Exhibit 10.1
AGREEMENT
This Agreement (the "Agreement") is made and entered into as of the 3rd day
of October, 2005, by and among X. X. Xxxxx Shoe Technologies, Inc., a Delaware
corporation doing business as Dicon Technologies with its principal office at
000 Xxxx Xxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxxxxx 00000 ("Dicon"), Hydrogel Design
Systems, Inc., a corporation organized and existing under the laws of Delaware
with its principal office at 0000 Xxxxx Xxxx. Xxxx Xxxxx X, Xxxxxxxxx, XX 00000,
and the wholly owned subsidiary of Hydrogel Design Systems, Inc., to be formed
(the "Hydrogel Subsidiary") (Hydrogel Design Systems, Inc. and the Hydrogel
Subsidiary are hereinafter collectively referred to as "Hydrogel").
RECITALS
Dicon is the owner of substantial technology, issued and pending U.S. and
foreign patents, Know-How (as such term is defined below) and proprietary
information (collectively, the "Technology") for the production and manufacture
of hydrophilic urethane foam products and polyurethane gels, components and
materials (the "Products"). The Products covered by this Agreement are set forth
in Appendix A attached to this Agreement (the "Licensed Products"). Appendix A
may be supplemented from time to time during the term hereof by mutual agreement
of the parties hereto set forth on a revised Appendix A to be attached to this
agreement.
Dicon is the owner of the Patents specified in Appendix B attached to this
Agreement.
Dicon is the owner of the Trademarks specified in Appendix C attached to
this Agreement. Hydrogel desires to purchase certain of Dicon's equipment to
manufacture Licensed Products and obtain an exclusive license to manufacture and
non-exclusive license to distribute Licensed Products in the Territory (as such
term is defined below), and Dicon is willing to grant such specific right, all
on the terms and conditions hereinafter set forth.
Dicon is the owner of the Patents specified in Appendix D (the "Dryz
Patents") attached to this Agreement. Hydrogel desires to purchase certain of
Dicon's equipment to manufacture products for Dicon under the Dryz Patents as
set forth on Appendix D (the "Dryz Products") and to obtain a non-exclusive
license to manufacture the Dryz Products in the United States, and Dicon is
willing to grant such specific right, all on the terms and conditions
hereinafter set forth.
NOW THEREFORE, in consideration of the terms, covenants and provisions
contained herein, the parties do hereby agree as follows:
1. DEFINITIONS.
For the purposes of this Agreement, the following terms shall have the
meaning set forth below:
"XX Xxxxx Parties" means Dicon, X.X. Xxxxx Shoe Company, Inc. or any of
their divisions, subsidiaries or affiliates.
"Know-How" shall have its usual and accepted meaning such as, by way of
example, but not limited to, all factual knowledge, proprietary information,
trade secrets, procedures, processes, methods, designs, discoveries, inventions,
patent applications, licenses, software and source code, programs, prototypes,
techniques, ideas, concepts, data, engineering, manufacturing information,
specifications, diagrams, schematics, or rights or works of authorship, whether
or not reduced to writing and including without limitation all chemical,
biochemical, manufacturing, formulation and scientific research information,
whether or not capable of precise separate description but which alone or when
accumulated gives to the one acquiring it an ability to study, test, produce,
formulate, manufacture or market something which one otherwise would not have
known how to study, test, produce, formulate, manufacture or market in the same
way.
"Hydrogel Parties" means Hydrogel, any of its divisions, subsidiaries or
affiliates.
"Territory" means North America and any additional territories as may be
granted by Dicon in accordance with Section 3a hereof.
2. SALE OF EQUIPMENT.
a. First Line Equipment. Dicon agrees to sell, and Hydrogel agrees to
purchase, one (1) urethane casting line, including RF Oven and
associated line components, used in the production of Licensed
Products and one (1) PU Gel molding line, and associated line
components (together, the "First Line Equipment"). A complete
description of the First Line Equipment and its specifications and any
documentation (the "Documentation") are set forth on Appendix E
attached to this Agreement.
b. Condition. Hydrogel confirms that it has had opportunity to inspect
the First Line Equipment at Dicon's facility in New Jersey and
acknowledges that the First Line Equipment is being purchased "USED"
and that Dicon makes no warranties as to its condition except as
expressly provided herein.
c. First Line Equipment Price; Payment Terms. The purchase price of the
First Line Equipment's urethane casting line shall be Two Hundred
Fifty Thousand Dollars (US$250,000.00). The purchase price of the
First Line Equipment's PU Gel molding line shall be Twenty Thousand
Dollars (US$20,000.00). The purchase price for the First Line
Equipment shall be payable by wire transfer to an account designated
by Dicon in installments as follows:
i. one hundred thirty five thousand (US$135,000), on the execution
of this Agreement by Dicon and Hydrogel. The initial $135,000
payment shall be made before Dicon provides any additional
technical know-how, information or data to Hydrogel. Except as
provided in Section 2(f) below, this amount is nonrefundable.
ii. one hundred thirty five thousand (US$135,000) on completion of
equipment set up in Pennsylvania and upon the first production
run according to the specifications set forth on Appendix F (the
"Test Date").
d. Second Line Equipment. In addition to the First Line Equipment,
Hydrogel agrees to purchase Dicon's second urethane casting line,
including RF Oven and associated line components (the "Second Line
Equipment"). A complete description of the Second Line Equipment and
its specifications and any documentation (the "Documentation") are set
forth on Appendix G attached to this Agreement. The purchase of the
Second Line Equipment shall be consummated on March 31, 2006, or
earlier by mutual agreement of the parties hereto.
e. Condition. Hydrogel acknowledges that the Second Line Equipment is
being purchased "USED" and that Dicon makes no warranties as to its
condition except as expressly provided herein.
f. Second Line Equipment Purchase Price; Payment Terms. The purchase
price of the Second Line Equipment shall be Three Hundred Fifty
Thousand Dollars (US$350,000.00). The purchase price for the Second
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Line Equipment shall be payable by wire transfer to an account
designated by Dicon in installments as follows:
i. fifty thousand (US$50,000) by February 28, 2006, or such earlier
time as the parties shall mutually agree upon.
ii. three hundred thousand (US$300,000) amortized over a period of
thirty-six (36) months at an annual variable rate of interest
equal to Prime plus two percent (2%) percent, with principal and
interest to be payable monthly beginning April 1, 2006 and
continuing on the first day of each successive calendar month
until the full amount shall have been paid, all in accordance
with the terms of a promissory note to be executed by Dicon and
Hydrogel, which promissory note shall be governed by Connecticut
law, shall grant Dicon the right to accelerate in the event of a
default by Hydrogel thereunder or under this Agreement, and if
suit is brought to enforce the promissory note, shall entitle
Dicon to recover attorneys' fees, court costs and costs of
investigation. The Prime Rate shall be the Prime Rate as
published in the Wall Street Journal, as adjusted from time to
time. By way of example, based upon the Prime Rate on the date
hereof (6.75%), the initial monthly payment of principal and
interest would be $9,505.05 ($7,317.55 in principal and $2,187.50
in interest). Until said promissory note shall have been paid in
full in accordance with its terms, the obligations thereof shall
be secured by a first priority lien by the Second Line Equipment
in accordance with the terms of a security agreement to be
entered into by Dicon and Hydrogel.
g. Retention of Title. Title to the First Line Equipment shall not pass
until 100% percent of the Purchase Price and all other charges and
fees are paid in full, excluding royalties. Upon the final payment,
Dicon warrants that title to the First Line Equipment shall pass to
Hydrogel free and clear of any and all liens, equities, claims, prior
assignments, mortgages, charges, security interests, pledges,
conditional sales contracts, collateral security arrangements and
other title retention arrangements, restrictions or encumbrances
whatsoever. Dicon agrees to provide Hydrogel with proof of the
satisfaction or release of liens, if any, as necessary to satisfy the
provisions of this paragraph.
