Exhibit 10.12
EZEE WHIP ICE CREAM
(OVERSEAS) LIMITED
and
AVALANCHE PRODUCTS
INC
________________________________
MANUFACTURING
LICENCE
FOR EZEE WHIP
SYSTEM
________________________________
Version 9
Clean
January 27,
2005
INDEX
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Clause
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Page
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1.
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Interpretation
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3
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2.
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Term
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4
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3
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Grant
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4
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4.
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Obligations of the
Licensor
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4
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5.
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Obligations of the
Licensee
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5
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6.
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Liability for Claims
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5
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7.
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Royalty and Payment
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6
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8.
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Payments
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6
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9.
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Confidentiality
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6
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10.
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Licensor’ Warranties
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7
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11.
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Intellectual Property Rights
Disputes
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7
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12.
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Ownership of Drawings and
Copyright
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7
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13.
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Ownership of Inventions
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7
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13A
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Non- Solicitation
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8
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14.
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Termination
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8
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15.
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Manufacture and Sale of the Products
after Termination
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8
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16.
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Assignment
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9
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17.
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Expenses
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9
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18.
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Waiver
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9
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19.
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Force Majeure
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9
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20.
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Notice
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9
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21.
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Entire Agreement and
Variation
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10
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22.
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Severance
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10
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23.
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Proper Law and
Construction
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10
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24.
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Disputes
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10
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25.
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General
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11
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Schedule 1
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Royalties
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12
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Schedule 2
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Licensor’s Bank
details
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14
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Schedule 3
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Quarterly Return
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13
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2
THIS AGREEMENT is made
the
day
of
BETWEEN:
(1)
EZEE WHIP ICE CREAM
(OVERSEAS) LIMITED whose registered office is at, Ternion Court,
264-268, Upper Fourth Street, Milton Keynes, United Kingdom, MK9
2DP under Registered No: 5166701 (“the Licensor”);
and
(2)
AVALANCHE PRODUCTS INC
a California corporation formed and existing under the laws
of California under state Registry No. whose principal
address is 2234 Solitude Court, Rocklin, California 95765
(“the Licensee”)
WHEREAS:
(A)
The Licensor is entitled
to licence the US Design Patent No D 407093 (“Design”)
relating to a cartridge for measuring and dispensing individual
servings of flavored ices, ice cream, other dairy products and
frozen desserts (herein “the Cartridge” or
“Cartridges”), together with US trademark #2384589 for
“EZEE WHIP” with design registered in the US in
International Classes 7 and 30 (“Trademark”)
(B)
The Licensee wishes to
manufacture, fill, market, promote and distribute Cartridges in the
United States in accordance with the Licensor’s Design
Patent, and to be licensed to use the Trademark
IT IS AGREED as
follows:
1.
INTERPRETATION
1.1
In this Agreement unless
the context otherwise requires the following words and expressions
shall have the following meanings:-
Words/Expressions
Meaning
Cartridge(s)
Cartridge(s) made to,
using or in any way falling within the scope of the Design to be
filled with ice cream, frozen yoghurt, flavoured ices such as
sherbets, dairy products or other soft confections or products for
one-time use for the purposes of measuring and/or dispensing
individual servings.
Cartridges Sold
Cartridges
sold by the Licensee in the Territory
Commencement Date
the
date of signature of this Agreement by the parties
Confidential
Information
All information
communicated between the parties which is either
(a)
said at the time, in a
covering letter or by clear marking on a document to be
confidential or
(b)
which is obviously by its
very nature commercially sensitive or confidential.
Design
U.S. Design Patent No:
D407093 dated 23 rd March 1999 in respect of the
Cartridges
Existing
Customers
are customers of Licensee
to whom Licensee has sold at normal prices at least 25 dispensing
machines or 100 cases of Licensed Products within the twelve month
period ending on the last day of the last month as listed in
writing by Licensor to Licensee, with relevant data, by the 5
th day of every month.
Future
Invention(s)
Invention(s) made by the
Licensor or the Licensee during the term of this Agreement in the
development of the Licensed Products encompassed within or
anticipated by the Design and not leading to separately registrable
Intellectual Property.
Future IPR
Intellectual
Property granted in respect of a Future Invention.
