LICENSE AND SUPPLY AGREEMENT
This License Agreement is entered into as of this 18th of May, 2007 (the
effective date), by and among DIET COFFEE, Inc. (the "Licensee") having offices
at 16 East 40th Street, New York, N.Y. 10016 and Jason Ryu (Patent Holder,
Licensor) residing at 21 Veterans Way Edgewater, New Jersey.
Whereas: Licensor is the inventor of and sole owner of the device, described
"The Ionic Bulb;" and
Whereas: Licensor is the sole owner of United States Patent US2006/0078460,
International Patent PCT/KR2005/002997, and Korea Patent KR10-2004-74598 which
describes said device; and
Whereas: Licensor, and Licensee, which to enter into an agreement whereby said
device, and products derived from and based upon said device may be successfully
marketed,
In consideration of the mutual promises contained below, the parties agree as
follows:
SECTION 1 - LICENSE RIGHTS
1) Licensor owns all rights to the "The Ionic Bulb" (the "Licensed Product"),
including the "Patent Rights" for the Licensed Product. "Patent Rights" shall
mean: All U.S. and foreign patents and patent applications for the Licensed
Product, and any later-filed United States and/or foreign patent applications
for an Ionic Bulb based on U.S. Patent No. 2006/0078460, or corresponding
thereto, including any improvements, continuations, continuations-in-part,
divisional, reissues, reexaminations, or extensions thereof.
2) The Grant - The Licensor hereby grants to the Licensee and the Licensee
accepts, subject to the terms and conditions of this Agreement, an exclusive,
commercial license, subject to Licensor's reserve list, within the "Territory,"
as defined below, in all fields of use under the Patent Rights, and a license to
make, have made, use, lease and/or sell the Licensed Product (the "Grant").
Licensee agrees to use its reasonable, best efforts to promote the sale of the
"Products" in the "Territory", subject to the terms and conditions set forth
below and further to use its reasonable, best efforts to fill all orders secured
by it for the "Product."
3) Licensee agrees to sell the Licensed Product to Licensor at preferred prices
of the sum of costs of production, royalties, insurance and shipping plus
10%(ten percent) for sales to Licensors reserve list. Licensor's "reserve list"
shall mean the non-exclusive right to sell the Licensed Product within the
Territory to (i) Asian societies, (ii) governments, (iii) industrial users, and
(iv) hotels and schools.
3) The "Territory" consists of the entire world, except for Japan; Korea, and
the Peoples Republic of China.
4) Licensor warrants that it holds all rights to the Licensed Product, and
products derived from and based upon said device throughout the "Territory".
5) Any claims arising in jurisdictions covered by the Product PCT made by third
parties regarding the ownership of the rights that are claimed to be held by
Licensor shall be the responsibility of Licensor and Licensor agrees to
indemnify, and hold harmless, the Licensee, from any claim asserted based upon
Contract, and/or Patent or Trademark infringement.
6) The term of this License Agreement shall be for two years, during which
period Licensee shall purchase at least five million units of the Licensed
Product. The failure of Licensee to purchase five million units during the
initial term shall give Licensor the right to cancel this agreement after the
initial term, but shall not give rise to any obligation of Licensee to pay any
shortfall of Royalty to Licensor. If Licensee shall purchase at least five
million units during the initial term, this License shall automatically renew
for another two year term, and shall continue to renew for successive terms of
two years for the life of any rights arising under the Patent Rights, provided
Licensee shall purchase at least five million units in each prior term.
7) Within ninety (90) days from the date of this Agreement, Licensee shall place
an order not less than 100,000 units and at least 600,000 units each quarter
thereafter.
SECTION 2 - Royalties
1) Licensor shall receive, from Licensee, $0.20 per unit for first 1.5 million
units and $0.15 per unit thereafter or [CONFIDENTIAL TREATMENT REQUESTED] of
manufacturing cost, whichever is less.
2) Licensee anticipates minimum royalty payments of $825,000 in the initial term
of this Agreement.
3) Licensee shall pay royalty to Licensor upon receipt of goods from the
manufacturer. All such goods shall be ordered by Licensee.
SECTION 3 - DUTIES OF LICENSOR
1) At the Licensee's request, Licensor will supply Licensee with all available
studies; testimonials; clinical studies, certificates; approvals and or results,
pertaining to the Licensed Product, promotional and advertising, including the
master tape of all commercials relating to the Licensed Product and control over
all web sites and domain names pertaining to the Licensed Product, including
www.ionicbulb.com and ioniclight.com.
2) Licensor shall maintain product liability insurance in the amount of one
million dollars per occurrence, and shall name Licensee as an added named
insured under said policy. Licensor shall provide a copy of said policy to
Licensee.
3) The marketing rights granted herein are exclusive and Licensor agrees not to
manufacture or market, nor allow a third-party to manufacture or market, the
Licensed Product or product similar in composition or function, for itself or
for third parties, in competition with Licensee's marketing efforts in the
Territory during the "Term" of this agreement.
4) Licensor shall not present the product to anyone without written consent of
Licensee.
