PATENT ROYALTY AGREEMENT
Agreement made and entered into this 29th day of January, 1995 by and
between RADIANT ENERGY CORPORATION, 00 Xxxxxx Xxxx, Xxxxx Xxxx, Xxxxxxx, Xxxxxx
X0X 0X0 (hereinafter called "the Company"), and XXXXXXX X. XXXX ("Chew") and
XXXXXXX X. XXXX ("Xxxx"), of Ellicotville and Tonawanda, New York, respectively;
WITNESSETH:
WHEREAS, CHEW and XXXX have made certain inventions relating to the
"Method of, and Apparatus for, De-icing an Aircraft by Means of Infrared
Radiation" (the "Inventions") for which they have made application for Letters
Patent of the United States, the said application having been filed on the 7th
day of March, 1994, bearing U.S. Serial No. 08/207,883; as a continuation of an
earlier-filed Application being U.S. Serial No. 08/020,215, filed on the 19th
day of July, 1993 (now abandoned) and an Application for Letters Patent in
Canada in respect of which was filed in the Canadian Patent Office on November
14, 1994 (collectively the "Application") and
WHEREAS, the Company is desirous of acquiring rights in and to the
Invention(s), Application(s) any Letters Patent which may issue therefor and
related Know-How (collectively the "Assets"); and MESSRS. CHEW and XXXX are
desirous of transferring said Assets to the Company, subject to the terms and
conditions set forth herein and in the Assignment annexed hereto.
NOW, THEREFORE, for and in consideration of the premises and the covenants
hereinafter recited to be faithfully performed and the sum of One Dollar ($1.00)
and more by the Company to CHEW and XXXX in hand paid, the receipt of which is
hereby acknowledged, it is understood and agreed as follows:
1. CHEW and XXXX jointly and severally warrant that they are the sole and
exclusive owners of the Assets, that they have full right to enter into this
Agreement and that the Assets are transferred to the Company free and clear of
all liens, charges, security interest and encumbrances of any nature or kind,
except a security interest to Chew and Xxxx. The warranties in this Section 1
shall survive the closing of the purchase of the Assets by the Company from CHEW
and XXXX.
2. CHEW and XXXX shall execute all necessary and lawful
papers to enable the Company, at its own expense, to file and prosecute
applications for letters patent in all countries in which the Company shall
elect or be able to secure patent protection for said Inventions and all,
modifications and improvements thereto, and shall also execute all necessary and
lawful papers to vest in the Company the entire right, title and interest in, to
and under the Assets, modifications and improvements and the letters patent that
have issued or may issue thereon in all countries in which the Company elects to
secure patent protection.
3. The Company covenants to pay to CHEW and XXXX collectively during the
life of this Agreement, a royalty of two per cent (2.00%) of the gross sales
price of each apparatus or device intended and adapted for use in aircraft
de-icing (but not including the actual cost of the building housing the patented
product) embodying a claim in the Application or Patent which it or its
licensees may sell or use in the World. It is agreed said royalty shall be net
of any applicable taxes payable to any governmental authority. At such time or
the royalties payable hereunder shall aggregate a total of $1,000,000.00 (US)
CHEW and XXXX shall cease to receive royalties under this Agreement.
The obligation to pay royalties shall expire with the last to expire of
any Letters Patent granted in respect of the Inventions hereunder, or when the
royalties payable hereunder total $1,000,000.00 (US), whichever occurs first.
4. All royalties provided for by this Agreement shall be due and payable
quarterly, and Company agrees to pay to CHEW and XXXX on or before the last day
of each of the months of January, April, July and October of each year during
which this Agreement is in force, the total amount of royalties due and payable
on account of its operations under this Agreement during the calendar quarter
immediately preceding said dates.
5. The Company agrees that it will render to CHEW and XXXX with each such
royalty payment a written statement setting forth the total gross receipts from
its sales during the period covered by such statement less applicable taxes,
credits for any returned products and allowances for returned defective products
and Company agrees to keep adequate records in sufficient detail to enable the
royalties payable hereunder to be determined, and further agrees that it will
permit such book or set of books to be examined by an auditor or accountant,
authorized by CHEW and XXXX at any reasonable time during business hours to the
extent necessary to permit such records to be examined, it being agreed
that such auditor or accountant shall make his report to CHEW and XXXX in such
manner that names of customers or other information deemed confidential by
Company will not be disclosed to CHEW and XXXX.
The Company shall not be liable for royalties upon the patented product
returned by purchasers for credit and shall have the right to deduct the amount
of any such royalties already paid from the amount of the royalties that may
subsequently accrue. The Company shall also have no right to deduct allowances
for unreturned defective patented products from royalties that may subsequently
accrue.
