EXCLUSIVE LICENSE AGREEMENT
This
Exclusive License Agreement (“AGREEMENT”) is made and entered into as of the 3rd
day of April, 2006, by and between:
| (1) |
Total
Well Solutions, LLC, a Wyoming limited liability company (the “LICENSOR”);
|
| (2) |
USA
Petrovalve, Inc., a Texas corporation (the “LICENSEE”);
and
|
| (3) |
Flotek
Industries, Inc. a Delaware corporation and an AFFILIATE of the LICENSEE
(“FLOTEK”).
|
RECITALS
| 1.0 |
The
LICENSOR owns the right and title to the
INVENTION.
|
| 2.0 |
The
PARTIES have entered into that certain Asset Purchase Agreement,
dated the
date hereof, 2006 pursuant to which, among other things, the LICENSEE
has
acquired certain assets of the LICENSOR in exchange for consideration
from
the LICENSEE, which consideration includes the obligations of the
LICENSEE
set forth in this AGREEMENT;
|
| 3.0 |
The
LICENSEE desires to obtain an exclusive license in the
INVENTION.
|
| 4.0 |
The
LICENSOR is willing to grant such a license on terms and conditions
recited below.
|
In
consideration of the above-stated premises and the mutual promises and covenants
contained in this AGREEMENT, the PARTIES agree as follows:
AGREEMENT
| 1.0 |
DEFINITIONS
|
Each
of
the following terms shall, whenever found in this AGREEMENT, be used and
understood in accordance with the corresponding definitions below:
| 1.1 |
“LICENSED
PATENT” shall mean and include the United States Letters Patent No.
6,761,215 by Xxxxx X. Xxxxxxxx and Xxx Xxxxxxxx III, entitled “Downhole
Separator and Method” (listed in SCHEDULE A) and all reissues or
reexaminations thereof.
|
| 1.2 |
“RELATED
PATENTS” shall mean and include all United States or foreign patent
applications and patents that claim priority from the LICENSED PATENT,
including at least those listed in SCHEDULE A, and all divisions,
continuations, continuations-in-part, extensions, renewals,
patents-of-addition, reissues, reexaminations, supplementary protection
certificates, or equivalents
thereof.
|
1
| 1.3 |
“INVENTION”
shall mean the downhole separator and method, embodied in at least
the
LICENSED PATENT and the RELATED
PATENTS.
|
| 1.4 |
“CONTROL”
and its derivatives mean the ownership or control, either directly
or
indirectly, of greater than fifty percent (50%) of the voting rights
of an
entity.
|
| 1.5 |
“AFFILIATE”
means an entity that, directly or indirectly, through one of more
intermediaries, CONTROLS or is CONTROLLED by, or is under common
CONTROL
with, another entity.
|
| 1.6 |
“PARTIES”
collectively or “PARTY” individually means the LICENSOR, the LICENSEE, and
FLOTEK.
|
| 1.7 |
“TERRITORY”
means worldwide.
|
| 1.8 |
“LICENSED
PRODUCTS” means downhole separators that fall within or are described by
any claim or claims of the LICENSED PATENT and/or any of the RELATED
PATENTS that have not been held invalid or unenforceable and have
not
expired or lapsed.
|
| 1.9 |
“QUARTERLY
GROSS REVENUE” means revenue as determined under generally accepted
accounting principles, consistently applied (“GAAP”). QUARTERLY GROSS
REVENUE shall expressly exclude, by way of example and not by way
of
limitation, (i) sales tax or other taxes collected, and (ii) amounts
received as reimbursement of costs, such as freight
costs.
|
| 1.10 |
“MARKET
REPORT” shall mean a report that sets forth the computation of the
ROYALTY.
|
| 2.0 |
GRANT
OF LICENSE
|
| 2.1 |
The
LICENSOR hereby grants unto the LICENSEE an exclusive, transferable,
and
sublicensable license throughout the TERRITORY in and to the INVENTION,
the LICENSED PATENT, and the RELATED PATENTS, such license including,
but
not limited to, the exclusive license
to:
|
| 2.1.1 |
Manufacture,
use, import, offer to sell, sell, repair, and service the LICENSED
PRODUCTS;
|
| 2.1.2 |
Enforce
the LICENSED PATENT and the RELATED PATENTS as set forth under the
provisions of this AGREEMENT; and
|
2
| 2.1.3 |
Assign
and/or sublicense the LICENSEE’s rights under this AGREEMENT.
