Exhibit 10.9
LICENSE AGREEMENT
AGREEMENT, dated as of , 1994, between KNOGO NORTH
AMERICA INC., a Delaware corporation ("Knewco"), and KNOGO CORPORATION, a New
York corporation ("Knogo").
W I T N E S S E T H :
WHEREAS, Knogo and Knewco are parties to the Contribution and
Divestiture Agreement, dated as of , 1994 (the "Divestiture
Agreement"), pursuant to which Knewco was formed to continue Knogo's business
operations in the Knewco Territory (as defined below);
WHEREAS, Knogo and Knewco, together with Sensormatic
Electronics Corporation, a Delaware corporation ("Sensormatic"), are parties to
the Agreement and Plan of Merger dated as of August 14, 1994 between
Sensormatic, Knogo and Knewco (the "Merger Agreement"), pursuant to which Knogo
is to be merged with and into Sensormatic;
WHEREAS, pursuant to the Divestiture Agreement, certain patent
rights, technology and other assets of Knogo were transferred to Knewco,
including the Knewco SuperStrip Patent Rights and rights in the Knewco
Territory with respect to the SuperStrip Technology (as such terms are defined
below), which may be utilized in the manufacture, sale and promotion of
material with particular application to source labelling and source embedding;
WHEREAS, Knogo wishes to obtain from Knewco certain licenses
under such patent rights and technology, including a non-exclusive license from
Knewco under the Knewco SuperStrip Patent Rights and the SuperStrip Technology
in the Knewco Territory, subject to the terms and conditions of this Agreement,
and Knewco is willing to grant such licenses;
WHEREAS, it is contemplated that Sensormatic will succeed to
the rights of Knogo pursuant to the Merger Agreement; and
WHEREAS, the execution and delivery of this Agreement is a
condition to the respective obligations of the parties under the Merger
Agreement;
NOW, THEREFORE, in consideration of the premises and the
mutual agreements contained herein, the parties agree as follows:
1. DEFINITIONS. For purposes of this Agreement, the
following terms have the following meanings:
(a) "Affiliate" means an entity controlled by,
controlling or under common control with a specified entity. As used herein,
the term "control" includes, but is not limited to, the right to vote directly
or indirectly 50% or more of the voting stock of an entity or the right to
direct or influence significantly such entity's management or policies.
(b) "Change of Control" means any transaction or series
of transactions pursuant to which (i) any "person" (as such term is used in
Sections 13(d) and 14(d) of the Securities Exchange Act of 1934 (the "Exchange
Act")) becomes the "beneficial owner" (as such term is defined in Rule 13(d)
under the Exchange Act) of more than 50% of the combined voting power of Knewco
or (ii) the business, and substantially all of the assets, of Knewco relating
to the Products are sold or transferred to an unaffiliated third party.
(c) "Knewco Product Patent Rights" means (i) all the
United States and Canadian patents and patent applications with respect to the
Products and the Product Technology, as listed on Schedule I (but exclusive of
the Knewco SuperStrip Patent Rights), (ii) any continuation,
continuation-in-part or division of any such patent application and any patents
issuing on any thereof, (iii) any reissues, extensions or renewals of any
patents referred to in clauses (i) or (ii) of this Section 1(c) and (iv) any
patent application filed at any time hereafter by or on behalf of Knewco in the
United States or Canada, and any patent issued thereon, with respect to any
Product Technology.
(d) "Knewco Territory" means the fifty states of the
United States of America, the District of Columbia, Puerto Rico and Canada.
(e) "Pinned Wall Patent Rights" means (i) the United
States and Canadian patents and patent applications listed on Schedule II, (ii)
any continuation, continuation-in-part or division of any such patent
application and any patents issuing on any thereof, and (iii) any reissues,
extensions or renewals of any patents referred to in clauses (i) or (ii) of
this Section 1(e).
(f) "Products" means the Products currently marketed by
Knewco or Knogo, other than SuperStrip, including those listed on Schedule III,
and including all parts and components thereof. If applicable, Products shall
include any Product embodying a Product Improvement as contemplated by this
Agreement.
