EX-10.61.1
LICENSE AND BINDER PURCHASE AGREEMENT W/ COVOL
LICENSE AND BINDER PURCHASE AGREEMENT
THIS LICENSE AND BINDER PURCHASE AGREEMENT (the "Agreement"), is made
and entered into as of August 27, 1999 by and between DTE River Hill, L.L.C., a
Delaware limited liability company (the "Licensee"), and Covol Technologies,
Inc., a Delaware corporation (the "Licensor").
WHEREAS Licensor has developed a proprietary process to produce
synthetic coal fuel extrusions, pellets, and briquettes (collectively referred
to herein as "briquettes") from waste coal dust, coal fines and other coal
derivatives, and Licensor is entitled to license the synthetic Coal Briquetting
Technology (as defined below) to Licensee;
WHEREAS Licensor has constructed a synthetic fuel manufacturing plant
(the "Facility") located near Karthus, Clearfield County, Pennsylvania, on
property leased from River Hill Coal Company, Inc. and Licensee has or will
acquire the Facility from Licensor as contemplated by that certain Purchase
Agreement dated as of August 27, 1999, by and between Licensor and Licensee (the
"Purchase Agreement");
WHEREAS Licensee wishes to obtain and Licensor wishes to grant to
Licensee a license for the synthetic Coal Briquetting Technology to be used in
connection with the Facility on the terms and conditions set forth in this
Agreement, and Licensee wishes to obtain and Licensor wishes to sell to Licensee
the Proprietary Binder Material (as defined below) for use in the operation of
the Facility.
NOW, THEREFORE, in consideration of the foregoing premises, the mutual
covenants and agreements hereinafter set forth, and other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged,
Licensor and Licensee each agree as follows:
Section 1. Definitions.
"Coal Briquetting Technology" means all intellectual property, patents
(including but not limited to United States Patent Numbers 5,599,361; 5,487,764;
and 5,453,103) and applications therefor, printed and not printed technical
data, know-how, trade secrets, copyrights and other intellectual property
rights, inventions, discoveries, techniques, works, processes, methods, plans,
software, designs, drawings, schematics, specifications, communications
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protocols, source and object code and modifications, test procedures, program
cards, tapes, disks, algorithms and all other scientific or technical
information in whatever form including "Developed Technology" and "Improvements"
relating to, embodied in or used in the process to produce synthetic coal fuel
briquettes from waste coal dust, coal fines, run of mine coal, and other similar
coal derivatives, including all such information in existence as of the date of
this Agreement as well as related information later developed by Licensor;
provided, however, that the defined term "Coal Briquetting Technology" shall not
include the proprietary process/method or other binder material or composition
developed by Licensor to produce synthetic coke briquettes from coke breeze,
iron revert materials, or any technology used in any application other than the
processing and production of synthetic coal fuel briquettes. Nothing in this
Agreement is intended to grant to Licensee the right to apply the Coal
Briquetting Technology to produce anything other than synthetic coal fuel
intended to qualify for tax credits under Section 29(c)(1)(C) of the Internal
Revenue Code.
"Code" means the Internal Revenue Code of 1986, as amended.
"Developed Technology" means any inventions, "Improvement," or
technology that Licensor may conceive, make, invent, or suggest in connection
with Licensor's disclosure to Licensee of the Coal Briquetting Technology, all
of which the parties hereto acknowledge and agree constitutes the sole and
exclusive property of Licensor. "Developed Technology" also means any
inventions, "Improvement," or new technology directly related to the Coal
Briquetting Technology that Licensor or Licensee may conceive, make, invent or
suggest relating to the Coal Briquetting Technology during the Term of this
Agreement; provided, however, that "Developed Technology" shall not include coal
fines recovery, coal fines washing, material handling, or product marketing
techniques or technologies conceived, made, invented, or suggested by Licensee
that are generally applicable to the coal industry but which are used at the
Facility in connection with the Coal Briquetting Technology.
"Effective Date" means the date of this Agreement set forth above.
"Facility" has the meaning set forth in the preamble.
"Improvement" means an alteration or addition to an invention or
discovery which may enhance performance or economics while maintaining a
product's, device's, or method's essential identity and character. An
Improvement may comprise alterations or additions to either patented or
unpatented inventions, discoveries, technology, or devices, and may or may not
be patentable; provided, however, that "Improvement" shall not include coal
fines recovery, coal fines washing, material handling, or product marketing
techniques or technologies conceived, made, invented, or suggested by Licensee
that are generally applicable to the coal industry but which are used at the
Facility in connection with the Coal Briquetting Technology.