|
| 2.2 |
The
LICENSOR does not grant or imply to grant any other, further, or
different
license.
|
| 2.3 |
Except
as expressly provided in this AGREEMENT, the LICENSOR does not grant
or
imply to grant any transfer of right or title in and to the INVENTION,
the
LICENSED PATENT, or any of the RELATED PATENTS to the
LICENSEE.
|
| 2.4 |
The
LICENSOR covenants that it, its heirs, legal representatives, assigns,
administrators, and executors will, at the expense of the LICENSOR,
its
successors, and assigns, execute all papers and perform such other
acts as
may be reasonably necessary to give the LICENSEE, its successors,
and
assigns the full benefit of this
AGREEMENT.
|
| 2.5 |
The
LICENSOR retains no right to engage directly or indirectly in the
TERRITORY in the manufacture, importation, distribution, promotion,
or
sale (either on its own account or for or on behalf of any other
party) of
any invention described and/or claimed in the LICENSED PATENT or
RELATED
PATENTS, nor engage in activities that would prejudice the performance
of
its obligations under this
AGREEMENT.
|
| 3.0 |
SALES
AND PROMOTION
|
| 3.1 |
The
LICENSEE intends to use its best efforts regarding the manner in
which it
conducts its business with respect to the LICENSED PRODUCTS but shall
not
be held to any standard of conduct with respect to such business.
|
| 4.0 |
MARKET
REPORT/AUDIT
|
| 4.1 |
The
LICENSEE will on a quarterly basis provide to the LICENSOR a written
MARKET REPORT for the preceding quarter. The LICENSOR shall keep
such
reports, and any information provided to it by the LICENSEE in connection
with this AGREEMENT, confidential.
|
| 4.2 |
Upon
reasonable notice and during regular business hours, the LICENSOR
shall be
permitted on an annual basis to have its independent auditors inspect
and
audit the books and records of the LICENSEE which relates to the
determination of the ROYALTY. Such audit shall be at the expense
of the
LICENSOR, unless it is determined and agreed by the PARTIES that
the
ROYALTY has been underpaid by 10% or more, in which case the audit
shall
be at the expense of the LICENSEE.
|
3
| 5.0 |
ROYALTY
|
| 5.1 |
During
the term of this AGREEMENT and in consideration
for the exclusive rights granted in this AGREEMENT, the LICENSEE
and its
AFFILIATE, FLOTEK, agree to pay to LICENSOR a
royalty of 7.5% of the LICENSEE’s QUARTERLY GROSS REVENUE directly
attributable to the LICENSED PRODUCTS that
are sold by the LICENSEE in the TERRITORY (the
“ROYALTY”), provided, however, that the Royalty shall not apply to
QUARTERLY GROSS REVENUE attributable to any jurisdiction in which
the
LICENSED PRODUCTS are subject to competition from products whose
cost,
without the LICENSEE ROYALTY, is substantially the same to the LICENSED
PRODUCTS.
|
| 5.2 |
As
long as the LICENSED PATENT has not been found invalid or unenforceable,
and has not expired or lapsed, the LICENSEE will pay the LICENSOR,
with
respect to each calendar year (ending December 31st),
a guaranteed minimum amount of ROYALTY pursuant to Section 5.1 equal
to
$400,000. The
guaranteed minimum amount of ROYALTY shall only be paid should the
ROYALTY
payments described in Section 5.1 for the preceding calendar year
amount
to less than $400,000.00, in which case LICENSEE shall pay LICENSOR
within
45 days of the end of such period the amount required to cause the
ROYALTY
paid with respect to that complete 12 month period to equal such
minimum
amount. The minimum royalty for 2006 shall be pro rated to
$300,000.
