NIMSTEC LIMITED
- and -
▇-▇▇.▇▇▇
ASSET AND LICENSE PURCHASE AGREEMENT
EXHIBIT A
EQUIPMENT, ASSET AND LICENSE PURCHASE AGREEMENT
DATE: June 30th 1999
PARTIES:
"The Licensor": NIMSTEC LIMITED, an exempted corporation registration no.
21568 formed under the laws of Bermuda whose principal place of business is
at ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇ ▇▇, ▇▇▇▇▇▇▇
"The Licensee": ▇-▇▇.▇▇▇, a corporation organised under the laws of Nevada.
RECITALS:
(A) The Licensor is the beneficial owner, for the manufacture of lenticular
optical material and the photographic and digital origination of animated
and 3-D images, for the photographic printing of animated and 3-D images,
of a substantial body of valuable Technical Information (as defined below)
and equipment relating to the manufacture, assembly, and commercial
operation of certain equipment and is the beneficial owner of the know how
relating thereto (as defined below).
(B) The Licensee wishes to receive and the Licensor is willing to grant a
licence on the terms and conditions hereinafter set forth to use such
Technical Information and to work under the said know how in order to
produce certain products using the equipment and Technical Information for
the manufacture, photographic and digital origination of animated and 3-D
images, for the photographic printing of animated and 3-D images.
1. DEFINITIONS
1.1 In this Agreement the following terms shall have the following
meanings unless the context otherwise requires:
"COPYRIGHT" all copyright and rights in the nature of copyright to
which either party may now be or may subsequently become entitled in
or in respect of all drawings and other documents, recordings in any
form and all other articles bearing or embodying any part of the
Technical Information
"EFFECTIVE DATE" On the date of $500,000 purchase of ▇-▇▇.▇▇▇ common
stock by ELGT.
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"IMPROVEMENTS" all improvements, modifications or adaptations to any
part of the Technical Information which might reasonably be of
commercial interest to either party in the design manufacture or
supply of the Products or in the operation of the Equipment and which
may be made or acquired by either party during the term of this
Agreement
"GROSS SALES VALUE" the invoiced sales value of the Products in arm's
length transactions exclusively for money after deduction of any
credits actually given by the Licensee for returned or defective goods
and excluding or making proper deductions for any costs of packing,
insurance, carriage and freight and sales tax and, in the case of
export orders, any import duties or similar applicable governmental
levies or export insurance costs subject in all cases to the same
being separately charged on customer invoices. In any sale or other
disposal of any Products or part thereof otherwise than in an arm's
length transaction exclusively for money, the fair market price (if
higher) in the relevant country of disposal shall be substituted for
the Gross Sales Value.
"PATENTS"
(i) ***
(ii) ***
(iii) ***
"PRODUCTS" all animated or 3-D images *** created for the photographic
printing of animated or 3D images - 3D photographic cameras - 3D
photographic printers - 3D photographic apparatus used with 2-D
cameras *** - lenticular print optical material with photographic
emulsions (LPF).
"TECHNICAL INFORMATION" all know-how, experience, drawings, designs,
circuit diagrams, computer programs and all other technical
information relating to the Products or Equipment and which might
reasonably be of commercial interest to either party in the design
manufacture or supply of the Products or in the operation of the
Equipment.
"TERRITORY" North America, Canada, Mexico
2. ***
*** text omitted & filed separately
Confidential Treatment Requested
Under 17 C.F.R. Sections
200.80(b)(4), 200.83 and 240.246-2
Page 3
3. TECHNICAL INFORMATION
3.1 After execution of this Agreement by both parties the Licensor will
supply the Licensee with all Technical Information in its possession
that has not previously been disclosed that is reasonably necessary or
desirable to enable the Licensee to operate the Equipment and to
design manufacture on a commercial scale and sell Products of a
quality at least equivalent to those being produced by the Licensor at
the Effective Date.
