EXHIBIT 10.11
AGREEMENT
This AGREEMENT is made and entered-into this 23RD day of May,
2001, by and between
Technical Consumer Products, Inc. (hereinafter "TCP"), an Ohio
corporation, having principal office located at 000 Xxxx Xxxxx,
Xxxxxx, Xxxx 00000, U.S.A., represented by Xxxxx Xxx, President
and
Practical Innovations, Inc. a Delaware corporation having a
principal place of business at 000 Xxxxxx Xxxxx, Xxxx Xxxxxx, Xxxxxxxx
00000, XXX, and Xxxxxxx Xxxxx, an individual residing at 000 Xxxxxx
Xxxxx, Xxxx Xxxxxx, Xxxxxxxx 00000, (collectively "PRACTICAL").
This AGREEMENT incorporates the terms of earlier agreements covering
related subject matter made and entered into: (i) on the 18th day of
June, 1996 by and between TCP and PRACTICAL (hereinafter called the "1996
AGREEMENT") and (ii) on the 1st day of March, 2000 by and between TCP and
PRACTICAL (hereinafter called the "2000 AGREEMENT"); and
WHEREAS, PRACTICAL owns technologies related to Electronic Ballasts
for Gas Discharge Lamps, and PRACTICAL has knowledge and know-how of
Engineering, Development, Design, Manufacturing, and Market of Electronic
Ballasts and Gas Discharge Lamps; and
WHEREAS, TCP is desirous of acquiring rights to use PRACTICAL's
technologies, knowledge and know-how; and
WHEREAS, TCP and PRACTICAL entered into the "1996 AGREEMENT" under
which, PRACTICAL granted a non-exclusive license to TCP under certain
patents owned by PRACTICAL and transferred certain knowledge and know-how
to TCP; and
WHEREAS, TCP and PRACTICAL entered into the 2000 AGREEMENT under
which, PRACTICAL granted a non-exclusive license to TCP under certain
patents, granted an exclusive license under certain other patents owned
by PRACTICAL, and transferred certain knowledge and know-how to TCP; and
WHEREAS, said 1996 AGREEMENT was amended in certain respects by
entering into an amendment on November 13, 1998 (hereinafter called the
"1998 AMENDMENT");
WHEREAS, TCP is desirous to convert the exclusive license to a
non-exclusive license and to exercise an early pay off of the license.
NOW, THEREFORE, based on the mutual consideration herein
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specified, the parties hereto agree as follows:
1. DEFINITIONS
1.01 "EXCLUSIVE PATENT MATTER shall mean and include all inventions
as specified in "EXHIBIT A", attached to the 2000 AGREEMENT.
1.02 "NON-EXCLUSIVE PATENT MATTER" shall mean: the inventions as
specified in "EXHIBIT ONE" hereto.
1.03 "KNOW-HOW" shall mean and include any and all information
disclosed by PRACTICAL to TCP at any time in one of the following form:
oral, oral - confirmed in writing, written, graphic, and/or sample form,
or which is obtained by TCP from access to a facility of PRACTICAL, and
such information is related to: EXCLUSIVE PATENT MATTER, NON-EXCLUSIVE
PATENT MATTER, PRODUCTS, manufacture, use, sale of PRODUCTS, electronic
lighting, electronic ballasts for gas discharge lamps, gas discharge
lamps, the lighting market, market research and studies, competitive
analysis, and other related information.
1.04 "PRODUCTS" shall mean and include: (i) any and all types of
electronic ballasting means and/or systems suitable for powering gas
discharge lamps, as well as any and all other types of products which
include said ballasting means and/or systems, based on or derived from
the EXCLUSIVE PATENT MATTER, NON-EXCLUSIVE PATENT MATTER, or KNOW-HOW, or
(ii) any and all ballasting means and/or systems suitable for powering
gas discharge lamps, as well as any and all other types of products which
include said ballasting means developed, engineered, designed and/or
provided by PRACTICAL to TCP and not derived from and/or related to the
EXCLUSIVE PATENT MATTER or NON-EXCLUSIVE PATENT MATTER, or (iii) any and
all products based on or derived from KNOW-HOW, or (iv) any product
developed, engineered, designed and/or provided by PRACTICAL to TCP.