|
| 5.3 |
The
ROYALTY shall be offset by the costs of prosecution and maintenance
of the
LICENSED PATENT and the RELATED PATENTS as discussed below in Section
10.0
or the costs and expenses of any
claim, suit, demand, action, or litigation
as
discussed below in Section 11.0.
|
| 5.4 |
The
ROYALTY due under this AGREEMENT shall be subject to offset for any
losses, damages, liabilities, costs, expenses, attorneys’ fees or court
costs suffered by the LICENSEE or its affiliates (“DAMAGES”) as a result
of any breach by LICENSOR of the terms of the Asset Purchase Agreement
by
and
among the LICENSOR, Total Energy Technologies, LLC, and the LICENSEE
(the
“APA”), including, but not limited to, any breach of the representations
and warranties provided by the LICENSOR in the APA, provided that
such
breach is identified in a written notice provided by LICENSEE to
LICENSOR,
and remains uncured within one year of the date hereof (a “BREACH”). Upon
the initiation of, and until the conclusion of, any claim, suit,
demand,
action, or litigation against the LICENSOR by the LICENSEE for an
alleged
BREACH (a “CLAIM”), all ROYALTY payments, including any minimum amount of
ROYALTY, shall be paid into an escrow account (the “ESCROW ACCOUNT”) held
by an independent third party pursuant to terms established by the
LICENSOR with the independent third party in the reasonable discretion
of
the LICENSOR. The terms of such ESCROW ACCOUNT shall provide, among
other
things, that any amount held in the ESCROW ACCOUNT shall be released
to
the LICENSOR or returned to the LICENSEE upon the final, non-appealable
conclusion of the CLAIM (a “DETERMINATION”) to the extent required for the
LICENSEE to fully recover the DAMAGES. If the amount paid to the
LICENSEE
from the ESCROW ACCOUNT upon a DETERMINATION is not sufficient to
fully
offset and recover the DAMAGES, the LICENSEE shall be permitted to
offset
and reduce future ROYALTY payments until it has hereby recovered
all
DAMAGES. Once all DAMAGES have been recovered, the LICENSEE shall
continue
the ROYALTY payments under the terms above. The terms of this section
set
forth a non-exclusive remedy.
|
4
| 6.0 |
TERMS
OF PAYMENT
|
| 6.1 |
The
ROYALTY shall be payable as follows: (i) within thirty days after
the end of each calendar quarter ending on March 31, June 30 and
September
30, LICENSEE shall pay the LICENSOR $100,000, and (ii) on or before
February 15th,
LICENSEE shall pay LICENSOR the amount of Royalty which remains unpaid
with respect to the calendar year ending on the previous December
31st.
|
| 6.2 |
All
determinations by the LICENSEE with respect to the calculation of
the
ROYALTY shall be deemed to be correct unless objection is made within
thirty days and the LICENSOR is able to establish an error by a
preponderance of the evidence.
|
Unless
otherwise specified by the LICENSEE, all payments due by the LICENSEE to the
LICENSOR hereunder shall be paid in US dollars by international wire transfer
to
the account specified in writing from time to time by the LICENSOR.
| 7.0 |
CONFIDENTIALITY
|
| 7.1 |
Any
information acquired by any of the PARTIES in the course of this
AGREEMENT
regarding the affairs and business of the PARTIES and their affiliates
shall, during the TERM of the AGREEMENT and for (10) years thereafter,
be
treated as confidential and shall not be disclosed without the prior
consent of the PARTIES, except for information that:
|
| 7.1.1 |
at
the time of the disclosure or thereafter is generally available to
and
known by the public (other than as a result of its disclosure by
the
receiving PARTY), unless the information consists of a compilation
of
information that, despite the individual components of information
being
generally available to and known by the public, is not itself generally
available to and known by the public;
|
| 7.1.2 |
was
available to a receiving PARTY hereto on a non-confidential basis
prior to
disclosure by the disclosing PARTY;
or
|
5
| 7.1.3 |
becomes
available to a receiving PARTY hereto on a non-confidential basis
from a
person who is not otherwise bound by a confidentiality agreement
with the
disclosing PARTY, or is not otherwise prohibited from transmitting
the
information to the receiving PARTY.