Title to the Second Line Equipment shall pass in accordance with the
delivery of the equipment to Hydrogel FOB Dicon's factory.
h. Shipping Terms. All equipment shall be shipped FOB Dicon's factory at
0-00 Xxxxx Xxxxx Xxxxxxxx, Xxx Xxxxxx. Hydrogel shall pay the cost,
insurance and freight necessary to bring the equipment to the named
destination.
i. Services. At no additional charge, Dicon representatives shall provide
reasonable assistance to Hydrogel in the placement and re-assembly of
any equipment; provided, however, that the Hydrogel facility shall be
ready to accept the equipment and Hydrogel shall have readily
available all necessary utilities, and shall provide, at its sole cost
and expense, all machinery, labor and other services necessary for the
installation of the equipment. Hydrogel agrees to have ready and
available sufficient labor and appropriate raw materials for the
initial start-up and line testing of the equipment, including any
additional equipment necessary for the production line. Dicon agrees
to provide Hydrogel raw materials, up to a maximum of $5,000,
necessary for initial start-up operations of the First Line Equipment.
All employees or representatives of Dicon shall at all times remain
under Dicon's supervision and control.
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Upon reasonable prior notice by Dicon, Hydrogel agrees to send
qualified employees to Dicon's facility in New Jersey to observe the
final breakdown of the equipment and to familiarize Hydrogel with the
line layout and to begin operational training. All costs and expenses
of the Hydrogel representatives in connection with their travel and
stay shall be the responsibility of Hydrogel. Additionally, following
successful start-up and initial line testing, Dicon representatives
shall provide, at no additional charge, reasonable support services
for 30 days. Thereafter, support services shall be at agreed upon
additional charges.
j. LIMITED WARRANTY; Hydrogel's Responsibility. Dicon warrants that the
equipment, at the time of the installation and demonstration pursuant
hereto, will conform substantially to the product specifications set
forth in Appendix E for the First Line Equipment, the product
specifications set forth in Appendix G for the Second Line Equipment,
and be in working order. DICON MAKES NO OTHER REPRESENTATIONS OR
WARRANTIES EXPRESS OR IMPLIED WITH RESPECT TO THE EQUIPMENT, AND
EXPRESSLY DISCLAIMS WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A
PARTICULAR PURPOSE. ALL OTHER WARRANTIES, CONDITIONS OR LIABILITIES,
EXPRESS OR IMPLIED, BY OPERATION OF LAW OR OTHERWISE, ARE EXPRESSLY
EXCLUDED AND WAIVED BY Hydrogel. It shall be Hydrogel's responsibility
to ensure that the equipment is operated in a proper and safe manner.
Hydrogel acknowledges that it shall be solely responsible for
providing the necessary utilities (hot and cold water, electricity,
pneumatic service, ventilation, heating, and cooling).
k. Supply of Pre-Polymer. During the Term hereof, Dicon agrees to make
arrangements to dropship pre-polymer to Hydrogel from its current
vendor to be used by Hydrogel in connection with its manufacture of
the Licensed Products, all at prices and upon such other terms and
conditions as the parties shall mutually agree upon from time to time.
Payment terms for any pre-polymer that is shipped to Hydrogel under
this subsection 2k shall be net forty-five (45) days from the date of
Dicon's invoice to Hydrogel. Any such dropship arrangement shall at
all times remain subject to the reasonable availability of pre-polymer
from such vendor and terms and conditions of sale imposed by vendor
which are acceptable to Dicon in its discretion.
3. MANUFACTURE AND DISTRIBUTION RIGHTS.
x. Xxxxx of Exclusive License; Limitations. Dicon hereby grants to
Hydrogel, and Hydrogel hereby accepts, a non-transferable, exclusive
license (the "License") in and to the Patents listed in Appendix B and
the Trademarks listed in Appendix C solely for the purpose of
manufacture by Hydrogel in the USA, and a non-exclusive license for
the sale and distribution of Licensed Products to customers in the
Territory for end-users located in the Territory and outside of the
Territory as specifically permitted by Dicon below. Hydrogel
acknowledges and agrees that nothing contained in this Agreement shall
prevent or restrict Dicon, directly or indirectly, from manufacturing
any of the Licensed Products for sale or distributing outside of the
Territory or for the purpose of filling orders or demand for Licensed
Products in the Territory which Hydrogel, for whatever reason, is
unable to meet or satisfy.
Except as expressly provided below, the License granted hereby is
expressly limited to the manufacture, sale and distribution of
Licensed Products to customers in the Territory for end-users located
in the Territory or as component parts for products for which the
end-users are located in the Territory. Every other manufacture, sale
and/or distribution of Licensed Products shall require Dicon's prior
written consent in every instance, which consent Dicon may exercise in
its sole discretion; provided, however, if Hydrogel introduces a
substantial account for the sale and distribution of Licensed Products
outside of the Territory, then Dicon agrees not to unreasonably
withhold its consent, subject, at all times, to Hydrogel's payment of
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the Royalties set forth herein for any such sales. Dicon agrees in
good faith to review any proposal by Hydrogel for any sale or
marketing of Licensed Products by it outside the Territory, but Dicon
shall have no obligation to grant any additional rights hereunder to
Hydrogel that Dicon does not deem to be in its best interest.
Additionally, it is expressly understood and agreed that any refusal
by Dicon to consent to Hydrogel's sale or distribution of Licensed
Products to any territory for which Dicon has granted or contemplates
granting one or more licenses or distribution rights to any other
party shall be reasonable. Should Hydrogel discover that Licensed
Products are being distributed or sold outside of the Territory in
violation of this Agreement, Hydrogel shall immediately notify Dicon
thereof and unless Dicon shall expressly consent thereto in writing,
Hydrogel shall cause such distributor or seller, with whom it has a
direct relationship, to cease to use, distribute or sell such
products.
x. Xxxxx of Non-Exclusive License - Dryz; Limitations. Effective upon the
purchase by Hydrogel of the Second Line Equipment, Dicon grants to
Hydrogel, and Hydrogel hereby accepts, a non-transferable,
non-exclusive license (the "Dryz License") in and to the Dryz Patents
necessary to and solely for the purpose of manufacture of Dryz
Products for Dicon's or any of the X.X. Xxxxx Parties' sale and
distribution to end-users located in the United States and otherwise
on the terms and conditions set forth herein.