(g) "Product Improvements" means all improvements,
modifications, developments, revisions or enhancements of any Product or of the
means of manufacturing such Product, whether or not covered by a patent,
including without limitation improvements to Products which enhance
performance, durability or quality, expand applications for use or reduce cost
of manufacture, which are developed or acquired by any party (by purchase,
license or otherwise), alone or together with others, and embodied in such
party's Products or used in the manufacture thereof.
(h) "Product Technology" means concepts, ideas,
inventions, designs, devices, processes, technical information and know-how,
whether or not described in the Knewco Product Patent Rights or constituting
trade secrets, existing on the date hereof, and which relate to the design,
manufacture, use, installation, service or maintenance of Products, and all
written or electronic expressions or embodiments thereof, including, without
limitation, prototypes, schematics, plans, designs, blue-prints, drawings,
specifications, software, algorithms, manuals, notebooks and records.
(i) "SuperStrip" means the SuperStrip material described
in Schedule IV. If applicable, SuperStrip shall include any SuperStrip
material embodying a SuperStrip Improvement as contemplated by this Agreement.
(j) "SuperStrip Improvements" means all improvements,
modifications, developments, revisions or enhancements of SuperStrip material
or of the means of manufacturing such material, whether or not covered by a
patent, including without limitation improvements to such material which
enhance performance, durability or quality, expand applications for use or
reduce cost of manufacture, which are developed or acquired by any party (by
purchase, license or otherwise), alone or together with others, and embodied in
the SuperStrip material sold by such party or used in the manufacture thereof.
(k) "Knewco SuperStrip Patent Rights" means (i) the
United States and Canadian patents and patent applications with respect to
SuperStrip and the SuperStrip Technology, as listed on Schedule IV-1, (ii) any
continuation, continuation-in-part or division of any such patent applications
and any patents issuing on any thereof, (iii) any reissues, extensions or
renewals of any patents referred to in clauses (i) or (ii) of this Section
1(k), and (iv) any patent application filed at any time hereafter by or
on behalf of Knewco in the United States or Canada, and any patent issued
thereon, with respect to any SuperStrip Technology.
(l) "Knogo SuperStrip Patent Rights" means (i) patents
and patent applications in any jurisdiction other than the United States and
Canada with respect to SuperStrip and the SuperStrip Technology, as listed on
Schedule IV-2, and any additional corresponding patent applications filed in
any such jurisdiction after the date hereof, (ii) any continuation,
continuation-in-part or division of any such patent applications and any
patents issuing on any thereof and (iii) any reissues, extensions or renewals
of any patents referred to in clauses (i) or (ii) of this Section 1(l).
(m) "SuperStrip Technology" means concepts, ideas,
inventions, designs, devices, processes, technical information and know-how,
whether or not described in the Knewco SuperStrip Patent Rights or Knogo
SuperStrip Patent Rights or constituting trade secrets, existing on the date
hereof, and which relate to the design, manufacture or use of SuperStrip
material or any SuperStrip label product, and all written or electronic
expressions or embodiments thereof, including, without limitation, prototypes,
schematics, plans, designs, blue-prints, drawings, specifications, software,
algorithms, manuals, notebooks and records.
(n) "Knogo Product Patent Rights" means (i) patents and
patent applications in any jurisdiction other than the United States and Canada
with respect to Products and the Product Technology (but exclusive of the Knogo
SuperStrip Patent Rights) and any additional corresponding patent applications
filed in any such jurisdiction after the date hereof, (ii) any continuation,
continuation-in-part or division of any such patent applications and any
patents issuing on any thereof and (iii) any reissues, extensions or renewals
of any patents referred to in clauses (i) or (ii) of this Section 1(n).
(o) "Trademarks" means such trademarks, trade names,
service marks, slogans, labels, logos and other trade identifying symbols,
whether or not registered with any governmental authority, which at any time
have been used, or developed for use, in connection with the Products or
SuperStrip by Knogo or Knewco. A list of the Trademarks is set forth in
Schedule V.
Unless otherwise required by the context, references to
"Knogo" in this Agreement shall be deemed to refer also to Sensormatic as the
successor to Knogo pursuant to the Merger Agreement.