|
| 7.2 |
If
a PARTY is required by law to disclose all or any part of such
information, such PARTY agrees to:
|
| 7.2.1 |
immediately
notify the other PARTIES of the existence, terms, and circumstances
surrounding such a request;
|
| 7.2.2 |
consult
with the other PARTIES on the advisability of taking legally available
steps to resist or narrow such request; and
|
| 7.2.3 |
exercise
its commercially reasonable best efforts to obtain an order or other
reliable assurance that confidential treatment will be accorded to
such
portion of the information required to be
disclosed.
|
| 7.3 |
Information
to be treated as confidential under this AGREEMENT shall include,
but not
be limited to, MARKET REPORTS, information regarding the INVENTION,
the
PARTIES' customer lists, unpublished designs, marketing and business
plans, telemarketing and other unique sales techniques, and sources
of
supply.
|
| 7.4 |
This
duty of confidentiality pertains to both PARTIES' directors, officers,
employees, agents, and representatives, if any.
|
| 8.0 |
LIABILITY
AND DUTIES
|
| 8.1 |
The
LICENSOR and the LICENSEE each acknowledges and represents to the
other
that neither shall incur any liability on behalf of the other, purport
to
pledge the credit of the other, or accept any order or obligation
to be
binding upon the other.
|
| 8.2 |
None
of the PARTIES or their management or members shall owe a fiduciary
duty
to each other under this AGREEMENT.
|
| 9.0 |
WARRANTY
OF OWNERSHIP
|
| 9.1 |
LICENSOR
represents and warrants that it is the owner of the entire right,
title,
and interest in and to the INVENTION, the LICENSED PATENT, and any
RELATED
PATENTS.
|
6
| 10.0 |
PATENT
PROSECUTION AND MAINTENANCE
|
| 10.1 |
The
LICENSEE, at the LICENSOR’s expense, shall have the responsibility for and
control over the prosecution and maintenance of the LICENSED PATENT
and
any RELATED PATENTS. The LICENSEE shall take no action with respect
to the
LICENSED PATENT or any of the RELATED PATENTS where the purpose or
effect
of that action is to limit or diminish the LICENSEE’s obligation to pay
the ROYALTY set forth in Section 5.0 of this AGREEMENT. The LICENSOR,
at
the expense of the LICENSOR, shall cooperate in any way necessary
to
enable the LICENSEE to conduct such prosecution and maintenance.
The
amount of the ROYALTY due under Section 5.1 shall be offset by the
costs
of such prosecution and
maintenance.
|
| 11.0 |
INFRINGEMENT
BY LICENSEE/INDEMNIFICATION
|
| 11.1 |
In
the event of any claim, suit, demand, action, or litigation against
the
LICENSEE, on account of any claim of infringement arising out of
the
manufacture, use, importation, offer for sale, or sale of the LICENSED
PRODUCTS (a “LICENSEE INFRINGEMENT CLAIM”), the LICENSOR agrees to furnish
to the LICENSEE, on request and at the expense of the LICENSOR, all
evidence and information in possession relating to the defense of
such
litigation. Any such expenses incurred by the LICENSEE, but owed
by the
LICENSOR, shall be deducted from the amount of the next paid ROYALTY
payment.
|
| 11.2 |
The
LICENSOR shall indemnify and hold the LICENSEE,
its AFFILIATES, and their respective officers and directors harmless
from
all LICENSEE INFRINGEMENT CLAIMS s, including reasonable legal fees
and
court costs, that the LICENSEE may incur or suffer.
Upon the initiation of, and until the finalization of, any LICENSEE
INFRINGMENT CLAIM, all ROYALTY payments, minus all losses, damages,
and
costs, including reasonable legal fees and court costs, that the
LICENSEE
may incur or suffer in connection with same, shall be paid into escrow.
