LINE-X MASTER DISTRIBUTOR INTERNATIONAL

LICENSING AGREEMENT

DRAFT

This Licensing Agreement (hereinafter the Agreement or License) is entered into

between LINE-X Acquisition LLC, a Delaware company (hereinafter LINE-X), and Master
Distributor ____________________________., a ________________ company (hereinafter
MD Licensee). This Agreement is effective as of the _____ day of _____, 2013 (hereinafter
the Effective Date).

RECITALS
A.
LINE-X is the originator and developer of the chemical formulation of the
polyurethane/polyurea elastomer products known and sold under the trademarks LINE-X and
PAXCON (hereinafter the "Product). LINE-X also is the originator and developer of the
proprietary chemical formulations and techniques used to apply the Product in order to provide a
strong weather resistant surface (hereinafter the Program). The Program also includes
application equipment, training techniques, manuals, printed matter, advertising matter and
marketing techniques.
B.
LINE-X owns all rights to the LINE-X and PAXCON trademarks, logos and
trade dress (hereinafter the Trademarks), the Program, and the Product.
C.
LINE-X wishes to grant a license to use the Trademarks and the Program that has
been tailored for the specific MD Licensee.
D.
MD Licensee wishes to obtain a license to use the Trademarks, Program, and
Product, subject to the terms and conditions of this Agreement.
E.
LINE-X desires to enter into a master distribution license agreement with MD
Licensee on the terms and conditions set forth below without encumbering LINE-Xs rights to
the Trademarks, Program or Product.
NOW, THEREFORE, in consideration of the foregoing, the parties hereto agree as
follows:

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AGREEMENT
1.

Grant of License.

A.
Subject to the terms and conditions of this Agreement, LINE-X grants, and MD
Licensee accepts, an exclusive, non-transferable license to use the Trademarks and Program
within ________ (hereinafter the Licensed Territory) solely for the purpose of applying and
selling the Products (hereinafter the License). All rights in the Trademarks, Program and
Products (collectively, the LINE-X Proprietary Rights) that are not expressly granted to MD
Licensee hereunder are reserved to LINE-X.

DRAFT

B.
Terms and conditions to maintain the Licensed Territory are stated herein and in
Addendum No. 1 attached hereto, and incorporated herein by reference. The Licensed Territory
is subject to change by LINE-X upon any renewal of this Agreement.
C.
MD Licensee agrees that the use of this License is for its and its permitted SubLicensees (as defined below) sole and exclusive use. MD Licensee agrees that the LINE-X
Proprietary Rights may be used by MD Licensee (and its permitted Sub-Licensees) solely within
the MD Licensees Licensed Territory.
D.
MD Licensee may not use the Program or the Trademarks, or use or sell the
Products outside of the Licensed Territory, except with the prior written consent of LINE-X.
E.
This License shall not be deemed to restrict or prohibit LINE-Xs right to use the
Program or the Trademarks, or use or sell the Products in any territory for any purpose.
2.

License Period.

This License shall be in full force and effect from the Effective Date and shall remain in
force for an initial five (5) year term, unless sooner terminated pursuant to the terms of this
Agreement. Thereafter, the License will be renewed automatically for up to two (2) five (5)
year renewal terms, provided that (a) as of the renewal date MD Licensee is in compliance with
its annual minimum purchase obligations and (b) neither party has issued a written notice not to
renew at least sixty (60) days prior to the renewal date at the addresses as specified in this
Agreement. No additional license fees (beyond the amounts specified in Section 5) shall be
charged for the two (2) five (5) year renewal terms.
3.

Non-Assignment of License.

MD Licensee shall not assign or otherwise transfer its rights under this Agreement
without the prior written consent of LINE-X, which shall not be unreasonably withheld.
Notwithstanding the foregoing, MD Licensee may assign the Agreement to a partnership, joint
venture, or other business entity formed by MD Licensee with others to conduct the business,
provided that (a) at all times during the term the MD Licensee owns at least a 50% share in such
enterprise, (b) such enterprise is formally created pursuant to a written agreement, (c) LINE-X
has granted its prior written consent, and (d) such partnership, joint venture, or other business
entity accepts all obligations of MD Licensee hereunder.

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4.

Right to Sub-License.

