EXCLUSIVE AGREEMENT
This
Exclusive Agreement (“Agreement”) by and between LASERLOCK TECHNOLOGIES (“LL”)
located at 000 Xxxxx Xxxx, Xxxx Xxxxxx, XX 00000 and XXXXXX XXXXX & COMPANY,
INC., (“AB”) located at 000 Xxxxxxxxx Xxxxxx, Xxxxxx, XX 00000 is entered into
this 23rd day of June, 2008.
This
Agreement will describe the terms and conditions of the worldwide agreement
reached between AB and LL for the exclusive use of specific applications of
LL’s
color changing proprietary pigments defined as WHYTELITE®
(“WL”)
technology.
1.
General Provisions
a.)
this
Agreement shall apply to AB as well as all companies directly or indirectly
owned by ABN Corp worldwide, For sake of clarification, all references in this
Agreement to AB shall include all AB affiliated companies as described in the
preceding sentence. The initial term of this Agreement shall be effective July
1, 2008 and terminate on December 31, 2009 and may be extended by reaching
predefined goals in this Agreement;
b.)
the
royalty rate paid by AB to LL for WL pigment shall be $[The confidential
material contained herein has been omitted and has been separately filed with
the Commission.] per thousand products shipped and paid for, less normal returns
and allowances;
c.)
the
exclusivity will automatically expire on December 31, 2009 unless a minimum
of
$[The confidential material contained herein has been omitted and has been
separately filed with the Commission.] in royalty income is generated and paid
to LL during the initial term of the Agreement.
2.
Exclusive Products
a.)
Except as limited by Section 3, the exclusive products shall be defined as
all
plastic cards printed with WL pigments;
b.)
exclusivity shall include plastic cards in all markets AB serves without
restriction (including the casino industry); and including but not limited
to
driver’s licenses, loyalty and gift cards, as well as financial, telephone,
promotional, access, security, Passport and Border Crossing Cards, membership
and association industries;
c.)
products shall include all size and shape form factors that AB manufactures;
including but not limited to cards, keytags, RAC® Cards, signage and
shapes;
d.)
for
sake of clarification plastic shall mean, for example but not limited to: PVC,
PET, PLA, Styrene, Teslin, Polycarbonate and plant based plastics.
3.
Exclusions to Exclusivity
The
exclusivity described in Section 2, above, shall not apply to the
following:
a.)
The
American Express card;
b.)
All
applications/products not using plastic as a substrate.
4.
Pricing
a.)
$[The
confidential material contained herein has been omitted and has been separately
filed with the Commission.] per kilo FOB warehouse; all pigment orders to be
accompanied by a PO, terms net 30 days; the $[The confidential material
contained herein has been omitted and has been separately filed with the
Commission.] per kilo price will remain constant for the initial term of the
Agreement;
b.)
after
the initial term of this Agreement, the price per kilo may be increased but
only
based on price increases to LL for the cost of WL and/or its
components
c.)
Pigment may only be used for the AB manufactured products described in Section
2.
5.
License Renewal / Extension
a.)
Upon
expiration of this Agreement, any AB customers which have been sold products
incorporating the WL pigments during the course of the Agreement will remain
exclusive AB customers for a further two year period and LL agrees to continue
to provide WL pigments (subject to price increases in item 4 (b), above) to
AB
to service these customers and LL will continue to receive royalties on these
sales at the rate of $6 per thousand products;
b.)
This
Agreement shall automatically renew for four additional one year periods if
the
royalties paid to LL during the prior period shall meet or exceed the amounts
shown below:
In
order
to automatically renew for the period January 1, 2010 to December 31, 2010
royalties paid during the immediately prior license period must be $[The
confidential material contained herein has been omitted and has been separately
filed with the Commission.].
In
order
to automatically renew for the period January 1, 2011 to December 31, 2011
royalties paid during the immediately prior license period must be $[The
confidential material contained herein has been omitted and has been separately
filed with the Commission.].
In
order
to automatically renew for the period January 1, 2012 to December 31, 2012
royalties paid during the immediately prior license period must be $[The
confidential material contained herein has been omitted and has been separately
filed with the Commission.].
In
order
to automatically renew for the period January 1, 2013 to December 31, 2013
royalties paid during the immediately prior license period must be $[The
confidential material contained herein has been omitted and has been separately
filed with the Commission.].
This
Agreement automatically expires on December 31, 2013;
c.)
Should the royalty payments in any year not meet the minimum thresholds set
forth in Section 5b) above, AB may pay LL the difference between the actual
amount of royalties paid and the minimum royalties due for that period and,
if
AB does make such a payment, the exclusivity shall remain in effect for the
next
one year renewal period.
d.)
The
royalty rate shall remain $[The confidential material contained herein has
been
omitted and has been separately filed with the Commission.] per thousand
products for the entire term of the Agreement and any renewals/extensions;
unless otherwise agreed in writing on an individual order basis.
6.
WHYTELITE® Trademark
a.)
AB
shall be entitled, but not obligated, to use the companies Registered Trademark
WHYTELITE®.
7.
Reporting Obligations
a.)
AB
agrees to provide LL quarterly royalty statements no later than 30 days after
the close of each calendar quarter together with payment for any sales made
during the quarter; all royalty report are subject to audit by LL and if errors
of greater than 5% are found AB will pay for the cost of the audit.
b.)
AB
agrees to provide quarterly sales & marketing progress reports at the close
of each quarter during the initial term of this Agreement.
8.
General Provisions
a.)
This
Agreement is to be governed by Massachusetts law and all disputes under this
Agreement will be heard in the federal or state courts located in
Massachusetts.
b.)
Neither LL nor AB may assign this Agreement except in connection with the sale
of all or substantially all of the business on the party seeking to assign
this
Agreement.
c.)
LL
hereby indemnifies and holds AB harmless from and against any and all claims,
demands, actions, causes of action, suits, proceedings, damages, liabilities
and
reasonable costs and expenses including reasonable attorneys’ fees, relating to
or arising out of a claims that the use of the LL pigments violate the
intellectual property rights of any third party.
d.)
The
Confidential Agreement dated October 4, 2007 between AB and LL remains in full
force and effect
e.)
Any
notices required to be given under this Agreement should be given to a party
at
the address set forth at the start of this Agreement and sent to the attention
of the person signing this Agreement. Notice will be effective if sent US Mail
or by overnight delivery service, providing a receipt of delivery is generated
in all cases.
IN
WITNESS WHEREOF, the parties LL and AB hereto have executed this Agreement
as of
the date
first written above.
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/s/
Xxxxxx X. Xxxxxxx
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/s/
Xxxx Xxxxx
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Agreed
& Accepted
Laser
Lock Technologies
Per
Xxxxxx X. Xxxxxxx
Chairman
& Chief Executive Officer
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Agreed
& Accepted
Xxxxxx
Xxxxx & Co., Inc.
Per
Xxxx Xxxxx
Executive
Vice President
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