"Licensee" has the meaning set forth in the preamble.
"Licensor" has the meaning set forth in the preamble.
"Proprietary Binder Material" means and refers to the binder compound
necessary for the production, by Licensee, of synthetic coal briquettes as
contemplated under the Purchase Agreement and which briquettes are reasonably
expected to constitute "qualified fuels" pursuant
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to the terms of Section 29(c)(1)(C) of the Code and with respect to which
Section 29 is applicable pursuant to Section 29(f) and 29(g) of the Code.
"Purchase Agreement" has the meaning set forth in the preamble.
"Royalty" has the meaning set forth in Section 3.
Section 2. License Grant.
2.1 General. Licensor hereby grants to Licensee a non-exclusive license
to use the Coal Briquetting Technology, including Developed Technology and/or
Improvements relating to the Coal Briquetting Technology, throughout the term of
this Agreement, for the purpose of commercial exploitation, including the
non-exclusive right to make, have made or use at the Facility and to offer to
sell and to sell or otherwise transfer products that have been manufactured with
the Coal Briquetting Technology, subject to the terms and conditions of this
Agreement. Licensee hereby accepts the license on the terms hereof. Licensee
shall not have the right to sublicense the Coal Briquetting Technology.
2.2 Licensor's Ownership of Developed Technology. All Developed
Technology and/or Improvements are and shall become Licensor's absolute
property, subject to the terms of this Agreement. Licensee shall at any time
during the Term of this Agreement and thereafter, at Licensor's reasonable
request, execute any patent papers covering such Developed Technology and/or
Improvements as well as any other documents that Licensor may consider necessary
or helpful in the prosecution of applications for a patent thereon or in
connection with any litigation or controversy related thereto; provided,
however, that all expenses incident to the filing of such applications and the
prosecution thereof and the conduct of such litigation shall be borne by
Licensor.
2.3 Exclusive Technology. Licensee agrees to use only the Coal
Briquetting Technology at the Facility and not to use any other technology at
the Facility, except to the extent other or additional technology is necessary.
Licensee shall not use any process or methodology that is not part of the Coal
Briquetting Technology, except to the extent that other or additional technology
is necessary, and shall not use any materials in the production of Synthetic
Fuel at the Facility that are not Proprietary Binder Material as determined and
approved by Licensor. Licensee (i) shall not make or have made products using
the Coal Briquetting Technology or similar technology except at the Facility and
(ii) shall only make and have made products using the Coal Briquetting
Technology at the Facility under this License Agreement, except to the extent
other or additional technology is necessary. Licensee further agrees to use the
Coal Briquetting Technology only under authority of this License Agreement with
Licensor.
2.4 Non-licensed Technology. Licensor retains the absolute right to
fully exploit its technologies including, but not limited to, the application of
such technology embodied in the Coal Briquetting Technology to produce, market
and use synthetic coke briquettes from coke breeze, iron revert materials, and
any other materials to which Licensor's technology can be applied.
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2.5 Confidentiality. Each of the parties hereby agree to maintain the
Coal Briquetting Technology confidential and not to disclose the Coal
Briquetting Technology, or any aspect thereof, including the Developed
Technology or Improvements (collectively, the "Confidential Information").
Notwithstanding the foregoing, information which (i) is or becomes generally
available to the public other than as a result of an unauthorized disclosure by
the parties or their respective agents, employees, directors or representatives,
(ii) was available to the party receiving disclosure on a non-confidential basis
prior to its receiving disclosure hereunder, (iii) lawfully becomes available to
the party receiving disclosure on a non-confidential basis from a third party
source (provided that such source is not known by the party receiving disclosure
or its agents, employees, directors or representatives to be prohibited from
transmitting the information), or (iv) a party is compelled by legal process by
any court or other authority to disclose shall not be subject to the terms of
this Section 2.5. In the case of (iv) above, the compelled party shall give the
other party prompt written notice of such legal process in order that an
appropriate protective order can be sought and each party agrees not to oppose
the other party's efforts to prevent the disclosure of Confidential Information.
