10.1 License Agreement
EXCLUSIVE LICENSE AGREEMENT
This EXCLUSIVE LICENSE AGREEMENT ("Agreement") is made this 30th day of
December 1998 between DenexCorp/LVPS MicroFacility, a Nevada Corporation
("LICENSOR"), and LVPS MicroFacility, Inc., a Delaware corporation ("LICENSEE").
WHEREAS, LICENSOR has conducted extensive market feasibility studies,
spent significant resources on the concept, design, patent, and trademark
relating to Modular Pharmaceutical Solution Manufacturing for the production of
Large Volume Parenteral Solutions; and
WHEREAS, LICENSEE desires to obtain the exclusive use of the patent and
trademark relating to Modular Pharmaceutical Solution Manufacturing from
LICENSOR; and
WHEREAS, LICENSOR is willing to enter into an exclusive licensing
agreement with LICENSEE, subject to the terms and conditions of this Agreement.
NOW THEREFORE, in consideration of the recital set forth above and other good
and valuable consideration, the receipt and sufficiency of which is acknowledge,
the parties agree as follows.
1. Term.
The term of this Agreement shall be ten (10) years.
2. Exclusivity.
During the term of this Agreement, so long as LICENSEE pays the
royalties set forth below, LICENSEE shall have the exclusive use of any and all
patents and trademarks of LICENSOR relating to Modular Pharmaceutical Solution
Manufacturing (the "Intellectual Property").
3. Payments.
a. Royalty. During the term of this Agreement, LICENSEE shall pay to
LICENSOR as a royalty (the "Royalty") an amount equal to two percent (2%) of the
gross selling price on each MicroFacility sold during the term of this
Agreement.
4. Manner of Payment.
a. Payment. Not later than the tenth (10th) day after the end of each
and every quarter, beginning with June 30, 1999, LICENSEE shall pay and deliver
to LICENSOR the Royalty.
b. Prompt Delivery. LICENSEE acknowledges and agrees that the timely
delivery of the payments required by Section 4a and the Quarterly Reports and
Sales Reports required by Section 5 hereof are essential to this Agreement.
Interest shall accrue on all past due payments hereunder from their respective
due dates until paid at the rate of one percent (1%) per month, or if such rate
exceeds the maximum rate allowed by law, at the maximum rate allowed by law, and
shall be payable on demand.
5. Reports, Record Keeping And Audits.
a. Maintenance of Records. LICENSEE shall keep books of account and
records in accordance with generally accepted accounting principles,
consistently applied, covering all sales relating to this Agreement and the
license hereby granted. Such records shall be maintained for at least two (2)
years after the quarter to which such records relate.
b. Quarterly Reports. Every Royalty payment pursuant to Section 4a
shall be accompanied by a written report (individually, the "Quarterly Report"
and collectively, the "Quarterly Reports").
c. Sales Reports. In addition, LICENSEE shall provide LICENSOR with
monthly sales recap reports and seasonal sales projections as developed and
revised (collectively, the "Sales Reports"); provided, however, that all such
Sales Reports shall be in the form and format used by LICENSEE in the ordinary
course of business.
d. Audit. LICENSOR and its duly authorized representatives shall have
the right upon reasonable notice and at all reasonable hours during normal
business days to examine and copy such books of account and records and all
other documents and materials in the possession or under the control of LICENSEE
with respect to the subject matter and the terms of this Agreement, the cost of
which shall be borne by LICENSOR. LICENSOR shall not conduct an audit more than
once with respect to any calendar year, and in no event shall such audit be
during LICENSEE'S fourth fiscal quarter. If the audit discloses that the Royalty
payments actually due exceed the Royalty payments paid, LICENSEE shall pay the
unpaid Royalty and interest on such unpaid Royalty payments computed from the
date such Royalty payments were due, accrued at the rate of one percent (1%) per
month, or if such rate exceeds the maximum rate allowed by law, at such maximum
legal rate. If the audit discloses that the Royalty payments made by LICENSEE
exceed the Royalty payments due, LICENSOR shall reimburse LICENSEE in the amount
the overpaid Royalty and interest on such overpayment, computed from the date
such Royalty payments were made, accrued at the rate of one percent (1%) per
month. In addition, if the audit discloses that the Royalty payments actually
due exceed the Royalty payments paid by an amount greater than five percent (5%)
of the Royalty payments paid, the cost of the audit performed by LICENSOR shall
be paid by LICENSEE.
e. Financial Statements. If, at any time during the term, LICENSEE is
not a company required to provide public financial information pursuant to the
Securities and Exchange Commission reporting requirements, LICENSEE shall, upon
reasonable request of LICENSOR, and from time to time thereafter, provide
LICENSOR with interim and audited annual financial statements.
