Exhibit 10.1
LICENSE & DISTRIBUTION
AGREEMENT
This LICENSE & DISTRIBUTION AGREEMENT
(this “Agreement”) is made and entered into as of the
16 th day of September, 2004, by and among
E MED FUTURE, INC ., a corporation organized and existing
under the laws of the State of Nevada, United States of America
(“Licensor”) and ITDEVELOPMENT SOLUTIONS, INC .
a corporation organized and existing under the laws of the state of
Florida (“Licensee”).
WHEREAS , Licensor is engaged in the development,
manufacture and licensing of medical equipment destruction and
waste disposal devices, including a proprietary technology to
manufacture a portable medical device that incinerates aluminum,
stainless steel, and other metallic hypodermic needles (hereinafter
“licensor technology”), has applied for patents, has
developed know-how in connection therewith, has registered the
trademark “NeedleZap ® ” for the medical device in the United
States of America (hereinafter “United States”) and
other countries (hereinafter “licensor trademark
rights”), and is seeking a licensee to utilize licensor
technology outside of the United States (the
“product”).
WHEREAS , Licensor has the right to grant the license
rights described herein under Licensor Technology, including the
Applications for Letters Patent as listed in Schedules A and B,
attached hereto and made a part of this Agreement, and as amended
and updated from time to time (hereinafter “licensor patent
rights”), and the right to grant the license rights to use
licensor trademark rights, listed in Exhibit “A”,
attached hereto and made a part of this Agreement, and as amended
and updated from time to time; and
WHEREAS , Licensee is in the business of manufacturing
and selling various types of consumer products and equipment and
desires to obtain a license and right to manufacture the Product
for Licensor for worldwide distribution and to distribute and sell
the Product in Pakistan and the United Arabs Emirates
(“Licensed Territories”); and
WHEREAS, Licensor has granted access to certain Licensor
Technology, patent and license information, trade secrets, and
other materials to evaluate its Product under a Non Disclosure
Agreement; and
WHEREAS , Licensor desires to grant an exclusive license
and right to permit Licensee to manufacture or to contract to have
manufactured Licensed Products in the Licensed Territories
according to Licensor Technology under Licensor Patent Rights, to
grant licensee the exclusive right to distribute and to sell
Licensed Products in the Licensed Territories, and to grant an
exclusive license and right to use Licensor Trademark Rights in
connection with the distribution and sale of Licensed Products in
the Licensed Territories.
NOW, THEREFORE , in consideration of the terms, covenants and
conditions contained herein, the parties hereto mutually agree as
follows:
|
|
1)
|
Grant to
Manufacture and Distribution Rights .
|
|
|
(a)
|
Licensor hereby
grants to Licensee, and Licensee hereby accepts, for the term of
and under the provisions of this Agreement the right and license
(i.) to use Licensor Technology under Licensor Patent Rights in
order to manufacture or to contract to manufacture the Product and
(ii.) to distribute and sell the Product in the Licensed
Territories. Licensee may contract with sublicensees and agents to
distribute and sell the Product within the Licensed Territories.
Each sublicensee or agent shall be identified in writing to
Licensor by Licensee . Licensee agrees that it will not
distribute, manufacture, sell or market either directly or
indirectly the Product outside of the Licensed
Territories.
|
|
|
(b)
|
The license
granted hereby may not be transferred or sublicensed by Licensee,
except to the extent permit herein, but shall extend to any
wholly-owned subsidiaries and divisions of Licensee. Licensee shall
be responsible for the compliance by each such subsidiary and
division, sublicense and agent with the terms and provisions of
this Agreement, and agrees to report and pay royalties to Licensor
in accordance with Section 3 hereof with respect to production of
the Product by each such subsidiary or division, sublicense and
agent. Any such affiliate shall agree in advance in writing to be
bound by all the terms of this Agreement, and Licensee shall agree
to guarantee the obligations of such assignee hereunder.
|
|
|
(c)
|
The license
granted hereby conveys no right to Licensee to use or register any
trademark or trade name of Licensor, or to use the name of Licensor
or any trademark or trade name in any manner whatsoever in
connection with the sale of the Product hereunder. Nothing in this
Agreement shall be construed as conveying, expressly or by
implication, any right under any of Licensor’s know-how
except in connection with the manufacture and sale of the Product
hereunder.
