Exhibit 2.1
Certain information has been deleted from this Exhibit and filed separately with
the Securities and Exchange Commission pursuant to a request for confidential
information under Rule 24b-2.
ASSIGNMENT
This Assignment is made as of October 22, 2002 by and among xxxxxxxxxxx
(the "Assignor") and PentaPure, Incorporated, a Minnesota corporation (the
"Assignee").
The Assignor agrees with the Assignee as follows:
1. Assignment. Subject to the reservations in Section 2 below, the
Assignor hereby sells and assigns to the Assignee all of his right, title and
interest, including the right to xxx third parties for past infringement and to
collect for all past, present and future damages throughout the world, in the
proprietary know how which is described on the attached Exhibit A (the "Assigned
Technology"), including without limitation: (a) all rights in the U.S. Patent
Application serial no. xxxxxxxx filed xxxxxxxx, 2002 titled
xxxxxxxxxxxxxxxxxxxxxx (the "Assigned Patent Application") that is included as a
part of Exhibit A, and in any and all Letters Patent(s) therefor; and (b) in any
and all reissues, extensions, renewals and reexaminations of the Assigned Patent
Application or Letters Patent that issues there from, to the full extent of the
term or terms for which Letters Patent(s) issue.
2. Reservation of Rights by Assignor. The Assigned Technology does not
include, and the Assignor specifically reserves the right to pursue, (a) any and
all inventions by Assignor which are not included in the Assigned Technology,
(b) any and all inventions by Assignor which are disclosed in the Assigned
Patent Application but not claimed in the Assigned Patent Application as filed
or amended and which are not part of the Assigned Technology, and (c) any and
all inventions or uses outside of the field of water filtration or water
purification.
3. Restrictions on Use of Assigned Technology.
(a) Assignee shall have no rights to use the Assigned Technology
outside of the field of water filtration and/or water purification.
(b) During the period from the date of this Assignment until the
xxxxxxx anniversary of that date (such xxxxxx year period being referred to
herein as the "Exclusivity Period"), Assignee shall not and shall not permit
others on Assignee's behalf to manufacture products using the Assigned
Technology outside the United States, Canada or Mexico.
(c) During the Exclusivity Period, Assignee shall not use third-party
manufacturers to manufacture products using the Assigned Technology.
(d) During the Exclusivity Period (as defined above), Assignee shall
not make, use or sell the following water filtration products using or
incorporating the Assigned Technology xxxxxxxxxx:
(i) xxxxxxxxxxxxxxxxxxxxxxxx;
(ii) xxxxxxxxxxxxxxxxxxxxxxx;
(iii) xxxxxxxxxxxxxxxxxxxxxx;
(iv) xxxxxxxxxxxxxxxxxxxxxx;
(v) xxxxxxxxxxxxxxxxxxxxxx;
(vi) xxxxxxxxxxxxxxxxxxxxx.
(e) During the Exclusivity Period, except for xxxxxxxxxxx that are
specifically intended as xxxxxxxxxxxxxxxxxxx for Assignee's refrigerator
filtering systems, Assignee's reverse osmosis systems, or other systems which
are permitted under the terms of this Assignment, Assignee will not engage
(except in xxxxxxxxxxxx) in the business of selling unfinished xxxxxxxxxxxxxxx
incorporating the Assigned Technology for further rework.
4. Consideration. In consideration of the Assignor entering into this
Assignment, the Assignee shall pay Assignor the amount referred to in Exhibit B
upon the execution of this Assignment.
5. Ancillary Documents to be Delivered. At the time this Assignment is
executed: (a) the Assignor shall execute and deliver to Assignee the short form
assignments for recording with the U.S. Patent and Trademark Office ("PTO")
which are attached hereto as Exhibits C1 and C2; (b) the Assignee shall deliver
to the Assignor the initial payment referred to on Exhibit B; (c) Assignor shall
deliver to Assignee a letter in the form attached as Exhibit D confirming the
absence of other claims to the Assigned Technology; and (d) xxxxxxxx Bank shall
have executed and delivered letter in the form attached as Exhibit E releasing
any security interest or other right in the Assigned Technology.
