IDTEK
LICENSE AGREEMENT
THIS AGREEMENT is made effective as of the 1st day of August, 2000 (the
"Effective Date"), by and between ID Technologies Corporation, a North Carolina
Corporation, having a place of business and address of 0000 Xxxx Xxxx Xxxxxx,
Xxxxx X, Xxxxxx, Xxxxx Xxxxxxxx 00000 (the "Licensor"), and Xxx Xxxxxx Company,
Inc., having a place of business and address of 000 X. Xxxxx Xx., Xxxxxx -
Xxxxxx X.X. (the "License") (together, the "Parties").
WHEREAS, Licensor has obtained from Technical Partners (defined below)
a license to practice and use Technical Partners' inventions and patent(s)
(hereinafter referred to as "Technical Partners' Technology") in the Field of
License (defined below), to the extent to which they pertain to the subject
matter described and claimed in the `552 Patent and has further obtained from
Technical Partners' Technology in said Field of License to License.
WERHEREAS, Licensor desires to grant to Licensee a nontransferable,
exclusive license to the `522 Patent and also the Technical Partners Technology
to facilitate Licensee's application of the `522 Patent technology, and Licensee
desires to receive such license and technology pursuant to the terms of this
Agreement.
NOW, THEREFORE, the Parties agree that for and in consideration of the
mutual obligations contained herein, the receipt and sufficiency of which is
acknowledged, the Parties do hereby agree as follows:
1.0 Definitions
1.1 "Systems" means Licensor's fingerprint identification technology described
and claimed in the `522 Patent and the Licensor Technology (defined below).
1.2 "Licensed Patents" means the `522 Patent and other patents licensed to
Licensee hereunder.
1.3 "Subsidiary" means a corporation, company or other entity more than fifty
percent of whose outstanding shares or securities (representing the right,
other than as affected by events of default, to vote for the election of
directors or other managing authority) are, now or hereafter, owned or
controlled directly by a corporation, company or other entity which is a
party to this Agreement (either by Licensee or the Licensor), so long as
such ownership or control exists.
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1.4 "Licensee Technology" means presently existing or future developed
inventions, patents, and technology or Licensor pursuant to this Agreement.
1.5 "Technical Partners" Licensor's partners that develop and apply technology
covered by or related to the subject matter described and claimed in the
`522 Patent.
1.6 "Licensor Affiliate" shall means a Subsidiary of Licensor.
1.7 "Licensor Technology" means and includes the Licensed Patents as well as
all present and future intellectual property including rights in
inventions, patents, trade secrets, copyrights and other technology, and
any portion thereof, associated with or supportive of use of the System,
which Licensor owns or its authorized to license or otherwise transfer to
Licensee under this Agreement and which Licensor receives either from
Licensee or Technical Partners, and includes present and future Licensee
and Technical Partners' Technology, as well as other technology acquired by
Licensor with respect to which Licensor has the right to license.
1.8 "Field of License" means identification, access, and security cards,
associated systems and equipment of whatever type used for all fields,
except for the Excluded Fields of License, which are not part of otherwise
encompassed by "Field of License", unless one or more of Excluded Fields of
License (defined below) are acquired pursuant to Article 9 of this
Agreement.
1.9 "Excluded Fields of License," means the several Fields of License listed
and described in Schedule an attached hereto.
1.10 "Excluded Product" means any product or component of a product which
incorporates some or all of Licensor's Technology, or whose manufacture,
sale or use would infringe directly, contributory, or by inducement any
claim of the `522 Patent or any other patent licensed hereunder.
1.11 "Authorized Source" means a company selected by Licensor to manufacture the
Licensed Product or a company selected by License with Licensor's written
approval pursuant to Article 3.0 below.
1.12 "The Recitals and Attached Schedule" set forth in the "Whereas" provisions
on page 1 of this Agreement and the Schedule(s) attached hereto are
incorporated herein by reference and are made a part of this Agreement
herein.
2.0 Grant of Exclusive Technology License and Licensee's Intended Industries
2.1 Grant. Licensor hereby grants and conveys to Licensee, subject to the
express limitations of this Agreement and to the extent that is lawfully
may, a nontransferable, exclusive license to: (a) make and sell the System
or any component thereof only in the Field of License (b) to use such
certification xxxx(s), trademark(s) and/or other marking(s) on
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Licensed Products pursuant to Article 14 and (c) to disclose the System to
its Authorized Sources and others necessary for its practice by Licensee,
subject, however, to the confidentiality duty set forth in Article 22. It
is expressly understood and agreed that this Agreement does grant to
Licensee the right to sublicense the System with licensor's concurrence
which will not be withheld unreasonably.
