Exhibit 10.6
LICENSE AGREEMENT
THIS LICENSE AGREEMENT is dated the first day of November, 2003
BY AND BETWEEN: LASER LOCK TECHNOLOGIES INC., a corporation duly
organized and existing under the laws of Nevada, with offices
at ▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇, and its
Affiliates as herein defined.
Hereinafter referred to as "LICENSOR"
AND: COPAG U.S.A. INC., a corporation duly organized and existing
under the laws of Nevada, with offices at ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇, #▇▇▇-▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
Hereinafter referred to as "LICENSEE"
WITNESSETH:
WHEREAS, LICENSOR is the sole owner of a series of proprietary rights patents
and patent applications dealing with and relating to, amongst other things,
technology relating to systems incorporating luminescent pigments; and
WHEREAS, LICENSOR wishes to enter into a contractual arrangement with LICENSEE
so as to provide LICENSEE with the exclusive use of the LL Technology for the
products hereinafter defined in clause 1.06.
NOW, THEREFORE, in consideration of the premises and of the mutual agreements,
provisions and covenants here contained, the parties hereto hereby agree as
follows:
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ARTICLE ONE - DEFINITIONS
-------------------------
1.01 "ADDITIONAL ROYALTY" shall mean an amount equal to the sum arrived
at by multiplying the number of units of the Exclusive Products in
excess of two hundred thousand (200,000) sold or manufactured for
or by the LICENSEE during each Royalty Period, by FIVE CENTS
($0.05) for each excess Exclusive Product.
1.02 "AFFILIATE" means with respect to a party, any corporation or other
business entity directly or indirectly controlling, controlled by
or under common control with such party; as used herein, the term
"control" means possession of the power to direct, or cause the
direction of the management and policies of a corporation or other
entity whether through the ownership of voting securities, by
contract or otherwise.
1.03 "DESIGN RIGHTS" shall mean design rights (whether registered or
unregistered) which are owned or which may hereafter be owned by
the LICENSOR and which relate to the LL Technologies.
1.04 "EFFECTIVE DATE" of this Agreement shall be November 01, 2003.
1.05 "EXCLUSIVE PRODUCTS" shall mean and shall be restricted to decks of
plastic playing cards containing fifty-four (54) cards.
1.06 "LICENSEE REPORT" shall mean a written report, which shall list the
customer (or customer code), and the number of units of Exclusive
Products purchased by each customer of the LICENSEE during the
preceding Royalty Period, as well as such other information as the
LICENSOR reasonably requires.
1.07 "LL TECHNOLOGY" shall mean:
(i) the technology relating to the systems incorporating
luminescent pigments which are enacted by infrared (IR);
(ii) the technology relating to the preparation and mixing of
the LICENSOR's inorganic luminescent pigments and
phosphors which convert IR light into visible;
(iii) the technology relating to the excitation sources
necessary for up-converting phosphors and LICENSOR's
pigments;
(iv) all Design Rights and includes without limitation all
granted patents and patent applications together with any
granted patent arising from such applications
(collectively, the "Patents").
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1.08 "MINIMUM ANNUAL ROYALTY" shall mean the sum of TEN THOUSAND DOLLARS
($10,000.00).
1.09 "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.
1.10 "TERM" shall mean the time period contemplated by Article 6.
1.11 "TERRITORY" shall mean the world.
ARTICLE TWO - LICENSE
---------------------
2.01 The LICENSOR hereby licenses and grants to LICENSEE the exclusive
right to use the LL Technology to market, manufacture and sell
Exclusive Products in the Territory.
2.02 The LICENSOR agrees that the LICENSEE may sub-license all or any of
the LICENSEE's rights hereunder to the LICENSEE's parent company,
namely, Copag de Amazonia, S/a
ARTICLE THREE - SUPPLY OF RAW MATERIALS
---------------------------------------
3.01 THE LICENSOR shall sell to LICENSEE all pigment required by
LICENSEE in order that the LICENSEE may mix its own ink for use on
and with Exclusive Products, the whole at the LICENSOR's then
prevailing most favorable selling price of pigment to any other
party. The pigment selling price as of the Effective Date for the
ensuing twenty-four (24) months is FIVE HUNDRED DOLLARS ($500.00)
per pound, plus shipping, taxes and duty. The LICENSOR will not
increase the latter cost at least for the next twenty-four (24)
months.
