EXHIBIT 10.6
AGREEMENT AND LICENCE
THIS AGREEMENT AND LICENCE made effective as Of the 18t day of
January, 1996, by and between XX XXXX,LTD., a British Columbia
company, having an office at 0000 Xxxxxxxxxx Xxxxxx, Xxxxx
Xxxxxxxxx, Xxxxxxx Xxxxxxxx, X0X 0X0 (hereinafter referred to
as "Licensor") and XXXXXX X. XXXX, an inventor, residing at
0000 Xxxxxxxxxx Xxxxxx, Xxxxx Xxxxxxxxx, Xxxxxxx Xxxxxxxx, X0X
0X0 (hereinafter referred to as "Xx. Xxxx") and STOTHERT'
ENGINEERING LTD., a British Columbia company, having an office
at 14th Floor, 000 Xxxxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxx
Xxxxxxxx, X0X 0X0 (hereinafter referred to as "Licensee")
WHEREAS Licensor has developed and acquired specialized, novel
and unique technology, inventions, patents, practices,
knowledge, know-how, skill, experience and other proprietary
information relating to electrostatic precipitator technology;
AND WHEREAS Licensee desires to obtain from Licensor an
exclusive know-how and patent licence, and also certain
technical assistance, and Licensor is willing to grant such
licence and to make such assistance available to Licensee, all
as hereinafter more fully provided;
NOW, THEREFORE, in consideration of the mutual covenants and
undertakings contained herein and other good and valuable
consideration, the sufficiency of which is hereby
acknowledged, the parties hereby agree as follows:
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I DEFINITIONS
The following terms, whenever used in this Agreement or in the
Exhibits hereto, shall have the respective meanings set forth
below:
1. "Licensed products" shall mean gas flow control means and
duct systems designed for non-uniform gas distribution used in
electrostatic precipitators at or near inlet and/or outlet
openings in such precipitators, when made in accordance with
licensed know-how and/or licensed patents, as hereinafter
defined.
2. "Licensed patents" shall mean the U.S. and Canadian
patents identified in Schedule "A" hereto, and all future
patent applications and patents, xxxxx patents, utility models
and designs worldwide, owned or controlled by Licensor and
relating specifically to electrostatic precipitator gas flow
distribution technology or parts thereof, if any licensed
patent rights
(a) expire, or
(b) are adjudged invalid by a Court of competent
jurisdiction from which no appeal has been or can be
taken, they will automatically cease to be licensed
patent rights.
3. "Licensed know-how" shall mean Licensor's present and
future specialized, novel and unique technology, inventions,
drawings, computer software and copyright in respect thereof,
practices, knowledge, know-how, skill, experience and other
proprietary information relating to the subject matter of this
Agreement.
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4. "Affiliate" shall mean any firm, corporation or other
organization, or any person
(a) in which Licensee has, or which has in Licensee, at
the time, directly or indirectly, a substantial
stock interest or a substantial financial interest,
or
(b) with which Licensee has, or which has with Licensee,
at the time, directly or indirectly, management
relations sufficient to enable it to control the
oth6:~Is business policies and activities.
5. "Know-how" means any information, including without
limitation, invention records, research records and reports,
test procedures, test data, developmental reports,
experimental and other engineering reports, production plant
designs, product specifications, quality control reports and
specifications, drawings and photographs, computer programs,
manufacturing and production techniques, processes, methods,
marketing surveys, or any other information and know-how
relating to or concerning any of the licensed patent rights
xxX/or,licensed products developed by Licensor, or any
improvements, methods or 'processes useful to make, use or
sell licensed products to the extent that the knowhow is in
the possession of or owned or controlled by Licensor,
6. "Agreement" shall mean this Agreement and Licence,
including all Exhibits hereto.
7. "Licensed territory" shall mean worldwide.
8. "Term of this Agreement" shall mean the term hereinafter
provided for and any and all renewals or extensions thereof.
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9. "Installations" shall mean any electrostatic precipitator
in which the licensed products are installed.
10. "Licence fees" shall mean all fees charged by Licensee or
any Sub-Licensee for all licensed products and licensed
knowhow provided by Licensee or any Sub-Licensee to customers,
any third party or others. This shall include technology fees
charged by Licensee in countries where the licensed patents do
not apply.
