EXHIBIT 10.11
LICENSE AGREEMENT
This License Agreement (this "Agreement") is entered into effective the
13th day of October, 1998 between XXXX XXXXXX, an individual ("Xxxxxx"); and
ENVIROCON CORPORATION, a Nevada corporation (the "Envirocon").
R E C I T A L S
X. Xxxxxx desires to license and/or convey, under circumstances described
below, certain intellectual property described below; and
B. Envirocon desires to acquire a license to and/or ownership of the
intellectual property described below.
NOW, THEREFORE, the parties agree as follows:
1. License of Intellectual Property. Subject to the terms and
conditions of this Agreement, on the Closing Date and in consideration of the
Purchase Price set forth below, Xxxxxx will grant to Envirocon an irrevocable,
exclusive, fully-paid, royalty-free, unrestricted license to use all
intellectual property of Xxxxxx (the "License"), deriving from Xxxxxx'x right,
title and interest in and to (a) all inventions (whether patentable or
unpatentable and whether or not reduced to practice), all improvements thereto,
and all patents, patent applications, and patent disclosures, together with all
reissuances, continuations, continuations-in-part, revisions, extensions, and
reexaminations thereof, (b) all trademarks, service marks, trade dress, logos,
trade names, and corporate names, together with all translations, adaptations,
derivations, and combinations thereof and including all goodwill associated
therewith, and all applications, registrations, and renewals in connection
therewith, (c) all copyrightable works, all copyrights, and all applications,
registrations, and renewals in connection therewith, (d) all mask works and all
applications, registrations, and renewals in connection therewith, (e) all trade
secrets and confidential business information (including ideas, research and
development, know-how, formulas, compositions, manufacturing and production
processes and techniques, technical data, designs, drawings, specifications,
customer and supplier lists, pricing and cost information, and business and
marketing plans and proposals), (f) all computer software (including data and
related documentation), (g) all other proprietary rights, and (h) all copies and
tangible embodiments thereof (in whatever form or medium), insofar and only
insofar as any of the above-described items cover or relate to cotton products,
housing panel systems, and machinery and manufacturing equipment associated
therewith, but not otherwise.
The intellectual property of Xxxxxx being licensed to Envirocon is
hereafter referred to as the "Intellectual Property."
2. Purchase Price. The Purchase Price for the License is Xxx Xxxxxxx Xxxxx
Xxxxxxxx Xxxxxx Xxxxxx Dollars ($150,000).
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3. Payment of Purchase Price. Envirocon has already advanced $89,000 of the
Purchase Price to Xxxxxx (directly or to other persons for the benefit of
Xxxxxx) and Xxxxxx acknowledges receipt of same. Envirocon shall pay to Xxxxxx
$61,000, which constitutes the balance of the Purchase Price, on or before the
date that Envirocon has obtained equity capital in an amount not less than
$1,000,000. In the event that Closing does not occur, Xxxxxx agrees to return to
Envirocon, within ten business days, any portion of the Purchase Price advanced
to Xxxxxx.
4. Transfer of Ownership of Intellectual Property. Xxxxxx will assign and
transfer ownership of the Intellectual Property to Envirocon for no additional
consideration after (i) payment of the Purchase Price and (ii) Envirocon has
obtained equity capital in an amount not less than $1,000,000.
5. Xxxxxx'x Representations and Warranties. Xxxxxx, on behalf of himself
and his successors and affiliates, represents and warrants to Envirocon as
follows:
5.1 Authorization. Xxxxxx has the full power and authority to
enter into this Agreement and to carry out his obligations hereunder. The
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby do not violate, result in a breach of, or
constitute a default under any judgment, order or decree to which Xxxxxx is
subject. The execution, delivery and performance of this Agreement by Xxxxxx
will not violate, with or without the giving of notice and/or the passage of
time, any provision of law now applicable to Xxxxxx, or result in the creation
of any lien, charge or encumbrance upon any of the assets of Xxxxxx pursuant to
any indenture, mortgage, deed of trust, loan agreement, or other agreement or
instrument to which Xxxxxx is a party or by which Xxxxxx may be bound, or to
which he may be subject. The transactions contemplated by this Agreement will
not require the authorization, consent or approval of any third party.
