Exhibit 10.3
LICENSING AGREEMENT
THIS AGREEMENT is effective beginning January 9, 1998.
The parties to this agreement are Xxxxx X. Xxxxxxx dba PRETTY/PRIVATE,
residing at 000 Xxxxx Xxxxxxx, Xxxx, XX 00000, hereinafter referred to as
LICENSOR and The Rose Group Corporation located at 0000 Xxxxxx Xxxx Xxxxx,
Xxxxxxxx, XX, 00000, hereinafter referred to as "LICENSEE".
WHEREAS, LICENSOR has invented a nursing garment (hereinafter referred
to as the "Invention") and is owner of all right, title and interest in and to
trade secrets, proprietary know how, United States Letters Patent No. 5,008960
issued on April 3, 1991, for a Nursing Garment, and
WHEREAS, LICENSEE desires a license to make, have made, use and sell
the Invention, which license LICENSOR is willing to grant:
NOW, THEREFORE, in consideration of the premises and mutual covenants
of this Agreement, the parties hereto have agreed as follows:
LICENSEE shall mean not only The Rose Group Corporation, but shall
include any firm which is related to The Rose Group Corporation in the sense
that it is owned or controlled by, or which controls The Rose Group Corporation,
or is an exclusive affiliate, division, or parent of a company substantially
owned or controlled by The Rose Group Corporation.
1. PRODUCT DESCRIPTION
"Licensed Product", shall mean the invention, related trade secrets and
proprietary know how, any article covered by any of the claims of United States
Patent No. 5,008960 or any of its foreign counterparts, or of any pending patent
applications of LICENSOR, and any improvement upon said article.
2. LICENSE GRANT
LICENSOR hereby grants LICENSEE a personal, license(without the right to grant
sublicenses) to make, have made, use and sell the Licensed Product throughout
the world.
3. PERFORMANCE BY LICENSEE
LICENSEE shall use its best efforts to produce and sell the Licensed Product in
the greatest quantity and of the greatest quality possible, and shall deal in
good faith with LICENSOR at all times, and shall not engage in any activity
which is against the interests of LICENSOR.
4. ROYALTY PAYMENTS
As monetary consideration for the license herein granted, LICENSEE shall pay to
LICENSOR,
a. A 7.5% (Seven and one-half per cent) royalty, based on net selling
price, on all sales (or other commercial disposition) of LICENSED PRODUCTS by
LICENSEE, its subsidiaries, and/or associate companies. The term "Net Selling
Price" shall mean the invoice price, f.o.b. factory, less any discounts for
volume, promotion, defects, or freight.
b. Royalty payments are to be made monthly, within sixty (60) days
following the last day of the month for LICENSED PRODUCTS shipped during the
month. Payments not received by LICENSOR within sixty (60) days after the last
day of each month shall bear interest at the rate of twelve percent (12%) per
annum from sixty (60) days after the last day of the month until paid. Further,
LICENSEE agrees to reimburse LICENSOR for any legal costs it may incur in
collecting overdue royalty payments.
d. All payment to LICENSOR hereunder shall be made payable to Xxxxx X.
Xxxxxxx dba PRETTY/PRIVATE, and sent or delivered to 000 Xxxxx Xxxxxxx, Xxxx, XX
00000 or at such other address as LICENSOR may, from time to time, designate to
LICENSEE in writing.
5. REPORTS
LICENSEE shall submit a written report to LICENSOR together with each royalty
payment hereunder with respect to shipments in a given month, setting forth the
following:
a. The total quantify of LICENSED PRODUCTS sold for the given month,
b. The NET SALES PRICE at which each shipped LICENSED PRODUCT was sold.
c. the calculated royalty due; and
d. A running total of royalties paid hereunder for the calendar year.
6. RECORDS
LICENSEE shall maintain books and records in sufficient detail to confirm the
accuracy of royalty payments due hereunder and shall make such books and records
available for inspection by LICENSOR or its representative upon a reasonable
advance request in writing. In the event such inspection reveals that past
royalty payments have been deficient, the reasonable cost of such inspection
shall be borne by the LICENSEE.