|
|
|
(i.)
|
In the event
that the NeedleZap TM trademark cannot be utilized in the
Licensed Territories for legal, cultural, or other reasons, and
Licensee determines to create a brand for the distribution and sale
of the Product, all such brands shall be the property of Licensor;
Licensee shall notify Licensor of its inability to utilize existing
brand and request Licensor’s approval to utilize an alternate
brand. Licensee must include with the request (a) a proposed budget
for development and utilization of the brand and (b) copies of the
proposed brand design. Licensor shall have the final decision on
all brand changes to existing branding and labeling, which must
remain in compliance with US laws and the protection of
Licensor’s patent and intellectual property rights. In the
event of termination of this Agreement not for cause by Licensor,
Licensor agrees to reimburse Licensee for the exact cost paid to
develop this new “brand” name as previously approved by
Licensor.
|
2
|
|
(ii.)
|
Licensee shall
make application and/or register with local governmental
authorities all marks or branding of the Product. Any registration
of the mark or brand shall be made in the name of
Licensor.
|
|
|
(d)
|
Licensee shall
not have the Product manufactured for it by any third party without
the prior written consent of Licensor.
|
|
|
(e)
|
Upon the
termination of this license for any reason, Licensee shall return
the Technology, including but not limited to all plans, manuals,
FDA documentation and procedures, writings, and/or other materials
provided to Licensee by Licensor at any time, and any and all
copies thereof, to Licensor.
|
|
|
(f)
|
Licensee shall
be the sole manufacturer of product set forth in the attachment in
Pakistan and the U.A.E. Should Licensee desire to purchase FDA
product for sale in Pakistan & the U.A.E. prior to obtaining
FDA approval, Licensee may do so in accordance with
Licensor’s international marketing agreement with Transglobal
Medical.
|
|
|
(g)
|
Licensee shall
establish a program of quality control to assure Licensor that all
Products manufactured utilizing the Licensor Technology for
Products will perform in a reasonably satisfactory manner as a
medical device meeting the regulatory standards of the U.S. Food
and Drug Administration (FDA) and Licensor’s quality control
protocols, copies of which have been provided Licensee. Licensor
will assist Licensee in obtaining approval for units manufactured
in Pakistan under the FDA.
|
|
|
2.
|
Licensed
Territory . The license
to manufacture and sell the Product granted hereby shall be
exclusive as to sales for delivery within Pakistan and the United
Arab Emirates (U.A.E.). Licensee may from time to time request the
right to sell the Product in other areas. If Licensor has not at
the time granted to anyone else the right to sell the Product in
such other areas, Licensor will grant to Licensee the non exclusive
right to manufacture and sell the Product in such other areas on
terms to be negotiated at that time, provided that such right shall
exist only until such time as Licensor grants to Licensee or
someone else an exclusive right to sell in any such
area.
|
|
|
(a)
|
In
consideration of the rights and licenses granted herein to Licensor
Technology to be provided to Licensee by Licensor under this
Agreement, and in lieu of a sales quota until the 2006 calendar
year, Licensee shall provide
|
3
10,000 NeedleZap Units without cost
to Licensor together with the sum of Ninety Thousand dollars
($90,000), in addition to periodic royalties as hereinafter
provided, payable by Licensee to Licensor as follows:
|
|
(i.)
|
Thirty thousand
dollars (U.S. $30,000) within one (1) week after execution of the
Memorandum, nonrefundable, such payment to be in consideration of
Licensor’s agreement herein to grant exclusive territories to
Licensee without a minimum order guarantee for the remainder of
2004 and 2005;
|
|
|
(ii.)
|
Thirty thousand
dollars (U.S. $30,000) within four (4) weeks of execution of the
Agreement, nonrefundable, and
|
|
|
(iii.)
|
Thirty thousand
dollars (U.S. $30,000) within eight (8) weeks of execution of the
Agreement, nonrefundable.
|
|
|
(b)
|
In further
consideration of the license and rights granted and in addition to
the fixed payments provided for in Section 3(a) above, Licensee
shall pay to Licensor periodic royalties at the rate of fifteen
dollars (U.S. $15.00) for each unit of the Product sold by Licensee
within Pakistan and the UAE. Such periodic royalties shall be paid
by Licensee to Licensor within thirty (30) days following the end
of each fiscal quarter of this Agreement, beginning with the end of
the third full month following the execution of this
Agreement.
