Exhibit 2.2
Certain information has been deleted from this Exhibit and filed separately with
the Securities and Exchange Commission pursuant to a request for confidential
information under Rule 24b-2.
LICENSE AGREEMENT
THIS AGREEMENT, made and effective as of October 22, 2002, by and among
xxxxxxxxxxxxxxx., a Delaware corporation, ("xxxxxxxxxx"), xxxxxxxxxxx ("xxxxxx")
(xxxxxxxxxx and xxxxxx being collectively referred to herein as "Licensor") each
of whose business address and principal place of business is at xxxxxxxxxxxxxx,
and PentaPure Incorporated, a Minnesota corporation ("PentaPure") whose business
address and principal place of business is at ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
(hereinafter "PentaPure").
WHEREAS, xxxxxxxxxx is the owner of the intellectual property relating
to xxxxxxxxxxxxx which is described on the attached Exhibit A (the "Licensed
Technology"), including without limitation all rights in U.S. Patent Application
serial no. xxxxxxxxx filed on xxxxxxxxx, 2002 titled xxxxxxxxxxxxxxxxxxxxxxx
(the "Licensed Patent Application") that is included as a part of Exhibit A;
WHEREAS, PentaPure builds filtration products and systems and desires
to obtain from Licensor a license to the Licensed Technology on the terms
described in this License Agreement;
NOW THEREFORE, in consideration of their mutual covenants and
representations, the parties agree as follows:
1. License.
1.01 Grant. Subject to the terms of this Agreement, Licensor
hereby grants to PentaPure a worldwide, irrevocable, perpetual and fully paid up
license to design, develop, make, distribute, use, lease, offer for sale or
lease, sell and lease products using, incorporating or covered by the Licensed
Technology in the following two fields of use (the "Licensed Fields of Use"):
(a) water filtration or water purification products
xxxxxxxxxxxxxxxxxxxxxxxxx anywhere in the world; and
(b) xxxxxxxxxxxxxxxxxxx;
xxxxxxxxxxxxxxxxxxxxxxxxxxx.
This Agreement and the license granted under it may not be terminated, and the
parties agree that the sole remedies in the event of any breach or alleged
breach of this Agreement shall be damages, an order for specific performance, or
both.
1.02 Limitations. The License grant in Section 1.01 above
shall be subject to the following limitations:
(a) During the period from the date of this License Agreement
until the xxxxxxx anniversary of that date (such xxxxxx year period
being referred to herein as the "Exclusivity Period"), PentaPure shall
not make, use or sell the following water filtration products using or
incorporating the Licensed Technology xxxxxxxxxxxx:
(1) xxxxxxxxxxxxxxxxxx;
(2) xxxxxxxxxxxxxxxxx;
(3) xxxxxxxxxxxxxxxxx;
(4) xxxxxxxxxxxxxxxxx;
(5) xxxxxxxxxxxxxxxxx; and
(6) xxxxxxxxxxxxxxxxxx.
(b) xxxxxxxxxxxxxxxxx.
(c) During the Exclusivity Period, PentaPure will not, and
will not permit others on PentaPure's behalf, to manufacture products using the
Licensed Technology outside the United States, Canada, or Mexico.
(d) During the Exclusivity Period, PentaPure shall not use
third party manufacturers to manufacture products using the Licensed Technology
and shall not sublicense its rights under this Agreement to any party which is
not majority or more owned by PentaPure. Following the Exclusivity Period,
PentaPure may sublicense third party manufacturers to manufacture products for
PentaPure within the Licensed Fields of Use using the Licensed Technology.