Intellectual
Property
any patent, ` registered
design or any application in respect thereof, copyright, design
right, know how, trade or business names or any other right of the
same or a similar nature anywhere in the world.
Invention(s)
the
invention disclosed in the Design at the date of this
Agreement
Licensed
Products
the Cartridges
3
New Invention
Any invention made by the
Licensee during the term of this Agreement which is not encompassed
within or anticipated by the Design and leads to separately
registrable Intellectual Property
Quarter
the period of three
months running each year from 1 st January to 31
st March, that from 1 st April to 30
th June, from 1 st July to 30 th
September, and from 1 st October to 31 st
December.
Ready for Sale
Cartridges filled and
packed by or on behalf of the Licensee ready for
dispatch.
Royalties
the sums calculated in
accordance with Schedule 1 of this Agreement.
Specification
the specifications for
the Licensed Products to be provided by the Licensor to the
Licensee hereunder.
Target
Customers
are proposed customers of
Licensee as listed by Licensee in writing to Licensor by the 1
st March 2005 or from time to time
thereafter.
Territory
The United States of
America
1.2
Any reference herein to
the provisions of any statute shall be deemed to refer to the same
as in force (including any amendment or re-enactment from time to
time).
1.3
References to the
singular shall include the plural and vice versa and words in one
gender shall include any other gender.
1.4
References to Clauses and
Schedules are to clauses and schedules to this Agreement. The
headings to Clauses and Schedules are for convenience only and have
no legal effect.
2.
TERM
This Agreement shall
commence on the Commencement Date and shall continue unless and
until terminated in accordance with the provisions of clause
14
3.
GRANT
3.1
The Licensor hereby
grants the Licensee on the terms of this Agreement a non-exclusive,
non-transferable, limited licence:
3.1.1
to manufacture the
Licensed Products in the Territory and to market, promote,
distribute and sell the Licensed Products to commercial customers
for use in the Territory on the terms of this Licence using the
Design; and
3.1.2
to use the Design, and
all Future Inventions in the manufacture of the Licensed
Products;
3.1.3
to make the Design and
Specifications available under written sub-license to its own
direct sub-contractors in the Territory as necessary strictly for
the sole purpose of manufacturing Licensed Product under the terms
of this Agreement and for no other purpose, provided that each such
sub-contractor agrees in writing to satisfactory safeguards,
restrictive use of the Design and Specifications and non-disclosure
terms at least as restrictive as the terms of this
Agreement.
3.2
For the avoidance of
doubt, it is declared that the Licensee shall have no right to
manufacture, use, sub-license or sell the Licensed Products
otherwise than expressly licensed to the Licensee under this
Agreement and it is acknowledged by the Licensee that any circular
cylindrical cartridge having a plunger at one end and using a
dispensing rosette at the other end shall be the subject of
royalty payments as set out in this agreement in any event, even if
it does not fall strictly within the Design, in consideration of
the know-how conveyed by Licensor to Licensee.
4.
OBLIGATIONS OF THE
LICENSOR
4.1
The Licensor
shall:
4.1.1
to the extent that it has
not done so at the date of this Agreement deliver to the Licensee
with all reasonable diligence but not later than seven days from
the Commencement Date.
4
4.1.1.1
one (1) printed hard copy of the
Specification
4.1.1.2
six (6) samples of the
Cartridge.
4.1.2
carry out all its
obligations within the times agreed or if not agreed within a
reasonable time;
4.1.3
give to the Licensee such
technical assistance and advice as the Licensee shall reasonably
require from time to time during the continuance of this Agreement
so as to enable the Licensee to manufacture and assemble the
Licensed Products correctly and effectively, subject in the case of
any work required, to the payment of its reasonable pre-agreed
out-of-pocket expenses and always provided that the Licensee shall
have no legal liability in respect of such advice and
assistance;
5.
OBLIGATIONS OF THE
LICENSEE
5.1
The Licensee shall
commence commercial production of Licensed Product as soon as
reasonably possible after the Commencement Date.
5.2
The Licensee shall
promote, distribute, sell and commercialise the Licensed Products
and to develop a market in the Territory for the Licensed
Products.
5.3
The Licensee shall mark
or cause to be marked in an indelible manner all Cartridges on a
visible surface with the Design Patent number. The
parties agree that notice placed on the plunger is sufficient.
