EXCLUSIVE LICENSING AGREEMENT
This Exclusive Licensing Agreement ("Agreement") is made as of
this Fourteenth (14th) day of September, 1999, by and between:
BIOREMEDIAL TECHNOLOGIES, INC., a Pennsylvania corporation,
with its principal office located at 0000 Xxxxxx Xxxxx, Xxxxxxxxx,
Xxxxxx Xxxxxx, Xxxxxxxxxxxx ("BRT")
AND
INFECTECH, INC., a Delaware corporation, with its principal
office located at 00 Xxxxxxxxx Xxxxxx, Xxxxx Xxx, Xxxxxx, Xxxxxx
Xxxxxx, Xxxxxxxxxxxx ("IFEC").
RECITALS:
A. BRT is actively engaged in the business of providing
environmental bioremediation services for third parties.
B. IFEC is actively engaged in the development of certain
processes and intellectual property having applications in the medical,
biological, veterinary and bioremediation fields and is the owner of
certain intellectual property and patents relating to same, and IFEC
is the Assignee of a certain patent granted to Xxxxxx X. Xxxxx, PhD
and Xxxx X. Xxxxxxxx, PhD by the U.S. Patent Office which patent is
useable or has applications in the process of environmental
bioremediation (the "IFEC IP").
C. BRT and IFEC believe that certain of the IFEC IP, patents
and applications may be of use in the business of BRT in its services
to third parties and wish to provide for the licensing of the IFEC IP
to BRT for use and application in environmental bioremediation and for
the further research and development of the IFEC IP by IFEC.
D. The parties had engaged in prior arrangements and had an
agreement by which BRT would invest $630,000 into IFEC for exploring
the use of the IFEC IP and patents in environmental bioremediation
before May 1, 2001, and IFEC would raise $1,200,000 pursuant to a
private placement memorandum offered to investors in 1998, and which
arrangement the parties memorialized in a certain Investment and
Licensing Agreement dated June 11, 1998 ("XXX").
E. Certain conditions precedent of the XXX were not met and
are impossible to be fulfilled, however the parties mutually desire to
enter into this Agreement setting forth their respective rights,
responsibilities and licensing arrangements of the IFEC IP.
F. The parties hereto desire that the IFEC IP may be licensed
by IFEC to BRT on an exclusive basis as provided herein both
domestically and worldwide, and BRT agrees to pay royalties to IFEC for
license of same, all as provided in this Agreement.
WITNESSETH:
NOW, THEREFORE, in consideration of the foregoing premises, the mutual
promises and covenants set forth herein, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto do agree and hereby agree as follows:
1. Incorporation of Recitals. The Recitals set forth above are
hereby expressly and totally incorporated herein by reference as if set
forth in full.
2. Commencement Date and Term. This Agreement shall be
effective as of the date of execution ("Commencement Date") and be for
a term of Ten (10) years, unless terminated earlier or extended as
provided herein.
3. License to BRT. Beginning on the Commencement Date, and for
a period of Ten (10) years thereafter IFEC hereby grants to BRT
exclusive domestic and worldwide license rights to the following:
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(a) the application of IFEC IP as listed in Schedule "A" attached
hereto which is incorporated herein by reference as if set
forth in full, which application shall be limited solely to
application and use of the IFEC IP in activities directly
involved in the field of environmental bioremediation.
(b) BRT hereby agrees that the IFEC IP shall not be used, owned,
licensed or sub-licensed by BRT for any other use or purpose
outside of the specific field of environmental bioremediation,
and BRT shall not use the IFEC IP for any other purposes or
uses, including, without limitation, medical, clinical,
veterinary or any other use foreseen or unforeseen. BRT shall
have no licensee claim upon the IFEC IP for any use other than
that of environmental bioremediation without the express
written permission of IFEC.
(c) The exclusive worldwide license rights to the IFEC IP granted
to BRT hereunder shall cease, at the sole option and discretion
of IFEC, if BRT has not, within a period of three (3) years
from the date of this Agreement obtained a sub-license to
utilize the IFEC IP outside of the United States of America.
In any event, the exclusive domestic license rights of BRT
shall continue for a period of ten (10) years as provided in
this Agreement.
