Exhibit 10.14
LICENSE AGREEMENT
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THIS LICENSE AGREEMENT is dated the first day of November, 2003
BY AND BETWEEN: LASER LOCK TECHNOLOGIES INC., a corporation duly
organized and existing under the laws of Nevada, with offices
at 000, Xxxxx Xxxx, Xxxx Xxxxxx, Xxxxxxxxxxxx, 00000, and its
Affiliates as herein defined.
Hereinafter referred to as "LICENSOR"
AND COPAG U.S.A. INC., a corporation duly organized and
existing under the laws of Nevada, with offices at 0000 Xxxxx
Xxxxxxx Xxxxxx, #000-00, Xxx Xxxxx, Xxxxxx 00000
Hereinafter referred to as "LICENSEE"
WITNESSETH:
WHEREAS, LICENSOR is the sole owner of a series of proprietary rights patents
and patent applications dealing with and relating to, amongst other things,
technology relating to systems incorporating luminescent pigments; and
WHEREAS, LICENSOR wishes to enter into a contractual arrangement with LICENSEE
so as to provide LICENSEE with the use of the LL Technology for the products
hereinafter defined in clause 1.06.
NOW, THEREFORE, in consideration of the premises and of the mutual agreements,
provisions and covenants here contained, the parties hereto hereby agree as
follows:
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ARTICLE ONE - DEFINITIONS
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1.01 "ADDITIONAL ROYALTY" shall mean an amount equal to the sum arrived
at by multiplying the number of units of the Products in excess of
One Hundred Thousand (100,000) sold or manufactured for or by the
LICENSEE during each Royalty Period, by FIVE CENTS ($0.05) for
each excess Exclusive Product.
1.02 "AFFILIATE" means with respect to a party, any corporation or
other business entity directly or indirectly controlling,
controlled by or under common control with such party; as used
herein, the term "control" means possession of the power to
direct, or cause the direction of the management and policies of a
corporation or other entity whether through the ownership of
voting securities, by contract or otherwise.
1.03 "DESIGN RIGHTS" shall mean design rights (whether registered or
unregistered) which are owned or which may hereafter be owned by
the LICENSOR and which relate to the LL Technologies.
1.04 "EFFECTIVE DATE" of this Agreement shall be November 01, 2003.
1.05 "LICENSEE REPORT" shall mean a written report, which shall list
the customer (or customer code), and the number of units of the
Products purchased by each customer of the LICENSEE during the
preceding Royalty Period, as well as such other information as the
LICENSOR reasonably requires.
1.06 "LL TECHNOLOGY" shall mean:
(i) the technology relating to the systems incorporating
luminescent pigments which are enacted by infrared (IR);
(ii) the technology relating to the preparation and mixing of
the LICENSOR's inorganic luminescent pigments and
phosphors which convert IR light into visible;
(iii) the technology relating to the excitation sources
necessary for up-converting phosphors and LICENSOR's
pigments;
(iv) all Design Rights and includes without limitation all
granted patents and patent applications together with
any granted patent arising from such applications
(collectively, the "Patents").
1.07 "MINIMUM ANNUAL ROYALTY" shall mean the sum of FIVE THOUSAND
DOLLARS ($5,000.00).
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1.08 "PRODUCTS" shall mean and shall be restricted to decks of paper
playing cards containing fifty-four (54) cards.
1.09 "ROYALTY PERIOD" shall mean a period of twelve (12) calendar
months commencing on the Effective Date and every twelve (12)
month period thereafter so long as this Agreement remains in
effect.
1.10 "TERM" shall mean the time period contemplated by Article 6.
1.11 "TERRITORY" shall mean the world.