The Dryz License granted hereby is expressly limited to the
manufacture of Dryz Products for Dicon or X.X. Xxxxx Parties for
end-users located in the Territory or as component parts for products
for which the end-users are located in the Territory. Every other
manufacture or other use of the Dryz Patents or Dryz Products shall
require Dicon's prior written consent in every instance, which consent
Dicon may exercise in its sole discretion
c. No Sublicensing. The license granted hereby may not be transferred or
sublicensed by Hydrogel; provided, however, Hydrogel shall have the
right, upon prior notice in writing to Dicon, to cause any of the
Hydrogel Parties to manufacture, sell and distribute the Licensed
Products in the Territory. Hydrogel shall not have the Licensed
Products or Dryz Products manufactured for it by any third party
without the prior written consent of Dicon.
d. Reserved Rights. Rights not herein specifically granted to Hydrogel
are reserved by Dicon and may be used by Dicon without limitation.
Nothing in this Agreement shall be construed as conveying, expressly
or by implication, any right under any of Dicon's Know-How and
intellectual property except in connection with the right to use the
Technology, Trademarks and Patents to manufacture and sell Licensed
Products pursuant to the terms hereof and the right to use the Dryz
Patents to manufacture Dryz Products pursuant to the terms hereof. Any
use by Dicon of such reserved rights, including but not limited to the
use or authorization of the use of the Technology, Trademarks and
Patents, including the Dryz Patents, in any manner whatsoever not
inconsistent with Hydrogel's rights under this Agreement, shall not be
deemed to be interference with or infringement of any of Hydrogel's
rights. The parties acknowledge and agree that Dicon will continue to
offer, sell and distribute Licensed Products and Dryz Products
worldwide as end-products and/or component parts, which may include
all or part of the Territory. Nothing in this Agreement shall be
construed as conveying, expressly or by implication, any of Dicon's
rights and obligations to manufacture and supply or have manufactured
or supplied that certain medicated brace insert, including any new
technology related thereto, for the account of Chattem, Inc. for sale
and distribution worldwide, including all or part of the Territory,
and any use of such reserved rights shall not be deemed to be
interference with or infringement of any of Hydrogel's rights
hereunder.
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e. Royalties - Licensed Products. Except as otherwise provided in this
Agreement, in consideration of the license herein granted, and in
addition to the fixed payments provided for in Section 1c above,
Hydrogel shall pay to Dicon continuing royalties from seven to ten
percent (7- 10%) of the Net Selling Price, all as determined in good
faith by Dicon taking into consideration the type of Licensed Product
and the content of the Licensed Product.
For purposes of this Agreement, "Net Selling Price" means the amounts
actually billed on sales of Licensed Products after deducting sales
taxes and shipping costs. The revenues received from any Direct
Purchase (as defined below) shall not be included.
f. Direct Purchases by Dicon. For any purchase of Licensed Products or
Dryz Products by Dicon, any XX Xxxxx Party or Dicon's licensees or
authorized agents (a "Direct Purchase"), the prices shall be
determined in accordance with subsection 3g below. Unless otherwise
agreed to in writing by Dicon and Hydrogel, no royalties shall be due
and payable by Hydrogel to Dicon in connection with any Direct
Purchase.
g. Pricing - Direct Purchases. The pricing for any Direct Purchase is
specified in Appendix H attached to this Agreement or as otherwise
determined by mutual agreement of the parties hereto from time to time
and confirmed in a writing signed by both parties.
h. Direct Purchase Estimates. During the first year of the Term hereof,
Dicon estimates the amount of Direct Purchases of Licensed Products to
be $250,000 - $750,000, more or less. During the second year of the
Term hereof, Dicon estimates the amount of Direct Purchases of
Licensed Products to be $750,000 - $1,000,000, more or less. These
estimates are provided at the request of Hydrogel and do not
constitute purchase guarantees or minimum purchase quantities. These
figures are estimates only and are not binding on any XX Xxxxx Parties
and shall not constitute any representation, warranty or covenant on
the part of any XX Xxxxx Parties to order and/or purchase Licensed
Products from Hydrogel. Dicon shall have no liability whatsoever to
Hydrogel in connection with the estimates contained in this paragraph.
i. Payments; Statements. Royalties shall accrue when any Licensed
Products are invoiced or shipped, whichever is earlier. Royalties
shall be paid by Hydrogel within thirty (30) days following the end of
each month, beginning with the end of the first full month. Unless
otherwise directed by Dicon, all payments of royalties shall be made
to Dicon by wire transfer to an account designated by Dicon, without
deduction for taxes, assessments, or other charges which may be
imposed on Dicon by any governmental authority or any political
subdivision thereof with respect to any amounts payable to Dicon
pursuant to this Agreement, and without deduction for banking or wire
transfer fees. With each payment of royalties, Hydrogel agrees to
furnish to Dicon a written statement, showing, the stock number, item,
units sold, description, quantity shipped, gross invoice, and
reportable sales of Licensed Products sold by Hydrogel during such
month, including customer names and the amount of royalties due for
such period.
For Direct Purchases by any XX Xxxxx Parties, payment terms shall be
net thirty (30) days from date of invoice. For any payments by any of
the XX Xxxxx Parties made within ten (10) days from date of invoice, a
discount of two percent (2%) of the invoiced amount shall apply.
j. Records. Hydrogel will at all times during the term of this Agreement
keep accurate books of account and other records reflecting all sales
of the Licensed Products, and will carefully prepare and maintain such
books and records for at least five (5) years following the
termination of this Agreement. Hydrogel hereby grants to Dicon or its
representatives the right to inspect and make copies of such books and
records for the purpose of ascertaining or confirming the accuracy of
statements made under this Agreement.
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k. Term. This Agreement shall begin on the date of this Agreement and
continue for a period of three (3) years, unless sooner terminated as
provided herein. Provided that Hydrogel is not in uncured breach of
this Agreement on the expiration of the initial term, this Agreement
shall automatically renew for one (1) period of two (2) years
(hereinafter the extension term) commencing as of the end of the
initial term and ending on the last day of the extension term at
midnight Eastern Standard Time, unless sooner terminated pursuant
hereto. Thereafter, unless either party shall provide the other party
with notice of its intent to terminate this Agreement within ninety
(90) prior to the expiration of the extension term, the term of this
Agreement shall automatically renew for successive periods of one (1)
year each (each an "additional extension term") commencing as of the
end of the extension term, unless sooner terminated pursuant hereto
and provided, however, that during any such additional extension term,
either party shall have the right to terminate this Agreement upon 120
days written notice to the other party of its intention to terminate
this Agreement. Any such additional extension term shall be subject to
the same terms and conditions as provided herein. The initial term,
any extension term and any additional extension term are hereinafter
sometimes collectively referred to as the "Term".
4. ADDITIONAL HYDROGEL RESPONSIBILITIES, COVENANTS AND AGREEMENTS.
a. Best Efforts. Hydrogel will use its commercial best efforts to
continuously manufacture, sell and distribute to meet orders for
Licensed Products and Dryz Products. Hydrogel shall not make or
authorize any use, direct or indirect, like or similar, of the
Technology, Patents, Dryz Patents, or Trademarks, Licensed Products or
Dryz Products, outside of the Territory or in contravention of its
rights hereunder and will not knowingly sell Licensed Products to
persons, other than Dicon, who intend or are likely to resell them
outside of the Territory.
b. Conduct of Business. Hydrogel warrants to Dicon that it will conduct
its business hereunder in a manner that reflects only favorably on the
quality image of the Trademarks, Licensed Products and Dryz Products.
