Exhbit 10.6
LICENSE AGREEMENT
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THIS AGREEMENT is entered into and made effective as of February 18,
1999, by and between XXXXXXXXX COMMUNICATIONS, INC., a Nevada corporation
("Xxxxxxxxx"), and ION SYSTEMS, INC., a Missouri corporation ("ION").
IN CONSIDERATION of the mutual covenants contained in this Agreement,
the parties agree as follows:
1. RULES OF INTERPRETATION.
1.1 In addition to other terms defined herein, the capitalized terms
identified below (in alphabetical order) shall have the respective meanings set
forth below when used in this Agreement.
"AFFILIATE" means, as to any referenced Person, any other Person
that directly or indirectly (through one or more intermediaries) Controls, is
Controlled by or is under common Control with such Person, including (in the
case of Persons that are entities) the Person's owners, shareholders, members,
partners, trustees, directors, officers, managers, employees and agents.
"BOOK" means information or data consisting primarily of text
(which may also include graphics or illustrations associated with the text),
having the same author or source, and grouped together for a single publication.
"BOOK CONVERSION" means the conversion, formatting and encoding of
a single Book, and the delivery to Xxxxxxxxx through the posting of the Book on
a Xxxxxxxxx Web Site, so that the Book may be used for Book Sales or Product
Sales, using the Products.
"BOOK SALE" means any transaction through a Xxxxxxxxx Web Site
generating revenue based on the publishing, displaying, viewing, subscribing,
selling, renting, downloading or other use of a Book or any portion of a Book.
"BUSINESS DAY" means any day other than (i) a Saturday or Sunday
and (ii) a day on which national banks in the United States are required or
permitted by applicable law to be closed for banking business.
"COMMISSION" means the U.S. Securities and Exchange Commission or
any successor agency thereto.
"CONTROL" means the possession, direct or indirect, of the power
to direct or cause the direction of the management and policies of a Person,
whether through the ownership of voting securities, by contract or otherwise. A
Person owning more than fifty percent of the capital stock or other equity
interests of another Person shall be presumed to Control such other Person.
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"DOLLARS" or "$" shall mean lawful currency of the united States
of America.
"E* WEB" means the computer software developed and owned by ION
that permits the viewing of Books on Web Sites while protecting the security of
the data.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended, together with the rules and regulations promulgated thereunder by the
Commission.
"EXCLUSIVE LICENSE OPTION" has the meaning given to such term in
SECTION 2.3.
"FIELD" means the use of the Products solely for the purpose of
engaging in the for-profit businesses of (i) publishing, displaying, promoting,
marketing, offering and selling, directly to customers and end users using the
facilities of a Web Site, the following specific categories of Books, to be
viewed on the Web Site or downloaded from the Web Site by the customers and end
users for a fee: vanity Books, direct author Books, publisher-owned Books, Books
consisting of technical manuals and documentation, and Books that may be read by
a voice synthesizer; and (ii) publishing and displaying Books on a Web Site for
the purpose of promoting, marketing, offering and selling, directly to customers
and end users for a fee using the facilities of the Web Site, products or
services (other than Books) listed or identified in the Books published or
displayed on the Web Site. The Field shall not include (A) any uses of the
Products for any purposes not specifically included within the foregoing
description, or (B) any categories of Books not included in the foregoing
specific categories. By way of explanation and without intending to limit the
generality of the foregoing: (1) the following uses of the Products are not
included in the Field: rentals of Books intended to be used as text books for
students, secure e-mail messages or other information and documents delivered
through the internet, publishing, displaying and delivering subscription Books
(e.g. newsletters and periodicals), use of the technology underlying the
Products in connection with other applications (e.g. databases and browsers),
other non-revenue generating uses (e.g. businesses or organizations publishing
their own information and documents electronically through internal systems or
the internet), stand alone publishing software, and downloading movies and other
information or data consisting primarily of video; and (2) the following
specific categories of Books are not included within the Field: Books intended
to be used as textbooks for students, and subscription Books (e.g. newsletters
and periodicals).
"XXXXXXXXX COMMON STOCK" means the authorized shares of common
stock, par value $.OO1 per share, of Kanakaris, together with any securities
issuable after the date hereof with respect to the shares thereof that are
currently outstanding.
"XXXXXXXXX PREFERRED STOCK" means the authorized shares of
preferred stock, par value $.OOl per share, of Xxxxxxxxx.
"XXXXXXXXX WEB SITE" means one or more Web Sites that are owned,
sponsored and operated by Xxxxxxxxx, or an Affiliate of Xxxxxxxxx that is under
the Control of Xxxxxxxxx, through which Books may be viewed for a fee or
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purchased by customers or end users directly from the Web Site for electronic
delivery through the internet, including the Web Site currently operated by
Kanakaris under the name "NetBooks" (having a world wide web address of
xxx.xxxxxxxx.xxx), or through which products or services (other than Books) may
be purchased by customers or end users using the facilities of the Web Site. A
Person shall be deemed to own, sponsor and operate a Web Site when such Person
controls the content of the Web Site and collects the revenue payable using the
facilities of the Web Site.
"LICENSE" means the license granted by ION to Kanakaris pursuant
to SECTION 2.1.
"OPTION SHARES" means 100,000 shares of Xxxxxxxxx Common Stock.
"PERSON" means any individual or entity, including a joint
venture, partnership, trust, company, limited liability company or corporation,
together with the permitted successors and assigns of any such Person.
"PRODUCTS" means collectively the E*Web and X*Maker computer
software, together with all related documents and manuals, and together with any
Product Upgrades.
"PRODUCT SALE" means any transaction through a Xxxxxxxxx Web Site
generating revenue based on the subscribing, selling, renting or downloading of
a product or service (other than a Book) identified in a Book published,
displayed or viewed on a Xxxxxxxxx Web Site.
"PRODUCT UPGRADE" means any upgrade to a Product that adds
features or capabilities but is dependent on the same underlying technology.
"SECURITIES ACT" means the Securities Act of 1933, as amended,
together with the rules and regulations promulgated thereunder by the
Commission.
"WEB SITE" means a location on the world wide web accessible
electronically by computers through the internet.
"X*MAKER" means the computer software developed and owned by ION
that enables the downloading of Books from Web Sites while protecting the
security of the data.
1.2 Unless the context clearly requires otherwise, this Agreement
shall be construed in accordance with the following rules: (i) the Section
numbers and headings preceding text have been inserted for convenient reference
only and shall not affect the meaning, construction or effect of this Agreement;
(ii) references to Sections and Exhibits are references to Sections of this
Agreement and Exhibits attached to this Agreement, respectively, which Exhibits
are hereby incorporated by reference and made a part of this Agreement; (iii)
words in the singular include the plural and words in the plural include the
singular; (iv) the word "INCLUDING" means by way of illustration or example but
without limitation; (v) the word "OR"is not exclusive; (vi) any calculations
required to be made pursuant to this Agreement shall be made in accordance with
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generally accepted accounting principles to the extent applicable thereto; and
(vii) any payment of money that becomes due on a day that is not a Business Day
shall be due and payable on the next Business Day.
