LICENSE AGREEMENT
THIS LICENSE AGREEMENT is dated the 20th day of September, 2001
BY AND BETWEEN: NOCOPI TECHNOLOGIES, INC., a corporation duly
organized and existing under the laws of Maryland, with offices
at 000 Xxxxx Xxxxxx, Xxxx Xxxxxxxxxxxx, Xxxxxxxxxxxx, 00000-0000
("NOCOPI")
AND: LL SECURITY PRODUCTS INC., a corporation duly organized and
existing under the laws of Nevada, with offices at 000 Xxxxx
Xxxx, Xxxx Xxxxxx, Xxxxxxxxxxxx, 00000, and its Affiliates as
herein defined ("LICENSEE")
WITNESSETH:
WHEREAS, NOCOPI is the sole owner of a series of patents and patent
applications dealing with and relating to, amongst other things, a system
incorporating activating and counterfeit-deterrent inks;
WHEREAS, NOCOPI wishes to enter into a contractual arrangement with LICENSEE so
as to provide LICENSEE with:
i) the non-exclusive use of the NOCOPI Technology for the specific range of
products hereinafter defined in clause 1.09; and
ii) the exclusive use of the NOCOPI Technology for the range of products
hereinafter defined in clause 1.06.
NOW, THEREFORE, in consideration of the premises and of the mutual agreements,
provisions and covenants herein contained, the parties hereto hereby agree as
follows:
1. DEFINITION
1.01 "ADDITIONAL EARNINGS" shall mean that portion of LICENSEE'S net
earnings during a Royalty Year, net of all costs as determined by
standard accounting methods, derived from the sale by LICENSEE of
Non-Exclusive Products and Exclusive Products which is attributed
solely to incorporation of NOCOPI Technology.
1.02 AFFILIATES" shall mean any corporation which owns either party or is
owned or controlled to the extent of at least fifty percent (50%) of
the issued and voting stock of such corporation by either party.
1.03 "DESIGN RIGHTS" shall mean design rights (whether registered or
unregistered) which are owned or which may hereafter be owned by NOCOPI
and which relate to the NOCOPI Technology.
1.04 "EFFECTIVE DATE" of this Agreement shall be September 20, 2001.
1.05 "EUROPE" shall mean all countries as are encompassed within the area
bounded by the Atlantic Ocean on the West, the Arctic Ocean on the
North, the Mediterranean and its annexes on the South and the fifty
(50) longitude on the East, and including also all countries or
territories comprised in the geographic territories of the area
previously occupied by the former Union of Soviet Socialist Republic,
as well as overseas territories and departments of any country in
Europe.
1.06 "EXCLUSIVE PRODUCTS" shall mean only paper products such as coupons,
slips and other documents which incorporate (but not during the
manufacture of paper and paperboard) NOCOPI Technology for the
legalized gambling industry (exclusive of government-sponsored
lotteries and promotional games).
1.07 "NOCOPI REPORT" shall mean a written report, which shall list the sale
price and customer (or customer code) rather than actual name of all
Non-Exclusive Products and Exclusive Products sold by the LICENSEE
during the preceding Royalty Period.
1.08 "NOCOPI TECHNOLOGY" shall mean the Rub & Reveal technology furnished by
NOCOPI that incorporates a counterfeit-deterrent ink which is reactive,
and includes without limitation all granted patents and patent
applications listed on Exhibit A hereto, together with any granted
patent arising from such applications (collectively, the "PATENTS").
1.09 "NON-EXCLUSIVE PRODUCTS" shall mean and shall be restricted to products
derived from Rub & Reveal applications which incorporate NOCOPI
Technology; provided, however, LICENSEE shall not use NOCOPI Technology
to market, sell, manufacture or have manufactured cash register tapes
or any other products derived from Rub & Reveal applications that
NOCOPI can demonstrate through documentary proof it was selling as of
the Effective Date (collectively, the "EXCLUDED PRODUCTS").
1.10 "QUARTERLY ROYALTY PERIOD" shall mean the period of three (3) calendar
months commencing on the Effective Date, and every three (3) month
period thereafter during the term of this Agreement.
