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TECHNOLOGY TRANSFER AGREEMENT
THIS AGREEMENT made this 4th day of June 1997,
BETWEEN:
E-ZONE NETWORKS INC., a body corporate, incorporated under the laws
of the State of Delaware, whose principal office is located at 4048 East
Superior, Phoenix, Arizona, ("THE VENDOR"),
OF THE FIRST PART,
- and -
PUSH TECHNOLOGIES INC., a body corporate, incorporated under the
laws of the Province of Alberta, whose principal office is located at 000, 000 -
0xx Xxxxxx XX, Xxxxxxx, Xxxxxxx, ("THE PURCHASER"),
OF THE SECOND PART.
WHEREAS THE VENDOR is the owner of certain technology relating in part to
interactive three-dimensional (3-D) entertainment; and
WHEREAS THE PURCHASER is entering into this Agreement as agent for and on
behalf of a Corporation to be incorporated pursuant to the General Corporate Law
of the State of Delaware ( "THE PARENT") and which will become the sole owner of
all of the shares of the capital stock of THE PURCHASER; and
WHEREAS THE VENDOR wishes to transfer certain parts of such technology,
improvements made thereto and certain chattels to THE PURCHASER; and
WHEREAS THE PURCHASER wishes to transfer and assign all of the rights
granted by the terms of this Agreement to THE PARENT and have THE PARENT assume
and become liable to discharge the obligations imposed by the terms of this
Agreement once THE PARENT has been incorporated and organized; and
WHEREAS this Agreement is intended to set forth the terms and conditions
of the transfer of such technology, improvements and chattels to THE PURCHASER
and the assignment of this Agreement and the further transfer of such
technology, improvements and chattels to THE PARENT.
NOW, THEREFORE, in consideration of the premises and the mutual terms and
conditions set out herein the parties hereto agree as follows:
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ARTICLE 1
DEFINITIONS
1.1 In this Agreement, the following capitalized terms used shall have the
meanings given below, except as otherwise expressly provided or unless the
context clearly requires otherwise:
(a) "AFFILIATE" when used to indicate a relationship with any specified
Person, means another Person that directly, or indirectly through one or
more intermediaries or otherwise, controls, or is controlled by, or is
under common control with, such specified Person. A corporation shall be
deemed to be an Affiliate of another corporation if one of them is the
Subsidiary of the other or if both are Subsidiaries of the same Person or
if each of them is directly or indirectly controlled by the same Person;
(b) "CONFIDENTIAL INFORMATION" shall mean all information relating to any
technology (including, without limitation, the Technology and the
Improvements), product, process or other intellectual property of THE
VENDOR, THE PURCHASER and THE PARENT and their Affiliates (including, but
not limited to, owned or licensed intellectual property rights, data,
know-how, samples, technical and non-technical materials, and
specifications) as well as any business plan or other confidential
commercial information of THE VENDOR, THE PURCHASER and THE PARENT and
their Affiliates. Notwithstanding the foregoing, information shall not be
considered "Confidential Information" to the extent that any other Person
possessing such information can demonstrate by written record or other
suitable physical evidence that:
(i) such specific information was lawfully in such other Person's
possession or control prior to the time such information was
disclosed to such other Person by THE VENDOR, THE PURCHASER or THE
PARENT;
(ii) such specific information was lawfully obtained by such other
Person from a third party under no obligation of confidentiality to
THE VENDOR, THE PURCHASER or THE PARENT; or
(iii) such specific information was at the time it was disclosed or
obtained by such other Person, or thereafter became, publicly known
otherwise than through a breach by such other Person of such other
Person's obligations to THE VENDOR, THE PURCHASER or THE PARENT;
(c) "EFFECTIVE DATE" shall mean the date of this Agreement;
(d) "COPYRIGHT" shall mean all copyright interests (registered or
unregistered) of THE VENDOR subsisting in any of the Confidential
Information, Technology or Trade Secrets;
(c) "DOLLARS" (including the symbol "$") shall mean U.S. dollars unless
otherwise indicated;
(f) "FIXED ASSETS" shall mean the chattels, equipment and property
described in Schedule "A";
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(g) "IMPROVEMENTS" shall mean any enhancement of, improvement to, or
technology related to, the Technology developed, created or obtained by
THE VENDOR between the Effective Date and December 31, 1997;
(h) "PATENTS" shall mean all patent applications and patents (including,
without limitation, U.S. Patent Applications entitled A METHOD AND
APPARATUS FOR RE-SIZING AND ZOOMING IMAGES BY OPERATING DIRECTLY ON THEIR
DIGITAL TRANSFORMS and VIDEO MANIPULATION USING DIGITAL PROCESSING and any
