Exhibit 10.2
SPEAKING ROSES INTERNATIONAL, INC.
EQUIPMENT LEASE
AND
LICENSE AGREEMENT
This Equipment Lease and License Agreement (the "Agreement") is made as of
October _______, 2004, between Speaking Roses International, Inc. ("Speaking
Roses"), and Xxxx Fresh Flowers, Inc., and its subsidiaries1 (collectively "Xxxx
Fresh Flowers"), as follows:
1. Lease of machines
(a) Speaking Roses will lease to Xxxx Fresh Flowers one or more
machines capable of embossing messages or images on flowers (the
"Machines").
(b) Xxxx Fresh Flowers will use the Machines to emboss messages or
images on flowers to be sold or distributed by Xxxx Fresh Flowers.
(c) For the lease of each Machine, Xxxx Fresh Flowers will pay
Speaking Roses US$[confidential treatment applied for] per
lease-year as rent, payable at the start of each lease-year. (A
"lease-year" for any Machine means the one-year period starting on
the date when Speaking Roses installs it at the location specified
by Xxxx Fresh Flowers.) Rent once paid is nonrefundable.
(d) Xxxx Fresh Flowers will exercise reasonable care in its possession
and use of the Machines; but Speaking Roses will provide any
maintenance needed to keep the Machines working properly, and will
promptly repair or replace any Machines or parts of Machines not
working properly. Regular daily supplies, such as ink, print
plates, etc., will be the responsibility of Xxxx Fresh Flowers.
(e) Xxxx Fresh Flowers will use as operators of the Machines only
personnel who are trained to operate them. Speaking Roses will
provide the initial training of such personnel, together with
operating manuals for each Machine. Any additional training will
be provided at a cost to Xxxx Fresh Flowers to be agreed on
between Speaking Roses and Xxxx Fresh Flowers.
(f) Speaking Roses may terminate the lease for any or all Machines
under this Agreement at any time on 180 days' prior written notice
to Xxxx Fresh Flowers. Xxxx Fresh Flowers may terminate the lease
for any or all Machines under this Agreement at any time on 30
days' prior written notice to Speaking Roses. Upon termination of
the lease for any Machine under this Agreement, Speaking Roses
will remove the Machine promptly from the location where it is
kept by Xxxx Fresh Flowers.
2. License
(a) For as long as a Machine remains under lease to Xxxx Fresh Flowers
under this Agreement, and for no longer, Speaking Roses grants to
Xxxx Fresh Flowers a nonexclusive, nontransferable, worldwide
license of the Intellectual Property (defined below) to produce,
sell and distribute flowers embossed by the leased Machine; the
license ending as soon as the leased Machine is not longer under
------------------------
(1) In this Agreement, a "subsidiary" of Xxxx Fresh Flowers means any company
directly or indirectly controlled by Xxxx Fresh Flowers; and "control" means the
power of one company to direct the policies and managgment of another whether
through the ownership of stock, by contract or otherwise.
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SPEAKING ROSES INTERNATIONAL, INC.
lease to Xxxx Fresh Flowers under this Agreement. No license of
the Intellectual Property is granted, and no license should be
implied, with respect to activities outside the scope of this
Agreement. The license of the Intellectual Property is a license
grant only, and does not include the transfer of any Intellectual
Property. Xxxx Fresh Flowers will have no property right,
ownership or interest whatsoever in any Intellectual Property
other than pursuant to the license granted in this Agreement.
(b) For the license granted in Section 2(a) above, Xxxx Fresh Flowers
will pay Speaking Roses a royalty of US$[confidential treatment
applied for] per embossed flower sold by Xxxx Fresh Flowers in
mixed bouquets, and a royalty of US$[confidential treatment
applied for] per embossed flower when sold by Xxxx Fresh Flowers
as single stems or in rose bouquets (a rose bouquet is a bouquet
that includes roses with gypsophila and/or greens only). Xxxx
Fresh Flowers will pay the royalties due for each calendar quarter
within 30 days after the end of the quarter, and will furnish with
each payment of royalties a report showing the number of embossed
flowers and bouquets sold in each country during the quarter and
the calculation of the royalties paid. Speaking Roses has the
right, for one year after any payment or payments of royalties, to
audit or review the relevant books and records of Xxxx Fresh
Flowers, to verify the royalties due Speaking Roses for the
quarter or quarters for which the payments were made. Speaking
Roses will bear the costs of such audit or review, except that if
the audit or review correctly shows that the payment or payments
total less than 95% of what was actually due, then Xxxx Fresh
Flowers will pay the costs of the audit or review as well as the
deficiency in royalties. If there is any dispute over any such
audit or review, and Speaking Roses and Xxxx Fresh Flowers do not
resolve it, they will pursue resolution through mediation with a
mutually acceptable mediator.