DRAFT

Upon the prior written approval of LINE-X, MD Licensee shall have the right to grant
sublicenses under the License solely to established business entities doing business within the
Licensed Territory (hereinafter Sub-Licensees). A Sub-Licensee shall not have the right to
grant further sublicenses. In establishing a Sub-Licensee, MD Licensee warrants and agrees that
the Sub-Licensee will be bound, pursuant to a written agreement between MD Licensee and each
such Sub-Licensee (hereinafter Sublicense Agreement), to the Required Terms for SubLicensees set forth in Exhibit A. MD Licensee will at all times remain responsible for the
compliance by its Sub-Licensees with the Required Terms for Sub-Licensees. Not later than ten
(10) days after execution of each Sub-License Agreement, MD Licensee shall deliver to LINE-X
a complete and correct copy of such Sublicense Agreement. Not later than thirty (30) days after
the end of each calendar quarter, MD Licensee shall deliver to LINE-X a written report
identifying: (a) the quantity (in pounds) of the Product sold to each Sub-Licensee during such
calendar quarter, and (b) the identity of all of MD Licensees Sub-Licensees as of the end of such
calendar quarter, along with contact information for such Sub-Licensees. Any failure by MD
Licensee to comply with the terms of this Section 4 shall be deemed a material breach of this
Agreement. Upon expiration or termination of this Agreement, all sublicenses granted by MD
Licensee hereunder also shall immediately and automatically terminate.
5.

Payment for MD License.

In consideration for the exclusive and non-transferable License granted under this
Agreement, MD Licensee shall pay LINE-X a license fee of XXXX Thousand United States
Dollars ($ ????.00 USD), exclusive of any sales or other taxes no later than _____, 2013.
6.

Purchase Requirements.

In each year during the term of this Agreement (including any renewal terms), MD
Licensee agrees to purchase from LINE-X not less than the initial and subsequent annual
minimum purchase obligation quantities specified in Addendum No. 1. It is understood and
agreed that the prices for the Product and equipment only represent current pricing (hereinafter
the Confidential Pricing List). As such, LINE-X may change prices without notice to reflect
increased costs.
7.

Payment For Product; Taxes; Shipping.

A.
MD Licensee shall pay for all invoices within the established terms, if any, for the
Product and equipment based on the current Confidential Pricing List. Shipping terms are
attached hereto as Exhibit B, exclusive of any sales or other taxes.
B.
MD Licensee shall pay any taxes or duties that may be assessed on the Program
or the Product. If the laws of the Licensed Territory require MD Licensee to withhold tax on any
payment which MD Licensee is obligated to make to LINE-X, MD Licensee shall: (a) obtain a
proper receipt and discharge for the tax so deducted and forward it without delay on MD
Licensees part to LINE-X; and do all such other things and take such other steps as may
reasonably be required to enable LINE-X to obtain any tax credit which may be available to it.
Where LINE-X is unable to obtain relief, in whole or in part, for tax deducted and paid in the
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Licensed Territory by MD Licensee, MD Licensee shall, in addition to complying with the

foregoing provisions of this section, promptly pay LINE-X a gross sum so that the amount
received by LINE-X is the amount which would have been received had there been no
withholding requirement.
8.

MD Licensees Further Obligations.

DRAFT

A.
MD Licensee shall engage local counsel to review the form of the Required
Terms for Sub-Licensees (attached hereto as Exhibit A) to ensure that it is enforceable in the
local legal jurisdiction to which it applies, and furthermore to ensure that it is compliant with all
legal and regulatory requirements. If such local counsel advises MD Licensee that any such
Required Terms for Sub-Licensees are not enforceable in the applicable local legal jurisdiction
or not compliant with all legal and regulatory requirements, MD Licensee shall immediately
notify LINE-X thereof and the parties shall discuss and negotiate appropriate modifications to
the Required Terms for Sub-Licensees for such jurisdiction. MD Licensee is solely responsible
for compliance by MD Licensee and its Sub-Licensees with all laws and regulations applicable
to the exercise by MD Licensee and its Sub-Licensees of the rights granted under this
Agreement.
B.
MD Licensee acknowledges the value of the Trademarks and the strict quality
requirements for the Products and the Program. Accordingly, MD Licensee shall only use LINEXs Products and LINE-X recommended application equipment purchased from LINE-X in the
sale and application of the Program applications. Any change in product or application
recommendations for the Program must be authorized in writing by LINE-X. During the term of
this Agreement, MD Licensee shall not purchase, sell, distribute or apply any other
polyurethane/polyurea product that could be a substitute for the Products.
C.
MD Licensee shall not sell applications of the Products or grant sublicenses to use
the Trademarks or the Program within the exclusive territory of any other MD Licensee or
licensed applicator.
D.
MD Licensee shall use its best efforts to advertise and aggressively promote the
Products, and make regular and sufficient contact with present and potential applicators within
all areas of the Licensed Territory.
E.
MD Licensee shall ensure that the business practices of its Sub-Licensees
conform to best business practices in their industry.
9.

Trademark Use Requirements; Quality Standards.