2.2 Licensee's Intended Industries. Simultaneous with execution of this
Agreement, Licensee shall indicate in writing on attached Schedule C, the
industries within the Field of License that Licensee intends to pursue
under this Agreement. It is understood that Schedule C is merely for
Licensor to determine the identity of those industries to which its System
may be sold or otherwise transferred by its Licensees, and is not binding
on Licensee.
3.0 Licensee Certificate of License and Authorized Source of Licensed Product
3.1 Authorized Source List. Licensor shall provide Licensee, in a waiting, the
name and address of at least one company, to be designated as an Authorized
Source, with the expertise, skill, and knowledge to manufacture and produce
License according to Licensee's specifications and which Licensee is
prepared to develop and market. The date of the writing required by this
Article 3.1 shall determine the date upon which the Term of this Agreement,
specified in Article 12.0, begins.
3.2 Additional Authorized Sources. At any time during the term of this
Agreement, the Licensee may request adding to the list of Authorized
Sources one or more manufactures of Licensed Products within Licensee's
Field of License. Such request shall affirmatively state that the Licensee
has investigated the proposed source and has an adequate basis for
believing that the proposed source can manufacture the particular Licensed
Product of interest to the Licensee to such standards of quality and grade
at least equal to and in all respects now less reliable than the Authorized
Sources identified by Licensor pursuant to Article 3.1. Licensor, not more
than thirty (30) days after it receives the proposed Additional Authorized
Sources from Licensee, shall advise Licensee with respect to such request,
and shall not unreasonably reject such proposed source.
3.3 Licensee Certificate of License. Simultaneous with the execution of this
Agreement, Licensor shall complete a License Certificate of License, a
blank copy of which is attached hereto as Schedule B. The completed
Licensee Certificate of License shall include Licensee's corporate name,
business address, telephone number, and shall include a licensee number
assigned by Licensor. Each Authorized Source is not authorized by Licensor
to manufacture and/or transfer Licensed Products to Licensee, unless
Licensee first presents to the Authorized Source a Licensee Certificate of
License containing a valid licensee number.
3.4 Procurement. Licensee shall procure the Licensed Product only from an
Authorized Source, and only by presenting to the Authorized Source the
Licensee Certification of License.
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3.5 Licensee Not Obligated to Purchase from Persons Selected by Licensor. The
Licensee acknowledges that it is not required to obtain the product from
any person affiliated with the Licensor, and that it has a full and
sufficient opportunity to seek out alternative sources of the product and
will take such advantage of that opportunity as it independently elects,
relying exclusively on nits own business judgment and not on the
recommendation of the Licensor for that purpose. The Licensee further
warrants that it will conduct its own inspection of any Authorized Source
whose identity is provided to the Licensee by the Licensor and will
independently determine the capability and quality of such Authorized
Source to meet the requirements of the Licensee, and will not rely on the
judgment of the L8icensor for that purpose. The Licensor makes no warranty
or representation whatsoever as to the capabilities or performance of any
Authorized Source, and expressly disclaims all such warranties and
representations. If licensee elects to purchase biometric cards from
licensor or through licensor, license will purchase at cost plus a 15%
handling fee.
The Licensee shall have the right to propose modifying Licensed Product
specifications in a manner that would permit the Licensed Product to better
service customers in the Field of License. Licensor has the right to reject
such modifications, if such modified specifications call for a Licensed
Product of a lesser grade or quality that desired by Licenser or a Licensed
Product likely to impair consumer acceptance of the Licensed Products.
5.0 Development of Prototypes of Licensed Products
5.1 Upon selection of an Authorized Source for the first selected Licensed
Product within Licensee's Field of License which Licensee stands ready to
procure, develop and market in commercial quantities. Licensee shall
promptly and forthwith proceed to procure such selected Licensed Product in
prototype form from such Authorized Source, and upon procurement thereof
provide Licensor with a sample thereof.
5.2 Licensor shall within twenty-one (21) days after receipt of a sample of
Licensee's first selected Licensed Product in a prototype form suitable for
reproduction in commercial quantities promptly notify Licensee of its
approval or disapproval thereof. In the event that the Licensor shall fail
to reply within said twenty-one (21) days, the proposed prototype for shall
be deemed to be approved by Licensor. In the event of approval, which shall
not be unreasonably withheld, Licensor shall inform Licensee of the reasons
therefore and Licensee shall promptly take steps to improve such prototype
of the first selected Licensed Product and shall again submit such
prototype to Licensor for approval in accordance with the terms of this
Article 5.2
5.3 After introduction and marketing of the first selected Licensed Product as
referred to above, Licensee shall proceed to select the next and subsequent
Licensed Products in the same manner as set forth above and shall again
submit such prototype to Licensor for approval in accordance with the terms
of Article 5.2
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6.0 Warranties and Representations of the Parties
6.1 Licensors Warranties and Representations
a. The Licensor warrants that it is the owner of all right, title
and interest in Letters Patent of the United States, No.
