Non-Exclusive License Agreement for Exploitation of a Secret Process

Non-Exclusive License Agreement for Exploitation of a Secret Process

Agreement made on the day of , 20,

between (Name of Corporation), a corporation organized and existing under the laws of the state of , with its principal office located at

(street address, city, county, state, zip code), referred to herein as Owner, and (Name of Corporation), a corporation organized and existing under the laws of the state of , with its principal office located at

(street address, city, county, state, zip code), referred to herein as Manufacturer.

Whereas, Owner has the exclusive knowledge, possession, and ownership of certain processes (collectively, the Process), which Process may be generally described as (describe Process)

on a limited scale; and

Whereas, Manufacturer desires to manufacture and sell in profitable quantities, but it cannot do so without first obtaining the right to use the Process; and

Whereas, Owner is willing to grant such rights as Manufacturer requires on the terms set forth in this Agreement;

Now, therefore, for and in consideration of the mutual covenants contained in this agreement, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties agree as follows:

1. Use of Process

Owner grants to manufacturer the non-exclusive right to use the process in the manufacture of and such other products as the parties may agree on from time to time. Owner will fully instruct and advise employees of Manufacturer in all aspects of the Process and in the practical application and use of the Process. From now on, Owner will devote to improvement and further development of the Process such time and effort as may be necessary for maximum feasible exploitation of the Process.

2. Warranty of Owner

Owner covenants and warrants that at no time previously has it imparted to anyone any part of the Process, that no person now has any knowledge obtained through Owner in regard to the same, and that it will at all times preserve the secrecy of the same.

3. Royalties

As consideration for the rights granted under this Agreement, Manufacturer will pay to Owner royalties according to the following schedule:

A. For an initial period ending , % of the net selling price of all and other products manufactured and sold pursuant to this Agreement;

B. Subsequently, % of the net selling price of all and other products manufactured and sold pursuant to this Agreement.

C. Accrued royalties shall be paid on the day of each month. For purposes of this Agreement, "net selling price" means (define)

D. Regardless of output and sales, the minimum royalty payable to Owner during the term of this Agreement shall be $ per month.

4. Best Efforts

Manufacturer shall begin manufacture and sale of , and such other products as are agreed on, without undue delay. It will devote its best efforts to establishing and expanding a market for the various products manufactured pursuant to this Agreement.

5. Accounting

Manufacturer shall keep complete and accurate records of all transactions relative to products manufactured and sold pursuant to this Agreement, and shall render statements to Owner on request. For the purpose of verifying such statements, Owner shall have the right to examine the books and records of Manufacturer relative to the transactions. Such examinations may be made at any time during regular business hours.

6. Owner’s Covenant Not to Compete

As long as this Agreement is in force, Owner will not engage in any manner in the Manufacture of products the same as or essentially similar to products manufactured and sold by Manufacturer pursuant to this Agreement.

7. Duration of Agreement; Termination

This Agreement shall continue in force until . At the end of the initial term, the Agreement may be extended by mutual agreement of the parties, and if either party elects not to extend the term, the Agreement will terminate on the above-mentioned date.

8. Confidential Information.

Confidential Information in this Agreement shall mean all information and any idea in whatever form, tangible or intangible, whether disclosed to or learned by the Manufacturer, pertaining in any manner to the business of the Owner, whether in written, oral, encoded, graphic, magnetic, electronic or in any other tangible or intangible form, and whether or not labeled as confidential by the Owner or otherwise provided by the Manufacturer. Confidential Information includes, without limitation, the following: (a) schematics, techniques, employee suggestions, development tools and processes, computer printouts, computer programs, design drawings and manuals, and improvements; (b) information about costs, profits, markets and sales; (c) plans for future development and new product concepts; and (d) all documents, books, papers, drawings, models, sketches, and other data of any kind and description, including electronic data recorded or retrieved by any means, that have been or will be given to the Manufacturer by the Owner, as well as written or verbal instructions or comments.

9. Non-Disclosure.

Manufacturer shall hold all Confidential Information in strict confidence and shall not disclose any Confidential Information to any third party, without the prior written approval of the Owner. Manufacturer shall disclose Confidential Information only to employees who need to know such information and who have signed agreements that obligate them to treat Confidential Information as required under this Agreement. Manufacturer shall take all reasonable measures to protect the confidentiality and avoid the unauthorized use, disclosure, publication, or dissemination of Confidential Information; provided, however, that such measures shall be no less stringent than measures taken to protect its own confidential and proprietary information. Manufacturer acknowledges that the Owner is neither responsible nor liable for any business decisions made by the Manufacturer in reliance upon any Confidential Information disclosed pursuant hereto.

10. Remedies.

Manufacturer agrees that the unauthorized disclosure or use of Confidential Information will cause irreparable harm and significant injury, which may be difficult to ascertain. The Manufacturer recognizes that its violation of this Agreement could cause the Owner irreparable harm and significant injury, the amount of which may be extremely difficult to estimate, thus, making any remedy at law or in damages inadequate. Therefore, the Manufacturer agrees that the Owner shall have the right to apply to any court of competent jurisdiction for an order restraining any breach or threatened breach of this Agreement and for any other relief the Owner deems appropriate. This right shall be in addition to any other remedy available to the Owner in law or equity.

11. Non-Circumvent Agreement

Manufacturer agrees not to disclose, reveal or make use of any information revealed during discussion or observation of the Process regarding methods, concepts, ideas, product/services, or proposed new products or services without the written consent of the Owner.

12. No Waiver

The failure of either party to this Agreement to insist upon the performance of any of the terms and conditions of this Agreement, or the waiver of any breach of any of the terms and conditions of this Agreement, shall not be construed as subsequently waiving any such terms and conditions, but the same shall continue and remain in full force and effect as if no such forbearance or waiver had occurred.

13. Governing Law

This Agreement shall be governed by, construed, and enforced in accordance with the laws of the State of .

14. Notices

Any notice provided for or concerning this Agreement shall be in writing and shall be deemed sufficiently given when sent by certified or registered mail if sent to the respective address of each party as set forth at the beginning of this Agreement.

15. Attorney’s Fees

In the event that any lawsuit is filed in relation to this Agreement, the unsuccessful party in the action shall pay to the successful party, in addition to all the sums that either party may be called on to pay, a reasonable sum for the successful party's attorney fees.

16. Mandatory Arbitration

Any dispute under this Agreement shall be required to be resolved by binding arbitration of the parties hereto. If the parties cannot agree on an arbitrator, each party shall select one arbitrator and both arbitrators shall then select a third. The third arbitrator so selected shall arbitrate said dispute. The arbitration shall be governed by the rules of the American Arbitration Association then in force and effect.

17. Entire Agreement

This Agreement shall constitute the entire agreement between the parties and any prior understanding or representation of any kind preceding the date of this Agreement shall not be binding upon either party except to the extent incorporated in this Agreement.

18. Modification of Agreement

Any modification of this Agreement or additional obligation assumed by either party in connection with this Agreement shall be binding only if placed in writing and signed by each party or an authorized representative of each party.

19. Assignment of Rights

The rights of each party under this Agreement are personal to that party and may not be assigned or transferred to any other person, firm, corporation, or other entity without the prior, express, and written consent of the other party.

20. Counterparts

This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original, but all of which together shall constitute but one and the same instrument.

WITNESS our signatures as of the day and date first above stated.