DOPACO - ECC
SUBLICENSE AGREEMENT
THIS SUBLICENSE AGREEMENT (the "Agreement") is made upon and shall be effective
as of June 19, 1995, by and between EARTHSHELL CONTAINER CORPORATION, a Delaware
corporation ("ECC"), and DOPACO, INC., a corporation formed and existing under
the laws of Pennsylvania ("Sublicensee").
RECITALS:
A. ECC has the exclusive right to utilize certain Technology (as defined
herein) to manufacture, use and sell, within a certain Field of Use (as defined
herein), certain containers made from inorganically filled moldable composites
and compounds for packaging, storing, portioning, dispensing, carrying,
presenting, serving and consuming food or beverages.
B. ECC has the right and authority to grant sublicenses which will permit
selected entities to utilize such Technology in order to manufacture, use and
sell certain food or beverage containers made from inorganically filled moldable
composites and compounds.
C. Sublicensee desires to obtain from ECC a sublicense to utilize the
Technology to manufacture, use and sell certain designated food or beverage
containers within a designated geographical area.
D. ECC is willing to grant a sublicense to Sublicensee upon the terms and
conditions set forth herein.
EXHIBIT 10.14
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AGREEMENT:
NOW, THEREFORE, in consideration of the foregoing Recitals, the covenants
and agreements set forth herein, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties covenant
and agree as follows:
1. DEFINITIONS. The capitalized terms used in this Agreement shall have
the meanings set forth below:
(a) The term "Affiliate" shall mean, with respect to any given
entity, any other entity directly or indirectly controlling, controlled by, or
under direct or indirect common control with such given entity. For purposes of
this definition, the ownership of a twenty-five percent (25%) or greater equity
interest in an entity shall be deemed control of such entity, and the ownership
of less than a twenty-five percent (25%) equity interest in an entity (absent
any other exercise of control) shall be deemed not to be control of such entity.
(b) The term "Core Technology" shall mean all of the confidential,
secret, or proprietary technology involving inorganically filled compositions
which are described or claimed in (i) any of the patents or patent applications
listed in Exhibit "A" hereto, including without limitation, any continuations,
divisionals or continuations-in-part, reissues and extensions thereto, and any
patents issued therefrom, and (ii) any future patent applications under the
Patent Cooperation Treaty, any future European Patent applications, and/or any
future national patent applications in or for any country that are based on any
of the applications listed in Section B or D of Exhibit "A" hereto, and any
patents issued therefrom.
(c) The term "Design Improvement" shall mean any improvement to the
physical shape, ornamental design or configuration of Products.
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(d) The term "Field of Use" shall mean (i) the use and sale of
Products in the food service and restaurant industry, (ii) the use and sale of
Products in other retail establishments selling Products (E.G., grocery stores,
convenience stores, food warehouses, and the like), but only with respect to
Products that have been introduced into the food service and restaurant
industry, (iii) the incidental use and sale in any manner of those Products
which are manufactured by Sublicensee hereunder where the predominant
use is within the food service and restaurant industry, and (iv) the sale of
Products to distributors and wholesalers for resale and use in retail outlets in
the food service and restaurant industry and, subject to clause (ii) above, in
retail establishments. As used in this subparagraph, the term "food service and
restaurant industry" is intended to include any facility (whether commercial,
nonprofit, governmental, or other), including vending machines wherever
located, where food or beverages are (x) sold for consumption on the premises or
(y) packaged for take-out in single or multiple portions intended for immediate
or same day consumption off the premises without substantial additional
preparation. By way of example, the term "food service and restaurant industry"
includes such facilities as eating establishments, diners, dining rooms, dine-in
restaurants, cafes, cafeterias, including institutional cafeterias, coffee
shops, delicatessens, quick service restaurants, take-out restaurants, snack
bars, cocktail lounges, bars, saloons, night clubs, cabarets, sports arenas and
the like, and their distributors, brokers and wholesalers, but does not include
other food industry facilities outside of the food service and restaurant
industry (such as packaging for pre-packaged foods in food processing
facilities, grocery stores, and food distributors, brokers and wholesalers)
except as specifically provided in clause (ii) of this subparagraph. As used in
this subparagraph, the term "incidental use and sale" shall encompass Products
designed for and predominantly used in the food service and restaurant "industry
but which, beyond the control or
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reasonable ability of Sublicensee to properly account for their end-use,
ultimately are used or sold outside of the Field of Use.
(e) The term "Moldable Compound Technology" shall mean all of the
confidential, secret, or proprietary technology involving inorganically
filled composites, including moldable compounds (both foam and non-foam
applications), articles manufactured from inorganically filled composites,
the compositions and uses of such inorganically filled composites or articles
made therefrom, and apparatus and methods for manufacturing same, which are
described or claimed in (i) any of the patents or patent applications listed
in Exhibit "B" hereto, including without limitation, any continuations,
divisionals or continuations-in-part, reissues and extensions thereto, any
patents issued therefrom, and (ii) any future patent applications under the
Patent Cooperation Treaty, any future European Patent applications, and/or
any future national patent applications in or for any country that are based
on any of the applications listed in Section B or D of Exhibit "B" hereto,
and any patents issued therefrom.
(f) The term "Net Sales Price" shall mean the gross invoice price
charged by Sublicensee, or its Affiliate as applicable, in the sale of a Product
to a non-Affiliate reduced by (i) any credit allowed by Sublicensee for the
return of the Product; (ii) trade, quantity and cash discounts (customer
reserves, allowances, rebates, bad debt) allowed by Sublicensee; (iii) excise,
value added and sales taxes actually paid by Sublicensee on the Product; and
(iv) freight charges actually paid by Sublicensee for the shipment and delivery
of the Product. In the case of non-cash consideration, "Net Sales Price" shall
be the fair market value of all non-cash-consideration actually received by
Sublicensee or its Affiliate for such Product. The "Net Sales Price" of
Products set aside for Sublicensee's own use, or sold or transferred to an
Affiliate or set aside for the Affiliate's
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own use, shall be deemed to be the price then charged to unrelated parties in
arms-length transactions for such Products in similar quantities and under
similar terms of sale.
(g) The term "Products" shall mean only those articles described in
Exhibit "C" hereto made from inorganically filled moldable composites or
compounds that incorporate or utilize the Technology in whole or in part. In
the event of any disagreement between the parties whether a particular item is
within or without the definition of "Product" hereunder, the parties may submit
the matter to arbitration pursuant to the provisions of paragraph 32 hereof.
(h) The term "Product Improvement" shall mean any improvement or
change, irrespective of whence derived, relating in whole or in part to the
composition, formulation or use of a Product or the Technology, including any
improvement, development or change relating to a Product by process (any
change in the processing of a Product which yields a materially different
Product), such as a change in chemical composition, change in physical
characteristics or properties brought about by substitution or replacement of
elements or components, change in method of formulation, change in rheology,
etc. The term "Product Improvement" shall not include improvements to the
physical shape, ornamental design, or configuration of Products (hereinafter
"Design Improvements").
(i) The term "Process Improvement" shall mean any improvement,
development, or change relating in whole or part to the Technology or a Product
which involves an apparatus, machine or process so long as such improvement,
development or change does not materially alter the finished Product, but rather
yields a more efficient production of a Product. The term "Process Improvement"
shall also include any development, refinement, improvement or change relating
in whole or in part to the application of materials, chemical compositions,
coatings or other substances, including the processes of application, to a
Product after the finish trim and forming or conversion
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of the Product is completed to the extent that such development, refinement.
improvement or change is not already known by ECC (unless ECC's prior knowledge
is pursuant to a confidentiality agreement with Sublicensee) or in the public
domain.
(j) The term "Technology" shall refer collectively to the Core
Technology, the Moldable Compound Technology and the Trade Secrets.
(k) The term "Territory" shall mean that certain geographic territory
described in Exhibit "F" hereto. Upon written notice to ECC that Sublicensee
services, or intends to expand its business to service, geographic areas outside
of the Territory and that Sublicensee desires to commercialize Products in such
additional geographic areas, which notice shall include evidence of such intent
reasonably satisfactory to ECC, ECC shall cooperate in amending this Agreement
to include such additional geographic areas by amending Exhibit "F hereto;
provided, however, that the parties must first reach an agreement as to the
royalty rate that shall apply to such additional geographic area and provided
further that ECC shall have no obligation to grant rights to Sublicensee in any
country in which (i) ECC has already granted to a third party an exclusive
license of the Technology or (ii) it is necessary or desirable for ECC to enter
into an exclusive license with a citizen of the country at issue due to monetary
restrictions or other legal, tax or business considerations under the local laws
of such country.
(l) The term "Trade Secrets" shall mean the proprietary information of ECC
that is related to the Technology and which is described in Exhibit "D" hereto
or which is delivered to Sublicensee by ECC and marked "Confidential", but only
to the extent that such proprietary information is directly utilized in the
manufacture, use, or sale of Products.
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2. THE SUBLICENSE.
(a) Subject to the terms and conditions set forth in this Agreement,
ECC hereby grants to Sublicensee a non-exclusive, royalty-bearing sublicense
(the "Sublicense") to use the Technology to make, use, sell and otherwise
commercialize the Products solely within the Territory and solely within the
Field of Use.
(b) Sublicensee shall not have the right to further sublicense,
assign or transfer the Technology, or any interest in or rights under the
Sublicense except (i) to an Affiliate, or (ii) in the case of the sale of
substantially all of Sublicensee's assets that are dedicated to the Technology,
with the prior written consent of ECC, which consent will not unreasonably be
withheld. Any attempted unauthorized sublicense or transfer shall be void and
shall constitute a breach of a material obligation of Sublicensee under this
Agreement.
(c) ECC is free to grant additional sublicenses to other third
parties to utilize the Technology to make, use and sell Products in the Field of
Use and in the Territory.
(d) Nothing in this Agreement shall be construed to constitute a
grant by ECC to Sublicensee of rights broader than that which ECC is entitled to
grant under its license from ECC's licensor of the Technology (hereinafter
referred to as "Licensor"). If and to the extent it is determined that
Sublicensee is selling, or desires to sell, Products outside of the Field of Use
(as defined in the master license agreement between ECC and its Licensor)
granted to ECC by its Licensor, then it is understood and agreed that
Sublicensee must obtain an appropriate license from, and pay royalties directly
to, ECC's Licensor.
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3. ROYALTIES.
(a) As consideration for the grant of the Sublicense, Sublicensee
shall pay to ECC a royalty (the "Royalty") of twenty-two percent (22%) of the
Net Sales Price for each Product sold by Sublicensee during the term of this
Agreement.
(b) Sublicensee shall be deemed to have "sold" a Product, and ECC
shall be deemed to have earned the Royalty, upon the earliest date that
Sublicensee actually ships, delivers, or invoices the Product to any person,
firm or entity other than an Affiliate of Sublicensee, or upon the earliest date
that Sublicensee sets such Product aside for Sublicensee's own use. For
Products transferred to an Affiliate, Sublicensee shall be deemed to have "sold"
the Product, and ECC shall be deemed to have earned the Royalty, upon the
earliest date that the Affiliate to whom the Product was transferred either (i)
sets aside such Product for an Affiliate's own use, or (ii) ships, delivers or
invoices such Product to any person, firm or entity which is not an Affiliate of
Sublicensee.