At the termination of this Agreement, all copies of any Confidential Information
(including, without limitation, any reports or memoranda) shall be returned by
the party receiving disclosure. Nothing in this Agreement shall prohibit
Licensee from disclosing the Confidential Information to others as may be
reasonably necessary for Licensee to exploit Licensee's rights under the
Purchase Agreement, and/or this Agreement; provided that the recipient of any
such Confidential Information executes a Confidentiality Agreement restricting
further disclosure of the Confidential Information.
2.6 Know-How and Assistance. To enable Licensee to benefit fully from
the license of the Coal Briquetting Technology, Licensor shall provide access to
all relevant documentation, drawings, engineering specifications and other
know-how in its possession, reasonable access to its employees or agents who are
familiar with the Coal Briquetting Technology, Developed Technology, and
Improvements and shall provide such technical assistance and training as is
requested by Licensee. If Licensor does not have responsibility for the
operation of the Facility, Licensee shall reimburse Licensor for reasonable
travel and other similar out-of-pocket expenses of Licensor in performing
services under this Section 2.6; provided however, that Licensor shall obtain
the prior approval of Licensee for any expenditures in excess of $5,000.
Section 3. Royalty.
3.1 Royalty Payments. Subject to adjustment as described below, during
the term of this Agreement, Licensee shall pay to Licensor a royalty in an
amount equal to ** per ton of Section 29 Product (as defined in the Purchase
Agreement) produced at the Facility and sold during the period commencing on the
effective date hereof and ending on December 31, 2000, and a royalty in an
amount equal to ** per ton of Section 29 Product produced at the Facility and
sold during the period commencing on January 1, 2001 and ending upon the
expiration of the term (or earlier termination) of this Agreement. Such royalty
shall be paid quarterly on the last day of January, April, July and October of
each year for the Section 29 Product sold during the previous calendar quarter.
3.2 Royalty Advance Payment Option. At any time prior to July 1, 2000
at which Licensor demonstrates to Licensee's reasonable satisfaction that
Purchase Commitments (as defined below) for Section 29 Product (whether
delivered as a blended product or otherwise) are
** This exhibit contains confidential material which has been omitted
pursuant to a Confidential Treatment Request. The omitted information
has been filed separately with the Securities and Exchange Commission.
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in place for minimum annual tonnage in excess of ** tons, Licensor shall be
entitled to exercise an option (the "Option") to receive an advance lump-sum
payment of a portion of the royalties provided in Section 3.1 (the "Lump-Sum
Royalty Payment") as provided herein. For purposes hereof, "Purchase Commitment"
shall mean a binding contract whereby the customer is required to purchase
Section 29 Product (whether delivered as a blended product or otherwise), which
contract has a duration of at least three years, and contains force majeure and
other terms, conditions and product specifications that are industry-standard
and customary for coal purchase contracts in the central Pennsylvania region and
which can reasonably be expected to be met by the product produced at the
Facility, when blended with River Hill Coal Company supplied coal, if applicable
all as determined by Licensee to its reasonable satisfaction. The Option may be
exercised more than once but must be exercised, if at all, by written notice
given by Licensor to Licensee of such exercise, together with such supporting
evidence and necessary documentation, on or before June 30, 2000. The maximum
amount of the Lump-Sum Royalty Payment available upon exercise of the Option
shall be (i) **, to the extent that Licensor demonstrates to Licensee's
satisfaction (pursuant to testing and operating procedures or protocols agreed
to by the parties) production of 10,000 tons of Section 29 Product at the
Facility within any ten consecutive day period (the "Ten Day Threshold"), less
(ii) an amount equal to ** times the aggregate number of tons of Section 29
Product produced at the Facility prior to the initial exercise of the Option,
for which royalties were previously paid pursuant to Section 3.1 hereof. The
maximum Lump-Sum Royalty Payment available upon exercise of the Option prior to
achieving the Ten Day Threshold shall be ** (the "Initial Cap"). At any time the
Option is exercised, the Lump-Sum Royalty Payment will equal (i) the product of
(X) ** reduced by ** times the aggregate number of tons of Section 29 Product
produced at the Facility prior to the initial exercise of the Option, for which
royalties were previously paid pursuant to Section 3.1 hereof and (Y) a
fraction, the numerator of which is the aggregate amount by which Purchase
Commitments exceed ** tons and the denominator of which is **; less (ii) the
aggregate amount already paid in respect of any previous exercise of the Option;
provided, however, that such aggregate amounts shall not exceed the Initial Cap,
if applicable. Upon achievement of the Ten Day Threshold, the Cap shall be
eliminated as to the calculation of the Lump-Sum Royalty Payment for any
exercise of the Option following such achievement, and the portion of the
Lump-Sum Royalty Payment not previously paid by reason of the Initial Cap shall
then become payable. Upon initial exercise of the Option, the royalty payments
provided for in Section 3.1 shall be reduced to ** per ton for the period
commencing on the effective date hereof and ending on December 31, 2000 and **
per ton for the period commencing on January 1, 2001 ending upon the expiration
of the term (or earlier termination) of this Agreement.
