Exhibit 10.10
LICENSE AND DISTRIBUTION AGREEMENT
THIS LICENSE AND DISTRIBUTION AGREEMENT (this "AGREEMENT") is made and
entered into as if the 28th day of May, 1998 by and between SmartDisk
Corporation, a Delaware corporation (the "COMPANY") and Xxxxxxx International
Systems Corporation a Florida corporation ("LICENSEE").
In consideration of the mutual promises herein and subject to the
following terms and conditions, the parties do hereby agree as follows:
1. DISTRIBUTION RIGHTS.
1.1 GRANT OF RIGHTS. Subject to the terms and conditions of
this Agreement, the Company hereby grants Licensee a non-exclusive,
nontransferable (except as set forth herein) right and license to: (i) reproduce
the Products, as defined in Section 2 below, in object code form only, and the
Documentation, as defined in Section 2 below, for the sole purpose of
distribution as authorized herein; (ii) market and distribute only in the
Territory throughout the term of this Agreement copies of the Products together
with appropriate Documentation, in their stand-alone form or combined with other
products to form combined products ("COMBINED PRODUCTS") or pursuant to customer
orders for Products which are intended to carry a product name of a third party
("PRIVATE LABEL PRODUCTS") pursuant to the procedure set forth in Section 2.3
below; and (iii) to resell the Company's maintenance program for the Products,
as then in effect.. Unless otherwise set forth herein, "Products" shall include
the appropriate Documentation for each such Product.
1.2 RESERVATION OF RIGHTS. The Company shall be entitled to
appoint additional distributors to distribute and market the Products in the
Territory and may distribute the Products direct to end users, to original
equipment manufacturers, systems integrators and value-added resellers for
resale in the Territory.
1.3 FURTHER APPOINTMENTS. The Company grants Licensee the
non-exclusive right and license to appoint, by written agreement only,
subdistributors and dealers ("SUBDISTRIBUTORS") for the Products in the
Territory; provided that the Company's and its Affiliates' Intellectual Property
Rights are as fully protected under each such written appointment as they are
protected under this Agreement. A license or appointment by Licensee of
substantially all rights hereunder shall be considered an assignment and shall
be prohibited pursuant to Section 13.18.
1.4 DELIVERY. Within ten (10) calendar days after the
Effective Date of this Agreement, the Company shall deliver to Licensee one (1)
reproducible master of object code for each of the Products set forth on Exhibit
A. In addition, simultaneously with the delivery of the masters for the Products
set forth on Exhibit A, the Company shall deliver to Licensee source code for
such Products. As Products are added to this Agreement, pursuant to the terms
and conditions hereof, the parties will mutually agree upon the delivery date
and form of such additional Product object code masters and it shall be in the
discretion of the Company whether the Company delivers source code for such
Products.
2. PRODUCTS AND TERRITORY.
2.1 PRODUCTS. Licensee's reproduction and distribution rights
as set forth herein shall be for the products listed on attached Exhibit A and
all updates, enhancements and modifications thereto (individually, a "PRODUCT"
and collectively, the "PRODUCTS") and the end-user documentation
("DOCUMENTATION") delivered with the master copy of such product to Licensee by
the Company. The Company may from time to time, by written notice to Licensee,
make updates, enhancements and modifications to the Products without otherwise
affecting the terms of this Agreement although Company may only do so upon sixty
(60) calendar days written
notice to Licensee.
2.2 ADDITIONAL PRODUCTS. For any additional product
("ADDITIONAL PRODUCT") developed by the Company which has substantially the same
functionality as the Products, but does not constitute an update, enhancement or
modification of any Product, the Company will discuss with, and offer to
Licensee in writing, the right to distribute such Additional Product in the
Territory for a royalty specified by the Company and, unless otherwise specified
by the Company, upon such other terms as are set forth herein with respect to
the Products. For each Additional Product, the Company shall commence such
discussion and offer with Licensee no later than any other discussion with or
offer to any other distributor for such Additional Product. Within thirty (30)
calendar days, or such longer period as the parties may agree upon in writing,
after receipt of any offer of appointment from the Company pursuant to this
Section 2.2, Licensee shall notify the Company in writing whether Licensee
elects to accept or reject such offer. Failure by Licensee to give any notice
within such period shall constitute a rejection by Licensee of such offer. In
the event Licensee accepts any such offer of appointment, the Additional
Product(s) accepted shall become Product(s) under this Agreement and shall be
governed by the terms and conditions hereof applicable to the Products, except
that the terms and conditions of the Company's written offer shall govern to the
extent they supplement or modify the terms and conditions of this Agreement. In
the event Licensee rejects any Company offer of appointment, Licensee shall have
no rights with respect to the Additional Product covered by such rejected offer.
The Company shall have no obligation to make any further offer of appointment to
Licensee for an Additional Product for which Licensee has rejected an initial
offer of appointment, including at the time that any distribution arrangement
with another licensee for such Additional Product expires. Notwithstanding any
of the foregoing, and as an exception thereto, in the event that the Company
offers any such Additional Product to any other licensee or third party on terms
or conditions more favorable than those offered to Licensee, the Company shall
reoffer such Additional Product to Licensee on such more favorable terms and
conditions. The Company's obligation hereunder to offer Licensee the right to
distribute Additional Products shall only be applicable for such periods as
Licensee is in compliance with all of the terms and provisions of this
Agreement.