and all additions, divisions, continuations, substitutions, extensions,
renewals, patent term extensions or revisions thereof) in relation to the
Technology and Improvements;
(i) "PERSON" shall mean an individual, partnership, joint venture,
syndicate, sole proprietorship, company or corporation with or without
share capital, unincorporated association, trust, trustee, executor,
administrator or other legal personal representative, regulatory body or
agency, government or governmental body or agency authority or entity
however designated or constituted;
(j) "TECHNOLOGY" shall mean all know-how, data, materials, inventions, and
other proprietary information and technology including any Patents,
Trademarks, Copyright and Trade Secrets of THE VENDOR and its Affiliates
relating to interactive 3-D entertainment and which without limiting the
generality of the foregoing shall include those products and processes
listed in Schedule "B";
(k) "TOWER NETWORK" shall mean that Audio/Visual broadcast communication
system using satellite, cable or internet, or a combination of any of
them, currently under development by THE VENDOR and which will provide
content for THE VENDOR's entertainment tower and headphone;
(l) "TRADE-MARKS" shall mean those trade names, trademarks (registered or
unregistered), and trade-xxxx applications for registration of THE VENDOR
relating to the Technology; and
(m) "TRADE SECRETS" shall mean all secret processes, data, computer
programs, formulae and technical information relating to the production or
use of the Technology and all non-technical materials related to the
business carried out using the Technology.
ARTICLE 2
INTERPRETATION
2.1 In this Agreement, except as otherwise expressly provided or unless the
context otherwise requires:
(a) words importing the masculine gender include the feminine and neuter
genders, corporations, partnerships and other Persons, and words in the
singular include the plural, and vice versa, wherever the context
requires;
(b) all references to designated Articles, Sections and other subdivisions
are to the designated Articles, Sections and other subdivisions of this
Agreement;
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(c) any reference to a statute will include and will be deemed to be a
reference to the regulations made pursuant to it, and to all amendments
made to the statute and regulations in force from time to time, and to any
statute or regulations that may be passed which has the effect of
supplementing, replacing or superseding the statute referred to or the
relevant regulations;
(d) any reference to a Person will include and will be deemed to be a
reference to any Person that is a successor to that Person;
(e) business day will be deemed to be a reference to any day which is not
a Saturday, Sunday or a day which is generally observed as a holiday in
Calgary, Alberta; and
(f) "hereof", "hereto", and "hereunder" mean and refer to this Agreement
and not to any particular Article, Section or other subdivision. Unless
something in the subject matter or context is inconsistent therewith,
references herein or in the Schedules to this Agreement, to Articles,
Sections, other subdivisions or Schedules, are to Articles, Sections,
other subdivisions and Schedules of and to this Agreement or of the
Schedule in which such reference is made.
2.2 Schedules "A", "B" and "C" are appended hereto and incorporated into this
Agreement.
ARTICLE 3
TECHNOLOGY TRANSFER AND ASSIGNMENT
3.1 THE VENDOR hereby assigns, transfers and conveys to THE PURCHASER absolutely
all right, title and interest in and to the Technology, Trade Secrets,
Copyright, Patents and Trademarks free and clear of any claim of any other
party.
3.2 THE VENDOR hereby assigns, transfers and conveys to THE PURCHASER absolutely
all right, title and interest in and to the Fixed Assets free and clear of any
claim of any other party.
3.3 The assignments and transfers in Sections 3.1 and 3.2 shall be considered
fully performed and non-executory.
3.4 THE VENDOR shall execute such documents as may be necessary or desirable for
THE PURCHASER to record the assignments and transfers described in this section.
THE PURCHASER and THE VENDOR may agree on an escrow agent or other trustee to
hold such written assignments and transfers until such time as they may be
recorded, if any.
3.5 THE VENDOR shall not enter into any agreement, transfer or grant of security
which would impair the rights of THE PURCHASER under this Article 3.
3.6 The Improvements shall belong to and be the exclusive property of THE
PURCHASER.
3.7 THE VENDOR acknowledges and agrees that THE PURCHASER is entering into this
Agreement as the agent for and on behalf of THE PARENT and that the terms of
this Agreement may be assigned and transferred by THE PURCHASER to THE PARENT
and that the obligations and liabilities imposed upon and assumed by THE
PURCHASER pursuant to this Agreement shall become those of THE PARENT upon THE
PURCHASER giving notice to THE VENDOR that THE PARENT has been incorporated.