1.05 "SELLER" shall mean (i) TCP to the extent that TCP sells or
acts as the marketing agent for PRODUCTS, and/or (ii) TCP's marketing
agent(s), to the extent that TCP uses or permits other persons or
entities to sell PRODUCTS under any kind of licensing and/or restricted
marketing arrangement.
1.06 "NET SALES" shall mean SELLER's gross selling price of
PRODUCTS, less the following items: (i) trade discounts actually
deducted, (ii) credits actually deducted for PRODUCTS returned, and (iii)
taxes, if any, collected and remitted by the SELLER.
1.07 "TERRITORY" shall mean and include: all countries of the
world.
2.0 GRANT
2.01 PRACTICAL hereby grants to TCP a perpetual NON-EXCLUSIVE
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LICENSE to the NON-EXCLUSIVE PATENT MATTER within the TERRITORY. The
previous exclusive license for NON-EXCLUSIVE PATENT MATTER in the 2000
AGREEMENT is revoked.
2.02 TCP may transfer or assign any or all of its rights and
obligations under this AGREEMENT, provided however that PRACTICAL agrees
to such transfer with prior written consent. TCP shall have no right to
sub-license.
2.03 Any contract manufacturer or supplier selected by TCP to
manufacture PRODUCTS for TCP shall not be considered a licensed or
sub-licensed party under this AGREEMENT.
3.0 WARRANTY
3.01 PRACTICAL warrants that: to the best of its knowledge it owns
all right, title and interest in or to the NON-EXCLUSIVE PATENT MATTER,
and it does not know of any right, title or interest of any person or
entity other than PRACTICAL in or to NON-EXCLUSIVE PATENT MATTER which
would prevent or conflict with the grant of the non-exclusive license
herein.
No warranties other than as specifically stated herein are expressed
or implied relative to the NON-EXCLUSIVE PATENT MATTER and/or relative to
any rights that any party may assert in respect to the manufacture, use
or sale of PRODUCTS.
3.02 TCP warrants that it does not know of any right, title,
interest, license or agreement of any other person or entity that would
prevent or conflict with the grant of the NON-EXCLUSIVE license herein
and the termination of the exclusive license in the 2000 AGREEMENT.
4.0 EARLY PAYOFF
4.01 In consideration of the perpetual NON-EXCLUSIVE license granted
hereunder by PRACTICAL, TCP will payoff ALL of it's obligations and ALL
royalties by making a non-refundable payment of $2,000,000 (Two Million
Dollars) to PRACTICAL, payable as follows: - For each and every calendar
month on or before the 10th day of the month, during first six (6) months
of this AGREEMENT, TCP shall pay to PRACTICAL monthly amount equal to
$108,334 (One Hundred and Eight Thousand and three Hundred Thirty Four
Dollars);
and
- For each and every calendar month on or before the 10th day of the
month, during second six (6) months of this AGREEMENT, and during second,
third, fourth and fifth year of this AGREEMENT, TCP shall pay to
PRACTICAL monthly amounts equal to $25,000 (Twenty Five Thousand
Dollars).
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TCP will have no obligation of any royalty payments to PRACTICAL after
completion of all monthly payments as specified herein above.
4.02 If any payment due hereunder is not timely paid, then the
unpaid balance will bear interest until paid at annual rate of fifteen
percent (15%) compounded monthly, until the delinquent balance is paid in
full.
