LICENSE AGREEMENT
This License Agreement is entered into as of April 30, 1999 between IEM,
Inc., a Florida corporation having its principal place of business at 0000 Xxxx
Xxxxxxx Xxxxxx, Xxxxx 00, Xxxx Xxxxx, XX 00000 (hereinafter "Licensor") and
Ergovision, Inc., a Delaware corporation having its principal place of business
at Xxx Xxxxxxxxx Xxxxx, Xxxxxxxxx, Xxx Xxxx 00000 (together with any successors
and permitted assigns hereunder, hereinafter "Licensee").
RECITALS
Xxxxxxx X. Xxxx ("Pine") is the owner of United States Patent No.
5,488,496 covering the Licensed Technology (as defined below). Pine has licensed
the patent to Licensor on an exclusive basis for use in the manufacture,
installation and sale on portable computers. Licensee desires to obtain from
Licensor, and Licensor is willing to grant to Licensee, on the terms and
conditions set forth in this Agreement, a license to use the technology covered
by the patent on portable computers for distribution in the United States.
TERMS OF AGREEMENT
NOW THEREFORE, in consideration of the foregoing and the mutual covenants
and agreements of Licensor and Licensee as hereinafter set forth, it is hereby
agreed as follows:
ARTICLE 1
DEFINITIONS
For the purpose of this Agreement, the following defined terms shall have
the following meanings indicated below:
1.1 "Agreement" shall mean this License Agreement, as the same may be amended or
modified from time to time.
1.2 "Confidential Information" shall mean all information, whether of a
technical, commercial or other nature, relating in any way to the business and
products of a party, and shall include, without limitation, any concepts, ideas,
drawings, models, designs plans, proposals, devices, formulas, processes,
methods, techniques, know-how, and any marketing, sales, cost, pricing or
customer information.
1.3 "Effective Date" shall mean the date first written above, which shall be the
effective date of this Agreement.
page 1 of 10
1.4 "Contract Period" shall mean the period beginning with the Effective Date
and ending on the date on which this Agreement terminates in accordance with the
provisions of Article 11.
1.5 "Improvements" shall mean any and all inventions, discoveries or
improvements, whether or not patented, coming within the scope of the Patent.
1.6 "License" shall mean the license granted by Licensor to Licensee pursuant to
this Agreement.
1.7 "Licensed Technology" shall mean the technology permitting the selective
display of images on a liquid crystal display through the use of a movable
polarizing screen affixed to such display, which technology is claimed in the
Patent, and any Improvements relating thereto.
1.8 "Patent" shall mean U.S. Patent No. 5,488,496 and all patents which may be
issued with respect to any Improvements, and any continuations,
continuations-in-part, divisions, reissues, reexaminations or extensions
thereof.
1.9 "Product" shall mean any portable computer which contains the Licensed
Technology.
1.10 "Territory" shall mean the Exclusive use for the United States and
uncontested use in the rest of the world.
1.11 "Trademark" shall mean the xxxx Invisiview and any other tradenames, or
trademarks used in connection with the Product.
ARTICLE 2
GRANT OF LICENSE
2.1 Grant of Exclusive License. Subject to the terms and conditions of this
Agreement and to the extent permitted by law, Licensor hereby grants to
Licensee, and Licensee hereby accepts from Licensor, an exclusive license ( the
"Exclusive License") to use the Patent and Improvements to manufacture, have
manufactured, install and offer for sale and sell Products within the Territory
during the Contract Period.
2.2 Reservation of Rights. Subject to the License granted by Licensor to
Licensee hereunder, Licensor reserves all rights in and to the Patent and the
Improvements and the technology covered thereby and nothing contained in this
Agreement shall be construed to convey to Licensee or any of its sublicensees
any rights in or to (i) the Patent or the Improvements or the technology covered
thereby for use other than in Products or (ii) in
page 2 of 10
any other technology or patents thereon which pine or Licensor may develop or
acquire any interests in at any time unless the same constitutes an Improvement.
2.3 Right to Sublicense. Licensee shall have the right during the Contract
Period to grant a sublicense of all or any portion of its rights under this
Agreement to any third party without the prior written consent of Licensor,
provided, however that as a condition to granting such sublicense, that any
sublicensee undertake in the sublicense agreement obligations identical to the
obligations of Licensee under Article 4,6,8,9,11 and 13 of this Agreement and
expressly naming Licensor as a third-party beneficiary thereof.
