EXCLUSIVE LICENSE AND SALES AGREEMENT
THIS EXCLUSIVE LICENSE AND SALES
AGREEMENT (“Agreement”) is made and
entered into as of February 24, 2009 (the “Effective Date”), by and
between Zevotek, Inc., a Delaware corporation located at134 Xxxxx Xxxxxx,
Xxxxxx, XX 00000 (“Licensee”), Xxxxx Xxx, an
individual residing at 000X Xxxxxxx Xxxxxx, Xxxxxxxxx Xxxx, Xxx Xxxxxx
(collectively, “Licensor”).
RECITALS
A. Licensor
is the owner of the Licensed Intellectual Property (as defined
below).
B. On
May 22, 2007, Licensor and Licensee entered into that certain License and Supply
Agreement (the “Original
Agreement”) pursuant to which Licensor granted Licensee an exclusive,
commercial license to market, distribute, sell and manufacture the Ionic Bulb
Product and the patents underlying the Ionic Bulb Product set forth under the
term “Ionic Bulb Patents” on Exhibit A hereto (the
“Ionic Bulb Patents”)
which Original Agreement currently continues on a non-exclusive
basis.
C. Licensor
and Licensee wish to renegotiate the Original Agreement to amongst other things,
reclaim the license for the Ionic Bulb Products on an exclusive
basis.
NOW,
THEREFORE, in consideration of the premises and the mutual agreements and
covenants hereinafter set forth, the parties hereto hereby agree as
follows:
1. Definitions.
1.1 “Affiliate” means any person or entity
that directly, or indirectly through one or more intermediaries, controls or is
controlled by, or is under common control with, the person
specified.
1.2 “Change of
Control” means
(a) the sale, leasing, licensing (on an exclusive basis) or otherwise disposing
of all or substantially all of the assets of the Licensee or of any subsidiary
of the Licensee (other than the leasing or licensing of assets or technologies
to an Affiliate of the Licensee), (b) the consolidation or merger of the
Licensee or any subsidiary of the Licensee with any other corporation or entity,
or the consolidation or merger of any other corporation or entity into the
Licensee or any subsidiary of the Licensee, (c) the approval by the shareholders
of the Licensee of any plan or proposal for the liquidation or dissolution of
the Licensee, or (d) the acquisition by any person or entity of “beneficial
ownership” (as defined in Rule 13d-3 under the Exchange Act), directly or
indirectly, of more than 50 percent of the combined voting power of the
Licensee’s securities ordinarily having the right to vote at elections of
directors (other than the current “beneficial owners” of the outstanding
securities of the Licensee).
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1.3 “Consulting
Term” has the
meaning set forth in Section 7.3.2.
1.4 “Licensed
Intellectual Property” means all of the Licensor’s
right, title and interest in and to all of the Licensed Patents and Licensed
Trademarks, all knowledge, information, know-how, discoveries, procedures,
devices, techniques, programs, inventions, creations, methods, formulas,
software, designs, drawings, works of authorship or other technical information
related to such Licensed Patents and Licensed Trademarks which has been
developed by or on behalf of Licensor as of the date of this
Agreement.
1.5 “Licensed
Patents” means
those patents, patent applications, letters patent and like protections of the
United States or any other countries Patents as set forth on Exhibit A, including,
without limitation, improvements, divisions, continuations, renewals, reissues,
extensions and continuations-in-part of the same.
1.6 “Licensed
Products” means
any product, service, component and/or tool of a system of products, sold,
licensed, rented, leased, or otherwise offered by the Licensee (or a
sub-licensee) or an Affiliate of the Licensee (or a sub-licensee of such
Affiliate), (i) but for this Agreement would be an infringement of any claim of
any Licensed Patent, that has neither expired nor been declared invalid by a
court from which no appeal has been or can be taken, or (ii) but for this
Agreement would be an infringement of any Licensed Trademark.
1.7 “Licensed
Trademarks” means
those trademarks and service xxxx rights set forth on Exhibit B, whether or
not registered, applications to register and registrations of the same and like
protections, and the entire goodwill of the business of the Licensor connected
with or symbolized by such trademarks.
1.8 “Losses” has the meaning set forth in
Section 9.1.
1.9
“Net
Profits means, with respect to sales of the
Licensed Products by Ryu or any Sales Associate hired by Ryu, all revenues
generated by sales of the Licensed Products less the sum of (i) costs of goods
sold and (ii) selling general and administrative expenses (including, without
limitation, any and all financing costs, legal expenses and other promotional
and marketing expenses, including press releases).
1.10
“Sales
Associate” has
the meaning set forth in Section 7.3.5.
1.11 “Zevotek
Bankruptcy Event”
occurs if Zevotek becomes the subject of a voluntary or
involuntary proceeding or appointment under any bankruptcy, insolvency,
receivership, liquidation, general assignment, custodian, trusteeship or similar
law or rule, and such proceeding is not withdrawn or abandoned within 90
days,
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2. License
Grant.
2.1 License.
2.1.1 Licensor
grants to Licensee, upon and subject to the terms and conditions of this
Agreement, for the Term of this Agreement, a worldwide, exclusive license (the
“License”) to
manufacture, have manufactured, market, use, sell, distribute and advertise
Licensed Products.