4.03 Payments according to paragraphs 4.01 shall be made complete
and in full, despite if: (i) the PRODUCTS are covered or not by at least
one claim of one of PRACTICAL'S pending or issued unexpired US patent,
or (ii) the EXCLISIVE PATENT MATTER or NON-EXCLUSIVE PATENT MATTER
contains or not at least one pending or issued unexpired US patent, or
(iii) the PRODUCTS sold have been developed or not, and/or engineered or
not, and/or designed and provided by PRACTICAL to TCP or not, or (iv)
PRODUCTS have been developed by TCP based on or not, or derived from or
not: (a) EXCLUSIVE PATENT MATTER and/or NON-EXCLUSIVE PATENT MATTER,
and/or KNOW-HOW, or (b) any product developed, and/or engineered, and/or
designed, and/or provided by PRACTICAL to TCP under 2000 AGREEMENT or
1996 AGREEMENT.
5.0 OTHER PROVISIONS
5.01 TCP shall have right, if desired, to negotiate and enter into
a new non-exclusive license agreement with PRACTICAL in order to license
any new technologies, any time during the term of this AGREEMENT.
5.02 The TCP hereby warrants that it will make timely monthly
payments to PRACTICAL according to Paragraph 4.01. In the event, that TCP
for any reason stops making monthly payments as outlined in 4.01 herein,
this AGREEMENT shall be void and the 2000 AGREEMENT shall be reinstated,
according to Paragraph 5.14.
5.03 During the entire term of this AGREEMENT, as well as after
completion of the early payoff payments by TCP according to paragraph
4.01, TCP shall have all non-exclusive license rights to the NON-
EXCLUSIVE PATENT MATTER as well as can use all knowledge and KNOW-HOW
transferred to TCP by PRACTICAL under all earlier agreements.
5.04 TCP shall xxxx all PRODUCTS with the applicable trademark and
patent markings, including patent pending and actual patent numbers of
the NON-EXCLUSIVE PATENT MATTER where applicable.
5.05 Except as specified in paragraph 3, nothing herein shall be
construed as a warranty or representation by PRACTICAL as to the scope or
validity of the NON-EXCLUSIVE PATENT MATTER or any patent(s) issuing
thereon. TCP, as the manufacturer of PRODUCTS, will be solely responsible
for defending any claims against it for design defects or patent
infringement claims arising from the manufacture, sale or use of all
models of PRODUCTS. PRACTICAL will assist TCP, at the request
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of TCP, in defending any such claims. TCP will pay all expenses of
PRACTICAL associated with such assistance. TCP will also defend and hold
PRACTICAL and Xxxxx harmless against any such claim for damages and TCP
will not xxx PRACTICAL or Xxxxx as a result of any such claim.
5.06 TCP will indemnify, defend and hold PRACTICAL and Xxxxx
harmless from any and all losses, judgments, settlements, claims, or
damages, including attorney fees, costs and expenses incurred as a result
of any claim arising out of or in connection with TCP's manufacture, use,
promotion, marketing, distribution, offer for sale, or sale of PRODUCTS,
including, but not limited to, claims arising out of the alleged
negligence in TCP's manufacture, use, promotion, marketing, distribution,
offer for sale, or sale of the PRODUCTS or claims based upon product
liability, provided that TCP is promptly notified in writing of such
claims against PRACTICAL and provided further that PRACTICAL permits TCP
to defend, compromise, or settle such claim and gives TCP all available
information, reasonable assistance, and authority to enable TCP to do so.
5.07 In the event that the NON-EXCLUSIVE PATENT MATTER is or has
been infringed upon by a third party, PRACTICAL has a right but not the
obligation to prosecute an infringement action, to initiate discussions
regarding settlement, or to otherwise enforce its patent rights. In any
such action, all expenses associated with such action will be borne by
PRACTICAL and all proceeds from such action will belong to PRACTICAL,
including all damages, profits, royalties or awards of whatever nature
that are recoverable for any and all past, present and/or future
infringement. TCP hereby assigns to PRACTICAL any and all choses in
action and/or rights to xxx for past, present or future infringement of
any NON-EXCLUSIVE PATENT MATTER herein, including any infringement
occurring in whole or in part during the term of the 1996 AGREEMENT or
2000 AGREEMENT.
5.08 In the event that the NON-EXCLUSIVE PATENT MATTER is infringed
upon by a third party, TCP shall have no right to take any legal action
or any proceedings on its own against the infringing party without the
express written consent of PRACTICAL and upon such terms as are agreeable
to PRACTICAL.
