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Exhibit 10.05
LICENSE AGREEMENT
This Agreement made this first day of November, 1996, by and between New
Century Marketing & Distributors Inc., a New York corporation, having its
principal place of business at ▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
(hereinafter referred to as the "Licensor") and Dynamic Insulated Products, Inc.
a New York corporation, having its principal place of business at ▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ (hereinafter referred to as the "Licensee").
W I T N E S S E T H:
WHEREAS, Licensor has developed and is the owner and/or licenses of
certain information, know-how;, techniques, methods, and trade secrets,
including U.S. patent #4,324,111 and Patent applications filed with the United
States Patent and Trademark office, and with the International Patent Office,
copies of which are annexed hereto and marked Exhibit "A", which are proprietary
and which relate to the development, design, operation, and manufacture of the
Licensed Technology. Licensor is also the owner of the Trademarks for use with
the Licensed Products, copies of which are annexed hereto and marked Exhibit
"B". Licensor has also developed a business relationship with a manufacturer of
Soft Sided Coolers and Insulated Bags and is bringing to the attention of
Licensee the opportunity to start a Soft Sided Cooler line and to use such
manufacturer in Licensee's discretion; and
WHEREAS, Licensee acknowledges the uniqueness and advanced design of the
Licensed Technology as well as the benefits of information and expertise
provided by Licensor relating to the manufacture and sale of Soft Sided Coolers/
Insulated Bags and further acknowledges that Licensor has warranted the validity
and enforceability of the Licensed Patents and Trademarks and Licensee desires
to obtain from Licensor the right to manufacture, whether or not utilizing, in
its sole discretion, the manufacturer introduced by Licensor, distribute and
sell the Licensed Products; and
WHEREAS, Licensor, by this Agreement, grants to Licensed the exclusive
right during the Term to manufacture and/or, in Licensee's discretion, utilize
the manufacturer introduced by Licensor to manufacture, and then to distribute
and sell the Licensed Products using the Trademarks through the Distribution
Channels in the Territory subject to and in accordance with the terms and
conditions of this Agreement.
NOW, THEREFORE in consideration of the mutual covenants herein set forth
the parties do hereby agree as follows:
1. Defined Terms. The following terms utilized and capitalized in this
Agreement shall have, at all times, the meanings as hereinafter set forth:
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A. Licensed Technology. The proprietary information, know-how, techniques,
methods and trade secrets relating to the development, design, operation, and
manufacture of an insulated bag incorporating a uniquely designed wrap-around
Gel Pack (Freeze-Pack), for cooling and maintaining products cold for an
extended duration and a sectional wrap-around Gel Pack, Soft Sided
Cooler/Insulated Bag for the purpose of cooling and/or heating products as well
as maintaining their temperature for an extended duration including, but not
limited to Patent No.: 4,324,111. The term Licensed Technology shall not include
any information, know-how, techniques or methods which are otherwise known by or
available to the trade or third parties, or which are not trade secrets or
proprietary information known only to or owned only by the Licensor.
B. TRADEMARKS-"FREEZY-BAG" and "FREEZYGEL, are registered trademarks owned
by Licensor. Licensor grants permission to Licensee to print and utilize these
Trademarks on the Licensed Product or their packaging or sales literature in
accordance with this Agreement. Copies of the Trademarks are annexed as Exhibit
"B".
C. Licensed Products. An insulated bag incorporating a uniquely designed
wrap-around Freeze-Pack for cooling and maintaining products cold for an
extended duration and a flexible wrap-around freeze-pack and/or soft sided
coolers/insulated bags for cooling and/or heating products and/or maintaining
their temperature.
D. Territory. Worldwide, including the United States but excluding only
Israel and Mexico. Licensor acknowledges that it may not manufacture in or sell
to the Territory.
E. Distribution Channels. Sales, shipment and distribution to retail
stores and merchants for direct sale and/or to jobbers, wholesalers and
distributors for sale at wholesale or retail, mail order catalogs, shipment and
distribution to the public and the sale, distribution and shipment of Licensed
Products by any other means in, to or from the Territory.
F. Term. (i) The period commencing as of the date of this Agreement and
expiring on December 31, 1998; provided, however, that the Term shall be deemed
automatically extended each year thereafter if Gross Sales of Licensed Products
during the prior year were at least $2,000,000 up to an initial total period of
5 years ending on December 31, 2001. The Term shall be deemed automatically
extended for each year thereafter if Gross Sales of Licensed Products during the
prior year were at least $3,000,000 up to a total period of an additional 5
years ending on December 31, 2006; thereafter The Term shall be deemed,
automatically extended for each year thereafter if Gross Sales of Licensed
Products during the prior year were at least $4,000,000 up to a total period of
an additional 5 years ending on December 31, 2011; and thereafter The Term shall
be deemed automatically extended for each year thereafter if Gross Sales of
Licensed Products during the prior year were at
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least $5,000,000 up to a total period of an additional 5 period ending on
December 31, 2016; after which date the Term of this Agreement shall be deemed
to expire.
