EXHIBIT 10.6 - TECHNOLOGY LICENSE AGREEMENT WITH COLOR-SPEC TECHNOLOGIES, INC.
TECHNOLOGY LICENSE AGREEMENT
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THIS TECHNOLOGY LICENSE AGREEMENT (the "Agreement"), effective as of the
Effective Date of October 3, 2001, is entered into by and between Color-Spec
Technologies, Inc., a Colorado Corporation having a principal place of business
located at 0000 X. 0xx Xxxxxx, Xxxxxx, XX 00000, ("Licensor") and Real Estate
Opportunities, Inc., a Colorado Corporation having a principal place of business
located at 0000 X. 0xx Xxxxxx, Xxxxxx, XX 00000 ("Licensee"). RECITALS
WHEREAS, Licensor owns certain patents, patent applications and know-how
covering certain inventions, discoveries and information, developed by Licensor
at Licensor's expense, relating to Licensor's hand-held color analyzer device
having the capability to be expanded to analysis of various ranges of the
electromagnetic spectrum (the "Device"); and
WHEREAS, Licensee wishes to develop devices for analysis of various ranges
of visible light, ultra-violet, and infra-red frequencies, and utilize the
technology for development of biomedical analytical devices; and
WHEREAS, Licensee wishes to obtain from Licensor, and Licensor is willing
to grant to Licensee, a right and license under the Licensed Subject Matter (as
defined hereinafter below) to develop such a Device; and
WHEREAS, Licensee desires to obtain from Licensor, and Licensor is willing
to grant to Licensee, a right and license under the Licensed Subject Matter to
manufacture, offer for sale and sell the Device based on the licensed technology
in the Licensed Field.
NOW, THEREFORE, Licensor and Licensee agree as follows:
1. DEFINITIONS
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As used in this Agreement, the following terms shall have the meanings
indicated:
1.1 "Licensed Field" shall mean the field of analysis of electromagnetic
frequencies in the ranges for visible light, ultraviolet, and
infra-red spectrums, andbiomedical applications of the Licensed
Subject Matter for diagnostic analysis.
1.2 "Licensed Subject Matter" shall mean the Intellectual Property Rights
and the Technology Rights.
1.3 Intellectual Property Rights" shall mean all rights owned or otherwise
held by Licensor in, to or under patents and patent applications,
whether domestic or foreign, and all divisions, continuations and
continuations-in-part of any patent applications, and all patents
which may issue from any patent applications, and all reissues,
reexaminations and extensions of patents, relating to Licensor's
Device, and which are set forth in Schedule A.
1.4 "Technology Rights" shall mean all rights owned or otherwise
controlled by Licensor in, to or under technical information,
know-how, process, procedure, composition, device, method, formula,
protocol, technique, software, design, drawing or data relating to
Licensor's Device which are not covered by Intellectual Property
Rights, but which are necessary for the practice and full utilization
of inventions at any time disclosed or claimed under the Intellectual
Property Rights.
1.5 "Technology" shall mean all tangible and intangible results and items
arising out of, developed in connection with or constituting the
results of each party's respective development, including all ideas,
inventions, discoveries, designs, know-how, notes, memoranda,
documentation, and copyrighted materials, and all intellectual
property rights constituting, embodied in, or pertaining to any of the
foregoing.
1.6 "Affiliate" shall mean (a) any entity controlled, controlling or under
common control with, directly or indirectly, at least fifty percent
(50%) of the stock normally entitled to vote for election of directors
of a party; or (b) any entity at least fifty percent (50%) of whose
stock normally entitled to vote for election of directors is
controlled, controlling or under common control with, directly or
indirectly, a party, or, if such level exceeds that which is otherwise
permissible in the country of residence of such entity, the maximum
level permitted in such country.
1.7 "Effective Date" shall mean the date of transfer by Licensee to
Licensor of the Licensee's common stock, which is October 3, 2001.
