PATENT LICENSE AGREEMENT
This Patent
License Agreement (the
"AGREEMENT") is entered into by and between
Integral Technologies,
Inc., a Nevada corporation located at
805 West Orchard
Street, #7,
Bellingham,
WA 98225 ("INTEGRAL")
and ADAC Plastics,
Inc., d/b/a
ADAC Automotive, a
Michigan corporation with offices at 5920 Tahoe Drive SE, PO
Box 888375,
Grand Rapids, MI 49588-8375 ("COMPANY") and is effective as
of
November 28,
2006 (the "EFFECTIVE DATE").
WHEREAS, Integral is the owner of certain technology, generally
characterized as
ElectriPlast
technology;
WHEREAS, particular applications of the technology are covered by
certain patent
rights defined
below and those patent rights are owned by Integral; and
WHEREAS, Company
wishes to obtain a non-exclusive license under such patents to
develop, manufacture,
and sell certain products;
NOW, THEREFORE, in consideration of the promises and of the mutual
covenants and
agreements herein
contained,
receipt and sufficiency of which is hereby
acknowledged, the
Parties hereby agree as follows:
1.
DEFINITIONS.
1.1.
"CONFIDENTIAL
INFORMATION" means
all non-public information
regarding the
Disclosing
Party or its business activities,
including without
limitation (i) its
sublicensees, manufacturers, contractors, or sales, (ii) any
non-public information
disclosed in any report provided under this
Agreement,
(iii) the Documentation and any other information disclosed during any
consulting services;
(iv) the terms of this
Agreement; and (v) any information
disclosed by
Company pursuant to Section 3.
1.2.
"LICENSED FIELD"
means the manufacture and sale of
Products for
use in (i) car antennas; (ii) cup holder
heating elements; (iii) driver's seat
heating elements;
and (iv) light-emitting diode (LED) packs
manufactured and
sold by the entities listed in the attached
Exhibit A, and such other uses as
---------
may be agreed upon in writing and signed by the parties.
1.3.
"LICENSED
PRODUCT" means any Product made, used, sold, or
otherwise disposed of by or for Company that (i) uses the Raw
Materials and (ii)
is either branded with a Company brand or is designed by
Company and sold in
Company's ordinary
course of business. Licensed Products do not include
"private label"
Products or other products sold without a designation
that
Company is
the source of the Product.
1.4.
"LICENSED
PATENTS" means the (i) patents, provisional patent
applications, and
utility patent
applications set forth in Exhibit B; (ii) any
---------
divisions, continuations, continuations-in-part, reissues, or
re-examinations of
such patents
and patent applications; (iii) all foreign counterparts of
the
foregoing (i)
and (ii); and (iv) all
applications for any of the foregoing (i)
through (iii).
Licensed Patents do not include any patent claim that has
either
expired or
been held invalid or unenforceable by a decision of a court or
governmental agency of competent jurisdiction, which decision is
unappealable or
unappealed within the
time allowed for an appeal, or any other patent or patent
application.
1.5.
"PRODUCT" means any
product (i) the manufacture, use, sale, offer
for sale, or import of which is covered by at
least one claim of the Licensed
Patents; or
(ii) produced by a
process, the practice of which is covered by at
least one claim of the Licensed Patents.
1.6.
"RAW
MATERIALS"
means the Technology,
as Integral provides it to
Company, on
a per weight basis for use in manufacturing Licensed
Products.
1.7.
"TECHNOLOGY" means
Integral's
proprietary
ElectriPlast(TM)
technology, portions
of which may be covered by the Licensed Patents.
The
Technology is
a compounded, pelletized formulation of resin-
INTEGRAL PROPRIETARY AND CONFIDENTIAL
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based materials,
which are conductively loaded or doped with a proprietary
controlled, balanced
concentration
of micron conductive materials contained
within the
manufactured
pellet. The conductive loading or doping
within this
pellet is then homogenized using conventional molding techniques and
conventional molding
equipment.
The resulting polymer is electrically
conductive.
1.8.
"THIRD PARTY"
means corporate
entities or individuals other than
Integral or
Company.
2.
CONSULTING
SERVICES.