ARTICLE TWO - LICENSE
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2.01 The LICENSOR hereby licenses and grants to LICENSEE a limited
exclusive right to use the LL Technology to market, manufacture
and sell the Products (as defined in 1.08) in the Territory. The
LICENSEE acknowledges that the LICENSOR may at its sole and
absolute discretion grant a license to one other Company to use
market, manufacture and sell the Products (1.08) but only in the
United States of America, it being understood that the LICENSEE
shall have an exclusivity for the rest of the world.
2.02 The LICENSOR agrees that the LICENSEE may sub-license all or any
of the LICENSEE's rights hereunder to the LICENSEE's parent
company, namely, Copag de Amazonia, S/a
ARTICLE THREE - SUPPLY OF RAW MATERIALS
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3.01 THE LICENSOR shall sell to LICENSEE all pigment required by
LICENSEE in order that the LICENSEE may mix its own ink for use on
and with the Products, the whole at the LICENSOR's then prevailing
most favorable selling price of pigment to any other party. The
pigment selling price as of the Effective Date for the ensuing
twenty-four (24) months is FIVE HUNDRED DOLLARS ($500.00) per
pound, plus shipping, taxes and duty. The LICENSOR will not
increase the latter cost at least for the next twenty-four (24)
months.
3.02 THE LICENSOR also agrees to supply the LICENSEE with such amount
of laser light activators as LICENSEE may require, provided that
the LICENSEE gives the LICENSOR sufficient and adequate notice so
as to allow LICENSOR sufficient time to supply the requested
amount to the LICENSEE. The LICENSEE shall pay the LICENSOR's cost
for such laser light activators. The current LICENSOR'S cost is
ONE HUNDRED AND FIFTY DOLLARS ($150,00) per laser light activator,
plus shipping, taxes and duty.
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3.03 LICENSEE shall pay LICENSOR for the pigments ordered in compliance
with clause 3.01 and for laser light activators ordered in
compliance with clause 3.02 within a period of forty-five (45)
days following the date of invoice.
3.04 Should LICENSOR's cost for the laser light activators be
increased, then the LICENSOR shall give the LICENSEE a notice of
such need to change price. The new price shall continue to be
based upon the actual cost to the LICENSOR, whose records for
laser light activators costing shall be subject to inspection and
audit by the LICENSEE or its duly authorized representatives.
3.05 LICENSOR warrants that all pigments and laser light activators
shipped and delivered to the LICENSEE will be in accordance with
samples previously submitted to the LICENSEE, who hereby
acknowledges having received and inspected same. It is agreed that
no implied warranty or warranties shall arise out of or in
connection with any sale or sales by the LICENSEE to third
parties, and the liability of the LICENSOR shall at all times and
for whatever occurrence be limited to the replacement of defective
material within a reasonable time after being notified in writing
by the LICENSEE.
ARTICLE FOUR - CONSIDERATION
----------------------------
4.01 In consideration of the rights granted to LICENSEE under this
Agreement for the LL Technology, LICENSEE agrees to pay to the
Licensor royalties in accordance with the clauses hereinafter
following.
4.02 For each Royalty Period commencing on the Effective Date, LICENSEE
shall pay to LICENSOR the Minimum Annual Royalty and, if justified
by the number of units of the Products sold, the Additional
Royalty, both shall be paid at the times and in the manner set out
in clauses 4.03 and 5.02 hereof.
4.03 The Minimum Annual Royalty fee shall be paid by LICENSEE to
LICENSOR on the Effective Date, and each anniversary date thereof
during the Term, failing the timely receipt of such amount by the
LICENSOR, this Agreement shall terminate.
ARTICLE FIVE - RECORD AND REPORTS
---------------------------------
5.01 LICENSEE agrees to keep accurate accounts and complete records in
sufficient detail to record the Licensee Report during each
Royalty Period.
