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EXHIBIT 10.29.1
LICENSE AGREEMENT
LICENSE AGREEMENT (this "Agreement"), dated as of December 11,
1998 and effective as of August 28, 1999, by and between Quintelcomm, Inc., a
Delaware corporation ("Xxxxxxx" or "Licensee"), and {Confidential portion
omitted and filed separately with the Commission}. Licensee and Licensor are
sometimes referred to individually as a "Party" and collectively as the
"Parties".
RECITALS
WHEREAS, Licensor owns certain rights in the Licensed Property
(as defined below) and Licensee desires to obtain and use a license for the use
of the Licensed Property in the Territory (as defined below); and
WHEREAS, the businesses of each of the Licensor and Licensee
will benefit from the use of the license granted to Licensee pursuant to this
Agreement.
NOW THEREFORE, in consideration of the foregoing premises and
the representations, warranties, covenants and agreements contained herein,
intending to be legally bound hereby, the Parties agree as follows:
I. License.
x. Xxxxx. Licensor hereby grants to Licensee and Licensee
accepts, a license to use the Licensed Property (the "License"), during the
period commencing on the date hereof and ending on December 31, 2047 (the
"Term") within the Territory. Such uses shall include, without limitation,
referencing any of the names, logos, or other items included within the Licensed
Property in connection with marketing, advertising, publicity, promotion and
sale of products for services by the Licensee or its Affiliates (as defined
below) for itself or as a marketing agent for other third parties (the "Covered
Products"). Nothing herein contained shall be construed as an assignment or
grant to Licensee of any right, title, or interest in or to the Licensed
Property. All rights relating to the Licensed Property, except for the License,
are reserved by Licensor.
i. For purposes of this Agreement, "Licensed
Property" means any of the following, whether presently existing or hereafter
created: (A) the marketing program developed by {Confidential portion omitted
and filed separately with the Commission} under the name "Fly Free America"(TM)
offering free airline travel in conjunction with hotel and other travel
arrangements (the "Free Travel Concept"), (B) the materials setting forth the
terms of the Travel Premium (as defined below) which incorporate the Trademark
(as defined below), as described in Section 3(a) (the "Fly Free Package"), (C)
the registered and unregistered trade names, trademarks, service marks,
copyrights, and rights under or related to copyrights of Licensor which relate
to the
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business of the Licensor related to the Free Travel Concept and the Fly Free
Package listed on Schedule 1(a) hereto (the "Trademark"); and (F) all common law
and other rights to the Trademark which relate to the business of the Licensor
related to the Free Travel Concept and the Fly Free Package. In addition,
"Licensed Property" includes, without limitation, any derivations or variations
of any of the foregoing.
ii. For purposes of this Agreement "Affiliate" means,
with respect to any entity, (A) any entity directly or indirectly controlling,
controlled by or under common control with such entity, or (B) any executive
officer, director or member of such entity. For purposes of this definition, the
terms "controls", "is controlled by" or "is under common control with" shall
mean the possession, direct or indirect, of the power to direct or cause the
direction of the management and policies of a entity, whether through the
ownership of voting securities, by contract or otherwise.
b. Territory. For purposes of this Agreement, "Territory"
means the United States and Canada.
c. Exclusivity. Except as provided below, the License shall be
non-exclusive. For purposes of this Agreement, "Fiscal Period" means the twelve
month period from September 1 through August 31. The first Fiscal Period under
this Agreement shall be the twelve month period commencing on September 1, 1998
through August 31, 1999 (the "Initial Period").
i. Initial Period. During the Initial Period, the
Licensee shall have the exclusive right to use the Licensed Property in the
marketing, advertising, publicity, promotions and sale of Telecommunications
Products (as defined below) within the Territory (the "Exclusivity Right"). For
purposes hereof, "Telecommunications Products" means long distance
telecommunications service for purchasing such long distance service and
excludes all other telecommunications services and products, including without
limitation, local service, internet telephone service, voice mail, cellular
telephone service (both analog and digital) and calling cards for purchasing
such other products and services.
ii. Extended and Subsequent Periods. For purposes of
this Agreement, the "License Payment Formula" means the product of (1) the
difference between the Package Fee (as defined below) received by Licensor and
{Confidential portion omitted and filed separately with the Commission}, and (2)
the number of Fly Free Packages requested, received and paid for by Licensee.
The License Payment Formula shall be calculated separately for each applicable
Package Fee.
(a) If at the end of the Initial Period, the
License Fee together with the aggregate amount of the License Payment Formula
exceeds {Confidential portion omitted and filed separately with the Commission},
then the
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Exclusivity Right shall be automatically extended for the immediately following
Fiscal Year (the "Extended Period").
(b) If the Exclusivity Right has been
extended through the Extended Period, then at the end of each subsequent Fiscal
Year, the Exclusivity Right shall be automatically extended for the immediately
following Fiscal Year (a "Subsequent Period") provided that the aggregate amount
of the License Payment Formula is not less than the aggregate amount of the
License Payment Formula for the immediately preceding Fiscal Year.
