EXHIBIT 10.5
TECHNOLOGY TRANSFER AGREEMENT
THIS AGREEMENT is made between Xxxxxxx Industries, Inc., an Oregon corporation
having a principal place of business at 0000 X.X. Xxxxxxx, Xxxxxxxx, Xxxxxx
00000 (hereinafter "Xxxxxxx") and Centerline Engineering, Inc., an Illinois
corporation having a principal place of business at 0000 Xxxxxx Xxxxx Xxxx,
Xxxxxxxxxxx, Xxxxxxxx 00000 and the following individuals: Xxxxxxx Xxxxx having
a principal place of residence at X. X. #0, Xxx 0, Xxx, Xxxxxxxx 00000, Xxxxxxx
Xxxxx having a principal place of residence at 0000 Xxxxxxx Xxxxx, Xxxxxxxxxxx,
Xxxxxxxx 00000, and Xxxxxx Xxxxxx having a principal place of residence at R. R.
#4, Xxx 000, Xxxxxxxxxxx, Xxxxxxxx 00000, (hereinafter "Centerline").
WHEREAS, Centerline has developed certain Technology relating to a
non-contact gauging apparatus and method and has filed with the U.S. Patent and
Trademark Office a Patent Application directed to the Technology; and
WHEREAS, Xxxxxxx is desirous of acquiring from Centerline all rights in and
to said Technology.
NOW, THEREFORE, Centerline and Xxxxxxx, in consideration of the premises
and mutual covenants stated herein and other good and valuable consideration,
the sufficiency of which is hereby acknowledged, do hereby agree as follows:
I. DEFINITIONS
When used in this Agreement, the following terms shall have the meaning
indicated:
A. Technology: Any invention, improvement, discovery, product,
apparatus, method, formula or process, or patent or patent application
with respect thereto, know-how or trade secret relating to the gauging
of cylindrical rolls which has been developed by Centerline.
B. Device: Any apparatus employing the Technology, the manufacture, use
or sale of which by a third party would constitute an infringement of
any claim in an issued patent (or pending application), which claim
covers an invention invented solely by Centerline and relating to the
Technology.
C. Prototype: The measurement machine built by Centerline and employing
the Technology which was disclosed to Xxxxxxx on April 17, 1998.
D. Patent Application: U.S. Patent Application Serial No. 08/844,727
filed April 18, 1997 entitled "Non-contact Gauging Apparatus And
Method."
E. Net Sales Price: The gross amount billed for any Devices sold,
excluding Xxxxxxx'x actual cost of transporting the Devices to its
customers, the actual cost
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of installation (if any), income or business taxes paid to any
governmental entity whether domestic or foreign, the actual cost of
insurance paid in connection with the delivery of devices to
customers, and the actual cost, not exceeding 24% of gross sales
price, of any commissions or rebates given to unrelated non-user
customers, distributors, or sales representatives.
II. WARRANTY
A. Centerline warrants that to the best of Centerline's knowledge that
the Technology is secret and has not been published or otherwise
publicly disclosed, or revealed to anyone not having an obligation of
confidentiality to keep the Technology confidential.
B. Centerline warrants that it has the right and power to enter into this
Agreement and to grant, sell, assign and transfer all rights in the
Technology to Xxxxxxx.
C. Centerline warrants that it has not heretofore entered into any
contract in conflict with this Agreement and has not sold, granted,
assigned or transferred to any third party any right, license or
privilege relating to the Technology.
D. Centerline warrants that it has not filed or caused to be filed any
applications for letters patent in the U.S. or anywhere else in the
world relating to the Technology except U.S. Provisional Patent
Application Serial No. 60/015,670, filed April 19, 1996 and U.S.
Patent Application Serial No. 08/844,727, filed April 18, 1997.
E. Centerline warrants that it knows of no patents, trade secrets or
proprietary rights of others which would be infringed or violated by
the making, using, selling, testing, promoting or distributing of
the Prototype by Xxxxxxx.
III. TRANSFER OF THE TECHNOLOGY
A. Centerline agrees to assign to Xxxxxxx, and hereby does assign to
Xxxxxxx, the entire right, title and interest in and to the
Technology, including, without limitation, the right to file for and
prosecute patent applications in the name of Xxxxxxx relating to the
Technology wherever such right may be legally exercised.
B. Centerline agrees to supply to Xxxxxxx, at no additional charge, the
technical information and material in Centerline's possession required
to adequately disclose the Technology, including the operation and
method of manufacture of
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the Prototype. This technical information shall include, but is not
limited to, all presently existing prototypes, drawings, schematics,
software code, blueprints, and test reports, relating to the
performance, function, operation, design, and manufacture of the
Prototype.