1.03 Exclusivity. (a) During the Exclusivity Period, Licensor
agrees not to use, or grant any other party license or right to use, the
Licensed Technology for the design, development, manufacture, distribution, use,
importation, copying, sale, lease, offer for the sale or lease of products
within the Licensed Fields of Use, other than xxxxxxxxxxxxxxxxxxx, which shall
be permitted. During the Exclusivity Period, Licensor agrees that xxxxxxx shall
inform those of its customers as xxxxxxx deems appropriate of the Licensed
Fields of Use under this Agreement. During the Exclusivity Period, upon
notification by PentaPure that products which are being supplied by xxxxxxx (or
which are being supplied by others who are using the Licensed Technology) are
being used in the Licensed Fields of Use, Licensors shall cause xxxxxxx to take
whatever steps are necessary to cause such use to cease, to and including
refusal to sell products to customers who are using or supplying them within the
Licensed Fields of Use.
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(b) PentaPure agrees not to use, or grant any other party license or
right to use, the Licensed Technology for the design, development, manufacture,
distribution, use, importation, copying, sale, lease, offer for the sale or
lease of products outside the Licensed Fields of Use. PentaPure agrees to inform
those of its customers as PentaPure deems appropriate of the Licensed Fields of
Use under this Agreement. During the Exclusivity Period, upon notification by
xxxxxxx that products which are being supplied by PentaPure are being used
outside the Licensed Fields of Use, PentaPure shall take whatever steps are
necessary to cause such use to cease, to and including refusal to sell products
to customers who are using or supplying them outside the Licensed Fields of Use.
(c) During and after the Exclusivity Period, the Licensor shall not
grant to any other party any license or right to use the Licensed Technology in
the Licensed Field of Use referred to in Section 1.01(a).
2. License Fee. (a) Upon execution of this Agreement, PentaPure shall
(i) pay to xxxxxxx as a license fee the amounts referred to in Exhibit B at the
times indicated thereon, (ii) assign and deliver to xxxxxxxxxx all xx shares of
xxxxxxxxxxxxx common stock currently owned by PentaPure, (iii) join with
xxxxxxxxxxxxxxxx in executing a joint instruction letter to the escrow agent in
the form attached as Exhibit E to release to xxxxxxxx and xxxxxx all of the
xxxxxxxxxx stock certificates held by the escrow agent, and (iv) execute
together with xxxxxxxxxx and deliver that certain Escrow Agreement in the form
attached hereto as Exhibit F.
(b) No royalties or other payments shall be owed by PentaPure with
respect to the Licensed Technology or this Agreement. At the time of execution
of this Agreement, payment of the license fee and assignment of the stock
referred to in clauses (a) (i) and (ii) above, Licensor shall execute and
deliver to PentaPure a ▇▇▇▇ of Sale in the form attached as Exhibit D to assign
title to, and shall deliver to, PentaPure all tooling held by Licensor related
to products which Licensor has delivered to PentaPure, including tooling for the
xxxxxxxxxxxxxxxxxt and any prototype tooling for other projects that were
exclusively for PentaPure.
3. Confidentiality. Licensor and PentaPure each agree to protect and
maintain the confidentiality of the Licensed Technology. To that end, both
parties agree to put in place or maintain confidentiality agreements for
employees and to implement trade secret practices to protect the confidentiality
of the Licensed Technology. Each party hereby commits to the other that it will
pursue all commercially reasonable means to maintain such confidentiality. The
obligations of this Section 3 shall not apply (i) to those portions (but only
those portions) of the Licensed Technology which enter the public domain through
no fault of the party otherwise obligated under this Section, or (ii) to
disclosures which a party is obligated by law to make.
4. Improvements. PentaPure and Licensor each shall own and have no duty
to disclose any enhancements to or improvements of the Licensed Technology that
are developed by it. PentaPure shall be entitled to seek patents as to any such
enhancements or improvements which are developed by PentaPure and which meet the
normal requirements of novelty and utility for issuance of a new patent, and any
such patents which may be issued shall be the property of PentaPure. Any patent
application by PentaPure shall, to the full extent required by law, disclose as
prior art any patent which has been issued to Licensor covering Licensed
Technology. Notwithstanding the other provisions of this Section 4, PentaPure
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shall not disclose in any patent application filed by or on behalf of PentaPure
any Licensed Technology obtained under this Agreement which has not entered the
public domain.