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ARTICLE 4
CONSIDERATION
4.1 THE PURCHASER shall pay to THE VENDOR for the rights granted by Section
3.1 and the property transferred by Section 3.2 of this Agreement the sum of TWO
HUNDRED THOUSAND DOLLARS ($200,000.00), by way of Promissory Note in the form
appended to this Agreement as Schedule "C".
4.2 THE PURCHASER shall pay to THE VENDOR for the Improvements that amount
presently estimated to be the sum of ONE HUNDRED AND FIFTY THOUSAND DOLLARS
($150,000.00), and which may be invoiced to THE PURCHASER or THE PARENT, as the
case may be, for the Improvements and which sum shall not in any event exceed
the sum of TWO HUNDRED THOUSAND DOLLARS ($200,000.00) without the written
consent and approval of THE PURCHASER or THE VENDOR, as the case may be, first
had and obtained.
4.3 THE PURCHASER hereby grants to THE VENDOR the license to use the Technology,
Improvement, Trade Secrets, Copyright, Patents and Trademarks for use in
conjunction with the Tower Network at such rate or rates as may be negotiated by
THE PURCHASER and THE VENDOR, acting reasonably and in good faith.
4.4 THE PURCHASER shall be liable for and shall pay all sales taxes (or
replacement or new sales taxes which are applicable on a similar basis) imposed
on or with respect to the payments provided for in Sections 4.1 and 4.2.
4.5 The license granted by Section 4.3 shall survive the termination of this
Agreement and shall remain in effect for twenty (20) years from the Effective
Date.
ARTICLE 5
CONFIDENTIAL INFORMATION
5.1 Treatment of Confidential Information
THE VENDOR, THE PURCHASER and THE PARENT shall maintain the Confidential
Information in confidence, and shall not disclose, divulge or otherwise
communicate the Confidential Information to others, or use it for any purpose,
and hereby agree to exercise every reasonable precaution to prevent and restrain
the unauthorized disclosure of such Confidential Information by any of their
employees, consultants, subcontractors, sublicensees, agents or any Person and
their respective directors, officers, employees, consultants, subcontractors,
sublicensees or agents.
5.2 Release from Restrictions
The provisions of Section 5.1 shall not apply to any Confidential
Information disclosed in order to comply with applicable laws or with
governmental regulations provided that prior written notice of such disclosure
the other party and the party making the disclosure takes reasonable and lawful
action to avoid and/or minimize the degree of such disclosure.
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5.3 Survival of Confidentiality Covenants
The covenants in this Article 5 shall survive the termination of this
Agreement and shall remain in effect for twenty (20) years from the Effective
Date.
ARTICLE 6
REGISTRATION
6.1 THE PURCHASER or THE PARENT may at any time request THE VENDOR to grant to
THE PURCHASER or THE PARENT formal documents in respect of any of the Patents,
Copyright, Trademarks, Improvements or the Fixed Assets in a form that complies
with the requirements of law and public authorities in each territory where
applicable to enable THE PURCHASER or THE PARENT at its expense, to become
registered owner under the Patents, Copyright, Trade-marks, Improvements or
Fixed Assets in each territory where applicable. THE PURCHASER or THE PARENT
shall bear all costs and expenses incurred in the registration of such formal
documents.
ARTICLE 7
REPRESENTATIONS AND WARRANTIES
7.1 Corporate Representations
Each party represents and warrants to the other that:
(a) it has all requisite right, power, authority and capacity to enter
into this Agreement and to consummate the actions contemplated hereby, and has
taken all necessary action to authorize the execution, delivery and performance
of this Agreement;
(b) the entering into of this Agreement and the performance of its
obligations hereunder does not contravene its charter documents or any
agreements, documents, orders, decrees or judgments to which such party is a
party or by which such party or its property is bound; and
(c) when executed and delivered by it, this Agreement will constitute the
legal, valid and binding obligation of it.
7.2 Intellectual Property Representations
THE VENDOR represents and warrants to THE PURCHASER that:
(a) THE VENDOR has title, rights by license and other agreements or such
other legal rights as are necessary to permit THE VENDOR to grant the
assignments, transfers and conveyances contemplated under this Agreement;
(b) THE VENDOR has taken all commercially reasonable measures necessary to
protect its rights in the Technology;
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(c) to the best of THE VENDOR's knowledge, there is no basis upon which a
claim may be asserted against THE PURCHASER for infringement as a result of THE
PURCHASER's use of the Technology; and
(d) no suit or action has been commenced and no claim has been asserted in
writing against THE VENDOR with respect to the ownership or use by THE VENDOR of
the Technology or which prevents THE VENDOR from entering into this Agreement.
