LICENSE AGREEMENT
Exhibit
10.T
1.
Introduction.
This
License Agreement (the "Agreement") is made between Xxxx
Xxxx,
an
individual (hereinafter referred to as “Licensor” or “Xx. Xxxx”), 00000
Xxxxxxxxx, Xxxxxxx Xxxxx XX, 00000 and Seychelle
Environmental Technologies, Inc., a
California Corporation (hereinafter referred to as “Licensee”), 00000 Xxxxx
Xxxxxxxx Xxx Xxxx Xxxxxxxxxx, XX 00000 Licensor
and Licensee shall be collectively referred to as "the parties." Licensor is
the
owner of certain proprietary rights to an invention referred to as Aqua Gear
Drinking Water Purifier and its patented design and technology. Licensee desires
to license certain rights in the invention. Therefore the parties agree as
follows:
2.
The Property
The
Property is defined as (i) the invention(s) described in U.S. Patent No
6,136,188, and any reissues, re-examinations, continuations,
continuations-in-party or divisions of such patent; (ii) know-how, trade
secrets, formulas, research data, know-how and specifications related to the
practice of such invention owned or controlled by Licensor, and (iii) any
improvements to the practice of such invention to the extent not newly
patentable inventions.
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Licensed
Products
Licensed
Products are defined as any products sold by the Licensee, or its affiliates
or
sublicensees that incorporate any of the Property. The Products are defined
in
Exhibit “A” attached. From time to time additional Products may be
added.
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Trademarks
Trademarks
are defined as the words and marks set out on Exhibit “B.” The parties
acknowledge that the Trademarks were developed and owned by Licensor, and on
the
Agreement of the parties, Licensor permitted ownership of the Trademarks, and
the goodwill associated with the Trademarks, to be taken by
Licensee.
3.
Grant of Rights.
Licensor
grants to Licensee an exclusive license to the Property to make, use and sell
Licensed Products for any use. Notwithstanding the foregoing exclusive license
of Licensor’s rights, Licensee acknowledges that U.S. Patent No. 6,136,188 is
co-owned by a third party who retains the right to practice the inventions
therein and to assign or license his rights thereto, without notice or
accounting to Licensor or Licensee. It is expressly understood that the third
party acquires no rights whatsoever, directly or indirectly to any Property,
Products, Trademarks or compensation under this Agreement.
4.
Sublicense.
Subject
to payment of the compensation set forth in Section 10 below, Licensee may
sublicense the rights granted pursuant to this Agreement.
5.
Reservation
of Rights.
Licensor
expressly reserves all rights other than those being conveyed or granted in
this
Agreement.
6.
Territory
The
rights granted to Licensee are worldwide.
7.
Term
This
Agreement shall commence upon the latest signature date, and shall continue
until terminated as set forth herein. In the event that either party defaults
or
is in breach of any of the provisions of this Agreement, the other party may
terminate this Agreement by giving the defaulting or breaching party sixty
(60)
days’ advance written notice thereof (or ten (10) days in the event of a payment
default); provided, however, that if the defaulting or breaching party cures
said default or breach within the sixty (60) day (or ten (10)) period referred
to, this Agreement shall continue in full force and effect as if such default
or
breach had not occurred.
In
the
event Licensee shall go into liquidation, or have a receiver or trustee
appointed for its property or estate, or shall make an assignment for the
benefit of creditors, whether any of the aforesaid events be the outcome of
a
voluntary act or otherwise, Licensor shall be entitled by notice to terminate
this Agreement forthwith.
8.
Diligence.
Licensee
shall use its best effort to commercialize the Property through the manufacture
and sale of Licensed Products, and to exploit the Trademarks.
9.
Net Sales
Net
Sales
are defined as Licensee's or any affiliate’s or licensee’s or sublicense’s gross
sales (i.e., the gross invoice amount billed customers) of (i) Licensed
Products, and (ii) any other products or services using the Trademarks, less
quantity discounts and returns actually credited. A quantity discount is a
discount made at the time of shipment. For sales in currency other than U.S.
dollars, Licensee will calculate the sales in the foreign currency and convert
to U.S. Dollars using the appropriate foreign exchange rate for the currency
quoted by the Bank of America (San Francisco) foreign exchange desk, on the
close of business on the last banking day of each calendar quarter. No Net
Sales
shall accrue on sales by Licensee, or its affiliates or sub-licensees directly
or indirectly to Governments, military or organizations such as PX’s that supply
military bases.
10.
Compensation
A.
