EXHIBIT 10.48
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PATENT LICENSE AGREEMENT
This Patent License Agreement ("Agreement") is made effective January 1,
2003 between PALWEB CORP., an Oklahoma corporation, having its principal place
of business at 0000 Xxxx Xxxxxxxx Xxxxxx, Xxxxxx, Xxxxx 00000 ("Palweb"), and
Gravity Management & Engineering Group, LLC, a Oklahoma company, having its
principal place of business at 000 Xxxxx Xxxxxxx Xxxxxx, Xxxxx 000, Xxxxx,
Xxxxxxxx 00000 ("GME Group").
RECITALS
A. Palweb is the owner (directly or indirectly through its one or more
affiliates or subsidiaries, including, but not limited to, Plastic Pallet
Production, Inc., an Oklahoma corporation) of and/or has the right to grant
interests in certain inventions, which are the subject matter of the following
United States Letters Patents:
US PATENT NO. ISSUE DATE FILING DATE KNOWN AS
6,241,508 June 5, 2001 July 1, 1999 Multiple Mold Workstation With
Single Injection Feeder and
Hydraulic Pumping Station
and any patent that should be issued from the following United States
Provisional application:
PROVISIONAL APP. FILING DATE KNOWN AS
60/368,490 March 27, 2002 Apparatus For The Continuous
Production Of Plastic Pallets
as well as any reissues or extensions and any corresponding applications and
patents granted worldwide by PalWeb Corp. directly or indirectly through one or
more of its affiliates or subsidiaries during the term of this Agreement.
(collectively called the "Licensed Patents").
B. GME Group desires to obtain the exclusive rights to utilize the
technology covered by the Licensed Patents ("Licensed Technology") throughout
the world ("Licensed Territory").
C. Palweb Corp., directly or indirectly through one or more of its
affiliates or subsidiaries, is willing to grant these rights to GME Group.
PalWeb Corp., its affiliates and subsidiaries are collectively called "PaIWeb"
in this Agreement and referred to in singular neuter pronouns. The term
affiliates means any and all entities that are partially or wholly owned by or
in any way controlled by PalWeb Corp. or its stockholders, directors or
officers.
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Therefore the parties agree as follows:
ARTICLE 1
GRANT OF LICENSE
1.1 LICENSE. Palweb grants to GME Group a license under the Licensed
Patents, including the right to grant sublicenses, utilize the Licensed
Technology in order to make use or sell equipment utilizing the Licensed
Technology ("Licensed Products") with the limitation that the Licensed Products
are not initially sold or leased to persons or entities who intend to utilize
the License Technology and Licensed Products for the manufacturing of shipping
pallets and/or shipping containers or any other plastic product used in the
material handling industry.
1.2 TERM.
(a) INITIAL TERM. The initial term of this Agreement is five years.
(b) RENEWALS. GME Group may renew this Agreement for three additional
terms of five years by giving Palweb 30 days written notice of its
intent to renew prior to the termination of the initial term.
(c) SUBLICENSES. GME Group may not enter into any sublicense for a
term longer than the term of this Agreement. GME Group shall include
in all sublicensing agreements a provision requiring the sublicense to
terminate upon the termination of this Agreement.
(d) EXCLUSIVITY AND NON EXCLUSIVITY. The license shall initially be
exclusive but shall become non exclusive in the event that PaIWeb has
not received a royalty payment of at least $200,000 during the first
twenty four (24) months of this Agreement and at least $100,000 every
twelve (12) month period thereafter.
(e) LIMITED APPLICATION. Under this Agreement, GME is not allowed to
utilize any of the Licensed Technology or Improved Technology for the
purpose of building manufacturing equipment which will be initially or
knowingly used in the plastic pallet or plastic shipping platform or
business.
ARTICLE 2
ROYALTIES AND FEES
2.1 ROYALTY. GME Group shall pay Palweb a royalty equal to 5% of the sales
price or gross lease payment ("Revenue") of each Licensed Product sold of leased
by GME Group, its affiliates or sublicensees. Royalty payments shall be payable
quarterly on Revenue proceeds received during that quarter and shall be due
within 30 days after the end of the payment period.
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2.2 DEFINITIONS.
(a) The term "sales price" or gross lease payment " shall mean gross
Revenue in arm's length transactions with independently controlled
third parties, less reduction for trade discounts, returns or other
allowances, sales, use or similar taxes, shipping charges or
insurance.
(b) The term "affiliates" shall mean any entity that is partially or
wholly owned by or in any way controlled by GME Group or any
stockholder, director or officer of GME Group.