(d) Notwithstanding the license granted herein, IFEC retains
the rights to pursue all research and development concerning
the IFEC IP including, without limitation, obtaining research
grants, performing testing and assessments and related uses in
furtherance of the same. IFEC retains the unrestricted right
to utilize, develop, employ or apply the IFEC IP outside of the
field of environmental bioremediation. With respect to
applications of the IFEC IP by IFEC in the field of
environmental bioremediation, IFEC agrees that it will consult
with BRT on a case-by-case basis, however IFEC shall not
compete with BRT in environmental bioremediation. As used
herein, "bioremediation" means the process of remediation and
cleaning up toxic and non-toxic sites and residue, however
shall not include the scientific surveying, assaying, or
analyses of the procedures and methodologies used in
implementing the same.
4. Termination of Exclusivity. At the sole discretion of IFEC,
the license granted hereunder shall cease to be exclusive and shall
become non-exclusive upon the occurrence of any of the following:
(a) BRT shall fail to attain the applicable Gross Sales Level,
as defined herein, in each of the following years during the term
hereof:
Year 1 Not Applicable
Year 2 $1,000,000
Year 3 $2,500,000
Year 4 $5,000,000
"Gross Sales Level" shall mean the gross revenues generated and
received on a cash accounting basis by BRT for projects, uses and
applications in which the IFEC IP is utilized. It shall not include
revenues derived by BRT from any projects, uses or applications in
which IFEC IP is not utilized to any substantial extent or revenues
accrued but not yet received. BRT agrees to use its best efforts to
generate revenues by projects, uses and applications in which the IFEC
IP is utilized.
5. Royalties to be Paid for License; Reports and Monthly
Certifications. During the term hereof, and in consideration of the
License set forth in Xxxxxxxxx 0, XXX agrees to pay IFEC a royalty per
each project or use of the IFEC IP which shall be equal to Fifteen
percent (15%) of the gross revenues of each project, use or
application undertaken by BRT in which the IFEC IP is utilized.
The gross revenues for all projects, uses and applications of
BRT shall be made available to Xx. Xxxxxxxx, or her successor (as
provided herein), with an indication made as to which utilized IFEC
IP. Xx. Xxxxxxxx shall be provided with all information reasonably
requested in order to verify the indication as to whether IFEC IP was
utilized or not as to all projects and all information regarding the
details and supporting documentation of the revenues, projects, uses
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and applications. Xx. Xxxxxxxx shall make a written certification in
form and substance acceptable to IFEC, delivered on a monthly basis to
the parties by the 15th day of each month for the prior month's uses,
application and work of BRT, summarizing the information, validating
its accuracy and stating the amount of royalties due to IFEC.
Revenues derived from joint ventures or teaming agreements or
similar arrangements shall be presumed to be a sub-licensing
relationship and subject to the provisions of Paragraph 6 and the
royalties payable thereunder, as provided hereinafter, unless BRT
demonstrates that the relationship is otherwise, in that BRT performs
substantial and actual work in the project or application.
6. Royalties to be Paid For Sub-Licenses. Subject to the
provisions and conditions set forth elsewhere herein, including the
prior consent of IFEC, the parties agree that the royalty BRT shall pay
to IFEC for each sub-license shall be 50% of the revenues received by
BRT for each permitted sub-license. BRT shall provide to Xx. Xxxxxxxx
the same information and access to all records, reports and data as
that set forth in Paragraph 5 and otherwise in this Agreement. Xx.
Xxxxxxxx shall make written certification for all sub-licenses and
royalties in similar form and substance as the certification required
in Paragraph 5.
7. Responsibilities of Xx. Xxxx X. Xxxxxxx; Successors. The
parties hereto recognize the integral involvement of Xxxx X. Xxxxxxxx,
PhD, the co-author of certain of the IFEC IP, in the implementation of
the use of the IFEC IP and the administration of this Agreement. Xx.
Xxxxxxxx agrees to use "best efforts" to share all pertinent scientific
matters involving the IFEC IP and/or Compound C with IFEC.
In the event Xx. Xxxxxxxx is no longer able to carry out her
role in the administration of this Agreement, then the parties agree
that her responsibilities under this Agreement shall be performed by
and all rights to examination of records and otherwise provided herein,
shall succeed to Xxxxxx X. Xxxxx, PhD, the other co-author of certain
of the IFEC IP, or Xx. Xxxxx'x designee. Such successor(s) shall not
be employees of BRT but the designated person(s) or entities employed
in order to obtain and verify the information and make the
certifications required of Xx. Xxxxxxxx hereunder.
8. Early Termination: BRT Sale and Other. Further, IFEC shall
have the right to terminate this Agreement upon any of the following:
(a) Either the assets or stock of BRT are acquired in whole, a
controlling interest or a greater than 20% interest of BRT is
acquired by any third-party, person or entity not a party to
this Agreement or by a person or entity who is not currently a
shareholder of BRT.