5,623,552 dated April 22, 1997, and entitled "Self Authenticating
Identification Card With Fingerprint Identification," and has the
right to grant licenses to others to manufacture, use, and sell,
products covered by the patent, and further warrants that it has
the right to license the System to Licensee pursuant to the terms
of this Agreement.
b. Licensor also warrants that it has obtained from Technical
Partners a license in the Field of License to receive certain of
Technical Partners' Technology to the full extent to which such
technology pertains to the subject matter described and claimed
in the `522 Patent and has further obtained from Technical
Partners the right to sublicense such Technical Partners'
Technology in said Field of License to Licensee.
c. Licensor fully warrants and shall warrant throughout the term of
this Agreement that it has full, unrestricted right to grant to
Licensee the rights granted in Article 2.0
6.1.2 Prosecution of Licensor Patents. Licensor shall maintain the `522
Patent and any other presently or future existing United States or
foreign patents owned by Licensor and relating to the System.
6.1.3 Licensor Best Efforts. Licensor shall use its best efforts to
develop, improve, enhance and commercialize the System through its
dealings with its Technical Partners, Subsidiaries and Licensees.
6.1.4 Licensor Employees. Licensor represents and warrants that it shall
require its employees to assign to Licensor all intellectual property
rights to the inventions developed by its employees relating to the
System.
6.1.5 Due Organizations, Good Standing, Authority of Licensor. Licensor is
a corporation duly organized, validly existing, and in good standing
under the laws of North Carolina. Licensor has full right, power, and
authority to own its properties and assets, and to carry on its
business. To the best of Licensor's knowledge. Licensor us duly
licensed, qualified and authorized to do business, and is in good
standing in each jurisdiction in which the properties and assets owned
by it or the nature of the business conducted by it makes such
licensing, qualifications and authorization legally necessary.
Page 5
6.1.6 License Not in Conflict with Other Instruments: Required Approvals
Obtained.
6.1.6.1 To the best of Licensor's knowledge, the execution, delivery,
and performance of this License by Licensor will not (a) violate
or require any registration, qualification, or filing under, (i)
any law, statute, ordinance, rule or regulation ("Laws") of any
federal, state or local government ("Governments") or any agency,
bureau, commission or instrumentality or any Governments, or (ii)
any judgment, injunction, order, writ or decree or any court,
arbitrator, or Government.
6.1.6.2 To the best of Licensors knowledge, the execution, delivery,
and performance of this License by Licensor will not conflict
with, require any consent, approval, or filing under, result in
the breach or termination of any provision or, or constitute a
default under (i) any indenture, mortgage, deed of trust,
license, permit, approval, consent, franchise, lease, contract,
or any instrument or agreement to which the Licensor is a party
or is bound, or (iii) any judgment, injunction, order, writ, or
decree of any court, arbitrator, or government by which the
Licensor or any of its assets or properties is bound.
6.1.7 Legal Proceedings - Licensor. To the best of Licensor's knowledge,
there is no action, suit, proceeding, claim, arbitration, or
investigation by any Government or any other person (i) pending to
which the Licensor is a party, (ii) threatened against or relation to
the Licensor or any of the Licensor's assets or businesses, (iii)
challenging the Licensor's right to execute, deliver, or perform under
this License, or (iv) asserting any right against Licensor with
respect to the System, and there is no basis for any such action,
suite, proceeding, claim, arbitration, or investigation.
6.2 Licensee's Warranties and Representations
6.2.1 Licensee's Best Efforts. Licensee represents and warrants to use its
best efforts to proceed diligently with its manufacture, marketing,
distribution, and sale of the Licensed Products and Systems in the
Field of License in accordance with the terms of this Agreement.
Licensee shall at its cost and expense use its best efforts and all
due diligence to energetically and aggressively develop the market for
the Licensed Products in the Field of License, to promote the sale,
and use of the Licensed Products and to enhance the reputation and
goodwill associated with the Licensed Products and to enhance the
reputation and goodwill associated with the Licensed Products. In
connection with its obligations under this Article 6.2.1, Licensee
shall maintain facilities of a nature and style suitable in the Field
of License to facilitate the marketing, distribution, and sale of the
Licensed Products; shall provide representation in the Field of
License by means of sales and support staff sufficient in number,
qualifications, and training to aggressively and effectively promote,
market, and service the Licensed Products.