SECTION 4 - DUTIES OF LICENSEE
1) Licensee will provide the promotional, advertising and fulfillment materials
necessary to satisfy "Territorial" statutory and regulatory requirements.
2) Licensee agrees to use its reasonable best efforts to provide information on
any competitive products that may come to the attention of Licensee.
3) Licensee may assign its rights hereunder upon written approval from Licensor,
such consent not to be unreasonably withheld.
SECTION 5 - Confidentiality
Each of the Parties agrees not to disclose (i) confidential information
regarding the Product's construction, technical information, designs, drawings,
concepts, ideas, sketches, wordings, media or marketing strategies, or
composition, (ii) confidential information regarding the spot production, and
(iii) confidential information regarding the other party, or such other party's
companies, products, or operations, or any other company information which may
be deemed a trade secret, or is sensitive in nature and not otherwise known to
the public, including the contents of this agreement ("Information"), without
the prior written consent of such other party. Notwithstanding the foregoing,
disclosure may be made to persons on a need to know basis to effectuate the
purposes herein (such as third-party auditors and distributors, buyers and sales
representatives )or by court order, or as otherwise provided herein so long as
the recipient of such Information agrees to treat all such Information in strict
confidence.
SECTION 6 - Manufacture and Supply
1) Product - A basic unit of the Product consists of one negative ion generator
("NIG") and a compact fluorescent lamp ("CFL").
2) Manufacture and Supply of the Licensed Product - Upon execution of this
Agreement, Licensor shall (i) provide Licensee with all manufacturing
information and know-how related to the production of the Licensed Product; (ii)
contact information for Licensor's manufacturers of the NIG and the CFL for the
Licensed Product.
3) Authority to Buy Direct - Licensor hereby authorizes Licensee to deal
directly with Licensor's manufacturer of the Licensed Product and agrees to
provide Licensee with introductions to the manufacturer of the Licensed Product
("Manufacturer").
4) Licensor agrees to supply to Licensee, within the Initial Term for this
Agreement, Licensee's total requirements for NIG's in accordance with the terms
and conditions of this Agreement, at a price not to exceed [CONFIDENTIAL
TREATMENT REQUESTED].Any price adjustments after the initial term shall be based
on prices acceptable to the licensee.
5) Manufacturing Option - Should the Parties mutually determine at any time
during the term of this Agreement that it is not feasible for Licensor to supply
NIG's, or should Licensor fail to timely fill Licensee's orders for NIG's or
meet appropriate quality standards in accordance with this Agreement, then
Licensee shall have the option to manufacture or arrange for a third-party to
manufacture NIG's for the duration of the term of this agreement. Upon
Licensee's exercise of this option, Licensor shall supply NIG design, and
manufacturing specifications and Licensee shall assume all manufacturing rights
and responsibilities which were formerly Licensor's rights and responsibilities
pursuant to this Agreement.
6) Notwithstanding any other provisions to this agreement, Licensee's
obligations hereunder shall commence only upon receipt by Licensee from
Manufacturer of reasonable assurances that Manufacturer shall supply Licensees
requirements for the Licensed Product during the Initial Term of this Agreement
at a price not to exceed [CONFIDENTIAL TREATMENT REQUESTED] per unit FOB China.
Any failure of Licensee to meet its duties under this Agreement, which is wholly
or partly attributable to the Manufacturer to supply the Licensed Product to
Licensee or Licensor failure to supply NIG's to Licensee, each in a timely
manner, in accordance with appropriate quality standards and according to
Licensee's requirements, shall not constitute a breach of this Agreement on the
part of Licensee and shall not effect the Grant to Licensee provided in this
Agreement.
SECTION 7 -- RELATIONS OF THE PARTIES
1) Additional Products; First Right of Refusal - Licensor is in the process of
developing Ionic Products, each of which Licensee shall have the first right of
refusal to market in varying product configurations along with Product pursuant
to the terms herein.
2) Neither party nor any of its employees, representatives or agents will be or
act or purport to act as employee, representative or agent of the other party
for any reason whatsoever.
SECTION 8 - TERMINATION OF AGREEMENT
1) Any party seeking termination of this Agreement for default in performance
herein described must give not less than thirty (30) days prior written notice
by certified mail or facsimile, to the other party in default, specifying the
nature of the default.
2) In the event the defaulting party cures the default within thirty (30) days
after the required notice described in paragraph 1 (above), then this Agreement
will not terminate.
SECTION 9 - GOVERNING LAW
1) This Agreement shall be interpreted under the Laws of New York State, U.S.A.
SECTION 10 - CONTRACT ACKNOWLEDGMENT
This Agreement constitutes the entire Agreement between the parties hereto. No
change, modification or amendment of this Agreement is binding upon Licensor and
Licensee unless made in writing and signed by both parties.
LICENSOR LICENSEE: DIET COFFEE, INC
/s/ Jason Ryu /s/ David Stocknoff
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Individually Jason Ryu President David Stocknoff
/s/ David Attarian
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Secretary David Attarian