Technology Marketing and License Agreement
This Technology License Agreement ("Agreement") is entered into
between HYPERLIGHT NETWORK CORPORATION, a Delaware corporation ("Licensor")
and TELECOM WIRELESS CORPORATION, a Utah corporation with its stock symbol
(OTCBB:NOYR) ("Licensee").
Recitals
A. Licensor and its predecessors have developed certain Technology and
has, or will, enter into an agreement with an unaffiliated entity (the
"Licensor's Designated Manufacturer") to manufacture DSX Units which
will incorporate the Technology for commercial purposes.
B. Licensor is in the process of obtaining ownership of, and the right to
grant a license, manufacturing, and marketing rights with respect to
the Technology and the DSX Units.
C. Licensor and the Licensor's Designated Manufacturer are also planning
to test the Technology to determine the produceability and scalability
of the DSX Units, which will incorporate the Technology.
D. The Licensor's Designated Manufacturer will conduct certain testing of
the Technology and the DSX Units and, if the testing is completed
satisfactorily, is expected to enter into a license agreement for the
manufacture of the DSX Units, incorporating the Technology into the DSX
Units.
E. If the Licensor's Designated Manufacturer fails to exercise its option
to enter into a license agreement for the manufacture of the DSX Units,
the Licensor will use its best efforts to make the DSX Units available
to the Licensee through another manufacturer.
Now, therefore, in consideration of the mutual promises and
covenants contained herein, the sufficiency of which both the Licensor and
the Licensee acknowledge, the parties agree as follows:
1. Definitions
a. The term "Effective Date" means the later of the following: the
date the last party executes this Agreement and delivers it to the other
party, or the date the Licensor designates a Licensor's Designated
Manufacturer to the Licensee pursuant to paragraph 3.b, below.
b. The term "IP" means the Technology together with any other
intellectual property anywhere in the world, including patents, patent
applications, copyrights, trademarks, service marks, logos, Internet domain
names, trade names, trade secrets, and other confidential or proprietary
information based on, related to, or in connection with the Technology which
is owned by the Licensor.
c. The term "Technology" means that certain high speed, broadband
technology useful in carrying voice, data and video signals in either analog
or digital format owned by the Licensor, including all improvements and
enhancements thereto owned by the Licensor.
d. The term "Territory" means the entire world.
e. "DSX Units" mean those certain switchable and routable, DSX,
broadband transmission DSX Units developed and built for testing purposes
only by Madison Priest that employ the IP. The term "DSX Units" when used
herein does not include units that are not switchable or routable which are
commonly referred to as "DSL Units."
2. License.
a. Subject to any license for the DSX Units and the Technology
incorporated therein which is delivered to the Licensee in connection with
the acquisition of the DSX Units from the Licensor's Designated Manufacturer
and subject further to the additional terms and conditions contained herein,
Licensor grants Licensee a non-exclusive, irrevocable but terminable in
accordance with the provisions of this Agreement, non-transferable license to
market the DSX Units to provide video, data, and telephony ("Broadband
Services") pursuant to the terms and conditions of this Agreement. Although
this license is non-transferable, the Licensee may enter into distributor
sublicenses and end-user sublicenses with other parties as permitted in
Paragraph 4 below. This license does not grant the Licensee any authority to
market the DSX Units in Governmental Applications as defined in Exhibit "A".
b. Subject to any license for the DSX Units and the Technology
incorporated therein which is delivered to the Licensee in connection with
the acquisition of the DSX Units from the Licensor's Designated Manufacturer
and subject further to the additional terms and conditions contained herein,
Licensor further grants Licensee a non-exclusive, irrevocable but terminable
in accordance with the provisions of this Agreement, non-transferable license
to market, directly and indirectly, all products related to Broadband
Services containing DSX applications then being offered by the Licensor in
the Territory. Although this license is non-transferable, the Licensee may
enter into distributor sublicenses and end-user sublicenses with other
parties as permitted in Paragraph 4 below.
c. Licensee will maintain at its own expense all regulatory
compliance necessary or appropriate for it to comply with its obligations
under this Agreement. Licensee will, on Licensor's request not more
frequently than annually, provide the Licensor with documentation to
substantiate such regulatory compliance. If the Licensee seeks to market the
DSX Units outside of the United States, Licensee will, prior to entering into
the first distributor sublicense or end-user license outside of the United
States, provide the Licensor with documentation substantiating such
regulatory compliance. In addition, the Licensee will notify the Licensor
each time there is a material change to regulatory compliance required by
this paragraph.