1.8 Rules of Construction. As used in this Agreement, all terms defined in
the singular shall include the plural, and vice versa, as the context
may require. The words "hereof," "herein," and "hereunder" and other
words of similar import refer to this Agreement as a whole. The word
"including" when used herein is intended to be exclusive and is not
intended to mean "including, without limitation." The headings of the
several sections of this Agreement are intended for convenience of
reference only and are not intended to be a part of or to affect the
meaning or interpretation of this Agreement. This Agreement has been
negotiated and drafted by the parties with assistance by counsel and
shall be fairly interpreted in accordance with its terms and without
any rules of construction relating to which party drafted the
Agreement being applied in favor or against either party.
1.9 "Territory" means the country or countries in which Intellectual
Propert Rights are or become effective, and which are set forth in
Schedule A.
2. LICENSE
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2.1 Grant. Subject to the terms and conditions stated herein, Licensor
hereby grants to Licensee an exclusive, royalty-bearing right and
license for the Licensed Subject Matter in the Territory to
manufacture, have manufactured, use, offer to sell, sell and import
the Device in the Licensed Field, and grants the right to sublicense
all or part of the Intellectual Property Rights.
2.2 Ownership. Licensee acknowledges and agrees that Licensor is and shall
remain the sole and exclusive owner of the Licensed Subject Matter.
2.3 No Other Rights. Except as expressly provided herein, no right, title,
or interest is granted by Licensor to Licensee in, to or under the
Licensed Subject Matter.
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3. Technology License Fee.
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3.1 Equity in Licensee. In consideration for the rights and licenses
granted hereunder subject to approval by the board of directors of
Licensee, Licensee shall deliver to Licensor shares of its common
stock as set forth in Schedule B.
3.2 Royalty. For the life of this Agreement, Licensee shall pay to
Licensor a royalty in the amount of $75.00 for every Device sold by
Licensee which, absent the right and license granted by Licensor to
Licensee under Section 2.1, would infringe Licensor's rights under the
Licensed Subject Matter. In the event that Licensee places such
Devices with end users at no cost, Licensee shall pay Licensor the
same royalty as set forth herein.
3.3 Adjustment of Royalties. A determination of invalidity of any claims
of the patents that constitute the Intellectual Property Rights does
not relieve Licensee from payment of royalties, nor provide any ground
for refund of royalties already paid for the practice of any patent
claims that have not been adjudicated to be invalid, or for the
licensed use of Technology Rights relating to the Licensed Subject
Matter. In the event of adjudication of invalidity of any patent
claims, Licensee shall be entitled to an adjusted royalty that is
reasonably related to the value of the Licensed Subject matter, which
shall be negotiated by the parties.
3.4 Document Delivery. Licensor shall make available existing
documentation relating to design and manufacturing of the Devices.
Licensor shall have no obligation to provide to Licensee any documents
that do not already exist at Licensor's facility as of the Effective
Date.
3.4.1 Design Documents. Licensor shall make available documents
relating to hardware and software for Licensor's Device,
including without limitation the following documents:
mechanical drawings, xxxx of materials, source code for all
software related to the Device, and schematics.
3.4.2 Manufacturing Documents. Licensor shall make available
documents relating to the manufacture of Licensor's Device
to the extent such documents exist, including without
limitation: documents of materials, suppliers, all phases of
manufacturing, and all manufacturing quality assurance test
procedures related to Licensor's Device.
3.5 Records, Reports and Payment of Royalties. During the term of this
Agreement and for five (5) years thereafter, Licensee shall keep
complete and accurate records of the sale of the Devices which, absent
the right and license granted by Licensor to Licensee under Section
2.1, would infringe Licensor rights under the Licensed Subject Matter,
in sufficient detail to enable the royalties payable to Licensor under
Section 3.2 of this Agreement to be determined. Within sixty (60) days
after the end of each fiscal quarter, which end on the last day of
January, April, July and October, during which units using the
technology licensed under this Agreement have been sold, Licensee
shall furnish to Licensor a written report setting forth the number of
such Devices sold in such just-ended fiscal quarter, together with
royalties payable to Licensor pursuant to Section 3.2.
