Exhibit 10.1
LICENSE AND TECHNICAL ASSISTANCE AGREEMENT
This Agreement, made and entered into this 1st day of November, 2001, is by
and between Spectrum Meditech, Inc. ("Licensor") and Sharps Elimination
Technologies, Inc. (the "Company").
1. Background
The Licensor has developed and is the sole owner of a certain
technology which can be used to incinerate medical needles in an environmentally
safe way (hereinafter referred to as the "Licensed Technology"), and certain
aspects of the Licensed Technology are described, shown and disclosed in United
States Patent #5,551,355 (the "Patent"). The Licensed Technology includes the
Patent and all information, knowledge, experience and results, whether or not in
tangible form, in the possession or control of Licensor and persons in privy to
the Licensor, including, but not limited to, pending and abandoned patent
applications, blueprints, drawings, specifications, engineering data,
engineering calculations, processes, apparatuses, and parts thereof relating to
the Licensed Technology which are not otherwise in the public domain, and shall
include present and future developed information.
Licensor is willing to grant Company an exclusive world-wide license to
make or have others make, use and sell equipment using the Licensed Technology
and to otherwise exploit the Licensed Technology. Such equipment is sometimes
referred to in this Agreement as the Licensed Products.
2. License
2.1 Subject to the conditions hereof, Licensor hereby grants to the Company
the exclusive right, license and privilege throughout the world to use the
Licensed Technology to manufacture and sell Licensed Products with the right to
grant exclusive or non-exclusive sublicenses hereunder. Included as part of this
License are the rights to use the trademarks and tradenames listed on Exhibit A.
2.2 The Company shall have the exclusive right to grant sublicenses to make
or have others make, use and sell the Licensed Products throughout the world,
and the Company shall have the full right to receive royalties, payments, or
other consideration paid for such sublicenses. Termination of the license
granted to the Company in this Agreement shall, except as otherwise agreed by
Licensor, terminate all sublicenses which may have been granted by Company. Any
sublicense granted by the Company shall contain provisions corresponding to
those of this Agreement respecting termination of sublicenses.
2.3 The Licensor agrees to make available to the Company all information
which it has concerning the Licensed Products, including but not limited to test
data, engineering studies, calculations, formulas, specifications and drawings,
and to assist the Company with the commercial exploitation of the Licensed
Technology.
2.4 The Company agrees to expend its best efforts to successfully market the
Licensed Products.
2.5 Licensor agrees that all inventions, whether or not patentable or
patented, which are made by or acquired by it, by purchase, license or otherwise
during the term of this Agreement, which relates to the Licensed Technology
whether by way of improvements, modifications, and/ or new uses therefor, shall
automatically become a part of the Licensed Technology under which the Company
is licensed by this Agreement; providing, however, that the Company, upon its
indication of its desire to obtain such license under any one or more of such
inventions, shall pay all expenses to be incurred or theretofore incurred by
Licensor in connection with the preparation, filing, prosecution, and
interpartes proceedings of applications for and issuance and maintenance of
patents covering the inventions that the Company desires to include in this
Agreement. It is further understood and agreed that for any such invention,
Licensor shall have the first right to decide whether or not to file for an
application for a patent and the country or countries in which such applications
shall be filed. However, if Licensor decides not to file an application for a
patent, the Company has the right to file such an application(s) at its own
expense, and Licensor will cooperate in all respects in filing such patent
applications.
2.6 Any inventions or improvements, whether or not patentable, resulting
from the efforts of the Company or acquired by the Company by purchase, license
or otherwise during the term of this Agreement shall be the property of the
Company and the Company shall have the entire right, title and interest thereto,
with the mutual understanding by the parties that the commercialization and
exploitation of such inventions or improvements by sale, license, or otherwise,
shall be subject to the royalty provisions of this Agreement to the extent that
such inventions or improvements fall within the scope of the Licensed
Technology. The Company will promptly notify Licensor of any such inventions or
improvements. The Company will be financially responsible for and will pay all
attorneys fees, government fees, drafting fees, and other expenses required to
prepare, file and prosecute patent applications and to obtain and maintain
patents in the United States and throughout the world on all inventions,
developments and improvements made by or on behalf of the Company relating to
the Licensed Technology.
3. License Fees and Royalties
3.1 In consideration for the license the Company agrees to:
A. Pay the Licensor $300,000 within six months of the execution of
this Agreement.
