Exhibit 10.35
PATENT, INFORMATION AND TRADEMARK AGREEMENT
Agreement effective February 9, 1998 by and between COMPOSITECH LTD.
(hereinafter referred as Licensor"), having a place of business at 000 Xxxxxxxxx
Xxxx, Xxxxxxxxx, Xxx Xxxx 00000-0000, X.X.X; and Compositech Taiwan or Composite
Technologies, Inc. (hereinafter referred to as "Licensee") having a place of
business at 5th Fl., Bld. 000, Xxx.0, Xxx-Xxxxx Xxxx Xxxx, Xxxxxx, Xxxxxx,
Xxxxxxxx of China ("R.O.C.").
WHEREAS, Licensor owns or controls certain patent rights and proprietary
information relating to laminates used in the production of printed circuit
boards (hereinafter defined as "Licensor's Patents" and "Licensor's
Information");
WHEREAS, Licensor owns or control trademarks (hereinafter defined as the
"Trademark") relating to said laminates:
WHEREAS, Licensor has been and is engaged in extensive research and
experimentation to develop said laminates;
WHEREAS, Licensor has the right to grant licenses under such patent rights and
for the use of such proprietary information;
WHEREAS, Licensor has the right to grant licenses for the use of the Trademark;
WHEREAS, Licensee desires to engage in the development, manufacture and sale of
laminates used in the production of printed circuit boards; and
WHEREAS, Licensee desires acquiring an exclusive right and license under
Licensor's aforesaid rights to make and sell laminates in accordance with
Licensor's Patents and/or Licensor's Information and using the Trademark, in a
certain Territory, and Licensor has agreed to grant such license to Licensee
upon the terms and conditions hereinafter set forth;
NOW, THEREFORE, the parties hereto, intending to be legally bound hereby,
agree as follows:
ARTICLE I
DEFINITIONS
As used throughout this Agreement, the following terms shall have the following
meanings:
1.1 Territory. "Territory" shall mean the R.O.C. and The Peoples Republic of
China.
1
1.2 Licensed Products. "Licensed Products" shall mean copper clad laminates for
use as printed circuit boards, in which the filaments in the layers are parallel
rather than woven, but excluding all such laminates within the scope of any
claims of Licensor's Patents relating to (i) multi-layer printed circuit board
process, including claims (numbers to be added) of Licensor's R.O.C. patent No.
34906 and (ii) integral circuits and process, including claims (numbers to be
added) of Licensor's R.O.C. patent No.
34906.
1.3 Licensor's Patents. "Licensor's Patents" shall mean all patents and/or
applications in the Territory owned or controlled by Licensor or under which
Licensor has the right to grant licenses at any time during the term of this
Agreement and relating to the field of Licensed Products, and any and all
reissues, extensions, patents of addition and patents for improvements thereon,
including Licensor's R.O.C. Patent No. 34906 but excluding claims (numbers to be
added) thereof.
1.4 Licensor's Information. "Licensor's Information" shall mean and include all
proprietary know-how, formulations, engineering and other data and
specifications relating to the manufacture or use of Licensed Products, now
possessed by Licensor or which may be acquired by Licensor during the term of
this Agreement or which Licensor may acquire the right to use and disclose in
the Territory during the term of this Agreement, and which are useful to produce
Licensed Products in an efficient way.
1.5 Licensee's Patents. "Licensee's Patents" shall mean any and all patents
filed by or for or issued to Licensee in any country of the world relating to
any addition or to or modification of Licensed Products.
1.6 Licensee's Information. "Licensee's Information" shall mean and include the
sum of Licensee's research and development efforts and manufacturing experience
including all information, know-how, formulations, engineering data and
specifications related to the field of Licensed Products, now possessed or
acquired by Licensee during the term of this Agreement or which Licensee may
acquire the right to use and disclose during the term of this Agreement.
1.7 Trademark. "Trademark" shall mean collectively any one or more of the
trademarks, trade names or service marks adopted by Licensor anywhere in the
world to identify Licensed Products.
1.8 Net Sales. "Net Sales" shall mean the gross invoice prices charged by
Licensee for Licensed Products, less credit for goods returned and (to the
extent separately stated in each invoice) charges for packing, shipping and
insurance. In the case of anything other than an arms length sale by Licensee of
Licensed Products, Net Sales shall mean the price ordinarily charged at that
time by Licensee for Licensed Products sold for cash in an arms length
transaction.