2.3 PRIVATE LABEL PRODUCTS In the event that a Subdistributor
desires to distribute a Private Label Product, Licensee shall have the right to
grant such Subdistributor the right to distribute such Private Label Product,
the subject Private Label Product is in accordance with the Private Label
Product criteria established by the Company from time to time. All such Private
Label Products shall become Products under this Agreement and shall be governed
by the terms and conditions hereof applicable to Products.
2.4 MAINTENANCE. The Company may from time to time, by written
notice to Licensee, change its Product maintenance policy although Company may
only do so upon sixty (60) calendar days written notice to Licensee.
2.5 TERRITORY. Licensee shall distribute and solicit orders
for the distribution of the Products, and shall permit its Subdistributors to
distribute and solicit orders for the distribution of the Products only within
the geographic area set forth on Exhibit B (the "TERRITORY").
3. LICENSEE'S DISTRIBUTION DUTIES.
During the term of this Agreement, Licensee shall be
responsible for the following:
3.1 REASONABLE COMMERCIAL EFFORTS. Licensee shall use its
reasonable commercial efforts to solicit orders and distribute the Products
within the Territory and to develop the full sales potential for the Products
within the Territory consistent with ethical business practices and in a manner
that will reflect favorably on the Products and on the good will and reputation
of the Company.
3.2 SUPPORT AND TRAINING COMMITMENT. The Company hereby grants
Licensee the right and confers upon Licensee the obligation to pass through to
the end-user the warranty established by the
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Company for the Products. The Company reserves the right to modify the form of
Product warranty from time to time upon written notice to Licensee. Licensee
shall warrant the media upon which the Product resides in accordance with the
Company's media warranty policy for licensees. Licensee shall provide all
Subdistributor and end-user support, as well as Subdistributor training, for the
Products which Licensee distributes, except for modifications and corrections to
errors in the software code which cause a Product to cease functioning
substantially in accordance with its specifications, if any, as set forth in the
Documentation, which modifications and corrections shall be performed only by
the Company. Notwithstanding anything set forth herein, Licensee shall encourage
all end-user customers to bring their claims for Product support and warranty to
the relevant Subdistributor, and shall instruct all Subdistributors to bring
their claims for Product support and warranty to Licensee. To assist Licensee
perform its support obligations set forth in this Section 3.2, the Company
hereby grants Licensee a non-exclusive, nontransferable right and license to use
internally the source code for the Products, if delivered by the Company, only
for the purpose of providing customer support and maintenance. Licensee shall
NOT have the right to: (i) make copies of Product source code; (ii) make
modifications to the Product source code; or (iii) distribute, sell, assign,
license, convey, disclose or transfer any or all of the Product source code.
3.3 PROPRIETARY MARKINGS. As both a covenant by Licensee and a
condition of the grant by the Company of the rights in this Agreement, Licensee
agrees to include in each copy of the Products distributed by Licensee and its
Subdistributors, on all containers and storage media therefore and in all
marketing material, all trademarks, copyright notices, patent notices, trade
secret notices and other notices regarding proprietary rights included by the
Company in copies of the Products (and on containers and storage media
therefore), as well as the statement that Licensee is an authorized licensee of
the Company.
3.4 DISTRIBUTION MATERIALS. Licensee shall create appropriate
promotion and advertising materials for the Products. Licensee's promotion and
advertising material shall be subject to the Company's prior written consent
which shall not be unreasonably withheld. Licensee shall provide the Company
with not less than fourteen (14) calendar days prior delivery of copies of the
promotion and advertising material to be approved by the Company. Failure of the
Company to accept or reject such materials on or before the fourteen (14th)
calendar day after receipt by the Company thereof shall be deemed acceptance of
such materials.
3.5 GOVERNMENTAL REGULATIONS AND REGULATORY COMPLIANCE.
Licensee shall comply with all laws, regulations and orders of government, and
with all other governmental requirements applicable to its sales activities with
respect to the Products in the Territory. The Company shall furnish Licensee
with such assistance and cooperation as may reasonably be requested in
connection with compliance with such governmental requirements. All
registrations and permits required for the sale and distribution of the Products
shall be filed by Licensee in the name of, for the benefit of and at the expense
of the Company. In the event any registration or permit must be filed in the
name of any entity other than the Company because of requirements of applicable
law, Licensee agrees promptly upon termination or expiration of this Agreement
to assign or cause to be assigned to the Company or its designee, without
charge, every such registration or permit to the fullest extent assignable.
Licensee shall also obtain, at its own expense, any import license, foreign
exchange license, foreign exchange permit, or other permit or approval it may
need for the performance of its obligations under this Agreement. Licensee
further agrees to maintain and to provide the Company with such records and
reports as the Company deems necessary or advisable to enable the Company to
satisfy and conform to all regulatory requirements relating to the distribution
of the Products. In particular, Licensee agrees to maintain and to provide the
Company with product liability and traceability, quality assurance and defect
incident reports in such form as may be requested by the Company from time to
time. Licensee will immediately report to the Company all defects in the
Products discovered by or reported to Licensee in sufficient detail to enable
the Company to take
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corrective action.