(c) For purposes of this Agreement,
"Exclusivity Period" means the Initial Period and, as extended, the Extended
Period and any Subsequent Period.
iii. Adjustments. In the event that the Exclusivity
Period is extended through the second anniversary of the date hereof, then the
Package Fee shall be adjusted proportionately with respect to any increase or
decrease of Licensee's pricing arrangements with providers of Telecommunications
Products; provided, however, in no event shall the Package Fee be less than
{Confidential portion omitted and filed separately with the Commission}.
2. Fees.
a. License Fee. On or prior to the execution of this
Agreement, Licensee shall pay to the Licensor an initial license fee of
{Confidential portion omitted and filed separately with the Commission} (the
"License Fee"). Licensor shall pay the License Fee as follows: (i) {Confidential
portion omitted and filed separately with the Commission} by check or wire
transfer of immediately available funds to an account or accounts designated by
the Licensor in a written notice delivered to Licensee, and (ii) {Confidential
portion omitted and filed separately with the Commission} (such amount, the
"Escrow Amount") by check or wire transfer of immediately available funds,
delivered to Xxxxxxx Berlin Shereff Xxxxxxxx, LLP (the "Escrow Agent"). The
Escrow Amount is to be held in an escrow account (the "Escrow Account") in
accordance with the terms of an escrow agreement among Licensor, Licensee and
the Escrow Agent (the "Escrow Agreement") in the form attached hereto as Exhibit
A.
b. Package Fee. The Licensee shall pay to the Licensor the
following fees for each Fly Free Package requested by and provided to Licensee
throughout the Term (the "Package Fee"):
Aggregate Number of Fly Free Packages Price Xxx Xxx Free Package
{Confidential portion omitted and filed separately with the Commission}
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Licensee shall pay the Package Fee to Licensor within thirty (30) days after
delivery of the Fly Free Packages requested by Licensee from Licensor.
c. Sample Fee. From time to time, Licensee may request, and
Licensor shall provide to Licensee, Fly Free Packages which contain inactive
travel vouchers ("Sample Packages") for use by Licensee in marketing and
promoting the Free Travel Concept and the Fly Free Package. Licensee shall not
cause, assist, encourage, or permit any other party to cause, assist or
encourage the activation of the inactive travel vouchers contained within the
Sample Packages. In addition to the fees described above, Licensee shall pay
Licensor {Confidential portion omitted and filed separately with the Commission}
for each Sample Package provided to Licensee within thirty (30) days after
delivery of the Sample Packages requested by Licensee from Licensor.
d. Kiosk Fee. The Licensee shall pay Licensor a fee of
{Confidential portion omitted and filed separately with the Commission} for each
customer that has been pic'd and for which the service provider of
Telecommunications Products has compensated the Licensee.
3. Obligations of Licensor. Licensor shall be responsible for the
following:
a. Travel Premiums. For purposes of this Agreement, "Travel
Premiums" mean an offer of free airline travel with paid hotel and other travel
arrangements made to potential customers of Licensee for products or services as
an inducement to purchase or subscribe for a particular product or service.
Licensor shall furnish to the Licensee, for distribution to the recipients of
Travel Premiums, complete, ready to mail travel packages containing materials
setting forth the terms of the Travel Premium which incorporate the Trademark
(which travel packages are substantially similar to all other travel packages
provided by Licensor to its other customers at such time) and which travel
packages will be in a form ready for transmittal to the Travel Premium
customers. It is expressly acknowledged by the Parties that a substantial
portion of the total price of such travel packages are set annually by
participating hotels, who generally increase the cost each year, but it is
agreed that rate charged to customers of Licensee will not be greater than the
"rack rate."
b. Fly Free Packages. Upon reasonable request by Licensee in
writing, Licensor shall deliver requested Fly Free Packages and Sample Packages
to Licensee within ten (10) business days following such request.
c. Customer Service. In accordance with the terms and
conditions and general information sections of the Travel Premiums, Licensor
shall provide the following services to those customers who accept the Travel
Premium incorporated in a travel package and/or any upsell premium provided by
Licensor or {Confidential portion omitted and filed separately with the
Commission}:
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i. making all necessary arrangements with the air,
hotel and other providers of travel accommodations and services constituting
part of a travel package offered as a Travel Premium;
ii. addressing any customer complaints or inquiries
regarding the arrangements constituting part of the Travel Premium, travel
package or such upsell premium.
4. Additional Agreements.
a. Continued Development. Licensee may, and Licensor agrees to
cooperate with Licensee to, develop new opportunities for the use of Travel
Premiums incorporating the Free Travel Concept and the Trademark in the
marketing of Telecommunications Products; provided, however, that any use of
such developments shall be subject to the prior written approval of Licensor
which shall not be unreasonably withheld or delayed.
b. Credit Card Transactions. The transactions described in
this paragraph are referred to as the "Credit Card Transactions." With the
approval of the issuing bank or credit card company, Licensor shall attempt to
arrange for Licensee to be granted the right to market credit cards ("Licensee
Credit Cards") to the extent Licensor or its Affiliates may have such rights.
