Exhibit 16
LICENSING AND MARKETING AGREEMENT
Agreement made this 7 day of July 1997 by and between Nitro Plastics
Technologies of Israel, an Israel Corporation whose business address is 00
Xxx Xxxxxx Xx. Xxxxxxx 00000 and Palletech Inc., a Delaware Corporation whose
business address is 0000 Xxxxx Xxxxxxx, Xxxxx, XX 00000 (hereinafter referred
to as "Palletech"). Franchise is to be operated in the Fix-Corp. plant,
located at 0000 Xxxxx Xxxxxxx, Xxxxx, XX 00000.
WITNESSETH
WHEREAS, Palletech is a manufacturer of plastic
WHEREAS, Nitro Plastics Technologies of Israel is the licensee of a proprietary
injection molding technology especially suited for the manufacturing of plastic
pallets and other products from recycled plastics; and,
WHEREAS, Nitro Plastics Technologies of Israel wishes Palletech to manufacture
plastic pallets, and Palletech wishes to manufacture pallets utilizing the
technology to be supplied by Nitro Plastics Technologies of Israel.
NOW THEREFORE, in consideration of the mutual covenants, terms and conditions
contained herein, the parties agree as follows:
1. RECITATIONS: The above recitations are true and correct.
2. CONDITIONS PRECEDENT:
2.1. Palletech will purchase an injection molding machine and appropriate
molds and equipment for the purpose of manufacturing plastic pallets. Said
machines is described as a 750 ton form molding machine, with gas assist
technology and proprietary configuration, and said machine shall be physically
located on the premises of Palletech no later than January 1998.
2.2. Nitro Plastics Technologies of Israel shall sub-license Palletech to
utilize the subject technology for the specific purpose of manufacture of
plastic pallets (or such other products as shall be mutually agreed by the
parties) for a period of ten (10) years, commencing with the date that the
subject machine is installed and operational. After the ten (10) year period of
time, Palletech Inc. owns the sub-licensing agreement free and clear. Product
manufactured pursuant to this agreement shall be sold in the areas generally
identified as the Midwest and Northeastern regions of the United States. Those
above mentioned territories will be the exclusive territories to Palletech
unless Palletech does not have the ability to build new facilities as they are
needed. If Palletech Inc. is not able to perform, they have a reasonable period
of time to satisfy Nitro Plastics Technologies of Israel increase demand of
production, then Palletech Inc. will go on a first write of refusal to open and
establishing a manufacturing and distribution plant and have the right to
produce sales in the state of California. Before Nitro Plastics Technologies of
Israel
makes an agreement with an additional third party for other territories in the
United States, Nitro Plastics Technologies of Israel will give the same
opportunity to Palletech Inc.
3. RESPECTIVE DUTIES, RESPONSIBILITIES AND OBLIGATIONS OF THE PARTIES:
3.1. Duties of Nitro Plastics Technologies of Israel:
3.1.1. Nitro Plastics Technologies of Israel shall provide supervisory
and technical personnel to effect the installation of the subject machine and
train personnel of Palletech in the use and operation of said machine; and,
Nitro Plastics Technologies of Israel shall continue to provide technical
support for a period of one (1) year commencing with the date that the machine
is operational.
3.1.2. Nitro Plastics Technologies of Israel shall provide sales
personnel who will undertake the sale of all pallets produced, at a price
determined by Palletech.
3.1.3. Nitro Plastics Technologies of Israel shall perform such other
sales and marketing functions as it deems necessary or desirable, providing
however that Palletech shall bear the expense of an annual advertising
allowance, such an amount to be determined by the agreement of the parties.
3.2. Duties of Palletech
3.2.1. Palletech shall, at its own cost and expense, provide all
production facilities, equipment, raw materials, supplies, maintenance, repair,
personnel and any and all other items, including also freight and installation
costs, as shall be necessary to accomplish the manufacture of plastic pallets.
4. FEES AND PAYMENTS
4.1. Palletech shall pay to Nitro Plastics Technologies of Israel a
licensing fee in the amount of $250,000.00, payable in three equal installments
as follows: (1) $83,333.33 upon execution of this Agreement, and the remaining
to be paid, in pallets at Palletech Inc.'s wholesale price, after production
begins in Ohio.
4.2. During the first five (5) years of the term of this Agreement,
Palletech shall pay to Nitro Plastics Technologies of Israel, in exchange for
all services to be rendered by Nitro Plastics Technologies of Israel, a total
fee in the amount of $2.10 per pallet sold, and a royalty for the licensed
technology in the amount of 50 CENTS per pallet. During the second five (5)
years of the term of the Agreement, the royalty portion of the payment per
pallet shall reduce from 50 CENTS to 25 CENTS per pallet. Payment shall be
made to Nitro Plastics Technologies of Israel by Palletech within seven (7)
business days after receipt, and clearance of funds, by Palletech.
4.3. During years two through five of the term of this agreement,
contingent upon Nitro Plastics Technologies of Israel selling in excess of
950,000 pallets in each year, Nitro
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Plastics Technologies of Israel shall be entitled to receive from Palletech
100,000 common stock warrants, per year, for Fix-Corp. International, Inc.,
common stock, at 75% face value.