5. Licensors' Representations and Warranties. The Licensors jointly and
severally represent and warrant to PentaPure that: (a) Licensors are the
exclusive owners of the Licensed Technology; (b) all rights of the Licensors in
or to the Licensed Technology within the Licensed Fields of Use are hereby being
licensed to PentaPure; (c) the Licensed Technology is secret and has not been
revealed to anyone other than the Licensors, employees of xxxxxxx, persons or
entities that have signed confidentiality agreements not to disclose, xxxxxxx'
counsel, and to the PTO in the Licensed Patent Application; (d) the only patent
applications which have been filed by or on behalf of the Licensor with respect
to the Licensed Technology are the Licensed Patent Application and the patent
application (the "Assigned Patent Application") referred to in the Assignment of
even date hereof by xxxxxxxx to PentaPure (the "Assignment") and a request for
non-publication of has been made to the PTO as to both the Licensed Patent
Application and the Assigned Patent Application; (e) to the best of Licensors'
knowledge, the Licensed Technology and PentaPure's practice of the Licensed
Technology does not infringe the proprietary rights of any other party; (f)
there are no suits, claims, demands or any form of litigation asserted or, to
Licensor's knowledge threatened, with respect to the Licensed Technology or its
ownership; (g) Licensors have not previously sold, licensed, transferred or
encumbered the Licensed Technology or any rights therein in any manner; (h) the
Licensors are entitled to enter into this Agreement without obtaining the
consent of any third party; and (i) this Agreement is a valid and binding
obligation of the Licensors that is enforceable by PentaPure in accordance with
its terms.
6. Infringement. In the event that any third party infringes or
allegedly infringes any patent or other proprietary right to the Licensed
Technology held by Licensor which is applicable to the Licensed Field of Use,
PentaPure shall be entitled to enforce such patent or other proprietary right
against such infringement. Such enforcement may include bringing suit, and
Licensor agrees that any such suit may be brought in Licensor's name if
necessary. PentaPure shall bear the costs of any such enforcement proceeding.
The rights granted to PentaPure under this Section are in addition to, and not
in derogation of, Licensor's obligations under Section 1.03 above.
7. Indemnity. Except to the extent PentaPure has recovered such expense
from insurance payments, xxxxxxx shall indemnify PentaPure as to any out of
pocket expense incurred by PentaPure in (a) the defense of any suit or demand
against PentaPure alleging that the its use of the Licensed Technology infringes
the U.S. patent or other U.S. proprietary rights of another party or parties,
(b) settling any claim of the type referred to in clause (a) above, or (c)
paying any damages assessed or judgment rendered against PentaPure based on a
determination that its use of the Licensed Technology infringes the U.S. patent
or U.S. proprietary rights of another party or parties. xxxxxx shall be entitled
to assume, by means of legal counsel reasonably acceptable to PentaPure, the
defense of any claim as to which xxxxxxxxx is obligated to provide indemnity
under this paragraph. xxxxxx shall control the settlement (up to the limit of
liability provided below) or any such claim as to which xxxxxxxxxx has assumed
the defense, provided that no proposed settlement shall impose any obligation on
PentaPure or limit PentaPure's activities without its prior consent. If xxxxxx
elects not to assume the defense of such claims, the parties shall consult and
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reasonably cooperate with each other in PentaPure's conduct of the defense.
PentaPure shall promptly notify xxxxxxxxxxx of any suit or claim brought against
PentaPure of which PentaPure becomes aware. The aggregate liability of xxxxxxxxx
to the Assignee under this Section 7 (or for any breach of warranty of
noninfringement) shall not exceed a total of $xxxxxxxxx. No claim for
indemnification made under or pursuant to this Section 7 shall be initially
asserted more than five years after the date of this Agreement.
