LICENSE AND ROYALTY AGREEMENT
This Agreement is entered into effective the 31st day of January, 2006, by
and between Rothschild Trust Holdings, LLC, a private limited liability company
organized and in good standing pursuant to the laws of the state of Florida
(herein referred to as the "Licensor" or "Trust"), and Connected Media
Technologies, Inc., a corporation organized and in good standing pursuant to the
laws of the State of Delaware, (herein referred to as "Licensee" or "CMT").
WITNESSETH:
WHEREAS, CMT is the owner of the certain patents and patents pending listed
and described on Schedule A attached hereto (the "Intellectual Property"); and
WHEREAS, CMT has transferred all rights, title and interest in the above
mentioned Intellectual Property to the Trust, as evidenced by the Purchase and
Sale Agreement dated as of the date hereof; and
WHEREAS, Licensor is willing to grant to Licensee a twelve month right of
election to choose to license and exploit the Intellectual Property under the
terms and conditions set forth herein;
WHEREAS, the parties hereby agree that the Agreement shall be replaced by a
Long Form License and Royalty Agreement, upon the Licensee's exercise of the
right of election, that shall expand upon the intentions of the parties;
NOW, THEREFORE, in consideration of the premises, the agreements,
covenants, promises and conditions contained herein, and in consideration of the
monies and other consideration exchanged between the parties, the parties hereto
agree as follows:
1. Right of Election. Licensor hereby grants to Licensee a right of election to
license and exploit the Intellectual Property. Such right of election shall run
for a period of twelve months from the date of this Agreement. If Licensee does
not notify the Licensor in writing of its exercise of the right of election
within the twelve month period, this Agreement shall expire and be deemed null
and void.
2. Grant of Exclusive License. If Licensee notifies Licensor of its exercise of
the right of election, Licensor shall grant a two year exclusive license for the
use of the Intellectual Property to Licensee in an agreed upon field of use
pursuant to a Long Form License and Royalty Agreement (the "Long Form
Agreement") which shall be executed within 10 days of the date the notice was
received by Licensor. The license shall only continue if the Licensee is
exploiting the intellectual property. The definition and parameters of
explotation to be further detailed in the Long Form Agreement. The Long Form
Agreement will include the right for Licensee to use the Intellectual Property
as well as the right to sub-license the Intellectual Property to third parties
in an agreed upon field of use. "Sub licenses" to be as defined in the Long Form
Agreement.
3. Renewal. The Long Form Agreement shall be automatically renewable at the end
of the initial or any subsequent two year term for a successive two year if
Licensee is actively exploiting the Intellectual Property. "Actively exploiting
and performance quotas" to be defined in the Long Form Agreement
4. Upon execution of the Long Form Agreement, Licensor shall have the right to
file and prosecute patent applications and/or trade marks covering the
Intellectual Property and any improvements to the Intellectual Property in the
patent offices authorized to issue patents within all or any portion of the
world. Licensor will bear the cost of prosecuting such Intellectual Property,
and Licensor will bear the cost of maintaining such Intellectual Property.
Licensee shall make available to Licensor any information regarding the
Intellectual Property within its possession.
5. Licensee shall provide reasonable assistance to Licensor in enforcement
actions on the licensed Intellectual property. Upon recovery in any such
enforcement actions, after attorney fees and applicable expenses, Licensor shall
receive eighty five percent of the net recovery from the enforcement action and
Licensee shall receive the remaining fifteen percent of the net recovery.
6. Royalties. Upon execution of the Long Form Agreement, Licensor shall receive
royalties on the use of the Intellectual Property from the Licensee according to
the following terms:
(a) From the gross receipts (as defined herein ), Licensee shall receive 90%
percent of such gross receipts, out of which it will pay all reasonable costs of
development, promotion and distribution, including the reasonable costs of
sales, rental and preview prints, warehousing, shipping, advertising, brochures,
mailings, xxxxxxxx, etc. Out of the balance of such gross receipts, amounting to
10% percent thereof and known as the "Licensor's Revenue", the Licensor will
receive 100% percent of such Licensor's Revenue. The Licensor's Revenue shall be
held in escrow pursuant to the terms of that certain Escrow Agreement between
the parties and Xxxxxxxxxx Equity Partners, LP as of the date hereof (the
"Escrow Agreement"). Gross receipts include all revenue derived from the
Licensing of the Intellectual Property and/or the sale of solutions and products
incorporating the Intellectual Property. Gross receipts do not include cost of
goods for the products sold.
