Exhibit 10.1
LICENSE AGREEMENT
This License Agreement (“
Agreement ”) is made this 2nd day of January, 2008
(“ Effective Date ”) by and between Let’s
Go Aero, Inc. a Colorado corporation located at 3380 N. El Paso
St., Suite G, Colorado Springs, Colorado (“ LGA
”) and Cequent Towing Products, Inc., located at
47774 Anchor Court West, Plymouth MI 48170, on behalf of itself and
its parent, subsidiaries, sister companies and any current or
future related companies (collectively, “ Cequent
”).
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LGA has developed, will develop and will
continue to develop and is the sole owner of all right, title and
interest in and to such intellectual property, including certain
patents, patent applications, complete designs and designs in
process, that relate to the design, manufacture and sale of
products specified on Exhibit A, as well as all future cargo
management and towing products that will be added by the parties as
a signed addendum to Exhibit A (collectively, the “
Products ”), all of which will be attached to this
Agreement and made part of it in its entirety.
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LGA will provide to Cequent written
notification of all future cargo management and towing products
that LGA designs, develops or continues to develop during the Term
(as later defined), which writing will be signed by the parties and
added to Exhibit A, as subsequent A-1, A-2, etc.
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The intellectual property owned by LGA and
related to the design, manufacture and sale of Products is
collectively referred to in this Agreement as the “
Licensed Technology. ”
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Cequent desires to acquire a license for the
Licensed Technology, in order to manufacture, make, have made, use,
distribute, offer to sell, import and sell Products utilizing the
Licensed Technology, referred to in this Agreement as the “
Licensed Products. ”
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The parties agree that the recitals above are
binding on the Parties and further agree as follows:
1.1 LGA
grants to Cequent a worldwide limited exclusive license for the
Licensed Technology and all improvements thereto developed, owned
or controlled by LGA to make, manufacture, have made, use, import,
offer for sale and sell the Licensed Products set forth on Exhibit
A under Cequent trademarks or trade names or such other brands as
Cequent may determine in its sole discretion, for a period
beginning as of the Effective Date and ending December 31, 2009
(the “ Exclusive License ”). The
Parties acknowledge and agree that should LGA develop or design a
Product during the Term (as defined below), LGA will grant to
Cequent a worldwide limited exclusive license as stated in this
paragraph 1 for the new Licensed Product, which two year period
will begin upon the execution of the signed addendum to Exhibit A
and the exclusivity will end two years thereafter, which license
will also be designated as the “Exclusive License” as
the term is used throughout this Agreement.
1.2 Upon
expiration of any Exclusive License period, LGA grants to Cequent a
worldwide nonexclusive license for the Licensed Technology and all
improvements thereto owned or controlled by LGA to make,
manufacture, have made, use, import, offer for sale and sell the
Licensed Products under Cequent trademarks or trade names or such
other brands as Cequent may determine in its sole discretion, for a
period beginning as of the expiration of any Exclusive License
period through the expiration or cancellation of any patents (the
“ Non-Exclusive Period ”) covering the Licensed
Technology and Products (the “ Non - Exclusive
License ”). The Exclusive License(s) and the
Non-Exclusive License(s) are collectively referred to in this
Agreement as the “ License ”.
1.3 Cequent
shall have the right to grant sublicenses under this Agreement to
third parties for the manufacture of the Licensed Product on behalf
of Cequent, provided that Cequent requires such third party to
enter into a nondisclosure agreement protecting the confidentiality
of the Licensed Technology and the License. For a two
year period beginning upon the expiration of any Exclusive License
period for Licensed Products and for a period not greater than the
first two years of any Non-Exclusive period, should LGA solicit
direct sales of Licensed Products, LGA agrees to purchase
exclusively from Cequent all required parts to manufacture and
assemble the Licensed Products at the lowest price that Cequent
gives to any other customer. All rights not specifically
granted to Cequent under this Agreement shall be reserved to
LGA.
2.
Term & Termination Unless earlier
terminated by Cequent, this Agreement will be effective as of the
Effective Date or the date of execution by the parties of any
written Addendum(s) to Exhibit A and shall expire simultaneously
with the cancellation or expiration of the patents covering the
Licensed Technology for the Licensed Products (the “
Term ”). Cequent shall have the right
to terminate this Agreement without penalty or consideration of any
kind. LGA may terminate this Agreement only upon
Cequent’s failure to cure a material breach of the Agreement
within 60 days after receipt of written notice of the material
breach from LGA.
3. Royalties
and Other Payments
3.1 Within
30 days from the date of this Agreement, Cequent shall pay a
$400,000 fee to LGA, which fee will include payment for the
transition of existing Product sales to current customers from LGA
to Cequent and services related to the commercialization and
transition of the Products to Cequent. Additionally, as
further consideration for the License during the Term, Cequent will
pay to LGA a royalty in the amount of 7% of the Net Sales Price for
the Licensed Products, as sold by Cequent to its customers, except
for a maximum of three customers specifically set forth in
Exhibit B attached to this Agreement and made part of it in
its entirety (the “Special
Customers”). Cequent will pay to LGA a royalty in
the amount of 5% of the Net Sales Price for the Licensed Products
sold by Cequent to the Special Customers. All Special
Customers shall be mass-market retailers unrelated to Cequent, and
shall be mutually agreed upon in writing by Cequent and
LGA. Cequent and LGA may amend Exhibit B, Special
Customers b
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