LICENSE AGREEMENT
THIS AGREEMENT, effective the 22nd day of SEPTEMBER 1999, is between Safe Water
Technologies, Inc., a Florida corporation, ("SWT"), located at 202 South Wheeler
Street, Plant City Florida, and the University of South Florida Research
Foundation, Inc., a corporation not for profit under Chapter 617 Florida
Statutes, and a direct support organization of the University of South Florida
(USF) pursuant to section 240.299 Florida Statutes (USFRF).
Introduction
WHEREAS, SWT will be actively involved in the merchandising of technologies for
purifying water.
WHEREAS, USF developed the following technology:
A method and apparatus for the detection and classification of microorganisms in
water as set forth in US Patent No. 5,616,457. A copy of the patent is attached
in Exhibit A.
WHEREAS, USFRF is the exclusive licensor of USF Technology and is willing to
grant SWT an exclusive license to use USF Technology and other USF research
results derived pursuant to this Agreement, on the terms and conditions therein;
and
WHEREAS, USFRF believes it is in public interest to grant SWT license set forth
below.
NOW THEREFORE, in consideration of the premises and mutual covenants set forth
herein, and intending to be legally bound, the parties agree as follows:
I. Definitions
A. "USF Patent Rights" shall mean the US Patent listed above and any
successor application, domestic or foreign resulting therefrom, and
any US or foreign patents issuing therefrom.
B. "USF Technology" shall mean a method and apparatus for the detection
and classification of microorganisms in water disclosed and claimed in
the USF Patent Rights, and shall include know-how related directly
thereto.
C. "Licensed Product" shall mean any SWT product, system and/or process
in which USF Technology is used.
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D. To "Commercially Exploit" or "Commercial Exploitation" of a Licensed
Product, shall mean to provide the Licensed Product to a customer, in
exchange for valuable consideration.
E. "Revenue" for a Licensed Product shall mean consideration due or paid
to SWT for SWT's providing of a Licensed Product to a customer.
F. "Territory" shall mean Worldwide.
II. Grant
Subject to USFRF's retained rights and covenants set forth in Section
VIII below, SWT is granted the exclusive right and license to
Commercially Exploit Licensed Products in the Territory.
Ill. Best Efforts
SWT shall use its best efforts to develop and Commercially Exploit
Licensed Products in the Territory.
IV. License Fees and Running Royalties
SWT agrees to pay license fees, and running royalties (all payable to
USFRF) as follows:
A. For this technology for the detection and classification of
microorganisms in water (Dr. Garcia-Rubio's technology) initial
license fee of two million Common Shares of SWT (2,000,000) to be
delivered within (30) days after full execution of this License. This
represents 20% of the authorized shares of SWT.
B. Running Royalties equal to:
Two Percent (2%) of the Revenue resulting from Commercial Exploitation
for Licensed Products utilizing this technology
V. Patent Prosecution
The filing, prosecution and maintenance of all USF Patent Rights shall
be at the sole discretion of USF, provided that at SWT's request and
sole expense, USFRF will arrange for USF to seek, obtain and maintain
the USF Patent Rights and requested other protection, in the
Territory, to the extent that USF is lawfully entitled to do so, all
of which shall be incorporated in USF Patent Rights. Should SWT elect
not to seek, obtain or maintain a part of USF Patent Rights, all
rights to such part shall revert to USFRF, and SWT shall have no
further interest therein.
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VI. Assignability
This Agreement may be assigned to any person or entity without USFRF's
advance notice, and thereafter may be assigned to any person or entity
only with advanced written approval from USFRF; provided that USFRF
will not reasonably withhold such approval in a timely manner, and
further provided that any such assignee agrees to comply with all of
the terms and conditions hereunder.
VII. Sublicensing
SWT's rights and obligations under this Agreement may be sublicensed
without USFRF's advance written permission, provided SWT is in
compliance with all of its obligations under this Agreement.