Hydrogel will not (a) do any act or thing which may in the reasonable
opinion of Dicon (i) bring Dicon or its products into contempt,
disrepute or ridicule or (ii) portray any of these in a manner which
is or can be reasonably construed as being offensive or unsafe (e.g.,
encourage unsafe use or application, etc.); or (b) do or assist in any
act which, in the opinion of Dicon, damages or tarnishes the goodwill,
image, or reputation of the Trademarks, Licensed Products, Dryz
Products and their respective trademarks and products. Hydrogel
recognizes the importance for Dicon to maintain the image associated
with the Licensed Products, Dryz Products and Trademarks and the
goodwill associated with the Trademarks and undertakes not to sell the
Licensed Products to parties which may adversely affect the said image
and goodwill, such parties to be determined from time to time at the
discretion of Dicon.
c. Labeling. Hydrogel agrees, as an essential condition of this
Agreement, that it will cause to appear in the appropriate place on or
within each of the Licensed Products sold and distributed by it or on
Hydrogel's behalf or for the account of Hydrogel under this Agreement
and on or within all tags, labels, packaging, advertising, promotional
and display materials bearing an appropriate trademark or service xxxx
ownership notice and such other legends, markings and notices in
accordance with the guidelines adopted by Dicon from time to time and
communicated to Hydrogel and as may be reasonably required by Dicon's
legal counsel or by law to give appropriate notice of all trademarks,
trade name, patents, patents pending or other rights therein or
pertaining thereto.
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d. Quality Control; Quality Submissions; Approval; Inspection Rights.
Hydrogel hereby covenants and agrees that the Licensed Products and
Dryz Products covered by this Agreement shall be of high standard and
of such quality, style and appearance at least equal to the quality,
design, material and workmanship of the Licensed Products or Dryz
Products or comparable products manufactured and distributed by Dicon
on the date hereof and at any time during the Term; that such products
will be manufactured, packaged, sold and distributed and advertised,
as applicable, in accordance with all applicable (whether national,
federal, state, provisional or local) laws; and that the policy of
sale, distribution and/or exploitation by or on behalf of Hydrogel of
the Licensed Products shall be of high standard and to the best
advance of said Trademarks and any trademarks associated therewith and
that the same shall in no manner in the sole and reasonable judgment
of Dicon be offensive to good taste, reflect adversely upon the good
name of Dicon or of any of its programs or said Trademarks or the
value of any of these. Any carton, container and packaging or wrapping
material, if the Trademarks appear thereon, shall be of first class
merchantable quality consistent with manufacturing standards
prevailing in the industry and shall be subject to the approval of
Dicon as set forth below. Dicon shall be entitled to reject any design
which it deems offensive to good taste or incompatible with Dicon's
brand image.
Prior to any production of the Licensed Products or Dryz Products
and/or use of any Trademarks and the sale or distribution of any
Licensed Products, Hydrogel shall obtain Dicon's prior written
approval of the specifications for first production runs and shall
provide Dicon's designate with appropriate information and first
production samples of any products covered by this agreement and any
proposed packaging, advertising, and literature which Hydrogel intends
to use in merchandising Licensed Products (the "Quality Submissions"),
and such other samples and information as Dicon may reasonably request
from time to time. No Quality Submissions will be approved until
Dicon's designate has provided express approval of the same in
writing. Dicon will use reasonable efforts to approve or disapprove
any Quality Submissions within ten (10) days from its receipt of such
submissions. If a response is not received by Hydrogel after such ten
day period, then Hydrogel shall be entitled to give Dicon notice in
writing of its inaction and, if Dicon fails to respond with ten (10)
days from such notice, the submissions shall be deemed approved
hereunder. Without the prior written approval of Dicon, Hydrogel shall
not sell or distribute any Licensed Products which deviate from the
approved License Quality Submissions more than the deviation which
would occur as a result of normal deviations in raw material
characteristics and manufacture. Hydrogel shall immediately notify
Dicon of any changes made in the Licensed Products or its packaging or
advertising materials during the term of this Agreement and submit
production samples thereof to Dicon for its approval in accordance
with this Agreement. Hydrogel agrees to notify Dicon promptly of any
material change in manufacturing, shipping or selling locations.
Hydrogel shall comply with all laws and regulations of all applicable
jurisdictions relating to the manufacture, sale and distribution of
the Licensed Products and Dryz Products, as applicable. Hydrogel will,
at its expense, promptly undertake such registration, recording,
validation or reporting. Hydrogel will supply prompt notice and
appropriate verification of any such registration, recording,
validation or reporting and any agency ruling resulting therefrom.
Hydrogel agrees that it will not violate any applicable United States,
foreign or international labor laws or treaties, including child labor
laws.
Hydrogel agrees to permit, from time to time, designated
representatives of Dicon to inspect the office and factory premises of
Hydrogel as well as any other selling, manufacturing and shipping
locations where the Licensed Products and/or Dryz Products are
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produced, shipped, sold or kept by Hydrogel, on behalf of or for the
account of Hydrogel, at reasonable times during normal business hours,
for examination of such Licensed Products and/or Dryz Products as may
be licensed hereunder in connection with which Hydrogel uses or
intends to use said Trademarks and for the purpose of enabling Dicon
to determine whether or not Hydrogel is meeting acceptable standards
of quality.
e. Title and Protection of Patents and Trademarks. Hydrogel agrees not to
seek any United States or foreign patent or trademark or other
protection for the Patents, Dryz Patents, and Trademarks or the
Technology as they are used in connection with the rights of Hydrogel
under this Agreement and agrees that its use of the Patents, Dryz
Patents, Trademarks and the Technology is for the sole benefit of
Dicon. Hydrogel agrees to assist Dicon, at Dicon's expense, to the
extent necessary in the procurement of any protection or to protect
any of Dicon's rights to the Trademarks, Patents, Dryz Patents and the
Technology, including any patents that have issued, or will issue,
from any continuation, improvement, continuation-in-part, divisional,
parent, reissue, or reexamination application of any Patent, or any
patent or foreign equivalent to or based upon any such patent.
Hydrogel agrees to execute and deliver to Dicon in such form as Dicon
shall reasonably request, any and all documents which may be necessary
or desirable to assist Dicon in recording any Trademark, Patent or
Dryz Patent in the Territory.
Hydrogel agrees that it will not at any time use a shape, xxxx or
design identical with or confusingly similar to any of the Trademarks.
Hydrogel agrees not to contest the validity of the Patents, Trademarks
or any rights of Dicon therein, nor shall Hydrogel become an adverse
party in litigation in which others shall contest the Patents,
Trademarks or Dicon's rights thereto. In the event Hydrogel obtains
trademark protection by way of registrations or the like or in any way
whatsoever with respect to the Trademarks said registrations or the
like and trademarks shall be promptly assigned to Dicon or Dicon's
designee.
f. Confidentiality. Hydrogel agrees, on behalf of itself, its directors,
officers, employees, agents, representatives and affiliates to hold in
strict confidence and not disclose, publish, reveal to any third party
or use for its own benefit, except as permitted in furtherance of this
Agreement, any confidential information of Dicon, unless required to
do so by law. For purposes of this Agreement, the term "confidential
information" shall mean any information disclosed by one party to the
other which:
(i) at the time of disclosure, is not in the public domain;
(ii) at the time of disclosure, is not already known to the
non-disclosing party and documented by such party;
(iii) is not rightfully in the possession of the disclosing party
from a third party who was not in breach of any obligation
of confidentiality to the non-disclosing party; or
(iv) is not the subject of a subpoena or demand of any court, or
governmental or administrative body or agency, provided that
the disclosing party shall promptly notify the
non-disclosing party of such subpoena or demand.
