TRICON HOLDINGS, L.L.C.
TRICON
HOLDINGS, L.L.C.
000
Xxxxxxxxx Xxxxxx
Suite
401
Coral
Gables, Florida 33134
February
26, 2007
Personal
and Confidential
Xxxxx
X.
Xxxxxxx
President
Chairman
Pet
Ecology Brands, Inc.
14822
Venture Dr.
Dallas,
Texas 75234
Dear
Xx.
Xxxxxxx:
This
letter confirms the terms of this Agreement To License Patents
(“Agreement”) by and between Tricon Holdings, L.L.C. and Texas
Atlantic Capital Partners, L.L.C., or assigns,
(collectively, "Licensee") and Pet Ecology Brands, Inc. (“Company”)
whereby Company agrees to exclusively license to Licensee any and all domestic
and international rights to manufacture and sale products covered by any
and all
patents now or hereinafter applied for or obtained by Company, specifically,
but
not limited to those described on Exhibit “A” attached hereto and incorporated
herein for all purposes. Such license shall be limited to the sale by
Licensee of products covered by the patents via internet, telephone,
television or other
method Licensee may devise for sale to consumers who accept home delivery
of the
products.
In
consideration for such agreement, Xxxxxxxx agrees to pay to Company the
following:
a.
The sum of One Hundred Fifty Thousand Dollars ($150,000), Fifty Thousand
Dollars
($50,000) of which shall be due and payable as of the date hereof and the
balance being due on or before April 15, 2007; and,
b.
Payment by Licensee to Company a royalty in an amount equal to 12% of the
direct
cost to Licensee of manufacturing and packaging (but not shipping) any product
sold pursuant to the terms of the License Agreement. The parties agree that
payment by Licensee of such royalties shall be made no later than thirty
(30)
days following the end of each calendar quarter and shall be accompanied
by an
accounting of all direct costs incurred by Licensee in manufacturing the
products sold pursuant to the License Agreement. Company shall be entitled,
at
its own expense, to conduct and audit of Licensee’s costs upon which any royalty
payments are based, and, if the results of such audit reflects that Company
has
been underpaid by Licensee by 15% or more during the period subject to the
audit, Licensee shall, in addition to paying the additional amount of royalties,
shall reimburse Company for the reasonable expense of the audit.
1
The parties
agree to immediately engage the firm of Howinson & Arnott to draft the
Licenses in accordance with the terms of this Agreement and Licensee agrees
to
pay the legal expenses associated therewith.
In
addition to the Licenses, Company agrees to provide Licensee any and all
proprietary formulas and other information necessary for Licensee to manufacture
any and all products covered by this Agreement and the Licenses.
Licensee agrees that such formulas and information shall remain confidential
and
not disclosed to any third parties other than such third parties that are
engaged to manufacture products covered by this Agreement and the
Licenses. Licensee agrees to obtain confidentiality agreements with
such third parties which shall include terms reasonably designed to protect
the
proprietary nature of the formulas and other information.
Additionally,
and as a provision of the Licenses, the parties agree that an absolute
assignment of all patents covered by the Licenses shall be executed by Company
and delivered to Xxxxx Xxxxxx, Escrow Agent, along with any and all proprietary
formulas and other information essential for manufacturing all products covered
by this Agreement and the Licenses, with escrow instructions that, in the
event
Company should voluntarily or involuntarily seek bankruptcy protection or
should
any or all of the patents become subject to being sold or transferred to
any
third party as a result of actions taken by one or more creditors of the
Company, Escrow Agent shall deliver the absolute assignment of the
patents to Licensee.
Licensee
reserves the right to enter into consulting and other agreements with Xxxxx
X.
Xxxxxxx (“Inventor”) containing such terms and conditions and providing for such
compensation to Inventor as may reasonably be required to obtain
Inventor’s assistance and knowledge concerning the manufacture and
marketing of the products covered by the patents.
The
parties agree to enter into such
other and further agreements, if necessary, to ensure that the spirit and
terms
of this Agreement are fulfilled.
This
agreement may be executed in any number of counterparts, any of which shall
be
deemed an original.
Sincerely
Tricom
Holdings, L.L.C.
By: /s/
Xxxx
Xxxxxx
Name: Xxxx
Xxxxxx
Its: Managing
Director
Texas
Atlantic Capital Partners, L.L.C.
By: /s/
X.
Xxxxxx Xxxxx
Name: X.
Xxxxxx Xxxxx
Its:
Manager
AGREED:
Pet
Ecology Brands, Inc.
By: /s/
Xxxxx X. Xxxxxxx
Xxxxx
X. Xxxxxxx
President
/s/
Xxxxx X. Xxxxxxx
Xxxxx
X. Xxxxxxx
Individually
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