EXHIBIT 10.10
JOINT VENTURE AGREEMENT
This Joint Venture Agreement (the "Agreement") is made and entered into
this 4th day of March, 1997, by and between IAS COMMUNICATIONS, INC., an Oregon
corporation ("IAS") and EMERGENT TECHNOLOGIES CORPORATION, a West Virginia
corporation ("ETC").
W I T N E S S E T H:
WHEREAS, Integral Concepts, Inc. ("ICI") has a License Agreement from West
Virginia University Research Corporation of Morgantown, West Virginia ("WVURC"),
for certain technologies related to the design, construction and operation of
the Toroidal Helical Antenna, U.S. Patent Office Serial No. 07/993,970, et seq.,
and defined herein to be embraced within the expression "the Technology"; and,
WHEREAS, IAS was granted an exclusive worldwide sublicense from ICI of its
right, title and interest in and to the Technology, excluding all military
applications and resulting procurement interests, pursuant to the sublicense
dated July 10, 1995, by and between ICI and IAS (the "IAS Sublicense"); and,
WHEREAS, ETC was granted an exclusive worldwide sublicense from ICI of its
right, title and interest in and to the Technology for all military/government
applications and resulting procurement interests pursuant to the sublicense
dated January 2, 1996, by and between ICI and ETC (the "ETC Sublicense"); and,
WHEREAS, the IAS and ETC Sublicenses were amended as of March 4, 1997 (the
IAS and ETC Sublicenses as amended are attached hereto as Exhibit A and
incorporated herein by reference); and,
WHEREAS, the parties desire to cooperate in the research and development of
certain applications for the Technology and also desire to form a new
corporation, THA Manufacturing Co., Inc., a West Virginia corporation ("THA"),
to consolidate certain functions including assembly and manufacturing of certain
products relating to the Technology and further develop certain applications of
the Technology, all according to the terms and conditions contained herein.
NOW, THEREFORE, the parties agree as follows:
1. Grants of Rights. IAS and ETC hereby grant to THA exclusive assembly,
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manufacturing and research and development rights for the Technology, subject to
the provisions contained herein relating to sublicensing as set forth in Section
4 hereof. THA also shall conduct research and development of certain
applications of the Technology that benefit both IAS and ETC.
2. Board Membership. The Board of Directors of THA shall consist of
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representatives of IAS and ETC in proportion to their respective shareholdings
at all times; initially the Board of Directors of THA shall consist of four (4)
Directors and IAS and ETC shall each appoint two (2) members to the Board.
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3. License Rights. Each party hereto acknowledges:
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a. The exclusive rights of IAS to all commercial applications (as
defined in the IAS Sublicense and amendments thereto) and resulting
procurement uses of the Technology.
b. The exclusive rights of ETC to all military/governmental
applications (as defined in the ETC Sublicense and amendments thereto) and
resulting procurement uses of the Technology.
4. Rights to Sublicense. IAS and ETC specifically retain all rights to
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sublicense uses, applications, and manufacturing of the Technology as set forth
in the IAS Sublicense and ETC Sublicense. IAS and ETC shall also have the right
to and may, pursuant to their respective sublicense agreements, enter into
sublicense agreements relating to any and all additions and enhancements to the
Technology.
5. Manufacturing Costs. Initially orders for products relating to the
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Technology shall be manufactured and assembled by third parties selected by THA.
On these orders and any other orders not manufactured or assembled by THA, each
party hereto shall be responsible for its share of manufacturing, assembly and
shipping costs in proportion to the amount of the order allocated to IAS and ETC
respectively.
6. THA Organizational and Capital Expenses and Budget. IAS and ETC shall
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each fund 50% of the initial organizational and capital expenses of THA pursuant
to the budget attached hereto as Exhibit B and incorporated herein by reference.
The Board of Directors of THA shall approve all future capital expenditures and
budgets of THA. Payment of organizational and capital expenses in the following
amounts are to be made to THA by the parties hereto: $150,000.00 each within
ten days of the date of execution of this Agreement and $100,000.00 within
ninety days thereafter.
6.1 Initial Equity Interests. The parties shall have the following
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initial equity interests in THA ("Equity Interest"):
ETC - 50%
IAS - 50%
6.2 Changes in Equity Interests. A party's Equity Interest shall be
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changed upon an election by or inability of a party to contribute or to
contribute less to the budget for THA as approved by the Board of Directors
of THA (the "Budget") than the percentage reflected by its Equity Interest.
In such event, that party's Equity interest shall be reduced accordingly as
provided in this Section 6.
6.3 Dilution. If either party elects to contribute to the budget
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some lesser amount than its Equity Interest percentage or not at all, the
Equity Interest of the Diluting Party shall be recalculated by dividing (i)
the sum of (a) the total of Diluting Party's contributions, and (b) the
amount, if any, the Diluting Party elects to contribute to the Budget: by
(ii) the sum of (a) and (b) above for both parties; and then multiplying
the result by 100. The Nondiluting Party shall have 20 days from the date
on which it receives notice of noncontribution from
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the Diluting party to fund the Diluting Party's share of the Budget. In
such event, the Diluting Party's Equity Interest shall be readjusted
pursuant to this Section 6.3.