2. LICENSE GRANT.
2.1 Subject to the terms and conditions set forth in this Agreement,
ION grants to Xxxxxxxxx, and Xxxxxxxxx accepts, a license during the term of
this Agreement to use the Products solely within the Field, and solely for or in
connection with Xxxxxxxxx Web Sites, but without any geographic or territorial
restrictions. Neither the License nor any right, title or interest thereunder
shall be assignable or transferable by Kanakaris, and Kanakaris shall not have
the right to grant sublicenses under the License; PROVIDED, that Kanakaris may
authorize the use of the License by any Affiliate of Xxxxxxxxx that owns,
sponsors and operates a Xxxxxxxxx Web Site, which Affiliate is under the Control
of Xxxxxxxxx, but Xxxxxxxxx shall require any such Affiliate to comply with all
the terms and conditions of the License, Xxxxxxxxx warrants and guarantees such
compliance to ION, and Xxxxxxxxx shall immediately notify ION of any such
Affiliate that Xxxxxxxxx has authorized to use the License. ION reserves to
itself any right, title and interests in and to the Products not expressly
granted to Kanakaris herein. Without limiting the generality of the foregoing
reservation of rights to ION, ION shall have the right, and Kanakaris shall not
have any right, to use the Products for all purposes and uses, and all
categories of Books, outside of the Field.
2.2 The License with respect to E*Web shall be exclusive to Xxxxxxxxx
within the Field from the date of this Agreement until August 30, 1999. If the
Exclusive License Option is not exercised by Kanakaris pursuant to SECTION 2.3,
then from and after August 30, 1999, the License with respect to E*Web shall be
non-exclusive to Xxxxxxxxx within the Field and shall continue for the term of
this Agreement, and thereafter ION shall not be restricted from using E*Web for
any purpose and granting other licenses with respect to E*Web to any other
Person, both within and outside of the FIELD; PROVIDED, that for so long as the
License with respect to E*Web is exclusive to Xxxxxxxxx within the Field, ION
shall not exercise for itself or grant to any third Person any right, title or
interests with respect to E*Web within the Field. The License with respect to
X*Maker shall be non-exclusive to Xxxxxxxxx for the term of this Agreement, and
ION shall not be restricted from using X*Maker for any purpose and granting
other licenses with respect to X*Maker to any other Person, both within and
outside of the Field.
2.3 Subject to SECTION 2.3(a), Xxxxxxxxx shall have the right,
exercisable at the option of Xxxxxxxxx in its sole discretion (the "EXCLUSIVE
LICENSE OPTION"), to extend the exclusivity to Xxxxxxxxx of the License with
respect to E*Web within the Field for the entire term of this Agreement, on and
subject to the following terms and conditions:
(a) Xxxxxxxxx' shall not have the right to exercise the Exclusive
License Option unless, prior to the exercise thereof, ION shall have approved a
business and marketing plan (the "BUSINESS PLAN") prepared by Kanakaris for the
use of the Product and the promotion of the Xxxxxxxxx Web Sites in a manner
intended to maximize ION's return through the payment of fees and royalties to
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ION by Xxxxxxxxx as contemplated by SECTION 3, which approval by ION shall be
undertaken by ION in good faith promptly after the proposed Business Plan is
provided to ION.
(b) The license fee for exercising the Exclusive License Option
shall be $1,000,000.00 (the "EXCLUSIVE LICENSE FEE"), which shall be payable in
the manner provided herein.
(c) The Exclusive License Option, if exercised by Kanakaris, shall
be exercised by Kanakaris delivering notice of the exercise thereof to ION (the
"OPTION EXERCISE NOTICE"). To be valid and effective, the Option Exercise Notice
must be received by ION by not later than the close of business on August 30,
1999, and must be accompanied by cash, or a certified check or electronic wire
transfer of immediately available funds to an account designated by ION, in the
amount of $100,000.00 as partial payment of the Exclusive License Fee. The
balance of the Exclusive License Fee shall bear interest at the fixed rate of
five percent per annum, and shall be payable in nine monthly installment
payments, each in the amount of $100,000.00 plus accrued and unpaid interest
thereon, and each monthly installment payment shall be due and payable each
successive month after the Option Exercise Notice (on or before the same day of
the month as the date the Option Exercise Notice was delivered to ION), until
the entire Exclusive License Fee and all accrued interest thereon has been paid
in full. Each monthly installment payment shall paid to ION in cash, or by a
certified check or electronic wire transfer of immediately available funds to an
account designated by ION.
(d) From and after the date of ION's receipt of the Option
Exercise Notice, and continuing for the term of this Agreement, the License with
respect to E*Web shall be exclusive to Xxxxxxxxx within the Field, subject
however to forfeiture of exclusivity as provided in SECTION 2.4.
2.4 Upon the occurrence of any of the following events, the
exclusivity of the License with respect to E*Web shall immediately be forfeited
(as ION's sole and exclusive remedy with respect to the occurrence of such
event) and then and thereafter the License with respect to E*Web shall be
non-exclusive to Kanakaris within the Field, and thereafter ION shall not be
restricted from using E*Web for any purpose and granting other licenses with
respect to E*Web to any other Person, both within and outside of the Field:
(a) Any failure by Kanakaris to pay the Exclusive License Fee, or
any portion thereof, or any interest accrued thereon, to ION on or before the
date on which payment is due. In any such event, ION shall not be required to
refund to Kanakaris any previous payments of the Exclusive License Fee paid by
Kanakaris.
(b) Any failure by Kanakaris to supply ION with at least 1,000
Books for Book Conversions in each of the calendar years ending December 31,
1999, 2000, 2001, 2002, and 2003; PROVIDED, that if for any of such calendar
years Xxxxxxxxx has supplied ION with fewer than 1,000 Books for Book
Conversions, then Kanakaris shall have the right to pay to ION, by not later
than December 31 of such calendar year, an amount equal to the price payable by
Kanakaris for each Book Conversion multiplied by the difference between 1,000
Book Conversions and the actual number of Books supplied to ION for Book
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Conversions during such calendar year, and upon ION's receipt of such amount the
exclusivity of the License with respect to E*Web shall not be forfeited and
shall remain in effect.
2.5 After ION's initial approval of the Business Plan as contemplated
by SECTION 2.3(a), Xxxxxxxxx shall use its best efforts to execute, comply with
and follow the Business Plan substantially as stated therein. Xxxxxxxxx shall
provide a written report (in reasonable detail) to ION within ninety days after
the end of each calendar year during the term of this Agreement as to the
progress of Xxxxxxxxx under the Business Plan. The Business Plan may be modified
from time to time, but any material modifications to the Business Plan shall be
subject to ION's prior approval. In connection with a proposed modification of
the Business Plan, Xxxxxxxxx may propose to modify the specific uses of the
Products and the specific categories of Books included within the Field, but any
such modifications to the Field shall be subject to ION's prior approval in each
instance, which approval may be withheld in ION's sole discretion.
