EXHIBIT 10.05
CONFIDENTIAL INFORMATION AND
INVENTION ASSIGNMENT AGREEMENT
This CONFIDENTIAL INFORMATION AND INVENTION ASSIGNMENT AGREEMENT (the
"Agreement") is made between Composite Technology Corporation, a Nevada
corporation (the "Company") and D. Xxxx XxXxxxxxx III.
In consideration of my appointment as a director with the Company (which
for purposes of this Agreement shall be deemed to include any subsidiaries or
Affiliates of the Company and for purposes of this Agreement, "Affiliates" shall
mean any person or entity that directly or indirectly controls, is controlled by
or is under common control with the Company), the receipt of confidential
information while associated with the Company, and other good and valuable
consideration, I, the undersigned individual, agree that:
1. Term of Agreement. This Agreement shall continue in full force and
effect for the duration of my membership as a director of the Company (the
"Effective Period").
2. Confidentiality.
(a) Existence of Confidential Information. The Company is in the
legal possession of and/or owns and will develop and/or acquire Proprietary
Information, as defined below, which have value to its business. This
Confidential Information includes not only information disclosed by the Company
to me, but also information developed or learned by me during the course of my
tenure as a Director with the Company.
(b) Definitions. "Proprietary Information" is all information in
whatever form, tangible or intangible, pertaining in any manner to the business
of the Company, or any of its Affiliates, or its employees, customers,
consultants or business associates. All Proprietary Information not generally
known outside of the Company's organization, and all Proprietary Information so
known only through improper means, shall be deemed "Confidential Information."
By example and without limiting the foregoing definition, Proprietary and
Confidential Information shall include, but not be limited to:
(i) Formulas, research and development techniques, processes,
trade secrets, computer programs, software, electronic codes, mask works,
inventions, innovations, patents, patent applications, discoveries,
improvements, data, know-how, formats, test results and research projects;
(ii) information about costs, profits, markets, sales,
contracts and lists of customers and distributors;
(iii) business, marketing and strategic plans;
(iv) forecasts, unpublished financial information, budgets,
projections and customer identities, characteristics and agreements; and
(v) employee personnel files and compensation information.
Confidential Information is to be broadly defined, and includes all information
that has or could have commercial value or other utility in the business in
which the Company is engaged or contemplates engaging, and all information of
which the unauthorized disclosure could be detrimental to the interests of the
Company, whether or not such information is identified as Confidential
Information by the Company.
(c) Protection of Confidential Information. I will not, directly or
indirectly, use, make available, sell, disclose or otherwise communicate to any
third party, other than in my assigned duties and for the benefit of the
Company, any of the Company's Confidential Information, either during or after
my tenure as a Director with the Company.
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(d) Delivery of Confidential Information. Upon request or when my
directorship with the Company terminates, I will immediately deliver to the
Company all copies of any and all materials and writings received from, created
for or belonging to the Company including, but not limited to, those which
relate to or contain Confidential Information.
(e) Location and Reproduction. I shall maintain at my work station
and/or any other place under my control only such Confidential Information as I
have a current "need to know." I shall return to the appropriate person or
location or otherwise properly dispose of Confidential Information once that
need to know no longer exists. I shall not make copies of or otherwise reproduce
Confidential Information unless there is a legitimate business need of the
Company for reproduction.
(f) Prior Actions and Knowledge. I represent and warrant that from
the time of my first contact with the Company I held in strict confidence all
Confidential Information and have not disclosed any Confidential Information,
directly or indirectly, to anyone outside the Company, or used, copied,
published or summarized any Confidential Information, except to the extent
otherwise permitted in this Agreement.
(g) Third-Party Information. I acknowledge that the Company has
received and in the future will receive from third parties the third party's
confidential information subject to a duty on the Company's part to maintain the
confidentiality of such information, and to use it only for certain limited
purposes. I agree during the Effective Period and thereafter, I will hold all
such confidential information in the strictest confidence and not disclose or
use it, except as necessary to perform my obligations hereunder, and as is
consistent with the Company's agreement with such third parties.
(h) Third Parties. I represent appointment and position as a
Director with the Company does not and will not breach any agreements with or
duties to any employer, former employer or any other third party. I will not
disclose to the Company or use on its behalf any confidential information
belonging to others and I will not bring onto the premises of the Company any
confidential information belonging to any such party unless consented to in
writing by such party.