4. RESTRICTIONS.
Licensee's rights to the Products are limited to those expressly
granted in this Agreement. As both a covenant by Licensee and a condition of the
grant of rights set forth above by the Company, Licensee agrees not to do any of
the following:
(a) copy, disclose or distribute to any person all or any part of the
Products, except as specifically permitted by this Agreement for the marketing,
distribution and support of the Products;
(b) make any representation, guarantee or warranty to any
Subdistributor, end user or any other party regarding the performance or
functional characteristics of the Products inconsistent with or beyond those
expressly contained in the Company's Documentation with respect to the Products,
or as approved in writing by the Company; or
(c) modify or permit others to modify the Products or any Product
source code, except as expressly set forth in this Agreement. In the even that
Licensee or any Subdistributor requires modifications to a Product to enable
such Product to interoperate with another product, whether the Product will be
distributed as a stand alone product, a Combined Product, or a Private Label
Product, Licensee shall send the Company a written description of such required
modification and, if the Company deems it in the interests of the Company and
the Product, in its sole and absolute discretion, the Company will use its
reasonable commercial efforts to make such modifications to the Product pursuant
to a schedule to be agreed upon by the parties. Such modifications shall be
known hereafter as "INTEROPERABILITY MODIFICATIONS."
5. PAYMENTS.
5.1 ROYALTIES. Licensee will pay to the Company the following
royalties:
(a) for the distribution of Products as stand alone
products (which shall include Private Label Products to the extent such are not
combined with other products) and resale of maintenance therefor: thirty-three
and three tenths percent (33.3%) of Net Revenue derived therefrom;
(b) for the distribution of Products as Combined
Products (which shall include Private Label Products to the extent such are
combined with other products) and resale of maintenance therefor: five percent
(5%) of Net Revenue derived therefrom.
5.2 NET REVENUE. As used "NET REVENUE" means the total amount
received by Licensee for all copies of the subject Products or Combined
Products, as the case may be, less the following amounts, in each case either
allocated from Licensee's total such expenses or, in certain instances where it
is practical to measure such expenses on a per-Product basis, attributable to
the subject Product: all sales, value-added, excise and other taxes; export
charges or import duties; sales commissions which are reasonable and consistent
with the amounts customarily paid in the industry; freight paid by Licensee for
shipments of Products; any currency exchange fees incurred by Licensee with
respect to invoiced amounts other than in United States dollars.
5.3 PAYMENT AND REPORTING. Within thirty twenty (20) calendar
days after the end
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of each month, Licensee will furnish the Company with a detailed written report
of all payments and fees owed to the Company for that month, which report will
include a complete itemized accounting of the number of units of Products which
Licensee and its Subdistributors licensed and otherwise distributed during that
month and an accounting of royalty payments owed to the Company for such month.
At the time of each such report, Licensee will pay the Company the amount due
pursuant to such report. All payments made under this Agreement after their due
date will incur interest at a rate equal to 1.5% per month or the highest rate
permitted by applicable law, whichever is lower.
5.4 TAXES AND ASSESSMENTS. In addition to royalty payments and
other charges, Licensee assumes and agrees to pay (or provide the Company with a
certificate of exemption acceptable to the appropriate taxing authorities prior
to shipment) and to indemnify and hold the Company harmless from all export
charges and import duties and any and all sales, use, excise or other taxes or
assessments imposed upon or applicable to any sale or license to Licensee
hereunder by any governmental authority. If any taxes or assessments are
required to be withheld from payments to the Company, Licensee will pay the
Company an amount which, after such withholding, equals the original amount due
under this Agreement, and will provide the Company With official tax receipts or
other evidence of payment of such withheld taxes or assessments sufficient to
substantiate a claim by the Company for credit against United States federal
income tax.
5.5 EXAMINATION. The Company will have the right at least once
per calendar year to have the Company's internal or external accounting
representatives examine Licensee's books, records and accounts for the purpose
of verifying payments made hereunder. Each such examination will be upon at
least five (5) calendar days prior written notice to Licensee and will not
unreasonably interfere With Licensee's business. If any examination discloses a
shortfall in any monthly payment due under this Agreement of more than five
percent (5%), then, in addition to paying the delinquent amount plus interest at
the rate specified above, Licensee will pay the fees and expenses of the
Company's accounting representatives for that examination. In all written
agreements between Licensee and Subdistributors, Licensee will include a
provision which permits the Company the same examination rights as set forth
herein With respect to the books and records of all Subdistributors.
6. OWNERSHIP OF INTELLECTUAL PROPERTY.
6.1 MATERIAL OWNED BY THE COMPANY. The Company has and will
retain all rights of ownership in and to the Products, including without
limitation the object code, source code and documentation, all proprietary
rights embodied therein and related thereto, and all modifications, enhancements
and derivatives thereof and Licensee agrees and understands that it will not
obtain, assert or claim any right or license therein except as specifically set
forth in this Agreement.
6.2 ASSIGNMENT OF RIGHTS BY LICENSEE. Licensee hereby assigns
and transfers to the Company all its right, title and interest in and to any
marketing material developed by Licensee for the Products, subject to the rights
of Licensee in any Licensee corporate trademarks, and Licensee agrees to execute
such other and further documents as may be reasonably necessary and appropriate
to secure to the Company all rights of ownership in such materials and the
proprietary rights embodied therein.
7. TERM OF AGREEMENT AND TERMINATION.
7.1 TERM. Subject to earlier termination as provided in this
Section 7, the term of this Agreement shall extend from the date hereof through
December 31, 2001. This Agreement shall automatically be renewed for successive
periods of twelve (12) months, unless either party sends a written notice to the
other not
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less than sixty (60) calendar days before the expiration of the initial term of
this Agreement or any renewal thereof stating that such party is not renewing
this Agreement.