4.4. At the end of each year of the term of the agreement, in addition to
all the above fees, Palletech shall pay to Nitro Plastics Technologies of Israel
a lump sum fee of $50,000.00 for ongoing research and development. Palletech
will have the right to the new technology that it is paying for on an annual
basis.
5. MISCELLANEOUS PROVISIONS
5.1. DEFAULT
5.1.1. Default by Palletech: It is understood and agreed that the
technology licensed herein is proprietary to Nitro Plastics Technologies of
Israel pursuant to its licensing agreement with the owner of the technology.
Nitro Plastics Technologies of Israel agrees to indemnify Palletech Inc., or its
affiliates in the event that Nitro Plastics Technologies of Israel does not own
the proprietary technology that it has claimed it owns. Any attempt by Palletech
to utilize this technology for its own purposes, outside of the terms and
provisions of the agreement shall immediately terminate this agreement. In such
event Palletech shall be liable for payment to Nitro Plastics Technologies of
Israel for an amount equal to double the fees and royalties that would be
payable to Nitro Plastics Technologies of Israel based upon the anticipated
annual sales, which are anticipated and agree to be 950,000 pallets. In
addition, Nitro Plastics Technologies of Israel shall be entitled to such
equitable relief, including injunction, as shall be appropriate. Nitro Plastics
Technologies of Israel agrees that Palletech Inc. has the right to sell the
pallets through their own organization or an affiliates organization provided
that Nitro Plastics Technologies of Israel receives its royalties on those
sales. Nitro Plastics Technologies of Israel acknowledges that is the equipment
or reasons beyond Palletech Inc.'s control is not able to produce 950,000
pallets on an annual basis that this would not constitute a default by Palletech
Inc.
5.1.2. In the event of default by Palletech, including but not limited
to failure to produce or other attempted termination of the agreement, Palletech
shall be liable for payments to Nitro Plastics Technologies of Israel for the
accelerated payment of all fees that would be due to Nitro Plastics Technologies
of Israel under this agreement, including all sales, commissions and royalties
based upon the anticipated annual production of 950,000 plastic pallets. There
will be a 120 day cure period given to Palletech Inc. in the event of a default.
5.2. NO PARTNERSHIP: Nothing contained herein shall be construed or
interpreted to create a partnership relationship between the parties. Neither
party shall have any authority to obligate or bind the other for any debt to a
third party.
5.3. NOTICE: Any notice required by this agreement shall be given by
certified mail to the address of the party involved as shown at the beginning of
this agreement.
5.4. ARBITRATION: No civil action concerning any dispute arising under
this agreement shall be instituted before any court and all such disputes shall
be submitted to final and
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binding arbitration by a three man panel. Each party shall select one
arbitrator, who will in turn select a third arbitrator. All costs and expenses
of the arbitration, including actual attorney's fees, shall be allocated among
the parties according to the arbitrator's discretion. The arbitrator's award
resulting from such arbitration may be confirmed and entered as a final judgment
in any court of competent jurisdiction and enforced accordingly. Further, the
parties hereto expressly agree that proceeding to arbitration and obtaining an
award thereunder shall be a condition precedent to the bringing or maintaining
of any action in any court with respect to any dispute arising under this
agreement, except for the institution of a civil action to maintain the status
quo during the pendency of any arbitration proceeding.
5.5. ATTORNEYS FEES: In the event of any litigation (arbitration) caused
by a dispute arising from this agreement, the prevailing party shall be entitled
to reimbursement from the losing party for attorney's fees (including those on
appeal) and costs incurred during each dispute.
5.6. SUCCESSORS IN INTEREST: Although it is understood and agreed that
this agreement is not assignable by Palletech to any third party without the
prior written consent of Nitro Plastics Technologies of Israel the provisions,
conditions, terms and covenants herein contained shall bind and the benefits and
advantages shall inure to, the respective successors, assigns, trustees,
receivers, heirs and personal representative of the parties hereto.
5.7. LAWS CONTROLLING: This agreement shall be construed, enforced and
interpreted in accordance with the laws of the State of Florida, whose
jurisdiction is acceptable to both parties.
5.8. CAPTIONS: The captions of sections of this agreement are for
convenient reference only, and shall not affect the construction of
interpretations of any of the terms and provisions set forth herein.
5.9. SEVERABILITY: In the event any provision of this agreement are found
to be in violation of any law, or are determined to be unenforceable for any
reason, this shall not serve to invalidate the remainder of this agreement.
6. ASSIGNMENTS
6.1. Nitro Plastics Technologies of Israel will take total production of
pallets from Palletech for distribution and selling purposes. Palletech Inc.
will determine the price of the pallets.
6.2. Nitro Plastics Technologies of Israel reserves the right to assign
this licensing and marketing agreement at any time without notification.
In WITNESS WHEREOF, the parties hereto have executed this agreement on the
day and year first above written.
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All documents, blue prints, machine blue prints, and operating techniques will
be placed in a safety deposit box.
Definition of a reasonable period of time is 24 months.
Palletech INC. Nitro Plastics Technologies of Israel
By: By: Xxxxx Xxxxxxxxx
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Title: Title: President
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Witness: Witness:
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Notary Public:
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