2. LICENSES AND TECHNOLOGY TRANSFERS BY KNEWCO.
(a) GRANT OF LICENSES. Pursuant to the Divestiture
Agreement, Knewco obtained the Knewco Product Patent Rights and the Knewco
SuperStrip Patent Rights and all rights to the Product Technology and
SuperStrip Technology in the Knewco Territory, and Knogo retained all
corresponding patent rights and all rights to the Product Technology and
SuperStrip Technology outside the Knewco Territory.
(i) In order to permit Knogo to produce products in
the Knewco Territory, Knewco, subject to the terms and conditions of
this Agreement, grants to Knogo a fully-paid, perpetual, non-exclusive
right and license, with the right to sublicense others, to practice
and use the Knewco Product Patent Rights and the Product Technology in
the Knewco Territory to use, make and have made products, provided
that such products are marketed, distributed, sold or leased outside
of the Knewco Territory for use outside of the Knewco Territory.
(ii) Subject to the terms and conditions of this
Agreement, Knewco grants to Knogo a fully-paid, perpetual,
non-exclusive right and license, including the right to sublicense to
others, to practice and use the Knewco SuperStrip Patent Rights and
the SuperStrip Technology in the Knewco Territory to use, make, have
made, market, distribute, sell or lease
SuperStrip material and products used in conjunction therewith or
otherwise utilizing the Knewco SuperStrip Patent Rights and/or
SuperStrip Technology.
(b) FURTHER ASSISTANCE. In order to assist Sensormatic,
as successor to Knogo, in establishing its own capacity to manufacture Products
and SuperStrip, Knewco shall:
(i) transfer to Sensormatic, not later than 10 days
after the date hereof, the Product Technology and SuperStrip
Technology by delivering copies of all existing written or electronic
expressions or embodiments thereof, including, without limitation,
prototypes, schematics, plans, designs, blue-prints, drawings,
specifications, software, algorithms, manuals, notebooks and records,
and including bills of materials and components for each Product and
each version of SuperStrip, specifying the sources of supply of each
thereof. Knewco agrees that (A) prior to the date of delivery it
shall reduce to writing all Product Technology and SuperStrip
Technology which has not heretofore been expressed in written or
electronic form, (B) all such writings shall be in English and (C) all
expressions and embodiments delivered to Sensormatic shall together
constitute a clear and complete description of all of the Product
Technology and SuperStrip Technology sufficient to provide Sensormatic
with all information reasonably required by it for the manufacture
(including the design, manufacture and operation of related tooling,
equipment and processes), testing, installation, service and
maintenance of the Products and SuperStrip by Sensormatic;
(ii) conduct, without charge and at times reasonably
requested by Sensormatic, six to ten training sessions with respect to
the Products, Product Technology, SuperStrip and SuperStrip Technology
for Sensormatic personnel at Knewco's facilities in Cidra, Puerto
Rico; and
(iii) during the 18 months following the date of this
Agreement, make available, as requested by Sensormatic and without
charge, at Sensormatic's manufacturing facilities or other locations,
the services of its engineering, manufacturing and service personnel,
up to a maximum of 500 man-hours over such 18 months, with respect to
all aspects of the manufacture (including the design, manufacture and
operation of related tooling, equipment and processes), testing,
installation, service and maintenance of the Products and SuperStrip.
If requested by Sensormatic, such services may include plant tours and
inspection of manufacturing equipment and processes at Knewco's
facilities. If Sensormatic requests such services in excess of such
500 man-hours, Knewco shall provide them to Sensormatic at a daily
rate of approximately $500 calculated on the basis of the annual
salary and other direct employment costs of the individuals involved,
plus reasonable out-of-pocket expenses.
3. TRADEMARK LICENSE. Knewco grants to Knogo a
fully-paid, perpetual, non-exclusive right and license within the Knewco
Territory, with the right to sublicense others, to apply the Trademarks to
Products and any other products, provided that such Products and other products
are marketed, distributed, sold or leased outside of the Knewco Territory for
use outside of the Knewco Territory. Knewco further grants to Knogo a
fully-paid, perpetual, non-exclusive, world-wide right and license, with the
right to sublicense to others, to apply any SuperStrip trademarks and trade
names to SuperStrip or products used in conjunction with SuperStrip. The
foregoing licenses shall be subject to an obligation by Knogo to maintain the
quality of the products marketed, distributed, sold or leased under this
trademark license at reasonable standards established by Knewco. Knewco
reserves the right to inspect the quality of such products during the term of
this license.
