LICENSE AGREEMENT
BETWEEN
POLAROID CORPORATION
AND
PSI INDUSTRIES, INC.
TABLE OF CONTENTS
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DESCRIPTION PAGE NO.
ARTICLE 1: PARTIES 1
1.1 Licensee 1
1.2 Polaroid 1
ARTICLE 2: NATURE, PURPOSE AND SCOPE 1
ARTICLE 3: LICENSE PATENT - LICENSE PRODUCT DEFINITIONS 1
ARTICLE 4: GRANT OF LICENSE 2
ARTICLE 5: DURATION 2
ARTICLE 6: COMPENSATION/ACCOUNTING 2
ARTICLE 7: INVENTIONS, DISCOVERIES, OR IMPROVEMENTS 4
ARTICLE 8: REPRESENTATIONS, DISCLAIMER, INFRINGEMENT 4
ARTICLE 9: PATENT MARKING 6
ARTICLE 10: CONFIDENTIAL INFORMATION 6
ARTICLE 11: MOST FAVORED LICENSEE 6
ARTICLE 12: DISPUTE RESOLUTION 7
ARTICLE 13: FORCE MAJEURE 7
ARTICLE 14: MISCELLANEOUS 8
14.1 Relationship of Parties 8
14.2 Choice of Law/Choice of Forum 8
14.3 Waiver Jury Trial 8
14.4 Assignments 8
14-5 Severability 8
14.6 Non-Waiver 8
15.7 Notices 9
14.8 Survival 9
14.9 Entire Agreement 9
14.10 Paragraph Headings 9
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TABLE OF SCHEDULES
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SCHEDULE DESCRIPTION
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A U.S. Patent and foreign counterparts
-ii-
LICENSE AGREEMENT
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This Agreement made as of this lst day of November, 1997 between POLAROID
CORPORATION ("Polaroid), with its principal place of business at 000 Xxxxxxxxxx
Xxxxxx, Xxxxxxxxx, Xxxxxxxxxxxxx 00000 and PSI INDUSTRIES, INC. ("Licensee'),
with its principal place of business at 0000-X Xxxxx Xxxxxx Xxxxxx, Xxxx Xxxxx,
Xxxxxxx 00000-0000.
ARTICLE 1: PARTIES
1.1 LICENSEE. PSI INDUSTRIES, INC. ("Licensee"), with its principal place
of business at 0000-X Xxxxx Xxxxxx Xxxxxx, Xxxx Xxxxx, Xxxxxxx
00000-0000.
1.2 POLAROID. POLAROID CORPORATION ("Polaroid"), with its principal place
of business at 000 Xxxxxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxxxxxxx 00000.
ARTICLE 2: NATURE, PURPOSE AND SCOPE
Polaroid is the owner of the United States patent and foreign
counterparts, set forth in SCHEDULE A, for a photographic package
containing pre-exposed film. Licensee is desirous of manufacturing and
selling photographic packages containing pre-exposed film throughout
the world. Polaroid is willing to grant a non-exclusive license to
Licensee under Polaroid's patents to manufacture and sell photographic
packages containing pre-exposed film throughout the world. The Parties
have agreed to reduce their understandings relevant to the subject of
this license to this Agreement. Each of the Parties hereto represents
that it has the right, authority, capability and capacity to enter into
this Agreement and to perform each of its obligations and
responsibilities as set forth herein.
ARTICLE 3: LICENSE PATENT - LICENSE PRODUCT DEFINITIONS
3.1 "Licensed Patents" shall mean the U.S. Patent as set forth in SCHEDULE
A, and the foreign counterparts thereof which either have been issued
or which in the future may be issued in any country of the world, and
all continuations, extensions, reissues or renewals of such patents
relating to photographic packages containing pre-exposed film.
3.2 "Licensed Product" shall mean single use camera photographic packages
containing pre-exposed film made by or for Licensee, under the grant of
rights provided by this license utilizing one or more of the claim(s)
of the Licensed Patents.
ARTICLE 4: GRANT OF LICENSE
Polaroid hereby grants to Licensee during the term of this Agreement a
nonexclusive, non-transferable license, without the right to grant
sub-licenses to third parties, to make, have made, use, sell and
otherwise dispose of Licensed Product under the Licensed Patents upon
the terms and conditions hereinafter set forth.
ARTICLE 5: DURATION
5.1 This Agreement shall become effective as of the 1st day of November
1997 and continue in full force and effect until the expiration date of
the last to expire of the Licensed Patents unless it is earlier
terminated in accordance with Articles 5.2 or 5.3 below.
