Exhibit 10.9
LICENSE AGREEMENT DATED MARCH 31, 1997 BETWEEN
THE COMPANY AND FLY TECHNOLOGIES, INC.
INFORMATION PLACED IN BRACKETS [ ] HAS BEEN
OMITTED IN ACCORDANCE WITH A CONFIDENTIAL
TREATMENT REQUEST PURSUANT TO RULE 406 AND
HAS BEEN FILED SEPARATELY WITH THE COMMISSION
LICENSE AGREEMENT
This License Agreement, entered into this 31st day of March, 1997 (referred to
as the "Agreement") is between:
FLY TECHNOLOGIES, INC., a corporation doing business at 0000 Xxxxxxxxx Xxxxxx,
Xxxx Xxxxx, Xxxxx, 00000, hereinafter referred to as "Fly Tech ", and
Xxxxxx Technologies, Inc., a corporation organized under the laws of the State
of North Carolina, with its principal place of business at 000 Xxxxx Xxxx
Xxxxxx, Xxxxxxxx, Xxx Xxxx 00000, hereinafter referred to as "Frisby".
RECITALS
WHEREAS, Frisby is the exclusive worldwide licensee of certain patented and
proprietary thermal management technologies and information relating to
microencapsulated phase change materials (hereinafter "MicroPCMs") with the
right to sublicense; and
WHEREAS, Fly Tech wishes to sublicense Xxxxxx'x technologies relating to
MicroPCMs for Fly Tech's exclusive use in selected products for the worldwide
fishing and hunting gear marketplace; and
NOW, THEREFORE, in consideration of the premises and covenants herein contained,
receipt of which is hereby acknowledged, and intending to be legally bound
hereby, the parties hereto agree as follows:
ARTICLE I - DEFINITIONS
1.01 MicroPCMs. "MicroPCMs" means microencapsulated phase change materials.
1.02 Thermasorb. "Thermasorb" means ThermasorbTM which is the name of Xxxxxx'x
thermal additive products based upon its licensed MicroPCM technology.
Thermasorb is a trademark of Frisby.
1.03 ComforTemp. "ComforTemp" means ComforTempTM which is the name of Xxxxxx'x
insulating foam products based upon Xxxxxx'x licensed MicroPCM technology.
ComforTemp is a trademark of Frisby.
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1.04 Technology. "Technology" means all of Xxxxxx'x interest in any inventions,
developments, proprietary information, patents, trademarks, trade names, trade
secrets, know-how and improvements, whether present or future, relating to
MicroPCMs, Thermasorb, and ComforTemp and their incorporation into commercial,
industrial and military products, but specifically excluding fibers or fabrics
which are coated or embedded with MicroPCMs.
1.05 End-Use Product. "End-Use Product" means
(a) insulated waders for fishing, hunting, or other outdoor sports or
activities; and, (b) any other item containing the Technology or
service performed incorporating the Technology into any product that is
presently, or may one day be, a sellable product or service of Fly
Tech, and which is approved by Frisby as being within the scope of the
license granted by this Agreement.
1.06 Royalty. "Royalty" means [This information has been omitted in accordance
with a Confidential Treatment Request and has been filed separately with the
Commission.]
1.07 Sublicensee Payments. "Sublicensee Payments" means all monies or other
consideration received by Fly Tech from any sublicensees for use of the
Technology.
1.08 Patent. "Patent" means all patents and applications for patents, including,
but not limited to, those that are identified in Exhibit "B" and foreign
counterparts thereof, as well as all continuations, continuations-in-part,
divisions and renewals of such Patents. Additionally, Patent means all further
patents which may be granted regarding a Patent, as well as all reissues,
reexaminations, extensions, patents of additions, patents of importation
thereof, and any common law rights associated with such Patents.
1.09 Proprietary Information. " Proprietary Information" means all of the
following information and materials, whether or not patentable or protected by a
copyright, to which Fly Tech receives, or has received, access or which Fly Tech
develops or has developed, all or in part, as a result, whether direct or
indirect, of the Agreement set forth herein: (i) Xxxxxx'x: production processes,
marketing techniques, purchasing or supply information, price lists, financial
information, customer names and requirements, customer data and other
information relating to the MicroPCMs, Thermasorb, ComforTemp and/or any
derivation thereof; (ii) discoveries, context and ideas, and the embodiment
thereof, including without limitation the nature and results of research and
development activities, processes, formulations, techniques and "know how";
(iii) any other materials or information directly related to the MicroPCMs,
Thermasorb, ComforTemp and any technology derived from these items; and (iv) all
inventions and ideas which are derived from, or relate to, Fly Tech's access to
or knowledge of any of the above-enumerated materials and information.