7.2 TERMINATION BY EITHER PARTY. Either party may terminate
this Agreement as follows:
7.2.1 In the event of a material default by either
party in the performance of its duties, obligations or undertakings under this
Agreement, the non-defaulting party shall have the right to give written notice
to the defaulting party advising such party of the specific default involved
and, if within thirty (30) calendar days after such notice, the defaulting party
shall not have remedied such default, the other party shall have the
unconditional right, in addition to any other rights and remedies it may have,
to terminate this Agreement immediately upon giving written notice to the
defaulting party.
7.2.2 At any time by giving written notice of such
termination in the event the other party becomes insolvent or institutes or
permits to be instituted against it any proceedings seeking receivership,
trusteeship, bankruptcy, reorganization, arrangement, readjustment of debt,
assignment for the benefit of creditors, or other similar proceedings under any
applicable law.
7.3 TERMINATION OF RIGHTS AND OBLIGATIONS. Upon termination of
this Agreement for any reason:
7.3.1 All amounts owed by Licensee to the Company
shall become immediately due, except in the case of expiration of the term of
this Agreement, in which case all amounts owed shall be paid in accordance with
Section 7.3;
7.3.2 The right of Licensee to act as a licensee for
the Company shall cease, and Licensee shall immediately discontinue all use of
the Company's trade names and trademarks, and Licensee shall return to the
Company all masters, source code, catalogs, sales literature, operating and
service manuals, advertising literature and materials relating to the Products
and send to the Company a written certification by an officer of Licensee that
all source code and masters of the Products have been returned;
7.3.3 Licensees shall return all copies of the
Products to the Company and send to the Company a written certification by an
officer of Licensee that all copies of the Products have been returned or, at
the sole option of the Company, destroy all copies the Products and send to the
Company a written certification by an officer of Licensee that all copies of the
Products have been destroyed;
7.3.4 Licensee shall not thereafter represent or hold
itself out as being an authorized licensee for the Company's Products or engage
in any practices which might make it appear that Licensee is still such an
authorized licensee; and
7.3.5 Licensee shall transfer to the Company any
rights it may have to any trademarks or trade names of the Company and Licensee
shall assign to the Company, or its nominee, any registrations or other
governmental permits with respect to the Products except to the extent a
Combined Product carries a trademark which is distinct from the Products, or if
such assignment is not permitted by law, Licensee shall cooperate in the
cancellation of such registrations and permits standing in its name and the
reassurance thereof to the Company or its nominee.
7.4 NO LIABILITY. The Company shall have no obligation to
Licensee by reason of the
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expiration or termination, in compliance with the provisions of Section 7.2, of
this Agreement or the Company's non-renewal of this Agreement at the expiration
of the initial term or any extension thereof, and Licensee hereby agrees not to
assert any claim by reason of such expiration or termination of this Agreement.
Neither party, by reason of the termination of this Agreement, shall be liable
to the other because of any loss of anticipated revenue or prospective profits
or because of expenditures or investments related to the performance of this
Agreement or the goodwill created in the course of performance hereunder.
7.5 NO RELEASE. No termination of this Agreement shall in any
manner whatsoever release, or be construed as releasing, any party from any
liability to the other arising out of or in connection with a party's breach of,
of failure to perform, any covenant, agreement, duty or obligation contained
herein.
7.6 SURVIVAL. The provisions of Sections 5,6,7, 8,9, 10, 11,
12 and 13 will survive the expiration or termination of this Agreement.
8. WARRANTIES.
8.1 PRODUCT WARRANTY. The Company warrants that for a period
of ninety (90) calendar days, the Products will substantially conform to the
specifications set forth in the Documentation. The Company may change its
Product warranty for a Product from time to time upon giving Licensee written
notice thereof at least thirty (30) calendar days in advance of the effective
date of any change together with a copy of the new Product warranty which will
be effective as to all subject Products distributed after the effective date
specified in such notice. Licensee shall not make any Product warranty to its
customers of the Products other than the Company's Product warranty then in
effect with respect to such Product. Licensee shall pass the Company's warranty
through to its customers as set forth in Section 3.2 above. Licensee will be
solely responsible for all warranties with respect to the media upon which the
Products reside.
8.2 THE COMPANY OPTION. The Company shall, at its option,
replace, repair or issue credit to Licensee for any confirmed defective Products
licensed by the Company to Licensee under this Agreement and covered under the
warranty period.
8.3 EXCLUSIVE REMEDY. In case of breach of the Product
warranties, Licensee's or its customers' exclusive remedy against the Company,
and the Company's sole liability, shall be, as set forth in Section 8.2.
Licensee or its customers shall prepay return transportation charges to the
Company's designated site. If the returned Product is found defective by the
Company under the terms of the warranty and the Company elects to repair or
replace the defective Product, the Company will prepay return transportation
charges to Licensee or its customers, as appropriate. The Company shall have a
reasonable time to make repairs, replace or issue credit with respect to
Products found to be defective.
8.4 LIMITATION. The Company's warranty will not apply to a
Product if its correction, repair or replacement is required due to: (i) natural
disasters, including fire, smoke, water, wind, earthquakes or lightning, (ii)
electric power failures, (iii) the failure to maintain appropriate environmental
conditions, (iv) the neglect, misuse or other than the ordinary use of the
Product, or (v) attempted repairs or alterations by persons other than those
employed by the Company. Under these circumstances, the Company may charge
Licensee or its customers for the correction, repair or replacement on a
time-and-materials basis at the Company's then-current rates.