|
|
|
(c)
|
Beginning in
calendar year 2006, Licensee’s Sales Quota shall be set at
50% of their 2005 calendar year total unit sales in Pakistan and
the UAE (each country separately) or a minimum of 10,000 units in
Pakistan and in U.A.E. combined, whichever is greater. The SALES
QUOTA for the Licensed Territories shall increase by five percent
(5%) after the 2006 sales year and shall increase by five percent
(5%) on the anniversary date of subsequent years thereafter during
the time the Agreement is in effect for the countries. Failure to
meet the annual Sales Quota in either country, allows Licensor the
right to terminate all exclusive sales rights within that
country.
|
|
|
(d)
|
Licensee will
furnish to Licensor within thirty (30) days following the end of
each such quarter a written statement certified by the Chief
Financial Officer of Licensee showing the number of units of the
Product sold by Licensee during such quarter, and the amount of
periodic royalties due for the corresponding period, together with
payment of the royalties due.
|
|
|
(e)
|
Licensee will
at all times during the term of this Agreement keep accurate books
of account and other records reflecting all sales of the Product,
and will carefully prepare and maintain such books and records for
at least two (2) years following the termination of this Agreement.
Licensee hereby grants to Licensor or its duly accredited
representative the right to inspect and copy such books and records
for the purpose of ascertaining or confirming the accuracy of
statements rendered hereunder, such inspection and copying costs to
be at the expense of Licensor.
|
4
|
|
(f)
|
All payments
provided for in this Agreement shall be made to Licensor in United
States currency. Said payments are to be made by wire as directed
by Licensor under separate instruction. All payments shall be net
to Licensor, without deduction for taxes, assessments, or other
charges which may be imposed on Licensor by the Government of
Pakistan, the U.A.E., or any other entity or any political
subdivision thereof with respect to any amounts payable to Licensor
pursuant to this Agreement, and without deduction for banking or
wire transfer fees. Such taxes, assessments or other charges, and
fees shall be paid by Licensee.
|
|
|
4.
|
Manufacturing for non-Licensed Territories and
Licensor Use . Licensee
agrees that it will sell to Licensor for Licensor’s purposes
the products listed in the attachments and manufactured in Licensed
Territories, at Licensees’ MLO (Material, Labor, Overhead)
Manufacturing Cost per unit plus 20% MLO cost.
|
|
|
a)
|
The initial per
unit cost shall including one AC or DC charger as specified by
Licensor from time to time, and packaged for shipment at $10.75 per
unit. Said pricing will be maintained for the first 100,000 units
of production, not including the units supplied as part of the
license, or through December 31, 2005 (whichever comes first). This
per unit price is subject to minimum quantity orders of 10,000
units, with approved Financing.
|
|
|
b)
|
Licensor shall
pay for any shipping, crating, handling, insurance, transportation,
customs duties, taxes and other customary charges. The Licensee
shall assist Licensor in obtaining any export compliance approvals
necessary under Pakistani export laws and designated country of
delivery import laws, the cost of which shall be borne by
Licensor.
|
Nature of Manufacturing
Relationship .
|
|
(a)
|
Nothing
contained herein to the contrary shall prohibit Licensor from
continuing to purchase products from its existing manufacturing
relationships, manufacturing the products listed in the attachment
in its own facilities, or through contractual manufacturers other
than Licensee; however, Licensor warrants that it has no intent to
license another non-United States, non- FDA approved manufacturing
facility other than Licensee, so long as Licensee can meet
quantity, quality, and competitive pricing suitable to Licensor.
Licensor and Licensee acknowledge and agree that an agreement
between Licensor and Providers International pre-exists this
Agreement and permits Provider’s International to manufacture
or cause to be manufacture the products listed in the attachments
in China for sales in China and Australia by Providers
International and their distributors.
|
5
|
|
(b)
|
Licensee
acknowledges that Licensor is in the business of selling its
products and Licensor must have the opportunity to have
manufactured products at quantity, quality, and pricing levels
commercially acceptable in various marketplaces around the globe.
