EXHIBIT 10.14
LICENSE AGREEMENT
AGREEMENT made this 19 day of February, 1997, by and between Xxxxxxx X. Xxxxx at
Natural Cool, Inc. a Vermont Corporation (herein referenced to as Licensor), and
Safe Alternatives Corporation of America, Inc. a Florida Corporation with its
principal place of business in Ridgefield, Connecticut (hereafter referred to as
Licensee) acting herein by Xxxxxxx X. Xxxxxxxx its President.
WHEREAS: Licensor has exclusive worldwide marketing rights and manufacturing
rights to a patented product known as Natural Cool (hereafter referred to as the
Product; and
WHEREAS: Licensee is in the business of the commercial exploitation of
environmentally friendly products; and
WHEREAS: Licensor is desirous of licensing the world-wide exclusive marketing
rights to the product to license; and
WHEREAS: Licensee is desirous of obtaining said license;
NOW, THEREFORE, it is agreed as follows:
1. Licensor agrees to grant to license the exclusive worldwide
marketing rights for the Natural Cool system product as described in the United
States Patent attached hereto and made a part hereof. Licensor further agrees
that any improvements, trade secrets, alternatives or changes to said product
shall be included hereunder and the exclusive worldwide marketing rights shall
belong to Licensee.
2. Licensee agrees to pay Licensor a two (2%) percent royalty on gross
sales of the product. It is agreed and understood that the royalty percentage
will be reduced proportionately when the following benchmarks are not met:
A) The average retail price must be a minimum of four thousand
($4,000.00) dollars per unit.
B) Each unit must have a gross profit percentage of at least
sixty (60%) percent. Gross profit herein defined as the gross sales price less
all costs of manufacturing.
3. Licensee shall, upon the execution of this Agreement,
immediately escrow 250,000 shares of its common stock for the benefit of
Licensor. The stock escrowed shall be released on or before the 15th of March
1997.
As a condition of this Agreement:
4. Licensee shall enter into a mutually agreed upon employment
contract with Xxxxxxx X. Xxxxx for the overseeing of the Natural Cool Division
of Licensee. Proof of the existence of said agreed to employment contract will
be the execution of this Agreement which shall not be executed until said
mutually agreed to employment contract is in full force and effect. This
Licensee may be terminated if the terms of the Employment Agreement attached
hereto and made a part hereof are not honored by Licensee and written notice of
any default under said Contract has been given Licensee by Xxxxxxx X. Xxxxx and
said default has not been cured within 120 days of receipt of said notice.
5. Licensee represents that it is able to provide
manufacturing capital for the product in the minimum amount of fifty (50%)
percent of all bona-fide purchase orders received from creditworthy customers,
not to be less than $3,000.00 per unit, up to a minimum of two million
($2,000,000.00) dollars at this time. Licensee's representations herein is
conditional on the assumption that the purchaser is creditworthy and that the
product is suitable for the purpose of which it is intended and free from defect
and in good working order.
6. It is understood and agreed that all representations herein by
Licensee and Licensor are material and are being relied upon by the other party.
7. Licensor hereby represents the following:
A) The product is patented under a United States Patent and a
Canadian patent, a copy of which is attached hereto.
B) Licensor or its principals know of no other patent which is
similar to the patent of Licensor and that Licensor's patent does not
infringe and will not infringe on any other United States Patent.
C) The product is approved and listed by Underwriter's
Laboratory and N.S.F. for the purpose for which it's used.
D) There currently exist a minimum of 200 installed units of
the product. All of said units are in good working order and
functionary for the purpose for which they were installed. Licensor
agrees to give Licensee all names, addresses and all information the
Licensor possesses. Said customers shall become customers of Licensee
for all purposes.
E) Licensor has a leasing company available for purchases of
the product, the terms of said leases being competitive with other
leasing companies.
F) Licensor projects, within a one year period, purchase
orders for 13,000 units of the product at a minimum sales price of
$4,000.00 per unit per year.
G) Licensor is the sole owner of the worldwide marketing
rights for the product. H) Licensor hereby represents the
following:
i) Licensse agrees to purchase minimum of 500 units
per year.
ii) 100 units will be funded on or before the 15th of
March 1997.
8. It is agreed by Licensor that Licensee shall have the right to
manufacture the product if Licensor ever fails to complete the manufacture of
all units ordered in a timely fashion, or the manufacturing entity increases
costs in excess of three (3%) percent of the established base cost in any one
year for purposes of this Paragraph the term timely fashion shall be defined as
one hundred twenty (120) days from the date of the placement of an order.
9. Licensee agrees to maintain complete records in accordance with
generally accepted principals which accurately reflect the activities of
Licensee under this Agreement as are pertinent to an
accurate calculation of continuing royalties. Licensor shall have the right, at
its own expense, to have the records maintained by Licensee hereunder inspected
by a firm of nationally recognized certified public accountants for the purpose
of verifying the amount of continuing royalties due and payable hereunder, but
such rights of inspection shall be limited to no more than two inspections per
calendar year, and alt information provided or obtained by such certified public
accountant, except the total amount of continuing royalties accruing in each
calendar quarter, shall be held by them in strict confidence including as to
Licensor.