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8.5 DISCLAIMER. EXCEPT AS EXPRESSLY PROVIDED IN THIS SECTION
8, ALL WARRANTIES, CONDITIONS, REPRESENTATIONS, INDEMNITIES AND GUARANTEES,
WHETHER EXPRESS OR IMPLIED, ARISING BY LAW, CUSTOM, PRIOR ORAL OR WRITTEN
STATEMENTS BY THE COMPANY OR OTHERWISE (INCLUDING, BUT NOT LIMITED TO, ANY
WARRANTY OF MERCHANTABILITY OR FITNESS FOR PARTICULAR PURPOSE OR OF
UNINTERRUPTED USE) ARE HEREBY OVERRIDDEN, EXCLUDED AND DISCLAIMED.
8.6 NO CONSEQUENTIAL DAMAGES. THE COMPANY WILL NOT BE LIABLE
TO LICENSEE OR ITS CUSTOMERS OR SUBDISTRIBUTORS AND LICENSEE WILL NOT BE LIABLE
TO THE COMPANY FOR ANY CONSEQUENTIAL, INDIRECT, PUNITIVE, SPECIAL OR INCIDENTAL
DAMAGES, WHETHER FORESEEABLE OR UNFORESEEABLE, BASED ON CLAIMS OF LICENSEE, OR
ITS CUSTOMERS, OR THE COMPANY, AS THE CASE MAY BE, (INCLUDING, BUT NOT LIMITED
TO, CLAIMS FOR LOSS OF GOODWILL, PROFITS, INVESTMENTS, USE OF MONEY, LOSS OF USE
OF THE COMPANY'S PRODUCTS; INTERRUPTION IN USE, STOPPAGE OF OTHER WORK OR
IMPAIRMENT OF OTHER ASSETS, OR LABOR CLAIMS), ARISING OUT OF BREACH OF EXPRESS
OR
IMPLIED WARRANTY, BREACH OF CONTRACT, MISREPRESENTATION,
NEGLIGENCE, STRICT LIABILITY IN TORT OR OTHERWISE, EXCEPT ONLY IN THE CASE OF
DEATH OR PERSONAL INJURY WHERE AND SOLELY TO THE EXTENT THAT APPLICABLE LAW
REQUIRES SUCH LIABILITY.
8.7 LICENSEE INDEMNITY. If Licensee makes any warranty or
representation inconsistent with or in addition to the warranties stated in this
Section 8, Licensee shall, at its own expense, defend, indemnify and hold the
Company harmless from any claim to the extent it is based upon such inconsistent
or additional warranty or representation.
9. TRADEMARKS AND TRADE NAMES.
9.1 VALIDITY AND LICENSEE REGISTRATION. Licensee recognizes
the validity of the Company's trademarks and trade names as set forth on Exhibit
C attached hereto, (the "COMPANY TRADEMARKS"), acknowledges that the same are
the property of the Company, and agrees not to infringe upon, harm or contest
the rights of the Company in the Company Trademarks. Licensee further agrees, if
requested by the Company and at the Company's expense, to register or otherwise
obtain protection in the Territory for the Company Trademarks on behalf and for
the benefit of the Company.
9.2 OWNERSHIP. All Company Trademarks are and will remain the
exclusive property of the Company, whether or not specifically recognized or
registered under applicable law. Licensee will not take any action that
jeopardizes the proprietary rights of or acquire any right to the Company
Trademarks, except the limited use rights specified in this Section 9. Licensee
will not register, directly or indirectly, any trademark, service xxxx, trade
name, copyright, company name or other proprietary or commercial right which is
identical or confusingly similar to the Company Trademarks.
9.3 USE. Licensee shall have the right to use in the Territory
all the Company Trademarks as well as other trademarks which are or may be owned
by the Company during the term of this Agreement in connection with the Products
for the exclusive purpose of advertising and promoting the Products in the
Territory. All advertisements and promotional materials will (i) clearly
identify the Company as the owner of its trademarks, (ii) conform to the
Company's then-current trademark and logotype guidelines and (iii) otherwise
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comply with any local applicable notice or marking requirement. Before
publishing or disseminating any advertisement or promotional materials bearing a
trademark of the Company, Licensee will deliver a copy of the advertisement or
promotional materials in the English language to the Company for approval, which
approval shall not be unreasonably withheld. If the Company gives Licensee
written notice that the proposed use of its trademark is inappropriate within
ten (10) calendar days from the date of submission by Licensee, Licensee will
not place the advertisement or promotional materials in circulation.
9.4 RETURN OF MATERIALS. Licensee agrees that upon termination
of this Agreement for any reason it will destroy or return to the Company any
advertising, stationery or other materials bearing any of the Company's trade
names or trademarks.
9.5 INFRINGEMENT. Licensee will immediately notify the Company
if it learns (i) of any potential infringement of a Company trademark by a third
party or (ii) that the use of a the Company trademark may infringe the
proprietary rights of a third party. The Company will determine the steps to be
taken under these circumstances in accordance with Section 10.2 below.