Notwithstanding anything to the contrary contained in this Section
4(f), Hydrogel shall be permitted to disclose confidential information
as follows:
(A) To Hydrogel's representatives who need to know such
confidential information for the purpose of administering
Hydrogel's rights and obligations under this Agreement.
Hydrogel agrees to cause its representatives to whom it
discloses confidential material to comply with the
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restrictions on the use and disclosure thereof contained
herein to the same extent as such restrictions apply to
Hydrogel.
(B) To any investor, or material credit enhancer or other person
that is, or is contemplating, investing in or financing
Hydrogel's activities hereunder, but only as reasonably
necessary for the specific purpose thereof and provided that
such person agrees in writing to limit its use and
disclosure of such confidential information on terms not
less restrictive in any material respect than the terms
hereof, and further provided that Dicon is expressly
designated as a third party beneficiary of any such
agreement.
(C) To the extent necessary or desirable to establish, enforce
or assert any claims or defenses in connection with any
legal proceeding by or against Hydrogel, provided Hydrogel
will promptly notify Dicon thereof and use reasonable
efforts to obtain protective measures to safeguard the
confidential information.
(D) To auditors, reviewers or examiners in the course of any
internal or external audit, review or examination of us or
any of our affiliates, provided that such auditors,
reviewers or examiners are required by law, regulation or
policy to keep such information confidential.
(E) To the extent otherwise required by law, regulation, legal
process or requested by any governmental or regulatory
authority; provided, that Hydrogel shall exercise
commercially reasonable efforts to (A) promptly notify Dicon
in order to provide Dicon an opportunity to seek any
available protective order; (ii) provide Dicon with
reasonable cooperation, upon reasonable request by Dicon and
at Dicon's expense; and (iii) disclose only the portion of
Dicon's confidential information that is required to be
disclosed under such law, regulation or order.
g. Non-Solicitation. Each party to this agreement covenants and agrees
that during the Term of this agreement and in any event for a period
of eighteen (18) months thereafter, it will not, directly or
indirectly, hire, solicit to hire, assist others to hire, or assist
others to solicit to hire, any person who is or was an employee or
agent of the other party at any time during the Term hereof.
h. Specific Performance. Without intending to limit the remedies
available to Dicon, Hydrogel acknowledges and agrees that any breach
by it of the terms of Sections 4f and 4g of this agreement will result
in immediate irreparable injury to Dicon for which Dicon will not have
an adequate remedy at law. Hydrogel further agrees that Dicon shall be
entitled to obtain immediate injunctive relief in any court of
competent jurisdiction to restrain the breach or threatened breach of,
or otherwise to specifically enforce, any of the covenants contained
in such section, without the necessity of proving irreparable injury
or the inadequacy of monetary damages.
5. TERMINATION.
a. If either party violates any of its obligations under this Agreement
or otherwise breach this Agreement, the other party may give the
defaulting party written notice of such default. If the defaulting
party shall fail or refuse to remedy such default within thirty (30)
days from the date of said notice, this Agreement may be terminated by
a second written notice and said termination shall be effective as of
the date of the second notice of default, subject to a party's right
to demand resolution of any dispute or controversy concerning such
10
termination or otherwise by arbitration, all in accordance with
Sections 8 and 9 hereof. Notwithstanding, Hydrogel shall be entitled
to only ten (10) days to remedy any violation or breach by Hydrogel of
any payment obligation, restrictive covenant or any agreement relating
to the Trademarks, Patents, Dryz Patents and Know-How, and Dicon shall
be required to give no more than two (2) notices in any twelve (12)
month period of any breach by Hydrogel of a payment obligation before
Dicon shall have the right to immediately terminate this Agreement
upon written notice to Hydrogel for any subsequent default of a
payment obligation during such period. Any such termination shall be
without prejudice to any other rights or claims the aggrieved party
may have against the defaulting party. Defaults under this Agreement
shall be deemed to include, but shall not be limited to:
i. failure by either party to fulfill any of its obligations
under this Agreement;
ii. cessation by Hydrogel of its manufacture, sale or
distribution of Licensed Products and/or Dryz Products in
the normal course of business for a continuous period of
sixty (60) days.
iii. an adjudication of bankruptcy or insolvency of either party
under any bankruptcy or insolvency law, the appointment of a
receiver for its business or any of its property, or the
making of any general assignment for the benefit of
creditors; or
iv. the sale or disposition by Hydrogel of substantially all of
its assets, stock or stock equivalents or the sale or
disposition of a controlling interest in the ownership of
Hydrogel.
In addition, either party may, immediately upon notice, terminate this
Agreement in its entirety or with respect to any particular license or
right granted hereunder if the normal conduct of the business of the
other party as a private enterprise ceases or is substantially altered
as a consequence of action taken by governmental or other authority.
6. HOLD HARMLESS.
a. Hydrogel. Hydrogel and the Hydrogel Subsidiary, jointly and severally,
agree to indemnify, to defend and to hold harmless Dicon from claims
of third persons either:
i. proximately caused by the fault or negligence of Hydrogel
and/or the Hydrogel Subsidiary, any or their officers,
employees or agents; or
ii. which relates to any customer disputes or claims relating to
the manufacture, marketing, sale, distribution,
installation, training or service of any Licensed Products
or the performance thereof; or
iii. which relates to any other failure by Hydrogel and/or the
Hydrogel Subsidiary to comply with any terms of this
Agreement; or
iv. which relates to any failure by Hydrogel and or the Hydrogel
Subsidiary to comply with applicable laws and/or regulations
in the manufacture, distribution and sale of the Licensed
Products.
b. Dicon. Dicon agrees to indemnify, to defend and to hold harmless
Hydrogel, from claims of third persons arising out of any actual or
alleged infringement of any patent or trademark by any of the Patents,
Dryz Patents or Trademarks listed on Appendix B, C and D,
respectively. Hydrogel shall notify Dicon of any such infringement
11
suit, action or claim promptly upon receiving notice or being informed
of the existence thereof. Upon such notice from Hydrogel, Dicon shall
promptly take such action as may be necessary to protect and defend
Hydrogel against such suit, action, claim, judgment, debt, obligation
or right of action, and shall indemnify Hydrogel against any costs or
expenses incurred in connection therewith. Hydrogel shall have no
power or authority to settle or compromise any such suit, action or
claim and Hydrogel agrees to cooperate fully with DICON in connection
with the defense thereof.
7. INSURANCE.
Each Hydrogel party shall purchase and shall maintain at all times
during the Term of this Agreement, insurance against public liability
including products liability coverage with limits of liability of not
less than $2 million combined single limit (bodily injury and property
damage), naming Dicon as an additional insured in connection with the
manufacture, sale and distribution of the Licensed Products, which
insurance shall carry an endorsement to the effect that the same shall
not be cancelled by the insurer without at least twenty (20) days
prior notice to Dicon by registered mail. Hydrogel shall supply Dicon
with proof of such insurance at the time of the execution of this
Agreement and from time to time thereafter as such policies are
renewed and at any other reasonable time requested by Dicon.