1.11 "ROYALTY PERIOD" shall mean a period of twelve (12) calendar months
commencing on the Effective Date and every twelve (12) month period
thereafter so long as this Agreement remains in effect.
1.12 "TERM" shall mean the time period contemplated by Article 7.
1.13 "TERRITORY" shall mean the world, save and except for Europe, which
shall be governed by the provisions of clause 2.03.
2. LICENSE
2.01 NOCOPI irrevocably licenses and grants to LICENSEE the exclusive right
to use the NOCOPI Technology to market, promote, sell, manufacture, and
have manufactured Exclusive Products in the Territory.
2.02 NOCOPI also irrevocably licenses and grants to LICENSEE the
non-exclusive right to use the NOCOPI Technology to market, promote,
sell, manufacture, and have manufactured Non-Exclusive Products (not
including the Excluded Products) in the Territory.
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2.03 If at any time during the Term of this License Agreement, NOCOPI's
right to grant LICENSEE the licenses in clauses 2.01 and 2.02 in Europe
is confirmed, then the Territory shall be immediately redefined to
include Europe, and NOCOPI will take all necessary actions to confirm
such right.
2.04 NOCOPI undertakes that it will make complete and full disclosure to the
LICENSEE of all of the NOCOPI Technology required to enable the
LICENSEE to market, sell and distribute Exclusive and Non-Exclusive
Products in the Territory.
2.04.1 The Licenses granted in clauses 2.01 and 2.02 shall
specifically include the right to sublicense an unaffiliated
third party (each, a "sublicensee"), provided:
i) that all such sublicensees have executed contracts
with NOCOPI which (a) contain secrecy and
confidentiality provisions for NOCOPI's benefit at
least as extensive as those required of LICENSEE in
Article 10, (b) authorize enforcement by either
LICENSEE or NOCOPI, at its option, (c) provide for
NOCOPI to receive the same royalties, in the same
manner, as required of LICENSEE in Article 4, (d)
provide for termination of the sublicense if
LICENSEE's rights hereunder are validly terminated by
NOCOPI, and (e) provide for termination of the
sublicense due to any breach by the sublicensee that
would constitute a breach of this Agreement if
committed by LICENSEE;
ii) that LICENSEE shall have delivered to NOCOPI within a
period of ten (10) business days of execution, an
original of each sublicense contract; and
iii) that any sublicense relating to Non-Exclusive
Products shall be subject to NOCOPI's prior written
consent, which will not be unreasonably withheld or
delayed.
2.05 Notwithstanding the provisions of clauses 2.01 and 2.02 hereof but in
addition thereto, NOCOPI agrees and acknowledges that as long as this
Agreement remains in effect, that (a) NOCOPI will treat as exclusive
customers of the LICENSEE all customers to whom the LICENSEE may have
sold Non-Exclusive Products during the Term of this Agreement, (b)
NOCOPI shall not solicit any such customers to purchase products
competitive with or comparable to the Non-Exclusive Products from
either NOCOPI or any party other than LICENSEE, and (c) NOCOPI shall
not sell, attempt to sell, or assist others to sell or attempt to sell
competitive or comparable products to any such customers. LICENSEE
recognizes and agrees that it will include all such sales in its report
of Additional Earnings.
3. SUPPLY OF RAW MATERIALS
3.01 NOCOPI shall sell to LICENSEE and shall provide all necessary deterrent
inks required by LICENSEE for the Exclusive Products and Non-Exclusive
Products, the whole at NOCOPI'S then prevailing most favorable selling
price to any other party. The ink selling price as of the Effective
Date is One Hundred Dollars ($100.00) per gallon, and no changes to the
selling price will be made except upon written notice given to LICENSEE
at least thirty (30) days prior to the effective date of such change.
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3.02 LICENSEE shall pay NOCOPI for the costs of all such inks within a
period of forty-five (45) days following the date of invoice.