10. INTELLECTUAL PROPERTY RIGHTS.
10.1 COMPANY'S RIGHTS. The Company is the sole author and
exclusive owner, or authorized licensee of the Products and all intellectual
property rights therein. The Products do not and will not throughout the term of
this Agreement infringe upon any patent, copyright, trade secret or other
proprietary right held by any third party and there is no such claim or pen4ing
or threatening action with respect thereto.
10.2 COMPANY'S OBLIGATIONS. The Company will indemnify and
hold harmless Licensee from and against all claims, actions, damages, costs and
expenses (including attorneys fees) arising out of any actual or threatened
claim of infringement of any proprietary right, including copyrights,
trademarks, patent rights and trade secrets, arising out of the Products (but
not attributable to any product with which a Product is combined to form a
Combined Product, nor attributable to any Interoperability Modifications.) This
obligation will be subject to the following terms and conditions:
(i) The obligation will arise only if Licensee gives the
Company prompt notice of the infringement claim and grants the Company, in
writing, exclusive control over its defense and settlements;
(ii) Without limiting the introduction to this Section 10.2
above, this obligation will cover the Products only in the form as licensed to
Licensee by the Company or its agents, and will not cover any correction,
modification, improvement, enhancement or addition to any Product made by anyone
other than the Company without the Company's prior written authorization;
(iii) This obligation will not cover any claim that any
Product infringes any third party's rights as used in combination with any
hardware or software not supplied by the Company if that claim could have been
avoided by the use of that Product in combination with other hardware or
software;
(iv) Without limiting the Company's general obligation of
indemnification, and in addition thereto, if an infringement claim is asserted,
or if the Company believes one likely, the Company will have the right and the
obligation to do any of the following: (a) procure a license from the person(s)
claiming or likely to claim infringements; or (b) modify the Product to avoid
the claim of infringement; or (c) suspend the Agreement with respect to such
Product until the infringement claim has otherwise been resolved. If the Company
modifies
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any Product to avoid a claim of infringement, the Company will have no
obligation to indemnify Licensee with respect to unmodified Products distributed
by Licensee after the Company has supplied the modification to Licensee; and
THE FOREGOING STATES THE COMPANY'S EXCLUSIVE AND ENTIRE OBLIGATION WITH RESPECT
TO ANY CLAIMS OF INFRINGEMENT OF PROPRIETARY RIGHTS OF ANY KIND.
10.3 LICENSEES INDEMNIFICATION. Licensee will indemnify and
hold harmless the Company from and against all claims, actions, damages, costs
and expenses (including attorneys fees) arising out of any actual or threatened
claim of infringement of any proprietary right, including copyrights,
trademarks, patent rights and trade secrets, arising out of the inclusion of any
product not supplied by the Company and combined with the Product for
distribution as a Combined Product or a Private Label Product. Licensee's
obligation to indemnify the Company will arise if the Company gives Licensee
prompt notice of the claim and cooperates and consults fully with Licensee in
its defense and/or settlement. If such an infringement claim is asserted, or if
Licensee believes one likely, Licensee will have the right, but no obligation,
to procure a license from the person claiming or likely to claim infringement.
11. CONFIDENTIAL INFORMATION. Each party agrees that it will treat
accordingly all verbal and written communications from the other party which are
designated, or which should reasonably be regarded in the normal commercial
view, as constituting business secrets or proprietary information, and will
impose upon its employees and agents the same obligations with respect to the
other party's proprietary information as it employs with respect to its own
confidential information, but in no event less than a reasonable degree of care.
The provisions of this Section shall survive the termination of this Agreement.
12. INDEPENDENT CONTRACTOR.
12.1 NO AUTHORIZATION. Licensee shall be an independent
contractor hereunder. Licensee is not authorized to: (i) enter into agreements
for or on behalf of the Company; (ii) create any obligation or responsibility,
express or implied, for or on behalf of the Company; (iii) accept payment of any
obligation due or owed to the Company; (iv) accept service of process for the
Company; or (v) bind the Company in any manner whatsoever, except for Licensee's
right to pass to its customers and end-users the Company's product warranties
for the Products as set forth herein. Licensee shall not list, print, or display
the Company's name in such manner as to indicate or imply that there is an
employer-employee or a principal-agent relationship between the Company and
Licensee.
12.2 CONTROL OF LICENSEE. Subject to its compliance with all
applicable laws and regulations and except as otherwise provided herein,
Licensee shall have control over the manner and means of performing its
obligations under this Agreement. All expenses incurred by Licensee in
connection with the performance of its obligations hereunder shall be borne
solely by Licensee. Licensee shall be responsible for appointing its own
employees, agents and representatives, who shall be compensated by Licensee.
13. MISCELLANEOUS PROVISIONS.
13.1 SALES AND LICENSES. All Products delivered hereunder are
licensed as provided herein. All references in this Agreement to the "sale" or
"purchase" of Products signify only the delivery of the Product in question
subject to the terms set forth in this Agreement. Licensee shall acquire no
rights with respect to the Products other than the right to reproduce and
distribute such Products and provide related support, as provided
License and Distribution Agreement
Page 11
herein.
13.2 MOST FAVORED NATIONS. In no event shall the Company offer
any other distributor or third party customer any terms or conditions more
favorable than those set forth in this Agreement.
13.3 GOVERNING LAWS. The internal laws of the State of
Delaware, U.S.A., regardless of any choice of law principles, shall govern the
validity of this Agreement, the construction of its terms and the interpretation
and enforcement of the rights and duties of the parties. THE PARTIES AGREE THAT
THE UNITED NATIONS CONVENTION ON CONTRACTS FOR THE INTERNATIONAL SALE OF GOODS
SHALL NOT APPLY TO THIS AGREEMENT AND ITS APPLICATION IS HEREBY EXPRESSLY
EXCLUDED.