3.3 Termination by Licensee. Licensees' obligations to pay royalties
under this Section 3 are subject to the terms of Section 5.9 of the Purchase
Agreement.
Section 4. Sales of Binder.
4.1 Sale and Purchase. Licensor shall sell to Licensee, and Licensee
shall purchase from Licensor, all of Licensee's requirements of Proprietary
Binder Material required to operate the Facility. Licensor shall deliver the
Proprietary Binder Material at such times and in such amounts as requested by
Licensee. Licensor shall invoice Licensee for Proprietary Binder Material
monthly. Payments for Proprietary Binder Material delivered by Licensor during
any
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calendar month shall be due and payable to Licensor on the tenth business day of
the immediately succeeding month.
4.2 Price. The price which Licensee shall pay for the Proprietary
Binder Material delivered by Licensor shall be an amount equal to (i) Licensor's
direct and actual costs (including, but not limited to, material, labor, and
transportation costs) and a percentage of the total overhead costs of Licensor
reasonably reflecting the ratio of the administrative costs incurred in
connection with the manufacture and sale of the Proprietary Binder Material
(estimated at the date hereof to be ** per unit of Proprietary Binder Material
necessary to create one (1) ton of synthetic fuel product), payable within 30
days of receipt of an invoice therefor, plus (ii) ** per unit of Proprietary
Binder Material necessary to create one (1) ton of synthetic fuel product,
payable for the preceding calendar quarter on the last day of January, April,
July and October of each year.
4.3 Licensor Representations and Warranties. Licensor represents,
warrants and covenants as follows:
(a) Licensor shall convey to Licensee good title to all
Proprietary Binder Material purchased by Licensee from Licensor
hereunder, free and clear of any and all liens, claims and encumbrances
of any type whatsoever.
(b) No Proprietary Binder Material shall contain any hazardous
material in violation of applicable laws and governmental regulations.
(c) At Licensee's reasonable request, Licensor shall replace,
or refund the purchase price of, all non-conforming Proprietary Binding
Material.
(d) Proper use of the Coal Briquetting Technology, including
use at an adequate, qualified facility and with adequate feedstocks and
other raw materials, will enable Licensor to produce a product which is
reasonably expected to constitute "qualified fuels" pursuant to the
terms of Section 29(c)(1)(C) of the Code.
4.4 Order Procedure. Licensee shall deliver all purchase orders for
Proprietary Binder Materials at least thirty (30) days in advance of the first
day of the month in which delivery of such Proprietary Binder Material is
required under such purchase order. (For example, Licensee shall deliver a
purchase order for December delivery by no later than November 1st). Each such
purchase order shall be delivered either (i) in writing (including by fax), or
(ii) orally by telephone by an authorized agent of Licensee (subject to the
condition that it is followed by a written purchase order within 24 hours). Such
purchase orders shall be sent to Licensor at such address as Licensor shall
direct.
4.5 Delivery and Acceptance. All Proprietary Binder Material purchased
hereunder shall be delivered F.O.B. the Facility. Licensor shall arrange for any
necessary transportation of the Proprietary Binder Material to the Facility.
Licensee shall bear the expense of unloading of Proprietary Binder Material from
the trucks. Licensee shall have a reasonable opportunity to sample Proprietary
Binder Material delivered to it hereunder to confirm that such Proprietary
Binder Material conforms to the terms and requirements hereof, and Licensee
shall not be
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deemed or required to accept any such Proprietary Binder Material prior to the
completion of such sampling.