Licensee shall market Licensee Credit Cards as an upsell premium (other than a
Travel Premium) as an inducement to purchase or subscribe for a
Telecommunication Product (a "Upsell Premium"), with the Travel Premium provided
by or developed with Licensor, or to the extent permitted, market the credit
card as a default choice in marketing Telecommunications Products, subject in
each instance to the consent of the issuing bank or credit card company.
i. Credit Card Fees. Licensor shall pay to Licensee
sixty percent (60%) of the fees which it received from the issuing bank or
credit card company with respect to each Activated Customer obtained by Licensee
pursuant to the terms contained in Section 4b (the "Credit Card Fee"). For
purposes of this Agreement, an "Activated Customer" means a customer who
activates a Licensee Credit Card and uses such card to make one purchase or such
other amount as required by the issuer of such credit card. Licensor shall pay
all Credit Card Fees to Licensee within thirty (30) days after the receipt by
Licensor of the applicable payment which the issuing bank or credit card company
is obligated to make to Licensor pursuant to the relevant credit card customer
acquisition programs.
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c. Customer Databases. Licensor shall rent to the Licensee all
customer databases owned or controlled by Licensor (and Licensor shall use its
reasonable efforts to cause Triad's customer database to be rented to Licensee)
(the "Database") for Licensee's non-exclusive use in the marketing of
Telecommunications Products using the Licensed Property during the Term.
Licensor shall provide Licensee with regular updates of the Database from time
to time during the Term not less than monthly. The Database shall revert to the
exclusive control of the Licensor upon the expiration or earlier termination of
this Agreement. Nothing herein contained shall be construed as an assignment or
grant to Licensee of any right, title, or interest in or to the Database. All
rights relating to the Database are reserved by Licensor.
i. Database Fee. Licensor has provided access to the
Database to Licensee. From the date of this Agreement, Licensee shall pay a
monthly fee to Licensor of {Confidential portion omitted and filed separately
with the Commission} per each monthly update (the "Update") of {Confidential
portion omitted and filed separately with the Commission} customer names from
the Database (the "Database Fee"). The Database Fee shall be reduced by (A) then
applicable brokerage fee (which fee is currently {Confidential portion omitted
and filed separately with the Commission}, and (B) the product of {Confidential
portion omitted and filed separately with the Commission} and the number of
sales generated from customers listed in the Database that remain active
customer of the applicable provider of Telecommunications Products for more than
sixty (60) days and receive the Fly Free Package.
ii. Rights of Priority. Licensor shall not provide
the Update to any other marketer of Telecommunications Products, until the date
which is two (2) weeks after the delivery of the Update by Licensor to Licensee.
d. Customer Upsells. Any upsell premium provided by Licensor
or Triad to Licensee shall be on terms no less favorable than are offered by
Licensor or Triad, as the case may be, to any third party.
e. Licensor's Kiosks. Subject to the provisions of Section
2d., Licensor shall distribute promotional materials prepared by the Licensee
concerning the Licensee's Telecommunications Products using the Licensed
Property at any shopping mall kiosks operated by Licensor or its Affiliates. The
form and content of the materials would be determined by Licensee, subject to
Licensor's approval, which will not be unreasonably withheld or delayed.
5. Audit Rights. With respect to Licensee's transactions related to its
use of the License, Licensee shall, and with respect to Licensor's record of all
transactions related to the Credit Card Transactions, Licensor shall, maintain
full, true and accurate books and records, in accordance with generally accepted
accounting principles set forth in the opinions and pronouncements of the
Financial Accounting Standards Board which are applicable in the United States,
applied on a consistent basis to give a complete record
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of all of such actions for the preceding three (3) Fiscal Years. Upon the
request of either party (the "Requesting Party"), the other party (the
"Producing Party") shall give access to the relevant books and records relating
to the use of the License and the Credit Card Transactions, as the case may be,
at reasonable times, during reasonable hours so long as the Requesting Party has
requested such access at least forty-eight (48) hours in advance; provided that
the Producing Party shall not be required to provide such access to the
Requesting Party more than once in any Fiscal Year. A representative of the
Requesting Party (including an independent certified public accountant retained
by the Requesting Party for the purpose of verifying the accuracy of the reports
supplied hereunder) shall have the right to inspect such books and records at
the offices of the Producing Party. The Requesting Party shall pay for the cost
of its representative; provided that if such inspection reveals that the
Producing Party has inaccurately stated amounts due hereunder, as the case may
be, in an average amount of five percent (5%) or more over a six (6) month, then
the Producing Party will pay or reimburse the Requesting Party for the entire
cost of such inspection. The Producing Party agrees to pay the balance of any
fee due together with the cost of the inspection, to the Requesting Party within
ten (10) days after receipt by the Producing Party of written notice from the
Requesting Party of any inaccurate statements.