13.4 SUCCESSORS AND ASSIGNS. The terms and conditions of this
Agreement shall inure to the benefit of and be binding upon the respective
permitted successors and assigns of the parties. Nothing in this Agreement,
express or implied, is intended to confer upon any party, other than the parties
hereto or their respective permitted successors and assigns, any rights,
remedies, obligations or liabilities under or by reason of this Agreement,
except as expressly provided in this Agreement.
13.5 SEVERABILITY. If any provision of this Agreement, or the
application thereof, shall for any reason and to any extent be invalid or
unenforceable, the remainder of this Agreement and application of such provision
to other persons or circumstances shall be interpreted so as best to reasonably
effect the intent of the parties hereto. The parties further agree to replace
such void or unenforceable provision of this Agreement with a valid and
enforceable provision which will achieve, to the extent possible, the economic,
business and other purposes of the void or unenforceable provision.
13.6 ENTIRE AGREEMENT. This Agreement, the exhibits hereto,
the documents referenced herein and the exhibits thereto, constitute the entire
understanding and agreement of the parties hereto with respect to the subject
matter hereof and thereof and supersede all prior and contemporaneous agreements
or understandings, inducements or conditions, express or implied, written or
oral, between the parties with respect hereto and thereto. The express terms
hereof control and supersede any course of performance or usage of the trade
inconsistent with any of the terms hereof.
13.7 COUNTERPARTS. This Agreement may be executed in any
number of counterparts, each of which shall be an original as against any party
whose signature appears thereon, and all of which together shall constitute one
and the same instrument.
13.8 OTHER REMEDIES. Any and all remedies herein expressly
conferred upon a party shall be deemed cumulative with, and not exclusive of,
any other remedy conferred hereby or by law on such party' and the exercise of
any one remedy shall not preclude the exercise of any other.
13.9 AMENDMENT AND WAIVERS. Any term or provision of this
Agreement may be amended, and the observance of any term of this Agreement may
be waived (either generally or in a particular instance and either retroactively
or prospectively), only by a writing signed by the parties. The waiver by a
party of any breach hereof for default in payment of any amount due hereunder or
default in the performance hereof shall not be deemed to constitute a waiver of
any other default or succeeding breach or default.
13.10 ATTORNEYS' FEES. Should suit be brought to enforce or
interpret any part of this
License and Distribution Agreement
Page 12
Agreement, the prevailing party shall be entitled to recover, as an element of
the costs of suit and not as damages, reasonable attorneys' fees to be fixed by
the court (including, without limitation, costs, expenses and fees on any
appeal). The prevailing party shall be the party entitled to recover its costs
of suit, regardless of whether such suit proceeds to final judgment. A party not
entitled to recover its costs shall not be entitled to recover attorneys' fees.
No sum for attorneys' fees shall be counted in calculating the amount of a
judgment for purposes of determining if a party is entitled to recover costs or
attorneys' fees.
13.11 NOTICES. Whenever any party hereto desires or is
required to give any notice, demand or request with respect to this Agreement,
each such communication shall be in writing and shall be given or made by
telecopy, telegraph, cable, mail or other delivery and telecopied, telegraphed,
cabled, mailed or delivered to the intended recipient at the addresses specified
below:
If to the Company: SmartDisk Corporation
0000 Xxxxxxxxxx Xxxxxx
Xxxxxx, XX 00000
Facsimile: (000) 000-0000
Attn: Xxxxxxx X. Xxxxxxxxx
with a copy to: Xxxxx & XxXxxxxx
000 Xxxxxx Xxx
Xxxx Xxxx, XX 00000
Facsimile: (000) 000-0000
Attn: J. Xxx Xxxxxx, Esq.
If to Licensee: Xxxxxxx International Systems Corporation
0000 Xxxxxxxxxx Xxxxxx
Xxxxxx, XX 00000
Facsimile: (000) 000-0000
Attn: Xxxx X. Xxxxxxx
with a copy to: Xxxxxxxxx Xxxxx Morosoli & Maser LLP
000 Xxxx Xxxx Xxxx, Xxxxxx Xxxxx
Xxxx Xxxx, XX 00000
Facsimile: (000) 000-0000
Attn: Xxxx X. Xxxxxxxx, Esq.
Except as may be otherwise provided in this Agreement, all such communications
shall be deemed to have been duly given when transmitted by telecopier with
verified receipt by the receiving telecopier, when personally delivered, four
(4) days after being delivered to an overnight air courier (e.g. DHL, or Federal
Express) upon proof of delivery, or, in the case of a mailed notice, five (5)
days after being deposited in the United States mail certified or registered
mail, postage prepaid. Either party may change its address for such
communications by giving notice thereof to the other party in conformance with
this section.
13.12 CONSTRUCTION OF AGREEMENT. This Agreement has been
negotiated by the respective parties hereto and their attorneys and the language
hereof shall not be construed for or against any party. A reference in this
Agreement to any Section shall include a reference to every Section the number
of which begins
License and Distribution Agreement
Page 13
with the number of the Section to which reference is specifically made (e.g., a
reference to Section 5.8 shall include a reference to Sections 5.8.1 and
5.8.1.1). The titles and headings herein are for reference purposes only and
shall not in any manner limit the construction of this Agreement which shall be
considered as a whole. A reference to a Schedule, Exhibit or Section means a
Schedule, Exhibit or Section of this Agreement, unless the context expressly
otherwise requires.