4. CONSIDERATION
4.01 In consideration of the rights granted to LICENSEE under this Agreement
for the NOCOPI Technology, LICENSEE agrees to pay to NOCOPI royalties
in accordance with the clauses hereinafter following, but subject to
any offsets authorized under clause 8.02 below,
4.02 For each Royalty Period commencing on the Effective Date, LICENSEE
shall pay to NOCOPI at the times and in the manner set out in clauses
4.03 and 5.02 hereof a minimum annual royalty fee equal to the greater
of (i) Fifteen Thousand Dollars ($15,000.00), or (ii) five percent (5%)
of the Additional Earnings relating to sales of Exclusive Products and
ten percent (10%) of the Additional Earnings relating to sales of
Non-Exclusive Products. In the event that one or more technologies
emanating from LICENSEE are incorporated by LICENSEE into Exclusive
Products and Non-Exclusive Products, the Royalty Fee shall be reduced
to two and one-half percent (2 1/2%) for all such Exclusive Products
utilizing technology emanating from LICENSEE, and to five percent (5%)
for all such Non-Exclusive Products utilizing technology emanating from
LICENSEE.
4.03 The minimum annual royalty fee of Fifteen Thousand Dollars ($15,000.00)
shall be paid by LICENSEE to NOCOPI as follows:
i) as to the Royalty Periods ending September 19, 2002 and
September 19, 2003 respectively, the sum of Thirty Thousand
Dollars ($30,000.00) concurrently with the execution and
delivery of this License Agreement and a certain Escrow
Agreement, the receipt of which sum is acknowledged by NOCOPI;
ii) as to each Royalty Period (if applicable) subsequent to that
ending on September l9, 2003, by way of four quarterly
payments of Three Thousand Seven Hundred and Fifty Dollars
($3,750.00) beginning forty-five (45) days after the
commencement of such Royalty Period.
4.04 In the event of NOCOPI's alleged breach of any of clauses 2.05, 3.01,
8.02, 9.02, 10.02, 13.01, or 15.02 of this Agreement, LICENSEE shall,
in addition to its other rights or remedies, be authorized, during the
pendency of any dispute related thereto, to deposit the royalties
otherwise due into an interest-bearing account maintained by the Escrow
Agent. The royalties so deposited and maintained shall be released and
disbursed only as directed by the parties' joint written instruction,
by a court of competent jurisdiction, or by the arbitrators pursuant to
Article 16 hereof.
5. RECORDS AND REPORTS
5.01 LICENSEE agrees to keep accurate accounts and complete records in
sufficient detail to record the Additional Earnings for the Territory
during each Quarterly Royalty Period or during each Royalty Period as
the case may be, so that the amount of royalty payments due to NOCOPI
may be ascertained.
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5.02 LICENSEE shall deliver to NOCOPI:
i) no later than forty-five (45) days after the close of each
Royalty Period during the Term; and
ii) commencing with the Quarterly Royalty Period beginning on the
Effective Date, no later than forty-five (45) days after the
close of each Quarterly Royalty Period; and
iii) after the termination of this agreement
a statement specifying the information referred to in clause 5.01
hereof and in such form and containing such details as NOCOPI
reasonably requires substantiating LICENSEE'S Additional Earnings in
the Territory during the applicable period. LICENSEE shall, at the same
time as providing the said statement, also remit the amount of any
royalties due in accordance with the statement. The receipt or
acceptance by NOCOPI of any statements furnished pursuant to this
Agreement or any royalty payments paid hereunder (or the cashing of any
checks paid hereunder) shall not preclude NOCOPI from questioning the
correctness thereof at any time and in the event that inconsistencies
or mistakes are discovered in such statements or payments, they shall
be rectified and appropriate payments shall immediately be made by
LICENSEE or credit given to LICENSEE by NOCOPI, as may be appropriate.
5.03 If LICENSEE fails to deliver such a statement to NOCOPI within
forty-five (45) days of the end of the particular period, NOCOPI, in
addition to any other rights and on not less than ten (10) days prior
notice to LICENSEE, may employ an independent auditor qualified to
practice and practicing in the United States, to examine such books and
records of LICENSEE as may be necessary to enable him to report upon
and certify the amount of Additional Earnings and LICENSEE will
promptly pay to NOCOPI the cost thereof as additional royalty.