5.02 The LICENSEE shall deliver the Licensee Report to the LICENSOR no
later than forty-five (45) days after the close of each Royalty
Period and after the termination of this Agreement. The LICENSEE
shall at the same time as providing the Licensee Report also remit
any amount of Additional Royalty due. The receipt or acceptance by
the LICENSOR of the Licensee Report or any
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royalty payments paid hereunder (or the cashing of any cheques
paid hereunder) shall not preclude the LICENSOR from questioning
the correctness thereof at any time and in the event that
inconsistencies or mistakes are discovered in the Licensee Report
or payments, they shall be rectified and appropriate payments
shall immediately be made by the LICENSEE or credit given to the
LICENSEE by the LICENSOR as may be appropriate.
5.03 If LICENSEE fails to deliver such a Licensee Report to the
LICENSOR, within the said period of forty-five (45) days, the
LICENSOR in addition to any other rights and on not less than ten
(10) days prior notice to LICENSEE may employ an independent
certified public accountant, qualified to practice and practicing
in the United States, to examine the books and records of the
LICENSEE necessary to enable him to report upon and certify the
amount of units of the Products sold by or for the LICENSEE for
the preceding Royalty Period, and the LICENSEE will promptly pay
to the LICENSOR the cost thereof as Additional Royalty.
5.04 The LICENSEE agrees, upon request by the LICENSOR, to permit a
firm of certified public accountants qualified to practice and
practicing in the United States, who may be designated by either
party, to have access during normal business hours at least once
annually on ten (10) business days' notice, to audit such books
and records as may be necessary to determine the correctness of
any report or payment made under this Agreement. On request, with
reasonable notice, the LICENSEE will make available at its
offices, all relevant books of account and records.
5.05 If any audit reveals a discrepancy between the amount payable to
the LICENSOR and the amounts actually paid to the LICENSOR and if
that discrepancy exceeds five percent (5%) of the amounts payable
as determined in the audit, the LICENSEE shall pay all of the
LICENSOR's reasonable costs associated with such audit. Otherwise,
all costs associated with any audit shall be the responsibility of
the LICENSOR.
5.06 LICENSEE shall be entitled to receive copies of all audit reports
prepared pursuant to this Article 5.
ARTICLE SIX - TERM AND TERMINATION
----------------------------------
6.01 This Agreement shall commence on November 01, 2003, 2003 and shall
continue until 7:00 o'clock in the afternoon of October 31, 2005
(unless terminated as hereinafter provided); and shall thereafter
automatically renew from year to year, unless and until terminated
as provided for in clause 6.02 or clause 6.03 hereof.
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6.02 The LICENSEE shall have the option of terminating this Agreement
by not less than ninety (90) days' notice, in advance and in
writing, to LICENSOR prior to October 2004, or prior to each
November 01st thereafter as may be applicable.
6.03 Either LICENSEE or LICENSOR shall have the option of terminating
this Agreement in the following circumstances:
a) If a party shall make any composition with creditors or go
into liquidation whether voluntary or compulsory, or analogous
proceedings shall be commenced, then the other party may, at
its sole and absolute discretion, by notice in writing,
forthwith terminate this Agreement, failing which notice this
Agreement shall continue to remain in full force and effect;
b) If a party shall breach any material term or condition of this
Agreement, and shall fail to cure or initiate the cure of such
material breach or to initiate reasonable steps to cure such
default within thirty (30) days after receipt of written
notice from the other party specifying the nature of the
material in full detail, the non-breaching party may forthwith
terminate this Agreement by notice in writing and shall be
entitled to seek such damages in accordance with Article 14 as
may be awarded because of such breach. If the non-breaching
party does not deliver such notice, then this Agreement shall
continue to remain in full force and effect. Notwithstanding
the foregoing, in the event of a dispute between LICENSEE and
LICENSOR as to whether a material breach has occurred or been
cured, LICENSOR shall continue to manufacture and supply inks
to LICENSOR and LICENSEE shall continue to pay for such inks,
pursuant to Articles 3 and 11, until and unless otherwise
directed by the arbitrators pursuant to Article 14 thereof.