USFRF will permit SWT to sublicense its rights to Commercially Exploit
Licensed Products, provided that SWT pay royalties to USFRF as if SWT
had Commercially Exploited Licensed Products sold by it's sublicensees
which may have been granted sublicenses by SWT. All sub-licensees
shall agree to comply with all of the terms and conditions of this
Agreement. SWT shall provide US FRF with a copy of each executed
sublicense within fifteen (15) days of its execution.
VIII. USFRF Retained Rights and Covenants
USFRF retains for itself and for USF the right to do all things
granted to SWT under Section II, and USFRF covenants that USFRF will
not license others to Commercially Exploit USF Technology licensed to
SWT under this Agreement, and will not itself so Commercially Exploit,
unless
(A) authorized by this Agreement, or
(B) SWT becomes insolvent, or
(C) anyone files a lien against this Agreement, or
(D) SWT takes any action, or fails to take any action, the result
of which gives a third party the right to acquire a security
interest in this Agreement and/or USF Patent Rights, or
(E) SWT files for bankruptcy or a receiver is appointed, or
(F) SWT ceases to carry on its business, with the exception of
merger, reorganization, acquisition, or similar restructuring.
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(G) SWT materially breaches this Agreement in a manner which
causes the Agreement to terminate or gives USFRF the right to
terminate under Section XII.
IX. Product Liability/Insurance
SWT shall, at all times during the term of this Agreement and
thereafter, be solely responsible for, and defend, hold harmless and
indemnify the State of Florida, Board of Regents, USF, USFRF, their
trustees, officers, employees, agents and other representatives,
against any claims and expenses, including legal expenses and
reasonable attorney's fees, arising out of the death of or injury to
any person or property based upon products and/or services produced,
provided or developed for, or by SWT, or commercially exploited by SWT
pursuant to its rights under this Agreement. SWT shall obtain and
carry in full force and effect product liability insurance1 in amounts
customary in the relevant industry in which SWT commercially exploits
licensed products which shall protect USF, USFRF, their trustees, the
Board of Regents, officers, employees, and agents and the State of
Florida and other representatives in regard to the foregoing events at
such time as SWT begins to supply licensed products to the
marketplace.
X. Record Keeping
A. SWT shall keep full, true and accurate books of account
containing all particulars that may be necessary for the purpose
of showing the amounts payable to USFRF hereunder. Said books of
account shall be kept at SWT's principal place of business. Said
books and the supporting data shall be open at all reasonable
times, with reasonable advanced notice, for five (5) years
following the end of the calendar year to which they pertain, to
the inspection of USFRF or its agents for the purpose of
verifying SWT's royalty statement or compliance in other respects
with Agreement.
B. SWT within ninety (90) days after each six (6) months, shall
deliver to USFRF true and accurate reports, giving such
particulars of the business conducted by SWT during the six (6)
months as shall be pertinent to royalty accounting hereunder.
These shall include at least the following:
(i) the number of Licensed Products provided by SWT to its
customers, if any,
(ii) the Revenue derived by SWT from it Commercial
Exploitation of Licensed Products, if any, and
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(iii) the royalties due pursuant to Section IV
With each such report submitted, SWT shall pay the royalties and
any other consideration due and payable under this Agreement. If
no royalties, fees or other consideration shall be due, SWT shall
so report.
C. On or before the ninetieth (90th) day following the close of
SWT's fiscal year, SWT shall provide USFRF with SWT's financial
statements for the preceding fiscal year including, at a minimum,
a balance sheet and an Operating Statement.
D. The payments for royalties, fees or other consideration set forth
in this Agreement shall, if overdue, bear interest until payment
at the monthly rate of one percent (1%). The payment of such
interest shall not foreclose USFRF from exercising any other
rights either may have as a consequence of the lateness of any
payment.
