EXHIBIT 10.2
SUB-LICENSE
SAFETY CONE DISPENSER / FLEXIBLE MARKER DEVICE
For and in consideration of mutual benefits, detriments, and promises the
adequacy and receipt of which is hereby acknowledged by the Parties, the Parties
hereby recite covenant, and agree as follows:
This Sub-License Agreement is by and between Superior Traffic Controls, Inc.
("STC"), a California Corporation located at ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇, ▇▇ and
Safe Lane Systems, Inc. ("SLS"), a Colorado corporation located at ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇., ▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇.
WHEREAS, STC, has a Master License for a certain new and useful invention (the
"Invention") from Worldwide Safety, LLC (WWS), hereinafter referred to as the
"Cone Dispenser." WWS holds a patent(s) and/or Intellectual Property related
thereto, and STC holds Intellectual Property and designs related thereto (the
"Master License"); and
WHEREAS, STC has a Master License for a certain new and useful traffic and
directional device, hereinafter referred to as the "Safety Cone." STC holds a
patent(s) and/or Intellectual Property and designs related thereto, both of
which are described in Exhibit A (the "I.P."); and
WHEREAS, SLS, wishes to acquire from STC the exclusive right to manufacture and
distribute the Cone Dispenser for the duration or length of the covered patents
owned by STC, and the NON-EXCLUSIVE right to distribute the Safety Cone
throughout the length, term, or duration of the patent(s) and all related
intellectual property.
EXCLUSION: THE MUTCD COMPLIANT SPRING LOADED SAFETY CONE THAT IS USED
AS A FLEXIBLE MARKER DEVICE, IS CURRENTLY SUBJECT TO A LICENSE AGREEMENT
INVOLVING A THIRD PARTY THROUGHOUT 2014, AND IS NOT SUBJECT TO THE TERMS AND
CONDITIONS SET FORTH IN THIS AGREEMENT.
NOW, the parties agree as follows:
1. DEFINITIONS. As used in this Agreement, the following terms shall be
deemed to have the following meanings:
a. The term "Patent Rights" shall mean all U.S. and foreign patent
applications and patents covering the "Licensed Products," as
defined in Article 1 (b). These patents and patent applications
are listed in Exhibit A, which may be updated from time to time
during the term of this license.
b. The term "Licensed Products" shall mean any product covered by,
or made by a process, which is covered by, one or more claims of
an issue and unexpired patent or patent application included
within the Patent Rights;
c. The term "Territory" shall mean the United States of America, its
territories and possessions, and any other country where License
manufacturers or sells Licensed Products.
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d. The term "Net Sales Price" shall mean the amount of SLS's gross
sales of Licensed Products which are manufactured by or for SLS
and sold, for the first time only, to distributors or end users
within the Territory, after deducting any returns, cash discounts
actually made or granted by SLS, or bad debt, and excluding
freight. No deduction from the amount of gross sales shall be
made for any cost of manufacture, sale or advertisement of
Licensed Products within the Territory borne by SLS.
2. LICENSE GRANTED
a. STC hereby grants to SLS the sole and exclusive right to make,
have made, use and sell throughout the Territory said Cone
Dispenser and all related parts, manufacturable components used
to comprise the cone dispenser invention, and permission to use
all other pertinent information that may be used to facilitate
the manufacture and subsequent distribution of Cone Dispenser
products. This shall include, but not be limited to engineering
designs, white papers, CAD Drawings, and all related spec sheets,
artwork, copyrighted materials, registered marks (if any),
marketing brochures, sales catalogues, and all other related
properties that are currently in the possession of STC.
Any of the above referenced manufacturing components or
aforementioned items relative to the Cone Dispenser invention
that may materialize, are produced in the future, shall be
subject to the terms and conditions set forth in this Agreement,
commencing on the date of execution of this Agreement by both
partied, and ending in accordance to the termination date set
forth herein.
b. STC hereby grants to SLS an-exclusive right to make, have made,
use and sell throughout the Territory said Safety Cone and all
related parts, manufacturable components used to comprise the
Safety Cone product. This right, however, does not include the
Compact Safety Cone, described in Exhibit B, attached hereto and
incorporated by this reference.
LICENSE SHALL NOT INCLUDE ANY LEGAL OWNERSHIP OF THE
PATENTS, OR RELATED INTELLECTUAL PROPERTY, TITLE, AND/OR
FRACTIONAL INTEREST OF THE PATENT(S), ITS CLAIMS, EXISTING
GOODWILL, OR ANY OTHER RIGHTS, IN AND OF THE PATENT AND THE
INVENTION.
