LICENSE AGREEMENT
This agreement, made and entered into as of this 30th day
of November, 1999, between American IR Technologies Inc.
(AIR), a U.S.A. Corporation and WellMike Enterprise Co.,
Ltd., a Hong Kong Corporation (WELLMIKE).
RECITALS:
Whereas AIR has developed a line of Infrared Remote
Control Devices (PRODUCTS), as well as other products to
be identified, and
Whereas WELLMIKE is presently producing the PRODUCTS
under contract from AIR, and
Whereas WELLMIKE wishes to obtain the right to sell and
distribute PRODUCTS manufactured by WELLMIKE within the
territories described in Schedule B (TERRITORIES), and
Whereas AIR is willing to grant WELLMIKE a license to
sell and distribute PRODUCTS within said TERRITORIES,
Now, therefore, AIR and WELLMIKE agree as follows:
1.0 Grant of license and acceptance
1.1 Subject to the terms and conditions herein contained, AIR
hereby grants to WELLMIKE a license to sell and distribute within
said TERRITORIES, the PRODUCTS described in Schedule A
1.2 WELLMIKE hereby accepts such license and agrees to comply with
the terms and conditions herein contained
2.0 Responsibilities of WELLMIKE
2.1 WELLMIKE shall at all times actively and diligently promote
the sale of PRDUCTS within said TERRITORIES.
2.2 WELLMIKE shall at all times maintain an adequate inventory of
PRODUCTS to meet the demand for the PRODUCTS within said
TERRITORIES.
2.3 WELLMIKE shall, at its own expense, make whatever changes are
required to make the PRODUCTS safe for sale and use within the
TERRITORIES and conform to receptacle configuration, electrical
codes, and applicable regulatory agency requirements.
2.4 WELLMIKE shall submit all proposed sales literature
advertisements, instructions, pamphlets, specification and other
data related to the PRODUCTS to AIR for written approval prior to
use.
3.0 Product Changes
3.1 AIR reserves the right from time to time to delete items from
the list of licensed PRODUCTS set forth in Schedule A, and to
modify, alter, improve, or discontinue the manufacture or sale of
any or all of the PRODUCTS, provided, however, that any PRODUCTS so
deleted may not be sold by AIR or any third party acting under
authority granted by AIR in the TERRITORIES during the term of this
agreement or renewal or extension thereof, provided that sales
quotas are being met as agreed. By mutual agreement, the parties
may add items from time to time to the list of PRODUCTS set forth
in Schedule A; all such additions shall be subject to the terms and
conditions of this agreement, effective from the date added.
3.2 Except as set forth in section 3.1, nothing herein shall
restrict AIR's right to sell PRODUCTS not listed on Schedule A,
either directly or through third parties within said TERRITORIES.
3.3 Where AIR gives notice to WELLMIKE of its intent to delete
items from Schedule A in accordance with section 3.1 hereof,
WELLMIKE may request the right to continue to manufacture and sell
such PRODUCTS in the TERRITORIES. Such approval by ARI shall not
unreasonably be withheld. WELLMIKE shall remain liable for the
payment of royalties as set forth in subsection 5.0, but shall be
relieved from meeting the sale quotas specified in Schedule C
hereof, for each deleted PRODUCT.
4.0 Responsibilities of AIR
4.1 AIR shall provide WELLMIKE with reasonable assistance in
obtaining information, including technical data, specifications,
advertising material, and marketing experience to enable WELLMIKE
to prepare similar material as applicable to the TERRITORIES.
4.2 AIR shall assist WELLMIKE with translations into the
applicable language of the TERRITORIES, for all materials related
to PRODUCTS.
4.3 AIR shall provide WELLMIKE with technical information
developed by AIR for product improvements.
4.4 AIR shall not forfeit the right to grant license to third
parties other than this license.
5.0 Royalties
5.1 WELLMIKE shall pay to AIR a royalty fee for the exclusive
license as follows:
5.1.1 Base royalty of $2.00 per unit of gross sales of PRODUCTS
within the TERRITORIES, excluding shipping costs, taxes
and duties.
5.1.2 An additional royalty of five (5) percent of gross sales
of PRODUCTS within the TERRITORIES in those instances where AIR
has an issued or pending patent in the TERRITORIES applicable
to the PRODUCTS.