5.2 Licensee may terminate this Agreement at any time by sixty (60) days
prior written notice to Polaroid.
5.3 In the event Licensee fails or becomes unable to substantially perform
the obligations or undertakings to be performed by it hereunder and
such default or inability is not cured within sixty (60) days after
written notice from Polaroid specifying in reasonable detail the
alleged non-performance, then Polaroid may terminate this Agreement
forthwith by giving written notice.
5.4 Upon termination or expiration of this Agreement, all rights granted to
Licensee shall terminate forthwith.
ARTICLE 6: COMPENSATION/ACCOUNTING
6.1 In consideration of the license granted under this Article Licensee
shall pay to Polaroid for each Licensed Product sold or otherwise
disposed of for consideration on or after November 1, 1997 a royalty
rate of $.30 or five percent (5%) of the net selling price of the
Licensed Product whichever is greater. In consideration of the royalty
specified in this Article, Polaroid agrees not to assert any of the
Licensed Patents against Licensee for any Licensed Product which
Licensee sold or otherwise disposed of for consideration prior to
November 1,1997.
6.2 For the purposes of this Agreement the term net selling price is to
mean the invoice amount billed to Licensee's customers less discounts
and allowances actually allowed customers and shown on the invoice or
any other writing forwarded to Licensee's customers and net of all
returns actually made or allowed as supported by credit memos issued to
customers. For the purpose of this Agreement, the Licensed Product
shall be considered to be sold when billed out and collected; or
otherwise disposed of, when leased, loaned, bartered or exchanged for
goods or services or otherwise transferred for consideration to a third
party.
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6.3 (a) Licensee shall provide to Polaroid on or before the 20th of each
month a written report specifying the number and net selling price of
the Licensed Product sold or disposed of by Licensee during ft prior
month. The written report due in the month of December shall be
submitted on or before the 10th of said month.
(b) Licensee further agrees to provide Polaroid with a similar written
report within thirty (30) days following the expiration or termination
of this Agreement, covering all Licensed Product made and placed in
inventory, sold or otherwise disposed of by Licensee prior to such
expiration or termination date, but which were not previously reported
to Polaroid. Concurrently with the making of such report, Licensee
shall pay to Polaroid the amount of royalties due on such Licensed
Product identified in such report which was sold or otherwise disposed
of by Licensee prior to such expiration or termination date. For such
Licensed Product made and placed in inventory but not sold or otherwise
disposed of prior to such expiration or termination date, Licensee "I
have a period of twelve (12) months to sell or otherwise dispose of
such Licensed Product and pay to Polaroid the amount of royalties due
and during said twelve (12) month period Licensee shall make the
reports specified in Article 6.3(a) and the payments required in
Article 6.3(c).
(c) On or before the 25th of each month Licensee shall provide to
Polaroid a payment of royalties due upon collections made from the sale
or disposition of Licensed Products in the prior month.
6.4 All payments made hereunder shall be in United States dollars and shall
be paid by Licensee without deduction of any taxes, duties or other
charges except as required by law.
6.5 Licensee shall keep true and accurate records, files and account books
containing all of the data reasonably required for the full computation
and verification of the royalties payable hereunder. Such records,
files and account books shall be maintained by Licensee for a period of
five (5) years from the royalty reporting period, as specified in
Article 6.3(a), to which such records, files and account books are
applicable. Upon written request from Polaroid no more than once per
calendar year, Licensee agrees to permit the aforesaid records, files
and account books to be examined to the extent necessary to verify the
correctness of the royalties payable hereunder. Such examination shall
be conducted at Polaroid's' expense by an independent certified public
accountant designated by Polaroid. Polaroid agrees to hold all
information derived from such examination in confidence. If any
examination reveals that Licensee owed Polaroid any additional
royalties, the additional royalties shall be paid within thirty (30)
days following completion of the respective examination plus interest
on such royalties at the rate specified in this Article. If any such
examination or any other examination reveals that Polaroid owes
Licensee any amounts because of incorrect over-payments by Licensee the
over-payment amounts shall be paid within thirty (30) days following
the completion of any such examination. If such overpayment amount
could have been determined by Polaroid from reports supplied to
Polaroid by Licensee than Polaroid shall pay on such amounts the
interest as specified in this Article.
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6.6 In the event that any amount payable hereunder by either Party is not
paid by the date payment is due, the paying Party shall also pay
interest on such amount at a per annum rate equal to the prime rate for
U.S. dollars on the date payment was due calculated from the date
payment was due to the date payment is actually made.