11. "Net feel' shall be determined for each month of
Licensee's fiscal calendar year and shall mean any licence
fees received and any withholding taxes released, and any
monetary awards to Licensee arising from litigation and/or
settlement in respect to the licensed patents and/or know-how
received during that month less the legal fees paid in respect
of such licence fees or monetary awards, less any withholding
taxes applied during that month, See Schedule "B".
II. LICENCE GRANT
12. Licensor hereby grants Licensee for the term of this
Agreement an exclusive licence to make, have made for it,
offer for sale and sell throughout the licensed territory the
licensed patents and licensed know-how, and to sub-license the
same on written notice to the Lilcensor. Any such sub-licence
shall contain terms and conditions consistent with the terms
and conditions of this Agreement.
Technical Assistance to be provided by Licensor
13. At Licensee's request, Licensor shall make available Xx.
Xxxx or his representative to provide technical assistance to
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Licensee or Sub-Licensees. Each such request by Licensee shall
be made by notice to Licensor in writing, given where possible
at least 30 days prior to the time set therein for such
technical assistance. The actual xxxxx incurred by Licensor
for transportation and lodgings for Xx. Xxxx or his
representative shall be reimbursed to Licensor by Licensee.
III INSPECTION
Inspection of Licensee's and Sub-Licensee's Equipment,
Other Facilities, Engineering Specifications and Drawings
14. Licensee and Sub-Licensee shall permit a duly authorized
representative of the Licensor, upon reasonable notice, to
enter into and upon any premises of Licensee where Licensee
shall be conducting operations hereunder, for the purpose of
inspecting equipment, other facilities, engineering
specifications and drawings and generally ascertaining that
provisions of this Agreement are being complied with by
Licensee.
IV RIGHTS OF LICENSOR WITH RESPECT TO CERTAIN INVENTIONS,
CONFIDENTIAL INFORMATION, NEW DEVELOPMENTS AND
IMPROVEMENTS.
Confidential lnformation
15. All the licensed know-how shall be and remain the sole
and exclusive property of Licensor; shall be used by Licensee
only in connection with, and for the term of, this Agreement;
shall be disclosed by Licensee only to those employees to whom
it shall be absolutely necessary in order to facilitate
Licensee's operations hereunder, and should be kept and
maintained by Licensee as confidential and in secrecy, both
during the term of this Agreement and after the termination
of this Agreement for
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any reason. Licensee will take all reasonable measures to
prevent its employees and others from divulging licensed know
how. However, the provisions of this paragraph shall only
apply where the licensed know-how is not published or
otherwise in the public domain, from a source other than the
Licensee.
16. If, at any time subsequent to the date of this
Agreementand prior to the expiration or termination of this
Agreement for any reason, any invention, new development or
improvement (including, without limitation, know-how) relating
to the subject matter of this Agreement and based on the
know-how or any of the licensed patents shall become available
to Licensee or any of its affiliates, and as often as same
shall occur, Licensee shall promptly disclose the same to
Licensor (whether patentable or unpatentable) and furnish
Licensor with all relevant information pertaining thereto.
17. Licensee further agrees that, in each such event, all
rights to new developments and improvements related to the
licensed products developed by Licensee during the term of
this Agreement shall be the property of Licensor. Licensee
agrees to promptly disclose to Licensor any-such improvements,
to preserve confidentiality for a reasonable period of time to
permit a patent application to be filed if applicable and to
promptly execute all documents which. may reasonably be
required by Licensor to give title to Licensor. in the event
that Licensor does not wish to file a Canadian, United States
or other patent application worldwide, within six (6) months
of the disclosure of such improvement by Licensee to Licensor,
or in the event that Licensor gives notice to Licensee that it
does not intend to proceed with a patent application in any
country, the Licensee may do so at its own expense at any time
following the first six (6) months or the giving of the
notice, in which case Licensee shall be entitled to retain a
portion of proceeds from licensing, manufacture, sale or other
exploitation of the
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patentable improvements to the licensed product, in an amount
representing the value added to the invention by the
improvement.
V MARKETING
18. Licensee shall exert its beat efforts to develop, design,
manufacture, advertise, distribute and sell the licensed
products and licensed know-how in a manner that will be of
high professional standards. The technology shall be referred
to as "skewed gas flow technology" developed by X.X. Xxxx.
VI ROYALTIES
19. Licensee agrees to make royalty payments to Licensor
within 15 days of the end of each month, such payments to
include a proportion of the net fee for that month. The
aforementioned royalty payments based on the net fee to be
paid by Licensee to Licensor are to be calculated as shown by
Schedule "B".
