1
EXHIBIT 6.1
TECHNOLOGY LICENSE AGREEMENT
This TECHNOLOGY LICENSE AGREEMENT (the "Agreement") is entered into as
of this 1st day of June, 1999, between Krida Overseas Investments Trading
Limited, a Cyprus company, ("Krida") and NuPro Innovations Inc., a Delaware
corporation ("NII").
RECITALS
WHEREAS, Krida possesses proprietary trade secrets, know-how, and
technical information and trademarks related to "NuPro" (defined below);
WHEREAS, Krida entered into a license agreement with TrucTech, Inc., a
Georgia corporation ("TrucTech"), pursuant to which Krida granted to TrucTech
the non-exclusive right to manufacture NuPro, develop products using NuPro, and
market, sell and distribute those products (the "Products") world-wide
("TrucTech License Agreement");
WHEREAS, NII and TrucTech have entered into an Asset Purchase Agreement,
effective the date hereof, for the sale of all of the assets of TrucTech to
NuPro, including TrucTech's rights under the TrucTech License Agreement;
WHEREAS, Krida entered into an oral license agreement with NII on
December 1, 1998 (the "NII Initial License Agreement") pursuant to which Krida
granted to NII and indefinite and exclusive right to manufacture, market, sell
and distribute NuPro, and develop, market, sell and distribute Products
world-wide subject to the achievement of certain agreed targets to preserve the
exclusive right under the NII Initial License Agreement;
WHEREAS, NII has entered into negotiations with a group of German
investors represented by Xx. Xxxxxxxx Xxxxxx (the "German Investors") for
additional financing to NII and, as a result of such negotiations, NII has
agreed to modifications to the NII Initial License Agreement regarding to the
limitations to the exclusive right to NuPro and the Products; and
WHEREAS, Krida desires to grant to NII and NII desires to receive a
grant from Krida an indefinite and exclusive right to manufacture, market, sell
and distribute NuPro, and develop, market, sell and distribute Products
world-wide considering the negotiations with the German Investors.
NOW, THEREFORE, in consideration of the mutual covenants and promises
contained herein and for other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, Krida and NII do each hereby agree as
follows:
2
AGREEMENT
1. DEFINITIONS
In addition to the terms defined elsewhere throughout this Agreement,
the parties agree that the following terms shall have the following meanings
throughout:
1.1. "Business Plan" shall mean NII's Business Plan, dated February
1999, as updated from time to time, attached as Exhibit A to this Agreement.
1.2. "Confidential Information" shall mean the Technical Information,
Trade Secrets, and all other information, oral and written, about each party,
each party's business, NuPro, or the Products that either party has disclosed to
the other party in confidence in connection with this Agreement. Information
shall not be considered "Confidential Information" to the extent that the
disclosing party can clearly demonstrate the information (i) is publicly and
openly known and in the public domain through no fault of the receiving party
and without a breach of this Agreement, (ii) was already in the possession of
the receiving party prior to any disclosure by the receiving party and without
any restriction on the use or disclosure of the information, (iii) is or has
lawfully been disclosed to the receiving party by a third party without any
obligation of confidentiality, or (iv) is required to be disclosed by law.
1.3. "Know How" shall mean the information, data, and experience of each
party relating to the development, design, and manufacture of NuPro, and the
promotion, marketing and sale of NuPro and the Products.
1.4. "Licensed Material" shall mean the Know How, Patents (if any
granted now or during the term of this Agreement), Technical Information,
Trademarks and Trade Secrets defined herein.
1.5. "NuPro" shall mean the industrial engineering hybrid polyurea
composite material formulation (previously known under the names "Veselka" and
"Lubalite") developed by Xxxx Xxxxxxxxxxx. NuPro is a blend of ring opened
cyclic esters and polyamines combined with polyisocyanate formulations that is
bonded via an exothermic process using low-pressure machinery without the need
to supply thermal energy.
1.6. "Patents" shall mean the patents owned by Krida now or at any time
during the term hereof relating to NuPro or the Products and any extensions or
improvements thereto.
1.7. "Technical Information" shall mean any information of either party
including Know How, whether or not patented, which relates to the design,
engineering, manufacture or use of NuPro or the Products as well as quality
control and cost accounting data relating thereto, which is now owned or
acquired or has been developed or discovered, or is hereinafter owned, acquired,
developed, or discovered by either party and which is in a form that is able to
be transferred.
