EXHIBIT 10.3
LICENSE AGREEMENT
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THIS AGREEMENT ("Agreement") is made effective the ____ day of July,
2002, between LIFE INTERNATIONAL PRODUCTS, INC, a California corporation, with
its principal office located at ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇,
together with its affiliated business entity, LIFE 02 BEVERAGES, INC., a Indiana
limited liability company, with its principal office located at ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, hereinafter collectively referred to as
"'LICENSOR", and HYDRON TECHNOLOGIES, INC., a New York corporation, whose shares
are publicly traded, with principal offices located at ▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇, ▇▇▇▇▇ ▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, hereinafter referred to as
"LICENSEE".
W I T N E S S E T H:
WHEREAS, LICENSOR owns all of the undivided interests in certain
intellectual property rights and interests in Patent Rights and Know-How and as
defined below; which as LICENSOR it has or will disclose to LICENSEE hereunder;
and
WHEREAS, LICENSOR desires to grant LICENSEE this non-exclusive license
under the Patent Rights to develop, manufacture, use, test, distribute, market
and sell Products and Services in the world and LICENSEE desires to receive such
grant subject to the terms, considerations, and conditions hereof.
NOW, THEREFORE, in consideration of the premises and of the mutual
promises and covenants herein made and the mutual benefits to be derived from
this Agreement, LICENSOR and LICENSEE represent, warrant, covenant, and agree as
follows:
1. DEFINITIONS.
A. "Products" or "Services" shall mean any device,
equipment, supplies or personalty ("Products") and/or any treatment, service or
activity ("Services") made with LICENSOR's patented equipment for use or
application in the Field.
B. "Process" shall mean the mechanical process of
enriching fluids with oxygen (super oxygenation), with equipment patented by
LICENSOR, wherein the liquid is saturated with a high concentration of dissolved
oxygen. For purposes of this Agreement, "Process" shall refer only to the use of
the Process in the Field made with LICENSOR's patented equipment.
C. "Patent Rights" shall mean any and all U.S. patent
applications and Letters Patent issued upon LICENSOR's U.S. patent applications,
including without limitation all patent rights as more particularly described on
Exhibit "A" attached hereto and incorporated herein by reference and including
without limitation any patent and/or applications issued in whole or in part
based upon any such patents together with any continuations,
continuations-in-part, divisions, and re-issues thereof or additions thereto;
any and all foreign patent applications and patents issued upon LICENSOR's
foreign patent applications ("Foreign Patent Rights") arising out of or
connected with such U.S. patents and/or applications, including those which may
be more particularly described on Exhibit "A" attached hereto.
D. "Know-How" shall mean LICENSOR's unpatented, secret
proprietary data, documents, information and trade secrets relating to the
manufacture of Products or delivery of Services using the Process, now or
hereafter acquired, owned or controlled by LICENSOR during the term hereof
including test results, clinical data, research, processing, quality control and
assembly information, technical reports and technology which may be reasonably
desirable for the manufacture and assembly and/or sale of Products or delivery
of Services using the Process.
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E. "Improvements" shall mean any and all modifications,
derivatives, or related derivatives or any refinements in using the Process for
Products or Services, whether patented or unpatented, which may be developed or
acquired by LICENSOR or LICENSEE during the term hereof.
F. "Field" shall mean cosmetics, pharmaceuticals and
medical oxygenation products, but specifically excluding only oxygen enriched or
fortified products which are consumed orally for digestion in the stomach and
not sold, marketed or used as cosmetics, pharmaceuticals or medical oxygenation
products (Human Consumables), which is subject to a prior license of LICENSOR.
G. "System" shall mean LICENSOR's Products, Services,
Patent Rights, Know-How, Process and Improvements made with LICENSOR's patented
equipment for use in the Field.
H. "Unit" shall mean an individual piece of LICENSOR's
patented equipment which makes use of the Process in order to produce oxygenated
fluids.
2. GRANT OF LICENSE.
A. Use of License. Subject to all the terms and
conditions hereof including, specifically, performance by LICENSEE of its
obligations hereunder, LICENSOR, as owner and holder of the Patent Rights for
the Process agrees to, and hereby does, grant LICENSEE, who accepts same, an
unconditional, unqualified, worldwide non-exclusive license, to develop or have
developed, to manufacture or have manufactured, to use or have used, to test or
have tested, to distribute or have distributed, to market or have marketed, and
to sell or have sold, Products and Services applying the Process in the Field.
This grant creates in LICENSEE certain rights as a LICENSEE only, and nothing
herein contained shall be deemed to constitute a conveyance to LICENSEE of legal
title which shall remain exclusively in the name of LICENSOR. This grant creates
in LICENSEE the right to use or employ LICENSOR's Know-How and LICENSOR's
Process in connection with the manufacture of Products or delivery of Services
during the term of this Agreement; provided, however, no legal title to such
Know-How or such Process is being sold or otherwise conveyed hereunder.
B. Term. Subject to all of the provisions hereof,
including specifically earlier termination, the term of the license granted
herein shall continue for a period of five (5) years (the "Initial Term")
commencing on the date of this Agreement. At LICENSEE's election, LICENSEE may
extend the term of this Agreement for an additional term of five (5) years (the
"First Renewal Term") by giving notice to the LICENSOR not later than ninety
(90) days prior to the expiration of the Initial Term, provided that this
Agreement has not been previously terminated and further provided that LICENSEE,
on the commencement of such First Renewal Term, is not in breach of any material
terms of this Agreement. LICENSEE shall have the right to further extend the
term of this Agreement for successive five (5) year terms (each a "Succeeding
Renewal Term"), commencing on the expiration of the First Renewal Term by giving
notice to the LICENSOR not later than ninety (90) days prior to the expiration
of the First Renewal Term or any Succeeding Renewal Term, provided that this
Agreement has not been previously terminated and further provided that LICENSEE,
on the commencement of each Succeeding Renewal Term, is not in breach of any
material terms of this Agreement.