2.4 Warranty Disclaimer. Licensor represents and warrants that it is not aware
of the Patent infringing upon the rights of any third party; however, nothing
contained in this Agreement shall be construed as a representation or warranty
by Licensor that the manufacture, use, sale or other disposition of Products
does not infringe the patent or other intellectual property rights of third
parties, and Licensor expressly disclaims any and all such warranty.
ARTICLE 3
PAYMENT
In consideration for the License granted by Licensor to Licensee
hereunder, Licensee agrees to pay Licensor Thirty Six Thousand Dollars ($36,000)
and Licensor grants Licensee a paid up royalty free Exclusive License for the
Contract Period in accordance with the terms and conditions of this Agreement.
Licensor acknowledges payment of Ten Thousand Dollars ($10,000) previously
received by Licensor from Licensee in accordance with the terms and conditions
of an Option Agreement dated as of April 24,1998 which payment is credited
against the above amount, leaving a balance due of Twenty Six Thousand Dollars
($26,000) payable as follows:
A. Ten Thousand Dollars ($10,000) simultaneously with the exercise of
the Option; and
B. Fifteen Thousand Dollars ($15,000) payable at the rate of One
Thousand Dollars ($1,000) per month, in fifteen monthly payments,
commencing June 15, 1999; and
C. One Thousand Dollars ($1,000) payable by the issuance of Ten
Thousand (10,000) restricted shares ("Shares") of Licensor's Common
Stock, $.001 par value issued to Xxxxxxx X. Xxxx which Licensee
agrees to. The Licensor and Pine acknowledge that restrictions on
further transactions involving the Shares may be imposed by
applicable federal and state securities laws.
page 3 of 10
ARTICLE 4
MATERIALS AND CONTRACT MANUFACTURERS
Licensor shall provide to Licensee within five days following written
request a list of possible vendors for material to modify portable computers to
incorporate the Licensed Technology; however it is the Licensee's complete
responsibility to secure vendors and bring the Licensed Technology to market.
ARTICLE 5
CONSULTING SERVICES
Upon making the full payment due in Article 3, Licensor will cause Pine to
assist Licensee for up to ten (10) working days in the first year thereafter
(such days shall be mutually and reasonably acceptable to Licensor and Licensee)
to select the contract manufacturers and provide technical information in order
for Licensee to commence production, licensing and/or sale of Products under
this Agreement. This assistance will be provided by Pine at the rate of $1,000
per day plus expenses (including, without limitation, all coach airfare,
reasonable hotel and rental car expenses and $75/day for food expenses).
ARTICLE 6
CONFIDENTIALITY
6.1 Nondisclosure of Confidential Information. Each party (the "Recipient
Party") acknowledges that it may , as a result of this Agreement or otherwise,
be given access to Confidential Information of the other party (the "Disclosing
Party"). The Recipient Party agrees that at all times during and after the term
of this Agreement, it shall (i) not directly or indirectly disclose to others
any Confidential Information of the Disclosing Party, (ii) not directly or
indirectly use any Confidential Information of the Disclosing Party other than
as contemplated by this Agreement and (iii) exercise diligent precautions to
safeguard and protect the confidentiality and integrity of the Confidential
Information of the Disclosing Party. Notwithstanding the foregoing, the
Recipient Party shall have the right to make disclosures of the Confidential
Information on a strict "need to know" basis to (i) its advisors and employees;
provided, however, that the Recipient Party will inform such advisor or employee
of the confidential nature of the disclosures and that such advisor or employee
must abide by the terms of this Agreement and not disclose the Confidential
Information to any other person, and (ii) with the Disclosing Party's prior
written approval (which shall not be unreasonably withheld or delayed), the
Recipient Party's suppliers and contractors to whom such disclosure is necessary
for there
page 4 of 10
performance of this Agreement; provided, however, that the Recipient Party shall
first obtain from each supplier or contractor confidentiality agreements with
respect to the Confidential Information in the form and substance reasonably
satisfactory to the Disclosing Party, and the Recipient Party shall promptly
deliver copies of all such confidentiality agreements to the Disclosing Party.