IV. ROYALTIES, PAYMENTS AND RECORD KEEPING
X. Xxxxxxx agrees to pay to Centerline One Hundred Thousand Dollars
($100,000), said fee to be paid as follows:
1. A payment of Twenty-Five Thousand Dollars ($25,000) shall be due
and payable by Xxxxxxx to Centerline upon the execution of this
Agreement by both parties.
2. A payment of Twenty-Five Thousand Dollars ($25,000) shall be due
and payable by Xxxxxxx to Centerline on or before May 11, 1998
provided that Centerline has delivered the Prototype to Xxxxxxx
or before May 11, 1998, and provided that by May 6, 1998,
Centerline has:
a. Obtained a new assignment of the invention disclosed and
claimed in the Patent Application from all inventors to
Centerline and forwarded said assignment(s) to the U.S.
Patent and Trademark Office for recordation;
b. Assigned the Patent Application to Xxxxxxx and forwarded
said assignment to the U.S. Patent and Trademark Office for
recordation;
c. Filed with the U.S. Patent and Trademark Office an amendment
under Rule 312 to correct typographical errors in the Patent
Application;
d. Filed at Xxxxxxx'x expense with the U.S. Patent and
Trademark Office a Petition to Correct Inventorship to
correct the inventorship in the Patent Application; and
e. Paid the Issue Fee for the Patent Application.
3. A payment of Twenty-Five Thousand Dollars ($25,000) shall be due
and payable by Xxxxxxx to Centerline on or before July 17, 1998,
provided that by June 30, 1998:
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a. Centerline personnel (including Xxxxxxx Xxxxx and Xxxxxxx
Xxxxx) have cooperated with Xxxxxxx in connection with the
preparation and filing of a continuation-in-part application
("the CIP Patent Application") claiming priority to the
Patent Application to be prepared by Xxxxxxx; and
b. Centerline has physically transferred to Xxxxxxx all
information and equipment relating to the Technology being
assigned by this Agreement.
4. A payment of Twenty-Five Thousand Dollars ($25,000) shall be due
and payable by Xxxxxxx to Centerline on or before October 16,
1998.
X. Xxxxxxx agrees to pay to Centerline a royalty of the greater of:
1. One Thousand Dollars ($1,000) per Device; or
2. Five percent (5%) of the Net Sales Price obtained from the sale
of each Device shipped by Xxxxxxx.
However, Centerline hereby waives the first Fifty Thousand Dollars
($50,000) of earned royalty after the date of this Agreement.
C. The royalties provided for under this Agreement shall be paid
quarterly, and Xxxxxxx agrees to pay Centerline on or before the last
day of the months of January, April, July and October the total amount
of royalties due and payable under this Agreement during the calendar
quarter immediately preceding said dates.
X. Xxxxxxx agrees to keep an accurate account of the operations coming
under the scope of this Agreement and shall render a statement in
writing to Centerline with each royalty payment indicating how many
Devices have been sold and shipped during the period for which
royalties are being paid.
V. PATENTS
A. Centerline agrees, without further consideration, to sign all lawful
papers and to perform all other lawful acts which Xxxxxxx may request,
including the prompt execution of all original, divisional,
substitute, reissue, and other United States and foreign patent
applications on said Technology, including the Patent Application and
the CIP Patent Application, and all lawful documents requested by
Xxxxxxx to further the prosecution of any of such patent applications.
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B. Centerline agrees to cooperate at Xxxxxxx'x expense to the best of its
ability in the execution of all lawful documents and the production of
evidence in any nullification, reissue, extension, or infringement
proceedings involving any patents covering the Technology.
C. Centerline agrees that Xxxxxxx may, at its sole discretion and at its
expense, file and prosecute foreign patent applications relating to
the Technology.
VI. IMPROVEMENTS
If, during the next ten (10) years, Centerline makes any improvements
relating to the Technology, Centerline shall promptly communicate such
improvement to Xxxxxxx and give Xxxxxxx full information regarding the
improvement. Such information may be transmitted orally, in writing,
and through demonstrations as the occasion requires and shall be
sufficient for technical personnel of the parties to understand and apply
and evaluate the subject matter. In order to facilitate such improvements,
Xxxxxxx will provide to Jerseyville Precision Inc., at 0000 Xxxxxx Xxxxx
Xxxx, Xxxxxxxxxxx, Xxxxxxxx on behalf of Centerline, the most current model
of the Device at no cost to Centerline or Jerseyville Precision, Inc. for
improvement and demonstration. In exchange, Centerline agrees to convey
and assign any such improvements to Xxxxxxx at no additional price to
Xxxxxxx.
