EXHIBIT 10.23
LICENSE AGREEMENT
Made as of January 1, 1997, by and between
XXXX X. XXXXXXX,
a sole proprietorship, with its principal place of business at 0000 Xxxxx Xxxxx,
Xxxxx X, Xxxxxxx, Xxxxxxxxxx 00000 (hereinafter referred to as "EFCO")
and
ALLERGY FREE LP,
a Texas Limited Partnership, represented by its general partner, Allergy Free
II, Inc., a company duly organized and existing under the laws of Delaware,
United States of America, with its principal place of business at 0000 Xxxx
Xxxxx, Xxxxxxxxx, Xxxxx 00000 (hereinafter referred to as "AF").
WITNEESETH THAT
WHEREAS EFCO has developed through its research novel designs for air
filtration systems, as well as the manufacturing processes to produce the
Products (as defined in this Agreement);
WHEREAS EFCO has submitted or is prepared to submit applications for
patents for claims covering some or all of the Products in the United States of
America, as set forth on Appendix B;
WHEREAS AF, after having evaluated the Products through information
received from EFCO under a confidentiality agreement, desires to obtain a
license from EFCO to manufacture the Products and to use and sell the Products
in the Territory under the terms and conditions set forth hereunder, and EFCO is
willing to grant to AF such a license;
NOW, THEREFORE, in consideration of the premises and mutual covenants and
agreements herein contained, the Parties agree as follows:
ARTICLE 1: DEFINITIONS
As used in this Agreement, each term listed below shall, unless the context
clearly indicates otherwise, have the meaning which is given after it:
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1.1 Affiliates
Any corporation, firm, partnership, or other entity which, directly or
indirectly, owns, is owned by, or is under common ownership or control
with a specified party to the extent of more than fifty percent (50%) of
the equity having the power to vote on or direct the affairs of the entity
or otherwise control such entity.
1.2 Applications
Based upon the marketing channels through which a product is sold or the
design of the product, the place of intended use being either Residential,
Commercial or Institutional (as defined herein).
1.3 Commercial
Intended use in all other than Residential or Institutional.
1.4 Effective Date
Shall mean the date on the first page of this Agreement on which date this
Agreement becomes effective.
1.5 Field
The use of a product in filtration of air for the removal of particulates
and/or odors.
1.6 Improvements
Modifications to the Products which improve the Product, add features or
modify the specifications.
1.7 Including
The term "including" wherever used herein shall mean "including without
limitation."
1.8 Institutional
Intended use in hospitals, clinics, nursing homes, long-term care
facilities and other establishments which offer care to individuals of a
medical nature.
1.9 Know-How
All data and information regarding the Products, including Confidential
Information, which are developed by, or which is or becomes available to
or under the control of, EFCO during the term of this Agreement with
respect to the design, manufacture, use, and sale of the Products,
including, but not limited to, sources of supply for materials used in the
Products, the physical properties of the Products and testing
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reports which are necessary or useful for AF and its Affiliates to
manufacture, use and sell the Products in the Territory.
1.10 Licensed Patents
All patents and patent applications (effective when a patent issues for
such application) which are necessary or useful for the manufacture of the
Products worldwide or the use or sale of the Products in the Territory,
owned, or controlled by EFCO during the term of this Agreement including,
but not limited to, patents and patent applications listed in Appendix B
attached hereto and any and all reissues, extensions, substitutions,
confirmations, registrations, revalidations, additions, continuations, or
divisions of or to any of the aforesaid patents or patent applications.
1.11 Marketing Year
The 12 calendar month period immediately following the date of first
shipment of the Products by AF, directly or indirectly, in the Territory
to another party for sale rather than evaluation.
1.12 Net Sales
The invoiced sales price to a customer by AF or any of its Affiliates in
respect of sales of the Products less: (a) any taxes or impositions which
may be applied directly on sales of the Product and applicable to
individual sales, (b) returned goods credits not exceeding the original
invoice amount, (c) any discounts, in amounts customary in the trade, for
quantity purchases or cash or prompt payment, (d) retroactive price
reductions, (e) commissions paid to distributors (but excluding sales
commissions to AF employees), and (f) freight charges, handling and
insurance related to shipping, in amounts customary in the trade. A
Product shall be deemed sold at the time AF or its Affiliates ship such
Product, whichever event occurs later, provided that sales between AF and
its Affiliates shall be disregarded.
1.13 Products
The air filtration systems (i) which are covered by a claim of the
Licensed Patents ("Patented Products"), (ii) which are within the
specifications listed in Appendix. A hereto, regardless of whether it is
covered by a claim of a Licensed Patent, (iii) any Improvements to such
Products and (iv) any products added pursuant to Article 6 of this
Agreement.
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1.14 Residential
Intended use in private residences or homes of individuals, as
single-family homes, multiple-family domiciles or apartment/condominium
residences included.
1.15 Territory
The countries of (a) United States of America and its territories and
possessions, and (b) Canada.
ARTICLE 2: REPRESENTATIONS AND WARRANTIES
2.1 As an inducement to the execution and delivery of this Agreement, EFCO
hereby makes the following representations and warranties to AF, each of
which is true and correct in all material respects as of the Effective
Date: (i) EFCO is the sole owner of the entire right, title, and interest
in and to the Licensed Patents, the Know-How, and the Products; (ii) EFCO
has the full right, power, and authority, without the approval, or in
conflict with the rights, of any third party, to enter into this Agreement
and to perform its obligations hereunder; (iii) there are no patents,
trade secrets or other proprietary rights of others that to EFCO's best
knowledge would be infringed or violated by the making, using, or selling
of the Products in the Territory; (iv) there are no adverse actions,
suits, or claims pending or threatened against EFCO or any of its
Affiliates in any court of, by, or before any governmental body or agency
with respect to the Licensed Patents, the Products, and/or the Know-How;
and (v) no other person or organization presently has any option or
license with respect to the manufacture, use or sale of the Products or
is presently authorized to use the Licensed Patents or Know-How, in the
Territory.