A.
MD Licensee shall use the Trademarks in all literature and television and print
advertising of the Product or the Program. MD Licensee shall identify LINE-X and
PAXCON as trademarks of LINE-X. The parties expressly intend and agree that all use of the
LINE-X Proprietary Rights shall inure to the sole benefit of LINE-X.
B.
MD Licensee agrees that the use of said literature and television and print
advertising (including any websites) associated with the Trademarks shall conform to the
Trademark use and style guidelines, and MD Licensees use of the Products shall conform to the
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DRAFT

quality requirements, and application specifications, in each case that are established by LINE-X
from time to time in its sole discretion and provided to MD Licensee by LINE-X (hereinafter,
collectively the Quality Standards). MD Licensee agrees to adhere to the Quality Standards
located at LINE-Xs website, www.linex.com, with a secure password to be provided by LINEX. Quality Standards may be amended or supplemented by LINE-X in its sole discretion. The
Quality Standards are intended to maintain the value of the Trademarks and the Program to
ensure that MD Licensees usage of the Trademarks is not immoral or disparaging, and does not
cast LINE-X in a negative light.
C.
Prior to the first date of its use of the Trademarks in connection with the Program
or the Products and not less than quarterly thereafter, MD Licensee shall submit samples of any
advertising or publicity material to LINE-X for approval of all aspects of such use. These
samples shall be provided to LINE-X without charge and shall include labels, cards,
advertisements, catalogs, letterhead, and the like.
D.
In furtherance of this Section 9, LINE-X shall have the right to reasonably request
and receive information from MD Licensee (and its Sub-Licensees) regarding their operations,
and on reasonable prior notice and during normal business hours to inspect and conduct an audit
of MD Licensees (and its Sub-Licensees) operations relating to the Programs, in each case to
confirm MD Licensee's (and its Sub-Licensees) compliance with the Quality Standards.
E.
MD Licensee acknowledges that the LINE-X Proprietary Rights are the sole
property of LINE-X. Except for its rights under the License as expressly set forth herein, MD
Licensee shall have no rights or interests, by implication, estoppel or otherwise, in or to any of
the LINE-X Proprietary Rights, or any intellectual property rights relating thereto. Only LINE-X
may register its trademarks in MD Licensees Licensed Territory. MD Licensee will never
represent that it has any ownership in the LINE-X Proprietary Rights or in any registration of
them and shall not attempt to register the LINE-X Proprietary Rights alone or as part of its own
trademark or service mark in any jurisdiction. MD Licensee agrees that it shall not, on the basis
of its use of the LINE-X Proprietary Rights, oppose or seek to cancel in any court or state or
federal agency, including, but not limited to, the United States Patent and Trademark Office, any
registration for any mark which LINE-X files an application or obtains a registration for, whether
such use be by LINE-X directly or through different licensees or authorized users. MD Licensee
agrees that it will immediately discontinue the use of the Trademarks upon expiration or
termination of this Agreement. MD Licensee shall comply with any requirement under local law
that it record this Agreement or otherwise register as a MD Licensee under the Trademarks, and
shall provide prompt notice to LINE-X of the same.
F.
MD Licensee shall not use or authorize use, either during or after the term of this
License, any configuration, mark, name, design, logo or other designation confusingly similar to
the Trademarks.
G.
MD Licensee promptly shall notify LINE-X in the event that it learns that a third
party is infringing any of the LINE-X Proprietary Rights and will provide reasonable cooperation
at its expense to LINE-X to the extent that LINE-X seeks to enforce the LINE-X Proprietary
Rights against any such third party. LINE-X shall have the sole right to determine the
appropriate action to be taken against any such infringement or unauthorized use of the LINE-X
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Proprietary Rights, including the sole discretion to settle any claims or any controversy arising
out of any such claims. MD Licensee shall not have any rights against LINE-X for damages or
otherwise by reason of any determination by LINE-X not to act with respect to any alleged
infringement or unauthorized use by others of the LINE-X Proprietary Rights; nor shall any such
determination of LINE-X affect the validity or enforceability of this License. Any and all
damages/settlements recovered in any action or proceeding shall belong solely and exclusively to
LINE-X, unless otherwise agreed to in writing by LINE-X.

DRAFT

10.

Delivery and Acceptance of Program.

Upon execution of this Agreement and receipt of the license fee, LINE-X will provide to
MD Licensee a complete copy of the Program, an initial order of the Product, and application
equipment. MD Licensee agrees that all details of the Program, the Product, and application
equipment shall be subject to the confidentiality provisions of Section 12 herein. During the
term of this Agreement, LINE-X will provide MD Licensee with any and all updates to the
Program that is provided generally to its other licensees.
11.

Modifications or Adaptations of Program.