4. ADDITIONAL LICENSES; SUPPLY ARRANGEMENTS.
(a) Subject to the terms and conditions of this
Agreement, Knogo grants to Knewco fully-paid, perpetual, non-exclusive
licenses (i) to practice and use the Knogo SuperStrip Patent Rights
and SuperStrip Technology to use, make or have made SuperStrip outside the
Knewco Territory; and (ii) to practice and use the Knogo Product Patent Rights
and Product Technology to use, make or have made products outside the Knewco
Territory; but provided in each case that such SuperStrip or other products are
marketed, distributed, leased or sold inside the Knewco Territory for use
inside the Knewco Territory, and provided in each case that Knewco notifies
Sensormatic of the location of such manufacture and the identity of the
manufacturer. Knewco shall have no right to grant sublicenses to others under
the foregoing licenses, except for the purpose of having SuperStrip or such
other products made for Knewco in accordance with this Section 4(a).
(b) If a Change of Control of Knewco occurs, Knewco or
its successor shall have the following additional rights with respect to the
Knogo SuperStrip Patent Rights and SuperStrip Technology. If Sensormatic or
any of its Affiliates, before or after such Change of Control, assigns rights
in or licenses the Knogo SuperStrip Patent Rights or SuperStrip Technology to a
party which is not its Affiliate (other than a distributor or dealer of
Sensormatic or a party which manufactures, installs or services SuperStrip for
Sensormatic, any of its Affiliates or any customers of Sensormatic or of its
Affiliates for affixing on or incorporating into such customers' own products),
Knewco or such successor shall have the further right to obtain a non-exclusive
license outside of the Knewco Territory under the Knogo SuperStrip Patent
Rights and SuperStrip Technology on the most favorable terms granted to any
such non-affiliated licensee, provided that Knewco or its successor meets and
accepts all essential economic and other terms and conditions of such
third-party license.
(c) If Sensormatic chooses to manufacture the SuperStrip
material or to have such material manufactured by others under contract to
Sensormatic, Sensormatic shall, as requested by Knewco, either: (i) supply to
Knewco its requirements for such material at the following prices: (A) during
the period commencing on the date hereof and ending on the fifth anniversary of
the date hereof, a price equal to Sensormatic's Cost (as defined below), and
(B) during the five-year period thereafter, a price equal to the lesser of (1)
Sensormatic's Cost plus 10% and (2) the most favorable prices granted by
Sensormatic to any of its customers, dealers and distributors (excluding any
trial prices or isolated transactions); or (ii) permit Knewco to purchase its
requirements for such material directly from Sensormatic's supplier, subject in
either case to reasonable arrangements governing orders, payment, forecasts,
availability, term and the like. For purposes of this Section 4(c),
"Sensormatic's Cost" shall mean the total material, components, labor and
direct, manufacturing-related overhead costs (exclusive of research and
development expenses) incurred by Sensormatic in producing the SuperStrip
material sold to Knewco, determined on a basis consistent with Sensormatic's
determination of such cost used in its financial statements and in accordance
with generally accepted accounting principles consistently applied over all
periods. Notwithstanding the foregoing, if a Change of Control of Knewco
occurs, Sensormatic shall, as requested by Knewco or its successor, either: (i)
supply to Knewco, or its successor, its requirements for such material at a
price equal to Sensormatic's Cost plus 10% for the period commencing on the
date of effectiveness of such Change of Control and ending on the second
anniversary thereof; or (ii) supply to Knewco, or its successor, its
requirements for such material for the period commencing on the date of
effectiveness of such Change of Control and ending on the fifth anniversary
thereof, at the most favorable prices granted by Sensormatic to any of its
customers, dealers and distributors (excluding any trial prices or isolated
transactions), provided that in no event shall the term of the foregoing
agreement exceed ten years from the date of this Agreement, and subject in any
case to reasonable arrangements governing orders, payment, forecasts,
availability, term and the like.