8. MISCELLANEOUS.
a. Joint and Several Liability. Hydrogel and the Hydrogel Subsidiary
shall be jointly and severally liable for any and all of their
respective obligations and liabilities under this Agreement. A breach
by Hydrogel or the Hydrogel Subsidiary under this Agreement shall also
constitute a breach by the other party and shall entitle Dicon to
exercise all of its rights and remedies under this Agreement and at
law or in equity against Hydrogel or the Hydrogel Subsidiary, or both.
b. Notice of Sale. If at any time during the Term hereof (i) Dicon shall
desire to sell all or substantially all of the Know How related to the
Licensed Products to a person or entity other than a sale or transfer
to an affiliate of Dicon or as a result of a merger or consolidation
resulting in Dicon or a Dicon affiliate having a controlling interest
in the surviving entity, or (ii) Dicon shall desire to grant future
licenses for the Territory for related technologies that it may
develop, and provided that Hydrogel is not then in breach of this
Agreement, Dicon agrees that it shall provide Hydrogel with sufficient
notice of any such sale or licensing opportunity to permit Hydrogel to
enter into discussions with Dicon concerning such opportunity and
Dicon further agrees that it shall in good faith review any reasonable
written offer by Hydrogel concerning any such opportunity.
c. Entire Agreement; Amendment. This Agreement, including any Appendix
referenced in this Agreement, represents the entire agreement and
understanding of the parties hereto with respect to the subject matter
hereof and supersedes all other prior agreements, understandings and
communications, whether oral or written. No provision of this
Agreement may be amended, revoked or waived except by a writing signed
by a duly authorized representative of each party to this Agreement.
d. Governing Law. This Agreement and the relationship of the parties
hereto shall be governed in all respects by the laws of the State of
Connecticut, United States of America, except that questions affecting
the validity, construction and effect of any patent shall be
determined by the law of the country in which the patent has been
granted. In the event of any controversy between the parties
respecting the interpretation or application of the terms of this
Agreement, the procedures in Section 9 of this Agreement shall be
followed.
12
e. Assignment. This Agreement shall not be assigned by Hydrogel or the
Hydrogel Subsidiary.
f. Notices. Any notice required to be given hereunder shall be deemed
sufficient and delivery shall be deemed complete if sent by registered
or certified Air Mail or messenger service that can certify delivery
to an officer or authorized representative of the other party, to the
address of the party first above written.
9. DISPUTE RESOLUTION.
a. Except for Dicon's rights to seek injunctive relief as provided in
Section 4h of this agreement, all disputes and controversies between
the parties hereto of every kind and nature arising out of or in
connection with this Agreement shall be resolved by arbitration in
Bergen County, New Jersey, United States of America, within thirty
(30) days after the dispute is submitted to an arbitrator. The
Arbitration Rules of the American Arbitration Association applicable
to Commercial Disputes shall be utilized in the arbitration
proceedings. The arbitration hearing shall be conducted before a
single arbitrator with experience in commercial matters to be selected
by the parties within fifteen (15) days of the formal demand for
arbitration by a party. If the disputing parties cannot within such
time agree on an arbitrator, the arbitrator shall be chosen under
American Arbitration Association procedures from its panels of
arbitrators with commercial experience.
b. The arbitration hearing shall be concluded in not more than three (3)
days unless otherwise ordered by the arbitrator. The award on the
hearing shall be made within thirty (30) days after the close of the
submission of evidence at or in connection with the hearing. An award
rendered by the arbitrator appointed pursuant to this Agreement shall
be final and binding on the parties to such proceeding. Judgment on
such award may be entered by any of the disputing parties in the
highest court having jurisdiction in any country.
c. The parties shall each bear all of their respective arbitration costs
and expenses, provided, however, that the parties shall share equally
the costs and expenses of the arbitrator. The failure or refusal of
any party hereto to submit to arbitration in accordance with this
Agreement shall be deemed a breach of this Agreement.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by
their duly authorized officers as of the day and year first above written.
X. X. Xxxxx Shoe Technologies, Inc. Hydrogel Design Systems, Inc.
d/b/a Dicon Technologies
/s/ Xxxxxxx Xxxxxxxx
By:_______________________________________________
Xxxxxxx Xxxxxxxx, President, duly authorized
/s/ Xxxxx Xxxxx
By:_______________________________________
Xxxxx Xxxxx, President, duly authorized
13
Appendix A
-----------
Licensed Products
Roll Goods - Hydrophilic polyurethane foam produced in roll
using any of the rights under the Patents listed on Appendix
B attached hereto.
Molded Products - Hydrophilic and Polyurethane Foam and Gel
molded products incorporating soaps, waxes, antibacterial
and fragrances using any of the rights under the Patents
listed on Appendix B attached hereto.
Appendix B
----------
Patents
1. US Xxx No. 5,976,616 - Polyurethane Foam Materials With Skin Conditioning
Additives
2. US Xxx No. 6,566,576 B1 - Hydrocolloid Foam Medical Dressings and Method Of
Making The Same
3. US Patent No. 6,706,775 - Polyurethane Foam Products with Controlled
release of Agents and Additives
4. US Patent Application - Elastic bandage incorporating a Hydrophilic foam
dressing
5. US Patent Application - Elastomeric Matrix with Fragrance Comprising a
Synthetic Vapor Permeable Film To Control Release
Appendix C
-----------
Trademarks
Silverwear(TM)
Dryz Gelz(TM)
(Other specific DRYZ products with HHB written approval)
Appendix D
----------
Dryz Patents:
6. US XXX NO. 5,763,335
7. US XXX NO. 6,025,287
Dryz Products:
1.5mm Dryz moisture management foam
Appendix E
----------
First Line Equipment Specifications
Line Speed----------------------------5-15 linear ft/minute
Traverse width------------------------ stationary-----18"
Product width-------------------------12" --24"
Batch size-(maximum) --------------0-4000 LBS
Oven Capacity------------------------
Air temperature--------------- 250 Degree heat
< 5 %----based on formulation and speed
Product Thickness--------------------.157"-1.5"
Product finished rolls Diameter-----0-50"
Paper roll Diameter------------------4-24"
Paper roll width----------------------24"-26" maximum
Maximum Polyol flow---------------1800 grams / Minute
Maximum Aqueous flow-------------3600 grams / Minute
Appendix F
----------
Product Specifications
FINISHED PRODUCT SPECIFICATIONS
--------------------------------------------------------------------------------------------------------------------------------
PRODUCT NAME: I" PURECELL
--------------------------------------------------------------------------------------------------------------------------------
CODE NO.: 00030-DIC-PR1-l
--------------------------------------------------------------------------------------------------------------------------------
DOCUMENT NO.: FPI002
--------------------------------------------------------------------------------------------------------------------------------
PROPERTIES
---------------------------------------------------------------------------------
SA TCH SPECIFICATIONS MINIMUM OPTIMUM MAXIMUM
--------------------------------------------------------------------------------------------------------------------------------
% NON-VOLATILE (SOLIDS) 40% 50% 60%
--------------------------------------------------------------------------------------------------------------------------------
pH 8.1% 8.8% 9.5%
--------------------------------------------------------------------------------------------------------------------------------
VISCOSITY 200cps 500cps 800cps
--------------------------------------------------------------------------------------------------------------------------------
COLOR WHITE
--------------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------
FOAM SPECIFICATIONS MINIMUM OPTIMUM MAXIMUM
---------------------------------------------------------------------------------------------------------------------------------
TYPE OF FOAM COSMETIC
---------------------------------------------------------------------------------------------------------------------------------
WET GAUGE (THICKNESS) 1.200" 1.250" 1.300"
---------------------------------------------------------------------------------------------------------------------------------
DRY GAUGE (THICKNESS .9375" 1.0" 1.125"
---------------------------------------------------------------------------------------------------------------------------------
MOISTURE CONTENT (WET) 34% 36% 40%
---------------------------------------------------------------------------------------------------------------------------------
MOISTURE LEVEL (AFTER DRYING) <5%
---------------------------------------------------------------------------------------------------------------------------------
WIDTH 16.5" 17" 17.5"*
---------------------------------------------------------------------------------------------------------------------------------
