11
SCHEDULE B: CONDITIONS OF LICENSE
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THIS AGREEMENT, made and entered into this 14th day of February, 2001, by
and between XXXXXXX X. XXXXXXX ("Licensor"), with a mailing address at 000 Xxxx
Xxxxx, Xxxxxx Xxxxx, XX 00000, and SEAVIEW VIDEO TECHNOLOGY, INC. ("Licensee"),
a public corporation, with a mailing address at 000 Xxxxxxx Xxxxxxxxx, Xxxxxx
Xxxxx, XX 00000.
WITNESSETH
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WHEREAS, Licensor has developed certain apparatus covered under various and
several patents, patent applications and provisional patent applications
referenced on Schedule "A", including all divisions, continuations, reissues,
substitutes, technical and manufacturing know-how and extensions relating to the
foregoing (collectively "Subject Matter").
WHEREAS, Licensee desires to obtain from Licensor and Licensor hereby
grants to Licensee a license to develop, market and exploit for
commercialization the Subject Matter relating to said apparatus.
NOW, THEREFORE, in consideration of the premises and the mutual promises
and covenants herein contained, the parties hereby agree as follows:
1. GRANT OF LICENSE
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(a) Licensor hereby grants to Licensee, upon the terms and conditions
set forth herein, the exclusive right and license to use the Subject Matter to
make, have made, develop, market, distribute, sell and use the Licensed
Products.
(b) Licensee agrees that it shall incorporate into any contract for the
manufacture or distribution of Licensed Products a provision expressly
prohibiting; and will exercise its best efforts to prevent, such contract
manufacturer or distributor from independently selling or distributing, directly
or indirectly, any merchandise, including the Licensed Products, using or
depicting the Subject Matter or any simulation, variation or imitation thereof.
(c) Nothing contained in this Agreement shall be construed as an
assignment or grant to Licensee of any right, title or interest in or to the
Subject Matter, it being understood and acknowledged by Licensee that all rights
relating thereto are reserved by Licensor, as owner of the Subject Matter,
except as pertains to the license granted hereunder to Licensee of the right to
use the Subject Matter only as specifically and expressly provided in this
Agreement.
(d) Nothing contained in this Agreement shall be construed as an
assignment or grant to Licensor of any right, title or interest in or to any
Design Patent, Utility Patent, either granted or pending, any Trademark, or
Copyrighted material relating to any enclosure, cabinet, container, package, or
any other component essential to the construction of a "Finished Product," as
defined in this agreement. It is further understood and acknowledged by Licensor
that all rights relating thereto are reserved by Licensee, with the sole
exclusion of rights pertaining to the Licensed Product and relevant Subject
Matter, as set forth in of this Agreement.
(e) Licensee shall not sublicense the rights granted under this
Agreement. This Agreement shall not, tacitly or otherwise, restrict or prevent
Licensee from manufacturing and/or selling products utilizing components,
methods, or techniques other than those defined by the Subject Matter for
inclusion in Licensed Products.
(f) Licensor shall protect the interests of Licensee as regards this
Agreement, to wit: (i) Licensor shall not directly or indirectly, during the
term of this Agreement, knowingly provide consulting services to any person,
business, or entity specifically relating to the use of the Licensed Products or
any commercially feasible substitute of such products.
(ii) Licensor shall not directly or indirectly, during the term of this
Agreement, knowingly call on, contact, or solicit any customer or other person
or entity with whom Licensee does or did business with respect to the Licensed
Products, to encourage, suggest, or otherwise cause such customers, persons, or
entities to purchase any Finished Product incorporating the Licensed Products or
commercially feasible substitution of such products, from anyone other than
Licensee; or to encourage, suggest, or otherwise cause said customers to change
their business relationship with Licensee.
(g) Both parties agree that each shall notify the other in a prompt and
timely fashion regarding any product not made or sold by the Licensee, which
could affect the terms set forth herein, specifically pursuant to the interests
of the Licensee as stated above, and to the protection of the Patents of the
Parties as defined in section 6 of this Agreement.
