EXHIBIT 10.9
JOINT VENTURE AGREEMENT
AGREEMENT dated the 8th day of August, 1996, by and between Weather
Eye, Inc. (hereinafter referred to as WeatherEye), a corporation duly form and
existing under the laws of the state of Nevada and having a New York office
located at 0000 Xxxxx Xxxxxxxxx, Xxxx Xxxxx, Xxx Xxxx 00000 and Alcohol
Sensors International, Ltd. (hereinafter referred to as ASI), a corporation
duly formed and existing under the laws of the state of New York and having
its principal place of business located at 00 Xxxx Xxxxx, Xxxxxxxx, Xxx Xxxx
00000.
WHEREAS, WeatherEye is the owner, inventor and developer of certain
technology which automatically turns on the headlights of automobiles to a
certain percentage of their capacity (which is less than 100%) when the car is
started 1 hereinafter referred to as a Daytime Running Light or DRL), along
with other technology which automatically puts the vehicles headlights and
taillight on when the windshield wipers are switched on and a twilight
sentinel which automatically puts the headlights and taillights on at dusk,
all within one piece of equipment, and
WHEREAS, WeatherEye wishes to sell this product to various
distributors, after market suppliers, automobile dealerships, etc., and
WHEREAS, ASI has the expertise and ability to manufacture, market and
distribute said DRL via the distribution and marketing arrangements AST
presently has or is currently forming
NOW THEREFORE, in consideration of the mutual promises contained
herein, the parties agree an follows:
1. The parties agree that they will, to the extent possible and as
otherwise outlined herein, perform all tasks pursuant to this
Agreement, as a joint venture between the parties.
2. The term of this agreement shall be from the date written above, up
to and Including December 31, 2000.
3. This Agreement may be extended for terms of an additional two years
with the mutual consent of the parties.
4. ASI is hereby granted the exclusive right to distribute DRL to the
new/used car dealers, subject to ASI maintaining a minimum numbers of
DRL being distributed, in accordance with the following:
From the date of the Agreement through December 31, 1997
100,000 units;
January 1 - December 31, 1998
350,000 units;
January 1 - December 31, 1999
350,000 units; and
January 1 - December 31, 2000
200,000 units.
In the event ASI shall fail to meet the minimum number of DRLs it
must sell in order to retain its exclusivity with regard to the new/used car
dealers, Weather Eye, at its sole discretion, may terminate ASI's exclusivity
with regard to the new/used car dealers.
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In the event WeatherEye shall choose to terminate ASI's exclusivity,
as provided for herein, ASI shall retain the right to distribute DRL to the
new/used car dealers, however, this right shall not be exclusive to ASI.
5. ASI shall be granted the Manufacturing rights to the DRL in the
territory of the United States of America and Canada, for the term of this
Agreement, with regard to the exclusive market that it has been granted. ASI
may perform the manufacturing of the product itself or may subcontract this
manufacturing obligation to any of the contract manufacturers it presently
uses for ASI's products. In the event ASI subcontracts the manufacturing of
the product, ASI shall remain liable for the workmanship of the manufacturer.
6. In consideration for the performance of the manufacturing of the
DRL, ASI Shall be paid, from the profits of the joint venture, the sum of
three ($3.00) dollars for the first 200,000 DRL manufactured and sold and the
SUM of two ($2.00) per every DRL manufactured and sold thereafter.
7. The geographic area for the exclusive marketing and distribution
of the Product the subject of this Agreement, shall be limited to the United
States of America and Canada. ASI, in addition to the aforementioned exclusive
markets, shall also be granted the non-exclusive right to sell the DRL in
other Markets which ASI may wish to market and distribute the DRL.
8. As additional consideration of ASI undertaking the cost and
responsibility of the manufacturing of the DRL, the parties agree that from
the date of this Agreement through December 31, 1996 (up to a maximum of the
first 15,000 units sold), unless otherwise agreed by the parties, ASI shall be
entitled to all but fifteen ($15.00) dollars of the not profit received as a
result of ASI's sale of Weather Eye under this Agreement.
9. After December 31, 1996 and throughout the remaining term of this
Agreement, including extensions or renewals of this Agreement, the parties
shall share the net profits from the joint venture an a 52/48 basis, with the
majority share being paid to ASI.
10. The parties shall both be responsible for the arrangement of
markets for distribution of the DRL and shall work in conjunction with one
another to achieve the maximum number of outlets and sources of distribution.