(c) In this Agreement, "Intellectual Property" means proprietary data,
information, "know-how," "show-how," trade secrets, inventions and
technology, whether patentable or not, owned or controlled by
Speaking Roses and directed or relating to the embossing process,
and to all processes, formulations and/or methods related to that
process, including, without limitation, the rights described in
any and all pending patent applications anywhere in the world,
owned or controlled by Speaking Roses, relating to the embossing
process, or to any method of manufacture, creation or use of that
process, including all provisional applications, substitutions,
continuations, continuations-in-part, divisions, and renewals, all
letters patent granted thereon, and all patents-of-addition,
reissues, reexaminations and extensions or restorations by
existing or future extension or restoration mechanisms, including,
without limitation, supplementary protection certificates, or the
equivalent of any of the foregoing under the laws of the
respective country in which Xxxx Fresh Flowers uses a Machine, or
sells or distributes flowers embossed by a Machine.
(d) Speaking Roses represents and warrants to Xxxx Fresh Flowers that
the Intellectual Property:
(i) Is owned by Speaking Roses or, to the extent it incorporates
technology that is not owned by Speaking Roses, Speaking Roses
has all necessary rights to perform its obligations under this
Agreement, and no third party consent or approval is required
for Speaking Roses to enter into this Agreement and to
complete all transactions contemplated by it;
(ii)Is original technology and the subject of valid, legally
enforceable and non-infringing patents (or patent filings) in
the United States; and
(iii) Does not and will not, if used as contemplated by this
Agreement, infringe any third party's patent or other
intellectual property or commercial rights.
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SPEAKING ROSES INTERNATIONAL, INC.
(e) Speaking Roses also represents and warrants to Xxxx Fresh Flowers
that there are no claims, actions, suits or proceedings commenced,
pending or threatened against Speaking Roses that will or might in
any way affect or relate to the rights and benefits granted to
Xxxx Fresh Flowers under this Agreement, and to the best of its
knowledge, Speaking Roses is not aware of any grounds existing on
the date of this Agreement on which any claims, actions, suits or
proceedings might be commenced against Speaking Roses with respect
to Intellectual Property.
(f) Speaking Roses will defend Xxxx Fresh Flowers, Inc., and its
subsidiaries, and their stockholders, directors, officers,
employees and agents against, and indemnify them for, any and all
liabilities, damages, claims, suits, judgments, penalties, amounts
paid in settlement, interest, deficiencies, costs and expense
(including reasonable counsel fees and disbursements), directly or
indirectly incurred, as a result of a breach of any of the
representations or warranties of Speaking Roses in this Agreement.
(g) Regardless of anything to the contrary in this Agreement, NEITHER
PARTY TO THIS AGREEMENT WILL BE LIABLE TO THE OTHER FOR INDIRECT,
INCIDENTAL, CONSEQUENTIAL, EXEMPLARY, PUNITIVE OR SPECIAL DAMAGES,
INCLUDING LOST PROFITS, REGARDLESS OF THE FORM OF ACTION OR THEORY
OF RECOVERY; but the limitation on liability set forth in this
Section 2(g) does not apply to any obligation or liability of
Speaking Roses under Section 2(f) above.
3. Patents and claims
(a) For as long as the license under this Agreement is in force (i.e.,
for as long as any Machine remains under lease to Xxxx Fresh
Flowers under this Agreement), Xxxx Fresh Flowers will not
directly or indirectly:
(i) Make, use or sell any flowers that have messages or images
embossed on them (other than by use of the Machines); or
(ii)Have control of any person, firm, corporation or business
that engages in the manufacture, use or sale of any flowers
that have messages or images embossed on them (other than by
use of the Machines).
(b) As used in Sections 3(a)(i) and 3(a)(ii) above, "flowers" does
not include any item, or part of an item, sold for human
consumption.
4. Notices
Notice under this Agreement is given when faxed as follows: (i) to
Speaking Roses at fax no. _______________ in the United States or such
other fax number as Speaking Roses specifies by written notice faxed to
Xxxx Fresh Flowers; and (ii) to Xxxx Fresh Flowers at fax no
000-000-0000 in the United States or such other fax number as Speaking
Roses specifies by written notice faxed to Xxxx Fresh Flowers.
5. Governing law
This Agreement is governed by Utah law, without regard to its choice of
law provisions.
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SPEAKING ROSES INTERNATIONAL, INC.
6. Whole agreement; modifications
This Agreement contains the parties' whole greement; it can be modified
only by a writing signed by both parties.
Speaking Roses International, Inc. Xxxx Fresh Flowers, Inc.
On behalf of itself
and its subsidiaries
By: /s/ Xxxxxx Xxxxxx By: /s/ Xxxx Xxxxx
--------------------------------- -------------------------------
Xxxxxx Xxxxxx, President Xxxx Xxxxx
Chief Executive Officer Vice President and CFO
Date: _________________, 2004 Date: ______________, 2004
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