C. Sublicensing. LICENSEE shall have the right to
sublicense any of the rights hereby licensed to the LICENSEE upon full
compliance with Paragraph 14 and all other terms and conditions herein.
Specifically, unless otherwise provided herein, all sublicenses by LICENSEE
shall prohibit any further sublicensing by such sublicense without the prior
written consent of LICENSOR.
D. Regulatory Requirements. LICENSEE shall take any and
all necessary steps with full and due diligence to maintain and/or obtain from
all regulatory or public health authorities within the United States, any state
thereof, and/or any foreign or domestic governmental authority otherwise having
jurisdiction over the use of the Process either as a result of the provision of
Services, or the manufacture, use, testing, distribution, marketing and/or sale
of the Products, such approvals, licenses, permits, consents, etc. as may be
required by such authorities for the manufacture, use, testing, distribution,
and marketing within their jurisdiction, all at LICENSEE's sole cost and
expense.
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E. No Action. LICENSEE shall not undertake anything
which will prejudice the Products, the Services or the Process or any interest
of the LICENSOR as owner therein; provided, however, nothing in this Agreement
shall be construed as interfering with LICENSOR's or LICENSEE's use of its own
or licensed patents, trademarks and other intellectual property in its
respective business matters, specifically including LICENSEE's right to pursue
issuance of patents for compositions or methods for administering high levels of
oxygen to skin or tissue, the right, title and interest in which is acknowledged
by LICENSOR, its officers and directors, to belong solely to LICENSEE, and
regarding which LICENSOR's President has executed Exhibit B hereto.
3. REPRESENTATIONS OF LICENSOR. All representations and
warranties of LICENSOR are specifically and expressly limited to the following:
A. LICENSOR has the right to grant this non-exclusive
license in the Field.
B. Other than as set forth on Exhibit "B" attached
hereto, LICENSOR has at no time filed, or caused to be filed, patent
applications, or obtained in the name of any LICENSOR or caused to be obtained
in the name of others, any United States Letter Patent or any Foreign Patent
Right based in whole or in part arising out of or connected with the Products or
Services.
C. LICENSOR expressly represents that its prior license
to a single entity for the purpose of producing, marketing and/or selling Human
Consumables in no way conflicts with or shall limit the license granted
hereunder.
D. LICENSOR is in good standing as a corporation under
the laws of the State of California, with full power and authority to execute
this Agreement and to perform all of the transactions described or contemplated
in this Agreement.
E. LICENSOR expressly acknowledges and agrees that it
has relied on only those representations of LICENSEE contained herein, and that
in selecting LICENSEE as a LICENSEE, it has relied solely on its own
investigation of LICENSEE and that of its officers and directors, by attorneys,
accountants and/or other professionals of LICENSOR's own choosing.
F. LICENSOR acknowledges and agrees it is under no time
constraints and has availed itself of any and all due diligence in the absence
of any time or business pressures to enter into this Agreement.
G. LICENSOR makes no representation or covenant, oral or
written, relating to the Patent Rights, Process, Products or Services other than
as specifically set forth herein, and LICENSOR expressly makes no representation
or covenant whatsoever, oral or written, as to the commercial viability or
profitability of the Patent Rights, Process, Products, Services or the System or
the effectiveness thereof.
4. REPRESENTATIONS OF LICENSEE. LICENSEE expressly represents and
warrants to LICENSOR as follows:
A. LICENSEE expressly acknowledges and agrees that with
regard to the use of the Process for the Products and Services, LICENSEE has
relied on no representations, oral or written, of LICENSOR, other than as set
forth in Paragraphs 3C and 3E hereof, and expressly acknowledges and agrees that
in making this agreement LICENSEE has relied solely on its own investigation and
that of its officers, directors, and professional advisors to determine the
chance for financial success of its agreement with LICENSOR after full
disclosure by LICENSOR to LICENSEE of its System.
B. LICENSEE is in good standing under the laws of the
state of New York, with full power and authority to execute this Agreement and
to perform all of the transactions described in this Agreement.
5. RENEWAL AND MAINTENANCE COSTS. LICENSOR shall apply for, seek
prompt issuance of, and maintain during the term of this Agreement the Licensed
Patents. The filing, prosecution, and maintenance of all Licensed Patents shall
be the primary responsibility of LICENSOR. LICENSOR shall file patent
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applications corresponding to Licensed Patents in such foreign countries, as
LICENSOR in its discretion shall decide after consultation with LICENSEE. Should
LICENSOR expressly decline to have patent applications filed in any country,
LICENSEE at its discretion and expense may file, prosecute and maintain
corresponding patent applications in such country, which patent application or
patent resulting therefrom shall not be a Patent Right within the scope of this
Agreement and LICENSEE shall be free to practice the patent in such country
without any obligation to pay Royalties hereunder.
6. ROYALTY; MINIMUM GUARANTEE.
A. Percentage Payments Treated as Royalties
(i) LICENSEE. LICENSEE shall pay LICENSOR a royalty (the
"Royalty") of five percent (5%) of annual "Net Sales Revenue"
received by LICENSEE from all worldwide Products and Services
produced using LICENSOR's patented equipment. "Net Sales
Revenue" shall be gross sales revenues exclusive of returns,
discounts, freight and any sales or other similar taxes that
may be included in the price. It is expressly agreed that
"gross sales revenues" shall include all amounts received for
any Products or Services, provided, however, Sub-licensee's
royalties, Sublicensor "up-front fees" or Sublicensor fees
from the sale or lease of Units shall not be included under
this Paragraph 6(A)(i). In the event that LICENSEE sells to a
related party of LICENSEE, the Net Sales Revenue shall be
calculated in an amount taking into account the fair market
value of the Products or Services sold to such related party.