2
3
1.8. "Trademarks" shall mean any proprietary right in and to the names
"Lubalite" and "NuPro," whether registered with the federal Patent and Trademark
Office, and state authority, foreign authority, common law right or otherwise.
1.9. "Trade Secrets" shall mean Technical Information which is treated
as secret and confidential by either party which derives independent or actual
value from not being generally known to other persons.
2. LICENSE GRANT
2.1. Scope of Use. In consideration of the payment of the applicable
fees set forth in Section 4, Krida grants to NII, during the term of this
Agreement, a personal and exclusive right to use the Licensed Material and to
market and sell NuPro and the Products anywhere in the world.
2.2. Restrictions on Use. The limited rights to the Licensed Materials
herein include the following use restrictions:
2.2.1 No title in or to the Licensed Materials is transferred to
NII in granting this license under this Agreement; and
2.2.2 NII will not copy, modify, adapt, assign, or transfer the
Licensed Materials, in whole or in part, except as expressly provided for in
this Agreement.
2.3. Improvements. The license provided in this Agreement includes any
improvements or inventions relating to NuPro, the Products or the Licensed
Materials that occur after the date hereof and during the term of this
Agreement.
2.4. Limitations on Exclusiveness of License. The license granted under
this Agreement will remain exclusive until and through December 31, 2002. After
December 31, 2002, the license granted under this Agreement will continue to
remain exclusive so long as Xxxx Xxxxxxxxxxx has a major influence, directly or
indirectly, on the decision-making process of NII for at least six (6) months of
any calendar year.
2.5. Effect of Xxxx Xxxxxxxxxxx'x Departure. If Xxxx Xxxxxxxxxxx leaves
NII after December 31, 2002 for any reason, including, but not limited to death,
or an illness or legal impairment that lasts for a consecutive six (6) month
period (a "Departure"), the license granted under this Agreement will continue
to remain exclusive if (i) NII's aggregate annual sales volume for any complete
calendar year following Xx. Xxxxxxxxxxx'x Departure is 50% or more of NII's
sales forecasts for such calendar year set forth in the Business Plan, and (ii)
NII's aggregate annual increase in sales is equal to or greater than 10% with
respect to the previous calendar year for each successive calendar year
following December 31, 2002.
2.6. Effect of Failing to Satisfy Conditions of Sections 2.4 and 2.5. If
NII fails to satisfy the conditions of Sections 2.4 and 2.5 above, the license
granted under this Agreement will become non-exclusive on the sixtieth day
following the end of the calendar year in which NII failed to satisfy the
conditions of Sections 2.4 and 2.5 above.
3
4
3. TERM
3.1. Term of Agreement. The term of this Agreement is for an indefinite
amount of time. The term shall commence on the date hereof, and shall continue
until this Agreement is terminated in accordance with the provisions of Section
8.
4. FEES AND PAYMENT
4.1. Fees. In consideration of the license granted by Krida under this
Agreement, NII agrees to pay to Krida one and one-half percent (1.5%) of the
gross revenues for the first $5,000,000 of NuPro and Products sold by NII, and
two percent (2%) of the gross revenues for sales of NuPro and Products in excess
of $5,000,000, during the term of this Agreement (the "Fees"). For purposes of
this Section 4.1, "gross revenues" means the total revenues received by NII from
the sale of NuPro and the Products not including any sales, use, excise, value
added, utility or personal property tax or other similar charge.
4.2. Payment. Within ten (10) days after the end of each three-month
period beginning March 1, 2000, NII agrees to provide to Krida (i) quarterly
reports of sales of NuPro and Products, (ii) a true and updated copy of the
backlog of orders of NuPro and Products, and (iii) payment of any Fees then due
under Section 4.1 above.
4.3. Payment Method. NII shall make payments for the Fees to Krida by
delivering a check to Krida to the address set forth in Section 9.6 of this
Agreement, or as agreed by the parties in writing from time to time and notified
to the parties according to the notice procedures set forth in Section 9.6 of
this Agreement.
5. ADDITIONAL OBLIGATIONS OF NII
5.1. No Agent Relationship. NII agrees that it will not at any time,
including after termination or expiration of this Agreement, incur or purport to
incur any liability on behalf of Krida or in any way pledge or purport to pledge
Krida's credit or purport to make any contract binding upon Krida.