3. Acquisition of DSX Units from the Licensor's Designated Manufacturer
a. Licensee agrees that it will acquire the DSX Units only from the
Licensor's Designated Manufacturer, as the Licensor's Designated Manufacturer
may be designated from time-to-time by the Licensor subject to the terms and
conditions the Licensor's Designated Manufacturer or the Licensor may impose.
It is expected that the terms will include, but may not be limited, to the
following:
i. Use and installation of the DSX Units in a manner consistent
with the Licensor's Designated Manufacturer's and the
Licensor's instructions;
ii. Maintenance of any labeling or other identification installed
on any DSX Units by the Licensor's Designated Manufacturer;
iii. Each right to use the DSX Units will be conditional on the
end-users continuing compliance with the revenue-sharing and
accounting provisions of this agreement and any successor
agreement addressing those points; and
iv. Prevention from disassembly of or reverse engineering the DSX
Units in any respect.
v. Notification and compliance provisions imposed on the end-user
and distributor similar to those imposed on the Licensee in
paragraph 2(c), above.
b. Licensee agrees that the Licensor may designate from time-to-time
one or more Licensor's Designated Manufacturers with whom it has a
manufacturing relationship with respect to the Territory and which are
capable of producing the DSX Units, but the Licensee further agrees that the
Licensor:
i. has no obligation to maintain any particular manufacturing
relationship;
ii. has no obligation to set or establish the terms or conditions
of any acquisition of DSX Units;
iii. has no liability with respect to delivery obligations or any
warranty with respect to any DSX Units licensed by the
Licensee; and
iv. offers no warranty with respect to any DSX Units, including
specifically (and without limitation) no warranty of
merchantability or fitness for a specific purpose, which
warranties the Licensor specifically disclaims.
The Licensee agrees that, with respect to any DSX Units marketed by the
Licensee pursuant to this License Agreement, the Licensor has no liability to
the Licensee or any sublicensee under Article 2 of the Uniform Commercial
Code ("Sales") as adopted in any state of the United States or any comparable
law, custom, or practice anywhere in the world. The Licensee specifically
acknowledges and agrees that, to the extent the Licensee or any sublicensee
requires any warranty, delivery obligation, or other term or condition of
purchase, the Licensee or sublicensee must negotiate such terms with the
Licensor's Designated Manufacturer.
4. Sublicense.
a. (i) The Licensor hereby grants the right and privilege to the
Licensee to market the DSX Units and to enter into sublicenses consistent
with this Agreement with other distributors for the purpose of marketing the
DSX Units (a "distributor sublicense"), provided all sublicensees agree that
any distributor sublicense granted (which distributor sublicense is
directly or indirectly related to the subject matter of this Agreement) is
specifically subject to the terms of this Agreement.
(ii) The Licensor hereby grants the right and privilege to
the Licensee to market the DSX Units and to enter into sublicenses consistent
with this Agreement ("end-user sublicense") with persons who will place the
DSX Units in service to provide (or obtain) Broadband Services.
(iii) The Licensee will promptly notify the Licensor of any
distributor sublicense or end-user sublicense entered into by the Licensee,
and will provide a copy of the sublicense agreement to the Licensor as
executed by both the Licensee and the sublicensee within five days of the
sublicense having been executed by the parties.
b. The Licensee agrees to monitor the performance of all persons
with whom it has entered sublicenses as to their compliance with the terms of
this License Agreement and to enforce the terms of this License Agreement
from time to time as may be necessary against any of its sublicensees to
ensure such sub-licensee's compliance with the terms of this License
Agreement and the sublicense agreement.
c. Each distributor sublicense granted hereunder must be expressly
stated to be subject to, and terminable upon termination of, this Agreement.