(ii) Sublicensee Royalties. LICENSOR shall also be
entitled to receive twenty-five percent (25%) of any and all
royalties received by LICENSEE from any sublicensee of
LICENSEE hereunder; provided, however, Sublicensor "up-front
fees" or Sublicensor fee from the sale or lease of "Units"
shall not be included in this Paragraph 6(A)(ii). In the event
that sublicensee is a related party of LICENSEE, the amounts
to be paid to LICENSEE pursuant to such sublicense shall be
calculated in an amount taking into account the fair market
value of the Products or Services sublicensed to a related
party.
(iii) Sublicensor Up-front Fees. The parties agree that all
lump sum fees (whether or not actually payable on a periodic
basis) LICENSEE receives from any third party other than for
the use of Products or Services using the Process at the
inception of a contract ("Up-front Fees") shall not be treated
as fees subject to the royalty provisions of Paragraph 6.A(i)
or treated as Sublicensee fees of Paragraph 6.A(ii). The
parties acknowledge that royalties are only based on a
sublicensee's revenue stream under said sublicense. Up-front
Fees shall be based on the gross amount paid to LICENSEE after
any direct charges or expenses attributable thereto, if any;
the Up-front Fees shall be distributed 75% to LICENSEE and 25%
to LICENSOR in accordance with this Paragraph 6.
(iv) Commission on Sale or Lease of Units. LICENSOR shall
be entitled to receive a portion of the net amount (gross
amount less direct expenses incurred to produce, assemble, or
install the Unit) paid to LICENSEE as a result of the sale or
lease of any Unit. The Unit fees shall be based on such amount
paid to LICENSEE after such charges or expenses; the Unit fees
shall be distributed 75% to LICENSEE and 25% to LICENSOR in
accordance with this Paragraph 6.
B. Stock Consideration. In consideration of LICENSOR's
grant of the license to LICENSEE, LICENSEE agrees to cause to be issued common
stock of Hydron. LICENSEE agrees that such stock shall constitute the
unconditional right of ownership in Hydron represented by such certificates.
Hydron shall issue 325,000 common shares of stock in Hydron to LICENSOR within
thirty (30) days from the execution of this Agreement by all parties hereto.
Additional terms regarding the Stock Consideration are contained in Exhibit "C"
attached hereto and made a part hereof. Such Stock Consideration shall be in
addition to, and not in limitation of, all other amounts due from LICENSEE
hereunder, and shall not be applicable against any other amounts due under this
Agreement.
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C. Minimum Payment. As a condition of maintaining the
license granted hereunder, LICENSEE shall be required to pay to LICENSOR an
annual Guaranteed Minimum Payment in accordance with this section. In the event
that the total of payments due LICENSOR under Paragraph 6(A) hereof in any
calendar year commencing in the year that commercial sales are first made,
through the term of this Agreement, is less than $65,000, LICENSEE shall pay to
LICENSOR on or before thirty (30) days following the end of each such calendar
year the difference between the total of all payments under Paragraph 6(A) for
such calendar year and the Guaranteed Minimum Payment of $65,000. The first and
last year in which the Guaranteed Minimum Payment is due shall be calculated on
a pro rata basis considering the number of months in each such calendar year in
which commercial sales actually occurred.
D. Accounting. LICENSEE shall keep full complete and
accurate records showing the production and sales of all Products and Services
in sufficient detail to enable the Royalty payable hereunder to be determined.
LICENSEE agrees to permit LICENSOR's duly authorized representatives, i.e.
certified public accountants designated by LICENSOR to inspect such records at
all reasonable times upon twenty (20) days advance written notice to LICENSEE.
The cost of such examination by LICENSOR's representative shall be borne by
LICENSOR, unless such examination shall determine that LICENSOR has been
underpaid by two percent (2%) or more; in such event the cost of examination
shall be at the expense of LICENSEE. If any such examination shall disclose that
LICENSEE or any sublicensee has understated Net Sales Revenue or has underpaid
Royalties for any reporting period, LICENSEE shall, within ten (10) working days
of receipt of written demand therefore, pay to LICENSOR the amount, if any, by
which Royalties owing exceed Royalties paid, with interest at two percent (2%)
over the prime rate, as described in Paragraph 6(F). In all sublicensee
agreements, LICENSEE shall as a condition of this License procure for the
LICENSOR a similar right to have the books of all sublicensees examined for the
purpose of verifying Royalty statements and shall impose the same obligations
relative to the payment for such examination and the payment of any additional
Royalty owing to Licensor.
E. Reports. After the expiration of each calendar
quarter (or less frequently if agreed to by LICENSOR), LICENSEE shall furnish to
LICENSOR a written statement specifying Products or Services sold by LICENSEE
and any Sublicense and the Net Sales Revenue. The statement shall be certified
by the Chief Financial Officer of LICENSEE to be true and correct to the best of
such Chief Financial Officer's information and belief. Such certified statement
is due no later than sixty (60) days after the end of each calendar quarter
along with payment of Royalties.
F. Payment. LICENSEE may elect to have payments made by
check, wire transfer or bank transfer. Past due payments hereunder shall bear
interest at the rate of prime plus two percent (2%) per annum, with the amount
calculated from such time as said amounts were initially due hereunder until
they are actually paid. In no event shall the interest rate charged exceed the
maximum interest rate permissible under Florida law. Prime rate shall be
determined by the rate reported in the Wall Street Journal as of the due date of
payment or in its absence, a similar financial publication. If LICENSEE pays to
LICENSOR any monies which are either disputed or ultimately determined not to be
owed to LICENSOR, such funds shall likewise bear interest at the rate stated and
continue to bear interest until actually received by LICENSEE.