3. Proprietary Rights, Inventions and New Ideas.
(a) Definition. The term "Subject Ideas" or "Inventions" includes
any and all ideas, processes, trademarks, service marks, inventions, designs,
technologies, computer hardware or software, original works of authorship,
formulas, discoveries, patents, copyrights, copyrightable works, products,
marketing and business ideas, and all improvements, know-how, data, rights and
claims related to the foregoing, whether or not patentable, which are conceived,
developed or created in whole or in part by me during the period I hold a
Directorship with the Company and which: (i) relate to the Company's current or
contemplated business or activities; (ii) relate to the Company's actual or
demonstrably anticipated research or development; (iii) result from any work
performed by me for the Company; (iv) involve the use of the Company's
equipment, supplies, facilities or trade secrets; (v) result from or are
suggested by any work done by the Company or at the Company's request, or any
projects specifically assigned to me; or (vi) result from my access to any of
the Company's memoranda, notes, records, drawings, sketches, models, maps,
customer lists, research results, data, formulae, specifications, inventions,
processes, equipment or other materials (collectively, "Company Materials").
(b) Company Ownership. I hereby assign all right, title and interest
in and to all of my Subject Ideas and Inventions, including but not limited to
all registrable and patent rights which may subsist therein, to the Company. All
Subject Ideas and Inventions shall be considered works made for hire. I shall
take all actions deemed necessary by the Company to protect the Company's rights
therein.
(c) California Labor Code. Section 3(b) of this Agreement shall not
apply if and to the extent California Labor Code Section 2870 lawfully prohibits
the assignment of rights in such intellectual property. I acknowledge I
understand the limits placed on this definition by California Labor Code Section
2870, if applicable to me, which provides:
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"(1) Any provision in an employment agreement
which provides that an employee shall assign,
or offer to assign, any of his or her rights in
an invention to his or her employer shall not
apply to an invention that the employee
developed entirely on his or her own time
without using the employer's equipment,
supplies, facilities or trade secret
information except for those inventions that
either:
a. Relate at the time of conception
or reduction to practice of the
invention to the employer's
business, or actual or demonstrably
anticipated research or development
of the employer; or
b. Result from any work performed by
the employee for the employer.
2) To the extent a provision in an employment
agreement purports to require an employee to
assign an invention otherwise excluded from
being required to be assigned under subdivision
(a), the provision is against the public policy
of this state and is unenforceable."
(d) I understand I bear the full burden of proving to the Company an
Invention qualifies fully under Section 2870. I agree to disclose promptly to
the Company in writing full details of any and all Subject Ideas and Inventions.
(e) Maintenance of Records. I agree to keep and maintain adequate
and current written records of all Subject Ideas and Inventions and their
development made by me (solely or jointly with others) during the term of
appointment as a Director of the Company. These records will be in the form of
notes, sketches, drawings and any other format that may be specified by the
Company. These records will be available to and remain the sole property of the
Company at all times.
(f) Access. Because of the difficulty of establishing when any
Subject Ideas or Inventions are first conceived by me, or whether they result
from my access to Confidential Information or Company Materials, I agree that
any Subject Idea and Invention shall, among other circumstances, be deemed to
have resulted from my access to Company Materials if: (i) it grew out of or
resulted from my work with the Company or is related to the business of the
Company, and (ii) it is made, used, sold, exploited or reduced to practice, or
an application for patent, trademark, copyright or other proprietary protection
is filed thereon, by me or with my significant aid, within one (1) year after
termination of the Effective Period.
(g) Assistance. I further agree to assist the Company in every
proper way (but at the Company's expense) to obtain and from time to time
enforce patents, copyrights or other rights or registrations on said Subject
Ideas and Inventions in any and all countries, and to that end will execute all
documents necessary:
(i) to apply for, obtain and vest in the name of the Company
alone (unless the Company otherwise directs) letters patent, copyrights or other
analogous protection in any country throughout the world and when so obtained or
vested to renew and restore the same; and
(ii) to defend any opposition proceedings in respect of such
applications and any opposition proceedings or petitions or applications for
revocation of such letters patent, copyright or other analogous protection; and
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(iii) to cooperate with the Company (but at the Company's
expense) in any enforcement or infringement proceeding on such letters patent,
copyright or other analogous protection.
(h) Authorization to Company. In the event the Company is unable,
after reasonable effort, to secure my signature on any patent, copyright or
other analogous protection relating to a Subject Idea and Invention, whether
because of my physical or mental incapacity or for any other reason whatsoever,
I hereby irrevocably designate and appoint the Company and its duly authorized
officers and agents as my agent and attorney-in-fact, to act for and on my
behalf and stead to execute and file any such application, applications or other
documents and to do all other lawfully permitted acts to further the
prosecution, issuance and enforcement of letters patent, copyright or other
analogous rights or protections thereon with the same legal force and effect as
if executed by me. My obligation to assist the Company in obtaining and
enforcing patents and copyrights for Subject Ideas and Inventions in any and all
countries shall continue beyond the termination of my relationship with the
Company, but the Company shall compensate me at a reasonable rate after such
termination for time actually spent by me at the Company's request on such
assistance.