With this requirement as a condition, Licensor grants unto Licensee
an exclusive license to manufacture Licensor’s non-US
requirements for non-FDA approved products listed in the
attachments.
|
|
|
i.
|
Licensee agrees
that in the event Licensor notifies Licensee of a potential market,
country, or distribution source that desires to purchase
Licensor’s products, but that market, country, or
distribution has quantity, quality, or pricing or non-commercial
concerns with the products manufactured by Licensee, that Licensee
will work with Licensor to structure an acceptable solution. If no
solution can be reached, Licensor shall be permitted to explore and
utilize alternative manufacturing opportunities.
|
|
|
ii.
|
Licensor agrees
to assist Licensee in obtaining FDA approval for product through
its Pakistan manufacturing facility. Should Licensee obtain FDA
approval, Licensor agrees to purchase FDA approved products listed
on the attachments from Licensee where commercially viable and
available.
|
|
|
a)
|
Product
Warranties, if any, are provided by Licensee for Products it
produces. Licensor makes no warranties whatsoever.
|
|
|
b)
|
IN NO EVENT
SHALL LICENSOR BE LIABLE FOR ANY CONSEQUENTIAL DAMAGES OR DAMAGES
OF ANY KIND OR NATURE ALLEGED TO HAVE RESULTED FROM ANY BREACH OF
WARRANTY. LICENSOR DOES NOT WARRANT THE MERCHANTABILITY OF THE
PRODUCTS OR THEIR FITNESS FOR ANY PARTICULAR PURPOSE. LICENSOR
MAKES NO WARRANTY, EXPRESS OR IMPLIED, OTHER THAN THOSE
SPECIFICALLY SET FORTH HEREIN.
|
|
|
c)
|
Licensee shall
provide for Products sold to Licensor or outside Licensed
territories at the request of Licensor or its representatives a one
year limited warranty consisting of the following:
|
One-Year Limited Warranty
Licensee warrants this device to be
free from defects in material and workmanship existing at the time
of manufacture and appearing within one (1) year from the original
date of purchase.
6
If such a defect appears during the
warranty period, we will (at our sole option) repair or replace the
defective unit with no charge for service or parts, provided that
the unit is delivered at the customer’s expense to the
manufacturer.
This warranty extends only to the
original consumer purchaser and does not cover damage or claims
resulting from misuse, failure to follow instructions in use,
failure to replace the clean-out plug as directed, neglect,
improper maintenance, use on a current or voltage other than
specified for the device, or unauthorized service during the
warranty period.
THIS WARRANTY SHALL BE EXCLUSIVE AND
SHALL BE IN LIEU OF ANY OTHER EXPRESS WARRANTY, WRITTEN OR ORAL,
INCLUDING BUT NOT LIMITED TO ANY EXPRESS WARRANTY OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE. THE DURATION
OF ANY IMPLIED WARRANTIES OF MERCHANTABILTY OR FITNESS FOR A
PARTICULAR PURPOSE IS EXPRESSLY LIMITED TO THE PERIOD OF THIS
LIMITED WARRANTY.
THE CUSTOMER’S EXCLUSIVE
REMEDY FOR BREACH OF THIS WARRANTY OR ANY IMPLIED WARRANTY OR ANY
OTHER OBLIGATION ARISING BY OPERATION OF LAW OR OTHERWISE SHALL BE
LIMITED AS SPECIFIED HEREIN TO REPAIR OR REPLACEMENT, AT OUR SOLE
OPTION. IN ANY EVENT, LICENSEE EXPRESSLY DISCLAIMS ALL
REPONSIBILITY FOR SPECIAL, CONSEQUENTIAL, OR INCIDENTAL DAMAGES
CAUSED BY THE USE OF THE DEVICE. Some jurisdictions may not allow this exclusion
or limitation of incidental or consequential damages, so the
foregoing disclaimer may not apply to you.
If you have a claim under this
warranty, please call the toll free number listed below. ALL
RETURNS MUST BE ASSIGNED AN RMA NUMBER PRIOR TO
RETURN.
NUMBER TO BE
ASSIGNED
|
|
i.
|
Licensor may
return to Licensee for replacement or credit any Products (other
than Configured Products) found to be defective within ninety (90)
days of purchase or any Configured Products which are found to be
defective within thirty (30) days of purchase. Licensor must obtain
Licensee’s approval prior to returning the Products. Licensee
reserves the right to require Licensor to return defective Products
directly to the Product
|
|