6. Protection of Intellectual Property
a. Acknowledgments and Agreements of LICENSEE. As a material inducement
to LICENSOR to enter into this Agreement, and as a material part of the
consideration to LICENSOR hereunder, LICENSEE hereby acknowledges and agrees
that:
(i) (a) LICENSOR owns the Intellectual Property in various
countries worldwide, and all rights, registrations,
applications and filings with respect to such Intellectual
Property, and all renewals and extensions of any such
registrations, applications and filings, (b) LICENSOR has the
right to license the Intellectual Property, and (c) LICENSEE
is acquiring hereby only the right to use the Intellectual
Property for the purpose stated in and pursuant to the terms
and conditions of the Agreement.
(ii) (a) Great value is placed on the Intellectual Property,
and the goodwill associated therewith, (b) the Intellectual
Property and all rights therein and goodwill pertaining
thereto belong exclusively to LICENSOR, and (c) all authorized
use of the Intellectual Property by LICENSEE shall inure to
the benefit of LICENSOR.
(iii) The conditions, terms, restrictions, covenants and
limitations of this Agreement are necessary, equitable,
reasonable and essential to assure the consuming public that
all goods sold under the Intellectual Property are of the same
consistently high quality as sold by LICENSOR and by others
who are licensed to design, manufacture and/or sell any
products by, under or with the Intellectual Property, if any.
b. Protection of Rights.
(i) Restriction on Use. LICENSEE shall not use or permit the
use of the Intellectual Property for any purpose or use other
than the uses licensed under this Agreement.
(ii) General. LICENSEE shall cooperate fully and in good faith
with LICENSOR for the purpose of securing and preserving
LICENSOR's (or any grantee of LICENSOR's) rights in and to the
Intellectual Property.
7. Defaults And Remedies.
a. Defaults by LICENSEE. The occurrence of any one or more of the
following shall constitute a default by LICENSEE under this Agreement:
(i) LICENSEE shall fail to make any payment, submit any
Quarterly Report or provide any financial information required
under this Agreement when due, and such failure continues for
more than thirty (30) days after written notice thereof,
unless such failure cannot be cured within such thirty (30)
day period and LICENSEE shall have commenced to cure the
failure and proceeds diligently thereafter to cure such
failure.
(ii) LICENSEE uses the Intellectual Property in any manner
likely to endanger the validity of the Intellectual Property
or to damage or impair the reputation or value of the
Intellectual Property, and such action continues for more than
thirty (30) days after written notice thereof, unless the
action cannot be cured within such thirty (30) day period and
LICENSEE shall have commenced to cure the action and proceeds
diligently thereafter to cure such action.
(iii) The failure of LICENSEE to perform any of its other
material obligations under this Agreement and such failure
continues for more than thirty (30) days after written notice
thereof, unless the failure cannot be cured within such thirty
(30) day period and LICENSEE shall have commenced to cure the
failure and proceeds diligently thereafter to cure such
failure.
b. Default by LICENSOR. If LICENSOR fails to perform any of its
material obligations under this Agreement and such failure continues for more
than thirty (30) days after the written notice thereof, such failure shall
constitute a failure by LICENSOR under this Agreement, unless the failure cannot
be cured within such thirty (30) day-period and LICENSOR shall have commenced to
cure such failure and proceeds diligently thereafter to cure such failure.
c. Remedies.
(i) If LICENSEE has not cured any such breach or
non-performance in accordance with Section 7a above, in
addition to all other rights and remedies available to
LICENSOR, whether pursuant to the terms of this Agreement at
law in equity or otherwise, LICENSOR shall have the right to
terminate this Agreement without further notice to LICENSEE.
(ii) If LICENSOR has not cured any such breach or
non-performance in accordance with Section 7b above, in
addition to all of the other rights and remedies available to
LICENSEE, whether pursuant to the terms of this Agreement at
law, in equity or otherwise, LICENSEE shall have the right to
terminate this Agreement without further notice to LICENSOR.
d. Effect of Expiration or Termination. Except as specifically provided
herein to the contrary, upon expiration or termination of this Agreement, the
rights and licenses granted herein shall terminate and LICENSEE shall have no
further right to use the Intellectual Property. Upon the request of LICENSOR,
LICENSEE shall immediately execute without further consideration such
assignments and other instruments which may be required to be recorded to effect
the termination of the licenses and rights granted herein (and the assignments
of LICENSEE's rights to LICENSOR). Within twenty (20) days of the expiration or
termination of this Agreement, LICENSEE shall deliver to LICENSOR all unpaid
Royalties together with a final Quarterly Report covering all sales from the end
of the period covered by the preceding Quarterly Report through the date of
expiration or termination of this Agreement.
8. Warranties.
a. LICENSOR warrants and represents that LICENSOR (i) is free to enter
into this Agreement, (ii) has the full power, right and authority to make the
grant of rights to LICENSEE as provided hereunder and that the exercise by
LICENSEE of such rights, as authorized hereunder, shall not violate the rights
of any third party, and (iii) is not subject to any obligation which will or
might hinder or prevent the full completion and performance by LICENSOR of any
of the covenants and the conditions to be kept and performed by LICENSOR
hereunder.
b. LICENSEE hereby represents and warrants that LICENSEE (i) is free to
enter into this Agreement, (ii) is not subject to any obligation which will or
might hinder or prevent the full completion and performance by LICENSEE of any
of the covenants and conditions to be kept and performed by LICENSEE hereunder,
and (iii) will ensure that all uses of the Intellectual Property comply with the
terms of this Agreement.