5.04 LICENSEE agrees, upon request by NOCOPI, to permit an auditor qualified
to practice and practicing in the United States, who may be designated
by either party, to have access during normal business hours at least
once annually on ten (10) business days' notice, to audit such books
and records as may be necessary to determine the correctness of any
report or payment made under this Agreement. On request, with
reasonable notice, LICENSEE will make available at its offices, all
relevant books of account and records.
5.05 If any audit reveals a discrepancy between the amount payable to NOCOPI
and the amounts actually paid to NOCOPI and if that discrepancy exceeds
five percent (5%) of the amounts payable as determined in the audit,
LICENSEE shall pay all of NOCOPI's reasonable costs associated with
such audit. Otherwise, all costs associated with any audit shall be the
responsibility of NOCOPI.
5.06 LICENSEE shall be entitled to receive copies of all audit reports
prepared pursuant to this Article 5.
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6. MARKING AND USE OF NOCOPI'S TRADEMARK
6.01 If LICENSEE and/or any of its sublicensees utilize the trademark "Rub &
Reveal" or any other trademark owned by NOCOPI in association with the
NOCOPI Technology, they shall do so only in respect of products the
qualify and specifications of which have been previously approved of by
NOCOPI, and LICENSEE shall provide NOCOPI with adequate opportunity so
that NOCOPI may satisfy itself that such quality and specifications are
maintained during continuance of such use. Before using such trademark
in any area, LICENSEE and/or its sublicensees shall be responsible for
acquainting themselves with and informing NOCOPI of all licensing
formalities, user registration and quality control requirements
applicable in such area, which are reasonably necessary to the
protection of NOCOPI's interest in the trademark, and NOCOPI shall
co-operate with LICENSEE and/or its sublicensees at their respective
expense in fulfilling such requirements, it being understood that in
any area where NOCOPI takes no steps to register the trademark, there
shall be no such obligation on LICENSEE and/or its sublicensees in
respect of such requirements other than quality control. In the event
that any good will shall accrue to LICENSEE in the trademark "Rub &
Reveal" or any other trademark of NOCOPI in any area, LICENSEE and/or
its sublicensees will agree in writing to assign such goodwill to
NOCOPI on termination of this license or upon request by NOCOPI to this
extent that such can be accomplished under generally accepted
accounting principles. Nothing herein shall be deemed to prevent
LICENSEE from selling Non-Exclusive and Exclusive Products under its
own trade names.
7. TERM AND TERMINATION
7.01 This Agreement shall commence on September 20, 2001 and shall continue
until 7:00 o'clock in the afternoon of September 19, 2003 (unless
terminated as hereinafter provided); and shall thereafter automatically
renew from year to year, unless and until terminated as provided for in
clause 7.02 or clause 7.03 hereof.
7.02 Only LICENSEE shall have the option of terminating this
Agreement in the following circumstance:
7.02.1 by not less than thirty (30) days' notice, in advance and in
writing, to NOCOPI, prior to September 19, 2003 or, in the
event that this Agreement continues after the first 24-month
period, by sixty (60) days' notice, in advance and in writing,
to NOCOPI.
7.03 Either LICENSEE or NOCOPI shall have the option of terminating
this Agreement in the following circumstances:
7.03.1 If a party shall make any composition with creditors or go
into liquidation whether voluntary or compulsory, or analogous
proceedings shall be commenced, then the other party may, at
its sole and absolute discretion, by notice in writing,
forthwith terminate this Agreement, failing which notice this
Agreement shall continue to remain in full force and effect.
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7.03.2 If a party shall breach any material term or condition of this
Agreement, and shall fail to cure or initiate the cure of such
material breach within thirty (30) days after receipt of
written notice from the other party specifying the nature of
the material breach in full detail, the non-breaching party
may forthwith terminate this Agreement by notice in writing,
failing which notice this Agreement shall continue to remain
in full force and effect. Notwithstanding the foregoing, in
the event of a dispute between LICENSEE and NOCOPI as to
whether a material breach has occurred or been cured during
the pendency of which dispute LICENSEE pays any royalties due
hereunder either to NOCOPI or to the Escrow Agent pursuant to
clause 4.04, NOCOPI shall continue to manufacture and supply
inks to LICENSEE, and LICENSEE shall continue to pay for such
inks, pursuant to Articles 3 and 13, until and unless
otherwise directed by the arbitrators pursuant to Article 16
hereof.