VII. NONCOMPETE
A. Centerline agrees that Xxxxxxx Xxxxx, Xxxxxxx Xxxxx, and Xxxxxx
Xxxxxx, during the term of this Agreement and thereafter for a period
of two (2) years, will not directly or indirectly use any of the
Technology or perform activities relating to gauging of cylindrical
rolls in any business, profession, or other endeavor which is either
directly or indirectly in competition with the business of Xxxxxxx.
B. Centerline agrees that during the term of this Agreement and
thereafter Centerline Engineering Inc. will not directly or indirectly
use any of the Technology or perform activities relating to gauging of
cylindrical rolls in any business, profession, or other endeavor which
is either directly or indirectly in competition with the business of
Xxxxxxx.
C. If any court finds the provisions in part VII. of this Agreement to be
unreasonable, the parties agree that the court may so modify this
Agreement to the extent necessary to make the provisions reasonable.
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VIII. TERM AND TERMINATION
A. This Agreement shall become effective from the date of its execution
and shall, unless terminated earlier by one of the parties hereto in
accordance with its terms, expire upon the expiration of the last
patent having a claim covering the Device or method of using the
Device, or in two (2) years from the date of its execution if no
patent issues.
B. In the event that either party defaults or breaches any of the
provisions of this Agreement, the non-defaulting party reserves the
right to terminate this Agreement upon sixty (60) calendar days
written notice to the defaulting party; unless, however, the
defaulting party within the sixty (60) calendar day period referred
to, cures the default or breach.
IX. GENERAL PROVISIONS
A. ARBITRATION: Any controversy or claim arising out of or relating to
this Agreement or the breach thereof shall be settled by arbitration
in St. Louis, Missouri in accordance with the Commercial Arbitration
Rules of the American Arbitration Association, and judgment upon the
award rendered by the arbitrator(s) may be entered in any Court having
jurisdiction thereof.
B. ATTORNEY'S FEES: In the event of a dispute between the parties
arising under this Agreement, the party prevailing in such dispute
shall be entitled to collect such party's costs from the other party
including, without limitation, court and investigation costs and
reasonable attorney's fees and disbursements.
C. ASSIGNMENT: This Agreement shall be binding by both parties to their
successors and assignees and personal representatives, including
specifically Xxxxxxx Xxxxx, Xxxxxxx Xxxxx, and Xxxxxx Xxxxxx.
D. INTERPRETATION AND CONSTRUCTION: This Agreement is written and will
be administered under the laws and applicable regulations of commerce
of the State of Oregon.
E. SEVERABILITY: In the event any one or more of the provisions
contained in this Agreement shall for any reason be held to be
invalid, illegal or unenforceable in any respect, such invalidity,
illegality or unenforceability shall not affect the validity of
any other provision hereof and this Agreement shall be construed as
if such invalid, illegal or unenforceable provision were not
contained herein provided the Agreement as so modified preserves the
basic intent.
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F. WAIVER: The failure of any party at any time to require performance
by any other party of any of the provisions herein shall not operate
as a waiver of the right of said party to request strict performance
of the same or like provisions, or any other provisions hereof, at a
later date.
G. ENTIRE AGREEMENT: This Agreement represents the entire agreement
between the parties on the subject matter hereof and supersedes all
prior discussions, agreements, and understandings of every kind and
nature between them. No modification of this Agreement will be
effective unless in writing and signed by both parties.
IN WITNESS WHEREOF, the parties hereto intending to be legally bound have
caused the presents to be signed, in duplicate, effective as of the date of the
last signature hereto.
XXXXXXX INDUSTRIES, INC. CENTERLINE ENGINEERING INC.
/s/ Xxxxx X. Case /s/ Xxxxxx Xxxxxx
------------------------------------- -----------------------------------
By: Xxxxx X. Case By: Xxxxxx Xxxxxx
Its: President Its: Chairman and CEO
Date: May 8, 1998 Date: April 23, 1998
-------------------------------- ----------------------------
INDIVIDUALLY
The following undersigned
individuals agree to assist
Centerline in fulfilling all of its
duties and obligations outlined in
this Agreement.
/s/ Xxxxxxx Xxxxx
-----------------------------------
Xxxxxxx Xxxxx
/s/ Xxxxxxx Xxxxx
-----------------------------------
Xxxxxxx Xxxxx
/s/ Xxxxxx Xxxxxx
-----------------------------------
Xxxxxx Xxxxxx
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