3.02 THE LICENSOR also agrees to supply the LICENSEE with such amount of
laser light activators as LICENSEE may require, provided that the
LICENSEE gives the LICENSOR sufficient and adequate notice so as to
allow LICENSOR sufficient time to supply the requested amount to
the LICENSEE. The LICENSEE shall pay the LICENSOR's cost for such
laser light activators. The current LICENSOR's cost is ONE HUNDRED
AND FIFTY DOLLARS ($150.00) per laser light activator, plus
shipping, taxes and duty.
3.03 LICENSEE shall pay LICENSOR for the pigments ordered in compliance
with clause 3.01 and for laser light activators ordered in
compliance with
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clause 3.02 within a period of forty-five (45) days following the
date of invoice.
3.04 Should LICENSOR's cost for the laser light activators be increased,
then the LICENSOR shall give the LICENSEE a notice of such need to
change price. The new price shall continue to be based upon the
actual cost to the LICENSOR, whose records for laser light
activators costing shall be subject to inspection and audit by the
LICENSEE or its duly authorized representatives.
3.05 LICENSOR warrants that all pigments and laser light activators
shipped and delivered to the LICENSEE will be in accordance with
samples previously submitted to the LICENSEE, who hereby
acknowledges having received and inspected same. It is agreed that
no implied warranty or warranties shall arise out of or in
connection with any sale or sales by the LICENSEE to third parties,
and the liability of the LICENSOR shall at all times and for
whatever occurrence be limited to the replacement of defective
material within a reasonable time after being notified in writing
by the LICENSEE.
ARTICLE FOUR - CONSIDERATION
----------------------------
4.01 In consideration of the rights granted to LICENSEE under this
Agreement for the LL Technology, LICENSEE agrees to pay to the
LICENSOR royalties in accordance with the clauses hereinafter
following.
4.02 For each Royalty Period commencing on the Effective Date, LICENSEE
shall pay to LICENSOR the Minimum Annual Royalty and, if justified
by the number of units of the Exclusive Product sold, the
Additional Royalty, both shall be paid at the times and in the
manner set out in clauses 4.03 and 5.02 hereof.
4.03 The Minimum Annual Royalty fee shall be paid by LICENSEE to
LICENSOR on the Effective Date, and each anniversary date thereof
during the Term, failing the timely receipt of such amount by the
LICENSOR, this Agreement shall terminate.
ARTICLE FIVE - RECORD AND REPORTS
---------------------------------
5.01 LICENSEE agrees to keep accurate accounts and complete records in
sufficient detail to record the Licensee Report during each Royalty
Period.
5.02 The LICENSEE shall deliver the Licensee Report to the LICENSOR no
later than forty-five (45) days after the close of each Royalty
Period and
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after the termination of this Agreement. The LICENSEE shall at the
same time as providing the Licensee Report also remit any amount of
Additional Royalty due. The receipt or acceptance by the LICENSOR
of the Licensee Report or any royalty payments paid hereunder (or
the cashing of any cheques paid hereunder) shall not preclude the
LICENSOR from questioning the correctness thereof at any time and
in the event that inconsistencies or mistakes are discovered in the
Licensee Report or payments, they shall be rectified and
appropriate payments shall immediately be made by the LICENSEE or
credit given to the LICENSEE by the LICENSOR as may be appropriate.
5.03 If LICENSEE fails to deliver such a Licensee Report to the
LICENSOR, within the said period of forty-five (45) days, the
LICENSOR in addition to any other rights and on not less than ten
(10) days prior notice to LICENSEE may employ an independent
certified public accountant, qualified to practice and practicing
in the United States, to examine the books and records of the
LICENSEE necessary to enable him to report upon and certify the
amount of units of the Exclusive Products sold by or for the
LICENSEE for the preceding Royalty Period, and the LICENSEE will
promptly pay to the LICENSOR the cost thereof as Additional
Royalty.