8. Transfer of Licensed Technology. Licensor shall promptly deliver to
PentaPure all information and copies of all documents of Licensor which would be
helpful to PentaPure in manufacturing products utilizing the Licensed
Technology. Without limiting the generality of the forgoing, beginning
immediately upon execution of this License Agreement and payment of the initial
payment provided in Exhibit B, Licensee shall:
(a) commence within 30 days after the execution of this License
Agreement, and thereafter provide upon PentaPure's request, provide training to
PentaPure's authorized personnel at xxxxxxxxxxxx manufacturing facility
concerning the xxxxxxxxxx; in this regard PentaPure shall have open access,
subject to the confidentiality provisions of Section 15 below, to xxxxxxxxxx'
facility under reasonable limitations related to the availability of personnel,
equipment, etc. for the purpose of implementing the xxxxxxxxxx project and
learning the Licensed Technology by direct involvement in manufacturing;
(b) within 60 days after the execution of this License Agreement, (i)
complete delivery to PentaPure of all information and expertise known by the
Licensor related to manufacturing products using the Licensed Technology,
including access to any proprietary materials that have been supplied to xxxxxxx
by its vendors and whatever knowledge Licensor possess related to the
development of xxxxxxxxxxxxxxxx material, and (ii) complete the training of
PentaPure's personnel to manufacture xxxxxxxxxxxxx using the Licensed
Technology, including, but not limited to, the xxxxxxxxxxxxxxx previously
manufactured by xxxxxxxxxx for PentaPure; and
(c) within 120 days after the execution of this License Agreement,
complete delivery to PentaPure of Licensors' list of plant equipment and
manufacturer's specifications, process equipment design, process control
specifications which are useful for the design and construction by PentaPure of
a manufacturing facility at a site chosen by PentaPure. At any time after the
execution of this License Agreement, PentaPure shall have the right, subject to
the confidentiality provisions of Section 7 above, to enter xxxxxxxxxx' plant
and take photographs of existing equipment and draw a plant layout and design
for use as a basis of its own plant layout and design (PentaPure acknowledges
that the availability of sufficient natural gas, electricity and water is
necessary for the operation of such a manufacturing facility and that Assignee
is solely responsible for the availability of such utilities).
Without limiting the generality of the foregoing, PentaPure shall have
unrestricted access to Licensors' suppliers of proprietary and nonproprietary
materials and components used with the Licensed Technology. Any representative
or agent of PentaPure that visits the xxxxxxxxxx facility must be authorized by
PentaPure to receive Confidential Information and must be bound to PentaPure in
writing to keep such information of Licensor confidential.
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9. Notice. Any notice permitted or required under this Agreement shall
be addressed as follows: (a) If to xxxxxxxxx, to: xxxxxxxxxxxxxx; (b) if to
PentaPure, to: PentaPure, Inc., Attention: President, ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇; or (c) as to either party, to such other address as the party
may specify in a written notice to the other.
11. Independent Contractors. The parties hereto are independent
contractors with respect to each other and neither has the right or authority to
incur obligations of any kind in the name of or for the account of the other,
nor to commit or bind the other by any contract.
12. Severability. Should any part or provision of this Agreement be
held unenforceable or in conflict with the law of any jurisdiction, the validity
of the remaining parts or provisions shall not be affected by such holding.
13. Entire Agreement; Amendment. This Agreement contains the entire
agreement of the parties concerning the subject matter. The obligations of the
parties constituting the Licensor shall be joint and several. No provision of
this Agreement may be amended, supplement or waived other than by a writing on
behalf of xxxxxxxxxx and PentaPure. This Agreement may be executed in
counterparts, each of which shall be deemed an original, but all of which
together shall constitute but one agreement binding on the parties.