In the event of a breach by EFCO of any of the foregoing representations
and warranties, EFCO shall indemnify and hold harmless AF and each of its
Affiliates from all losses, liabilities, damages, judgments, awards, costs
(including reasonable attorneys' fees and expenses) incurred by AF or its
Affiliates as a result of such breach.
2.2 As an inducement to the execution and delivery of this Agreement, AF
hereby makes the following representations and warranties to EFCO, each of
which is true and correct in all material respects as of the Effective
Date: (i) AF has the full right, power, authority, and approvals to enter
into this Agreement and to perform its obligations hereunder; (ii) AF
warrants that it has experience both in the practice of manufacturing,
marketing, and selling similar products in the Territory.
In the event of a breach by AF of Article 2.2(i), AF shall indemnify
and hold harmless EFCO and each of its Affiliates from all losses,
liabilities, damages, judgments, awards.
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costs (including reasonable attorneys' fees and expenses) incurred by EFCO
or its Affiliates as a result of such breach.
ARTICLE 3: GRANT OF LICENSES
3.1 EFCO hereby grants to AF and AF hereby accepts from EFCO (i) an exclusive
license to manufacture, use and sell the Products in the Territory and to
use the Licensed Patents and Know-How in connection with the manufacture,
use and sale of the Products in the Territory and (ii) to manufacture the
Products, including use of the Know-How, on a non-exclusive basis
worldwide other than the Territory.
3.2 AF shall not have the right to grant sub-licenses, except to its
Affiliates, as required to fulfill the purposes of this Agreement, without
the prior written consent of EFCO, which consent shall not be subject to
any commercial or other standards of reasonableness.
3.3 AF hereby undertakes that it shall not, directly or through one of its
Affiliates or any third party, export the Product to countries outside the
Territory and will use reasonable efforts to discourage such export by
third parties to the extent not prevented by any applicable law.
ARTICLE 4: ADVANCE PAYMENTS
4.1 In consideration of the granting of the licenses set forth in Article 3.1
hereof, AF agrees to make to EFCO a monthly advance payment as follows:
US $5,000 (five thousand dollars) per month
4.2 The advance payments shall be paid monthly by AF commencing on March 1,
1996, and ending on the earlier of (i) the date upon which EFCO delivers
any Product which AF accepts and determines that it can immediately ship
and invoice on a commercial basis in the Territory (provided that any
delay is not due solely to AF's delay in evaluation of the delivered
Products) or (ii) April 15, 1997.
4.3 If the event in 4.2(i) does not occur within thirty (30) days after notice
by AF after April 15, 1997, AF may immediately terminate this Agreement,
but shall retain a paid up license for a ten (10) year term from such date
for the rights in Article 3, but all licenses shall be non-exclusive.
4.4 The advance payments paid by AF to EFCO shall be creditable against future
royalty payments by AF to EFCO pursuant to Article 5 hereunder.
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ARTICLE 5: ROYALTIES
5.1 Ongoing Royalties
5.1.1 In further consideration of the granting of the licenses set forth
in Article 3.1 hereof, AF shall pay to EFCO during the
applicable period specified in Article 5.1.2 during the term of this
Agreement for all Products, a royalty of three and twenty- five one
hundredths percent (3.25%) of Net Sales.
5.1.2 The royalties set forth under Article 5.1.1 shall be paid by AF for
the following periods:
(a) For Patented Products, until expiration or invalidation of the
last remaining of the Licensed Patents as applies to such Patented
Products,or until the expiration or termination of this Agreement,
whichever is earlier.
(b) For those Products which are not Patented Products, for a period
of five (5) years from the first date of sale of each such Product;
provided, at the end of such five (5) year period, the Parties
hereby agree to negotiate in good faith to determine whether to
extend the period for payment of the royalties based on a
then-current market and profitability review for each such Product.
5.2 Report - Payment of Royalties
AF shall provide EFCO within thirty (30) days after the end of each
calendar month, with a report stating the volume of each Product sold in
units and value and deductions therefrom in units and value in computing
Net Sales pursuant to Article 1.12 the amount of royalties accrued, and
credits against such royalties based on any adjustments to royalties
accrued in prior periods. Along with this report AF shall pay via check
the due amount of royalties to EFCO. All payments herewith shall be made
in U.S. dollars. In the event that Net Sales are effected in another
currency than U.S. dollars, then the royalties to be paid shall be
converted to U.S. dollars using the exchange rate published by The Wall
Street Journal on the last business day of the month in which the Net
Sales occurred.
5.3 Records
AF shall keep accurate books and records, as in the normal course of
business in the Territory, identifying sales in units and values, Net
Sales, units of Product distributed free of charge, units and values of
Product returned, credits applied to returned units and amounts payable to
AF hereunder. AF shall maintain such books and records for three (3) years
or in accordance with prevailing AF operating
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procedures, or until any relevant dispute has been resolved, whichever is
longer. Upon EFCO's request, and at EFCO's expense, AF shall permit an
independent certified public accountant, to whom AF has no reasonable
objections, to examine such books and records on behalf of EFCO upon
reasonable notice and during regular business hours. Such accountant shall
not disclose to EFCO or to any other party any information except such
which should properly be contained in a royalty report required under
Article 5.2 of this Agreement. Such examination shall be permitted not
more than once per calendar year or 12-month period and not later than one
(1) year following the submission of each royalty report by AF to EFCO.