2.6 The parties acknowledge that the technology, know-how, inventions
and works of authorship included within the Products or on which they are based
may be protected by patents and copyrights, and that ION is preparing or has
prepared one or more patent applications and may prepare further patent or
copyright applications, and is pursuing and may further pursue patent or
copyright protections, for such technology, know-how, inventions and works of
authorship. All patent or copyright applications and patents or copyrights
issuable or claimed with respect to any technology, know-how, inventions and
works of authorship included within the Products or on which they are based
shall be the exclusive property of ION, and ION shall have the exclusive right
to apply for, pursue and claim any such patents and copyrights, in all domestic
and foreign jurisdictions; PROVIDED, that the License shall include the right of
Kanakaris to utilize the technology, know-how, inventions and works of
authorship and to practice the art covered by any such patent or copyrights
applications or patents or copyrights. Xxxxxxxxx shall not oppose any such
patent or copyright applications filed by ION and shall not challenge the
validity of any patent or copyright issued to or asserted by ION or any claims
made in any such patents. Xxxxxxxxx shall display or publish any notices of
patent or copyright claims as reasonably required by ION.
2.7 Upon request by Xxxxxxxxx, ION shall deliver one copy of the
Products to Xxxxxxxxx, including all related documents and manuals. Xxxxxxxxx
shall not copy or use the Products (including but not limited to the
documentation and manuals) except as expressly permitted by this Agreement.
Xxxxxxxxx may copy the Products solely for archival or backup purposes. All
archival and backup copies and any other permitted copies of the Products are
subject to the terms and conditions of this Agreement. Xxxxxxxxx shall not cause
or permit the reverse engineering, disassembly or decompilation of the Products.
2.8 ION shall notify Xxxxxxxxx in the event any Product Upgrades are
developed by ION; PROVIDED, that ION shall not have any duty to develop any
Product Upgrades. Any Product Upgrades shall be provided to Xxxxxxxxx and shall
become a part of the related Product and shall be included in the License for
such Product. Xxxxxxxxx or its Affiliates may from time to time request ION to
develop Product Upgrades, and in such event if ION is agreeable to undertaking
such development, the cost of such development shall be paid by Xxxxxxxxx on
terms and conditions to be mutually agreed to by the parties.
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2.9 Notwithstanding anything to the contrary contained herein,
Xxxxxxxxx shall not be required to exclusively use the Products in connection
with the Xxxxxxxxx Web Sites, and Xxxxxxxxx shall have the right to use other
computer software programs on or in connection with the Xxxxxxxxx Web Sites for
any purpose.
2.10 If during the term of this Agreement ION develops and desires to
commercialize technology to enable the secure downloading from the internet of
movies and other information or data consisting primarily of video ("VIDEO
TECHNOLOGY"), whether by modifications to the Products or otherwise, then prior
to granting any licenses to third Persons with respect to the Video Technology
or selling the Video Technology to third Persons, ION shall disclose the
existence of the Video Technology to Xxxxxxxxx and permit Xxxxxxxxx a reasonable
opportunity to make a proposal for the acquisition of the Video Technology or a
license with respect thereto, and the parties shall in good faith negotiate with
each other for a reasonable time with respect to such proposal by Kanakaris.
Notwithstanding anything to the contrary contained herein, Xxxxxxxxx shall have
no expressed or implied obligation to acquire or license the Video Technology
from ION or to make any proposal with respect thereto, and ION shall have no
expressed or implied obligation to sell or license the Video Technology to
Xxxxxxxxx on the terms as proposed by Xxxxxxxxx or on any other terms.
3. FEES AND ROYALTIES.
3.1 During the term of this Agreement, ION shall have the exclusive
right to perform Book Conversions for all Books for the Xxxxxxxxx Web Sites, on
the following terms and conditions:
(a) The price for each Book Conversion shall be $100.00 for each
Book supplied to ION in accordance with ION's standard specifications for Book
Conversions; PROVIDED, that effective as of January 1, 2000, and as of the first
day of each calendar year thereafter, ION shall have the right to increase the
price for each Book Conversion, by not more than five percent each year, by
giving Xxxxxxxxx notice of such price increase not later than the December 15
prior to the effective date of the price increase. For each Book supplied to ION
for a Book Conversion that does not comply with ION's standard specifications
for Book Conversions, ION may also charge additional fees at ION's then
applicable standard rates.
(b) ION will issue invoices to Xxxxxxxxx for all Books delivered
by ION to Xxxxxxxxx as to which ION has performed a Book Conversion, and all
such invoices shall be due and payable in full within thirty days after the date
of ION's invoice.
(c) ION shall use its best efforts to diligently and promptly
complete Book Conversions as soon as possible after Books are supplied to ION.
The parties will reasonably cooperate with each other to establish mutually
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agreeable procedures and working arrangements to implement and administer the
Book Conversions. Any failure or delay by ION in performing any Book Conversion
shall not constitute a breach or default by ION to the extent and for so long as
such failure or delay is caused by or results from or in connection with any
cause or event beyond ION's reasonable control, including any act of God, fire,
flood, epidemic, quarantine restriction, war, riot, work stoppage, worker
shortage, breakdown, interruption in power, governmental regulation or action,
or order of any court or governmental body.
(d) During the term of this Agreement, Xxxxxxxxx shall not
directly or indirectly perform Book Conversions, either itself or through any
Affiliate, and Kanakaris shall not engage any third Person to perform Book
Conversions.
3.2 In consideration of the License granted to Xxxxxxxxx by ION
herein, and without regard to whether any rights thereunder are exclusive or
non-exclusive, Kanakaris shall pay royalties to ION, on and subject to following
terms and conditions:
(a) "ROYALTY FEE" means (i) in the case of a Book Sale, an amount
equal to the gross revenue to Kanakaris from the Book Sale, less the amount of
any commission, fee or royalty payable by Kanakaris to the publisher or author
of the Book involved in the Book Sale, multiplied by twelve percent, and (ii) in
the case of a Product Sale, an amount equal to the gross revenue to Kanakaris
from the Product Sale, multiplied by five percent; PROVIDED, that if the Product
Sale is based on a Book for which the Book Conversion was performed by ION, then
the Royalty Fee on such gross revenue shall be determined by multiplying by ten
percent instead of five percent.
(b) ION shall earn a Royalty Fee on each Book Sale or Product Sale
at the time the Book Sale or Product Sale is transacted through a Xxxxxxxxx Web
Site, without regard to whether any Product was used or involved in connection
with the Book Sale or Product Sale or whether the related Book was the result of
a Book Conversion by ION. All Royalty Fees earned in a calendar month shall be
due and payable to ION within thirty days after the end of the month in which
they are earned.