B. Pay the Licensor a royalty of $3.25 for each Licensed Product
sold by the Company or any sublicensee of the Company, provided,
however, that the Company, beginning with the year ending
December 31, 2002, agrees to pay the Licensor royalties of not
less than $100,000 per year.
C. Issue to the Licensor 800,000 shares of the Company's common
stock, which shares, at the time of issuance, will represent 20%
of the Company's issued and outstanding shares.
3.2 The Company will provide the Licensor with written quarterly reports,
for each calendar quarter ending March 31, June 30, September 30, and December
31, showing for the preceeding quarter, the number of Licensed Products sold by
the Company or any sublicensee of the Company. Each quarterly report will be due
within 30 days from the end of such quarter and shall be accompanied by the
payment of any royalty due for such quarter.
3.3 The Company agrees to keep full and accurate books of account showing
the number of Licensed Products sold and the revenues received from sales of the
Licensed Products and the Company shall furnish annual financial statements to
the Licensor. Licensor shall have and is hereby given the right of access to
such records maintained by the Company for the purpose of verifying the written
reports received from the Company, such access to be during reasonable business
hours and upon advance notice, provided however, that such access shall be
limited to no more than four accountings per calendar year.
4. Termination
4.1 This Agreement shall remain in full force and effect, unless otherwise
terminated as provided below until the expiration or abandonment of all of the
patent rights pertaining to the Licensed Technology, or until the subject matter
relating to the Licensed Technology enters into the public domain, whichever is
later. Notwithstanding the above:
A. The Company may at any time upon 30 days written notice terminate
this Agreement.
B. If royalty payments to the Licensor are in arrears for 60 days
after the due date, or if the Company defaults in performing any
other terms of this Agreement and continues to be in default for
a period of 60 days following written notice of such default from
Licensor to the Company, then the Licensor shall have the right
to terminate this Agreement upon 30 days written notice to the
Company. If the default is not cured by the date of termination,
then this Agreement shall terminate, but without prejudice to any
other rights of the Licensor.
4.2 The Company may at any time upon five days notice to Licensor acquire
all rigts to the Licensed Technology by paying Licensor $5,000,000. Upon the
payment of the $5,000,000 Sections 1, 2, 3, and 4 of this Agreement will
terminate.
4.3 Upon the termination of this Agreement pursuant to Section 4.1 the
inventions or improvements made or acquired by the Company in accordance with
Section 2.6 of this Agreement will remain the property of the Company and no
further royalties will be due to Licensor with respect to the sale of any
products made with the technology described in Section 2.6.
4.4 Notwithstanding anything contained herein to the contrary, upon the
termination of this Agreement the Licensor will be entitled to the consideration
provided by Section 3.1 regardless of the date this Agreement is terminated,
including any royalties due the Licensor up to the date of termination. In the
event this Agreement is terminated after January 1, 2002 the minimum royalty
provided by Section 3.1.C will be prorated between the January 1st date which
was prior to the termination date and the date of termination.
5. Confidential Treatment of Licensed Technology
5.1 The Licensor and the Company both agree that the Licensed Technology and
all information developed in relation to the Licensed Technology are valuable
trade secrets and the parties agree to maintain the confidentiality of such
information. It is understood and agreed that certain proprietary information
relating to the Licensed Technology may be required to be disclosed to potential
users of the Licensed Technology in order to promote the sale or use of the
Licensed Products, and such disclosures will not be a violation of this
paragraph.
5.2 The Licensor and the Company agree to limit access to all confidential
information relating to the Licensed Technology to those employees that have an
actual need to use such information in the performance of their duties.
5.3 The Licensor and the Company shall not disclose any information relating
to or concerning the Licensed Technology to any person, including their own
employees, who has not previously executed a written agreement to maintain the
confidential nature of such proprietary information and to refrain from using
the same for any purpose except as authorized by this Agreement.
5.4 The Licensor and the Company shall immediately notify the other of any
information which comes to their attention which suggests that there has been,
or may be any loss of the confidential information relating to the Licensed
Technology.
5.5 It is agreed that any information which (i) is now or hereafter becomes
part of the public domain, (ii) is known by the party receiving the information
independent of its relations hereunder, or (iii) otherwise has lost its
confidential nature without violation of the provisions hereof, shall not be
considered to be a trade secret or confidential information.
5.6 The provisions of this section shall survive the termination of this
Agreement, and as to any particular piece of confidential information, shall
continue until such time as such information becomes public through no fault of
the Company.