7. PATENT MARKING
LICENSEE agrees that on the product, its packaging and collateral material there
will be printed notice, in compliance with the applicable statutory
requirements, of any patents issued or pending, such notice showing the LICENSOR
as the owner of said patents under exclusive license to LICENSEE.
8. IMPROVEMENTS
Should LICENSEE or any member of its organization develop, either solely or
jointly with others or with LICENSOR, any improvements in the LICENSED PRODUCT
or any intellectual property related thereto (collectively "Developments"),
which Developments are based on, derived from, or otherwise result from access
to the LICENSED PRODUCT, LICENSEE agrees to assign and does hereby assign to
LICENSOR, for consideration herein acknowledged, all of LICENSEE'S right, title,
and interest in and to said Developments. LICENSEE hereby appoints LICENSOR as
its attorney-in-fact for the limited purpose of executing all documents and
performing all other acts necessary to give effect and legality to the
provisions of this paragraph.
9. TERMS AND WARRANTS
a. Unless sooner terminated as provided herein, this License Agreement
shall remain in full force and effect for four years commencing on the effective
date of this License Agreement, and ending at midnight on the fourth anniversary
of said effective date, provided the term automatically be extended for another
four (4) years unless either party gives the other written notice on the third
(3rd) anniversary of the effective date of their intent to terminate.
b. This Agreement shall be considered to be in force during the terms
of paragraph 9.a, so long as LICENSEE continues to sell the LICENSED PRODUCT,
including the original product line or subsequent extensions and/or variations
thereof. However, it is herein acknowledged that, with the exception of the
requirement of paragraph 12.a, LICENSEE has made no warrants to LICENSOR in
regard to minimum sales and/or royalty payment guarantees. Further, LICENSOR
agrees that, for the life of the Agreement, it will not create and/or provide
directly competitive products to another manufacturer or distributor without
giving the right of first refusal to LICENSEE.
10. PRODUCT DESIGNS
LICENSOR agrees to furnish product designs, if requested, for the initial
product line and all subsequent variations and extensions at no charge to
LICENSEE. In addition, if requested, LICENSOR will assist in the design of
packaging, point-of-purchase material, displays, etc. at no charge to LICENSEE.
However, all direct costs for such activities will be borne by LICENSEE.
LICENSEE shall submit product samples of the initial product line and all
subsequent variations and extensions to LICENSOR for design approval. The
approval will not be unreasonably withheld. If approval is not received within
30 days, then approval is automatic.
11. HOLD HARMLESS
In the event any claim for damages (including, but not limited to, consequential
damages) by way of product liability, negligence of otherwise is asserted
against the LICENSOR, alleging that any Licensed Product manufactured by or for
LICENSEE is faulty and provided that LICENSEE is given notice in writing of any
such claims promptly after receipt by the LICENSOR, and provided that the
LICENSOR affords LICENSEE information relative to the defense of such claim,
LICENSEE agrees to defend or settle, at its own cost and expense, any such claim
or subsequent action, suit or proceeding brought against the LICENSOR and shall
indemnify and hold the LICENSOR harmless against any such claim or action, suit
or proceeding, including reasonable legal fees and cost incurred and any
judgment or award of damages arising out of such claim or action.
12. TERMINATION
a. In the event LICENSEE does not commence to manufacture, distribute
and sell Licensed Products within six months after the execution of this
agreement, LICENSOR, in addition to all other remedies available to him, shall
have the option of terminating this Agreement immediately upon written notice to
LICENSEE.
b. In the event LICENSEE files a petition in bankruptcy, of if the
LICENSEE becomes insolvent or makes an assignment for the benefit of creditors,
the license granted hereunder shall terminate automatically without the
requirement of written notice.
c. If LICENSEE shall breach any other obligations under the terms of
the Agreement, LICENSOR, without waiving any other remedies it may have, may
terminate this License Agreement upon thirty (30) days advance written notice.