(i) Exhibit. I acknowledge that there are no currently existing
ideas, processes, inventions, discoveries, marketing or business ideas or
improvements which I desire to exclude from the operation of this Agreement
except for the list set forth on Exhibit A, Prior Knowledge and Inventions, to
this Agreement. To the best of my knowledge, there is no other contract to
assign inventions, trademarks, copyrights, ideas, processes, discoveries or
other intellectual property that is now in existence between me and any other
person (including any business or governmental entity).
(j) No Use of Name. I shall not at any time use the Company's name
or any of the Company trademark(s) or trade name(s) in any advertising or
publicity without the prior written consent of the Company.
4. Prohibited Activity. To prevent the above-described disclosure,
misappropriation and breach, I agree that during the Effective Period and for a
period of one (1) year after termination of the Effective Period, without the
Company's express written consent, I shall not, directly or indirectly, (i)
employ, solicit for employment or recommend for employment by any party other
than the Company, any person employed by the Company (or any Affiliate) as an
employee or a consultant; and (ii) call on, solicit or take away, or attempt to
call on, solicit or take away, any of the Company's customers or potential
customers on whom I called or with whom I became acquainted during my Effective
Period.
5. Representations and Warranties. I represent and warrant (i) I have no
obligations, legal or otherwise, inconsistent with the terms of this Agreement
or with my undertaking a relationship with the Company; (ii) the performance of
the services called for by this Agreement do not and will not violate any
applicable law, rule or regulation or any proprietary or other right of any
third party; (iii) I will not use in the performance of my responsibilities for
the Company any materials or documents of any employer or former employer; and
(iv) I have not entered into or will enter into any agreement (whether oral or
written) in conflict with this Agreement.
6. Termination Obligations.
(a) Upon the termination of my relationship with the Company or
promptly upon the Company's request, I shall surrender to the Company all
equipment, tangible Proprietary Information, documents, books, notebooks,
records, reports, notes, memoranda, drawings, sketches, models, maps, contracts,
lists, computer disks (and other computer-generated files and data), any other
data and records of any kind, and copies thereof (collectively, "Company
Records"), created on any medium and furnished to, obtained by or prepared by
myself in the course of or incident to my term as a Director, that are in my
possession or under my control.
(b) My representations, warranties and obligations contained in this
Agreement shall survive the termination of the Effective Period.
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(c) Following any termination of the Effective Period, I will fully
cooperate with the Company in all matters relating to my continuing obligations
under this Agreement.
(d) In the event that I leave the position as a Director of the
Company I hereby grant consent to notification by the Company to any new
employer about my rights and obligations under this Agreement.
7. Injunctive Relief. I acknowledge my failure to carry out any obligation
under this Agreement, or a breach by me of any provision herein, will constitute
immediate and irreparable damage to the Company, which cannot be fully and
adequately compensated in money damages and which will warrant preliminary and
other injunctive relief, an order for specific performance and other equitable
relief. I further agree no bond or other security shall be required in obtaining
such equitable relief and I hereby consent to the issuance of such injunction
and to the ordering of specific performance. I also understand other action may
be taken and remedies enforced against me.
8. Modification. No modification of this Agreement shall be valid unless
made in writing and signed by both parties.
9. Binding Effect. This Agreement shall be binding upon me, my heirs,
executors, assigns and administrators and is for the benefit of the Company and
its successors and assigns.
10. Governing Law. Any action or proceeding seeking to enforce any
provision of, or based on any right arising out of, this Agreement may be
brought against any of the Parties only in the courts of Orange County, in the
State of California, or, if it has or can acquire jurisdiction, in the
appropriate United States District Court for the Southern District of
California, and each of the Parties consents to such venue and to the
jurisdiction of such courts (and of the appropriate appellate courts) in any
such action or proceeding and waives any objection to venue laid therein.
Process in any action or proceeding referred to in the preceding sentence may be
served on any Party anywhere in the world.
11. Integration. This Agreement sets forth the parties' mutual rights and
obligations with respect to proprietary information, prohibited competition
after the Effective Period and intellectual property. It is intended to be the
final, complete and exclusive statement of the terms of the parties' agreements
regarding these subjects. This Agreement supersedes all other prior and
contemporaneous agreements and statements on these subjects, and it may not be
contradicted by evidence of any prior or contemporaneous statements or
agreements. To the extent that the practices, policies or procedures of the
Company, now or in the future, apply to myself and are inconsistent with the
terms of this Agreement, the provisions of this Agreement shall control unless
changed in writing by the Company.