(c) Each Royalty Fee payment shall be accompanied by a statement
setting forth in reasonable detail Xxxxxxxxx'x calculation of the amount of the
Royalty Fee payment. Delivery of such statement to ION shall constitute a
representation and warranty by Kanakaris to ION that the statement is true,
complete and accurate. Xxxxxxxxx shall create, maintain and retain, for at least
five years after the date of the related Royalty Fee payment to ION, reasonable
books and records to establish the accuracy of Xxxxxxxxx' statement accompanying
each Royalty Fee payment. Such books and records shall be subject to inspection
by ION or its designated representatives, upon reasonable prior notice by ION to
Xxxxxxxxx, at reasonable times during Xxxxxxxxx' regular business hours and
without unreasonably interfering with Xxxxxxxxx' operations. In the event ION's
inspection results in the discovery of any inaccurate payment, an adjustment
shall be made promptly by the parties to correct such inaccurate payment. All
such inspections shall be at ION's own cost and expense; PROVIDED, that if a
material inaccuracy is discovered that results in Xxxxxxxxx being required to
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make an adjusting payment to ION, then Kanakaris shall promptly reimburse ION
for any reasonable costs and expenses incurred in discovering such inaccuracy.
All information that comes to the attention of ION or its designated
representatives while taking the actions permitted by this SECTION 3.2(c) is
designated to be Xxxxxxxxx' Restricted Information that is subject to the
confidentiality restrictions of SECTION 8.
3.3 If ION procures for or introduces to Kanakaris any publisher or
author of a Book that is then published, displayed or viewed on a Xxxxxxxxx Web
Site, then Xxxxxxxxx shall pay to ION, in addition to any other amounts payable
to ION pursuant to SECTIONS 3.1 AND 3.2, the amount of any commission, fee or
royalty payable by Kanakaris to its sales agents at the standard rates as then
in effect.
3.4 The parties may from time to time by mutual agreement increase,
decrease or otherwise modify the amounts payable under SECTIONS 3.1. 3.2 OR 3.3
on a case-by-case basis; PROVIDED, that neither party shall have any obligation
to agree to any such modification.
4. STOCK OPTION.
4.1 Subject to SECTION 4.5, ION shall have the right, exercisable at
the option of ION in its sole discretion one time at any time on or after June
1, 1999, and on or before December 31, 2005 (the "STOCK OPTION"), to purchase
from Xxxxxxxxx all or any portion of the Option Shares, for an aggregate
purchase price equal to $.30 per share multiplied by the number of Option Shares
as to which the Stock Option is being exercised, on and subject to the terms and
conditions in this SECTION 4.
4.2 The Stock Option, if exercised by ION, shall be exercised by ION
delivering notice of the exercise thereof to Kanakaris (the "STOCK OPTION
EXERCISE NOTICE"). To be valid and effective, the Stock Option Exercise Notice
must be received by Kanakaris by not later than the close of business on
December 31, 2005, and must be accompanied by cash, or a certified check or
electronic wire transfer of immediately available funds to an account designated
by Xxxxxxxxx, in the full amount of the aggregate purchase price for the Option
Shares being purchased. Upon giving the Stock Option Exercise Notice, ION shall
be deemed for all purposes to be the owner of the Option Shares being purchased
from and after the date of the Stock Option Exercise Notice. Prior to the
exercise of the Stock Option by ION, ION shall not have any rights as a
shareholder of Kanakaris or with respect to any of the Option Shares issuable
upon the exercise of the Stock Option, except such rights as are expressly
provided herein.
4.3 Upon receipt of the Stock Option Exercise Notice from ION,
Kanakaris shall promptly issue a stock certificate to represent the Option
Shares being purchased, duly registered in the name of ION on the books and
records of Xxxxxxxxx regarding its capital stock and duly executed on behalf of
Xxxxxxxxx, and deliver such stock certificate to ION; PROVIDED, that at the
request of ION, Xxxxxxxxx shall deliver the Option Shares being purchased to a
brokerage account designated by ION. Delivery to ION of the Option Shares being
purchased in the manner contemplated herein shall constitute a representation
and warranty by Kanakaris to ION that the Option Shares purchased by ION are
validly authorized and issued, fully paid and non-assessable.
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4.4 For so long as the Stock Option remains exercisable by ION, the
following covenants shall be in effect:
(a) Xxxxxxxxx shall reserve a sufficient number of shares of
authorized but unissued shares of Xxxxxxxxx Common Stock for issuance to ION
pursuant to the Stock Option.
(b) Xxxxxxxxx shall provide to ION copies of all reports, notices
and other documents provided to the shareholders of Kanakaris.
(c) In the event of any restructuring of the capital stock or
capitalization of Xxxxxxxxx, including any stock split or stock dividend, the
terms of the Stock Option (including the number of shares of Xxxxxxxxx Common
Stock subject to the Stock Option and the price per share for the shares to be
purchased thereunder) shall be modified so as to preserve the rights of ION
under the Stock Option and the intentions of the parties hereunder; PROVIDED,
that ION shall not be protected from any dilution of its interests under the
Stock Option as a result of the issuance of additional shares of the authorized
shares of Xxxxxxxxx Common Stock subsequent to the date of this Agreement, and
ION shall not have any preemptive rights with respect to the issuance of any
capital stock of any class by Kanakaris.
4.5 Kanakaris shall give ION notice not less than forty-five days
prior to the consummation of any of the following events (each a "SALE EVENT"):
a merger, consolidation or other reorganization of Xxxxxxxxx in which Xxxxxxxxx
is not the surviving entity; the sale or other transfer of all or substantially
all of Xxxxxxxxx' property or assets; the purchase or other acquisition of fifty
percent or more of Xxxxxxxxx' outstanding equity interests; or any other change
in the Control of Xxxxxxxxx. If ION does not deliver to Xxxxxxxxx a Stock Option
Exercise Notice within thirty days after ION's receipt of such notice from ION,
then Kanakaris shall have the right to cancel the Stock Option at any time prior
to the consummation of such Sale Event by paying $30,000.00 to ION; PROVIDED,
that if the Sale Event as to which notice was given to ION is not consummated
within ninety days after the notice to ION, then Kanakaris shall then again be
required to give the notice to ION as contemplated herein; and PROVIDED FURTHER,
that if Xxxxxxxxx exercises the right to cancel the Stock Option and such Sale
Event is not consummated within sixty days after such payment is made to ION,
then ION shall have the right to reinstate the Stock Option by refunding such
amount to Xxxxxxxxx, whereupon the Stock Option shall be reinstated and shall
continue to be exercisable by ION.