(d) If Knewco chooses to manufacture the SuperStrip
material or to have such material manufactured by others under contract to
Knewco, Knewco shall, as requested by Sensormatic, either: (i) supply to
Sensormatic its requirements for such material at a price equal to Knewco's
Cost (as defined below); or (ii) permit Sensormatic to purchase its
requirements for such material directly from Knewco's supplier, subject in
either case to reasonable arrangements governing orders, payment, forecasts,
availability, term and the like. For purposes of this Section 4(d), "Knewco's
Cost" shall mean the total material, components, labor and direct,
manufacturing-related overhead costs (exclusive of research and development
expenses) incurred by Knewco in producing the SuperStrip material sold to
Sensormatic, determined on a basis consistent with Knewco's determination of
such cost used in its financial statements and in accordance with generally
accepted accounting principles consistently applied over all periods. The term
of the foregoing agreement shall be five years from the date hereof.
5. IMPROVEMENTS; OTHER MATTERS.
(a) Knewco grants to Knogo a fully paid, non-exclusive,
perpetual right and license, including the right to sublicense others, under
any and all applicable existing or future patents and patent applications or
otherwise, (i) to practice and use in the Knewco Territory any Product
Improvements developed or acquired by Knewco or any of its Affiliates on or
before the fifth anniversary of the date hereof, in order to use, make or have
made Products embodying such Product Improvements, provided that such Products
embodying such Product Improvements are marketed, distributed, sold or leased
outside of the Knewco Territory for use outside of the Knewco Territory, and
(ii) to practice and use any such Product Improvements to make or have made,
use, market, distribute, sell, lease, install, service and maintain Products
embodying such Product Improvements outside of the Knewco Territory for use
outside of the Knewco Territory. Notwithstanding the foregoing, in the case of
any Product Improvements obtained by Knewco from third parties, this license
shall be subject to the payment by Knogo of any royalty payable by Knewco with
respect to a like use by Knewco.
(b) Knewco grants to Knogo a fully paid, non-exclusive,
perpetual right and license, including the right to sublicense others, under
any and all applicable existing or future patents and patent applications or
otherwise, (i) to practice and use in the Knewco Territory any SuperStrip
Improvements developed or acquired by Knewco or any of its Affiliates on or
before the fifth anniversary of the date hereof, in order to make or have made
products embodying such SuperStrip Improvements, provided that such products
embodying such SuperStrip Improvements are marketed, distributed, sold or
leased outside of the Knewco Territory for use outside of the Knewco Territory,
and (ii) to practice and use any such SuperStrip Improvements to make or have
made, use, market, distribute, sell, install, service and maintain products
embodying such SuperStrip Improvements outside of the Knewco Territory for use
outside of the Knewco Territory. Notwithstanding the foregoing, in the case of
any SuperStrip Improvements obtained by Knewco from third parties, this license
shall be subject to the payment by Knogo of any royalty payable by Knewco with
respect to a like use by Knewco.
(c) Knogo grants to Knewco a fully-paid, non-exclusive,
perpetual right and license, including the right to sublicense others, under
any and all applicable existing or future patents and patent applications or
otherwise, (i) to practice and use outside the Knewco Territory any Product
Improvements developed or acquired by Knogo or any of its Affiliates on or
before the fifth anniversary of the date hereof, in order to use, make or have
made Products embodying such Product Improvements, provided that such Products
embodying such Product Improvements are marketed, distributed, sold or leased
within the Knewco Territory for use within the Knewco Territory, and (ii) to
practice and use any such Product Improvements to make or have made, use,
market, distribute, sell, lease, install, service and maintain Products
embodying such Product Improvements within the Knewco Territory for use within
the Knewco Territory. Notwithstanding the foregoing, in the case of any
Product Improvements obtained by Knogo from third parties, this license shall
be subject to the payment by Knewco of any royalty payable by Knogo with
respect to a like use by Knogo.