All brochures and other promotional material will include the
citation US Design Patent No D 407093 or its equivalent.
5.4
During this Agreement,
the Licensee shall not act as agent of the Licensor, nor give any
indication that it is acting otherwise than as principal, and in
advertising or selling the Licensed Products not make any
representation or give any warranty on behalf of the
Licensor;
5.5
The Licensee shall on
reasonable notice from the Licensor give the Licensor’s
authorised representative(s) free access at any reasonable times to
the Licensee’s premises for the purpose of ensuring that the
Licensed Products are being produced and used correctly in
accordance with the Agreement and shall ensure that all
sub-contractors are equally contractually obliged to provide the
same access to the Licensor’s authorised representative(s)
provided that the Licensor shall not be entitled to inspect
any particular premises more than twice in any calendar
year.
5.6
The Licensee agrees to
obtain whatever licences, statutory approvals or consents that may
be needed in the Territory to manufacture and sell the Licensed
Products and to provide the Licensor on reasonable request from
time to time with evidence that it is has done so.
5.7
The Licensee shall notify
the Licensor of:
5.2.1
all prosecutions,
indictments and other like proceedings, threatened or commenced in
the Territory in respect of the design, construction, manufacture
or use of the Licensed Products, or
5.2.2
of any dispute of which it is aware in the
Territory relating to the Licensed Products, their use,
construction or design.
5.8
Licensee shall notify
Licensor of the names and locations of any sub-contractor engaged
by Licensee to manufacture Licensed Product, and provide Licensor
with a copy of all sub-licenses and non-disclosure agreements.
Such sub-contractors shall be located in the Territory,
unless Licensor expressly grants written approval for
sub-contractors located outside the Territory.
5.9
Licensee shall provide in
its sales and use agreements with its re-sellers and end-users that
Cartridges are single-use items and that the re-filling of
Cartridges by any vendor after dispensing the first unit of
contents is strictly prohibited for reasons of quality control,
consumer health and safety.
6.
LIABILITY FOR
CLAIMS
6.1
The Licensee hereby
accepts responsibility for all actions, proceedings, demands and
claims and the costs arising therefrom relating to manufacturing
defects in or any contents or products contained in the Licensed
Products manufactured or assembled by it or its subcontractors and
agrees to indemnify and hold harmless the Licensor in respect of
any claim whatsoever which may be made against Licensor in respect
thereof.
6.2
Licensee shall take out,
carry and maintain products liability insurance with a reliable
Best’s “A” rated or above carrier in such amounts
as Licensee deems sufficient for its business operations, but not
less than US$1,000,000 per occurrence, US$ 3 million annual
aggregate. Such policy or policies shall name Licensor as an
additional named insured.
5
6.3
Licensee shall ensure
that any indemnity provisions against third party and/or product
liability claims contained in its manufacturing and production
subcontractor agreements extend also expressly to
Licensor.
7.
ROYALTY AND
PAYMENT
7.1
In consideration for the
grant of the rights licensed pursuant to this Agreement, the
Licensee agrees to pay the Royalties in accordance with Schedule 1
on each Cartridge rendered Ready for Sale
7.2
By the 21 st
day of each April, July, November and January the Licensee shall
furnish to the Licensor a Quarterly Return in the form provided in
Schedule 3 relating to the immediate past Quarter giving the
information set out in Schedule 3A and 3B.
Payment of all Royalties
due shall be made by the last day of the same month, that is to say
by the 30 th April, 31 st July, 30
th November and 31 st January
respectively.
Interest shall be payable
on any sums unpaid by the due date at the rate of 6% per annum
calculated on a daily basis from the due date to date of
payment.
7.3
All Royalties shall be
paid in accordance with clause 8.1 and the receipt of the Licensor
shall be sufficient discharge of the Licensee’s obligation to
make payment.
7.4
To enable the amounts
payable to the Licensor hereunder to be verified:-
7.4.1
the Licensee shall
maintain sufficient and accurate records as may be reasonably
necessary to enable the Licensor to validate the information
supplied under the Agreement and shall permit the Licensor or their
professional advisors at the Licensor’s expense once every
twelve (12) months to inspect and investigate the same during
normal business hours at a time agreed in advance for the purpose
of verifying such amounts; and
7.4.2
the Licensee shall
provide t