2
1.9 Notice. "Notice" shall mean a communication in writing sent by recorded
delivery to the herein listed address of Licensee or Licensor or to such other
address or addresses as the addressee may from time to time specify by written
notice to the Licensor.
1.10 Calendar Year and Calendar Quarter. "Calendar Year" and "Calendar Quarter"
shall mean respectively the twelve-month periods beginning each January 1 and
the three-month periods beginning each January 1, April 1, July 1 and October 1.
1.11 Information. "Information" shall mean collectively or individually, as is
apparent from the context, Licensor's Information and Licensee's Information.
1.12 Joint Venture Agreement. "Joint Venture Agreement" shall mean the agreement
executed substantially contemporaneously with this Agreement by the parties
hereto with respect to the formation by them of a joint venture for the
production of copper-clad laminates.
1.13 Sold or Sale. "Sold" or "sale" shall be understood in it broadest sense to
include sales, leases and any other form of disposal of Licensed Product by
Licensor.
ARTICLE II
GRANT OF LICENSES
2.1 Grant-Patents. Licensor hereby grants to Licensee, and Licensee hereby
accepts from Licensor, a personal, nontransferable, exclusive license under
Licensor's Patents (1) to manufacture Licensed Products in the Territory, and
(2) to sell Licensed Products in the Territory for use within the Territory,
except that Licensed Products may be sold outside or for use outside the
Territory only as provided in Section 2.8 hereof.
2.2 Grant-information. Licensor hereby grants to Licensee, and Licensee hereby
accepts from Licensor, a personal, nontransferable, exclusive right to use
Licensor's Information in the Territory solely for the manufacture within the
Territory of Licensed Products.
2.3 Grant-Trademark. Licensor hereby grants to Licensee, and Licensee hereby
accepts from Licensor, a personal, nontransferable exclusive right and license
to use the Trademark on and to apply it to Licensed Products made by Licensee in
the Territory, and Licensee agrees to use it in connection with the sale of
Licensed Products.
2.4 Limitation on Transfer or Sub-License. None of the licenses or rights
granted in Sections 2.1, 2.2 or 2.3 hereof may be transferred or sub-licensed by
Licensee to others except in the case of companies related to or commonly owned
by
3
Licensee, and then only subject to prior notification to and receipt of prior
written approval from Licensor.
2.5 Grant of License in Licensee's Improvement Patents. Licensee hereby grants
to Licensor, and Licensor accepts from Licensee, the non-exclusive right and
license under any and all Licensee's Improvement Patents to make and have made,
use and sell Licensed Products and, subject to Section 2.7, to sub-license other
licensees of Licensor to do the same within their licensed territories. Without
the consent of Licensor, Licensee is not permitted to issue sublicenses to third
parties, to make, to have made, to use or sell Licensed Products covered by
Licensee Improvement Patents.
2.6 Grant of License in Licensee's Information. Licensee hereby grants to
Licensor, and Licensor accepts from Licensee, the non-exclusive right and
license to use Licensee's Information in connection with the manufacture, use
and sale of Licensed Products and, subject to Section 2.7, to sub-license other
licensees of Licensor to do the same within their licensed territories. Without
the consent of Licensor, Licensee is not permitted to disclose Licensee's
Information or to issue sublicenses to third parties, to make, to have made, to
use or sell Licensed Products covered by Licensee's Information.
2.7 Grant of Reciprocal Rights. Notwithstanding the foregoing provisions of
Sections 2.5 and 2.6, Licensor's right to sublicense its other licensees
thereunder may be exercised only insofar as the respective other licensees of
Licensor, to the extent they have developed or acquired rights in proprietary
information or patents useful in the manufacture, use or sale of Licensed
Products, shall have granted reciprocal rights to Licensor and through Licensor
to Licensee.
2.8 Additional Territory of Sales. Notwithstanding the foregoing, Licensee may
have an non-exclusive right to sell Licensed Products in the Asia-Pacific region
including countries such as Japan, China (including Hong Kong), Korea and,
Singapore. This non-exclusive right to sell in the Asia-Pacific region outside
the Territory shall be subject to the terms and conditions of licensing
agreement(s) established between Licensor and any future joint venture partner
and/or licensee in any country(ies) in the Asia-Pacific region.