MD Licensee is not authorized hereunder to modify or revise the LINE-X Proprietary

Rights. Without limiting the foregoing, MD Licensee agrees that any modification or revision of
the Program or the Product made by MD Licensee does not constitute the design or development
of a new Program or Product, and that all right, title and interest in and to any such
modification or revision, and all intellectual property rights relating to such modification or
revision, will vest in LINE-X and/or are hereby assigned to LINE-X without need for any further
action by any Party. Notwithstanding the foregoing, if pursuant to any law in the Licensed
Territory the assignment of intellectual property rights set forth above would in relation to any
portion of such intellectual property rights be invalid or unlawful, MD Licensee shall grant
LINE-X a non-exclusive, perpetual, royalty free, fully paid, transferable, sub-licensable and
unrestricted license to use such portion. MD Licensee further agrees that upon non-renewal,
expiration or termination of this Agreement for any reason, LINE-X will maintain all property
rights in the LINE-X Proprietary Rights.
12.

Program as Confidential Trade Secret.

MD Licensee acknowledges that the Program and the Product are confidential in nature
and constitutes a trade secret belonging to LINE-X. MD Licensee agrees to take all action
necessary to maintain the secrecy of the confidential information of LINE-X and furthermore, to
disclose such confidential information only to its employees involved in the activities permitted
under this Agreement and only to the extent necessary to execute the obligations of MD Licensee
pursuant to this Agreement. MD Licensee shall inform all of its employees who are involved in
the activities permitted under this Agreement that the Program and the Product are confidential
and shall ensure that all of its employees comply with the obligations of this Agreement. This
provision shall survive expiration or termination of this Agreement.
13.

Initial Training.

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LINE-X shall provide technical orientation and training for MD Licensees employees
through the LINE-X and PAXCON Training Course in _________ or as agreed upon by the
parties. The cost of the initial training shall be included in the license fee. Additional training or
technical support shall be provided at a price agreed upon between the parties.
14.

Warranties and Representations.

DRAFT

MD Licensee warrants and represents to LINE-X that:

A.
MD Licensee has fully and carefully investigated the risks and potential losses
that could occur in the event of a business failure by MD Licensee.
B.
LINE-X has not promised that MD Licensee shall make a profit on any sale since
the success or failure of MD Licensee is subject to his, her, or its own control, efforts, and
financial circumstances. All business operations conducted under the License and in connection
with this Agreement are under the control and management of MD Licensee.
C.
MD Licensee acknowledges and agrees that any projections of income or profit
provided by LINE-X to MD Licensee are merely expectations.
D.
MD Licensee acknowledges and agrees that any purchases made under the
Agreement are made on MD Licensees own account.
E.
MD Licensee acknowledges that it has been advised that the chemicals used in the
catalytic process of the Product may cause sensitivity for people with asthma or other respiratory
ailments, and that MD Licensee and its employees should check with a doctor prior to entering
into this Agreement to understand the potential health risks associated with the Product. MD
Licensee agrees that the applicator must always wear the approved fresh air breathing apparatus
provided when applying the Product and that MD Licensee must always follow the approved
safety measures as outlined in the LINE-X Safety Manual.
F.
Prior to opening the business or exercising the rights licensed hereunder, MD
Licensee shall obtain all written authorizations as may be required from authorities where the
business is to be operated.
G.
MD Licensee is solely responsible for compliance by MD Licensee or its
permitted Sub-Licensees with any laws or regulations applicable to its exercise of the rights
granted under this Agreement.
H.
MD Licensee shall ensure that its business practices and the business practices of
its Sub-Licensees conform to best business practices in their industry.
15.

Cause for Termination.

This Agreement may be terminated by LINE-X at any time due to a breach of this
Agreement by MD Licensee, upon issuance by LINE-X of thirty (30) days written notice,
provided MD Licensee fails to cure such violation within the thirty (30) day period. Without
limiting any other of LINE-Xs rights hereunder, this Agreement may be terminated by written
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notice effective immediately at the discretion of LINE-X upon the occurrence of any of the
following:
A.
Failure by MD Licensee to fulfill its annual minimum purchase obligation as set
forth in Addendum No. 1.

DRAFT

B.
Disclosure of the Product formulation or any other aspect of the Program to an
unauthorized third party, unless such information is already in the public domain other than as a
result of a disclosure by MD Licensee or any of its employees or a breach of any other duty of
confidence.
C.
Refusal by MD Licensee to pay any invoice or fee provided for in this Agreement
or the nonpayment of an open account for more than thirty (30) calendar days past due.
D.
Cessation of business by MD Licensee or any successor or assignee to whom the
License has been transferred in compliance with the terms of this Agreement.
E.
A petition in bankruptcy is filed by or against MD Licensee, or MD Licensee
becomes insolvent or otherwise unable to pay its bills when due.
F.
A receiver, trustee in bankruptcy, or similar officer is appointed to take charge of
all or part of MD Licensees business or property.
G.
To the extent such termination is not prohibited by applicable law, if MD
Licensee challenges any of LINE-Xs intellectual property rights in the Program, Trademarks or
Products.
H.
Agreement.