8. ADDITIONAL OBLIGATIONS
8.01 NOCOPI shall provide, at the expense of LICENSEE, such technical
training for personnel of LICENSEE as may be required in order to
acquaint LICENSEE with the NOCOPI Technology. For these purposes,
"expense" shall include travel costs only and not include salary or
other compensation or the cost of benefits for NOCOPI personnel whether
employed by NOCOPI or retained by NOCOPI on any other basis.
8.02 NOCOPI shall, through counsel acceptable to LICENSEE (i) prosecute
diligently any patent applications relating to the PATENTS pending as
of the date of this Agreement or thereafter, (ii) preserve and maintain
all rights in any patent applications and the PATENTS, including
without limitation the payment of all renewal, maintenance, or other
fees related thereto, and (iii) bring suit in its own name, with the
prior written consent of LICENSEE which will not be unreasonably
withheld, to enforce the PATENTS and any other licenses issued by
NOCOPI thereunder. NOCOPI represents and warrants to LICENSEE that the
current payment schedule for all renewals, maintenance, or other fees
related to the PATENTS is attached as Exhibit B hereto. NOCOPI shall
promptly provide LICENSEE with a copy of any notices received by NOCOPI
regarding any of the PATENTS or patent applications, including without
limitation any renewal, maintenance, or other fees relating thereto,
and shall, upon request, furnish written proof that is reasonably
satisfactory to LICENSEE regarding NOCOPI's compliance with the
foregoing obligations. Any expenses incurred in connection with any of
the foregoing obligations shall be borne solely by NOCOPI; provided,
however, that if NOCOPI shall fail to perform any of the obligations or
provide LICENSEE with any of the notices set forth in this clause 8.02,
LICENSEE is hereby authorized to take such actions in its own name or
in the name of NOCOPI as may be necessary or appropriate in LICENSEE'S
sole judgment to perform such obligation. NOCOPI shall promptly, upon
demand, reimburse and indemnify LICENSEE for all damages, costs and
expenses, including attorney's fees, incurred by LICENSEE pursuant to
this clause 8.02. Without limiting the generality of the foregoing,
LICENSEE shall have the right to offset against royalties otherwise due
to NOCOPI under Article 4 above the damages, costs, and expenses,
including attorney's fees, incurred by LICENSEE. NOCOPI shall not
abandon any PATENTS, or any right to file a patent application or any
pending patent application relating to any PATENTS, without LICENSEE'S
prior written consent.
8.03 The LICENSEE shall immediately advise NOCOPI of any legal notices
served on the LICENSEE which might affect NOCOPI, handle promptly all
correspondence from NOCOPI, and assist and co-operate with NOCOPI's
officers, research and sales personnel during their trips to the
facilities of the LICENSEE and/or the suppliers of the LICENSEE.
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9. WARRANTIES, LIMITATIONS OF LIABILITY, AND HOLD HARMLESS
9.01 Each party expressly saves and holds the other party, and any
Affiliates, harmless from any and all liability of any kind or nature
whatsoever to customers and to other third parties which may arise from
its negligent acts or omissions.