6. Covenants.
a. Compliance with Laws. Each Party agrees to comply in all
material respects with the provisions of applicable law, including without
limitation, the notice provisions of the copyright and trademark law of the
United States. Each Party agrees to place appropriate notice of any applicable
trademark, service xxxx or copyright with respect to the Licensed Property.
Licensee shall submit to Licensor and its counsel a sample of all uses of the
Licensed Property for its approval to ensure compliance in all material respects
with the provisions of applicable law, prior to any such use of the Licensed
Property.
b. Ownership and Goodwill. Each Party recognizes the value of
the good will associated with the Licensed Property and acknowledges that all
rights based upon or derived from the Licensed Property, including all rights
therein and good will pertaining thereto, belong to Licensor, subject to the
License, and that the Licensed Property has a secondary meaning in the mind of
the public associated with Licensor and, as used subject to the License, with
Licensee. Each Party agrees that it will not, during the Term, do or permit to
be done any act that will invalidate, attack or affect in any manner whatsoever
Licensor's rights based upon or derived from the Licensed Property as well as
the goodwill associated therewith.
c. Quality. Each Party agrees that it shall use, and shall
authorize the use of, the Licensed Property, with such style, appearance and
quality as to be adequate and suited for exploitation to the best advantage and
to the protection and enhancement of the Licensed Property and the good will
pertaining thereto, and that such uses shall in
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no manner reflect adversely upon the Licensed Property. Licensee shall submit to
Licensor a sample of all uses of the Licensed Property for its approval of the
design and quality of such use of the Licensed Property prior to any such use of
the Licensed Property. Such approval shall not be unreasonably withheld or
delayed, conditioned or delayed and shall be (i) deemed given, and the
submission of a sample shall not be required, if the uses of the Licensed
Property by the Licensee are the same as or substantially similar to uses
previously approved by the Licensor, or (ii) evidenced by written notice
executed by Licensor. Licensor's failure to approve or disapprove any such
sample by written notice within ten (10) business days of receipt of such sample
shall be deemed approval of such sample.
d. Advertising and Promotion. Each Party agrees that it shall
not engage, participate or otherwise become involved in any activity or course
of action including, without limitation, advertising and promotion, that
diminishes and/or tarnishes the image and/or reputation of the Licensed
Property.
e. Cooperation. Each Party agrees to cooperate with the other
in obtaining and enforcing copyright, service xxxx, trade name, trade dress and
trademark protection for the Licensed Property, including without limitation, in
connection with suits and claims for infringement of the Licensed Property.
f. Confidentiality. During the term of this Agreement, both
Parties may be exposed to certain information of the other Party which is the
confidential as well as other proprietary information and not generally known to
the public (herein "Confidential Information"). Both Parties will either xxxx
their materials as Confidential Information or notify the other Party, in
writing, that written or oral information is Confidential Information. Both
Parties agree that during and after the term of this Agreement they will not use
or disclose to any third party any of the other Party's Confidential Information
for purposes other than set forth in this Agreement without the prior written
consent of the other Party. Both Parties hereby consent to the disclosure of
their Confidential Information to the employees of the other Party as is
reasonably necessary in order to allow each Party to perform under this
Agreement and to obtain the benefits hereof, subject to obtaining written
confidentiality agreements from said employees, which are at least as protective
as this Agreement. This paragraph shall not apply to information after such
information is made generally known to the public through no breach of this
Agreement.
g. Non-Competition. Licensee agrees that during the Term and
for the twelve month period immediately following the date of expiration or
termination of this Agreement, Licensee shall not use Travel premiums
incorporating the Free Travel Concept, or a substantially similar travel offer,
in connection with marketing, advertising, publicity, promotion and sale of
products for services by the Licensee or its Affiliates for itself or as a
marketing agent for other third parties without the express written consent of
Licensor.
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7. Protection of the Licensed Property.
a. Enforcement of Licensed Property Rights. Each Party agrees
to assist the other in protecting the intellectual property rights with respect
to the Licensed Property as follows:
i. Registration. Licensor shall seek to obtain and
maintain a registration from the United States Patent and Trademark Office, the
United States Register of Copyrights, or appropriate state agencies within the
United States with respect to uses of the Licensed Property by either the
Licensee or Licensor or any modifications thereto or derivations thereof (the
"Registrations") and shall renew all such registrations, as required, maintain
notices of allowance and otherwise take all appropriate action relating to the
Registrations, including, without limitation, the filing of Statements of Use,
Requests for Extensions of Time to File Statements of Use, Affidavits of Use and
Affidavits of Incontestability. Licensor shall bear the cost of obtaining and
maintaining such Registration.
