MARKETING AND LICENSE AGREEMENT

 

                                                                   EXHIBIT 10.13

 

                                                                    CONFIDENTIAL

 

                         MARKETING AND LICENSE AGREEMENT

 

 

     This   Agreement is entered into as of April 1, 2004 by and between   GENERAL

PLASTIC   INDUSTRIAL   CO.,   LTD.   (hereinafter   referred   to as "GPI")   and Color

Imaging,   Inc.   (hereinafter   referred to as "CI")   (together   both   hereinafter

referred to as   "parties")   and   becomes   effective   April 1, 2004   (hereinafter

referred to as "Agreement").

 

     The parties agree that this Agreement replaces an agreement entered into as

of June 1, 2003 (hereinafter referred to as "Effective Date") by and between GPI

and CI.

 

     WHEREAS,   CI   wishes   to   have   greater   pricing   flexibility   and be   more

competitive when selling certain Licensed Products from GPI; and

 

     WHEREAS, GPI wishes CI to increase CI's sales of the Licensed Products.

 

     NOW,   THEREFORE,   for and in   consideration   of the   premises   and   promise

contained   herein and other good and   valuable   consideration,   the   receipt and

sufficiency   of which are hereby   acknowledged,   the parties do hereby   agree as

follows:

 

                                   ARTICLE I.

 

                                     LICENSE

 

     1.1 Grant of License.   GPI hereby grants to CI an exclusive license to sell

Licensed   Products,   offer to sell   Licensed   Products,   and   import   and export

Licensed Products for use or sale in the Field, free from suit by GPI for patent

infringement in all states of the United States and Canada.

 

     1.2 Exclusivity.   The licenses granted under Section 1.1 is exclusive to CI

in that,   after the   Effective   Date,   GPI agrees not to grant to a third   party

another concurrently   effective license, or option to a license, to use Licensed

Products, sell Licensed Products, offer to sell Licensed Products, or import and

export   Licensed   Products for use or sale in the Field in the United States and

Canada with   exceptions   provided in this   provision.   However,   GPI and CI both

agree   that GPI at its will can   grant   to a third   party   another   concurrently

effective   license,   or option to a   license,   to use   Licensed   Products,   sell

Licensed   Products,   offer to sell   Licensed   Products,   or   import   and   export

Licensed   Products   for use or sale in the Field in all   countries   of the world

except the United States and Canada.   GPI and CI both further agree that GPI may

sell the Licensed   Products in the United   States and Canada   directly to one or

more   customers of GPI,   providing   that GPI   receives   consent from CI, one OEM

disclosed by GPI to CI and end-users   directly   through the internet,   providing

that GPI's   internet sales are at customary   retail   prices,   under a name other

than GPI's and does not use CI's packaging   (point of sale box) for the Licensed

Products. During the term of this Agreement, CI agrees that it will not directly

nor indirectly research, develop, or commercialize other products for use in the

Field,    except   in   collaboration    with   GPI,    pursuant   to   this   Agreement.

Notwithstanding   anything in this   agreement   or   otherwise,   CI agrees that GPI

retains any and all GPI's intellectual property rights in the Licensed Products.

 

 

                                       

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                                                                    CONFIDENTIAL

 

     1.3 Delivery of Samples. During the term of this Agreement,   GPI shall have

the   obligation   to provide   sample(s) of the Licensed   Products to CI upon CI's

reasonable   request.   To the   extent   CI   provides   sample(s)   of   the   Licensed

Products,   at no charge or cost, to customers or prospective   customers so as to

promote the sale of the   Licensed   Products,   GPI agrees to, upon   documentation

being   provided to GPI by CI, credit CI for sixty percent (60%) of the delivered

duty   related   cost to CI.   CI is   responsible   for the   costs   associated   with

delivering the sample(s) to the customers or prospective customers.   The profits

from the sample(s)   shall be distributed to GPI and CI according to the same pro

rata sharing for the costs of the sample(s).