5.04 The LICENSEE agrees, upon request by the LICENSOR, to permit a firm
of certified public accountants 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, the 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
the LICENSOR and the amounts actually paid to the LICENSOR and if
that discrepancy exceeds five percent (5%) of the amounts payable
as determined in the audit, the LICENSEE shall pay all of the
LICENSOR's reasonable costs associated with such audit. Otherwise,
all costs associated with any audit shall be the responsibility of
the LICENSOR.
5.06 LICENSEE shall be entitled to receive copies of all audit reports
prepared pursuant to this Article 5.
ARTICLE SIX - TERM AND TERMINATION
----------------------------------
6.01 This Agreement shall commence on November 01, 2003 and shall
continue until 7:00 o'clock in the afternoon of October 31, 2005
(unless terminated as hereinafter provided); and shall thereafter
automatically
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renew from year to year, unless and until terminated as provided
for in clause 6.02 or clause 6.03 hereof.
6.02 The LICENSEE shall have the option of terminating this Agreement by
not less than ninety (90) days' notice, in advance and in writing,
to LICENSOR prior to October 2004 or prior to each November 01,
thereafter as may be applicable.
6.03 Either LICENSEE or LICENSOR shall have the option of terminating
this Agreement in the following circumstances:
a) 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;
b) 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 or to initiate reasonable steps to
cure such default within thirty (30) days after receipt of
written notice from the other party specifying the nature
of the material in full detail, the non-breaching party may
forthwith terminate this Agreement by notice in writing,
and shall be entitled to seek such damages in accordance
with Article 14 as may be awarded because of such breach.
If the non-breaching party does not deliver such notice,
then this Agreement shall continue to remain in full force
and effect. Notwithstanding the foregoing, in the event of
a dispute between LICENSEE and LICENSOR as to whether a
material breach has occurred or been cured, LICENSOR shall
continue to manufacture and supply inks to LICENSOR and
LICENSEE shall continue to pay for such inks, pursuant to
Articles 3 and 11, until and unless otherwise directed by
the arbitrators pursuant to Article 14 thereof.
ARTICLE SEVEN - WARRANTIES, LIMITATIONS OF LIABILITY AND HOLD HARMLESS
----------------------------------------------------------------------
7.01 Each party expressly saves and holds the other party, and any
Affiliate, 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.
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7.02 LICENSOR warrants that:
a) LICENSOR is the sole and exclusive owner of the LL
Technology, including without limitation any Patents
associated therewith;
b) LICENSOR has the unqualified right to enter into this
Agreement and perform its terms;
c) LICENSOR has not and will not enter into any agreement
which is inconsistent with "LICENSOR's" obligations and
undertakings to LICENSEE under this Agreement;
d) Any pigment 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. LICENSOR 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
attorney's fees) asserted by or on behalf of any person or
entity arising our of any claim that any of the licenses or
rights granted by LICENSOR pursuant to this Agreement, or
the LL 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;
7.03 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) LICENSOR disclaims any implied warranty or merchantability
or fitness for a particular purpose; and
c) In no event shall LICENSOR or its Affiliates, be liable for
any incidental, indirect or consequential damages in
connection with or arising out of this Agreement;
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ARTICLE EIGHT - CONFIDENTIALITY
-------------------------------
8.01 LICENSEE shall keep secret and confidential the LL Technology
and/or Design Rights made available to it by LICENSOR and shall not
disclose the same other than to permitted sub-licenses, 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 LL Technology and/or Design Rights.
8.02 LICENSOR shall keep secret and confidential the terms and
conditions of this Agreement and any information which LICENSEE
passes to LICENSOR 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 law.
8.03 The obligations of secrecy undertaken by both parties pursuant to
this Article 8 shall not apply to information which:
a) Is already, or which subsequently becomes generally known
to the public through no fault of the recipient; or
b) 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
c) Is received from a third party, provided that such third
party is Lawfully entitled to disclose the same; or
d) Is disclosed in any patent or patent application which may
publish;
8.04 The obligations of secrecy pursuant to this Article 8 will expire
on the tenth anniversary of the termination of this Agreement as
hereinabove provided.