Upon termination of this Agreement or any distributor sublicense granted
hereunder, the Licensee must obtain from each distributor sublicensee and
return to the Licensor each Unit acquired from the Licensor's Designated
Manufacturer or any other source pursuant to this Agreement unless the
Licensee and the Licensor make other arrangements with respect to the
continuation of any of the sublicenses on other terms following such
termination.
d. Each end-user sublicense not then in default will survive the
termination of this Agreement.
e. Each end-user sublicense and distributor sublicense will be in a
form as may be designated from time-to-time by the Licensor. Neither the
Licensee nor any other person but the Licensor has any authority to make any
changes to the form of sublicense except to complete any blanks set forth on
the form. The end-user sublicense agreements and the distributor sublicense
agreements will, among other provisions, provide that they:
i. are expressly subject to the terms of this Agreement,
ii. provide adequately for the protection of the Technology and
the integrity of the DSX Units,
iii. provide for the accurate reporting of all revenues received
from the further license of the DSX Units and such other
information necessary to determine, accurately, the license
fee required hereunder,
iv. provide for the ability of the Licensee and its agents or
representatives to review and audit the relevant books and
records of the sublicensee, and
v. appoint the Licensor as the Licensee's agent for all actions
of the Licensee permitted or required under the sublicense
(with the understanding that the
Licensor will not be required to take any action, and that the
responsibility for taking any actions lies solely with the
Licensee).
vi. Compliance with all federal, state, local, provincial, or
other domestic regulations in the United States or elsewhere
necessary or appropriate for it to comply with its obligations
under any end-user sublicense or distributor sublicense, as
appropriate. Licensee will, on Licensor's request not more
frequently than annually provide the Licensor with
documentation to substantiate such regulatory compliance. In
addition, the end-user sublicensee or the distributor
sublicensee will notify the Licensee (which will promptly
notify the Licensor) each time there is a material change to
regulatory compliance required by this paragraph.
vii. Provide for termination and assignment provisions consistent
with Paragraph 11 hereof
5. License Fee
a. In consideration for the license granted by Licensor under this
Agreement, Licensee shall pay Licensor a fee as set forth in Exhibit A (the
"License Fee").
b. Each installment of the License Fee shall be due and payable in
accordance with the Payment Schedule set forth in Exhibit A. All amounts not
paid within ten (10) days of the due date shall bear interest at the rate of
one and one-half percent (1.5 %) per month, or at the highest rate allowed by
law, whichever is less, from the date due until paid. Failure of Licensee to
pay any amounts when due shall constitute sufficient cause for Licensor to
terminate this Agreement. Each payment of any installment of the license fee
shall be accompanied by reasonably detailed records from the Licensee
sufficient to allow the Licensor to determine whether the calculation of the
Licensee Fee appears to be correct.
c. Licensee shall, in addition to the other amounts payable under
this Agreement, pay all sales, use, value added or other taxes, federal,
state or otherwise, however designated, which are levied or imposed by reason
of the transactions contemplated by this Agreement.
d. Licensor, its agents and representatives, shall have the right to
review and audit the Licensee's books and records relating to the accrual and
the payment of the license fee from time-to-time during the Licensee's normal
business hours. The Licensee will pay 110% of the costs of any such audit or
review (including the reasonable costs of employees of the Licensor involved
in such audit or review) if any audit or review of the Licensee's books and
records pursuant to this paragraph reveals:
i. an underpayment of the License Fee by more than 5%; or
ii. failure by the Licensee to maintain books and records reasonably
necessary to determine the amount of the license fee due to the extent
the Licensee accrues any obligation to pay the Licensor a fee; or
iii. failure by the Licensee to ensure that its sublicensees maintain
adequate books and records to the extent the Licensee accrues any
obligation to pay the Licensor a fee; or
iv. failure by the Licensee to receive adequate reports from any
sublicensee from whom reports may be due.