13.13 PRONOUNS. All pronouns and any variations thereof shall
be deemed to refer to the masculine, feminine or neuter, singular or plural, as
the identity of the person, persons, entity or entities may require.
13.14 FURTHER ASSURANCES. Each party agrees to cooperate fully
with the other parties and to execute such further instruments, documents and
agreements and to give such further written assurances as may be reasonably
requested by any other party to better evidence and reflect the transactions
described herein and contemplated hereby, and to carry into effect the intents
and purposes of this Agreement.
13.15 ABSENCE OF THIRD PARTY BENEFICIARY RIGHTS. No provisions
of this Agreement are intended nor shall be interpreted to provide or create any
third party beneficiary rights or any other rights of any kind in any client,
customer, affiliate, shareholder or partner of any party hereto, or any other
person, unless specifically provided otherwise herein and, except as so
provided, all provisions hereof shall be personal solely between the parties to
this Agreement.
13.16 FORCE MAJEURE. Except as to the timely payment by
Licensee of the royalties as set forth herein, no failure or omission to carry
out or observe any of the terms, provisions or conditions of this Agreement
shall give rise to any claim by one party against the other or be deemed to be a
breach of this Agreement if the same is caused by or arises out of one or more
of the following conditions: acts of God; acts, regulations or laws of any
government; war; civil commotion; destruction of production facilities or
materials by fire, earthquake or storm; labor disturbances; epidemic; failure of
public utilities or of suppliers; or any other event, matter or thing wherever
occurring and whether or not of the same class or kind as those set forth above,
which is not reasonably within the control of the party affected thereby.
However, the parties hereto shall endeavor to avoid, remove or cure all such
conditions. Any party temporarily excused from performance hereunder by such
conditions shall resume performance promptly when such conditions are removed or
cured. Any party claiming any such conditions as an excuse for delay in
performance hereunder shall give prompt notice in writing thereof to the other
party.
13.17 COMPLIANCE WITH LAWS. The parties acknowledge and agree
that this Agreement and the rights and obligations of the parties hereunder are
subject to all applicable laws and regulations of governmental entities having
jurisdiction over any aspects of this Agreement.
13.18 ASSIGNMENT. Except as provided in this Section, neither
party to this Agreement shall assign or otherwise transfer any of its rights or
obligations under this Agreement to any third party, and any such attempt at
assignment shall be void. However, the Company shall have the right to assign
this Agreement, without the prior approval of Licensee, to any successor of all
or substantially all of its business and assets at the time of assignment,
provided that such successor undertakes to fulfill all the obligations of the
Company under this Agreement. Additionally, both the Company and Licensee shall
have the right to assign this Agreement or delegate its obligations hereunder to
any affiliate by giving written notice, provided that such party guarantees the
obligations to be performed by such affiliate. For purposes of this Agreement,
the term "affiliate" shall mean any corporation or business entity controlled
by, controlling or under common control with the Company or
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Page 14
Licensee.
13.19 FOREIGN RESHIPMENT LIABILITY. THIS AGREEMENT IS
EXPRESSLY MADE SUBJECT TO ANY LAWS, REGULATIONS, ORDERS OR OTHER RESTRICTIONS ON
THE EXPORT FROM THE UNITED STATES OF AMERICA OF TECHNICAL INFORMATION OR
PRODUCTS WHICH MAY BE IMPOSED FROM TIME TO TIME BY THE GOVERNMENT OF THE UNITED
STATES OF AMERICA. NOTWITHSTANDING ANYTHING CONTAINED IN THIS AGREEMENT TO THE
CONTRARY, LICENSEE SHALL NOT EXPORT OR REEXPORT, DIRECTLY OR INDIRECTLY, ANY
TECHNICAL INFORMATION OR PRODUCTS TO ANY COUNTRY OR DESTINATION OR PERMIT ITS
TRANSHIPMENT TO ANY COUNTRY OR DESTINATION FOR WHICH SUCH GOVERNMENT OR ANY
AGENCY THEREOF REQUIRES AN EXPORT LICENSE OR OTHER GOVERNMENTAL APPROVAL AT THE
TIME OF EXPORT WITHOUT FIRST OBTAINING SUCH LICENSE OR APPROVAL.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
effective as of the day and year first above written.
SMARTDISK CORPORATION XXXXXXX INTERNATIONAL SYSTEMS CORPORATION
By: /s/ XXXXXXX XXXXXXXXX By: /s/ XXXXXXX X. XXXXXXXXX
--------------------- ------------------------
Name: Xxxxxxx Xxxxxxxxx Name: Xxxxxxx X. Xxxxxxxxx
Title: Secretary Title: President
EXHIBIT A
LIST OF PRODUCTS
SafeBoot
SafeBoot Corporate Edition
EXHIBIT B
TERRITORY
Worldwide except:
Australia
Burma/Myanmar
China/Hong Kong
Indonesia
Japan
Korea
Laos
Malaysia
Micronesia
New Zealand
Papua / New Guinea
Philippines
Singapore
Taiwan
Thailand
Vietnam
EXHIBIT C
TRADEMARKS
SmartDisk
SafeBoot