7. IMPROVEMENT AND DEVELOPMENT. Any improvement or innovation in
the Products or Services in the Field made by either party and capable of being
patented may be patented by the party discovering such improvement or
innovation, at the expense of such party, and the patent applications filed and
the patents issued thereof shall remain the sole and exclusive property of the
party so patenting, and may be used by the other party hereto pursuant to the
terms of this Agreement. If LICENSOR causes the improvement or innovation to be
patented, LICENSOR agrees to grant to LICENSEE a royalty-free, fully paid up,
worldwide, non-exclusive license to use the improvements or innovations in the
Field for the term hereof. If LICENSEE causes the improvements or innovations to
be patented, LICENSEE agrees to grant to LICENSOR a royalty-free, fully paid up,
worldwide, non-exclusive, perpetual license to use the improvements or
innovations in all areas and applications outside the Field for the term hereof.
Any improvement or innovation in the Process made by either
party and capable of being patented shall be patented by the party discovering
such improvement or innovation in the name of the LICENSOR, at the expense of
such party, and the patent applications filed and the patents issued thereof
shall remain the sole and exclusive property of the LICENSOR. LICENSOR agrees to
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grant to LICENSEE a non-exclusive, fully paid up, worldwide license to use the
improvements or innovations in the Field for the term hereof.
8. NON-DISCLOSURE OF KNOW-HOW. LICENSOR and LICENSEE, during the
term of this Agreement, will exercise their best efforts to keep secret and
confidential and not disclose to third parties, except other licensees of
LICENSOR, the LICENSOR's Know-How, whether during the term of this Agreement or
after its termination
The requirement of non-disclosure of any Know-How shall cease
as to specific designated Know-How if one of the following is applicable: (i)
the information comes to LICENSEE's knowledge through an unrelated third party
on a non-confidential basis; (ii) such information comes into the public domain
by publication or otherwise without the connivance or fault on the part of the
LICENSEE, its officers, directors, employees, agents, contractors, sublicensees
or affiliates; (iii) such information is later agreed by LICENSOR in writing to
be disclosed; (iv) disclosure to any authorities with respect to any petition,
registration, or application needed to obtain approval pursuant to state or
federal securities laws, rules or regulations, or other applicable laws, or as
described herein, including without limitation, Paragraphs 2(C) or 5 hereof; or,
disclosure to LICENSEE's shareholders, underwriters of or placement agents with
respect to the offer and sale of securities, or other third parties making a
legitimate business request for disclosure; (v) disclosure to responsible
employees of the parties or to their directors, officers, independent
contractors, service providers, or technical or legal consultants as may be
necessary for LICENSOR'S or LICENSEE's requirements; provided, however, the
parties disclose this non-disclosure agreement and obtain understandings from
such employees, directors, officers, contractors, service providers, or persons
to maintain the secrecy of the designated Know-How and agrees to use its
reasonable efforts to enforce such understandings; or (vi) Know-How
independently developed by LICENSEE without reference to LICENSOR's Know-How .
9. TRADEMARK AND SERVICE ▇▇▇▇ DESIGNATIONS OF MANUFACTURER.
LICENSEE shall have the right to apply for any trademark or service ▇▇▇▇ of its
own choosing which it desires to secure registrations therefore in LICENSEE's
name. Legal title to any such trademark or service ▇▇▇▇ used by LICENSEE for the
Products, Services, Process or System shall be and remain the sole and exclusive
property of LICENSEE, and any goodwill attached to or associated with any such
marks shall inure to the benefit of the LICENSEE
10. TERM AND TERMINATION. This Agreement shall continue in full
force and effect for the term of the license granted under Paragraph 2 hereof,
unless terminated in accordance with the provisions of this Paragraph 10.
Without cause, LICENSEE may terminate this Agreement for any reason on one
hundred twenty (120) days prior written notice.
A. Breach. Either party hereto may terminate this
Agreement upon the material and substantial breach of any of the terms hereof by
the other party, on sixty (60) days' prior written notice; provided, however,
that if during the said sixty (60) days, the party notified of its breach
materially cures said breach, then the Agreement shall continue in full force
and effect.
B. Bankruptcy. Should LICENSOR be dissolved or
liquidated or become insolvent or if any proceeding is filed or commenced by or
against LICENSOR under federal bankruptcy or state insolvency or debtor relief
laws, or if LICENSOR shall voluntarily seek liquidation, reorganization or other
relief under any bankruptcy, insolvency or similar law, or if LICENSOR shall
make a general assignment for the benefit of creditors, then LICENSEE shall
without further notice be entitled to terminate this Agreement and upon such
termination being communicated to LICENSOR in writing the same shall constitute
a complete cancellation of this Agreement and neither party shall have any
further obligation hereunder to the other.
C. Remedies of LICENSEE. In the event LICENSOR shall
fail to perform any material covenant, agreement or obligation hereunder,
LICENSEE shall be entitled to any or all of the following (i) entry of an order
of competent jurisdiction specifically enforcing the terms and conditions of
this Agreement and/or enjoining or mandating conduct of LICENSOR, its
sublicensee, officers, directors, contractors, or agents, (ii) termination of
the license and/or this agreement and/or (iii) LICENSEE shall be entitled to any
other remedy at law or equity. Such rights shall be cumulative at the election
of LICENSEE.
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D. Bankruptcy. Should LICENSEE be dissolved or
liquidated or become insolvent or if any proceeding is filed or commenced by or
against LICENSEE under federal bankruptcy or state insolvency or debtor relief
laws, or if LICENSEE shall voluntarily seek liquidation, reorganization or other
relief under any bankruptcy, insolvency or similar law, or if LICENSEE shall
make a general assignment for the benefit of creditors, then LICENSOR shall
without further notice be entitled to terminate this Agreement and upon such
termination being communicated to LICENSEE in writing the same shall constitute
a complete cancellation of this Agreement and neither party shall have any
further obligation hereunder to the other, excepting only any payments due
LICENSOR by reason of Net Sales Revenue of LICENSEE or any Sublicensee in
Paragraph 6 hereof.
