EXHBIT 10.4
EXCLUSIVE PATENT LICENSE AGREEMENT
by and between
XXXXXXXX XXXXXXX
("Licensor")
and
ADMINISTRATION FOR INTERNATIONAL CREDIT & INVESTMENT, INC.
("Licensee")
Dated as of July 13, 2000
TABLE OF CONTENTS
1. Definitions...............................................................1
2. License Grants and Restrictions...........................................3
3. Compensation..............................................................4
4. Patent Prosecution........................................................5
5. Infringement..............................................................6
6. Representations and Warranties............................................6
7. Indemnification...........................................................7
8. Confidentiality...........................................................8
9. Liability.................................................................9
10. Term and Termination......................................................9
11. General Provisions.......................................................11
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EXCLUSIVE PATENT LICENSE AGREEMENT
THIS EXCLUSIVE PATENT LICENSE AGREEMENT (this "AGREEMENT") is made as of
July13, 2000 (the "EFFECTIVE DATE"), between Xxxxxxxx Xxxxxxx, a Austrian
national residing in Stuttgart with an address located at Xxxxxxxxxxx 0x,
X-00000 Stuttgart ("LICENSOR"), and Administration For International Credit and
Investment, Inc., an Oregon corporation with an address located at 000 X.X.
000xx Xxx., Xxxxx, Xxxxxx 00000 ("LICENSEE") (each a "PARTY" and together the
"PARTIES").
RECITALS
WHEREAS, Licensor is the owner of certain Technology, as defined herein;
and
WHEREAS, Licensor is willing to license the Technology to Licensee for the
development and Use of the Technology in the Voice-Over-Internet Protocol
("VOIP") market in those jurisdictions where the Technology has been registered
upon the terms and subject to the conditions set forth in this Agreement.
NOW, THEREFORE, in consideration of these premises and of the mutual
promises and conditions contained in this Agreement, Licensor and Licensee agree
as follows:
1. DEFINITIONS
1.1 "AFFILIATE" of a party shall mean an entity directly or indirectly
controlling, controlled by or under common control with that party where control
means the ownership or control, directly or indirectly, of more than fifty
percent (50%) of all of the voting power of the shares (or other securities or
rights) entitled to vote for the election of directors or other governing
authority; provided that such entity shall be considered an Affiliate only for
the time during which such control exists.
1.2 "CHANGE OF CONTROL" shall mean the occurrence of any of the following
events:
(a) Any "person" or "group of persons" (as such terms are used in
Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as
amended) is or becomes the "beneficial owner" (as defined in Rule 13d-3
under said Act), directly or indirectly, of securities of the Company
representing 50% or more of the total voting power represented by the
Company's then-outstanding voting securities; or
(b) The shareholders of the Company approve a merger or
consolidation of the Company with any other corporation, other than a
merger or consolidation that would result in the voting securities of the
Company outstanding immediately prior thereto continuing to represent
(either by remaining outstanding or by being converted into voting
securities of the surviving entity) at least 50% of the total voting power
represented by the voting securities of the Company or such surviving
entity outstanding immediately after such merger or consolidation, or the
shareholders of the Company approve a plan of complete liquidation of the
Company or an agreement for the sale or disposition by the Company of all
or substantially all of the Company's assets.
1.3 "CONTRACT QUARTER" shall mean each calendar quarter period (March 31,
June 30, September 30 and December 31) following the Effective Date during the
Term.
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1.4 "ENTITY" shall mean any general partnership, limited partnership,
limited liability company, corporation, joint venture, trust, business trust,
cooperative or association, or any foreign trust or foreign business
organization.
1.5 "EXCLUSIVE PERIOD" shall mean the period of time set forth in Section
2.1.
1.6 "INTELLECTUAL PROPERTY RIGHT" and "INTELLECTUAL PROPERTY RIGHTS" shall
mean all worldwide right, title and interest of a Person in, to and under any
and all: (a) United States or foreign patents and pending patent applications
therefor, including the right to file new and additional patent applications
based thereon, including provisionals, divisionals, continuations,
continuations-in-part, reissues and reexaminations; (b) copyrights; and (c)
trade secrets, know-how, processes, methods, engineering data and technical
information.
1.7 "NET RECEIPTS" shall mean the gross amount recognized as income on
Licensee's books (pursuant to generally accepted accounting principles
consistently applied) in connection with the sale of a Product or Processes,
less deductions for payment of sales, value added or any similar taxes, and
shipping and insurance charges, with respect to such Product or Process.