4.6 Delivery Of Binder Material. If Licensor's ability to deliver the
Proprietary Binder Material to Licensee will be interrupted or terminated for
any reason, Licensor shall give not less than ninety (90) days notice to
Licensee. Subject to giving notice of its inability to deliver the Proprietary
Binder Material to Licensee (or, in the absence of such notice, the actual
failure to deliver the Proprietary Binder Material for at least twenty (20) days
after Licensee gives written notice of non-delivery to Licensor), Licensor
hereby grants to Licensee a nonexclusive license for the term of this Agreement
(or such shorter period as provided in the proviso hereto) to use the technology
used to manufacture the Proprietary Binder Material, and the copy of the Formula
delivered in escrow pursuant to Section 4.7, to manufacture the Proprietary
Binder Material in sufficient quantities to operate the Facility to full
capacity, and such technology shall be deemed "Coal Briquetting Technology" for
the purposes of this Agreement; provided, however, that the license granted to
Licensee under this Section 4.6 shall cease (subject to reinstatement upon the
reoccurrence of the events contemplated above) and sales of Proprietary Binder
Material under the terms of this Agreement shall be reinstated, in each case, on
a date not less than ninety (90) days after Licensor gives notice to Licensee,
together with evidence reasonably satisfactory to Licensee that Licensor is able
to deliver the Proprietary Binder Material in accordance with this Agreement. No
additional fee or royalty shall be payable to Licensor in connection with the
License granted pursuant to this Section and Licensor shall be responsible for
any additional out-of-pocket costs incurred by Licensee in connection with the
production of Proprietary Binder Material pursuant to this Section.
4.7 Escrow of Binder Material Formula.
As a material inducement for Licensee entering into this Agreement and
for the Buyer under the Purchase Agreement entering into the Purchase Agreement,
and in order to provide assurance to Licensee of access to and adequate and
continuing supply of the Proprietary Binder Material during the term of this
Agreement, Licensor agrees to place in escrow with Licensee the formula and
technology used to manufacture the Proprietary Binder Material (the "Formula")
as provided herein. In connection therewith, Licensor agrees to deposit with
Licensee, within ten (10) days of the date of this Agreement, a copy of the
Formula. During the term of this Agreement, Licensor shall keep the Formula in
escrow fully current by depositing all updates and revisions thereto and related
materials, as the Formula may be updated or revised from time to time. Such
supplemental deposits will be completed no later than ten (10) days after the
date of use of such revised Formula by Licensor. Title to the Formula shall
remain in Licensor, but title to the copy thereof to be deposited in escrow
hereunder shall, in the event the Formula shall be released for use to Licensee
as provided in Section 4.6, pass to and vest in Licensee. Licensee shall hold
such copy of the Formula and any supplements in a safe-deposit box at a
financial institution located in the Detroit/Ann Arbor, Michigan region
designated by Licensee and reasonably approved by Licensor. Notwithstanding its
ownership of a copy of the Formula in such event, Licensee's use of the Formula
shall remain subject to the terms of this Agreement.
Section 5. Records; Inspection; Confidentiality. Each party hereto
shall keep accurate records containing all data reasonably required for the
computation and verification of the amounts to be paid by the respective parties
under this Agreement, and shall permit each other
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party or an independent accounting firm designated by such other party to
inspect and/or audit such records during normal business hours upon reasonable
advance notice. All costs and expenses incurred by a party in connection with
such inspection shall be borne by it. Each party agrees to hold confidential
from all third parties all information contained in records examined by or on
behalf of it pursuant to this Section 5; provided, however, that information
which (i) is or becomes generally available to the public other than as a result
of an unauthorized disclosure by the parties or their respective agents,
employees, directors or representatives, (ii) was available to the party
receiving disclosure on a non-confidential basis prior to its receiving
disclosure hereunder, (iii) lawfully becomes available to the party receiving
disclosure on a non-confidential basis from a third party source (provided that
such source is not known by the party receiving disclosure or its agents,
employees, directors or representatives to be prohibited from transmitting the
information), or (iv) a party is compelled by legal process by any court or
other authority to disclose shall not be subject to the terms of this Section 5.
In the case of (iv) above, the compelled party shall give the other party prompt
written notice of such legal process in order that an appropriate protective
order can be sought and each party agrees not to oppose the other party's
efforts to prevent the disclosure of such information. At the termination of
this Agreement, all copies of such information (including, without limitation,
any reports or memoranda) shall be returned by the party receiving disclosure.
Section 6. Enforcement Of Proprietary Rights. Licensee shall cooperate
in good faith, with Licensor's efforts to enforce its proprietary patent and
trade secret rights.