4.6 Subject to SECTION 4.7, after the exercise of the Stock Option by
ION, ION shall have the right, exercisable at the option of ION in its sole
discretion by giving notice to Kanakaris at any time after the expiration of
ninety days after ION's exercise of the Stock Option, to require Kanakaris (at
the expense of Kanakaris) to promptly take all such actions (including
registration under the Securities Act, if such is required) as may be necessary
under applicable federal and state laws to enable and permit ION to sell the
Option Shares, then or at any time thereafter, in the public markets or on the
stock exchanges where the Xxxxxxxxx Common Stock is then publicly traded,
without any holding periods or other restrictions.
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4.7 Xxxxxxxxx shall have the right, exercisable at the option of
Kanakaris in its sole discretion by paying to ION (in cash, or by a certified
check or electronic wire transfer of immediately available funds to an account
designated by ION), at any time prior to the expiration of fifteen days after
Xxxxxxxxx receives the notice from ION pursuant to SECTION 4.6, an amount equal
to the number of Option Shares purchased by ION multiplied by $.30 per share,
for Kanakaris to be permitted a one year period after the date on which ION
exercises its right under SECTION 4.6 in which to satisfy the requirements of
SECTION 4.6, and during such one year period or until an earlier date when
Xxxxxxxxx satisfies such requirements the Option Shares purchased by ION may be
subject to restrictions on their transferability unless the registration
requirements of the Securities Act or the requirements of the Commission's Rule
144 thereunder are satisfied.
5. ADDITIONAL COVENANTS.
5.1 Kanakaris shall use its best efforts to utilize the Products and
to actively promote the sale of Books through the Xxxxxxxxx Web Site so as to
maximize the fees and royalties that may be earned by ION as contemplated by
this Agreement.
5.2 Xxxxxxxxx shall absorb all accounting costs associated with the
Products and their implementation on Xxxxxxxxx Web Sites.
5.3 Kanakaris shall be responsible for design and maintenance of all
Xxxxxxxxx Web Sites.
5.4 Xxxxxxxxx shall be responsible for server hosting for Xxxxxxxxx
Web Sites (with adequate bandwidth so as to not impede the performance of ION
software or user access). ION shall have the option to propose other hosting
solutions to Xxxxxxxxx, and shall compare costs and services (e.g. if Xxxxxxxxx'
band width is too small).
5.5 Kanakaris shall be responsible for all programming costs.
Xxxxxxxxx shall facilitate the ability on Xxxxxxxxx Web Sites to allow users to
rent Books by the hour as well as buy permanent copies or access.
5.6 ION shall have access to all the Books contained within the
Xxxxxxxxx Web Sites as search material for a database. Xxxxxxxxx and publishers
or authors shall receive a mutually agreeable (yet-to-be-determined) percentage
of revenues generated off of Books from Xxxxxxxxx Web Sites to which access was
achieved through a database search. ION shall assume all expenses for creating
this database.
11
5.7 ION reserves the right to publish public domain Books with the
Products through Xxxxxxxxx Web Sites with ION receiving author or publisher
revenues. Xxxxxxxxx shall not charge ION a posting fee.
5.8 XXXXXXXXX and ION shall reasonably cooperate with each other to
demonstrate and market the unique aspects of the Products and ION's underlying
technology. ION shall send ION employees to a limited number of meetings, trade
shows or other sales opportunities, if Xxxxxxxxx pays all direct expenses other
than their salaries.
5.9 XXXXXXXXX and ION each shall retain sole ownership of their
respective names and trademarks.
5.10 Some mutually agreeable method and fee structure needs to be
determined by the parties for users who convert their Book using the Products
and wish to publish the Book on their own Web Site. (ION has suggested at least
double the fee).
6. XXXXXXXXX' REPRESENTATIONS AND WARRANTIES.
As an inducement for ION to enter into this Agreement, Xxxxxxxxx
hereby represents and warrants to ION, as of the date of this Agreement, as
follows:
6.1 Xxxxxxxxx has been duly incorporated and organized and is validly
existing and in good standing as a corporation under the laws of the State of
Nevada, and has been duly qualified and is in good standing to transact business
as a foreign corporation under the laws of the State of California and each
other jurisdiction in which the nature of Xxxxxxxxx' business, properties or
operations requires such qualification, with the full right, power and authority
to enter into, execute, deliver and perform this Agreement.
6.2 The authorized, issued and outstanding capital stock of Xxxxxxxxx
is as follows: (i) 1,000,000 authorized shares of preferred stock, par value
$.00l per share, of which on the date of this Agreement all 1,000,000 shares are
outstanding; and (ii) 100,000,000 authorized shares of common stock, par value
$.00l per share, of which on the date of this Agreement 23,000,000 shares are
outstanding, no shares are held in treasury, and less than 500,000 shares are
reserved for or subject to issuance pursuant to options, warrants, conversions,
privilege or other similar rights. All shares of the Xxxxxxxxx Preferred Stock
and Xxxxxxxxx Common Stock currently outstanding are validly authorized and
issued, fully paid and non-assessable.
6.3 All necessary proceedings and consents, corporate or otherwise,
have been duly taken or obtained to authorize the execution, delivery and
performance of this Agreement by Kanakaris.
6.4 This Agreement has been duly authorized, executed and delivered by
Kanakaris, constitutes a legal, valid and binding obligation of Xxxxxxxxx and is
enforceable against Xxxxxxxxx in accordance with its terms.
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6.5 The execution, delivery and performance of this Agreement by
Kanakaris do not and will not (i) conflict with or violate any provision of
Xxxxxxxxx' articles of incorporation or bylaws, (ii) with or without the giving
of notice or the passage of time or both, conflict with, violate or constitute a
breach or default under, or result in the creation or imposition of any lien,
charge or encumbrance on any property or assets of Xxxxxxxxx pursuant to, any
terms or provisions of (A) any indenture, mortgage, loan agreement, note, lease
or other agreement or instrument to which Xxxxxxxxx is a party or by which it
may be bound or to which any of its properties or assets may be subject
(including any agreements with Xxxxxxx Xxxx regarding NetBooks) or (B) any
existing applicable law, rule, regulation, judgment, order or decree of any
governmental authority, court or other tribunal having jurisdiction over
Xxxxxxxxx or any of its properties or assets.
6.6 No litigation, arbitration, governmental or other proceeding or
investigation is pending or, to Xxxxxxxxx' knowledge, threatened with respect to
Xxxxxxxxx or its properties, assets or business that can reasonably be expected
to materially interfere with the execution, delivery and performance of this
Agreement by Kanakaris (including any such litigation, arbitration, governmental
or other proceeding or investigation arising with respect to agreements with
Xxxxxxx Xxxx regarding NetBooks), and Xxxxxxxxx does not have actual knowledge
of any fact that could reasonably be expected to be the basis for any such
litigation, arbitration, governmental or other proceeding.
6.7 No consent, authorization, order, license, certificate or permit
of or from, notice to, or declaration or filing with, any governmental
authority, court or other tribunal, or any third party (including members), is
required for Kanakaris to execute, deliver and perform this Agreement.