6. Prosecution of Assigned Patent Application. The Assignor shall
retain the right, at Assignor's cost and expense, to prosecute the claims of the
Assigned Patent Application. Assignor shall consult with Assignee and provide
Assignee's patent counsel the right to comment concerning any proposed amendment
to the Assigned Patent Application or proposed response to the PTO. The claims
made in the Assigned Patent Application as filed will not be changed by the
Assignor without the consent of Assignee's patent counsel, which will not be
unreasonably withheld or delayed, particularly where the change is required by
the PTO as a condition of allowing a patent to issue on the Assigned Patent
Application. Assignee acknowledges that in no event may any claim in the
Assigned Patent Application be written in such a manner so as to nullify the
claims set forth in the Licensed Patent Application referred to in the License
Agreement of even date hereof among the Assignor, xxxxxxxxxxxx and the Assignee
(the "License Agreement"). The Assignor agrees to timely provide the Assignee
with a copy of any and all communications to or from the PTO regarding the
prosecution of the Assigned Patent Application. Subject to the terms as set
forth above, the undersigned inventors agree to execute all papers necessary in
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connection with the Assigned Patent Application as the Assignee may deem
necessary or expedient. The Assignor agrees to execute all papers necessary in
connection with any interference or patent enforcement action (judicial or
otherwise) related to the application or any reissue or reexamination
application(s) thereof and to cooperate with the Assignee in every way possible
in obtaining evidence and going forward with such interference or patent
enforcement action. The Assigned Patent Application may not be abandoned without
Assignor's prior written consent, which may be withheld in Assignor's sole
discretion.
7. Representations and Warranties. (a) The Assignor represents and
warrants to Assignee that: (i) Assignor is the exclusive owner of the Assigned
Technology; (ii) all rights of the Assignor or any other inventor or developer
of the Assigned Technology are hereby being assigned to Assignee; (iii) the
Assigned Technology is secret and has not been revealed to anyone other than the
Assignor and xxxxxxxxxxxxx, corporate or personal attorneys and persons who have
signed confidentiality agreements not to disclose the information, and to the
PTO in the Assigned Patent Application and in the Licensed Patent Application
referred to in the License Agreement; (iv) the only patent applications which
have been filed by or on behalf of the Assignor prior to the date of this
Assignment with respect to the Assigned Technology are the Assigned Patent
Application and the Licensed Patent Application and a request for
non-publication of has been made to the PTO as to both the Assigned Patent
Application and the Licensed Patent Application; (v) to the best of Assignor's
knowledge as of the date of this Assignment, the Assigned Technology does not
infringe the proprietary rights of any other party; (vi) there are no suits,
claims, demands or any form of litigation asserted or threatened with respect to
the Assigned Technology or its ownership; (vii) Assignor has not previously
sold, licensed, transferred or encumbered the Licensed Technology or any rights
therein in any manner; (viii) the Assignor is entitled to enter into this
Assignment without obtaining the consent of any third party; and (ix) this
Assignment is a valid and binding obligation of the Assignor that is enforceable
by Assignee in accordance with its terms.
(b) Assignee represents and warrants to Assignor that: (i) this
Agreement is a valid and binding obligation of Assignee that is enforceable by
Assignor in accordance with its terms; and (ii) the party executing this
Assignment on behalf of Assignee has full power and authority to execute and
deliver this Assignment and such execution and delivery has been duly authorized
by Assignee.
8. Exclusivity; Grantback License. (a) Assignee hereby grants to
Assignor, his successors and assigns, a non-exclusive, worldwide, perpetual,
irrevocable royalty-free and fully paid-up license to use the Assigned
Technology with rights to make, use and sell products incorporating or covered
by the Assigned Technology and to grant licenses or sublicenses to others to do
the same. Assignor's grantback license from the Assignee to the Assigned
Technology shall be exclusive, even as to Assignee, in all fields outside the
field of water filtration and/or water purification and non-exclusive in the
field of water filtration and/or water purification.