Section 7. General Representations and Warranties.
7.1 Authority. Each of Licensee and Licensor represents and warrants
that (i) the execution, delivery and performance of this Agreement and the
consummation of the transactions contemplated hereby have been duly authorized
on its behalf by all requisite action, corporate or otherwise, (ii) it has the
full right, power and authority to enter into this Agreement and to carry out
the terms of this Agreement, (iii) it has duly executed and delivered this
Agreement, and (iv) this Agreement is a valid and binding obligation of it
enforceable in accordance with its terms.
7.2 No Consent. Each of Licensee and Licensor represents and warrants
that no approval, consent, authorization, order, designation or declaration of
any court or regulatory authority or governmental body or any third-party is
required to be obtained by it, nor is any filing or registration required to be
made therewith by it for the consummation by it of the transactions contemplated
under this Agreement.
7.3 Intellectual Property Matters. Licensor represents and warrants
that (i) it owns, free and clear of all liens and encumbrances, patents related
to the Coal Briquetting Technology (including, but not limited to, United States
Patent Numbers 5,599,361, 5,487,764 and 5,453,103) and has developed the Coal
Briquetting Technology, including, but not limited to, printed and not printed
technical data, know-how, trade secrets, copyrights, and other intellectual
property rights and all other scientific or technical information in whatever
form relating to, embodied in or used in the process to produce synthetic coal
fuel briquettes from waste coal dust, coal fines, run of mine coal and other
similar coal derivatives, and, the right to freely make, use, sell and exploit
Proprietary Binder Material used in manufacturing synthetic coal fuel briquettes
from waste coal dust, coal fines and other similar coal derivatives, (ii) it has
the right and power
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to grant to Licensee the licenses granted herein, and (iii) the sale or use of
the rights, Proprietary Binder Material and/or licenses granted herein as
contemplated by this Agreement will not infringe any third-party's intellectual
property rights.
7.4 Indemnification. Each party agrees to indemnify, defend and hold
harmless the other party and its partners, directors, officers, members, agents,
representatives, subsidiaries and affiliates from and against any and all
claims, demands or suits (by any party, including any governmental entity),
losses, liabilities, damages, obligations, payments, costs and expenses
(including the costs and expenses of enforcing this indemnification and
defending any and all actions, suits, proceedings, demands and assessments,
which shall include reasonable attorneys' fees and court costs) resulting from,
relating to, arising out of, or incurred in connection with any breach of any of
the representations, warranties and/or covenants contained in this Agreement.
Section 8. Term. The term of this Agreement is (a) for the period
commencing on the Effective Date of this Agreement and ending on 31 December
2007, (b) for the full term of Section 29 of the Code, or (c) for the full life
of the last to expire of the U.S. patents in existence at the effective date of
this Agreement that disclose and claim Covol's proprietary Coal Briquetting
Technology as defined herein, whichever date is later. Any extension of this
Agreement must be in writing, signed by both parties.
Section 9. Termination. This Agreement shall terminate upon the
termination date set forth in Section 8, unless the Agreement is terminated
sooner pursuant to this Section 9.
9.1 Termination for Cause. In addition to any other remedies that may
exist, either party may terminate this Agreement for cause in the event the
other party commits a material breach of any provision of this Agreement by
giving the other party at least sixty (60) days prior written notice of such
termination, unless such default or breach is cured within said sixty (60) days.
If either party terminates this Agreement pursuant to this Section 9, Licensee
shall promptly return and cause all agents of Licensee to promptly return to
Licensor all Confidential Information and all Coal Briquetting Technology then
in Licensee's possession, and Licensee shall not thereafter use for its own
commercial benefit or disclose to any third person any Confidential Information
or Coal Briquetting Technology during the period ending three (3) years from the
date of such termination. Notwithstanding the foregoing, information which (i)
is or becomes generally available to the public other than as a result of an
unauthorized disclosure by the Licensee or its respective members, agents,
employees, directors or representatives, (ii) was available to the Licensee on a
non-confidential basis prior to its receiving disclosure hereunder, (iii)
lawfully becomes available to the Licensee on a non-confidential basis from a
third party source (provided that such source is not known by the Licensee or
its members, agents, employees, directors or representatives to be prohibited
from transmitting the information), or (iv) the Licensee is compelled by legal
process by any court or other authority to disclose shall not be subject to the
terms of the duty to protect Confidential Information set forth in this section.