3.6 Audit Rights. Licensee shall permit Licensor, or representatives of
Licensor which are reasonably acceptable to Licensee, at Licensor's
expense, to periodically examine Licensee's books, ledgers, and
records during regular business hours for the sole purpose of, and
only to the extent necessary, to verify reports furnished to Licensor
pursuant to Section 3.5; provided that Licensor delivers to Licensee a
written notice of Licensor's intention to conduct an inspection not
less than ten (10) business days before the intended date of such
inspection; and provided further that only one (1) such inspection may
be conducted during any calendar six (6) month period. In the event
that amounts due Licensor are determined to have been underpaid by an
amount greater than ten percent (10%) of the amount actually due,
Licensee shall pay the cost of such examination. Any royalty payment
not paid on or before the date corresponding to forty five (45) days
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after the end of the calendar quarter for which such royalties are due
and payable hereunder shall accrue interest at a rate equal to one
percent (1%) per calendar month or, if less, the maximum rate
permitted under applicable law. Notwithstanding the above, each report
delivered by Licensee to Licensor pursuant to Section 3.5, shall be
deemed correct and accurate, and Licensor shall have no right to
inspection records relating thereto, or otherwise challenge the
accuracy of either such report or the records relating thereto, after
the third anniversary of the date of delivery of such report to
Licensor.
4. DEVELOPMENT
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4.1 Transfer of Technology. Licensee agrees that all information and
descriptions of technology, including but not limited to, all ideas,
inventions, discoveries, specifications, designs, know-how, notes,
memoranda, documentation, test fixtures, calibration equipment, all
copyrighted materials, and all intellectual property rights
constituting, embodied in, or pertaining to any of the foregoing,
developed by Licensee as a result of this Technology License Agreement
shall be transferred by Licensee to Licensor. Licensor hereby grants
to Licensee an irrevocable, non-exclusive, worldwide, fully-paid,
royalty-free right and license under intellectual property covering
such information and technology to use and otherwise exploit such
information and technology.
4.2 Patent Marking. Licensee agrees to place appropriate patent markings
on Device(s), pursuant to 35 U.S.C.287, that Device(s) are the subject
of pending patent applications. Upon issuance of any patents, this
notice shall be conformed accordingly.
4.3 Ownership and Rights in Technology.
4.3.1 Licensor shall own all right, title and interest in
Technology developed, made or otherwise created solely by
employees and consultants of Licensor. Subject to the terms
set forth in section 4.4, Licensee shall own all right,
title and interest in Technology developed, made or
otherwise created solely by employees and consultants of
Licensee that is not a result of this Technology License
Agreement.
4.3.2 All Technology shall be deemed to be Confidential
Information of the party (or parties) whose employee(s) and
consultant(s) developed, made or otherwise created such
Technology and shall be subject to the restrictions set
forth in Article 6 below.
4.4 Use of Third Party Developers. Due to the confidential nature of the
Licensed Subject Matter, in the event Licensee uses a third party
developer or manufacturer, Licensee shall require such third party
developer or manufacturer to execute confidentiality agreements in a
form acceptable to Licensor. Licensee shall provide copies of all such
confidentiality agreements to Licensor upon request.
4.5 Regulatory Approvals and Testing. Licensee shall be responsible for
obtaining necessary regulatory approvals and authorizations for the
Device(s) to be developed as a result of this Technology License
Agreement, and development of all test procedures. Licensee shall be
responsible for developing all verification and validation protocols
and performing, or have performed as appropriate, such verification
and validation protocols to determine whether each unit using the
technology licensed under this Agreement meets the specification
requirements for such Devices.
