EXHIBIT 10.7
LICENSE AGREEMENT
This License Agreement, entered into as of this 9th day of December, 1992, by
and between XXXXXXX X. XXXXXXX, of Ridgefield, Connecticut, XXXXXXX X. XXXXXX of
Ridgefield, Connecticut (hereinafter referred to as "Xxxxxxx") and SAFE
ALTERNATIVES CORPORATION OF AMERICA, INC., a Delaware Corporation having a
principal place of business in Ridgefield, Connecticut (hereinafter referred to
as "SAC");
W I T N E S S E T H
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WHEREAS, Xxxxxxx owns the entire right, title and interest in and to
certain inventions and technology and know-how relating to fire retarded water
blown urethane foam and reduced smoke toxicity (herinafter referred to as
"Xxxxxxx Technology and Know-How") and;
WHEREAS, Xxxxxxx has or shall apply for certain United States Letters
Patent (hereinafter referred to as "Xxxxxxx Patent Rights") and;
WHEREAS, SAC is engaged in the commercialization of new technologies
dealing with the treatment of sludge, land-fill and waste materials, and
hazardous waste (especially medical waste) and has developed and owns
considerable expertise, technology and know-how in this field; and;
WHEREAS, SAC is desirous of acquiring from Xxxxxxx an exclusive license to
practice said patents and trade secrets within the Continental United States of
America under Xxxxxxx Patent Rights and related Xxxxxxx Technology and Know-How,
and Xxxxxxx is
willing to grant SAC such an exclusive license; /1/
NOW, THEREFORE, in consideration of the mutual covenants and premises set
forth herein and subject to the terms and conditions hereinafter recited, it is
hereby agreed as follows:
I. DEFINITIONS
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1.01 The entire retarded water blown urethane foam with reduced smoke
toxicity means any foam produced pursuant to Xxxxxxx Technology and Know-How and
is or may be covered by Xxxxxxx Patent Rights (i.e., the manufacture, use and
sale of which would otherwise entitle Xxxxxxx to relief under 35 U.S.C. section
271).
1.02 "Xxxxxxx Patent Rights" means any issued or to be issued patents and
pending patent applications relating to the fire retarded smoke blown urethane
foam with reduced smoke toxicity owned or controlled by Xxxxxxx.
1.03 "Xxxxxxx Technology and Know-How" means the technical information
and/or technology, either oral or written, relating to methods, products and
apparatus described or claimed in Patent Rights or other information patentable
or unpatentable made know during the term of this agreement by Xxxxxxx to SAC,
SAC's agents or SAC's authorized representatives.
1.04 "Licensed Territory" means the Continental United States of America in
which Xxxxxxx Patent Rights exist and/or in which Xxxxxxx Technology and Know-
How has application.
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/1/ Any licensing of Technology herein shall specifically exclude use in the
packaging foam industry.
1.05 "Xxxxxxx Improvement" means any new invention, improvement or
addition to Xxxxxxx Patent Rights or Xxxxxxx Technology and Know-How made,
acquired or owned by Xxxxxxx or any other member thereof, during the term of
this Agreement.
1.06 "Joint Improvement" means any new invention, improvement or
development relating to this technology made jointly by Xxxxxxx and SAC during
the term of this Agreement.
II. WARRANTIES
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2.01 Xxxxxxx warrants that it is the owner of all Xxxxxxx Patent Rights and
Xxxxxxx Technology and Know-How and has the full rights and authority to make
this Agreement and to grant the exclusive rights provided for herein.
2.02 Xxxxxxx warrants that it is not aware of any prior patents or
publications, prior public uses or sales, or other material facts which
adversely affect the validity of the Xxxxxxx Patent Rights.
2.03 Xxxxxxx warrants that it is not aware of an patent or other
proprietary rights of any party which would be infringed upon by SAC's
performance under any provision hereof.
2.04 Xxxxxxx warrants that the exclusive rights granted to SAC herein will
not conflict with any prior agreement, understanding or obligation of Xxxxxxx or
otherwise relating to the Xxxxxxx Patent Rights and/or Xxxxxxx Technology and
Know-How.
III. EXCLUSIVE LICENSE
----------------------
3.01 Xxxxxxx hereby grants to SAC an exclusive license under the Xxxxxxx
Patent Rights to practice said patent and trade secrets within the Continental
United States of America, Xxxxxxx Technology and Know-How and Joint Patent
Rights to manufacture, use
and sell and to sublicense.
3.02 The initial term of this exclusive license shall be the full term of
the Xxxxxxx Patent Rights and Joint Patent Rights.