5.2. Access to NII Facilities. NII agrees that it will permit any duly
authorized representative of Krida to enter, during normal business hours, into
its manufacturing and administrative facilities or where any production or
records relating to NuPro or the Products are located for the purpose of
ascertaining that the provisions of this Agreement are being complied with by
NII.
5.3. Records. NII agrees to at all times, including for a period of one
year after termination of this Agreement, keep full and accurate books of
account and records relating to NuPro and the Products and related invoices,
inventory, purchase orders, backlog, accounts receivable, and any other related
documents and will allow any duly authorized representative of
4
5
Krida to have reasonable access to, and to audit, such books and records, and
make copies at Krida's expense as such representative may reasonably require.
6. REPRESENTATION AND WARRANTIES. Krida represents and warrants that it is
the sole owner of any and all rights in and to the Licensed Materials and that
the Licensed Materials do not infringe, misappropriate, or otherwise conflict
with any proprietary rights of any third party. No written or oral claim by any
third party contesting Krida's rights in and to the Licensed Materials has been
made, is currently outstanding or, to the knowledge of Krida, is threatened.
7. CONFIDENTIALITY. The parties agree not to disclose any Confidential
Information to any third party except as provided in this Agreement and subject
to a Confidentiality Agreement in substantially the same form attached hereto as
Exhibit B, duly executed by such third party. The parties further agree that
they shall not disclose any Confidential Information to any employees, agents,
or consultants, except for those for whom disclosure is necessary for the
effective performance of their responsibilities in connection with this
Agreement, and only to the extent required for such effective performance. In
addition, the parties hereby agree to take all reasonable and necessary steps to
ensure that all principals, officers, agents, employees, representatives,
consultants, or any other persons affiliated in any manner do not use, modify,
disclose, make public, or authorize any disclosure or publication of any
Confidential Information, except as permitted herein. Additionally, each party
agrees to return all of the other party's Confidential Information and all
copies of any written materials delivered to it at any time throughout the term
of this Agreement upon the termination of this Agreement.
8. TERMINATION.
8.1. Termination For Cause. Either party shall have the right to
terminate this Agreement for good cause upon thirty (30) days written notice to
the other party, if such other party fails to comply with a term of this
Agreement and such failure to comply causes a material negative effect to the
non-breaching party and is not corrected within such thirty (30) day period to
the absolute satisfaction of the non-breaching party. Without limiting the
interpretation of the foregoing, the failure by NII to pay the Fees set forth in
Section 4 hereof constitutes good cause to terminate this Agreement.
8.2. Termination Without Cause. Krida may not terminate this Agreement
without cause.
8.3. Termination by Krida - Bankruptcy Proceeding. Krida shall have the
right to terminate this Agreement in the event NII files a voluntary petition
commencing a bankruptcy proceeding under the United States Bankruptcy Code,
Title 11, U.S.C. (the "Code"), or under a similar statute in another country or
jurisdiction, or has a petition filed against it commencing an involuntary
bankruptcy proceeding under the Code, or under a similar statute in another
country or jurisdiction, or otherwise becomes insolvent, has a receiver
appointed, or makes an assignment for the benefit of creditors (an "Event of
Bankruptcy"). In addition, NII acknowledges that this Agreement creates licenses
constituting "intellectual property" as defined
5
6
in the Code and that its rights and obligations shall be governed by Section
365(n) of the Code, or its equivalent, in the event NII suffers an Event of
Bankruptcy.
8.4. Termination by Mutual Written Consent. This Agreement may be
terminated by the mutual written consent of both parties.
8.5. Survivability. Sections 6 and 7 of this Agreement shall survive
termination of this Agreement.
9. MISCELLANEOUS
9.1. Assignment. This Agreement may not be assigned to any party, other
than without the prior written consent of the other party.
9.2. Severability. The provisions of this Agreement are severable.
Invalidity or unenforceability of any provision, or portion thereof, shall not
affect the enforceability of the remaining provisions hereof which are valid and
enforceable.
9.3. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the United States and the State of Delaware, without
regard to conflicts of law.