ARTICLE SEVEN - WARRANTIES, LIMITATIONS OF LIABILITY AND HOLD HARMLESS
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7.01 Each party expressly saves and holds the other party, and any
Affiliate, harmless from any and all liability of any kind or
nature whatsoever to customers and to other third parties which
may arise from its negligent acts or omissions.
7.02 LICENSOR warrants that:
a) LICENSOR is the sole and exclusive owner of the LL Technology,
including without limitation any Patents associated therewith;
b) LICENSOR has the unqualified right to enter into this
Agreement and performs its terms;
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c) LICENSOR has not and will not enter into any agreement
which is inconsistent with LICENSOR's obligations and
undertakings to LICENSEE under this Agreement;
d) Any pigment sold to LICENSEE will conform to samples
previously provided; and
e) The licenses and rights granted pursuant to this
Agreement, when used as intended and without unauthorized
modification, do not violate any right or infringe any
patent, copyright or other protection of intellectual
property belonging to any third party. LICENSOR agrees to
defend, indemnify, and hold harmless the LICENSEE and
LICENSEE's principals, directors, officers, employees,
and/or agents from and against any and all liabilities,
penalties, claims, demands, suits, and causes of action of
any nature whatsoever, whether groundless or otherwise,
and any and all damages, costs and expenses sustained or
incurred (including cost of defense, settlement, and
attorney's fees) asserted by or on behalf of any person or
entity arising our of any claim that any of the licenses
or rights granted by LICENSOR pursuant to this Agreement,
or the LL Technology applied pursuant to this Agreement,
infringe any patent, copyright or protection of
intellectual property generally, whether such claim is
valid or baseless and wherever it may arise;
7.03 Except as herein expressly stated:
a) There are no warranties, expressed or implied, by
operation of law or otherwise for any item furnished
hereunder;
b) LICENSOR disclaims any implied warranty or merchantability
or fitness for a particular purpose; and
c) in no event shall LICENSOR or its Affiliates, be liable
for any incidental, indirect or consequential damages in
connection with or arising out of this Agreement;
ARTICLE EIGHT - CONFIDENTIALITY
-------------------------------
8.01 LICENSEE shall keep secret and confidential the LL Technology
and/or Design Rights made available to it by LICENSOR and shall
not disclose the same other than to permitted sub-licenses, ink
manufacturers, and those Directors and employees of LICENSEE or
any Affiliate of LICENSEE who may be deemed to have a legitimate
reason to be party to the LL Technology and/or Design Rights.
8.02 LICENSOR shall keep secret and confidential the terms and
conditions of this Agreement and any information which LICENSEE
passes to LICENSOR
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hereunder, and not disclose the same except to its own employees
as necessary to carry out the purposes of this Agreement, or, with
respect to the terms and conditions of this Agreement, as may be
necessary to comply with applicable federal securities or other
law.
8.03 The obligations of secrecy undertaken by both parties pursuant to
this Article 8 shall not apply to information which:
a) Is already, or which subsequently becomes generally known
to the public through no fault of the recipient; or
b) The recipient can demonstrate was known to the recipient
prior to the date disclosed. For the purposes hereof, that
which the recipient can demonstrate was known will be that
which the recipient can establish by written evidence was
known to it at the date disclosed; or
c) Is received from a third party, provided that such third
party is lawfully entitled to disclose the same; or
d) Is disclosed in any patent or patent application which may
publish;
8.04 The obligations of secrecy pursuant to this Article 8 will expire
on the tenth anniversary of the termination of this Agreement as
hereinabove provided.
8.05 The provisions of this Article 8 contain the entire understanding
and agreement between the parties with respect to matters dealing
with confidentiality and cannot be amended, modified or supplanted
in any respect except by a subsequent written agreement entered
into by both parties. If either party is required by a court of
law or government agency to disclose information otherwise deemed
confidential under this Article 8, it shall give the other party
prompt written notice of such requirement prior to such disclosure
and assistance in obtaining and order protecting the information
from public disclosure.
