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PATENT AND TECHNOLOGY LICENSE
AGREEMENT
This AGREEMENT ("AGREEMENT") is made on this 24th day of July,
2003 between U.S.
Global Nanospace, Inc., a Delaware corporation, having a
principal place of
business at 2533 North Carson, Suite 5107, Carson City, Nevada
89706
("LICENSEE") and TIAX LLC, a Delaware limited liability company
having a
principal place of business located at 15 Acorn Park, Cambridge,
Massachusetts
02140 ("LICENSOR").
TABLE OF CONTENTS
RECITALS Page 1
I. EFFECTIVE DATE Page 1
II. DEFINITIONS Page 2
III. LICENSE Page 3
IV. CONSIDERATION, PAYMENTS AND REPORTS Page 4
V. SPONSORED RESEARCH Page 5
VI. PATENTS AND INVENTIONS Page 6
VII. INFRINGEMENT BY THIRD PARTIES Page 6
VIII. PATENT MARKING Page 6
IX. INDEMNIFICATION Page 6
X. USE OF LICENSOR AND COMPONENT'S NAME Page 7
XI. CONFIDENTIAL INFORMATION AND PUBLICATION Page 7
XII. ASSIGNMENT Page 8
XIII. TERMS AND TERMINATION Page 8
XIV. REPRESENTATIONS AND WARRANTIES Page 10
XV. GENERAL Page 11
SIGNATURES Page 12
RECITALS
A. LICENSOR owns certain PATENT RIGHTS and TECHNOLOGY RIGHTS
related to
LICENSED SUBJECT MATTER developed by LICENSOR.
B. LICENSOR desires to have the LICENSED SUBJECT MATTER
developed in the
LICENSED FIELD.
C. LICENSEE wishes to obtain a license from LICENSOR to practice
LICENSED
SUBJECT MATTER.
NOW, THEREFORE, in consideration of the mutual covenants and
premises herein
contained, the parties agree as follows:
<PAGE>
I. EFFECTIVE DATE
1.1 This AGREEMENT is effective as of the date written above
("EFFECTIVE DATE").
II. DEFINITIONS
As used in this AGREEMENT, the following terms have the meanings
indicated:
2.1 AFFILIATE means any business entity more than fifty percent
(50%) owned by
LICENSEE, any business entity which owns more than fifty percent
(50%) of
LICENSEE, or any business entity that is more than fifty percent
(50%) owned by
a business entity that owns more than fifty percent (50%) of
LICENSEE.
2.2 LICENSED FIELD means non-hazardous bio-decontamination by or
through the use
of an aqueous, sprayable foam.
2.3 LICENSED PRODUCTS means any product or service SOLD by
LICENSEE comprising
LICENSED SUBJECT MATTER pursuant to this AGREEMENT
2.4 LICENSED SUBJECT MATTER means inventions and discoveries
covered by PATENT
RIGHTS or TECHNOLOGY RIGHTS within LICENSED FIELD.
2.5 LICENSED TERRITORY means world-wide, subject to any export
control or
similar restrictions.
2.6 NET SALES means the gross revenues received by LICENSEE from
the SALE of
LICENSED PRODUCTS less sales discounts actually granted, sales
and/or use taxes
actually paid, import and/or export duties actually paid,
outbound
transportation actually prepaid or allowed, and amounts actually
allowed or
credited due to returns (not exceeding the original billing or
invoice amount).
2.7 PATENT RIGHTS means LICENSOR's rights in information or
discoveries claimed
in invention disclosures, patents, and/or patent applications,
whether domestic
or foreign, and all divisionals, continuations,
continuations-in-part, reissues,
reexaminations or extensions thereof, and any letters patent
that issue thereon
as defined in Exhibit I attached hereto.
2.8 SALE or SOLD means the transfer or disposition of a LICENSED
PRODUCT for
value to a party other than LICENSEE or AFFILIATE.
2.9 TECHNOLOGY RIGHTS means LICENSOR's rights in any technical
information,
know-how, processes, procedures, compositions, devices, methods,
formulae,
protocols, techniques, software, designs, drawings or data
created by the
inventor(s) listed in Exhibit I by LICENSOR before the EFFECTIVE
DATE which are
not claimed in PATENT RIGHTS but which are necessary for
practicing PATENT
RIGHTS.