14. Successors and Assigns. (a) During the Exclusivity Period,
PentaPure may not assign its rights under this Agreement without the written
consent of xxxxxxxxxx, except that no such consent shall be required (i) for an
assignment to WTC Industries, Inc., PentaPure's parent, (ii) for an assignment
to an acquiror in connection with the sale of all or substantially all of
PentaPure's or WTC Industries, Inc.'s business by merger, sale of stock, sale of
assets or otherwise, (iii) for a sublicense granted after the Exclusivity Period
to a third party manufacturer as provided in Section 1.02(c), or (iv) for the
subsequent assignment by a permitted assignee under (i), (ii) or (iii) above to
a new entity which meets the requirements of (i), (ii) or (iii) above. Following
the Exclusivity Period, PentaPure may freely assign its rights under this
Agreement without any consent of the Licensor or acknowledgement by the
assignee, successor, acquirer or surviving party, provided, however, that
Pentapure shall not grant a license to a third party to develop, design, make,
or manufacture products under this license outside of the Licensed Field of Use
referred to in Section 1.01(a). In each case during the Exclusivity Period, the
permitted assignee, successor, acquirer or surviving party shall execute an
acknowledgement to Licensor in the form attached as Exhibit C of being bound by
the terms of this Agreement.
(b) Subject to the foregoing, this Agreement shall be binding upon and
inure to the benefit of the parties and their respective successors and assigns.
15. Confidential Information. "Confidential Information" includes: (a)
any and all information disclosed by one party to the other, in whatever format,
that is either identified as or would reasonably be understood to be
confidential and/or proprietary; (b) any notes, extracts, analyses or materials
prepared by the receiving party which are copies of or derivative works of
Confidential Information or from which the substance of the Confidential
Information can be inferred or otherwise understood; and (c) the terms and
conditions of this Agreement. "Confidential Information" does not include
information that the receiving party can clearly establish by written evidence:
(x) is or becomes known to the receiving party from a third party without an
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obligation to maintain its confidentiality; (y) is or becomes generally known to
the public through no act or omission of the receiving party; or (z) is
independently developed by the receiving party without the use of Confidential
Information.
The receiving party will not disclose Confidential Information to any
third party except as permitted by this Assignment and will protect and treat
all Confidential Information with the same degree of care as it uses to protect
its own confidential information of like importance, but in no event with less
than reasonable care. The receiving party will only disclose Confidential
Information to its employees, investors, attorneys, accountants and/or persons
having a need to know for the purposes of this Agreement and who have signed
confidentiality agreements. The receiving party will notify and inform such
employees and/or authorized subcontractors of the limitations, duties and
obligations regarding use, access to and nondisclosure of Confidential
Information imposed by this Agreement. The receiving party will obtain its
employees' and authorized subcontractors' written agreements to comply with such
limitations, duties and obligations. In the event that the receiving party is
required to disclose Confidential Information pursuant to law, the receiving
party will notify the disclosing party of the required disclosure with
sufficient time for the disclosing party to seek relief, will cooperate with the
disclosing party in taking appropriate protective measures and will make such
disclosure in a fashion that maximizes protection of the Confidential
Information from further disclosure.
16. Governing Law. This Agreement is made in and shall be construed in
accordance with the laws of the State of xxxxxxxx.
17. Arbitration. Any and all disputes concerning the interpretation,
application, breach or claimed breach of this Agreement shall be settled by
binding arbitration in accordance with the rules of the American Arbitration
Association in a proceeding conducted before a single arbitrator in xxxxxxxxxxx.
The arbitrator shall award to any prevailing party in the arbitration proceeding
(a) interest on any damages awarded to the prevailing party, computed at the
prime rate prevailing at the time of the award, from the date the arbitration
proceeding was commenced, and (b) the reasonable attorneys incurred by the
prevailing party in bringing and conducting arbitration proceeding. Judgment may
be entered on the arbitrator's award in any court having jurisdiction.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year set forth above.
XXXXXXXXXXXXXXXX PENTAPURE INCORPORATED
By: /s/ xxxxxxxxxxx By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
------------------------------- -------------------------------
xxxxxxxxxxx ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, President
/s/ xxxxxxxx
-----------------------------------
xxxxxxxxxx, individually
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Exhibits to Exhibit 2.2
A Licensed Technology
B Consideration
C Form of acknowledgement by assignee
D ▇▇▇▇ of Sale for Tooling
E Termination of prior escrow
F Escrow Agreement
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