(b) BRT attempts to assign, sub-license, lease or otherwise
transfer its license set forth in this Agreement, without the
express prior written permission of IFEC, however the refusal
of IFEC to grant its permission to a bona fide prospect for
sub-licensing by BRT shall not operate to prejudice BRT under
the provisions of 3 (c) above.
(c) BRT shall make an assignment for the benefit of its
creditors, or shall become the subject of insolvency or
conservator proceedings.
(d) BRT shall become disqualified to do business in the
Commonwealth of Pennsylvania or any other state in which it had
been formerly qualified to do business, and qualification for
reinstatement is not being diligently prosecuted and
reinstatement is not granted within six (6) months.
(e) A material adverse change in the financial condition of
BRT, which shall be determined in the sole and absolute
discretion of IFEC, subject, however, to Generally Accepted
Accounting Principles (GAAP) with respect to financial changes.
(f) BRT shall be in default of any provision of this Agreement
and shall not have cured the same within fifteen (15) business
days after written notice thereof.
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9. Revocation of Exclusivity. IFEC shall have the right, in
addition to the termination provisions set forth herein and any other
remedies available at law or in equity, to revoke the exclusivity of
the license granted herein and to declare the license of BRT to be non-
exclusive, but otherwise subject to the terms of this Agreement upon
the occurrence of any event set forth in Paragraphs 4 or 6.
10. No Representations or Warranties. Except for the warranty
of title to the patents issued by the United States Patent Office,
IFEC makes no other representations or warranties, expressed or
implied, with respect to the IFEC IP, including without limitation, the
warranties of merchantability and fitness for a particular purpose.
11. Indemnification. BRT agrees to indemnify and hold
harmless IFEC, its officers, directors, agents and employees from and
against all liability, loss, cost, damages and expenses (including
attorneys' fees) arising out of claims or suits based upon BRT's
negligence or breach of representations arising from the proper or
improper use, employment or application of the IFEC IP by any person or
entity. IFEC agrees that it will assist BRT , at the expense of BRT,
in BRT's defense of any claims made against BRT in which the IFEC IP is
utilized.
12. Confidentiality; Remedies for Breach. Except as otherwise
agreed in writing, neither party shall 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 the other party, to which it
shall have obtained access hereunder or in contemplation of this
Agreement, or which shall otherwise in any way shall relate to the IFEC
IP or the subject matter of this Agreement, which has not been publicly
disclosed prior thereto. Any of the aforesaid which is or comes into
the possession of BRT shall be held IN TRUST for IFEC and remain the
sole and exclusive property of IFEC, subject to the rights of License
by BRT as provided herein.
The provisions of this Paragraph shall survive the termination
of this Agreement. FURTHER, the parties agree that there do not exist
adequate remedies at law for a violation of this Paragraph and
therefore, in addition to monetary and other damages, which may be
recovered for a breach hereof that IFEC shall be entitled to and may
obtain injunctive and other equitable and extraordinary relief and
remedies for any such breach.
13. Representations and Warranties. The parties hereto each
represent and warrant respectively as follows:
(a) Each is a corporation duly-organized, validly existing and
in good standing in its state of incorporation, the
Commonwealth of Pennsylvania and in all jurisdictions in which
the ownership of its properties or the nature of its business
makes such qualification necessary.
(b) Each has the requisite corporate power and authority to
conduct its business as presently conducted and to execute,
deliver and perform this Agreement and the transactions
contemplated hereby.
(c) This Agreement has been duly executed by the proper
officers of each party who are incumbent in their respective
positions and fully able to bind the party for the purposes
herein contained. Further on the Commencement Date this
Agreement shall constitute a legal, valid and binding
obligation of the party enforceable in accordance with its
terms.
(d) The execution, delivery and performance of this Agreement
and the transactions contemplated hereby do not and will not:
(1) violate the party's charter or by-laws;
(2) breach or result in a default under (or an event
which, with the giving of notice or passage of time,
or both, would constitute a default hereunder),
require any consent, or give to others any rights of
termination, acceleration, suspension, revocation,
cancellation with regard to this Agreement; or
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(3) breach or otherwise violate any Governmental Rule
or Governmental Order.
(e) There is no litigation threatened or pending which relates
to this Agreement or to the to the ability of the respective parties to
perform hereunder.
14. No Joint Venture. The parties hereto 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 BRT as an investor and licensee and IFEC as a
licensor entitled to royalty payments as provided hereunder.