(c) Notwithstanding subparagraph (a) of this paragraph, during the
first three years of the term of this Agreement ECC shall be sensitive to
Sublicensee's ability to produce Products profitably under this Agreement. If,
during the first three years of the term of this Agreement, Sublicensee
demonstrates to ECC's reasonable satisfaction that a material change in
circumstance has occurred affecting Sublicensee's ability to produce Products
profitably under this Agreement, ECC shall cooperate with Sublicensee in
negotiating such adjustments as may be commercially reasonable under the
circumstances. If the parties are unable, in good faith, to reach an agreement
as to a mutually acceptable adjustment, then the matter may be referred to
arbitration under paragraph 32 hereof. By way of example, a "material change
in circumstance" may include a significant and unexpected increase in the cost
of one or more of the raw materials required for the manufacture of the
Products.
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(d) Between the third and fourth anniversaries of the effective date
of this Agreement, the parties shall jointly review and evaluate the continued
benefit of the advertising allowance set forth in subparagraph 20(b) hereof and
the economic impact thereof and shall cooperate in negotiating such adjustments
as are commercially reasonable under the circumstances. If the parties are
unable to agree as to the need for, or the nature or amount of, such an
adjustment, then the matter may be referred to arbitration under paragraph 32
hereof.
(e) Notwithstanding anything to the contrary contained in this
paragraph 3, no royalties shall be payable by Sublicensee with respect to (i)
marketing or promotional samples provided by Sublicensee without charge to
BONA FIDE prospective customers (other than Affiliates), provided that the
dollar value of such marketing or promotional samples does not exceed 0.05%
of Sublicensee's total Net Sales of Products for the calendar quarter in
which such marketing or promotional samples are given away or (ii) samples
used by Sublicensee for in-house quality control or customer product testing.
4. PAYMENT OF THE ROYALTY.
(a) Within sixty (60) days after the final day of each calendar month
(or fiscal month if Sublicensee is reporting on a fiscal basis) which occurs
during the term of this Agreement (a "Month"), Sublicensee shall pay to ECC the
Royalty earned on all Products sold by Sublicensee during such Month. Each
Royalty payment shall be accompanied by a written report (the "Royalty Report")
prepared by Sublicensee and certified as accurate by the appropriate financial
officer of Sublicensee. Each Royalty Report shall set forth, for the Month
covered by the Royalty Report, (i) the number of each of the Products sold by
the Sublicensee, (ii) the Net Sale Price for each of such Products, and (iii)
reductions to the Net Sales Price for applicable returns, discounts, freight
charges, bad debts/uncollected accounts and taxes with respect to the Products.
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(b) The Royalty payment shall accrue interest from the date payment
should have been made until actual payment is made at the per annum base rate on
corporate loans published as the "Prime Rate" in the WALL STREET JOURNAL on the
next business day following the day the Royalty payment was due.
(c) Failure to make payment when due of any Royalty hereunder is a
breach of a material obligation of Sublicensee.
5. SUBLICENSEE COVENANTS.
Sublicensee hereby covenants:
(a) not to utilize the Technology except strictly in accordance with
the terms and conditions set forth in this Agreement;
(b) to utilize the Technology solely in connection with the
manufacture, marketing, distribution, use and sale of the
Products;
(c) not to utilize the Technology for any purpose other than the
manufacture, marketing, distribution, use and sale of the
Products;
(d) not to manufacture, market, distribute, use and sell Products
except in strict accordance with the terms and conditions of this
Agreement;
(e) to manufacture, market, distribute, use and sell Products solely
within the Territory;
(f) not to market, distribute or sell any Product to any person, firm
or entity outside the Territory, or to any person, firm or entity
within the Territory if Sublicensee knows that such person, firm
or entity intends to make or sell the Product in question outside
the Territory;
(g) to market, distribute, use and sell Products solely within the
Field of Use; and
(h) not to market, distribute, use or sell Products outside of the
Field of Use.
Any breach by Sublicensee of any one or more of the foregoing covenants shall
constitute a breach by Sublicensee of a material obligation under this
Agreement.
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6. RIGHT TO AUDIT.
(a) Sublicensee shall keep and maintain complete and accurate records
concerning the manufacture and sale of the Products. ECC or its designee (the
"Representative") shall have the right, at ECC's expense, to periodically (but
not more frequently than once each calendar year) review those records and
operations of Sublicensee which deal with the design, manufacture, shipment or
sale of the Products or with Product Improvements or Process Improvements
developed by Sublicensee. Such reviews may take place only during the normal
business hours of Sublicensee and only upon written notice to Sublicensee given
at least ten (10) business days prior to such review. The Representative
conducting such review shall be required to execute a confidentiality agreement
pursuant to which the Representative shall agree that it will not disclose or
use the information obtained pursuant to such review to or for the benefit of
any person or entity except ECC unless required to do so in connection with the
resolution of any dispute concerning any payment required by this Agreement.
(b) ECC shall give written notice to Sublicensee of any dispute as to
proper payment of any Royalty due hereunder. If the parties are unable to
resolve any disputes raised by ECC in the notice to Sublicensee within thirty
(30) days from the date of such notice, then the dispute shall be submitted to
arbitration or mediation for resolution as provided under this Agreement.
7. IMPROVEMENTS TO THE TECHNOLOGY.
(a) PRODUCT IMPROVEMENTS. If, while the Sublicense remains in
effect, Sublicensee should develop any Product Improvement, Sublicensee shall
notify ECC of such Product Improvement within a reasonable time of, and in no
event more than ninety (90) days after, its development and shall provide ECC
with access to all information concerning such Product
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Improvement as ECC shall reasonably request; provided, however, that all such
information shall be confidential and shall be subject to all restrictions on
disclosure as set forth in this Agreement. Sublicensee shall assign to ECC all
rights, title and interest in the Product Improvement for an assignment fee of
$1,000.00, and ECC shall grant back to Sublicensee the non-exclusive right to
utilize the Product Improvement within the Field of Use and within the Territory
as if such Product Improvement were originally within the scope of the
Sublicense for the full term of this Agreement. There shall be no royalty
charged to Sublicensee for the right to utilize the Product Improvement. For a
period of (i) one year from the date of commercialization of such Product
Improvement, or (ii) two years from the date of the development of such Product
Improvement, whichever is shorter, ECC shall not grant any right to utilize the
Product Improvement within the Field of Use to any third party within the
Territory. The failure of Sublicensee to disclose any such Product Improvement
to ECC within the time period set forth above shall constitute a material breach
of this Agreement. Product Improvements developed by any other ECC sublicensee
of the Technology shall be automatically licensed hereunder and promptly
disclosed by ECC to Sublicensee, but only after any period of exclusivity
provided to such other sublicensee shall have expired.
(b) PROCESS IMPROVEMENTS. If, while the Sublicense remains in
effect, Sublicensee should develop any material Process Improvement, then
Sublicensee shall notify ECC of such Process Improvement within a reasonable
time of, and in no event more than ninety (90) days after, its development and
shall provide ECC with access to all information concerning such improvements as
ECC shall reasonably request; provided, however, that all such information shall
be confidential and shall be subject to all restrictions on disclosure as set
forth in this Agreement. For a single lump sum payment of $ 1,000.00 by ECC to
Sublicensee, Sublicensee shall grant to ECC an exclusive, fully paid-up license
(including the right to further sublicense and/or assign its rights to ECC's
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Licensor) to utilize Process Improvement in connection with the Product and/or
the Technology (i) outside of the Territory and (ii) within the Territory,
outside of the Field of Use. The license granted to ECC under this subparagraph
7(b) shall be irrevocable and shall survive termination or expiration of this
Agreement for any reason whatsoever. The failure of Sublicensee to disclose any
such Process Improvement to ECC within the time period set forth above shall
constitute a material breach of this Agreement.
(c) PATENT RIGHTS FOR PRODUCT IMPROVEMENTS. ECC shall have the right
to seek patent protection for any Product Improvement at its own cost and
expense. Sublicensee shall provide to ECC or its assignee with such assistance
as may be reasonably requested, from time to time, in connection with such
efforts, including the execution of any documents necessary to obtain and
maintain such patent protection; provided, however, that ECC or its assignee
will reimburse Sublicensee for any out-of-pocket fees and expenses reasonably
incurred by Sublicensee in providing such assistance.
(d) PATENT RIGHTS FOR PROCESS IMPROVEMENTS. Sublicensee shall have
the right to seek patent protection for any Process Improvement at its own cost
and expense. ECC shall provide Sublicensee or its assignee with such assistance
as may be reasonably requested, from time to time, in connection with such
efforts, including the execution of any documents necessary to obtain and
maintain such patent protection; provided, however, that Sublicensee or its
assignee will reimburse ECC for any out-of-pocket expenses reasonably incurred
by ECC in providing such assistance. Sublicensee shall keep ECC informed of the
status of the prosecution of each patent application that Sublicensee elects to
pursue and shall consult with ECC on all material aspects of such application,
although all final decisions in regard to a patent application shall remain
within the sole discretion of Sublicensee. In the event Sublicensee elects not
to seek patent protection for a Process
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Improvement. Sublicensee shall promptly notify ECC in writing, and ECC shall
have the option, for a period of ninety (90) days after its receipt of such
written notice, to acquire by assignment from Sublicensee ail rights, title and
interests in and to the Process Improvement in question, including the right to
seek patent protection in ECC's name or its designee, in consideration of a
single lumpsum payment of One Thousand Dollars ($1,000.00). In the event ECC
exercises the option provided for in the preceding sentence, Sublicensee shall
provide to ECC or its designee such assistance as may reasonably be requested,
from time to time, in connection with ECC's or its designee's efforts to obtain
protection of the Process Improvement in question, including the execution of
any documents necessary to obtain and maintain such patent protection; provided,
however, that ECC or its assignee will reimburse Sublicensee for any out-of-
pocket fees and expenses reasonably incurred by Sublicensee in providing such
assistance.
(e) PROPRIETARY RIGHTS OF SUBLICENSEE. ECC acknowledges and agrees
that Sublicensee presently owns certain patents, trade secrets and other
proprietary information relating to the Technology ("Sublicensee Proprietary
Property") which is more fully set forth on Exhibit "E" attached herein and
incorporated herein. The Sublicensee Proprietary Property is and shall remain
the exclusive property of Sublicensee. All Sublicensee Proprietary Property
shall be subject to the conditions, and obligations of confidentiality which
apply to all confidential and proprietary information of the respective parties
hereto as required under this Agreement. Except for any developments,
improvements or modifications to the Sublicensee Proprietary Property which are
Product or Process Improvements which are otherwise governed by this Agreement,
ECC shall not acquire any right, title, interest or license in any of the
Sublicensee Proprietary Property as a result of this Agreement, or as a result
of any dealings between the parties pursuant to this Agreement. Any proprietary
information or technology relating to the Products and/or the Technology and not
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set forth in Exhibit "E" hereto shall be subject to the terms and conditions of
this Agreement governing Product Improvements and Process Improvements unless
such proprietary information or technology is in the public domain or in the
possession of ECC.
(f) IMPROVEMENTS TO PRODUCT CONFIGURATION. Sublicensee shall own the
rights to any Design Improvements that may be developed by Sublicensee during
the term of this Agreement.