3.2 The Licensor warrants that all Technical Information disclosed or to
be disclosed to the Licensee hereunder is or will be, to the best of
the Licensor's knowledge and belief, accurate (provided always that
the Licensor will promptly correct any significant errors in the
Technical Information subsequently discovered by the Licensor), but
subject thereto and without prejudice to the Licensor's obligations
under clause 2.1 hereof the Licensor shall be under no further
liability to the Licensee in respect of the Technical Information or
of the manufacture, use, sale or other disposition of the Equipment or
Products.
3.3 The Licensee shall be exclusively responsible for the technical and
commercial operation of the Equipment and for incorporating any
modifications or developments thereto that might be necessary or
desirable and for all Products sold or supplied by the Licensee and
accordingly the Licensee shall indemnify the Licensor in respect of
all costs, damages and expenses incurred as a result of any claims by
third parties in tort or otherwise against the Licensor arising in any
way out of the use of any of the Technical Information by the
Licensee.
3.4 The Licensee undertakes that for so long as any part of the Technical
Information remains subject to the obligations of confidence of clause
4 hereof it will not use the same for any purpose except as expressly
licensed hereby and in accordance with the terms of this Agreement.
4. IMPROVEMENTS
4.1 Each party shall forthwith disclose to the other in confidence and in
such detail as that other may reasonably require all Improvements that
it may develop or acquire during the term of this Agreement except in
so far as such disclosure would disclose information derived from and
subject to confidentiality obligations in favour of a third party.
4.2 Improvements that the Licensee is due to disclose to the Licensor
under clause 3.1 above shall be deemed to be part of the Technical
Information for the purposes of the rights granted to the Licensee
under clause 5 hereof.
5. CONFIDENTIALITY
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5.1 Each party agrees to maintain secret and confidential all Technical
Information and information regarding Improvements obtained from the
other both pursuant to this Agreement and prior to and in
contemplation of it and all other information that it may acquire from
the other in the course of this Agreement, to respect the other's
proprietary rights therein, to use the same exclusively for the
purposes of this Agreement, and to disclose the same only to those of
its employees and contractors and sub-licensees pursuant to this
Agreement (if any) to whom and to the extent that such disclosure is
reasonably necessary for the purpose of this Agreement.
5.2 The foregoing obligations under clause 4.1 above shall not apply to
Technical Information or other information which:
5.2.1 prior to receipt thereof from one party was in the possession of
the other and at its free disposal;
5.2.2 is subsequently disclosed to the recipient party without any
obligations of confidence by a third party who has not derived
it directly or indirectly from the other;
5.2.3 is or becomes generally available to the public in printed
publications in general circulation through no act or default of
the recipient party or its agents or employees.
5.3 Notwithstanding the foregoing provisions the parties and any
sub-licensees pursuant to this Agreement shall be entitled to disclose
Technical Information of the other to actual or potential customers
for Products in so far as such disclosure is reasonably necessary to
promote the sale or use of Products.
5.4 Each party shall procure that all its employees contractors and
sub-licensees pursuant to this Agreement (if any) who have access to
any information of the other to which the obligations of clause 4.1
apply shall be made aware of and subject to these obligations and
shall further procure that so far as is reasonably practicable all of
such employees contractors and sub-licensees shall enter into written
undertakings in favour of the other party to this end in a form
previously approved by the Licensor.
6. GRANT OF RIGHTS
6.1 The Licensor hereby grants to the Licensee:
6.1.1 an exclusive licence to use the Technical Information and
improvements in the Territory and under the Licensor's
copyrights, technology, patents, trade secrets, know-how and
trademarks to use the Equipment to manufacture Products; and
6.1.2 an exclusive licence to use the name "NimsTec" and "3-Dx" in
connection with the marketing and putting into commercial effect
of the License in the Territory.
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6.2 ***
6.3 The Licensee shall further be entitled to a licence under the Patent
Rights so far as the same extend to any act of the Licensee licensed
under clause 5.1 above.
6.4 The Licensee shall not be entitled to grant sub-licences of the rights
granted or to be granted under clauses 5.1 and 5.2 above without
approval of Licensor.
7. PAYMENT
7.1 The Licensee shall during the continuance of this Agreement pay to the
Licensor a license fee of five per cent (5%) of the Gross Sales Value
of all Products (or any part thereof) sold or otherwise supplied for
money or money's worth.
7.2 If any Products are incorporated in any other equipment or apparatus
sold by the Licensee or any sub-licensee hereunder at a price which is
included in the price for the other equipment or apparatus, the Gross
Sales Value for the purpose of calculating license fees due hereunder
shall be that proportion of the Gross Sales Value of that other
equipment or apparatus which is fairly attributable to such Products
comparing the manufacturing cost of the other equipment or apparatus
to that of the Products as components thereof.
7.3 Payments due under clause 6.1 shall be made within 30 days of the end
of each calendar quarter in respect of license fees accruing on
Products invoiced in that calendar quarter.
7.4 *** Amended
7.5 All sums due under this Agreement:
7.5.1 are exclusive of any sales tax which shall be payable in addition on
the rendering by Licensor of any invoice incorporating appropriate
sales tax;
7.5.2 shall be made in US dollars to the credit of a bank account to be
designated in writing by the Licensor. Conversion into US dollars
shall be calculated:
(a) in the case of each royalty payment at the rate of exchange
ruling on the last day of the calendar quarter in respect of
which the payment is due;
(b) in the case of all other payments at the rate of exchange ruling
on the day payment is made or due whichever is earlier; provided
always that where any payment is made after the date provided
therefor herein conversion shall be at the rate ruling at the
date of payment if this is more favourable to the Licensor;
*** text omitted & filed separately
Confidential Treatment Requested
Under 17 C.F.R. Sections
200.80(b)(4), 200.83 and 240.246-2
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7.5.3 shall be made in full without deduction of taxes charges and other
duties that may be imposed except in so far as any such deduction may
be credited in full by the Licensor against the Licensor's own tax
liabilities. The parties agree to co-operate in all respects
necessary to take advantage of such double taxation agreements as
may be available.
7.5.4 ***
8. RECORDS AND REPORTS
8.1 The Licensee agrees to keep true and accurate records and books of
account containing all data necessary for the determination of license
fees payable under clause 6.1 which records and books of account shall
upon reasonable notice of the Licensor be open at all reasonable times
during business hours for inspection by the Licensor or its duly
authorised agent for the purpose of verifying the accuracy of the
Licensee's reports hereunder.
8.2 The Licensee shall submit to the Licensor within 30 days of the end of
each calendar quarter a statement setting forth with respect to the
operations of the Licensee hereunder during that period the quantity
of Products made used or sold and the Gross Sales Value of Products.
8.3 The Licensor agrees to maintain confidential all financial information
received with respect to the Licensee's operations pursuant to the
foregoing clauses 7.1 and 7.2.
9. PERFORMANCE
9.1 During the continuance of this Agreement the Licensee shall:
9.1.1 use its best endeavours to promote the distribution and sale of
Products in the Territory as widely as its resources reasonably
permit and will make available all necessary selling and
manufacturing facilities to meet all reasonable demands for
Products throughout the Territory. The Licensee shall seek to
maximise such demand, consistent only with the Licensee
obtaining a reasonable rate of return on its assets employed in
making and selling Products;
9.1.2 ensure that all Products supplied by the Licensee meet all such
reasonable specifications as the Licensor may from time to time
apply thereto and satisfy in performance, quality, construction
and use the reasonable requirements of the Licensor and shall
upon reasonable notice from the Licensor give the Licensor or
its authorised representative free access at any reasonable time
to the premises of the Licensee for the purpose of ensuring that
the Licensee is observing these obligations;
9.1.3 sell Products to any suitable buyer independently of any other
products of the Licensee if
*** text omitted & filed separately
Confidential Treatment Requested
Under 17 C.F.R. Sections
200.80(b)(4), 200.83 and 240.246-2
Page 7
so required;
9.1.4 ensure that all literature prepared by the Licensee and relating
to Products bears an acknowledgement to the effect that they are
subject to a licence from the Licensor, and attach to all
Products a label quoting relevant patent numbers and stating
that such Products are made under licence from the Licensor;
9.1.5 provide adequate servicing facilities for any Products
manufactured and/or supplied by the Licensee;
9.1.6 not act as agent of the Licensor and specifically not give any
indication that it is acting otherwise than as principal and in
advertising or selling Products not make any representation or
give any warranty on behalf of the Licensor;
9.1.7 not use any equipment other than the Equipment to manufacture
the Products.