6.2 Exceptions. The Recipient Party shall not be held to a duty of
confidentiality for any Confidential Information that: (a) was known to the
Recipient Party prior to such disclosure; or (b) becomes or has become generally
available or known in the industry other than as a result of disclosure by the
Recipient Party or any of its employees, agents or Affiliates; or (c) after its
disclosure to the Recipient Party, is received by the Recipient Party in an
integrated form from an independent third party whose disclosure of such
Confidential Information shall not constitute a direct or indirect breach by
that third party of any duty of confidentiality owed to the Disclosing Party.
6.3 Unique Character of Confidential Information. The Recipient Party
acknowledges that the Confidential Information to be disclosed by the Disclosing
Party is of a special and unique character which gives it a peculiar value and
that consequently any wrongful use or disclosure of the Confidential Information
will cause irreparable injury not readily compensable in monetary damages.
Accordingly, whether in a court action or arbitration, the Disclosing Party
shall be entitled to the remedies of injunction, specific performance and other
equitable relief to redress any such breach, and no proof of special damages
shall be necessary for the enforcement of or for any action upon such
obligations and no posting of any bond or other security shall be required of
the Disclosing Party in any such action. The provisions of this Article 6 shall
not, however, be construed as a waiver of any of the other rights which the
Disclosing Party may have against any party for damages or otherwise.
ARTICLE 7
LICENSOR REPRESENTS AND WARRANTS
Licensor represents and warrants that it is the exclusive licensee of all
right, title and interest, in and to the Patent for the manufacture and sale of
Products throughout the Territory, and holds such rights free and clear of all
liens or encumbrances of whatsoever kind. Licensor confirms that it has not
granted to any party any sublicense or other rights in or to the Licensed
Technology for the manufacture, installation and sale of Products and covenants
that it will not grant any such sublicense or other rights to any party for the
manufacture, installation or sale of Products in the Territory.
ARTICLE 8
CONDUCT OF LICENSEE'S BUSINESS
page 5 of 10
8.1 Compliance with Laws. Licensee represents and warrants to Licensor
that in Licensee's performance of its obligations under this Agreement, Licensee
shall comply with any and all pertinent laws, rules and regulations applicable
to it.
8.2 Insurance. Licensee shall at all times during the term of this
Agreement, subsequent to the commencement of sales of Products, maintain general
liability insurance (including product liability insurance) (naming Licensor and
Pine as additional named insured) in an amount of not less than $500,000 per
occurrence, nor less than $1,000,000 in the aggregate. Licensee shall promptly
provide Licensor with copies of all such policies prior to the commencement of
sales of Products.
8.3 Indemnity. Notwithstanding anything to the contrary set forth herein,
Licensee shall indemnify and hold harmless Licensor and its officers, directors,
employees and agents from and against any and all losses, damages, liabilities,
claims, charges, actions, proceedings, demands, judgments settlement, costs and
expenses of any nature whatsoever (including, without limitation, reasonable
attorneys' fees and expenses) that Licensor or any other such indemnified party
may incur as a result of (i) the breach by Licensee of any representation,
warranty or covenant made or undertaken by it in this Agreement or by the breach
of any sublicensee of any representation, warranty in covenant made or
undertaken by any such sublicensee in any sublicensee agreement, (ii) the
violation by Licensee of any law, rule or regulation applicable to it, or (iii)
any product liability, advertising or any other claim with respect to any
Product installed, manufactured, offered for sale or sold by Licensee.
ARTICLE 9
PATENT
9.1 Payment of Maintenance Fees. If Licensor shall fail to prosecute or
pay the maintenance fees when due with respect to the Patent, Licensor shall
notify Licensee sixty (60) days prior to such date in writing and Licensee shall
have the right to continue to maintain such Patent at its own expense.
9.2 Notice of Infringement. Each party shall notify the other party in
writing within thirty (30) days of any suspected infringement(s) of the Patent
or of any claim by a third party that the Patent infringes the rights of others
and shall inform the other party of any evidence of such infringement(s).
