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 Heatron, Inc. a Missouri
corporation with offices at 3000 Wilson Avenue, Leavenworth, KS 66048
("HEATRON") and is effective as of March 17, 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, Heatron wishes to obtain a non-exclusive license under such patents to
develop, manufacture, and sell certain products.
NOW, THEREFORE, in consideration of the premises 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.
a. "AFFILIATE" means any corporation or other business entity controlled
by, controlling, or under common control with Heatron, Inc. For this
purpose, "control" means direct or indirect beneficial ownership of
stock sufficient to vote on the election of a director, or at least
fifty percent (50%) interest in the income of such corporation or
other business entity.
b. "HEATRON" means Heatron, Inc. and all of its Affiliates collectively.
c. "LICENSED PRODUCT" means a product or composition that (i) contains at
least one Product; (ii) uses Raw Materials; and (iii) is either
branded with a Heatron brand or is designed by Heatron and sold in
Heatron's ordinary course of business.
d. "PARTY" means Heatron or Integral and when used in plural, means
Heatron and Integral.
e. "PATENT RIGHTS" means all rights granted under the Patents.
f. "PATENTS" means all patent claims in the (i) patents, provisional
patent applications, and utility patent applications set forth in
Exhibit A; (ii) any divisions, continuations, continuations-in-part,
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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). Patent
Rights 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.
g. "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
Patents; or (ii) produced by a process, the practice of which is
covered by at least one claim of the Patents.
h. "RAW MATERIALS" means the ElectriPlast,TM Technology, as provided by
Integral on a per weight basis for use in manufacturing Licensed
Products.
i. "TECHNOLOGY" means Integral's proprietary ElectriPlast,TM technology,
portions of which may be covered by the Patents. The Technology,
sometimes referred to as ElectriPlast,TM is a compounded, pelletized
formulation of resin-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
INTEGRAL PROPRIETARY AND CONFIDENTIAL
PAGE 1 OF 7
then homogenized using conventional molding techniques and
conventional molding equipment. The resulting polymer is electrically
conductive.
j. "THIRD PARTY" means corporate entities or individuals other than
Integral or Heatron.
2. TECHNOLOGY TRANSFER SERVICES. Integral shall provide Heatron with
commercially reasonable technology transfer services related to the
Technology ("TECHNOLOGY TRANSFER"), on a date and at a location mutually
agreeable to the Parties, at Integral's standard hourly rates for the
provision of technology transfer consulting services. If Heatron requests
that all or part of the Technology Transfer take place at facilities other
than Integral's place of business, Heatron shall reimburse Integral for its
reasonable and actual meals, travel, and lodging expenses incurred as a
result of providing such Technology Transfer. Integral may, but is not
obligated to, provide Heatron with certain pre-existing or developed
written materials as part of the Technology Transfer ("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
Heatron. By way of clarification, Integral's rights in the Technology under
U.S. patent application numbers 10/883,915 and 11/313,915 are not licensed
under this Agreement, except as otherwise covered under the Patents.
3. LICENSE GRANT.
a. To Heatron. Integral grants to Heatron a non-exclusive,
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non-sublicensable, non-assignable, worldwide license, under the Patent
Rights, to (i) make, use, offer to sell, sell or import Licensed
Products; and (ii) internally use the Documentation and information
provided as part of any Technology Transfer solely for purposes of
developing and manufacturing Licensed Products. However, Integral
agrees that Heatron's rights under this section will be exclusive for
two years from the Effective Date. That exclusivity period may be
extended by mutual agreement of the parties, as memorialized in an
amendment to this Agreement. No other rights are granted hereby under
any patent rights, copyrights or trade secret rights owned by
Integral, including but not limited to Integral's rights in the
Technology not covered by the Patents.
b. New Joint Developments. All technology, information and inventions
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("New Developments"), whether or not patentable, developed jointly by
Integral and Heatron that concern the Technology (including the
manufacture or formulation of the Raw Materials) shall be the
exclusive property of Integral. All New Developments, whether or not
patentable, developed jointly by Integral and Heatron that concern the
design or manufacture of fabricated products made using the Raw
Materials shall be the exclusive property of Heatron; provided that
Heatron shall have no rights in the Technology or Patents except as
provided pursuant to the delivery of Raw Materials by Integral. All
other New Developments jointly developed by the Parties under this
Agreement shall be jointly owned by the Parties; provided that Heatron
shall have no rights in the Technology or Patents except as provided
pursuant to the delivery of Raw Materials by Integral. 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. 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. Any such
derivative technology made after the termination or expiration of this
Agreement shall be owned exclusively by the creator of such derivative
technology. 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 Heatron shall have no
rights in the Technology or Patents except as provided pursuant to the
delivery of Raw Materials by Integral.
INTEGRAL PROPRIETARY AND CONFIDENTIAL
PAGE 2 OF 7
4. PAYMENTS.
a. Up-Front Payment. Upon execution of this Agreement, Heatron shall pay
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Integral a non-refundable up-front fee in the amount of One Dollar
($1.00).
b. Raw Materials Fees. The Parties agree to use good faith efforts to
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reach agreement on commercially reasonable terms for the pricing and
delivery of the Raw Materials to Heatron by Integral, and that
agreement regarding the pricing and delivery of Raw Materials shall be
memorialized as an amendment to this Agreement.
5. [SECTION NUMBER RESERVED AND NOT USED]
6. ENFORCEMENT OF PATENT RIGHTS.
a. Notice; Enforcement. In the event that Heatron becomes aware of actual
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or threatened infringement of the Patent Rights by a Third Party
involving Licensed Product, Heatron shall promptly notify Integral in
writing. Integral may, at its discretion, take corrective action
against the Third Party, and may identify Heatron as having rights
under the Patents. Integral shall not name Heatron as a co-party in
any such action without an express written request from Heatron.
b. 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
Heatron unless Heatron joins the suit as a co-party, and any recovery
shall go solely to Integral. Heatron is under no obligation to join
any such action and Integral must approve the addition of Heatron as a
co-party.
7. TERM AND TERMINATION.
a. 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.
b. Termination. Heatron may terminate this Agreement upon thirty (30)
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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) Heatron institutes
any action or proceeding in which it claims that any Patent is invalid
or unenforceable; or (ii) Heatron institutes any action (including by
counter or cross-claim) alleging that Integral infringes any Heatron
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.
c. Effect of Expiration or Termination. Upon expiration or termination of
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this Agreement, (i) Heatron shall pay all sums accrued hereunder prior
to such termination, (ii) Integral shall have the right to retain any
sums already paid by Heatron, and (iii) Heatron shall return or
certify in writing that it has destroyed all Documentation. Upon the
termination of this Agreement, Heatron shall have the right to use or
sell all Licensed Product on-hand at the time of such termination,
provided that Heatron shall be obliged to pay Integral a royalty on
use or such sales as set forth in this Agreement.
d. Survival. In the event of expiration or termination of this Agreement
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for any reason, the following sections will survive such termination
or expiration: 1, 3(b), 7(d), and 8 - 11.
8. WARRANTIES, REPRESENTATIONS, AND COVENANTS; DISCLAIMER.
a. 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)
INTEGRAL PROPRIETARY AND CONFIDENTIAL
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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.
b. Representations and Warranties of Integral. Integral represents and
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warrants that (i) it has the lawful right to grant the license set
forth herein; and (ii) as of the Effective Date, the patents listed in
Exhibit A are issued, unexpired, valid according to the U.S. Patent
and Trademark Office and in good standing.
c. Representations, Warranties, and Covenants of Heatron. Heatron
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warrants that it has and will have throughout the Term the lawful
right to grant the licenses contemplated herein.
d. WARRANTY DISCLAIMER. EXCEPT AS PROVIDED IN SECTIONS 8(A), AND 8(B)
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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 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 PATENTS OR PATENT RIGHTS; (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. INDEMIFICATION. Each Party (the "INDEMNIFYING PARTY") will indemnify, hold
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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 a arising out of (i) the Indemnifying Party's breach of
this Agreement, including without limitation the warranties set forth in
Sections 8(a) and 8(b) above; or (ii) in the case where Heatron 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
Heatron or their customers in any manner whatsoever. The Indemnified Party
may, at its expense, employ separate counsel to monitor and participate in
the defense of any claim that the 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
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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,
INTEGRAL PROPRIETARY AND CONFIDENTIAL
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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 the Receiving
Party; (iii) became known to the Receiving Party from a source other than
the Disclosing Party other than by the breach of an obligation of
confidentiality owed to the Disclosing Party; or (iv) is independently
developed by the Receiving Party without reference to any of the Disclosing
Party's Confidential Information. The term "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 the Technology
Transfer; (v) the terms of this Agreement; and (v) any information
disclosed by Heatron pursuant to Section 3.
11. GENERAL.
a. Notices. All notices, requests, consents, approvals, or authorizations
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in connection with this Agreement: (i) must be given in writing; and
(ii) will be deemed given as of (a) the day they are delivered on
paper by a nationally recognized express delivery service (such as
Federal Express or DHL), addressed as set forth below; or (b) three
(3) days after they are deposited in the sender's national mail
system, postage prepaid, certified or registered, return receipt
requested, and addressed as follows:
To Integral: 805 West Orchard Street, #7, Bellingham, WA 98225, Attn:
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William Robinson
To Heatron:3000 Wilson Avenue, Leavenworth, KS 66048; Attn: Michael W.
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Keenan, CEO
Either Party may change the address above by giving notice to the
other Party pursuant to this Section 11.1.
b. Assignment. Integral may assign this Agreement or its rights and
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duties under this Agreement, but Heatron may not undertake any
assignment of this Agreement or any of its rights and duties under
this Agreement without Integral's prior written consent. However,
Heatron may assign this Agreement without Integral's prior written
consent as part of a merger, or a sale or transfer of all or
substantially all of its assets, provided such merger or sale is not
with or to a competitor of Integral. Any attempted assignment by
Heatron of this Agreement or all or part of its rights and/or
obligations under this Agreement without Integral's prior written
consent (except as provided by the prior sentence) will be voidable at
Integral's option. This Agreement will bind each Party's heirs and
personal representatives, and inure to the benefit of each Party and
its successors, heirs and/or personal assigns.
c. Dispute Resolution. This Agreement will be governed by and construed
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in accordance with the laws of the State of Washington as such laws
apply to contracts performed within Washington by its residents. Any
dispute arising under or relating to this Agreement or concerning its
interpretation will be resolved exclusively by binding arbitration
conducted under the Commercial Arbitration Rules of the American
Arbitration Association. Any such arbitration shall take place in King
County, Washington. In any action to enforce any right or remedy under
this Agreement or to interpret any provision of this Agreement, the
prevailing Party will be entitled to recover its costs, including
attorneys' fees.
d. No Joint Venture. Nothing in this Agreement will be construed to mean
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that any Party is appointed or in any way authorized to act as an
agent of any other Party. This Agreement does not create any joint
venture, partnership or formal business entity or organization of any
kind.
INTEGRAL PROPRIETARY AND CONFIDENTIAL
PAGE 5 OF 7
e. Waiver. No waiver of any provision of this Agreement will be effective
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unless it is in a signed writing, and no such waiver will constitute a
waiver of any other provision(s) or of the same provision on another
occasion.
f. Severability. If a court of competent jurisdiction holds any term,
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covenant or restriction of this Agreement to be illegal, invalid or
unenforceable, in whole or in part, the Parties agree to negotiate in
good faith to create an appropriate amendment to the remaining terms,
covenants and provisions that will replicate the economic effect of
the Parties' intentions under this Agreement.
g. Injunctive and Equitable Relief. Each Party acknowledges and agrees
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that monetary damages may not be a sufficient remedy for a breach of
the terms of this Agreement respecting Confidential Information, and
that such breach will cause the owner of that Confidential Information
immediate and irreparable injury. In such cases, the non-breaching
Party will be entitled, without waiving or prejudicing any other
rights or remedies, to injunctive or equitable relief.
h. Entire Agreement; Amendments. This Agreement is not an offer by
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Integral and it is not effective until signed by both Parties. This
Agreement, including the Exhibits attached hereto which are
incorporated by this reference, constitutes the entire agreement
between the Parties with respect to the subject matter hereof and
merges all prior and contemporaneous communications and proposals,
whether electronic, oral or written, between the Parties with respect
to such subject matter. This Agreement may not be modified except by a
written agreement dated subsequent to the date of this Agreement and
signed by duly authorized representatives of Integral and Heatron.
IN WITNESS WHEREOF, both Integral and Heatron have executed this Agreement, in
duplicate originals by their respective officers hereunto duly authorized.
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INTEGRAL TECHNOLOGIES, INC. HEATRON, INC.
By: /s/ William S. Robinson By: /s/ Michael W. Keenan
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Title: Chairman and CEO Title: CEO
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INTEGRAL PROPRIETARY AND CONFIDENTIAL
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EXHIBIT A
LICENSED PATENTS AND PATENT APPLICATIONS
1. U.S. Patent Application No. 10/819,809 (Publication No. 20040189170)
(Plastilight) - Low cost lighting circuits manufactured from conductive loaded
resin-based materials
2. U.S. Patent Application No. 10/819,808 (Publication No. 20040188418)
(Plastiheater) - Low cost heating devices manufactured from conductive loaded
resin-based materials
INTEGRAL PROPRIETARY AND CONFIDENTIAL
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