E. Remedies of LICENSOR. In the event LICENSEE shall
fail to perform any material covenant, agreement or obligation hereunder,
including but not limited to prompt and timely payment of Royalties described
herein, LICENSOR shall be entitled to any or all of the following (i) entry of
an order of competent jurisdiction specifically enforcing the terms and
conditions of this Agreement and/or enjoining conduct of LICENSEE, its
sublicensees, officers, directors, contractors, or agents, (ii) termination of
the license and/or this agreement, (iii) a judgment for any Royalty due plus
interest at the highest legal rate allowed by law and/or (iv) LICENSOR shall be
entitled to any other remedy at law or equity. Such rights shall be cumulative
at the election of LICENSOR.
F. Termination. On any lawful termination of this
Agreement whether by LICENSOR or LICENSEE, LICENSEE hereby agrees to immediately
cease and desist all use or application of the Process or Patent Rights in the
world and to deliver to LICENSOR any and all Know-How . LICENSEE shall have one
(1) year from date of termination to sell any Products or Services already
manufactured or available for sale at time of termination, but all such sales
are subject to payment of Royalties within thirty (30) days of the end of such
one year term.
11. INFRINGEMENT.
A. Notice. In the event of a claim of infringement with
respect to the Patent Rights, each party shall: (i) notify the other party in
writing upon receipt of any claim made by any third-party, and (ii) notify the
other party in writing upon receipt of proof or substantive information that a
third-party is infringing in any manner upon the Patent Rights.
B. Infringement. In the event that during the term of
this Agreement the LICENSOR has knowledge that any of the Patent Rights are
being infringed, LICENSOR shall have the right, but not the obligation, to bring
an action or proceeding with respect to such infringement at its own expense,
and for its own benefit. Any damages recovered by LICENSOR shall be for the sole
benefit of LICENSOR. In the event LICENSOR elects not to bring any action or
proceeding, then LICENSEE shall have the right, but not the obligation, to bring
an action or proceeding with respect to such infringement at its own expense,
and for its own benefit. Any damages recovered by LICENSEE shall be for the sole
benefit of LICENSEE. Should both parties hereto agree to actively participate in
a joint prosecution of any infringement or defense of any claim of infringement
affecting the Patent Rights and to share in the costs of such prosecution or
defense, any recovery in such suit shall be shared by the parties as their
interests may appear.
C. Cooperation. The parties agree to cooperate in good
faith, and each agrees to use commercially reasonable efforts to assist the
other in the defense or prosecution of any action, proceeding, or claim
described in this section.
12. INDEMNIFICATION AND HOLD HARMLESS.
A. Damages. Damages, as used in this Paragraph 12, shall
mean any claims, losses, cost, expense, liabilities (joint or several), penalty
and other damage including (without limitation) all amounts paid in settlement,
reasonable counsel fees and other costs and expenses (whether at the pre-trial,
trial or appellate levels) reasonably incurred in investigating or in attempting
to avoid damages or in opposing imposition thereof or in enforcing the indemnity
set forth in this Paragraph.
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B. LICENSOR Indemnification. The LICENSOR hereby agrees
to indemnify and hold the LICENSEE, its sublicensees and assigns, and their
respective officers, directors, shareholders and agents harmless against and
with respect to all Damages that arises in whole or in part as a result of any
of the following provided that LICENSEE shall not be at fault in whole or in
part: (i) the inaccuracy of any of LICENSOR's representations or warranties in
this Agreement, the attachments hereto or any other agreement between LICENSOR
and LICENSEE; (ii) material breach of any of the warranties made by or on behalf
of the LICENSOR in this Agreement, the attachments hereto or any other agreement
between LICENSOR and LICENSEE; or (iii) material breach or default in the
performance by the LICENSOR of any of the covenants or obligations to be
performed by it hereunder.
C. LICENSEE Indemnification. Where any action,
proceeding, or claim is made against the LICENSOR by any third party as a result
of activities of the LICENSEE not controlled by the LICENSOR under this
Agreement and not arising from a breach of LICENSOR's representations and
warranties in this Agreement or LICENSOR's failure to perform under Paragraph
12.B, or under any other agreement between LICENSOR and LICENSEE, and LICENSOR
shall not be at fault in whole or in part, LICENSEE agrees to indemnify the
LICENSOR, its officers, directors, shareholders and agents for any Damages paid
or payable to such plaintiff.
D. Notice. The party seeking indemnification
("Indemnified Party") shall promptly notify the other party in writing of any
claim for indemnification, specifying in detail the basis of such claim, the
facts pertaining thereto and, if known, the amount, or an estimate of the
amount, of the liability arising therefrom (the "Indemnification Notice"). The
Indemnified Party shall provide to the other party as promptly as practicable
thereafter all information and documentation necessary to support and verify the
claim asserted and the other party shall be given reasonable access to all books
and records in the possession or control of the Indemnified Party or any of its
affiliates which the other party reasonably determines to be related to such
claim.
E. Defense of Claim. Promptly after the receipt of an
Indemnification Notice, the other party shall have the right, upon written
notice (the "Defense Notice") to the Indemnified Party within 30 days after
receipt by the other party of the Indemnification Notice (or sooner if such
claim so requires), to conduct, at their own expense, the defense against the
claim in their own name or, if necessary, in the name of the Indemnified Party.
The Defense Notice shall specify the counsel the other party shall appoint to
defend such claim (the "Defense Counsel") and the Indemnified Party shall have
the right to approve the Defense Counsel, which approval shall not be
unreasonably withheld. The Indemnified Party shall have the right to employ
separate counsel in any such claim and/or to participate in the defense thereof,
but the fees and expenses of such counsel shall not be included as part of any
Damages incurred by the Indemnified Party unless (i) the other party shall have
failed to give the Defense Notice within the prescribed period, (ii) the
Indemnified Party shall have received an opinion of counsel, reasonably
acceptable to the other party, to the effect that the interests of the
Indemnified Party and the other party with respect to the claim are sufficiently
adverse to prohibit the representation by the same counsel of both parties under
applicable ethical rules, or (iii) the employment of such counsel at the expense
of the Indemnified Party has been specifically authorized by the other party.
