Exhibit 10.21
MEMORANDUM OF UNDERSTANDING DATED DECEMBER 11, 1997 BETWEEN
THE COMPANY AND FOAMEX INTERNATIONAL, INC.
[INFORMATION PLACED IN BRACKETS [ ] HAS BEEN
OMITTED IN ACCORDANCE WITH A CONFIDENTIAL
TREATMENT REQUEST PURSUANT TO RULE 406 AND
HAS BEEN FILED SEPARATELY WITH THE COMMISSION
Memorandum of Understanding
between
Xxxxxx Technologies, Inc.
and
Foamex International, Inc.
December 11, 1997
The Parties have agreed, in principle, to establish a License Agreement in order
to provide Foamex International, Inc. (hereinafter "Foamex") with certain rights
to manufacture selected foam products that contain microencapsulated phase
change materials (hereinafter "the Technology"), and to sell same under Xxxxxx'x
ComforTemp(R) tradename, subject to the provisions and understandings below.
This document, while not binding upon either party, sets forth the status of
negotiations to date. The parties commit to continuing their good faith
negotiations so as to execute a final and binding agreement within the next
thirty (30) days. The parties recognize, however, that nothing herein commits
either party to a final contract.
1. Scope of License
(a) License to Sell: Frisby grants Foamex a five (5) year Co-Exclusive
License, with a two (2) year option based on TBD annual volume guarantees, to
sell ComforTemp polyurethane foams worldwide. Frisby Technologies will remain
the only other source that can sell ComforTemp polyurethane foams during this
exclusive license.
(i) Frisby grants to Foamex the right to sublicense their
rights to develop and sell ComforTemp based products to
selected end-product manufacturers, subject to the prior
written approval of Frisby.
(ii) The Territory of the license to sell shall be worldwide.
(b) License To Manufacture: Frisby grants Foamex a five (5) year
exclusive License, with a two (2) year option based on TBD pricing guarantees,
to manufacture polyurethane ComforTemp foams, with the sole exception of
ComforTemp LX and DX foams supplied by LMI under their existing license, within
the Territory*. All non-LMI polyurethane foams that are sold within the
Territory by Frisby will be supplied by Foamex to Frisby at a mutually agreeable
distributor discount.
(i) Frisby does not grant to Foamex the rights to sublicense
the manufacture of ComforTemp to a third party.
(ii) The Territory of the license to manufacture shall be the
Americas. However, if Foamex formally commits to establish a
manufacturing facility for ComforTemp polyurethane foams
outside of the Territory, then that region will be added by
Frisby to the licensed territory hereunder.
(iii) Frisby cannot guarantee that certain customers will
specify Foamex foams.
2. License Fees and Requirements:
In return for the exclusive license granted above, Foamex agrees, at a minimum,
to provide the following to Frisby:
(i) A one time, up-front License Fee of [This information has
been omitted in accordance with a Confidential Treatment
Request and has been filed separately with the Commission.],
payable at signing of the License,
(ii) Technical Support payments of [This information has been
omitted in accordance with a Confidential Treatment Request
and has been filed separately with the Commission.] on the
tenth (10th) day of each month from 2/98 through 5/98 and from
1/99 through 4/99,
(iii) A Purchase Order for 3,000 lb. of Thermasorb(R)
development quantities at [This information has been omitted
in accordance with a Confidential Treatment Request and has
been filed separately with the Commission.] deliverable by
January 23, 1998,
(iv) In addition to the above fees, Foamex will pay Frisby
[This information has been omitted in accordance with a
Confidential Treatment Request and has been filed separately
with the Commission.] of any sublicense fees and royalty
income related to the Technology received by Foamex from any
third parties, and
(v) Foamex will prominently feature the ComforTemp logo in all
advertising, brochures, sales sheets, and other promotional
materials and at all appropriate trade shows.
3. Sole Source Supply:
1. Microcapsules: The Parties hereto agree that Frisby Technologies
will be the sole source of supply for all microencapsulated phase change
materials (i.e., Thermasorb) that are required by Foamex, and any of their
Sublicensees or affiliates, for the life of this agreement. Frisby will offer to
Foamex Xxxxxx'x best available pricing for same.
2. ComforTemp: Except for those materials purchased from LMI under its'
existing license from Frisby, Foamex will be Xxxxxx'x sole source of ComforTemp
polyurethane foams within the Territory at not-to-exceed pricing and terms to be
agreed upon prior to execution of License. Frisby and Foamex will also establish
a mutually agreeable distributor discount from the Foamex price list for sales
by Frisby.
4. Delivery of Product:
In order to protect production lead-times and customer requirements, Foamex
shall maintain an adequate inventory of Thermasorb additives on hand to support
all orders due within ninety (90) days. Further, the Parties will agree on
standard reorder lead-times and other terms of sale prior to License execution.
5. Intellectual Property:
Intellectual property relating t the licensed Technology, developed by either
party under this Agreement, shall remain the exclusive intellectual property of
Frisby, and will be subsequently included within the Foamex License. Any
manufacturing and/or process improvements that are solely developed by Foamex
relating to the manufacture of the licensed foam products, as well as any
intellectual property not related to the technology shall remain the exclusive
Intellectual property of Foamex.
6. Product Support, New Product Development and News Releases:
1. Foamex will maintain a dedicated in-house development and
manufacturing effort to develop new applications of ComforTemp polyurethane
foams for existing and new customer applications throughout the full term of the
License.
2. If Frisby intends to develop and/or launch new, non-polyurethane
ComforTemp foam product offerings, Foamex will be given the opportunity, on a
case-by-case basis and subject to a Foamex commitment to invest appropriate
development resources at that time, to participate in the project.
3. Foamex agrees to support Frisby and its' customers at a reasonable
number of sales and/or technical meetings in order to address any technical
questions the third party may have.
4. The parties agree to collaborate on all public relations and media
releases respecting this Agreement and all products developed or sold by any
party containing the Technology.
XXXXXX TECHNOLOGIES, INC. FOAMEX INTERNATIONAL, INC.
\s\ Xxxx Xxxxxx \s\ Xxxxxx Xxxxxx
----------------------------- --------------------------------------------
Xxxx Xxxxxx, Chairman and CEO Xxxxxx Xxxxxx, Chairman and CEO