2.1.2 If
either (a) the Licensee fails to file its quarterly and annual reports by the
due date for such report (including, if applicable, any extensions permitted
under Rule 12b-25 of the Securities Exchange Act of 1934, as amended) or (b) the
Licensee’s Common Stock (as defined in Section 3.1 below) is not quoted on the
OTCBB on or before February 14, 2010, then the License shall (unless Licensee
exercises the Option set forth under Section 3.2 below) continue on a
non-exclusive basis
2.2 Sub-License. Licensee shall have the
right to grant sublicenses with respect to the Licensed Products upon written
approval by Licensor, which written approval shall not be unreasonably
withheld.
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3.
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License
Fees.
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3.1 In
consideration of the license which Licensor has granted, Licensee shall issue
fifty million (50,000,000) shares (the “Shares”) of the Licensee’s
common stock, par value $0.00001 per share (“Common Stock”) in the name of
Xxxxx Xxx (“Ryu) The Shares
shall fully vest immediately with Ryu as of the effective date of this Agreement
and the certificates representing theses Shares should bear the following
legend:
THE
SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933 (THE “SECURITIES ACT”). THE SHARES HAVE BEEN
ACQUIRED FOR INVESTMENT AND MAY NOT BE SOLD, TRANSFERRED, ASSIGNED OR OTHERWISE
DISPOSED OF IN THE ABSENCE OF A CURRENT AND EFFECTIVE REGISTRATION STATEMENT
UNDER THE 1933 ACT WITH RESPECT TO SUCH SHARES, OR AN OPINION OF THE ISSUER’S
COUNSEL TO THE EFFECT THAT REGISTRATION IS NOT REQUIRED UNDER THE 1933
ACT.
3.2 If,
pursuant to 2.1.2 the License is to be converted from exclusive to
non-exclusive, the Licensee, at it option (the “Option”), may issue to Ryu an
additional amount of shares of Common Stock equal to $90,000 (based upon the
average of the closing prices for the Company’s Common Stock on the 10 days
preceding notice by the Company of its option under this Section 3.2), the
exercise of such Option shall cause the License to continue on an exclusive
basis
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4. Term and
Termination.
4.1 Term. The
term of this Agreement and the license granted hereunder (the “Term”) shall continue in full
force from the Effective Date and thereafter from year to year unless earlier
terminated pursuant to Section 4.2 hereof.
4.2 Termination. This
Agreement may only be terminated as follows:
4.2.1 by
mutual consent of all parties;
4.2.2 in
the event of a material breach of this Agreement, by the non-breaching party if
(a) such non-breaching party has given notice of the material breach to the
breaching party, and (b) the breaching party has not cured the material breach
within thirty (30) days after the notice has been sent; provided, however, that
the parties agree that any breach of Section 7.3 shall not be sufficient to
terminate the License granted under Section 2.1 above; or
4.2.3 in
the event of a Zevotek Bankruptcy Event.
5. Licensor
Representations and Warranties.
5.1 Organization,
Standing, Etc. Ryu has the requisite power and authority to
own, lease or operate the Licensed Intellectual Property.
5.2 Corporate
Acts and Proceedings. This Agreement has been duly authorized
by all necessary action on behalf of the Licensor, has been duly executed and
delivered, is a valid and binding agreement on the part of the Licensor and is
enforceable against the Licensor in accordance with its terms.
5.3 Compliance
with Applicable Laws and Other Instruments. Neither the
execution nor delivery of, nor the performance of or compliance with, this
Agreement nor the consummation of the transactions contemplated hereby or
thereby will, with or without the giving of notice or passage of time, result in
any breach of, or constitute a default under, or result in the imposition of any
lien or encumbrance upon any of the Licensed Intellectual Property pursuant to,
any agreement or other instrument to which the Licensor is a party or by which
it or any of the Licensed Intellectual Property is bound or
affected. The Licensor is not subject to any restriction that would
prohibit it from entering into or performing its obligations under this
Agreement.
5.4 Patents
and Other Intangible Rights.
5.4.1 Licensor
is the sole owner of and owns all right, title and interest in and to the
Licensed Intellectual Property and has the sole, exclusive and unencumbered
right to license the Licensed Intellectual Property.
5.4.2 Neither
the Licensed Intellectual Property, the use thereof, nor the manufacture,
marketing, use, sale, distribution, or advertisement of Licensed Products
infringe upon or otherwise act adversely to any patent right, trademark right,
common law, proprietary or other right of another or require the consent of any
third party.
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5.4.3 Licensor
has made no assignment of the Licensed Intellectual Property to a party other
than Licensee and is under no obligation to make any assignment of the Licensed
Intellectual Property therefor to any other party.
5.4.4 Licensor
is not aware of any prior art which would preclude the issuance of any pending
patent application which is part of the Licensed Intellectual
Property. Each of the patent applications which are part of the
Licensed Intellectual Property was properly filed and is being diligently
prosecuted, and none of these patent applications is under final
rejection. There are no interferences, oppositions, or inventorship
challenges pending or contemplated with respect to any patents or patent
applications that are part of the Licensed Intellectual
Property.