15. Notices. All notices, requests, demands and other
communications required to be made under the terms of this Agreement
shall be made in writing and delivered personally, or three (3) days
after deposit with the United States Postal Service if sent by
certified or registered mail, or a recognized overnight or courier
provider, and shall be deemed given when delivered to the other, if
delivered personally, or three (3) days after deposit with the United
States Postal Service or overnight or courier provider. Such notices
shall be delivered as follows (or to such other address as a party may
have specified by notice given to the other pursuant to this provision:
If to BRT:
Xxxxxx X. Xxxxx
CEO and President
Bioremedial Technologies, Inc.
0000 Xxxxxx Xxxxx
Xxxxxxxxx, XX 00000
If to IFEC:
Xxxxxxxx X. Xxxxxx, M.D.
CEO and President
Suite Two, 00 Xxxxxxxxx Xxxxxx
Xxxxxx, XX 00000
With a copy to:
Xxxxxxx X. Xxxxx, III, Esquire
0000 Xxxxxxxx Xxxx, Xxxxx 000
Xxxxxxxx Xxxxx, X.X. Xxx 0000
Xxxxxxxxx, XX 00000
16. Maintenance and Examination of Books and Records. BRT
shall maintain its books and records on a regular basis with current
and complete information to clearly and accurately reflect its revenues
per project and consolidated information. The books and records of BRT
shall be preserved for a period of not less than three (3) years after
the close of BRT's fiscal year to which they relate.
BRT's books and records shall be open to inspection and
verification by IFEC, Xx. Xxxxxxxx or any of its representatives at all
reasonable times. IFEC, its accountants Xxxx, Xxxxx & Xxxx, or IFEC's
designees shall be entitled at any time to have BRT's books and records
relating to the licensing and royalties examined or audited and BRT
shall cooperate promptly and fully with the party or parties making any
examination or audit on behalf of IFEC. Should any examination or
audit of BRT's records be necessitated by BRT's failure to submit
information or to maintain the books and records as required by this
Agreement, then BRT shall be liable for any such costs thereof. Should
the audit not reveal any irregularities, misstatements or non-
conformity in such books and records with GAAP and/or the information
required under this Agreement, then IFEC shall be liable for the costs
thereof.
"Books and records" shall include, without limitation,
business plans, marketing strategies and studies, sales plans and
strategies, reports, and other information and data, including
projected information and results, with no duty on the part of BRT to
provide any such documents if they never existed, unless required by
this Agreement.
17. Counterparts. This Agreement may be executed in one or
more counterparts as the parties shall deem desirable, each of which
shall be deemed an original, but all of which shall constitute the same
instrument, however, in any action to enforce or with regard to this
Agreement, it shall not be necessary to produce all such counterparts.
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18. Draftsmanship. This Agreement has been drafted by IFEC for
the convenience of the parties hereto, and such fact shall be
irrelevant in the construction and interpretation of the same; nor
shall any inference or presumption be made in favor of or against any
party hereto based upon the identity of the draftsman hereof.
19. Headnotes. The headnotes appearing at the beginning of
each paragraph are for the convenience of reference only and shall not
be construed to limit or otherwise affect the provisions set forth
therein.
20. Telefacsimile Execution. The parties agree that this
Agreement shall be fully binding upon the execution of same by
counterparts and/or facsimile and shall be effective when fully
executed by same, however all such counterparts and facsimiles shall
constitute one and the same instrument, nor shall it be necessary for
any party to produce all such counterparts in any action or proceeding
regarding the Agreement or the enforcement thereof.
21. Integration; Modifications to be in Writing. This
Agreement represents the entire agreement between the parties and there
are no other agreements, understandings or writings between them except
as set forth herein. This Agreement supersedes and replaces the XXX.
This Agreement may be amended or modified only in writing and signed by
the parties hereto.
22. Successors and Assigns. This Agreement shall bind the
parties hereto and their respective successors and assigns, however all
references herein to "assigns" shall mean only assigns permitted under
the terms of this Agreement.
23. Severability. Should any term or provision of this
Agreement be declared invalid or unenforceable in whole or in part by a
court of competent jurisdiction, then this Agreement shall be construed
and interpreted as if said term or provision were not included herein,
however all other terms and provisions hereof shall remain valid and
enforceable and the application of such invalid or unenforceable terms
and provisions to parties unaffected by such determination to the
fullest extent permitted by law.
24. Waiver. The waiver by either party to insist upon strict
compliance with this Agreement or to exercise any right or remedy
hereunder shall not constitute a waiver of the right of said party to
insist upon strict compliance with this Agreement or to exercise any
rights or remedies provided herein at any other time or under the same
or similar circumstances.