5.2 Royalties shall be paid quarterly for PRODUCTS shipped for
sale in the TERRITORIES. Payment shall be due AIR at the end of
the month following the quarter when payment is due to WELLMIKE.
5.3 Payment shall be made in U.S. Currency at the official
exchange rate in effect on the date of the invoice.
6.0 Reports
6.1 WELLMIKE shall provide to AIR within 15 days following the end
of each quarter a report listing all sales of PRODUCTS within the
TERRITORIES, specifying invoice number, customer, quantities sold,
prices, and terms.
6.2 WELLMIKE shall provide AIR with a report identifying the
invoices for which royalties are being paid, the invoice amounts,
and the royalty rates applicable.
7.0 Trademarks and Trade Names
7.1 Subject to the terms of this agreement, WELLMIKE may use the
trademarks, trade names, and advertising utilized by AIR relating
to PRODUCTS as may be reasonable and appropriate to promote the
sales of PRODUCTS by WELLMIKE.
7.2 AIR shall have the right to reasonably approve the form,
content and manner of use of any such trademarks, trade names, or
advertising used by WELLMIKE.
7.3 WELLMIKE may use its own other trademarks, trade name, or
advertising in connection with its own business or use of any other
name, title, or expression as would be likely to lead to confusion
or uncertainty.
7.4 Upon termination of this agreement, WELLMIKE shall discontinue
use of any AIR trademark, trade name, or advertising in connection
with its own business or use of any name, title, or expression as
would be likely to lead to confusion or uncertainty.
8.0 Patent Indemnity
8.1 AIR agrees to indemnify, defend, and hold WELLMIKE harmless
from all claims, actions, liability, damages, and expenses
(including attorney fees) assessed against or incurred by WELLMIKE
arising out of or relating to any claim, demand, or actions for
infringement of any letters patent issued with respect to PRODUCTS.
WELLMIKE shall give AIR prompt written notice of any claim made or
filed against WELLMIKE. Upon receipt of such notice, AIR shall
defend any such claims, demands, or actions at no expense to
WELLMIKE.
8.2 Patent rights relating to PRODUCTS shall at all times during
the term of this agreement, and after the termination of this
agreement, remain vested in AIR, and WELLMIKE shall have no rights
thereto whatsoever.
9.0 Term
9.1 Subject to provisions of section 10.0, this agreement shall
continue for a period of three years from the date of this
agreement.
9.2 WELLMIKE shall have six months from the date of this
agreement, or from the date AIR approves WELLMIKE tooling for
equivalent PRODUCT made for AIR, whichever comes later, to commence
sales to the TERRITIORIES. After said period, the sales quotas
specified in schedule C shall apply.
9.3 WELLMIKE shall have six moths from the date of an amendment
adding a product to this license, or from the date AIR approves
WELLMIKE tooling for equivalent PRODUCT made for AIR, whichever
comes later, to commence sales to the TERRITORIES.
10.0 Termination
10.1 Notwithstanding section 9.0, this license may be terminated at
any time by mutual consent of AIR and WELLMIKE.
10.2 This agreement may be terminated for a breach of its terms or
conditions by the non-defaulting party upon 30 days prior written
notice via registered or certified mail or telex in accordance with
the provision of section 19.0 hereof. Said written notice shall
specify the alleged breach and cite the applicable provisions of
this agreement. If the party claimed to be in default does not
cure the alleged breach of this agreement within 30 days after
receipt of the aforesaid written notice, or make substantial
progress for correction, this agreement shall terminate at the end
of such 30 day period without further action of the party giving
such written notice.
10.3 If WELLMIKE does not meet or exceed the sales quotas set forth
in Schedule C and in accordance with Section 9.2 and 9.3, AIR may
terminate xxxxx agreement for those PRODUCTS or those TERRITORIES
where WELLMIKE fails to meet said quotas. Should AIRnot choose to
terminate this agreement for those PRODUCTS or TERRITORIES, AIR
shall not be deemed to have waived its rights, and may exercise
them at any time thereafter, unless WELLMIKE meets or exceeds those
sales quotas in the interim.
10.4 If either party becomes insolvent; or if proceedings are
instituted by or against either party in bankruptcy or under
insolvency law; or for reorganization, receivership, or
dissolution; or if either firm shall make an assignment for the
benefit of its creditors; then the other party may terminate this
agreement forthwith upon written notice given by registered or
certified mail or telex pursuant to the provisions of section 19.0
hereof.