ARTICLE III
TRANSFER OF LICENSOR'S INFORMATION: TRAINING
3.1 Disclosure of Licensor's Information. Within 30 days following the approval
of the license of the Joint Venture by Xxxx-Xxxx Science Base Industrial Park,
Licensor shall disclose Licensor's Information to Licensee in the form of
Technical Documents.
4
3.2 Initial Training. Licensor shall provide a reasonable number of Licensee's
qualified employees with one or more training courses in the manufacture of
Licensed Products under Licensor's Patents and Licensor's Information. Such
training shall take place at such times and places as may be recommended by
Licensor or requested by Licensee and are acceptable to both parties. All
travel, living, salary and other expenses incurred by Licensee's employees, and
a reasonable salary plus travel and living expenses for each individual
furnished by Licensor to Licensee in connection with such training that may take
place other than at Licensor's facility, shall be borne by Licensee.
3.3 Additional Training. At Licensee's request, at any time during the term of
this Agreement after completion of the initial training courses provided for in
Section 3.2, Licensor shall provide additional training and/or retraining for
reasonable numbers of Licensee's qualified employees in the manufacture of
Licensed Products under Licensor's Patents and Licensor's Information. Licensor
and Licensee shall discuss the cost for such training and attempt in good faith
to agree upon a reasonable charge to be paid by Licensee to Licensor for such
additional training.
3.4 Employer's Responsibility. When employees or agents of either party are on
the premises or under the supervision of the other party, their employer or
principal shall nevertheless remain exclusively responsible for any problem they
may incur, including injury or death, of whatever nature and from whatever cause
(except if caused intentionally by the other party), and shall hold harmless the
other party from all liability therefor including attorneys fees. When employees
or agents of either party are on the premises of the other party they shall
abide by all standards, rules and regulations applicable to the work place.
ARTICLE IV
EXCHANGE OF INFORMATION
4.1 Disclosure of New Licensor's Information. From time to time during the term
of this Agreement, Licensor shall furnish to Licensee, at no extra charge, new
Licensor's Information not yet disclosed to Licensee as it is developed by
Licensor or acquired by Licensor without prohibition against disclosure to
others, in order to maintain Licensee as current as Licensor with respect to the
manufacture and use of Licensed Products. 4.2 Disclosure of New Licensee's
Information. From time to time during the term of this Agreement, Licensee shall
furnish to Licensor, at no extra charge, new Licensee's Information not yet
disclosed to Licensor as it is developed by Licensee or acquired by Licensee
without prohibition against disclosure to others, in order to maintain Licensor
as current as Licensee with respect to the manufacture and use of Licensed
Products.
4.3 Representative's Visits. At least once during each Calendar Quarter, or at
such other intervals as the parties may agree to, Licensor at its expense will
send a representative to one of Licensee's plants in the Territory to meet with
Licensee
5
for the purpose of disclosing to Licensee and receiving from Licensee the
parties' respective Information developed since the previous such disclosure.
Licensee may also, from time to time and upon reasonable notice, at its own
expense and without charge from Licensor, send any qualified employee at
reasonable times to Licensor's plant for further Information or demonstration.
4.4 Training in Use of New Licensor's Information. At Licensee's request,
Licensor shall train any of Licensee's qualified employees in the use of new
Licensor's Information furnished pursuant to Section 4.1. Licensor and Licensee
shall negotiate in good faith to determine a reasonable cost for such training
to be paid by Licensee.
4.5 Limitation on Exchange of Information. This Agreement shall not be deemed to
obligate either party to impart or communicate to the other party such
information which it shall have obtained from or in conjunction with others not
party to this Agreement under such circumstances as would constitute a breach of
confidence or good business ethics, or bad faith, provided, however, that
neither party shall enter into agreements with third parties obligating them not
to disclose to the other party any information which would normally be
communicated to the other party under the terms of this Agreement.
ARTICLE V
ROYALTIES
5.1 Royalties. In partial consideration for the licenses granted herein by
Licensor, Licensee shall pay to Licensor a non-refundable lump sum initial
royalty in accordance with Section 5.2, and a running royalty in accordance with
Section 5.3.