Use of a third partys polyurethane/polyurea products during the term of this

I.
Violation of restrictions or prohibition of the importation of the Product or
equipment into the Licensed Territory by the United States government or any other competent
world jurisdictional entity.
16.

Effect of Expiration or Termination.

Upon expiration or termination of this Agreement, all rights granted to MD Licensee (and
its Sub-Licensees) under the License immediately shall cease. Termination of this Agreement
shall not relieve MD Licensee of its obligation to pay LINE-X for the Product and equipment
received. MD Licensee agrees that upon expiration or termination, it shall immediately cease
using the LINE-X Proprietary Rights, it shall return or destroy all marketing materials bearing
the Trademarks and it shall return all the Program materials to LINE-X. At LINE-Xs option,
MD Licensee shall return unused product at MD Licensees expense or dispose of the unused
product with LINE-X facilitating or providing appropriate leads. MD Licensee agrees that in the
event of expiration or termination, all fees or charges due for the remaining term of this
Agreement are immediately due and payable.

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17.

Prohibited Transactions.

This Agreement shall be null and void as to a particular country if LINE-X is restricted or
prohibited from selling or exporting product or equipment thereto by the United States
government. MD Licensee shall not allow product or equipment to be sold or shipped to any
country proscribed by the U.S. Department of Commerce Export Administration Regulations, the
U.S. Treasury Department Office of Foreign Assets Control or the U.S. State Department.
18.

Restrictive Covenant.

DRAFT

MD Licensee agrees that, except as expressly permitted herein, during the term of this
Agreement and for a period of one (1) year thereafter, the MD Licensee shall not compete with
the business of LINE-X, or of its other MD Licensees or Sub-Licensees. This provision shall
survive expiration or termination of this Agreement.
19.

Warranty of Title; Product Warranty

LINE-X warrants that it has good title to the Trademarks and the Program, and that
LINE-X has the right to license their use to MD Licensee.
LINE-X warrants that the Product is free from defects in workmanship and materials
under normal authorized use for a period of twelve (12) months from the date of manufacture
except LINE-X fire-resistant materials which are free from defects in workmanship and materials
under normal authorized use for a period of six (6) months from the date of manufacture. LINEX will replace any defective product under this warranty, which is MD Licensees sole remedy
for breach of this warranty. This warranty is void if MD Licensee, its agents, employees or SubLicensees fail to use the Product in the manner prescribed by LINE-X. The use of the Product
by any persons other than MD Licensee or authorized Sub-Licensees shall void this warranty.
The warranties set forth in this Agreement are in lieu of all other warranties, express or
implied, including, without limitation, any warranties of merchantability or fitness for a
particular purpose.
20.

Liability; Limitation of Liability.

MD Licensee shall be completely responsible for any liability that may arise out of MD
Licensees application or sale of the Product to or on behalf of any Sub-Licensee or others who
may purchase it from MD Licensee and/or MD Licensees Sub-Licensees.
MD Licensee further agrees that LINE-X shall not be liable to MD Licensee or MD
Licensees Sub-Licensees for any incidental or consequential damages including any lost profits,
lost savings, including attorneys fees, arising out of its use or inability to use the Program or the
Product, or the breach of this Agreement or any express or implied warranty. UNDER NO
CIRCUMSTANCES AND IN NO EVENT SHALL EITHER PARTY BE LIABLE TO THE
OTHER PARTY FOR PUNITIVE OR EXEMPLARY DAMAGES REGARDLESS OF THE
ACTIONS GIVING RISE TO THE CLAIM FOR SUCH DAMAGES. This provision shall
survive expiration or termination of this Agreement.

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21.

Indemnification.

DRAFT

MD Licensee shall indemnify and hold LINE-X harmless from any claims which may be
asserted against LINE-X based upon any act, omission, or representation by MD Licensee or MD
Licensees Sub-Licensee in connection with the Agreement, the Program, and any services and
products provided by MD Licensee or MD Licensees Sub-Licensee during MD Licensees use
of the License, including costs and attorneys fees. MD Licensee or LINE-X, as shall be
determined by LINE-X, shall control the defense and/or settlement of any such claim. MD
Licensee promptly shall reimburse LINE-X for any costs and expenses incurred by LINE-X in
connection with the defense and/or settlement of such claim. This provision shall survive
expiration or termination of this Agreement with respect to any events or circumstances that
occurred during the term of this Agreement.
22.

Notices.