9.02 NOCOPI warrants that (a) NOCOPI is the sole and exclusive owner of the
NOCOPI Technology, including without limitation any PATENTS associated
therewith, (b) NOCOPI has the unqualified right to enter into this
Agreement and perform its terms, (c) NOCOPI has not and will not enter
into any agreement which is inconsistent with NOCOPI's obligations and
undertakings to LICENSEE under this Agreement, (d) any ink sold to
LICENSEE will conform to samples previously provided, and (e) the
licenses and rights granted pursuant to this Agreement, when used as
intended and without unauthorized modification, do not violate any
right or infringe any patent, copyright or other protection of
intellectual property belonging to any third party. NOCOPI agrees to
defend, indemnify, and hold harmless the LICENSEE and LICENSEE'S
principals, directors, officers, employees, and/or agents from and
against any and all liabilities, penalties, claims, demands, suits, and
causes of action of any nature whatsoever, whether groundless or
otherwise, and any and all damages, costs and expenses sustained or
incurred (including cost of defense, settlement, and attorneys' fees)
asserted by or on behalf of any person or entity arising out of any
claim that any of the licenses or rights granted by NOCOPI pursuant to
this Agreement, or the NOCOPI Technology applied pursuant to this
Agreement, infringe any patent, copyright or protection of intellectual
property generally, whether such claim is valid or baseless and
wherever it may arise. NOCOPI shall include LICENSEE as a named insured
on all liability insurance policies maintained by NOCOPI during the
Term and shall provide written proof thereof to LICENSEE from time to
time as requested. These undertakings shall expressly survive any
termination of this Agreement.
9.03 Except as herein expressly stated (a) there are no warranties,
expressed or implied, by operation of law or otherwise for any item
furnished hereunder, (b) NOCOPI disclaims any implied warranty or
merchantability or fitness for a particular purpose, and (c) in no
event shall LICENSEE or its Affiliates, be liable for any incidental,
indirect or consequential damages in connection with or arising out of
this Agreement.
10. CONFIDENTIALITY
10.01 LICENSEE shall keep secret and confidential the NOCOPI Technology
and/or Design Rights made available to it by NOCOPI and shall not
disclose the same other than to permitted sublicensees, ink
manufacturers, and those Directors and employees of LICENSEE or any
Affiliate of LICENSEE who may be deemed to have a legitimate reason to
be party to the NOCOPI Technology and/or Design Rights.
10.02 OCOPI shall keep secret and confidential the terms and conditions of
this Agreement and any information which LICENSEE passes to NOCOPI
hereunder, and not disclose the same except to its own employees as
necessary to carry out the purposes of this Agreement, or, with respect
to the terms and conditions of this Agreement, as may be necessary to
comply with applicable federal securities or other laws.
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10.03 The obligations of secrecy undertaken by both parties pursuant to this
Article 10, shall not apply to information which:
10.03.1 is already, or which subsequently becomes generally known to
the public through no fault of the recipient; or
10.03.2 the recipient can demonstrate was known to the recipient prior
to the date disclosed. For the purposes hereof, that which the
recipient can demonstrate was known will be that which the
recipient can establish by written evidence was known to it at
the date disclosed; or
10.03.3 is received from a third party, provided that such third party
is lawfully entitled to disclose the same; or
10.03.4 is disclosed in any patent or patent application which may
publish
10.04 The obligations of secrecy pursuant to this Article 10 will expire on
the tenth anniversary of the termination of this Agreement as
hereinabove provided.
10.05 The provisions of this Article 10 contain the entire understanding and
agreement between the parties with respect to matters dealing with
confidentiality and cannot be amended, modified or supplanted in any
respect except by a subsequent written agreement entered into by both
parties. If either party is required by a court of law or government
agency to disclose information otherwise deemed confidential under this
Article 10, it shall give the other party prompt written notice of such
requirement prior to such disclosure and assistance in obtaining an
order protecting the information from public disclosure.
11. IMPROVEMENTS
11.01 During the term of this Agreement, each party shall disclose to the
other party any improvements to the NOCOPI Technology and/or Design
Rights which the first party may discover or which comes into its
possession. Any such improvements shall, from the time of the party's
knowledge, conception or development, be the property of NOCOPI. Upon
request by NOCOPI, the LICENSEE shall execute and deliver to NOCOPI
such instrument as NOCOPI may reasonably request in order to achieve
such industrial or intellectual property status as NOCOPI shall deem
appropriate to perfect the assignment of the rights so granted by the
LICENSEE to NOCOPI; provided, however, that LICENSEE shall have a
perpetual, irrevocable, non-exclusive, and royalty-free license for any
such improvements which LICENSEE discovers or which come into its
possession
12. MISCELLANEOUS
12.01 Neither the LICENSEE nor NOCOPI shall be in default under this
Agreement nor be liable for any failure to perform or for any delay in
performance resulting from any cause beyond its/their reasonable
control including compliance with any regulations, orders or act, of
any federal, provincial, state or municipal government, or any
department or agency thereof, civil or military authority, acts of God,
acts or omissions of the other party, fires, floods or weather, strikes
or lockouts, factory shutdowns, embargoes, wars, hostilities or riots,
delays or shortages in transportation or inability to obtain labor,
manufacturing facilities or material.