Should an injunction, damages, or other relief not be awarded to
the third
party plaintiff, any amount remaining in escrow shall be released
to the
LICENSOR upon the final, non-appealable conclusion of the claim,
suit,
demand, action, or litigation against the LICENSEE. Should an injunction,
damages, or other relief be awarded to the third party plaintiff,
any
amount remaining in escrow shall be released to the LICENSEE to the
extent
required to receive the indemnification to which it is entitled pursuant
to this Section and thereafter shall be paid to the
LICENSOR.
|
| 12.0 |
INFRINGEMENT
BY THIRD PARTY
|
| 12.1 |
In
the event that the LICENSED PATENT or any of the RELATED PATENTS
shall be
considered by the LICENSEE to be infringed by others, the LICENSEE,
at its
own expense, shall have the right, but not the obligation, to
institute any action or proceeding that the LICENSEE may deem necessary
or
advisable, including, without limitation, the filing of a lawsuit
seeking
damages and/or an injunction against such infringement, as well as
to
prosecute, settle, compromise, or otherwise dispose of the same.
The
LICENSOR waives any right, if any such right exists, to prevent or
enjoin
the LICENSEE from filing or pursuing an action for infringement by
reason
of the LICENSOR not being a party to the action. The LICENSOR cannot
join
any action brought by the LICENSEE per this AGREEMENT unless the
LICENSEE
requests such joinder or a court orders that the LICENSOR be a party,
in
which instance the LICENSOR shall join such action by filing the
appropriate pleadings or papers with the Court having jurisdiction.
In
situations where the LICENSOR is or becomes a party to any proceeding
or
action, the LICENSOR shall be entitled to non-controlling participation
through counsel of its selection, in which the LICENSEE shall be
responsible for paying the necessary and reasonable attorney fees
and
expenses of the LICENSOR.
|
7
| 12.2 |
The
LICENSEE shall notify the LICENSOR of its intention not to institute
any
such action or proceeding relating to the infringement by a third
party,
including correspondence or discussions regarding the infringement
without
the filing of a lawsuit, within ninety days of knowing of any potential
infringement by a third party. Upon such notice, the LICENSOR, at
its own
expense, shall have the right, but not the obligation, to institute
any
action or proceeding that the LICENSOR may deem necessary or advisable,
including, without limitation, the filing of a lawsuit seeking damages
and/or an injunction against such infringement, as well as to prosecute,
settle, compromise, or otherwise dispose of the same. The LICENSEE
waives
any right, if any such right exists, to prevent or enjoin the LICENSOR
from filing or pursuing an action for infringement by reason of the
LICENSEE not being a party to the action. The LICENSEE cannot join
any
action brought by the LICENSOR per this AGREEMENT unless the LICENSOR
requests such joinder or a court orders that the LICENSEE be a party,
in
which instance the LICENSEE shall join such action by filing the
appropriate pleadings or papers with the Court having jurisdiction.
In
situations where the LICENSEE is or becomes a party to any proceeding
or
action, the LICENSEE shall be entitled to non-controlling participation
through counsel of its selection, in which the LICENSOR shall be
responsible for paying the necessary and reasonable attorney fees
and
expenses of the LICENSEE.
|
| 12.3 |
The
PARTY bringing any action or proceeding described in Sections 12.1-12.2
shall retain the moneys collected through such action or proceeding.
The
non-controlling PARTY is not entitled to any award and/or collection
of
damages from such action.
|
| 12.4 |
Sections
12.1-12.3 include actions involving the filing of a declaratory judgment
action or the filing of any counter-claim for infringement and
damages.
|
8
| 12.5 |
Should
the LICENSOR become a party to an action brought by the LICENSEE
pursuant
to this AGREEMENT, the LICENSOR waives and agrees not to assert in
the
action or proceedings, any claim that: (1) the LICENSOR is not subject
to
the jurisdiction of the court or of any other court to which the
proceedings in the court may be appealed; (2) the suit, action, or
proceeding is brought in an inconvenient forum; or (3) the venue
of the
suit, action, or proceeding is
improper.
|
| 12.6 |
The
LICENSOR and LICENSEE shall each promptly inform the other of any
suspected infringement of the LICENSED PATENT or the RELATED PATENTS
by a
third party.