11.0 Purchase of PRODUCTS
11.1 If this agreement is terminated by either party for any reason
other than for breach of contract by WELLMIKE, AIR shall have the
option, but not the obligation, to purchase from WELLMIKE, any
unsold PRODUCTS in WELLMIKE. WELLMIKE hereby agrees to sell to AIR
such PRODUCTS at its cost. If AIR does not exercise its option,
WELLMIKE may sell its unsold inventory of PRODUCTS in the
TERRITORIES, while still maintaining the same royalty arrangement
with AIR.
11.2 If this agreement is terminated by AIR, other than for breach
of contract by WELLMIKE, AIR shall have the obligation to purchase
at actual cost the in-stock inventory and on-order material up to
next four months shipment requirement per customer purchase order
or firm forecast, written or telexed.
11.3 If this agreement is terminated by AIR, other than for breach
of contract by WELLMIKE, AIR shall have the obligations to purchase
any and all tools related to such PRODUCTS at the book value of
such tools. WELLMIKE hereby agrees to sell such tools to AIR at
such price and under such terms and conditions as the parties may
hereafter agree.
11.4 Notwithstanding the terms of Section 11.1 and 11.2, if any of
the unsold PRODUCTS in WELLMIKE's inventory are the same as
PRODUCTS which WELLMIKE is manufacturing for AIR under a contract,
the purchase price to be paid by AIR shall be the current price
paid by AIR for PRODUCT it has ordered from WELLMIKE.
11.5 Notwithstanding the terms of Section 11.3, if any of the
tooling related to such PRODUCTS is the same tooling used by
WELLMIKE to produce PRODUCTS WELLMIKE is manufacturing for AIR
under a contract, that tooling shall remain in WELLMIKE's
possession.
12.0 Books and Records
12.1 WELLMIKE shall maintain complete records in accordance with
generally accepted accounting principals showing all transactions
involving sale of PRODUCTS by WELLMIKE.
12.2 AIR shall have the right to examine said books and records
with 48 hours advance notice during regular business hours.
13.0 Confidential Treatment of Information
13.1 Each party hereto agrees to keep confidential, and not to
divulge except as expressly authorized under this agreement, any
information obtained from the other with respect to PRODUCTS, trade
secrets, processes, inventions, prices, operating procedures, or
any other material identified as "Confidential" by the supplying
party.
13.2 The obligations of each party under this section shall survive
the termination of this agreement.
14.0 Disputes and Arbitration
14.1 Any dispute between the parties arising out of the
relationship created by this agreement shall be settled by
arbitration. The arbitrators shall be selected in accordance with
the rules of arbitration of the General Chamber of Commerce Hong
Kong then in effect.
14.2 The determination of the arbitrator or arbitrators shall be
final and binding on the parties. Arbitration shall be conducted
in such place as the parties may agree; but if they do not agree,
the arbitration shall be conducted in eh City of London, U.K. The
decision of the arbitrator shall be final and shall be binding upon
the parties.
15.0 General Relationship
15.1 WELLMIKE agrees that in all matters relating to this
agreement, WELLMIKE shall be acting as an independent contractor.
WELLMIKE shall be responsible to its own agents, officers, and
employees, and shall hold AIR harmless from any and all claims
arising from acts or omission of said persons.
15.2 WELLMIKE shall have no right, power, or authority to create
any obligation, expressed or implied, on behalf of AIR and shall
have no authority to represent AIR as an agent.
16.0 Waiver
16.1 The failure of AIR or WELLMIKE to enforce, at any time, any of
the provision of this agreement, or any right with respect thereto,
or to exercise an option herein provided, shall in no way be
construed to be a waiver of such provisions, rights, or options, or
in any way affect the validity of this agreement.
16.2 The failure of AIR or WELLMIKE to exercise any of their rights
or any of their options under the terms and conditions herein shall
not preclude nor prejudice either party from thereafter exercising
the same or any other right they may have under this agreement,
irrespective of any previous action or proceeding taken by either
party hereunder.
17.0 Successors
17.1 This agreement shall be binding upon and inure to the benefit
of the parties and their permitted successors and authorized
assigns.