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6.2.2 Licensee Technology.
Licensee represents and warrants in recognition of mutual benefits to
be derived by Licensee, that it shall grant to Licensor a
nonexclusive, royalty free license, with the right to sublicense, to
make, use, and sell any Licensee made improvement or enhancement, or
improvement or enhancement made on behalf of Licensee, to the Licensed
Product (Licensee Technology). With regard to technology developed by
Licensee, Licensee represents and warrants that its shall have eth
sole and exclusive right to grant the license to manufacture, use,
sell, and otherwise transfer Licensee's Technology relating to the
System to Licensor.
6.2.3 Quality Of Licensed Products. Licensee represents, warrants and
covenants that it shall diligently inspect goods delivered by
Authorized Sources to assure conformity with specifications, grade and
quality satisfactory to Licensor, and shall not procure goods from any
unauthorized source. Furthermore, Licensee shall not induce any
Authorized Source to engage in adulteration, substitution or other
practices that would constitute a variance from such specifications,
grade and quality and shall not knowingly countenance any such
practices.
6.2.4License Not in Conflict with Other Instruments; Required Approvals
obtained.
6.2.4.1 To the best of Licensee's knowledge, the execution delivery,
and performance of this License by Licensee will not (a) violate
or require any registration, qualification, or filing under, (i)
any law, statute, ordinance, rule or regulation ("Laws") of any
federal, state or local government ("Governments") or agency,
bureau, commission or instrumentality of any Governments, or (ii)
any judgment, injunction, order, writ or decree or any court,
arbitrator, or Government.
6.2.4.2 To the best of Licensee's knowledge, the execution delivery
and performance of this License by Licensee will not conflict
with, require any consent, approval, or filing under, result in
the breach or termination of any provision of, or constitute a
default under (i) any indenture, mortgage, deed of trust,
license, permit, approval, consent, franchise, lease, contract,
or any instrument or agreement to which the Licensee is a party
to or is bound, or (iii) any judgment, injunction order, writ, or
decree of any court, arbitrator, or government by which the
Licensee or any of its assets or properties is bound.
6.2.5 Legal Xxxxxxxxxxx-xxxxxxxx.Xx the best of Licensee's knowledge, there
is no action, suit, proceeding, claim, arbitration, or investigation
by any Government or any other person (i) pending to which the
Licensee is a party, (ii) threatened against or relating to the
Licensee or any of the Licensee's assets or businesses, (iii)
challenging the Licensee's right to execute, deliver, or perform under
this License, or (iv) asserting any right against Licensee with
respect to the System, and there is no basis for any such action,
suite, proceeding, claim, arbitration, or investigation.
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6.2.6 Due Organization, Good Standing, Authority of Licensee. Licensee is a
corporation duly organized, validly existing, and in good standing
under the laws of __________________________ Licensee has full right,
power and authority to own its properties and assets, and to carry on
its business. To the best of Licensee's knowledge, Licensee is duly
licensed, qualified and authorize to do business, and is in good
standing in each jurisdiction in which the properties and assts owned
by it or the nature of the business conducted by it makes such
licensing, qualification and authorization legally necessary.
7.0 Assignment
Assignment. This Agreement may not be assigned by Licensee without the written
consent of Licensor, such consent not to be unreasonably withheld. Furthermore,
Licensee may not transfer this Agreement along with the sale or transfer of
Licensee's business to a third party without first obtaining the written consent
of Licensor, such consent not to be unreasonably withheld. Except as otherwise
provided under this Article 7.0, it is expressly understood and agreed that
Licensee shall not license, sublicense, or otherwise dispose of the System or
rights provided under this Agreement to any third party.
8.0 License Fee
Licensee shall pay to Licensor upon the Effective Date of this Agreement a
License Fee in the amount of $0.00 (zero) dollars.
It is understood that Licensor collects a surcharge from Authorized Source(s)
that is 10% percent of the final price, before applicable sales tax, that
Licensee pays to such Authorized Source(s) for Licensed Product.