DUROMETER (POINTS) 40 45 50
---------------------------------------------------------------------------------------------------------------------------------
DENSITY (LBS.lCU FT 8.0 9.0 9.5
---------------------------------------------------------------------------------------------------------------------------------
GRAM WEIGHT G/FP 5.0 5.6 6.2
---------------------------------------------------------------------------------------------------------------------------------
FRAGRANCE N/A
---------------------------------------------------------------------------------------------------------------------------------
LENGTH OF ROLL (LINEAR FEET) N/A 70 (Dryz Line) 80 (WR) white Room*
---------------------------------------------------------------------------------------------------------------------------------
APPROVALS
---------------------------------------------------------------------------------------------------------------------------------
TECHNICAL MANAGER QA MANAGER REV# 2 NOTES
--------------------------------------------------------------------------------------------------------------
X. Xxxxxxxxxx Rev.#1 1)Revised Length & Width of rolls
(X.Xxxxxxx: Width
8/26/02 revision)
Rev.#2 2)Revised durometer from 30-35-40 1'0
40-45-50
10/1/02 Revised Density from 6.5-7.5-8.5 to 8-9-9.5
as X. Xxxxxxx
Rev. #3 3) Revised Density from 8;09.0-9.5 to
6-0-7.5-8.5
as X. Xxxxxxx
Rev. #4 3) Revised Density back to 8.0-9.0-9.5 from
6-0.7.5-8.5
12/3/04 as X. Xxxxxxx
--------------------------------------------------------------------------------------------------------------
FINISHED PRODUCT SPECIFICATIONS
--------------------------------------------------------------------------------------------------------------------------------
PRODUCT NAME: PURECELL .200 MATERIAL
--------------------------------------------------------------------------------------------------------------------------------
CODE NO.: 00030-DIC-PRl-.200
--------------------------------------------------------------------------------------------------------------------------------
DOCUMENT NO.: FPI017
--------------------------------------------------------------------------------------------------------------------------------
PROPERTIES
----------------------------------------------------------------------------------
BATCH SPECIFICATIONS . MINIMUM OPTIMUM MAXIMUM
---------------------------------------------------------------------------------------------------------------------------------
% NON-VOLATILE (SOLIDS) 40% 50% 60%
---------------------------------------------------------------------------------------------------------------------------------
pH 8.1% 8.8% 9.5%
---------------------------------------------------------------------------------------------------------------------------------
VISCOSITY #2 50 RPM 200CDS 500cps 800cps
---------------------------------------------------------------------------------------------------------------------------------
.COLOR WHITE
---------------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------
FOAM SPECIFICATIONS' MINIMUM OPTIMUM MAXIMUM
---------------------------------------------------------------------------------------------------------------------------------
TYPE OF FOAM COSMETIC
---------------------------------------------------------------------------------------------------------------------------------
WET GAUGE (THICKNESS) .210" .230" .250"
---------------------------------------------------------------------------------------------------------------------------------
DRY GAUGE (THICKNESS. .180" .200" .220"
---------------------------------------------------------------------------------------------------------------------------------
MOISTURE CONTENT (WEn 33% 36% 39%
---------------------------------------------------------------------------------------------------------------------------------
MOISTURE LEVEL (AFTER DRYING) <1%*
---------------------------------------------------------------------------------------------------------------------------------
WIDTH 15" 15.5" 16"
---------------------------------------------------------------------------------------------------------------------------------
DUROMETER (POINTS) 45 52.5 60
---------------------------------------------------------------------------------------------------------------------------------
DENSITY (LBS.fCU FT . 9 10 11
---------------------------------------------------------------------------------------------------------------------------------
GRAM WEIGHT G/FT2 1.0 1.5 2.0
---------------------------------------------------------------------------------------------------------------------------------
FRAGRANCE N/A
---------------------------------------------------------------------------------------------------------------------------------
LENGTH OF ROLL (LINEAR FEET) 200
---------------------------------------------------------------------------------------------------------------------------------
APPROVAL
--------------------------------------------------------------------------------------------------------------------------------
TECHNICAL MANAGER. QA MANAGER REV NOTES
#
--------------------------------------------------------------------------------------------------------------------------------
F. Slim 1 5/24/02 *Changed moisture level from < 5% to < 1%
--------------------------------------------------------------------------------------------------------------------------------
FINISHED PRODUCT SPECIFICATIONS
--------------------------------------------------------------------------------------------------------------------------------
PRODUCT NAME: .250" PURE CELL
--------------------------------------------------------------------------------------------------------------------------------
CODE NO.: 00030-DIC-PRI-l/4"
--------------------------------------------------------------------------------------------------------------------------------
DOCUMENT NO.: FPI015
--------------------------------------------------------------------------------------------------------------------------------
PROPERTIES
----------------------------------------------------------------------------------
SA TCH SPECIFICATIONS MINIMUM OPTIMUM MAXIMUM
---------------------------------------------------------------------------------------------------------------------------------
% NON-VOLATILE (SOLIDS) 40% 50% 60%
---------------------------------------------------------------------------------------------------------------------------------
pH 8.1% 8.8% 9.5%
---------------------------------------------------------------------------------------------------------------------------------
VISCOSITY #2 50 RPM 200CDS 500CDS 800cps
---------------------------------------------------------------------------------------------------------------------------------
COLOR
---------------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------
FOAM SPECIFICATIONS MINIMUM OPTIMUM MAXIMUM
---------------------------------------------------------------------------------------------------------------------------------
TYPE OF FOAM COSMETIC
---------------------------------------------------------------------------------------------------------------------------------
WET GAUGE (THICKNESS) .218" .280" .342"
---------------------------------------------------------------------------------------------------------------------------------
DRY GAUGE (THICKNESS .188" .250"(see note) .312"*
---------------------------------------------------------------------------------------------------------------------------------
MOISTURE CONTENT (WEn 33% 36% 39%
---------------------------------------------------------------------------------------------------------------------------------
MOISTURE LEVEL (AFTER DRYING) <5%**
---------------------------------------------------------------------------------------------------------------------------------
WIDTH 14.5" 15.25" 16"
---------------------------------------------------------------------------------------------------------------------------------
DUROMETER (POINTS) 40 47.5 55
---------------------------------------------------------------------------------------------------------------------------------
DENSITY (LBS./CU FT 9.0 10.0 (see note) 11.0***
---------------------------------------------------------------------------------------------------------------------------------
GRAM WEIGHT G/FTZ 1.0 1.5 2.0
---------------------------------------------------------------------------------------------------------------------------------
FRAGRANCE N/A
---------------------------------------------------------------------------------------------------------------------------------
LENGTH OF ROLL (LINEAR FEET) 200
---------------------------------------------------------------------------------------------------------------------------------
5/31/02 Note: For Qosina (.250 buffed): 1-Thickness .230 to .270 2- Density 9.0 to 11.0
APPROVAL
---------------------------------------------------------------------------------------------------------------------------------
TECHNICAL MANAGER QA MANAGER REV# NOTES
---------------------------------------------------------------------------------------------------------------------------------
F.Slim *1 9/21/01 *Changed dry thickness tolerance from .250+/-
.020 to .250 +/. 1/16
** 2 5/24/02 **Changed moisture level from <5% to <1%
*** 3 9/12/02 ***Changed Density from 9+/.1 to 10+/.1 as per
X.Xxxxxxx request.
