LICENSE AGREEMENT
This License Agreement ("Agreement") is entered into this 30th day of
March, 2001 between Thermoplastic Composite Designs, Inc., a Florida corporation
("Licensor"), having a business address of 0000 Xxxxx Xxxx, #00, Xxxx, Xxxxxxx
00000, and Envirokare Composite Corp., a Delaware corporation, ("Licensee"),
having a business address of 0000 X. Xxxxxx Xxxx, Xxxxx 000X, Xxxx Xxxxx,
Xxxxxxx 00000.
WHEREAS, Licensor has developed, and is the owner of all right, title and
interest to a plastic processing technology referred to as Thermoplastic
Flowforming (the "Technology").
WHEREAS, Licensor has filed a process patent application in connection with
the Technology with the United States Patent and Trademark Office, Serial No.
08/993,518 (the "Patent Application") and owns, and/or has the exclusive right
to use, registered and unregistered trademarks and copyrights in connection with
the Technology, including the U.S. Trademark Registration No. 861,257 for the
trademark "Thermoplastic Flowforming (TPF)". The Patent Application, trademarks
and copyrights relating to the Technology are hereinafter referred to as the
"Intellectual Property").
WHEREAS, Licensor is the owner of certain information, know-how,
technology, software, trade secrets, drawings, plans, specifications, blue
prints, material lists, processes, methods, manuals, technical support,
techniques, molds, equipment, terms of reference, and other confidential
information (the "Know-How") which enables Licensor to design, develop, and
commercialize the Technology and products employing the Technology in their
manufacture ("TPF Products").
WHEREAS, Licensee desires to obtain from Licensor and Licensor desires to
grant to Licensee, the exclusive license (the "License") for the Technology,
Intellectual Property and Know-How, subject to the exclusions set forth in
Section 2.5 herein.
In consideration of the mutual promises and covenants contained herein and
for other good and valuable consideration, the receipt and sufficiency of which
is hereby acknowledged, Licensor and Licensee hereby agree as follows:
SECTION 1
CERTAIN DEFINITIONS
1.1 Certain Definitions. (a) "Intellectual Property Rights" means any and
all intangible rights existing from time to time under patent law, copyright
law, trademark law, trade secret law, unfair competition law or other similar
laws or principles arising from or actionable under the laws of the United
States or any foreign country.
(b) "Merger Agreement" shall mean that certain Merger Agreement between
Licensor and Licensee dated as of March 30, 2001, of which this Agreement is an
exhibit.
SECTION 2
LICENSE
2.1 License Grant. Subject to the terms and conditions of this Agreement,
Licensor hereby grants to Licensee a worldwide, exclusive license to use the
Technology, Know-How and Intellectual Property to manufacture, market, sell and
distribute TPF Products at Licensee's Boca Raton, Florida facilities, subject to
the exclusions set forth in Section 2.5 herein. Licensor shall not restrict, or
grant to any other party, any of the rights granted to Licensee hereunder.
2.2 Licensee Restrictions. Licensee may not reverse engineer, tamper,
attempt to discover, decompile, disassemble, or modify the Technology or any
portion thereof, nor may it authorize or assist any third party to do so.
2.3 Ownership Rights of Licensor. Licensor owns all Intellectual Property
Rights in and to the Technology, including, without limitation, any improvements
in the Technology that are developed by Licensor and would not constitute
infringement and/or misappropriation of Licensor's Intellectual Property Rights
in the absence of this Agreement. Licensee shall reasonably assist Licensor, if
requested, in the protection of its Intellectual Property Rights in and to the
Technology and agrees to execute any documents Licensor may reasonably request
to verify and maintain its ownership rights, or to transfer any part of the
same.
2.4 Limited Ownership Rights of Licensee. Notwithstanding Section 2.3
above, Licensee retains any and all Intellectual Property Rights in and to any
improvements to the Technology to the extent that they are independently
developed by Licensee and would not constitute infringement and/or
misappropriation of Licensor's Intellectual Property Rights in the absence of
this Agreement.
2.5 License Exclusions. Licensee may not manufacture, market, sell or
distribute any of the following TPF Product applications:
(a) Doors and shutters for the home, office, personal entry, firm, storm or
garage for use in North America;
(b) Modular pallet sales and distribution. Modular pallets shall be defined
as pallets with decks that are bound together by an injection molded plastic
foot;
(c) Advanced composites and aerospace applications. Advanced composites
shall be defined as composites consisting of thirty-five percent (35%) or more
of fiber materials such as but not limited to carbon, glass, aramid and metal
fibers. Licensee, however, is entitled to manufacture products using advanced
materials and aerospace applications with the exception
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of Rocket Nozzles described on Schedule 2.5. Licensee is prohibited from the
research and production of Rocket Nozzles utilizing the Technology and Licensee
cannot hinder Licensor from production or licensing of the Technology for
advanced material or aerospace product production;
(d) Dumpster lids and floors;
(e) Third world plastic housing;
(f) Field and stadium floor coverings;
(g) Paneling which replace plywood for all uses, except for shipping
containers which Licensee is permitted to manufacture; and
(h) Flooring for trucks and over the road trailors.