6.8 Xxxxxxxxx has timely filed all statements and reports required to
be filed under the Securities Act and the Exchange Act (the "PUBLIC FILINGS")
true, correct and complete copies of all such Public Filings filed since January
1, 1998, have been provided to ION by Xxxxxxxxx; and none of the Public Filings
provided to ION by Xxxxxxxxx includes any untrue statement of a material fact or
omits to state any material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they were
made, not misleading.
6.9 The foregoing representations and warranties by Kanakaris,
together with the information previously disclosed to ION by Kanakaris in
connection with this Agreement, are accurate in all material respects and do not
omit any statements necessary to make such representations or information, in
light of the circumstances in which they were made or disclosed, not misleading.
7. ION'S REPRESENTATION AND WARRANTIES.
As an inducement for Kanakaris to enter into this Agreement, ION
hereby represents and warrants to Xxxxxxxxx, as of the date of this Agreement,
as follows:
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7.1 ION has been duly incorporated and organized and is validly
existing and in good standing as a corporation under the laws of the State of
Missouri, with the full right, power and authority to enter into, execute,
deliver and perform this Agreement.
7.2 All necessary proceedings and consents, corporate or otherwise,
have been duly taken or obtained to authorize the execution, delivery and
performance of this Agreement by ION.
7.3 This Agreement has been duly authorized, executed and delivered by
ION, constitutes a legal, valid and binding obligation of ION and is enforceable
against ION in accordance with its terms.
7.4 The execution, delivery and performance of this Agreement by ION
do not and will not (i) conflict with or violate any provision of ION's articles
of incorporation or bylaws, (ii) with or without the giving of notice or the
passage of time or both, conflict with, violate or constitute a breach or
default under, or result in the creation or imposition of any lien, charge or
encumbrance on any property or assets of ION pursuant to, any terms or
provisions of (A) any indenture, mortgage, loan agreement, note, lease or other
agreement or instrument to which ION is a party or by which it may be bound or
to which any of its properties or assets may be subject or (B) any existing
applicable law, rule, regulation, judgment, order or decree of any governmental
authority, court or other tribunal having jurisdiction over ION or any of its
properties or assets.
7.5 No litigation, arbitration, governmental or other proceeding or
investigation is pending or, to ION's knowledge, threatened with respect to ION
or its properties, assets or business that can reasonably be expected to
materially interfere with the execution, delivery and performance of this
Agreement by ION, and ION does not have actual knowledge of any fact that could
reasonably be expected to be the basis for any such litigation, arbitration,
governmental or other proceeding.
7.6 No consent, authorization, order, license, certificate or permit
of or from, notice to, or declaration or filing with, any governmental
authority, court or other tribunal, or any third party (including shareholders),
is required for ION to execute, deliver and perform this Agreement.
7.7 ION is the sole and exclusive owner of the Products, free and
clear of any adverse lien, security interest, encumbrance or interest of any
third Person (except for non-exclusive licenses with respect to X*Maker), and to
the knowledge of ION (i) ION has not misappropriated or infringed the trade
secret, patent, copyright or trademark rights of any third Person, and (ii) no
litigation, arbitration, governmental or other proceeding or investigation is
pending or threatened that alleges that the Products misappropriate or infringe
on any third Person's trade secret, patent, copyright or trademark rights, and
ION does not know of any fact that could reasonably be expected to be the basis
for any such litigation, arbitration, governmental or other proceeding or
investigation.
7.8 The foregoing representations and warranties by ION, together with
the information previously disclosed to Xxxxxxxxx by ION in connection with this
Agreement, are accurate in all material respects and do not omit any statements
necessary to make such representations or information, in light of the
circumstances in which they were made or disclosed, not misleading.
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8. CONFIDENTIALITY.
8.1 "RESTRICTED INFORMATION" means any information designated by a
party (at the time of disclosure or within a reasonable time thereafter) as
being confidential or proprietary to the party, PROVIDED, that if such
designation is not made in writing, then the designation must be confirmed in
writing within a reasonable time thereafter; "DISCLOSING PARTY" means the party
(either ION or Xxxxxxxxx), or any of its Affiliates, disclosing its Restricted
Information to the Receiving Party; and "RECEIVING PARTY" means the party
(either ION or Xxxxxxxxx), together with its Affiliates, receiving Restricted
Information from the Disclosing Party. The Products and all technology,
know-how, inventions and works of authorship included in the Products or on
which they are based, including any source code, documents and manuals, are
designated as ION's Restricted Information.
8.2 Each Receiving Party shall, and it shall require its Affiliates
to, protect and maintain in strict confidence and secrecy any Restricted
Information that it may receive from the Disclosing Party and shall use such
Restricted Information solely for the purpose for which it was disclosed to the
Receiving Party, and the Receiving Party shall not otherwise use or disclose or
permit any use or disclosure of such Restricted Information without the
Disclosing Party's prior consent, except as follows:
(a) Any use or disclosure of Restricted Information required to be
made by or under applicable law or regulation or by order of a court or
governmental authority acting within its jurisdiction, PROVIDED, that the
Receiving Party has given the Disclosing Party prior notice and a reasonable
opportunity to contest such requirement. ION acknowledges that Xxxxxxxxx has
filed a registration statement under the Securities Act and is subject to the
public reporting requirements of the Exchange Act, and pursuant to the
requirements of the Securities Act and the Exchange Act Xxxxxxxxx is required to
make certain public disclosures. ION authorizes Kanakaris to make any
disclosures regarding ION, the Products and this Agreement to the extent
required by the Securities Act or the Exchange Act; PROVIDED, that Xxxxxxxxx
shall provide ION with a copy of any such disclosures within a reasonable time
prior to any public filing or release thereof. Xxxxxxxxx, and not ION, shall be
solely responsible for the preparation, filing and release of any such
disclosures.
(b) Any use or disclosure of Restricted Information that the
Receiving Party can establish was (i) already known to or in the possession of
the Receiving Party at the time of disclosure by the Disclosing Party, (ii) in
the public domain other than by means of any use or disclosure in violation of
this Agreement by the Receiving Party, (iii) obtained by the Receiving Party
from an independent source that to the knowledge of the Receiving Party has not
violated a confidentiality agreement with the Disclosing Party, or (iv)
developed independently by the Receiving Party or an Affiliate without any
reliance on the Restricted Information.
15
The Receiving Party shall give the Disclosing Party prior notice of
any anticipated use (other than a use for the purpose for which the Restricted
Information was disclosed to the Receiving Party) or disclosure of Restricted
Information pursuant to this SECTION 8.2, and the Receiving Party shall have the
burden of proving the basis for any use or disclosure of Restricted Information
claimed to be permitted by this SECTION 8.2. Upon any termination or expiration
of this Agreement, each party shall return to the other party or destroy, in
accordance with the reasonable instructions of the other party, the originals
and all copies, extracts or other tangible or intangible forms or records of any
Restricted Information of the other party.
