EXHIBIT 10.15
TECHNOLOGY LICENSE AGREEMENT
between
SPINTECH, INC.
and
BIOTRONIX LABORATORIES, INC.
This Agreement (the "Agreement") is entered into as of this 20th day of
September, 1996, by and between Spintech, Inc., a Delaware corporation, which
has a principal business address of ▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
("Spintech") and Biotronix Laboratories, Inc., a Delaware corporation which has
a principal place of business at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇. ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇▇▇ ("Licensee").
WHEREAS, Spintech owns the right to the MINI-TAPS UNIT (the "Product")
as set forth in U.S. Patent No. 5512730 dated April 30, 1996 and certain
corresponding foreign patents and related know-how and technology
(collectively the "Intellectual Property Rights") and
WHEREAS, Spintech desires to grant to Licensee, and Licensee desires to
accept a license for the use of the Intellectual Property Rights to manufacture
and market the Product in accordance with the terms set forth below.
NOW THEREFORE, in consideration of the foregoing and of the mutual
covenants and agreements herein, the parties agree as follows:
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1. License Grants.
(a) Spintech hereby grants to Licensee, and Licensee hereby accepts, a
non-transferable, worldwide license to make, use and sell the Product which
utilizes the Intellectual Property Rights and which, in the absence of this
license, would infringe on Spintech's rights therein. The license shall be
exclusive worldwide for the balance of the term.
1.1 Sublicensing. Licensee shall not have the right to sublicense under
this Agreement without the prior written consent of Licensor which consent shall
not be unreasonably withheld. Licensee agrees that any such sublicense shall be
in writing and in terms consistent with the terms of this Agreement, and that
Licensee shall remain primarily liable to Spintech for performance by any
manufacturing sublicensees of Licensee's obligations under this Agreement.
Licensee shall forward to Spintech for its approval, not to be unreasonably
withheld, a complete copy of each proposed sublicense prior to its execution.
Anything herein to the contrary notwithstanding, L.G. Group Technologies, Inc.
("LG"), or any newly formed corporation in which LG has a controlling interest,
is hereby approved by Spintech as a sublicensee or assignee of Licensee's rights
hereunder. Licensee agrees to bind any sublicensee to an obligation to maintain
the confidentiality of proprietary information of Spintech.
1.2 Corporate affiliates; change in control. The license granted herein
may be assigned or sublicensed by Licensee to its corporate parent or any other
corporate affiliate now existing or hereafter formed provided Licensee
guarantees the obligations of such assignee or sublicensee. Changes in the
ownership or control of Licensee shall not constitute an assignment or
sublicensing of the Intellectual Property Rights in violation of this Agreement.
Merger or acquisition of Licensee shall not constitute an assignment or
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sublicensing in violation of this Agreement, provided the surviving company of
such merger or the acquirer of Licensee assumes the obligations of this
Agreement. Anything herein to the contrary notwithstanding, LG or any newly
formed corporation n which LG has a controlling interest is hereby approved by
Spintech as a sublicensee or assignee of Licensee's rights hereunder.
2. Research and Development. Spintech is presently engaged in the research
and development of a "mini-TAPS" unit utilizing the Intellectual Property
Rights. Spintech estimates but does not guarantee that, with appropriate
funding, research and development of the unit can be completed within
approximately six months. In partial consideration for the granting of this
exclusive license, Licensee agrees to pay up to $125,000, as a research and
development fund only, to Spintech to enable it to complete research and
development of the Product and thereafter to pay royalties as provided below.
2.1 Payment of Costs by Licensee. Within twenty-one (21) days of the date of
signing of this Agreement, Licensee shall pay Spintech the initial sum of
$50,000. Subsequent payments shall be made by Licensee to Spintech within ten
business days of each call by Spintech, provided however that, apart from the
initial sum of $50,000, Licensee shall be required to advance an amount of no
more than $25,000 within any given thirty (30) day period unless it elects to do
so. Spintech shall act in a commercially reasonable manner in an attempt to
complete research and development of the Product for less than $125,000. If
Spintech is able to complete research and development of the Product for less
than $125,000, Licensee shall be required to pay only that lesser amount.