<PAGE>
III. LICENSE
3.1 LICENSOR hereby grants to LICENSEE a royalty-bearing,
exclusive license
under LICENSED SUBJECT MATTER to manufacture, have manufactured,
use, import,
offer to sell and/or sell LICENSED PRODUCTS within LICENSED
TERRITORY for use
within LICENSED FIELD and, subject to Section 4.6 herein, will
extend to
LICENSOR's undivided interest in any LICENSED SUBJECT MATTER
developed during
the term of this AGREEMENT and jointly owned by LICENSOR and
LICENSEE. This
grant is subject to Sections 14.2 and 14.3 hereinbelow, the
payment by LICENSEE
to LICENSOR of all consideration as provided herein, and is
further subject to
the following rights retained by LICENSOR:
(a) The right to publish the general scientific findings from
research related
to LICENSED SUBJECT MATTER, subject to the terms of Article
XI
(Confidential Information and Publication); and
(b) The right to use LICENSED SUBJECT MATTER for all other
purposes.
3.2 LICENSEE may extend the license granted herein to any
AFFILIATE provided
that the AFFILIATE consents in writing to be bound by this
AGREEMENT to the same
extent as LICENSEE. LICENSEE agrees to deliver such contract to
LICENSOR within
thirty (30) days of execution thereof.
3.3 LICENSEE may grant sublicenses under LICENSED SUBJECT MATTER
consistent with
the terms of this AGREEMENT provided that LICENSEE obtains the
prior written
consent of LICENSOR, which consent shall not be unreasonably
withheld, and
further provided that LICENSEE is responsible for its
sublicensees relevant to
this AGREEMENT, and for diligently collecting all amounts due
LICENSEE from
sublicensees. If a sublicensee pursuant hereto becomes bankrupt,
insolvent or is
placed in the hands of a receiver or trustee, LICENSEE, to the
extent allowed
under applicable law and in a timely manner, agrees to use its
best reasonable
efforts to collect all consideration owed to LICENSEE and to
have the sublicense
agreement confirmed or rejected by a court of proper
jurisdiction.
3.4 LICENSEE must deliver to LICENSOR a true and correct copy of
each sublicense
granted by LICENSEE, and any modification or termination
thereof, within thirty
(30) days after execution, modification, or termination.
3.5 When this AGREEMENT is terminated, LICENSOR agree to accept
as successors to
LICENSEE, existing sublicensees in good standing at the date of
termination
provided that the sublicensees consent in writing to be bound by
all of the
terms and conditions of this AGREEMENT.
<PAGE>
IV. CONSIDERATION, PAYMENTS AND REPORTS
4.1 In consideration of rights granted by LICENSOR to LICENSEE
under this
AGREEMENT, LICENSEE agrees to pay the following:
(a) All reasonable out-of-pocket expenses incurred by LICENSOR
in enforcing
and maintaining PATENT RIGHTS, and all such future expenses
incurred by
LICENSOR, for so long as, and in such countries as, this
AGREEMENT remains
in effect. LICENSOR will invoice LICENSEE within thirty (30)
days of the
EFFECTIVE DATE for expenses incurred as of that time and on a
quarterly
basis thereafter. The invoiced amounts will be due and payable
by LICENSEE
within thirty (30) days of invoice; and
(b) A nonrefundable license fee equal to $120,000, payable in
four (4) equal
installments. The first payment will be due and payable on
January 31,
2004, and the remaining three (3) payments will be made on a
quarterly
basis thereafter (on June 30, 2004, September 30, 2004 and
December 31,
2004). LICENSEE will be invoiced for said amounts by LICENSOR;
and
(c) A running royalty equal to six percent (6%) of LICENSEE's
NET SALES of
LICENSED PRODUCTS will be applicable on NET SALES in excess of
the first
One Million Dollars ($1,000,000); and
(d) Minimum annual royalties of Sixty Thousand Dollars
($60,000.00), which
will be payable within thirty (30) days after March 31, June 30,
September
30, and December 31 of each year during the term of this
AGREEMENT, with
the first payment due within thirty (30) days after March 31,
2005; and
(e) Up to fifty percent (50%) of all consideration received by
LICENSEE from
either (i) any sublicensee pursuant to Sections 3.3 and 3.4
herein above,
or (ii) any assignee pursuant to Section 12.1 hereinbelow,
including but
not limited to, royalties, upfront payments, marketing,
distribution,
franchise, option, license, or documentation fees, bonus and
milestone
payments and equity securities. The amount due under this
Section 4.1(e)
shall be fixed by mutual agreement of LICENSEE and LICENSOR.