5.2 Title to License. Xxxxxx is the owner and has good and
marketable title to the Intellectual Property being licenses and/or transferred
to Envirocon hereunder, free and clear of all claims, liens, pledges or
encumbrances of any kind, and if and when ownership of the Intellectual Property
is transferred, Envirocon will receive good and marketable title to the
Intellectual Property, free and clear of all claims, liens, pledges or
encumbrances of any kind.
5.3 No Commitments. Xxxxxx is not a party to or bound by any
written or oral agreement, partnership, joint venture, lease, commitment or
other understanding or obligation which affects the Intellectual Property.
5.4 Compliance with Laws. Xxxxxx is not in violation in any
material respect of any law, rule, regulation, order, injunction or decree of
the government or courts of the United States or any state or other jurisdiction
which affects or could affect, directly or indirectly, the Intellectual
Property.
5.5 Intangible Assets. All of Xxxxxx'x patents, trademarks,
trade names and copyrights, and registration and applications therefor, if any,
are valid and in good standing, and no proceedings involving the invalidity
thereof or ownership by Xxxxxx thereof are pending or to Xxxxxx'x knowledge have
been threatened. Xxxxxx owns the entire right, title and interest in
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and to, and has the exclusive right to, the patents, trademarks, trade names,
service marks and copyrights, as well as trade secrets, formulae and processes
included in the Intellectual Property. Use of the Intellectual Property does not
infringe upon the patent, trademark, service xxxx, copyright or confidential
information, formulae, or trade secrets of any third party.
5.6 No Litigation. There is (i) no litigation, proceeding,
arbitral action or governmental investigation pending or threatened against
Xxxxxx or any of its assets, and (ii) no decree, injunction or order of any
court or governmental department or agency outstanding against Xxxxxx.
5.7 Disclosure. No representation, warranty or statement in
this Agreement, nor in any exhibit, certificate or schedule hereto or to be
delivered to Envirocon pursuant to this Agreement, contains any untrue statement
of a material fact or omits to state any material fact necessary in order to
make the statements contained therein or herein not misleading.
5.8 Effect of This Agreement. The execution, delivery and
performance of this Agreement by Xxxxxx and the consummation of the transactions
contemplated herein by Xxxxxx and Envirocon do not require the consent, waiver,
approval, license or authorization of any person or public authority; do not
violate in any material respect any provision of law applicable to Xxxxxx; and
do not violate any restriction of any kind or character in any agreement between
Xxxxxx and any other party. The consummation of this transaction does not result
in the creation of any lien, charge or encumbrance on any of the Intellectual
Property.
5.9 No Prior Disclosure. Xxxxxx has not disclosed or
disseminated any of the secret or confidential information which constitutes a
part of the Intellectual Property at any time prior to the date of this
Agreement to any third parties.
5.10 Continuing Obligation. Due to the nature of the
Intellectual Property and the necessity that Xxxxxx convey personal knowledge of
the Intellectual Property to Envirocon to enable Envirocon to use and receive
the benefits of the Intellectual Property, Xxxxxx agrees to make himself
available from time to time, upon reasonable request of Envirocon, to provide
information and advice concerning the Intellectual Property and the use thereof
on a continuing basis.
6. Representations and Warranties of Envirocon. Envirocon hereby
represents and warrants to Xxxxxx as follows:
6.1 Corporate Existence. Envirocon is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Nevada. Envirocon has all requisite corporate power and authority to enter into
this Agreement and to perform its obligations hereunder.