(ii) All Term extensions as above set forth shall be in Licensee's
discretion. Licensee shall, within 30 days following the end of the initial two
year term and at any time during each year thereafter, notify Licensor in
writing if it elects to cancel this Agreement, or if the required Sales were not
reached in the prior year. If no notice of cancellation is given by Licensee, or
if Licensor does not desire to cancel because the required Sales were not
reached during the prior year, then the Agreement shall be deemed automatically
renewed for the next year.
G. Royalties. A sum to be paid in the manner provided for payment in
Section 10 of this Agreement by Licensee to Licensor for each year during the
Term as follows:
(i) Five (5%) percent of the Net Invoice Amount for all "Soft Sided
Coolers/Insulated Bags" sold without wraparound gel-pack;
(ii) Seven (7%) percent of the Net Invoice Amount for all coolers
sold with the wrap-around gel-pack; and
(iii) Ten (10%) percent of the Net Invoice Amount for wrap-around
gel-packs sold separately as to the first 0 units sold, whenever achieved and
five (5%) percent on Net Invoice Amount for sales of said gel-packs sold
separately thereafter.
(iv) Licensee agrees to code or ▇▇▇▇ License Products so that
identification may be made as to which royalty category The Item sold applies
to.
H. Net Invoice Amount. The sales price of Licensed Products charged by
Licensee to wholesalers, retailers or any other third party, as reflected on an
invoice evidencing such sales, less however: actual returns, credits,
advertising or promotional allowances or rebates. If such returns, credits,
allowances or rebates are charged to or against Licensee after Royalties have
been paid concerning such sale then Licensee shall be entitled to a credit
against the next Royalty payment due. Net Invoice Amount shall not include
shipping/handling charges or sales or any other type of taxes, tariffs or
governmental impositions.
I. Patent, Copyright and Trademark Notices.
(i) Patent Notice: To be furnished by Licensor and approved by
Licensee in a separate writing signed by the parties;
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(ii) Copyright Notice: To be furnished by Licensor and approved by
Licensee in a separate writing signed by the parties;
(iii) Trademark Notice: To be furnished by Licensor and approved by
Licensee in a separate writing signed by the parties;
(iv) The Patent, Copyright and Trademark Notices will appear on all
Licensed Products, artwork, packaging, advertising and promotional materials.
Licensee shall include these notices on all Licensed Products, artwork,
packaging, advertising and promotional materials in a manner selected by
Licensee.
2. Artwork and Packaging. Licensee shall, in its discretion, develop such
Packaging, informative booklets, sales catalogues and/or sales sheets as it
deems necessary in order to promote and sell the Licensed Products. Licensor
shall provide Licensee with ArtWork and Packaging already developed and prepared
by Licensor, if any.
3. Product Development. Licensor shall pay for all expenses necessary, in
its opinion, for the further development of the Licensed Products as opposed to
the manufacture of existing Licensed Technology which shall be Licensee's
responsibility. All modifications or further developments shall be deemed to be
part of the Licensed Technology hereunder.
4. Licensee Warranties. Licensee warrants and represents that the Licensed
Products will be distributed, advertised, promoted and sold in accordance with
all applicable laws, rules and regulations. Licensee is entitled solely during
the Term or any renewals to use the Licensed Technology, Patents and Trademarks
as it sees fit in advertising material or otherwise to promote the sale of the
Licensed Products.
5. Defects. Intentionally omitted.
6. Sublicense. Licensee may sublicense, assign or encumber the rights
granted to it hereunder or delegate its obligations hereunder, in whole or in
part without Licensor's prior approval, but upon notice to Licensor and upon the
understanding that Licensee shall not be relieved of its obligations hereunder
with respect to such sublicense, or assignment.
7. Governing Law. This Agreement shall be governed by the laws of New
York, applicable to agreements made and to be wholly performed therein.
8. Expiration. (i) Upon expiration of the Term and Licensee's right to
sell Licensed Products, or upon earlier termination for any reason, Licensee
agrees that Licensor shall have the right (but not the obligation) to purchase
from Licensee all or part of Licensee's then existing inventory of Licensed
Products at Licensee's
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actual-manufacturing cost therefor plus 50%. If Licensor elects not to so
purchase all or part of such inventory within fifteen (15) days following
expiration or termination, Licensee shall thereupon be free to sell said
Licensed Products in any manner and at any price. Royalties shall be due
Licensor on such sales.
(ii) Upon the expiration or termination of this Agreement, the
rights granted to Licensee hereunder shall revert to Licensor, except as
provided in Paragraph 8(i) and Licensee shall return all other materials which
may have been used or created by Licensee in connection with this Agreement.