|
| 12.7 |
Should
a lawsuit, reexamination, reissue or other proceeding be commenced
in
which the validity or enforceability of any of the LICENSED PATENT
or any
of the RELATED PATENTS is contested or challenged (the “CHALLENGED
PATENT”) or in which certain of the claims of the CHALLENGED PATENT are
challenged or asserted as being invalid (the “CHALLENGED CLAIMS”), then in
the event that a court or other tribunal of competent jurisdiction
holds
in a final, non-appealable judgment that the CHALLENGED PATENT is
unenforceable, and not withstanding anything to the contrary in this
AGREEMENT, the LICENSEE shall have no obligation to make any further
ROYALTY payments to the LICENSOR for the sales of what were formerly
LICENSED PRODUCTS in the country of the CHALLENGED PATENT but shall
still
retain the rights under this AGREEMENT as to what were the formerly
the
LICENSED PRODUCTS in that country.
|
| 13.0 |
TERM
|
| 13.1 |
The
TERM of this AGREEMENT shall, unless terminated earlier in accordance
with
Section 14 below, remain in effect as long as at least one of the
LICENSED
PATENT or any RELATED PATENTS has
(1) not been found by the relevant country’s patent office or court of law
to be invalid or unenforceable; or (2) has not expired or lapsed.
|
| 14.0 |
TERMINATION
|
| 14.1 |
The
LICENSOR or the LICENSEE may terminate this AGREEMENT at any time
by
giving the other notice to that effect, stating the precise reasons
therefore, in any of the following
events:
|
| 14.1.1 |
any
material breach by the other for which effective remedial action
has not
been undertaken within sixty days after written notice is given specifying
the breach and requiring remedy of the same,
the written notice being effective after the remedial period or any
subsequent date specified in the notice;
or
|
9
| 14.1.2 |
if
the other shall be unable to pay its debts in the ordinary course
of
business, shall enter into liquidation (otherwise than for reason
of
corporate amalgamation or reconstruction), shall become bankrupt
or
insolvent, or shall be placed in the control of a receiver or trustee,
whether compulsorily or voluntarily, the notice being effective on
the
date when notice is given or any subsequent date specified in the
notice.
|
| 15.0 |
CONSEQUENCES
OF TERMINATION
|
| 15.1 |
Upon
termination of this AGREEMENT:
|
| 15.1.1 |
the
LICENSEE shall promptly pay to the LICENSOR all amounts due by way
of
ROYALTY, or otherwise to the date of termination (which shall be
deemed to
be the end of the calendar quarter in which it
falls);
|
| 15.1.2 |
the
LICENSEE shall make no further use or sale of the LICENSED PRODUCTS
(subject to Section 15.1.3);
|
| 15.1.3 |
the
LICENSOR will, except where termination is based on material breach
of
this AGREEMENT by the LICENSEE by reason of the LICENSEE’s gross
misconduct, permit the LICENSEE to dispose of any stock then in hand
within up to six months following the date of termination. The LICENSOR
shall be entitled to ROYALTY payments on this stock in
hand.
|
| 16.0 |
REPRESENTATIONS
AND WARRANTIES
|
| 16.1 |
The
LICENSOR hereby represents and warrants to the LICENSEE that neither
the
LICENSED PATENT nor any of the RELATED PATENTS has been held invalid
or
unenforceable, that to the knowledge of the LICENSOR, the LICENSED
PATENT
and the RELATED PATENTS are valid and enforceable, and neither the
LICENSED PATENT nor any of the RELATED PATENTS is the subject of,
or
involved in, any suit, action or reexamination or reissue
proceeding.
|
| 16.2 |
The
LICENSOR hereby represents and warrants to the LICENSEE that the
LICENSOR
owns and holds all right, title, claim, and interest in and to the
LICENSED PATENT and the RELATED PATENTS, subject to no restrictions
or
encumbrances of any kind.
|
| 16.3 |
The
LICENSOR further represents and warrants that there are no current
licenses or commitments or agreements to license any rights in and
to
LICENSED PATENT or any of the RELATED PATENTS other than the rights
granted in this AGREEMENT.
|
| 16.4 |
The
LICENSOR and the LICENSEE hereby represent and warrant that they
have full
and complete power and authority to enter into and carry out their
obligations under this AGREEMENT and under any documents, which may
be
executed in connection herewith.