6.2 Corporate Authority. The execution, delivery and
performance of this Agreement by Envirocon and the consummation by it of the
transactions contemplated hereby have been duly and effectively authorized by
all necessary corporate action. This Agreement, upon its execution by Envirocon
and Xxxxxx, shall constitute a legal, valid and binding obligation of Envirocon,
enforceable in accordance with its terms, except as they may be limited by
bankruptcy, insolvency, reorganization or other laws affecting the enforcement
of creditor's rights generally.
6.3 Effective Agreement. The execution, delivery and
performance of this Agreement by Envirocon and the consummation by it of the
transactions contemplated herein do notrequire the consent, waiver or approval
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approval of any person or public authority; do not violate in any material
respect any provision of law applicable to Envirocon; do not result in a breach
of the Articles of Incorporation or Bylaws of Envirocon and do not violate any
other restriction of any character which may be imposed upon Envirocon.
7. Closing. The closing of the transactions provided for in this
Agreement (the "Closing") shall be deemed effective at the close of business on
October 14, 1998 (the "Closing Date").
8. Indemnification.
8.1 Indemnification by Xxxxxx. Xxxxxx hereby agrees to
indemnify, defend and hold harmless Envirocon, from, against, and with respect
to any claim, liability, obligation, loss, damage, assessment, tax, judgment,
action, suit, proceeding, demand, cost or expense (including, without
limitation, reasonable attorneys fees and costs, and expenses reasonably
incurred in investigating, preparing, defending against or prosecuting any
litigation or claim), of any kind or character, arising out of or in any manner
incident, relating or attributable to any failure of Xxxxxx to perform or
observe, or to have performed or observed, in full, any covenant, agreement or
condition to be performed or observed by Xxxxxx under this Agreement or under
any certificate or other document or agreement signed by Xxxxxx in connection
with this Agreement, or arising out of or in any manner incident, relating or
attributable to the breach of any representation or warranty by Xxxxxx under
this Agreement or under any certificate or other document or agreement signed by
Xxxxxx in connection with this Agreement. The obligations contained in this
Section shall survive Closing.
8.2 Indemnification by Envirocon. Envirocon hereby agrees to
indemnify, defend and hold Xxxxxx harmless from, against and with respect to any
claim, liability, obligation, loss, damage, assessment, tax, judgment, action,
suit, proceeding or demand, cost or expense (including, without limitation,
reasonable attorneys fees and costs, and expenses reasonably incurred in
investigating, preparing, defending against or prosecuting any litigation or
claim), of any kind or character, arising out of or attributable to any failure
of Envirocon to perform or observe, or to have performed or observed, any
covenant, agreement or condition of Envirocon under this Agreement, or relating
or attributable to the breach of any representation or warranty by Envirocon
under this Agreement or under any certificate or other document or agreement
signed by Envirocon in connection with this Agreement. The obligations contained
in this Section shall survive Closing.
8.3 Notice and Defense. In the case of any action or claim
brought by a third party against Envirocon, or Xxxxxx, for an indemnifiable
claim, the party against whom the claim is brought must, as a condition to
enforceability of the other parties indemnity obligations hereunder, give the
party to whom the obligation to indemnify may accrue written notice of the
action or claim within five business days of receipt of actual notice and afford
such party the opportunity to direct and control the negotiations, defense and
settlement of the action or claim. The indemnifying party may elect within
twenty (20) days after receipt of such notice to contest the claim in such
manner as it deems necessary or advisable. If the indemnifying party elects to
contest such claim, the indemnified party shall have the right to appoint
associate counsel in such proceedings at its own expense. The indemnifying party
shall not have the right to settle an indemnifiable matter except with the
consent of the indemnified party. The indemnified party shall permit the
indemnifying party reasonable access to the books and records of the indemnified
party and its subsidiaries and shall otherwise cooperate with the indemnifying
party in connection with any matter or claim for indemnification. If the
indemnifying party does not elect to contest such claim, the indemnified party
shall have the exclusive right to prosecute, defend, compromise, settle or pay
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such claim and receive indemnification therefor. If neither the indemnifying
party nor the indemnified party elect to contest the claim, then the
indemnifying party shall pay the amount of any indemnifiable claim within 30
days after receipt of the notice of claim.