6. Patent Matters
6.1 The Company shall maintain all Patents relating to the Licensed
Technology (the "Licensed Patents"), in force during the term of this Agreement
for the life of such Patents.
6.2 While and as long as this Agreement remains in force, the Company shall
have the obligation:
A. To bring suit in its own name or, if required by law, jointly
with Licensor, at its own expense and on its own behalf, for
infringement of any Licensed Patent;
B. In any such suit, to enjoin infringement and to collect for the
Company's use, damages, profits, and awards of whatever nature
recoverable for such infringement; and
C. It is in the Company's discretion, to settle any claim or suit
for infringement of any Licensed Patent by granting the
infringing party a sublicense under any Licensed Patent.
6.3 In the event Licensor becomes aware of the infringement of any Licensed
Patent, it shall, before it files suit for any infringement of the Licensed
Patent, notify the Company of its intention to file such suit, and if Company
does not, within six months of such notice:
A. Secure cessation of the infringement and notify Licensor thereof,
or
B. Enter suit against the infringer, or
C. Provide Licensor with evidence of the pendency of a bona fide
negotiation for the acceptance by the infringer of a sublicense
under the Licensed Patent,
then the license herein granted to Company shall forthwith become
non-exclusive, and Licensor shall thereafter have the right to
xxx the infringing party for the infringement at Licensor's own
expense, and to collect for its own use all damages, profits, and
awards of whatever nature recoverable for such infringement.
6.4 In connection with such suit brought to enforce a Licensed Patent, the
Licensor shall, at the expense of the Company, give evidence and execute such
documents as the Company may require.
6.5 In the event the Company is sued for infringement of any Licensed
Patent, by reason of its making, using or selling products embodying the
Licensed Products the Company will, at its own expense, undertake to defend such
litigation; and Licensor will provide, at its expense, all evidence and
information in its possession relating to the defense of such litigation.
7. Technical Assistance
7.1 Licensor agrees that, upon reasonable notice from the Company, Licensor
will provided the Company with information known to the Licensor concerning the
Licensed Technology, including manufacturing procedures, processes, trade
secrets, skills and ideas, and current and accumulated experience which Licensor
has acquired or will acquire during the existence of this Agreement in
connection with the design, manufacture and operation of the Licensed Products,
including, but not limited to: (a) sources for the purchase of machinery,
equipment and raw materials needed in the manufacture of the Licensed Products;
(b) the proper use, maintenance and repair of the Licensed Products; (c) a
description of the manufacturing and quality control methods relating to the
Licensed Products; (d) technical information including drawings, blueprints,
specifications, operating manuals and other writings used by Licensor in the
manufacture, assembly, sale or servicing of the Licensed Products; and (e)
instruction on the design and estimating of equipment and systems incorporating
the Licensed Products.
8. Notices
8.1 All payments, reports, notices, instructions, demands, requests,
approvals and other communications provided for pursuant to the Agreement shall
be sent as follows:
A. If to Licensor:
B. If to Company:
or such other address as shall be furnished in writing by either party to the
other party.
8.2 Any notice, payment, request, demand or other communications hereunder
shall be in writing and shall be deemed to have been duly given when:
A. delivered personally, upon personal delivery to the party to be
notified; or
B. sent by facsimile transmission, twelve (12) hours after the
facsimile message was sent to the party to be notified; or
C. sent by registered or certified mail, three (3) business days
after the date sent, postage paid, to the party to be notified;
or
D. sent by ordinary mail, upon delivery, postage paid, to the party
to be notified at the address set forth below:
9. General Provisions
9.1 The Company shall procure and thereafter maintain general liability
(bodily and property damage) and product liability insurance, consistent with
accepted industry standards, with respect to its performance under this
Agreement and all activities related to the Licensed Technology. The Company
shall promptly give the Licensor or its representative immediate notice of any
suit or action threatened against the Company, or prompt notice of any claim
made against the Company arising out of its performance under this Agreement or
in anyway related to the Invention.
9.2 The Company shall fully protect, indemnify, defend and hold the Licensor
free and harmless from any and all losses of any kind or character on account of
damages or losses to persons or property resulting from the negligence or other
tortuous conduct of the Company, its agents, servants, employees or any
subcontractor performing any function under this Agreement.