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12.02 Each of the parties shall bear all taxes imposed on each of them as a
result of the existence or operation of this Agreement including, but
not restricted to, any tax on or measured by any payment required to be
made by it hereunder, any registration tax, any tax imposed with
respect to the granting of, or transfer of, licenses or other rights or
payments hereunder.
12.03 This Agreement may be varied or amended only by the written agreement
of the parties hereto through their duly authorized officers or
representatives.
12.04 In any case where any notice or other communication is required or
permitted to be given hereunder, such notice or communication shall be
in writing and:
i) personally delivered;
ii) sent by postage prepaid registered mail, or
iii) transmitted by telex or facsimile to the parties at the
addresses first hereinbefore listed or to such other addresses
as the parties may notify each other.
12.05 The relationship between the parties shall be governed by the terms of
this Agreement, and the terms of a certain Escrow Agreement being
executed contemporaneously, and shall not extend to other activities,
transactions or contracts. This Agreement is expressly conditional upon
LICENSEE'S receiving written assurances from Westvaco Corporation and
Westvaco Brand Security, Inc. (collectively, "Westvaco") relative to
certain agreements between NOCOPI and Westvaco that are satisfactory to
LICENSEE in its sole discretion. Neither party is in any way the legal
representative or agent of, nor has any authority to assume or create
any obligation on behalf of, the other party. LICENSEE shall make no
guarantees, warranty or representation with respect to the Exclusive
Products or to the Non-Exclusive Products that purports to apply to or
bind NOCOPI.
12.06 If any provision of this Agreement is held illegal, such provision
shall be severed from this Agreement and shall be inoperative. The
parties shall use their best endeavors to replace the severed provision
with a new provision which is not illegal and which follows the
principles of the severed provision as closely as is legally possible.
The remainder of this Agreement shall remain binding on the parties
hereto,
12.07 No waiver of breach of any of the provisions of this Agreement shall be
construed to be a waiver of any succeeding breach of the same or any
other provision.
12.08 This Agreement may be executed in any number of counterparts. Any
single counterpart or set of counterparts signed, in either case, by
the parties hereto, shall constitute a full and original Agreement for
all purposes.
12.09 The descriptive heading of the several articles of this Agreement are
inserted for convenience only and do not constitute a part of this
Agreement. Capitalized terms not otherwise defined in this Agreement
shall have the meaning set forth in the Escrow Agreement.
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12.10 The preamble hereof shall be deemed to form part of this Agreement for
all purposes,
13. SUPPLY OF INK
13.1 NOCOPI agrees that it will timely supply LICENSEE with inks proprietary
to NOCOPI in accordance with the terms and conditions of clause 3.01
hereof. The obligation to supply such inks shall apply only for that
quantity of ink that is ordered by a purchase order emanating from the
LICENSEE and which is received by NOCOPI at least twenty-one (21) days
prior to the requested delivery date.
13.2 NOCOPI further agrees that upon request by LICENSEE it will provide
statements justifying its most favorable selling price for the NOCOPI
inks.
14. GOVERNING LAW
14.01 This Agreement shall be governed by the laws of the Commonwealth of
Pennsylvania. Any action in equity seeking to enforce or interpret this
Agreement shall only be brought in a state or federal court serving
Xxxxxxxxxx County, Pennsylvania, and both parties hereby consent to
personal jurisdiction and venue in Xxxxxxxxxx County, Pennsylvania.