The party conducting the defense of any claim for indemnification shall keep the
other party apprised of all significant developments and shall not enter into
any settlement, compromise or consent to judgment with respect to such claim
unless the Indemnified Party consents, such consent not to be unreasonably
withheld.
F. Third Party Royalties. If LICENSEE is required to pay
any royalty to a third party by any order of a court of competent jurisdiction
or as deemed necessary by LICENSEE, after due consultation with LICENSOR, to
settle any claim by a third party for infringement by LICENSEE in the
manufacture or sale of Products or Services, the amount of such royalty may be
deducted from the payments owing to LICENSOR under Paragraph 6(A) hereof.
13. PURCHASE OF UNITS. LICENSEE, at its sole expense, shall
contract directly with third party vendors for Unit purchases, installation,
maintenance, and technical assistance. LICENSOR shall permit LICENSEE to use the
test Unit owned by LICENSOR, free of charge, during the Term of this Agreement.
LICENSEE agrees to indemnify and hold LICENSOR, its officers, directors,
shareholders and agents, harmless from any and all Damages (as that term is
defined in Section 12A of this Agreement) that arise out of LICENSEE's use of
the test Unit.
8
14. SUCCESSION AND ASSIGNMENT. LICENSEE may assign this license
and other rights under this Agreement. LICENSEE also may enter into written
sublicense agreements licensing all or a portion of the rights licensed to
LICENSEE hereunder; further provided, however, (a) all such sublicense
agreements shall be in writing and a true and correct duplicate original
delivered to LICENSOR; (b) in no event shall any sublicense agreement give the
right to any such sublicensee to in turn sublicense or assign any right or
benefit under the Patent Rights, Products, Services, Process or the System
without the prior written consent of LICENSOR, which consent shall not be
unreasonably withheld; (c) such sublicense agreement shall strictly impose upon
such sublicensee all covenants, agreements, representations, duties and
standards as imposed upon LICENSEE under the terms of this Agreement; (d)
LICENSEE shall duly enforce each and every term of such sublicense agreement to
ensure that no covenant or agreement of such sublicensee is in any way
materially breached or otherwise materially non-performed; and (e) LICENSEE
shall advise LICENSOR in writing of any breach or other failure of performance
by such sublicensee. This Agreement shall inure to the benefit of and be binding
upon each party signatory hereto, its successors and permitted assignees.
15. EXECUTION OF ADDITIONAL DOCUMENTS. Each party signatory hereto
agrees to execute such further papers or documents or agreements as may be
necessary or desirable to effect the purposes of this Agreement and carry out
its provisions.
16. MISCELLANEOUS.
A. Inquiries. LICENSOR shall forward to LICENSEE any
inquiries relating to Products, Services, the Process, or the System regarding
ultimate sale and distribution.
B. Law and Venue. This Agreement shall be interpreted in
accordance with and be governed by the Federal laws of the United States of
America and the laws of the state of Florida. In the event of any litigation,
arbitration or other proceeding arising out of or connected with this Agreement,
the parties agree that the only venue for such proceedings shall be the
appropriate court of competent jurisdiction located in Florida.
C. Notice. Any notice hereunder by either party be
=signed by such party and shall be given by sending such notice by registered or
certified mail, Federal Express or other courier, addressed to each such party
at the address indicated above or to such address as shall hereafter be
furnished by such party by written notice and any notice not so given shall not
be valid. Any notice given in accordance with the provisions of this paragraph
shall be effective when mailed.
D. Interpretation, Waiver and Severability. This
Agreement embodies all of the terms and conditions relating to the parties'
license arrangement and all oral and parol representations or statements made by
either party prior to execution are merged herein. No waiver or modification of
this Agreement or of any covenant, condition or limitation herein contained
shall be valid unless in writing and duly executed all by the same signatories
hereto; provided, however, any modification or variation imposed or required by
the Food and Drug Administration or any other governmental regulatory agency
shall be deemed to be included in this Agreement. No evidence of any waiver or
modification shall be offered or received in evidence of any proceeding,
arbitration or litigation between the parties hereto arising out of or affecting
this Agreement, or the rights or obligations of the parties hereunder, unless
such waiver or modification is in writing, duly executed as aforesaid, and the
parties further agree that the provisions of this section may not be waived
except as herein set forth. All agreements and covenants contained herein are
severable and in the event any of them shall be held to be invalid by a court of
competent jurisdiction, this contract shall be interpreted as if such invalid
agreements or covenants were not contained herein; provided, however, any
modification or variation imposed or required by the Food and Drug
Administration or other governmental regulatory agency shall be deemed to be
included in this Agreement.
E. Captions. The captions appearing in this Agreement
are inserted as a matter of convenience and for reference and in no way affect
this Agreement, define, limit or describe its scope, intent or any of its
provisions.
9
F. Multiple Counterparts. This document may be executed
in multiple counterparts, each of which shall be deemed an original document.
G. Entire Agreement. This Agreement constitutes the
entire agreement between LICENSOR and LICENSEE and supersedes any and all other
negotiations, understandings, agreements or discussions, oral or written,
between the parties or their respective officers, shareholders, directors or
agents with respect to the subject matter hereof. Further, the parties hereby
release and forever discharge the other, and their respective officers,
directors, shareholders and agents from any and all claims or potential claims
regarding the actions or inactions of the other party or its officers,
directors, shareholders or agents prior to the date of this Agreement,
specifically including the release of ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ who has been employed by
both parties in various capacities in the past.
H. Independent Contractors. The relationship of LICENSOR
and LICENSEE established by this Agreement is that of independent contractors,
and nothing contained in this Agreement shall be construed to (i) give either
party the power to direct and control the day-to-day activities of the other,
(ii) constitute the parties as partners, joint venturers, co-owners or otherwise
as participants in a franchise relationship, or joint or common undertaking, or
(iii) allow LICENSEE to create or assume any obligation on behalf of LICENSOR
for any purpose whatsoever.