9.0 Acquiring Rights to Excluded Fields of License
It is understood that Licensor is without the right to grant a license to make,
use, sell, sublicense or otherwise transfer the System in any of the Excluded
Fields of License listed and described in Schedule A of this Agreement. Should
Licensee desire to acquire a nonexclusive license to make, use, and sell the
System or any component thereof in one or more of the Excluded Fields of
License, Licensee shall contact Licensor in writing requesting a grant(s) of
such license(s), Licensor shall submit the request to the owner of the Field(s)
of Licensee wishes to acquire. The owner of the Field(s) of License may grant
Licensee, at its sole discretion, a nonexclusive license on owner's Field of
License. The terms and conditions of any such nonexclusive license shall be
negotiated on a case-by-case basis. Once Licensee acquires one or more of the
Excluded Fields of License, such acquired Excluded Fields of License shall be
deemed as part of Licensee's Field of License for purposes of this Agreement.
Page 8
10.0 Infringement and Indemnification
10.1 Infringement Claimed by Third Parties.
10.1.1 If the License shall be sued for infringement by reason of the
Licensee's activities under the license granted in this Agreement, the
License shall immediately notify the Licensor and the Licensor shall
defend, indemnify, and hold the Licensee harmless against any such
claims, which, if proven, would constitute a breach of any of the
Licensor's representations or warranties of Article 6.1 above.
Provided, however, that the Licensor shall not have a duty to defend
if the claim of infringement is based upon acts of the Licensee which
go beyond the scope of the Licenses granted, such as by reason of
combination of practice under the license and authorized practices,
with additional unlicensed activity, which combined licensed and
unlicensed activity shall be the subject matter of the infringement
action. Without limiting the foregoing, the Licensor shall have the
control of any such defense and the right to enter into any settlement
and/or compromise of any such claim. The Licensee shall, if requested
by Licensor, make such reasonable modifications in the practice of the
license granted under this Agreement such as would enable the practice
of the license granted under this Agreement such as would enable the
parties to avoid or mitigate any third-party claims of infringement or
misappropriation.
10.1.2 If Licensor shall be sued for infringement by reason of the
Licensor's activities under any cross-license as anticipated by
Article 6.2.2, the Licensor shall immediately notify the Licensee and
the Licensee shall defend, indemnify, and hold the Licensor harmless
against any such claims, which; if proven, would constitute a breach
of any of the Licensee's representations or warranties of Article 6.2
above. Provided, however, that the Licensee shall not have a duty to
defend if the claim of infringement is based upon acts of the Licensor
which go beyond the scope of the Licenses granted, such as by reason
of combination of practice under the license and authorized practices,
with additional unlicensed activity, which combined licensed and
unlicensed activity shall be the subject matter of the infringement
action. Without limiting the foregoing, the Licensee shall have the
control of any such defense and the right to enter into any settlement
and compromise of any such claim or action. The Licensor shall, if
requested by Licensee, make such reasonable modifications in the
practice of the license granted under this Agreement such as would
enable the parties to avoid or mitigate any third-party claims of
infringement or misappropriation.
10.2 Infringement by Third Parties. Licensor shall have the right, but not the
obligation, to institute and prosecute any and all suits to enjoin any and
all infringers of the `522 Patent where such infringement affects
Licensor's use, sale, or tights to the System, and from time to time during
the continuance of this Agreement, and at its own expense, may institute
any suit or suits it may deem necessary. The Licensor shall have the right
to institute and prosecute such suits, and to employ its own counsel for
such suits; and Licensor shall pay for all services rendered by counsel so
retained, and for all incidental costs and expenses. Licensor agrees that
Licensee may join as a party plaintiff in any suit initiated by Licensor
pertaining to infringement in the Field of License regarding the
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System; at Licensee's sole expense, where Licensee deems that joining as a
party plaintiff is necessary and in Licensee's best interest.
11.0 Limitations of Liability and Consequential Damages
IN NO EVENT, WHETHER BASED ON CONTRACT, INDEMNITY, WARRANTY, TORT
(INCLUDING NECLICENCE), STRICT LIABILITY OR OTHERWISE, SHALL LICENSOR OR ITS
SUBCONTRACTORS OR SUPPLIERS, OR ANY OF ITS RESPECTIVE DIRECTORS, OFFICERS,
EMPLOYEES OR AGENTS, BE LIEABLE FOR (I) SPECIAL, EXEMPLARY, OR PUNITIVE DAMAGES;
OR (II) ANY LOSSES OR DAMAGES ARISING OUT OF, CONNECTED WITH, OR RESULTING FROM
(A) THE PERFORMANCE OF ANY THRID PARTY NOT HIRED BY LICENSOR, (B) ANY SOFTWARE,
HARDWARE OR OTHER PRODUCT OR COMPONENT PROVIDED BY ANY THIRD PARTY, (C) THE
RELIANCE BY LICENSOR ON ANY STATEMENT OR REPRESENTATION MADE BY LICENSEE
REGARDING A THRID PARTY VENDOR; OR (D) ANY FAILURES STEMMING FROM PROBLEMS
RELATING TO THE YEAR 2000.