4.2 The payments under Sections 4.1(c) are payable within thirty
(30) days after
March 31, June 30, September 30, and December 31 of each year
during the term of
this AGREEMENT, at which time LICENSEE will also deliver to
LICENSOR a true and
accurate report, giving such particulars of the business
conducted by LICENSEE
and its sublicensees, if any exist, during the preceding three
(3) calendar
months under this AGREEMENT as necessary for LICENSOR to account
for LICENSEE's
payments hereunder. This report will include pertinent data,
including, but not
limited to:
(a) the total quantities of LICENSED PRODUCTS produced; and
(b) the total SALES; and
(c) the calculation of NET SALES and royalties thereon; and
(d) the total royalties (and/or minimum royalties) so computed
and due
LICENSOR; and
(e) all other amounts due LICENSOR herein.
<PAGE>
Simultaneously with the delivery of each such report, LICENSEE
agrees to pay
LICENSOR the amount due, if any, for the period of such report.
These reports
are required even if no payments are due.
4.3 During the term of this AGREEMENT and for three (3) years
thereafter,
LICENSEE agrees to keep complete and accurate records of its and
its
sublicensees' SALES and NET SALES of LICENSED PRODUCTS in
sufficient detail to
enable the royalties payable hereunder to be determined.
LICENSEE shall permit
LICENSOR or its representatives, at LICENSOR'S expense, to
periodically examine
LICENSEE'S books, ledgers and records during regular business
hours for the
purpose of and to the extent necessary to verify any report
required under this
AGREEMENT. If the amounts due LICENSOR are determined to have
been underpaid in
an amount equal to or greater than five percent (5%) of the
total amount due
during the period so examined, then LICENSEE will pay the cost
of the
examination plus the accrued interest at the highest allowable
rate.
4.4 Within thirty (30) days of each anniversary of the EFFECTIVE
DATE, LICENSEE
will deliver to LICENSOR a written progress report as to
LICENSEE'S (and any
sublicensee's) efforts and accomplishments during the preceding
year in
diligently commercializing LICENSED SUBJECT MATTER in the
LICENSED TERRITORY and
LICENSEE's (and sublicensees') commercialization plans for the
upcoming year.
4.5 All amounts payable hereunder by LICENSEE will be paid in
United States
funds without deductions for taxes, assessments, fees, or
charges of any kind.
Checks are to be made payable to TIAX LLC, P.O. Box 846108,
Boston, MA
02284-6108, or by wire transfer to Citizens Bank, 1 Citizens
Drive, Riverside,
RI 02915; Routing Number: 011500120; Account Number: 1135538317;
Account Name:
TIAX LLC.
4.6 No payments due or royalty rates owed under this AGREEMENT
will be reduced
as the result of co-ownership of LICENSED SUBJECT MATTER by
LICENSOR and (i)
U.S. government agencies, and/or (ii) another party, including,
but not limited
to, LICENSEE, except to the extent such co-ownership legally or
effectively
reduces or limits LICENSEE's ability to derive the full benefit
of the rights
granted to it under Section 3.1 of this Agreement.
V. SPONSORED RESEARCH
5.1 If LICENSEE desires to sponsor research for or related to
the LICENSED
SUBJECT MATTER, and particularly where LICENSEE receives
payments for sponsored
research pursuant to a sublicense under this AGREEMENT, LICENSEE
will first
notify LICENSOR in writing of all opportunities to conduct this
sponsored
research. LICENSOR shall have the right to approve or disapprove
any such
sponsored research, provided that such approval shall not be
unreasonably
withheld.
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