|
10
| 16.5 |
The
LICENSOR represents and warrants that they have provided all information
concerning notices or allegations made by the LICENSOR concerning
the
LICENSED PATENT and the RELATED PATENTS, any litigation involving
the
LICENSED PATENT or any of the RELATED PATENTS, and other license
agreements or proposals concerning the LICENSED PATENT or any of
the
RELATED PATENTS.
|
| 16.6 |
The
LICENSOR agrees to indemnify and hold the LICENSEE harmless from
any
liabilities, costs and expenses (including reasonable attorneys'
fees and
expenses), obligations, and causes of action arising out of or related
to
any breach of the representations and warranties made by the LICENSOR
herein.
|
| 16.7 |
The
LICENSOR
represents and warrants that all maintenance or equivalent fees have
been
paid on the LICENSED PATENT and the RELATED PATENTS and that neither
the
LICENSED PATENT nor any of the RELATED PATENTS has expired for failure
to
pay any fees.
|
| 16.8 |
The
LICENSOR hereby further represent and warrant that:
|
| 16.8.1 |
The
LICENSOR shall not make any license, assignment, commitment or other
agreement which is inconsistent with the terms of this AGREEMENT
|
| 16.8.2 |
The
LICENSOR owns and holds the exclusive right, title, and interest
in and to
the LICENSED PATENT and the RELATED PATENTS, and that such rights
and the
LICENSED PATENT and the RELATED PATENTS are subject to no liens,
restrictions, or encumbrances of any kind, and that no other person
or
entity has any right, title, interest, or claim in or to the LICENSED
PATENT or any of the RELATED PATENTS as a result of any action taken
by
the LICENSOR.
|
17.0 IMPROVEMENTS
If
the
LICENSEE, AFFILIATES of the LICENSEE, or any of the officers, agents, or
employees of the LICENSEE or its AFFILIATES devise or acquire any improvement
in
the INVENTION, the LICENSEE or its AFFILIATE shall own all patent rights and
any
other intellectual property related to such improvement, not subject to any
of
the terms under this AGREEMENT, as long as said improvements are not covered
by
the LICENSED PATENT or RELATED PATENTS.
11
| 18.0 |
EXPENSES
|
| 18.1 |
The
expenses incurred by the PARTIES in performance of this AGREEMENT,
including all travel and out-of-pocket expenses, shall be solely
for their
own account.
|
| 19.0 |
TRANSFERABILITY
|
| 19.1 |
The
LICENSOR may not assign or transfer all or any portion of its rights
under
this AGREEMENT or of its title in the LICENSED PATENT or any of the
RELATED PATENTS without providing at least thirty days written notice
of
such to and receiving written approval of such from the
LICENSEE.
|
| 19.2 |
The
LICENSEE agrees not to unreasonably withhold approval of such assignment
or transfer under Section 19.1.
|
| 19.3 |
The
LICENSEE may transfer, assign, and/or sublicense all or any portion
of its
rights under this AGREEMENT, provided that the LICENSEE shall guarantee
the performance by its assignee of the obligations of the LICENSEE
pursuant to this agreement which accrue subsequent to such assignment
and
provided further that the LICENSEE must provide at least 30 days
advance
written notice of the assignment to the LICENSOR.
|
| 20.0 |
SUCCESSORS
|
| 20.1 |
Upon
execution, this AGREEMENT shall be binding upon each of the PARTIES
and
inure to the benefit of the PARTIES and their successors and
assigns.
|
| 21.0 |
SEVERABILITY
|
| 21.1 |
Should
any part or provision of this AGREEMENT be held unenforceable or
in
conflict with the law of any jurisdiction, the validity of the remaining
parts or provisions shall not be affected by such
holding.
|
| 22.0 |
WAIVER
|
| 22.1 |
A
waiver of any breach of any provision of this AGREEMENT to be enforceable
must be in writing and shall not be construed as a continuing waiver
of
other breaches of the same or other provisions of this
AGREEMENT.