If the LICENSEE shall cure the breach within the 30-day notice period, the
notice of termination shall be rendered null and void, and this License
Agreement shall remain in full force and effect. No right to cure a breach or
default shall be provided for non-payment of royalties hereunder by LICENSEE
after two (2) notices of termination for non-payment of royalties have been
served upon LICENSEE with two (2) corresponding opportunities to cure.
d. The waiver by LICENSOR of any breach of any provisions of License
Agreement shall not be construed to be a waiver of any succeeding breach of the
provisions or a waiver of the provision itself.
13. LICENSEE'S RIGHT TO TERMINATE
Notwithstanding anything contained in this Agreement, LICENSEE shall have the
absolute right to cancel this Agreement at any time by notifying LICENSOR of its
decision in writing to discontinue the sale of the product(s) covered by this
Agreement. This cancellation shall be without recourse from the LICENSOR except
as provided by Paragraph 14 herein.
14. DUTIES UPON TERMINATION
a. Upon any termination of this Agreement, Licensee shall (1)
immediately cease manufacturing the Licensed Products, and (2) make no further
use of any and all of LICENSOR'S rights conferred by this Agreement.
b. LICENSOR shall retain any and all payments made in accordance with
any payment provisions of this Agreement. It is further understood that after
termination, LICENSEE shall have sixty (60) days, give LICENSOR a final report
setting forth the number of Licensed Products manufactured by or on behalf of
LICENSEE pursuant to the provisions of section 4), and LICENSEE shall, with such
final report, pay all royalties due to LICENSOR for such Licensed Products
manufactured but not yet shipped, and the location of such products. A royalty
shall be paid on all products in inventory as if sold at cost, in the event of
termination, within thirty (30) days of termination.
In the event of termination, for whatever reason under this
Agreement, IT IS EXPRESSLY UNDERSTOOD by the parties that LICENSEE may dispose
of any and all Licensed Products remaining within its possession or control
provided that royalties are paid therefore to LICENSOR.
15. OBLIGATIONS OF CONFIDENCE
During the term of this Agreement, LICENSOR and LICENSEE shall keep in trust and
confidence all trade secrets and proprietary know how relating to the Licensed
Product, provided however, that such obligation shall not preclude or impair
LICENSEE's right to develop, manufacture, have manufactured, service, maintain
or market the Licensed Product, LICENSEE's obligation being that it will
maintain the trade secrets and proprietary know-how confidential to the same
degree it exercises in protecting its own confidential or proprietary
information.
16. INDEMNIFICATION
LICENSEE agrees to obtain, at its own expense, product liability insurance for
at least $1,000,000 combined single unit for LICENSEE and LICENSOR against
claims, suits, loss or damage arising out of any alleged defect in the Licensed
Product(s). As proof of such insurance, LICENSEE will submit to LICENSOR a full
paid certification of insurance naming LICENSOR as an insured party. This
submission is to be made before any Licensed Product is distributed or sold.
17. NO PARTNERSHIP, ETC.
This Agreement shall be binding upon the successors and assigns of the parties
hereto. Nothing contained in this Agreement shall be construed to place the
parties in the relationship of legal representatives, partners, or joint
venturers. Neither LICENSOR nor LICENSEE shall have the power to bind or
obligate in any manner whatsoever, other than as per this Agreement.
18. DISPUTES
Disputes are to be settled through The American Arbitration Association,
location to be determined by the LICENSOR.
19. GOVERNING LAW
This Agreement shall be construed in accordance with the laws of the State of
Arizona.
IN WITNESS WHEREOF, the parties hereto have signed this Agreement as of the day
and year written below.
LICENSOR
DATE: January 9, 1998 By /s/ XXXXX X. XXXXXXX
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Xxxxx X. Xxxxxxx
President
Pretty/Private
LICENSEE
DATE: January 9, 1998 By /s/ XXXXXXX X. XXXX
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Xxxxxxx X. Xxxx
Chief Executive Officer
The Rose Group Corporation