ARTICLE 3
RECORDS AND REPORTS
3.1 GME Group agrees on behalf of itself and its affiliates and
sublicensees under this Agreement to keep accurate records for a period of three
years after the years to which the records pertain. The records must be kept in
sufficient detail to enable the royalties payable by GME Group and its
affiliates and sublicensees under this Agreement to be determined. GME Group
agrees on behalf of itself and its affiliates and sublicensees under this
Agreement to permit the records to be examined from time to time during usual
business hours during the term of this Agreement and for one year after the
expiration or termination of this Agreement by authorized representatives of
Palweb, and to the extent necessary to verify the reports and payments required
under this Agreement.
3.2 GME Group agrees to furnish written reports to Palweb within 30 days
after the end of each quarter of each calendar year during the term of this
Agreement setting out the number and gross selling prices of Licensed Products
sold by GME Group, its affiliates and sublicensees during the preceding quarter,
and the royalties due on these sales. Each report shall be accompanied by a
remittance as provided in Article 2 covering the royalties then due, if any.
3.3 All reports and payments due under this Agreement shall be made to
Palweb at the address on page one of this Agreement, unless GME Group is
notified otherwise in writing by PalWeb.
ARTICLE 4
MARKING
4.1 GME Group agrees on behalf of itself and its affiliates and
sublicensees to apply to all products manufactured under this Agreement all
notice of the Licensed Patents required by law.
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ARTICLE 5
MAINTENANCE AND ENFORCEMENT OF LICENSED PATENTS
5.1 Palweb shall remain responsible to pay for all legal expenses and
fees in the preparation, filing, prosecution, issuance, and maintenance of the
Licensed Patents in those countries in which it has elected to file the patents.
Palweb may, in its sole judgment and discretion, take whatever action it deems
proper during prosecution and/or maintenance of the Licensed Patents, including
selection of patent counsel, without any obligation to GME Group.
5.2 GME Group shall have the right to bring suit against third parties for
infringement in the Licensed Territory of the Licensed Patents, and shall be
entitled to join Palweb as a party in any suit.
(a) Palweb shall render any reasonable assistance GME Group may
reasonably request.
5.3 If any person, other than GME Group and its sublicensees, begins to
manufacture products covered by the Licensed Patents, infringing on the
exclusive rights granted to GME Group, and Palweb notifies GME Group in writing
of the infringement, GME Group agrees to use reasonable efforts to terminate the
infringement. If, within 180 days after receiving notice, GME Group has not
either: (a) obtained the complete termination of the infringement; or (b) filed
appropriate suit seeking termination of the infringement, then Palweb shall have
the sole right to select legal counsel and take any and all legal actions to
terminate the infringement. All expenses for the action by Palweb shall be borne
entirely by Palweb and Palweb shall own and retain all recoveries awarded by way
of damages, costs, attorney fees, or otherwise.
ARTICLE 6
TECHNICAL INFORMATION
6.1 Upon GME Group's written request, Palweb agrees to furnish GME Group
at Palweb's place of business with copies of all drawings, specifications,
and/or other technical information relating to the Licensed Technology and
Licensed Products ("Confidential Information") during the term of this
Agreement. GME Group acknowledges that the Confidential Information is for
information only. GME Group assumes all responsibility for product design and
manufacture.
(a) GME Group will not disclose Confidential Information (directly or
indirectly) to any third party without Palweb's prior written consent
and will not use Confidential Information (directly or indirectly) for
any purpose other than purposes directly related to the License
granted under this Agreement.
(b) If this Agreement is breached, Palweb will be irreparably damaged.
Its remedies at law will be inadequate. Accordingly, Palweb will have
the right of specific performance and/or injunctive relief in addition
to all other remedies at law.
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(c) Upon request, GME Group shall sign, and shall cause its affiliates
and sublicensees to sign, any confidentiality or nondisclosure
agreement requested by Palweb.
6.2 Palweb agrees that it will render reasonable assistance GME Group
which is requested in writing with regard to the marketing of the Licensed
Products, including but not limited to making the prototype Piper 600 available
for examination by prospective buyers.
6.3 The GME Group and PalWeb agree that any improvements or other
innovations to the "Confidential Information" (collectively Improved Technology)
prior to or during the term of this Agreement will be jointly owned (for
utilization purposes) and accessible for use by either GME and/or PalWeb
regardless of whether GME, PaIWeb or a third party contributed to the design or
improvement. GME's and PaIWeb's use of the Improved Technology will continue
beyond the termination of this Agreement. However, the parties agree that GME
will be the sole Licensor and Assignee of all Improved Technology with the
benefit of such licensing being for the account of GME except for such instances
where the origin of the Improved Technology was PaIWeb, its employees, contract
employees or agents (excepting GME). Notwithstanding the above, the parties
acknowledge that each party may utilize the Improved Technology for their
internal manufacturing needs free of royalty cost or other charges.