Licensee shall examine any product the manufacture or sale of which is thought
by Licensor to constitute a possible infringement and inform Licensor whether
such product was manufactured or sold by Licensee and shall inform Licensor
whenever any person or entity identified by Licensor as manufacturing or selling
a product thought by Licensor to be a possible infringement is or was at any
time a customer or sublicensee of Licensee.
page 6 of 10
9.3 Prosecution of Infringement Actions. Licensee may, but shall have no
obligation to, xxx third parties alleged to be infringers of the Patent. In any
action brought by Licensee (a) Licensee shall retain full control thereof,
including the settlement or other disposition of the action, (b) all costs and
expenses shall be for the account of Licensee, and (c) any recovery shall be for
the account of Licensee. Licensor shall, at Licensee's own expense, lend such
cooperation and assistance to Licensor in the prosecution of any such
infringement suit as Licensee shall reasonably request; provided, that, Licensee
shall reimburse Licensor for the reasonable out-of-pocket expenses incurred by
Licensor in providing such cooperation and assistance. If Licensee shall fail to
institute suit to enjoin such infringement within 90 days after written
notification thereof by Licensor, then Licensor shall have the right to bring
suit in its own name. If in the case of any such suit brought by Licensor, any
recovery shall be for the account of Licensor.
ARTICLE 10
TRADEMARK
10.1 Trademark Ownership. Licensor does hereby agree to and does grant
Licensee an exclusive license to use, or sublicense others to use,the Trademark
in the Territory for the Product simultaneously with this Agreement and will
sign any additional documents required. Licensee shall have the right to file a
trademark application covering the Trademark in the name of Licensor which is
licensed under this Agreement.
10.2 Discontinuance of Use of the Trademark. Upon termination of this
Agreement, Licensee will discontinue the use of the Trademark and reassign the
Trademark to Licensor.
ARTICLE 11
TERM AND TERMINATION
The following provisions relate the term and termination of this
Agreement:
11.1 Term. Unless sooner terminated in a manner herein provided, the term
of this Agreement shall be from the date of this Agreement until the expiration
of the Patent and any patents covering any Improvements (such period being
referred to herein as the "Term").
11.2 Termination. The license granted to Licensee under this Agreement may
be terminated:
(a) by mutual agreement of the Licensor and Licensee; or
page 7 of 10
(b) by either Licensor or Licensee if the other has breached or
failed to punctually perform any of its duties or obligations under this
Agreement and such breach remains uncured or such failure to perform continues
for at least thirty (30) days after the aggrieved party has given written notice
to the other party; or
(c) by either Licensor or Licensee if the other becomes insolvent or
becomes the subject of a voluntary or involuntary petition in bankruptcy for its
reorganization or liquidation, or makes any assignment for the benefit of its
creditors, or if a trustee or receiver of its property is appointed, or takes or
is subjected to any other similar action based upon its inability to meet its
financial obligations; unless all of the above does not prevent the ongoing
business of Licensor or Licensee or to continue; or
(d) by Licensor, if Licensee provides a sublicense to any party
other than in accordance with the terms of this Agreement.
ARTICLE 12
NON-COMPETITION
Licensor hereby covenants and agrees that during the Term of this
Agreement, it shall not, and it shall use reasonable efforts to cause its
affiliates not to, directly or indirectly manufacture, market or distribute
Products within the Territory.
ARTICLE 13
MISCELLANEOUS PROVISIONS
The following miscellaneous provisions shall apply to this Agreement:
13.1 Notices. Any notices, demands, or other communications required or
permitted hereunder shall be in writing and shall be (i) sent by telecopy (and
confirmed by one of the following three methods), (ii) hand delivered, (iii)
sent by Federal Express, Express Mail or similar overnight delivery service for
priority next business day delivery, or (iv) sent by certified or registered
mail, return receipt requested, in any case addressed as follows (or to such
other address a party shall have designated by notice given to the other party
pursuant hereto), and shall be deemed given (i) when received at the recipient's
telecopy number if received before 5:00 p.m. or otherwise at 9:00 a.m. on the
next business day, (ii) when delivered if hand delivered, (iii) the next
business day after being sent if given by Federal Express, Express Mail or other
overnight delivery service or (iv) the date received if sent by certified or
registered mail, return receipt requested:
If to the Licensee: If to the Licensor:
Ergovision, Inc. IEM, Inc.