5.5 Access to
Information. Ryu represents
that he has been given full and complete access to the Licensee for the purpose
of obtaining such information as Ryu or his qualified representative
has reasonably requested in connection with the decision to accept Common Stock
under this Agreement. Ryu represents that he has reviewed copies of
the reports filed by the Licensee with the Securities and Exchange
Commission. Ryu represents that he has been afforded the opportunity
to ask questions of the officers of the Licensee regarding its business
prospects and the Common Stock, all as Ryu or Ryu’s qualified representative
have found necessary to make an informed investment regarding the Common
Stock.
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5.6 Restricted
Securities.
5.6.1 Ryu
has been advised that the Shares and the Incentive Shares have not been
registered under the Securities Act or any other applicable securities laws and
that Shares and the Incentive Shares are being offered and sold pursuant to
Section 4(2) of the Securities Act, and that the Licensee’s reliance upon
Section 4(2) is predicated in part on Ryu’s representations as contained
herein. Ryu acknowledges that the Shares and the Incentive Shares
will be issued as “restricted securities” as defined by Rule 144 promulgated
pursuant to the Securities Act. The Shares and the Incentive Shares
may not be resold in the absence of an effective registration thereof under the
Securities Act and applicable state securities laws unless, in the opinion of
the Licensee’s counsel, an applicable exemption from registration is
available.
5.6.2 Ryu
represents that he is acquiring the Shares and the Incentive Shares for his own
account, and not as nominee or agent, for investment purposes only and not with
a view to, or for sale in connection with, a distribution, as that term is used
in Section 2(11) of the Securities Act, in a manner which would require
registration under the Securities Act or any state securities laws.
5.6.3 Ryu
acknowledges that an investment in the Shares and the Incentive Shares is not
liquid and is transferable only under limited conditions. Ryu
acknowledges that such securities must be held indefinitely unless they are
subsequently registered under the Securities Act or an exemption from such
registration is available. Ryu is aware of the provisions of
Rule 144 promulgated under the Securities Act, which permits limited resale
of restricted securities subject to the satisfaction of certain conditions and
that such Rule is not now available and, in the future, may not become available
for resale of any of the Shares and the Incentive Shares.
5.7 Sophistication
and Ability to Bear Risk of Loss. Ryu acknowledges that he is
able to protect his interests in connection with the acquisition of the Shares
and the Incentive Shares can bear the economic risk of investment in such
securities without producing a material adverse change in Ryu’s financial
condition. Ryu, either alone or with the Ryu’s representative(s),
otherwise has such knowledge and experience in financial or business matters
that Ryu is capable of evaluating the merits and risks of the investment in the
Shares and the Incentive Shares.
5.8 Preexisting
Relationship. Ryu
has a preexisting personal or business relationship with the Licensee, one or
more of its officers, directors or controlling persons.
6. Licensee
Representations and Warranties.
6.1 Organization,
Standing, Etc. The Licensee is a corporation duly organized,
validly existing and in good standing under the laws of Delaware and has the
requisite corporate power and authority to own, lease or operate its properties
and to carry on its business as it is now being conducted and as it is presently
proposed to be conducted.
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6.2 Corporate
Acts and Proceedings. This Agreement has been duly authorized
by all necessary action on behalf of the Licensee, has been duly executed and
delivered, is a valid and binding agreement on the part of the Licensee and is
enforceable against the Licensee in accordance with its terms.
6.3 Compliance
with Applicable Laws and Other Instruments. Neither the
execution nor delivery of, nor the performance of or compliance with, this
Agreement nor the consummation of the transactions contemplated hereby or
thereby will, with or without the giving of notice or passage of time, result in
any breach of, or constitute a default under any agreement or other instrument
to which the Licensee is a party, and will not violate its articles of
incorporation, bylaws, or any other of its governing documents. The
Licensee is not subject to any restriction which would prohibit it from entering
into or performing its obligations under this Agreement.
6.4 Valid
Issuance of Shares. The shares of
Common Stock that are being issued to the Ryu hereunder, when issued, sold and
delivered in accordance with the terms hereof for the consideration expressed
herein, will be duly and validly issued, fully paid and nonassessable and free
of restrictions on transfer, other than restrictions on transfer under this
Agreement and under applicable federal and state securities laws, will be free
of all other liens and adverse claims.
7.
Covenants.
7.1 Confidentiality. The
parties realize that some information received by one party from the other
pursuant to this Agreement may be confidential. It is therefore
agreed that any information received by one party from the other, and clearly
designated in writing as “CONFIDENTIAL,” shall not be disclosed by the receiving
party to any third party and shall not be used by the receiving party for
purposes other than those contemplated by this Agreement, including but not
limited to the use of the Licensed Intellectual Property, for the term of this
Agreement and for a period of five (5) years thereafter, unless, or
until:
7.1.1 said
information shall become publicly known through no fault of the receiving party,
or
7.1.2 said
information was already in the receiving party’s possession prior to the
disclosure of said information to the receiving party, or
7.1.3 said
information shall be subsequently disclosed to the receiving party by a third
party who is not under any obligation of confidentiality to the disclosing
party, or
7.1.4 said
information is independently developed by the receiving party.