5.4 Maintenance of Exclusivity
In order for AF to maintain its exclusive license under Section 3.1(i) to
the Patented Products, the following minimum annual sales targets must be
met by AF:
(a) First Marketing Year of Net Sales of Products must be equal to or
greater than $1,000,000.
(b) All subsequent Marketing Years of Net Sales of Products must be at
least $3,500,000.
If total Net Sales of Products for any Marketing Year falls below the
targets specified in 5.4 (a) or (b) above, applying any excess amounts in
prior periods to shortfalls in subsequent periods, upon notice by EFCO,
AF's license under Section 3.1(i) to the Patented Products shall become
nonexclusive and EFCO may grant a license to the Patented Products to
third parties; provided, however, that AF shall retain its license rights,
subject to the payment of royalties to EFCO, as described in this
Agreement, but on a nonexclusive basis, but shall no longer be obligated
under Articles 6 or 7.
ARTICLE 6: PRODUCT DEVELOPMENT
6.1 The Parties hereby agree to cooperate with one another and to communicate
regularly regarding the status of any Product Development activity. Such
communication should occur at minimum on a monthly basis.
6.2 The Parties agree to consider all aspects of Products specifications
ideas, including proposed changes or Improvements, suggested by either
Party, as must be considered to develop marketable and profitable
Products.
6.3 AF shall have the right to review and analyze any new designs or concepts
in the Field generated by EFCO, of which EFCO agrees to promptly notify to
AF, or generated by AF, to determine if AF desires to extend this
Agreement to those concepts or designs. It is both understood and accepted
by
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the Parties that any development work or activity to be conducted by EFCO
on behalf of AF, but without further advances or development payments,
shall be limited to those product designs identified by AF in writing,
which are of interest to AF. EFCO shall promptly thereafter commence such
development. AF shall have sole discretion in the identification of such
product designs and shall have no obligation to EFCO for product design
ideas in which AF has not indicated, in writing, its interest.
6.4 Any such product design in which AF shall indicate an interest shall be
incorporated into this Agreement, by a mutually acceptable exhibit to
Appendix A or B and shall be included thereafter as a Product subject to
the same terms and conditions described herein.
6.5 EFCO agrees to deliver to AF all Know-How promptly after development.
ARTICLE 7: EXCHANGE OF INFORMATION - IMPROVEMENTS
7.1 In the event either party develops or obtains during the term of this
Agreement rights to any Improvement in the Field relating to the Products,
it shall promptly disclose such Improvement to the other party, to the
extent that it has the right to disclose such Improvement. During the term
of this Agreement, AF's license in Section 3.1 shall include such
Improvement made by EFCO without payment of additional royalties and AF
agrees to grant EFCO a non-exclusive license, to use in the Field outside
the Territory any such Improvement made by AF, subject to payment to AF by
EFCO of royalties on the same basis as under Articles 5.1-5.3.
7.2 If such Improvements are in whole or in part the property of a third
party, each party shall use its diligent efforts to secure licenses to be
made available to the other party by such third party, subject to payment
of any required royalties by the other party to the third party.
7.3 In the event either party undertakes to develop or obtain during the term
of this Agreement any Improvement relating to the Product but outside the
Field, both parties agree to meet and consider the feasibility of working
together to commercialize such Improvement.
ARTICLE 8: MARKETING OF PRODUCT
8.1 Marketing
AF shall undertake to launch in the Territory each of the Products within
one (1) month following availability of suitable quantities of that
Product. AF shall promptly inform EFCO by telex or telefax of the date of
first commercial sale. AF shall use reasonable efforts to promote and
develop the sales of the Products in the Territory during
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the term of this Agreement. AF shall undertake to develop and maintain
staff sufficient for the purpose of the launching, promoting, and selling
of the Product as required by this Agreement.
8.2 Marketing Plan
At a reasonable time and in no event later than one (1) month before the
launch of any of the Products, AF shall provide EFCO with its marketing
plan for such country. Thereafter, AF shall regularly provide EFCO with
its annual marketing plan as soon as possible, but not later than at the
end of each October of the previous calendar year until termination or
expiration of this Agreement. EFCO shall be entitled to comment on the
marketing plan and suggest reasonable modifications thereof, which AF
shall take into due consideration.
ARTICLE 9: PRODUCT LIABILITY - INDEMNIFICATION
9.1 Each party shall notify the other if it becomes aware of any claim,
action, suit, less, liability, cost or expense alleged to be caused by or
resulting from the manufacture, sale or use of the Products in the
Territory (other than those relating to infringement of intellectual
property under Article 10). EFCO and AF shall cooperate in the defense of
any such claim or suit, and each party may, at its expense, and provided
the respective insurance carriers permit, have counsel of its choice
present at proceedings or present at any settlement discussions relating
to any such claims regardless of whether such party is named in such
proceeding.
9.2 Except as provided in the second sentence of this Article 9.2 and under
Article 10, AF shall indemnify and hold EFCO and its Affiliates free and
harmless from any loss, damage, claim, suit, cost, or expense (including
reasonable attorneys' fees) arising from the storage, promotion,
marketing, distribution, use, or sale of the Products in the Territory.