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5. REPRESENTATIONS, WARRANTIES AND COVENANTS
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5.1 Representations, Warranties and Covenants of Licensor. Licensor
represents, warrants and covenants that: (i) Licensor is the sole and
exclusive owner of all right, title and interest in the Licensed
Subject Matter; (ii) the Licensed Subject Matter is free and clear of
any lien, encumbrance, security interest and restriction on license;
(iii) Licensor has not previously granted, and will not grant during
the term of this Agreement, any right, license or interest in, to or
under the Licensed Subject Matter, or any portion thereof, which is
inconsistent with the rights and licenses granted to Licensee herein;
(iv) to the best of Licensor' knowledge as of the Effective Date, the
Licensed Subject Matter does not infringe any intellectual property
right of any third party; (v) there are no actions, suits,
investigations, claims or proceedings pending or threatened in any way
relating to the Licensed Subject Matter; (vi) during the term of this
Agreement, Licensor will not conduct any work for its own behalf or
seek out ny services from any party which relates to development of
the Device(s) for use in the Licensed Field, (vii) Licensor is a
corporation, duly organized validly existing and in good standing
under the laws of the State of Colorado; and (viii) the execution,
delivery and performance of this Agreement have been duly authorized
by all necessary corporate action on the part of Licensor.
5.2 Representations, Warranties and Covenants of Licensee. Licensee
represents, warrants and covenants that: (i) during the term of this
Agreement, Licensee will not conduct any work for its own behalf or
seek out any services from any party which relates to development of
the Device; (ii) Licensee is a corporation, duly organized validly
existing and in good standing under the laws of the State of Colorado;
and (iii) the execution, delivery and performance of this Agreement
have been duly authorized by all necessary corporate action on the
part of Licensee.
5.3 Effect of Representations, Warranties and Covenants. It is understood
that if the representations and warranties made by a party under this
Article 5 are not true and accurate, or if the covenants made by a
party under this Article 5 are not upheld and complied with, and the
other party incurs damages, liabilities, costs or other expenses as a
result of such falsity or non- compliance, the party making such
representations, warranties and covenants shall indemnify and hold the
other party harmless from and against any such damages, liabilities,
costs or other expenses incurred as a result of such falsity or such
non-compliance.
6. CONFIDENTIAL INFORMATION
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6.1 General. Licensee shall keep confidential the methods, processes and
techniques and all information, knowledge, know-how, trade practices,
and trade secrets divulged, disclosed, or in any way communicated by
Licensor to Licensee pertaining to the Licensed Subject Matter.
Licensee shall have the right, however, to communicate the same to its
employees for the purpose of and to the extent necessary for
practicing the Licensed Subject Matter as herein provided, but each
employee to whom such information is communicated shall
correspondingly be bound to secrecy.
6.2 Nondisclosure. Licensor and Licensee each agree that all information
contained in documents marked "confidential" which are received by one
party from the other party, and all information indicated to be
Confidential Information in Section 4.3 (collectively, "Confidential
Information") shall be received in strict confidence, used only for
the express purposes set forth in this Agreement, and not disclosed by
the recipient party (except as required by law or court order), its
agents or employees without the prior written consent of the other
party, unless such Confidential Information: (i) was in the public
domain at the time of disclosure, (ii) later became part of the public
domain through no act or omission of the recipient party, its
employees, agents, or permitted successors or assigns, (iii) was
lawfully disclosed to the recipient party by a third party having no
bligation to the disclosing party, (iv) was already known by the
recipient party at the time of disclosure, (v) was independently
developed by the recipient without use of or access to such
Confidential Information or (vi) is required to be disclosed to a
government agency.
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6.3 Protection of Confidential Information. Each party's obligations of
confidentiality, non-use and nondisclosure set forth in Section 6
shall be fulfilled by using at least the same degree of care with the
other party's Confidential Information as it uses to protect its own
confidential information. This obligation shall continue in full force
and effect during the term of this Agreement and thereafter for a
period of three (3) years.
7. INFRINGEMENT BY THIRD PARTIES
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7.1 General. Licensee shall notify Licensor if it learns of any possible
infringement by any third party of the Intellectual Property Rights.