(b) The Assignor agrees that during the Exclusivity Period, Assignor
will not, and will not permit others, to use the Assigned Technology or grant to
any party any license or other right to use the Assigned Technology for
xxxxxxxxxxxxxxxxxxxx; provided, however, that notwithstanding the foregoing
restrictions, Assignor's and its permitted successors and assigns hereunder
shall at all times have the right to make and sell to anyone:
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(i) xxxxxxxxxxxxxxxxxxxxxxx;
(ii) xxxxxxxxxxxxxxxxxxxxxx;
(iii) xxxxxxxxxxxxxxxxxxxxx;
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx.
9. Transfer of the Assigned Technology. Assignor shall promptly deliver
to Assignee all information and copies of all documents of Assignor which would
be helpful to Assignee in manufacturing products utilizing the Assigned
Technology. Without limiting the generality of the forgoing, beginning
immediately upon execution of this Assignment and payment of the payment
provided in Exhibit B, Assignor shall:
(a) within 60 days after the execution of this Assignment, (i) complete
delivery to Assignee of all information and expertise known by the Assignor
related to manufacturing products using the Assigned Technology, including
access to any proprietary materials and whatever knowledge Assignor possess
related to the development of xxxxxxxxxxxxxxxx material, and (ii)
xxxxxxxxxxxxxxxxxxxx; and
(b) within 120 days after the execution of this Assignment, complete
delivery to Assignee of Assignor's list of plant equipment and manufacturer's
specifications, process equipment design, process control specifications which
are useful for the design and construction by Assignee of a manufacturing
facility at a site chosen by Assignee.
Without limiting the generality of the foregoing, Assignee shall have
unrestricted access to Assignor's suppliers of proprietary and nonproprietary
materials and components used with the Assigned Technology.
10. Consulting Services. Assignor agrees to provide the following
services when and as requested by Assignee for a period of 12 months after the
date of this Assignment:
(a) consultation and assistance concerning the nature, function,
manufacturing processes, materials and components related to the Assigned
Technology; and
(b) consultation and assistance in the design, layout and start-up of a
new plant to be owned and operated by Assignee which utilizes the Assigned
Technology, including visits to the new plant for up to three working days per
month with reasonable advance notice.
No additional consideration shall be paid by Assignee for these services.
Assignee shall pay all expenses of its own personnel and shall reimburse
Assignor for any travel, lodging and meal expense incurred by Assignor or by his
employees when traveling outside the xxxxxxxxxx area for purposes of consulting
with Assignee. In the event that Assignee achieves production utilizing the
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Assigned Technology at its plant referred to in paragraph (b) above for
xxxxxxxxxxxxxxxxxx, it shall be treated as a rebuttable presumption of
Assignor's compliance with its technology transfer and training obligations
under Section 9 (a), (b) and (c) of this Agreement.
11. Confidential Information. (a) "Confidential Information" includes:
(a) any and all information disclosed by one party to the other, in whatever
format, that is either identified as or would reasonably be understood to be
confidential and/or proprietary; (b) any notes, extracts, analyses or materials
prepared by the receiving party which are copies of or derivative works of
Confidential Information or from which the substance of the Confidential
Information can be inferred or otherwise understood; and (c) the terms and
conditions of this Agreement. "Confidential Information" does not include
information that the receiving party can clearly establish: (x) is or becomes
known to the receiving party from a third party without an obligation to
maintain its confidentiality; (y) is or becomes generally known to the public
through no act or omission of the receiving party; or (z) is independently
developed by the receiving party without the use of Confidential Information.