EFCO shall indemnify and hold AF and its Affiliates free and harmless from
any loss, damage, claim, suit, cost, or expense (including reasonable
attorneys' fees) related to the sale or use of the Products by ultimate
consumers deriving from EFCO's breach of its warranties in Article 2.
9.3 Except as otherwise mentioned in this Agreement, EFCO gives no other
warranty, express or implied, of merchantability, capability, safety, or
fitness for a particular purpose with respect to the Products. No oral or
written representation by or on behalf of EFCO shall be interpreted to
contain any such warranty. Neither AF nor EFCO shall be liable to the
other for incidental or consequential damages arising out of or in any way
related to this Agreement.
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ARTICLE 10: PATENT AND TRADEMARK RIGHTS
10.1 Prosecution
During the entire term of this Agreement EFCO shall, at its own cost,
apply for patents in the Territory for any patentable ideas contained in
the Products, including those listed on Attachment B, and maintain the
registration of the Licensed Patents in the Territory under the relevant
law. Attachment B shall be amended periodically to add filed patent
applications and issued patents relating to patentable ideas in the
Products (and any Improvements). EFCO shall keep AF currently advised of
all steps taken or to be taken in prosecution and maintenance of the
Licensed Patents. AF shall have the sole right and ownership of any
trademarks used by AF for sale of the Products and any intellectual
property rights, including any patents which may issue, relating to
Improvements developed by AF.
10.2 Infringement by Third Parties
EFCO and AF shall promptly notify each other of any infringement of the
Licensed Patents and/or unauthorized use of the Know-How by third parties
which may come to their attention. EFCO shall promptly undertake
reasonable efforts to obtain discontinuance of the aforesaid infringement
or unauthorized use and, if not successful, EFCO may, at its option bring
suit against such infringer or unauthorized user, at its own expense,
recovering all damages arising from such infringement.
If EFCO fails to obtain a discontinuance of said infringement or
unauthorized use within a reasonable amount of time and/or elects not to
bring suit against such third party, EFCO shall promptly notify AF in
writing of its election, and of the circumstance of such infringement or
unauthorized use. In such event AF shall have the right, but not the
obligation, to take any and all action, at its own cost and expense, to
obtain a discontinuance of the alleged infringement or unauthorized use
and/or to bring suit against such third party. AF shall be entitled to
retain any amounts recovered in a suit brought by it. EFCO shall execute
such legal papers in connection with the foregoing as may be reasonably
requested by AF.
10.3 Adverse Patents
Except as provided in Article 2.1, EFCO does not warrant that the import,
manufacture, use, and/or sale Of the Products hereunder will not infringe
any patents or other intellectual property rights held by a third party.
EFCO hereby agrees to defend, indemnify, and hold harmless AF, its
Affiliates, manufacturers, dealers and customers from and against any and
all losses, costs, expenses, damages and liabilities, including attorneys'
fees by such parties as a result of any alleged infringement of any
patent, design, trademark, copyright or any intellectual property right of
any third party in the Territory as a result of the
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manufacture, sale, or use of the Products or the License and Patents
pursuant to this Agreement; provided, that AF shall promptly notify EFCO
if AF becomes aware of any claim, threat or suit and that AF provides
reasonable assistance, at EFCO's cost, to assist EFCO in the defense of
such lawsuit or action. AF shall have the right to participate in such
defense with its own counsel at its own cost. EFCO shall not settle any
lawsuit or action without AF's prior written consent, if such settlement
would affect AF's rights under this Agreement or require payment of any
payments or royalty by AF. EFCO shall have no obligation to indemnify AF
pursuant to this Article 10.3 resulting from any modification of the
Product made solely by AF without the participation of EFCO or use of AF's
own trademarks for the sale of the Products. EFCO's liability to AF (and
the other indemnified parties) under this Article 10.3 shall be limited to
the amount of any royalties or advances paid by AF to EFCO under this
Agreement. In the event that any such infringement should be found to
exist or, in EFCO's opinion is likely to exist, EFCO shall have the right
either (i) to procure, at EFCO's expense; a license sufficient to allow AF
to continue its activities licensed under this Agreement or (ii) to make
such modifications to the Product to eliminate any such infringement, so
long as any such modifications do not materially change the specifications
or functionality of such Products .
AF shall also have the right to deduct from the Royalties due to EFCO
under Article 5 for Net Sales the amount of royalties (or other damages
not indemnified by EFCO because of any limits or liability) which AF may
be required, by a court judgment or pursuant to a settlement agreement
entered into, with EFCO's consent, with third parties owning or
controlling a patent containing claims infringed by the Licensed Patents
or the manufacture, use or sale of the Product, to pay to third parties in
order to manufacture, use or sell the Product in the Territory.
ARTICLE 11: CONFIDENTIALITY
11.1 For the purpose of this Agreement, the term "Confidential Information"
shall mean information which is confidential to a party and which is
disclosed by either party to the other during the term of this Agreement
in tangible form, clearly marked "confidential," or if disclosed
otherwise, summarized or described in writing and clearly marked as above.
11.2 Each party undertakes to maintain in strict confidence and secret and not
to disclose to others the Confidential Information it receives from the
other party (the disclosing party), except insofar as it may be necessary
in carrying out the purpose of this Agreement and to bind its employees,
consultants, contractors and its Affiliates with a like obligation of
confidentiality.