2.2. Payment of Excess Costs by Spintech. In the event that research and
development of the Product cannot be completed for $125,000, and Spintech elects
to
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proceed with further research and development of the Product, Spintech shall
bear all costs in excess thereof Subject to Section 3 hereof, Spintech shall
furnish Licensee with such reports as to the progress of research and
development as Licensee may reasonably request. Spintech shall act in a
commercially reasonable manner to complete research and development of the
Product as soon as reasonably possible.
3. Termination of Project. In the event that Spintech reasonably believes that
the potential value of a fully researched and developed product does not warrant
additional expenditures for research and development of the Product beyond
$125,000 of which Spintech shall be the sole judge, it shall have the right to
terminate the project after a thirty (30) day written notification to Licensee.
Licensee shall then have the right to complete development, manufacture, and
sell the Product, at its sole cost and risk, or to terminate its rights and
obligations under this Agreement. In that event, Licensee shall not be subject
to any minimum sales figures provided in Section 4(a) hereof but shall be liable
for paying royalties based upon actual Net Sales pursuant to Section 4(a)
hereof.
4. Royalties.
(a) Licensee will pay Spintech royalties at the rate of 6% on world-wide gross
sales, less returns ("Net Sales") of the Product utilizing the Intellectual
Property Rights. No obligation to pay royalties shall accrue until the Product
is available for a sales and marketing effort to commence. For the first year
following commencement of sales, Licensee shall pay royalties calculated on
minimum Net Sales of $100,000 or actual Net Sales, whichever is greater. During
the following six month period, Licensee shall pay royalties calculated on
minimum Net Sales of $200,000 or actual Net Sales, whichever is . For the one
year period thereafter, Licensee shall pay royalties based on minimum annual Net
Sales of $1,000,000 or actual Net Sales, whichever is greater. The
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minimum annual Net Sales figure used to calculate minimum royalty payments shall
increase by $250,000 for each succeeding year throughout the duration of this
Agreement, until the minimum annual Net Sales figure reaches $4,000,000 and
thereafter the minimum annual Net Sales figure used to calculate minimum
royalties shall be $4,000,000 for each succeeding year.
(b) Licensee shall provide Spintech with Net Sales figures with respect to each
product utilizing the Intellectual Property Rights for each calendar quarter
within twenty-one (21) days after the end of each quarter and with such other
details as Spintech may reasonably request. Within twenty-one (21) days after
the end of each quarter, Licensee shall pay to Spintech the amount of royalties
for such period based on such figures or based on the minimum Net Sales of the
Product pursuant to subparagraph (a), whichever is greater.
(c) Promotional units, in an amount not to exceed ten (10%) percent of the
number of units of the Product sold during the first year following commencement
of Sales, which means units given away without charge, shall be excluded from
Net Sales during such year and shall not earn royalties.
5. Term. The license granted herein shall be for a term commencing as of the
date of this Agreement and ending on the expiration of the last patent for which
rights are granted hereunder. Notwithstanding the foregoing, the license and
this Agreement may be terminated by Spintech (a) if Licensee defaults on
advances payable pursuant to Section 2.1 hereof, (b) if Licensee defaults on
paying royalties and fails to cure such default within ten (10) days after
receipt of written notice of default; or (c) upon thirty (30) days written
notice upon the default by Licensee of any other material provision hereunder;
provided such default has not been remedied within such thirty (30)` days. At
any time
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during the term of this Agreement, upon ninety (90) days written notice, in its
absolute discretion, Licensee may terminate this Agreement by giving notice
thereof and, upon payment of all royalties owed and submission of all required
sales reports through the date of termination, be relieved and discharged of all
further obligations and liability hereunder.
5.1 Automatic Termination. If the $50,000 payment, required by Section 2.1
of this Agreement, is not paid by Licensee to Spintech by 5:00 p.m. (EST) on
October 11, 1996, this Agreement shall terminate and shall be of no force and
effect without notice or any other claim by Spintech.
6. Spintech's Representations and Warranties. Spintech represents and warrants
to Licensee that as of the effective date hereof:
(a) Spintech is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware.
(b) Spintech owns the Intellectual Property Rights hereunder.
(c) The execution and delivery of this Agreement have been duly authorized, and
as of the effective date hereof this Agreement will be a legal, valid and
binding obligation of Spintech enforceable against it in accordance with its
terms, and does not violate any provisions of any agreement to which Spintech is
a party or to which it is subject.