ARTICLE 7. INVENTIONS, DISCOVERIES, OR IMPROVEMENTS
7.1 In the event of any action by the Licensee during the term of this
Agreement as a result of information obtained under this License
Agreement that results in an invention, discovery, or improvement of
the Licensed Patents regarding photographic packages containing
pre-exposed film or methods or processes for the assembly thereof,
whether or not patentable, Polaroid or any company controlled by,
controlling, or under common control with Polaroid a license with
respect to such invention, discovery, or improvement on the same
royalty terms as set forth in this Agreement.
7.2 In the event Polaroid, during the term of this Agreement, makes an
invention, discovery or improvement of the Licensed Patents regarding
photographic packages containing pre-exposed film or methods or
processes for the assembly thereof, whether or not patentable, Polaroid
agrees to make such inventions, discoveries or improvements available
to Licensee subject to the provisions of this Agreement. In the event a
United States patent is issued with Polaroid named as the assignee for
any such invention, discovery or improvement, such patent,' including
any foreign counterparts, shall be included in SCHEDULE A and become a
part of this Agreement.
ARTICLE 8. REPRESENTATIONS; DISCLAIMER; INFRINGEMENT
8.1 Except as set forth herein, Polaroid makes no express or implied
warranty or representation with respect to the Licensed Patents,
including without limitation any warranty or representation regarding
the usefulness, merchantability, functional effectiveness, safety,
performance or fitness for any particular use of any Licensed Products
manufactured under the license granted hereunder. In no event shall
Polaroid or Licensee be liable for any incidental, indirect, special or
consequential damages, suffered or incurred in connection with the
licenses granted hereunder. Furthermore, no representation or warranty
is made by Polaroid that any Licensed product manufactured, used, sold
or otherwise disposed of by Licensee under this Agreement will not
infringe patents owned or controlled by any third xxxxx and Polaroid
shall not be liable either directly or as an indemnitor of Licensee as
a consequence of any infringement of any such third party patents.
8.3 Polaroid makes no express or implied warranty or representation as to
the scope or validity of the Licensed Patents, other than as set forth
herein.
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8.4 Licensee represents and warrants: (a) that it has the full power to
enter into this Agreement; (b) that it has entered into and shall enter
into no agreement with another party which is inconsistent or in
conflict with this Agreement in any respect; (c) shall disclose to
Polaroid any and all modifications or improvements on the Licensed
Products that are based upon information received from Polaroid, and
(d) that Licensee has no reason to believe that the Licensed Products
infringe on any patents, patent rights or trademarks of any other
person, firm, corporation or other entity.
8.5 Polaroid represents and warrants: (a) that it is the sole exclusive
owner of the Licensed Patents; (b) that it has the full power to enter
into this Agreement; (e) that it has entered into and shall enter into
no agreement with another party which is inconsistent or in conflict
with this Agreement in any respect; (d) that is has no reason to
believe that the Licensed Products infringe upon any patent rights, or
other proprietary rights of any other person, firm, corporation or
other entity and (e) that it has no reason to believe that the Licensed
Patents are invalid. Polaroid agrees to indemnify and hold harmless
Licensee against and from any and all claims, suits, damages, costs and
expenses (including reasonable attorney fees) based upon or resulting
from any claim by any other person, firm, corporation or other entity
arising out of the breach by Polaroid of any of the foregoing
warranties and representations as recited in this Article provided
however, such indemnification shall be limited to the sum of all
royalties or revenues previously paid or due to Polaroid at the time
such claim is asserted, Polaroid shall be provided written notice of
such claim or suit, sole authority to defend or settle any third party
claim or suit and Licensee shall fully cooperate with Polaroid in the
defense or settlement of such third party claim or suit Licensee shall
have the right to withhold all such amounts due Polaroid from the date
such claim is asserted in order to apply same to satisfy Polaroid's
obligation under this Article. The foregoing representations and
warranties shall survive the termination of this Agreement.
8.6 Licensee shall promptly notify Polaroid in writing of any infringement
or suspected infringement, by any other person, firm, corporation or
other entity relating to the Licensed Patents. Polaroid may, at its own
discretion institute and prosecute an action or proceeding against any
third party for or by reason of any unlawful infringing of the rights
granted to Licensee by this Agreement.
