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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
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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
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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,
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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
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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,
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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.
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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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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
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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
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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
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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
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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,
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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
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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 oblig
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