(d) Spintech shall maintain the licensed patents during the term of this
Agreement, by timely paying all fees and costs required by 35 U.S.C. ss.41 (b)
and similar regulations.
(e) Spintech has no knowledge of the existence of any patent right other than
the Intellectual Property Rights which would prevent Licensee from making,
selling or distributing the Product.
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(f) Spintech will make available to Licensee any scientific documentation or
data concerning the Intellectual Property Rights and the Product that Spintech
in its discretion believes may assist Licensee in making, selling or
distributing the Product.
7. Spintech's Disclaimer. Spintech disclaims any representation regarding 510K
approval or obligation to obtain such approval, and Licensee assumes the
responsibility for obtaining and maintaining such approval.
8. Licensee's Representations and Warranties. Licensee represents and warrants
to Spintech that as of the effective date hereof:
(a) Licensee is a corporation duly organized, existing and in good standing
under the laws of Delaware.
(b) The execution and delivery of this Agreement have been duly authorized and
as of the effective date hereof, will be a legal, valid and binding obligation
of Licensee enforceable against it in accordance with its terms, and does not
violate any provisions of any agreement to which Licensee is a party or to which
it is subject.
9. Confidentiality Obligation. Spintech and Licensee acknowledge that the
proprietary information of both parties which shall be disclosed under this
Agreement is a valuable property right to each disclosing party and shall only
be disclosed with the understanding that the proprietary information is
confidential and shall not, under any circumstance, except as stated in this
Agreement, be disclosed to any third parties without the prior written consent
of the party to be affected by such disclosure. Both parties agree to keep
secret and confidential all proprietary information which is supplied to each
other and which is designated as confidential, and both parties agree not to use
such proprietary information except as contemplated by and appropriate under
this Agreement. The obligation of confidentiality imposed by this Section shall
survive for five (5) years after
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the expiration or termination of this Agreement. Information which Is designated
as confidential proprietary information shall not be deemed confidential, if
such information was: (a) publicly known prior to or are disclosure hereunder
other than through acts or omissions attributable to a party, or (b) already
known to a party at the time of disclosure hereunder, or (c) disclosed in good
faith to a party by a third party having a lawful right to do so.
9.1 Licensee's Subcontractors. Licensee is permitted under this Agreement to
engage in the services of subcontractors to assist Licensee to manufacture the
Product to be sold under this Agreement. Licensee hereby agrees that, in all
instances of such engagement of subcontractors, Licensee shall bind such
subcontractors to an obligation of confidentiality, designed to protect the
confidentiality of Spintech's proprietary information, which utilizes standards
of confidentiality which are at least equivalent to those applicable to the
parties hereunder.
GENERAL PROVISIONS
10. Entire Agreement of Parties. This Agreement contains the entire agreement
between the parties hereto with respect to the subject matter hereof, supersedes
any and all prior and/or contemporaneous agreements, representations, and
understandings of the parties whether written or oral relating to the subject
matter hereof.
11. Amendments. The parties of this Agreement understand and agree that this
Agreement may not be altered, amended, modified or otherwise changed in any
respect or particular whatsoever except by a writing duly executed by the
parties and/or their duly authorized representatives.
12. Severability. The parties agree that if any part, term, or provision of this
Agreement shall be found illegal or in conflict with any valid controlling law,
the validity
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of the remaining provisions shall not be affected thereby. In any event the
legality of any provision of this Agreement is brought into question because of
a decision by a court of competent jurisdiction of any country in which this
Agreement applies, Spintech, by written notice to Licensee, may revise the
provision in question or may delete it entirely so as to comply with the
decision of said court.
13. Counterparts. This Agreement may be executed in one or more counterparts,
each of which shall be deemed an original, but all of which shall be deemed to
be and constitute one and the same instrument.
14. Force Majeure. Neither party shall be responsible for failure or delay in
the performance of any of its obligations hereunder due to force majeure, which
shall mean any circumstances which, due to an event beyond the party's
reasonable control, delay or prevent the performance when due of the obligations
of any party hereunder, such as but not limited to, acts of God, acts,
regulations or laws of any government, wars, civil commotions, destruction of
production facilities or materials by fires, earthquakes or storms, labor
disturbances, shortages of public utilities, common carriers or raw materials,
or any other causes of similar effect. During any such occurrence of force
majeure, this Agreement shall not be terminated or expire, but shall only be
suspended and the party claiming force majeure shall continue to perform its
obligations as soon as such cause of force majeure is removed or alleviated.