E. SWT hereby agrees that it shall not sell, transfer, export or
re-export any Licensed Products or related information in any
form, or any direct products of such information, except in
compliance with all applicable laws, including the export laws of
any U.S. government agency and any regulations thereunder, and
will not sell, transfer, export or re-export any such Licensed
Products or information to any persons or any entities with
regard to which there exist grounds to suspect or believe that
they are violating such laws. SWT shall be solely responsible for
obtaining all licenses, permits or authorizations required from
the U.S. and any other government for any such export or
re-export.
Xl. Non Use of Names
SWT shall not use the names of the USF or USFRF, nor any adaptation of
either, in any advertising, promotional or sales literature without
prior written consent obtained from USF and/or USFRF in each case,
except that SWT may sate that it is licensed under one or more of the
patents and/or applications comprising the USF Patent Rights.
XII. Term and Termination
A. Unless sooner terminated as provided herein, the royalty
obligations of this Agreement will expire with respect to a given
Licensed Product the longer of twenty (20) years from the date of
the execution of this Agreement or the expiration of the last to
expire patent which covers the licensed intellectual property in
the Territory. Notwithstanding the foregoing, the parties hereto
agree
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that the royalty provisions of Paragraph lV.B. and IV C., are not
solely dependent upon Patent Rights, and SWT's obligations to pay
royalties under paragraph lV.C. hereinabove shall continue
unabated regardless of any of the foregoing expirations.
B. In the event either party files for bankruptcy or a receiver is
appointed, this Agreement may immediately thereafter be
terminated at the option of the other party.
C. Should SWT fail to pay the royalties, fees and/or other
consideration due and payable hereunder, USFRF shall have the
right to terminate this Agreement on forty-five (45) days'
written notice. Upon the expiration of the forty-five (45) day
period, if SWT shall not have paid all such royalties and
interest thereon, USFRF shall have the right to terminate this
Agreement. Upon any material breach or default of Agreement by
SWT, other than those occurrences set out hereinabove which shall
always take precedence in that order over any material breach or
default referred to in this Section, USFRF shall have the right
to terminate this Agreement and the rights, privileges and
license granted hereunder upon forty-five (45) days' written
notice to SWT. Such termination shall become effective unless SWT
shall have cured any such breach or default prior to the
expiration of forty-five (45) days from the date SWT receives
notice of the breach or default.
D. Upon termination of this Agreement for any reason, nothing herein
Shall be construed to release either party from any obligation
that matured prior to the effective date of such termination. SWT
may, however, after the effective date of such termination,
complete Commercial Exploitation of Licensed Products for which
SWT has received consideration at the time of such termination
and sell the same, provided that SWT shall pay to USFRF the
royalties or other consideration thereon as required under the
provisions of Section IV of this Agreement, and shall submit the
reports required under Section X regarding the Commercial
Exploitation of the Licensed Products.
E. Upon termination of this Agreement for any reason, all
intellectual property rights licensed hereunder, including
without limitation, all USF Patent Rights and all USF Technology
shall revert to USF and USFRF, and SWT shall have no further
right to or continuing Interest. In addition, any sublicenses
hereunder shall terminate, unless accepted by USFRF.
F. SWT, its successors or assigns, shall have the option to
terminate This license agreement upon thirty (30) days written
notice and in
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That event, SWT shall cease using USF Technology and return same
to USF. In this event, it is understood that all future monetary
obligations under this Agreement shall be void and any monies
paid to date to USFRF shall be non-refundable to SWT, or its
Assigns.
XIII. Payments Notices and Other Communications
Any payment, notice or other communication made to any party pursuant
to this Agreement shall be sufficiently made or given on the date of
mailing if sent to such party by certified first class mail or air
courier, postage prepaid, addressed to it at its address below, or at
such other address as it shall have designated by written notice given
to the other party.
In the case of USF:
Director, Patents & Licensing
4202 East Fowler Avenue FAO 126
Tampa, Florida 33620-7900
In the case of USFRF:
USF Research Foundation, Inc.