9.4. Official Language. This Agreement is in the English language only.
No translation of this Agreement into any other language shall be of any force
or effect in the interpretation of any of the provisions of this Agreement.
9.5. Jurisdiction and Venue. The parties consent and submit to the
exclusive jurisdiction and venue of the State and Federal Courts for the
District of Arizona. The parties hereby expressly submit and consent to such
jurisdiction and waive any claim that such is an inconvenient or improper forum.
Furthermore, the parties agree that any judgment obtained pursuant to this
Section should be enforceable in any court of competent jurisdiction in the
United States or elsewhere, as applicable.
9.6. Notices. All notices under this Agreement, given by any party to
the others, shall be in writing and shall, until notice of any change is
delivered in accordance herewith, be sent by hand-delivery or recorded
electronic communication to each respective party, with a copy thereof sent the
same day by regular mail, postage prepaid, as follows:
If to Krida, to:
Krida Overseas Investments Trading Limited
x/x XXX Xxxxxx
X.X. Xxx 0000
Xxxxxxx, Xxxxxx
Attn: President
(___) ________________________
6
7
If to NII, to:
NuPro Innovations Inc.
0000 Xxxx Xxxxxxxx Xxxxxxxxx, Xxxxx 000
Xxxxxx, Xxxxxxx X.X.X. 00000
Attn: President
Facsimile: (000) 000-0000
with a copy to:
Squire, Xxxxxxx & Xxxxxxx L.L.P.
00 Xxxxx Xxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxx X.X.X. 00000
Attn: Xxxxxxxx Xxxxxxxx, Esq.
(000) 000-0000
9.7. Independent Contractors. It is expressly understood and agreed that
NII is and shall be deemed to be an independent contractor with respect to the
terms and conditions of this Agreement and that NII is not in any respect acting
as an agent or employee of Krida. This Agreement is not intended and shall not
be construed to constitute either party as the joint venturer, partner, agent or
legal representative of the other, and neither party shall have any authority,
express, implied or apparent to assume or create any obligations on behalf of or
in the name of the other party hereto.
9.8. Indemnification. Each party agrees to indemnify and save harmless
the other party and its subsidiaries, officers, directors, agents, employees,
contractors and legal representatives, from and against any and all claims,
demands, actions, causes of action, losses or liabilities, including attorney
fees and costs, which are hereafter made or brought against them or any of them,
by any third party, for the recovery of damages, which have as their basis the
actual or alleged violation by each party of any of the covenants herein or
which arise from each party's performance, failure to perform, or failure to
perform properly any term of this Agreement. Krida agrees to indemnify and save
harmless NII and its subsidiaries, officers, directors, agents, employees,
contractors, and legal representatives from and against any and all claims,
demands, actions, causes of actions, losses, or liabilities, including attorney
fees and costs, which are hereafter made or brought against them or any of them
for the recovery of damages, which have as their basis the actual or alleged
infringement, by Krida or NII, of any third party's patents, copyrights,
trademarks, or trade secrets or other intellectual property rights arising out
of NII's use of the Patents, Trademarks, Know How, Trade Secrets, or Technical
Information provided by Krida. Notwithstanding the foregoing, Krida shall not be
liable for any claim of patent, copyright or trade secret infringement which is
based on any modifications to such technology prepared or developed by NII, with
respect to any other products manufactured by NII.
9.9. Cumulative Remedies. Every right or remedy conferred upon or
reserved to the parties by this Agreement shall be cumulative and shall be in
addition to every right or remedy now or hereafter existing at law or in equity
and the pursuit of any right or remedy shall not be construed as an election.
7
8
9.10. No Waiver. The failure of a party to insist upon the performance
of any provision of this Agreement or to exercise any right or privilege granted
that party hereunder shall not be construed as waiving any such provision and
the same shall continue in force.
9.11. Force Majeure. No party shall be liable to the other by reason of
any failure in performance of this Agreement in accordance with its terms if
such failure arises out of causes beyond the reasonable control of such party,
including but not limited to, acts of God, acts of the public enemy, acts of
civil or military authority, unavailability of communications facilities, fires,
strikes, unavailability of energy sources, riots, or wars. The affected party
will have an extension of time to perform its obligations in proportion to the
time of duration of the above circumstances without penalty, but will make all
reasonable efforts to rectify the problem in a timely fashion.