Licensee shall make the following royalty payments to
Licensor:
1) For the first $150,000 of net fee:
48.3% of such net fee
2) For the next $550,000 of net fee:
60% of such net fee
3) For the next $1,450,000 of net fee:
70% of such net fee
4) For any additional net fee:
75% of such net fee
Licensee shall make a best effort to collect all overdue
receivables.
Payments, statements, books and records
20. Licensee will render to Licensor a monthly report showing
the total number of proposals made for licences, orders
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received, invoices issued, taxes withheld and licence fees
received on which a royalty is to be paid under this
Agreement. Licensor shall be given a copy of each proposal,
order, invoice, payment and withholding tax receipt as these
are issued or received. Licensee's books and records pertinent
to this Agreement, including sales invoices, can be inspected
by any certified public accountant chosen by Licensor at any
time during usual business hour's and upon reasonable notice.
Licensee shall promptly submit to Licensor a copy of all
enquiries and communications to and from prospective and
active clients.
21. In the event of any late payment or default in payment,
and notwithstanding any other provision of this Agreement,
Licensor will be entitled to reasonable interest for the
amount of that late payment or default in payment. If there
is a deficiency of 5k or greater from the amount of payment
due and owing by Licensee, Licensee shall pay all the costs of
the Licensor's audit and such deficiency owing, together with
interest thereon.
Minimum Fees
22. If, after twelve (12) months, from the effective date of
this Agreement, Licensee has not received licence fees in'
each twelve-month period thereafter that amount to at least
$100,000.00, then, Licensor or Licensee will have the option
to terminate the Agreement upon 60 days, written notice to the
other party.
VII REPRESENTATIONS, WARRANTIES AND COVENANTS
23. Licensor and Xx. Xxxx represent and warrant that Licensor
is the sole and exclusive owner of all rights, title and
interest in the licensed patents and that, to the best of his
knowledge, the patents are valid, subsisting and have not been
abandoned.
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24. To the best of Licensor's and Xx. Xxxx'x knowledge, the
subject matter of the licensed patents and know-how does not
infringe upon any rights of any third party.
25. Neither Xx. Xxxx nor Licensor has granted, nor will they
grant, any licence, right or interest to any other party in
the licensed patents or licensed know-how to the extent such
grant is inconsistent with the terms of this Agreement, as
long as this Agreement shall remain in effect.
26. Neither Xx. Xxxx nor Licensor is a party to or threatened
with any legal proceedings or enquiries relating to the
licensed patents or licensed know-how, nor is Xx. Xxxx or
Licensor aware of any circumstances which might give rise to
any such legal proceedings or enquiries against Licensor or
Xx. Xxxx.
VIII TERM, TERMINATION, BREACHES AND REMEDIES
27. This Agreement, unless sooner terminated in accordance
with paragraph 22, 28 or 33 shall continue in force for an
initial period of five (5) years from January 1, 1996. If
either party wishes to terminate the Agreement and Licence at
the end or the initial five-year period, that party shall give
the other party six (6) months, notice of such termination in
writing prior to the end of that period. The Agreement shall
automatically continue in force unless terminated thereafter
by six (6) months, notice in writing.
28. The licence shall terminate upon the occurrence of any of
the following events at the option of Licensor;
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(a) Licensee becomes insolvent and fails to pay any a
royalties which become due following the date of it
becoming insolvent and Licensee fails to remedy such
failure to pay within 10 days of receiving written
notice demanding such remedy;
(b) Licensee's assets being seized or otherwise attached
for the benefit of creditors;
(c) Licensee has failed to pay any royalties when due
and has failed to remedy such failure to pay within
21 days of receiving written notice demanding such
remedy; or
(d) Licensee has otherwise breached any provision of
this Agreement and has failed to remedy such breach
within 30 days of receiving written notice demanding
such remedy;
29. Termination of this Agreement shall not relieve Licensee
of its obligation or liability to provide reports and any
royalties pursuant to the terms of this Agreement.
30. The termination of this Agreement for any reason shall be
without prejudice to, and shall not affect, the right of
Licensor to recover from Licensee any and all royalty payments
to which Licensor may be entitled therefor, or any other
rights of Licensor in connection therewith, and all such
rights of Licensor shall survive such termination.
