EXHIBIT 10.30
LICENSE AGREEMENT
This License
Agreement (the “Agreement”) is entered into and
effective on the date last signed below, by and between
DAIDONE-STEFFENS LLC, a Pennsylvania limited liability company,
having its principal place of business in Erie, Pennsylvania
(“Licensor”) and AESP, INC., a corporation having its
principal place of business in North Miami Beach, Florida
(“Licensee”).
The
reasons for this Agreement are as follows:
A. Licensor
is engaged in the business of collecting and reselling cellular
telephone and other battery products in the United States and other
countries of the world.
B. Licensor
has developed a proprietary process to recondition, restore and
improve the performance of new and used cellular telephone
batteries and other battery products.
C. Licensee
desires to use Licensor’s proprietary process to restore and
improve battery products for resale as hereinafter set
forth.
NOW, THEREFORE, in
consideration of the rights and obligations of the parties in this
Agreement, and intending to be legally bound hereby, the parties
agree as follows:
1. Definitions
“Battery
Products” means new and used nickel cadmium, nickel hydrate
and lithium ion batteries used in cellular telephones, laptop
computers, and other electronic devices powered by batteries. Each
of the foregoing is individually referred to as a “Battery
Product.”
“Confidential
Information” means, with respect to the Proprietary Process,
the Licensed Products, and any modifications, enhancements or
improvements of the Proprietary Process or the Licensed Products,
any and all trade secrets, inventions, and confidential information
and know-how, whether in documentary form, stored on computer
storage media or other media or available orally, which is owned or
controlled by Licensor or which Licensor has a right to control,
during the term of this Agreement including, but not limited to
designs, specifications, technical data, drawings, prints,
development journals and notes of designers and planners,
manufacturing methods, manufacturing information, engineering
instructions, marketing, feasibility, safety or other information
concerning marketing and sales, studies and reports and other
information, whether provided by Licensor or Licensee or their
employees or third party contractors or consultants, other than any
of the above which are in the public domain on or after the
Effective Date.
“Effective
Date” means the date when this Agreement is last signed below
by one of the parties.
“Intellectual
Property” means the Confidential Information and the
Proprietary Process owned or controlled by Licensor during the term
of this Agreement.
“Licensed
Products” means all Battery Products which are processed,
designed, manufactured or sold, in whole or in part, through the
use of Intellectual Property.
“Proprietary
Process” means the process owned and developed by Licensor to
recondition, restore and improve the performance of Battery
Products.
“Purchased
Battery Products” means Battery Products that have been
billed, shipped or delivered, whichever occurs first, by or on
behalf of Licensee to a third party. At the expiration or
termination
of this Agreement, Battery
Products shall be considered Purchased Battery Products, even if
they have not been billed, shipped or delivered.
“Territory”
means the states of Florida, Georgia, Alabama, Mississippi, South
Carolina and North Carolina.
2.
Grant
2.1 Exclusive
License. Subject to the terms and conditions of this Agreement,
Licensor hereby grants to Licensee an exclusive license under
Intellectual Property to manufacture, process and sell Licensed
Products in the Territory. Notwithstanding the foregoing grant of
an exclusive license to Licensee, Licensor reserves the right to
sell Licensed Products in the Territory if Licensee is not
reasonably able to meet customer demand in the Territory. Prior to
exercising its rights to sell Licensed Products in the Territory,
Licensor shall first notify Licensee, in writing, that Licensor has
reason to believe that Licensee is not adequately meeting customer
demand in the Territory. Licensor shall include in its notice all
information upon which Licensor is basing its belief about
Licensee’s failure to adequately meet customer demand.
Thereafter, Licensee shall have 30 days to address the
concerns raised by Licensor. If Licensee is unable to adequately
address the concerns of Licensor, in the reasonable judgment of
Licensor, then Licensor shall thereafter be free to sell Licensed
Products in the Territory.