ARTICLE 8
INDEMNITIES
8.1 Each party shall indemnify and save harmless the other of, from and against
any losses, damage, costs (including legal fees and expenses) which the other
may suffer or incur by reason of:
(a) a breach of the covenants, representations and warranties set out in
Section 7.1 or 7.2 hereof as the case may be; and
(b) a breach of any of its obligations set forth in this Agreement.
ARTICLE 9
INFRINGEMENT
9.1 THE VENDOR shall promptly notify THE PURCHASER whenever it becomes aware of
any such actual or apparent infringement or unauthorized use of the Technology,
Improvements, Trade Secrets, Copyright, Patents or Trade-marks. THE PURCHASER
may, at its expense, take all steps that in THE PURCHASER's sole opinion and
discretion are necessary or desirable to protect the Technology, Improvements,
Trade Secrets, Copyright, Patents and Trademarks against such infringement.
9.2 THE VENDOR shall, if required by THE PURCHASER or THE PARENT and if
necessary for the purposes of Section 9.1, lend its name and shall otherwise do
all acts and things THE PURCHASER or THE PARENT may reasonably require to assist
in the conduct of any such action brought by THE PURCHASER or THE PARENT
pursuant to Section 9.1.
9.3 The proceeds from any judgment recovered or settlement made by THE PURCHASER
of THE PARENT in any action brought by it pursuant to Section 9.1, shall be used
to reimburse THE VENDOR for all expenses incurred by it in assisting THE
PURCHASER or THE PARENT in prosecuting the action, and to pay the amount of any
consequential damages to THE VENDOR and to pay THE PURCHASER's or THE PARENT's
costs and expenses incurred in such prosecution, and the remainder shall be THE
PURCHASER's or THE PARENT's.
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ARTICLE 10
LIMITATION OF LIABILITY
10.1 No Warranty
It is agreed that THE VENDOR does not expressly or implicitly warrant that
the Technology, the Improvements or the Fixed Assets or the use of the
Technology, the Improvements or the Fixed Assets will meet the THE PURCHASER's
requirements. The use of the Technology, the Improvements and the Fixed Assets
hereunder are solely at THE PURCHASER's own risk.
10.2 Limitation of Liability
Section 10.1 hereof reflects an informed voluntary assumption by THE
PURCHASER of the risks (known and unknown) that may exist in connection with the
Technology, the Improvements and the Fixed Assets, and that such voluntary risk
assumption represents a fundamental part of the agreement reached between THE
VENDOR and THE PURCHASER.
ARTICLE 11
GENERAL
11.1 Waiver
Any waiver of forbearance in regard to the performance of this Agreement
shall operate only if in writing and shall apply only to the specified instance
and shall not affect the existence and continued applicability of the terms of
it thereafter.
11.2 Entire Agreement
This Agreement embodies all the terms binding between the parties in
relation to the Technology, the Improvements and the Fixed Assets and related
thereto and replaces all previous representations or proposals not embodied
herein.
11.3 Assignment
With the exception of the contemplated assignment and transfer to THE
PARENT neither party may otherwise assign any of its rights hereunder without
obtaining the prior consent of the other party.
11.4 Applicable Law
This Agreement shall be read and construed according to the laws of the
State of Delaware and the parties hereby submit to the jurisdiction of the
courts of Delaware and all courts having jurisdiction on appeal from them.
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11.5 Amendments
This Agreement may not be varied except in writing signed by the parties.
11.6 Time
Time shall be of the essence hereof.
11.7 Severability
If any provision of this Agreement is held by a court to be unlawful,
invalid, unenforceable or in conflict with any rule of law, statute, ordinance
or regulating the validity and enforceability of the remaining provisions shall
not be thereby affected.
11.8 Notices
(a) All notices permitted or required by this Agreement shall be in
writing and shall be given by any one of the following means:
(i) by delivering it to the address of the party on a business day
during normal business hours;
(ii) by sending it to the address of the party by pre-paid airmail
post; or
(iii) by sending it by facsimile transmission to the facsimile of
the party.
(b) A notice shall be deemed to be given and received:
(i) if given in accordance with Section 11.8(a)(i) on the next
business day after the day of delivery in the place of delivery;
(ii) if given in accordance with Section 11.8(a)(ii) five clear
business days after the day of posting in the place of delivery;
(iii) if given in accordance with Section 11.8(a)(iii) on the next
business day after transmission in the place of delivery.