ARTICLE NINE - IMPROVEMENTS
---------------------------
9.01 During the term of this Agreement, each party shall disclose to
the other party any improvements to the LL Technology and/or
Design Rights which the first party may discover or which come
into its possession. Any such improvements shall, from the time of
the party's knowledge, conception or development, be the property
of LICENSOR. Upon request by LICENSOR, the LICENSEE shall execute
and deliver to LICENSOR such instrument as LICENSOR may reasonably
request in order to achieve such industrial or intellectual
property status as LICENSOR shall deem appropriate to perfect the
assignment of the rights so granted by the LICENSEE to LICENSOR;
provided, however, that LICENSEE shall have a perpetual,
irrevocable, non-exclusive, and royalty-free
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license for any such improvements which LICENSEE discovers or
which come into its possession.
ARTICLE TEN - MISCELLANEOUS
---------------------------
10.1 Neither the LICENSEE nor LICENSOR shall be in default under this
Agreement nor be liable for any failure to perform or for any
delay in performance resulting from any cause beyond its/their
reasonable control including compliance with any regulations,
orders or act, of any federal, provincial, state or municipal
government, or any department or agency thereof, civil or military
authority, acts of God, acts or omissions of the other agency
thereof, civil or military authority, acts of God, acts or
omissions of the other party, fires, floods or weather, strikes or
lockouts, factory shutdowns, embargoes, wars, hostilities or
riots, delays or shortages in transportation or inability to
obtain labor, manufacturing facilities or material.
10.2 Each of the parties shall bear all taxes imposed on each of them
as a result of the existence or operation of this Agreement
including, but not restricted to, any tax on or measured by any
payment required to be made by it hereunder, any registration tax,
any tax imposed with respect to the granting of, or transfer of,
licenses or other rights or payments hereunder;
10.3 This Agreement may be varied or amended only by the written
agreement of the parties hereto through their duly authorized
officers or representatives.
10.4 in any case where any notice or other communication is required or
permitted to be given hereunder, such notice or communication
shall be in writing and:
i) Personally delivered;
ii) Sent by postage prepaid registered mail, or
iii) Transmitted by telex or facsimile to the parties at the
addresses first hereinbefore listed or to such other
addresses as the parties may notify each other.
10.05 The relationship between the parties shall be governed by the
terms of this Agreement, and shall not extend to other activities,
transactions or contracts.
10.06 If any provision of this Agreement is held illegal, such provision
shall be severed from this Agreement and shall be inoperative. The
parties shall use their best endeavors to replace the severed
provision with a new provision which is not illegal and which
follows the principles of the severed provision as closely as is
legally possible. The remainder of this Agreement shall remain
binding on the parties hereto.
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10.07 No waiver of breach of any of the provisions of this Agreement
shall be construed to be a waiver of any succeeding breach of the
same or any other provision.
10.08 This Agreement may be executed in any number of counterparts. Any
single counterpart or set of counterparts signed, in either case,
by the parties hereto, shall constitute a full and original
Agreement for all purposes.
10.09 The descriptive heading of the several articles of this Agreement
are inserted for convenience only and do not constitute a part of
this Agreement. Capitalized terms not otherwise defined in this
Agreement shall have the meaning set forth in the Escrow
Agreement.
10.10 The preamble hereof shall be deemed to form part of this Agreement
for all purposes.
ARTICLE ELEVEN - SUPPLY OF PIGMENTS
-----------------------------------
11.01 LICENSOR agrees that it will timely supply LICENSEE with pigment
proprietary to LICENSOR in accordance with the terms and
conditions of clause 3.01 hereof. The obligation to supply such
pigments shall apply only for that quantity of pigment that is
ordered by a purchase order emanating from the LICENSEE and which
is received by LICENSOR at least twenty-one (21) days prior to the
requested delivery date.