3.03 SAC shall pay Xxxxxxx a continuing royalty of four (4%) per cent of
the gross sales by SAC of the product licensed hereunder. Only one royalty
shall be paid on any particular sale hereunder, e.g. inter-company transfers or
sales by SAC to a subsidiary to SAC or another subsidiary for subsequent resale
shall be deemed to be one sale. The "one" royalty payment, at all times, shall
be based upon the highest gross dollar amount generated from the sale of the
product which shall include all resales and/or transfers in determining the
gross amount. If resales and/or transfers are delayed, for any reason, royalty
payments will still be made on the highest gross dollar amount generated from
the sales of the product. Royalty payments will then be adjusted accordingly
at the time of each additional resale and/or transfer.
3.04 Continuing royalty payments hereunder shall be made quarterly within
thirty (30) days after the end of each calendar quarter. SAC shall pay Xxxxxxx
four (4%) percent of all payments made by any sublicensee in accordance with
this paragraph.
3.05 SAC agrees to maintain complete records in accordance with generally
accepted accounting principals which accurately reflect the activities of SAC
under this Agreement as are pertinent to an accurate calculation of continuing
royalties. Xxxxxxx shall have the right, at its own expense, to have the
records maintained by SAC hereunder inspected by a firm of nationally recognized
certified public accounts for the purpose of verifying the amount of continuing
royalties due and payable hereunder, but such rights of inspection shall be
limited to no more than two inspections per calendar year, and all information
provided or obtained
by such certified public accountant, except the total amount of continuing
royalties accruing in each calendar quarter, shall be held by them in strict
confidence including as to Xxxxxxx.
IV. PATENTS
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4.01 Xxxxxxx represents to SAC that it has already filed or shall file for
United States Letters Patent covering this technology. Xxxxxxx and SAC agree
that it is important to this Agreement that the Xxxxxxx Patent Rights be
maintained.
4.02 For and in consideration of the right and license, SAC agrees to pay
all maintenance fees, all fees for filing and prosecuting pending patent
applications, etc., for those Xxxxxxx Patent Rights and Xxxxxxx Improvements
including any Joint Patents which Xxxxxxx and SAC agree are important to this
agreement. Xxxxxxx and SAC agree to cooperate fully with each other in such
filings and maintenance.
4.03 Xxxxxxx and SAC shall cooperate in the licensing of any Joint Patent
Rights to others and shall share equally any royalties or other licensing income
equally between them. Xxxxxxx and SAC agree to provide the other with quarterly
reports of any licensing income from Joint Patent Rights and to accompany such
reports with payment of their share of such licensing income. Such reports and
payments shall be made within forty-five (45) days of the end of each calendar
quarter.
4.04 Xxxxxxx Patent Rights and Improvements shall remain the sole property
of Xxxxxxx and SAC's only right therein are those granted by Xxxxxxx herein.
4.05 Joint Improvements and Joint Patent right shall remain equally the
property of Xxxxxxx and SAC.
4.06 Similarly, Xxxxxxx and SAC shall cooperate in the enforcement of any
Xxxxxxx
Patent Right or any Joint Patent Right. In the event of such infringement of
any patent Rights, SAC shall have the right but shall not be obligated to bring
suit against the infringer. All costs of the litigation shall be the
responsibility of SAC. Any recoveries from such litigation, or any settlement
thereof, shall go to SAC, with the provision that should the recoveries exceed
the outlays for such litigation, then SAC will pay to Xxxxxxx four (4%) percent
of such excess. SAC will keep Xxxxxxx fully and promptly informed of the
progress of such litigation. SAC shall have the power at its option to enter
into any settlement of such litigation; provided, however, that any such
settlement must uphold the existence of all the Patent Rights and this
Agreement. If SAC refuses or fails to enforce any patent Rights within a
reasonable time after notice, Xxxxxxx may do so in his own name, at his sole
expense and for his sole benefit.
V. TERMINATION
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5.01 In the event Xxxxxxx is in default of any substantial obligation, or
any warranty or material representation is breached or is untrue, then
commencing ninety (90) days after written notice to that effect SAC, without
limiting any rights or remedies SAC may have under this Agreement or at law or
in equity, all royalties accruing under this Agreement, shall be paid into
escrow for the time that Xxxxxxx is in default. In the event Xxxxxxx cures
such default, the royalties paid into escrow shall be paid to Xxxxxxx and
royalties accruing after the date on which the default was cured shall be paid
to Xxxxxxx immediately. Quarterly royalty payments will continue as provided
for herein. Xxxxxxx shall pay to SAC any and all costs and damages caused by
such breach.