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It is to
be understood that specific information that has been disclosed to the receiving
party shall not be deemed to be available to the public or in the receiving
party’s prior possession merely because it was embraced by more general
information available to the public or in the prior possession of the receiving
party. All information deemed Confidential will be marked
“Confidential.” All oral exchanges of Confidential Information shall
be reduced to writing within 30 days of disclosure by the disclosing party,
marked “Confidential” and a copy provided to the receiving party.
7.2 Non-Competition.
7.2.1 During
the Term of this Agreement, Licensor shall not, and shall cause all of its
Affiliates not to, engage directly or indirectly in the manufacture, marketing,
use, sale, distribution or advertisement of any Licensed Products, except as
specifically set forth in this Agreement. If the final judgment of a
court of competent jurisdiction declares that any term or provision of this
Section 7.2 is invalid or unenforceable, the court making the determination of
invalidity or unenforceability shall have the power to reduce the scope,
duration, or area of the term or provision, to delete specific words or phrases,
or to replace any invalid or unenforceable term or provision with a term or
provision that is valid and enforceable and that comes closest to expressing the
intention of the invalid or unenforceable term or provision, and this Agreement
shall be enforceable as so modified after the expiration of the time within
which the judgment may be appealed.
7.2.3 Licensee
agrees that nothing herein shall give to Licensee any right, title, or interest
in the Licensed Trademarks except the right to use the Licensed Trademarks in
accordance with the terms of this Agreement, and that the Licensed Trademarks
are the sole property of the Licensor.
7.2.4 Licensee
agrees not to raise or cause to be raised any questions, concerns, or objections
to the validity of the Licensed Trademarks or to the right of the Licensee
thereto on any grounds whatsoever.
7.3 Sales
Arrangement.
7.3.1 The
Licensee agrees to retain Ryu, and Ryu agrees to serve, as a non-exclusive
independent contractor sales representative so as to obtain purchase orders for
the Licensed Products on behalf of Licensee, subject to the terms and conditions
set forth in this Section 7.3. It is understood and agreed that all
payments for sales of Licensed Products is to be remitted directly from any
purchaser of such products directly to the Licensee and Ryu and any Sales
Associate hired by him hereby agree to direct any and all customers of such
payment terms. In the event that Ryu or any Sales Associate receives
payment for any sale of Licensed Product, they hereby agree to transfer such
payment directly to the Licensee without any deductions.
7.3.2 Ryu
shall provide sales representative services to the Licensee as requested from
time to time by the Licensee from the date of this Agreement until February 28,
2010 (the “Consulting
Term”); provided, however, that the term will be extended automatically
for successive 12 month periods unless either party sends written notice to the
other that such party does not want it renewed at least 30 days before the end
of any term.
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7.3.3 In
consideration for his consulting services, Licensee shall issue Ryu a
certificate for 750,000 shares of Common Stock for each $100,000 in gross sales
of the Licensed Product by Ryu (or any Sales Associate hired by him) on or
before February 28, 2010 up to a maximum of 75,000,000 shares of Common Stock
(collectively, the “Incentive
Shares”). The Incentive Shares shall not vest unless Ryu (or
any Sales Associate hired by him) shall have collectively procured gross sales
of $5,000,000 for the Licensed Products on or before February 28, 2010 (the
“Target”). If
Ryu fails to achieve the Target, such Incentive Shares shall be null and void
and of no further force and effect. Ryu understands and agrees that
he will not receive credit towards the Target for any returns, cancellations,
and such other events as require Licensee to make a payment back to the merchant
and/or accept an offset to other payments that Licensee receives from that
merchant (“Buybacks”). In the
event that Licensee receives notice of any Buybacks after February 28, 2010,
Licensee shall have the right to rescind the issuance of the Incentive Shares
and place a stop-transfer order with the Licensee’s transfer agent with respect
to the certificate representing the Incentive Shares. In the event
that Ryu has disposed of any of the Incentive Shares prior to such date, Ryu
shall purchase in the open market the number of shares of the Licensee’s common
stock so disposed and return such shares to the Licensee along with any
Incentive Shares not so disposed, for cancellation.. Each certificate
representing these Incentive Shares should bear the following
legend:
THE
SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933 (THE “1933 ACT”). THE SHARES HAVE BEEN
ACQUIRED FOR INVESTMENT AND MAY NOT BE SOLD, TRANSFERRED, ASSIGNED OR OTHERWISE
DISPOSED OF IN THE ABSENCE OF A CURRENT AND EFFECTIVE REGISTRATION STATEMENT
UNDER THE 1933 ACT WITH RESPECT TO SUCH SHARES, OR AN OPINION OF THE ISSUER’S
COUNSEL TO THE EFFECT THAT REGISTRATION IS NOT REQUIRED UNDER THE 1933
ACT.
THE
SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE TERMS AND CONDITIONS
OF THAT CERTAIN EXCLUSIVE LICENSE AND SALES AGREEMENT DATED FEBRUARY 24, 2009 BY
AND AMONG ZEVOTEK, INC. AND XXXXX XXX.