 

     1.4   Licensing   Rights of Product   Information.   GPI hereby   grants to CI a

non-exclusive,   worldwide,   perpetual,   and royalty-free   license to (a) convert

certain Product   Information for each Licensed   Product into digital   electronic

form;   (b)   make   reasonable    nonsubstantive    modifications    to   the   Product

Information;   (c) use all   trademarks   and trade   names   included in the Product

Information;   (d) use, copy, and distribute the Product Information for purposes

of promotion and   distribution   of the Licensed   Products and (e) sublicense the

foregoing rights to a sub-licensee.

 

     1.5 No Further Rights.   Except as expressly   provided in this Article I, no

further or different license or right is granted or implied.

 

     1.6   No   Franchise.   The   parties   agree   that   this   Agreement   shall   not

constitute a franchise agreement under Florida,   Georgia, New York, Delaware, or

any other state law. If the parties' relationship is deemed to be a franchise by

a court of law or other judicial body,   the parties   hereto   expressly   agree to

waive all rights and remedies which either of them may have due to any status as

a franchiser or franchisee or pursuant to the application of any franchise laws,

rules, or regulations.

 

                                  ARTICLE II.

 

                                FINANCIAL TERMS

 

     2.1   Marketing   Expenses.   GPI   agrees to render a monthly   payment   in the

amount of $3,500 to CI as a   consideration   from GPI toward CI's   marketing   and

promotional   expenses related to the Licensed   Products.   This payment shall run

from June 1, 2003 and   continue   thereafter   for a maximum   of   thirty-six   (36)

monthly   payment.   This payment shall   automatically   stop if this   Agreement is

terminated.

 

     2.2 Other   Expenses.   GPI agrees to indemnify   and hold harmless CI for any

costs and   expense   arising   from any   defective   Licensed   Product,   and/or any

recalled Licensed Product including litigation arising therefrom.   GPI agrees to

credit CI for product   cost,   shipping   and related   expenses   arising   from any

defective Licensed Product, and/or any recalled Licensed Product.

 

     2.3 Royalty. The parties agree that CI shall pay GPI a royalty,   calculated

as an agreed upon   percentage of the profit realized on the sale of the Licensed

Products   (hereinafter   referred   to as   "Royalty"),   after   deducting   from the

selling price (a) the cost CI pays GPI for the Licensed   Product,   (b) marketing

expenses paid by CI to a third party to access the regional and national   retail

 

 

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                                                                     CONFIDENTIAL

 

and catalog   sales   channels   and (c) the actual   costs for the   delivery to the

reseller the   Licensed   Products and   reseller   program   expenses   paid by CI or

provided by CI as   allowances,   rebates,   discounts or other   deductions   to the

invoice amount   (hereinafter   referred to as   "Program"),   if any, and as may be

changed from time to time by the   parties.   The Royalty may be changed from time

to time by the agreement of both parties.

 

     2.4 Royalty Accounting. Within ten (10) days after the end of each calendar

month, CI shall remit,   pay or otherwise settle with GPI the Royalty payment due

GPI for the sale of the Licensed   Product during the preceding month and provide

an   accounting   of the sales by CI of the   Licensed   Product   during that period

(hereinafter   referred to as   "Accounting").   The   Accounting   shall include the

identification of each customer by account number, CI's invoice number,   invoice

date, Licensed Product(s) sold, quantity of the sale(s), selling price(s), total

invoice   amount and any third party   marketing,   delivery   or Program   expenses,

after which the profit is determined and the   percentage   share is calculated to

be paid to GPI as the Royalty.

 

     2.5 Auditing Rights. GPI shall have the right, upon reasonable notice to CI

and during the normal   working hours of CI, to audit the books and records of CI

to verify the accuracy and completeness of the Accounting.

 

                                  ARTICLE III.

 

                          INTELLECTUAL PROPERTY RIGHTS

 

     3.1 Intent.   Except as expressly set forth herein, no licenses,   transfers,

or other rights are granted under this Agreement.