2.2 Nonexclusive
License. Licensor hereby grants to Licensee a nonexclusive license
under Intellectual Property to Licensed Products in all countries
of the world.
2.3 Other
Domestic Sales. With the prior written consent of Licensor,
Licensee may sell Licensed Products in states of the United States
outside of the Territory. Licensor’s written consent shall
not be unreasonably withheld, but may be withdrawn by Licensor if
Licensor intends to grant an exclusive license for such states to a
third party or if Licensor, itself, intends to directly sell in
such states.
2.4 Quality
Control. It is the intent of the parties that the quality and the
performance of Licensed Products shall always be in accordance with
standards, specifications and instructions reviewed and approved by
Licensor in writing. Licensor shall have the right to inspect the
premises of Licensee at reasonable times; and Licensor shall also
have the right to receive and review samples of Licensed Products
before any are manufactured or processed for shipment, in
accordance with a reasonable schedule to be established between
Licensor and Licensee. Licensee agrees to correct, as promptly as
possible, any faults in Licensed Products and/or in the manufacture
or processing thereof that are brought to Licensee’s
attention by Licensor or otherwise. Licensee agrees to submit to
Licensor for inspection and prior approval, which approval will not
be unreasonably withheld, labels, packaging, advertising and
promotional materials that are proposed to be used in relation to
the Licensed Products.
2.5 No
Sublicense. Licensee shall not have the right to sublicense any of
the rights granted pursuant to this Agreement.
2.6 Reservation
of Rights. Licensor expressly reserves all rights other than those
being conveyed or granted in this Agreement. During the term of
this Agreement, Licensee shall not manufacture, process, or have
manufactured or processed, or sell Licensed Products or any
products which are substantially equivalent to Licensed Products
except as provided in this Agreement.
3.
Royalties.
3.1
Earned Royalty. In further consideration for the licenses granted
hereunder, Licensee shall pay to Licensor a royalty in the amount
Fifty ($.50) Cents per each Purchased Battery Product, regardless
of whether it is a Licensed Product.
3.2
Payment of Royalty. The royalty with respect to Purchased Battery
Products during each calendar quarter shall be due and payable to
Licensor, along with a report showing the basis for the computation
of the royalty, within thirty (30) days from the end of each
calendar quarter during the term of this Agreement and within
thirty (30) days of a termination or expiration of this
Agreement. If no royalty is due, Licensee shall so indicate in its
report.
3.3
Records. Licensee agrees to maintain at its principal place of
business within the United States complete, accurate and up-to-date
books and records of all activities relating to the purchase of
Battery Products and the order, manufacture, processing and sale of
Battery Products. The books and records of Licensee shall contain
all of the underlying details necessary to establish the accuracy
of the foregoing items and shall be sufficient to enable an auditor
selected by Licensor to verify the reports and payments made by
Licensee. Licensee shall retain such books and records, and the
rights of Licensor set forth in paragraph 3.4 shall continue, for a
period of three (3) years after the expiration of the term of this
Agreement.
3.4
Audit. At any time during normal business hours, following written
notice sent at least five (5) days in advance, Licensee shall
permit a representative of Licensor, or an independent certified
public accountant, to examine the books and records described
above, and Licensee shall cooperate in making available to
Licensor’s representative or accountant, any information
reasonably requested and necessary or useful to establish the
accuracy of the books and records or to determine the amount of
royalties due. The fees and expenses incurred by Licensor for the
examination of the books and records shall be borne by Licensor,
unless the examination of the books and records shows a failure
during any quarter to report an excess of Ten (10%) Percent of the
amount of royalty earned during that quarter. Any royalty which is
not paid when due shall bear interest at the rate of 1% per month
on the unpaid balance.