(d) Neither Knogo nor Knewco shall have any liability to
the other or any party claiming through the other for any infringement or
misappropriation claims made by any third parties regarding Product
Improvements or SuperStrip Improvements licensed by it pursuant to this Section
5 or any other rights licensed by a party hereto to the other under this
Agreement, including the licenses pursuant to Sections 2(a) and 4. The initial
express confirmation of a grant of a license to Product
Improvements or SuperStrip Improvements pursuant to this Section 5 may,
however, be relied on by the licensee and any sublicensee as evidencing an
absence of any knowledge or belief on the part of the licensor at the time of
such confirmation that the subject matter of the licensor's Product
Improvements or SuperStrip Improvements violates any third party's patent or
other intellectual property rights.
(e) The Divestiture Agreement provides that Knewco shall
have all rights in the Product Technology and SuperStrip Technology required
for its business in the Knewco Territory and that Knogo shall have all rights
in the Product Technology and SuperStrip Technology required for its business
outside the Knewco Territory. For avoidance of doubt, each party hereto also
grants to the other fully-paid, non-exclusive, perpetual license in the
granting party's Product Technology and SuperStrip Technology, which license
shall be subject to the same provisions and limitations as to practice and use
as are set forth in Section 5(a) (in the case of such license granted to Knogo)
and Section 5(c) (in the case of such license to Knewco), subject to any
applicable provisions of this Agreement; provided, however, that such
limitations under Section 5(a) shall not apply in the case of Knogo's rights
under the Knewco SuperStrip Patent Rights and Knewco SuperStrip Technology,
which are governed by Section 2(a)(ii). Further, to the extent that the Knewco
Product Patent Rights or Knewco SuperStrip Patent Rights are applicable in
territories not included in the Knewco Territory (e.g., the U.S. Virgin
Islands), the foregoing license from Knewco to Knogo shall also include an
exclusive license to practice and use such patent rights in such territories.
6. SALES TO MANUFACTURERS FOR SOURCE LABELLING.
Notwithstanding any territorial restriction in any license granted under
Section 2(a), 4(a) or 5 of this Agreement, (i) Knewco shall have the further
right and license to sell SuperStrip or, if applicable, other label material
included in Products, to manufacturers or distributors of merchandise located
outside the Knewco Territory, but only to be embedded in or affixed to such
merchandise for source labelling purposes, and only if such merchandise is to
be sold by such manufacturers or distributors for sale and use in the Knewco
Territory, and (ii) Sensormatic shall have the further right and license to
sell any such label material included in Products to manufacturers or
distributors of merchandise located inside the Knewco Territory, but only to be
embedded in or affixed to such merchandise for source labelling purposes, and
only if such merchandise is to be sold by such manufacturers or distributors
for sale and use outside the Knewco Territory. (Sensormatic has such rights in
the Knewco Territory with respect to SuperStrip, as provided in Section
2(a)(ii).) It shall be a condition to the respective foregoing rights that
each such manufacturer or distributor agrees in writing to be bound by the
foregoing restriction applicable to the party from which such manufacturer or
distributor purchases such material.
7. CERTAIN PATENT MATTERS. Sensormatic shall not assert
the Pinned Wall Patent Rights against Knewco or any of its Affiliates of which
it owns a majority of the voting power, or customers, with respect to the
manufacture, sale or use of SuperStrip material in the Knewco Territory for use
in the Knewco Territory. The foregoing agreement shall not apply to any
successor or assign of Knewco, or any licensee or sublicensee of Knewco (other
than for the purpose of having SuperStrip made for Knewco or an Affiliate
referred to in the preceding sentence for sale and use in accordance with the
limitations applicable to Knewco under this Agreement and the Divestiture
Agreement), and shall terminate and become void in the event of a Change of
Control of Knewco.
8. CONFIDENTIALITY.
(a) CONFIDENTIALITY. Each of the parties understands and
acknowledges (i) that as a result of the transactions contemplated by this
Agreement, each of them may become informed of, and have access to,
confidential information regarding inventions, trade secrets, technical
information, know-how, plans, specifications and other information respecting
Products, Product Technology, Product Improvements, SuperStrip and SuperStrip
Technology, and (ii) that such information is held by it in trust and solely
for the benefit of the parties in accordance with their respective interests
pursuant to this Agreement and any other written agreement between them. The
parties shall not, at any time, reveal, report, publish, transfer or otherwise
disclose to any person or entity, or use, any of the other's confidential
information, except for use as contemplated by this Agreement or such other
agreements. This Section 8 shall not be construed to restrict Knogo's or
Sensormatic's disclosure or use of any information acquired or obtained by it
other than pursuant to this Agreement, including without limitation any
information acquired by Knogo pursuant to the Divestiture Agreement or any
information acquired or obtained by Sensormatic in the course of its business.