6. Ownership
a. Title. Licensee and Licensor agree that Licensor owns and will
continue to own all proprietary rights, including patent, copyright, trade
secret, trademark and other proprietary rights, in and to the IP, including
any corrections, fixes, enhancements, updates or other modifications thereto,
whether made by Licensee, or any third party.
b. Title to DSX Units. The Licensor disclaims any warranty as to
title to the DSX Units. The Licensee acknowledges that the Licensee must
obtain whatever warranties as to title to, or merchantability, or fitness for
a particular purpose of, the DSX Units the Licensee may desire from the
Licensor's Designated Manufacturer.
7. Limitations Period
No arbitration or other action under this Agreement, unless
involving death or personal injury, may be brought by either party against
the other more than one (1) year after the cause of action arises.
8. No Consequential Damages
Licensor shall not be liable to Licensee for indirect, special,
incidental, exemplary or consequential damages (including, without
limitation, lost profits) related to this Agreement or resulting from
Licensee's use or inability to use the IP or the inability of the Licensor's
Designated Manufacturer to make DSX Units available in quantities sufficient
to meet any purchase order submitted by Licensee, or arising from any other
cause of action whatsoever, including contract, warranty, strict liability,
or negligence, even if Licensor has been notified of the possibility of such
damages.
9. Limitation on Recovery
Under no circumstances shall the liability of Licensor to Licensee
exceed the amounts paid by Licensee to Licensor under this Agreement.
10. Indemnification
Licensor shall indemnify and hold harmless Licensee from and against any
claims, including reasonable legal fees and expenses, based upon infringement
of any United States copyright, trademark, or patent by the DSX Units.
Licensee agrees to notify Licensor of any such claim promptly in writing and
to allow Licensor to control the proceedings. Licensee agrees to cooperate
fully with Licensor during such proceedings. Licensor shall defend and shall
have the further right, in its sole discretion, to settle at its sole expense
all proceedings arising out of the foregoing.
11. Terms and Termination
a. Effective Date and Term. This Agreement and the license granted
hereunder shall take effect upon the Effective Date that the last party
executes this Agreement and shall continue (unless sooner terminated pursuant
to paragraph 11.b, below, for 5 years following the Effective Date.
b. Termination. Each party shall have the right to terminate this
Agreement and the license granted herein upon the occurrence the following
events (each an "Event of Default"):
(i) In the event the other party violates any provision of this
Agreement.
(ii) In the event the Licensee (A) terminates or suspends its
business, (B) becomes subject to any bankruptcy or insolvency
proceeding under Federal or state statute, (C) becomes
insolvent or subject to direct control by a trustee, receiver
or similar authority, or (D) has wound up or liquidated,
voluntarily or otherwise.
(iii) Within 30 days from the date the last party executes this
Agreement and delivers it to the other party upon the request
from either party that the parties enter into a new agreement
setting forth in more detail the obligations of the parties
hereto.
(iv) By the Licensor if the Licensee does not provide the Licensor
with a purchase order for a minimum of 50,000 DSX Units,
backed by an irrevocable letter of credit for $50,000,000 (not
later than November 1, 1999), which purchase order and letter
of credit are satisfactory to the Licensor in the Licensor's
sole discretion.
c. Notice and Opportunity to Cure. Upon the occurrence of an Event
of Default, a party shall deliver to the defaulting party a Notice of Intent
to Terminate that identifies in detail the Event of Default.
(i) If the Event of Default (described in 11(b)(i), (ii), or
(iii)) remains uncured for thirty (30) days, the
non-defaulting party may terminate this Agreement and the
license granted herein by delivering to the defaulting party a
Notice of Termination that identifies the effective date of
the termination, which date shall not be less than thirty (30)
days after the date of the Notice of Intent to Terminate.
