licensing fee shall
be paid to Licensor according to the following schedule:
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One-third ($166,666) upon subscription of
3,000,000 shares of preferred stock;
One-third ($166,666) upon subscription of
4,000,000 shares of preferred stock; and
A final one-third ($166,666) upon the first
to occur of a subscription of the full
5,000,000 shares of preferred stock or
three (3) years of company operations.
2. Licensee shall pay to Licensor a royalty on "Licensed Products"
sold, in the amount of five (5) percent of gross sales of "Licensed Products" to
customers, according to the next paragraph of this Section Three. For purposes
hereof, Licensed Product shall be deemed sold when it is invoiced and shipped to
a customer. No royalty shall be payable upon "Licensed Products" when returned,
accepted for return and credited to a customer account.
3. The amount of royalty shall be determined in the following manner.
If the customer is the end user of the Product, the five percent (5%) royalty
shall be based upon the price to the end user. If the customer is a third party
intermediary unrelated to Licensee, the five percent (5%) royalty shall be
based on the price to the intermediary. If Licensee distributes Product through
one or more related entities, such as subsidiaries, affiliated companies, parent
companies, holding companies or unincorporated divisions or the like, the five
percent (5%) royalty shall be based on the price from the last of the related
entities in the chain of distribution to the first third party intermediary
customer or the end user customer, as the case may be. Licensee shall have the
obligation to render royalty payments to Licensor based upon a "price" which is
determined in good faith as representing the real monetary value to be received
by
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Licensor from the sale of Licensed Products to third party intermediary
customers and end users without resorting to artificially low prices designed
mainly to reduce royalty otherwise due.
SECTION FOUR
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TERM OF THIS AGREEMENT
1. The term of this Agreement shall commence on the execution date
hereof and end at the date of expiration of the last to expire of the domestic
patents described as "Licensed Patents" in Section One of this Agreement, unless
sooner terminated under the terms and conditions set forth in this Agreement.
2. In event of an early termination of this Agreement within the
first five (5) calendar years, Licensor shall be given access to all trade
secrets, documents and other "Information" of the type defined in Section One
which is in the possession, custody or control of Licensee and shall be
permitted to use such "Information" in order to make sure the "Invention" is
made available to the public.
SECTION FIVE
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1. Licensee shall be obligated on a best effort basis to commercially
exploit the Subject Matter of this Agreement in good faith.
SECTION SIX
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ASSIGNABILITY
1. Licensee agrees that it will not assign the rights or obligations
of this Agreement to any other party, including subsidiaries, affiliates or
related entities without the written consent
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of Licensor. Any purported assignment by Licensee in violation of this provision
shall be null and void and grounds for immediate termination of this Agreement.
SECTION SEVEN
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PATENT PROSECUTION
1. Licensee has the right and obligation to attempt to obtain patent
protection for the "Invention", to maintain and preserve pending patent
applications and patents obtained and shall have full and complete control over
the prosecution of the "Patent Properties." This obligation is subject to
Licensees sound business judgment. Licensor shall cooperate as a party with the
Licensee as is reasonably necessary or desirable in any such patent prosecution.
2. If in the exercise of its business judgment Licensee decides not
to pursue or maintain any patent or patent application, Licensee shall give
written notice to Licensor in time to act and thereafter Licensor shall have
whatever rights he can obtain for his own benefit and Licensee shall not have
exclusive license with respect to such rights.
SECTION EIGHT
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PAYMENT, RECORDS, AND REPORTS
1. Licensee will keep complete and accurate account of the sales of
"Licensed Products" that are subject to Royalty under this Agreement and shall
maintain its records for inspection by Licensor for a period of at least two (2)
years after the last Royalty payment made.
2. Licensor shall be provided quarterly, within thirty (30) days
after the end of each quarter, with all Royalty payments due under this
Agreement by Licensee and by any sublicensees of the Licensee, for sales of
Licensed Product for that quarter, including any unpaid
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Royalty due Licensor from any previous quarter on sales of Product, and shall be
provided with a report as indicated below.
3. Licensee shall provide to Licensor a written report along with
each quarterly Royalty payment which shall show the number of "Licensed
Products" sold during that quarter of each type of Product, the distributor to
whom sold, and the gross selling price. The same information shall be provided
quarterly by Licensee for each sublicensee.
4. It is further understood that Licensor shall have the right,
personally or through designated agents or representatives to examine, without
cost, and without limitations, the books and records of Licensee sufficient to
determine correctness of sales records of "Licensed Products".
SECTION NINE
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PATENT MARKING
1. Licensee shall be required to xxxx the "Licensed Product" sold
under this Agreement in accordance with the statutes of the United States
relating to the marketing of Patented Products. If foreign protection is
obtained, marking under the patent laws of the applicable foreign countries
shall be required.
SECTION TEN
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LITIGATION
1. Licensee shall have the right to xxx for infringement in its own
name or if necessary, in its own name and Licensor's name, and in such
circumstances Licensor hereby agrees to be joined in a suit for infringement.
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2. Licensor agrees to cooperate fully in the prosecution of such
action as Licensee in its discretion chooses to undertake against the alleged
infringement.
3. Both parties to this Agreement shall have the duty to promptly
notify the other of any circumstances which it believes might be an infringement
of any patent rights that have been obtained on the Invention which is the
Subject Matter of this Agreement.