Royalties:
Licensee agrees to pay, on a monthly basis, a royalty of two percent (2%) of
Net
Sales until $120,000 in royalties is reached in any calendar year starting
from
the date of this Agreement, and one percent (1%) of Net Sales for the balance
of
such calendar year thereafter. All royalty payments will be made in U.S.
dollars, within fifteen (15) days following the end of each calendar month,
and
shall be accompanied by a report stating gross sales of Licensed Products and
other products bearing the Trademark(s), the permitted deductions there from,
any applicable currency conversions, any credits of the royalty prepayments
under Section 10B, and the total amount due. If in any month there are no Net
Sales, Licensee shall so report to Licensor. With respect to Licensed Products
that do not bear, or are not promoted with the Trademark(s), the obligation
to
pay royalties on Net Sales shall expire on the expiration of the last patent
licensed hereunder. Royalty payments shall remain in force for Trademark and
Trade Name as long as Licensee or its affiliates uses them.
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B.
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Annual
Minimum Royalties:
Starting January 1, 2007, and each year thereafter Licensee shall
pay to
Licensor a royalty prepayment of $1,000 per month creditable against
royalties accruing. If actual monthly royalties are greater than
$1,000,
no payment shall be made.
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C.
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Sublicense
Revenues: Licensee
shall pay Licensor fees of all sublicensing revenue received by Licensee
or its affiliates. For purposes of this Agreement, sublicensing revenue
shall be determined as follows:
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Fees
will be paid on all Products sold for export using brand names
incorporated in Exhibit “A.”
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Fees
will be paid on all Private Brand products incorporating technology
covered in Exhibit “A.”
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Fees
will be paid on all Joint Ventures as follows: A one time 5% fee
on all
initial cash received by License. Thereafter, a 5% commission on
all
filter sales for Products sold by the Joint Venture incorporating
brand
names or technology identified in Exhibit
“A.”
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D.
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Warrants:
Concurrently with the execution of this Agreement, Licensee shall
has
issue to Licensor a warrant to purchase100, 000 shares of Licensor
common
stock at $.40 a share. Such warrant shall be evidenced by a written
memo
form an Officer of the Licensee detailing the terms and details of
execution of the warrant.
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E.
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11.
Audit Rights
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Licensee
shall keep, and shall cause its licensees and sublicensees to keep, accurate
books of account and records covering all transactions relating to the license
granted in this Agreement, and Licensor or its duly authorized representatives
shall have the right upon five days prior written notice, and during normal
business hours, to inspect and audit such records. All books of account and
records shall be made available in the United States and kept available for
at
least two years after the termination of this Agreement.
12.
Late Payment.
Time
is
of the essence with respect to all payments to be made by Licensee under this
Agreement. If Licensee is late in any payment provided for in this Agreement,
Licensee shall pay interest on the payment from the date due until paid at
a
rate of .5% per month.
13.
Licensor Warranties
Licensor
warrants that it has the power and authority to enter into this Agreement and
has no knowledge as to any third party claims regarding the proprietary rights
in the Property that would interfere with the rights granted under this
Agreement.
14.
Patent Maintenance.
Licensee
shall maintain any patent included in the Property.
15. Enforcement.
Licensor
and Licensee shall each give immediate notice to the other of any infringement
of the Property or the Trademarks by third parties, which may come to their
attention. Licensor hereby grants Licensee the right to institute and conduct
such legal action against third party infringers of the Property and
acknowledges Licensee’s right conduct such legal action against third party
infringers of the Trademarks. Licensee shall not settle any such action without
the consent of Licensor, which will not be unreasonably withheld. Licensee
shall
receive the full benefits of any action it takes pursuant to this Section 15,
provided, however, if Licensee receives any amounts by way of settlement or
judgment from a third party infringer in excess of Licensee’s costs and expenses
in bringing such action an/or obtaining such settlement, such excess shall
be
deemed to be sublicensing revenue under Section 10 above, and Licensor shall
be
entitled ten percent (10%) thereof. In any such action, Licensee shall be
entitled to join Licensor as a party to such action and Licensor will be
obligated to reasonably assist Licensee, at the expense of Licensee. In the
event that Licensee, without reasonable business justification, fails to
commence actions or proceedings against infringers of the Property within ninety
(90) days after receiving written notice thereof from Licensor, Licensor,
at Licensor’s expense, shall have the right to initiate and pursue such action
and receive all resulting benefits.
16.
Defense.
Licensor
and Licensee shall each give immediate notice to the other of any claim that
the
use of the Property or the Trademarks infringes the rights of third parties.
Licensor shall defend against such claims and shall defend, and hold harmless
Licensee with respect to such claims. Licensee shall not settle any such action
without the consent of Licensor, which will not be unreasonably withheld.
17.