8.3 Each Receiving Party acknowledges that any use or disclosure of
Restricted Information by the Receiving Party or its Affiliates in a manner
inconsistent with this SECTION 8 will cause the Disclosing Party irreparable
harm, and that the Disclosing Party shall have the right to obtain equitable and
injunctive relief to prohibit such use or disclosure, in addition to all other
rights and remedies that may be available to the Disclosing Party at law, in
equity or by statute. The provisions of this SECTION 8 shall survive for ten
years after the last disclosure of Restricted Information pursuant to this
Agreement.
9. ARBITRATION.
9.1 "DISPUTE" means any controversy, dispute or claim arising out of or
relating to this Agreement or the performance or interpretation hereof that
cannot be resolved by mutual agreement of the parties; "ARBITRABLE DISPUTE"
means any Dispute, except as provided in SECTION 9.4 and except for any Dispute
that is prohibited by law from being arbitrated; "AAA" means the American
Arbitration Association; "AAA RULES" means commercial arbitration rules and
procedures of the AAA.
9.2 Any Arbitrable Dispute shall be resolved by submitting it to
binding arbitration under the AAA Rules, except that if the provisions of this
SECTION 9 conflict with any provisions of the AAA Rules, then the provisions of
this SECTION 9 shall control to the extent permitted by the AAA Rules. Such
arbitration shall be the sole and exclusive means for resolving Arbitrable
Disputes. The submission of an Arbitrable Dispute to arbitration shall not be
cause for the delay or suspension of the performance of any duty or obligation
under this Agreement.
9.3 An Arbitrable Dispute may be submitted to arbitration by either
party, at any time prior to the expiration of the time within which a lawsuit
over the Arbitrable Dispute may be filed, by giving prompt written notice of
demand of arbitration to the other party and to the AAA. No person who has been
employed by or had any business relationship with any party to such arbitration
may serve as an arbitrator. The arbitration shall be conducted at such location
as may be mutually agreeable to the parties or, if not mutually agreed, then as
determined by the arbitrators. The arbitrators shall render their award in
writing, accompanied by a written opinion specifying any findings of fact and
other conclusions as a basis for such award, within sixty days after the close
of the parties' presentation of evidence. The arbitrators may award any
appropriate relief, including an award for damages, specific performance or
other equitable relief, but the arbitrators may not award any punitive or
16
exemplary damages. The decision and award of the arbitrators shall be final and
binding on the parties and judgment on the award may be entered in any court
having jurisdiction. Each party shall bear its own fees, costs and expenses in
connection with any arbitration, except that any fees, costs and expenses of the
AAA and the arbitrators shall be assessed against the non-prevailing party as
determined by the arbitrators.
9.4 If any party asserts against the other party an alleged violation
of any federal or state statute, including securities laws, anti-trust laws,
consumer protection laws and Racketeer Influenced and Corrupt Organizations Law,
then the party against whom the violation is alleged may opt to have such
alleged violation determined by lawsuit in a court having jurisdiction rather
than by arbitration by so notifying the other party, the arbitrators (if already
selected) and the AAA in writing within thirty days after the allegation of such
violation is made. Upon receipt of such notice, the AAA and the arbitrators
shall have no further jurisdiction with respect to such alleged violation, but
the party alleging such violation shall be free to allege such violation by
lawsuit. No such notice or lawsuit shall be cause for delay or suspension of the
arbitration of any other Arbitrable Disputes under this SECTION 9.
10. TERM AND TERMINATION.
10.1 Subject to SECTION 10.2, the initial term of this Agreement shall
commence on the effective date of this Agreement first indicated above and shall
remain in effect until December 31, 2004, and thereafter the term of this
Agreement shall automatically renew for successive additional renewal terms of
five years each, ending on December 31 of each fifth year. This Agreement may be
terminated only as provided in SECTION 10.2. Any termination of this Agreement
also shall constitute a termination of the License.
10.2 (a) In the event of any failure by Kanakaris to make full payment
to ION of any amount required to be paid by Kanakaris to ION by this Agreement,
on or before the date such payment is required to be made (a "PAYMENT DEFAULT"),
ION shall have the right (then or at any time thereafter for so long as such
Payment Default is continuing) to give Xxxxxxxxx notice of default in writing
specifying the payment that was not made (and the amount thereof if known to
ION). If Xxxxxxxxx does not make such payment in full within a period of five
Business Days after the date such notice is delivered to Xxxxxxxxx, then ION
shall have the right at any time after such period, for so long as such Payment
Default is continuing, to terminate this Agreement, effective immediately upon
giving notice of termination to Kanakaris. The occurrence of an event as
described in SECTION 2.4(a) shall not constitute a Payment Default under this
SECTION 10.2(a).
(b) In the event of any material breach or default, other than a
Payment Default, under the terms of this Agreement by either party (the
"DEFAULTING PARTY"), the other party (the "NON-DEFAULTING Party") shall have the
right to give the Defaulting Party notice of default in writing specifying in
reasonable detail the nature of such breach or default. If the Defaulting Party
does not cure the breach or default so specified to the reasonable satisfaction
of the Non-Defaulting Party within thirty days after delivery of such notice of
default, or (in the case of a breach or default that cannot be cured within such
17
thirty-day period) commence the cure of such breach or default and thereafter
diligently prosecute the cure to completion to the reasonable satisfaction of
the Non-Defaulting Party, then the Non-Defaulting Party shall have the right
within thirty days after such thirty-day period to terminate this Agreement,
effective immediately upon giving notice of termination to the Defaulting Party.
The occurrence of an event as described in SECTION 2.4(a) shall not constitute a
breach or default under this SECTION 10.2(b).
(c) Subject to the last sentence of this SECTION 10.2(c), this
Agreement shall terminate automatically, without any notice or other action by
either party being required, effective upon the occurrence of any of the
following events with respect to either of the parties (the "TERMINATING
PARTY"): (i) the liquidation or dissolution of the Terminating Party; (ii) an
assignment for the benefit of the Terminating Party's creditors, the Terminating
Party's insolvency or inability to pay debts as they mature, the filing by or
against the Terminating Party of a petition, or any answer or consent thereto,
seeking liquidation, receivership, reorganization or readjustment of the
Terminating Party's property, assets or liabilities under bankruptcy or other
insolvency laws or the appointment of a conservator, sequestrator, receiver or
trustee for all or substantially all of the Terminating Party's property or
assets or liabilities under bankruptcy or other insolvency laws; (iii) a merger,
consolidation or other reorganization of the Terminating Party in which the
Terminating Party is not the surviving entity and the surviving entity does not
expressly assume the obligations of the Terminating Party hereunder, the sale or
other transfer of all or substantially all of the Terminating Party's property
or assets to, or the purchase or other acquisition of fifty percent or more of
the Terminating Party's outstanding equity interests by, any person or group
that does not expressly assume the obligations of the Terminating Party
hereunder; or (iv) the taking of any corporate or other action for the purpose
of effecting any of the foregoing. The party other than the Terminating Party
(the "NON-TERMINATING PARTY") shall have the right to affirm this Agreement, in
which case it shall remain in full force and effect, by so notifying the
Terminating Party within thirty days after the Non-Terminating Party first has
actual knowledge of any of the foregoing events.