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1.10 Net Sales Revenues. "Net Sales Revenues" means the revenues generated by or
to Fly Tech from the sale, lease, or use of End-Use Products whether during the
term of this Agreement or subsequently, less the following amounts: reasonable
discounts, rebates, or returns actually allowed or granted, all applicable taxes
related to the sale and/or use of the End-Use Product, and initial
transportation charges of the End-Use Products to customers.
1.11 Effective Date. This Agreement is effective when duly signed by the Parties
and Frisby receives the Fee, or the initial installment of the Fee as the case
may be.
ARTICLE II - GRANT OF LICENSE
2.01 Exclusive License. Frisby grants to Fly Tech a worldwide license to utilize
the Technology in order to make, use, sublicense, sell and lease End-Use
Products, including but not limited to the right to use Xxxxxx'x ComforTemp and
Thermasorb Trademarks in the promotion, advertising, and marketing of such
products. This License is exclusive with respect to utilizing the Technology in
the End-Use Products, but does not preclude or limit Frisby from licensing the
Technology to others for products and services other than those listed in this
Agreement as End-Use Products or which Frisby subsequently acknowledges in
writing to be End-Use Products. Any sublicensing by Fly Tech may only be for
End-Use Products and shall require that any sublicensee use Frisby as the sole
source of supply for ComforTemp and Thermasorb. Fly Tech will not disclose the
Technology to any sublicensee or subcontractor unless that party has agreed in
writing to hold all Proprietary Information in confidence and to use the
Technology solely for the purpose of designing, developing, manufacturing,
assembling or selling the End-Use Products or their components for Fly Tech.
2.02 Term of Agreement. The initial term of this Agreement is for a period
beginning with the Effective Date and ending at 11:59 p.m. on December 31, 1999.
Provided Fly Tech is not in breach of this Agreement and Fly Tech places a
binding purchase order with Frisby not later than May 31, 1999 for at least
50,000 yards of ComforTemp foams to support Fly Tech's fiscal year 2000
production, this Agreement will be automatically extended for an additional one
(1) year period until 11:59 p.m. on December 31, 2000.
2.03 Relationship of Parties. Each party is an independent contractor and under
no circumstances shall any party be deemed to be a legal representative, express
or implied agent, or employee of another party. No act of any party, and no
assistance given from one party to the other, shall be construed to alter this
independent contractor relationship.
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ARTICLE III - PROVISION OF COMFORTEMP AND THERMASORB
3.01 Provision of Thermasorb and ComforTemp. Sole Source Supply. The sole source
of supply for all Thermasorb and ComforTemp to Fly Tech (for use by Fly Tech,
its subcontractors, sublicensees, or affiliates) to support product development
and production shall be Frisby, unless Frisby provides an express written waiver
of that right and any such waiver will be only as to a particular order and not
of Xxxxxx'x right to be the sole source of supply under this Agreement. Frisby
shall arrange for the supply of all Thermasorb and ComforTemp required by Fly
Tech, its subcontractors, Sublicensees, and/or affiliates.
3.02 Purchase Requirement. At the time of signing this Agreement, Fly Tech
agrees to place a purchase order with Frisby for each type and thickness of
ComforTemp foam desired by Fly Tech. The purchase order, and any subsequent
purchase orders, shall reflect the volume desired in each variety of ComforTemp,
minimum purchase requirements, minimum delivery requirements, and shall be based
on Xxxxxx'x then current price list. A current price list is attached to this
Agreement as Exhibit A and Frisby agrees to honor such price list for period of
at least thirty (30) days after this Agreement is fully signed by the parties.
In order to obtain favorable volume discounts, Frisby grants Fly Tech the right
to submit a binding purchase order for all of Fly Tech's anticipated ComforTemp
foam needs during the initial term of this Agreement. This special purchase
right expires thirty (30) days after the Effective Date. The exercise of this
right by Fly Tech does not limit Fly Tech's ability to subsequently purchase
additional quantities of ComforTemp foam at the then current pricing.