5.02 In the event SAC fails to make a payment for any reason after such
payment is
due, or it is in default of any other substantial obligation under this
Agreement, then Xxxxxxx may terminate this Agreement to be effective after
ninety (90) days from a written notice to that effect given by Xxxxxxx to SAC
specifying the default; provided, however, that if SAC makes such payment or
cures such default within the notice period, this Agreement shall remain in
full force and effect as it would have had such notice not been given and
provided further that SAC shall pay to Xxxxxxx any and all costs and damages
caused by such breach.
5.03 In the event of termination of this Agreement pursuant to paragraphs
5.01 or 5.02, SAC shall: (a) have the right to fill all outstanding orders upon
payment of the royalty due thereon, provided such sale is completed within six
(6) months after the date of termination; (b) return to Xxxxxxx all confidential
information furnished to SAC by Xxxxxxx and all Xxxxxxx Patent Rights and all
Xxxxxxx Technology Know-How (c) Xxxxxxx is to be paid any royalties which have
been paid into escrow, including any interest or other income earned thereby.
5.04 In the event of any termination of this Agreement, Xxxxxxx and SAC
shall be joint owners of any Joint Patent Rights with all rights and privileges
attendant thereto. Any other existing licenses under such Join Patent Rights
shall survive any termination hereof and the provisions of this Agreement
relating to the division of royalties from such other licensees shall likewise
survive termination hereof.
5.05 Notwithstanding anything to the contrary, in the event this License
does not generate $20,000.00 per annum within two (2) years of the date of this
License, it shall become automatically a non-exclusive License. If, however,
said License generates the sum of $20,000.00 in any one o the two (2) years, the
License shall continue as an exclusive License.
VI. DISPUTE RESOLUTION
----------------------
Any dispute arising between Xxxxxxx and SAC with respect to any provision
of this Agreement or any matter relating to the Agreement shall be resolved if
at all possible by good faith negotiation between the parties hereto. If such
negotiation fails to resolve such dispute, Xxxxxxx and SAC agree to submit the
dispute to binding arbitration conducted in Danbury, Connecticut, pursuant to
the rules of the American Arbitration Association.
VII. NO CONTINUING WAIVER
-------------------------
Any waiver of any breach of this Agreement must be my notice in accordance
with Article X and any waiver of any breach shall not be deemed a waiver of any
breach of a continuing nature or any other breach of either the same of
different character.
VIII. FORCE MAJEURE
-------------------
The performance of their respective obligations under this Agreement shall
be suspended for such period of time as they are prevented from performing such
obligations by reason of acts of God, fire, flood, explosion, insurrection,
riot, enemy attack, malicious mischief, order of court or other governmental
authority, inability to secure or delay in securing rights of way, privileges,
franchises, permits equipment, and other events reasonably beyond the control
of the party subject thereto.
IX. ASSIGNMENT
--------------
This Agreement shall be assignable by the SAC without the prior written
consent of the other party. This Agreement shall be binding upon an apply,
extend to, and inure to the
benefit of the successors, heirs and assigns of the respective parties
hereunder.
X. NOTICES
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All notices required or permitted to be given pursuant to this Agreement
shall be in writing and shall be deemed adequately given if delivered in person
or sent by registered or certified mail, return receipt requested, to the
following address:
SAFE ALTERNATIVES CORPORATION
c/o Xxxxxxx X. Xxxxxx, Esq.
00 Xxxxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
XXXXXXX X. XXXXXXX
000 Xxxxxxxxxxx Xxxx
Xxxxxxxxxx, XX 00000
or such other address as may be designated by a party, by a notice in
compliance with this Article X.
XI. GOVERNING LAW
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This Agreement shall be governed by and construed in accordance with the
laws of the State of Connecticut.
XII. COMPLETE AGREEMENT
-----------------------
This Agreement represents the complete agreement of the parties with
respect to the subject matter hereof, and all prior agreements and negotiations
are merged herein. This Agreement may be amended or changed only by a written
document purporting to do so and signed by the parties.
XIV. SEVERABILITY
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If it shall at any time appear that any right or obligation provided
in this Agreement is contrary to any law, treaty or regulation of a government
to which any party is subject, such right or obligation shall be deemed
annulled, or shall be modified to the extent required to comply with such law,
treaty or regulation.