[The balance of this page is intentionally left blank.]
10
IN WITNESS WHEREOF, the parties have caused this Agreement, through
their duly authorized and appointed representations, to be executed effective
the day and year first above written.
LICENSOR: LICENSEE:
LIFE INTERNATIONAL PRODUCTS, INC. HYDRON TECHNOLOGIES, INC.
a California corporation a New York corporation
By /s/: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ By /s/: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------- ------------------------
▇▇▇▇▇ ▇▇▇▇▇▇▇▇, as President and ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, as Chief Operating
Authorized Representative Officer
LIFE O2 BEVERAGES, INC.
an Indiana limited liability company
By /s/: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
-------------------
▇▇▇▇▇ ▇▇▇▇▇▇▇▇, as President and
Authorized Representative
11
EXHIBIT "A"
PATENT RIGHTS
The Patent Rights include the following enumerated Patents and Patent
Applications which LICENSOR represents and warrants as a full and complete
listing of all Patent Rights in which LICENSOR has an ownership interest and has
the right to convey a non-exclusive license to LICENSEE hereby:
LIP0001I. A. U.S. Patent No. 5,006,352
Title: PROCESS FOR THE PRODUCTION OF AN
OXYGENATED RESTORATIVE DRINK
Inventors: ▇▇▇▇▇ ▇▇▇▇▇▇▇ nee Zoltai et al.
Filed: February 26, 1988
Issued: April 9, 1991
Counterpart Cases:
-----------------
B. Austrian (EPC) Patent No. E105676, issued
C. Belgian (EPC) Patent No. 303658, issued
D. British (EPC) Patent No. 303658, issued
E. French (EPC) Patent No. 303658, issued
F German (EPC) Patent No. P3889604.4, issued
G. Italian (EPC) Patent No. 303658, issued
H. Netherlands (EPC) Patent No. 303658, issued
I. Swedish (EPC) Patent No. 303658, issued
J. Swiss (EPC) Patent No. 303658, issued
LIP0002 II. A. Hungarian Patent No. 217,450
P1 Title: OXYGEN ENRICHED LIQUIDS, METHOD AND
APPARATUS FOR MAKING, AND
APPLICATIONS THEREOF
Inventors: ▇▇▇▇▇ ▇▇▇▇▇▇ et al.
Filed: April 27, 1994
Issued: April 3, 2000
Counterpart Cases:
-----------------
LIP0002-35 B. International PCT Patent Application Serial
No. PCT/US95/03889
Filed: March 31, 1995
Title: OXYGEN ENRICHED LIQUIDS, METHOD AND
APPARATUS FOR MAKING, AND
APPLICATIONS THEREOF
Status: Completed. Published November 2,
1995.
Publ. No. WO 95/29130
12
LIP0002-36 C. 1. U.S. Patent No. 5,814,222
Title: OXYGEN ENRICHED LIQUIDS,
METHOD AND APPARATUS FOR
MAKING, AND APPLICATIONS
THEREOF
Filed: May 1, 1995
Issued: September 29, 1998
LIP0002-38 2. U.S. Patent No. 5,885,467
Title: METHOD AND APPARATUS FOR
MAKING OXYGEN ENRICHED
LIQUIDS
Continuation of U.S. Patent
Application
Serial No. 08/976,770
Filed: November 24, 1997
Issued: March 23, 1999
LIP0002-30 D. Canadian Application Serial No. 2,147,659
Filed: March 31, 1995
Status: Pending
LIP0002-32 E. Indian Patent Application Serial No.
635/DEL/95
Filed: April 5, 1995
Status: Pending
LIP0002-31 F. Israeli Patent No. 113281
Filed: April 6, 1995
Issued: February 1, 1999
LIP0002-33 G. South African Patent No. 95/02750
Filed: April 4, 1995
Issued: February 28, 1996
LIP0002-34 H. Taiwanese Patent No. 127964
Filed: May 11, 1995
Issued: June 26, 2001
LIP0003 III. A. International PCT Patent Application No.
P2/P2A PCT/US96/00037
Title: OXYGENATING APPARATUS, METHOD FOR
OXYGENATING WATER THEREWITH, AND
APPLICATIONS THEREOF
Inventors: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Filed: January 24, 1996
Status: Completed. Published July 31, 1997.
Publ. No. WO 97/27146
Counterpart Cases:
-----------------
LIP0003-20 B. 1. U.S. Patent No. 5,766,490
Title: OXYGENATING APPARATUS,
METHOD FOR OXYGENATING
WATER THEREWITH, AND
APPLICATIONS THEREOF
Filed: January 25, 1996
Issued: June 16, 1998
13
LIP0003-32 2. U.S. Patent No. 5,904,851
Title: OXYGENATING APPARATUS,
METHOD FOR OXYGENATING A
LIQUID THEREWITH, AND
APPLICATIONS THEREOF
Divisional U.S. Patent Application
Serial No. 09/008,736
Filed: January 19, 1998
Issued: May 18, 1999
LIP0003-26 C. 1. Australian (PCT) Patent No. 715815
Filed: January 24, 1996
Issued: May 25, 2000
LIP0003-35 2. Australian Divisional Patent
Application
Serial No. 6304699
Filed: December 2, 1999
Status: Pending
LIP0003-27 D. Chinese (PCT) Patent Application Serial No.
96192783.6
Filed: January 24, 1996
Status: Pending
▇▇▇▇▇▇▇-▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇ (PCT) Patent Application Serial
No. SP-97-2221
Filed: August 12, 1997
Status: ABANDONED
LIP0003-34 F. European (PCT) Patent Application Serial No.
96902059.3
Filed: January 24, 1996
Status: Pending
LIP0003-22 G. Indian Patent Application Serial No.