3.03 Delivery of Product. Fly Tech agrees to submit its purchase orders to
Frisby at least ninety (90) days in advance of Fly Tech's on-dock need dates.
Further, Fly Tech agrees to maintain an adequate on-hand inventory of ComforTemp
to support all its orders due within ninety (90) days. Delivery of goods shall
be F.O.B. at the site of ComforTemp manufacture, unless otherwise agreed in a
writing signed by both Fly Tech and Frisby.
ARTICLE IV - PAYMENTS
4.01 Payments to Frisby. All amounts owed by Fly Tech to Frisby for supply of
Thermasorb and ComforTemp or any products or services related thereto provided
by Frisby to Fly Tech shall be paid within thirty (30) days after billing by
Frisby. Frisby will xxxx Fly Tech for such products at the time the products are
shipped to Fly Tech.
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4.02 Fee. Fly Tech acknowledges upon signing of this Agreement a Fee of [This
information has been omitted in accordance with a Confidential Treatment Request
and has been filed separately with the Commission.]
4.03 Active Promotion By Fly Tech. As consideration for the license granted
under this Agreement, Fly Tech agrees to pursue active promotional efforts for
the End-Use Products. At a minimum, active promotional efforts means Fly Tech
will:
[a] design and produce at least one (1) style of End-Use
Product for Fly Tech's 1997 product line which will be introduced and promoted
at the September 1997 Flyfishing Show;
[b] design several End-Use Products for the 1998 product line
of Fly Tech and/or its affiliates;
[c] actively support leading retailers who wish to create
private label waders that incorporate ComforTemp by promptly responding to
inquiries, providing samples and requisite information, and providing such other
encouragement and support as needed to create a private label wader for the
retailer;
[d] aggressively promote the sale of End-Use Products by, at a
minimum, prominently displaying the End-Use Products at all appropriate fishing,
hunting, and outdoor trade shows;
[e] include End-Use Products as part of any Fly Tech
sponsored tournaments or events, with the ComforTemp name and its Trademark
prominently featured in all promotional materials;
[f] prominently feature the ComforTemp name and its Trademark
in all brochures, advertising and promotional literature that promote the
End-Use Products;
[g] prominently display the ComforTemp name and its Trademark
on "hang tags" on all End-Use Products; and
[h] feature the ComforTemp name and its Trademark in all
consumer advertising related to End-Use Products.
4.04 Royalty Payments. In addition to the active promotional efforts, Fly Tech
agrees to pay Frisby [This information has been omitted in accordance with a
Confidential Treatment Request and has been filed separately with the
Commission.] The Royalties due shall be paid to Frisby within thirty (30) days
following the end of each calendar quarter in which the sales occur.
4.05 Sublicensee Payments. In addition to the active promotional efforts and
Royalties, Fly Tech agrees to pay Frisby [This information has been omitted in
accordance with a Confidential Treatment Request and has been filed separately
with the Commission.] Such payments shall be due and payable to Frisby within
thirty days following the end of each calendar quarter in which payments were
received by Fly Tech.
4.06 Records Inspection. Fly Tech shall maintain adequate books and records in
connection with activity under this Agreement. Once per year Frisby may audit
the
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relevant books and records of Fly Tech to ensure compliance with the terms of
this Agreement upon reasonable written notice to Fly Tech. Any such audit shall
be conducted during regular business hours at Fly Tech's offices and shall not
interfere unreasonably with Fly Tech's business activities. Fly Tech agrees in
advance to provide all information reasonably relevant to conducting such an
audit and that all information provided will be true and correct to the best of
Fly Tech's knowledge.
ARTICLE V - INTELLECTUAL PROPERTY
5.01 Xxxxxx'x Intellectual Property. Fly Tech acknowledges that the Technology
and the chemical formulations of Thermasorb and ComforTemp are proprietary and
confidential and constitute valuable commercial assets of Frisby. Fly Tech, and
any of its related parties, consultants, subcontractors, sublicensees, or
affiliates, shall not incorporate the Technology in any applications other than
those licensed to Fly Tech under this Agreement.
5.02 Reports of Technical Results. Fly Tech agrees that all information and
evaluation results generated by Fly Tech, its consultants, subcontractors,
affiliates, or sublicensees, or otherwise obtained during the term of this
Agreement, which are related to the Technology, shall be the exclusive property
of Frisby, with rights to same licensed to Fly Tech for the term of this
Agreement.