2. TERM
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Unless sooner terminated in accordance with the terms hereof, the initial
term of this Agreement shall be for the period commencing on the date hereof and
extending for fourteen (14) years, including patent applications pending when
and as issued ("Initial Term").
3. ADVERTISING AND PROMOTION
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(a) Licensee agrees that, during the Initial Term of this Agreement and
any renewals or extensions thereof it will use its best efforts to promote the
development and sale of Licensed Products.
(b) Licensee shall furnish Licensor, within ninety (90) days after this
Agreement is signed relating to the first Contract Year, and within sixty (60)
days before the commencement date of any subsequent Contract Year of this
Agreement, a detailed marketing plan ("Marketing Plan") for the Licensed
Products for such Contract Year. Each such Marketing Plan shall contain detailed
information about the marketing efforts planned for the coming Contract Year,
including the intended channels of product distribution, any trade networks to
be utilized, any promotional activities or programs contemplated, the target
markets to be identified and addressed through specified means, and other means
by which Licensee intends to market the Licensed Products.
4. LICENSED PRODUCTS QUALITY AND ADVERTISING
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(a) Licensee agrees that the design, content, workmanship and all other
characteristics of Licensed Products shall at all times be of the highest
quality, consistent with the prestige and reputation which the Subject Matter
has developed heretofore and that all Licensed Products will be manufactured,
labeled, packaged, distributed, advertised and sold in accordance with all
applicable laws and regulations. Licensee warrants and agrees that all Licensed
Products shall meet or exceed all legally applicable statutes, standards,
regulations and guidelines, including those relating to health and safety of
consumers. Licensee agrees to comply with the laws, regulations and rules of the
United States regarding the prohibition of exporting technical information
furnished to Licensee, directly or indirectly, by Licensor.
(b) Licensor or its designated representative shall have the right,
upon reasonable advance notice, to examine the Licensed Products in the process
of being manufactured and to inspect all facilities utilized by Licensee in
connection with the manufacture, distribution, storage and handling of Licensed
Products.
5. DISTRIBUTION
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(a) Licensee agrees that it shall use its best efforts to (i) develop
and manufacture high quality Licensed Products, (ii) promote, distribute and
sell Licensed Products continuously and diligently throughout the Initial Term
(including any extensions or renewals) hereof. Licensee shall maintain
facilities and trained personnel sufficient and adequate to accomplish the
foregoing. Licensee recognizes and acknowledges that the obligations set forth
in this Section 5 represent a major inducement and consideration for Licensor to
enter this Agreement, and upon cessation of any of the above for a continuous
period not to exceed thirty (30) days, Licensor shall have the right to
terminate this Agreement immediately, without liability.
(b) Licensee shall perform all its obligations under this Agreement in
a manner which will assure and perpetuate the high quality and prestige of the
Licensor and Licensed Products and the substantial goodwill associated with the
Subject Matter. Licensee shall distribute and sell the Licensed Products only to
third parties whose location, merchandising, customer services ant overall
operations are consistent with Licensee's approved Marketing Plan.
6. PATENT PROTECTION
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(a) Licensee shall give written notice to Licensor as soon as
practicable of any suspected infringement of any of the patents or related
applications covered by the intellectual property set forth on Schedule "A"
relating to the Subject Matter which comes to Licensee's attention. Licensor, at
its sole discretion and in its own name, may prosecute any action or proceeding
which it deems necessary or desirable to protect the Subject Matter against such
infringement. Any failure of Licensor to prosecute or otherwise act upon notice
of infringement shall not give rise to any specific rights on the part of
Licensee. Licensee may, and upon written request by Licensor shall, at
Licensor's sole expense join Licensor in any such action or proceeding. Licensee
shall not commence any action or proceeding alleging infringement of the Subject
Matter without the prior written consent of Licensor. Any and all damages or
awards recovered in any action or proceeding commenced by Licensor shall belong
solely and exclusively to Licensor.
Licensee agrees to cooperate with Licensor in the prosecution of any
trademark or copyright applications that it may desire to file and for that
purpose Licensee shall supply, upon request, such samples, containers, labels
and similar materials as may be required in connection with any such
application.