8.4 Third-Party Indemnification. Each of Xxxxxx and Envirocon
shall make a good faith attempt (which shall not be deemed to include an
obligation to commence any litigation) to seek indemnification from any third
parties, including insurers, who may be liable upon any claims made against
Xxxxxx or Envirocon and for which the other party would be liable under this
Section. To the extent either party indemnifies the other party for claims upon
which third parties, including insurers, may be liable, the indemnified party
shall, to the extent permissible, subrogate to the indemnifying party its rights
with respect to such claims.
9. Covenant Not To Compete. As a further inducement to Envirocon to
enter into this Agreement, Xxxxxx, on behalf of himself and his successors and
affiliates, including but not limited to Cotton Products & Machinery, LLC,
covenants and agrees as follows:
9.1 Confidentiality. Xxxxxx and his successors and affiliates
shall hold in confidence, and shall not disclose any and all secret or
confidential information which constitutes a part of the Intellectual Property
at any time subsequent to the Closing Date, and shall not use any such
information after Closing for any purpose whatsoever without the prior written
consent of Envirocon.
9.2 Non-Competition. Xxxxxx and his successors and affiliates
shall not, either alone or in partnership or in conjunction with any person,
firm, association, syndication, company or corporation as principal, agent,
consultant, employee or shareholder, directly or indirectly, or in any other
manner engage in competition with Envirocon for a period of six (6) years from
the Closing. During such six (6) year period, the parties named in this Section
shall not directly or indirectly solicit or entice or in any way divert any
vendor, supplier, customer, distributor or strategic relationship of Envirocon
to do business with any entity in a manner which impairs or competes with the
conduct of Envirocon's business. In no event may the Intellectual Property be
used in any way by Xxxxxx or his successors or affiliates.
9.3 Equitable Relief. Xxxxxx acknowledges the irreparable
injury that will result to Envirocon and its business and properties if such
parties should breach the covenants contained in this section and understands
that Envirocon entered into this Agreement in reliance upon such covenants.
Accordingly, if any of the parties listed in this section should breach such
covenants, Envirocon's remedies may include, in addition to other available
remedies and damages, injunctive relief enjoining breach of such covenants
without posting a bond. The rights and obligations contained in this Section
shall survive Closing.
10. Survival of Representations and Warranties. All representations and
warranties made hereunder and in any exhibits delivered pursuant hereto shall be
deemed to be material and to have been relied upon by Envirocon and Xxxxxx,
notwithstanding any investigation heretofore or hereafter made by or on behalf
of Envirocon or Xxxxxx, and shall survive the Closing for a period of three (3)
years.
11. Notices. To be effective, any notice hereunder shall be in writing,
delivered in person or mailed by certified or registered mail, postage prepaid,
to the appropriate party or parties at the addresses set forth below their
signatures hereto, or to such other address as the parties may hereinafter
designate.
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12. Amendment and/or Modification. Neither this Agreement nor any term
or provision hereof may be changed, waived, discharged, amended or modified
orally, or in any manner other than by an instrument in writing signed by all of
the parties hereto.
13. Binding Effect. Subject to provisions hereof regarding assignment,
if any, this Agreement shall be binding upon and inure to the benefit of the
respective parties, and their legal representatives, successors, assigns and
heirs.
14. Interpretation and Fair Construction of Contract. This Agreement
has been reviewed and approved by each of the parties. In the event it should be
determined that any provision of this Agreement is uncertain or ambiguous, the
language in all parts of this Agreement shall be in all cases construed as a
whole according to its fair meaning and not strictly construed for nor against
either party.
15. Undertaking and Further Assurances. Each party to this Agreement
shall perform any and all acts and execute and deliver any and all documents as
may be necessary and proper under the circumstances in order to accomplish the
intents and purposes of this Agreement and to carry out its provisions.
