EXHIBIT 10.11
SALE AGREEMENT AND ASSIGNMENT OF PATENTS
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Agreement made this ______ day of _______ 1998 between Xxxxx X.
Xxxxxxxx ("Seller") whose address is 000 Xxxx Xxxxxxxxxx, Xxxxxxx, Xxxxxxx 00000
and Xxxxxxxx Equipment & Engineering Company, a Florida corporation ("Buyer")
whose address is 000 Xxxx Xxxxxxxxxx, Xxxxxxx, Xxxxxxx 00000.
RECITALS
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WHEREAS, Seller is the owner of certain U.S. Letters Patent Nos.
4,512,264 issued April 23, 1985; 4,685,403 issued August 11, 1987; 4,890,367
issued January 2, 1990; and 5,152,232 issued October 6, 1992 the ("Patents")
that are designed for use in the manufacture of packaged combustion equipment
systems; and
WHEREAS, the Buyer is desirous of acquiring the Patents in accordance
with the terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the foregoing premises and the
covenants and agreements contained herein, the parties hereto intending to be
legally bound, covenant and agree as follows :
1. Purchase Price.
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Buyer agrees to pay to Seller as consideration for the purchase of the
Patents the sum of $875,000 together with certain royalty payments as
hereinafter described. Buyer at its sole discretion may elect to finance up to
$375,000 of the purchase price over a five (5) year term. At such election,
Buyer shall execute a promissory note in a form substantially similar to that
promissory note attached hereto as Exhibit A in the principal sum not to exceed
$375,000, which shall bear interest at the rate of eight percent (8%) per annum.
Payments of principal and interest due under the note, if applicable, shall be
paid quarterly in equal installments.
2. Royalty Fee.
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(a) As additional consideration for the sale of the Patents
described herein Buyer shall pay to Seller until the expiration of the last
Patent transferred hereunder, which takes place on October 6, 2009, or until
this Agreement is sooner terminated a royalty fee equal to $350 for each system
manufactured by the Company that implements one or more of the Patents.
(b) Seller shall collect royalty fees directly from the Buyer on a
monthly basis. Said payments shall be due and payable in immediately available
U.S. funds, by the fifth day following the end of each month, for products sold
during that month.
(c) Upon Buyer's failure to timely deliver any payment due
hereunder, a late penalty of five percent (5%) of the total amount of the
royalty fees due and payable shall be immediately
assessed, provided, however, that in the event Buyer shall remain in arrears for
more than three (3) months for royalty fees due and payable with respect to any
calendar month ("Arrears"), a late penalty of Eighteen Percent (18%) per annum,
or One and One-half Percent (1 1/2%) per month, shall be assessed against such
Arrears, which assessment shall be deemed to have commenced as of the date upon
which such Arrears was due and payable hereunder, provided further, that in such
case the initial five Percent (5%) late penalty shall be credited towards the
assessed Eighteen Percent (18%) late penalty. This provision shall survive the
termination of this Agreement.
3. Reports and Records.
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(a) Within thirty (30) days after the end of each calendar quarter, Buyer
shall deliver to Seller a report reflecting the gross sales for all products
sold by the Buyer, in the immediately preceding calendar quarter for which
royalties are due hereunder, (ii) the quantities and amount of all products sold
by the Buyer for which royalties are due hereunder, in the immediately preceding
calendar quarter, and (iii) the computation of royalty fees payable to the
Seller with respect thereto.
(b) Buyer agrees to maintain complete accurate books and records in
sufficient detail to enable the royalty fees payable hereunder to be determined,
and further agrees that the Seller shall have the right, at its own expense,
upon twenty-four (24) hours notice, to examine Buyer's books and records to the
extent necessary to verify Seller's reports rendered pursuant to Article 4(a)
hereof, the amounts of fees due and payable to Seller under this Agreement,
and/or Buyer's compliance in other respects with this Agreement. Such
examination shall be conducted by Seller or a personal representative designated
by Seller and acceptable to Buyer, provided, however, that Buyer's acceptance of
Seller's designated personal representative shall not be unreasonably withheld.