12.0 Term of Agreement and Renewal
The term of this Agreement shall be 15 years from the date that Licensor
provides Licensee with the name of an Authorized Source pursuant to Article 3.1
of this Agreement.
13.0 Termination
13.1 This Agreement may be terminated as follows:
a. By Mutual Agreement of the Parties.
b. If the Licensee shall (i) commence a voluntary case under the federal
or state bankruptcy laws, (ii) file a petition seeking to take
advantage of any other laws, domestic or foreign, relation to
bankruptcy, insolvency, reorganization, winding up or composition for
adjustment of debts, (iii) consent to or fail to contest in a timely
and appropriate manner any petition filed against it in an involuntary
case under such bankruptcy laws or other laws, (iv) apply for or
consent to, or fail to contest in a timely and appropriate manner, the
appointment of, or the taking of possession by, a receiver, custodian,
trustee, or liquidator or itself or of a substantial part of its
property, domestic or foreign (v) admit in writing its inability to
pay its debts as they become due, (vi) make a general assignment for
the benefit of creditors, (vii) become the subject of a case or other
proceeding in any court of competent jurisdiction seeking relief under
the federal bankruptcy laws or under any other laws, domestic or
foreign, relating to bankruptcy, insolvency, reorganization, winding
up or adjustment of debts, which proceeding shall continue undismissed
or unstayed for a period of sixty consecutive calendar days, or an
order granting the relief requested shall be entered, or (ix) become
the subject of the appointment shall continue indismmissed or unstayed
for a period of sixty consecutive calendar days.
c. If Licensee, without having first terminated this Agreement and ceased
obtaining any of the benefits of this Agreement challenges the
validity of any parent
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Purported to be licensed by the Licensee under this Agreement.
d. If Licensee does not procure Licensed Product from the Authorized
Source pursuant to Article 3.4
e. By either party due to the other party's material breach of its
obligations under this Agreement, upon giving written notice.
13.2 Upon terminations of this Agreement, any and all rights which the Licensee
shall have or possess, under this Agreement shall permanently cease and be
by it relinquished and surrendered to the Licensor. If such termination is
not due to a Licensee breach of this Agreement, Licensee shall have the
right to sell all Licensed Products already manufactured and in its
possession for a period of three (3) months following the termination date.
Should termination of this Agreement be due to a Licensee breach, than
Licensee shall, upon termination, transfer all Licensed Products to
Licensor (unless otherwise agreed to in writing by Licensor).
14.0 Marketing
The Licensee shall use such certification xxxx(s), trademark(s), and/or
other marking(s) as may from time to time be adopted by the Licensor to indicate
to the public that the Licensed Products are genuine licensed products, and/or
to indicate the patent protection applicable thereto (Licensor Xxxx(s)). The
Licensee shall in any event when requested by Licensor xxxx the patent number of
each patent covering the Licensed Products, on each Licensed Product
manufactured, sold or otherwise distributed by the Licensee in a manner
satisfactory to Licensor, and shall use the trademark registration symbol
adjacent any registered trademark to the extent permitted by law. However, it is
agreed and is understood that Licensee may use its own certification xxxx(s),
trademarks, and/or other marking(s) (Licensee Xxxx(s)) as Licensee may from time
to time adopt, on Licensed Products. It is further agreed and understood that
Licensee may use Licensee Xxxx(s) conspicuously on Licensed Products, and may
use Licensor Xxxx(s) less conspicuously. By way of example, Licensee may apply
Licensee Xxxx(s) in large bold type or design on the primary display surface of
Licensed Product and apply Licensor Xxxx(s) on a secondary surface of Licensed
Products in a small, but readable, type or design.
15.0 No Business Opportunity or Franchise
This Agreement is not intended to be, and shall not be construed to be, the
granting of a business opportunity or of a franchise under the laws of the
United States or any state or territory thereof. The Licensee warrants to the
Licensor that the Licensee possesses business expertise relevant to the field in
which it will engage pursuant to the license granted herein. The Licensee advice
or acknowledges that the Licensor is not obligated by this Agreement to provide
any business advice or business assistance of any kind or nature whatsoever,
including but not limited to the provision of a prescribed marketing plan or
system, and warrants that the Licensee has not received, and does not expect to
receive, any business advice or assistance from Licensor on which it has relied
or intends to rely in any manner whatsoever. The Licensee further acknowledges
that the Licensee, in evaluating the property of entering into this Agreement,
has relied exclusively on its own advisors and not on any representations made
by the Licensor except such representations as are expressly stated in the words
of this Agreement.