5.2 Initial Royalties. As an Initial Royalty, Licensee shall pay to Licensor the
non-refundable sum of Two Million United States Dollars (US $2,000,000) and
Technical Investment Shares, payable as follows:
a. At the signing of the Letter of Intent which has taken place before
the end of January 1998 the sum of US$1.0 million.
b. Within 30 days following the approval of the license of the Joint
Venture by Xxxx-Xxxx Science Base Industrial Park and the delivery of
the Technical Documents by the Licensor to the Joint Venture the sum
of US$250,000. (The license of the Joint Venture is expected to be
granted by the Xxxx-Xxxx Science Base Industrial Park within 120 days
from the signing of the Letter of Intent and/or submission of the
license application).
c. US$250,000. upon the completion of the placement of the order for
the equipment of the production plant which is estimated to take place
6
within 90 days after the approval of the license of the Joint Venture
by Xxxx-Xxxx Science Base Industrial Park.
d. US$500,000. upon the completion of the installation and successful
test run of the equipment supplied to the Joint Venture by Compositech
which is estimated to take place approximately 18 months after the
order for the equipment is placed.
e. Within thirty days after the later of the date of the approval of
the license of the Joint Venture by Xxxx-Xxxx Science Base Industrial
Park or the date of incorporation of the Joint Venture, Licensee shall
deliver to Licensor, in partial consideration for the patent license
granted pursuant to Section 2.1 hereof and without additional charge,
equity shares equal to 8.0% of the common stock of the Joint Venture
to be formed pursuant to the Joint Venture Agreement, as Technical
Investment shares.
5.3 Running Royalties. Licensee shall pay to Licensor running royalties equal to
the Royalty Rate determined in accordance with the following schedule multiplied
by the Net Sales of Licensed Products.
a. Beginning from year 1 from start-up of the production facility in
Taiwan through year 6 a royalty of *%
b. From Year 7 through year 10 a royalty of *% and
c. Years 11 and 12 a royalty of *%
ARTICLE VI
RECORDS, REPORTS AND PAYMENTS
6.1 Records. Licensee shall keep complete and accurate records, commensurate
with generally accepted accounting practice in both the R.O.C. and the United
States, sufficient to establish the basis for and computation of royalties due
hereunder. Such records may be audited not more than once each Calendar Year,
upon reasonable notice, by a qualified accountant appointed by Licensor and to
whom Licensee has no reasonable objection. Such audit shall be conducted at
Licensor's expense, for the sole purpose of verifying the royalty payments due
hereunder. If Licensee shall have failed to furnish any report as required by
Section 6.2 or if any such report understates the royalties due and owing to
Licensor by more than ten (10%) percent, then Licensee shall pay the cost of
such audit, without prejudice to any other remedies or claims of Licensor.
6.2 Reports and Payments. Within eight weeks after the close of each Calendar
Quarter, Licensee shall furnish to Licensor a report signed by an authorized
* This material has been omitted pursuant to a request for confidential
treatment. The material has been filed with the Securities and Exchange
Commission.
7
officer of Licensee stating the royalties due and owing in accordance with
Section 5.3 for that Calendar Quarter together with the number of shippable
quality-inspected panels manufactured in each month during the Calendar Quarter,
the royalty rate applied for each month during the Calendar Quarter, Net Sales
for that month, the name and address of all purchasers of Licensed Products
during the Calendar Quarter and the computation of the royalty due. A report
shall be furnished for every Calendar Quarter during the term hereof and for
every Calendar Quarter after the term until all Licensed Products made during
the term have been sold or otherwise disposed of and royalties paid thereon
pursuant to Section 10.5. With each such report, Licensee shall remit to
Licensor by wire transfer, to an account or accounts designated by Licensor, the
amount stated in the report to be due. In the event that Licensee fails to
timely report and pay any royalty required hereunder, Licensor shall have the
right, immediately upon notice, to convert all licenses granted herein by
Licensor to non-exclusive licenses, and it is understood and agreed that if
Licensor does so in accordance with this Section 6.2, all other obligations of
Licensor and Licensee shall continue in effect as set forth herein, including
Licensee's obligation to make all royalty payments.