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7.3.4 Ryu
also agrees to establish, negotiate and execute a distribution agreement with
National Express (or a similar national distributor acceptable to Licensee) for
distribution of the Licensed Products (the ‘Distribution
Agreement”). As consideration for consummation of the
Distribution Agreement Licensee agrees (within 7 days after receipt by Licensee
of a fully executed and enforceable Distribution Agreement) to issue Ryu a
certificate for 10,000,000 shares of Common Stock. As soon as
practicable, following the execution of this Agreement, the Licensee will set
aside, out of its existing stock compensation plan(s), the shares to be issued
under this Section 7.3.4 and register such shares on a Form S-8 or other
applicable registration statement, which the Licensee agrees to file, if not
already filed, with the Securities and Exchange Commission (the “Commission”) as
soon as practicable after the date hereof.
7.3.5 Licensee
agrees to pay a commission to Ryu at the rate 50% of all Net Profits recognized
by Licensee on sales of the Licensed Products made by Ryu (or Sales Associates
hired by Ryu) on behalf of Licensee during the period of this Agreement (the
“Commissions”). All
Commissions that Ryu earns are subject to subsequent adjustment for any Buybacks
on Licensed Products sold by Ryu or Sales Associates, if any. Such
adjustments can be applied at any time by Licensee at its sole
discretion Licensee will reimburse Ryu in accordance with its normal
reimbursement policy for reasonable travel and other expenses incurred at the
Licensee’s request in carrying out the Ryu’s duties under this
Agreement. Reimbursement for approved expenses will be made within
ten (10) days of receipt from Ryu of an itemized expense report.
7.3.6 Within
thirty (30) days of the last day of each quarter, Licensee will calculate the
Commissions that it owes Ryu, provide Ryu with a statement regarding same and
make payment of said commissions. In the event that, as a result of
adjustments, Ryu owes Licensee a payment at the end of any month, Licensee shall
have the option of either (a) carrying such negative balance to the following
month and offsetting it against income in the following month, or (b) providing
Ryu with a xxxx requiring Ryu to pay Licensee the amount of such negative
balance within ten (10) days of receipt of the xxxx
7.3.7 Ryu
may engage one or more agents to directly sell the Licensed Products (each a
“Sales Associate”);
provided that such Sales Associates agree to be bound by the terms and
conditions of this Agreement. Licensee shall have the right to
approve (which approval show not be unreasonably withheld, conditioned or
delayed) all Sales Associates. It is understood and agreed that Ryu
shall be responsible for any and all compensation and any other amount due any
Sales Associate and Licensee shall have no monetary or other obligations with
respect to any activities of such Sales Associates.
7.3.8 Ryu
shall keep, and shall contractually obligate its Affiliates (including Sales
Associates) to
keep, complete and accurate records of the latest three (3) years relating to
sales of Licensed Products and all information relevant under this Section
7.3. Licensee shall have the right annually (and, reasonably, at
other times), at its expense, to retain an independent certified public
accountant selected by it and reasonably acceptable to the Ryu, to review Ryu’s
records in the location(s) where such records are maintained by the Ryu or its
affiliates upon reasonable notice and during regular business
hours. Such representatives shall disclose to Licensee their
conclusions regarding the accuracy of Commissions and of records related
thereto. The right to audit any Commission report shall extend for
three (3) years from the receipt of each Commission report.
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7.3.9 Ryu
(and any Sales Associates) shall provide the services under this Section 7.4 as
an independent contractor of the Licensee and not as an employee. Ryu declares
and covenants for himself and any Sales Associates that Ryu is engaged in an
independent business, that the commissions received from Licensee are not the
only income source for such business and has complied and will comply with all
federal, state and local laws relating to business permits and licenses of any
kind that may be required to carry out the business and tasks to be performed by
Ryu under this Agreement. Ryu is not required by Licensee to incur
any costs or expenses pursuant to this Agreement. If Ryu does incur
costs and expenses, such as premiums for insurance of any kind, hiring
assistants, or local, state and federal taxes due and/or relating to income
received by Ryu from Licensee, Ryu agrees to pay them, and not seek
reimbursement from Licensee. No payment or withholding of any
federal, state, local, city or other payroll or employment taxes, including but
not limited to FICA, state and federal income taxes, FUTA, state disability
insurance taxes, and state unemployment insurance taxes relating to income
received by Ryu from Licensee will be made by Licensee. Ryu agrees to
indemnify and hold Licenssee harmless should a claim related to his expenses,
insurance or the lack thereof and/or local, state or federal taxes be made by
anyone, including any governmental authority
7.3.10
Licensee retains the right to control the sales and promotion activities
to insure that they are consistent with the best interests of
Licensee. Licensee retains the right to establish policies to enhance
business and/or customer relations for both Ryu and Licensee and to establish
other business procedures consistent with these goals and Ryu agrees to pursue
these procedures and policies to the best of Ryu's ability.
7.3.11 No
worker's compensation insurance has been or will be obtained by Licensee on
account of Ryu or any Sales Associate. Ryu is not entitled to receive
and will not receive benefits that employees of Licensee may or may not receive
such as medical insurance, life insurance, paid vacation or holidays, pension or
profit-sharing benefits, deferred compensation or any other similar
benefits.