15. BINDING EFFECT ASSIGNMENT
15.01 This Agreement may not be assigned or otherwise transferred by either
party, in whole or in part, whether voluntarily or by operation of law,
without the written consent of the other party except that the LICENSEE
may assign this Agreement to an Affiliate without consent. No
assignment of this Agreement shall be valid unless and until all of the
obligations of the assigning party, including without limitation
NOCOPI's covenants in clause 15.02 below, have been assumed, in
writing, by the assignee. When duly assigned in accordance with the
foregoing, this Agreement shall be binding upon and inure to the
benefit of the assignee, including, without limitation, in connection
with the assigning party's purchase or sale of assets, or merger or
consolidation with another party. Any attempted assignment in
contravention of this clause 15.01 shall be void.
15.02 NOCOPI covenants and agrees that it shall not sell the NOCOPI Technology
or any material part thereof (including without limitation the PATENTS) unless
it shall have first offered in writing to sell such NOCOPI Technology or part
thereof to LICENSEE. In the event NOCOPI (a) receives a bona fide offer from a
third party to purchase the NOCOPI Technology or any material part thereof, or
(b) otherwise desires to sell the NOCOPI Technology or any material part
thereof, NOCOPI shall present the terms of such offer to LICENSEE in writing,
which shall include the sale price, payment, and all other material terms and
conditions, including customary representations and warranties given by the
seller of a business or business assets. LICENSEE shall signify its interest to
purchase the NOCOPI Technology or material part thereof, as the case may be, by
presenting a signed letter of intent to NOCOPI not later than 30 days after
NOCOPI's delivery of the terms of the offer to sell. In its letter of intent,
LICENSEE may substitute cash or cash equivalents for any other form of payment
proposed by the third party purchaser. If LICENSEE does not present a signed
letter of intent to NOCOPI within such 30 day period, LICENSEE's first right of
purchase shall lapse and NOCOPI may, for a period of 90 days thereafter, sell
the NOCOPI Technology or any material part thereof, as the case may be, to a
third party, subject to the terms and conditions of this License Agreement and a
certain Escrow Agreement being executed contemporaneously hereto, upon
substantially the same terms and conditions that were offered to LICENSEE, after
which time, if the third party sale has not closed, NOCOPI must again first
offer to sell the NOCOPI Technology or any material part thereof, as the case
may be, to LICENSEE hereunder before selling the same to any third party. If
LICENSEE and NOCOPI enter into a letter of intent, the parties agree to
negotiate diligently and in good faith to consummate the sale within not more
than 90 days thereafter, unless the parties agree to extend such date. With
respect to the price of any such proposed sale. LICENSEE shall be entitled to a
credit equal to one half (1/2) of all fees paid to NOCOPI under Article 4
hereof.
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16. ARBITRATION
16.1 in the event of any dispute, difference or question arising between the
parties in connection with this Agreement, or any clause or the
construction thereof, or the rights, duties or liabilities of either
party, which cannot be amicably resolved by the parties then and in
every such case, unless the parties concur in the appointment of a
single arbitrator, the matter of difference shall be referred to three
(3) arbitrators, one to be appointed by each party, and the third to be
nominated by the two so selected by the parties, or if they cannot
agree on a third, by the Philadelphia, PA office of the American
Arbitration Association ("AAA").
16.2 In the event that either party, within thirty (30) days of any
notification made to it of the demand for arbitration by the other
party, shall not have appointed its arbitrator, such arbitrator shall
be appointed by the AAA. Arbitration shall take place at the AAA's
Philadelphia, PA office under the AAA's Commercial Rules. The
arbitrators must base their decision on this Agreement and their
decision shall be binding on both parties and may be enforced by any
court of competent jurisdiction.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
by their respective representatives thereunto duly authorized as of the date
first hereinabove written.
NOCOPI TECHNOLOGIES, INC.
Per: /s/ Xxxxxxx X. Xxxxxxxxx, M.D.
------------------------------
Xxxxxxx X. Xxxxxxxxx, M.D.
Chairman
LL SECURITY PRODUCTS INC.
Per: /s/ Xxxxxx X. Xxxxxxx
---------------------
Xxxxxx X. Xxxxxxx
President
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