10.3 Upon termination of this Agreement and the License, (i) Xxxxxxxxx
shall not have the right to use, and shall immediately discontinue using, the
Products and any technology, know-how, inventions and works of authorship
included within the Products or on which they are based, for any purpose within
or outside the Field, (ii) Xxxxxxxxx shall immediately discontinue effecting any
Book Sales of, or Product Sales based on, Books viewed or downloaded using the
Products or any technology, know-how, inventions or works of authorship on which
the Products are based, and (iii) Xxxxxxxxx shall immediately return to ION or
destroy in accordance with ION's instructions all copies (including archived and
backup copies) of the Products.
10.4 The following provisions of this Agreement shall survive any
termination of this Agreement: (i) the previously accrued obligation of either
party to pay any amounts to the other party; (ii) SECTIONS 2.6, 2.7, 4, 8, 9 AND
10.7 and (iii) any provisions of this Agreement affecting the construction,
interpretation or enforcement of the foregoing surviving provisions of this
Agreement.
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11. MISCELLANEOUS.
Except as otherwise expressly provided in a particular provision of
this Agreement, the provisions of this SECTION 11 shall apply generally to all
provisions of this Agreement.
11.1 Neither party may assign or delegate any rights or duties under
this Agreement without the other party's prior consent, which consent may be
withheld in the other party's sole discretion; PROVIDED, that either party may
assign this Agreement to its successor in interest in the circumstances referred
to in SECTION 10.2(c)(iii) if the successor in interest expressly assumes the
obligations under this Agreement. This Agreement shall be binding on, inure to
the benefit of and be enforceable by and against the successors and permitted
assigns of the parties.
11.2 This Agreement constitutes the entire understanding of the
parties with respect to the subject matter hereof. This Agreement may be
modified, amended or otherwise altered only in writing signed by both parties.
11.3 The delay or failure in the exercise of any right, remedy or power
shall not operate as a waiver thereof, nor shall any single or partial exercise
or waiver thereof preclude or limit any other or future exercise thereof. All
rights and remedies provided herein are cumulative in addition to any other
rights and remedies available herein or at law, in equity or by statute. The
prevailing party (as determined by the tribunal having jurisdiction) in any
action to enforce this Agreement shall be entitled to recover from the other
parties all fees, costs and expenses (including reasonable attorneys' fees)
incurred by the prevailing party in connection with such action. Any amount due
and payable hereunder shall not be deemed to have been paid until actual receipt
of full payment by the payee in cleared funds available to be drawn on by the
payee. Any amount not paid at the time it becomes due and payable under this
Agreement shall bear interest until paid at a per annum rate equal to the lesser
of the prime rate of interest as reported on the due date in the Midwest edition
of THE WALL STREET JOURNAL plus four percent, or the maximum rate permitted by
applicable law. All payments shall be made in Dollars.
11.4 All notices, requests, approvals, consents or other
communications required or permitted to be given herein shall be in writing and
shall be sufficiently given if delivered personally, forwarded by certified U.S.
mail with proper postage prepaid and return receipt requested (or by other
prepaid commercial delivery service that documents delivery) or transmitted by
facsimile with receipt promptly acknowledged by the receiving party, in each
case to the party to which directed at its address indicated after the
signatures to this Agreement below. Such communications shall be effective upon
delivery to the address of the party to which directed (notwithstanding any
acceptance, rejection or acknowledgment of such delivery). Either party may from
time to time designate any other address to which such communications shall be
sent.
11.5 Neither party shall be, nor shall it hold itself out as being, an
agent, joint venturer or partner of the other party or of any entity directly or
indirectly controlling, controlled by, under common control with or otherwise
affiliated with the other party. Neither party shall have any authority to act
19
on behalf of or bind the other party. This Agreement is solely for the benefit
of the parties to this Agreement and, to the extent provided herein, their
respective Affiliates, and no provision of this Agreement shall be deemed to
confer any rights to any other third Persons.
11.6 Each party shall reasonably cooperate with the other, execute and
deliver such further documents and instruments and do such further acts as
reasonably necessary to give effect to the intent of the parties expressed
herein. All approvals or consents required to be obtained from a party shall not
be unreasonably withheld or delayed, but any provision herein permitting a party
to exercise a right in its "SOLE DISCRETION" means that the party is not
required to act reasonably in exercising such right.
11.7 If any court of competent jurisdiction declares invalid or
unenforceable any provision of this Agreement, then such invalidity or
unenforceability shall have no effect on the other provisions hereof, which
shall remain valid, binding and enforceable and in full force and effect, and
such invalid or unenforceable provision shall be construed in a manner so as to
give the maximum valid and enforceable effect to the intent of the parties
expressed therein.
11.8 This Agreement shall be governed by and construed in accordance
with the laws of the State of Missouri, without regard to its principles of
conflicts of laws.
11.9 This Agreement may be executed in multiple counterparts, all of
which together shall constitute one and the same agreement. This Agreement shall
become effective only upon execution and delivery of this Agreement on behalf of
both parties, whereupon it shall be effective as of the date first above written
with the same effect as if both parties had executed and delivered this
Agreement on such date. Signature pages to this Agreement (and any other
documents contemplated herein), duly executed by the respective authorized
representative of the parties, may be exchanged by facsimile transmission and
shall be treated for all purposes with the same effect as if such signature
pages were duly executed originals attached to the documents to which they
relate, and promptly thereafter the parties shall cooperate to exchange the
originals of all signature pages exchanged by facsimile transmission (but the
failure to so exchange such originals shall not affect the validity of the
documents to which they relate).
[The remainder of this page is intentionally left blank.]
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THIS CONTRACT CONTAINS A BINDING ARBITRATION PROVISION
WHICH MAY BE ENFORCED BY THE PARTIES
___________________
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed and delivered by their respective duly authorized officers as of the
date first indicated above.
XXXXXXXXX COMMUNICATIONS, INC.
By /S/ Xxxx Xxxxxxxxx
----------------------------
Xxxx Xxxxxxxxx, President
0000 Xxxxxx Xxxxxxxxx, Xxxxx X0
Xxxxx Xxxx, Xxxxxxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
ION SYSTEMS, INC.
By /S/ Xxxx Xxxxxx
----------------------------
Xxxx Xxxxxx, President
000 Xxxxxxxxxxx Xxxxxx
Xxxxxxx Xxxx, Xxxxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
21