Page 11
16.0 No Investment or Securities Offering
The Licensee represents and warrants that the Licensor shall not, by reason
of entering into this license with the Licensee, be or become obligated to file
a registration statement with the Securities and Exchange Commission to qualify
the License to fall under the blue sky laws of any state. Furthermore,
notwithstanding any other provision of this Agreement, the Licensee shall not
enter into any transaction regarding the License that would require the Licensor
to file a registration statement with the Securities and Exchange Commission to
qualify the License to fall under the blue sky law of any state. Any violation
of this Article 16.0 is a material default that shall entitle the Licensor to
terminate this Agreement.
17.0 Consent to Advertising and Publicity
The Licensor may issue and disseminate to the public information describing
the license entered into with the Licensee, including the name and address of
the Licensee, the general terms of the agreement, and a general description of
the Licensee's business.
18.0 Governing Law
This Agreement shall be interpreted and construed in accordance with the
laws of the United States and the laws of the State of North Carolina.
19.0 Independent Contractors
The Parties to this Agreement are independent contractors. Nothing in this
Agreement is to be construed as making either party an agent of or join venturer
with the other.
20.0 Complete Agreement and Modification
This Agreement represents the entire agreements, both written and oral of
the Parties, and supersedes and replaces any prior written or oral agreements
between Licensee and Licensor. This Agreement may be amended only in a writing
stating that it is an amendment or modification of this Agreement, and signed by
an authorized representative or each of the Parties hereto.
21.0 Notes
Any notice required to be given under this Agreement shall be properly
given if delivered by first-class mail as follows:
ID Technologies Corporation
---------------------------
0000 Xxxx Xxxx Xxxxxx, Xxxxx X
---------------------------
Xxxxxx, Xxxxx Xxxxxxxx 00000
---------------------------
Attention: President
---------------------------
X. Xxxxxxxx L Xxxxxxxx
Page 12
22.0 Confidentiality
The Parties acknowledge that in order to carry out the License granted
hereunder, it may be necessary for either Parties to transfer or disclose
certain trade secrets that have been developed by Licensor and/or Licensee, or
on their behalf at great expense and that have required considerable effort of
skilled professionals. The Parties acknowledge and agree that in no event shall
either Party disclose any such trade secrets to any third party. In the event
that it is necessary to transfer or otherwise disclose such trade secret and
confidential information shall require the party to which the information is
being disclosed to sign a confidentiality agreement, requiring that in no event
shall the receiving party disclose any such trade secrets and confidential
information to a third party. Confidential information shall be that information
disclosed or transferred to either Party that is marked "Confidential," or
information disclosed or transferred to either party that at the time of such
disclosure or transfer the party receiving such disclosure was informed that the
information must be treated by the receiving Party as confidential.
23.0 Arbitration
Any dispute under this Agreement not resolved within thirty (30) days of
notice to the other party shall be submitted to binding arbitration under the
rules of the American Arbitration Associated then in effect. There shall be no
appeal from the decision other than for gross violation of due process or fraud
in the conduct of the arbitration. Judgment upon the decision may be entered in
a state or federal court, as may be appropriate, selected by the party of whom
arbitration was requested, or, if that party declines to promptly select such a
court, in a court selected by the party who had requested arbitration. The
parties irrevocably agree, for this purpose only, to submit to the jurisdiction
of such a court, or application may be made to such court for confirmation of
the decision, for the judicial acceptance thereof, for an order of enforcement,
or for any other legal remedies that may be necessary to effectuate the
decision. The expense of the arbitration and/or arbitrators costs, including
without limitations its own costs of preparation, attorney's fees, and witness
fees and expenses. In the event of litigation between the Parties, arbitration
may be so requested at any time prior to the beginning of a trial. Any required
arbitration shall be held at a site in North Carolina as determined by Licensor.
24.0 Severability
If any provisions of this Agreement shall be construed to be illegal or
invalid, the legality of the validity of any other provisions hereof shall not
be affected hereby. Any illegal or invalid provision of this Agreement shall be
severable, and all provisions shall remain in full force and effect.
Page 13
25.0 Survival of Representations and Warranties
All of the representations and warranties of the parties contained in this
Agreement, the indemnification provisions of Article 10, and the Limitations of
Liability and Consequential Damages provisions of Article 11 shall survive
termination of this Agreement.