(ii) If the Event of Default (described in 11(b)(iv)) occurs, the
Licensor may terminate this Agreement and the license granted
herein by delivering to the Licensee a Notice of Termination
that identifies the effective date of the termination, which
date shall not be less than five (5) days after the date of
the Notice of Intent to Terminate.
d. Effect of Termination. Termination of this License Agreement does
not operate to terminate any end-user license then existing that is in
good-standing. The Licensor may give notice to the holder of the end-user
license and the distributor sublicense at any time after the occurrence of an
Event of Default, however, and direct the end-user licensee and the
distributor sublicensee to make all future payments and owe all further
obligations to the Licensor.
12. Assignment
a. Licensee shall not assign or otherwise transfer the license
granted hereby to anyone, including any parent, subsidiaries, affiliated
entities or third parties, or as part of the sale of any portion of its
business, or pursuant to any merger, consolidation or reorganization, without
Licensor's prior written consent, which consent the Licensor will not
unreasonably withhold. Licensor acknowledges that Licensee is engaged in
negotiations for a business combination with FlashNet. Licensor hereby
accepts an assignment of this agreement to FlashNet in conjunction with the
completion of such business combination. Licensor agrees to keep all material
nonpublic information received regarding Licensee's proposed business
combination with FlashNet confidential.
b. Licensee may enter into sublicense arrangements with end-users of
the DSX Units or distributors provided such arrangements:
i. are expressly subject to the terms of this Agreement,
ii. provide adequately for the protection of the Technology and
the integrity of the DSX Units,
iii. provide for the accurate reporting of all revenues received
from the further license of the DSX Units and such other
information necessary to determine, accurately, the license
fee required hereunder,
iv. provide for the ability of the Licensee and its agents or
representatives to review and audit the relevant books and
records of the sublicensee, and
v. appoint the Licensor as the Licensee's agent for all actions
of the Licensee permitted or required under the sublicense
(with the understanding that the Licensor will not be required
to take any action, and that the responsibility for taking any
actions lies solely with the Licensee).
13. Arbitration
The parties shall settle any controversy arising out of this
Agreement by arbitration in Denver, Colorado, in accordance with the rules of
the Judicial Arbiter Group, Inc., Denver, Colorado ("JAG"). The parties shall
agree upon a single arbitrator or, if the parties cannot agree upon an
arbitrator within thirty (30) days, then the parties agree that a single
arbitrator shall be appointed by the JAG. The arbitrator may award attorneys'
fees and costs as part of the award. The award of the arbitrator shall be
binding and may be entered as a judgment in any court of competent
jurisdiction.
14. Notices
All notices under this Agreement are to be delivered by (i)
depositing the notice in the mail, using registered mail, return receipt
requested, addressed to the address below or to any other address as the
party may designate by providing notice, (ii) telecopying the notice by using
the telephone number set forth below or any other telephone number as the
party may designate
by providing notice, (iii) overnight delivery service addressed to the
address below or to any other address as the party may designate by providing
notice, or (iv) hand delivery to the individual designated below or to any
other individual as the party may designate by providing notice. The notice
shall be deemed delivered (i) if by registered mail, four (4) days after the
notice's deposit in the mail, (ii) if by telecopy, on the date the notice is
delivered, (iii) if by overnight delivery service, on the day of delivery,
and (iv) if by hand delivery, on the date of hand delivery.
LICENSOR:
HyperLight Network Corporation
000 Xxxxx Xxxx Xxxxx
Xxxxxx, Xxxxxxx 00000
Attention: J. Xxxx Xxxxxx - President
Telecopy No.: 000-000-0000
with a copy (which does not constitute notice) to:
Xxxxxx Xxxxxxxx, X.X.
Xxxxx 000, Xxx Xxxxxxxx
0000 XXX Xxxxxxx
Xxxxxxxxx, XX 801 11
Attn: Xxxxxxx X. Xxxxxxxx, Xx., Esq.