1.8 "PATENT" shall mean:
(a) United States and international applications listed on Appendix
A and the resulting patents;
(b) any divisionals, continuations, continuation-in-part
applications, and continued prosecution applications (and their relevant
international equivalents) of the patent applications described in (a)
above to the extent the claims are directed to subject matter specifically
described in such patent applications, and the resulting patents;
(c) any patents resulting from reissues, reexaminations, or
extensions (and their relevant international equivalents) of the patents
described in (a) and (b); and
(d) international (non-United States) patent applications filed
after the Effective Date and the relevant international equivalents to
divisionals, continuations, continuation-in-part applications and
continued prosecution applications of such patent applications and any
patents resulting from reissues, reexaminations, or extensions of the
patents described in (c) to the extent the claims are directed to subject
matter specifically described in the patents or patent applications
referred to in (a), (b) and (c), above, and the resulting patents.
1.9 "PATENT RIGHTS" shall mean all rights related to the Use of the
Patents for the development, manufacture, use, sell, offer to sell, lease,
distribution and import of VoIP billing and customer care software and other
VoIP-related Products.
1.10 "PRODUCT" shall mean any product or service that cannot be developed,
manufactured, Used, leased, sold or imported, in whole or in part, without
infringing on one or more claims under the Patent Rights.
1.11 "PROCESS" shall mean any process or service that cannot be performed,
in whole or in part, without using at least one process that infringes one or
more claims under the Patent Rights.
1.12 "PATENT TERM" shall mean the period of time commencing on the
Effective Date and ending with the expiration or abandonment of all issued
patents and filed patent applications within the Patent Rights, unless earlier
terminated in accordance with the provisions of this Agreement.
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1.13 "TERRITORY" shall mean worldwide.
1.14 "THIRD PARTY" shall mean, with respect to a party, any Person that is
not an Affiliate of such party.
1.15 "USE" shall mean operate, reproduce, distribute, transmit (by
electronic means or otherwise), make available, perform and display.
2. LICENSE GRANTS AND RESTRICTIONS
2.1 Grant Of License. Subject to the terms of this Agreement, Licensor
hereby grants to Licensee an exclusive license under the Patent Rights to
develop, make, have made, Use, sell, offer to sell, lease, distributed and
import Products or to practice Processes in the Territory from the Effective
Date through the Patent Term (the "EXCLUSIVE PERIOD") (such licenses shall be
hereinafter referred to, collectively, as the "License").
2.2 Restriction on Sublicensing. The License granted hereby may not be
transferred or sublicensed by Licensee, but shall extend to any wholly-owned
subsidiaries and divisions or Affiliates of Licensee (collectively,
"Affiliates"). Licensee shall be responsible for the compliance by each such
Affiliate 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 Products by each such Affiliate. 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 Affiliate hereunder.
2.3 U.S. Production. Licensee agrees that any Products used or sold in the
Untied States will be manufactured substantially in the United States.
2.4 Audits and Inspection Rights.
2.4.1 Licensor shall have the right, upon reasonable advance notice,
to inspect Licensee's records and facilities, and the records and
facilities of Affiliates of Licensee, with respect to the manufacture or
distribution of Products and Processes hereunder and to receive samples
thereof in order to verify that such manufacturing is within the scope of
this Agreement, and that there are appropriate security procedures to
protect Licensor's Confidential Information, as that term is defined in
Section 8.1 hereof. Licensee shall have similar rights as to any contract
manufacturer utilized by Licensee.
2.4.2 If the payment of Royalties is required as provided in Section
3.2, during the term of this Agreement and for a period of one (1) year
thereafter, Licensor shall have the right, at his expense, and upon
reasonable notice to Licensee, to have examined by an independent auditor
with a national reputation, reasonably acceptable to Licensee, Licensee's
books and records in order to determine or verify the Net Receipts and
sales of Products. Licensor shall not make any such examination more than
twice in any calendar year. If an error in the reported Net Receipts or
the reported number of Products sold by Licensee is discovered as a result
of such an examination and the reported Net Receipts or the reported
Product sold by Licensee during the period(s) examined were in excess of
5% less than the actual Net Receipts or Product sold by Licensee, as the
case may be, during such period(s), Licensee (i) shall pay all of
Licensor's out-of-pocket expenses related to such examination, and (ii)
shall pay Licensor interest on the amount of such underpayment, at the
rate of 10% per annum, from the date such amount was due and payable until
such amount is actually paid.
2.4.3 Licensee shall keep adequate records to verify all reports and
payments made to Licensor pursuant to this Agreement for a period of two
(2) years following the date of such reports and payments.
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2.5 No Other Licenses. The License granted under this Agreement is
specifically set forth herein, and no other licenses are granted by Licensor to
Licensee by implication or estoppel, including, but not limited to non-VoIP Uses
of the Patents.
2.6 Reservation Of Rights. All rights not specifically granted to Licensee
hereunder are reserved by Licensor.
2.7 Restrictions on Export. Licensee acknowledges and agrees that it shall
not import, export, or re-export Product to any country in violation of the laws
and regulations of any applicable jurisdiction. Licensee further agrees to
defend, indemnify, and hold Licensor harmless for any losses, costs, claims, or
other liabilities arising out of Licensee's breach of this Section.