(b) Licensee shall place or cause to be placed in a conspicuous
location on all Licensed Products, a patent notice in accordance with 35 U.S.C.
287. Licensee shall xxxx or caused to be marked on each Licensed Product made or
using a process covered by a patent relating to the Subject Matter with the
identification number of such patent.
(c) Licensor acknowledges that Licensee has or may apply for, or has
been granted, certain other Patents or Trademarks essential for the completion
of Finished Products as defined herein. Nothing contained in this Agreement
shall be construed as an assignment or grant to Licensor of any right, title or
interest in or to the aforesaid Intellectual Property, it being understood and
acknowledged by Licensee that all rights relating thereto are reserved by
Licensee.
7. RECORDS AND AUDIT
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Licensee shall keep accurate books of account and records at its principal
place of business covering all transactions relating to the license herein
granted. Licensor or its authorized representative shall have the right, at all
reasonable times and upon reasonable advance notice to Licensee, to examine such
books of account, records and all other documents and materials in Licensee's
possession or under its control with respect to the Subject Matter and terms of
this Agreement, and shall have free and full access thereto for such purposes
and for the purpose of making copies and extracts therefrom. Licensee agrees
that the books of account and records it maintains shall include information
disclosing the unit volume and gross and Net Unit Sales price of each Licensed
Product manufactured and/or sold. Said information shall be subject to the
aforementioned inspection and copying rights. All such books of account and
records shall be kept available for at least three (3) years after the
termination or expiration of this Agreement.
8. INDEMNIFICATION
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(a) Licensee hereby agrees to indemnify, defend and hold Licensor, its
officers, directors, agents, heirs or assigns, and employees thereof, harmless
from and against any and all liability, claims, damages and expenses (including
reasonable attorneys' fees and expenses) on account of any actual or alleged
loss, injury, damage, death or other consequence occurring to any person, entity
or property arising out of or resulting directly or indirectly from any defect
or alleged defect in the Licensed Products; the acts, omissions or negligence of
Licensee or its affiliates, agents, or employees in any way connected with the
manufacture, distribution, sales advertising or promotion of the Licensed
Products; or on account of any violation by Licensee of the terms of this
Agreement. The provisions of this paragraph shall survive the expiration or
termination of this Agreement.
(b) Licensor agrees to indemnify, defend and hold Licensee, its agents,
heirs or assigns, and employees, harmless from and against any and all
liability, claims, damages and expenses (including reasonable attorneys' fees
and expenses), from any patent infringement claim arising out of Licensee's use
of Licensor's invention as described in any independent claim of any of the
patents (issued or when issued and listed on Exhibit "A"), as authorized by this
Agreement, provided Licensor is given immediate notice of, and shall have the
option to undertake and conduct the defense of any such claim.
9. INSURANCE
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(a) Licensee shall procure and maintain at its own expense in full
force and effect at all times during the Initial Term of this Agreement and any
renewals or extensions thereof Comprehensive General Liability Insurance,
including Products Liability Coverage with respect to the Licensed Products,
with a limit of liability of not less than Two Million and 00/100 Dollars
($2,000,000.00) combined single limit bodily injury and property damage, which
shall include contractual liability coverage which specifically insures the hold
harmless and indemnification provisions under this Agreement.
(b) The insurance coverage required under this Section 9 shall be
secured and maintained under an occurrence form policy, shall be placed with an
insurer of recognized responsibility and acceptable to Licensor, shall name
Licensor and its directors, officers, agents, heirs or assigns, and employees
thereof as "additional insurers", shall show that it covers all Licensed
Products or all products of the Licensee, and shall provide for at least sixty
(60) days prior written notice to Licensor of the cancellation or modification
thereof. Licensee shall deliver to Licensor, promptly upon issuance of same, a
certificate of such insurance policy and of all renewals thereof.
(c) Nothing contained in this Section 9 shall be deemed to limit, in my
way, the indemnification provisions of Section 8.