2.6 Manufacture of Backboards.
(a) Licensor hereby represents and warrants that it has developed and is
manufacturing and selling backboards as more specifically described on the
schedule attached hereto as Schedule 2.6 (the "Backboards").
(b) Licensor may, at its sole option, either (i) continue to manufacture
Backboards or (ii) permit Licensee to manufacture Backboards.
(c) If Licensor decides to permit Licensee to manufacture Backboards, then
Licensor and Licensee shall, in accordance with GAAP, determine the amount of
the cash flow that can be allocated solely to the manufacturing and sale of
Backboards (the "Backboard Income"). If Licensor and Licensee cannot agree as to
the amount of the Backboard Income, then a nationally recognized accounting
firm, appointed by Licensee and reasonably acceptable to Licensor, shall make
such determination. Licensor and Licensee shall each receive fifty percent (50%)
of such Backboard Income, which amounts shall be distributed on a quarterly
basis in cash or by wire transfer of immediately available funds in accordance
with wire transfer instructions provided to Licensee from time to time.
2.7 Delivery of Source Code. Immediately upon the execution and delivery of
this Agreement, Licensor will provide to Licensee the Control System Source Code
Software as described on Schedule 2.7, and all related documentation necessary
to operate the Technology (the "Source Code"). Licensor agrees to provide
Licensee with all updates, modifications and other alterations to such Source
Code and all copies of new source codes within thirty (30) days of their
release.
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SECTION 3
PAYMENTS
3.1 License Fee. Licensee shall pay to Licensor a one time license fee (the
"License Fee") of Four Hundred Fifty Thousand Dollars ($450,000) payable as
follows:
(a) Twenty-Five Thousand Dollars ($25,000) on the date hereof;
(b) Twenty-Five Thousand Dollars ($25,000) on the date that is thirty (30)
days from the date hereof.
(c) One Hundred Fifty Thousand Dollars ($150,000) on or before June 1,
2001; and
(d) Two Hundred Fifty Thousand Dollars ($250,000) on or before September 1,
2001.
3.2 Taxes. All payments required by this Agreement shall be made in U.S.
dollars and are exclusive of taxes. Licensee agrees to bear and be responsible
for the payment of all such taxes, including, without limitation, all
manufacture, sales, use, personal property, excise, or other taxes which may be
levied or assessed in connection with this Agreement, excluding taxes based on
Licensor's net income.
SECTION 4
DUTIES OF LICENSEE
4.1 Sublicensing.
(a) Licensee shall have the right to grant sublicenses for use of the
License to manufacture the TPF Products to all affiliates of Licensee.
(b) Licensee shall have the right to grant sublicenses for use of the
License to manufacture the TPF Products to an unaffiliated third party (the
"Sublicensee"), provided, however, Licensee shall pay to Licensor a royalty
payment (the "Royalty Payment") equal to fifty (50%) of any royalty payments,
licensee fees or other monies received by Licensee from Sublicensee, net of all
costs and expenses incurred by Licensee in connection with such sublicense.
(c) Notwithstanding the foregoing provision of Section 4.1(b), Licensee may
grant a sublicense for doors and shutters for the home, office, personal entry,
firm, storm or garage for use outside of North America without paying any
Royalty Payment to Licensor.
4.2 TPF Products. Licensee agrees to manufacture, market, sell and
distribute the TPF Products in accordance with the Merger Agreement. The parties
acknowledge and agree that Licensee shall be the builder of record for the TPF
Products manufactured.
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4.3 Insurance. Licensee shall maintain liability insurance that is
reasonable for the type of business engaged by Licensee.
SECTION 5
DUTIES OF LICENSOR
5.1 Assistance. Licensor agrees that during the term of this Agreement, it
shall provide Licensee with information related to the Technology that is
available to Licensor, including, without limitation: bills of materials;
historical testing and analysis documentation; and technical support as outlined
in Section 5.2 below.
5.2 Know-How and Technical Support. As soon as practicable after the date
hereof, Licensor shall deliver the Know-How to Licensee as recorded in writing
or in such other tangible or technological forms requested by the Licensee. If
any of the Know-How cannot be physically delivered, such Know-How shall be
communicated to Licensee by an authorized representative of the Licensor. For
the purposes of this document, communication shall include performance or
demonstration and the free installation of non-site proprietary equipment
relating to the Know-How. Design and technical support relating to the use of
the Know-How are included in the License Fee to be paid to the Licensor by the
Licensee.
