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INVESTMENT AND LICENSING AGREEMENT
This Investment and Licensing Agreement ("Agreement") is made as of
this 11th day of June, 1998, by and between:
BioRemedial Technologies, Inc., a corporation organized and existing
under the laws of the Commonwealth of Pennsylvania, with its principal
office located at 0000 Xxxxxx Xxxxx, Xxxxxxxxx, Xxxxxx Xxxxxx,
Xxxxxxxxxxxx ("BRT")
AND
Infectech, Inc., a corporation organized and existing under the laws of
the State of Delaware, with its principal office located at 00
Xxxxxxxxx Xxxxxx, Xxxxxx, Xxxxxx Xxxxxx, Xxxxxxxxxxxx ("Infectech").
RECITALS:
A. BRT is actively engaged in the business of Environmental
Bioremediation for third parties.
B. Infectech is actively engaged in the development of certain
processes and intellectual property having applications in the medical,
biological and veterinary field and is the owner of certain
intellectual property and patents relating to same.
C. BRT and Infectech believe that certain of the Infectech intellectual
property and applications may be of use in the field of Environmental
Bioremediation.
D. In order to explore the use of Infectech intellectual property in
the field of Environmental Remediation, BRT is willing to provide or
arrange for an investment in Infectech in the amount of Six Hundred
Thirty Thousand Dollars ($630,000.00), which investment shall be
earmarked and placed into escrow for the collaborative efforts of
Infectech and BRT in the field of Environmental Remediation in
conjunction with the same.
E. The parties hereto desire that the results of said efforts shall be
licensed both domestically and worldwide by Infectech exclusively to
BRT, and BRT agrees to pay royalties to Infectech for the license of
same.
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. The Investment. BRT shall provide or arrange for an investment into
Infectech in the amount of Six Hundred Thirty Thousand Dollars
($630,000.00) ("Investment"). The Investment shall be held by
Infectech in a separate account escrowed with the attorney for
Infectech ("Escrow Account").
(A) Funds in the Escrow Account shall be utilized solely for the
research and development, protection of, or costs directly associated
with the intellectual property as it relates to Environmental
Bioremediation. The parties agree that approximately 50% of the
Investment Account will be utilized for research and development of the
intellectual property, and that approximately 50% of the Investment
Account will be utilized to obtain patent protection of same.
(B) Funds in the Escrow Account shall be used solely for the aforesaid
purposes unless the parties mutually agree otherwise.
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(C) No funds from the Escrow Account shall be expended until Infectech
shall achieve $1,200,000.00 of equity capitalization from its current
public offering. Upon Infectech obtaining $1,200,000.00 of equity
investment, monies may be disbursed from the Escrow Account with
Infectech matching any amount(s) disbursed in an equal amount, with all
such monies being expended for the purposes set forth herein, subject
to (D) below.
(D) Infectech agrees that funds from the Escrow Account attributable
to the Investment, may be utilized for the purposes set forth in (B),
prior to the $1,200,000.00 capitalization, PROVIDED that BRT submit to
Infectech an itemization of uses of the funds and the payees and
purposes for which the same are to be applied, and with the prior
written consent of Infectech which shall not be unreasonably withheld.
3. Commencement Date. BRT shall use its best efforts to cause the
Investment to be made in full on or before May 1, 2001. Infectech will
recognize, on a mutually negotiated basis, the financial contributions
made by BRT in further developing the Infectech intellectual property
and application solely in further developing the Infectech intellectual
property solely in the field of Environmental Bioremediation from the
time of the letter of intent (LOI) (March 6, 1998) until the
commencement of this Investment and Licensing Agreement. Should BRT
fail to fulfill this condition precedent to this Agreement, then both
parties (BRT and Infectech, Inc.) Will renegotiate the contract to the
best of their abilities in good faith. The date on which the Investment
is made into Infectech shall be the "Commencement Date".
4. License to BRT. For a period of Ten (10) years after the
Commencement Date, Infectech agrees to grant BRT the exclusive
worldwide license to the following:
(a) the application of Infectech intellectual property 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 in activities directly involved in the field of
Environmental Bioremediation.
(b) BRT hereby agrees that the Infectech intellectual property 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 Infectech intellectual
property 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 Infectech intellectual
property for any use other than that of environmental bioremediation
without the express written permission of Infectech.
(c) The license of BRT granted hereunder shall cease to be exclusive
outside of the United States of America, at the option of Infectech,
upon the first to occur of the following:
(i) BRT has not, within a period of three (3) years from the date of
this Agreement obtained a sub-license to utilize the Infectech
intellectual property outside of the United States of America; or (ii)
BRT advises Infectech it no longer desires the exclusive license
outside of the United States of America. Nothing herein shall be
construed to terminate the BRT license outside of the United States of
America and the effect of such termination shall be as to the
exclusivity of such license only.
5. Royalties to be Paid for License. During the term hereof, and in
consideration of the License set forth in 4, BRT agrees to pay
Infectech a royalty per project which shall be not less than 14% nor
more than 18% of each project undertaken by BRT, the actual percentage
to be mutually agreed upon by the parties for each individual project.
All royalty payments hereunder shall be based exclusively upon the
mutually agreed biological components of each project. Should the
parties be unable to mutually agree upon the royalty, then the parties
agree that the allocation shall be decided by Xxxxx Xxxxxxxx, PhD, or
such other individual upon whom the parties mutually agree.
6. Early Termination: Royalty Payments. Infectech shall have the right
on the Fifth (5th) anniversary of the Commencement Date to terminate
this Agreement should BRT not have paid royalties hereunder in an
amount in excess of $100,000 during the previous Sixty (60) month
period just elapsed. The notice of early termination by Infectech
shall be made in writing not later than Forty-Five (45) days after the
Fifth (5th) anniversary.
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7. Early Termination: BRT Sale and Other. Further, Infectech shall have
the right to terminate this Agreement upon any of the following:
(a) The assets or stock of BRT is acquired in whole or a controlling
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 exclusive license set forth in this Agreement, without the express
prior written permission of Infectech;
(c) BRT shall have a proceeding in bankruptcy or reorgan-ization filed,
either voluntarily or involuntarily, shall make an assignment for the
benefit of its creditors, or shall become the subject of an 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.
(e) A material adverse change, financial or otherwise, shall have
occurred in the affairs or business of BRT, which shall be determined
in the sole and absolute discretion of Infectech, subject, however, to
Generally Accepted Accounting Principles (GAAP) with respect to
financial changes.
8. Confidentiality. Except as otherwise agreed in writing by
Infectech, BRT shall not appropriate, use or disclose, directly or
indirectly, for its own benefit or otherwise, any information,
materials, trade secrets, documents, correspondence, or other property
of Infectech in whatever form or media, to which it shall have obtained
access hereunder or in contemplation of this Agreement, or which shall
otherwise in any way shall relate to Infectech or the Infectech
Property, 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 Infectech and remain the sole and exclusive property
of Infectech, subject to the rights of License by BRT as provided
herein.
9. 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 the 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;
(3) breach or otherwise violate any Governmental Rule or Governmental
Order; or
(4) require any consent, authorization, approval, exemption or other
action by, or any filing, registration or qualification with, any
person or entity.
(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.
10. 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 Infectech as a Licensor
entitled to royalty payments as provided hereunder.
11. 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 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