5.03 Reporting Obligations. If Fly Tech or its employees, contractors,
affiliates, agents, or sublicensees makes a discovery or invention during the
term of this Agreement which relates to the Technology, Fly Tech shall promptly
make such discovery known to Frisby in writing. If the parties jointly develop,
or Fly Tech independently develops, patentable intellectual property related to
the Technology, then that technology will be deemed Technology under this
Agreement and licensed to Fly Tech accordingly.
5.04 Trademarks. ComforTemp and Thermasorb are Xxxxxx'x Trademarks regarding the
Technology licensed in this Agreement. Except for the licensed right to use
Xxxxxx'x Trademarks as set forth herein, during the term of this Agreement and
any time after, Fly Tech shall not obtain any right, title or interest to
Xxxxxx'x Trademarks. All licensed products sold by Fly Tech under the terms of
this License Agreement shall appropriately reference one or more of Xxxxxx'x
Trademarks for ComforTemp or Thermasorb, as designated by Frisby. Further, Fly
Tech shall not obtain at any time Trademarks or use any Tradenames that are
confusingly similar (as that term is construed under federal trademark law) to
the Trademarks that are the subject of this Agreement .
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ARTICLE VI - REPRESENTATIONS AND WARRANTIES
6.01 Representation. Frisby represents that it is the exclusive worldwide
licensee of and has the right to license or sublicense the Technology, that it
has not and will not enter into any conflicting agreement, and that it will pay
any renewal or other fees and take any other action necessary for the
maintenance of the Patents, Trademarks, and License and to maintain the
confidential nature of the Proprietary information in light of the Royalties
paid under this Agreement. If use of the Technology is enjoined, Frisby shall
provide a suitable substitute or refund all License Fees paid under this
Agreement
6.02 Indemnification. Frisby agrees to protect, defend, indemnify and hold Fly
Tech harmless from any action brought by a third party alleging an infringement
based on the use of the Technology by Fly Tech as licensed under this Agreement.
The monetary limit of this indemnity is reasonable defense costs and the extent
of Fees paid to Frisby under this Agreement. Under this indemnity provision, the
term "Fees" includes Royalties if Fly Tech is ordered as part of the
infringement action to disgorge any part of the sales revenue which generated
the Royalties. This indemnification specifically excludes any action brought by
a third party which claims that Fly Tech has breached any prior or existing
agreement with the third party. Further, Fly Tech agrees to protect, defend,
indemnify and hold Frisby harmless for reasonable defense costs arising from any
action against Frisby which arises out of any such contract action .
ARTICLE VII - TECHNICAL AND MARKETING ASSISTANCE
7.01 Support. The parties agree to use their mutual best efforts in support of
the development and introduction of new products which incorporate the
Technology, as well as the promotion and sales of the End-Use Products. As to
Fly Tech, this will mean the active promotional efforts as set forth above. For
Frisby, this will mean the reasonable support of Fly Tech's End-Use Products by
including it in Frisby promotions regarding products incorporating ComforTemp,
as well as appearance by Frisby personnel at a reasonable number of sales
presentations and trade shows in order to answer any technical questions that
potential customers may have regarding ComforTemp.
ARTICLE VIII - MISCELLANEOUS PROVISIONS
8.01 Effect of Waiver. No waiver whether express or implied, of any breach of
any term, condition, or obligation of this Agreement shall be construed as a
waiver of any subsequent breach of that term, condition, or obligation, or any
other term, condition, or obligation of this Agreement of the same or different
nature.
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8.02 Notices. Any notice provided for in this Agreement must be in writing. If
the notice is given by certified mail, the notice will be deemed to have been
given when such certified letter, properly addressed, is mailed. If such notice
is given by any other means, it will be deemed to have been given at the time of
receipt by the addressee. If such notice is to be given to Fly Tech, copies
shall be addressed to Xx. Xxxxx Xxxxxx, President, Fly Tech, Inc., 0000
Xxxxxxxxx Xxxxxx, Xxxx Xxxxx, Xxxxx, 00000. If given to Frisby, copies shall be
addressed to Xx. Xxxx Xxxxxx, Chief Executive Officer, Xxxxxx Technologies,
Inc., 000 X. Xxxx Xxxxxx, Xxxxxxxx, XX 00000. At any time during this Agreement
after giving thirty (30) days advance written notice, either party may designate
a replacement address for delivery of formal notices.