6.3 Currency Exchange. All royalties and other payments due hereunder shall be
paid to the Licensor in U.S. dollars, such amounts to be converted from the
currency in which payment for sales is made at the rate of exchange quoted under
"Foreign Exchange" in the U.S Wall Street Journal as applicable to the last date
of the quarter for which the payment is due or, if such date is not a day which
foreign exchange is traded and quoted, then the immediately preceding business
day. In the case of any payment in a currency the exchange rate of which is not
quoted in the U.S. Wall Street Journal, payment shall be deemed to have been
made in the currency of the R.O.C. at the price then currently offered (or if
none is quoted then the price at which the last comparable sale was made in
R.O.C. currency).
6.4 Taxes. In the event that Licensee is required by any law in the Territory to
withhold and/or make payments to taxing authorities in respect of any amounts
payable by Licensee to Licensor under this Agreement, the liability of Licensee
to Licensor shall be to that extent satisfied, and such amounts shall be deemed
to have been paid to Licensor on their due dates, provided that Licensee shall
furnish to Licensor evidence of such payments acceptable to the United States
tax authorities.
ARTICLE VII
PATENTS
7.1 Improvement Applications. Licensee may from time to time make application
for patents on its inventions based upon Licensee information, provided that it
shall first have given Licensor prior notice of and the opportunity to review
such
8
application. No such application nor anything filed or divulged in connection
with its prosecution to secure a patent shall in any way reveal Licensor's
Information.
7.2 Licensor's Rights to Licensee's Improvement Patents. If Licensee has an
invention for which it decides not to seek a patent, or if it files for a patent
in some but not all countries of the world or if it files for and then decides
to abandon a patent application or patent, through any means whatsoever
including failure to prosecute it or to pay taxes or maintenance fees, Licensee
shall notify Licensor in writing before the date of abandonment or loss of
rights in order to provide Licensor with an adequate opportunity to secure or
continue patent protection in any or all such countries. Any such patents or
applications procured, continued or prosecuted by Licensor shall be so done at
Licensor's expense, and Licensee shall without charge furnish to Licensor all
papers, information, access to employees or agents (who may have information
useful in obtaining patent protection) and shall assign all rights therein
together with the right to xxx for and collect damages for infringement to
Licensor. All such patents so procured by or transferred to Licensor shall be
subject to the license in the Territory granted in this Agreement.
7.3 Claims by Third Parties. If legal proceedings are instituted by a third
party against Licensee in which it claimed that the manufacture or sale of
Licensed Products infringes a patent or patents held by such third party,
Licensee will promptly advise Licensor and confer with Licensor as to the
defense thereof. The parties agree to determine through good faith negotiation
how to respond to and defend such suit.
7.4 Infringement on Licensor's Patents. In the event anyone sells laminates in
the Territory which in Licensor's judgment infringe Licensor's Patents, then
Licensor shall initiate and prosecute such suits or actions as it may deem
appropriate to best secure the cessation of such infringement. Licensee shall
pay all costs of such actions and in the event of any recovery of damages the
Licensee shall first recoup its costs and the balance of the recovery shall be
shared equally by the parties. Both parties agree to cooperate fully in
connection with any action against an alleged infringe of Licensor's Patents.
7.5 Origin Marking. Licensee shall xxxx all Licensed Products or packages sold
by it with the patent number(s) of Licensor's Patents both in the Territory and
in all other jurisdictions where Licensee may sell Licensed Products in such
manner as will fully comply with all applicable marking provisions of the patent
laws of such jurisdictions. Licensee shall furnish samples of such marking to
Licensor from time to time so that Licensor shall be currently apprised of
Licensee's marking practices.
ARTICLE VIII
TRADEMARKS
9
8.1 Use of Trademark. Licensee agrees to use the Trademark on and in connection
with the marketing, advertising and sale of all Licensed Products in accordance
with Licensor's trademark practices and procedures, as they may be amended from
time to time in order to maintain and enhance the value of the Trademark or to
comply with applicable laws, regulations or practices in various countries.
Licensee shall submit samples of any proposed use of the Trademark, or any
change in its usage, to Licensor in advance of their adoption by Licensee,
Licensor's practices. Licensee shall not adopt any trademarks or other indicia
during the term hereof, which may be confusingly similar to the Trademark.
8.2 Infringement on Trademark. Licensee shall promptly notify Licensor in
writing of any use by another of a trademark or indicia that might infringe or
be confusingly similar to the Trademark, and shall assist Licensor without
charge in every reasonable way in any effort by Licensor to take steps against
such use.