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(c) The address, and facsimile numbers referred to in Section 11.8(a)
shall in the absence of notice to the contrary be set out as below:
IF TO E-ZONE NETWORKS INC.:
4048 East Superior
Xxxxxxx, Xxxxxxx
00000
Attention: Xxxxx Xxxx
Facsimile: (000) 000-0000
IF TO PUSH TECHNOLOGIES INC.:
#000, 000 - 0xx Xxxxxx XX
Xxxxxxx, XX
X0X 0X0
Attention: Xxxx Xxxxxxx
Facsimile: (000) 000-0000
11.9 Further Agreements
Each party shall execute such agreements, deeds and documents and do or
cause to be executed or done all such acts and things as shall be necessary to
give effect to this Agreement.
11.10 Relationship of the Parties
This Agreement does not constitute and shall not be construed as
constituting a partnership or joint venture between the parties hereto. Neither
party shall have any right to obligate or bind the other in any manner
whatsoever and nothing contained in this Agreement shall give or is intended to
give any rights of any kind to persons not a party to this Agreement. Each party
shall ensure that neither it or any of its employees represent to any third
party that it or they are servant or agents of the other.
IN WITNESS WHEREOF the parties have caused this Agreement to be signed by their
respective corporate officers duly authorized as of the Effective Date.
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ZONE NETWORKS INC.
PER:___________________
Xxxxx X. Xxxx, Pres. and CEO
PUSH TECHNOLOGIES INC.
PER:____________________
Xxxx X. Xxxxxxx, Vice Pres.
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SCHEDULE "A"
Two (2) personal computers with Open Step operating systems
Stereoscopic viewing hardware
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SCHEDULE "B"
1. THE VISOR
The Visor is a compact, portable Head Mounted Display that has been
designed to be compatible with standards established by NTSC (National
Television Standards Committee) or PAL/SECAM (the European equivalent of NTSC)
and VGA (Video Graphics Adapter) for 3-D. VGA data will not be downgraded to
NTSC quality, thus ensuring the highest possible quality. The Visor delivers a
high resolution, high intensity, 3-D stereoscopic video image. Users experience
that of large-screen viewing system in a personal, private viewing environment.
The Visor has distinct left/right LCD screens and is field sequential and line
sequential compatible. The product weighs less than eight ounces. The Visor is
designed to eliminate the hygienic concerns associated with public-use
applications. For the fitness club application, the Visor has been designed to
work with the Headphone.
2. C3-D PROCESSOR
The C3-D Processor is capable of real-time conversion of 2-D video to a
simulated 3-D video experience, utilizing a sub-set of the technology being
developed for the 3-D Professional Workstation. C3-D enables the reproduction of
3-D content libraries. C3-D interfaces with analog video sources such as VCRs,
cable television and digital devices with analog outputs, such as DSS and DVD. A
sub-set of C3-D functions is applicable to flat-screen displays in personal
computers and conventional television with other 3-D viewing products.
3. 3-D PROFESSIONAL WORKSTATION
The 3-D Professional Workstation is a suite of functions designed for use
by post-production and digital imaging professionals. These functions
significantly improve the production process for creating stereoscopic
compressed 3-D video and will generate high quality 3-D moving images from
existing 2-D library content.
4. V.I.A.
V.I.A. (Virtual Interactive Access) technology can be incorporated, in
software form, within MPEG decompression chipsets. These chipsets are currently
being designed for cable television set-top boxes, personal computers, DVD and
DSS. V.I.A. has been designed to comply with ISO/IEC MPEG standards and to be
capable of managing multiple video streams that will provide users with the
ability to select point-of-view camera options. V.I.A. technology will be
compatible with next generation digital set-top box technology, DSS, DVD and
personal computers.
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SCHEDULE "C"
PROMISSORY NOTE
AMOUNT: $200,000.00 U.S. DATE: JUNE 4, 1997
FOR VALUE RECEIVED, the undersigned, hereby promises to pay, on March 31,
1998, to E-ZONE NETWORKS INC., or order, the sum of TWO HUNDRED THOUSAND DOLLARS
in United States funds ($200,000.00 U.S.). The principal amount hereby secured
shall bear simple interest at the rate of five percent (5%) per annum, which
shall be payable in conjunction with the principal amount at maturity.
NOTICE OF DISHONOUR and presentation for payment are hereby waived.
DATED at the City of Calgary, in the Province of Alberta, this 4th of
June, 1997.
PUSH TECHNOLOGIES INC.
Per: ________________________________
XXXX XXXXXXX, Vice President
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