3. EXCLUSIVITY. STC grants SLS the exclusive rights to manufacture and
distribute the Cone Dispenser product subject to the terms and
conditions mutually agreed upon herein. STC shall not at any time,
engage 3rd party contract manufacturers, or distributors, in regards
to the Cone Dispenser product provided that SLS is not in breach of
any of the provisions of this Agreement.
4. PERFORMANCE REQUIREMENTS. In consideration of the license rights
granted herein SLS shall be required to pay a minimum guaranteed
royalty of $2,000 on or before May 31, 2014, and the royalties per
unit as set forth in Section 9a. hereof:
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5. PATENT MARKING. SLS agrees to ▇▇▇▇ licensed products in accordance
with applicable United States or other patent laws.
6. EXPENSES INCURRED. Any and all costs associated with the continued
development, manufacture, sales, and distribution of the cone
dispenser product shall be bourne by SLS for the duration of the
contract term. This includes, but is not limited to all time and raw
materials related to the engineering, design, and manufacture of the
product, as well as any and all distribution costs and marketing
expenses, sales literature, and website design/maintenance.
7. TERM. The terms of this Agreement shall remain in effect, throughout
the duration of the registered patent tern, and shall remain binding
upon the extension/re-registration of the intellectual property or
patent life.
8. RIGHT OF FIRST REFUSAL. STC shall grant SLS right of first refusal
regarding future cone dispenser products or new components that may be
developed, or opportunities that may materialize relative specifically
to provide SLS a 30 day quiet period to either accept or refuse STC's
proposal prior to seeking or entering into any 3rd party agreements
respective to opportunity.
9. CONSIDERATION. In consideration for the License set forth in Article
1, SLS shall pay STC, or STC's Licensor for the account of STC under
its license, at the option of SLS, a fee in the form of a royalty of
$200 per cone dispenser unit sold from all sales of the cone dispenser
for the duration of the contract term.
a. Royalty Payments 1) Royalty payments shall be payable monthly,
beginning on the 1st day of the month following the first
commercial unit sale of the device. SLS agrees to pay STC
monthly, subject to trailing clearance of the purchasing funds,
and payable on the 15th day of each trailing successive month
thereafter. The royalty accounting cycle will end on the 20th of
every month, with royalties paid on the 15th of the following
month. Royalty payments shall survive the expiration of any
Patent Rights for a period of five (5) years. Any requirement to
pay royalties shall pass to any successor entity, partnership,
individual, venture, or company that may acquire this License
interest tin the future.
10. REPRESENTATION AND WARRANTIES.
a. STC represents and warrants to SLS:
i. STC has the right, power, and authority to enter into this
Agreement;
ii. STC is the exclusive owner of all right, title and interest,
including all intellectual property rights, in the Master
License for Invention;
iii. The Master License for Invention and Patent are free of any
liens, security interests, encumbrances or licenses;
iv. The Sub-License for the Invention and Patent do not infringe
the rights of any person or entity;
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v. There are no claims, pending or threatened, with respect to
STC's rights in the Invention and Patent;
vi. This Agreement is valid, binding and enforceable in
accordance with its terms; and
vii. STC is not subject to any agreement, judgment or order
inconsistent with the terms of this Agreement.
b. SLS represents and warrants to STC:
i. SLS has the right, power and authority to enter into this
Agreement;
ii. SLS will be the sole Sub-Licensee of all rights, title and
interest, including all intellectual property rights under
the Master License, granted by WWS to STC related to the
Cone Dispenser and the Patent;
iii. SLS is free of any liens security interests, encumbrances or
license; that may have an adverse effect, or place
encumbrance on the Sub-License for the invention.
iv. The Sub-License Agreement does not infringe the rights of
any person or entity;
v. There are no claims, pending or threatened, with respect to
SLS's assigned rights, and/or Sub-License with regard to the
Invention;
vi. This Agreement is valid, binding and enforceable in
accordance with its terms; and
vii. SLS is not subject to any agreement, judgment or order
inconsistent with the terms of this Agreement.
viii.SLS agrees to carry out any and all enforcement of
violations of the patents, or any of the related
intellectual property, and promptly furnish all documents
and/or legal correspondence to STC upon possession by SLS in
order to adequately communicate status of any pending legal
action, or enforcement. In addition to furnishing legal
correspondence mentioned above, SLS agrees to also notify
STC, in writing within ten business days of any legal action
or enforcement what action, or remedies are being taken in
the best interests of the cone Dispenser and patent.
11. SLS shall bear all expenses of filing, prosecuting, and maintaining
all U.S. patent applications or patents constituting part of the
Patent Rights, but shall provide STC with copies of all prosecution
documents in a timely manner, so that STC can supply input regarding
claim and prosecution strategy. Maintenance fees disclosed to SLS by
STC include: GCG-105 "maintenance fees" for US 6752582 year 12, due
12/22/2014 in the approximate amount of $2200 and US 814213, year 4,
due 9/27/2015 in the approximate amount of $900. Patent expiration
7-12-2022. These estimates were obtained by STC from its Patent Agent
in good faith and are approximate amounts as provided by said agent.