31. Licensor shall not be liable to Licensee, by virtue of
the termination of this Agreement for any reason, for any
compensation, reimbursement, expenditure, or statutory or
other indemnities, or for any investments, leases or other
commitments, or for any damages on account of the loss of
prospective profits
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or anticipated sales, or for any other loss, damage, expense
or other matter growing out of such termination.
32. Upon the termination of this Agreement for any reason
other than for breach by Licensor or Xx. Xxxx, in addition to
the other matters provided for in this Agreement in such
event:
(a) All rights, privileges and licence of Licensee hereunder
shall forthwith terminate and revert to Licensor, and Licensee
shall not thereafter make any use whatsoever of any licensed
know-how or of any licensed patent, provided, however, that
this prohibition shall only apply in relation to licensed,
know-how which is hot published or otherwise in the public
domain from a source other than Licensee.
(b) Licensee shall promptly return to Licensor all of the
licensed know-how, including, without limitation, all copies
of written materials, drawings, data, computer software and
other proprietary information.
33. This Agreement may be terminated by Licensee by written
notice to Licensor if Licensor is in any breach of any
covenant or obligation to be observed or performed under this
Agreement and such breach is not remedied within 30 days after
written notice thereof from Licensee.
34. All sub-licensing agreements with specified extended
terms will continue if this Agreement is terminated.
IX PATENTS AND OTHER PROPRIETARY RIGHTS
35. Licensee will not contest or attack or assist others in
contesting or attacking, either during the term of this
Agreement or after its termination, the subject matter,
validity or
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ownership of Licensor in the licensed patents, licensed
know-how or in any copyright in its computer programs, or in
any other proprietary information of Licensor.
X INDEPENDENCE
36. Nothing in this Agreement shall be deemed or construed to
create between the parties a partnership or joint venture.
Licensee shall not have the authority to act on behalf of
Licensor in any matter or cause whatsoever. Licensee shall not
use Licensor's name in any way, except as specifically
authorized by this Agreement.
37. No party shall be liable for any act, omission,
representation, obligation or debt of another party, even if
informed of such act, omission, representation, obligation or
debt.
XI CHOICE OF LAW
38. This Agreement shall be governed by and construed in
accordance with the applicable laws of the Province of British
Columbia and Canada.
XII NON-WAIVER
39. No condoning, excusing or overlooking by any party of any
default, breach or non-observance by another at any time or
times in respect of any covenant, proviso or condition of this
Agreement shall operate as a waiver of such party's rights
under this Agreement in respect of any continuing or
subsequent default, breach or non-observance, so as to defeat
in any way the rights of such party in respect of any such
continuing or subsequent default or breach and no waiver shall
be interred from
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or implied by anything done or omitted by such
party, save only an express waiver in writing.
XIII NOTICES
40. Except as either party may hereafter notify the other
with respect to itself, the addressee of the parties for
purposes of this Agreement shall be;
Licensor: XX Xxxx Ltd., Attention: Xx. Xxxxxx X. Xxxx 0000
Xxxxxxxxxx Xxxxxx Xxxxx Xxxxxxxxx, Xxxxxxx Xxxxxxxx, X0X 0X0
Xx. Xxxxxx X. Xxxx 0000 Xxxxxxxxxx Xxxxxx Xxxxx Xxxxxxxxx,
Xxxxxxx Xxxxxxxx, X0X 0X0
Licensee: Stothert Engineering Ltd. Attention: Xx. Xxxx Xxxxx
P.O. Box 10355 14th Floor, 000 Xxxxxxxxx Xxxxxx Xxxxxxxxx,
Xxxxxxx Xxxxxxxx, X0X 0XX
41. All notices, reports, payments and communications
pursuant hereto are to be delivered to the intended receiving
party by hand or by prepaid mail or courier service to the
address provided above or such other address as the parties
may from time to time advise the other of in writing.
XIV GENERAL
42. This Agreement sets forth the entire understanding
between the parties relating to the subject matter hereof and
supersedes all previous negotiations, representations and,
agreements between the parties, and no modification of this
Agreement shall be binding upon a party unless executed in
writing by that party.
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43. Time shall be of the essence of this Agreement.
44. Whenever the singular or Masculine or neuter is used
throughout this Agreement, the same shall be construed as
meaning the plural or feminine or body corporate when the
context or the parties hereto so require.
45. Headings as used in this Agreement are for convenience of
reference only and do not form a part of this Agreement and
are not to be used in the interpretation hereof.