4. Seller's Representations & Warranties.
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Seller represents and warrants as follows:
(a) Seller is the party named in the Patents and is the party who made or
caused to be made the application for the U.S. Letters Patent;
(b) The Patents are valid, and in full force and effect as of the date of
this Agreement;
(c) The Patents to be sold, transferred and assigned hereunder are free
and clear of any and all liens, claims, security interests, pledges,
hypothecations or other encumbrances of any nature or kind and no interest in
any of the Patents has been previously or simultaneously granted, transferred,
assigned or otherwise conveyed.
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5. Assignment and Transfer of Patents.
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In consideration of the sum of $875,000 evidenced in cash or in cash
together with an executed promissory note, the principal amount of which may not
exceed the sum of $375,000, the receipt of which consideration is hereby
acknowledged, Seller hereby sells, transfers and assigns to the Buyer all of
Seller's rights, title and interest in the improvements made to and the U.S.
Letters Patent issued for such Patents with such rights, title and interest
to the Patents to be held to the full end of the term for each of the respective
Patents for which the Letters Patent or any reissues, renewals or extensions
thereof are or may be granted.
6. Arbitration.
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Any dispute or controversy arising out of or relating to this Agreement or
its actual or alleged breach shall be finally settled by arbitration, to be
conducted in Orange County, Florida, in accordance with the rules then in effect
of the American Arbitration Association in accordance with those rules, and
judgement upon the award rendered therein may be entered in any court having
jurisdiction thereof.
7. Governing Law.
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This Agreement shall be construed and interpreted in accordance with the
law of the State of Florida. In any action to interpret this Agreement, or to
resolve any dispute between the parties arising hereunder, the prevailing party
shall be entitled to its attorney fees, costs and expenses.
8. Notices.
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Any notices required or permitted under this Agreement shall be sent by
U.S. certified mail, return receipt requested, and addressed follows:
To Licensee: Xxxxxxxx Equipment & Engineering Co.
000 Xxxx Xxxxxxxxxx
Xxxxxxx, Xxxxxxx 00000
To Licensor: Xx. Xxxxx X. Xxxxxxxx
000 Xxxx Xxxxxxxxxx
Xxxxxxx, Xxxxxxx 00000
Such notice shall be deemed received three (3) days after the mailing thereof.
9. Complete Agreement.
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This Agreement shall constitute the entire understanding between the
parties with respect to the subject matter hereof and shall supersede all
previous or contemporaneous negotiations, commitments or writings with respect
to such subject matter. Licensor and Licensee each acknowledge that it has not
executed
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this Agreement in reliance upon any promise, representation or warranty not
expressly set forth herein. This Agreement may not be released, discharged,
changed, modified or amended except by any instrument in writing duly executed
by both of the parties hereof.
10. Binding Effect.
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This Agreement shall be binding upon and shall inure to the benefit of the
parties hereto and their respective successors, legal representatives and
permitted assigns.
11. No Waiver of Enforcement.
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The failure of any party to require performance of any term of this
Agreement or the waiver of any party of any breach under this Agreement shall
not prevent a subsequent enforcement of such term, nor be deemed a waiver by
that party of any subsequent breach.
12. Invalidity.
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The invalidity of any one or more of the words, phrases, sentences,
clauses, or sections contained in this Agreement shall not affect the
enforceability of the remaining portions of this Agreement or any part hereof,
all of which are inserted conditionally on their being valid under the law. In
the event that any one or more of the words, phrases, sentences, clauses, or
sections contained in this Agreement shall be invalidated, this Agreement shall
be construed as if such invalid word or words, phrase or phrases, sentence or
sentences, clause or clauses, or section or sections had not been inserted.
IN WITNESS WHEREOF, this Agreement has been duly executed by the parties
hereto as of the date first above written.
BUYER:
--------------------------- XXXXXXXX EQUIPMENT & ENGINEERING
Witness COMPANY
--------------------------- By
Witness -------------------------------
Xxxxxx Xxxxxxxx, President
--------------------------- Seller:
Witness
--------------------------- -------------------------------
Witness Xxxxx X. Xxxxxxxx
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