SECTION 6
CONFIDENTIAL INFORMATION
6.1 Confidential Information. "Confidential Information" means: (i) the
Technology, Know-How and Intellectual Property; (ii) the terms and conditions
set forth in this Agreement; and (iii) any other information provided to
Licensee or Licensor that is indicated as confidential. Notwithstanding the
foregoing, either party may disclose the existence of this Agreement. For
purposes of this Section 6, "Disclosing Party" shall refer to the party
disclosing Confidential Information and "Receiving Party" shall refer to the
party receiving Confidential Information hereunder. Confidential Information
shall not include any information that: (a) can be clearly shown is already
known to the Receiving Party at time of its disclosure from sources other than
the Disclosing Party; (b) is or becomes publicly known through no wrongful act
of the Receiving Party; or (c) can be clearly shown that is independently
developed by the Receiving Party without use of or reference to any of the
Disclosing Party's Confidential Information; provided that before making any use
or disclosure in reliance upon one or the foregoing exceptions, the Receiving
Party shall give the Disclosing Party an adequate opportunity to interpose an
objection or take action to assure confidential handling of such information.
6.2 Duties of Receiving Party. A Receiving Party shall protect the
Confidential Information with the same degree of care, and no less than a
reasonable degree of care, that it treats its own confidential information. A
Receiving Party shall not disclose or permit the disclosure of any Confidential
Information that it receives from a Disclosing Party to any person or entity
except those officers, employees, contractors or agents or sublicensees of the
Receiving Party who have a need to know and who have expressly agreed, by and
upon receiving such information, to be bound by the terms of this Agreement as
if they were direct
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signatories hereto. A Receiving Party will return all copies of the Confidential
Information which is in its possession or control upon request or termination of
this Agreement.
SECTION 7
WARRANTIES AND REPRESENTATIONS
7.1 Limited Warranty and Remedy and Damages.
(a) Licensor solely provides the limited warranties and remedies set forth
in this Section 7.1(a). Licensor represents and warrants that: (i) it owns or
otherwise has the rights to the Technology, Know-How and Intellectual Property
free and clear of any claims, liens and encumbrances, and can grant the License
to Licensee as set forth in this Agreement; (ii) to its knowledge, there is no
threatened or pending litigation involving the Technology, Know-How or
Intellectual Property; and (iii) it is not a party to any other agreement or
obligation that is inconsistent with the terms and conditions of this Agreement.
(b) Licensee represents and warrants that: (i) it is not a party to any
other agreement or obligation that is inconsistent with the terms and conditions
of this Agreement; and (ii) it will not violate or infringe or misappropriate
the intellectual property rights of any third party, including, without
limitation, the unauthorized use or incorporation of trade secrets or
confidential information of third parties, patent infringement or copyright
infringement.
7.2 Indemnity.
(a) Licensor shall indemnify and hold harmless and defend Licensee from and
against any and all claims and lawsuits including court costs and attorneys'
fees that arise from (i) any third party claim of the Licensee's infringement of
the Technology, Know-How or Intellectual Property; and (ii) Licensor's breach of
its representations or warranties hereunder.
(b) Licensee shall indemnify and hold harmless and defend Licensor from and
against any claims or lawsuits, including court costs and attorneys fees but
excluding those claims set forth in Section 7.2(a) above, that arise from: (i)
Licensee's manufacture, sale, marketing or distribution of the TPF Products,
including, without limitation, claims for personal injury, death or property
damage; and (ii) Licensee's breach of its representations and warranties
hereunder.
SECTION 8
TERM AND TERMINATION
8.1 Term. This Agreement shall be effective from the date hereof and shall
extend until the earlier to occur of:
(a) the date that is thirty (30) months from the date hereof;
(b) the date the Merger (as such term is defined in the Merger Agreement)
is consummated; or
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(c) as otherwise terminated pursuant to this Section 8.
8.2 Automatic Termination. This Agreement shall be terminated upon:
(a) the expiration of the last U.S. Patent rights granted from the Patent
Application or any extensions, renewals, continuations in part or divisionals
thereof; or
(b) the mutual consent of the parties.
8.3 Termination by Licensor.
(a) Licensor may terminate this Agreement upon a breach by Licensee of this
Agreement or upon a breach by Licensee of the Merger Agreement, which breach is
not cured within ten days of written notice of the breach by Licensor.