18.0 Attorney's Fees
18.1 In any action (including arbitration) which may be brought in
connection with this agreement, the prevailing party in any action
(including arbitration) shall be entitled to recover all related
costs, disbursements, and reasonable attorneys' fees.
19.0 Notices
19.1 Whenever it is provided herein that notice, demand, request,
or other communication shall or may be given to, or served upon,
either of the parties, and whenever either of the parties shall
desire to give or serve upon the other any notice, demand, request,
or other communication with respect to this agreement, each such
notice, demand, request, or other communication shall be in writing
and shall not be effective for any purpose unless the same shall be
given or served as follows:
19.1.1 If given or served by AIR by telex or by mailing the same
to WELLMIKE by registered or certified mail, postage prepaid,
return receipt requested, addressed to:
WellMike Enterprise Co., Ltd.
3 FL. XX. 0, XXXX 000, XXXXX XXXX XXXX
R.O.C.
TEL: (8862) 0000-0000, 0000-0000 (REP.)
FAX: (8862) 0000-0000
Or to such other address as WELLMIKE may
from time to time designate by notice
given to AIR via registered or certified
mail or telex.
19.1.2 If given or served by WELLMIKE by telex or by mailing the
same to AIR by telex, registered or certified mail, postage
prepaid, return receipt requested, addressed to:
American IR Technologies Inc.
Suite 201, 0000 Xxxxx Xxxxxx Xxxx Xxxx.
Xxx Xxxxx, XX 00000
TEL: (000) 000-0000
FAX: (000) 000-0000
Or to such other address as AIR may from
time to time designate by notice given to
WELLMIKE via registered or certified mail
or telex.
19.2 Every demand, notice, request, or other communication shall be
sent by telex or deposited in the mail, postage prepaid, in the
manner aforesaid.
20.0 Representation - Entire Agreement
20.1 There are no other representations, promises, agreements, or
understandings either oral, written, expressed, or implied,
existing on any of the subjects referred to in this agreement,
other than as expressly set forth herein. Every such
representation, promise, agreement, understanding, or other
arrangement has been merged into this agreement, and this agreement
contains the entire agreement and understanding between the parties
and supercedes all other agreement heretofore made.
21.0 Applicable Law
21.1 This agreement shall be construed in accordance with, and its
performance shall be governed by, the laws of Hong Kong.
In WITNESS WHEREOF, each of the parties hereto has caused
this agreement to be executed on the day and year first
written above.
WELLMIKE ENTERPRISE CO., LTD.
By: XXXX XXXX /s/ Xxxx Xxxx, November 30, 1999
AMERICAN IR TECHNOLOGIES INC.
By: XXX XXXX /s/ Xxx Xxxx, November 30, 1999
SCHEDULE A: PRODUCTS
The following are the products which are included in the
License Agreement. Identification is in AIR product
numbers.
AIR 0001 Border Patrol
AIR0002 Cupboard Light
AIR0003 Garage Parking
Wand
AIR0004 Electronic
Peephole
AIR0005 STM Alarm
SCHEDULE B: TERRITORIES
The following are the territories included within the
License Agreement:
1. Germany, United Kingdom and Japan
2. All other areas outside of North America
It is further agreed that if any WellMike order is in
conflict in any way with American IR, its pricing
policies or market philosophy or principals, the order
can be cancelled by American IR without further notice.
SCHEDULE C: SALES QUOTAS
The following are the sales quotas applicable to the
territories listed in Schedule B.
Product Territor Sales Quota Sales Quota year Sales Quota
ies year one two year three
-------- -------- ------------ ---------------- -----------
0001 1. 30,000 50,000 75,000
0002 2. 10,000 20,000 30,000
DEFINITIONS:
SALES QUOTA (1 year) Refers to rate of sales to be
achieved after 12 months from the
start of sales as defined in Section
9.2 and 9.3.
SALES QUOTA (2 years) Refers to rate of sales to be
achieved from 12 to 24 months from
the start of sales as defined in
Section 9.2 and 9.3.
SALES QUOTA (3 years) Refers to annualized rate of sales
to be achieved from 24 to 36 months
from the start of sales as defined
in Section 9.2 and 9.3.
Both parties shall operate in good faith, for a mutually
beneficial long-term relationship.