7. Shareholder Agreement and Voting Agreement. Each party hereto shall
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sign the Shareholder Agreement in the form attached hereto as Exhibit C and
incorporated herein by reference. ETC also agrees that as long as IAS is a
shareholder of THA, ETC shall execute a proxy granting to IAS the right to vote
all shares of THA voting stock owned by ETC and any of its affiliates on all
matters.
8. On Site Audit Rights. IAS and ETC shall have full on site audit
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rights of all books and records of THA.
9. Referral of Orders. All parties hereto agree to refer any and all
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potential orders relating to the Technology to IAS for "commercial" applications
and to ETC for "military/governmental" applications (as defined in the
respective Sublicense Agreements and amendments thereto).
10. THA's Right to Solicit and Receive Orders. THA shall have the right
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to solicit and receive orders for products from the commercial and
government/military sectors so long as the sublicensee of the technology
receives the benefit of such order(s) as set forth in the IAS and ETC
Sublicenses.
11. Manufacturing Price. THA's initial manufacturing price for the
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antenna products will be cost to manufacture plus 30%. Future adjustments in
THA's manufacturing price will be made at the discretion of THA's Board of
Directors, officers and personnel.
12. Governing Law. This Agreement shall be governed by and construed and
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enforced in accordance with the laws of the State of West Virginia without
giving effect to conflicts of law principles.
13. Assignment. With the exception of a pending agreement between ETC and
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Integral Technologies, Inc. for the possible merger of ETC and ITI, this
Agreement may not be assigned by any party without the prior written consent of
the other parties hereto, and any such assignment shall be binding upon and
shall inure to the benefit of the parties and their respective legal
representatives, successors and permitted assigns.
14. Entire Agreement. This Agreement embodies the entire understanding of
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the parties and there are no further or other agreements or understandings
representations or warranties, written or verbal, in effect between the parties
relating to the subject matter of this Agreement unless expressly referenced
herein.
15. Arbitration. Any controversy or claim arising out of or relating to
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this Agreement or the making, performance or interpretation hereof shall be
resolved by arbitration in accordance with the rules of the American Arbitration
Association then existing, and judgment of the arbitration award may be entered
in any court having competent jurisdiction over the subject matter.
16. Rights Cumulative. No right granted to the parties under this
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Agreement for default or breach is intended to be in full or complete
satisfaction of any damages arising out of such default or breach, and each and
every right under this Agreement, or under any other document or instrument
delivered hereunder, or allowed by law or equity, shall be cumulative and may be
exercised from
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time to time.
17. Time of the Essence. Time is of the essence for each provision of the
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Agreement in which time is an element.
18. General Provisions:
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a. Modification of Waiver. No supplement, modification or amendment
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of this Agreement shall be binding unless executed in writing by the
parties. No waiver of any of the provisions of this Agreement shall be
deemed or shall constitute a waiver of any other provision, whether or not
similar, nor shall any single waiver constitute a continuing waiver. No
waiver shall be binding unless executed in writing by the party making the
waiver.
b. Counterparts. This Agreement may be executed simultaneously in
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one or more counterparts, each of which shall be deemed an original, but
all of which together shall constitute one and the same instrument.
c. No Third-Party Beneficiaries. This Agreement shall not confer any
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rights or remedies upon any person other than the parties and their
respective successors and permitted assigns.
d. Attorneys' Fees. In the event of a dispute between any of the
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parties to this Agreement, the losing party shall pay the prevailing party
all its attorneys' fees, costs of litigation, arbitration, mediation or
other dispute resolution process, costs of investigation and costs of
appeal.
e. Notices. All notices, consents and other communications under this
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Agreement shall be in writing and shall be deemed to have been duly given
when (i) delivered in person; (ii) sent by fax, provided that a copy is
mailed first class mail; or (iii) when received by the addressee, if sent
by express mail, Federal Express or other express delivery service (receipt
requested), in each case to the appropriate addressee or fax numbers set
forth below (or to such other address or fax number as a party may
designate as to itself or himself by notice to the other party):
(1) If to IAS Communications:
Xxxx X. Xxxxxxxxx
00000 Xxxxxxxxxxx Xxx, Xxxxx 000
Xxxxxxxx, X.X. X0X0X0
XXXXXX
Telephone: (000) 000-0000
FAX: (000) 000-0000
(2) If to ETC:
Xxxx Xxxxxxx
000 Xxxxxxx Xxxxx
Xxxxxxxxxx, Xxxx Xxxxxxxx 00000
Telephone: (000) 000-0000
FAX: (000) 000-0000
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IN WITNESS WHEREOF, the undersigned have affixed their respective
signatures.
IAS COMMUNICATIONS, INC.
By:
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Xxxx X. Xxxxxxxxx, President
EMERGENT TECHNOLOGIES CORP.
By:
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Xxxxxx Xxxx Xxxxxxx II, President
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