IN WITNESS WHEREOF, the parties hereto have through a duly authorized
officer thereof duly executed this Agreement on the dates indicated below to be
effective as of the day first indicated above.
ID Technologies Corporation (Licensor) ______________________(Licensee)
By: /s/ X. Xxxxxxxx L Xxxxxxxx By: Xxx Xxxxxx
------------------------------- --------------------------------
J Xxxxxxxx L Xxxxxxxx Xxx Xxxxxx
Title: President Title President & CEO
Date: August 10, 2000 Date: August 10, 2000
The following Schedules, when initialed by both parties, are incorporated herein
by reference:
LICENSOR LICENSEE
N/A N/A Schedule A
----------------- -------------
Schedule B
---------------- -------------
Schedule C
---------------- -------------
Page 14
SCHEDULE B
CERTIFICATE OF LICENSE
[NAME OF LICENSEE]
--------------------------------
--------------------------------
--------------------------------
Street
--------------------------------
City, State, Zip Code
Licensee Number: _______________________
Authorized By: _________________________ Date: ______________
Officer of ID Technologies Corporation
Xxxxxx Xxxxxxx
Page 16
IDTEK
SCHEDULE C
LICENSEE'S INTENDED INDUSTRIES
EXCLUSIVE LICENSE FOR ALL FEDERAL, STATE, COUNTY, CITY AND PRIVATE PRISONS IN
THE USA FOR ALL PRISON APPLICATIONS INCLUDING PRISON PERSONNEL AND INMATES.
[GRAPHIC OMITTED] [GRAPHIC OMITTED]
Xxx Xxxxxx IDTEK
--------------------------------- --------------------------------
Xxx Xxxxxx Company, Inc. ID Technologies
XX Xxx 000 CORPORATION
000 X Xxxxx Xxxxxx X. Xxxxxxxx X. Xxxxxxxx. X.X.
Xxxxxx-Xxxxxx, XX 00000 President/CEO
Xxx Xxxxxx, President Tel: (000) 000-0000x000
0000 Xxxxxx Xx. Fax: (000) 000-0000
phone: (000) 000-0000 ID Technologies Corporation
phone: (000) 000-0000 NCSU Centennial Campus
fax: (000)000-0000 000 Xxxx Xxxxxx Xx - Xxxxx 000
Xxxxxxx XX 00000
ID Technologies Corporation
--------------------------------------------------------------------------------
NCSU Centennial Xxxxxx-000 Xxxx Xxxxxx Xxxxx - Xxxxx 000 - Xxxxxxx, XX 00000
Phone:(000)000-0000x000 - Fax (000) 000-0000
October 4, 2000
Mr. Xxx Xxxxxx
President
Xxx Xxxxxx Company, Inc.
000 Xxxx Xxxxx Xxxxxx
Xxxxxx-Xxxxxx, XX 00000
Dear Xxx,
Thank you for your investment of $300,000.
You are being issued a certificate for 375,000 shares of stock and an
exclusive prepaid license for detention systems at a 10% royalty and 15%
surcharge.
You might want to share our tax handbook with you attorney and Xx. Xxx
Xxxxxx, your CFO. We cannot guarantee that you will receive any tax benefit when
investing in IDTEK.
We look forward to seeing you at Xxxxxx and Xxxxxxx, 0000 Xxxxxxxx
Xxx., Raleigh, Monday, October 23rd at 10 am for our shareholder meeting.
With best personal regards,
Sincerely,
/s/ X. Xxxxxxxx X. Xxxxxxxx
X. Xxxxxxxx X. Xxxxxxxx
President
Xxx Xxxxxx Company, Inc.
------------------------
o 375,000 shares of IDTEK
o IDTEK is qualified under North Carolinass.125 for 25% tax credit; $225,000
is the net cost if the credit is allowed.
o IDTEK also qualified as a small business under Federal Tax Code; there
should be no capital gain tax on $150,000 half after a 5 year holding
period.
o Exclusive license for prison systems in North America.
Terms of License
----------------
o 10% Royalty
o Xxx Xxxxxx Company, Inc. does not have to purchase biometric fingerprint
cards from IDTEK or out manufacturers.
o If elects to purchase from IDTEK or our manufacturers, IDTEK will sale at
its cost plus a 15% handling fee.
o Xxx xxxxxx, Inc. is responsible for marketing to the prison system and
developing the applications for prisons.
o If the stock bid price is 80(cent), the license is essentially free. If
56.2(cent)(9/16), the license cost would be $89,062. If 50(cent), the
license cost would be $112,500