9.12. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
9.13. Headings. The titles, captions or headings of the Articles,
Sections and subsections herein are inserted for convenience of reference only
and are not intended to be a part of or to affect the meaning or interpretation
of this Agreement.
9.14. Amendments and Waivers. No amendment, supplement, modification or
waiver of this Agreement shall be binding unless executed in writing by the
party to be bound thereby. No waiver of any of the provisions of this Agreement
shall be deemed or shall constitute a waiver of any other provision hereof
(whether or not similar), nor shall such waiver constitute a continuing waiver
unless otherwise expressly provided.
9.15. Alternative Dispute Resolution.
9.15.1 Mediation. NII and Krida agree that they shall attempt to
settle any claim or controversy arising out of this Agreement through
consultation and negotiation in the spirit of mutual friendship and cooperation.
If any such attempt should fail, then the dispute shall first be submitted to a
mutually acceptable neutral advisor for initial fact finding and mediation.
Neither party shall unreasonably withhold acceptance of such an advisor, and
selection of such an advisor shall be made within 45 days after written notice
by one of the parties for such fact finding and mediation. The cost of such fact
finding and mediation, and of any other subsequent alternative dispute
resolution agreed upon by the parties shall be shared equally by NII and Krida.
The mandatory mediation set forth in this paragraph shall not be required for
disputes involving use or misuse of the license or Licensed Property.
9.15.2 Arbitration. Any dispute, controversy or claim arising
out of or relating to this Agreement or its formation, breach, performance,
validity, invalidity or termination, not settled by mediation under Section
9.15.1 above, shall be submitted to and be settled by arbitration. The final
award of the arbitrators shall be final and binding, and shall not be subject to
judicial review. Interim awards issued during the proceedings by the arbitration
tribunal shall
8
9
not be subject to any judicial review, except after issuance of the final
arbitration award. In the event that the party against which the final award is
made attempts to challenge it before a competent judicial authority, that party
may be required by such judicial authority to post adequate security on behalf
of the party who received the award, to insure the payment of such award, if the
final award is confirmed judicially. The mandatory arbitration set forth in this
paragraph shall not be required for disputes involving use or misuse of the
license or Licensed Property.
9.15.3 Rules. The arbitration and arbitration proceedings
related to this Agreement shall be conducted by the American Arbitration
Association (the "AAA") in accordance with its Rules in effect at the
commencement of such proceedings. In the event of any conflict between the
foregoing Rules of the AAA with the dispute resolution provisions in this
Agreement regarding the solution of controversies, the provisions of this
Agreement shall govern.
9.15.4 Panel. The arbitration tribunal shall be made up of one
Arbitrator, who shall be selected by the parties. Should the parties not agree
in the selection of the Arbitrator, the Arbitrator shall be chosen in accordance
with the applicable Rules of the AAA.
9.15.5 Venue and Fees. All proceedings and hearings related to
this process shall be conducted in Phoenix, Arizona, U.S.A. The arbitrator's
fees and facility expenses shall be shared equally. The prevailing party shall
be entitled to recover from the other party, as part of the prevailing party's
costs, reasonable attorney's fees. The parties agree that the arbitrator shall
have the authority to fix such attorney's fees and they shall be made part of
any judgment rendered.
9.15.6 Litigation. Any dispute which the parties cannot so
resolve between themselves in good faith within six (6) months of the date of
the initial demand may proceed to litigation through a court of competent
jurisdiction pursuant to the terms of this Agreement.
9.16. Public Announcements. Neither party shall make any public
announcement or issue any press releases relating to the subject matter of this
Agreement or its terms, without the prior written consent of the other party or
as required by law.
9.17. Entire Agreement. This Agreement constitutes the entire agreement
between Krida and NII with regard to the subject matter, superseding all
previous communications and negotiations, whether written or oral. The terms and
conditions of the Agreement shall prevail over any additional or conflicting
terms of any advertising literature or memorandum submitted by one party to the
others.
9
10
IN WITNESS WHEREOF, the parties hereto, by their respective duly
authorized officers or representatives, have each executed this Agreement on the
date and year first above written.
KRIDA OVERSEAS TRADING LIMITED, NuPro Innovations Inc,
a Cyprus corporation a Delaware corporation
By:_______________________________ By:_______________________________
Its: Its:
10