In the event that Licensor does not file suit against a substantial
infringer of such patents or other rights granted herein within six
(6) months after receipt of such notification from Licensee, Licensee
shall have a right, but no obligation, to enforce any patent licensed
hereunder on behalf of itself and Licensor. Licensor shall provide all
reasonable assistance requested by Licensee in connection with any
action aken by Licensee to enforce the Intellectual Property Rights
consistent with its obligations pursuant to Section 7.2, including
without limitation joining legal ction initiated by Licensee as a
party. In the event that Licensee takes action to enforce the
Intellectual Property Rights, Licensee shall retain for its own
benefit all recoveries obtained from such action, after reimbursement
of Licensor for its costs and expenses, if any, incurred. Such to the
extent Licensor joins any legal action initiated by Licensee, Licensor
and Licensee shall split equally all costs, expenses and recoveries.
7.2 Cooperation. In any suit or dispute involving an infringer, the
parties shall cooperate fully, and upon the request and at the expense
of the party bringing suit, the other party shall make available to
the party bringing suit, at reasonable times and under appropriate
conditions all relevant personnel, records, papers, information,
samples, specimens, and the like in its possession.
8. INDEMNIFICATION
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8.1 General. Licensee shall hold harmless and indemnify Licensor, its
officers, employees and agents from and against any claims, demands or
causes of action whatsoever, including without limitation those
arising on account of any injury or death of persons or damage to
property caused by, or arising out of, or resulting from, the exercise
or practice of the rights and licenses granted hereunder by Licensee,
its Affiliates or their officers, employees, agents or
representatives, except to the extent that any such claims, demands or
causes of action arise as a result of Licensor's negligence or
misconduct.
9. TERM AND TERMINATION
9.1 Term. The term of this Agreement shall commence on the Effective Date
and continue in full force and effect for a period of ten (10) years.
This Agreement may be terminated without cause by mutual agreement of
the parties at any time.
9.2 Termination for Cause. Either party may, without penalty, terminate
this Agreement, effective upon written notice to the other party in
the event of one of the following events:
9.2.1 The other party materially breaches this Agreement, and such
breach remains uncured for thirty (30) days following
written notice of breach by the non-breaching party, unless
such breach is incurable, in which event termination shall
be immediate upon receive of written notice;
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9.2.2 To the extent permitted by applicable law, a petition for
relief under any bankruptcy statute is filed by or against
the other party, or the other party makes an assignment for
creditors, or a receiver is appointed for all or a
substantial party of the party's assets, and such petition,
assignment or appointment is not dismissed or vacated within
sixty (60) days.
9.3 Licenses. Upon termination of this Agreement by Licensor pursuant to
Section 9.2, all rights and licenses granted herein by Licensor to
Licensee under Licensed Subject Matter shall immediately terminate.
9.4 Return of Confidential Information. Upon termination of this
Agreement, or upon expiration of this Agreement, Licensee shall
promptly return to Licensor any Confidential Information of Licensor
received from Licensor prior to such termination, and Licensee shall
be no longer be entitled to use any such Confidential Information for
any purpose.
9.5 Accrued Rights. Expiration or termination of this Agreement shall not
release either party from any obligation theretofore accrued.
9.6 Survival. Articles 5, 6, and 10, and Sections 9.3, 9.4, 9.5 and 9.6,
of this Agreement shall survive expiration or termination of this
Agreement for any reason.
10. MISCELLANEOUS
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10.1 Governing Law. This Agreement shall be governed by, and construed and
interpreted, in accordance with the laws of the State of Colorado
without reference to principles of conflicts of laws.
10.2 Compliance with Laws. Each party shall perform this Agreement in
compliance with all applicable federal, national, state and local
laws, rules and regulations and shall indemnify the other party and
its customers for loss or damage sustained because of such party's
noncompliance with any such law, rule or regulation. Each party shall
furnish to the other party any information requested or required by
that party during the term of this Agreement or any extensions hereof
to enable that party to comply with the requirements of any U.S. or
foreign federal, state, and/or governmental agency.
10.3 Limitation of Liability. IN NO EVENT SHALL EITHER PARTY BE LIABLE FOR
INCIDENTAL, CONSEQUENTIAL, INDIRECT, OR SPECIAL DAMAGES OF THE OTHER
PARTY ARISING OUT OF THIS AGREEMENT, UNDER ANY THEORY OF LIABILITY.