3. COMPENSATION
3.1 Royalties. Licensee shall pay to Licensor royalties equal to 3% on its
Net Receipts ("Royalties") or an stock option acceptable by the Licensor in
exchange for the Royalties. Such Royalties shall be due and payable to Licensor
regardless of whether Licensee collects payments for Product from its consumers.
3.2 Patent Costs. In consideration of the License granted in Section 2.1
above, Licensee agrees to pay all patent filing, prosecution and maintenance
costs related to the Patents as set forth in Section 4.3 during the Exclusive
Period, to the extent such costs relate to the maintenance and preservation of
the Patents as they relate to VoIP services.
3.3 Taxes and Assessments.
3.3.1 In addition to any other payments due under this Agreement,
Licensee agrees to pay, indemnify and hold Licensor harmless from any
sales, Use, excise, import or export, value-added or similar tax or duty,
and any other tax not based upon Licensor's net income, including any
penalties and interest, and all government permit or license fees and all
customs and similar fees, levied upon the Use or distribution of Product
which Licensor may incur in respect of this Agreement, and any costs
associated with the collection or withholding of any of the foregoing
items ("Taxes").
3.3.2 If Licensee fails to pay any Taxes as of the original due date
for such Taxes and Licensor receives any assessment or other notice
(collectively the "ASSESSMENT") from any governmental taxing authority
providing that such Taxes are due from Licensor, Licensor shall give
Licensee written notice of the Assessment and Licensee shall pay to
Licensor or the taxing authority the amount set forth as due in the
Assessment within thirty (30) days of receipt of such written notice from
Licensor.
3.4 Payment Terms. Royalties shall accrue upon delivery of Product to a
customer by Licensee and shall be payable within thirty (30) days after the end
of each Contract Quarter. Each Royalty payment shall be accompanied by a
statement setting forth in sufficient detail the basis upon which Royalties were
calculated. Payments and statements shall be sent to Licensor at the address set
forth in Section 11.12 of this Agreement or such other address as Licensor may
designate in writing. All payments due under this Agreement shall be payable in
United States dollars. Conversion of foreign currency to U.S. dollars shall be
made at the conversion rate existing in the United States (as reported in the
Wall Street Journal) on the first working day of the month in which payment is
due. Such payments shall be without deduction of exchange, collection or other
charges, and, specifically, without deduction of withholding or similar taxes or
other government imposed fees or taxes.
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3.5 Diligence Requirements. Licensee shall use its diligent efforts, or
shall cause its Affiliates to use diligent efforts, to develop Product or
Processes and to introduce such Product and Processes into the commercial
market; thereafter, Licensee or its Affiliates shall make such Product and
Processes reasonably available to the public.
3.6 Record Keeping. Licensee shall maintain, and shall cause its
Affiliates to maintain, complete and accurate records relating to the rights and
obligations under this Agreement, which records shall contain sufficient
information to permit Licensor to confirm the accuracy of any reports delivered
to Licensor and compliance in other respects with this Agreement. Licensee or
its Affiliates shall retain such records for at least five (5) years following
the end of the calendar year to which they pertain, during which time Licensor
or his appointed agents shall have the right, at Licensor's expense, to inspect
such records during normal business hours to verify any reports made or
compliance in other respects under this Agreement. Such inspections shall be
conducted at the Licensee's business office, with reasonable notice, and shall
be conducted no more than twice every twelve (12) months.
3.7 Purchase Option. Licensor hereby grants Licensee an exclusive option
to purchase all right and title in and to the Patent Rights on or after the
fourth anniversary of the Effective Date through the end of the Exclusive Period
(the "OPTION PERIOD") for a purchase of Four Million U.S. Dollars ($4,000,000)
("PURCHASE Price") (the "OPTION"). The Option must be exercised by written
notice from Licensee to Licensor at least thirty (30) days prior to the proposed
purchase date. Following receipt of such notice by Licensor, the parties shall
enter into a purchase agreement for the Patent Rights on substantially the terms
set forth in this Section 3.7 (the "PURCHASE AGREEMENT") within thirty (30)
days. Pursuant to the Purchase Agreement and upon delivery of the Purchase Price
to Licensor, Licensor shall file an assignment with respect to the Patent
Rights, and shall take all other actions deemed reasonably necessary by Licensee
to separate the Patent Rights from the Patents and to transfer ownership of such
Patent Rights to Licensee. Licensee may notify Licensor in writing at any time
during the Option Period of its decision not to exercise the Option at which
point the Option will lapse and Licensor shall be free to offer the Patent
Rights to a Third Party purchaser subject to the terms of this Agreement;
provided, however, that if Licensor should make an offer to sell or solicit or
receive an offer to buy the Patent Rights to or from any Third Party for a price
less than the Purchase Price, he shall first be required to offer the Patent
Rights to Licensee on the same or similar terms as those offered to such Third
Party and Licensee shall have the right to purchase the Patent Rights on the
terms presented within thirty (30) days of such notice. For the avoidance of
doubt, the parties' obligations under this Agreement shall continue in force
after any notice of exercise of they Option has been given until assignment of
the Purchase Price shall have been effectuated. The Option may not be assigned
in whole or in part without the prior written consent of Licensor.