The foregoing obligations of confidentiality shall not apply
to information of a party which lawfully comes into the possession of the
receiving party and which (i) is received from a third party without violation
of any confidentiality obligations in favor of the other party with respect to
such information, (ii) can be demonstrated to have been previously known to the
receiving party, (iii) is or becomes part of public or industry knowledge
through no conduct of the receiving party or (iv) can be demonstrated to have
been independently developed by the receiving party.
(b) PERMITTED DISCLOSURE. The foregoing shall not
prohibit the disclosure by either party of confidential information to
its employees who have a need to know such information for the purposes of this
Agreement or to its counsel, so long as such persons shall be obligated to hold
such information in confidence to the same extent as provided herein.
(c) SPECIAL PRECAUTIONS. On the written request of
either party, the other shall forthwith adopt any special precautions
as may be reasonably necessary to prevent any unauthorized disclosure of any of
the requesting party's confidential information and shall cause its employees,
agents and associates to forthwith adopt such special precautions. If the
adoption of such precautions would involve unusual expense, the requesting
party shall bear the cost incurred by the other in adopting such precautions.
(d) INJUNCTIVE RELIEF. Because neither party would have
an adequate remedy at law to protect its business from the unfair
competition of the other or to protect its interests in its confidential
information and similar commercial assets, each of them shall be entitled to
injunctive relief, in addition to such remedies and relief that would, in the
event of a breach of the provisions of this Section 8 by the other, be
available to it. In the event of such a breach, in addition to any other
remedies, either party, as the case may be, shall be entitled to receive from
the breaching party payment of, or reimbursement for, its reasonable attorneys'
fees and disbursements incurred in enforcing any such provision.
(e) SURVIVAL. The provisions of this Section 8 shall
survive any termination of this Agreement.
9. ARBITRATION.
(a) GENERAL. Any controversy or claim arising out of or
relating to this Agreement shall be settled by arbitration before a
single arbitrator in New York, New York, in accordance with the Commercial
Arbitration Rules of the American Arbitration Association. Any decision or
award of the arbitrator shall be binding on the parties. Judgment on any award
rendered by the arbitrator may be entered in any court of competent
jurisdiction.
(b) PROCEDURE. Each party consents to the jurisdiction
of such arbitration and to such venue. The arbitrator shall apply the
law of the State of New York, exclusive of conflict of laws principles, to any
dispute. Nothing in this Agreement shall require the arbitration of disputes
between the parties that arise from actions, suits or proceedings instituted by
third parties. Knogo appoints Messrs. Xxxxxxx & Xxxxxx, 000 Xxxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000, Attention: Xxxxxxx X. Xxxxx, Esq., and Knewco appoints
Messrs. Stroock & Stroock & Xxxxx, Seven Xxxxxxx Xxxxxx, Xxx Xxxx,
Xxx Xxxx 00000, Attention: Xxxxx X. Xxxxxxx, Esq., as their respective
attorneys-in-fact and authorized agents solely to receive on their behalf,
service of any demands for, or any notice with respect to, arbitration
hereunder or any service of process. Service on either of such
attorneys-in-fact may be made by registered or certified mail or by personal
delivery, in any case return receipt requested, and shall be effective as
service on either party, as the case may be. Nothing herein shall be deemed to
affect any right to serve any such demand, notice or process in any other
manner permitted under applicable law.
10. DELAYED TRANSFERS UNDER MERGER AGREEMENT. In the
event that ownership of any Acquired Subsidiary (as defined in the
Merger Agreement) is managed by Knewco on an interim basis, or is ultimately
transferred to Knewco by the Escrow Agent pursuant to Section 10.2 of the
Merger Agreement, the parties agree that any such Acquired Subsidiary shall be
deemed to be covered by this Agreement as if it were a subsidiary of Knewco,
and that the Knewco Territory, non-competition and other provisions of this
Agreement shall be modified by the parties as may be necessary to equitably
adjust their respective rights and obligations in order to enable Knewco to
operate with respect to the business of any such Acquired Subsidiary. Knewco
shall abide by Section 5.1 of the Merger Agreement with respect to any such
Acquired Subsidiary, unless and until transferred to Knewco thereunder.