ii. Infringement. Licensor may commence or prosecute
any claims or suits with respect to any infringements or possible infringement
of the Licensed Property in its own name. If Licensor elects to prosecute any
such claim or suit, Licensor shall bear all costs and expenses, including legal
fees, incurred in connection with any such suits and Licensee shall not
institute any suit or take any action on account of any infringements or
possible infringements of the Licensed Property without first notifying and
consulting with Licensor. If Licensor elects not to prosecute any such claim or
suit within ten (10) days after the receipt of written notice of Licensee
requesting it to do so, then Licensee shall have the right to prosecute any such
infringement or possible infringement. If Licensee elects to do so, costs and
expenses, including legal fees, incurred in connection with any such suits shall
be borne by Licensee (subject to Section 8, to the extent applicable). If either
Party institutes a suit for infringement pursuant to this Agreement, the other
Party shall have the right to participate and represent its interest through
other counsel of its own choosing and at its cost and expense, including legal
fees, incurred in connection with such participation.
iii. Remedies. In the event that either Party obtains
any recovery as a result of any claims or suits commenced, prosecuted or
settled, the allocation of such recovery (net of the cost and expenses,
including legal fees, reasonably incurred in connection with any such suit or
claim) shall be allocated as follows: (A) in the event that either Party bears
all costs and expenses, including legal fees, incurred in connection with any
such claims or suit, such Party shall receive one hundred percent (100%) of any
such recovery, or (B) in the event that the Licensor and Licensee each bear a
portion of the costs and expenses, including legal fees, incurred in connection
with any such claims or suits, then such recovery shall be allocated between the
Licensor and Licensee in proportion to costs and expenses so incurred; provided,
however, that in no event shall Licensor receive less than fifty percent (50%)
of any such recovery.
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b. Notice of Infringement. Each Party agrees to notify the
other promptly in writing of any adverse use of the Licensed Property or other
designation similar to the Licensed Property of which such Party is or becomes
aware.
8. Indemnification, Insurance Coverage.
a. Indemnification; Insurance Coverage. Licensor shall
indemnify and hold harmless Licensee, its subsidiaries, sublicensees and their
respective officers, directors and employees from and against any and all
damages, costs and expenses (including reasonable attorney's fees) incurred by
any of them arising out of or in connection with (1) any breach by Licensor or
any of its officers, directors or employees (the "Licensor Affiliates") of the
representations and warranties in this Agreement, and (ii) any breach of any
covenant or agreement of the Licensor or the Licensor Affiliates with the
Licensee contained in this Agreement. The Parties acknowledge that Triad may be
sold, recapitalized, or enter into an extraordinary transaction, and upon the
consummation of any such transaction, all obligations of Triad, and of Licensor
with respect to Triad, shall be terminated without any liability to any Party
and all references to Triad in this Agreement shall be null and void.
b. Indemnification by Licensee. Licensee shall indemnify,
defend and hold harmless Licensor, its subsidiaries, sublicensees and their
respective officers, directors and employees from and against any and all
damages, costs and expenses (including reasonable attorney's fees) incurred by
any of them arising out of or in connection with (i) any breach by Licensee or
any of its officers, directors or employees (the "Licensee Affiliates") of the
representations and warranties in this Agreement, and (ii) any breach of any
covenant or agreement of the Licensee or the Licensee Affiliates with the
Licensor contained in this Agreement, and (iii) any claim or cause of action by
any third party arising out of or in connection with the sale or use of any
Covered Products, including by any customer of Licensee.
c. Indemnification Procedure. An indemnified party shall
provide written notice to each indemnifying party of any claim of such
indemnified party for indemnification under this Agreement promptly after the
date on which such indemnified party has actual knowledge of the existence of
such claim. Such notice shall specify the nature of such claim in reasonable
detail and the indemnifying parties shall be given reasonable access to any
documents or properties within the control of the indemnified party as may be
useful in the investigation of the basis for such claim. The failure to so
notify the indemnifying parties shall not constitute a waiver of such claim but
an indemnified party shall not be entitled to receive any indemnification with
respect to any losses that occurred directly as a result of the failure of such
indemnified party to give such notice.
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i. In the event any indemnified party seeks
indemnification hereunder based upon a claim asserted by a third party, the
indemnifying parties shall have the right (without prejudice to the right of any
indemnified party to participate at its expense through counsel of its own
choosing) to defend or prosecute such claim at its expense and through counsel
of its own choosing if it gives written notice of its intention to do so no
later than twenty (20) days following notice thereof by an indemnified party or
such shorter time period as required so that the interests of the indemnified
party would not be materially prejudiced as a result of its failure to have
received such notice; provided, however, that, if the indemnified party shall
have reasonably concluded that separate counsel is required because a conflict
of interest would otherwise exist, the indemnified party shall have the right to
select separate counsel (but not more than one law firm together with local
counsel, if necessary) to participate in the defense of such action on its
behalf, at the expense of the indemnifying party. If the indemnifying party does
not so choose to defend or prosecute any such claim asserted by a third party
for which any indemnified party would be entitled to indemnification hereunder,
then the indemnified party shall be entitled to recover from the indemnifying
party, all of the reasonable attorney's fees and other costs and expenses of
litigation of any nature whatsoever incurred in the defense of such claim.