4 6/24/03 6/24/03: Rev.#4 - Correction: Changed moisture
level back to <5% as per X.Xxxxxxx
---------------------------------------------------------------------------------------------------------------------------------
FINISHED PRODUCT SPECIFICATIONS
--------------------------------------------------------------------------------------------------------------------------------
PRODUCT NAME: PURE CELL .300 MATERIAL
--------------------------------------------------------------------------------------------------------------------------------
CODE NO.: 00300-DIC-PRl-3/8"
--------------------------------------------------------------------------------------------------------------------------------
DOCUMENT NO.: FPIOll
--------------------------------------------------------------------------------------------------------------------------------
PROPERTIES
----------------------------------------------------------------------------------
SA TCH SPECIFICATIONS MINIMUM OPTIMUM MAXIMUM
---------------------------------------------------------------------------------------------------------------------------------
% NON-VOLATilE (SOLIDS) 40% 50% 60%
---------------------------------------------------------------------------------------------------------------------------------
cH 8.1% 8.8% 9.5%
---------------------------------------------------------------------------------------------------------------------------------
VISCOSITY #2 50 RPM 200cps 500cps 800cps
---------------------------------------------------------------------------------------------------------------------------------
COLOR WHITE
---------------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------
FOAM SPECIFICATIONS MINIMUM OPTIMUM MAXIMUM
---------------------------------------------------------------------------------------------------------------------------------
TYPE OF FOAM COSMETIC
---------------------------------------------------------------------------------------------------------------------------------
WET GAUGE (THICKNESS) .4 20" .425" :440"
---------------------------------------------------------------------------------------------------------------------------------
DRY GAUGE (THICKNESS .320" .350" .390"****
---------------------------------------------------------------------------------------------------------------------------------
MOISTURE CONTENT (WET) 33% 36% 39%
---------------------------------------------------------------------------------------------------------------------------------
MOISTURE LEVEL (AFTER DRYING) <1 %**
---------------------------------------------------------------------------------------------------------------------------------
WIDTH 14.5" 15.25" 16"
---------------------------------------------------------------------------------------------------------------------------------
DUROMETER (POINTS) 50 55 60
---------------------------------------------------------------------------------------------------------------------------------
DENSITY (lBS./CU FT 9 10 11
---------------------------------------------------------------------------------------------------------------------------------
GRAM WEIGHT G/FP 2.0 2.5 3.0
---------------------------------------------------------------------------------------------------------------------------------
FRAGRANCE N/A
---------------------------------------------------------------------------------------------------------------------------------
LENGTH OF ROLL (LINEAR FEET) 200
---------------------------------------------------------------------------------------------------------------------------------
*Note:For Qosina, the dry thickness .270 to .330, wet thickness .350 to .370
APPROVAL
,.'
--------------------------------------------------------------------------------------------------------------------------------
TECHNICAL MANAGER QA MANAGER REV NOTES
#
--------------------------------------------------------------------------------------------------------------------------------
X. Xxxxxxxxxx **1 5/24/02 ** Changed moisture level from <5% to <1%
***2 9/12/02 *** Changed Density from 9+/-1 to 10+/-1 as
***2 per X.Xxxxxxx request
****3 11/18/02 **** Changed thickness spec. from .340 +/-.040
to .350 +.040/-.030 as per Xxxxx Xxxxx
****4 12/3/04 ***** Changed Durometer from 30-50 to 50-60
--------------------------------------------------------------------------------------------------------------------------------
FINISHED PRODUCT SPECIFICATIONS
-------------------------------------------------------------------------------------------------------------------------------
PRODUCT NAME: 4MM Medical Foam
-------------------------------------------------------------------------------------------------------------------------------
CODE NO,:
-------------------------------------------------------------------------------------------------------------------------------
DOCUMENT NO,: FPl126
-------------------------------------------------------------------------------------------------------------------------------
PROPERTIES
---------------------------------------------------------------------------------
F/P SPECIFICATIONS MINIMUM OPTIMUM MAXIMUM
--------------------------------------------------------------------------------------------------------------------------------
TYPE OF FOAM MEDICAL
--------------------------------------------------------------------------------------------------------------------------------
WET GAUGE (THICKNESS) .173" .188" .193" .
--------------------------------------------------------------------------------------------------------------------------------
DRY GAUGE (THICKNESS) .140" .160" .180"
--------------------------------------------------------------------------------------------------------------------------------
MOISTURE LEVELCAFTER DRYING) <5%
--------------------------------------------------------------------------------------------------------------------------------
DUROMETER (POINTS) 20 30 .40
--------------------------------------------------------------------------------------------------------------------------------
DENSITY lLBS./CU.FT) 7.5 '8.25 9.0
--------------------------------------------------------------------------------------------------------------------------------
APPROVAL
--------------------------------------------------------------------------------------------------------------------------------
TECHNICAL MANAGER QA MANAGER REV# NOTES
--------------------------------------------------------------------------------------------------------------------------------
W.Xxxxx X. Xxxxxxxxxx Initial
4127105
--------------------------------------------------------------------------------------------------------------------------------
Appendix G
-----------
Second Line Equipment Specifications
Line Speed----------------------------6-12 ft / minute
Traverse width------------------------0-40"
Product width-------------------------30" - 50"
Batch size-(maximum) --------------0-4000 LBS
Oven Capacity------------------------
Air temperature---------------190-200-degree f
< 5 %----based on formula and speed
Product Thickness--------------------.060"-1.5"
Product finished rolls Diameter-----50" diameter
Paper roll Diameter------------------24" Diameter
Paper roll width----------------------20.5"-25"
Maximum Polyol pump------------2300 grams / minute
Maximum Aqueous Pump---------4600 grams/ minute
Appendix H
----------
Price Schedule
Item UOM Cost
--------------------------------------------------------------------------
Cosmetic Foam
-------------
1) Purecell 1.00" cosmetic foam SFT $1.25
2) Purecell .200" SFT $ .60
3) Purecell .250" SFT $ .65
4) Purecell .300" SFT $ .70
Medical Foam
------------
1) 4mm medical foam
Dow Prepolymer JT6000 SFT $1.40
2) 4mm medical Foam
Dow Prepolymer 2060 SFT $1.75
Urethane Gel
------------
1) Large oval gel (Mens Metatarsal) PAIR $ .42
2) Small oval gel (Womens Metatarsal) PAIR $ .38
Dryz Product
-------------
1) 1.5mm Dryz moisture management foam SFT $ .57
--------------------------------------------------------------------------