ARTICLE 9: PATENT MARKING
Licensee shall observe any statutory requirement that a patent marking
of the kind specified in the applicable statutes of any country where
the Licensed Products are used, sold or otherwise disposed of shall be
applied to Licensed Products which are made, used, sold or otherwise
disposed of under the license granted herein. Further, Licensee shall
have the option, at its discretion, in any country where such Licensed
Products are used, sold or otherwise disposed of and where there is no
statutory requirement for patent marking. to apply a patent marking to
such Licensed Products. Any patent marking in which Polaroid is
mentioned and which is applied in accordance with this Article to any
Licensed Product which is made, used, sold or otherwise disposed of
shall be approved in writing by Polaroid prior to being applied to any
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Licensed Product; provided, however, that Polaroid agrees that
Licensee, notwithstanding anything to the contrary herein, shall have
the right to apply the following patent marking-. "This camera was
manufactured under license from Polaroid Corporation under United
States Patent No. 5,187,512" (or whichever Licensed Patent listed in
SCHEDULE A may be appropriate).
ARTICLE 10: CONFIDENTIAL INFORMATION
Unless compelled by law neither Party shall disclose the terms and
conditions of this Agreement to any other person or entity provided
however that it is agreed that the Parties are permitted to identify
the terms and conditions of this Agreement to counsel, consultants, and
auditors as necessary in the ordinary course of business. If either
Party receives any subpoena, court order, or legal process requiring
the disclosure of this Agreement or any terms of this Agreement such
Party shall immediately notify, in writing, the other Party.
ARTICLE 1L. MOST FAVORED LICENSEE
If under otherwise similar or substantially the same conditions as
contained in this Agreement Polaroid shall accord, at any time on or
after the Effective Date of this Agreement a license, for all or
substantially all, the Licensed Patents on royalty or payment terms
more favorable to a third party licensee than the royalty or payment
terms then applicable to Licensee under this Agreement then Polaroid
shall promptly notify Licensee of any license so accorded and describe
in the notice the more favorable royalty or payment terms provided to
the third party licensee; and Licensee shall be entitled to have the
royalty rate or payment terms modified to such extent that for future
royalties the same shall be as favorable as that available to such
third party, provided that such obligation shall not apply in respect
of cross-license agreements and other agreements in which the
consideration for such licenses shall not be wholly expressed in
payment of royalties and shall not apply to licenses or other
arrangements made pursuant to a settlement of a dispute or court
decision.
ARTICLE 12. DISPUTE RESOLUTION
Except as provided herein, no civil action with respect to any dispute,
claim or controversy arising out of or relating to this Agreement may
be commenced unless the Parties have first attempted in good faith to
resolve such dispute claim or controversy through non-binding
mediation. Either Party may initiate the mediation process by providing
written notice in letter form to the other party (the "Dispute,
Notice"). The Dispute Notice shall (i) signal the formal commencement
of this dispute resolution provision and the dates, deadlines and time
frames set forth herein; (ii) make specific reference to this Article
and (iii) set forth the subject of the dispute and the specific relief
requested. The recipient of such notice will respond in writing within
five (5) days with a statement of its position and recommended solution
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to the dispute. If the dispute is not resolved by this exchange of
correspondence, then each Party shall designate one or more senior
executives with full settlement authority to meet at a mutually
agreeable time and place within twenty (20) days of the Dispute Notice
in order to exchange relevant information and perspectives, and to
attempt to resolve the dispute. If the dispute is not resolved within
two (2) days of the commencement of such meeting, unless otherwise
mutually extended, each Party shall have the right to institute legal
action, provided however that if each party agrees, the Parties may
proceed to non binding mediation with a mediator to be picked through
the American Arbitration Association and with mediation to occur in the
Commonwealth of Massachusetts. Each Party will bear its own costs
relevant to the mediation process. All offers, promises, conduct and
statements, whether oral or written, made in the course of the
mediation process by either of the PARTIES, their agents, employees,
experts or attorneys, are confidential privileged and inadmissible for
any purpose, including impeachment, in any litigation or other
proceeding involving the Parties, provided that evidence that is
otherwise admissible or discoverable shall not be rendered inadmissible
or non-discoverable as a result of its we in the mediation. Anything to
the contrary notwithstanding either Party may, at any time, seek
equitable or injunctive relief with respect to any emergent matter or
to preserve the status quo. In the event of the institution of any
civil proceeding at any time the prevailing Party shall be entitled to
recover its reasonable attorney fees and costs in such civil
litigation.