10. Licensor represents to Licensee that a U.S. Patent exists covering
this technology. Licensor and Licensee agree that it is important to this
Agreement that the Licensor Patent Rights be maintained.
A) For and in consideration of the right and license, Licensor
agrees to pay all maintenance fees, all fees for filing and prosecuting
pending patent applications, etc., for those Licensor Patent Rights and
Licensor Improvements.
B) Licensor shall have the option at its sole discretion of
maintaining the Patent Rights by the payment of all maintenance fees,
all fees for filing and prosecuting pending patent applications, etc.,
for those Patent Rights and Improvements which Licensor and SAC agree
are important to this Agreement in which event such Patent Rights and
Improvements shall remain the sole property of Licensor and SAC's only
rights therein are those granted by license herein. In the event
Licensor chooses not to maintain any of the Patent Rights at its own
expense, it shall notify SAC in writing thereof at least thirty (30)
days before the expiration of the relevant period for filing or
maintenance and SAC shall then have the option, at its sole discretion,
of filing or maintaining such Patent Rights. Should SAC choose to file
or maintain such Patent Rights at its own expense, the cost of filing
or maintaining said patent rights shall be deducted from payments due
Licensor. Licensor agrees to cooperate fully with SAC in such filing
and maintenance.
C) Similarly, Licensor shall be solely responsible for
enforcement of the Licensor's Patent Rights and shall pay all expenses
of and receive all recoveries from such enforcement. However, in the
event that Licensor falls to enforce the Licensor' 5 Patent Rights
against an infringer (in the opinion of SAC's patent counsel) within a
reasonable time after having notice thereof, then SAC may bring an
action for enforcement of the Licensor's Patent Rights in its own name,
at its own expense and for its own benefit, and Licensor shall
cooperate flilly with SAC in any such enforcement action.
11. The performance by the parties of their respective obligations
under this Agreement shall be suspended for such period of time as they are
prevented from performing such obligations by reason of acts of God, fire,
flood, explosion, insurrection, riot, enemy attach, malicious mischief, order of
the court or other governmental authority, inability to secure or delay in
securing rights of way, privileges, franchises, permits equipment and other
events reasonably beyond the control of the party subject thereto.
12. All notices required or permitted to be given pursuant to this
Agreement shall be in writing and shall be deemed adequately given if delivered
in person or sent by registered or certified mail, return receipt requested, to
the following address:
Safe Alternatives Corporation of America, Inc.
C/o Xxxxxxx X. Xxxxxx
00 Xxxxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Xx. Xxxxxxx X. Xxxxx and/or assigns
000 Xxxxxxx Xxxxxx
Xxxxxxx, XX 00000
or such other address as may be designated by a party, by a notice in compliance
with this article.
13. This Agreement shall be governed by and construed in accordance
with the laws of the State of Connecticut.
14. This Agreement represents the complete agreement of the parties
with respect to the subject matter hereof, and all prior agreements and
negotiations are merged herein. This Agreement may be amended or changed only by
a written document purporting to do so and signed by both parties.
15. If it shall at any time appear that any right or obligation
provided in this Agreement is contrary to any law, treaty or regulation of a
government to which any party is subject, such right or obligation shall be
deemed annulled, or shall be modified to the extent required to comply with such
law, treaty or regulation.
16. Except to the extent permitted under and necessary to enjoy the
full benefits of the Agreement, it is agreed that without prior written approval
of the other party, neither party will during the term of this Agreement
disclose or permit to be disclosed to others or used for, its own benefit, any
know-how and unpublished information relating to the business, engineering,
research activities or trade secrets of the other acquired by the party during
the term of this Agreement, provided that such know-how and unpublished
information has been designated and marked as "CONFIDENTIAL" by the party to
whom the know-how and information belongs prior to its acquisition by-the
receiving party; and provided further that the know-how or unpublished
information has not fallen into the public domain through no fault of the
receiving party and has not been received by the receiving party from another
source.
17. This Agreement is being executed in duplicate original form, each
of which shall serve and function as an original agreement for all purposes.
IN WITNESS WHEREOF the undersigned have set their hands and seals this
day of January, 1997.
In the presence of:
---------------------------
Witness
---------------------------
Witness
Safe Alternatives Corporation of America. Inc.
/s/ Xxxxxxx X. Xxxxxxxx
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Xxxxxxx X. Xxxxxxxx, its President
Natural Cool, Inc.
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Xxxxxxx X. Xxxxx, its President
/s/ Xxxxxxx X. Xxxxx
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Xxxxxxx X. Xxxxx, as individual
Date: Feb. 19, 1997