10. TERMINATION
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(a) Without prejudice to any other rights Licensor may have, Licensor
may terminate this Agreement, without liability, at any time if Licensee fails
to obtain or maintain the Comprehensive General Liability Insurance as required
by paragraph 9 hereof; or
(b) Licensee shall be unable to pay its obligations when due, or shall
make any assignment for the benefit of creditors, or shall file a voluntary
petition in bankruptcy; or be adjudicated bankrupt or insolvent, or if any
receiver is appointed for its business or property, or if any trustee in
bankruptcy or insolvency shall be appointed for Licensee, Licensor, without
prejudice to any other rights Licensor may have, may
(i) terminate Licensee's exclusive right and license to use the
Subject Matter; or
(ii) reduce the Term provided for in Section 2 of this Agreement
to six (6) months from the date of any stated event listed in Section 11(B).
(c) In accordance with Section 1(c) of this Agreement, in the event of
the Licensee's filing of a voluntary petition in bankruptcy, or its adjudication
as bankrupt or insolvent, of if any receiver is appointed for its business or
property, or if any trustee in bankruptcy or insolvency proceeding shall be
appointed for Licensee, Licensee's license herein shall not be determined to be
property of the Licensee' bankrupt estate, it being understood and agreed by
Licensee that Licensor, retains all right, title and interest in or to the
Subject Matter, and that Licensee shall retain no right, title or interest other
than as specifically and expressly provided in this Agreement.
(d) In accordance with Section 1(c) of this Agreement, in the event the
Licensee should cease doing business as a Public Company as defined under the
current and applicable Federal Statutes, or be acquired by another Company or
entity as part of any direct sale, merger, or acquisition; Licensee's license
herein shall not be determined to be property of the Licensee for the purpose of
transfer or assignment without expressed written amendment or renegotiation of
this License and the overlaying Consulting Agreement.
(e) If Licensee shall violate any of its other obligations under the
terms of this Agreement, Licensor shall have the right to terminate the license
hereby granted, without liability, upon thirty (30) days' notice in writing and
such notice of termination shall become effective unless Licensee shall
completely remedy the violation within such thirty (30) day period and
reasonably satisfies Licensor that such violation has been remedied.
(f) Notwithstanding any termination in accordance with the foregoing,
Licensor shall have and hereby reserves all rights and remedies which it may
have, or which are granted to it by operation of law, with respect to the
collection of fees payable by Licensee pursuant to this Agreement, with respect
to damages for breach of this Agreement by Licensee, and to enjoin the unlawful
and unauthorized use of the Subject Matter.
11. EFFECT OF EXPIRATION OR TERMINATION AND DISPOSAL OF INVENTORY
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(a) At the expiration or termination of this Agreement, Licensee, its
receivers, representatives, trustees, agents, administrators, successors, and/or
assigns shall cease all use of the Subject Matter and shall have no right to and
shall not manufacture, advertise, distribute, sell, or otherwise deal with or in
the Licensed Products except with and under the express written consent and
instructions of Licensor. Licensee agrees that the Licensed Products possess
special, unique, and extraordinary characteristics which make difficult the
assessment of monetary damages which Licensor would sustain by Licensee's
unauthorized use thereof and Licensee recognizes that irreparable injury would
be caused Licensor by such unauthorized use and agrees that injunctive and other
equitable relief is appropriate in the event of a breach of this Agreement by
Licensee, provided; however, that such remedy shall neither be exclusive of
other legal remedies otherwise available, nor shall it be deemed an election of
remedies by Licensor. Further, upon expiration or termination of this Agreement,
Licensee shall thereafter refrain from dealing in any articles or goods of
whatsoever type or form which display or in any fashion incorporate any of the
Subject Matter, except as provided in this Section hereof, or upon such other
terms and conditions as Licensor may otherwise approve. Nothing in this Section
11(a) shall be construed to prohibit Licensor's right to make, use, sell and
offer for sale a Licensed Product covered by the patents listed in Schedule A
after the patent expires.