(b) Licensor may terminate this Agreement immediately, without the
necessity of any notice or time to cure, in the event: (i) Licensee ceases to
function as a going concern or operate in the ordinary course of business; or
(ii) Licensor reasonably believes that Licensee is insolvent or unable to pay
its debts as they become due, is bankrupt or intends to file a petition for
bankruptcy.
8.4 Termination by Licensee.
(a) Licensee may terminate this Agreement upon a breach by Licensor of this
Agreement or upon a breach by Licensor of the Merger Agreement, which breach is
not cured within ten days of written notice of the breach by Licensee.
(b) Licensee may terminate this Agreement immediately, without the
necessity of any notice or time to cure, in the event: (i) Licensor ceases to
function as a going concern or operate in the ordinary course of business; or
(ii) if Licensor is insolvent or unable to pay its debts as they become due, is
bankrupt or intends to file a petition for bankruptcy.
8.5 Effect of Termination.
(a) Upon termination of this Agreement pursuant to Section 8.1(a), 8.2(b),
8.3 or 8.4(a), (i) all License rights of Licensee shall automatically terminate
and Licensee shall immediately cease all uses of the Technology, Know-How and
Intellectual Property, (ii) all of Licensor's Intellectual Property Rights
relating to the Technology, Know-How and Intellectual Property shall remain with
Licensor and (iii) both parties shall return all copies of the Confidential
Information of the other with certification in writing that the returning party
has complied with this requirement.
(b) Upon termination of this Agreement pursuant to Section 8.1(b) or
8.4(b), (i) Licensee shall retain all Intellectual Property Rights relating to
the Technology, Know-How and Intellectual Property and (ii) both parties shall
return all copies of the Confidential
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Information of the other with certification in writing that the returning party
has complied with this requirement.
8.6 Survival. The parties rights and obligations relating to Confidential
Information (Section 6), Payments (Section 3) and Indemnity (Subsection 7.2)
shall survive termination of this Agreement for any reason.
SECTION 9
MISCELLANEOUS
9.1 Assignment. Unless otherwise provided in this Agreement, Licensee may
not transfer or assign any of Licensee's rights or privileges under this
Agreement without the prior written consent of Licensor.
9.2 Governing Law. This Agreement shall be governed by the laws of the
State of Florida. The parties further agree that any suits arising hereunder
shall be filed and conducted in the courts of the State of Florida, waiving any
claim of lack of personal jurisdiction based upon its existing or future
domicile .
9.3 Effect of Partial Invalidity. If any one or more provisions of this
Agreement should be ruled wholly or partially invalid or unenforceable by a
court or other government body of competent jurisdiction, then: (a) the validity
and enforceability of all provisions of this Agreement not ruled to be invalid
or unenforceable will be unaffected; (b) the effect of the ruling will be
limited to the jurisdiction of the court or other government body making the
ruling; and (c) the provision(s) held wholly or partially invalid will be deemed
amended, and the court or other government body is authorized to reform the
provision(s), to the minimum extent necessary to render them valid and
enforceable in conformity with the parties' intent as manifested herein.
9.4 Amendment to Agreement. No modification or amendment of this Agreement
will be valid or binding unless in writing and duly executed by both parties.
This Agreement (including any schedules attached hereto) constitutes the entire
agreement between the parties concerning the subject matter hereof, and
supersedes prior or contemporaneous representations, inducements, promises, or
agreements, oral or otherwise, between the parties. Unless otherwise stated
herein, no modification or amendment to this Agreement will be valid or binding
unless reduced to writing and duly executed and delivered by the party to be
bound thereby. No terms in any written order or acknowledgment that add to or
change the terms of this Agreement shall be of any force and effect, whether or
not the party receiving the same signs the order or acknowledgment or otherwise
indicates its acceptance, unless such party expressly refers to the specific
addition or change in question as a modification of this Agreement.
9.5 No Waiver. The failure of either party at any time to require
performance by the other party of any provision of this Agreement shall in no
way affect the right of such party to require performance of that provision. Any
waiver by either party of any breach of any provision of this Agreement shall
not be construed as a waiver of any continuing or succeeding
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breach of such provision, a waiver of the provision itself or a waiver of any
right under this Agreement.
9.6 Entire Agreement. The provisions of this Agreement as they pertain to
the grant of the License are complete and supersede the terms of any other
agreements between the parties.
IN WITNESS WHEREOF, each party has caused this License Agreement to be
executed and delivered by its duly authorized representative as of the date
above.
Thermoplastic Composite Design, Inc.
By: /s/ Xxxx Xxxx, Xx.
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Name: Xxxx Xxxx, Xx.
Title: Vice President
Envirokare Composite Corp.
By: /s/ Xxxxxx Xxxxxxxxx
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Name: Xxxxxx Xxxxxxxxx
Title: Vice President