Any notice required by this Agreement shall be deemed to have been given if made in
writing and delivered personally or mailed by first-class, registered, or certified mail, postage
prepaid and addressed as follows:
(a)

when intended for MD Licensee to:

Name
Address
Phone
Attn:

(b)

when intended for LINE-X to:

LINE-X ACQUISITION LLC
2400 South Garnsey Street
Santa Ana, CA 92707
U.S.A.
(714) 850-8759 (fax)
Attn: Legal

23.

Severability.

If any part of this Agreement is adjudged by a court to be invalid, that judgment shall not
affect or nullify the remainder of this Agreement.
24.

Entire Agreement.

This Agreement is the entire agreement between the parties. There are no other terms or
conditions expressed or implied.

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25.

Governing Law.

DRAFT

This Agreement shall be deemed to have been made in, and be construed pursuant to, the
laws of the State of Alabama, without giving effect to any choice of law or conflicts of law
provision that would cause the application of the laws of any jurisdiction other than the State of
Alabama. With respect to all claims arising under or in connection with this Agreement, each
party hereby submits to the non-exclusive jurisdiction of the federal and state courts in
Huntsville, Alabama.
26.

No Waiver.

No waiver of any of the provisions of this Agreement shall be valid unless in writing
signed by LINE-X. No waiver by either party of any breach of or failure of performance shall be
deemed a waiver as to any subsequent breach or failure of performance, whether or not similar,
nor shall any waiver constitute a continuing waiver. Failure of LINE-X to enforce any provision
or to exercise any right or remedy shall not constitute a waiver of any of LINE-Xs rights or MD
Licensees obligations.
Executed this ___ day of _________ 2013 by LINE-X, in the City of Huntsville, State of
Alabama.
LINE-X ACQUISITION LLC
By:
Name: KEVIN HERONIMUS
Title:

CHIEF EXECUTIVE OFFICER

Executed this ___ day of __________ 2013 by MD Licensee.

NAME
By:
Name:
Title:

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ADDENDUM NO. 1

DRAFT

License Fee/Annual Minimum Purchase Obligations

The license fee of XXXXX Thousand U.S. Dollars ($ ????.00 USD) of which Seventy-Five Thousand
U.S. Dollars ($ ????.00 USD) must be fully paid and received by LINE-X Acquisition LLC no later
than the close of business on ___________ or this Agreement shall be null and void. In addition, an
Equipment Package of XXX Thousand U.S. Dollars ($??,000.00 USD) must be fully paid and received
by LINE-X Acquisition LLC no later than the close of business on _____________________.
Starting as of __________, 2013, the required minimum purchases of the Product in any combination,
exclusive of any applicable sales tax, shall be made to LINE-X Acquisition LLC no later than close of
business on the following dates:
Year 1

________, 2013

_______ pounds

Year 2

________, 2013

________pounds

Year 3

________, 2014

________ pounds

Year 4

________, 2015

________ pounds

Year 5

________, 2016

________ pounds

Failure by MD Licensee to make said annual minimum purchases is a material breach of this Agreement
subject to termination or the loss of MD Licensees exclusivity to its assigned territory at the discretion of
LINE-X. The prices quoted herein are only estimates and are subject to change at any time without prior
notice. LINE-X cannot and does not guarantee the availability of supply. In the event of Product
unavailability, the minimum purchase obligation may be reduced accordingly.

NAME

LINE-X ACQUISITION LLC

By:

By:

Name:

Name: KEVIN HERONIMUS

Title:

Title:

Date:

Date:

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EXHIBIT A
REQUIRED TERMS FOR SUB-LICENSEES

DRAFT

MD Licensee shall enter into a written agreement with each Sub-Licensee containing at a
minimum all of the following terms and conditions (Required Terms for Sub-Licensees). MD
Licensee may agree to additional terms and conditions with its Sub-Licensees relating to its
business relationships with such Sub-Licensees, but MD Licensee may not agree or grant to any
Sub-Licensee any terms that conflict with or in any way impair the Required Terms for SubLicensees. Further, MD Licensee shall not modify the Required Terms for Sub-Licensees
without LINE-Xs prior written consent. All capitalized terms used in the Required Terms for
Sub-Licensees shall be defined to be consistent with the definitions used in the Agreement and
the rights granted to the Sub-Licensee by MD Licensee.
1.
Sub-Licensee agrees that the use of this Sublicense, and the LINE-X Proprietary Rights,
may be used by Sub-Licensee solely within the Sub-Licensees Licensed Territory and in only in
the Licensed Field. Sub-Licensee may not use the Program or the Trademarks, or use or sell the
Products, outside of the Licensed Territory. Sub-Licensee shall ensure that its business practices
conform to best business practices in its industry. Sub-Licensees rights and obligations under
this Sublicense Agreement may not be assigned, transferred, sublicensed or otherwise alienated
(whether by contract, operation of law or otherwise) to any person or entity.
2.
Sub-Licensee acknowledges the value of the Trademarks and the strict quality
requirements for the Products and the Program. Accordingly, Sub-Licensee shall only use
LINE-Xs Products and LINE-X recommended application equipment purchased from LINE-X
in the sale and application of the Program applications. Any change in product or application
recommendations for the Program must be authorized in writing by LINE-X. Sub-Licensee shall
not sell, distribute or otherwise make available to the Product (including any chemical
formulations or components thereof) on a standalone (i.e., not applied) basis to any third party.
During the term of this Agreement, Sub-Licensee shall not purchase, sell, distribute or apply any
other polyurethane/polyurea product that could be a substitute for the Products.
3.
Sub-Licensee shall identify LINE-X and PAXCON as trademarks of LINE-X. SubLicensee agrees that all use of the LINE-X Proprietary Rights shall inure to the sole benefit of
LINE-X. Sub-Licensee agrees that its use of the Trademarks shall conform to the Trademark use
and style guidelines, and Sub-Licensees use of the Products shall conform to the quality
requirements and application specifications, in each case that are established by LINE-X from
time to time in its sole discretion and provided to Sublicensor by LINE-X (hereinafter,
collectively the Quality Standards). Further, Sub-Licensee agrees to adhere to the Quality
Standards located at LINE-Xs websites www.paxcon.com, www.line-xicd.com and
www.linex.com. The Quality Standards may be amended or supplemented by LINE-X in its sole
discretion. It is Sub-Licensees responsibility to become familiar with the Quality Standards and
any amendments or supplements thereto.
4.
LINE-X shall have the right to reasonably request and receive information from SubLicensee regarding its operations, and on reasonable prior notice and during normal business

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hours to inspect and conduct an audit of Sub-Licensees operations relating to the Programs, in
each case to confirm Sub-Licensees compliance with the Quality Standards.

DRAFT

5.
Sub-Licensee acknowledges that the LINE-X Proprietary Rights are the sole property of
LINE-X. Except for its rights under the Sublicense as expressly granted to it by Sublicensor,
Sub-Licensee shall have no rights or interests, by implication, estoppel or otherwise, in or to any
of the LINE-X Proprietary Rights, or any intellectual property rights relating thereto. SubLicensee will never represent that it has any ownership in the LINE-X Proprietary Rights or in
any registration of them and shall not attempt to register the LINE-X Proprietary Rights alone or
as part of its own trademark or service mark in any jurisdiction, or use or authorize use, either
during or after the term of this Sublicense, any configuration, mark, name, design, logo or other
designation confusingly similar to the Trademarks. Sub-Licensee agrees that it shall not, on the
basis of its use of the LINE-X Proprietary Rights, oppose or seek to cancel in any court or state
or federal agency any registration for any mark which LINE-X files an application or obtains a
registration for, whether such use is by LINE-X directly or through different licensees or
authorized users. Sub-Licensee shall comply with any requirement under local law that it record
this Sublicense Agreement or otherwise register as a sublicensee under the Trademarks, and shall
provide prompt notice to LINE-X of the same. This provision shall survive expiration or
termination of this Sublicense Agreement.
6.
Sub-Licensee promptly shall notify Sublicensor in the event that it learns that a third
party is infringing any of the LINE-X Proprietary Rights and will provide reasonable cooperation
at its expense to LINE-X to the extent that LINE-X seeks to enforce the LINE-X Proprietary
Rights against any such third party. LINE-X shall have the sole right to determine the
appropriate action to be taken against any such infringement or unauthorized use of the LINE-X
Proprietary Rights, and shall have no liability to Sub-Licensee with respect to any action or
inaction in connection therewith; nor shall any such determination of LINE-X affect the validity
or enforceability of this License. Any and all damages/settlements recovered in any action or
proceeding shall belong solely and exclusively to LINE-X, unless otherwise agreed to in writing
by LINE-X.
7.
Sub-Licensee is not authorized hereunder to modify or revise the LINE-X Proprietary
Rights. Without limiting the foregoing, Sub-Licensee agrees that any modification or revision of
the Program or the Product made by Sub-Licensee does not constitute the design or development
of a new Program or Product, and that all right, title and interest in and to any such
modification or revision, and all intellectual property rights relating to such modification or
revision, will vest in LINE-X and/or are hereby assigned to LINE-X without need for any further
action by any party. Notwithstanding the foregoing, if pursuant to any law in the Licensed
Territory the assignment of intellectual property rights set forth above would in relation to any
portion of such intellectual property rights be invalid or unlawful, Sub-Licensee shall grant, and
hereby does grant, to LINE-X a non-exclusive, perpetual, irrevocable, royalty free, fully paid,
transferable, sub-licensable and unrestricted license to use such portion. Sub-Licensee further
agrees that upon non-renewal, expiration or termination of this Sublicense Agreement for any
reason, LINE-X will maintain all property rights in the LINE-X Proprietary Rights. This
provision shall survive expiration or termination of this Sublicense Agreement.