11. The parties shall coordinate their efforts and will agree upon
the sales material, brochures and packaging of the DRL units. In the event of
a disagreement between the parties with regard to the contents of same, ASI
shall have the final decision.
12. Throughout the term Of this Agreement, ASI may use the trademark
of Weather Eye, for which a trademark application has been filed by Weather
Eye, with respect to sales material, brochures, packaging and the production
of the DRL.
13. This Agreement shall not apply to the original equipment
manufactures market, which shall remain the sole and exclusive property of
Weather Eye. Upon demonstration to Weather Eye by ASI of ASI's ability to
assist in the creation of the original equipment manufactures market, the
parties may subsequently include said market within the confines of this
Agreement by a subsequent amendment hereto.
In the event Weather Eye in successful in entering the original
equipment market, ASI shall receive a royalty payment equal to one (it)
percent of the gross profit from the sales of Weather Bye to that market. This
royalty payment shall be applicable only to the territory to which ASI has
been granted the exclusive marketing rights pursuant to this Agreement and any
amendments hereto.
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14. Weather Eye presently has royalty agreements with engineers
employed by Weather Eye who were instrumental in the development of the DRL.
Weather Eye has disclosed the terms of these royalty agreements to ASI and the
parties agree that the royalty payments to be made pursuant to these
agreements shall be paid from the overall net profit realized by the joint
venture prior to the parties sharing the net profits, as specified in
paragraph 8 above.
15. During the term of this Agreement and for a period of two (2)
years after the term of this Agreement or any extensions thereof, ASI agrees
not to manufacture, distribute, sell, promote, market or otherwise become
involved or affiliated with any other person, company or other entity that
manufactures, distributes, sells, promotes or market a product that in
competitive to that of the DRL without the written consent of Weather Eye.
During the term of this Agreement and for a period of two (2) years
after the term of this Agreement or any extensions thereof, Weather Eye agrees
not to manufacture, distribute, sell, promote, market or otherwise become
involved or affiliated with any person, company or other entity that
manufactures, distributes, sells, promotes or markets a product that in
competitive to that of ASI's without the written consent of ASI.
16. Weather Eye way terminate this Agreement if ASI shall fail to
meet any of the material provisions of this Agreement or if any of the
representations contained herein by ASI are found to be false . In the event
weather Eye elects to terminate this Agreement, it shall provide ASI with
written notice of such election sixty (60) days prior to the termination date.
ASI may terminate this Agreement if Weather Eye shall fail to meet
any of the material provisions of this Agreement or if any of the
representations contained herein are found to be false. In the event ASI
elects to terminate this Argument, it shall provide Weather Eye with written
notice of such election sixty (60) days prior to the termination date.
17. The invalidity of any provision of this Agreement shall not
effect the validity of any other provision. In the event that any provision is
held to be invalid by a court of law, that provision shall be stricken from
the Agreement and the parties agree that the remaining provisions of this
Agreement shall remain in full force and effect as if the stricken provision
had never been included in thin Agreement.
18. This Agreement contains the entire understanding between the
parties hereto and that it supersedes all other agreement, oral or written,
that may exist between the parties with respect to the subject matter
contained herein. The parties stipulate and agree that they have made no other
representations other than those as set forth in this Agreement and that each
acknowledges that they have not relied upon any other representation other
than those as get forth herein. The parties further represent that this
Agreement was jointly constructed and drafted and that each party has relied
upon its own judgment and business expertise in entering this Agreement.
19. Neither party to this Agreement may assign their respective
rights or obligations under this Agreement, except as provided for herein,
without the express written consent by the other party. Any unauthorized
assignment shall be invalid, null and void and shall render this Agreement
terminated.
20. All notices, demands and requests shall be given in writing and
shall be delivered by certified mail, return receipt requested to the other
party at the address shown above, unless otherwise notified by the parties.
21. Any amendment, modification, changes, subsequent terms or
extensions to this Agreement shall only be effective when they are signed by
both parties to this Agreement.
22. This Agreement shall be governed, enforced and interpreted
in accordance with the laws of the State of New York.
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23. Any dispute, controversy or claim arising out of this Agreement,
or a breach of this Agreement, shall be settled by arbitration in accordance
with the Commercial Arbitration Rules of the American Arbitration Association,
and judgment upon the award rendered by the arbitrator may be entered in any
court having jurisdiction. The judgment of the arbitrator shall be final and
binding between the parties. The parties agree that the venue for any
adjudication proceedings shall be in Suffolk County, State of New York.