15. Notices. Any notice that may or shall be delivered to either party hereunder
shall be considered delivered and effective (a) when personally delivered, (b)
when received by facsimile, or (c) when received by courier or postal service
delivery at the following addresses:
If to Spintech: Spintech, Inc.
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▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn.: ▇▇▇▇▇▇▇ ▇▇▇▇▇, President
If to Licensee: Biotronix Laboratories, Inc.
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
S. ▇▇▇▇ Descent, CEO
16. Attorney's Fees. In the event any action, suit, arbitration or other
proceeding is brought, in law or equity, to enforce or interpret any of the
provisions of this Agreement, the prevailing party shall be entitled to recover,
in addition to any other relief to which it is entitled, reasonable attorneys'
fees and other costs.
17. Binding on Successors and Assigns. Each and all of the covenants, terms,
provisions and agreements contained in this Agreement shall be binding on, and
inure to the benefit of, the successors, executors heirs, representatives,
administrators, and assigns of the parties hereto; provided that any assignment
shall be made only with the consent of the non-assigning party, which consent
shall not be unreasonably withheld.
18. No Waiver. No failure to exercise, and no delay in exercising any right,
power or privilege hereunder shall operate as a waiver thereof No waiver of any
breach of any provisions shall be deemed to be a waiver of any preceding or
succeeding breach of the same or any other provision. No extension of time or
performance of any obligations or other act hereunder shall be deemed to be an
extension of time for performance of any other obligation or any other act
hereunder.
19. Independent Contractors. The relationship between Spintech and Licensee
established by this Agreement is that of independent entities, and nothing in
this Agreement shall be construed: (a) to give either party the right or power
to direct or control the daily activities of the other party; (b) to constitute
the parties as principal and
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agent, principal and distributor, employer and employee, partners, joint
ventures, co-owners or otherwise as participants in a joint undertaking; or (c)
to allow either party to create or assume any obligation on behalf of the other
party for any purpose whatsoever except as may be specifically permitted
hereunder; or (d) to allow either party to represent to any person or entity
that such party has any right or power to enter into any binding obligation on
the other party's behalf except as may be specifically permitted hereunder.
20. Governing Law. This Agreement shall be governed by and intended in
accordance with the laws of the State of New York.
21. Litigation. Licensee shall notify Spintech of any suspected infringement of
Spintech's patents. The primary right to institute a suit for infringement rests
with Spintech. Should Spintech fail to institute an infringement action in the
case of a bona fide infringement, as determined in good faith by and within the
sole discretion of Spintech, within thirty (30) days after notice by Licensee of
the confirmed infringement or if Spintech gives notice to Licensee that Spintech
will not institute an infringement action in the relevant instance, then
Licensee shall have the right to bring an action for infringement at its cost
and risk. Both parties agree to cooperate with the other party in all reasonable
respects, to have any of Spintech's or Licensee's employees testify when
requested by the other party, and to make available any records, papers,
information, specimens and the like reasonably necessary to prosecution of the
infringement action. Any recovery received pursuant to such infringement action
shall be retained by the party or parties bringing the infringement action, with
allowances to the cooperating party for expenses incurred in supporting the
infringement action.
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During the term of this Agreement, Licensee shall bring to Spintech's
attention any prior art or other information known to Licensee which is relevant
to the patentability or validity of any of the relevant patents and which might
cause a court to deem any of the patents wholly or partly inoperative or
invalid. Licensee shall particularly specify such prior art or other information
to Spintech at the time it learns thereof and not less than ninety (90) days
prior to bringing any action against Spintech asserting the invalidity of any of
the patents.
IN WITNESS WHEREOF, this Agreement is executed by the duly authorized
officers effective as of the day and year first written above.
SPINTECH, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇
---------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇
CEO and President
BIOTRONIX LABORATORIES, INC.
By: /s/ S. ▇▇▇▇ Descent
---------------------------------
S. ▇▇▇▇ Descent
Chairman and CEO
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