4. PATENT PROSECUTION
4.1 Responsibility for Patent Rights. Licensee shall prepare, file,
prosecute and maintain the Patents, including patents, patent applications,
continuations, continuations-in-part and divisionals having claims covering the
Patent Rights as they may be applied in the Territory. The attorney handling the
filing, prosecution and maintenance of the Patents shall be notified that
Licensor is the owner of the Patents, that all prosecution shall be conducted in
the best interests of Licensor, and that Licensor shall be copied on all
correspondence.
4.2 Unrelated Rights. Licensor shall be responsible for and maintain the
Patents, including any patents, patent applications, continuations,
continuations-in-part and divisionals related to non-VoIP technology and
services.
4.3 Payment of Expenses. Payment of all fees and costs incurred after the
Effective Date, including attorney's fees, relating to the filing, prosecution
and maintenance of the Patents under Section 4.1 shall be the responsibility of
Licensee.
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5. INFRINGEMENT
5.1 Notification of Infringement. Each party agrees to provide written
notice to the other party promptly after becoming aware of any infringement of
the Patent Rights.
5.2 Rights to Prosecute Infringement of the Patent Rights.
(a) Licensee's Right to Prosecute. So long as Licensee remains the
exclusive licensee of the Patent Rights in the Territory, Licensee, to the
extent permitted by law, shall have the right, under its own control and
at its own expense, to prosecute any Third Party infringement of the
Patent Rights in the Territory subject to Section 5.4. If required by law,
Licensor shall permit any action under this Section to be brought in his
name, including being joined as a party-plaintiff, provided that Licensee
shall hold Licensor harmless from, and indemnify Licensor against, any
costs, expenses or liability that Licensor incurs in connection with such
action.
Prior to commencing any such action, Licensee shall consult with Licensor
and shall consider the views of Licensor regarding the advisability of the
proposed action and its effect on the public interest. Licensee shall not
enter into any settlement, consent judgment, or other voluntary final
disposition of any infringement action under this Section without the
prior written consent of Licensor, which will not be materially withheld
or delayed.
(b) Licensor's Right to Prosecute. In the event that Licensee is
unsuccessful in persuading the alleged infringer to desist or fails to
have initiated an infringement action within a reasonable time after
Licensee first becomes aware of the basis for such action, Licensor shall
have the right, at his sole discretion, to prosecute such infringement
under his sole control and at his sole expense, and any recovery obtained
shall belong to Licensor. Licensor shall indemnify Licensee for any order
for costs that may be made against Licensee in such proceedings.
5.3 Declaratory Judgment Actions. In the event that a declaratory judgment
action is brought against Licensor or Licensee by a Third Party alleging
invalidity or unenforceability of the Patent Rights, Licensor, at his option,
shall have the right within twenty (20) days after commencement of such action
to take over the sole defense of the action at his own expense. If Licensor does
not exercise this right, Licensee may take over the sole defense of the action
at Licensee's sole expense, subject to Section 5.4.
5.4 Recovery. Any recovery obtained in an action brought by Licensee under
Sections 5.2 or 5.3 shall be distributed as follows: (i) each party shall be
reimbursed for any expenses incurred in the action, (ii) as to ordinary damages,
Licensee shall receive 100% of any award, and (iii) as to special or punitive
damages (including any damages in excess of "single damages"), Licensor shall
receive thirty percent (30%) and the Licensee seventy percent (70%) of any
award.
5.5 Cooperation. Each party agrees to cooperate in any action under this
Section 5 which is controlled by the other party, provided that the controlling
party reimburses the cooperating party promptly for any costs and expenses
incurred by the cooperating party in connection with providing such assistance.