In the case of (iv) above, the Licensee shall give the Licensor prompt written
notice of such legal process in order that an appropriate protective order can
be sought and Licensee agrees not to oppose Licensor's efforts to prevent the
disclosure of Confidential Information.
9.2 Termination for Insolvency or Ceasing Business. This Agreement may
be terminated by Licensor if:
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(a) Licensee becomes insolvent or is unable to pay its debts
as they fall due, seeks protection voluntarily or involuntarily under
any law relating to bankruptcy, receivership, insolvency,
administration, liquidation, dissolution or similar law of any
jurisdiction (other than for the purposes of a reorganization with a
view to continuing the business as a going concern under relevant
bankruptcy or insolvency proceedings) or enters into a general
assignment or arrangement or a composition with or for the benefit of
its creditors; or
(b) Licensee takes any step (including the filing or
presentation of a petition, the convening of a meeting or the filing of
an application or consent) in any jurisdiction for, or with a view to,
the appointment of an administrator, liquidator, receiver, trustee,
custodian or similar official (other than for the purposes of a
reorganization with a view to continuing the business as a going
concern under relevant bankruptcy or insolvency proceedings) for
Licensee and/or the whole or any part of the business, undertaking,
property, assets, receiver or uncalled capital of Licensee or any such
person is appointed.
9.3 Effect of Termination. Upon termination of this Agreement, all
rights granted to and future obligations of the parties shall immediately cease;
however termination shall not relieve either party of its obligations accrued
during the term of this Agreement (including any pre-termination obligation
Licensee may have to pay Licensor) which has not been fulfilled, and all
representations, warranties, indemnification obligations and confidentiality
agreements made herein shall survive termination of this Agreement.
Section 10. Waiver. The failure of any party to enforce at any time any
provision of this Agreement shall not be construed as a waiver of such provision
or the right thereafter to enforce each and every provision. No waiver by any
party, either express or implied, of any breach of any of the provisions of this
Agreement shall be construed as a waiver of any other breach of such term or
condition.
Section 11. Severability. If any provision of this Agreement shall be
held by a court of competent jurisdiction to be invalid or unenforceable in any
respect for any reason, the validity and enforceability of any such provision in
any other respect and of the remaining provisions of this Agreement shall not be
in any way impaired.
Section 12. Notices. All notices required or authorized by this
Agreement shall be effective upon receipt and given to the parties in writing by
fax, mail, or courier as follows:
To Licensor: ▇▇▇▇▇ ▇. ▇▇▇▇, President
Covol Technologies, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
To Licensee: DTE RIVER HILL, L.L.C.
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▇▇▇▇▇ ▇▇▇
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Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇▇▇▇▇
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With a copy to: DTE Energy Services
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Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: General Counsel
Section 13. Remedies Cumulative. Remedies provided under this Agreement
shall be cumulative and in addition to other remedies provided by law or in
equity.
Section 14. Entire Agreement. This Agreement, together with the
Transaction Documents (as defined in the Purchase Agreement), constitutes the
entire agreement of the parties relating to the subject matter hereof. There are
no promises, terms, conditions, obligations, or warranties other than those
contained herein and therein. This Agreement and the Transaction Documents
supersede any and all prior communications, representations, or agreements,
verbal or written, between the parties relating to the subject matter hereof.
This Agreement may not be amended except in writing signed by the parties
hereto.
Section 15. Governing Law. This Agreement shall be governed in
accordance with the laws of the State of New York, exclusive of its conflict of
laws rules.
Section 16. Assignment. This Agreement may not be assigned, in whole or
in part, by any party without the written consent of the other party, which
consent shall not be unreasonably withheld, except that Licensor and Licensee
shall have the right to assign their respective rights and obligations under
this Agreement to any entity which is controlled by Licensor or Licensee, as the
case may be, and of which Licensor or Licensee, as the case may be, owns,
directly or indirectly, at least fifty percent (50%) of each class of its
outstanding securities, provided that no such assignment shall release Licensor
or Licensee, as the case may be, from their respective obligations hereunder.
Executed by the duly authorized representative of the parties on the
date and year first above written.
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COVOL TECHNOLOGIES, INC. DTE RIVER HILL, L.L.C.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇ By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇
------------------------- ---------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇ Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: CEO Title: VP and CFO
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