12. Employment at Will. This Agreement is not an employment agreement. I
understand that the Company may terminate my Directorship or association with it
at any time, with or without cause, subject to the terms of any separate written
agreement approved by the Board of Directors and executed by a duly authorized
officer of the Company.
13. Construction. This Agreement shall be construed as a whole, according
to its fair meaning, and not in favor of or against any party. By way of example
and not limitation, this Agreement shall not be construed against the party
responsible for any language in this Agreement. The headings of the paragraphs
hereof are inserted for convenience only, and do not constitute part of and
shall not be used to interpret this Agreement.
14. Attorneys' Fees. Should either I or the Company, or any heir, personal
representative, successor or permitted assign of either party, resort to legal
proceedings to enforce this Agreement, the prevailing party (as defined in
California statutory law) in such legal proceeding shall be awarded, in addition
to such other relief as may be granted, attorneys' fees and costs incurred in
connection with such proceeding.
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15. Severability. If any term, provision, covenant or condition of this
Agreement, or the application thereof to any person, place or circumstance,
shall be held to be invalid, unenforceable or void, the remainder of this
Agreement and such term, provision, covenant or condition as applied to other
persons, places and circumstances shall remain in full force and effect.
16. Rights Cumulative. The rights and remedies provided by this Agreement
are cumulative, and the exercise of any right or remedy by either the Company or
me (or by that party's successor), whether pursuant hereto, to any other
agreement, or to law, shall not preclude or waive that party's right to exercise
any or all other rights and remedies. This Agreement will inure to the benefit
of the Company and its successors and assigns.
17. Nonwaiver. The failure of either the Company or me, whether purposeful
or otherwise, to exercise in any instance any right, power or privilege under
this Agreement or under law shall not constitute a waiver of any other right,
power or privilege, nor of the same right, power or privilege in any other
instance. Any waiver by the Company or by me must be in writing and signed by
either myself, if I am seeking to waive any of my rights under this Agreement,
or by an officer of the Company (other than me) or some other person duly
authorized by the Company.
18. Notices. Any notice, request, consent or approval required or
permitted to be given under this Agreement or pursuant to law shall be
sufficient if it is in writing, and if and when it is hand delivered or sent by
regular mail, with postage prepaid, to my residence (as noted in the Company's
records), or to the Company's principal office, as the case may be.
19. Date of Effectiveness. This Agreement shall be deemed effective as of
the date of my nomination to the Board of Directors of the Company.
20. Agreement to Perform Necessary Acts. I agree to perform any further
acts and execute and deliver any documents that may be reasonably necessary to
carry out the provisions of this Agreement.
21. Assignment. This Agreement may not be assigned without the Company's
prior written consent.
22. Compliance with Law. I agree to abide by all federal, state and local
laws, ordinances and regulations.
23. Survival. Section 2 (b), (c) (d), Section 3 (g), (h) (j), and Sections
4, 7, 10, 14 and 20 shall survive the expiration or termination of this
Agreement.
24. Acknowledgment. I acknowledge that I have had the opportunity to
consult legal counsel in regard to this Agreement, that I have read and
understand this Agreement, that I am fully aware of its legal effect, and that I
have entered into it freely and voluntarily and based on my own judgment and not
on any representations or promises other than those contained in this Agreement.
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IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the date
set forth below.
Dated: January 9, 2006
D. Xxxx XxXxxxxxx III
/s/D. Xxxx XxXxxxxxx III
------------------------
D. Xxxx XxXxxxxxx III
0000 Xxxxxx Xxxxxx Xxxxx, Xxxxx 000, Xxxxxx 00000
Composite Technology Corporation
a Nevada corporation
By: /s/Xxxxxx X Xxxxxxxx
--------------------------
Name: Xxxxxx X Xxxxxxxx
--------------------------
Title: Chairman
-------------------------
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EXHIBIT A
PRIOR KNOWLEDGE AND INVENTIONS
1. Except as set forth below, I acknowledge that certain inventions which I
may conceive or first actually reduce to practice after I am appointed a
Director of the Company shall be the sole property of the Company. The
following are those inventions that I own at this time (if none, so
state):
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2. Except as set forth below, I acknowledge that I have no other current or
prior agreements, relationships or commitments that conflict with my
relationship with the Company under my Confidential Information and
Invention Assignment Agreement (if none, so state):
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3. I acknowledge and agree that I will not use any proprietary information or
trade secrets belonging to other persons or entities, including former
employers, in my work for the Company. I further certify that I returned
all property and confidential information belonging to all prior
employers.
Dated: January 9, 2006 /s/D. Xxxx XxXxxxxxx III
-------------------------- -----------------------------------
D. Xxxx XxXxxxxxx III
0000 Xxxxxx Xxxxxx Xxxxx, Xxxxx 000,
Xxxxxx 00000
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