46. If any part, section, paragraph or sub-paragraph of this
Agreement shall be held to be invalid, illegal or otherwise
void or unenforceable, the entire Agreement shall not fail on
account thereof, and the balance of the Agreement shall
continue in full force and effect.
47. This Agreement shall enure to the benefit of and be
binding upon the parties and their respective successors and
permitted assigns,
48. Neither party hereto shall be liable for any loss or
damage due to any delay in the due-performance of the terms of
this Agreement (except for the payment of money) by reason of
strikes, lockouts and other labour troubles, fires, riots,
wars, embargoes and civil commotion, acts of God, or
governmental acts, regulations, demands or requirements,
affecting either of the parties and beyond their reasonable
control, and the dates and times by which the affected party
is required to render performance under this Agreement (except
for the payment of money) shall be postponed automatically,
and to the extent and for the period of time that the affected
party is prevented from meeting them by reason of any such
cause.
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49. Licensor shall have no liability whatsoever to Licensee
or any other firm, corporation, or other organization or
person for or on account of any injury, loss or damage of any
kind or nature, sustained by, or any damages assessed or
asserted against, or any other liability, costs or expenses
whatsoever incurred by or imposed upon, Licensee or any other
firm, corporation, or other organization or person, or Sub-
Licensee,arising out of or in connection with or resulting
from Licensee's enjoyment of this Agreement, including,
without limitation,
(a) the manufacture and/or importation, use or sale of
any licensed products, or
(b) the use of any of the licensed know-how or
assistance made available or disclosed to Licensee by
Licensor;
provided, however, that this sentence shall not be construed
as limiting the obligations of Licensor as specifically
provided in the paragraph an "infringement".
50. Licensee agrees to indemnify and hold harmless Licensor,
its shareholders, directors, officers, employees and agents
from and against any and all claims arising out of the
exercise of any rights under this Agreement, including without
limitation against any expense, cost: (including without
limitation actual legal fees and disbursements), damages or
loss, consequential or otherwise, arising from or out of the
use of any of the licensed patents, products and know-how or
improvements or the manufacture, marketing, distribution, sale
or use of any of the licensed products by Licensee or its Sub-
Licensees or its customers howsoever the name may arise,
unless the same is shown by Licensee to have been caused
directly by bad faith or wilful misconduct on the part of
Licensor.
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XV INFRINGEMENT
51. in the event that any suit, action or other proceeding
shall be brought against Licensee involving any claim of
patent infringement based on Licensee's manufacture and/or
importation, use or sale of any licensed product or any use of
the licensed know-how, and as often as the game shall occur,
Licensee shall promptly end Licensor copies of all papers
which have been served in such suit, action or other
proceeding. In the defence of any such claim, Licensor will
co-operate fully with Licensee, will, on reasonable notice,
have any of its employees, officers, directors, managers or
agents testify when requested by Licensee and will, on
reasonable notice, make available to Licensee all relevant
records papers, information, xxx~les, specimens and the like.
52. In the event that Licensee or Licensor becomes aware of
infringement of Licensor's licensed patents or know-how, that
party shall notify the other in writing giving evidence or any
information which might lead to proof of infringement. This
shall lead to a course of action regarding the infringement.
If Licensor and Licensee agree on the course of action to be
pursued regarding infringement, then Licensee shall find the
costs of the action and such costs and any monetary proceeds
shall be accounted for as per Section 19 and Schedule "B" such
agreement shall be made in writing. If there is disagreement
between Licensor and Licensee on whether to pursue a course of
action, then the party wishing to pursue such an action
regarding infringement shall fund the cost and shall receive
75%, of the monetary awards after legal costs. Such
disagreement shall be made in writing.
149
53. The co-operation between Licensor and Licensee for
infringement of Licensor's licensed patents or know-how, as
described in paragraphs 51 and 52 above, shall survive, as
required, the termination of this Agreement.
AS EVIDENCE OF THEIR AGREEMENT the parties hereto have caused
this Agreement to be executed by their duly authorized
representatives as the date first above written.
LICENSOR By:
Name: /s/ X X Xxxx
(Print) X X Xxxx Title Date: 9 October 1996
LICENSEE By: (Signature illegible)
Name: President (Print) Title:
Date: 9 October 1996
XX. XXXX By: /s/ X. X. Xxxx
Name: X. X. Xxxx (Print)
Title: Date: 9 October 1996
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SCHEDULE A
United States Patent No. 4,695,297
- issued September 22, 1987
Canadian Patent No. 1,320,686
- issued July 27, 1993
151