9. General Provisions.
a. Entire Agreement. This Agreement sets forth the entire agreement
between the Parties with respect to the subject matter hereof, and all prior
negotiations, discussions, commitments and/or understandings relating thereto,
if any, are merged herein. This Agreement shall supersede any and all other
agreements between the Parties and may be modified only by a written agreement
signed by duly authorized of each of the Parties. No representations, oral or
otherwise expressed or implied, other than those specifically contained in this
Agreement have been made by any party hereto. No other agreements not referred
to or specifically contained herein, oral or otherwise, shall be deemed to exist
or to bind any of the Parties hereto.
b. Successors and Assigns. This Agreement shall be binding upon and
shall inure to the benefit of the successors and permitted assigns of the
Parties.
c. Choice of Law. The validity, construction and enforcement of this
Agreement shall be governed by the laws of the State of California without
regard to its choice of law principles.
d. Dispute Resolution. Any claim or controversy arising out of or
relating to this Agreement, or any breach thereof wherein only damages are
sought, shall be settled by the appointment of a retired judge of the Superior
or Appellate Courts of California who shall act pursuant to Section 638.1 of the
California Code of Civil Procedure "to try any and all of the issues in an
action or proceeding, whether of fact or of law, and to report a state of
decision thereon". The Parties stipulate to the use of the referenced procedure
and agree that the Superior Court of Orange County of the State of California
may issue such orders as are necessary to implement the Parties intent that any
such claim or controversy shall be resolved through the use of the referenced
procedure. The decision reached by the referee shall be entered as a judgment of
the Superior Court appointing the referee and such decisions shall be fully
appealable. All fees and expenses of the referee shall be initially borne on a
pro rata basis by the Parties, but shall be recoverable by the prevailing party.
Additionally, the prevailing party shall be entitled to recover, as an element
of such party's cost of suit, and not as damages, all reasonable costs and
expenses incurred or sustained by such prevailing party in connection with such
actions including without limitation, legal fees and costs.
e. No Waiver. No waiver by either party, whether express or implied, of
any provision of this Agreement or of any breach or default of any party, shall
constitute a continuing waiver of such provision or any other provisions of this
Agreement, and no such waiver by any party shall prevent such party from acting
upon the same or any subsequent breach or default of the other party of the same
or any other provision of this Agreement.
f. Disclaimer of Agency. Nothing in this Agreement shall create a
partnership or joint venture or establish the relationship of principal and
agent or any other relationship of a similar nature between the parties hereto,
and neither LICENSEE nor LICENSOR shall have the power to obligate or bind the
other in any manner whatsoever.
g. Construction. This Agreement shall be interpreted to provide
LICENSOR with the maximum control of the Intellectual Property and the use
thereof.
h. Licensor Approvals. Any approval required from LICENSOR under this
Agreement shall be effective and binding against LICENSOR only if it is in
writing. Any approval required hereunder must be obtained by LICENSEE prior to
LICENSEE taking any action which requires such approval.
i. This Agreement may be executed in any number of counterparts, each
of which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
j. Authority. Each individual signing on behalf of a party hereto
represents and warrants that he or she is authorized to execute this Agreement
on behalf of such party.
k. Termination on Insolvency of LICENSEE. LICENSOR may terminate this
Agreement if a petition for relief under applicable bankruptcy law is filed by
or against LICENSEE, and is not dismissed within sixty (60) days of such filing,
if LICENSEE makes any assignment for the benefit of its creditors, or if a
receiver is appointed for LICENSEE for all or substantially are of its business
interests. The license and rights granted hereunder are personal to LICENSEE. No
assignee for the benefit of creditors, receiver, debtor in possession, trustee
in bankruptcy, sheriff or any other officer of court charged with taking over
custody of LICENSEE's assets or business shall have any right to continue
performance to exploit or in any way use the Intellectual Property if this
Agreement is terminated, except as may be required by law.
l. Termination on Insolvency of LICENSOR. LICENSEE may terminate this
Agreement, if a petition for relief under applicable bankruptcy law is filed by
or against LICENSOR, and is not dismissed within sixty (60) days of such filing,
if LICENSOR makes any assignment for the benefit of its creditors, or if a
receiver is appointed for LICENSOR for all or substantially all of its business
interests. In the event of such termination, LICENSEE shall have the right to
continue thereafter to import and/or sell any and all Merchandise which LICENSEE
has purchased, produced or committed to purchase prior to the date of
termination.
IN WITNESS WHEREOF the parties have executed this Agreement as of the date set
forth above.
DenexCorp/LVPS MicroFacility
By: /s/ Ronald R. Patterson
Name: Ronald R. Patterson
Title: Chief Executive Officer
LVPS MicroFacility, Inc.
By: /s/ Ross T. Boling
Name: Ross T. Boling
Title: Chief Operating Officer