7.3.12 In
connection with the sale of the Licensed Products, Ryu (for himself and any
Sales Associate) represents, warrants, and agrees as follows:
7.3.12.1 to
provide the Licensee with monthly nonbinding good-faith forecasts of its
anticipated requirements and shipping dates for the three (3) month period
following each forecast (or, if shorter, the remaining term of this
Agreement);
7.3.12.2 to
use his best efforts to successfully market (including, without limitation,
production and broadcasting of infomercials relating to the Licensed Products),
distribute, and support the Licensed Products on a continuing basis and to
comply with good business practices and all laws and regulations relevant to
this Agreement or the subject matter hereof. In his efforts, Ryu will
(1) use the then-current names used by the Licensee for the Licensed Products
(but will not represent or imply that it is the Licensee or is a part of the
Licensee); provided that all advertisements and promotional materials shall be
subject to prior written approval of the Licensee, which approval shall not be
unreasonably withheld, and, provided further, that no other right to use any
name or designation is granted by this Agreement; (2) will promptly deliver the
Licensed Products to his customers in accordance with good business practice and
local custom;
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7.3.12.3 has
all required registrations, licenses, permits, approvals and authorizations
necessary to enter into and carry out its obligations under this Agreement,
including those that are required in connection with promoting, marketing,
selling and distributing the Licensed Products;
7.3.12.4 will
not, during the term of this Agreement, represent any brand competitive with the
Licensed Products.
7.3.12.5 timely
file all such price schedules and reports as may be prescribed by applicable
laws and regulations;
7.3.12.6 to
keep the Licensee informed as to any problems encountered with the Licensed
Products and any resolutions arrived at for those problems, and to communicate
promptly to Licensee any and all modifications, design changes, or improvements
of the Licensed Products suggested by any customer, employee, or
agent. Ryu further agrees that Licensee shall have and is hereby
assigned any and all right, title, and interest in and to any such suggested
modifications, design changes, or improvements of the Product, without the
payment of any additional consideration therefor either to Ryu, or its
employees, agents or customers. Ryu will also promptly notify
Licensee of any infringement of any trademarks or other proprietary rights
relating to the Licensed Products; and
7.3.12.7 to
comply with the U.S. Foreign Corrupt Practices Act and all applicable export
laws, restrictions, and regulations of any United States or foreign agency or
authority and not to export or re-export, or allow the export or re-export of
any product, technology, or information it obtains or learns pursuant to this
Agreement (or any direct product thereof) in violation of any such laws,
restrictions or regulations. Ryu shall obtain and bear all expenses
relating to any necessary licenses and/or exemptions with respect to the export
from the U.S. of the Licensed Product to any location in compliance with all
applicable laws and regulations prior to delivery thereof by
Licensee.
7.3.12.8 Ryu
has not been engaged to perform, nor will Ryu perform, any services in
connection with capital raising transactions for the Licensee or services that
will promote the market for the Common Stock. It is mutually
understood and agreed that any fees for the services provided by Ryu, which
result in some benefit for the Licensee in connection with a capital raising
transaction or that promote the market for the Common Stock, shall be negotiated
separately from this Agreement.
12
7.3.12.9 Ryu
will provide the services under this Section 7.3 to the Licensee, and such
services will be bona fide services to the Company.
7.3.12.9 Ryu
will not act as a conduit for distributing the any shares of Common Stock issued
pursuant to this Agreement to the general public.
7.3.12.10 Neither
the Licensee nor any affiliate (as defined in the Securities Act of 1933, as
amended) has directed, instructed, or caused Ryu to resell the shares of Common
Stock in the public market, and Ryu will refuse any such direction or
request.
7.3.12.11 Licensee
will not directly or indirectly receive a percentage of the proceeds from the
resale of the shares of Common Stock by Ryu
7.4 Manufacturing.
7.4.1 Licensor
will be responsible for manufacturing and supplying all Licensed Product
required for sales thereof. Licensor authorizes Licensee to deal
directly with Licensor’s manufacturers of the Licensed Products and agrees to
provide Licensee with introductions to Licensor’s manufacturers of the Licensed
Products.
7.4.2 Should
Licensee desire to utilize a third party manufacturer for the Licensed Products,
Licensor agrees to supply all design and manufacturing specifications to
Licensee.
7.5 Use of
Name. All Licensed Products for which Licensee delivers an
Acceptance Notice shall be marketed and sold under the “Zevotek”
name.
8.
Patents
and Trademarks.
8.1 Cost of
Patent Prosecution and Maintenance. The Licensor shall pay all
future costs incident to the United States and foreign applications, patents,
trademarks and like protection for the Licensed Patents and the Licensed
Trademarks, including all costs to be incurred in the future for filing,
prosecution, issuance and maintenance fees as well as any costs incurred in
filing continuations, continuations-in-part, divisionals or related applications
and any re-examinations or reissue proceedings.
8.2 Patent
and Trademark Prosecution. The Licensor, by counsel it selects
to whom the Licensee has no reasonable objection, in consultation with the
Licensee and/or with counsel appointed by the Licensor, may prepare, file,
prosecute, and maintain all Licensed Patents and Licensed Trademarks (including,
without limitation, improvements, divisions, continuations, renewals, reissues,
extensions and continuations-in-part of the same) in Licensor’s name and in
countries designated by the Licensee. Licensor and Licensee shall use
their best efforts to establish the broadest possible patent and trademark
coverage for the Licensed Products.