In the event fees are different, SLS agrees to pay the reasonable
costs for these services. Should SLS determine for any reason not to
continue prosecuting any patent application or not to maintain any
patent included within the Patent Rights, the SLS shall provide
written notification to STC at least sixty (60) days prior to the last
day for taking action to preserve such patents or patent applications,
at which time STC in its sole discretion shall have the opportunity to
take over the prosecution or maintenance of such patents or patent
applications. SLS shall fully cooperate with STC in such event, such
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full cooperation including, but not being limited to, executing all
necessary documents for continuing such prosecution or maintenance.
For absolute clarity, substantial performance will not satisfy this
performance condition. Solely for purposes of this Section, the terms,
provisions, and conditions of Section 11 of the MLA entitled
"Termination" does not apply.
12. TERMINATION.
12.1 This Agreement may be terminated by either party for failure by
the other to cure a default in any material term or condition of this
Agreement. Such termination shall be effective thirty (30) days
following written notice of the default, unless the default is cured
within such notice period.
12.2 This Agreement may be terminated by either party, effective
immediately upon receipt, if:
i. a receiver is appointed for the other party of its property;
ii. if the other party makes, or attempts to make, an assignment
for the benefit of its creditors;
iii. any proceedings are commenced by or for the other party
under any bankruptcy, insolvency or debtor's relief law; or
iv. the other party liquidates or dissolves, or attempts to
liquidate or dissolve, except by way of merger.
13. ATTORNEY'S FEES AND ARBITRATION FEES. Should either party hereto, or
any heir, personal representative, successor or assign of either party
hereto, resort to litigation to enforce this Agreement, the party
prevailing in such litigation shall be entitles, in addition to such
other relief as may be granted, to recover its or their reasonable
attorney's fees or arbitration fees and costs I such litigation from
the party against whom enforcement was sought.
14. ENTIRE AGREEMENT. This Agreement, contains the entire understanding
and agreement between the parties hereto with respect to its subject
matter and supersedes any prior or contemporaneous written or oral
agreements, representations or warranties between them respective the
subject matter hereof.
15. AMENDMENT. This Agreement may be amended only by a writing signed by
both parties.
16. SEVERABILITY. If any term, provision, covenant or condition of this
Agreement, or the application thereof to any person, place, or
circumstance, shall be held by a court of competent jurisdiction to be
invalid, unenforceable or void, the remainder of this Agreement and
such term, provision, covenant or condition as applied to other
persons, places and circumstances shall remain in full force and
effect.
17. NON-WAIVER. The failure of either party to insist upon performance of
any of the terms, covenants or conditions of this Agreement, to
exercise any right or privilege in this Agreement conferred, or the
waiver by said party of any breach of any of the terms, covenants or
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conditions of this Agreement will not be construed as a subsequent
waiver of any such terms, covenants, conditions rights or privileges,
but the same will continue and remain in full force and effect as if
no such forbearance or waiver had occurred.
18. AGREEMENT TO PERFORM NECESSARY ACTS. SLS agrees to perform any further
acts and execute and deliver any documents that may be reasonably
necessary to carry out the provisions of this Agreement.
19. GOVERNMENT. This Agreement shall be construed in accordance with, and
all actions arising hereunder shall be governed by, the laws of the
State of California.
ARBITRATION. Any dispute or controversy arising under or in connection
with this Agreement (other than any dispute or controversy arising from a
violation or alleged violation by the Consultant of the provisions of Section 7)
shall be settled exclusively by final and binding arbitration in Denver
Colorado, in accordance with the Engagement Arbitration Rules of the American
Arbitration Association ("AAA"). A sole arbitrator shall be selected by mutual
agreement of the parties, if possible. If the parties fail to reach agreement
upon appointment of an arbitrator within thirty days following receipt by one
party of the other party's notice of desire to arbitrate, the arbitrator shall
be selected from a panel or panels of persons submitted by the AAA. The
selection process shall be that which is set forth in the AAA Engagement
Arbitration Rules then prevailing, except that, if the parties fail to select an
arbitrator from one or more panels, AAA shall not have the power to make an
appointment but shall continue to submit additional panels until an arbitrator
has been selected. This agreement to arbitrate shall not preclude the parties
from engaging in voluntary, non-binding settlement efforts including mediation.
Any arbitration process and Order shall be confidential.
SUPERIOR TRAFFIC CONTROLS, INC. SAFE LANE SYSTEMS, INC.
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Date: ________________________ Date: ________________________
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