Telecopy: 000-000-0000
and to
Wollins, Xxxxxxx & Green
000 Xxxxx Xxxxxxxx Xxxx
Xxxxx 000-X
Xxxxxx, XX 00000
Attn: Xxxxx X. Xxxxxxx, Esq.
Telecopy: 000-000-00 11
LICENSEE:
Telecom Wireless Corporation
0000 XXX Xxxx, 00xx Xxxxx
Xxxxxxxxx, XX 00000
Attention: Xxx X. Xxxxxx, Esq. - Corporate Counsel
Telecopy No.: 000-000-0000
15. General Provisions
a. Complete Agreement. The parties agree that this Agreement is the
complete and exclusive statement of the agreement between the parties, which
supersedes and merges all prior proposals, understandings and all other
agreements, oral or written, between the parties relating to this Agreement.
b. Amendment. This Agreement may not be modified, altered or amended
except by written instrument duly executed by both parties.
c. Waiver. The waiver or failure of either party to exercise in any
respect any right provided for in this Agreement shall not be deemed a waiver
of any further right under this Agreement.
d. Severability. If any provision of this Agreement is invalid,
illegal or unenforceable under any applicable statute or rule of law, it is
to that extent to be deemed omitted. The remainder of the Agreement shall be
valid and enforceable to the maximum extent possible.
d. Governing Law. This Agreement and performance hereunder shall be
governed by the laws of the State of Delaware.
e. DSL License. When and if Licensor commences the marketing and
sale of DSL licenses, the Licensor will provide Licensee with a license on
the most favorable terms offered to third parties for placing orders for
similar quantities and delivery requirements.
f. Read and Understood. Each party acknowledges that it has read and
understands this Agreement and agrees to be bound by its terms.
AGREED:
LICENSOR:
HyperLight Network Corporation Date: 9/13 , 1999
-------------------
By: /s/ J. Xxxx Xxxxxx
--------------------------
J. Xxxx Xxxxxx, President
000 Xxxxx Xxxx Xxxxx
Xxxxxx, Xxxxxxx 00000
Telephone: 000-000-0000
Facsimile: 000-000-0000
LICENSEE:
TELECOM WIRELESS CORPORATION Date: , 1999
-------------------
By: /s/ Xx. Xxxxx X. Xxxxxxx
--------------------------
Xx. Xxxxx X. Xxxxxxx, CEO
0000 XXX Xxxx, 00xx Xxxxx
Telephone: 000-000-0000
Facsimile: 000-000-0000
EXHIBIT A
TO
TECHNOLOGY MARKETING AND LICENSE AGREEMENT
License Fee and Payment Schedule
1. License Fee
The License Fee shall be 50% of any revenues the Licensee receives
from any person attributable to any end-user sublicense for the commercial or
consumer use of the DSX Units (as that term is defined in this agreement).
Subject to the exceptions contained in the following sentence, if
the Licensor offers any third party a more favorable License Fee, this
agreement will be automatically amended to adopt such more favorable License
Fee. This does not include any license terms offered to the Licensor's
Designated Manufacturer for the sale of DSX Units or DSL Units in Government
Applications, defined as follows:
(A) to employ the IP, including all portions thereof, and to use, sell,
and offer to sell products purchased, leased, or otherwise acquired
from licensees and sublicensees of Licensor, or for which Interactive
has paid a royalty to Licensor pursuant to Paragraph 1, above, using or
based upon the IP and any portion thereof to provide integrated
broadband systems (the "Broadband Systems") to the U.S. Government, its
agencies, departments and designees which may include the provision of,
directly and indirectly, Broadband Services to other governmental
entities and
(B) to market worldwide, directly and indirectly, all products related
to such Government Applications then being offered by Licensor.
2. Payment Schedule
a. The Licensee must make payment of all amounts due to the Licensor
within five business days after the Licensee's receipt of payment from its
sublicensee.
b. TWC will provide accounting for all billing on a Quarterly basis
and TWC will provide copy of audited financials within 60 days of the close
of any quarter.