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11.3 This obligation of confidentiality shall be maintained for ten (10) years
after expiration or termination of this Agreement. It shall not apply to
information (i) which is part of the, public domain at the time of the
disclosure, or (ii) which will be published or otherwise known after the
disclosure through no fault of the receiving party or its Affiliates, or
(iii) that the receiving party or its Affiliates already knew through no
breach of a nondisclosure obligation to the disclosing party, or (iv) that
the receiving party or its Affiliates receive from a third party not in
breach of an obligation of confidentiality to the disclosing party, or (v)
which must be disclosed by a party hereto to a third party in order to
carry out a Development Study (provided that such party signs an agreement
obligating that party to maintain such information as confidential to the
same extent as such party hereunder) , or (vi) which is disclosed pursuant
to an order or requirement of any country, administrative agency, or other
governmental body, provided prior notice is given to the other party of
such disclosure.
ARTICLE 12: TERM AND TERMINATION
12.1 Term
This Agreement shall become effective on the Effective Date and shall
remain in force for each country of the Territory for a term that shall be
the longer of (i) the life of the Licensed Patents in force in that
country or (ii) ten (10) years starting from the date of the first
commercial sale of Product in such country. Thereafter, this Agreement
shall be automatically extended for additional periods of one (1) year
each, unless either party notifies the other party in writing of its
intention to terminate this Agreement at least twelve (12) months prior to
the date of the first expiration period of the Agreement and six (6)
months prior to the date of any subsequent expiration periods of the
Agreement.
12.2 Termination
12.2.1 In the event that either party materially breaches any warranty or
other provision of this Agreement, the other party shall have the
right, without prejudice to the right to obtain compensation for
its damages, to terminate this Agreement upon ninety (90) days
written notice to the other party (or thirty [30] days in the case
of any default in payments hereunder), provided, however, that, if
the defaulting party cures the said breach within said ninety (90)
days period (or thirty [30] days in the case of any default in
payments hereunder), this Agreement shall continue in full force
and effect.
12.2.2 In the event either party:
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(a) is adjudicated as bankrupt or insolvent and, such adjudication
being involuntary, it is not dismissed within sixty (60) days,
or
(b) any proceeding is commenced by or against such party seeking
relief under any bankruptcy or insolvency law and, such
proceeding being involuntary, it remains undismissed for sixty
(60) days, or such party, by action or answer, approves of,
consents to, or acquiesces in such proceeding or admits the
material allegations of or defaults in answering the petition
filed in such proceeding or
(c) admits in writing its inability to pay its debts as they
became due or
(d) makes an assignment for the benefit of creditors,
then, in any such case, such party shall be deemed in default
hereunder and the other party shall have the right, upon thirty (30)
days prior notice to terminate this Agreement.
12.2.3 AF shall have the right to terminate this Agreement, as to any
Product referenced on Attachment A, by giving to EFCO three (3)
months advance written notice in the event that, notwithstanding
AF's best efforts and fulfillment of its obligations hereunder, AF
determines that the development or manufacture of the Products is
not economically feasible.
12.3 Effect of Termination
12.3.1 Upon termination of this Agreement for any reason
(a) Each party shall return to the other party all Confidential
Information in its possession received from the other party,
except for one single copy to be kept in its confidential
legal files for the purpose of complying with its obligation
of confidentiality;
(b) Both Parties shall negotiate in good faith to determine
whether a new Agreement shall be executed or whether AF shall
cease marketing the Products, provided in any event AF shall
be permitted to continue to market the Products for not less
than two (2) years after the termination date, subject to the
payment of royalties as set forth herein.
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Article 13: General Provisions
13.1 Assignment
Neither party may assign the obligations of this Agreement to a third
party without the express and prior written consent of the other Party;
provided, that this Agreement may be assignable by AF, upon notice to
EFCO, to a successor in interest of AF.
13.2 Entire Agreement
This Agreement constitutes the entire Agreement between the parties hereto
with respect to the subject matter and supersedes all previous agreements
or understandings relating to the subject matter of this Agreement,
including any term sheets, heads of agreement or confidentiality
agreement, whether written or oral. No modification or alteration shall be
binding unless in writing and signed by both parties.
13.3 Notices
All notices, reports, requests, or demands required or permitted under
this Agreement shall be forwarded, charges prepaid, by registered airmail
letter, or by telecopier confirmed by registered airmail letter, properly
addressed to the respective parties as follows:
If to EFCO: Xxxx Xxxxxxx
c/o Enhanced Filter Company
0000 Xxxxx Xxxxx, Xxxxx X
Xxxxxxx, XX 00000
If to AF: Allergy Free LP
0000 Xxxx Xxxxx
Xxxxxxxxx, XX 00000
Attn: President
or to such other address as a party shall from time to time advise
by this notice provision; and shall be deemed to have been received
on the day following dispatch of any such telefax or on the eighth
day following the posting of such letter.
13.4 Force Majeure
If, for reason of Force Majeure, as hereinafter defined, either party
fails, for a period of no more than six months, to comply with its
obligations hereunder other than the payment of money, such failure
shall not constitute breach of this Agreement and the time periods
hereunder and the term hereof shall be extended by the period of such
Force Majeure. For the purpose of this Article, Force Majeure shall mean
Acts of God, acts, regulations of laws of any government, war, civil
commotion, destruction of production facilities or
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materials, fire, earthquake or storm, labor disturbances, failure of
public utilities or common carriers and any other causes beyond the
reasonable control of either party. Upon expiration of said six months
period, in the event such Force Majeure is continuing, the party whose
performance has not been hindered by the Force Majeure shall have the
right to terminate this Agreement upon sixty days' written notice to the
other.