Notwithstanding the assumption of the defense of any claim by an indemnifying
party pursuant to this paragraph, the indemnified party shall have the right to
approve the terms of any settlement of a claim (which approval shall not be
unreasonably delayed or withheld).
ii. The indemnifying party and the indemnified party
shall cooperate in furnishing evidence and testimony and in any other manner
which the other may reasonably request, and shall in all other respects have an
obligation of good faith dealing, one to the other, so as not to unreasonably
expose the other to undue risk of loss.
d. Limitation of Liability. Except as provided above, in no
event shall either Party be liable to the other Party for any incidental,
consequential, special, or punitive damages arising out of this Agreement or its
termination, whether liability is asserted in contract, tort (including
negligence or strict product liability) or otherwise, and irrespective of
whether such Party has been advised of the possibility of any such loss or
damage. Further, Licensor shall not be obligated to make any payment for
indemnification under this Section 8 in excess of the aggregate amount of the
License Fee, Package Fee and Sample Fee received by Licensor from Licensee.
9. Representations and Warranties of Licensee. Licensee hereby
represents and warrants as follows:
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a. Organization; Authority; Enforceability. Licensee is a
corporation, duly organized, validly existing and in good standing under the
laws of the State of Delaware, and has all requisite power and authority to
enter into this Agreement and to consummate the transactions contemplated
hereby. This Agreement has been duly executed and delivered by Licensee, has
been duly authorized by all necessary corporate action, and constitutes the
legal, valid and binding obligation of Licensee enforceable in accordance with
its terms.
b. No Conflict or Breach. The execution and delivery of this
Agreement, the consummation of the transactions contemplated hereby, and the
fulfillment of the terms hereof, will not (i) constitute, with or without the
giving of notice or passage of time, or both, a breach of any of the terms or
provisions of, or a default under any agreement, indenture or other instrument
to which Licensee is a party or by which it or any of its Property is bound,
(ii) cause, or give any person grounds to cause, with or without the giving of
notice or passage of time, or both, the maturity of any material liability or
obligation of Licensee to be accelerated, increased or otherwise affected, or
(iii) conflict with Licensee's Certificate of Incorporation, By-Laws, or any
judgment, decree, order or award of any court, governmental body or arbitrator
binding upon Licensee, or any law, rule, or regulation applicable to it.
c. Approvals. No consent, action, approval or authorization
prescribed by any law, rule or regulation, or by any agreement to which Licensee
is a party, is required in order to permit the consummation of the transactions
contemplated by this Agreement.
d. No Legal Bar. Licensee is not prohibited by any order,
writ, injunction or decree from consummating the transactions contemplated by
this Agreement, and no action or proceeding is pending or, to the best of
Licensee's knowledge, threatened against Licensee which questions the validity
of this Agreement or any of the actions which the Parties have taken in
connection herewith or which it is contemplated they shall take in connection
herewith.
c. Finder. Licensee has taken no action and has not dealt with
any person in any manner which will result in any liability to Licensor to pay
any brokerage fees or commissions or finder's fees with respect to this
Agreement or the transactions contemplated hereby.
10. Representations and Warranties of Licensor. Licensor represents and
warrants as follows:
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a. Organization and Authority. Licensor is a corporation, duly
organized, validly existing and in good standing under the laws of the State of
Florida, and has all requisite corporate power and authority to enter into this
Agreement and to consummate the transactions contemplated hereby. This Agreement
has been duly executed and delivered by Licensor, has been duly authorized by
all necessary corporate action on the part of Licensor, and constitutes the
legal, valid and binding obligation of Licensor, enforceable in accordance with
their respective terms.
b. No Conflict or Breach. The execution and delivery of this
Agreement, the consummation of the transactions contemplated hereby and the
fulfillment of the terms hereof will not (i) constitute, with or without the
giving of notice or passage of time, or both, a breach of any of the terms or
provisions of, or a default under, any agreement, indenture or other instrument
to which Licensor is a party or by which Licensor or any of its property is
bound or conflict with the terms of any license granted to any other person,
corporation or other entity, (ii) cause, or give any person grounds to cause,
with or without the giving of notice or passage of time, or both, the maturity
of any material liability or obligation of Licensor to be accelerated, increased
or otherwise affected, or (iii) conflict with Licensor's Certificate of
Incorporation or By-Laws, or any judgment, decree, order or award of any court,
governmental body or arbitrator binding upon Licensor, or any law, rule or
regulation applicable to Licensor.
c. Approvals. No consent, action, approval or authorization
prescribed by any law, rule or regulation or any agreement to which Licensor is
a party is required in order to permit the consummation of the transactions
contemplated by this Agreement.
d. No Legal Bar. Licensor is not prohibited by any order,
writ, injunction or decree from consummating the transactions contemplated by
this Agreement, and no action or proceeding is pending or, to the best of
Licensor's knowledge, threatened against either of them which questions the
validity of this Agreement or any of the actions which the Parties have taken in
connection herewith, or which it is contemplated they shall take in connection
herewith.
e. Finder. Licensor has not taken any action or dealt with any
person in any manner which will result in any liability to Licensee to pay any
brokerage fees or commissions or finder's fees with respect to this Agreement or
the transactions contemplated hereby or thereby.
f. Ownership. Licensor has all right, title, and interest in
and to the Licensed Property as required for the non-infringing use of the
Licensed Property. Schedule 1(a) is a complete and accurate list of all of the
Licensed Property owned or used by the Licensor which relate to the business of
the Licensor.