5.09 Neither TCP nor PRACTICAL shall challenge or contest the
validity of this AGREEMENT. TCP agrees and warrants that neither TCP nor
any SELLER will challenge or contest validity of any patent application
or issued patents owned by or assigned to PRACTICAL or Xxxxxxx Xxxxx.
5.10 TCP shall use its best effort to maintain in confidence all
proprietary matters associated with the EXCLUSIVE PATENT MATTER,
and/or-NON-EXCLUSIVE PATENT MATTER, and/or KNOW-HOW, and/or PRODUCTS, as
well as any other Proprietary or Confidential Information or Trade
Secrets ("PROPRIETARY MATTER") provided by PRACTICAL in connection
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with this AGREEMENT or earlier AGREEMENTS.
To the extent reasonable necessary, PROPRIETARY MATTER may be
disclosed to those employees or agents of TCP who are reasonably required
to have access to the PROPRIETARY MATTER in order to accomplish TCP's
manufacturing, sale, and/or marketing of PRODUCTS. However, any
disclosure under circumstances whereby such employee signs a
confidentiality agreement and understands its obligation to maintain in
confidence all PROPRIETARY MATTERS received from TCP or PRACTICAL.
5.11 If any dispute arises under this AGREEMENT, the parties shall
negotiate in good faith to settle such dispute. If the parties cannot
resolve such dispute themselves, then they shall submit the dispute to
mediation by any mutually acceptable mediator. If no mediator is mutually
acceptable, than the parties shall submit the matter to arbitration under
the rules of the American Arbitration Association ("AAA"). Under any
arbitration, both parties shall cooperate and agree to abide finally by
any decision of the arbitration proceedings. If AAA is selected, the
arbitration shall take place under the auspices of the Chicago branch.
The cost of the arbitration shall be born according to the decision of
the arbitrator, who may apportion costs equally, or in accordance with
any finding of fault or lack of good faith of either party. The
arbitrator's award shall be non-appealable and enforceable in any court
of competent jurisdiction.
5.12 PRACTICAL hereby directs TCP to make all payments due PRACTICAL
under this AGREEMENT payable to "Practical Innovations" by a check or
wire transfer to a designated bank account at any US Bank.
5.13 In the event that either party hereto shall be required, or
shall deem it necessary or advisable, to give notice to the other party,
such notice shall be served upon the other party by depositing said
notice in the United States mail, postage paid certified mail with return
receipt requested, and addressed to the following address:
Xxxxx Xxx, President
Technical Consumer Products, Inc.
000 Xxxx Xxxxx
Xxxxxx, Xxxx 00000
or
Xxxxxxx Xxxxx, President
Practical Innovations, Inc.
000 Xxxxxx Xxxxx
Xxxx Xxxxxx, Xxxxxxxx 00000
as appropriate. Any notice so given shall be deemed received on the
third business day following its deposit in the US Mail. Either party
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hereto may change the address at which such party shall receive notices
hereunder by giving notice of such change of address to the other party
hereto in accordance with the provisions of this paragraph.