13.5 Governing Law
This Agreement shall be governed and construed according to the laws of
the State of California, provided that all questions concerning the
construction or effect of patent applications and patents shall be decided
in accordance with the laws of the country or jurisdiction in which the
particular patent application or patent concerned has been filed, granted,
or registered, as the case may be.
13.6 Conciliation and Arbitration
13.6.1 In the event that any controversy or claims shall arise under, out
of, in connection with, or relating to this Agreement or the breach
thereof, the party initiating such controversy or making such claim
shall provide to the other party written notice containing a brief
and concise statement of the initiating party's claims, together
with relevant facts supporting them. During a period of sixty (60)
days (during which period any applicable statute of limitations
shall be tolled), or such longer period as may be mutually agreed
upon in writing by the parties, following the date of said notice,
the parties shall make good faith efforts to settle the dispute.
Such efforts shall include, but shall not be limited to, full
presentation of both parties' claims and responses, with or without
the assistance of counsel, before the owner of EFCO and the Chief
Executive Officer of AF or an equivalent executive if such position
does not or ceases to exist in the respective companies.
13.6.2 In the event that the parties have been unable to reach accord
using the procedures in Article 13.6.1, and only if such is the
case, either party may initiate arbitration proceedings. Failure to
comply with the provisions of Article 13.6.1 with respect to any
controversy or claim shall constitute an absolute bar to the
institution of any arbitration proceedings with respect to such
controversy or claim.
13.6.3 Subject to the provisions in Article 13.6.1 and 13.6.2 any
controversy or claim which may arise under, out of, in connection
with, or relating to
15
this Agreement or the breach thereof shall be settled by final and
binding arbitration in San Francisco, California in accordance with
the then existing rules of the American Arbitration Association.
Pursuant to California Code of Civil Procedure (CCP) Section 1283.1,
the provisions of CCP section 1283.05 are expressly incorporated
herein. The award shall be final and binding upon both parties.
Judgment upon the award rendered by the arbitrators may be entered
in any court having jurisdiction thereof.
13.7 No Agency
It is understood and agreed that neither party is, by this Agreement or
anything herein contained, constituted, or appointed the agent or
representative of the other party for any purpose whatsoever, nor shall
anything herein contained be deemed or construed as granting to a party
any right or authority to assume or to create any obligation or
responsibility, express or implied, for or in behalf of or in the name of
the other party or to bind the other party in any way or manner
whatsoever.
13.8 Severability
Should any part of this Agreement be held to be unenforceable or otherwise
in conflict with or in violation of the law of any jurisdiction which is
applicable thereto, the remainder of this Agreement shall remain binding
upon the parties. The waiver by either party of any right hereunder, or of
a failure to perform, or of a breach by the other party, shall not be
deemed a waiver of any other right hereunder, or of any other breach or
failure by said party, whether of a similar nature or otherwise.
13.9 Survival
All indemnification and confidentiality provisions contained herein
shall survive the expiration or other termination of this Agreement.
13.10 Headings
Headings are inserted for convenience and shall not be themselves
determine the interpretation of this Agreement.
13.11 Publicity
Except as required by law, the parties agree to treat this Agreement as
Confidential Information under Article XII hereof until and except as they
mutually agree on publicity. All publicity regarding this Agreement shall
be jointly planned and coordinated by and between the parties.
16
IN WITNESS THEROF, the parties herto have caused this Agreement to be duly
executed in duplicate by their authorized officers as of the date first above
written.
ALLERGY FREE L.P. ENHANCED FILTER COMPANY
/s/ [ILLEGIBLE] /s/ [ILLEGIBLE]
--------------------- -----------------------
ALLERGY FREE II, INC.
/s/ [ILLEGIBLE]
---------------------
17
APPENDIX A
Exhibits attached to this Appendix A shall represent general, descriptive
and/or specific details of specifications for those Products covered by this
Agreement.
Each Exhibit must be signed by the executing Parties (AF, EFCO, Allergy
Free II, Inc.) In order to be included in this Agreement.
18
Exhibit 1
to Appendix A
Product Description: Adjustable, electro-static, air filter.
Materials: See specification and quote dated July 19, 1996 attached
hereto.
AF Trade Name: To be determined
Other Information:
Approvals: /s/ [ILLEGIBLE] 2-24-97
--------------------------------------------------------
EFCO Date
/s/ [ILLEGIBLE] 24 FEB 97
--------------------------------------------------------
AF Date
/s/ [ILLEGIBLE] 2/24/97
--------------------------------------------------------
XX XX, Inc. Date
19
Exhibit 2
to Appendix A
Product Description: Radial pleated air filter.
Materials: Beginning with existing technologies at 30% more media. Ending
with 60% Electra stat.
AF Trade Name: To be determined.
Other Information: Increased filter medial area. Easy to clean and less
often, lower initial pressure loss and higher efficiency. 30, 40, 50 and
60% model available now.
Approvals: /s/ [ILLEGIBLE] 2-24-97
--------------------------------------------------------
EFCO Date
/s/ [ILLEGIBLE] 24 FEB 97
--------------------------------------------------------
AF Date
/s/ [ILLEGIBLE] 2/24/97
--------------------------------------------------------
XX XX, Inc. Date
00
XXXXXXXX X
Exhibits attached to this Appendix B shall represent claims under any
Licensed Patents or patent applications covering aspects of any Products covered
by this Agreement.