ARTICLE 13. FORCE MAJEURE
If performance of any pan of this Agreement by Licensee or Polaroid is
prevented or delayed by reason of any cause beyond the control of, and
without the fault of, the party affected, and which cannot be overcome
by diligence (including, without limitation, acts of nature, strikes,
energy or material shortages, acts of civil or military authority,
fires, floods, epidemics, wars and riots), the party affected shall be
excused from such performance to the extent that it is necessarily
prevented or delayed thereby, during the continuance of any such
happening or event, and this Agreement shall be deemed suspended in
part so long as and to the extent that any such cause prevents or
delays its performance; provided, however, that after ninety (90)
cumulative days of such suspension on the part of one Party, the other
Party may, at its discretion, terminate without liability its
obligations under this Agreement. In order to obtain a suspension under
this Article 13, the Party delayed shall send written notice of the
delay and the reason therefor to the other Party within a reasonable
time after the Party delayed knew or should have known that performance
would be delayed or prevented due to the Force Majeure in question.
ARTICLE 14. MISCELLANEOUS
14.1 RELATIONSHIP OF PARTIES. No Party is an agent of the other Party nor
has authority to bind the other Party, transact any business in the
other Party's name or on its behalf, or make any promises or
representations on behalf of the other Party. Each Party makes this
Agreement and will perform all of its respective obligations under this
Agreement as an independent contractor, and no partnership or other
relationship shall be created or implied by this Agreement.
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14.2 CHOICE OF LAW/CHOICE OF FORUM. This Agreement and any questions,
claims, disputes or litigation concerning or arising from this
Agreement shall be governed by the laws of the Commonwealth of
Massachusetts and any litigation shall be brought within the state or
federal courts of Massachusetts.
14,3 WAIVER JURY TRIAL. The Parties each irrevocably waive any right to a
jury trial with respect to any claims or disputes arising out of or
related to this Agreement or the negotiation of this Agreement.
14.4 ASSIGNMENTS. Neither Licensee nor Polaroid shall assign rights or
delegate its duties under this Agreement without the prior written
approval of the other Party. Any assignment or transfer of this
Agreement or any interest therein without such written consent is void
and cause for termination of this Agreement.
14.5 SEVERABILITY. Any term, condition or provision of this Agreement
determined to be illegal, invalid or void under applicable state or
federal law, shall be deemed severable, and the remaining provisions,
terms and conditions shall not be impaired thereby, such, that the
remaining Agreement shall be interpreted and given effect as far as
possible to accomplish its stated purpose.
14.6 NON-WAIVER. Any failure of either Party at any time, or from time to
time, to require or enforce the strict keeping and performance by any
Party of any of the terms and conditions of this Agreement shall not
constitute a waiver by any Party of a breach of any such terms or
conditions in the future and shall not affect or impair such terms or
conditions in any way, or the right of either Party at any time to
avail itself of such remedies as it may have for any such breach of any
term or condition. No waiver of any right or remedy hereunder shall be
effective unless expressly stated in writing by the waiving party.
14.7 NOTICES. Any written notice or report to be made hereunder shall be
addressed as follows:
If to Polaroid:
Polaroid Corporation
000 Xxxxxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
U.S.A.
Attention: Xxxxxx X. Xxxxx, Esq.
Patent Counsel and Assistant S
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If to licensee:
Xxxxxxxx X. Xxxxxxxx
Chairman and CEO
PSI Industries, Inc.
0000-X Xxxxx Xxxxxx Xxxxxx,
Xxxx Xxxxx, Xxxxxxx 00000-0000
Either party may, by written notice to the other party, change the
address to which written notices or reports shall be given.
14.8 SURVIVAL. As the circumstances require, the rights and obligations of
the Parties hereto, express or implied, shall survive any termination,
cancellation or expiration of this Agreement.
14.9 ENTIRE AGREEMENT. This Agreement constitutes the entire Agreement
between the Parties relevant to the license granted herein. This
Agreement may not be modified except by further written agreements
executed by the Parties.
14.10 PARAGRAPH READINGS. The title and headings of the various paragraphs of
this Agreement are inserted for convenience or reference only and shall
not be construed to affect the construction of interpretation of any of
its provisions.
In Witness Whereof, the Parties hereto intending to be legally bound have
executed this Agreement.
POLAROID CORPORATION PSI INDUSTRIES, INC.
By: Xxxxxxxx X. Xxxx By: Xxxxxxxx X. Xxxxxxxx
Title: President Consumer Imaging Group Title: Chairman and CEO
Date: 12/16/97 Date:
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Signature: /S/ Signature:/S/
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SCHEDULE A
U.S. PATENT AND FOREIGN COUNTERPARTS
I. United States Patent 5,187,512
II. Foreign Counterparts
Canadian Patent Application No. 2074009
European Patent Application No. 92114678.3 (designates France, United
Kingdom and Germany)
Japanese Patent Registration No. 2507221