6. REPRESENTATIONS AND WARRANTIES
6.1 Licensor and Licensee each represents and warrants to the other that:
(i) with respect to Licensee, it is organized, validly existing and
in good standing under the laws of the country or state in which it is
incorporated;
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(ii) its or his execution and delivery of this Agreement, and the
performance of its or his obligations under this Agreement, have been duly
authorized by all necessary corporate action on its part, if applicable,
and it or he has full power, right and authority to enter into this
Agreement, to, in the case of Licensor, grant the license he has granted
hereunder, and to perform its or his obligations hereunder;
(iii) with respect to Licensee, neither the execution and delivery
of this Agreement by it, nor the performance by it of any of its
obligations under this Agreement, violates any applicable law or
regulation of any country, state or other governmental unit, or its
Articles or Certificates of Incorporation or Bylaws or other charter
documents;
(iv) the execution and delivery of this Agreement does not
constitute a violation of, or a breach or default under, any agreement or
instrument, or judgment or order of any court or governmental authority,
to which it or he is a party or to which it or he is subject or to which
any of the Patent Rights are subject;
(v) this Agreement is a valid and binding obligation of it or him,
enforceable against it or him in accordance with its terms, except as such
enforceability may be limited by equitable principles or by bankruptcy or
other laws affecting creditors' rights generally; and
(vi) no consent, approval, order or authorization of any person,
entity, court or governmental authority is required on its or his part in
connection with the execution and delivery of this Agreement or the
performance by it or him of its or his obligations hereunder.
6.2 Licensor represents and warrants to Licensee that he has title to, or
a license with a right to sublicense, the Patent Rights, in the form in which
they are delivered to Licensee, free and clear of any liens, claims or
encumbrances or interests of any third party or any license which is in conflict
with the License. As of date hereof, no part of the Patent Rights has been
licensed to Licensor and Licensor has not granted any license with respect to
any part of the Patent Rights.
7. INDEMNIFICATION
7.1 By Licensor. Licensor shall, at his own expense, defend and indemnify
Licensee for damages and reasonable costs incurred in any suit, claim or
proceeding brought against Licensee alleging that the Patent Rights licensed
pursuant to this Agreement infringe any patents in the states listed on Appendix
A, or misappropriate any trade secrets, provided that Licensor is promptly
notified, rendered reasonable assistance by Licensee as required, and permitted
to direct the defense or settlement negotiations. Licensor shall have no
liability for any infringement arising from: (a) the integration or combination
of the Patent Rights with other Intellectual Property of Licensee if the
infringement would have been avoided in the absence of such integration or
combination; or (b) modifications to the Patents requested by Licensee.
7.2 Remedies. In the event Licensor reasonably believes that the Use of
the Patent Rights is likely to be enjoined, Licensor may, at his option, either:
(i) modify the infringing item so that it no longer infringes but remains
functionally equivalent; (ii) obtain for Licensee, at Licensor's expense, the
right to continue Use of such item; or (iii) if none of the foregoing is
feasible, Licensor may terminate only that portion of the License associated
with respect to such item or items, subject to a mutually satisfactory equitable
reduction in the Royalty and fees payable under this Agreement. Notwithstanding
the foregoing, Licensee acknowledges that Licensor may undertake to obtain
patent licenses from third parties relating to the Patent Rights, and in such
event the royalty obligation for Product arising from such patent licenses shall
be passed through to, and paid at the direction of Licensor by Licensee;
provided, however, that the per-unit royalty obligation payable by Licensee
shall not exceed the per-unit or percentage royalty obligation (whichever is
less) payable by Licensor for products similar to the Licensee Products, and
shall not in any event exceed Licensee's Royalty obligations for Product under
this Agreement.
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7.3 By Licensee. Licensee shall, at its own expense, defend and indemnify
Licensor for damages and reasonable costs incurred in any suit, claim or
proceeding brought against Licensor or his Affiliates that Product or Processes
infringe (i) any patents in the United States, (ii) any copyrights worldwide, or
(iii) any trademarks in any countries in which Licensee markets Product in
connection with the Patent Rights, or misappropriate any trade secrets, provided
that Licensee is promptly notified, rendered reasonable assistance by Licensor
as required, and permitted to direct the defense or settlement negotiations.
Licensee shall have no liability for any infringement arising from Use of the
Patent Rights.
7.4 Procedure for Indemnification.
7.4.1 In the event that any legal proceedings are instituted, or any
claim or demand is asserted, by any third party which may give rise to any
damage, liability, loss, or cost or expense in respect of which either
party has indemnified the other party under this Section 7 above, the
indemnified party shall give the indemnifying party written notice of the
institution of such proceeding, or the assertion of such claim or demand,
promptly after the indemnified party first becomes aware thereof;
provided, however, that any failure by the indemnified party to give such
notice on such prompt basis shall not affect any of its or his rights to
indemnification hereunder unless such failure materially and adversely
affects the ability of the indemnifying party to defend such proceeding.