11.02 LICENSOR further agrees that upon request by LICENSEE it will
provide statements justifying its most favorable selling price for
the pigments.
ARTICLE TWELVE - NOTICES
------------------------
12.01 All Notices, requests, consents and other communications required
or permitted to be given and received when so delivered addressed
as follows:
If for the Licensor at Laser Lock Technologies, Inc.
000 Xxxxx Xxxx
Xxxx Xxxxxx, Xxxxxxxxxxxx, 00000
Attention: Xxxxxx X. Xxxxxxx
With a copy to: Xxxx X. Xxxxxx, Esq.
GROSS, PINSKY
0 Xxxxx Xxxxxx Xxxxx, Xxxxx
0000 Xxxxxxxx, Xx, X0X 0X0
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If for the Licensee at: Copag U.S.A. Inc.
0000 Xxxxx Xxxxxxx Xxxxxx, #000-00
Xxx Xxxxx, Xxxxxx, 00000
Attention:Xxxxxxx Xxxxxx Xxxxxxxxx Filho
With a copy to: Copag De Amazonia S/A
Rua Porta Martins,
546 Brooklin Novo
CEP 04570-140, Sao Paulo SP-Brazil
Attention:Xxxxxxx Xxxxxx Xxxxxxxxx Filho
With a copy to: Xxxxxx Xxxxxxxxxx, Esq
SLOSBERGAS & XXXXXXXXX
Courvoisier Centre
000 Xxxxxxxx Xxx Xxxxx,
Xxxxx 000 Xxxxx, Xxxxxxx 00000
or such other person or address as any party shall designate by
notice in writing to the others in accordance therewith.
ARTICLE THIRTEEN - GOVERNING LAW
--------------------------------
13.01 This Agreement shall be governed by the laws of the Commonwealth
of Pennsylvania. Any action in equity seeking to enforce or
interpret this Agreement shall only be brought in a state of
federal court serving Xxxxxxxxxx County, Pennsylvania, and both
parties hereby consent to personal jurisdiction and venue in
Xxxxxxxxxx County, Pennsylvania.
ARTICLE FOURTEEN - BINDING EFFECT ASSIGNMENT
--------------------------------------------
14.01 This Agreement may not be assigned or otherwise transferred by
either party, in whole or in part, whether voluntarily or by
operation of law, without the written consent of the other party
except that the LICENSEE or the LICENSOR may assign this Agreement
to an Affiliate without consent.
ARTICLE FIFTEEN - ARBITRATION
-----------------------------
15.01 In the event of any dispute, difference or question arising
between the parties in connection with this Agreement, or any
clause or the construction thereof, or the rights, duties or
liabilities or either party, which cannot be amicably resolved by
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the parties then and in every such case, unless the parties concur
in the appointment of a single arbitrator, the matter of difference
shall be referred to three (3) arbitrators, one to be appointed by
each party, and the third to be nominated by the two so selected by
the parties, or if they cannot agree on a third, by the
Philadelphia, PA office of the American Arbitration Association
("AAA").
15.02 In the even that either party, within thirty (30) days of any
notification made to it of the demand for arbitration by the other
party, shall not have appointed its arbitrator, such arbitrator
shall be appointed by the AAA. Arbitration shall take place at the
AAA's Philadelphia, PA office under the AAA's Commercial Rules. The
arbitrators must base their decision on this Agreement and their
decision shall be binding on both parties and may be enforce by any
court of competent jurisdiction.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective representatives thereunto duly authorized as of
the date first hereinabove written.
LASER LOCK TECHNOLOGIES, INC.
/s/ [graphic of signature]
Per:________________________________
Xxxxxx X. Xxxxxxx - President
COPAG U.S.A, INC,
/s/ [graphic of signature]
Per:________________________________
Xxxxxxx Xxxxxx Xxxxxxxxx Filho
Chief Executive Officer