(g) ECC DEVELOPED AND JOINTLY DEVELOPED PRODUCT, PROCESS AND DESIGN
IMPROVEMENTS. Any Product Improvements, Process Improvements or Design
Improvements developed by ECC during the term of this Agreement (hereinafter
referred to as "ECC Improvements") and any Product Improvements, Process
Improvements or Design Improvements developed jointly by ECC and Sublicensee
during the term of this Agreement (hereinafter referred to as "Jointly Developed
Improvements") shall be owned by ECC and, except as otherwise provided in this
Agreement, shall be disclosed and licensed by ECC to third parties. For a
period of (i) one year from the date of commercialization of any Jointly
Developed Improvement, or (ii) two years from the date of the development of the
Jointly Developed Improvement, whichever is shorter, ECC shall not grant any
right to utilize the Jointly Developed Improvement within the Field of Use to
any third party within the Territory. Any Jointly Developed Improvements shall
be deemed to be licensed to Sublicensee under this Agreement, shall be deemed to
be included within the definition of Technology, and shall be subject to all of
the terms, conditions and restrictions of this Agreement applicable to the
Technology.
(h) DISCLOSURE OF PRODUCT IMPROVEMENTS AND PROCESS IMPROVEMENTS. ECC
shall promptly disclose to Sublicensee (i) all Product Improvements and all
Process Improvements that may be developed solely by ECC during the term of this
Agreement and (ii) unless contractually restricted from doing so by any
agreement ECC may have with a third party, all Product
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Improvements and all Process Improvements that may be developed jointly by ECC
and a third party or otherwise acquired by ECC or licensed to ECC (along with
the right to sublicense such improvements) during the term of this Agreement.
All such Product Improvements and Process Improvements that may be disclosed by
ECC to Sublicensee pursuant to this subparagraph shall be deemed to be licensed
to Sublicensee under this Agreement, shall be deemed to be included within the
definition of Technology, and shall be subject to all of the terms, conditions
and restrictions of this Agreement applicable to the Technology.
8. INFRINGEMENT.
(a) ECC and Sublicensee will promptly notify (within 30 days) one
another of any apparent infringement of the Technology (whether or not such
apparent infringement is within the Field of Use) or of the Trademarks which
comes to their attention while the Sublicense remains in effect, and if in ECC's
opinion the apparent infringement has substantial and adverse consequences, ECC
shall, at its sole cost and expense, bring suit to enjoin such infringement and
to recover damages therefor. In any action brought by ECC pursuant to this
subparagraph, ECC shall select and control counsel for the prosecution of such
suit. Sublicensee shall (i) have the right to receive, from time to time, full
and complete information from ECC concerning the status of such suit, (ii) have
the right, at Sublicensee's own expense, to be represented therein by counsel in
an advisory capacity, and (iii) cooperate fully with ECC and provide whatever
assistance is reasonably requested by ECC in connection with such suit,
including the preparation and signing of documents. If ECC decides not to bring
suit to enjoin an alleged infringement either because it is deemed inadvisable
or DE MINIMIS, no such action will be required by ECC; however, ECC's Licensor
shall, at its own cost and expense, have the right, but not the obligation, to
bring suit to enjoin such infringement and to recover damages therefore. In the
event ECC's Licensor elects to bring suit,
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Sublicensee's rights and obligations hereunder shall be the same as if ECC had
undertaken to enjoin such infringement. In the event the action taken by ECC or
its Licensor is not satisfactory to Sublicensee, then Sublicensee shall have the
right at its sole cost, to take whatever action it deems appropriate in its own
name against an alleged infringer. Additionally, ECC and its Licensor shall (i)
have the right to consult with Sublicensee prior to Sublicensee pursuing legal
action against a potential infringer and thereafter shall have the right to
receive, from time to time, full and complete information from Sublicensee
concerning any actions Sublicensee has taken against an alleged infringer, and
(ii) have the right, at ECC's or its Licensor's, as applicable, own expense, to
be represented by counsel in an advisory capacity in any legal proceedings
initiated by Sublicensee.
(b) ECC and Sublicensee will promptly notify (within 30 days) one
another of any apparent infringement of any Sublicensee owned Process
Improvement (whether or not such apparent infringement is within the Field of
Use) which comes to their attention and, if in Sublicensee's opinion, the
apparent infringement has substantial and adverse consequences, Sublicensee
shall, at its sole cost and expense, bring suit to enjoin such infringement and
to recover damages therefor. In any action brought by Sublicensee pursuant to
this subparagraph, Sublicensee shall select and control counsel for the
prosecution of such suit. ECC shall (i) have the right to receive, from time to
time, full and complete information from Sublicensee concerning the status of
such suit, (ii) have the right, at ECC's own expense, to be represented therein
by counsel in an advisory capacity, and (iii) cooperate fully with Sublicensee
and provide whatever assistance is reasonably requested by Sublicensee in
connection with such suit, including the preparation and signing of documents,
If Sublicensee decides not to bring suit to enjoin an alleged infringement of
Sublicensee owned Process Improvements either because it is deemed inadvisable
or DE MINIMIS, no such action will be required by Sublicensee. In the event the
action taken by Sublicensee is not
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satisfactory to ECC, then ECC shall have the right but not the obligation, at
its sole cost, to take whatever action it deems appropriate in its own name
against an alleged infringer. Additionally, Sublicensee shall (i) have the
right to consult with ECC prior to ECC pursuing legal action against a potential
infringer and thereafter shall have the right to receive, from time to time,
full and complete information from ECC concerning any actions ECC has taken
against an alleged infringer, and (ii) have the right, at Sublicensee's own
expense, to be represented by counsel in an advisory capacity in any legal
proceedings initiated by ECC with respect to infringement of Sublicensee owned
Process Improvements.
(c) The parties shall notify (within 30 days) each other of any claim
by any person that the manufacture or use of the Technology with respect to any
Product by Sublicensee in the Field of Use infringes the rights of such person
or of the commencement of any lawsuit against ECC, Sublicensee, or any customers
of the foregoing, as the result of such alleged infringement. ECC may assume
and control the defense of any such lawsuit, at its sole cost and expense,
irrespective of whether ECC is named as a defendant in such litigation.
Sublicensee will assist ECC in the defense of such suit or action by providing
information and fact witnesses as needed, provided, however, that ECC shall
reimburse Sublicensee for all out-of-pocket costs, excluding attorney fees
except as preapproved by ECC, incurred by Sublicensee in connection with such
action by allowing a credit or offset against the Royalty due hereunder.
Sublicensee shall have the right to be represented in such suit or action only
in an advisory capacity. If ECC decides not to assume the defense of
infringement lawsuit described in this subparagraph, then ECC's Licensor shall
have the right, but not the obligation, to do so. In the event ECC's Licensor
elects to assume the defense, Sublicensee's obligations shall be the same as if
ECC were assuming the defense of such litigation. If ECC's Licensor does not
assume defense of such litigation, then Sublicensee shall have the right, but
not
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the obligation, at Sublicensee's own cost and expense, to assume the defense of
such lawsuit utilizing legal counsel of its choice.
(d) If, as the result of any lawsuit referred to in the preceding
subparagraph, Sublicensee is required by final court order from which no appeal
can be taken (or by a court order which ECC's legal counsel believes has no
reasonable likelihood of success for modification on appeal) to obtain a license
under any third party's patent not licensed hereunder in order to continue with
Sublicensee's activities as contemplated by this Agreement, and to pay a royalty
under such license, and the infringement of such patent cannot reasonably be
avoided by Sublicensee, the future payment of the Royalty shall thereafter be
reduced by an amount equal to 100% of any fee or royalty payable by Sublicensee
under such additional license, but in no event shall the Royalty be reduced to
an amount less than zero, as long as the infringement was due to the Technology
licensed hereunder. In addition, if Sublicensee settles an infringement action
referred to in the foregoing subparagraph, after obtaining the prior written
consent of ECC (which shall not be unreasonably withheld), and pursuant to such
settlement Sublicensee obtains a license under any patent not licensed
hereunder, to make, use or sell the Products in any manner contemplated by this
Agreement, and agrees to pay a royalty under such license, and the infringement
of such patent cannot reasonably be avoided by Sublicensee, the Royalty shall
thereafter be reduced by an amount equal to 100% of the sum payable by
Sublicensee pursuant to such settlement, but in no event shall the Royalty be
reduced to an amount less than zero, as long as the settlement was for claims of
infringement due to the Technology licensed hereunder.
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9. ADDITIONAL DUTIES OF THE SUBLICENSEE. In addition to, and not in
limitation of, the other duties and obligations of Sublicensee, as set forth in
this Agreement, Sublicensee shall:
(a) Use all commercially reasonable efforts to diligently exploit the
Sublicense by developing a commercial manufacturing capacity for the Products
and by actively manufacturing, marketing, advertising and selling the Products
within the Territory. ECC's sole and exclusive remedy for breach of this
subparagraph 9(a) shall be termination of this Agreement.
(b) Continue to make all required payments under this Agreement to
ECC during any challenge of the validity of any of the patents (or claims
thereof) issued in connection with the Technology. In the event Sublicensee
terminates such payments based upon or in connection with such a challenge, ECC
may at its option terminate this Agreement upon written notice to Sublicensee.
Notwithstanding the foregoing, if ECC or its Licensor does not assume the
defense of any litigation set forth in subparagraph 8(c), and Sublicensee does
assume the defense of such litigation, all Royalty payments due during the
pendency of such litigation shall be paid into a mutually agreeable escrow, and
such Royalty payments shall be held in escrow until the litigation becomes
final, from which no further appeal can be taken. Once the litigation is final,
the Royalty payments held in escrow shall be paid to ECC, less an amount equal
to any damage or loss Sublicensee sustained as a result of the litigation,
including attorney fees and costs, which amounts shall be paid to Sublicensee.
(c) If Sublicensee is a publicly traded corporation or is otherwise
required to publicly disseminate its financial statements, Sublicensee shall
provide ECC with annual financial reports of Sublicensee which are published and
detail Sublicensee's annual earnings and statement of net worth for the
preceding calendar or fiscal year. If Sublicensee is required to file financial
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reports with the S.E.C., then Sublicensee may provide ECC with copies of those
financial reports required to be filed with the S.E.C. in lieu of the foregoing.
(d) Forty-five (45) days after the final day of each of Sublicensee's
calendar or fiscal quarter end (the "Quarter") or such other reporting period as
the parties may from time to time mutually agree, Sublicensee shall deliver to
ECC a written report (the "Development Report"), which shall set forth, in
reasonable detail, the scope and results of all research and development
activities relating to the Technology and/or Products undertaken by Sublicensee
during the Quarter which report shall also set forth, in reasonable detail, a
description of all marketing activities for the Products undertaken during the
Quarter by Sublicensee. The Development Reports shall be certified as correct
and accurate by an appropriate officer of Sublicensee.
10. REPRESENTATIONS AND WARRANTIES OF ECC. ECC hereby represents and
warrants to Sublicensee that:
(a) ECC is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware. ECC has all requisite
corporate power and authority to own, operate and lease its properties and to
carry on its business as now being conducted, and is duly qualified to do
business in every jurisdiction wherein the nature of the business conducted or
the assets owned or leased by it make such qualification material to the conduct
of its business.
(b) ECC has all requisite corporate power and authority to enter into
this Agreement and to perform its obligations hereunder, including but not
limited to the right to sublicense the Technology. This Agreement has been duly
and validly authorized, executed and delivered by ECC and, assuming the due
authorization, execution and delivery by Sublicensee, is the legal, valid and
binding obligation of ECC, enforceable against it in accordance with its terms,
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subject only to bankruptcy, insolvency, reorganization, moratorium and other
laws relating to or affecting creditors' rights generally and to general
principles of equity.
(c) To the best knowledge of ECC, no person, firm or entity has made
any claims or threatened, in writing or otherwise, that ECC is in violation of
or has infringed any patent, patent license, trade name, trademark, service
▇▇▇▇, brand ▇▇▇▇, brand name, copyright, know-how, formula or other proprietary
or trade rights of such third party as they relate to the Technology. Except as
provided in this subparagraph, ECC makes no representation or warranty as to the
ownership or validity of the Technology. The license granted to Sublicensee
under this Agreement does not exceed the scope of the rights granted to ECC by
Licensor.