Upon expiration of this Agreement, Licensee agrees that Licensor shall also have
the right (but not the obligation) within fifteen (15) days after the end of the
Term, to purchase the following items from Licensee if same are owned by
Licensee: Licensed Products molds, clips, plates, tools, silkscreens and/or
other technical materials relating to and/or embodying any of the Licensed
Technology and Licensed Trademarks at their actual cost.
9. Obligation of Performance. Licensee shall manufacture and distribute
the Licensed Products in accordance with customary business practice and shall
always maintain adequate inventory of the Licensed Products as necessary in its
sole discretion.
10. Accounting and Payment.
(i) All payments of Royalties shall be deemed earned and shall be
due within thirty (30) days after Licensee has received payment for a Net
Invoiced Amount. All amounts payable hereunder shall be paid by check to: New
Century Marketing & Distributors, Inc., c/o ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇. Payment shall be due upon 30 days after
Licensee receives payment of the Net Invoice Amount.
(ii) The Royalties shall be accounted for on not less than a
calendar quarter basis. All payments to Licensor shall be in United States
Dollars. Statements of account accompanied by payments, if any, shown to be due
shall be delivered to Licensor or such party or parties as Licensor shall
designate, no later than thirty (30) days after the end of each calendar
quarter.
(iii) The statements of account shall be reasonably detailed and
contain information relevant to the computation of payments to Licensor.
Licensee shall keep and preserve for at least two (2) years after the expiration
of this Agreement accurate records of all transactions relating to this
Agreement. Licensor, or a representative as Licensor shall designate, shall at
any time during business hours, at Licensee's office, on prior five (5) days,
written notice to Licensee, be entitled to inspect Licensee's books and records
pertaining to the Licensed Products and the manufacture and distribution thereof
and the computation of Royalties hereunder.
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(iv) If Licensee is in default with the payment of any Royalties,
then without limiting any of Licensor's rights or remedies, Licensee shall pay
Licensor interest on such unpaid amount at a rate equal to two percent (2%)
above the then current "prima" rate quoted by the Chase Manhattan Bank, in New
York, or the highest interest rate allowed by law, if less.
11. Licensor Warranties. Licensor represents and warrants that it has the
right to enter into this Agreement and to grant the rights herein granted to
Licensee in connection with the Licensed Technology and Trademarks, subject to
the terms hereof. Licensor also represents that: (a) it owns the Trademarks and
Licensed Technology free and clear of any liens or encumbrances; (b) it has full
right to enter into and comply with this Agreement in all respects and it is not
a party to any agreement which might impair or effect such right or the terms
hereof; (c) no actions are pending or threatened against it which in any manner
affect its rights hereunder or which in any way adversely impair same; (d) it
will and hereby does indemnify Licensee against all claims of any kind relating
to ownership of the rights which are the subject of this License Agreement.
12. Infringements. Licensee shall promptly notify Licensor, in writing, of
any imitations or infringements of the Licensed Technology and Trademarks or the
rights licensed hereunder which may come to Licensee's attention. Licensee and
Licensor shall endeavor to jointly determine whether or not any demand, suit or
other action shall be taken on account of or with reference to any such
infringements or imitations. Licensee however shall have the right (but not the
obligation) to commence or prosecute any suits or make any such demands in its
own name or in the name of Licensor or join Licensor as a party thereto.
Licensor shall cooperate with 'Licensee as a party thereto and/or in any manner
that Licensee may request in connection with any such demand, suits, claims or
other actions. Any infringement or imitation action, claim or suit brought by
Licensee against a third party shall be at Licensee's cost and any recoveries
therefrom shall belong to Licensee. A royalty fee equal to 7% of any recovery,
less legal fees and costs, shall be due to Licenser. With respect to all claims
and suits, including suits in which Licensee is joined as a party, Licensee
shall have the sole right to employ counsel of its choosing, at Licensee's
exclusive cost, and to direct the handling of the litigation and any settlement
thereof. In the event Licensee decides not to take action hereunder, then
Licensor shall be free to do so at its expense and any recovery in that case
shall belong to Licensor.
13. Rights in the Licensed Technology and Trademarks.
(i) All rights not specifically granted to Licensee are hereby
reserved by Licensor. Licensee shall not be entitled to have design patents,
trademarks, or any other rights in connection with the Licensed Products
registered nor to claim any such rights without the prior written consent of
Licensor, which may be withheld in its sole discretion.
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(ii) Without limiting the other provisions hereof, Licenses is not
hereby granted, and Licensor hereby reserves for itself, the right to
manufacture, advertise, promote, distribute and otherwise exploit the Licensed
Products outside the Territory.