Post Office Box 30045
Tampa, Florida 33620-3044
In the case of SWT
Safe Water Technologies, Inc.
202 South Wheeler Street
Plant City, Florida 33566
XIV. Infringement
SWT understands that USFRF makes no representative and provides no
assurances that Commercial Exploitation of Licensed Products under
this Agreement does not and will not in the future, infringe or
otherwise violate the rights of others.
Xl. Miscellaneous Provisions
A. Each party represents and warrants that it has the authority to
enter Into this Agreement and that the execution, delivery and
performance of this Agreement does not conflict with any
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agreement, or understanding, either written or oral, to which it
is a party or to which it is otherwise bound.
B. This Agreement shall be construed, governed, interpreted and
applied in accordance with the laws of the State of Florida,
U.S.A.
C. The parties hereto acknowledge that this Agreement sets forth the
entire agreement and understanding of the parties, hereto as to
the subject matter hereof, and shall not be subject to any change
or modification except by the execution of a written instrument
subscribed to by the parties hereto.
D. If any term, covenant or condition of this Agreement or the
application thereof to any party or circumstance shall, to any
extent be held to be invalid or unenforceable,
(i) the remainder of this Agreement, or the application of such
term, covenant or condition to the parties or circumstances
other than those as to which it is held invalid or
unenforceable, shall not be affected thereby and each term,
covenant or condition of this Agreement shall be valid and
be enforced to the fullest extent permitted by law; and
(ii) the parties hereto covenant and agree to renegotiate any
such term, covenant or application thereof in good faith in
order to provide a reasonably acceptable alternative to the
term, covenant or condition of this Agreement or the
application thereof that is invalid or unenforceable, it
being the intent of the parties that the basic purpose of
this Agreement are to be effectuated.
E. ln the event any provision of this Agreement is inconsistent with
USF Rules and Policy in effect as of September 1, 1999 USF Rules
and Policy shall control.
F. SWT agrees to use in connection with Licensed Products used
and/or provided in the United States all applicable United States
patent numbers and/or copyright notices requested by USFRF. All
Licensed Products used and/or provided in other countries shall
be marked in such a manner as to conform with the patent,
copyright and other laws and practice of the country.
G. The failure of any party to assert a right hereunder or to insist
upon compliance with any term or condition of this Agreement
shall not constitute a waiver of that right or excuse a similar
subsequent failure to perform any such term or condition by the
other party.
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H. EXCEPT AS OTHERWlSE EXPRESSLY SET FORTH IN THIS AGREEMENT, USF
AND USFRF MAKE NO REPRESENTATION AND EXTEND NO WARRANTIES OF ANY
KIND, EITHER EXPRESS OR IMPLIED, INCLUDING BUT NOT LIMITED TO
WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE,
NON-INFRINGEMENT, AND VALIDITY OF USF PATENT RIGHTS.
I. It is understood and agreed that USF is a third party beneficiary
of this Agreement.
J. This Agreement shall not be effective until such time that USFRF
has received the up-front fee of two million (2,000,000) Shares
of SWT. If these shares are not received within thirty days (30)
from the execution of this Agreement, then this Agreement shall
become null and void and the parties shall be released from its
terms and obligations.
K. This Agreement, together with any amendments hereto, shall inure
to the benefits of SWT, its successors and/or assigns.
IN WITNESS WHEREOF, the parties have hereunto set their hands and seals and duly
executed this Agreement the day and year set forth below.
UNlVERSITY OF SOUTH FLORIDA
RESEARCH FOUNDATION, INC.
BY: _______________________ WITNESS: _________________
Name: Martin L. Silbiger
Title: President, USF Research Foundation
Date: September 17, 1999
Safe Water Technologies, Inc.
BY: ________________________ WITNESS: _________________
Dr. Uwe Reischl, M.D., Ph.D.
President
Date: Sept. 22, 1999
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Exhibit A
Description of technology to be licensed
and a copy of the Provisional Patent Application
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