10.4 Force Majeure. Neither party shall be held responsible for any delay
or failure in performance hereunder caused by strikes, embargoes,
unexpected government requirements, civil or military authorities,
acts of God, earthquake, or by the public enemy or other causes
reasonably beyond such party's control and without such party's fault
or negligence.
10.5 Independent Contractors. The relationship of Licensor and Licensee
established by this Agreement is that of independent contractors.
Nothing in this Agreement shall be constructed to create any other
relationship between Licensor and Licensee. Neither party shall have
any right, power or authority to assume, create or incur any expense,
liability or obligation, express or implied, on behalf of the other.
10.6 Confidentiality of Agreement. Except as required by law, neither party
to this Agreement shall disclose the contents or any term of this
Agreement to any person or entity without the prior written consent of
the non-disclosing party.
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10.7 Assignment. The parties agree that their rights and obligations under
this Agreement may not be transferred or assigned to a third party
without the prior written consent of the other party hereto, which
consent shall not be unreasonably withheld. Notwithstanding the
foregoing, a party may transfer or assign its rights and obligations
under this Agreement to a successor to all or more than fifty-percent
of its business or assets relating to this Agreement whether by sale,
merger, operation of law or otherwise.
10.8 No Use of Names. Neither party will use the name of the other in its
advertising or promotional materials without the prior written consent
of such other party.
10.9 Notices. Any required notices hereunder shall be given in writing by
certified mail or overnight express delivery service (such as FedEx)
at the address of each party below, or to such other address or as
either party may substitute by written notice. Notice shall be deemed
served when delivered or, if delivery is not accomplished by reason or
some fault of the addressee, when tendered.
If to Licensor: Color-Spec Technologies, Inc.
Attn: Chief Executive Officer
Address: 0000 X. Xxxxxx Xxxxxx
Xxxxxx, XX 00000
If to Licensee: Real Estate Opportunities, Inc. d/b/a
PocketSpec Technologies, Inc.
Attn: Chief Executive Officer
Address: 0000 X. Xxxxxx Xxxxxx
Xxxxxx, XX 00000
10.10Modification; Waiver. This Agreement may not be altered, amended or
modified in any way except by a writing signed by both parties. The
failure of a party to enforce any provision of the Agreement shall not
be construed to be a waiver of the right of such party to thereafter
enforce that provision or any other provision or right.
10.11Severability. If any provision of any provision of this Agreement
shall be found by a court to be void, invalid or unenforceable, the
same shall be reformed to comply with applicable law or stricken if
not so conformable, so as not to affect the validity or enforceability
of this Agreement.
10.12Entire Agreement. The parties hereto acknowledge that this Agreement
sets forth the entire Agreement and understanding of the parties
hereto as to the subject matter hereof, and includes the Real Estate
Agreement incorporated by reference herein, and supersedes all prior
discussions, agreements, and writings in respect hereto.
10.13Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original and which
together shall constitute one instrument.
IN WITNESS WHEREOF, Licensor and Licensee have executed this Agreement by their
respective duly authorized representatives.
COLOR-SPEC TECHNOLOGIES, INC. REAL ESTATE
OPPORTUNITIES, INC.
("Licensor") ("Licensee")
By: /s/ By: /s/
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Print: Print:
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Schedule A
1. Patent Application Serial No. 09/854344 filed May 11, 2001, in the United
States Patent and Trademark Office.
2. Patent Application Serial No. [to be assigned] filed October 4, 2001, in
the United States Patent and Trademark Office.
3. Patent Application Serial No. [to be assigned] filed October 4, 2001, in
the United States Patent and Trademark Office.
4. Patent Application Serial No. [to be assigned] filed October 4, 2001, in
the United States Patent and Trademark Office.
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Schedule B
Licensee shall deliver to Licensor 700,000 shares of its common stock with Rule
144 Restrictions.
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