 

     3.2 No   Assignment.   The parties agree that this Agreement is a license and

is not an assignment or transfer of title to CI of GPI's ownership rights in the

Licensed   Products and   Technology.   If any   mediator,   arbitrator,   or tribunal

construes this document to create an assignment of any of GPI's rights in any of

the Licensed Products or Technology, CI agrees that it shall cooperate fully and

promptly in executing any documents   reasonably   necessary to establish title in

the Licensed   Products and Technology   solely in GPI,   including   signing formal

assignment documents. Further, in such instance, this Agreement shall be amended

in whatever   respects are reasonably   necessary to ensure that it is interpreted

to be a   license,   based   on the   findings   of   such   mediator,   arbitrator,   or

tribunal.   In the   event of any   proceedings   instituted   to   settle   a   dispute

concerning this Agreement,   CI agrees that it shall not take a position contrary

to this Section.   This Section shall survive   expiration or   termination of this

Agreement for any reason.

 

     3.3 New Inventions and Materials.

 

          (a)   Ownership.    All   new    Intellectual    Property   and   Proprietary

Information that relates to the Licensed Products,   and that is not in existence

as of Effective Date but is conceived, made, or suggested during the term hereof

by either party hereto or its employees, consultants, agents, members, managers,

officers, directors,   shareholders,   or contractors (collectively,   "New Related

Technology"), shall be assigned to and owned by GPI and shall become immediately

subject to the license to CI in the Field as set forth herein. Each party agrees

 

 

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                                                                    CONFIDENTIAL

 

to promptly disclose to the other party the creation,   development, or discovery

of New   Related   Technology   promptly   upon   the   occurrence   of such   creation,

development, or discovery. Notwithstanding the above, the New Related Technology

does not include any toner developed by CI and any new   improvements   made by CI

related to making, testing, measuring, processing, and storing toner.

 

          (b) Assignment. CI shall, and shall cause its employees,   consultants,

agents, members, managers, officers, directors, shareholders, or contractors to,

execute any and all documents and take any other actions reasonably   required by

GPI to ensure that all such New Related   Technology   described in Section 3.3(a)

is properly and validly assigned to GPI.

 

          (c)   License.   GPI shall   execute any and all   documents   and take any

other   actions   reasonably   required   by CI to ensure   that all such New Related

Technology   described in Section 3.3(a) becomes   subject to the license to CI in

the Field granted herein.

 

     3.4   Trademarks.   Upon   the   request   of   GPI,   the   Managers   of CI   shall

collaborate   in the selection of any names,   trademarks,   service   marks,   trade

dress, domain names, icons, logos, and other   source-identifying   elements to be

used in   connection   with the marketing   and   commercialization   of the Licensed

Products in the Field (together, the "Trademarks"). GPI shall own all Trademarks

and   shall   have the   right to apply   in its own name for   state,   federal,   and

international   registration of same. At all times while the Trademarks are owned

by GPI, CI shall have a royalty-free   right and license to use the Trademarks in

the marketing, promotion,   registration,   sale, and distribution of the Licensed

Products.

 

     3.5 Qualification   Testing.   Upon the request of GPI, CI at CI's discretion

and expense,   shall test GPI's Licensed   Products under   development and provide

GPI with reports,   evaluations and recommendations to improve the performance of

the   Licensed   Products   and to   determine   to the best of CI's ability that the

Licensed   Products   performance   is compatible   with, and generally the same as,

that of the OEM.

 

                                  ARTICLE IV.

 

                                  INFRINGEMENT

 

     4.1 Indemnification. GPI shall defend, indemnify and hold CI, its officers,

directors,   representatives,   employees,   and   agents of the   Licensed   Products

harmless from and against any and all liability, losses, claims, costs, damages,

demand,   penalties,   or other expenses (including court costs,   attorneys' fees,

costs   of   investigation    and   costs   of   defense   and   other   legal   expenses)

(hereinafter "Liabilities") occasioned by any real or potential claim, demand or

a