25. Survival of Certain Provisions. The applicability and
enforcement of this Agreement shall survive the termination of the
same when the sense so requires, and specifically the provisions of
Paragraphs 11, 12, 16, 18, 19, 23 and 30 shall survive and be
enforceable subsequent to the termination or early termination of this
Agreement.
26. Publicity and Disclosure. IFEC and BRT hereby acknowledge
that IFEC securities are currently traded publicly and that the company
is required to make certain reports, disclosures and public statements
required by law and regulations applicable to such companies. BRT
agrees to co-operate and use its best efforts in assisting IFEC upon
request in making such public announcements and providing such
information required by reports and filings or as desired by IFEC.
IFEC similarly agrees on a best efforts basis to provide information to
BRT which BRT is required to provide by law or regulation to
governmental and quasi-governmental entities regarding BRT or as BRT
requests. The mutual co-operation contemplated hereby shall be prompt
and complete, and on a best efforts basis. Neither party shall be
required to disclose information which would be "inside information" or
other information or data which is restricted or prohibited by law or
regulation.
27. Monthly Status Meetings. In order to maintain current and
strategic information between the parties and to co-ordinate efforts
for the mutual success of the parties hereunder, the parties agree that
they will meet on a monthly basis, or more often, in order to discuss
the status of the companies and the issues relating to this Agreement.
Such meetings shall include representatives of BRT, IFEC and also Xx.
Xxxxxxxx or her successor.
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28. Investment by BRT. BRT may, but is not required to,
provide or arrange for an investment in the amount of up to Six
Hundred Thirty Thousand Dollars ($630,000.00) into IFEC, in such
amounts and at such intervals as BRT deems appropriate SUBJECT TO the
terms and provisions of any private placement offering in effect from
time to time (including provisions relating to minimum investments)
which offering is duly-registered under applicable securities laws and
regulations with the Securities and Exchange Commission and other
regulatory bodies ("Investment"). The Investment shall be placed into
a separate escrow account administered by the attorney for IFEC
("Escrow Account"). BRT shall have until May 1, 2001 to make or
arrange the Investment.
Funds in the Escrow Account shall be utilized solely for the
research and development, protection of, or costs directly related to
environmental bioremediation. The parties agree that approximately 50%
of the Escrow Account will be utilized for research and development of
intellectual property, and the remaining approximately 50% will be
utilized to obtain or maintain patent protection of the same. Monies
in the Escrow Account may be disbursed provided that BRT submits to
IFEC an itemization of uses of the funds and the purposes for which the
same are to be applied, the payees to whom payments are to be made, and
the prior written consent of IFEC , which consent shall not
unreasonably be withheld.
29. IFEC Stock Options to BRT. As additional consideration of
this Agreement, and provided further that this Agreement is still in
force and effect at the time, upon the following condition precedent
IFEC agrees to grant to BRT Seventy-One Thousand Four Hundred Sixty-Six
(71,466) stock options at a price of One Cent ($.01) per share to
purchase common stock of Infectech Inc., which shares may be restricted
under securities laws:
The options agreed to hereunder shall be granted upon request
of BRT at any time after the publicly-traded price of Infectech, Inc.
common stock is Ten Dollars ($10.00) or greater for thirty (30)
consecutive calendar days. The options shall be exercisable on or
before the Tenth (10th) anniversary of the Commencement Date.
30. Governing Law; Jurisdiction and Venue. This Agreement
shall be construed and interpreted in all respects under the statutes
and case authority of the Commonwealth of Pennsylvania. Should a
dispute arise governing this Agreement or the enforcement thereof, then
the parties agree that jurisdiction and venue for any such action or
proceeding shall lie in the Court of Common Pleas of Xxxxxx County,
Pennsylvania, or the United States District Court for the Western
District of Pennsylvania, the principles of conflicts of law
notwithstanding.
IN WITNESS WHEREOF, and intending to be legally bound in accord
with the Uniform Written Obligations Act (33 P.S sec 1 et seq), the
parties hereto have set their respective hands and seals the date first
above written.
WITNESS BIOREMEDIAL TECHNOLOGIES, INC.
/s/ Xxxxxxx X. Xxxxx, III BY: /s/ Xxxxxx X. Xxxxx
Xxxxxx X. Xxxxx, President & CEO
Date Signed:
ATTEST: INFECTECH, INC.
/s/ X. Xxxxxx, MD BY: /s/ Xxxxxx X. Xxxxx, PhD
Secretary Xxxxxx X. Xxxxx, Ph.D.,
Chairman of the Board
Date Signed:
