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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report: August 28, 1997
Amour Fiber Core, Inc.
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(Exact name of registrant as specified in its charter)
Washington 0-28978 91-1705387
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(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation or organization.) File Number.) Identification No.)
1120 East Stevens, P.O. Box 42, Sultan, WA 98294 (360) 793-0146
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(Address, including zip code, and telephone number, including area code,
of registrant;
Principal executive offices and principal place of business)
Item 5. Other Events.
On August 8, 1997 Amour Fiber Core Inc. entered into a License Agreement with
AMREPRO Inc.
ITEM 7. Financial Statements and/or Exhibits
Exhibits
Exhibit No. Description
EX-99.3 License Agreement
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Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has dully caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
AMOUR FIBER CORE INC.
(Registrant)
Date: August 28, 1997 By: /s/ C.A. Tony Peterson
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C.A. Tony Peterson
Director and
Chief Financial and
Principal Accounting Officer
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LICENSE AGREEMENT
This Agreement is made this 8th day of August 1997, by and between AMREPRO,
Inc., a California company hereinafter referred to as ("Licensee") and Amour
Fiber Core Inc., a Washington corporation, hereinafter referred to as
("Licensor").
WHEREAS: AMREPRO, Inc., desires to enter into a sublicensing agreement wherein
they will acquire licensing rights to the fiberglass and resin unification
process of Amour Fiber Core, Inc., and utilize this process in combination with
quartz, quartzite, and all other types of rock base compounds; and
WHEREAS: Amour Fiber Core Inc. desires to enter into an agreement to sublicense
rights to manufacture products which utilize the fiberglass and resin
unification process of Amour Fiber Core, Inc.
NOW THEREFORE all parties agree:
1. DEFINITIONS AND REFERENCES. The following definitions and references shall
apply:
"Adjusted Gross Receipts" shall mean the price received by the Licensee for
the sale of the Product, with deduction for any sales commissions and expenses
paid by the Licensee as defined in Exhibit "A" attached hereto and incorporated
herein by reference.
"Confidential Information" shall mean the information, defined as
confidential under the terms of the "AFC CORPORATE NON-DISCLOSURE AGREEMENT,"
provided in Exhibit "B" and incorporated herein by reference.
"Developments" shall mean each and every invention, development or
modification of any product or process made by, for, from, or under the master
license held by the Licensor/Seller.
"Documentation" shall mean all information relating to the Intellectual
Property Rights, including but not limited to the Patents, Trademarks, trade
secrets, copyrights, and confidential information.
"Dollars and $" shall mean in all cases, unless otherwise stated, US
Dollars.
"Excluded Products" shall mean all Products and all applications of
products or material, the creation and manufacture of which does not utilize the
Amour Fiber Core, Inc., fiberglass and resin unification process.
"Exclusive Territory" shall mean all countries of the world.
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"Initial License Fee" shall mean the license fee paid for the license to
manufacture and sell the licensed Products and Products derived therefrom for
the term of the Agreement without execution of any Option.
"Intellectual Property" shall mean the Technical Information, the
Confidential Information, and the Developments.
"Intellectual Property Rights" shall mean all intellectual property rights
associated with the fiberglass and unification process including but without
limitation: (i) patents, copyright, rights in designs, trademarks and the right
to have Confidential Information kept confidential; (ii) any application or
right to apply for registration of any of the rights; and (iii) rights in
relation to the Intellectual Property.
"Know-How" means all knowledge and capabilities relating to the Product in
possession or control of Licensor or the Licensee or the techniques which have
been or are developed by Licensor which are used in manufacturing the Product,
or which are within the scope of the master license, or the Patent from which
the master license has been issued.
"New Intellectual Property" means the Developments.
"Option" shall mean the right to negotiate an extension of the license
Agreement for an additional term.
"Product or Products" shall mean any product or products manufactured or
marketed by Licensor or its representative or agent, or licensees, including
products incorporating New Intellectual Property.
"References" A reference to: a person shall include a corporation; a person
shall include the legal personal representatives, successors and assigns of that
person; this or any other document shall include the document as varied or
replaced and notwithstanding any change to the identity of the parties; and
writing shall include any mode of representing or reproducing words intangible
and permanently visible form and shall include telex and facsimile transmission.
"Term" shall mean that period of time defined for enjoyment of the license
rights granted under this Agreement.
"Termination Date" shall mean the date that the license rights granted
under this agreement to the Licensee is ended.
"Words" importing the singular shall include the plural and vice-versa; and
any gender shall include all other genders.
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2. LICENSE TO MANUFACTURE AND SELL
2.1 Licensor hereby grants to the Licensee upon payment of the Initial License
Fee an exclusive license to manufacture and sell the Product for sale within the
Territory for the Term in accordance with the provisions of this Agreement.
This license is granted under a Master License which is held by the Licensor.
2.2 The Licensee shall pay Licensor:
2.2.1 Upon the execution of this Agreement two hundred and fifty thousand
American dollars US $250,000.00 (the Initial License Fee); and
2.2.2 A royalty in the amount of five percent (5%) of the Adjusted Gross
Receipts of all products sold by the Licensee, payable in US Dollars within 20
business days after the end of each calendar month in the manner directed by
Licensor from time to time. Sold for the purpose of royalty payments shall mean
receipt of cash or cash equivalent from buyer, and shall be subject to
adjustments, offsets consistent with collections and buyers associated
adjustments and offsets. No royalty will be earned by Licensor from the
manufacture and sale of Excluded Products.
2.2.3 The sublicense right, to manufacture and sell the products which are
the result of the proprietary manufacturing process is subject to the terms of
this License Agreement which provides an exclusive right as to the world. The
license rights are for the rights to the utilization of the fiberglass and resin
unification process of the Licensor and the utilization of that process in
combination with quartz, quartzite, and all other types of rock and rock based
compounds to produce products.
3. OBLIGATIONS OF LICENSEE
3.1 The Licensee shall:
3.1.1 Use its best endeavors to develop and maintain a demand for,
promote and maximize the sales of the Product within the Territory;
3.1.2 Ensure that all of its sales and marketing personnel are adequately
trained as to Products features;
3.1.3 Obtain, promote and maintain the goodwill with its customers and
the public;
3.1.4 Consult with Licensor from time to time regarding market
developments and promotion of the Product;
3.1.5 Preserve the Intellectual Property Rights of Licensor;
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3.1.6 Annually provide to the Licensor an independently audited
statements as to the total gross sales, and the average gross sales price of
each product, the number of each product sold;
3.1.7 Maintain at all times sufficient stocks of promotional material to
ensure that prospective customers can be adequately informed as to the Products;
and
3.1.8 Use its best endeavors to achieve the maximum annual production.
4. REPRESENTATIONS BY THE LICENSEE
4.1 The Licensee represents and warrants that it shall not, without the
specific consent in writing of Licensor:
4.1.1 Use, as any part of its corporate or business name or logo in
trade, any word or symbol of Licensor or confusingly similar to any word or
symbol of Licensor and
4.1.2 Remove, deface or alter any trademark, service mark, or trade name
of Licensor in relation to the Products;
4.2 The Licensee represents and warrants that it shall not, without the
specific consent in writing of Licensor:
4.2.1 Market or sell any Products, or services manufactured under this
agreement, outside of the territory defined in this Agreement;
4.2.2 Represent to any person that it has authority to bind Licensor; or
4.2.3 Enter into any license or sublicenses.
5.0 PRODUCTION EQUIPMENT UPGRADES
5.1 Licensee is authorized to purchase manufacturing equipment replacement,
upgrade and expansion equipment from any source.
5.2 The Licensor agrees to, and will, offer the Licensee the option of
purchasing molds for new products developed by the Licensor and the Licensee
agrees to, and will, offer the Licensor the option of purchasing molds for new
products developed by the Licensee.
5.3 The parties will share results of any product or process test and whenever
feasible will cooperate in testing projects.
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6.0 PROTECTION OF TERRITORIES
6.1 All parties will cooperate in the protection of the marketing and sales
territories established by this agreement and all territories which the Licensor
may in the future grant to various parties as either exclusive or non-exclusive.
6.2 The parties agree to develop a policy and procedure to: direct interested
and potential customers to the Licensed product supplier for the specific
marketing and sales territory; and as appropriate to establish a compensation
schedule for such referrals.
6.3 The parties agree to develop a policy and procedure to: monitor sales;
cooperate in the detection; and enforcement of territory sales rights.
7. CONFIDENTIALITY
7.1 The Licensee agrees to keep confidential the Confidential Information and
to use it only as specifically authorized by this Agreement.
7.2 The Licensee may disclose Confidential Information only to those of its
employees with a need to know and must not disclose or authorize anyone to
disclose Confidential Information to any third party.
7.3 The Licensee must ensure that all employees and any other parties to whom
the Licensee/Purchaser discloses Confidential Information sign the "AFC
CORPORATE NON-DISCLOSURE AGREEMENT" and are aware of and comply with the
provisions of this Section 7.
7.4 The obligations of the Licensee to Licensor pursuant to this Clause shall
remain in force for a period of five (5) years following the end of the Term.
8. NEW INTELLECTUAL PROPERTY
8.1 Licensor and Licensee shall promptly, effectively and fully disclose to
each other, in writing, full details of all New Intellectual Property.
8.2 For and in consideration of the benefits conferred upon the Licensee
hereunder including the benefit of the Option granted to the Licensee pursuant
to Agreement, the Licensee agrees and acknowledges that by virtue of this
Section all New Intellectual Property developed by Licensor is the property of
Licensor and Licensee hereby assigns all worldwide rights to Licensor.
8.3 Licensee must, at the request and expense of Licensor, and without
compensation from Licensor sign all such documents and do all such things as
shall be necessary to vest, confirm, perfect and record ownership by Licensor
throughout the world of all right title and interest in and to any New
Intellectual Property developed by Licensor and to enable Licensor to acquire
and preserve such rights and to have full enjoyment thereof.
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9. TERM AND TERMINATION
9.1 This Agreement commences on the date indicated and terminates ten (10)
years for the date indicated, subject to earlier termination due to the
occurrence of a Terminating Event.
9.2 The License is hereby granted an Option to extend the License rights
hereunder for an additional period of ten (10) years upon the same terms and
conditions as this Agreement and upon payment of a further License fee of
US$250,000.00.
9.3 Either party may terminate this agreement if the other party commits any
breach of this Agreement and fails to remedy that breach within forty-five days
after receiving written notice of the breach.
9.4 Either party shall immediately notify the other party if it enters into
voluntary or involuntary liquidation, files for protection under the Bankruptcy
code, ceases to be able to make payment to its creditor, makes or causes to be
made an assignment of its assets or business whether in whole or in part for the
benefit of its creditors if a receiver or receiver and manager or trustee is
appointed to take over, administer or conduct all or a substantial part of its
business or if any resolution is passed or proceedings commenced for the winding
up of the other party.
9.5 Upon termination of this Agreement, the Licensee must immediately:
9.5.1 Stop using all marks and names associated with Licensor;
9.5.2 Return to Licensor all Intellectual Property in a material form;
and
9.5.3 Cease to represent that it is acting as the agent of Licensor.
9.6 Neither party shall be liable to the other for any loss of profits or
earnings or compensations from, whether directly or indirectly, the termination.
10. RESOLUTION OF DISPUTES
10.1 Other than the right to proceed with a injunctive relief or interlocutory
relief, the parties agree to proceed with a private dispute resolution procedure
prior to utilization of the judicial remedies.
10.2 A party claiming that a dispute has arisen must notify the opposing party
in writing of the disputed issues giving details of the dispute. During a
period of twenty (20) days after a notice is given, all parties shall use their
best endeavors to resolve the dispute.
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11. PAYMENTS AND TAX
11.1 Both in the U.S. and in foreign sales transactions the Licensee shall act
in accordance with the directions of the regulatory taxing agencies and shall
deduct and remit such monies as shall be required.
11.2 Licensor hereby acknowledges that the Licensee shall have discharged its
payment obligations if it remits any monies otherwise payable pursuant to this
Agreement less such amounts paid or payable pursuant to Paragraph 11.1 together
with payment details.
11.3 The Licensor shall act in accordance with the directions of the US
Federal, Washington State Taxation Office and the appropriate export licensing
agencies and shall consequently deduct and remit to same such monies as shall be
required.
11.4 Licensee hereby acknowledges that the Licensor shall have discharged its
payment obligations if it remits any monies otherwise payable pursuant to this
Agreement less such amounts paid or payable pursuant to Paragraph 11.3 together
with payment details.
12. ASSIGNMENT
The Licensee may not assign or attempt to assign any right arising out of this
Agreement unless the Licensee:
12.1 Is not in breach of this Agreement.
12.2 Ensures that the Assignee assumes all of the Licensee obligations under
this Agreement.
12.3 Obtains the prior written approval of Licensee, which approval will not
be unreasonably withheld.
13. WAIVER
The failure by either party at any time to insist on performance of any
provision of this Agreement is not a waiver of its rights at any later time to
insist on performance of that or any other provision of this Agreement.
14. NOTICE
14.1 A party notifying or giving "Legal Notice" under this Agreement must
notify:
14.1.1 In writing;
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14.1.2 Addressed to the address of the recipient specified in this
Agreement or as altered by notice given in accordance with this Agreement; and
14.1.3 Hand delivered or sent by pre-paid airborne package delivery to
that address.
14.2 The Legal Notice given shall be deemed received:
14.2.1 If hand delivered, on the date of delivery; and
14.2.2 If sent by pre-paid airborne package delivery on the date of
delivery.
14.2.3 Parties may give a courtesy notice by facsimile transmission;
however, such notice shall not be Legal Notice under this agreement.
15. SEVERABILITY
The parties agree:
15.1 To apply a construction to each provision of this Agreement that creates a
legal and enforceable provision.
15.2 That any legal unenforceable provisions shall be severed from this
Agreement and will not affect the continued operation of the remaining
provisions.
15.3 To use their best endeavors to replace any severed provision with a
provision having a commercial import as close as possible to the severed
provision.
16. GENERAL
16.1 The Licensor and the Licensee will jointly cooperate in the fulfillment of
the objectives and the terms of the agreement.
16.2. In implementing the functional and operational activities of this
agreement the parties will comply with the laws of all governments and
regulatory authorities which hold jurisdiction over these activities, and will
jointly develop the plans and procedures which will fulfill the objectives of
this agreement.
16.3 Headings are for ease of reference only and do not affect the construction
of this Agreement.
16.4. This Agreement constitutes the entire understanding and agreement among
the parties hereto with respect to the subject matter hereof and there are no
agreements, understandings, restrictions, representations or warranties among
the parties other than those set forth herein.
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16.5 If litigation be brought to enforce the terms of this Agreement by any
party hereto, the prevailing party to such litigation shall be entitled to
recover from the other party reasonable attorneys' fees as well as the costs of
suit incurred.
16.6 This Agreement may be executed in several counterparts, and as executed
shall constitute one Agreement binding upon all parties hereto, notwithstanding
that all parties are not signatory to the original, or to the same counterpart.
17. GOVERNING LAW
This Agreement is governed by and shall be interpreted in accordance with the
laws of the State of Washington, USA.
18. ENTIRE AGREEMENT
This Agreement, including its Exhibits and Attachments constitutes the entire
agreement between the parties as to its subject matter and supersedes all prior
representations and agreements in connection with that subject matter, and may
only be altered in writing which is executed by the parties. The executing
parties represent and warrant they have the power and authority to execute this
agreement on behalf of the represented party. The warranties expressed and
implied shall survive the expiration and termination of this agreement.
IN WITNESS WHEREOF THE PARTIES have executed this Agreement on the day, month
and year herein before mentioned.
Licensee:
/s/ GLENN L. GEARHART
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Mr. Glenn L. Gearhart, President
AMREPRO, Inc.
Licensor:
/s/ WILLIAM E. AMOUR
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Mr. William Amour, President
Amour Fiber Core, Inc.
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EXHIBIT A
DEFINITION OF ADJUSTED GROSS RECEIPTS
For purposes of this Agreement, "Adjusted Gross Receipts" shall mean the Net
Income before federal, state, and local income taxes (hereinafter referred to as
Net Income) earned by the Licensee directly from the licensed process. Net
Income shall be computed, on an accrual basis, as revenues minus expenses.
Expenses include, but are not be limited to, costs of materials, costs of labor,
costs of sales, and general and administrative costs.
Net Income shall be calculated in conformity with the Accounting Standards set
forth by the Financial Accounting Standards Board (FASB), which are commonly
referred to as Generally Accepted Accounting Principles (GAAP). As these
Accounting Standards are regularly updated, the calculation of Net Income shall
conform to these updated Accounting Standards, unless the application of these
updated Accounting Standards become inappropriate due to a major revision to the
IRS code, as an example, the institution of a flat tax or VAT tax system, at
which time, the calculation of Net Income, for the purpose of determining the
royalty fee, shall conform to the Accounting Standards set forth by the FASB as
of August 8, 1997.
Once per fiscal year, the Licensee shall compute the "Actual Royalty Fee", based
on the Net Income reported for the fiscal year end. The Licensor will then
calculate the difference between the "Actual Royalty Fee" and the aggregate of
all royalty fee payments submitted to the Licensor throughout the fiscal year.
Hence, royalty fee payments made in excess of the "Actual Royalty Fee" will be
credited to the Licensee and any shortage of payment will be submitted to the
Licensor within 60 days of the date that the fiscal year end financial
statements are finalized and issued.
The royalty fee shall be waived by the Licensor as to all Net Income earned from
products sold to the Licensor. Net Income earned from products sold to the
Licensor shall be calculated as follows:
Sales to Licensor/Seller X Net Income
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Gross Sales
AGREED:
Licensee: Licensor:
/s/ GLENN L. GEARHART /s/ WILLIAM E. AMOUR
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Mr. Glenn L. Gearhart, President Mr. William Amour, President
AMREPRO, Inc. Amour Fiber Core, Inc.
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EXHIBIT B
COMMITMENT DATE: August 8, 1997
AFC CORPORATE NON-DISCLOSURE AGREEMENT
This Agreement is entered into and made effective as of the date set forth
above, by and between Amour Fiber Core Inc., a Washington corporation,
(hereinafter "AFC"), and the Participant identified below (hereinafter
"Participant") and applies worldwide. Unless the Participant indicates that
this Agreement will apply to the Participant's entire company or only to a
specific division or location of a company, this Agreement will apply to the
Participant.
THE PARTIES AGREE AS FOLLOWS:
1. Confidential Information Transmittal Form. The confidential, propriety and
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trade secret information of the disclosing party (hereinafter "Confidential
Information") provided hereunder is that information described in the
Confidential Information Transmittal Record ("CITR") executed from time to time
hereafter. CITRs are subject to the terms of this Agreement. CITRs will be
executed by the parties prior to the disclosure of Confidential Information.
All information described in a CITR and marked with a "confidential",
"proprietary", or similar legend, will be deemed Confidential Information. All
Confidential Information received from the disclosing party will be in tangible
form. To be considered Confidential Information, verbal disclosures must be
reduced to writing, marked "confidential" and delivered to the receiving party
within thirty (30) days. The CITR will indicate the disclosing party, a
description of the Confidential Information disclosed, the names of the
representatives of the parties and the date when the disclosures covered by the
CITR commenced.
2. Obligations of Receiving Party. The receiving party will not disclose
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Confidential Information to any third party without the prior written approval
of the disclosing party. AFC and Participant may disclose Confidential
Information as defined herein to their subsidiaries, parent and sister
companies, provided each such entity agrees to the terms of this Agreement, has
a need to know, and the receiving party agrees to be liable for breach of any
such entity. The receiving party will maintain the Confidential Information
with at least the same degree of care that the receiving party uses to protect
its own confidential and proprietary information, but no less than a reasonable
degrees of care under the circumstances. The receiving party will neither
disclose nor copy Confidential Information except as necessary for its employees
with a need to know. Any copies, which are made, will be identified as
belonging to the disclosing party and marked "confidential", "proprietary" or
with a similar legend.
3. Period of Non-Assertion. Unless a shorter period is stated in the
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applicable CITR, the disclosing party will not assert any claims against the
receiving party for disclosures of Confidential Information made more that five
(5) years from the date of the CITR.
4. Termination of Obligation of Confidentiality. The receiving party will not
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be liable for the disclosure of any Confidential Information, which is:
(a) in the public domain other than by a breach of this Agreement on the part
of the receiving party; or
(b) rightfully received from a third party without any obligation of
confidentiality; or
(c) rightfully known to the receiving party without any limitation on use or
disclosure prior to its receipt from the disclosing party; or
(d) independently developed by employees of the receiving party; or
(e) generally made available to third parties by the disclosing party without
restriction on disclosure.
5. Title. Title or the right to possess Confidential Information as between
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the parties will remain in the disclosing party.
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6. No Obligation of Disclosure. Neither party has any obligation to disclose
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Confidential Information to the other. Either party may, at any time, (a) cease
giving Confidential Information to the other party without any liability, and
/or (b) request in writing return of Confidential Information previously
disclosed.
7. Termination and Duty to Return. Either party may terminate this Agreement
-------------------------------
at any time without cause upon written notice to the other party. However, all
obligations of confidentially will survive the termination of this Agreement.
In the event this Agreement is terminated, and the disclosing party so requests
in writing, the receiving party will promptly return or destroy (and certify
destruction of) all Confidential Information which it received from the
disclosing party along with all copies which it made.
8. General Terms.
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(a) This Agreement is neither intended to nor will it be construed as creating a
joint venture, partnership or other form of business association between the
parties, nor an obligation to buy or sell products using or incorporating the
Confidential Information, nor as creating an implied or express license grant
from either party to the other.
(b) The failure of either party to enforce any right resulting from breach of
any provision of this Agreement by the other party will not be deemed a waiver
of any right relating to a subsequent breach of such provision or of any other
right hereunder.
(c) This Agreement will be governed by the laws of the State of Washington, USA.
(d) This Agreement, any accompanying CITR and CITRs executed from to time
hereafter which incorporate the terms of this Agreement, constitutes the entire
agreement, written or verbal, between the parties with respect to the
disclosure(s) of Confidential Information described in each CITR. This Agreement
may not be amended except in a writing signed by a duly authorized
representative of the respective parties. Any other agreements between the
parties, including non-disclosure agreements, will not be affected by this
Agreement.
AGREED: PARTICIPANT: Amerpro Inc.
AMOUR FIBER CORE INC. --------------------------------
1120 E. Stevens, PO Box 42 (Company Name Div., Sub, if applicable)
Sultan, WA, USA 98294
Tel: (360) 793-0146 19671 Beach Blvd Ste 403
Fax: (360) 793-7955 ---------------------------------------------
(Address)
Huntington Beach
---------------------------------------------
(City)
CA. 92648 USA
---------------------------------------------
(State) (Zip) (Country)
/s/ WILLIAM E. AMOUR /s/ GLENN L GEARHART
- -------------------------------- ---------------------------------------------
Signature (Pres. or V.P.) Signature of Authorized Party (Pres. or V.P.)
William E. Armour Glenn L. Gearhart
- -------------------------------- --------------------------------------------
Printed Name Printed Name
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