(iii) Licensee acknowledges that as between Licensor and Licensee,
Licensor is the owner of all right, title and interest in and to the Licensed
Technology and Trademarks (collectively the "Licensed Property") and in all
patents, copyrights, trademarks, and other rights associated therewith, and the
goodwill pertaining to all of the foregoing. Licensee hereby acknowledges that
Licensor is the owner of all right, title and interest in all patents,
copyrights and renewals and extensions of such patents and copyrights, relating
to the Licensed Technology and Trademarks, and warrants that Licensor will have
the right to use and exploit and authorize the exploitation of such materials in
any manner as Licensor elects without obligation to Licensee or any other entity
whatsoever except as otherwise provided in this Agreement. Licensee will not
during or after the Term attack the validity of the license granted hereunder,
or do or cause to be done any act which impairs or tends to impair Licensor's
right and title to the Licensed Property. Licensee shall not acquire and shall
not claim any title to the Licensed Property by virtue or through the license
granted to Licensee or through Licensee's use thereof.
14. Termination of this Agreement.
(i) In the event of a material default by Licensee hereunder,
Licensor may forward written notice specifying such default to Licensee.
Licensee shall thereupon have thirty (30) days within which to cure such default
or, if the default is not capable of a cure within such time, to commence such
cure and continue such cure diligently until completion. If not cured or if such
cure is not thereafter commenced and diligently pursued, Licensor may thereafter
terminate this agreement by sending a further ten (10) day notice, in writing
sent by certified mail, return receipt requested to Licensee at its address
first above mentioned.
(ii) If proceedings for bankruptcy or insolvency are filed or
instituted by or against Licensee, or if Licensee ceases to be actively involved
in the business of selling or distributing Licensed Products for more than 90
days, Licensor may terminate this Agreement upon fifteen (15) days prior written
notice to Licensee, which termination shall be effective on the date of giving
such notice unless such condition has been cured or a cure commenced by
Licensee.
(iii) In the event of termination, without limiting any of
Licensor's rights or remedies including, without limitation, Licensor's right to
injunctive or other equitable relief, any and all Royalty payments shall become
immediately due and payable to Licensor upon such termination, and the rights
granted hereunder shall automatically terminate and revert immediately to
Licensor.
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15. Confidentiality. Licensee agrees that it will use reasonable efforts
to maintain Licensed Technology in a confidential manner, and will use such
Licensed Technology only in accordance with this Agreement. Any information
otherwise available to the public is not deemed proprietary hereunder and is
excluded from this representation. Licensee shall have no liability for
non-willful breach or unauthorized disclosure to third parties.
16. Licensor's Sales Commissions. Notwithstanding anything to the contrary
contained herein, Licensor shall have the right, to solicit independent sales of
the Licensed Products in the Territory provided such solicitations are not made
to the customers or prospective customers of Licensee or its sales
representatives. Licensor shall notify Licensee in writing in advance of such
solicitations of all parties who it intends to solicit. If Licensor shall obtain
a purchase order for the Licensed Product (the "Purchase order") and forwards
the Purchase Order to Licensee for fulfillment, or shall direct a customer which
it solicits to Licensee and a Purchase Order is established, then, in addition
to Licensor's Royalty on the Net Invoice Amount of the sale resulting from the
Purchase Order, Licensor shall also be entitled to a sales commission in an
amount equal to five (5%) percent of the Net Invoice Amount of the Purchase
Order which shall be payable in accordance with Licensee's payment policy
hereinafter set forth. Licensee may refuse to accept Purchase Orders directed
from Licensor if the Customer does not meet its Credit or other customary
requirements is unwilling to open an L.C. or pay C.O.D. for the Licensed
Products or is already a customer or prospective customer of Licensee.
17. Notice. Any notice hereunder, if mailed by certified mail, return
receipt requested, shall be deemed given and received two (2) business days
after mailing, and if sent by professional express service, notice shall be
deemed given and received at the time of actual delivery. Notices shall be sent
to the following addresses, or such other addresses as the parties shall
designate in writing from time to time:
New Century Marketing and Distributors, Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇
Achim Importing Co., Inc.
▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
18. Entire-Agreement. This Agreement constitutes the entire understanding
and agreement between the parties. Any amendments to this Agreement must be in
writing and signed by a duly authorized officer of each party hereto.
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19. Severability . In case any one or more of the provisions contained in
this Agreement shall for any reason be held to be invalid, illegal, or
unenforceable in any respect, such invalidity, illegality, or unenforceability
shall not affect any other provision hereof, and this Agreement shall be
construed as if such invalid, illegal, or unenforceable provision had never been
contained herein.
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IN WITNESS WHEREOF the parties have hereto set their hand on the
date first above written.
NEW CENTURY MARKETING AND
DISTRIBUTORS, INC.
By:
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President
DYNAMIC INSULATED PRODUCTS, INC.
By:
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President
Witnessed by:
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