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11. Termination; Obligations on Expiration or Termination.
a. Termination for Breach. In the event of a material breach
of this Agreement, the non-breaching Party shall have the right to terminate
this Agreement, upon forty-five (45) days written notice specifying the nature
of the breach and provided that the breaching Party has not cured such breach
within such forty-five (45) day period.
b. Rights and Obligations on Termination. Upon expiration or
termination of this Agreement, Licensee shall cease use of the License, and any
sublicense shall terminate; provided, however that the Licensee shall have a
period of one hundred expiration or termination to use, on a non-exclusive
basis, its remaining inventory of Fly Free Packages in connection with the
marketing and sale of Covered Products (the "Sell-Off Period"). Upon the
expiration of the Sell-Off Period, the Licensee shall cease to use the Fly Free
Packages. In the event that this Agreement is terminated by the Licensee other
than by reason of a default of this Agreement by Licensor, the Escrow Amount (if
any) shall be immediately delivered to Licensor.
12. Arbitration. Except as provided in Section 13f, any and all
disputes between the Parties arising out of or in connection with the
negotiation, execution, interpretation, performance or nonperformance of this
Agreement shall be solely and finally settled by arbitration before a panel of
three (3) arbitrators, which shall be conducted in New York, New York or at such
other location as the Parties may agree in writing. The arbitrator shall conduct
the proceedings in accordance with the Commercial Arbitration Rules of the
American Arbitration Association (the "Rules"). The arbitration proceeding shall
be initiated in accordance with the Rules. The Parties hereby renounce all
recourse to litigation and agree that any arbitration award shall be final and
subject to no judicial review. The arbitration shall be conducted before three
(3) arbitrators, chosen in accordance with the Rules. The arbitrators shall
decide the issues submitted in accordance with (i) the commercial purposes of
this Agreement; and (ii) what is just and equitable under the circumstances,
provided that all substantive questions of law (excluding principles of
conflicts of laws) shall be determined under the laws of the State of New York.
a. Facilitation. The Parties agree to facilitate the
arbitration by: (i) making available to one another and to the arbitrators for
examination, inspection and extraction all documents, books, records and
personnel under their control determined by the arbitrator to be relevant to the
dispute, (ii) conducting arbitration hearings to the greatest extent possible on
successive days; and (iii) observing strictly the time periods established by
the Rules, or by the arbitrators, for submission of evidence or briefs.
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b. Entry of Judgment Costs. Judgment on the award of the
arbitrator may be entered in any court having jurisdiction over the Party
against which enforcement of the award is being sought. All deposits and other
costs of arbitration, including without limitation attorneys' fees incurred in
connection with such arbitration, shall be borne by the non-prevailing Party
unless the arbitrators decide that they shall be allocated between parties in
particular proportions.
13. Miscellaneous.
a. No Waiver. No action taken by any Party shall be deemed to
constitute a waiver by such Party of compliance with any covenant or agreement
contained in this Agreement, no course of dealing between the Parties and no
failure or delay on the part of any Party in exercising any right, power, or
privilege hereunder shall operate as a waiver thereof and no single or partial
exercise of any right, power or privilege shall preclude any other or future
exercise thereof or the exercise of any other right, power or privilege.
b. Entire Agreement: Amendments. This Agreement, together with
the Exhibit and Schedules hereto, constitute the entire agreement, and
supersedes all prior and contemporaneous agreements and understandings, whether
oral or written, between the Parties with respect to the subject matter hereof.
No modification, amendment or waiver of any provision of this Agreement shall be
effective unless in writing and signed by the party or parties against whom
enforcement thereof is sought, and any such waiver or consent shall be effective
only in the specific instance and for the purpose for which given.
c. Assignment. The Parties may not assign the License or any
of their respective rights hereunder (other than Licensee may sublicense the
License to an Affiliate of Licensee with fifteen (15) days prior written notice
to Licensor, provided that such sublicense shall not relieve Licensee of its
financial obligations hereunder, which shall remain primary and direct) without
the prior written approval of the other Party, which approval may be withheld in
such Party's sole discretion. In addition, any such assignment shall not become
effective until such time as the assignee executes an instrument binding it to
the terms of this Agreement, and the assigning Party provides written notice of
such assignment to the other Party.
d. Sublicense. Licensee may not sublicense the License or any
of its rights hereunder without the prior written approval of Licensor, which
approval may be withheld in Licensor's sole discretion. In addition, any such
sublicense shall not become effective until such time as the, sublicensee
executes an instrument with respect to the Licensed Property which shall
include, without limitation, quality control provisions substantially similar to
those set forth in paragraph 6c hereof, and the Licensee provide written notice
of such sublicense to the Licensor.