Each Exhibit must be signed by the executing Parties (AF, EFCO, Allergy
Free II, Inc.) In order to be included in this Agreement and must include a copy
of the Patent award and the Patent Application.
21
[ALLERGY FREE LOGO]
AMENDMENT No. 2
THIS AMENDMENT is made as of the 1st day of August 1997, by and between
Xxxx X. Xxxxxxx, a sole proprietorship, with its principal place of business at
0000 Xxxxx Xxxxx, Xxxxx X., Xxxxxxx, Xxxxxxxxxx 00000 (hereinafter referred to
as "EFCO"), and Allergy-Free, LP, a Texas Limited Partnership, represented by
its general partner, Allergy-Free II, Inc., a company duly organized and
existing under the laws of Delaware, with its principal place of business at
0000 Xxxx Xxxxx, Xxxxxxxxx, Xxxxx 00000 (hereinafter referred to as "AF").
WHEREAS, EFCO and AF entered into a License Agreement dated as of January
1, 1997, and as amended June 4, 1997, (hereinafter referred to as the "License
Agreement"), and EFCO and AF desire to amend the License Agreement so that the
monthly advance payments of $5.000 under Article 4 end on September 1,1997
instead of July 1, 1997 as currently provided in the License Agreement;
NOW, THEREFORE, in consideration of the premises and the mutual covenants
and agreements herein contained, EFCO and AF agree as follows:
Article 1: Definitions
Capitalized terms used in this Amendment shall have the meaning which is given
to such term in the License Agreement, unless otherwise defined in this
Amendment.
Article 2: Amendment
The License Agreement is hereby amended as follows:
2.1 Section 4.2 of the License Agreement, as amended, is hereby further
amended by replacing "July 1,1997" with "September 1, 1997".
2.2 Section of 4.3 of the License Agreement, as amended, is hereby further
amended by replacing "July 1, 1997" with "September 1, 1997".
2.3 For the avoidance of doubt, it is expressly agreed that the advance
payments referred to in Section 4.4 of the License Agreement, which
provides that the advance payments paid by AF to EFCO shall be creditable
against future royalty payments by AF to EFCO pursuant to Article 5 of the
License Agreement, shall include the advance payments paid by AF to EFCO
as a result of the amendment made by this Amendment.
0000 Xxxx Xxxxx - Xxxxxxxxx. Xxxxx 00000 - (000) 000-0000 - Fax(281) 000-0000
1 - 800 - ALLERGY
[ALLERGY FREE LOGO]
Article 3: General Provisions
3.1 Except as modified herein, all of the terms and conditions of the License
Agreement shall remain in full force and effect.
3.2 As of the date hereof, the License Agreement, as amended by this Amendment
shall be deemed a single integrated document. All references to "this
Agreement," "herein," "hereunder" and words of similar nature shall be
deemed to refer to the License Agreement, as amended by this Amendment,
and "advance payments" and similar words shall be deemed to refer to the
advance payments referred to in the License Agreement, as amended by this
Amendment.
3.3 This Amendment constitutes the entire agreement of the parties hereto with
respect to the subject matter hereof and supersedes all previous
agreements or understandings relating to the subject matter hereof. No
modification or alteration shall be binding unless in writing and signed
by both parties.
3.4 This Amendment shall be governed and construed according to the laws of
the State of California.
IN WITNESS HEREOF, the parties hereto have caused this Amendment to be duly
executed in duplicate by their authorized officers as of the date first above
written.
EFCO:
By: _____________________________ Date: ________________
Xxxx X. Xxxxxxx
AF: For Allergy Free II, Inc., General Partner
By: _________________________ Date: ________________
D. Xxxxxx Xxxx, President
By: _________________________ Date: ________________
Xxxxxxx X. Xxxx, CEO
0000 Xxxx Xxxxx - Xxxxxxxxx. Xxxxx 00000 - (000) 000-0000 - Fax(281) 000-0000
1 - 800 - ALLERGY
AMENDMENT No. 3
THIS AMENDMENT is made as of the 31st day of October 1997, by and between
Xxxx X. Xxxxxxx, a sole proprietorship, with its principal place of business at
0000 Xxxxx Xxxxx, Xxxxx X., Xxxxxxx, Xxxxxxxxxx 00000 (hereinafter referred to
as "EFCO"), and Allergy-Free, LP, a Delaware Limited Partnership, represented by
its general partner, Allergy-Free II, Inc., a company duly organized and
existing under the laws of Delaware, with its principal place of business at
0000 Xxxx Xxxxx, Xxxxxxxxx, Xxxxx 00000 (hereinafter referred to as "AF").
WHEREAS, EFCO and AF entered into a License Agreement dated as of January
1, 1997, and as susequently amended, (hereinafter referred to as the "License
Agreement"), and EFCO and AF desire to amend the License Agreement so that the
monthly advance payments of $5,000 under Article 4 continue beyond September
1, 1997 as currently provided in the License Agreement as amended;
WHEREAS, EFCO and AF desire to establish the process by which the adavance
payments will be offset against royalties paid to EFCO;
NOW, THEREFORE, in consideration of the premises and the mutual covenants
and agreements herein contained, EFCO and AF agree as follows:
Article 1: Definitions
Capitalized terms used in this Amendment shall have the meaning which is given
to such term in the License Agreement, unless otherwise defined in this
Amendment.
Article 2: Amendement
The License Agreement is hereby amended as follows:
2.1 Section 4.2 of the License Agreement, as amended, is hereby further
amended by replacing "September 1, 1997" with December 31, 1997.