(d) To the best knowledge of ECC, the execution, delivery and
performance of this Agreement by ECC and the consummation by it of the
transactions contemplated hereby will not (i) constitute a violation (with or
without the giving of notice or lapse of time) of any provision of applicable
law, (ii) require any consent, approval or authorization of any person or
governmental authority, (iii) result in a default under, acceleration or
termination of, or the creation in any party of the right to accelerate,
terminate, modify or cancel any agreement, lease, franchise, permit, note or
other restriction, encumbrance, obligation or liability to which ECC is a party
or by which it is bound or to which any of its assets are subject, (iv) result
in the creation of any lien or encumbrance upon ECC's assets, (v) conflict with,
result in the breach of, or constitute a default under any provision of ECC's
certificate of incorporation or bylaws, or (vi) conflict with, result in a
tortious interference as a result of such conflict with, or otherwise violate,
any material contract or arrangement between ECC and any other person. The
representation and warranty given in this subparagraph shall not be deemed or
construed to expand or modify the representation and warranty given by ECC in
subparagraph 10(c).
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(e) Neither ECC, nor anyone acting on behalf, has taken any action
relating to any broker, finder, consultant or other expert which could result in
the imposition upon the Sublicensee of any obligation to pay a fee to any
broker, finder, consultant or similar expert in connection with the transactions
contemplated hereby.
11. REPRESENTATIONS AND WARRANTIES OF SUBLICENSEE. Sublicensee hereby
represents and warrants to ECC that:
(a) Sublicensee is a corporation duly organized, validly existing and
in good standing under the laws of Pennsylvania. Sublicensee has all requisite
power and authority to own, operate and lease the properties and to carry on its
business as now being conducted, and is duly qualified to do business in every
jurisdiction wherein the nature of the business conducted or the assets owned or
leased by it make such qualification material to the conduct of its business.
(b) Sublicensee has all requisite power and authority to enter into
this Agreement and to perform its obligations hereunder. This Agreement has
been duly and validly authorized, executed and delivered by Sublicensee and,
assuming the due authorization, execution and delivery by ECC, is a legal and
binding obligation of Sublicensee, enforceable against it in accordance with its
terms, subject only to bankruptcy, insolvency, reorganization, moratorium and
other laws relating to or affecting creditors' rights generally and to general
principles of equity.
(c) To the best knowledge of Sublicensee, the execution, delivery and
performance of this Agreement by Sublicensee and the consummation by it of the
transactions contemplated hereby will not (i) constitute a violation (with or
without the giving of notice or lapse of time) of any provision of applicable
law, (ii) require any consent, approval or authorization of any person or
governmental authority, (iii) result in a default under, acceleration or
termination of, or the creation in any party of the right to accelerate,
terminate, modify or cancel, any agreement, lease,
-▇▇-
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇, note or other restriction, encumbrance, obligation or
liability to which Sublicensee is a party or by which it is bound or to which
any of its assets are subject, (iv) result in the creation of any lien or
encumbrance upon Sublicensee's assets, (v) conflict with, result in the breach
of, or constitute a default under any provision of Sublicensee's charter
documents, or (vi) conflict with, result in tortious interference as a result of
such conflict with, or otherwise violate, any contract or arrangement between
ECC and any other person.
(d) Neither Sublicensee, nor anyone acting on its behalf, has taken
any action relating to any broker, finder, consultant or other expert which
could result in the imposition upon ECC of any obligation to pay a fee to any
broker, finder, consultant or similar expert in connection with the
transactions contemplated hereby.
12. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The representations and
warranties of the parties, as set forth herein, shall be true and accurate as of
the effective date of this Agreement, and shall survive the execution of this
Agreement.
13. DISCLAIMER OF WARRANTIES.
NEITHER ECC NOR ITS LICENSOR MAKE OR GIVE, AND THEY HEREBY EXPRESSLY
DISCLAIM ANY AND ALL WARRANTIES, WHETHER EXPRESS OR IMPLIED, WRITTEN OR ORAL,
INCLUDING BUT NOT LIMITED TO THE WARRANTIES OF MERCHANTABILITY AND OF FITNESS
FOR A PARTICULAR PURPOSE, IN REGARD TO THE TECHNOLOGY AND/OR ANY PRODUCTS WHICH
MAY BE MANUFACTURED, USED OR SOLD BY SUBLICENSEE AND WHICH ARE BASED UPON OR
UTILIZE THE TECHNOLOGY.
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14. INDEMNIFICATION.
(a) ECC shall defend, indemnify and hold Sublicensee harmless from
and against, and hereby assumes liability for the payment of any and all
loss, liability or damage, and for all costs and expenses (including
reasonable costs of investigations and reasonable attorneys, accountants, and
expert witness fees) that may be imposed upon, suffered or incurred by, or
successfully asserted against Sublicensee as a consequence of or in
connection with any claim that may be asserted against Sublicensee that the
Technology infringes the valid patent rights of any third party. However,
ECC's liability to Sublicensee shall be limited to the total amount of all
Royalties paid to ECC by Sublicensee under this Agreement for (x) the
24-month period preceding the date that Sublicensee suffered a loss requiring
indemnification by ECC under this subparagraph or (y) in the case of patent
infringement litigation brought by a third party against Sublicensee, the
period from the date written notice of such infringement is received by
Sublicensee to the date final judgment is entered, whichever is longer.
In addition to, and not in lieu of, the indemnification of Sublicensee
by ECC under this subparagraph, during the first three years following the
initial product introduction by any ECC sublicensee of the Technology, ECC shall
obtain insurance covering third party claims of patent infringement from a
reputable insurance carrier reasonably acceptable to Sublicensee. Such policy
shall provide Sublicensee with minimum liability coverage as follows: (i)
$5,000,000.00 (U.S. Dollars) for the first year following the initial commercial
introduction of a Product by any ECC sublicensee of the Technology; (ii)
$15,000,000.00 (U.S. Dollars) for the second year following the initial
commercial introduction of a Product by any ECC sublicensee of the Technology;
and (iii) $25,000,000.00 (U.S. Dollars) for the third year following the initial
commercial introduction of a Product by any ECC sublicensee of the Technology.
Such patent infringement insurance policy shall
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be put into place prior to Sublicensee's initial commercial introduction of any
Product hereunder. For United States carriers, such carriers must have an A.M.
Best rating of "A-VI" or better. Upon Sublicensee's request, ECC shall provide
Sublicensee with a Certificate of Insurance evidencing such patent infringement
insurance policy.
(b) Sublicensee shall defend, indemnify and hold ECC and Licensor
harmless from and against, and hereby assumes liability for the payment of
any and all loss, liability or damage, and for all costs and expenses
(including reasonable costs of investigations and reasonable attorneys,
accountants, and expert witness fees) that may be imposed upon, suffered or
incurred by, or successfully asserted against ECC or its Licensor as a
consequence of or in connection with any claim or liability, other than those
expressly set forth in subparagraph 14(a) hereof, arising out of or as a
consequence of this Agreement, including, but not limited to, any product
liability claims that may be asserted against ECC or its Licensor in relation
to any Products manufactured, marketed, distributed, used and/or sold by
Sublicensee pursuant to this Agreement. In the event any action, suit or
proceeding is brought against ECC or its Licensor with respect to which there
may be indemnification pursuant to this subparagraph, the defense of such
action, suit or proceeding (including all settlements and arbitrations,
trials, appeals or other proceedings) shall be conducted by Sublicensee at
its sole cost and expense through legal counsel selected by Sublicensee. ECC
and its Licensor shall have the right to participate in such defense at their
own expense through legal counsel of their choice. If Sublicensee fails to
defend any such action, suit or proceedings, for any reason, such failure
shall constitute a material breach of this Agreement by Sublicensee, and ECC
or its Licensor may undertake defense of such action, suit or proceeding,
through legal counsel of their choice at the sole cost and expense of
Sublicensee (provided such legal costs and expenses are reasonable under the
circumstances). The parties shall make available to one
-26-
another, their legal counsel and accountants, all information and documents
reasonably available to them which relate to such action, suit or proceeding and
shall render such other assistance as they may reasonably require of one another
in order to insure the proper and adequate defense of any such action, suit or
proceeding.
(c) Neither party shall have any liability to the other party
pursuant to an indemnity provided by this paragraph unless and until the
aggregate amount of all indemnified losses suffered or incurred by such
indemnified party after the effective date hereof equals or exceeds $100,000
(U.S. Dollars), at which time the indemnifying party shall be obligated to
pay the indemnified party the full amount of all indemnified losses,
including such initial $100,000 (U.S. Dollars) in losses. The amount of
indemnity payable pursuant to this paragraph shall be calculated after giving
affect to any insurance proceeds actually received by the indemnified party
provided that neither party shall subrogate to any insurance carrier any
rights or claims which it may have against the other party.
(d) The obligations set forth in this paragraph 14 shall survive
the expiration or termination of the Agreement for any reason whatsoever.
15. PRODUCT LIABILITY INSURANCE. In addition to the indemnification
provided under subparagraph 14(b) hereof, Sublicensee shall obtain, and shall
maintain during the entire term of this Agreement, a product liability insurance
policy with a reputable insurance carrier reasonably acceptable to ECC. For
United States carriers, such carriers must have an A.M. Best rating of "A-VI" or
better. Such policy shall provide Sublicensee with product liability coverage
with Minimum liability coverage in the amount of $1,000,000.00 (U.S. Dollars)
aggregate and $1,000,000.00 (U.S. Dollars) per occurrence. Such product
liability insurance policy shall provide that ECC will be given thirty (30) days
prior written notice of any amendment or modification that would reduce or
change
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coverage under, or termination or cancellation of, the policy. Upon ECC's
request, Sublicensee shall provide ECC with a Certificate of Insurance
evidencing such product liability insurance. Sublicensee shall be required to
obtain and maintain the product liability insurance policy called for by the
provisions of this subparagraph only from and after the date of the first
commercial sale of a Product by Sublicensee, or the first public testing of a
Product by Sublicensee.
16. CONFIDENTIALITY.
(a) Sublicensee acknowledges that ECC claims that the Technology, as
it may exist from time to time, as well as the other confidential or proprietary
information (including business and financial information) of ECC (whether owned
by ECC or acquired by license from third parties) are and shall remain the
valuable, special, unique and proprietary assets of ECC, and shall constitute
"Confidential Information" hereunder. In order for any information other than
the Technology to be deemed to be "Confidential Information" hereunder, whether
disclosed orally or in writing, it must be identified, orally or in writing, to
Sublicensee as "Confidential Information" at time of disclosure, or reasonably
thereafter, or be reasonably understood by Sublicensee to be "Confidential
Information." Additionally, as used herein, "Confidential Information" shall not
include any information or data which Sublicensee can show: (i) is in, or
becomes a part of, the public domain by any means other than the failure by
Sublicensee to fulfill its obligations hereunder; or (ii) is rightfully known to
Sublicensee at the time of disclosure by ECC; or (iii) is, at any time,
disclosed to Sublicensee by a third party who has received and disclosed such
information without the breach of any obligation of confidentiality to ECC or to
any third party assignor of such Confidential Information. For purposes of
this subparagraph, information shall not be deemed to be a part of the public
domain or in Sublicensee's knowledge merely because it may be embraced in a
more general disclosure or simply because it may be derived from combinations
of disclosures
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or information generally available to the public or within Sublicensee's
knowledge. The parties acknowledge that disclosure to Sublicensee of
Confidential Information will be necessary order to enable Sublicensee to
utilize the Sublicense in the manner contemplated by this Agreement, and
ECC will make such disclosures of the Confidential Information to Sublicensee as
it is necessary, required or appropriate in that regard. The parties
acknowledge that they have a confidential relationship with one another and,
accordingly, Sublicensee shall maintain all Confidential Information disclosed
to it pursuant to this Agreement in confidence and shall not disclose the same
to any third party (with the exception of its employees, accountants, attorneys
and other agents and professional advisors) either during or after the term of
this Agreement unless required to do so by court order or by law, in which case
Sublicensee shall notify ECC, in writing, prior to making such disclosure and
shall cooperate with ECC to preserve and protect the confidentiality of the
Confidential Information in question to the fullest extent possible.