(b) Within 15 days following the end of each calendar quarter, Licensee will
submit a written statement to the Licensor showing the business transacted from
the use of the Intellectual Property during the period reported, and
simultaneously remit to the Escrow Agent, as that term is defined in the Escrow
Agreement, the amount due to the Licensor for such period. The Licensor and/or
his authorized representative shall have the right to audit the records of
Licensee relating to the use of the Intellectual Property. Upon notification by
the Escrow Agent or applicable authority that the Escrow Agreement has
terminated, the Licensee shall remit all royalties directly to the Licensor at
the address then provided.
7. Licensor makes no representation or warranty, and expressly disclaims any
liability with respect to the content of any Intellectual Property, including
but not limited to errors or omissions contained therein, libel, infringement of
rights of publicity, privacy, trademark rights, moral rights, or the disclosure
of confidential information.
Except for the express warranties stated herein, the Intellectual Property is
provided on an "as is" basis, and Licensor disclaims any and all other
warranties, conditions, or representations (express, implied, oral or written),
relating to the Intellectual Property or any part thereof, including, without
limitation, any and all implied warranties of quality, performance,
merchantability or fitness for a particular purpose.
8. Assignability. Licensee may not sell, transfer, convey or assign its interest
in this Agreement without the prior written consent of the Licensor, which
consent shall not be withheld unreasonably.
9. Amendments. No subsequent alteration, amendment, change or addition to this
Agreement shall be binding upon either party unless in writing and signed by
both parties.
10. Waiver. Waiver of any provision herein shall not be deemed a waiver of any
other provision herein, nor shall waiver of any breach of this Agreement be
construed as a continuing waiver of other breaches of the same or other
provisions of this Agreement.
11. Enforcement. The substantive and procedural laws of the State of Florida
applicable to agreements to be performed entirely in the State of New Jersey
shall govern the validity, construction, interpretation, performance and
enforcement of this Agreement. Licensor and Licensee hereby agree that any
action and/or proceeding in connection with this Agreement shall only be brought
in Monmouth County, New Jersey. In the event any action is commenced by either
party hereto against the other in connection with this Agreement, the prevailing
party shall be entitled to its costs and expenses including reasonable
attorneys' fees.
12. Notices. All notices from Licensor to Licensee required or permitted by any
provision of this Agreement shall be directed to Licensee as follows:
Connected Media Technologies, Inc.
00 XX 0xx Xxxxxx, Xxxxx 0000
Xxxxx, Xxxxxxx 00000
All notices from Licensee to Licensor required or permitted by any provision of
this Agreement shall be directed to Licensor as follows:
Rothschild Trust Holdings, LLC
00000 Xxxxxxx Xxxxxx #0000
Xxxxx Xxxxx Xxxxx, Xxxxxxx 00000
All notices to be given hereunder by Licensor or Licensee shall be written
either hand delivered, or sent by registered certified or express U.S. mail, or
by telecopier addressed to the party to be notified at the address or telecopy
number, as applicable, set forth above. Either party may, at any time, notify
the other party in writing of a substitute address or telecopy number for that
set forth above, and thereafter notices shall be directed to such substitute
address or telecopy number. Notice given as aforesaid shall be sufficient
service thereof and shall be deemed given as of the date received as evidenced
by the return receipt of the registered or certified mail, the express mail
delivery receipt or the telecopy confirmation, as the case may be.
13. Other Rights. Nothing contained in this Agreement shall be construed as
conferring by implication, estoppel, or otherwise upon either party any license
or other right except the licenses and rights expressly granted hereunder to
that party.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed as of
the day and year first above written.
ROTHSCHILD TRUST HOLDINGS, LLC,
"Licensor"
By: /s/ Xxxxx X. Xxxxxxxxxx
-----------------------------
Xxxxx X. Xxxxxxxxxx
Managing Member
CONNECTED MEDIA TECHNOLOGIES, INC.,
"Licensee"
By: /s/ Xxxxxxx Xxxx
-----------------------------
Xxxxxxx Xxxx
Chief Executive Officer