8.3 Exclusive Right to Trademark. Licensee acknowledges Licensor's ownership of
and exclusive right to use the Trademark, and that no other xxxx or symbol used
in commerce is likely to cause confusion with it. Upon expiration or termination
of this Agreement, Licensee shall cease and desist from all use of the Trademark
in any way. Licensee shall not at any time, either during or after the term of
this Agreement, adopt or use any xxxx or symbol which is similar to or is likely
to be confused with the Trademark.
ARTICLE IX
CONFIDENTIALITY
9.1 Secrecy Procedures. Each party agrees that it will (a) use the other's
information solely in connection with the development, manufacture and use of
Licensed Products pursuant to this Agreement and not for any other purpose; (b)
not disclose the other's Information to anyone other than an officer, employee
or qualified consultant and then only if the officer, employee or qualified
consultant is known to the party to be trustworthy and has a legitimate need to
know the information and has signed a written contract obligating him or her to
maintain and treat the other's Information as required by this Agreement; and
(c) adopt and maintain procedures adequate under applicable laws and practices
to preserve and protect the other's Information against unauthorized disclosure
or use to the same degree as it protects its own most valuable confidential
information. Each party agrees, as part of its aforesaid obligation, to keep the
other's Information separately and in a safe place accessible only to those who
properly have access to it. In the event that a receiving party properly
discloses Information of the other party to persons outside the receiving party
(such as in the case of disclosure of Licensee's Information to other licensees
of Licensor), the disclosing party shall take all appropriate precautions to
insure that the receiving party safeguard and preserve the confidentiality of
the Information.
10
9.2 Authorized Use of Information. Licensee shall timely provide Licensor from
time to time with the names and addresses of all persons to whom it has
disclosed any of Licensor's Information, and shall promptly notify Licensor if,
when and under what circumstances any such person leaves the employ of Licensee.
Licensee shall promptly inform Licensor of any possible unauthorized misuse or
disclosure of Licensor's Information and shall take all steps feasible, at its
expense and in consultation with Licensor, to identify any such possible misuse
or disclosure, to prevent or stop it and to minimize the possibility of injury
to Licensor with respect to its Information.
9.3 Exceptions. All information communicated by Licensor to Licensee or obtained
by Licensee from or in conjunction with Licensor in accordance with this
Agreement shall be deemed Licensor's Information and subject to Sections 9.1 and
9.2 except to the extent Licensee establishes that it shall have been or become
(a) generally known among those in the Territory working in the field of the
Licensed Products, (b) described in Licensee's written records kept in the
ordinary course of its business dated prior to the disclosure thereof by
Licensor, or (c) lawfully been made available to Licensee by a third party
having no obligation of confidentiality to Licensor. In the event Licensee
desires to disclose or use any Licensor Information other than in compliance
with Sections 9.1 and 9.2 in the belief that it has become known within the
purview of this Section 9.3, it shall first consult with Licensor and shall
continue to treat such information as required by Sections 9.1 and 9.2 until
such time as Licensor indicates its agreement in writing or the matter shall
have been resolved between the parties through arbitration or otherwise.
9.4 Survival on Termination and Return of Material. Licensee agrees that upon
the expiration or termination of this Agreement for any reason it will not
thereafter disclose, use or pass on in any way Licensor's Information at any
time, will continue in all respects to fully protect Licensor's Information in
accordance with this Article IX, and will promptly return all written materials
reflecting any Licensor's Information to Licensor at Licensee's expense.
9.5 Limitation on Purchase of Equipment. In order to assure and preserve the
confidentiality of Licensor's Information, Licensee intends to purchase all
laminate production Equipment to produce Licensed Products from Licensor.
ARTICLE X
TERM AND TERMINATION
10.1 Term. The effective date of this Agreement shall be deemed to be the date
when both parties shall have executed the Agreement. The term of this Agreement
shall begin on the effective date hereof and shall continue for a period of
twenty (20) years therefrom or until earlier terminated in accordance with this
Article X. The term shall be extended automatically for an indefinite number of
subsequent five (5) year periods, provided that either party may agree not to
extend the Agreement at any time without cause upon twelve (12) months written
11
Notice, which termination shall become effective at the end of the aforesaid
twenty-year period (if the notice becomes effective during the twenty year
period) or at the end of the subsequent five-year period during which the notice
becomes effective.