XV. MARKING
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SAC agrees to permanently and legibly xxxx or cause to be marked in
the manner prescribed by title 00, Xxxxxxx 000, xx xxx Xxxxxx Xxxxxx Code, or
appropriate foreign requirements all Xxxxxxx Technology marketed by SAC or its
sublicensees, with the number or numbers of the patents of the Xxxxxxx Patent
Rights insofar as it is reasonably practical.
XVI. CONFIDENTIALITY
--------------------
Except to the extent permitted under and necessary to enjoy the full
benefits of this Agreement, it is agreed that without the prior written approval
of the other party, neither party will during the term of this Agreement
disclose or permit to be disclosed to others or used for, its own benefit, any
know-how and unpublished information relating to the business, engineering,
research activities or trade secrets of the other acquired by the party during
the term of this Agreement, provided that such know-how and unpublished
information has been designated and marked as "CONFIDENTIAL" by the party to
whom the know-how and information belongs prior to its acquisition by the
receiving party; and provided further that the know-how or unpublished
information has not fallen into the public domain through no fault of the
receiving party and has not been received by the receiving party from another
source.
XVIII. DUPLICATE ORIGINALS
--------------------------
This Agreement is being executed in duplicate original form, each of
which shall serve and function as an original agreement for all purposes.
XIX. RESERVATION OF XXXXXXX RIGHTS
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Xxxxxxx represents, and based thereon SAC acknowledges, that Xxxxxxx
X. Xxxxxxx has expertise in numerous other areas. It is agreed by SAC that any
discoveries or inventions of Xxxxxxx X. Xxxxxxx which are not related to the
Xxxxxxx Patent Rights, Technology and Know-How and which do not come within the
purview of the definitions contained in Article I hereof shall remain the sole
property of Xxxxxxx X. Xxxxxxx.
XX. ROYALTY PAYMENTS
--------------------
Notwithstanding anything in the License Agreement to the contrary, the
royalty payments called for herein shall, at all times, be based upon the Fair
Market Value of the sale of the product. If there is a dispute about the Fair
Market Value of the product, said dispute shall be resolved in accordance with
the License Agreement.
IN WITNESS WHEREOF, Xxxxxxx has executed this Agreement under his hand
and seal and SAC has caused this Agreement to be executed by its duly authorized
representative as of the date and year first above written.
Signed, Sealed and Delivered
In the presence of:
s/Xxxxxxx X. Xxxxxxxx s/Xxxxxxx X. Xxxxxx
--------------------------------- --------------------------------------
Xxxxxxx X. Xxxxxx
s/Xxxxxxx X. Xxxxxxxx s/Xxxxxxx X. Xxxxxx
--------------------------------- --------------------------------------
Xxxxxxx X. Xxxxxx
s/Jo Ellyn K. S. s/Xxxxxxx X. Xxxxxxx
--------------------------------- --------------------------------------
Xxxxxxx X. Xxxxxxx
--------------------------------- SAFE ALTERNATIVES CORPORATION
OF AMERICA, INC.
s/Xxxxxxx X. Xxxxxxxx s/Xxxxxxx X. Xxxxxxxx
--------------------------------- --------------------------------------
Xxxxxxx X. Xxxxxxxx, Its President
STATE OF CONNECTICUT)
) SS. Ridgefield
COUNTY OF FAIRFIELD )
Personally appeared XXXXXXX X. XXXXXXX, Signer and Sealer of the foregoing
Instrument, and acknowledged the same to be his free act and deed, before me.
s/Xxxxxxx X. Xxxxxxxx
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STATE OF CONNECTICUT)
) SS. Ridgefield
COUNTY OF FAIRFIELD )
Personally appeared XXXXXXX X. XXXXXX, Signer and Sealer of the foregoing
Instrument, and acknowledged the same to be his free act and deed, before me.
s/Xxxxxxx X. Xxxxxxxx
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STATE OF CONNECTICUT)
) SS. Ridgefield
COUNTY OF FAIRFIELD )
Personally appeared XXXXXXX X. XXXXXX, Signer and Sealer of the foregoing
Instrument, and acknowledged the same to be his free act and deed, before me.
s/Xxxxxxx X. Xxxxxxxx
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STATE OF CONNECTICUT)
) SS. Ridgefield
COUNTY OF FAIRFIELD )
Personally appeared XXXXXXX X. XXXXXXXX, President of SAFE ALTERNATIVES
CORPORATION OF AMERICA, INC. and acknowledged the same to be his free act and
deed, and the free act and deed of said corporation, before me.
s/Xxxxxxx X. Xxxxxxxx
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