One Xxxxxxxxx Court 0000 Xxxx Xxxxxx Xxxxxx
page 8 of 10
Plainview, New York 11803 Suite 17, Xxxx Xxxxx, XX 00000
Telecopy: (000) 000-0000 Telecopy: (000) 000-0000
Attention: Xxxx X. Xxxxx, President Attention: Xxxxxxx X. Xxxx, President
13.2 Amendment, Modification or Waiver. No amendment, modification or
waiver of any condition, provision or terms of this Agreement shall be valid or
of any effect unless made in writing and signed by both parties. Any waiver by
any party of any default of another party shall not affect or impair any rights
arising from any subsequent default. Nothing herein shall limit the remedies and
rights of the parties hereto under and pursuant to this Agreement.
13.3 Entire Agreement. This Agreement contains the entire understanding of
the parties hereto with respect to the transactions contemplated hereby and
supersedes all prior writings, discussions, agreements and understandings
between the parties with respect to such subject matter hereof.
13.4 Captions, Headings, or Titles. All captions, headings or titles in
the sections of the Agreement are inserted for convenience of reference only and
shall not determine the construction or interpretation of this Agreement or a
limitation of scope of the particular sections to which they apply.
13.5 Counterparts. This Agreement may be executed in one or in more
counterparts, each of which shall be considered one and the same Agreement and
shall become effective when one or more counterparts have been signed by each of
the parties and delivered to the other party. Facsimile signatures of the
undersigned parties will have the same force and effect as original signatures.
13.6 Governing Law. This Agreement and any modifications and additions
thereto shall be governed in accordance with the laws of the State of Florida,
without regard to the conflict of laws principles thereof or the actual
domiciles of the parties hereto.
13.7 No Waiver. A waiver of any breach or failure of any term or condition
of this Agreement shall not be construed as a waiver of a subsequent breach or
failure of the same term or condition or a waiver of any other term or
conditions of this Agreement. A delay or failure to exercise any right or remedy
hereunder shall not impair such right o remedy or be construed as a waiver
thereof or an acquiescence in a default.
13.8 No Third Party Beneficiaries. No entity other than the parities
hereto and Pine is intended to be, or shall be deemed to be, a beneficiary of
any provision of this Agreement.
13.9 Assignment. This Agreement may be assigned by Licensee without the
prior written consent of Licensor. This Agreement shall be binding upon and
shall inure to the benefit of the undersigned parties and their respective
successors and assigns.
13.10 Relationship of the Parties. This Agreement shall not be construed
as constituting any party as a partner of the other or to create any other form
of legal association that would impose liability upon one party for the act or
failure to act of
page 9 of 10
another or as providing any party with the right, power or authority to create
any duty or obligation of another party.
13.11 Corporate Action. Licensor and Licensee each represent and warrant
to the other party that they have full power and authority to enter in this
Agreement and carry out the transaction contemplated hereby, and that all
necessary corporate action has been duly taken in this regard.
ARTICLE 14
INVESTMENT INTENT; RESTRICTIONS ON TRANSFER
14.1 Investment Representation. Pine (i) represents and warrants to the
Licensor that he is acquiring all of the Shares of Ergovision Stock to be issued
to him pursuant to the provisions of this Agreement for his own account and for
the purposes of investment and not with a view to, or for sale in connection
with, any distribution thereof, and (ii) agrees that he will not at anytime sell
or otherwise transfer, or permit the sale or other transfer of, such shares of
Ergovision Stock other than in transactions that are not in violation of the
Securities Act ("Act") of 1933 or the provisions of any other applicable
securities laws, rules or regulations. The Shares are subject to Rule 144 under
the Act which presently requires a holding period of twelve months before
resale.
14.2 Stock Legend. All certificates representing Shares of Ergovision
Stock to be delivered to Pine under this Agreement shall bear the following
legend:
"The securities represented hereby have not been registered
under the Securities Act of 1933, as amended, or under the securities
laws of any state and may not be sold, assigned, transferred, pledged
or otherwise disposed of except in compliance with, or pursuant to an
exemption from, the requirements of such Act or such laws."
Licensee: Licensor:
Ergovision, Inc. IEM, Inc.
By: /s/ Xxxx X. Xxxxx By: /s/ Xxxxxxx X. Xxxx
------------------------------- -------------------------------
Xxxx X. Xxxxx, President Xxxxxxx X. Xxxx, President
page 10 of 10