Additionally, except as specifically contemplated by this Agreement, Sublicensee
shall not utilize any Confidential Information for its own benefit or for the
benefit of any third party. Prior to making any permitted disclosure of any
Confidential Information to its employees, accountants, attorneys and other
agents and professional advisors, Sublicensee shall use commercially reasonable
efforts to require such persons, firms, or entities to execute and deliver
written disclosure agreements which shall obligate such persons, firms, or
entities to comply with the same obligations of confidentiality and non-use as
imposed upon Sublicensee in this subparagraph. The obligation of
confidentiality as it relates to the Confidential Information shall survive the
termination of this Agreement and continue unabated until the expiration of the
last patent, including any extensions, reissues, or continuations thereof, which
has been or may be issued with respect to the Technology.
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(b) From time to time during the term of this Agreement, Sublicensee
may disclose to ECC certain information which Sublicensee deems to be
proprietary and confidential, including but not limited to, business plans,
marketing plans, financial information, and process technology (the "Sublicensee
Confidential Information"). The definition of "Sublicensee Confidential
Information." and ECC's use and disclosure thereof, shall be covered by terms
and conditions identical to those which govern Confidential Information, as set
forth in the preceding subparagraph; provided, however, that ECC shall have the
right to disclose Sublicensee Confidential Information to ECC's Licensor subject
to its accepting and treating it as Confidential Information in writing to
Sublicensee.
17. TERM AND TERMINATION.
(a) The term of this Agreement shall commence upon the effective date
hereof. Unless sooner terminated as hereinafter provided, this Agreement shall
continue in full force and effect until the expiration of the last material and
substantial patent covering the Technology which is utilized by Sublicensee, or
for so long as Sublicensee produces the Products which utilizes material and
substantial proprietary information or a material and substantial Trade Secret
of ECC; provided, however, that upon the expiration of the last aforementioned
patent, if Sublicensee desires to continue the Agreement in force, it will be
subject to an appropriate negotiated adjustment to the Royalty Payments or
License Fee. Any dispute as to the terms of this Agreement shall be resolved by
arbitration as provided under this Agreement.
(b) Sublicensee may terminate this Agreement, at any time, with or
without cause, upon sixty (60) days prior written notice of such termination to
ECC.
(c) If either party is in breach of any of its material obligations
hereunder, then the non-breaching party may give the breaching party written
notice of such breach. If such breach
-30-
is not cured within ninety (90) days after the date such written notice is
delivered or, if such default cannot be cured within such ninety day period but
the breaching party has taken action to cure such default, then if the default
is not cured within one hundred eighty (180) days from the date of the original
notice, the non-breaching party shall have the right immediately to terminate
the Sublicense by written notice to the breaching party.
(d) Subject to the conditions set forth in the last sentence of this
subparagraph, ECC shall have the right to terminate the Sublicense, upon thirty
(30) days written notice to Sublicensee, in the event that the amount of the
Royalty paid to ECC in any calendar year is not at least the greater of (i) 50%
of the Royalty payment amount for the preceding calendar year, or (ii)
commencing one (1) year after the effective date of this Agreement, $100,000
(U.S. Dollars), prorated for any partial calendar year. In the event of
termination of this Agreement pursuant to this subparagraph, Sublicensee shall
have the right to sell at market price existing stock and inventory of
manufactured Products for a period of one hundred and eighty days.
Notwithstanding the other provisions of this subparagraph, ECC shall not be
entitled to exercise the right of termination provided under this subparagraph,
and the $100,000 minimum royalty shall not begin to accrue, until one year
after: (x) the technology to commercially manufacture the Products is made
commercially available to Sublicensee; AND (y) at least one of ECC's
sublicensees of the Technology has been able successfully to commercialize at
least one of the Products.
18. EFFECT OF EXPIRATION OF TERMINATION.
(a) From and after the effective date of the expiration or
termination of this Agreement, Sublicensee shall have no right, whatsoever, to
utilize the Technology (except for Process Improvements then owned by
Sublicensee) or the Trademarks pertinent to this Agreement, and shall return to
ECC all copies of Confidential Information which is then in the possession of
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Sublicensee or destroy the same and provide satisfactory assurances of the
destruction of all Confidential Information; provided, however, that nothing
contained herein shall, or shall be deemed to, restrict the Sublicensee's
ability or right to use, free of Royalty, any Technology, trade name, know-how
or confidential information which is or has come into the public domain through
no fault of Sublicensee and is not otherwise deemed Confidential Information.
Notwithstanding the return of confidential information by Sublicensee, ECC shall
cooperate with and shall make available to Sublicensee such information,
including confidential information, as Sublicensee may reasonably require in
connection with any warranty claims asserted by an unrelated third party against
Sublicensee in relation to Products sold by Sublicensee hereunder. ECC shall
also be required to return to Sublicensee all copies of Confidential Information
of Sublicensee which are then in the possession of ECC or destroy and provide
satisfactory assurances of the destruction of all Confidential Information.
(b) The right of termination under paragraph 17 hereof shall be in
addition to, and not in lieu of, all other rights and remedies the terminating
party may have under this Agreement, at law or in equity.
(c) The obligation of Sublicensee to pay to ECC the Royalty for all
Products actually sold by Sublicensee prior to the effective date of the
expiration or termination of this Agreement, as well as the obligations
concerning indemnification, product liability and of confidentiality set forth
in this Agreement, shall survive the expiration or termination of the Sublicense
and of this Agreement.
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19. MARKING.
(a) Where feasible, Sublicensee shall ▇▇▇▇ the Products and related
documents with the applicable United States patent numbers, as required by
applicable law, or as reasonably instructed by ECC.
(b) Sublicensee shall comply with all applicable laws, rules and
regulations of the United States, including but not limited to, the Export
Regulations of the United States Department of Commerce, in connection with the
Technology. Sublicensee acknowledges that ECC has not made and does not make
any representations that any license is, or is not required in connection with
such export or, if required, that such license will be issued by the United
States Department of Commerce; provided, however, that ECC shall apply for all
licenses required or necessary to enable the Sublicensee to export the
Technology within the Territory without imposing any additional Royalty.
20. TRADEMARKS.
(a) Sublicensee may utilize, in connection with the manufacture,
marketing, distribution and sale of the Products, the EARTHSHELL-TM- trademark
and such other trade names, trademarks, service marks, slogans and logo marks
that may be designated in writing by ECC to Sublicensee prior to commercial
production of the Products by Sublicensee or from time to time thereafter
(collectively the "Trademarks").
(b) To the extent Sublicensee elects to use the Trademarks on or in
connection with manufacture, marketing, distribution, use and/or sale of
Products hereunder, Sublicensee shall be entitled to receive an advertising
allowance credit equal to Two Percent (2%) of the Net Sale Price of such
Products that bear the Trademarks. To qualify for the aforementioned
advertising allowance credit, Sublicensee shall submit to ECC written
documentation, reasonably satisfactory
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to ECC, of sales by Sublicensee of Products that bear the Trademarks, and ECC
shall credit the appropriate amount against future royalties payable by
Sublicensee hereunder.
(c) To the extent Sublicensee elects to use the Trademarks on or in
connection with the marketing, distribution, use and/or sale of the Products,
the specific placement, size, and detail of the Trademarks on the Product must
be approved by ECC, but shall not be required to be placed on the Products in
such a size, placement, detail or configuration so as to impair the
marketability of the Product. In addition, on any Products manufactured,
marketed, distributed and sold by Sublicensee and bearing any Trademark,
Sublicensee shall also include the following legend: "This product is
manufactured by Dopaco, Inc. under license from EarthShell Container
Corporation." To the extent it is not feasible to include the foregoing legend
directly on any Product itself, then such legend shall appear on the secondary
packaging materials in which such Products are shipped or transported.
(d) In connection with any use of the Trademarks by Sublicensee,
Sublicensee shall not in any manner represent that it has any ownership interest
therein and shall not challenge or impugn the ownership of the Trademarks.
Sublicensee acknowledges that use of the Trademarks shall not create in its own
favor any right, title, or interest in or to the Trademarks, but that all uses
of these marks by Sublicensee shall inure to the benefit of ECC or its Licensor.
Sublicensee shall cooperate with ECC or its Licensor in the execution of any
appropriate and necessary documents in connection with the registration of any
Trademark. Upon termination of this Agreement, Sublicensee shall cease and
desist from use of the Trademarks in any way, including any word or phrase that
is similar to or likely to be confused with such marks. However, in the event
of termination, Sublicensee shall have the right to sell at market price
existing stock and inventory of
-34-
manufactured Products for a period of one hundred and eighty days and
thereafter shall deliver to ECC or its duly authorized representative all
materials upon which the Trademarks appear.
(e) Subject to Sublicensee's review and acceptance of the ECC Quality
Standards Manual, which shall be provided to Sublicensee within eighteen months
from the date of this Agreement, all Products produced pursuant to this
Agreement bearing any Trademark shall be produced in compliance with the
specifications and procedures set forth "in the ECC Quality Standards Manual.
Sublicensee shall permit ECC to conduct periodic (but not more frequently than
once each calendar year) inspections/audits to ensure compliance with the ECC
Quality Standards Manual.
(f) Should any Product bearing any Trademark that is manufactured,
sold or otherwise commercialized by Sublicensee contain any material defect in
its appearance or function, Sublicensee shall cease any further manufacture,
sale or other commercialization of such Product containing such material defect.
Unless Sublicensee corrects such defect within a reasonable time following its
discovery by or disclosure to Sublicensee, Sublicensee shall be in breach of a
material obligation of this Agreement.
21. SPECIAL TAX PROVISIONS. Sublicensee or its agents shall be solely
responsible for the payment and discharge of any taxes, duties, or withholdings
relating to any transaction of Sublicensee or its agents in connection with the
manufacture, use, sale or commercialization of the Technology or the Products;
except that ECC shall be responsible for taxes, duties or withholding relating
to the payment to ECC of any Royalty payment under this Agreement and
Sublicensee shall be permitted to perform any withholding with respect to such
payments and fees required by law or regulation.
-35-
22. TECHNOLOGY TRANSFER.
(a) Sublicensee acknowledges and agrees that ECC has delivered and
made to Sublicensee a disclosure of a general introduction to the Technology and
to its commercial feasibility prior to the execution of this Agreement. Except
to the extent such information falls within one or more of the exceptions to the
definition of "Confidential Information", all information disclosed by ECC to
Sublicensee prior to the execution of this Agreement shall be deemed to
constitute part of the Technology and shall be deemed to be confidential. The
timing and extent of additional disclosure by ECC to Sublicensee shall be as set
forth in subparagraph 22(b) hereof.