10.2 Termination upon Default. If either party shall default in fulfilling any
of its material obligations hereunder, and such default is not cured within
sixty (60) days after Notice from the party not in default, the party not in
default shall thereafter have the right to terminate this Agreement at once by
written Notice. Upon giving such Notice this Agreement shall be deemed
terminated.
10.3 Bankruptcy. If Licensee shall file a petition in bankruptcy or make a
general assignment for the benefit of creditors or otherwise acknowledge
insolvency, or shall be adjudged a bankrupt or go or be placed into a complete
liquidation (other than for an amalgamation, reorganization, or the merger or
consolidation of such party), or if a receiver shall be appointed for the
business of the Licensee and such receiver shall not be discharged within sixty
(60) days after such appointment, then the Licensor at its option may thereupon
terminate this Agreement by Notice effective upon the date thereof.
10.4 Perpetuity of Licenses Granted to Licensor. Upon termination for any
reason, the licenses granted hereunder to Licensor under Licensee's Information
and Licensee's Patents shall remain in effect in perpetuity.
10.5 Royalty on Unsold Products at Termination. If any Licensed Products
manufactured during the term of this Agreement and subject to royalty remain
unsold at the expiration or termination of the Agreement, said royalty shall be
paid when sold.
ARTICLE XI
DISPUTE RESOLUTION
11.1 Arbitration. In the event of any dispute between the parties relating to
this Agreement, including its scope or validity, they shall first try to resolve
the matter through good faith negotiation and, if a resolution cannot be
achieved in that manner, then it shall be submitted to binding arbitration in
Geneva, Switzerland (or such other place as the parties may agree to) under the
applicable rules of the American Arbitration Association. The arbitration shall
be by a single arbitrator selected in accordance with the procedures of the
American Arbitration Association but who shall be technically grounded and whose
experience and training shall enable him or her to readily comprehend the
technical aspects of the issues to be decided. At the request of either party,
the arbitrator may permit discovery of documents and things as provided in the
Federal Rules of Civil Procedure of the United States. The costs of the
arbitration shall be shared
12
equally by both parties but the arbitrator shall award costs, including the
amount paid to the arbitrator but excluding attorney's fees, to the prevailing
party.
11.2 Arbitrator's Award. The arbitrator's award may be enforced in a court of
competent jurisdiction, and the parties hereby submit themselves to the
jurisdiction of any federal or state court within the State of New York for that
purpose.
11.3 Emergency Relief. Notwithstanding the provisions of Sections 11.1 and 11.2,
in the event either party requires emergency relief to protect the value or
confidentiality of its Information, it may seek the same in any federal or state
court sitting in the State of New York, and both parties agree to and hereby
submit to the jurisdiction of any such court for that purpose and agree further
that service of process to initiate such action may be made (and shall be
sufficient if so made) by certified or registered mail, with return receipt.
ARTICLE XII
MISCELLANEOUS PROVISIONS
12.1 Waiver of Compliance. The failure of any party to this Agreement to object
to or take steps to remedy any one or more failures to perform any of the terms,
covenants or conditions of this Agreement or to exercise any right hereunder
shall not be construed as a waiver of or relinquishment of the future
performance of any such terms, covenants or conditions or the future exercise of
such right, or of the performance of any other term, covenant or condition of
this Agreement, but the obligations of the respective parties with respect to
such future performance shall continue in full force and effect.
12.2 Government Regulations. Disclosure of information hereunder shall be
subject to all applicable government regulations. Both parties agree to comply
fully with all export laws, restrictions and regulations of the jurisdictions
here involved including the United States Department of Commerce, and that they
will not knowingly export, or allow the export or re-export, of any product or
information, or any derivatives thereof, in violation of any such restrictions,
laws or regulations and that they will not without all required licenses and
authorizations export any of the foregoing to the People's Republic of China,
Afghanistan or any Group Q, S, W, Y or Z country specified in the then current
Supplement No. 1 to Section 770 of the U.S. Expert Administration Regulations
(or any successor supplement or regulations) .