2.2 Section of 4.3 of the License Agreement, as amended, is hereby further
amended by replacing "September 1, 1997" with December 31, 1997.
2.3 Section 5.2 of the License Agreement, as amended, is hereby further
amended by adding the following sentence: "The amount of each royalty payment
shall not exceed $5,000 per month until all of the advance payments have been
offset in full."
ARTICLE 3: GENERAL PROVISIONS
3.1 Except as modified herein, all of the terms and conditions of the License
Agreement shall remain in full force and effect.
3.2 As of the date hereof, the License Agreement, as amended by this Amendment
shall be deemed a single integrated document. All references to "this
Agreement," "herein," "hereunder" and words of similar nature shall be
deemed to refer to the License Agreement, as amended by this Amendment,
and "advance payments" and similar words shall be deemed to refer to the
advance payments referred to in the License Agreement, as amended by this
Amendment.
3.3 This Amendment constitutes the entire agreement of the parties hereto with
respect to the subject matter hereof and supersedes all previous
agreements or understandings relating to the subject matter hereof. No
modification or alteration shall be binding unless in writing and signed
by both parties.
3.4 This Amendment shall be governed and construed according to the laws of
the State of California.
IN WITNESS HEREOF, the parties hereto have caused this Amendment to be duly
executed in duplicate by their authorized officers as of the date first above
written.
EFCO:
By: /s/ Xxxx X. Xxxxxxx Date: 31, Oct 97
-----------------------
Xxxx X. Xxxxxxx
AF: For Allergy Free II, Inc., General Partner
By: /s/ D. Xxxxxx Xxxx, President Date: 31, Oct 97
-----------------------------------
D. Xxxxxx Xxxx, President
By: /s/ Xxxxxxx X. Xxxx, CEO Date: 10/31/97
-----------------------------------
Xxxxxxx X. Xxxx, CEO
AMENDMENT No. 4
TO LICENSEAGREEMENT
DATED JANUARY 1, 1997
THIS AMENDMENT is made as of the 18 December, 1998, by and between Xxxx X.
Xxxxxxx, dba Enhanced Filter Company, a sole proprietorship, with its principal
place of business at 0000 Xxxxx Xxxxx, Xxxxx X., Xxxxxxx, Xxxxxxxxxx 00000
(hereinafter referred to as "EFCO"), and Allergy-free, LP, a Delaware Limited
Partnership, represented by its general partner, Allergy-Free II, Inc. a company
duty organized and existing under the laws of Delaware, with its principal place
of business at 000 Xxxxxx, Xxxxxxx, Xxxxx 00000 (hereinafter referred to as
"AF").
A. WHEREAS, EFCO and AF entered into a License Agreement dated January 1, 1997,
and as subsequently amended (hereinafter referred to as the "License
Agreement"); and
B. WHEREAS, EFCO and AF desire to ensure the economic feasibiltiy of AF and to
ensure a long lasting relationship between AF and EFCO; and
C. WHEREAS, EFCO and AF desire to amend the License Agreement as set forth
herein;
NOW, THEREFORE, in consideration of the premises and the mutual covenants
and agreements herein contained, EFCO and AF agree as follows :
1. Capitalized terms used in this Amendment shall have the meaning which is
given to such term in the License Agreement, unless otherwise defined in this
Amendment.
2. For the year starting January 1, 1999 and ending December 31, 1999, the
royalties payable to EFCO by AF pursuant to Article 5 of the License Agreement
(only as to the Product referred to in Exhibit 2 to Appendix A of the License
Agreement, which is the only Product as to which AF shall have an exclusive
license pursuant to the modifications to the License Agreement as set forth
herein) shall be modified and payable as follows:
a. January 1, 1999 through June 1, 1999: AF will pay to EFCO the sum of
eight thousand dollars ($8.000.00) per month, which amount is due and payable on
the first of each month beginning on January 1, 1999.
b. July 1, 1999 and thereafter: Royalties of 1.625% on total gross sales
of said product, which royalties are due and payable as set forth in the License
Agreement.
Payment of royalties as set forth herein will be reviewed on a good faith basis
by AF and EFCO before January 1,2000 to determine whether the payment of
royalties could revert to the amounts set forth in the License Agreement.
3. As of January 1, 1999, all Products other than the product referred to in
Exhibit 2 to Appendix A of the License Agreement will be released back to
Xxxxxxx, and AF shall no longer have any rights thereto whatsoever, exclusive or
non exclusive (the "Released Products"), except that AF must continue to pay
royalties to EFCO for sales of said released products after that time as set
forth in the License Agreement. AF agrees to return all Know How or other
information, materials and product regarding or relating to the Released
Products to EFCO forthwith.
4. The first right of refusal on all new Product developments are hereby
released back to Xxxxxxx. By this release, the parties hereto intend to and
hereby revoke Articles 6 and 7 of the License Agreement. Notwithstanding the
above, AF and EFCO agree to provide the other with all Know How regarding
improvements to the product referred to in Exhibit 2 to Appendix A on a
non-exclusive basis.
DATED: 12-16-98
/s/ Xxxx X. Xxxxxxx
------------------------------------
Xxxx X. Xxxxxxx, dba Enhanced
Filter Company
Allergy Free LP
DATED: 2/3/99
By: /s/ [ILLEGIBLE]
--------------------------------
Allergy Free II, Inc.
By: /s/ [ILLEGIBLE]
--------------------------------
DATED: 7/3/99