3.5
Grant of Stock Options. As additional consideration for the rights
granted to Licensee under this Agreement, Licensee hereby grants to
Licensor, or to Licensor’s designees, 300,000 options to
purchase Licensee’s common stock at the price thereof as of
the close of the trading day on the Effective Date. One hundred
thousand (100,000) of the stock options granted to Licensor shall
vest as soon as the production line is up and running and the
Proprietary Process has been delivered to Licensee (such date, the
“First Vesting Date.”) The remaining stock options
shall vest on the following schedule: 50,000 options shall vest one
year after the First Vesting Date, 50,000 options shall vest two
years after the First Vesting Date; 50,000 options shall vest three
years after the First Vesting Date; and the final 50,000 options
shall vest four years after the First Vesting Date. The stock
options granted pursuant to this paragraph, if not exercised, shall
expire on the tenth anniversary of the Effective Date of this
Agreement.
4. Production Line Setup;
Technical Assistance.
4.1
Production Line Setup. Prior to the effective date of this
Agreement Licensor shall provide production line setup support
together with all equipment necessary for Licensee to employ the
Proprietary Process. Prior to providing the production line setup
and equipment to Licensee, Licensor and Licensee shall agree upon
the costs and expenses which Licensor will charge to Licensee in
connection therewith. If the parties are unable to agree upon the
costs and expenses associated with the production line setup and
equipment, either party may terminate this Agreement upon five days
written notice to the other party. At the termination of this
Agreement, Licensor shall purchase, and Licensee shall sell to
Licensor, all of the equipment used by Licensee in connection with
the Proprietary Process. The sale price for such equipment shall be
the fair market value thereof as determined by an appraiser jointly
selected by Licensor and Licensee. In arriving at the fair market
value determination of such equipment, the appraiser shall not
consider the value of any Intellectual Property associated with the
use or design of such equipment.
4.2
Technical Assistance. During the term of this Agreement, Licensor
shall make available to the employees of Licensee, such
Confidential Information as is necessary to carry out the intent of
this Agreement. Additionally, Licensor shall make one of
Licensor’s employees available to Licensee to provide
technical consultation and assistance with respect to the Licensed
Products and the Intellectual Property. Licensor shall be
responsible for the costs of such technical assistance, unless
Licensor’s technical employee is required to travel to
Licensee’s premises, in which event Licensee shall reimburse
Licensor for agreed upon travel and subsistence expenses of
Licensor’s technical employee.
5. Promotion And Sale Of
Licensed Products . Licensee agrees that following the
Effective Date and throughout the term of this Agreement it will
use its best efforts to promote the sale of Licensed Products by
actions which include, but are not limited to, advertising Licensed
Products to potential customers, showing Licensed Products at trade
shows attended by potential customers, and periodically having
sales representatives call on potential customers to sell Licensed
Products with the same frequency as is Licensee’s practice
with respect to Licensee’s other products. The Licensed
Product shall be offered for sale in the Territory, in reasonable
commercial quantities, on or before 180 days after the production
line is up and running and the Proprietary Process has been
delivered to Licensee. The parties agree that time is of the
essence with respect to this requirement. The price to Licensee for
such Battery Products shall be Licensor’s cost plus
22%.
6. Licensee’s
Obligation to Purchase Battery Products. During the term of
this Agreement, Licensee shall purchase and obtain all Battery
Products from Licensor. If Licensor is unable to meet
Licensee’s purchase requirements for Battery Products,
Licensee, after written notice to Licensor, may purchase Battery
Products from other sources; provided, however, that Licensee shall
keep such documents and records as are necessary to establish
Licensor’s inability to meet Licensee’s demand for
Battery Products.
7. Confidentiality,
Non-Competition and Non-Solicitation.
7.1 Confidential
Disclosure. Licensee shall hold in confidence all Confidential
Information disclosed to it by Licensor and shall not disclose such
Confidential Information to any third party or use such
Confidential Information for any purpose, whatsoever, other than
for the purposes set forth in this Agreement, without the prior
written consent of the Licensor. In addition, Licensee shall
confine the di
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