9.3 The Licensor hereby covenants and warrants that it is the sole owner of
the entire right, title and interest in and to the Licensed Technology, as such
exists as of the date of this Agreement. Licensor represents and warrants that
it has the legal power to extend the rights granted to the Company in this
Agreement and that it has not made and will not make any commitments to others
inconsistent with or in derogation of such rights. Licensor represents and
warrants that the Licensed Technology is free and clear of all present and
future liens, claims, agreements and other interests of every kind and character
that would encumber or restrict the Company's ownership, development, marketing
or use of the Licensed Products in any manner; except in regard to present and
future infringement claims Licensor only represents that to the best of its
knowledge there are no existing patents held by third parties which would be
infringed by the use of the Licensed Products.
9.4 This Agreement will inure to the benefit of an be binding upon the
Licensor, the Company, and their successors and assigns. This Agreement may be
assigned or otherwise transferred by the Company to another entity which is (i)
wholly owned by the Company or (ii) which owns all of the Company's outstanding
capital stock.
9.5 The Licensor agrees that during the term of the Agreement that it shall
not compete with the Company in any field in which the Licensed Products could
have a commercial application. This covenant shall not only apply to the
Licensor but also to all entities in which the Licensor has (directly or
indirectly) an interest of 25% or more.
9.6 The representations and warranties made in this Agreement and in any
certificate, exhibit or document delivered in connection herewith shall survive
the termination of this Agreement.
9.7 If any provision or provisions of this Agreement shall be held to be
invalid, illegal or unenforceable, the validity, legality, and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
9.8 Nothing contained herein shall be construed to constitute any of the
parties hereto as partners, joint ventures, representatives, or agents of the
other.
9.9 Any controversy or claim arising out of or relating to this Agreement,
or the breach thereof, shall be settled by arbitration in accordance with the
then current commercial arbitration rules of the American Arbitration
Association in Dover, Delaware.
9.10 Each party hereby agrees to perform any further acts and to execute and
deliver any documents which may be reasonably necessary to carry out the
provision of the Agreement.
9.11 The Agreement constitutes the entire agreement between the parties with
respect to the subject matter hereof, and supersedes all prior understandings
and writings thereto. No amendment of modification of this Agreement shall be
valid or binding unless made in writing and signed by both parties hereto.
9.12 The failure of any party at any time to require performance by the
other party of any provision hereof shall not affect in any way the full right
to require such performance at any time thereafter. The waiver by either party
of a breach of any provision hereof be taken or held to be a waiver of any
future or continuing breach.
9.13 This Agreement and the relationships between the parties shall be
governed in all respects by the laws of Delaware, except that questions
affecting the construction and effect of any patent shall be determined by the
law of the country in which the patent has been granted.
IN WITNESS WHEREOF, the parties hereto have executed or caused their
respective officers or representatives thereunto duly authorized to execute this
Agreement on their behalf as of the day of the year above written.
SPECTRUM MEDITECH INC.
By /s/ Xxxxx Xxxxxxx
-------------------------
Xxxxx Xxxxxxx, President
SHARPS ELIMINATION TECHNOLOGIES, INC.
By: /s/ E.M. "Mick" Xxxxxxx
-------------------------
E.M. ("Mick") Xxxxxxx, Vice President
AMENDMENT TO LICENSE AND TECHNICAL ASSISTANCE AGREEMENT
By Agreement dated November 12, 2001, Sharps Elimination Technologies, Inc.
acquired an exclusive license to the Needle-Ease(TM)technology from Spectrum
Meditech Inc.
("Spectrum").
The parties hereto agree that the following provisions of the License and
Technical Assistance Agreement are amended:
3.1 In consideration for the license the Company agrees to:
A. Pay the Licensor $300,000 no later than September 30, 2003.
B. Pay the Licensor a royalty of $3.25 for each Licensed Product
sold by the Company or any sublicensee of the Company, provided,
however, that the Company, beginning with the year ending April
30, 2004, agrees to pay the Licensor royalties of not less than
$100,000 per year.
4.4 Notwithstanding anything contained herein to the contrary, upon the
termination of this Agreement the Licensor will be entitled to the consideration
provided by Section 3.1 regardless of the date this Agreement is terminated,
including any royalties due the Licensor up to the date of termination. In the
event this Agreement is terminated after January 1, 2004 the minimum royalty
provided by Section 3.1.B will be prorated between the January 1st date which
was prior to the termination date and the date of termination.
Dated: March 31, 2003 SHARPS ELIMINATION TECHNOLOGIES, INC.
By /s/ Xxxxx Xxxxxxx
---------------------------
President
SPECTRUM MEDITECH INC.
By /s/ Xxxxx Xxxxxxx
------------------------------
President