8.03 Severability. It is understood and agreed by the parties to this Agreement
that if any part, term or provision of this Agreement is held to be illegal by
United States courts or in conflict with applicable law, the validity of the
remaining portions of the provision shall not be affected, and the rights and
obligations of the parties shall be construed and enforced consistent with the
intent of this Agreement.
8.04 Interpretation Presumption. This Agreement has been negotiated by the
parties hereto and by the respective attorneys for each party. The parties
represent and warrant to one another that each has, by counsel or otherwise,
actively participated in the finalization of this Agreement, and in the event of
a dispute concerning the interpretation of this Agreement, each party hereby
waives the doctrine that an ambiguity should be interpreted against the party
which has drafted the document.
8.05 Remedies and Defaults. Each party acknowledges and agrees that unless
otherwise stated in this Agreement, the remedies provided in this Agreement
shall be in addition to, and not in lieu of, any other remedies provided at law
or in equity, including, but not limited to, such injunctive or other equitable
relief as may be deemed appropriate by a court of competent jurisdiction. If a
party defaults in the performance of its obligations under this Agreement and
fails to cure such default within thirty (30) days after receipt of written
notice of such default, the non-defaulting party shall have the right to
immediately terminate this Agreement and the license provided herein.
Notwithstanding termination of this Agreement, the obligation to pay Royalties
shall not terminate for so long as End-Use Products are sold.
8.06 Successors and Assigns. This Agreement shall inure to the benefit of the
successors, heirs, representatives, or assigns of the parties. However, Fly Tech
shall not assign its obligations or interests under this Agreement without prior
written approval from Frisby.
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8.07 Choice of Law and Dispute Resolution. This Agreement is to be governed by
and interpreted in accordance with the laws of the State of New York. If a
dispute arises between the parties regarding the interpretation or enforcement
of this Agreement, the prevailing party shall be entitled to an award of its
reasonable attorneys' fees in addition to any other relief awarded.
8.08 Complete Agreement. This Agreement, including its exhibits, comprises the
entire understanding between the parties and supersedes all negotiations,
representations and warranties, commitments, offers, contracts and writings
prior to the date of this Agreement. Otherwise, the parties to this Agreement
are not to be bound by any representations or warranties other than those set
forth herein or in a written amendment subsequently entered into by the parties
and duly executed by each party.
8.09 Counterparts. This Agreement may be executed in one or more counterparts,
each of which shall be deemed an original but all of which shall constitute one
and the same instrument.
8.10 Warranty of Authority. The individuals actually executing this Agreement
personally represent and warrant that they have the necessary power and
authority to execute this Agreement on behalf of the party they represent, and
that their signatures are sufficient to make this Agreement the binding and
enforceable obligation of such party.
IN WITNESS WHEREOF, THE PARTIES HERETO HAVE CAUSED THIS AGREEMENT TO BE DULY
EXECUTED.
FLY TECHNOLOGIES, INC. XXXXXX TECHNOLOGIES, INC.
By: /s/ Xxxxxx X. Xxxxxx By: /s/ Xxxxxxx X. Xxxxxx
------------------------- -----------------------------
Its: President Its: Chief Executive Officer
Exhibits to be attached:
"A" - [This information has been omitted in accordance with a Confidential
Treatment Request and has been filed separately with the Commission.]
"B" - Patent List
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Attachment A
XXXXXX TECHNOLOGIES, INC.
[This information has been omitted in accordance with a Confidential Treatment
Request and has been filed separately with the Commission.
APPENDIX B -
Licensed Intellectual Property
United States Patents
No. 5,499,460 Moldable Foam Insole with Reversible Enhanced
Thermal Storage
Xxx. Pend. Thermally Enhanced Foam Insulation
No. 5,290,904 Thermally Enhanced Heat Xxxxxxx (Shared with
Gateway Technologies, Inc., Boulder, CO)
Xxx. Pend. Thermal Insulating Coatings Using MicroPCMs
No. 4,807,696 Thermal Energy Storage Apparatus Using Encapsulated
Phase Change Materials
No. 4,911,232 Heat Transfer Using MicroPCM Slurries
No. 5,224,356 Thermal Energy Absorbing and Conducting Potting
Materials
No. 5,415,222 Microclimate Cooling Garments
No. 5,366,801 Fabric With Reversible Enhanced Thermal Properties
(Shared with Gateway Technologies, Inc., Boulder, CO)