Integral will provide Company with consulting services related to
the Technology
at Integral's
standard hourly rates
for such consulting services, on dates and
at a locations
mutually agreeable to the Parties. If Company requests that all
or part of the consulting services take place at facilities other than
Integral's place of business, Company will reimburse Integral for
its reasonable
and actual meals, travel, and lodging expenses incurred as a result
of providing
such consulting
services. Integral may, but is not obligated to, provide
Company with certain
pre-existing or developed written materials as part of the
consulting services
("DOCUMENTATION"),
provided that in no event shall any
Documentation be
deemed a "work made for hire" or any
ownership rights in the
Documentation be
assigned to Company. Documentation shall be treated as
Confidential
Information.
3.
LICENSE GRANTS.
3.1.
To
Company. Integral grants to Company a non-exclusive,
-----------
non-sublicensable,
non-assignable,
worldwide license
under all of
Integral's
rights under
the Licensed Patents to (i) make, use, offer to sell, sell
or
import Licensed
Products in the Licensed Field; and (ii)
internally use the
Documentation and
information
provided solely for purposes of developing
and
manufacturing Licensed
Products in the Licensed Field.
3.2.
No
Foundry Rights.
Without limiting the
restrictions on "private
------------------
labeling" as provided in Section 1.2 above, Section 3.1 shall not
be interpreted
as granting
any rights to Company
to manufacture Third Party Products, wherein
such products
are designed by the Third Party without substantial
input of
Company and
such products are essentially sold only to that
designing Third
Party.
3.3.
Ownership. Except
as expressly set forth in this Agreement,
---------
nothing in this Agreement shall be construed as a grant of any
license or rights
by implication or estoppel and Integral retains all right, title
and interest in
and to the Licensed Patents. All rights not expressly granted by
Integral
hereunder are
reserved and retained by Integral,
including but not limited to
Integral's rights
in the Technology not covered by the Licensed Patents.
3.4.
New
Joint Developments.
------------------------
3.4.1. All technology, information and inventions ("New
Developments"),
whether or
not patentable, developed jointly by
Integral and
Company that concern the Technology (including the manufacture or
formulation of
the Raw Materials) shall be the exclusive property of Integral.
3.4.2. Except
for New Developments that concern the
Technology,
all New Developments, whether or not
patentable, developed jointly by Integral
and Company
that concern the
design or manufacture of fabricated products made
using the Raw Materials shall be the exclusive property of
Company; provided
that Company
shall have no rights
in the Technology or Licensed Patents except
as provided
pursuant to the delivery of Raw Materials by Integral.
3.4.3. All other New Developments not
addressed in Sections 3.4.1
and 3.4.2 that are jointly developed by the
Parties under this Agreement shall
be jointly
owned by the Parties;
provided that Company shall have no rights in
the Technology
or Licensed Patents
except as provided pursuant to the delivery
of Raw Materials by Integral.
3.4.4. The Parties agree to discuss in good
faith whether and how
to jointly
prosecute or enforce any patents based on jointly owned New
Developments in
a mutually agreed fashion.
INTEGRAL PROPRIETARY AND CONFIDENTIAL
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<PAGE>
3.4.5. Neither
Party shall be obligated to pay the other any
royalties or other
consideration, nor account to the other for any royalties or
other consideration it may receive, for any licenses, assignment,
sale, lease or
other distribution
of the jointly owned New Developments or any
derivative
technology
thereof.
3.4.6. Any such derivative technology made after
the termination
or expiration
of this Agreement shall be owned
exclusively by the creator of
such derivative
technology.
3.4.7. Additionally,
regardless
of subject matter, all New
Developments
discovered or
developed by one Party without the participation of
the other Party shall
become the sole property of the discovering or developing
Party; provided that
Company shall have no rights in the Technology or Licensed
Patents except
as provided pursuant to the delivery of Raw Materials by
Integral.
4.
CONSIDERATION.
Upon execution
of this Agreement, Company shall pay
Integral a non-refundable
fee of One U.S. Dollar ($1.00).
5.
RAW MATERIALS
FEES.
The Parties
agree to use good
faith efforts to reach agreement on commercially
reasonable terms for the pricing and delivery of the Raw Materials
to Company by
Integral, and that agreement regarding the pricing and delivery of
Raw Materials
shall be memorialized as an amendment to this Agreement.
6.
ENFORCEMENT OF
PATENT RIGHTS.
6.1.
Notice; Enforcement.
In the event that Company becomes
aware of
--------------------
actual or threatened infringement of the Patent Rights by a Third Party
involving Licensed
Products, Company shall promptly notify Integral in writing.
Integral may, at its discretion, take corrective action against the
Third Party,
and may identify
Company as having rights under the Licensed Patents. Integral
shall not name Company as a co-party in any such action
without an express
written request
from Company.
6.2.
Infringement Action.
In the event Integral brings an infringement
-------------------
action against a Third
Party, such action shall be at no cost to Company unless
Company joins
the suit as a co-party, and any recovery shall go solely
to
Integral. Company
is under no obligation to join any
such action and Integral
must approve
the addition of Company as a co-party.
7.
TERM AND TERMINATION.
7.1.
Term. This
Agreement shall be in full force and effect
from the
----
Effective Date
and shall remain in effect until the expiration of the
last
patent contemplated
to be licensed by this Agreement, or until otherwise
terminated pursuant
to the terms and conditions of this Agreement.
7.2.
Termination. Company
may terminate this Agreement upon thirty
-----------
(30) days'
written notice at any time. Either Party may terminate this
Agreement immediately
upon written notice at
any time if the other Party is in
material breach
of any material warranty, term or
condition of this Agreement
and has failed to cure
that breach within thirty (30) days after written notice
thereof. Integral may
terminate this Agreement upon written notice in the event
(i) Company
institutes
any action or proceeding in which it claims
that any
Licensed Patent
is invalid or unenforceable; or (ii) Company
institutes any
action (including
by counter or cross-claim) alleging
that Integral infringes
any Company patent
and/or patent application. The terminating Party will
incur
no liability
to the other Party for damages of any
kind resulting solely from
terminating this
Agreement in accordance with its terms.
7.3.
Effect of Expiration or Termination. Upon expiration or
---------------------------------------
termination of this
Agreement, (i) Company shall pay all sums accrued hereunder
prior to such termination, (ii) Integral shall have the right to
retain any sums
already paid by
Company for this license and for any Raw Materials delivered or
created for Company
prior to expiration or termination, and (iii) Company shall
return or certify in
writing that it has destroyed all Documentation. Upon the
termination of
this Agreement, Company shall
INTEGRAL PROPRIETARY AND CONFIDENTIAL
PAGE 3 OF 12
<PAGE>
have the right to use or sell all Licensed
Product on-hand at the time of such
termination, provided that Company shall be obliged to pay Integral
a royalty on
use or such sales as set forth in this Agreement.
7.4.
Survival. In
the event of expiration or termination of this
--------
Agreement for
any reason, the
following sections will survive such termination
or expiration:
1, 3.4, 7.4, and 8 - 11.
8.
WARRANTIES,
REPRESENTATIONS, AND
COVENANTS;
DISCLAIMER.
8.1.
Mutual Representations
and Warranties. Each Party represents,
----------------------------------------
warrants, and
covenants that: (i) this Agreement has been duly and
validly
executed and
delivered by such Party and constitutes a legal and binding
obligation of
such Party,
enforceable against it in accordance with its terms;
(ii) such Party has
all necessary power and authority to execute and perform in
accordance with
this Agreement; and
(iii) such Party's execution, delivery and
performance of this Agreement will not conflict with or violate any
provision of
law, rule or regulation to which it is subject, or any agreement or
other
obligation directly
or indirectly
applicable to such Party or binding upon its
assets.
8.2.
Representations and
Warranties of
Integral. Integral
represents
--------------------------------------------
and warrants
that (i) it has the lawful right to grant
the license set forth
herein; and
(ii) as of the Effective Date, the Licensed Patents listed
in
Exhibit A are issued, unexpired, valid according to the U.S. Patent and
Trademark Office
and in good standing.
8.3.
Representations,
Warranties, and
Covenants of Company.
Company
--------------------------------------------------------
warrants that it has and will have throughout the Term the lawful
right to grant
the licenses
contemplated
herein.
8.4.
WARRANTY DISCLAIMER.
EXCEPT AS PROVIDED IN
SECTIONS 8.1, AND 8.2
--------------------
ABOVE, INTEGRAL
EXPRESSLY DISCLAIMS ALL WARRANTIES, EXPRESS, IMPLIED OR
STATUTORY, INCLUDING
BUT NOT LIMITED TO ANY IMPLIED WARRANTIES OF
MERCHANTABILITY,
FITNESS FOR A PARTICULAR PURPOSE, OR NONINFRINGEMENT, ALL WITH
RESPECT TO
THE PATENTS,
DOCUMENTATION, AND ANY OTHER MATERIALS OR INTELLECTUAL
PROPERTY PROVIDED
OR LICENSED UNDER THIS AGREEMENT. IN ADDITION, NOTHING IN
THIS AGREEMENT
SHALL BE CONSTRUED AS (I) A WARRANTY OR REPRESENTATION BY
INTEGRAL OF
THE VALIDITY OR SCOPE OF ANY OF THE LICENSED PATENTS; (II)
A
WARRANTY OR
REPRESENTATION
THAT ANYTHING MADE, USED, SOLD OFFERED FOR
SALE,
IMPORTED, OR
OTHERWISE DISPOSED OF
UNDER ANY LICENSE GRANTED IN THIS AGREEMENT
IS OR SHALL BE FREE
FROM INFRINGEMENT OF PATENTS OR PROPRIETARY RIGHTS OF THIRD
PARTIES; OR
(III) AN AGREEMENT BY INTEGRAL TO BRING OR PROSECUTE
ACTIONS OR
SUITS AGAINST
THIRD PARTIES FOR INFRINGEMENT OF THE PATENT RIGHTS.
9.
INDEMNIFICATION.
Each Party (the
"INDEMNIFYING PARTY") will indemnify, hold harmless, and defend
the other Party (the "INDEMNIFIED PARTY") and its subsidiary and parent
entities, successors,
affiliates,
and assigns, and all of their respective
officers, directors,
members, stockholders, agents, employees,
and attorneys,
from any and all actions, causes of action, suits, proceedings,
claims, demands,
judgments, bona
fide settlements, penalties, damages, losses, liabilities,
costs, and expenses (including without limitation reasonable
attorneys' fees and
costs and those necessary to interpret or enforce this Section 9)
arising out of
or relating
to any claim or allegation arising out of (i) the
Indemnifying
Party's breach
of this Agreement, including without
limitation the warranties
set forth in Section 8 above; or (ii) in the case where Company is the
Indemnifying Party,
the manufacture, use, or sale of any Licensed Product,
including, but not limited to any damages, losses or liabilities
whatsoever with
respect to death or injury to any person and damage to any property
arising from
the possession,
use or operation of the Licensed Product
by Company or their
customers in any
manner whatsoever; except to the extent that the claim results
from Integral's
infringement
of the intellectual
property rights of any third
party. The
Indemnified
Party may, at its expense, employ
separate counsel to
monitor and
participate
in the defense of any claim that the
INTEGRAL PROPRIETARY AND CONFIDENTIAL
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<PAGE>
Indemnifying Party is
defending under this Section. The Indemnified Party will
provide the
Indemnifying Party
with reasonably prompt notice in writing of any
claim to which this Section relates.
10.
CONFIDENTIALITY.
A Party receiving
Confidential Information (the "RECEIVING PARTY") of the other
Party (the "DISCLOSING
PARTY") shall not disclose or make any use of any of the
Disclosing Party's
Confidential
Information except
expressly as authorized in
writing by
the Disclosing Party. Authorized uses include use
related to the
implementation of this
Agreement. The
Receiving Party agrees to take all steps
reasonably requested
by the Disclosing Party to confirm and protect the
Disclosing Party's
interests in the
Confidential Information. For purposes of
clarification,
Confidential
Information shall not include information that the
Receiving Party can
establish by written evidence: (i) entered or subsequently
enters the public
domain without the Receiving Party's breach of any obligation
owed the Disclosing Party; (ii) became known to the Receiving Party
prior to the
Disclosing Party's
disclosure of such information to th