ARTICLE 7
TERMINATION
7.1 GME Group may terminate this Agreement at any time on 90 days written
notice to Palweb.
7.2 Palweb may terminate this Agreement or any portion of this Agreement,
including the exclusivity provisions, on 90 days written notice to GME Group for
failure of GME Group to fulfill any of its obligations under this Agreement;
provided, however, if during the period of the notice GME Group remedies the
failure, this Agreement shall continue in full force and effect as it would have
if notice had not been given.
7.3 This Agreement shall terminate automatically in the event of the
insolvency or bankruptcy of GME Group, or upon the appointment of a receiver for
GME Group, or upon GME Group's reorganization for the benefit of creditors.
7.4 This agreement shall terminate automatically in the event of the
insolvency or bankruptcy of PaIWeb, or upon or the appointment of a receiver for
PalWeb, or upon PalWeb's reorganization for the benefit of creditors.
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ARTICLE 8
RIGHTS AFTER TERMINATION
8.1 The termination of this Agreement shall not relieve GME Group of its
obligation to pay Palweb all royalties that have accrued up to the effective
date of termination.
8.2 Upon termination of this Agreement, GME Group, its affiliates and
sublicensees shall have the right to complete work in process and to sell
products on hand covered by the Licensed Patents until the supply is depleted,
and GME Group shall pay Palweb for those products the royalties specified in
Article 2 of this Agreement.
8.3 If any sublicenses under the Licensed Patents are in effect at the
effective date of termination of this Agreement, GME Group shall, at Palweb's
option, promptly assign the sublicenses to Palweb.
ARTICLE 9
OPTIONS
9.1 Subject to and in accordance with Section 6.3, PalWeb shall always
have the option to purchase the Piper 600 or improved version thereof from the
GME Group per item 3 in attached addendum letter.
ARTICLE 10
MISCELLANEOUS
10.1 SEVERABILITY. If any provision of this Agreement is declared
unenforceable, the provision shall not affect the rights and obligations of the
parties with regard to the remaining provisions of this Agreement, which shall
continue as binding. The unenforceable provision shall be modified, but only to
the extent necessary to make it enforceable.
10.2 SURVIVAL OF RIGHTS. Termination of this Agreement shall not prejudice
the rights of either party to seek other remedies. Any delay in exercising the
right to terminate this Agreement shall not prejudice the right of any party to
terminate it for any subsequent or continuing breach.
10.3 NOTICES. All notices under this Agreement shall be in writing and
shall be deemed to have been given if mailed by registered or certified mail,
postage prepaid, addressed to the party at its address last designated. Each
notice shall be effective on the date that it is posted. Until changed by
written notice given by the parties, the respective addresses of the parties to
this Agreement shall be as written on page one of this Agreement.
10.4 ASSIGNABILITY. Neither party may assign this Agreement or any rights
under this Agreement without the prior written consent of the other party.
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10.5 GOVERNING LAW. This Agreement is deemed to have been made in Lansing,
Michigan and shall be governed by and construed in accordance with the laws of
the State of Michigan. The parties waive personal service of process and consent
to all service of process being made by registered mail. Service by registered
mail shall be deemed completed five business days after deposit in the U.S.
mail, postage prepaid.
10.6 VENUE. This Agreement shall be governed by and construed in accordance
with the laws of the State of Oklahoma. The parties agree that jurisdiction and
venue for any matter arising out of or pertaining to this Agreement shall be
proper only in the state courts located in Tulsa County, Oklahoma and the
federal courts having jurisdiction over the Northern District of Oklahoma, and
the parties hereby consent to such venue and jurisdiction.
10.7 CONSTRUCTION. This Agreement is deemed to have been drafted by both
parties and no party may assert any ambiguity in its construction against any
other party because the other party allegedly drafted the provision in question.
10.8 ATTORNEY FEES. The prevailing party in any litigation or arbitration
involving this Agreement shall be entitled to recover, in addition to any other
relief obtained, the costs and expenses, including reasonable attorney's fees
and expenses, incurred by the prevailing party.
10.9 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be enforceable against the party actually
signing the counterpart and all of which together shall constitute one
instrument.
10.10 ENTIRE AGREEMENT. This Agreement constitutes the entire understanding
between the parties with respect to its subject matter, supersedes all previous
agreements between the parties with respect to its subject matter, and shall not
be modified in any way except by an instrument in writing signed by the parties
to this Agreement or their respective assignees.
Date: 1/29/03 Date: 1/29/03
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GME Group, LLC PalWeb Corporation
By: /s/ Xxxxx R, Xxxxxxxx By: /s/ Xxxxxx X. Xxxxxx
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