4. If Licensee elects to take action against alleged infringers, it
shall have the right to control the litigation, name its own attorneys and bear
the cost, expenses and attorney fees of such litigation and if damages or other
proceeds shall be obtained from such litigation, they shall be shared equally
with Licensor after deducting all costs, expenses and attorney fees reasonably
expended in conducting the litigation.
5. In the event Licensee in its discretion chooses not to take action
against alleged infringement of any patent rights to the Invention which is the
subject matter of this Agreement, it shall be required to promptly notify
Licensor of the circumstances of such alleged infringement and its decision not
to take action against the alleged infringer, and in such cases Licensor may
bring suit at its own expense for its own benefit against such infringer and
Licensee agrees to cooperate fully in the prosecution of such action and if
necessary to be named as a party to the action.
SECTION ELEVEN
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TERMINATION
1. If Licensee shall at any time make default in the payment of any
Royalty or the providing of any report under this Agreement, or shall commit any
breach of any covenant or agreement contained herein, or shall make any false
report, and fail to remedy any such defaults
Technology License Agreement Page 10
or breaches within thirty (30) days after written notice thereof by Licensor,
Licensor may at its option, terminate this Agreement and revoke any license
herein granted, by notice in writing to such effect. Such action shall not
prejudice the right of Licensor to receive any Royalty or other sum due at the
time of such termination and shall not prejudice any cause of action or claim of
Licensor accrued or to accrue on account of any breach or default by Licensee.
Breach of a material term of this Agreement is grounds for termination by either
party subject to an opportunity to cure within thirty (30) days after written
notice of said breach.
2. In the event Licensee should find itself subject to a hostile
takeover, and said hostile takeover is consummated, Licensor reserves the right
to unilaterally change the nature of the license granted herein from exclusive
to nonexclusive without giving any consideration in return for such change.
3. This Agreement is based upon the understanding that Licensor will
have and maintain a controlling interest in Licensee. If Licensor suffers an
involuntary loss of his controlling interest, Licensor shall have the right
coincident with his loss of controlling interest, to immediately downgrade the
license granted herein from exclusive to nonexclusive and have the right to
Information specified in Section Four, paragraph 2, without limitation, unless
Licensor in writing voluntarily surrenders the right specified in this
paragraph. In the event Licensor voluntarily sells or otherwise voluntarily
transfers some of all of his stock for valuable consideration, the result of
said sale or transfer being said loss of controlling interest, then
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Licensor shall not have the right to change this License from exclusive to
non-exclusive and Licensee shall continue to enjoy the full benefits of this
License Agreement according to its terms and conditions.
SECTION TWELVE
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MISCELLANEOUS
1. Should any part or provision of this Agreement be held
unenforceable or in conflict with the law of any jurisdiction, the validity of
the remaining parts or provisions shall not be affected by such holding and the
Agreement may be reformed to best effectuate the interest of the parties as to
the remainder of the Agreement.
2. It is understood and agreed that any delay, waiver or omission by
Licensor to exercise any right or power arising from a breach or default in any
of the terms, provisions or covenants of this Agreement shall not be construed
to be a waiver by Licensor of any subsequent breach or default of the same or
other terms, provisions or covenants.
3. This Agreement contains the entire understanding of the parties,
shall supersede other oral or written agreements and shall be binding on and
inure to the benefit of the respective heirs, legal representatives, executors,
successors and assigns of the parties. It may not be modified in any way unless
in writing.
4. This Agreement shall be construed, interpreted and enforced
according to the laws of the State of Texas.
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5. All notices required or provided for in this Agreement shall be in
writing and shall be given in person or sent by registered or certified mail,
postage prepaid, properly addressed to the last given address of the party to be
served unless the address is changed by notice in writing given by the
respective parties. Notice shall be effective upon the date upon which such
notice was mailed.
Executed this 23 day of June, 1995.
/s/ Xxxxxx X. Xxxx
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Xxxxxx X. Xxxx, Licensor
/s/ Xxxxxx X. Xxxx
---------------------------------------
Retractable Technologies, Inc., Licensee
By: Xxxxxx X. Xxxx, President
STATE OF TEXAS (S)
(S)
COUNTY OF DALLAS (S)
Xxxxxx X. Xxxx, an individual, personally appeared before me, and
being first duly sworn declared that he executed this Technology License
Agreement on the date shown above and states that the statements therein
contained are true and correct.
Subscribed and sworn to before me this 23rd day of June, 1995.
/s/ Xxxx X. Xxxxx
---------------------------------------
Notary Public Signature
Seal [SEAL APPEARS HERE] My commission expires the 12th day of
---- June, 1999.
Technology License Agreement Page 13
STATE OF TEXAS (S)
(S)
COUNTY OF DALLAS (S)
Xxxxxx X. Xxxx, as President of Retractable Technologies, Inc.,
personally appeared before me, and being first duly sworn declared that he
executed this Technology License Agreement on the date shown above and states
that the statements therein contained are true and correct.
Subscribed and sworn to before me this 23rd day of June, 1995.
/s/ Xxxx X. Xxxxx
---------------------------------------
Notary Public Signature
Seal [SEAL APPEARS HERE] My commission expires the 12th day of
----
June, 1999.
Technology License Agreement Page 14