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8.
Sub-Licensee acknowledges that the Program and the Product are confidential in nature
and constitutes a trade secret belonging to LINE-X. Sub-Licensee agrees to take all action
necessary to maintain the secrecy of the confidential information of LINE-X and furthermore, to
disclose such confidential information only to its employees involved in the activities permitted
under this Sublicense Agreement and only to the extent necessary to execute the obligations of
Sub-Licensee pursuant to this Sublicense Agreement. Sub-Licensee shall inform all of its
employees who are involved in the activities permitted under this Sublicense Agreement that the
Program and the Product are confidential and shall ensure that all of its employees comply with
the obligations of this Agreement. Sub-Licensee may not use any confidential information of
LINE-X other than for the sole purpose of exercising its rights under the Sublicense. This
provision shall survive expiration or termination of this Sublicense Agreement.

DRAFT

9.
Sub-Licensee acknowledges and agrees that this Sublicense Agreement will terminate
effective immediately, without notice, upon expiration or termination of Sublicensors agreement
with LINE-X. Sub-Licensee agrees that upon expiration or termination of this Sublicense
Agreement, it shall immediately cease using the LINE-X Proprietary Rights, it shall return or
destroy all marketing materials bearing the Trademarks and it shall return all the Program
materials and LINE-X confidential information to LINE-X, and all unused Product to
Sublicensor.
10.
Sub-Licensee agrees that, except as expressly permitted herein, during the term of this
Agreement and for a period of one (1) year thereafter, the Sub-Licensee shall not compete with
the business of LINE-X, or of its other MD Licensees or sublicensees. This provision shall
survive expiration or termination of this Agreement.
11.
Sub-Licensee acknowledges that LINE-X is not involved in this Sublicense Agreement,
and that Sub-Licensees sole recourse with respect to the Product, the Program and the
Trademarks is to Sublicensor. Sub-Licensee acknowledges that it is fully aware of all risks
associated with its appointment as a Sub-Licensee and with the Product, the Program and the
Trademarks and is not relying on any representations or warranties from LINE-X in entering into
this Sublicense Agreement. LINE-X SHALL NOT BE RESPONSIBLE OR LIABLE TO SUBLICENSEE OR ANY OTHER PERSON FOR ANY DAMAGES, LOSSES OR LIABILITY
THAT MAY ARISE OUT OF SUB-LICENSEES APPLICATION, USE OR SALE OF THE
PRODUCT OR WITH RESPECT TO THE PROGRAM OR THE TRADEMARKS,
INCLUDING WITHOUT LIMITATION ANY DIRECT, INCIDENTAL, CONSEQUENTIAL,
EXEMPLARY OR PUNITIVE DAMAGES, INCLUDING WITHOUT LIMITATION ANY
LOST PROFITS, LOST SAVINGS AND ATTORNEYS FEES, ARISING OUT OF SUBLICENSEES USE OR INABILITY TO USE THE PROGRAM, THE PRODUCT OR THE
TRADEMARK, OR ANY EXPRESS OR IMPLIED WARRANTY REGARDLESS OF THE
ACTIONS GIVING RISE TO THE CLAIM FOR SUCH DAMAGES. This provision shall
survive expiration or termination of this Agreement.
12.
Sub-Licensee shall indemnify and hold LINE-X harmless from any claims which may be
asserted against LINE-X based upon any act, omission, or representation by Sub-Licensee in
connection with this Sublicense Agreement, the Program, the Trademarks and any services and
products provided by Sub-Licensee during Sub-Licensees use of the Sub-License, including
costs and attorneys fees. LINE-X shall control the defense and/or settlement of any such claim.
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Sub-Licensee promptly shall reimburse LINE-X for any costs and expenses incurred by LINE-X
in connection with the defense and/or settlement of such claim. This provision shall survive
expiration or termination of this Sublicense Agreement with respect to any events or
circumstances that occurred during the term of this Sublicense Agreement.
13.
Sub-Licensee agrees that LINE-X is an intended third party beneficiary of this Sublicense
Agreement, with the right to enforce the terms of this Sublicense Agreement on behalf of
Sublicensor and on its own behalf.

DRAFT

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EXHIBIT B

DRAFT

SHIPPING TERMS

Shipping terms are Incoterms 2010 CIF, CFR and/or ExWorks. MD Licensee shall be
responsible for all other shipping charges to final destination.

MD Licensing Agreement
Rev 112009