7.4.2 The indemnifying party shall have the right, at its or his
option and at its or his own expense, to be represented by counsel of its
choice, subject to the approval of the indemnified party, which approval
shall not be unreasonably withheld or delayed, and to defend against,
negotiate with respect to, settle or otherwise deal with such proceeding,
claim or demand; provided, however, that no settlement of such proceeding,
claim or demand shall be made without the prior written consent of the
indemnified party, which consent shall not be unreasonably withheld or
delayed, unless, pursuant to the terms and conditions of such settlement,
the indemnified party shall be released from any liability or other
exposure with respect to such proceeding, claim or demand; and provided,
further, that the indemnified party may participate in any such proceeding
with counsel of its or his choice and at its or his own expense. In the
event, or to the extent, the indemnifying party elects not to, or fails
to, defend such proceeding, claim or demand and the indemnified party
defends against, settles or otherwise deals with any such proceeding,
claim or demand, any settlement thereof may be made without the consent of
the indemnifying party if it or he is given written notice of the material
terms and conditions of such settlement at least ten (10) business days
prior to a binding agreement with respect to such settlement being
reached. Each of the parties agrees to cooperate fully with each other in
connection with the defense, negotiation or settlement of any such
proceeding, claim or demand.
8. CONFIDENTIALITY
8.1 Confidential Information. For the purposes of this Agreement,
"Confidential Information" shall mean any information delivered by one party to
another which the receiving party ("RECEIVING PARTY") knows or has reason to
know is considered confidential by disclosing party ("DISCLOSING PARTY"). The
Receiving party agrees to take precautions to prevent any unauthorized
disclosure or use of Confidential Information of the Disclosing party consistent
with precautions used to protect the Receiving party's own confidential
information, but in no event less than reasonable care. Except as provided
below, Licensee agrees to treat the Confidential Information as confidential and
shall not disclose the Confidential Information to any person or Entity without
the Disclosing party's prior written consent. The Receiving party may only
disclose the Confidential Information to its Affiliates, employees and agents
who reasonably require access to such Confidential Information to perform
obligations under this Agreement. The Receiving party shall take all appropriate
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steps to ensure that its employees and contractors who are permitted access to
the Confidential Information of the Disclosing party agree to act in accordance
with the obligations of confidentiality imposed by this Agreement. Should any
party be faced with legal action to disclose Confidential Information under this
Agreement, the Receiving party shall promptly notify the Disclosing party and
upon the Disclosing party's request, shall reasonably cooperate with the
Disclosing party in contesting such disclosures. The obligations imposed by this
Section shall survive any termination of this Agreement.
8.2 Non-Confidential Information. The obligations set forth in Section 8.1
shall not apply to any particular portion of any Confidential Information to the
extent that: (i) now or subsequently becomes generally known or available
through no act or omission of Receiving party; (ii) was or is known at the time
of receipt of same from Disclosing party; (iii) is provided by the Disclosing
party to a third party without restriction on disclosure; (iv) is subsequently
rightfully provided to Receiving party by a third party without restriction on
disclosure; or (v) is independently developed by Receiving party and as can be
demonstrated from Receiving party's business records and documentation, provided
the person or persons developing same had not had access to the Confidential
Information of the Disclosing party prior to such independent development.
9. LIABILITY
9.1 EXCEPT FOR LIABILITY FOR BREACH OF SECTION 8 (CONFIDENTIALITY) AND
EXCEPT AS SPECIFICALLY PROVIDED IN SECTION 7 (INDEMNIFICATION): (A) NEITHER
PARTY SHALL HAVE ANY LIABILITY FOR INCIDENTAL, CONSEQUENTIAL, INDIRECT, SPECIAL
OR PUNITIVE DAMAGES OF ANY KIND OR FOR LOSS OF REVENUE OR LOSS OF BUSINESS
ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT, REGARDLESS OF THE FORM OF
THE ACTION, WHETHER IN CONTRACT, TORT (INCLUDING NEGLIGENCE), STRICT PRODUCT
LIABILITY OR OTHERWISE, EVEN IF ANY REPRESENTATIVE OF A PARTY HERETO HAS BEEN
ADVISED OF THE POSSIBILITY OF SUCH DAMANGES; AND (B) IN NO EVENT SHALL
LICENSOR'S LIABILITY UNDER THIS AGREEMENT EXCEED THE AMOUNTS PAID BY LICENSEE TO
LICENSOR UNDER THIS AGREEMENT.
10. TERM AND TERMINATION
10.1 Term. The Term of this Agreement shall begin on the Effective Date
and shall continue through the Exclusive Period.
10.2 Termination Due to Bankruptcy. In the event a party: (i) becomes
insolvent; (ii) voluntarily files or has filed against it a petition under
applicable bankruptcy or insolvency laws which such party fails to have released
within thirty (30) days after filing; (iii) proposes any dissolution,
composition or financial reorganization with creditors or if a receiver,
trustee, custodian or similar agent is appointed or takes possession with
respect to all or substantially all property or business of such party; or (iv)
such party makes a general assignment for the benefit of creditors, the other
party may terminate this Agreement by giving a termination notice, which
termination shall become effective ten (10) days after mailing.