5.14 If TCP shall be in default in any terms of this AGREEMENT,
PRACTICAL has the right to terminate this AGREEMENT and to reinstate the
2000 AGREEMENT effective fifteen (15) days after the mailing date of a
written notice from PRACTICAL to TCP describing the default and
termination decision. Unless the default is remedied within fifteen (15)
days after the mailing date of such written notice, this AGREEMENT shall
terminate as of the expiration of such fifteen day period, and the 2000
AGREEMENT shall take effect immediately. In the event - that the
reinstated 2000 AGREEMENT becomes effective, the license of the
NON-EXCLUSIVE PATENT MATTER of this AGREEMENT shall remain non-exclusive
and there shall be no exclusive license under the reinstated 2000
AGREEMENT. Further, the assignment of any and all choses in action
and/or rights to xxx for past, present and/or future infringement under
this AGREEMENT shall remain effective under any reinstatement of the
2000 AGREEMENT.
5.15. In the event that TCP stops making monthly payments according
to paragraph 4.01 and/or this AGREEMENT is terminated according to
paragraph 5.14 before all monthly payments according to paragraph 4.01
are paid to PRACTICAL by TCP, PRACTICAL shall have a full legal rights to
enter a JUDGEMENT in any court of competent jurisdiction and
automatically recover any unpaid balance of unpaid obligations according
to Paragraph 4.01. This JUDGMENT shall be immediately enforceable after
filing, and shall be undisputable, and unappealable by TCP.
5.16 If TCP shall go into receivership, bankruptcy, or insolvency,
or make an assignment, this AGREEMENT may be immediately terminated by
PRACTICAL by written notice, and PRACTICAL shall not be obligated to
refund any money to TCP or any other party in relation to such
receivership, bankruptcy, or insolvency of TCP.
5.17 TCP shall keep in confidence any and all proprietary
information received from PRACTICAL under or in connection with all
earlier agreements. TCP shall not disclose to any third party and shall
keep in strict confidence any and all details associated with PATENT
MATTER, KNOW-HOW, PRODUCTS, this AGREEMENT and all earlier agreements
between TCP and PRACTICAL.
5.18 This AGREEMENT shall be binding upon and shall inure to the
benefit of the parties hereto and their respective successors and assigns
including any and all worldwide subsidiaries, affiliates, suppliers,
customers, and legal representatives.
5.19 This AGREEMENT may not be amended or canceled except in
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writing, signed by the parties hereto or their respective successors
and assigns.
5.20 This AGREEMENT shall be governed by and construed in accordance
with the laws of state of Illinois.
5.21 TCP represents and warrants that the execution and delivery by
it of this AGREEMENT has been authorized by appropriate action of its
Board of Directors in accordance with provisions of law and its by-laws.
IN WITNESS WHEREOF the parties hereto have duly executed this
AGREEMENT on the day and year first above written.
Technical Consumer Products, Inc. (TCP)
By: /s/Xxxxx Xxx 5/23/2001
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Xxxxx Xxx, President Date
Practical Innovations, Inc. (PRACTICAL)
By: /s/Xxxxxxx Xxxxx 5/23/2001
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Xxxxxxx Xxxxx, President Date
EXHIBIT ONE
NON-EXCLUSIVE PATENT MATTER
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U.S. Patent No. Issue Date Title
5,448,137 Sept.5, 1995 ELECTRONIC ENERGY
CONVERTER HAVING TWO
RESONANT CIRCUITS
5,502,635 Mar.26,1996 PARALLEL RESONANT
INTEGRATED INVERTER
BALLAST FOR GAS
DISCHARGE LAMPS
5,801,492 Sep.l, 1998 ELECTRONIC BALLAST FOR
GAS DISCHARGE LAMP
HAVING PRIMARY AND
AUXILIARY RESONANT
CIRCUIT
5,434,480 July 18,1995 ELECTRONIC DEVICE FOR
POWERING A GAS
DISCHARGE LOAD FROM
A LOW FREQUENCY SOURCE
5,436,529 July 25, 1995 CONTROL AND PROTECTION
CIRCUIT FOR ELECTRONIC
BALLAST
5,371,438 Dec. 6, 1994 ENERGY CONVERSION DEVICE
HAVING AN ELECTRONIC
CONVERTER WITH DC INPUT
TERMINAL FOR DELIVERING
A HIGH FREQUENCY SOURCE
5,982,106 Nov.9,1999 SELF-PROTECTED SERIES
RESONANT ELECTRONIC
ENERGY CONVERTER
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