(b) The receiving party will not disclose Confidential Information to
any third party except as permitted by this Assignment and will protect and
treat all Confidential Information with the same degree of care as it uses to
protect its own confidential information of like importance, but in no event
with less than reasonable care. The receiving party will only disclose
Confidential Information to its employees, investors, attorneys, accountants
and/or persons having a need to know for the purposes of this Agreement and who
have signed confidentiality agreements. The receiving party will notify and
inform such employees and/or authorized subcontractors of the limitations,
duties and obligations regarding use, access to and nondisclosure of
Confidential Information imposed by this Agreement. The receiving party will
obtain its employees' and authorized subcontractors' written agreements to
comply with such limitations, duties and obligations. In the event that the
receiving party is required to disclose Confidential Information pursuant to
law, the receiving party will notify the disclosing party of the required
disclosure with sufficient time for the disclosing party to seek relief, will
cooperate with the disclosing party in taking appropriate protective measures
and will make such disclosure in a fashion that maximizes protection of the
Confidential Information from further disclosure.
12. Indemnity. Except to the extent that Assignee has recovered such
expense from insurance, Assignor shall indemnify Assignee as to any out of
pocket expense incurred by Assignee in (a) the defense of any suit or demand
against Assignee alleging that the its manufacture, use, offering for sale or
sale of goods based on or utilizing the Assigned Technology infringes the patent
or other proprietary rights of another party or parties, (b) settling any claim
of the type referred to in clause (a) above, or (c) paying any damages assessed
or judgment rendered against Assignee based on a determination that its
manufacture, use, offering for sale or sale of goods based on or utilizing the
Assigned Technology infringes the patent or proprietary rights of another party
or parties. Assignor shall be entitled to assume, by means of legal counsel
reasonably acceptable to Assignee, the defense of any claim as to which Assignor
is obligated to provide indemnity under this paragraph. Assignor shall control
the settlement (up to the limit of Assignor's liability provided below) of any
such claim as to which Assignor has assumed the defense, provided that no
proposed settlement shall impose any obligation on Assignee or limit Assignee's
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activities without its prior consent. If Assignor elects not to assume the
defense of such claims, the parties shall consult and reasonably cooperate with
each other in Assignee's conduct of the defense. Assignee will promptly notify
Assignor of any suit or claim brought against Assignee of which Assignee becomes
aware. The liability of Assignor to the Assignee under this Section 12 (or for
any breach of warranty of noninfringement) shall not exceed $xxxxxxxx. No claim
for indemnification made under or pursuant to this Section 12 shall be initially
asserted more than five years after the date of this Assignment.
13. Default; Cure. If Assignor, on the one hand, or the Assignee, on
the other hand, fails to perform his or its obligations hereunder and fails to
cure the same within thirty (30) days of being notified by the Assignee or
Assignor, respectively, of said failure of performance or, if cure is not
possible within such 30 day period, fail to commence and diligently pursue cure
of such failure of performance, the notifying party shall be entitled to damages
or an order for specific performance or both.
14. Improvements. Each party shall own and have no duty to disclose to
the other any enhancements to or improvements of the Assigned Technology that
are developed by said party. Each party shall be entitled to apply for U.S. and
foreign patents as to any such enhancements or improvements which are developed
by said party and which meet the normal requirements of novelty and utility for
issuance of a new patent, and any such patents which may be issued shall be the
property of the party who so applies. Any patent application by either party
shall, to the full extent required by law, disclose as prior art any patent
which has been issued to Assignee covering Assigned Technology. Notwithstanding
the other provisions of this Section 15, Assignee shall not disclose in any
patent application filed by or on behalf of Assignee any Assigned Technology
obtained under this Assignment which has not entered the public domain.
15. Notice. Any notice permitted or required under this Assignment
shall be addressed as follows: (a) If to Assignor, to: xxxxxxxxxx; (b) if to
Assignee, to: PentaPure, Inc., Attention: President, 0000 Xxxxxx Xxxx, Xxxxx,
Xxxxxxxxx 00000; or (c) as to either party, to such other address as the party
may specify in a written notice to the other.
16. Successors and Assigns. (a) During the Exclusivity Period, Assignee
shall not assign its rights under this Assignment (including, without
limitation, its rights to the Assigned Patent Application and the Assigned
Technology) without the written consent of Assignor, except that no such consent
shall be required (i) as to an assignment to WTC Industries, Inc., Assignee's
parent, (ii) as to an assignment to the acquiror in connection with the sale of
all or substantially all of Assignee or WTC Industries, Inc.'s business by
merger, sale of stock, sale of assets or otherwise, or (iii) for a sublicense
granted after the Exclusivity Period to a third party manufacturer as provided
in Section 3(c), or (iv) for the subsequent assignment by a permitted assignee
under (i), (ii) or (iii) above to a new entity which meets the requirements of
(i), (ii) or (iii) above. In each case during the Exclusivity Period, the
permitted assignee, successor, acquirer or surviving party shall execute an
acknowledgement to Assignor in the form attached as Exhibit F of being bound by
the terms of this Agreement. Following the Exclusivity Period, Assignee may
freely assign its rights under this Agreement without the consent of Assignor or
acknowledgment by the assignee, successor, acquirer or surviving partner.
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(b) During the Exclusivity Period, Assignor shall not assign his rights
under this Assignment without the written consent of Assignee, except
that no such consent shall be required as to an assignment (i) to
xxxxxxx, (ii) to the acquiror in connection with the sale of all or
substantially all of xxxxxxx' business by merger, sale of stock, sale
of assets or otherwise, (iii) or to a subsequent assignee, successor,
acquirer or surviving party of an entity which was a permitted entity
under clauses (i) or (ii) above or this clause (iii).
(c) Following the Exclusivity Period, Assignee may freely assign its
rights under this Agreement without the consent of Assignor or
acknowledgment by the assignee, successor, acquirer or surviving
partner, provided, however, that no such assignee, successor, acquirer
or surviving party shall be permitted to assign or license the Assigned
Technology to any other party to design, develop, make or manufacture
xxxxxxxxxxxxx for refrigerator applications.
(d) Subject to the foregoing, this Assignment shall be binding upon and
inure to the benefit of the parties and their respective assignees,
successors, acquirers or assigns.
(e) Nothing in this Section 16 shall limit the right of Assignor to
assign is xxxxxxxxx.
17. Entire Agreement; Amendment. This Assignment contains the entire
agreement of the parties concerning the subject matter. No provision of this
Assignment may be amended, supplement or waived other than by a writing on
behalf of the Assignor and Assignee. This Assignment may be executed in
counterparts, each of which shall be deemed an original, but all of which
together shall constitute but one agreement binding on the parties.
18. Independent Contractors. The parties hereto are independent
contractors with respect to each other and neither has the right or authority to
incur obligations of any kind in the name or for the amount of the other, nor to
commit or bind the other by contract.
19. Severability. Should any part or provision of this Assignment be
held unenforceable or in conflict with the law of any jurisdiction, the validity
of the remaining parts or provisions of this Assignment shall not be affected by
such holding.
20. Governing Law. This Assignment is made in and shall be construed in
accordance with the laws of the State of xxxxxxx.
21. Arbitration. Any and all disputes concerning the interpretation,
application, breach or claimed breach of this Assignment shall be settled by
binding arbitration in accordance with the rules of the American Arbitration
Association in a proceeding conducted before a single arbitrator in xxxxxxxxxxx.
The arbitrator shall award to any prevailing party in the arbitration proceeding
(a) interest on any damages awarded to the prevailing party, computed at the
prime rate prevailing at the time of the award, from the date the arbitration
proceeding was commenced, and (b) the reasonable attorneys incurred by the
prevailing party in bringing and conducting the arbitration proceeding. Judgment
may be entered on the arbitrator's award in any court having jurisdiction.
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IN WITNESS WHEREOF, the parties hereto have executed this Assignment as
of the day and year set forth above.
ASSIGNOR: PENTAPURE INCORPORATED
/s/ xxxxxxxxxxx By: /s/ Xxxxx Xxxxxxxxx
---------------------------------- ---------------------------------
xxxxxxxxxxx Xxxxx Xxxxxxxxx, President
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Exhibits to Exhibit 2.1
A Assigned Technology
B Consideration
C1&2 Assignment of Patent Application
D Confirmation of no claim
E Release of certain collateral
F Form of acknowledgement by assignee
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