(b) Upon execution of this Agreement, ECC shall provide Sublicensee
with copies of the patents listed in Section B of Exhibit "B" hereto. Beyond
that, ECC shall not be required to provide additional information concerning, or
disclosure of, the Technology to Sublicensee until Sublicensee provides to ECC
(i) written notice of Sublicensee's intent to commercialize a Product, which
written notice shall include detailed specifications for the designated Product,
and (ii) evidence, reasonably satisfactory to ECC, of Sublicensee's intent to
commercialize the designated Product in the form of written documentation of
orders placed by Sublicensee of the equipment needed by Sublicensee to produce
and commercialize the designated Product or in the form of written documentation
from Sublicensee confirming the dedication and/or modification of existing
equipment necessary to produce the designated Product. Within ninety (90) days
after ECC's receipt of the items described in the preceding sentence, ECC shall
provide to Sublicensee the following additional disclosure: (w) a Product
specific recipe for the production of the designated Product; (x) Product
specific process specifications for the production of the designated Product;
(y) copies of all patent applications listed in the Exhibits hereto that ECC
deems relevant
-36-
to the production of the designated Product; and (z) a list of known raw
materials suppliers and preferred equipment vendors.
23. ▇▇▇▇▇▇▇▇'▇ CORPORATION. Because of work jointly undertaken by ECC and
▇▇▇▇▇▇▇▇'▇ Corporation ("McDonald's") (as used herein the term "McDonald's"
shall include purchasing agents and franchisees thereof) with regards to studies
of market potential and food package design, it has been agreed that McDonald's
is to receive "priority" with regard to the distribution of the Products that
are ordered by it and covered by this Agreement. In compliance with this
arrangement, for a period of two (2) years from the effective date of this
Agreement, Sublicensee shall give priority to McDonald's orders for Products, in
that, on a regional basis, Sublicensee shall dedicate to the production and
delivery of Products to McDonald's such portion of Sublicensee's production
capacity (i) as is available at the time of receipt of a purchase order from
McDonald's and (ii) is reasonably necessary to fill such purchase order at the
rate of production and/or the delivery schedule contained in such order, and
Sublicense shall not accept additional purchase orders from, or deliver Products
to, any entity in the food service and restaurant industry other than McDonald's
unless or until Sublicensee has production capacity in excess of that required
to fill, on a timely basis, purchase orders from McDonald's that have previously
been accepted by Sublicense. A region shall be that geographic area which is
serviced by a specific "distribution center" that supplies products solely or
primarily to McDonald's in that geographic area.
24. FAVORED NATIONS. In the event ECC grants any sublicense within the
Territory of the Technology to any third party containing terms that are more
favorable than those granted to Sublicensee under this Agreement, ECC shall
notify Sublicensee of such more favorable terms and, upon written request by
Sublicensee, this Agreement shall be amended to incorporate such more favorable
terms; provided, however, that this paragraph 24 shall not apply with respect to
exclusivity
-37-
provisions or the grant of rights to specific Products contained in any other
sublicense of the Technology by ECC. To the extent that ECC grants a license to
any party, either within or without the Territory, that includes the right to
import into the Territory and includes terms directed to Product Improvements,
Process Improvements and/or Royalties that are more favorable than those granted
to Sublicensee under this Agreement, ECC shall notify Sublicensee of such more
favorable terms and, upon written request by Sublicensee, this Agreement shall
be amended to incorporate such more favorable terms.
25. EQUITABLE RELIEF. A breach or default by Sublicensee of the
provisions of paragraph 5 and/or paragraph 16 hereof shall cause ECC to suffer
irreparable harm and, in such event, ECC shall be entitled, as a matter of
right, to a restraining order and other injunctive relief from any court of
competent jurisdiction, restraining any further violation thereof by
Sublicensee, its officers, agents, servants, employees, and those persons in
active concert or participation with them. The right to a restraining order or
other injunctive relief shall be supplemental to any other right or remedy ECC
may have, including, without limitation, the recovery of additional damages for
the breach or default of any of the terms of this Agreement.
26. RELATIONSHIP OF THE PARTIES. This Agreement shall not create any
partnership, joint venture or similar relationship between the parties hereto
(or ECC's Affiliates) and no representation to the contrary shall be made by
either party. Neither party shall have any authority to act for or on behalf of
or to bind the other party in any fashion, and no representations to the
contrary shall be made by either party.
27. NOTICES. Any notice which is required or permitted to be given to ECC
or Sublicensee pursuant to this Agreement shall be deemed to have been given
only if such notice is reduced to writing and delivered personally, or by United
States mail with postage prepaid and return
-38-
receipt requested, or by telecopier (FAX) transmission, confirmed by letter by
United States mail with postage prepaid and return receipt requested, or by
reputable overnight courier (pursuant to instructions requiring next-day
delivery) to the person in question as set forth below:
ECC: EarthShell Container Corporation
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: President
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
with copy to:
EarthShell Container Corporation
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Chief Legal Officer
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Sublicensee: Dopaco, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇
ECC or Sublicensee may change its address by giving notice of such change in
the manner set forth herein. If delivered personally, a notice shall be deemed
delivered when actually received at the address specified herein. Any notice
given by mail shall be deemed delivered three (3) days following the date upon
which it is deposited in the mail, with postage prepaid and return receipt
requested. Any notice given by FAX shall be deemed delivered on the date it is
actually transmitted to the person in question at the FAX number specified
above. Any notice given by overnight courier shall be deemed delivered on the
next business day following the date it is placed in the possession of such
courier.
28. ENTIRE AGREEMENT. This Agreement supersedes all prior understandings
or agreements, whether written or oral, and any contemporaneous oral agreements,
between the parties
-39-
hereto in regard to the subject matter hereof and contains, the entire agreement
between the parties in regard to the subject matter hereof. This Agreement may
not be changed or modified orally, but only by an agreement, in writing, signed
by both the parties hereto.
29. SAVINGS CLAUSE. Should any part or provision of this Agreement be
rendered or declared invalid by reason of any law or by decree of a court of
competent jurisdiction, the invalidation of such part or provision of this
Agreement shall not invalidate the remaining parts or provisions hereof, and the
remaining parts and provisions of this Agreement shall remain in full force and
effect.
30. WAIVER. Neither the failure or delay on the part of either party to
exercise any right, power or privilege hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise of any such right or privilege
preclude any other or further exercise thereof or of any other right or
privilege.
31. ▇▇▇▇▇▇▇▇▇.▇▇▇. This Agreement shall be governed by and construed in
accordance with the laws of the State of California, without giving effect to
the choice of law rules thereof.
32. RESOLUTION OF DISPUTES.
(a) In the event of a breach of this Agreement, or a dispute as to
the meaning of this Agreement, or any of its terms which the parties cannot
resolve by themselves amicably, the parties agree to submit such dispute to
resolution in the manner hereinafter described. First, the parties shall
endeavor to resolve the dispute through the use of an acceptable alternative
dispute resolution procedure. If, within 30 days after one party notifies the
other in writing of the existence of a dispute which it desires to be resolved
under this paragraph, the parties have not agreed upon an acceptable alternative
dispute resolution procedure, then the matter shall be resolved by arbitration
as set forth below and according to the rules of the American Arbitration
Association,
-40-
except as herein modified by the parties. Unless otherwise agreed to in
writing, all alternative dispute resolutions or arbitration hearings will be
held in Los Angeles, California.
(b) The parties shall cooperate and use their respective best efforts
to encourage compliance with the following time periods: (i) within 10 days
after the failure to agree to an acceptable alternative dispute resolution
procedure, each party will select an arbitrator, and notify the other party of
its selection; (ii) within 15 days after such notice, the respective arbitrators
will select a third arbitrator as Chairman of the panel; (iii) a hearing by the
arbitration panel shall be held Within 30 days after the selection of the
Chairman; and (iv) a majority decision and resolution shall be reached within 30
days of such hearing. Decisions of the panel must be in writing and will be
final and binding on the parties, and judgment may be entered thereon by any
court having jurisdiction of the parties.
(c) Each party shall bear its own costs of presenting its case in an
alternative dispute resolution procedure, or arbitration, as the case may be,
(d) The validity, construction and performance of this Agreement
shall be Governed by and interpreted in accordance with the laws of the State of
California (as if all aspects of the Agreement were to be performed in
California).
33. FORCE MAJEURE. The failure of either party to perform its obligations
under this Agreement (except the obligation to make payments) shall not subject
such party to any liability to the other or subject this Agreement to
termination if such failure is caused by acts such as, but not limited to, acts
of God, earthquake, explosion, flood, drought, war, riot, sabotage, embargo,
compliance with any order or regulation of any governmental entity acting with
color of right, intervention or delays created by any regulatory authority, or
by any other similar cause beyond the reasonable control of the parties. The
party so affected shall promptly notify the other party of the
-41-
event of force majeure, and shall use all reasonable efforts to remove such
event as soon as reasonable practicable.
34. COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
35. TERMINOLOGY. As used this Agreement, the singular shall include
the plural and the plural shall include the singular. Titles of sections and
paragraphs in this Agreement are for convenience only, and neither limit nor
amplify the provisions of the Agreement, and all references in this Agreement
to a section or paragraph shall refer to the corresponding section or
paragraph of this Agreement unless specific reference is made to the sections
of another document or instrument.
IN WITNESS WHEREOF, the parties have caused this Sublicense Agreement to be
executed and delivered by their duly authorized representatives upon the date
first herein written.
ECC: SUBLICENSEE:
EarthShell Container Corporation Dopaco, Inc.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ By: /s/ ▇▇ ▇▇▇▇▇
-------------------------------- --------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇
Its: Chief Executive Officer Its: President
-42-
EXHIBIT "A"
CORE TECHNOLOGY
A. ISSUED UNITED STATES LETTER PATENTS
1. U.S. Letters Patent No. 4,225,247, issued September 30, 1980, and entitled
"Mixing and Agitating Device."
2. U.S. Patent No. 4,552,463, issued November 12, 1985, and entitled "Methods
and Apparatus for Producing a Colloidal Mixture."
3. U.S. Letters Patent No. 4,944,595, issued July 31, 1990, and entitled
"Apparatus for Producing Cement Building Material."
4. U.S. Letters Patent No. 5,061,319, issued October 29, 1991, and entitled
The Process for Producing Cement Building Material."
5. U.S. Letters Patent No. 5,232,496, issued August 3, 1993, and entitled
"Process for Producing Improved Building Material and Product Thereof."
6. U.S. Patent No. 5,356,579, issued October 18, 1994, and entitled "Methods
of Manufacture and Use for Low Density Hydraulically Bonded Cement
Compositions."
7. U.S. Patent No. 5,358,676, issued October 25, 1994, and entitled
"Hydraulically Bonded Cement Compositions and Their Methods of Manufacture
and Use."
B. PENDING UNITED STATES PATENT APPLICATIONS
8. U.S. Patent Application entitled "Food and Beverage Containers Made from
inorganic Aggregates and Polysaccharide, Protein, or Synthetic Organic
Binders, and the Methods of Manufacturing Such Containers."
9. U.S. Patent Application entitled "Cementitious Materials for Use in
Packaging Containers and their Methods of Manufacture."
10. U.S. Patent Application entitled "Cementitious Materials for Use in
Cushioning, Spacing, Partitioning, Portioning or Wrapping Objects and the
Methods of Manufacturing Such Materials."
11. U.S. Patent Application entitled "Design Optimized Compositions and
Processed for Microstructurally Engineering Cementitious Mixtures."