11. NON-AGENCY. For all purposes of this Agreement,
each party shall be an independent contractor, and not an agent, partner or
joint venturer, of the other.
12. NO ASSIGNMENT. Neither party shall assign,
subcontract or otherwise transfer this Agreement or any right or
interest in or to this Agreement without the prior consent of the other, except
that either party may assign this Agreement to any parent corporation or
wholly-owned subsidiary or to any successor to all or a substantial portion of
its business.
13. COMMUNICATIONS. All notices, consents and other
communications given under this Agreement shall be in writing and shall be
deemed to have been duly given (a) when delivered by hand or by Federal Express
or a similar overnight courier to, (b) five days after being deposited in any
United States post office enclosed in an airmail postage prepaid registered or
certified envelope addressed to, or (c) when successfully transmitted by
facsimile (with a confirming copy of such communication to be sent as provided
in (a) or (b) above) to, the party for whom intended, at the address or
facsimile number for such party set forth below, or to such other address or
facsimile number as may be furnished by such party by notice in the manner
provided herein; provided, however, that any notice of change of address or
facsimile number shall be effective only upon receipt.
If to Knogo or Sensormatic:
Sensormatic Electronics Corporation
000 X.X. 00xx Xxxxxx
Xxxxxxxxx Xxxxx, Xxxxxxx 00000
Attention: Corporate Counsel
Facsimile No.: (000) 000-0000
and
Vice President of Corporate Development
Facsimile No.: (000) 000-0000
With a copy to:
Xxxxxxx & Xxxxxx
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X. Xxxxxxx, Esq.
Facsimile No.: (000) 000-0000
If to Knewco:
Knogo North America Inc.
000 Xxxxxxxx Xxxxxxxxx
Xxxxxxxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxxxxx
Facsimile No.: (000) 000-0000
With a copy to:
Stroock & Stroock & Xxxxx
Seven Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx X. Xxxxxxx, Esq.
Facsimile No.: (000) 000-0000
14. ENTIRE AGREEMENT. This Agreement sets forth the entire
understanding of the parties with respect to its subject matter, merges and
supersedes all prior and contemporaneous understandings with respect to its
subject matter and may not be waived or modified, in whole or in part, except
by a writing signed by each of the parties. No waiver of any provision of this
Agreement in any instance shall be deemed to be a waiver of the same or any
other provision in any other instance. Failure of any party to enforce any
provision of this Agreement shall not be construed as a waiver of its rights
under such or any other provision.
15. SUCCESSORS AND ASSIGNS. This Agreement shall be
binding on, enforceable against and inure to the benefit of, the parties and
their respective successors and assigns, and nothing herein is intended to
confer any right, remedy or benefit upon any other person.
16. GOVERNING LAW. This Agreement shall in all respects be
governed by and construed in accordance with the laws of the State of New York
applicable to agreements made and fully to be performed in such state, without
giving effect to conflicts of law principles.
17. CONSTRUCTION. Headings used in this Agreement are for
convenience only and shall not be used in the interpretation of this Agreement.
References herein to Sections and Schedules are to the sections and exhibits of
this Agreement. As used herein, the singular includes the plural.
IN WITNESS WHEREOF, the parties have executed this Agreement
as of the date first set forth above.
KNOGO CORPORATION
By
---------------------------------
Xxxxxx X. Xxxxxxxxx
President
KNOGO NORTH AMERICA INC.
By
---------------------------------
Xxxxxx X. Xxxxxxxxx
President
Effective as of the Effective Time under the Merger Agreement,
Sensormatic Electronics Corporation, as successor to Knogo Corporation, shall
become a party to the foregoing License Agreement and acknowledges and accepts
such Agreement.
SENSORMATIC ELECTRONICS CORPORATION
By
---------------------------------
Name:
Title:
