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Exhibit 10.4
SUB-LICENSE AGREEMENT
AGREEMENT made and entered into as of the 16th day of January, 1984, by
and between INSITUFORM OF NORTH AMERICA, INC., a corporation organized and
existing under the laws of the State of Delaware, hereinafter referred to as
"North America" and Insituform East, Inc., a Delaware corporation, having a
principal place of business at 0000 Xxxxxxxxx Xxxxx, Xxxxxxxx, Xxxxxxxx 00000,
hereinafter referred to as "Operator";
WITNESSETH
WHEREAS, North America has valuable experience in the practice of
certain inventions, know-how and techniques comprising the subject matter of
this Agreement and possesses valuable information with respect thereto;
WHEREAS, North America is the exclusive licensee of INSITUFORM
INTERNATIONAL N.V., a corporation organized and existing under the laws of the
Netherland Antilles having a principal place of business at X.X. Xxx 000,
Xxxxxxx Xxxxxxxxxx, Antilles, hereinafter referred to as "International",
throughout the United States of America except California, of certain know-how,
patent rights and inventions relating to methods, apparatus and materials used
in the lining of sewers, tunnels, pipelines and other passageways by
impregnating an absorbent layer with a synthetic resin, and retaining such layer
in place in such passageway while the layer cures or is cured and any
improvements thereon, and
WHEREAS, Operator is desirous of gaining knowledge of such inventions,
know-how, techniques, and information and an exclusive right and license within
and throughout the territory listed on Schedule A herein to use the same
together with any and all patent rights and copyrights relating thereto under
which North America has or obtains the right to grant licenses therein;
NOW, THEREFORE, in consideration of the mutual covenants and
undertakings set forth herein, the parties hereto agree, as follows:
I. DEFINITIONS. As employed herein.
A. "Territory" shall mean that geographical area set forth on Schedule
A within which Operator may exploit the various inventions, know-how, patent
rights, techniques and information granted herein.
B. "Subject Matter" shall mean and include all methods, apparatus and
materials used in the lining of sewers, tunnels, pipelines, and other
passageways (excepting those used to carry aromatic hydrocarbons in a gaseous
state) by impregnating an absorbent layer with a synthetic resin, and retaining
such layer in place in such passageway while the layer cures or is cured, and
including all matters relating to the preparation, installation and completion
of said lining.
C. "Know-how" shall mean and include all technological information,
ideas and techniques relating to the Subject Matter now owned or subsequently
acquired by North America or which North America subsequently acquires the right
to communicate to its licensees within the United States of America except
California, except any information, ideas or techniques which are common
knowledge to the industry or which are readily available from sources other than
North America.
D. "Patent Rights" shall mean and include the patents and patent
applications designated in Schedule B attached hereto and made a part hereof
together with any and all other patents and patent applications relating to the
Subject Matter in the Territory under which North America has, or hereafter
acquires, the right to license others.
E. "Copyrights" shall mean and include any and all copyrights at common
and/or statutory law within the Territory which relate to plans, brochures,
instructions or other means of expression, including photographs, diagrams and
other visual presentations, having to do with the Subject Matter or useful in
connection with the commercialization thereof, which North America has, or
hereafter acquires, the right to license others.
F. "Materials" shall mean and include any and all compositions,
products, components and other materials, whether patented or unpatented, for
use in the practice of the Subject Matter. Such Materials shall include by way
of illustration but not of limitation, the resin-absorbent material, the
impervious sheet material, the thermosetting resin and any and all other
materials which go into the lining of passageways or the like in accordance with
the Patent Rights except for such fuels as may be required for energy purposes.
G. "Apparatus" shall mean and include but not be limited to any and all
tools, equipment, instruments, machines, and devices, whether patented or
unpatented, for use in the practice of the Subject Matter.
H. "Royalty" shall mean an amount payable by Operator to North America
equivalent to 8% of the gross contract price of all sales and contracts
performed by Operator utilizing the Subject Matter as further defined herein.
Words of the neuter gender shall be deemed to be of the masculine or
feminine gender where the context requires. Words of the singular number shall
be deemed to be plural where the context requires and vice versa.
II. GRANT. North America hereby grants Operator an exclusive,
non-transferable right and license within and throughout the Territory:
A. To utilize the Know-how, to practice the inventions of the Patent
Rights relating to the Subject Matter, and to sell the resultant product,
however, the Subject Matter may not be used to line tunnels, pipelines and
passageways carrying aromatic hydrocarbons in the gaseous state;
B. To use any and all Copyrights, if there are any, as an adjunct to
the practice of such methods and the commercialization thereof; and
C. To use and display "Insituform" as a trademark in connection with
each and every aspect of the exploitation of the Process including but not
limited to all materials, apparatus and products sold hereunder purchased from
North America or a source recommended and approved by North America. All
equipment, letterheads, invoices, advertising signs of all types and printed
material shall bear appropriate insignia acknowledging such products, material
or equipment as under exclusive license from Insituform of North America, Inc.
D. The Operator hereby acknowledges that the name, "INSITUFORM", is a
valid service and/or trademark solely owned by INSITUFORM INTERNATIONAL N.V. and
exclusively licensed to North America, in the territory of the United States
excluding the State of California, and that only North America or its designated
licensees have the right within said territory to use such trademark and such
trademarks, service marks, trade names and copyrights as may presently exist or
be acquired by North America and licensed for use by Operator, along with all
ancillary signs, symbols or other indicia used in connection or conjunction with
said marks. Operator further acknowledges that valuable goodwill is attached to
such trademarks, service marks, trade names, and copyrights, and that it will
use same in the manner and to the extent specifically licensed by this
agreement. Operator understands and agrees that license to these Proprietary
Marks is non-exclusive, and that North America, in its sole discretion, has the
right itself to operate businesses under said marks, and to grant other licenses
in, to and under such Proprietary Marks on any terms and conditions North
America deems fit; provided, however that North America may so operate or grant
other licenses subject to the limitations of this agreement within Operator's
exclusive territory, but solely for use of the Insituform Process in lining
tunnels, pipelines, and other passageways used to carry aromatic hydrocarbons in
a gaseous state. Operator expressly covenants that during the term of this
Agreement, and after the expiration or termination thereof, Operator shall not
directly or indirectly contest or aid in contesting the validity or ownership of
said Proprietary Marks and copyrights. Operator agrees promptly to notify North
America of any claim, demand, or suit based upon or arising from, or of any
attempt by any other person, firm or corporation, to use the service and/or
trademarks licensed hereunder, or any trademark, service xxxx, symbol, trade
name, copyright or colorable variation thereof, in which North America has a
proprietary interest. Operator agrees also promptly to notify North America of
any material litigation instituted by Operator, or by any person, firm,
corporation or governmental agency against Operator. In the event North America,
pursuant to the terms of this agreement, undertakes the defense or prosecution
of any litigation, Operator agrees to execute any and all documents and do such
acts and things which may, in the opinion of counsel for North America, be
necessary to carry out such defense or prosecution, either in the name of North
America or in the name of Operator as North America shall elect. Operator
expressly recognizes that any and all goodwill associated with said Proprietary
Marks and copyrights, including any goodwill which might be deemed to have
arisen through Operator's activities, inures directly and exclusively to the
benefit of North America, except as otherwise provided herein.
E. The Operator hereby acknowledges that the Subject Matter is a new,
specialized and highly technological process and the exploitation thereof
throughout the United States will best be served by the grant of exclusive
licenses to carefully selected Operators for various defined Territories in the
United States.
F. It is specifically understood and agreed that the grant of this
exclusive license for the Territory is based upon the size and ability of the
Operator to exploit the demand for the Subject Matter within the Territory and
the nature and scope of the Territory has been determined accordingly. The
Operator further understands and agrees that North America retains the right to
grant exclusive Licenses to other Operators in other defined Territories; and
G. It is anticipated that each Operator under this and similar
agreements will fully exploit the Subject Matter in the Territory for the mutual
benefit of Operator, North America, and the customers and potential customers of
such Operator in order to assure market penetration for the Subject Matter, and
that such Operator will assure that the customers and potential customers of
such Operator are provided adequate information, warranties, and services by
such Operator. In so exploiting the Subject Matter, it is anticipated that such
Operator will be required to make significant financial investments in capital
equipment, in marketing and promotion and in providing information and services.
In order to compensate the Operator in other territories for the making of such
investment and to induce them to do so, should Operator seek to exploit the
Subject Matter outside of its exclusive Territory and in an area where an
exclusive license has already been granted, Operator shall pay the exclusive
licensee of such Territory a royalty of 8% of the gross contract price of all
installations utilizing the Subject Matter in addition to the normal royalty
payable to North America as set forth in Paragraph IX herein. Operator
acknowledges that North America cannot prevent other licensees from exploiting
the Subject Matter in Operator's exclusive Territory.
In addition, in order to assure adequate product quality and to meet
all products liability and health and safety requirements, it shall be the
responsibility of Operator, should it perform work outside its exclusive
Territory, to assure that satisfactory arrangements are made to provide full and
complete after-sales service and warranty protection for the job involved,
including specifically, but not limited to, the ability to rapidly deploy a
repair crew to the site of any such job.
H. North America is granting exclusive licenses for the exploitation of
the Insituform process in certain defined Territories, however, it reserves the
right to vary or otherwise modify the nature and scope of subsequent licenses
granted to subsequent licensees to accommodate specific territories and
population considerations and other factors.
I. In connection with his exploitation of the exclusive license granted
herein, Operator understands the importance of its after sales responsibilities
and agrees to provide prompt and efficient service to all those whether within
or outside of his Territory, for whom it has performed any functions utilizing
the practice of the Subject Matter.
III. ADEQUACY OF CONSIDERATION. It is specifically understood and
agreed that the exclusive licenses defined in Paragraph II above relating to the
specific territory set forth on Schedule A, and the Royalty defined in Paragraph
IX shall be deemed adequate consideration for this Agreement.
IV. AVAILABILITY. Since the Insituform Process and the installation
thereof is highly technical, its success in large part, is dependent upon
quality materials made to exacting specifications and North America shall make
available information enabling Operator to acquire Apparatus and Materials as
may be required for Operator to properly operate hereunder. Such Apparatus and
Materials which are not covered by any of the Patent Rights or Copyrights hereof
may be purchased from any source Operator desires. However, all such purchases
by Operator may be subject to North America's approval of the quality and
specifications thereof, which shall not be unreasonably withheld. North America
may in its sole discretion improve, vary or otherwise upgrade the specifications
and quality standards to which the Operator must abide.
V. DISCLOSURE AND TRAINING. Promptly upon execution of this Agreement,
Operator shall proceed to purchase the Apparatus and Materials required properly
to operate hereunder, and North America thereupon shall fully disclose to
Operator all Know-how, Patent Rights and Copyrights, if any, required in the
practice of the methods of the Subject Matter, and shall train at least four (4)
representatives of the Operator in the practice of the methods described above.
Further, North America shall provide a continuing education program to the end
that all lining of sewers, tunnels, pipelines and other passageways in
accordance with the Subject Matter shall be effectively and efficiently
performed and the resultant product of uniformly high quality. The content,
extent, and frequency of the educational program shall be solely at the
discretion of North America. At the request of Operator and subject to
availability, North America will provide a technician experienced in the
operation of the Subject Matter to assist the Operator and to render advice
subject to payment by the Operator of all direct traveling and hotel expenses
and a per diem rate which shall be agreed upon between the parties.
VI. PRESERVATION OF SECRECY. As North America considers its know-how
and technique to be a key element in the successful exploitation of the
Insituform process, it insists that the Operator exert every reasonable effort
to keep in strict secrecy the improvements therein, and modifications thereof
disclosed to Operator by or on behalf of North America and all plans, drawings,
specifications and other data and documents relating thereto and to the Subject
Matter, except as may be necessary, and only to the extent necessary, to
exercise its rights hereunder; and shall not reveal or communicate, or permit,
or cause to be revealed or communicated, the same to any person, firm or
corporation, except as above noted, nor shall Operator disclose or divulge in
whole or in part any trade secrets or private processes of North America or its
affiliated companies; and shall make diligent effort to ensure that its
officers, employees, agents, sub-contractors, and all others under its direction
or control to whom the same is communicated properly pursuant to the purposes of
this Agreement fully observe and abide by such obligations of secrecy. Operator
will execute an Agreement in the form attached hereto as Schedule C dealing with
non-disclosure of such information, among other things, contemporaneous with the
execution of this Sub-license Agreement and will cause its officers, employees,
agents, and other persons to whom such data or documents are disclosed to
execute such agreement.
VII. STANDARDS AND INSPECTION. Operator shall maintain a high standard
of quality in all products made with the practice of the methods of the Subject
Matter and in all other products sold hereunder under the trademark
"Insituform". To ensure the maintenance of such standards, North America may
periodically inspect Operator's practice of the methods of the Subject Matter.
Operator shall cooperate fully with North America in such inspections and shall
promptly put in effect all suggested improvements in its practices of the
methods of the Patent Rights made by North America which are economically
practical and are reasonably calculated to result in an improved product and
service. At all times Operator shall exert diligent effort to practice the
methods and techniques in accordance with the best available technical
information and advice received from North America.
VIII. IMPROVEMENTS AND MODIFICATIONS.
A. If during the term of this Agreement, the Operator, its officers,
agents or employees develop any improvements or modifications in the Subject
Matter, all such information must be disclosed immediately in writing to North
America and will become the property of North America. North America is obliged
to disseminate all such information and material to all of its licensees for
their mutual benefit. Operator will cause each of its officers, agents and
employees to execute an Agreement in the form attached hereto as Schedule C
requiring disclosure to North America and Operator of all such improvements and
modifications among other things.
B. Operator recognizes and agrees that from time to time hereafter
North America may change or modify the system presently identified by the xxxx,
"INSITUFORM", including the adoption and use of new or modified trade names,
trademarks, service marks or copyrighted materials, new products, new equipment
or new techniques, and that Operator will accept, use and display for the
purpose of this Agreement any such changes in system, including new or modified
trade names, trademarks, service marks or copyrighted materials, new products,
new equipment or new techniques, as if they were part of this Agreement at the
time of execution hereof. Operator will make such expenditures as such changes
or modifications in the system may reasonably require, and do so within a
reasonable time.
IX. ROYALTY.
A. The Operator will pay quarterly to North America a Royalty equal to
8% of the gross contract price of all contracts, including sales of the Subject
Matter, whether or not invoiced or paid, for the installation of the Subject
Matter, including preparatory and finishing work therefor, carried out by the
Operator, or any agent, employee, subcontractor or independent contractor
retained for such purpose, in its or any other Territory, such gross contract
price (adjusted for all proper change orders and contractually required
adjustments) being calculated after adding back trade discounts and other
preferences, provided however that such price is calculated at the going
commercial rate (i.e. current market price derived from arms length negotiation)
and in the event that the Operator carries out installations in the Territory at
less than the going commercial rate, then for the purposes of calculation of
Royalty due in respect of such work, it will be assumed that the Operator
performed such installations at the going commercial rate.
The gross contract price shall include the cost of all raw materials
necessary to complete the installation of the Subject Matter. If some or all of
the raw materials are acquired separately by the ultimate customer the cost
thereof shall nevertheless be added to the price charged by the Operator for the
purpose of computing Royalty under this Agreement. The gross contract price
shall also include the value of any actual, preparatory and/or finishing work
performed by any subcontractor or independent contractor, whether retained or
hired by Operator, its agents or employees, the ultimate customer, or any other
party, when such actual, preparatory and/or finishing work is performed as a
part of and/or adjunct to the installation and use of the Subject Matter, and
the value of any such work shall nevertheless be added to the price charged by
the Operator for the purpose of computing the Royalty under this Agreement.
Within 45 days after the end of each calendar quarter or portion
thereof the Operator shall submit to North America a written report in such form
as may be requested by North America fully detailing all sales and work
performed utilizing the Subject Matter during such calendar quarter, whether or
not invoiced or paid, the total of amounts invoiced, the contract price and
terms for the work performed, the stage of completion, a computation of the
Royalty due, and such other information as North America may reasonably request
and shall be accompanied by payment in full in favor of North America for the
Royalties due North America.
Operator shall keep accurate records of all of its operations involving
the Subject Matter and of all contracts entered into involving the Subject
Matter. North America or its designated agent shall have a right to inspect and
audit any and all such records and contracts at all reasonable times at its
expense, provided that North America shall not disclose any confidential
information so obtained to persons other than employees or agents of North
America except pursuant to subpoena of a court of proper jurisdiction.
B. Minimum Royalty Obligation
During the year commencing July 1, 1985 through June 30, 1986, Operator
undertakes and agrees to pay North America a total royalty of not less than
$91,700.00. Should Operator fail to generate sufficient royalties as per
Paragraph IX A above to achieve such minimum payment, he may contribute such
additional amounts so as to meet the minimum set forth herein. In meeting the
minimum royalty obligation hereunder, only royalties realized from work
performed within the Operator's Territory will be included in such calculation.
The Operator is further obligated, beginning July 1, 1986 and continuing for
each and every subsequent and successive twelve (12) month period during the
term of this agreement, to pay to North America, a total Royalty of not less
than $91,700.00 subject however, to increases or decreases in the Engineering
News Record Construction Cost Index as compiled by McGraw Hill Publications for
each 12 month period or a comparable index should such index not be available.
Any such contribution due from the Operator to North America to meet the minimum
set forth herein shall be made within 45 days after the end of each relevant 12
month period. In the event of a termination of this License Agreement during the
second or subsequent years thereof, Operator shall pay a pro rate minimum
Royalty for the year of termination based on the number of months in which the
License Agreement was in effect during such year.
C. Non-Payment.
Should Operator fail to pay the Royalties set forth in this Paragraph
IX herein in a timely manner, North America shall have the right pursuant to
Paragraph XIV hereof, TERMINATION, to terminate its agreement with the Operator.
X. RECORDS. Operator shall keep true and accurate records of all
operations of the Subject Matter. Such records shall be adequate to permit North
America to verify the accuracy of the Royalty Paragraph IX hereof and to perform
inspection and audit of information called for in Paragraph VII. Such records
shall be open at reasonable times during regular business hours for inspection
and copying by North America and its duly authorized agents and representatives.
North America shall make such periodic inspection of the records as it may
consider necessary, provided always that International, the owner of the Patent
Rights sub-licensed hereunder, or North America may from time to time require a
specific audit to be carried out on Operator's operations hereunder and in such
event such audit shall be undertaken by North America with a representative of
International in attendance if International so elects. Such audits shall be at
the expense of the party requiring the audit unless the audit discloses a
material violation of this Agreement in which event the party requiring the
audit shall be reimbursed the expenses of the audit by the party in violation.
XI. WARRANTY.
By North America. North America represents and warrants that it is the
exclusive licensee of International throughout the United States to the Patent
Rights described on Exhibit A and fully entitled to enter into this Agreement.
North America further represents and warrants that the Subject Matter can
successfully line many types of sewers, tunnels, pipelines and other passageways
when said methods are properly performed and that it will instruct Operator in
such performance. Every reasonable precaution will be taken by North America in
producing all Materials and Apparatus, compiling all data, and offering
instructions in the methods of use of the Materials and Apparatus purchased from
North America for operation hereunder to assure that they comply with North
America's exacting standards and that the ultimate lining for sewers and other
passageways maintains a high standard of quality. To the best of North America's
knowledge, all information given will be correct and the Materials and Apparatus
are believed by North America to be adequately suited to the purposes intended.
However, it is impossible to anticipate every possible variation in the manner
of use or the conditions under which the Operator will apply the Materials,
Apparatus, Know-how, data, and methods and North America makes no warranty as to
the results which the Operator will attain, and shall under no circumstances be
held responsible for any such results that occur as a consequence of a departure
from the instructions provided or from negligence or malfeasance on the part of
Operator except as may be contained in the specific written warranty provided by
North America with regard to any materials furnished by North America. North
America makes no representation nor warranty as to the validity of any of the
Patent Rights hereof, other than that it has no knowledge of any basis on which
any of the issued patents is invalid; no representation nor warranty that
performance in accordance with this Agreement will not infringe any existing or
subsequently issued or pending patent, other than that it has no knowledge of
the existence of any such patent, and no representation nor warranty that
"Insituform" is available for use as a tradename, trademark, and/or certificate
xxxx in the United States other than it believes it to be. Further, North
America shall not be held responsible for use by the Operator of any such
Materials, Apparatus, Know-how, data or method in such a manner as to infringe
any patent, trademark or copyright owned by another. North America agrees not to
sell its Materials or Apparatus hereof below its cost in violation of any
applicable provision of any antitrust or unfair trade practice statute and to
charge all Sub-Licensees of the Patent Rights Royalties according to the same
scale or formula.
Notwithstanding the above North America does hereby agree, at its
expense, to use its best efforts to defend the Patent Rights by such means as it
in its sole discretion may determine appropriate, including but not limited to,
patent infringement suits. North America reserves, however, the exclusive right
to determine whether a patent infringement has occurred or whether litigation or
other action is appropriate or feasible.
By Operator. Operator agrees to indemnify, defend and hold North
America harmless from any and all claims for bodily injury including death,
personal injury and damage to property of Operator, North America and/or others,
which arise from the alleged negligence or malfeasance of Operator or from the
existence or use of Materials and/or Apparatus acquired from sources other than
North America or which are produced by Operator.
The Operator also agrees at its expense to procure a policy or policies
of insurance from an insurance company or companies satisfactory to North
America, providing coverage for the operations of the Operator, including
product and completed operations, with minimum limits of Two Million Dollars
($2,000,000.00) per occurrence and Two Million Dollars ($2,000,000.00) annual
aggregate for injury to persons and Two Million Dollars ($2,000,000.00) annual
aggregate for damage to property. The operator also agrees to have North America
named as an additional named insured under the above described policy or
policies and to cause North America to be furnished with a Certificate of such
insurance which shall contain a requirement that North America be notified
thirty (30) days prior to any cancellation or any reduction in coverage or
limits. The insurance required above shall commence prior to the time the
Operator commences operations under this Sub-License Agreement and shall
continue in force throughout the life of the Sub-License Agreement until it
expires or is terminated.
This Agreement does not constitute Operator as an agent, legal
representative, joint venturer, partner, employee, or servant of North America
for any purpose whatsoever; and it is understood between the parties hereto that
Operator is an independent contractor and is in no way authorized to make any
contract, agreement, warranty or representation on behalf of North America, or
to create any obligation, express or implied, on behalf of North America.
Operator shall prominently display in its place of business a certificate from
North America stating that said business is operated by Operator as a Licensee
of North America, and not as an agent thereof. Under no circumstances shall
North America be liable for any act, omission, debt or any other obligation of
Operator. Operator shall indemnify and save North America harmless against any
such claim and the cost of defending against such claims arising directly or
indirectly from, or as a result of, or in connection with, Operator's operation
of the licensed business.
Operator shall promptly pay when due all taxes and assessments against
the premises or the equipment used in connection with Operator's business, and
all liens or encumbrances of every kind or character created or placed upon or
against any of said property, and all accounts and other indebtedness of every
kind incurred by Operator in the conduct of said business. Operator shall have
the right to contest the validity or amount of any assessment, tax, lien or
encumbrance, provided that Operator shall (1) give North America notice of its
intention to contest (2) diligently prosecute such contest, and (3) at all times
effectively stay or prevent any official or judicial sale of such property or
any part thereof by reason of the non-payment of any lien, encumbrance, tax, or
assessment. Operator shall comply with all federal, state, and local laws and
regulations, and shall timely obtain any and all permits, certificates, or
licenses necessary for the full and proper conduct of its business.
XII. DILIGENCE. Operator understands that the Subject Matter has been
designed to meet the growing needs of its customers and potential customers
within his exclusive Territory and that its license has been specifically
granted on the understanding that it will use all reasonable endeavors to create
a demand within the Territory for the Insituform products, and shall fill such
demand all as good businesslike conduct requires. The operator specifically
agrees to immediately establish a business location within its exclusive
territory including an office for the conduct of its Insituform business, and
facilities for the maintenance and storage of its equipment and materials. To
assure Operator's financial ability to meet its obligations hereunder, Operator
covenants that at all times it shall retain a net worth of at least $500,000,
and shall provide annual financial statements to North America, each with an
officer's certificate stating that the statements have been prepared in
accordance with generally accepted accounting principles applied consistently
with the prior year, and present fairly the financial position of the company
and the results of operations and changes in financial position for the year
then ended. It is specifically understood and agreed that nothing herein
provided shall be construed as requiring Operator to operate in accordance with
any designated marketing plan or system which, except for the maintenance of
high standards of quality, the exercise of diligence and the performance in
accordance with the terms and conditions hereof, are left to the determination
of Operator.
XIII. TERM. The Term of this Agreement shall commence on the date first
above written and shall continue for the life of the last to expire of the
patents (see Schedule A) or the Patent Rights including any improvements or
modifications thereto including patents subsequently granted extending such
life, unless sooner terminated as hereinafter provided.
XIV. TERMINATION
A. By Operator. The Operator may terminate this Agreement at any time
by service of written notice to such effect on North America two (2) calendar
quarters in advance of the effective date thereof and by complying with the
applicable terms and conditions of this Paragraph XIV. During such period after
notice but prior to actual termination, Operator shall not bid or accept any
additional jobs without the written consent of North America.
B. By North America. In the event Operator (i) becomes insolvent or a
petition in bankruptcy is filed by or against Operator and not removed within 90
days thereafter, or a receiver is appointed for Operator; (ii) fails to pay the
minimum Royalties in accordance with Paragraph IX hereof or other Royalties
hereunder, or fails to provide computations of Royalties, within fifteen (15)
days of when due and such failure shall continue for a period of fifteen (15)
days after written notice from North America to the Operator; (iii) fails to
perform any other material term or condition of this Agreement and fails to
correct the same within fifteen (15) days after written notice from North
America to the Operator, or if not reasonably capable of correction within such
period, fails to commence such correction within such period and thereafter
diligently proceeds to make such correction; or (iv) in the event Operator's net
worth falls below $500,000; then in any such event, North America may declare
this Agreement terminated immediately upon written notice to the Operator. Such
termination shall not limit or affect any other right or remedy of North
America, including the right to damages resulting from the Operator's breach.
C. Consequences. Upon termination of this Agreement by either of the
parties hereto, Operator shall immediately pay North America all Royalties then
due from it, terminate all use by it of the word "Insituform" as a tradename,
trademark, certification xxxx or corporate name, avoid all subsequent use of all
tradenames, trademarks, certification marks or corporate names likely to be
confused with "Insituform" as well as all stationery, invoices, signs or other
visual devices displaying or otherwise associated with "Insituform", terminate
all use of the methods, as well as the manufacture, use and sale of the products
of the Patent Rights, Copyrights, and Know-how; and assign to North America free
of charge all claims to and any and all rights arising from the use of
"Insituform", or combination involving "Insituform", in the specific Territory
and return to North America all confidential matter in its possession such as
instruction manuals and written know-how and any copies which it has made of the
same. Following termination Operator shall continue to be obligated to provide
all after sales services for which it has theretofore contracted, including the
honoring of all warranties. Should Operator fail to fulfill such obligations,
and should North America, in its sole discretion, whether for reason of
preserving product goodwill or otherwise, choose to perform any such obligations
(this paragraph in no way to be construed as an assumption by North America of
any obligations for which it is not specifically contractually responsible),
then Operator shall promptly reimburse North America the reasonable cost to
North America of performing such obligations of Operator. If Operator is a
corporation having the word "Insituform" as a part of its corporate name,
Operator shall, within sixty (60) days of termination amend its corporate name
to remove the word "Insituform" therefrom.
Operator shall promptly pay to North America all damages, costs and
expenses, including reasonable attorney's fees, incurred by North America by
reason of default on the part of Operator, whether or not such occurred prior to
or subsequent to the termination or expiration of the Agreement, and said sum
shall include all costs and expenses, including reasonable attorney's fees,
incurred by North America in obtaining injunctive or other relief to enforce the
provisions of this contract. No right or remedy herein conferred upon or
reserved to North America is exclusive of any other right or remedy herein or by
law or equity provided or permitted; but each shall be cumulative of every right
or remedy given hereunder. In addition to whatever remedy or remedies North
America may have by way of damages for violation of the provisions of this
Agreement and/or termination of the same, North America shall also have the
right to injunctive relief to enforce the provisions of this Agreement. Operator
herein agrees to abide by all of the terms and conditions of the Non-Disclosure
Agreement despite the termination of this License Agreement.
XV. Notices. Any notice required or permitted to be given or served
upon either party hereto pursuant to this Agreement shall be sufficiently given
or served if sent to such party by certified mail, postage prepaid addressed to
such party as set forth below or by telex, or to such other address as it shall
designate by written notice to the other party, as follows:
In case of notice to North America:
0000 Xxxxxxxx Xxxx
P.O. Box 181071
Memphis, TN 38118
In case of Notice to Operator:
Insituform East, Inc.
0000 Xxxxxx Xxxxx
Xxxxxxxx, Xxxxxxxx 00000
XVI. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
assigns with the specific understanding that no Operator or partner (if Operator
is a partnership), without North America's prior written consent, shall, by
operation of law or otherwise, sell, assign, transfer, convey, give away, or
encumber to any person, firm or corporation, its interest in this Agreement or
its interest in the license granted hereby or its interest in any proprietorship
which owns any interest in the license, nor offer, permit, or suffer the same.
Any such assignment shall be made on the express condition that the assignor
guarantees the performance of its assignees strictly in accordance with the
terms and provisions hereof. In the event that Operator is a corporation,
Operator agrees that this license may not be transferred by sale, conveyance,
operation of law or otherwise, without the express written permission of North
America. Should beneficial ownership of an amount of the outstanding common
stock or other indicia of ownership in Operator be conveyed so as to effect a
change in the control of Operator, whether by sale, conveyance, operation of law
or otherwise, without having first obtained the written consent of North America
to transfer the license, North America shall at its option have the right to
immediately terminate this license agreement. Any purported assignment of this
agreement not having the aforesaid consent shall be null and void and shall
constitute a material default hereunder. North America shall not unreasonably
withhold its consent to any such transfer of this agreement when requested. Such
consent shall not be deemed to be unreasonably withheld if the transferee would
not have qualified for a license under the guidelines of North America if it had
applied for such license in the first instance.
XVII. DEATH OF OPERATOR. In the event of the death of an individual
Operator, or any partner of an Operator which is a partnership, the heirs,
beneficiaries, devisees or legal representatives of said individual or partner,
together with all surviving partners, shall, within ninety (90) days of such
event:
A. Apply to North America for the right to continue to operate under
the license (for the duration of the term of this Agreement), which right shall
be granted if North America, in its sole judgment considers such continuing
right to be practicable; or
B. Sell, assign, transfer, or convey Operator's interest in compliance
with the provisions of paragraph XVI of this Agreement; provided, however, in
the event a proper and timely application for the right to continue to operate
has been made and rejected, the ninety (90) days to sell, assign, transfer, or
convey shall be computed from the date of said rejection.
Except as herein provided, if said representatives fail to take the
steps hereinabove noted, this Agreement and license shall automatically
terminate ninety (90) days after the death of such operator or partner.
XVIII. EXCLUSIVE LICENSE. North America has herein granted an exclusive
license to the Operator together with its Know-how, technical experience and
training program for the exploitation of the Insituform process within and
throughout the defined Territory. If, despite North America's best efforts to
maintain the exclusivity of its licenses and defend its Patent, Trademark and
Copyright protections, such exclusivity and/or protections should be terminated
for any reason whatsoever, the Operator hereunder is nevertheless obligated to
comply in full with each and every term and condition of this agreement,
including, but not limited to, the payment of Royalties to North America and the
maintenance of high standards of quality and service.
XIX. EXCLUSIONS. In the event that any one or more of the provisions of
this Agreement is, or are, held to be invalid it is agreed between the parties
that if legally practical said provision or provisions shall be considered never
to have been contained herein and the Agreement shall otherwise continue in
force and effect.
XX. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
between the parties hereto with respect to the Subject Matter hereof and
supersedes all prior oral and written understandings and agreements between the
parties hereto concerning the Subject Matter. The paragraph headings of this
Agreement are for convenience only and have no other significance. The
provisions of this Agreement shall not be waived, modified or amended, except by
a subsequent writing signed by both parties.
XXI. APPLICABLE LAW. This Sub-License Agreement shall be governed by
and construed in accordance with the laws of the State of Tennessee.
The foregoing notwithstanding, to the extent that the provisions of
this Agreement provide for periods of notice less than those required by
applicable law, or provide for termination, cancellation, nonrenewal or the like
other than in accordance with applicable law, such provisions shall, to the
extent such are not in accordance with applicable law, not be effective and
North America shall comply with applicable law in connection with each of these
matters.
XXII. BENEFIT. This Agreement shall issue only to the benefit of North
America, Insituform International, N.V., Operator, and their approved successors
and assigns.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
INSITUFORM OF NORTH AMERICA, INC. OPERATOR
By /s/ Xxxx Xxxxxx /s/ Xxxxxx X. Xxxx III
SCHEDULE A
TERRITORY
In the State of Ohio, all Counties North of, and including, Darke, Miami,
Shelby, Logan, Union, Xxxxxx, Morrow, Knox, Licking, Muskingum, Noble, and
Monroe.
SCHEDULE B
UNITED STATES PATENT
#4,064,211
SCHEDULE C
NONDISCLOSURE AGREEMENT AND AGREEMENT ON
IMPROVEMENTS, MODIFICATIONS AND TECHNOLOGICAL DEVELOPMENT
Insituform East, Inc.
(Name of Sublicensee)
being a party to a certain Sublicensing Agreement, dated January 16, 1984, by
and between itself and Insituform of North America, Inc. (hereinafter
"Insituform"), pursuant to the terms of the aforesaid Agreement,
-OR-
--------------------------------------------------------------------------------
(Name of employee, agent or representative)
as an employee, agent or representative of the above-named sublicensee, and for
good and valuable consideration, receipt of which is hereby acknowledged,
sublicensee or its employee, agrees as follows:
1. Operator or his employee, agent, or representative shall not during
the term of this Agreement or after its termination communicate or divulge to
any other person, persons, partnership or corporation except for marketing
purposes, any information or knowledge concerning the method of manufacture,
preparation, promotion, sale or distribution used in the North America business,
nor shall Operator or his agent, representative or employee disclose or divulge
in whole or in part any trade secrets or private processes of North America or
its affiliated companies, or any Subject Matter defined in the above-referenced
Sublicensing Agreement to include all methods, apparatus and materials used in
the preparation and installation (including cutting out of laterals of the
lining of sewers, tunnels, pipelines, and other passageways) excepting those
used to carry aromatic hydrocarbons in a gaseous state by impregnating an
absorbent layer with a synthetic resin, and retaining such layer in place in
such passageway while the layer cures or is cured.
2. Operator or his agent, representative or employee shall at all times
treat as confidential, and shall not at anytime disclose, copy, duplicate,
record, or otherwise reproduce, in whole or in part, or otherwise make available
to any unauthorized person or source, the contents of any manual or other
technical information or writing provided by Insituform.
3. If during the term of this Agreement, the Operator or his employee,
agent or representative, develop any improvements or modifications in the
Subject Matter, all such information must be disclosed immediately to
Insituform, and will become the property of Insituform.
4. Should Operator or his employee, agent or representative, design,
develop, devise or invent any process, device, equipment or technology for use
in conjunction with the Subject Matter, or as a development, improvement or
modification of Subject Matter, which process, device, equipment or technology
is, or may be, patentable or subject to copyright law, then aforesaid Operator,
or his employee, agent or representative, shall sell to North America all of his
right, title or interest in said process, device, equipment or technology,
including patent rights or copyrights, if any, for the sum of ONE DOLLAR.
IN WITNESS WHEREOF, Operator or its employee, agent or representative,
does hereby set his hand.
Insituform East, Inc..
(Name of Sublicensee)
By /s/ Xxxxxx X. Xxxx, III
-----------------------------------------------------
(Employee, Agent or Representative of Operator)
WITNESS
/s/ Xxxxxx X. Xxxxxxx
Witness
January 16, 1984
Insituform East, Inc.
0000 Xxxxxx Xxxxx
Xxxxxxxx, Xxxxxxxx 00000
Gentlemen:
This is in reference to the Sub-License Agreement between us for the Northern
Ohio Territory dated January 16, 1984.
For royalty purposes, the Ohio Territory's anniversary date will be June 30 of
each year and the anniversary date of your previously existing territories is
also June 30.
Until June 30, 1986, Insituform East, Inc. may, at the end of each such
anniversary year, use royalties from any of the previously existing territories
that are in excess of the minimum royalties to meet the minimum royalty due for
the Northern Ohio Territory.
Accepted and Agreed
INSITUFORM EAST, INC. INSITUFORM OF NORTH AMERICA, INC.
By /s/ Xxxxxx X. Xxxx, III /s/ Xxxx Xxxxxx
--------------------------- ---------------------------------------
January 16, 1984
Insituform East, Inc.
0000 Xxxxxx Xxxxx
Xxxxxxxx, Xxxxxxxx 00000
Gentlemen:
In relation to Clause IX, headed "Royalty" of the Insituform Sub-License granted
by us to your company, and dated January 16, 1984, we confirm that in computing
the gross price of all contracts involving the installation of the Insituform
Process, you may deduct the following:
(a) Fees billed for preparatory T.V. survey work but not including the
immediate T.V. survey which is recommended as part of the installation
process.
(b) Fees billed for overpumping provided that these shall not exceed
$2,000 per line unless agreed to in advance.
(c) Fees billed for incidentals, including cleaning, not directly relating
to the installation but performed in conjunction therewith provided
these do not exceed 3.5% of the total contract price.
INSITUFORM OF NORTH AMERICA, INC.
By: /s/ Xxxx Xxxxxx
-------------------------------------------------
Xxxx Xxxxxx,
Executive Vice President
Accepted and Agreed:
INSITUFORM EAST, INC.
By: /s/ Xxxxxx X. Xxxx, III
---------------------------------------------------------
