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EXHIBIT 10.2
CANADIAN LICENSING AGREEMENT OUTLINE
Principals: Licensor: Veridien Corporation
Licensee: Backcourt Industries Inc.
a Canadian Federally incorporated
Company ("CANCO")
Terms: The Licensing Agreement shall have an initial term of five
(5) years and thereafter renewed annually providing CANCO
is in good standing under the terms of the agreement.
Fees: In return for exclusive Canadian rights to manufacture or
have manufactured, distribute and sell in Canada (including
Quebec) products using Veridien's Virahol patented formula
and Veridien's other infection control related products and
use of the Viraguard / Virahol registered trade mark and
other applied Trademarks (collectively "Veridien Products"),
Veridien would earn a licensing fee based upon 10% of the
Net Sales realized from these Veridien Products in Canada
(as more particularly set out below). Net Sales shall be
defined as amounts received by CANCO from the sale of
Veridien Products less transport and costs of insurance
during transportation and less any amounts paid to or
credited to or on behalf of any customer ("Credit"). Said
Credit would include, return of goods, return of damaged
goods, trade listings, promotion allowances, co-op
allowances and slotting allowances.
CANCO shall make an initial license fee payment of
$345,000.00 CAN. upon Xxxxxxxx's execution of the licensing
agreement. Such amount shall be applied as a prepayment for
licence fees payable hereunder. Thereafter additional
licence fees of 10% of Veridien Product Net Sales in excess
of $3,450,000.00 is payable. VERIDIEN and CANCO have the
right of offset for any monies due and owing.
The sales period for determination of the licensing fee will
be February 28, 1998 to June 30, 1999 and thereafter 12
month periods commencing July 1st, 1999, however the
licensing fee will be determined and payable semi-annually
with semi-annual adjustments if necessary.
Exclusivity: In order for CANCO to maintain its Canadian exclusivity
rights, Veridien must receive minimum annual licence fees or
payments in lieu thereof ("Exclusive Minimums") as set out
below:
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Year 1 $ 250,000 CAN. (being that period February 28, 1998
through to June 30, 1999).
Year 2 500,000
Year 3 750,000
Year 4 875,000
Year 5 1,000,000
Thereafter each successive year under the agreement the
Exclusive Minimums will increase by 10%.
Should Veridien not receive the Exclusive Minimums for any
year as stipulated herein within 30 days following said
yearly period, CANCO will forfeit its exclusive rights in
Canada (including Quebec) commencing the yearly period
following the year in which Exclusive Minimums have not been
met. However, thereafter CANCO will be entitled to continue
to operate under the terms of the licence agreement on a
non-exclusive rights basis.
Further, should the Exclusive Minimums, in any yearly period
not at least equal $250,000.00, Veridien may terminate the
non-exclusive rights hereunder upon six months notice.
Sublicense Rights: CANCO will have the right to grant a sublicense of its
rights in Canada (including Quebec) obtained under the
licensing agreement to third parties subject to Xxxxxxxx's
approval with said approval not to be unreasonably withheld.
Miscellaneous: CANCO confirms that it has / will spend not less than
$250,000. in addition to initial licence fee in proceeding
with Licensee's business opportunity hereunder.
CANCO and Xxxxxxxx hereby agree to execute such further
documentation on customary terms as may be necessary to
formalize the terms of this agreement as set out herein
including, without limitation:
(a) providing for reasonable inspection of manufacturing
processes, use of trademarks and packaging by Veridien and
audit of sales volumes;
(b) exclusion from exclusivity for current Nutrition For Life
Inc. distribution system through existing network marketing
program;
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Each party shall bear their respective legal costs.
AGREED TO AND ACCEPTED BY:
BACKCOURT INDUSTRIES INC. VERIDIEN CORPORATION
Per: Per:
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Date Date:
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