A-1
12. U.S. Patent Application entitled "Highly Insulative Cementitious Matrices
and Methods for Their Manufacture."
13. U.S. Patent Application and entitled "Hydraulically Settable Containers and
Other Articles for Storing, Dispensing, and Packaging Food and Beverages
and Methods for their Manufacture."
14. U.S. Patent Application entitled "Methods and Systems for Manufacturing
Containers and Other Articles of Manufacture from Hydraulically Settable
Mixtures."
15. U.S. Patent Application entitled "Articles of Manufacture Molded from
Inorganically Filled Compositions."
16. U.S. Patent Application entitled "Methods of Molding Articles from
Inorganically Filled Compositions."
17. U.S. Patent Application entitled "Methods for Continuously Placing
Filaments within Hydraulically Settable Compositions being Extruded into
Articles of Manufacture."
18. U.S. Patent Application entitled "Systems and Apparatus for Continuously
Placing Filaments within Hydraulically Settable Compositions being Extruded
into Articles of Manufacture."
19. U.S. Patent Application entitled "Coated Hydraulically Settable Containers
and Other Articles for Storing, Dispensing, and Packaging Food or
Beverages."
20. U.S. Patent Application entitled "Compressed Low Density Hydraulically
Bonded Composite Articles."
21. U.S. Patent Application entitled "Compressed Hydraulically Bonded Composite
Articles."
C. ISSUED FOREIGN PATENTS.
22. Great Britain Patent No. 174,994, issued June 17, 1992, and entitled
"Method and Apparatus for Producing a Colloidal Mixture."
23. Canadian Patent No. 1,207,212, issued July 8, 1986, and entitled "Method
and Apparatus for Producing a Colloidal Mixture."
24. Japanese Patent No. 1,552,158, issued March 3, 1990, and entitled "Method
and Apparatus for Producing a Colloidal Mixture."
A-2
25. Australian Patent No. 594,555, issued June 26, 1990. and entitled "Method
and Apparatus for Producing a Colloidal Mixture."
26. Canadian Patent No. 1,298,282, issued March 31, 1992, and entitled
"Apparatus for Producing Cement Building Material."
27. Canadian Patent No. 1,298,830, issued April 14, 1992, and entitled "Process
for Producing Cement Building Material."
28. German Patent No. 3,586,229, issued July 23, 1992, and entitled "Method and
Apparatus for Producing a Colloidal Mixture."
29. Canadian Patent No. 1,321,609, issued August 24, 1993, and entitled "Cement
Building Material."
D. PENDING FOREIGN PATENT APPLICATIONS
30. Canadian Patent Application entitled "Process for Producing Improved
Building Material and Product Thereof."
31. European Patent Application entitled "Process for Producing Improved
Building Material and Product Thereof."
32. Japanese Patent Application entitled "Process for Producing Improved
Building Material and Product Thereof."
33. Canadian Patent Application entitled "Hydraulically Bonded Cement
Compositions and Their Methods of Manufacture and Use."
34. European Patent Application entitled "Hydraulically Bonded Cement
Compositions and Their Methods of Manufacture and Use."
35. PCT Patent Application entitled "Hydraulically Settable Containers and
Other Articles for Storing, Dispensing and Packaging Food and Beverages and
Methods for their Manufacture."
36. Argentine Patent Application entitled "Hydraulically Settable Containers
and Other Articles for Storing, Dispensing and Packaging Food and Beverages
and Methods for their Manufacture."
37. Chilean Patent Application entitled "Hydraulically Settable Containers and
Other Articles for Storing, Dispensing and Packaging Food and Beverages and
Methods for their Manufacture."
A-3
38. Chinese Patent Application entitled "Hydraulically Settable Containers and
Other Articles for Storing, Dispensing and Packaging Food and Beverages and
Methods for their Manufacture."
39. Colombian Patent Application entitled "Hydraulically Settable Containers
and Other Articles for Storing, Dispensing and Packaging Food and Beverages
and Methods for their Manufacture."
40. Indian Patent Application entitled "Hydraulically Settable Containers and
Other Articles for Storing, Dispensing and Packaging Food and Beverages and
Methods for their Manufacture."
41. Mexican Patent Application entitled "Hydraulically Settable Containers and
Other Articles for Storing, Dispensing and Packaging Food and Beverages and
Methods for their Manufacture."
42. Peruvian Patent Application entitled "Hydraulically Settable Containers and
Other Articles for Storing, Dispensing and Packaging Food and Beverages and
Methods for their Manufacture."
43. Philippine Patent Application entitled "Hydraulically Settable Containers
and Other Articles for Storing, Dispensing and Packaging Food and Beverages
and Methods for their Manufacture."
44. South African Patent Application entitled "Hydraulically Settable
Containers and Other Articles for Storing, Dispensing and Packaging Food
and Beverages and Methods for their Manufacture."
45. Taiwanese Patent Application entitled "Hydraulically Settable Containers
and Other Articles for Storing, Dispensing and Packaging Food and Beverages
and Methods for their Manufacture."
46. Venezuelan Patent Application entitled "Hydraulically Settable Containers
and Other Articles for Storing, Dispensing and Packaging Food and Beverages
and Methods for their Manufacture."
47. PCT Patent Application entitled "Sealable, Liquid-Tight, Thin-Walled
Containers Composed of Hydraulically Settable Materials and Methods for
Manufacturing Such Containers."
48. Argentine Patent Application entitled "Sealable, Liquid-Tight, Thin-Walled
Containers Composed of Hydraulically Settable Materials and Methods for
Manufacturing Such Containers."
A-4
49. Chilean Patent Application entitled "Sealable, Liquid-Tight, Thin-Walled
Containers Composed of Hydraulically Settable Materials and Methods for
Manufacturing Such Containers."
50. Chinese Patent Application entitled "Sealable, Liquid-Tight, Thin-Walled
Containers Composed of Hydraulically Settable Materials and Methods for
Manufacturing Such Containers."
51. Colombian Patent Application entitled "Sealable, Liquid-Tight, Thin-Walled
Containers Composed of Hydraulically Settable Materials and Methods for
Manufacturing Such Containers."
52. Egyptian Patent Application entitled "Sealable, Liquid-Tight, Thin-Walled
Containers Composed of Hydraulically Settable Materials and Methods for
Manufacturing Such Containers."
53. Indian Patent Application entitled "Sealable, Liquid-Tight, Thin-Walled
Containers Composed of Hydraulically Settable Materials and Methods for
Manufacturing Such Containers."
54. Iranian Patent Application entitled "Sealable, Liquid-Tight, Thin-Walled
Containers Composed of Hydraulically Settable Materials and Methods for
Manufacturing Such Containers."
55. Israeli Patent Application entitled "Sealable, Liquid-Tight, Thin-Walled
Containers Composed of Hydraulically Settable Materials and Methods for
Manufacturing Such Containers."
56. Mexican Patent Application entitled "Sealable, Liquid-Tight, Thin-Walled
Containers Composed of Hydraulically Settable Materials and Methods for
Manufacturing Such Containers."
57. Peruvian Patent Application entitled "Sealable, Liquid-Tight, Thin-Walled
Containers Composed of Hydraulically Settable Materials and Methods for
Manufacturing Such Containers."
58. Philippine Patent Application entitled "Sealable, Liquid-Tight, Thin-Walled
Containers Composed of Hydraulically Settable Materials and Methods for
Manufacturing Such Containers."
59. Saudi Patent Application entitled "Sealable, Liquid-Tight, Thin-Walled
Containers Composed of Hydraulically Settable Materials and Methods for
Manufacturing Such Containers."
A-5
60. South African Patent Application entitled "Sealable, Liquid-Tight, Thin-
Walled Containers Composed of Hydraulically Settable Materials and Methods
for Manufacturing Such Containers."
61. Taiwanese Patent Application entitled "Sealable, Liquid-Tight, Thin-Walled
Containers Composed of Hydraulically Settable Materials and Methods for
Manufacturing Such Containers."
62. Venezuelan Patent Application entitled "Sealable, Liquid-Tight, Thin-Walled
Containers Composed of Hydraulically Settable Materials and Methods for
Manufacturing Such Containers."
63. Zimbabwean Patent Application entitled "Sealable, Liquid-Tight, Thin-Walled
Containers Composed of Hydraulically Settable Materials and Methods for
Manufacturing Such Containers."
64. Georgian Patent Application entitled "Sealable, Liquid-Tight, Thin-Walled
Containers Composed of Hydraulically Settable Materials and Methods for
Manufacturing Such Containers."
65. PCT Patent Application entitled "Design Optimized Compositions and
Processes for Microstructurally Engineering Cementitious Mixtures."
66. Argentine Patent Application entitled "Design Optimized Compositions and
Processes for Microstructurally Engineering Cementitious Mixtures."
67. Chilean Patent Application entitled "Design Optimized Compositions and
Processes for Microstructurally Engineering Cementitious Mixtures."
68. Chinese Patent Application entitled "Design Optimized Compositions and
Processes for Microstructurally Engineering Cementitious Mixtures."
69. Colombian Patent Application entitled "Design Optimized Compositions and
Processes for Microstructurally Engineering Cementitious Mixtures."
70. Egyptian Patent Application entitled "Design Optimized Compositions and
Processes for Microstructurally Engineering Cementitious Mixtures."
71. Indian Patent Application entitled "Design Optimized Compositions and
Processes for Microstructurally Engineering Cementitious Mixtures."
72. Iranian Patent Application entitled "Design Optimized Compositions and
Processes for Microstructurally Engineering Cementitious Mixtures."
▇-▇
▇▇. ▇▇▇▇▇▇▇ Patent Application entitled "Design Optimized Compositions and
Processes for Microstructurally Engineering Cementitious Mixtures."
74. Mexican Patent Application entitled "Design Optimized Compositions and
Processes for Microstructurally Engineering Cementitious Mixtures."
75. Peruvian Patent Application entitled "Design Optimized Compositions and
Processes for Microstructurally Engineering Cementitious Mixtures."
76. Philippine Patent Application entitled "Design Optimized Compositions and
Processes for Microstructurally Engineering Cementitious Mixtures."
77. Saudi Patent Application entitled "Design Optimized Compositions and
Processes for Microstructurally Engineering Cementitious Mixtures."
78. South African Patent Application entitled "Design Optimized Compositions
and Processes for Microstructurally Engineering Cementitious Mixtures."
79. Taiwanese Patent Application entitled "Design Optimized Compositions and
Processes for Microstructurally Engineering Cementitious Mixtures."
80. Venezuelan Patent Application entitled "Design Optimized Compositions and
Processes for Microstructurally Engineering Cementitious Mixtures."
81. Zimbabwean Patent Application entitled "Design Optimized Compositions and
Processes for Microstructurally Engineering Cementitious Mixtures."
82. Georgian Patent Application entitled "Design Optimized Compositions and
Processes for Microstructurally Engineering Cementitious Mixtures."
83. Australian Patent Application entitled "Hydraulically Settable Containers."
84. Brazilian Patent Application entitled "Hydraulically Settable Containers."
85. Canadian Patent Application entitled "Hydraulically Settable Containers."
86. European Patent Application entitled "Hydraulically Settable Containers.
87. Japanese Patent Application entitled "Hydraulically Settable Containers."
88. South Korean Patent Application entitled "Hydraulically Settable
Containers."
89. New Zealand Patent Application entitled "Hydraulically Settable
Containers."
A-7
90. Russian Federation Patent Application entitled "Hydraulically Settable
Containers."
