TRADEMARK LICENSE
AND
CONTRACT ASSIGNMENT AND
ASSUMPTION AGREEMENT
THIS TRADEMARK LICENSE AND CONTRACT ASSIGNMENT
AND ASSUMPTION AGREEMENT (" Agreement ") is made
and entered into as of June 15, 2005 by and between Aronite
Industries, Inc., a Nevada corporation (" Aronite
"), and Special Stone Surfaces, Es3 Inc., a Nevada corporation ("
Es3 "), with respect to the following
facts:
A. Aronite was engaged in the business of
distributing decorative coatings that can be applied to resemble
stone.
B. Es3, among other businesses, intends to engage
in a similar business and wishes to procure from Aronite certain
rights and contract obligations on the terms set forth in this
Agreement.
THEREFORE, in consideration of the foregoing
premises and the mutual covenants contained in this Agreement, the
parties agree as follows:
a.
License . hereby grants Es3 a thirty year exclusive,
transferable, sub-licensable, except as expressly provided in this
Agreement, non-assignable, terminable, license to use any and all
(i) trademarks or tradenames that Aronite owns, whether or not
registered with the patent and trademark office ("Licensed
Trademarks") and (ii) marketing collateral, including source files
and images ("Marketing Collateral").
b.
Control . This license is limited to use in North
America, Central America and South America for the authorized uses
specified herein. Es3 acknowledges and agrees that any and all use
of the Licensed Trademarks by Es3 inures solely to the benefit of
Aronite and that Aronite reserves the right in its sole discretion
to control the nature and quality of the goods sold or services
rendered by Es3 utilizing the Licensed Trademarks.
c.
Ownership by Aronite
. Es3 acknowledges and agrees that
Aronite holds all right, title and interest in the Licensed
Trademarks. Any and all goodwill arising from Es3's use of the
Licensed Trademarks shall inure solely to the benefit of Aronite,
and neither during nor after the termination of this Agreement and
the license granted hereunder shall Es3 assert any claim to the
Licensed Trademarks (or any confusingly similar mark) or such
goodwill. Es3 shall not directly or indirectly, during the term of
this Agreement or thereafter, through itself or third parties,
challenge Aronite's rights in the Licensed Trademarks. In no event
shall Es3 seek to register any Licensed Trademark or any other mark
used by Aronite in any country, state or territory thereof. In the
event that the laws, regulations or practices of any legal
jurisdiction convey any right in any Licensed Trademark used by
Aronite to Es3, Es3 hereby assigns such right or interest to
Aronite and agrees to enter into any further documentation required
by Aronite, in its sole discretion, to perfect ownership of such
right or interest in Aronite. Es3 agrees to ensure that its
successors, assigns and affiliated companies, if any, comply with
the terms of this provision.
a.
Prices . Es3 shall pay to Aronite the applicable
royalties set forth on Exhibit A for the Licensed Trademarks and
the Marketing Collateral and other exclusive rights provided
pursuant to this Agreement.
b.
Payments . Es3 will report its sales of products using
the Licensed Trademarks to Aronite quarterly within thirty (30)
days of the end of each calendar quarter. The report will include
the information reasonably necessary to calculate the royalties due
hereunder. At the time of furnishing the report, Es3 will pay to
Aronite all unpaid royalties that accrued during the prior calendar
quarter.
c.
Interest . Es3 shall pay to Aronite interest on overdue
payments at an annual rate of 18 percent, compounded monthly, or,
if lower, the maximum rate permitted by law.
d.
Taxes . All payments to Aronite hereunder shall be net
of all VAT, customs duties, sales, use and other taxes or charges
that may be imposed upon such payments. If Es3 shall be obliged to
deduct any withholding tax from the royalties to be paid pursuant
to this Agreement in accordance with any applicable tax law, Es3
shall (i) pay such additional amounts as are necessary to ensure
that the net amount actually received by Aronite, free and clear of
all such taxes, will equal the full amount that Aronite would have
received had no such taxes been levied, and (ii) promptly provide
Aronite with the necessary certificate required by any applicable
tax law showing, inter alia, that such deductions have been made.
Aronite shall, at the request of Es3, apply for, and use reasonable
endeavors to obtain, an exemption certificate or direction to pay
gross in relation to withholding taxes on royalties under any
applicable tax law.
3.
Buy Out
Option. All of the
Licensed Trademarks and Marketing Collateral and related
intellectual property under this Agreement may be purchased by Es3
at its option at any time in accordance with the formula
established in Exhibit A.
4.
Contract Assignment and
Assumption . Aronite
hereby assigns all of Aronite's rights and obligations under that
certain Sublicense and Distribution Agreement dated as of April 30,
2004 between Aronite and Fyfe Co. LLC (the " Fyfe
Agreement "). Es3 hereby accepts
the assignment of the Fyfe Agreement and assumes and agrees to
discharge, pay, perform and satisfy, effective as of the close of
business on the date hereof, all of the duties, liabilities and
obligations and covenants of Aronite pursuant to or under the Fyfe
Agreement. Es3 is not assuming or otherwise responsible for any
duties, liabilities and obligations of Aronite pursuant to or under
the Fyfe Agreement which came due prior to the date of this
Agreement. Es3 is not accepting or assuming or agreeing to
discharge, pay, perform or satisfy any duties, liabilities or
obligations other than the Fyfe Agreement. Without limiting the
generality of the foregoing, Es3 is not assuming any contracts,
warranty or support obligations for any Aronite
customers.
5.
Issuance of Es3
Shares. As
additional consideration for the licenses and assignment set forth
in this Agreement, and in addition to the assumption of the Fyfe
Agreement set forth herein, Es3 hereby transfers to Aronite
8,618,750 shares of its authorized but unissued Common
Stock.
6.
Indemnification by
Es3. Es3 agrees to
defend, indemnify and hold Aronite and its successors, officers,
directors, shareholders, employees and assigns harmless against any
and all losses or damages arising out of or in connection with
Es3’s performance of or failure to perform the obligations of
Aronite to be performed under the Fyfe Agreement after the date of
this Agreement.
7.
Indemnification by
Aronite. Aronite
agrees to defend, indemnify and hold Es3 and Es3's successors,
officers, directors, shareholders, employees and assigns harmless
against any
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