13
8.3 Proceedings.
8.3.1 Licensor
and Licensee shall promptly notify the other if it knows or has reason to
believe that rights to any Licensed Intellectual Property are being infringed or
misappropriated by a third party or that such infringement or misappropriation
is threatened.
8.3.2 Unless
Licensor, within fifteen (15) days either receiving or giving notice pursuant to
Section 8.3.1, either coordinates with Licensee to cause such infringement to
terminate without resort to the initiation of a legal proceeding or initiate
legal proceedings in its own name against the infringer, Licensee may, in its
sole discretion upon notice to Licensor, initiate legal proceedings against the
infringer at Licensee’s expense but on behalf and if required by law to pursue
such legal proceedings in the name of Licensor. Any recovery in such
proceedings initiated or carried on by either party shall first be used to
reimburse the party initiating or carrying on such proceedings for reasonable
costs and legal fees incurred to conduct such proceedings. The
balance shall be treated as Net Sales of Licensed Products under this Agreement,
except that any amount of the balance attributable to damages other than actual
damages shall be allocated to the Licensee. In no event shall
Licensor settle any potential or actual infringement action without the prior
written consent of the Licensee.
8.3.3 If
one party shall initiate or carry on legal proceedings to enforce any Licensed
Intellectual Property against an alleged infringer, the other party shall use
its best efforts to cooperate fully with any shall supply all assistance
reasonably requested by the party initiating or carrying on such
proceedings. The party that institutes any proceeding to protect or
enforce a Licensed Patent shall have sole control of that proceeding, shall bear
the reasonable expenses incurred by said other party in providing such
assistance and cooperation as is requested pursuant to this paragraph, and shall
provide the other party with copies of all papers served and decisions rendered
in the proceeding.
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9.
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Indemnification.
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9.1 Indemnification
by Licensor. Licensor shall indemnify and hold Licensee
harmless from and against any and all claims, actions, liabilities, losses,
damages and expenses (“Losses”) incurred by Licensee
in connection with any claims, actions or liabilities arising out of or related
to any breaches of representations, warranties, covenants or any other
commitments given by Licensor (or any Sales Associate) in this Agreement,
including, but not limited to, any claim that the Licensee’s performance of this
Agreement constitutes an infringement of the intellectual property rights of a
third party. Licensee will promptly notify Licensor within a
reasonable time after it becomes aware of any claim, action or proceeding that
may be subject to indemnification pursuant to this Section and will cooperate
with and authorize Licensor to carry out the management and defense of such
claim, action or proceeding. Licensor agrees that Licensee may
participate and choose counsel of its own selection to defend and/or appeal the
claim or action on behalf of Licensee and shall pay any settlement amount or
judgment agreed to by or awarded against Licensee. Licensee will not
compromise or settle any claim, action or proceeding subject to indemnification
pursuant to this Article without the prior written approval of
Licensor. Section 9.1 shall survive expiration or other termination,
for any reason whatsoever, of this Agreement.
14
9.2 Indemnification
by Licensee. Licensee shall indemnify and hold harmless
Licensor from and against any and all Losses incurred by Licensor in connection
with any claims, actions or liabilities arising out of or related to the use of
the Licensed Intellectual Property by Licensee, except for any claim of
infringement of the intellectual property rights of a third party; Licensor will
promptly notify Licensee within a reasonable time after it becomes aware of any
claim, action or proceeding that may be subject to indemnification pursuant to
this Section and will cooperate with and authorize Licensee to carry out the
management and defense of such claim, action or proceeding. Licensee
agrees that Licensor may participate and choose counsel of its own selection to
defend and/or appeal the claim or action on behalf of Licensor and shall pay any
settlement amount or judgment agreed to by or awarded against
Licensor. Licensor will not compromise or settle any claim, action or
proceeding subject to indemnification pursuant to this Article without the prior
written approval of Licensee. Section 9.2 shall survive expiration or
other termination, for any reason whatsoever, of this Agreement.
10.
Miscellaneous.
10.1 Amendments. Any
term or provision of this Agreement may only be amended by a writing signed by
Licensor and Licensee.
10.2 Severability. Should
any one or more of the provisions of this Agreement or of any agreement entered
into pursuant to this Agreement be determined to be illegal or unenforceable,
all other provisions of this Agreement and of each other agreement entered into
pursuant to this Agreement, shall be given effect separately from the provision
or provisions determined to be illegal or unenforceable and shall not be
affected thereby. The parties further agree to replace such void or
unenforceable provision of this Agreement with a valid and enforceable provision
that will achieve, to the extent possible, the economic, business and other
purposes of the void or unenforceable provision.
10.3 Assignment. Neither
this Agreement nor any interest hereunder shall be assignable by either party,
nor shall either party undergo a Change of Control, without the prior written
consent or agreement of the other party; provided, however, that in the event of
a Licensee Change of Control, Ryu agrees that such consent or agreement shall
not be unreasonably withheld. In addition, it is understood and
agreed that a party shall have the unrestricted right to assign, license, sell
or otherwise transfer this Agreement, in whole or in part, to an Affiliate of
such party at its sole discretion. This Agreement shall inure to the
benefit of and shall be binding upon each party’s successors and permitted
assigns, and shall be deemed to include the names of each party’s successors and
permitted assigns to the extent necessary to carry out the intent of this
Agreement.