24. The headings to the provisions of this Agreement are solely for
the convenience of the parties and shall not affect the meaning of this
Agreement.
25. Provided that ASI has performed in accordance with its
obligations under the terms of this Agreement to the satisfaction of Weather
Eye, then Weather Eye shall grant a right of first refusal to ASI for any new
products that Weather Eye seeks to distribute.
26. Weather Eye hereby grants to ASI, the use of its corporate name
in the marketing of the product in marketing literature and communications,
subject to review and approval by Weather Eye. In consideration of Weather Eye
granting such permission, ASI agrees not to sell, market, distribute,
represent or become any way competitive with Weather Eye with regard to the
product(s) which are the subject of this Agreement.
27. Weather Eye agrees to indemnify and hold ASI harmless against any
claims and liabilities that are found to be directly caused by defective
design and for no other causes.
28. ASI agrees to indemnify and hold WeatherEye harmless against any
claims and liabilities that are found to be directly caused by the
manufacturing of the product and for no other causes.
29. Weather Eye agrees to indemnify and hold ASI harmless any
damages, costs and expenses, including reasonable attorneys fees and court
costs, resulting from any claim of patent infringement brought by another
party.
30. All rights, title and interest in WeatherEye's patents or
intellectual property shall remain with Weather Eye throughout the term of
this Agreement. Weather Eye represents that it has filed for a patent on the
technology which is the subject of this Agreement and that this patent in
currently pending in the United States Patent Office.
IN WITNESS WHEREOF, the parties have executed this Agreement on this
8th day of August, 1996.
__________________________________________
Alcohol Sensors International, Ltd.
By:
__________________________________________
WeatherEye, Inc.
By: Xxxxxx X. Xxxxxx
President
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AMENDMENT
Amendment, dated the 31st day of December 1996, by and between
WeatherEye, Inc. (hereinafter referred to as "WeatherEye"), a corporation duly
formed and existing under the laws of the State of Nevada and having a New
York office located at 000 Xxxxxxx Xxxxxx, Xxxxxxxxxxx, Xxx Xxxx 00000, and
Alcohol Sensors International, Ltd. (hereinafter referred to as "ASI"), a
corporation duly formed and existing under the laws of the State of New York
and having its principal office located at 00 Xxxx Xxxxx, Xxxxxxxx, Xxx Xxxx
00000.
WHEREAS, the parties have previously executed an agreement dated the
8th day of August 1996, wherein ASI was given the exclusive right to
distribute the product of WeatherEye to the new/used car dealers in the United
States, subject to ASI maintaining certain minimum quotas of distribution;
and,
WHEREAS, ASI has failed to reach those minimums as set forth in the
August 8, 1996 Agreement; and,
WHEREAS, ASI wishes to maintain its exclusivity under this prior
Agreement.
NOW THEREFORE, in consideration of the mutual premises contained
herein, the parties agree as follows:
1. Joint Venture. The parties agree that the prior Agreement will be
amended such that it will no longer be considered a joint venture
between the parties.
2. Exclusivity. It is agreed by and between the parties that ASI shall
maintain its exclusive rights under the prior Agreement, conditioned
upon ASI paying the mutually agreed legal fees of WeatherEye with regard
to its patent and trademark filings.
3. Product. ASI shall be granted the right to modularize the product into
various series in order to capitalize on as many markets available to
it. ASI shall be responsible for all costs involved with the testing and
manufacturing of such modularization of the product. A description of
the product series is annexed hereto in Schedule A.
4. Profits. The profits as stated in the prior Agreement, which were to be
shared on a 52/48% basis (with the majority share being paid to ASI),
will be changed such that ASI will pay WeatherEye a royalty per unit
sold, in accordance with Schedule B, attached hereto.
All other terms of the Agreement dated August 8, 1996, shall remain in
full force and effect.
IN WITNESS WHEREOF, the parties have executed this Amendment on this
31st day of December 1996.
____________________________________________________
Alcohol Sensors International, Ltd.
By: Xxxx X. Xxxxxx, Xx. Executive Vice President
Secretary
_____________________________________________________
WeatherEye, Inc.
By: Xxxxxx X. Xxxxxx
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