10.3 Right to Terminate; Early Termination.
10.3.1 Either party shall have the right to terminate this Agreement
if the other party is in material breach of any term or condition of this
Agreement and fails to remedy such breach within thirty (30) days after
receipt of a written notice of such breach given by the non-breaching
party; or
9
10.3.2 Licensee may terminate this Agreement upon thirty (30) days
written notice to Licensor:
(a) if remedies provided in Section 7.1 are insufficient to
provide Licensee with the right to continue using any part of the
Patent Rights subject to a claim of patent infringement or alleged
patent infringement, provided that Licensee shall not have the right
to terminate if to the extent that Licensor is able to avoid
infringement or alleged infringement of the patent rights of a Third
Party as provided in Section 7.1; and
(b) provided further that Licensee's right to terminate
pursuant to the foregoing subsection (a) shall not limit Licensee's
rights and remedies otherwise available in this Agreement or at law.
10.3.3 Licensor may terminate this Agreement if Licensee:
(a) makes an assignment for the benefit of creditors;
(b) admits in writing its inability to pay its debts as they
become due;
(c) distributes to its creditors any composition, extension or
similar kind of agreement which purpose is to reach an out of court
settlement with its creditors;
(d) causes or consents to the appointment of a receiver,
trustee, liquidator or similar officer for all or any material
portion of its property;
(e) shall be dissolved or fails to maintain its corporate
existence;
(f) has its ability to conduct business suspended or
terminated;
(g) becomes insolvent;
(h) makes or consents to a notice of intended bulk transfer of
its assets;
(i) convenes a meeting of creditors to restructure its debts;
(j) takes any corporate or other action for the purpose of
effectuating any of the foregoing; or
(k) if any proceeding, a receiver, trustee, liquidator or
similar officer is appointed to administer and/or liquidate all or
any portion of the property of the other party and such appointment
is not vacated or set aside within 45 days after the appointment of
such receiver, trustee, liquidator or similar officer.
10.4 Effect Of Termination. In the event of any termination of this
Agreement, each party shall be entitled to the rights and remedies afforded
pursuant to Section 365(n) of the Bankruptcy Code, and to any and all other
legal and equitable remedies to which such party may be entitled under the law.
Upon the termination or expiration of this Agreement, Licensee shall terminate
further Use of the Patent Rights.
10
10.5 Survival. The defined terms contained herein and the rights and
obligations in the following Sections shall survive any termination of this
Agreement: 3 ("Compensation"), 6 ("Representations and Warranties"), 7
("Indemnification"), 8 ("Confidentiality"), 9 ("Liability"), 10 ("Termination")
and 11 ("General Provisions").
11. GENERAL PROVISIONS
11.1 Allocation Of Risk. The Sections on limitation of liability,
limitation of warranties and limited warranties allocate the risks of this
Agreement between the parties. This allocation is reflected in the pricing of
the license fees and is an essential element of the basis of the bargain between
the parties.
11.2 Amendment. This Agreement may be amended or supplemented only by a
writing that is signed by duly authorized representatives of both parties.
11.3 Assignment. Licensor may assign this Agreement to any person to who
it transfers all or substantially all of its rights in the License or to any
subsidiary or affiliate or any entity into which it is merged or the surviving
Entity of any reorganization to which Licensee was a part, including but not
limited to a transaction in which Licensee is acquired by a publicly traded
Entity. Except as provided in the preceding sentence, neither party may assign,
voluntarily, by operation of law, or otherwise, any rights or delegate any
duties under this Agreement (other than the right to receive payments) without
the other party's prior written consent. Any attempt to do so without that
consent will be void. This Agreement will bind and inure to the benefit of the
parties and their representative successors and permitted assigns.
11.4 Choice Of Law. This Agreement will be governed by and construed in
accordance with the laws of the United States and the State of California as
applied to agreements entered into and to be performed entirely within
California between California residents. The parties agree that the United
Nations Convention on Contracts for the International Sale of Goods (1980) is
specifically excluded from application to this Agreement.
11.5 Choice of Forum. The parties hereby submit to the jurisdiction of and
waive any venue, objections against, the United States District Court for the
Southern District of California, San Diego Branch, and the Superior Courts of
the State of California, San Diego County, in any litigation arising out of this
Agreement.
11.6 Injunctive Relief. The Use of the Patent Rights in a manner
inconsistent with any provision of this Agreement may cause irreparable injury
to Licensor for which Licensor may not have an adequate remedy at law. Licensor
may be entitled to equitable relief in court, including, but not limited to,
temporary restraining orders, preliminary injunctions and permanent injunctions.
11.7 Compliance With Laws/Foreign Corrupt Practices Act. Licensee agrees
at all times to comply with applicable laws and regulations in its performance
of this Agreement, including, without limitation, the provisions of the United
States' Foreign Corrupt Practices Act ("FCPA"). Licensee will indemnify, defend
and hold harmless Licensor and its respective officers, agents and employees
from and against any and all losses, costs, claims and other liabilities arising
out of, relating to or resulting from Licensee's failure to comply with the
provisions of applicable laws or the FCPA.