(b) Upon expiration or termination of this Agreement by Licensor other
than pursuant to Section 10(a) or (b) above, Licensee may sell, in a manner
consistent with this Agreement, the Licensed Products which are on hand or in
the process of manufacture at the time of such expiration or termination, for a
period of ninety (90) days thereafter, provided within fifteen (15) days after
the date of expiration or termination of this Agreement, Licensee shall furnish
to Licensor a written statement of the number and description of Licensed
Products actually in stock on the date of expiration or termination and Licensor
shall have the right to conduct a physical inventory to verify such statement;
and the quantity of Licensed Products in stock on the date of expiration or
termination is not in excess of a reasonable inventory based on Licensee's
selling experience and requirements of Licensed Products during the term of this
Agreement. Any inventory of Licensed Products remaining after the agreed upon
sell off period shall be destroyed and written proof thereof supplied to
Licensor. In the event Licensee breaches this clause, Licensor shall be entitled
to injunctive relief to prevent continued use by Licensee of the Subject Matter
without prejudice to its right for damages.
Notwithstanding the requirement of disposal provided above, Licensor shall have
the right of first refusal to purchase at the prevailing market price the
Licensed Products which are on hand or are in the process of manufacture at the
time of the expiration or termination of this Agreement.
12. NOTICES
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All reports, approvals and notices required or permitted by this Agreement
to be given to a party shall be in writing find shall be deemed to be duly given
(whether or not accepted) if personally delivered or mailed by certified or
registered mail, return receipt requested, or by recognized overnight courier to
the party concerned at the addresses indicated below:
Licensee: SeaView Video Technology, Inc.
000 Xxxxxxx Xxxxxxxxx
Xxxxxx Xxxxx, XX 00000
Attention: Xxxxxx Xxxxxxxxxx iii
Licensor: Xxxxxxx X. XxXxxxx
000 Xxxx Xxxxx
Xxxxxx Xxxxx, XX 00000
or to such other person or address as a party may designate by written notice to
the other party hereto.
13. ASSIGNMENT OR SUBLICENSE
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This Agreement and the rights granted Licensee hereunder are personal to
and for the sole use and benefit of Licensee and shall not be assigned,
encumbered, sublicensed or inure to the benefit of any person, firm or entity
other than Licensee, without Licensor's prior written consent. Any unauthorized
assignment, encumbrance or sublicense shall be void. Licensor may assign this
Agreement and the benefits hereof upon written notice to Licensee.
14. NO AGENCY OR JOINT VENTURE
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Nothing herein contained shall be construed to constitute the parties
hereto as partners or as joint ventures, or either as agent of the other, and
Licensee shall have no power or authority to assume or create any obligation or
responsibility whatsoever, express or implied, on behalf of or in the name of
VideoCom, Inc. or any derivative thereof, to bind Licensor in any manner, or to
make any representation, warranty, or commitment on behalf of Licensor.
15. NO WAIVER
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No failure of Licensor to terminate for my breach shall constitute a waiver
of that breach. Failure of either party to enforce any provision of this
Agreement shall not operate as or be construed to be a general relinquishment or
waiver of that or any other provision of this Agreement and each party may, at
any time, demand strict and complete performance of the other of said terms,
covenants and conditions.
16. PARTIAL INVALIDITY
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If any provision of this Agreement is held to be invalid, illegal or
unenforceable by a court of law, the balance of this Agreement shall remain in
effect, and if any provision is inapplicable to any person or circumstance, it
shall nevertheless remain applicable to all other persons and circumstances.
17. CONFIDENTIALITY
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(a) Licensor's Obligations. During the operation of this Agreement and
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thereafter, Licensor shall keep confidential all financial and other information
as Licensee may from time to time disclose to Licensor, whether pursuant to this
Agreement or otherwise, including, without limitation, information with respect
to the business affairs, contract manufacturers, customer lists, patents,
trademarks, inventions, methods information systems, trade secrets and other
proprietary information of Licensee as may exist from time to time, as such are
valuable, special and unique assets of the business of Licensee, except for such
of the foregoing information which is readily ascertainable from public
information or sources, or otherwise required by law to be disclosed. Further,
the terms and conditions of this Agreement shall be kept confidential between
Licensor ant Licensee except to the extent disclosures are necessary in order to
effectuate this Agreement.