9.2 The Licensee shall not during the continuance of the Agreement and for
a period of five years from the date of its termination for any reason
be directly or indirectly concerned in the manufacture distribution
sale or other supply in any part of the Territory of any manufactured
goods which by reason of their properties and performance are
commercially competitive with any Products.
10. PATENTS
10.1 The Licensee shall at its own cost diligently prosecute to grant all
subsisting patent applications within the Patent Rights so as to
secure the broadest monopoly reasonably obtainable consistent with
avoiding serious prejudice to the validity of such granted patents and
shall maintain all patents within the Patent Rights in force for the
full terms thereof.
10.2 In the event of any infringement by a third party of any of the Patent
Rights in the Territory on such a scale as to affect prejudicially the
Licensee's business in the Products to a substantial extent the
Licensee may take all legitimate steps to halt such infringement.
Subject to receiving advice from experienced Patent Counsel that
infringement proceedings, including any interlocutory proceedings
where relevant, stand a reasonable chance of success the Licensee may
request the Licensor to lend its name to such proceedings and provide
reasonable assistance and the Licensor will do so subject to the
Licensee giving it an indemnity in respect of all costs damages and
expenses that it may incur including any award of costs against it.
Any damages recovered shall be dealt with in a manner which shall be
fair and reasonable as between the Licensor and the Licensee.
Page 8
10.3 To the best of the Licensor's knowledge and belief the exercise of the
rights granted or to be granted to the Licensee hereunder will not
result in the infringement of valid patents of third parties. Subject
thereto the Licensor gives no warranty in this respect and does not
give the Licensee any indemnity against costs damages expenses or
license fees arising out of proceedings brought against the Licensee
or any customer of the Licensee by any third party. Should the
Licensee be sued for infringement of any patent or patents of the
third party by reason of its operation of the Equipment or manufacture
use or sale of the Products the Licensor shall on request assist the
Licensee in its defence to such action to the extent that in all the
circumstances it is reasonable to do so but shall otherwise be under
no obligations in respect thereof. All costs of any such action shall
be borne by the Licensee to whom shall belong all sums that may be
recovered from the third party.
10.4 If at any time during this Agreement the Licensee directly or
indirectly opposes or assists any third party to oppose the grant of
letters patent on any patent application within the Patent Rights or
disputes or directly or indirectly assists any third party to dispute
the validity of any patent within the Patent Rights or any of the
claims thereof the Licensor shall be entitled at any time thereafter
to determine all or any of the licences granted hereunder forthwith by
notice thereof to the Licensee.
10.5 The Licensee shall bear the costs of filing and prosecuting any future
patent applications to grant and of maintaining such granted patents
in all countries.
11. TERM AND TERMINATION
11.1 Unless terminated earlier in accordance with the following provisions
of this clause or by mutual agreement by both parties, this Agreement
shall be for a fixed period of 50 years from the Effective Date and
shall be renewable by either party for a further fixed period of 50
years by giving the other party at least 3 months' notice in writing
to the other before the expiry of the first fixed period of 50.
11.2 If either party is in breach of any obligation on it hereunder and, in
the case of a breach capable of remedy, it shall not have been
remedied by the defaulting party within 30 days of written notice
specifying the breach and requiring its remedy, or if either party
becomes insolvent, has a receiver appointed over the whole or any part
of its assets, enters into any compound with creditors, or has an
order made or resolution passed for it to be wound up (otherwise than
in furtherance of a scheme for amalgamation or reconstruction) or if
the ownership or control of the Licensee shall pass into the hands of
any legal person whom the Licensor in its reasonable discretion
considers unsuitable for any reason whatsoever then the other party or
in the case of breach, the party not in breach of the obligation or
condition may forthwith terminate this Agreement by notice in writing
without prejudice to the accrued rights of either party.
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11.3 Termination of this Agreement for any reason shall not bring to an
end:
11.3.1 the secrecy obligations on the parties hereto;
11.3.2 the Licensee's obligations to pay license fees or other sums
which have accrued due or which will become due in respect of
sales under clause 10.4;
11.3.3 the obligations (if any) on the Licensee under clause 10.5;
11.3.4 the licences (if any) under clause 3.3.
11.4 On termination of this Agreement for any reason the Licensee shall
continue to have the right for a period of two months from the date of
termination to complete deliveries on contracts in force at that date
and to dispose of Products already manufactured subject to payment to
the Licensor of license fees thereon in accordance with clause 6
above.
11.5 On termination of this Agreement for any reason under clause 10.2
above the Licensee shall offer to the Licensor at cost all stocks of
Products and promotional and other literature relating thereto in its
possession or control and shall provide the Licensor with all
reasonable facilities to inspect the same and shall deliver up to the
Licensor all production manuals and all other documents (including
copies thereof) in its possession or control containing Technical
Information remaining subject to the secrecy obligations of clause 4
hereof.
12. INTELLECTUAL PROPERTY
12.1 Throughout the subsistence of this Agreement, the Licensee shall not
cause or permit anything which may damage or endanger such
intellectual property of the Licensor or Licensor's title to it or
assist or allow others to do so.
13. FORCE MAJEURE
13.1 If either party to this Agreement is prevented or delayed in the
performance of any of its obligations under this Agreement by force
majeure, and if such party gives written notice thereof to the other
party specifying the matters constituting force majeure, together with
such evidence as it reasonably can give and specifying the period for
which it is estimated that such prevention or delay will continue then
the party in question shall be excused the performance or the punctual
performance as the case may be as from the date of such notice for so
long as such cause of prevention or delay shall continue.
13.2 For the purpose of this Agreement "force majeure" shall be deemed to
be any cause affecting the performance of this Agreement arising from
or attributable to acts, events, omissions or
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accidents beyond the reasonable control of the party to perform and
without limiting the generality thereof shall include the following:
13.2.1 strikes, lock-outs or other industrial action;
13.2.2 civil commotion, riot, invasion, war threat or preparation for
war;
13.2.3 fire, explosion, storm, flood, earthquake, subsidence, epidemic
or other natural physical disaster;
13.2.4 impossibility of the use of railways, shipping, aircraft, motor
transport or other means of public or private transport;
13.2.5 political interference with the normal operations of any party.
14. GENERAL
14.1 This Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective legal successors but shall not
otherwise be assignable by either party without the written consent of
the other which consent shall not be unreasonably withheld.
14.2 No variation or amendment of this Agreement shall bind either party
unless made in writing in the English language and agreed to in
writing by duly authorised officers of both parties.
14.3 If any provision of this Agreement is agreed by the parties to be
illegal void or unenforceable under any law that is applicable hereto
or if any court of competent jurisdiction in a final decision so
determines this Agreement shall continue in force save that such
provision shall be deemed to be excised herefrom with effect from the
date of such agreement or decision or such earlier date as the parties
may agree.
14.4 The headings in this Agreement are for convenience only and are not
intended to have any legal effect.
14.5 A failure by either party hereto to exercise or enforce any rights
conferred upon it by this Agreement shall not be deemed to be a waiver
of any such rights or operate so as to bar the exercise or enforcement
thereof at any subsequent time or times.
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15. NOTICES
15.1 Any notice required to be given hereunder by either party to the other
shall be in writing and shall be served by sending the same by
registered or recorded delivery post or facsimile to the address of
the other party as given herein or to such other address as that party
may have previously notified to the party giving notice as its address
for such service.
15.2 All notices documents communications and any other data to be provided
under this Agreement shall be in the English language unless otherwise
agreed.
16. GOVERNING LAW AND DISPUTES
16.1 The construction validity and performance of this Agreement shall be
governed in all respects by the laws of Bermuda.
16.2 All disputes arising in connection with this Agreement shall be
finally settled by binding arbitration upon written demand by either
party. The arbitration shall be held at and conducted in accordance
with the Rules of the International Chamber of Commerce and its
International Court of Arbitration. Judgement upon the award rendered
may be entered in any court having jurisdiction or application may be
made to such court for a judicial acceptance of the award and an order
for enforcement (as the case may be).
16.3 The parties will seek to agree on a single arbitrator and if they fail
to so agree the arbitration will be conducted by three arbitrators,
with each party selecting one arbitrator who will in turn select the
third arbitrator. Arbitration shall be conducted in Bermuda and shall
be conducted in the English language.
NIMSTEC LIMITED ▇-▇▇.▇▇▇
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇ ▇▇ ▇▇ Bermuda
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇ By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------- -------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇ Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Chairman Title: President
Date: 6/30/99 Date: 6/30/99
----------------------------- -----------------------------
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ASSET AND LICENSE PURCHASE MODIFICATION AGREEMENT
THIS AGREEMENT, made effective as of the 30th day of June, 1999, by and
between NIMSTEC LIMITED, an exempted corporation registration no. 21568
formed under the laws of Bermuda (hereinafter "LICENSOR") and ▇▇▇▇.▇▇▇, a
company incorporated pursuant to the laws of the State of Nevada, formerly
known as ▇-▇▇.▇▇▇ (hereinafter "LICENSEE"), both of whom together referenced
herein as "the parties."
WHEREAS the LICENSOR and the LICENSEE entered into an Asset and License
Purchase Agreement governing the terms and conditions under which a
substantial body of valuable technical information owned beneficially by the
LICENSOR would be licensed to LICENSEE; and
WHEREAS the LICENSOR HAS AGREED TO CONTRIBUTE THE LICENSE RIGHTS SPECIFIED IN
THE JUNE 30, 1999 ASSET AND LICENSE PURCHASE AGREEMENT, IN THE SPECIFIED
TERRITORY, TO LICENSEE, THEREBY RESCINDING THAT PORTION OF THE ASSET AND
LICENSE PURCHASE AGREEMENT WHICH REQUIRES PAYMENT OF $2,000,000 AS PARTIAL
PAYMENT TO LICENSOR; and
WHEREAS the parties mutually agree to the modification of the Asset and
License Purchase Agreement for the purpose of effecting the contribution as
specified herein;
NOW THEREFORE, in consideration of the premises and mutual covenants and
agreements hereinafter contained, and for such other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged by
the parties hereto, it is agreed by and between the parties hereto as
follows:
1. RESCISSION OF LICENSE FEE.
The LICENSOR hereby agrees to the voiding and elimination of that
portion of sub-paragraph "7.4" of the Asset and License Purchase
Agreement, wherein Licensee purchased for the specified territory
the exclusive license for $2,000,000.00. However, the parties agree
that the remainder of sub-paragraph "7.4", wherein LICENSEE agrees
to pay LICENSOR 5% of LICENSEE'S gross revenues, remains intact.
LICENSOR agrees to the contribution of its $2,00,000.00 entitlement
for the intellectual property which is the subject of the license, to
LICENSEE, without charge other than the aforementioned 5% of
LICENSEE'S gross revenues.
2. RESCISSION OF DEBENTURE.
The parties hereto agree that the Convertible Debenture issued by the
LICENSEE to the LICENSOR on June 30, 1999, in the principle amount of
$2,000,000.00, with annual interest thereon at the rate of 8% per
annum, as security for the license is also null and void, and of no
force and effect AB INITIO. The LICENSOR further agrees to disgorge the
three interest payments received from the LICENSEE pursuant to the
terms of the Convertible Debenture, with return of said interest to be
made upon demand by LICENSEE.
3. AGREEMENT REMAINDER
The parties agree that any portion of the Asset and License Purchase
Agreement not modified by this Agreement shall remain in full force
and effect between the parties.
IN WITNESS WHEREOF the parties hereto have caused this agreement to be
executed on the 24th day of September 1999, effective as of the date first
above written.
LICENSOR: LICENSEE:
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇ By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------- -------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇, Chairman ▇▇▇▇ ▇. ▇▇▇▇▇▇, President
NIMSTEC LIMITED ▇▇▇▇.▇▇▇