A-8
EXHIBIT "B"
MOLDABLE COMPOUND TECHNOLOGY
A. ISSUED UNITED STATES LETTERS PATENTS
B. PENDING UNITED STATES PATENT APPLICATIONS
1. U.S. Patent Application entitled "Inorganically Filled, Starch-Bound
Compositions for Manufacturing Containers and Other Articles Having a
Thermodynamically Controlled Cellular Matrix."
2. U.S. Patent Application entitled "Methods and Systems for Manufacturing
Containers and Other Articles Having a Thermodynamically Controlled
Cellular Matrix From Inorganically Filled, Starch-Bound Compositions."
3. U.S. Patent Application entitled "Compositions and Methods for
Manufacturing Fiber-Reinforced, Inorganically Filled, Starch-Bound Articles
having a Foamed Cellular Matrix."
4. U.S. Patent Application entitled "Articles having Starch-Bound Cellular
Matrix Reinforced with Uniformly Dispersed Fibers."
5. U.S. Patent Application entitled "Methods and Systems for Manufacturing
Articles having Starch-Bound Cellular Matrix Reinforced with Uniformly
Dispersed Fibers."
6. U.S. Patent Application entitled "Starch-Based Compositions having
Uniformly Dispersed Fibers used to Manufacture High Strength Articles
having a Fiber-Reinforced, Starch-Bound Cellular Matrix."
C. ISSUED FOREIGN PATENTS
D. PENDING FOREIGN PATENT APPLICATIONS
7. PCT Patent Application entitled "Methods and Systems for Manufacturing
Packaging Materials, Containers, and Other Articles of Manufacture from
Hydraulically Settable Mixtures and Highly Inorganically Filled
Compositions."
8. Argentine Patent Application entitled "Methods and Systems for
Manufacturing Packaging Materials, Containers, and Other Articles of
Manufacture from Hydraulically Settable Mixtures and Highly Inorganically
Filled Compositions."
B-1
9. Chilean Patent Application entitled "Methods and Systems for Manufactural
Packaging Materials, Containers, and Other Articles of Manufacture from
Hydraulically Settable Mixtures and Highly Inorganically Filled
Compositions."
10. Chinese Patent Application entitled "Methods and Systems for Manufacturing
Packaging Materials, Containers, and Other Articles of Manufacture from
Hydraulically Settable Mixtures and Highly Inorganically Filled
Compositions."
11. Colombian Patent Application entitled "Methods and Systems for
Manufacturing Packaging Materials, Containers, and Other Articles of
Manufacture from Hydraulically Settable Mixtures and Highly Inorganically
Filled Compositions."
12. Egyptian Patent Application entitled "Methods and Systems for Manufacturing
Packaging Materials, Containers, and Other Articles of Manufacture from
Hydraulically Settable Mixtures and Highly Inorganically Filled
Compositions."
13. Indian Patent Application entitled "Methods and Systems for Manufacturing
Packaging Materials, Containers, and Other Articles of Manufacture from
Hydraulically Settable Mixtures and Highly Inorganically Filled
Compositions."
14. Iranian Patent Application entitled "Methods and Systems for Manufacturing
Packaging Materials, Containers, and Other Articles of Manufacture from
Hydraulically Settable Mixtures and Highly Inorganically Filled
Compositions."
15. Israeli Patent Application entitled "Methods and Systems for Manufacturing
Packaging Materials, Containers, and Other Articles of Manufacture from
Hydraulically Settable Mixtures and Highly Inorganically Filled
Compositions."
16. Mexican Patent Application entitled "Methods and Systems for Manufacturing
Packaging Materials, Containers, and Other Articles of Manufacture from
Hydraulically Settable Mixtures and Highly Inorganically Filled
Compositions."
17. Peruvian Patent Application entitled "Methods and Systems for Manufacturing
Packaging Materials, Containers, and Other Articles of Manufacture from
Hydraulically Settable Mixtures and Highly Inorganically Filled
Compositions."
18. Philippine Patent Application entitled "Methods and Systems for
Manufacturing Packaging Materials, Containers, and Other Articles of
Manufacture from Hydraulically Settable Mixtures and Highly Inorganically
Filled Compositions."
19. Saudi Patent Application entitled "Methods and Systems for Manufacturing
Packaging Materials, Containers, and Other Articles of Manufacture from
Hydraulically Settable Mixtures and Highly Inorganically Filled
Compositions."
B-2
20. South African Patent Application entitled "Methods and Systems for
Manufacturing Packaging Materials, Containers, and Other Articles of
Manufacture from Hydraulically Settable Mixtures and Highly Inorganically
Filled Compositions."
21. Taiwanese Patent Application entitled "Methods and Systems for
Manufacturing Packaging Materials, Containers, and Other Articles of
Manufacture from Hydraulically Settable Mixtures and Highly Inorganically
Filled Compositions."
22. Venezuelan Patent Application entitled "Methods and Systems for
Manufacturing Packaging Materials, Containers, and Other Articles of
Manufacture from Hydraulically Settable Mixtures and Highly Inorganically
Filled Compositions."
23. Zimbabwean Patent Application entitled "Methods and Systems for
Manufacturing Packaging Materials, Containers, and Other Articles of
Manufacture from Hydraulically Settable Mixtures and Highly Inorganically
Filled Compositions."
24. Georgian Patent Application entitled "Methods and Systems for Manufacturing
Packaging Materials, Containers, and Other Articles of Manufacture from
Hydraulically Settable Mixtures and Highly Inorganically Filled
Compositions."
B-3
EXHIBIT "C"
ITEMS WITHIN THE DEFINITION OF PRODUCTS:
Beverage containers - Hot and/or cold beverage
- May or may not be insulating
- With or without handles. Includes
collectibles that are disposable/
reusable
- Malt mixing collars
- Single service milk-containing cartons
(16 oz. or less)
- Beverage carriers
Beverage Container Lids All types, including
- no spill
- domed
- sippers
Bowls All shapes, sizes
Cutlery (including - knife, fork, spoon
Sticks/Skewers) - large serving utensils
- chopsticks
- hors d'ouvers picks
- popsicle sticks
- corndog sticks
- shish-kabob skewers
- tooth pricks
- steak markers
Food Containers tubs used for:
- popcorn
- deli salads
- takeout anything
- ice cream
- chicken buckets
C-1
Portion cups (souffle cups)
- sauces
- condiments
- butter
- candies
- side orders
- pills, medications
Trays used for:
- french fries
- nachos
- tacos
- burritos
- snacks
- hot dogs
- meal service
- vending
- single or multi-compartments
Boxes as used for:
- fry scoops
- popcorn
- chinese takeout
- kid's fun meal
- candy (vending)
- pie wedges
- bulky meals, pies, single compartment
- multi-compartment meals
Boats as used for:
- egg rolls
- ice-cream sundaes
- hot dogs, chili dogs
- hoagies, sub sandwiches
- chicken fingers
- baked potatoes
Cones
- snow cones
- ice cream cone holders
- foods
Food Container Lids All kinds
C-2
Hinged Lid Containers Clamshells type boxes for specialty or
general food portion or meal carryout
such as:
- hamburgers
- chicken nuggets
- salads
- single or multi-portion meals
- with or without multiple compartments
Plates/Platters - All shapes, including round
- oval
- rectangular
- deep
- with or without compartments
- individual portion or serving sized
- cake/pie plates
Plates/Platters Lids All types including domed, insulating, etc.
Serving Dishes - pitchers
- catering trays
- casserole dishes
- chafing/steam table dishes
EXAMPLES OF ITEMS OUTSIDE THE DEFINITION OF "PRODUCTS":
Baking - pie/cake tins
- muffin/eclair tins
- muffin/eclair cups
- fluted pan liners
- cake circles/squares
- loaf pans
- bundt pans
- casseroles
- cookie/cake sheets
- cake decorating triangles
C-3
Single or Multiple Portion - cereal boxes/bowls
Packaged Foods - sealed yogurt/desert cups
- sealed soups, stews, chili, pasta
- condiment packs (salt, pepper, catsup,
salsa, relish, etc.)
- a sealed frozen food containers
- egg cartons
- dairy product containers
- produce containers
- meat & deli trays
Aeseptic or Sealed
Packaging
Secondary Packaging - corrugated containers
- paper bags
Sealed Containers for - soft drink cans
Long Term Storage - milk cartons
of Liquids - sealed juice or drink containers
C-4
EXHIBIT "D"
TRADE SECRETS
The term "Trade Secrets" as used in the Agreement shall include any
technical or business information, any invention, equipment or apparatus, method
or process, technology, know-how, trade secret, drawing, data, evaluation,
specifications, quality and inspection standards, sales literature, report,
business plan, memorandum, market study, customer lists, training materials,
computer program or software (including both source and object code), or any
other document or thing which is in whole or in part confidential, proprietary,
or secret and which is owned or controlled by, licensed or assigned to ECC or
for which ECC has the right to grant licenses thereon during the term of this
Agreement and which relates in whole or in part to any of the following:
1. The compositions, including the variable and preferred parameters for each
component, used in the Products or the Technology based on inorganically
filled cellular composites.
2. The processing steps, including the variable and preferred parameters for
each step, used in the Technology.
3. The equipment and apparatus used in the manufacture of Products.
4. Quality control, testing and research and development data, reports and
information, including patent applications in preparation.
5. Customers and suppliers of the components and equipment of the Technology,
including any agreements.
D-1
EXHIBIT "E"
SUBLICENSEE PATENT, TRADE SECRET AND PROPRIETARY INFORMATION
RELATING TO THE TECHNOLOGY
None.
E-1
EXHIBIT "F"
TERRITORY
As used in the appended Agreement, the term "Territory" shall mean all
fifty states of the United States of America and any territories or possessions
of the United States of America. The term "Territory" also shall include
Canada, Mexico, Central America, and the Caribbean islands and nations, subject
to any foreign territory being removed at ECC's option, if Sublicensee has not
commenced commercial production or sales of Products in such foreign territory
prior to January 1, 1999.
F-1
[EARTHSHELL CONTAINER CORPORATION LETTERHEAD]
June 19, 1995
Dopaco, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇
RE: ECC-DOPACO SUBLICENSE AGREEMENT
Dear Sirs:
This letter, when accepted as provided below, shall constitute an amendment
(this "Amendment") to that certain ECC-Dopaco Sublicense Agreement of even date
herewith (the "Sublicense Agreement"), pursuant to which the parties agree to
amend and supplement the Sublicense Agreement as follows:
1. Referring to subparagraph 5(f) of the Sublicense Agreement, to the
extent ECC elects to grant an exclusive license with respect to the Technology
outside of the Territory (such as, for example, in Japan), ECC shall endeavor to
negotiate with the exclusive licensee to provide a mechanism pursuant to which
major customers (E.G., McDonald's, Burger King and other customers of similar
magnitude) who purchase Products from Sublicensee within the Territory may
export or transship such Products to locations within the territory that is the
subject of such exclusive license.
2. This Amendment shall control in the event of any conflict between the
terms of this Amendment and the terms of the Sublicense Agreement; otherwise,
all of provisions of the Sublicense Agreement shall remain in full force and
effect.
* * *
If the foregoing is acceptable to you, please indicate your acceptance
hereof by dating and signing the enclosed copy of this letter in the spaces
provided below and returning it to us.
EARTHSHELL CONTAINER CORPORATION
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Chief Executive Officer
AGREED TO AND ACCEPTED
as of June 19, 1995.
DOPACO, INC.
By: /s/ ▇▇ ▇▇▇▇▇
---------------------------
▇▇ ▇▇▇▇▇, President