Indemnification by Licensor
Licensor
shall indemnify Licensee and hold Licensee harmless from any damages and
liabilities (including reasonable attorneys' fees and costs), arising from
any
breach of Licensor's warranties as defined in Licensor's Warranties, above,
provided: (a) such claim, if sustained, would prevent Licensee from marketing
the Licensed Products or the Property; (b) such claim arises solely out of
the
Property as disclosed to the Licensee, and not out of any change in the Property
made by Licensee or a vendor, or by reason of an off--the--shelf component
or by
reason of any claim for trademark infringement; (c) Licensee gives Licensor
prompt written notice of any such claim; (d) such indemnity shall only be
applicable in the event of a final decision by a court of competent jurisdiction
from which no right to appeal exists; and (e) that the maximum amount due from
Licensor to Licensee under this paragraph shall not exceed the amounts due
to
Licensor under the Payment Section from the date that Licensor notifies Licensee
of the existence of such a claim, and shall be payable only by offset against
royalties accruing after such date.
18.
Indemnification by Licensee, Insurance.
Licensee
shall indemnify Licensor and hold Licensor harmless from any damages and
liabilities (including reasonable attorneys' fees and costs), (a) arising from
any breach of Licensee's warranties and representation as defined in the
Licensee Warranties, above, (b) arising out of any alleged defects or failures
to perform of the Licensed Products or any product liability claims or use
of
the Licensed Products; and (c), any claims arising out of manufacturing,
advertising, distribution, marketing or use of the Licensed Products or use
of
the Trademarks. During the term of this Agreement and for two years thereafter,
Licensee shall maintain product liability insurance of at least
$2,000,000.
19.
Survival.
The
obligations of this Agreement are binding upon successors, including without
limitation any acquirer or successor in interest of Licensee or Licensee’s
business.
20.
Dispute Resolution. - Mediation & Arbitration.
The
Parties agree that every dispute or difference between them, arising under
this
Agreement, shall be settled first by a meeting of the Parties attempting to
confer and resolve the dispute in a good faith manner. If the Parties cannot
resolve their dispute after conferring, any Party may require the other Parties
to submit the matter to non-binding mediation, utilizing the services of an
impartial professional mediator approved by all Parties. If the Parties cannot
come to an agreement following mediation, the Parties agree to submit the matter
to binding arbitration at a location mutually agreeable to the Parties. The
arbitration shall be conducted on a confidential basis pursuant to the
Commercial Arbitration Rules of the American Arbitration Association. Any
decision or award as a result of any such arbitration proceeding shall include
the assessment of costs, expenses and reasonable attorney's fees and shall
include a written record of the proceedings and a written determination of
the
arbitrators. Absent an agreement to the contrary, an arbitrator experienced
in
intellectual property law shall conduct any such arbitration. The Parties
reserve the right to object to any individual who shall be employed by or
affiliated with a competing organization or entity. In the event of any such
dispute or difference, either Party may give to the other notice requiring
that
the matter be settled by arbitration. An award of arbitration shall be final
and
binding on the Parties and may be confirmed in a court of competent
jurisdiction.
21.
Governing Law
This
Agreement shall be governed in accordance with the laws of the State of
California.
22.
Jurisdiction.
The
parties consent to the exclusive jurisdiction and venue of the federal and
state
courts located in Orange County, California in any action arising out of or
relating to this Agreement. The parties waive any other venue to which either
party might be entitled by domicile or otherwise.
23.
Waiver.
The
failure to exercise any right provided in this Agreement shall not be a waiver
of prior or subsequent rights.
24.
Invalidity.
If
any
provision of this Agreement is invalid under applicable statute or rule of
law,
it is to be considered omitted and the remaining provisions of this Agreement
shall in no way be affected.
25.
Entire Understanding.
This
Agreement expresses the complete understanding of the parties and supersedes
all
prior representations, agreements and understandings, whether written or oral.
This Agreement may not be altered except by a written document signed by both
parties.
26.
Attachments & Exhibits.
The
parties agree and acknowledge that all attachments, exhibits and schedules
referred to in this Agreement are incorporated in this Agreement by
reference.
24.
Notices.
Any
notice or communication required under this Agreement shall be sufficiently
given when received by certified mail, or sent by facsimile transmission or
overnight courier.
Agreed
and Accepted by:
Each
party has signed this Agreement through its authorized representative. The
parties, having read this Agreement, indicate their consent to the terms and
conditions by their signature below.
By
/s/
Xxxx Palmer__________________
Date:
July
25,
2006_______
Licensee
Name: Xxxx
Xxxxxx, President and CEO
Seychelle
Environmental Technologies, Inc.
By
/s/
Xxxx Hess_______________ Date:
July
25, 2006_______
Licensor:
Xxxx
Xxxx
Exhibit
“A”
Licensed
Products include the following:
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1.
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Filters
directly attached to a cap attached or screwed onto a
bottle
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Canteens
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180z
Sport Bottle
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New
cap for PET Bottled Water Bottles
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2.
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Flip
up spout on a bottle cap
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Flip
Top Bottles
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Bottoms
Up Bottles
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Exhibit
“B”
The
trade
name and logo covered in this Agreement is Aqua Gear.