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e. Survival. In addition to any provisions of this Agreement
providing for the continuation of fights or obligations after the termination of
this Agreement, the following Sections shall survive any termination of this
Agreement: Sections 2, 5, 6, 8, 9, 10, 11 and 13; and shall be specifically
enforceable in any court of competent jurisdiction. In no event shall a demand
for arbitration be made after the date when any applicable statute of
limitations, or period for claims under this Agreement, would bar institution of
a legal or equitable proceeding based on such dispute or subject matter in
question. Notwithstanding anything hereby to the contrary, if, prior to the
expiration of any indemnification period, either Licensor or Licensee shall have
been notified of a claim for indemnity hereunder, the substance of such claim to
be specified in reasonable detail to the extent available, and such claim shall
not have been finally resolved before the expiration of such period, any
representation, warranty, covenant or agreement that is the basis for such claim
shall continue to survive and shall remain a basis for indemnity as to such
claim until such claim is finally resolved.
f. Specific Performance. Licensor and Licensee each
acknowledge that the License is unique and that Licensor and/or Licensee may
have no adequate remedy at law for the failure by either of them to perform
their respective obligations hereunder. Accordingly, Licensor and Licensee each
agrees that in the event of any such failure, until the date of the final
judgment with respect to any such dispute pursuant to Section 12, the
non-breaching Party shall have the right to obtain an injunction against the
breaching party from any court having jurisdiction over the matter restraining
any such breach, and the non-breaching Party shall not oppose the granting of
such relief on the grounds that money damages are a sufficient remedy.
g. Notices. Except as otherwise specified herein, all notices,
requests, demands, consents and other communications required or permitted to be
given or made hereunder, including notice of change of address, shall be in
writing and shall be deemed to have been duly given or made when received,
either hand delivered, telexed or mailed, federal express courier, registered or
certified first class mail, postage prepaid, return receipt requested, to the
Party to whom the same is so given or made. is so given or made.
If to Licensor, {Confidential portion omitted and filed
separately with the Commission}
with a copy to: Xxxxxxx X. Xxxxxxxx
Xxxxxxx Berlin Shereff Xxxxxxxx, LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Fax: (000) 000-0000
If to Licensee: Xxxxxxx Xxxxxxxx
Quintelcomm, Inc.
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One Xxxx Xxxx Xxxxx
Xxxxx Xxxxx, Xxx Xxxx 00000
Fax: (000) 000-0000
with a copy to: Xxxxxxxx X. Xxxx, Esq.
Feder, Kaszovitz, Isaacson, Weber, Xxxxx &
Bass LLP
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
h. Binding Effect. This Agreement shall be binding upon and
shall inure to the benefit of and be enforceable by the Parties and their
respective successors, assigns, heirs and legal representatives.
i. Severability. The invalidity of all or part of any
paragraph of this Agreement shall not render invalid the remainder of such
paragraph or of this Agreement. If any provision of this Agreement is so broad
as to be unenforceable, such provision shall be interpreted to be only so broad
as is enforceable.
j. Headings. The headings of this Agreement are for reference
purposes only and shall not affect the meaning or interpretation of this
Agreement.
k. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original and all of which
taken together shall be deemed to constitute a single instrument.
l. Governing Law. This Agreement shall be governed by, and
construed and interpreted in all respects in accordance with the laws of the
State of New York, without giving effect to the principles of conflict of laws
thereof.
m. Franchise. The Parties acknowledge and agree that this
Agreement is an intellectual property rights license agreement and does not
constitute, and shall not be construed as, a franchise agreement. The Parties
further acknowledge and agree that state and federal franchise laws do not and
will not apply to this Agreement or to the relationship between Licensee and
Licensor and their respective rights and obligations hereunder.
n. Further Assurances. The Parties hereby agree to execute and
deliver any further instruments, certificates and documents as may be reasonably
requested from each Party by any of the Parties in order to carry out the terms
and conditions of this Agreement.
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IN WITNESS WHEREOF, the Parties have executed and delivered, or have
caused this Agreement to be executed and delivered by their duly authorized
representative, as of the date first above written.
{Confidential portion omitted and filed
separately with the Commission}
QUINTELCOMM, INC.
By: /s/ Xxxxxxx Xxxxxxxx
---------------------------------------
Name: Xxxxxxx Xxxxxxxx
Title: CEO
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Schedule 1(a)
Trademark
1. Fly Free America(TM) (including, without limitation, the uses of Fly
Free Emetica(TM) set forth in the attached Fly Free Package).
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