8.05 The provisions of this Article 8 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 8, it shall give the other party
prompt written notice of such requirement prior to such disclosure
and assistance in obtaining and order protecting the information
from public disclosure.
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ARTICLE NINE - IMPROVEMENTS
---------------------------
9.01 During the term of this Agreement, each party shall disclose to the
other party any improvements to the LL Technology and/or Design
Rights which the first party may discover or which come into its
possession. Any such improvements shall, from the time of the
party's knowledge, conception or development, be the property of
LICENSOR. Upon request by LICENSOR, the LICENSEE shall execute and
deliver to LICENSOR such instrument as LICENSOR may reasonably
request in order to achieve such industrial or intellectual
property status as LICENSOR shall deem appropriate to perfect the
assignment of the rights so granted by the LICENSEE to LICENSOR;
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.
ARTICLE TEN - MISCELLANEOUS
---------------------------
10.01 Neither the LICENSEE nor LICENSOR 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 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.
10.02 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;
10.03 This Agreement may be varied or amended only by the written
agreement of the parties hereto through their duly authorized
officers or representatives.
10.04 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:
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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.
10.05 The relationship between the parties shall be governed by the terms
of this Agreement, and shall not extend to other activities,
transactions or contracts.
10.06 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 if
legally possible. The remainder of this Agreement shall remain
binding on the parties hereto.
10.07 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.
10.08 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.
10.09 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
10.10 The preamble hereof shall be deemed to form part of this Agreement
for all purposes.
ARTICLE ELEVEN - SUPPLY OF PIGMENTS
-----------------------------------
11.01 LICENSOR agrees that it will timely supply LICENSEE with pigment
proprietary to Licensor in accordance with the terms and conditions
of clause 3.01 hereof. The obligation to supply such pigments shall
apply only for that quantity of pigment that is ordered by a
purchase order emanating from the LICENSEE and which is received by
LICENSOR at least twenty-one (21) days prior to the requested
delivery date
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11.02 LICENSOR further agrees that upon request by LICENSEE it will
provide statements justifying its most favorable selling price for
the pigments.
ARTICLE TWELVE - NOTICES
------------------------
12.01 All Notices, requests, consents and other communications
required or permitted to be given and received when so delivered
addressed as follows:
If for the Licensor at: Laser Lock Technologies, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
With a copy to: ▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
GROSS, PINSKY
▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇, ▇▇▇ ▇▇▇
If for the Licensee at: Copag U.S.A. Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, #▇▇▇-▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Filho
With a copy to: Copag De Amazonia S/A
Rua Porta Martins,
546 Brooklin Novo
CEP 04570-140, Sao Paulo SP-Brazil
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Filho
With a copy to: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, Esq
SLOSBERGAS & ▇▇▇▇▇▇▇▇▇
Courvoisier Centre
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
or such other person or address as any party shall designate by
notice in writing to the others in accordance therewith.
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ARTICLE THIRTEEN - GOVERNING LAW
--------------------------------
13.01 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 of federal court
serving ▇▇▇▇▇▇▇▇▇▇ County, Pennsylvania, and both parties hereby
consent to personal jurisdiction and venue in ▇▇▇▇▇▇▇▇▇▇ County,
Pennsylvania.
ARTICLE FOURTEEN - BINDING EFFECT ASSIGNMENT
--------------------------------------------
14.01 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 or the LICENSOR, may assign this Agreement
to an Affiliate without consent.
ARTICLE FIFTEEN - ARBITRATION
-----------------------------
15.01 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 or
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").
15.02 In the even 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 enforce by any
court of competent jurisdiction.
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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.
LASER LOCK TECHNOLOGIES, INC.
/s/ [graphic of signature]
Per:________________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ - President
COPAG U.S.A, INC,
/s/ [graphic of signature]
Per:________________________________
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ Filho
Chief Executive Officer