15
10.4 Notice. All
notices, requests, consents and other communications required or permitted
hereunder shall be in writing and shall be delivered, or sent by facsimile
transmission, or mailed first-class postage prepaid, registered or certified
mail, as follows:
10.4.1 to
Licensor:
Xxxxx
Xxx
000X
Xxxxxxx Xxxxxx
Xxxxxxxxx
Xxxx, Xxx Xxxxxx
Tel: (000)
000-0000
Fax:
with a
copy (which shall not constitute notice to Licensor) to:
Xxxxxxx
X. Xxxxxxx
0000
Xxxxxxxxx Xxxxxx
Xxxxx, XX
00000
Tel: (000)
000-0000
Fax: (000)
000-0000
10.4.2
to
Licensee:
000 Xxxxx
Xxxxxx
Xxxxxx,
XX 00000
Attn:
President
Tel: (000)
000-0000
Fax:
with a
copy (which shall not constitute notice to Licensee) to:
Indeglia
& Xxxxxx, P.C.
0000 Xxxx
Xxxxxx, Xxxxx 000
Xxxxxx,
XX 00000
Attn: Xxxx
X. Xxxxxxxx
Tel: (000)
000-0000
Fax: (000)
000-0000
and such
notices and other communications shall for all purposes of this Agreement be
treated as being effective or having been given if delivered personally, or, if
sent by mail delivery service or facsimile, when received. Any party
may change its address for such communications by giving notice thereof to the
other parties in conformity with this Section.
16
10.5 Governing
Law. This Agreement shall be governed by and construed in
accordance with, the laws of the State of New Jersey without regard to its
principles of conflicts of laws.
10.6 Jurisdiction;
Waiver of Jury Trial. In the event of any dispute which arises
out of or relates to this Agreement, the parties agree to negotiate in good
faith for a period of thirty (30) days to resolve any dispute arising out of or
relating to this Agreement or the formation, breach, termination or validity
thereof (a “Dispute”). If the
parties cannot timely resolve the Dispute, the parties agree that it will be
resolved in an action or proceeding brought in the state or federal courts of
the State of New Jersey, County of Essex and each of the parties hereby consents
to the exclusive jurisdiction of such courts (and of the appropriate appellate
courts) in any such action or proceeding and waives any objection to venue laid
therein. The parties hereto each waive any claim that such
jurisdiction is not a convenient forum for any such action; provided, however,
that each party reserves the right to seek to remove the action or proceeding
from the state court to the federal court in such jurisdiction or vice
versa. Each party waives the right to a jury
trial.
10.7 Attorney’s
Fees. Should suit be brought to enforce or interpret any part
of this Agreement, the prevailing party shall be entitled to recover, as an
element of the costs of suit and not as damages, reasonable attorneys’ fees and
expert costs to be fixed by the court (including, without limitation, costs,
expenses and fees on any appeal). The prevailing party shall be the
party entitled to recover its costs of suit, regardless of whether such suit
proceeds to final judgment. A party not entitled to recover its costs
shall not be entitled to recover attorneys’ fees.
10.8 Headings. The
headings in this Agreement are for convenience only and are not intended to have
any legal effect.
10.9 Waiver.
A failure by any party hereto to exercise or enforce any rights conferred upon
it by this Agreement shall not be deemed to be a waiver of any such rights or
operate so as to bar the exercise or enforcement thereof at any subsequent time
or times.
10.10 Entire
Agreement. This Agreement, the schedules hereto, the documents
referenced herein and the exhibits thereto, constitute the entire understanding
and agreement of the parties with respect to the subject matter hereof and
thereof and supersede all prior and contemporaneous agreements (including the
Original Agreement) or understandings, inducements or conditions, express or
implied, written or oral, between the Parties with respect hereto and
thereto. The express terms hereof control and supersede any course of
performance or usage of the trade inconsistent with any of the terms
hereof. Licensor
understands and agrees that it is not entitled to any fees, compensation or any
other form of payment under Original Agreement, any consulting arrangement or
other agreement entered into prior to the date hereof.
17
10.11 Counterparts. This
Agreement may be executed in two or more counterparts, each of which shall be
deemed to be an original, but all of which taken together shall constitute one
and the same agreement.
[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK]
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This
Agreement is hereby executed as of the date first written above.
LICENSOR:
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RYU
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Xxxxx
Xxx
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LICENSEE:
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||
By:
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||
Xxxx
Xxxxx, President
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(Signature
Page to Exclusive License and Sales Agreement)
19
EXHIBIT
A
LICENSED
PATENTS
Ionic Bulb
Patents
U.S.
Patent US2006/0078460
International
Patent PCT/KR2005/002997
Korea
Patent KR 00-0000-00000
A-1
EXHIBIT
B
LICENSED
TRADEMARKS
1. “Ionic
Bulb” – United States Trademark Registration No.
___________
C-1