12.3 Severability. In the event that any one or more of the provisions of this
Agreement shall for any reason be held to be void, invalid, illegal or
unenforceable in any respect, such holding shall not affect any other provision
of this Agreement, but this Agreement shall be construed as if such void,
invalid, illegal or unenforceable provision had never been contained herein.
13
12.4 Assignment by Licensor. Licensor hereby reserves unto itself the right to
assign or transfer all or any of its rights under this Agreement to another
party, provided that such assignment or transfer shall in no way be detrimental
to any of the technical advantages or other rights of which Licensee benefits
under this Agreement. Licensee may not assign or transfer any or all of the
rights enjoyed by it under this Agreement to any other party without the prior
written consent of Licensor.
12.5 Force Majeure. Neither party shall be liable for any delay or default in
performance hereunder (except for the payment of any sums of money owing) due to
any cause beyond its reasonable control, including but not limited to acts of
God or the public enemy; laws, regulations, acts or requests of any government
or any government officer or agent purporting to act under duly constituted
authority; wars, floods, fires, storms, strikes, lockouts, interruptions of
transportation, freight embargoes or failures, exhaustion or unavailability on
the open market or delays in delivery of material, equipment or services
necessary to the performance of any provision hereof; or happening of any
unforeseen act, misfortune or casualty by which performance hereunder is delayed
or prevented: provided, however, that the party so affected will use its best
efforts to remedy the situation.
12.6 Governing Law and Language. This Agreement shall be deemed a contract made
under the laws of the State of New York, U.S.A. and for all purposes, including
matters pertaining to its form and its essential validity, shall be construed
and enforced in accordance with the laws of said State: provided that all
questions relating to termination for insolvency under Section 10.3 shall be
determined in accordance with the laws of the R.O.C.
12.7 Chances or Modification. No representation or statement made on behalf of
either party shall in any way change or modify the terms or conditions contained
herein unless made in a writing signed by the party to be charged.
12.8 Headings. The headings of the Articles and sections this Agreement are
inserted for convenience only and not constitute a part hereof or affect in any
way the meaning or interpretation of this Agreement.
12.9 Entire Agreement. The Joint Venture Agreement shall form and be read as
integral part of this Agreement. Together with this Agreement, they form the
entire agreement between the parties, and supersede all prior written and oral
understandings, conditions or warranties between the parties on the subjects
covered by such agreements.
12.10 Not Staples or Commodities. Licensee agrees that Licensed Products are not
and shall not be deemed staple articles or commodities of commerce.
12.11 No Implied License. Nothing contained in this Agreement shall be construed
as a license, express or implied, under any patents owned or controlled by
Licensor other than Licensor's Patents, or as a license under any information
14
owned or controlled by Licensor other than Licensor's Information, or as a
license under any trademarks owned or controlled by Licensor other than the
Trademark.
12.12 Survival. The obligations set forth in Articles VII, IX and X shall
survive the termination or expiration of this Agreement and shall continue in
force until such time as they can be of no further effect.
12.13 No Adverse Position. Licensee undertakes and agrees that it will not
contest the validity or take any position adverse to Licensor with respect to
the scope or enforceability of the Licensed Patents.
12.14 Notices. All notices, requests, demands and other communications required
or permitted hereunder shall be in writing and shall be deemed to have been duly
given if delivered by hand, telecopied (with receipt confirmed), sent by
overnight courier service or mailed, by certified or registered mail:
15
(a) If to Licensor, to:
Compositech Ltd.
000 Xxxxxxxxx Xxxx
Xxxxxxxxx, Xxx Xxxx 00000-0000
Attn: Xx. Xxxx Xxxxxx
or to such other person or address as Licensor shall furnish to Licensee in
writing.
(b) If to Licensee, to:
COMPOSITECH TAIWAN
5th Fl., Xx. 000, Xxx. 0
Xxx-Xxxxx Xxxx Xxxx
Xxxxxx, Xxxxxx, R.O.C
Attn: Xx. Xxxxx-Xxxx Xxx
or to such other person or address as Licensee shall furnish to Licensor in
writing.
WITNESS WHEREOF, the parties hereto have executed this Agreement effective
as of the day and year first above written.
COMPOSITECH LTD.
BY:____________________________
Name: Xxxx X Xxxxxx
Title: President
COMPOSITECH TAIWAN (or
Compositech Technologies,
Inc.)
BY: ___________________________
Name:
Title:
16