6. In the event the Company fails to perform any of its obligations herein
prescribed, or in the event of any adjudication of bankruptcy, appointment of a
Receiver by a Court of competent jurisdiction, assignment for the benefit of
creditors or judgment against the Company, all letters patent and all
applications previously assigned by CHEW and XXXX to the Company in respect of
the Inventions shall revert automatically to CHEW and XXXX without further cost
or expense to CHEW and XXXX; provided, however, that the Company shall be
provided a period of 10 calendar days to cure a default under this Paragraph,
such period to commence upon written notice of such default being sent by Chew
and/or Xxxx to the Company at the address listed herein.
7. The Company shall also have the option to pay to CHEW and XXXX, at any
time during the existence of this Agreement, in lieu of further royalties, the
sum of Five Hundred Thousand Dollars (US) $500,000.00 (US), in addition to all
amounts paid and accrued prior to such payments, and such payment shall relieve
the Company of all further obligations hereunder. This paragraph shall be
effective only until such time as the shares of stock in the Company are listed
for sale on a stock exchange in Canada or the United States.
8. The Company shall keep, and shall require its nominees and licensees to
keep, proper books of account with reference to all apparatus which it or they
may manufacture and sell for use in accordance with the aforesaid Inventions,
modifications and improvements and shall render annual statments or extracts
from such books to CHEW and XXXX giving the gross selling prices of such
apparatus as may have been manufactured and sold during the preceeding year the
credits for any returned products and allowances for unreturned defective
products, and the amount of royalties payable to CHEW and XXXX, the said
statements to be
rendered at the time of making the royalty payments for the last calendar
quarter of such year.
9. The Company shall use every reasonable endeavor to xxxx, and to have
its nominees and licensees xxxx, all apparatus covered by patents for the
Inventions during the lives of the respective patents.
10. CHEW and XXXX covenant they will not raise or cause to be raised any
question concerning or any objection to the validity of any claim in the Letters
Patent granted in respect of the Inventions on any grounds whatsoever and agree
not to aid others in doing so.
11. Each of CHEW and XXXX will assign and transfer to the Company any and
all modifications and improvements on the Inventions and for the patents,
applications, processes and know-how related thereto discovered or invented by
CHEW and XXXX, or either of them.
12. The parties agree that the rights and obligations of the parties under
the Agreement shall be governed by the laws of the State of New York without
regard to its Conflict of Laws.
13. This Agreement and the covenants herein contained shall be binding
upon, and inure to the benefit of, the heirs, executors, administrators,
successors and assigns of the parties hereto.
14. Any notice to be sent hereunder shall be sent to the parties at the
addresses set forth in this Agreement.
15. This Agreement and the assignments annexed hereto constitute the
entire understanding between the parties, and no modification or alteration
thereof shall be effective unless in writing and duly executed by both parties.
16. In the event any provision hereof is declared by a court of competent
jurisdiction to be unenforceable, the remaining provisions of this Agreement
shall still be binding and effective on the parties.
17. Any dispute arising hereunder shall be litigated in the Supreme Court
of the State of New York in and for the County of Erie.
18. "Know How" as used herein shall include, without limitation,
engineering and scientific information, processes and formulae; manufacturing
data and procedures; machinery, plant, apparatus and equipment design; report,
drawings, specifications and blueprints relating to any method, product,
apparatus or article falling within the scope of said Application or any Patent
issuing therefrom.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
the day and year first above written.
RADIANT ENERGY CORPORATION
BY: /s/ Xxxx Xxxxxxxx
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XXXX XXXXXXXX, PRESIDENT
/s/ Xxxxxxx X. Xxxx
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XXXXXXX X. XXXX
/s/ Xxxxxxx X. Xxxx
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XXXXXXX X. XXXX
STATE OF NEW YORK )
COUNTY OF ERIE )SS:
On this day of January, 1995, before me personally came XXXX XXXXXXXX,
to me personally known, who being by me duly sworn, did depose and say that he
resides in Xxxxxxx, Xxxxxxx, Xxxxxx that he is the President of RADIANT ENERGY
CORPORATION, the corporation described in, and which executed, the within
Instrument; that he knows the seal of said corporation; that the seal affixed to
said Instrument is such corporate seal; that it was so affixed by order of the
Board of Directors of said corporation; and that he signed his name by like
order.
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Notary Public
STATE OF NEW YORK )
COUNTY OF ERIE )SS:
On this 19th day of January, 1995, before me, the subscriber, personally
appeared, XXXXXXX X. XXXX and XXXXXXX X. XXXX, to me known and known to me to be
the persons described in and who executed the within instrument, and they
acknowledged to me that they executed the same for the purposes therein
mentioned.
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Notary Public