16. Costs and Attorneys' Fees. If any party hereto shall bring any
suit, arbitration or other action against another for relief, declaratory or
otherwise, arising out of this Agreement, the substantially prevailing party
shall have and recover against the other party, in addition to all costs and
disbursements, such sum as the Court or arbiter may determine to be a reasonable
attorney's fee.
17. Waiver of Breach. The failure of any party hereto to insist upon
strict performance of any of the covenants and agreements herein contained, or
to exercise any option or right herein conferred, in any one or more instances,
shall not be construed to be a waiver or relinquishment of any such option or
right, or of any other covenants or agreements, but the same shall be and remain
in full force and effect.
18. Specific Performance. The parties hereto acknowledge that the
rights of Envirocon to consummate the transactions contemplated herein are
unique and of an extraordinary character, and that, in the event that Xxxxxx
fails to perform in accordance with this Agreement, Envirocon will be without an
adequate remedy at law. The parties agree, therefore, that in such event
Envirocon may, in addition to any remedies at law for damages or other relief or
other rights or remedies, institute and prosecute an action in any court of
competent jurisdiction to enforce specific performance of this Agreement or seek
any injunction or other equitable relief, and Xxxxxx hereby waives the defense
that Envirocon has adequate remedy at law.
19. Entire Agreement. This Agreement (and any attached exhibits)
contains the entire agreement and understanding of the parties with respect to
the entire subject matter hereof, and there are no representations, inducements,
promises or agreements, oral or otherwise, not embodied herein. Any and all
prior discussions, negotiations, commitments and understandings relating thereto
are merged herein. There are no conditions precedent to the effectiveness of
this Agreement other than as stated herein, and there are no related collateral
agreements existing between the parties that are not referenced herein.
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20. Expenses. Subject to the Indemnification provisions above, all
costs and expenses incurred by either party in negotiating this Agreement or in
consummating the transactions contemplated hereby, except as provided herein,
shall be paid by the party incurring such expenses.
21. Governing Law and Venue. The parties agree that this Agreement and
the transactions contemplated hereby shall be construed and enforced in
accordance with the laws of the State of Colorado, and that any action or
proceeding that may be brought arising out of, in connection with or by reason
of this Agreement shall be brought only in a court of competent jurisdiction
within the city and county of Denver, Colorado. Each of the parties hereto
hereby submits, unconditionally and irrevocably, to the jurisdiction to the
aforesaid courts for the purpose of any such lawsuits.
In the event of termination of this Agreement by mutual agreement of
the parties, then Envirocon and Xxxxxx intend that no party would have any claim
against any other party resulting from or related to the failure to consummate
the proposed transactions, and that each party would, in any such case, pay its
own costs and attorneys' fees incurred as a result.
22. Severability. If any part of this Agreement is deemed to be
unenforceable the balance of the Agreement shall remain in full force and
effect.
23. Headings. The section headings in this Agreement are inserted for
convenience only and shall not affect in any way the meaning or interpretation
of this Agreement.
24. Counterparts and Facsimile Signatures. This Agreement and any
exhibits, attachments, or documents ancillary hereto, may be executed
simultaneously in two or more counterparts, each of which shall be deemed an
original, but all of which taken together shall constitute one and the same
instrument. Execution and delivery of this Agreement by exchange of facsimile
copies bearing the facsimile signature of a party hereto shall constitute a
valid and binding execution and delivery of this Agreement by such party. Such
facsimile copies shall constitute enforceable original documents.
IN WITNESS WHEREOF, the parties hereto have signed this Agreement
effective on the date first set forth above.
Xxxxxx: ENVIROCON:
XXXX XXXXXX ENVIROCON CORPORATION
/s/ Xxxx Xxxxxx a Nevada corporation
---------------- By:/s/ Xxxxx Xxxxxxx
-----------------------
Xxxxx Xxxxxxx, President
Address: Address:
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