(b) Licensee's Obligation. During the operation of this Agreement and
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thereafter, Licensee shall keep confidential all financial and other information
as Licensor may from time to time disclose to Licensee, whether pursuant to this
Agreement or otherwise, including without limitation, information with respect
to the business affairs, customer lists, authorized retail account lists, sales
representatives' lists and licensees of Licensor, patents, trademarks,
copyrights or other intellectual properties listed on Schedule "A", inventions,
methods of manufacture and retailing, management information systems, trade
secrets and other proprietary information of Licensor and its affiliates as may
exist from time to time, as such are valuable, special and unique assets of the
business of Licensor, except for such of the foregoing information which is
readily ascertainable from public information or sources, or otherwise required
by law to be disclosed. Further, the terms and conditions of this Agreement
shall be kept confidential between Licensor and Licensee except to the extent
disclosures are necessary in order to effectuate this Agreement. Licensee agrees
that prior to delivering any prototype unit or product utilizing the Subject
Matter for testing purposes, it shall first receive an executed non-disclosure
agreement in a form acceptable to Licensor.
(c) The obligations set forth in Sections 17(a) and 17(b) shall survive
the expiration or termination of this Agreement.
18. REPRESENTATION OF AUTHORITY
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Each of the parties hereto represents and warrants to the other that it has
full power and authority to execute, deliver and perform this Agreement and that
all requisite corporate action for the execution, delivery, and performance of
this Agreement has been duly taken.
19. MFN STATUS
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Licensor shall have the right to purchase any Licensed Products from
Licensee, and Licensee shall sell any such product to Licensor, at a price per
unit which is no higher than the lowest price per unit charged by Licensee to
any customer.
20. DISCLAIMER OF WARRANTIES
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EXCEPT AS EXPRESSLY SET FORTH HEREIN, LICENSOR MAKES NO REPRESENTATIONS AND
EXTENDS NO WARRANTIES OF ANY KIND, EITHER EXPRESS OR IMPLIED. LICENSOR MAKES NO
EXPRESS OR IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR
PURPOSE OR USE. LICENSOR, ITS OFFICERS, DIRECTORS AND EMPLOYEES SHALL HAVE NO
LIABILITY WITH RESPECT TO THE OBLIGATIONS UNDER THIS AGREEMENT OR OTHERWISE FOR
CONSEQUENTIAL, EXEMPLARY, INCIDENTAL OR PUNITIVE DAMAGES EVEN IF ANY OF THEM HAS
BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.
21. COSTS OF PATENT REGISTRATION AND MAINTENANCE
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Licensor shall be responsible for all costs and expenses relating to the
filing, prosecution, maintenance of the United States, Pacific Rim and European
patents within the Territory (or reissues, renewals, extensions, or
continuations thereof) on the patents relating to the Subject Matter.
22. DEFINITIONS
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LICENSED PRODUCTS means products or processes, which in the absence of this
licensing agreement would infringe at least one claim of the Subject Matter, or
products which are made using a process or product covered by a claim of the
Subject Matter.
FINISHED PRODUCTS means any assembly, device, or article of merchandise in its
final form, which is considered ready for sale to the consumer. Finished
Products may or may not incorporate some form of the Licensed Products defined
in the preceding paragraph. Finished Products may alternately incorporate other
processes or technologies which are not included in the definitions of "Subject
Matter" and "Licensed Products" as described in this Exhibit and elsewhere in
this License Agreement. Any Finished Product which includes specific elements of
the Subject Matter, or any configuration of the Licensed Product, shall be
considered the same as a Licensed Product as pertains to the scope of this
agreement. Conversely, any Finished Product which includes no elements of the
Subject Matter nor any configuration of the Licensed Product, shall be outside
the scope of this agreement.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
by their duly authorized officers, as of the day and year first above written.
Licensee: Seaview Video Technology, Inc.
By:__________________________
Title:_______________________
Licensor: Xxxxxxx X. XxXxxxx
By:__________________________