|
| 23.0 |
INTEGRATION
|
| 23.1 |
This
AGREEMENT embodies the entire understanding between the PARTIES with
respect to the grant of license under the LICENSED PATENT and the
RELATED
PATENTS, there are no prior representations, warranties, or agreements
between the PARTIES relating hereto, and this AGREEMENT is executed
and
delivered upon the basis of this
understanding.
|
12
| 24.0 |
GOVERNING
LAW, JURISDICTION, AND PLACE OF
SUIT
|
| 24.1 |
This
AGREEMENT shall be governed by and construed in accordance with the
laws
of the State of Texas, U.S.A., applicable to agreements and contracts
executed and to be wholly performed there, without giving effect to the
conflicts of law principles
thereof.
|
| 24.2 |
The
PARTIES consent to the jurisdiction of the State of Texas, U.S.A.
for all
purposes in connection with this AGREEMENT.
|
| 24.3 |
Any
process, notice, motion, or other application to a Court or to a
Justice
of the State of Texas, U.S.A. may be served within or without the
territorial jurisdiction of the State of Texas, U.S.A., by registered
or
certified mail, return receipt requested, or by personal service,
or in
such other manner as is permissible under the Rules of a Court in
the
State of Texas, U.S.A., provided a reasonable time for appearance,
not
less than twenty business days, is allowed.
|
| 24.4 |
The
PARTIES agree that the proper jurisdiction and venue for resolution
of any
dispute arising from the terms of or performance under this AGREEMENT
(hereinafter “LICENSE DISPUTE”) shall be Xxxxxx County Texas. In the event
of a LICENSE DISPUTE, the Parties agree to submit the dispute to
non-binding mediation and then, if necessary, binding arbitration
conducted by the American Arbitration
Association.
|
| 25.0 |
MULTIPLE
COUNTERPARTS
|
| 25.1 |
This
Agreement may be executed in multiple counterparts, each of which
shall be
deemed an original.
|
| 26.0 |
MODIFICATION
|
| 26.1 |
This
AGREEMENT may not be modified otherwise than by written instrument
signed
by all PARTIES.
|
| 27.0 |
HEADINGS
|
| 27.1 |
The
headings of this AGREEMENT shall serve only reference purposes and
for
convenience and are not binding or intended to limit or expand the
breadth
of the provisions of this
AGREEMENT.
|
13
| 28.0 |
NOTICES
|
| 28.1 |
All
notices and communications required or permitted to be sent by the
PARTIES
to each other shall be deemed sufficient if transmitted in writing
by
registered mail addressed as
follows:
|
| If to LICENSOR: |
Xxxx X. Xxxxx
0000 X. Xxxxxx Xx
Xxxxxx, XX 00000
|
|
| If to LICENSEE: |
0000 Xxxxxx Xxxxxxx Xxxxx
Xxxxxxx, Xxxxx
00000
|
IN
WITNESS WHEREOF, the PARTIES hereto have executed this AGREEMENT as of the
date
set forth above.
| TOTAL WELL SOLUTIONS, LLC | ||
| |
|
|
| By: |
/s/
Xxxx
X. Xxxxx
|
|
|
Xxxx X. Xxxxx, Managing Member |
||
| USA PETROVALVE, INC. | ||
| |
|
|
| By: | /s/ Xxxxx X. Xxxxx Xx. | |
|
Xxxxx
X. Xxxxx, Xx., Chairman and
Chief
Executive Officer
|
||
| FLOTEK INDUSTRIES, INC. | ||
| |
|
|
| By: | /s/ Xxxxx X. Xxxxx Xx. | |
|
Xxxxx X. Xxxxx, Xx., Chairman and
Chief
Executive Officer
|
||
14
SCHEDULE
A
List
of
Patents and Patent Applications Being Licensed
| 1. |
U.S.
Patent No. 6,761,215;
|
| 2. |
Eurasian
Patent Application No.
200500439/26;
|
| 3. |
Australian
Patent Application No. 2003278716;
|
| 4. |
Canadian
Patent Application No. 2497929; and
|
| 5. |
Chinese
Patent Application No. 03824239.7
|
15