1170/DEL/96
Filed: May 30, 1996
Status: Pending
LIP0003-21 H. Japanese (PCT) Patent No. 3175091
Filed: April 15, 1997
Issued: April 6, 2001
LIP0003-24 I. Korean (PCT) Patent No. 267626
Filed: September 3, 1997
Issued: July 6, 2000
LIP0003-28 J. Malaysian (PCT) Patent Application Serial
No. PI9703231
Filed: July 16, 1997
Status: Pending
LIP0003-25 K. New Zealand (PCT) Patent No. 301159
Filed: August 6, 1997
Status: August 9, 2001
LIP0003-33 L. Norwegian (PCT) Patent Application Serial
No. P19983387
Filed: July 22, 1998
Status: Pending
LIP0003-23 M. 1. Taiwanese (R.O.C.) (PCT) Patent
Application Serial No. 86110601
Filed: July 25, 1997
Status: Pending
14
LIP0003-36 2. Taiwanese (R.O.C.) Divisional (PCT)
Patent Appl. Serial No. tbd
Filed: Anticipated filing by
February 8, 2002
Status: Being prepared
LIP0050 IV. A. 1. U.S. Patent No. 6,120,008
P3 Title: OXYGENATING APPARATUS, METHOD FOR
OXYGENATING A LIQUID THEREWITH, AND
APPLICATIONS THEREOF
Application Serial No. 09/067,689
Inventors: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, et al.
Filed: April 28, 1998
Issued: September 19, 2000.
LIP0050-01 2. Divisional U.S. Patent No.
6,279,882
Title: OXYGENATING APPARATUS,
METHOD FOR OXYGENATING A
LIQUID THEREWITH, AND
APPLICATIONS THEREOF
Inventors: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, et al.
Filed: April 27, 2000
Issued: August 28, 2001
Counterpart Cases:
-----------------
LIP0050-24 B. Chinese (PCT) Application Serial No.
99800614.9
Filed: April 20, 1999 (effective)
Status: Pending
LIP0050-26 C. European (PCT) Application Serial No.
99917650.6
Designated States: France, Germany, Ireland,
Italy, Spain, UK
Filed: April 20, 2000
Status: Pending
LIP0050-27 D. Hong Kong Application Serial No. 01101463.5
Extension of Chinese (PCT) Application
Serial No. 99800614.9
Filed: February 28, 2001
Status: Pending
LIP0050-20 E. Indian Patent Application Serial No.
415/MAS/99
Filed: April 13, 1999
Status: Pending
LIP0050-23 F. International PCT Application Serial No.
PCT/US99/08730
Filed: April 20, 1999
Status: Completed. Published November 4,
1999.
Publ. No. WO 99/55450
LIP0050-25 G. Japanese (PCT) Application Serial No.
2000-545637
Filed: October 26, 2000
Status: Pending
LIP0050-22 H. South African Patent No. 99/2685
Filed: April 13, 1999
Issued: December 29, 1999
15
LIP0050-21 I. Taiwanese Patent Application Serial No.
88106764
Filed: April 27, 1999
Status: Pending
LIP0054 V. A. U.S. Patent Application Serial No. 09/491,495
P4 Title: OXYGENATING APPARATUS, METHOD FOR
OXYGENATING A LIQUID THEREWITH, AND
APPLICATIONS THEREOF
Inventors: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Filed: January 25, 2000
Status: Pending. First Office Action
Received
Counterpart Cases:
-----------------
LIP0054-20 B. Japanese Patent Application Serial No.
2000-146447
Filed: May 18, 2000
Status: Pending
LIP0054-21 C. Philippine Patent Application Serial No.
▇-▇▇▇▇-▇▇▇▇▇
Filed: May 2, 2000
Status: Pending
LIP0054-22 D. International PCT Patent Application Serial
No. PCT/US00/40935
Title: OXYGENATING APPARATUS, METHOD FOR
OXYGENATING A LIQUID THEREWITH, AND
APPLICATIONS THEREOF
Filed: September 19, 2000
Status: Published August 2, 2001. Publ. No.
WO 01/54803
16
EXHIBIT "B"
ASSIGNMENT
I, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, a natural person, having an address at
__________________________________________ (hereinafter the "Assignor"), hereby
declare that I have not created, invented, designed or otherwise developed:
compositions or methods for administering high levels of oxygen to skin or
tissue, nor participated in such development, for which an application for a
United States Patent was filed on February 1, 2001, Serial No. 60/265,819 (and
its foreign counterparts, divisionals, continuations, continuations in part,
reissues, renewals or extensions thereof), (hereinafter the "Invention").
However, should it ever be determined by a court of competent jurisdiction or
otherwise established that I did so create, invent, design or otherwise develop
such a composition or method, I hereby assign all such right, title and interest
in and to such inventions.
Accordingly, for Ten Dollars and other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, Assignor hereby sells,
transfers and assigns to Hydron Technologies, Inc., a New York corporation, all
right, title and interest in and to the Invention, in the United States and in
all other countries of the world. Assignor hereby authorizes and requests the
Commissioner of Patent and Trademarks to issue said United States Patent to said
assignee, of the entire right, title, and interest in and to the same, for its
sole use and behoof; and for the use and behoof of its legal assignees, to the
full end of the term for which said patent may be granted, as fully and entirely
as the same would have been held by Assignor had this assignment and sale not
been made.
Assignor also assigns to Hydron Technologies, Inc. all existing causes of action
for infringement of the rights assigned and all proceeds of those causes.
Assignor hereby waives any and all rights that he has or may come to have in or
to such Invention in any country in the world, including, but not limited to,
any right of attribution or to control changes in or to the Invention.
/s/: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
-------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Dated: July, 2002
ACKNOWLEDGEMENT
State of _____________)
County of ____________) ss:
On this __ day of July, 2002, before me personally appeared ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ known
to me to be the individual described in, and who executed the foregoing
instrument, and who duly acknowledged to me that he executed the same as his
free act and deed.
______________________________________________
Notary Public in and for said County and State
17