11.8 Counterparts. This Agreement may be executed simultaneously in two or
more counterparts, each of which will be deemed an original, but all of which
together will constitute one and the same instrument.
11.9 Entire Agreement. This Agreement, including all exhibits to this
Agreement, constitutes the entire agreement between the parties relating to this
subject matter and supersedes all prior or simultaneous representations,
discussions, negotiations and agreements, whether written or oral. The headings
11
and captions are inserted for convenience of reference only and do not
constitute a part of or modify any of the terms of this Agreement.
11.10 Force Majeure. Neither party will be liable for any failure or delay
in performance under this Agreement which might be due, in whole or in part,
directly or indirectly, to any contingency, delay, failure, or cause of, any
nature beyond the reasonable control of such party, including, without in any
way limiting the generality of the foregoing, fire, explosion, earthquake,
storm, flood or other weather, unavailability of necessary utilities or raw
materials, strike, lockout, unavailability of components, activities of a
combination of workmen or other labor difficulties, war, insurrection, riot, act
of God or the public enemy, law, act, order, export control regulation,
proclamation, decree, regulation, ordinance, or instructions of Government or
other public authorities, or judgment or decree of a court of competent
jurisdiction (not arising out of breach by such party of this Agreement). In the
event of the happening of such a cause, the party whose performance is so
affected will give prompt written notice to the other party, stating the period
of time the same is expected to continue.
11.11 Licensee's Governmental Approval Obligations. Licensee shall, at its
own expense, obtain and arrange for the maintenance in full force and effect of
all governmental approvals, consents, licenses, authorizations, declarations,
filings, and registrations as may be necessary or advisable for the performance
of all the terms and conditions of this Agreement including, but not limited to,
distribution approval, foreign exchange approvals, import and export licenses
and all approvals which may be required to realize the purpose of this
Agreement.
11.12 Notices, Etc. All notices and other communications hereunder shall
be deemed given if given in writing and delivered by hand, prepaid express or
courier delivery service or by facsimile transmission or mailed by registered or
certified mail (return receipt requested), facsimile or postage fees prepaid, to
the party to receive the same at the respective addresses set forth below (or at
such other address as may from time to time be designated by such party in
accordance with this Section 14.11):
(a) If to Licensee:
Administration for International Credit & Investment, Inc.
000 X.X. 000xx Xxx., Xxxxx, Xxxxxx 00000
Attention: Xxxxx X. Xxxxxxxxx
(b) If to Licensor:
Xxxxxxxx Xxxxxxx
Zettachring 2a
D-70567 Stuttgart
All such notices and communications hereunder shall for all purposes of
this Agreement be treated as effective or having been given when delivered if
delivered personally, or, if sent by mail, at the earlier of its receipt or
seventy-two (72) hours after the same has been deposited in a regularly
maintained receptacle for the deposit of the United States mail, addressed and
postage prepaid as aforesaid.
11.13 Relationship of Parties. The parties to this Agreement are
independent contractors. Neither party has the authority to bind the other or to
incur any obligation on its behalf.
11.14 Severability. If any part of this Agreement is found invalid or
unenforceable, that part will be amended to achieve as nearly as possible the
same economic effect as the original provision and the remainder of this
Agreement will remain in full force.
12
11.15 Waiver. No term or provision hereof will be considered waived by
either party, and no breach excused by either party, unless such waiver or
consent is in writing signed by both parties. No consent by either party to, or
waiver of, a breach by either party, whether express or implied, will constitute
a consent to, waiver of, or excuse of any other, different, or subsequent breach
by either party.
11.16 Calendar Days. The references to "days" herein are to be calendar
days unless expressly designated as "business days."
11.17 Attorneys' Fees. In any action to enforce this Agreement, the
prevailing party shall be awarded all court costs and reasonable attorneys' fees
incurred, including such costs and attorneys' fees incurred in enforcing and
collecting any judgment.
[THIS SPACE INTENTIONALLY LEFT BLANK.]
13
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first set forth above.
LICENSOR
/s/ Xxxxxxxx Xxxxxxx
--------------------------------------------------------------
Xxxxxxxx Xxxxxxx
Date: July 13, 2000
--------------------------------------------------------
LICENSEE
ADMINISTRATION FOR INTERNATIONAL CREDIT
& INVESTMENT, INC.
/s/ Xxxxx X. Xxxxxxxxx
--------------------------------------------------------------
By: Xxxxx X. Xxxxxxxxx
Title: CEO/President
Date: July 17, 2000
--------------------------------------------------------
14
APPENDIX A
PATENTS
