59
EXCLUSIVE LICENSE AGREEMENT
CASINOVATIONS INCORPORATED
AND
TECHNOLOGY DEVELOPMENT CENTER, LLC.
1. PARTIES
1.1 This Agreement is made by and between;
(a) Casinovations Incorporated, a Washington corporation doing business in
Nevada, whose business address is 0000 X. Xxxxxxxx Xxxx, Xxxxx 000, Xxx
Xxxxx, Xxxxxx 00000, hereinafter referred to as "Licensee"; and,
(b) Technology Development Center, LLC. whose address is 0000 X. Xxxxxxxx
Xxxxx, Xxx Xxxxx, Xxxxxx 00000, hereinafter referred to as 'Licensor".
2. BACKGROUND
2.1 Licensor has acquired or developed technology known as a "Coin
Operating Machine Having An Electronically Identified Coin Collection Box"
and has devoted substantial time, effort and money to that
development. As a result of Licensor's efforts it now owns certain claims to
pending patent rights, trade secrets, know-how and other proprietary
information relating to such technology.
2.2 Licensee is engaged in the development and marketing of equipment in
the gaming industry. Licensee desires to acquire exclusive rights to the
technology developed by or for Licensor and to distribute, sell, lease, use,
service and promote products utilizing such technology.
2.3 In consideration of the premises, covenants and agreements contained
herein, and intending to be legally bound hereby, the parties hereto have
agreed to the terms and conditions provided in this Agreement.
3. DEFINITIONS
3.1 Licensor is the owner of all right, title, and interest to the inventions
described in:
(a) U.S. Patent Application Serial No. 08-675,899, originally filed July 5,
1996, entitled "Coin Operating Machine Having An Electronically Identified
Coin Collection Box";
(b) Any and all patents and/or patent applications, including foreign patent
and patent applications which Licensor has filed, relating to any one of the
above referenced patents or patent applications which Licensor has filed.
3.2 "Licensed Inventions", "Licensed Patents" and "Licensed Patent Rights";
The inventions so described above will be referred to herein as the "Licensed
Inventions". Licensed Inventions also include any inventions included in any
application filed on Licensed Technology as defined hereinafter. Said patent
applications and any other patents granted on the Licensed Inventions will be
referred to herein as the "Licensed Patents". The Licensed Patents have
associated Patent Rights and will be referred to herein as "Licensed Patent
Rights".
3.3 "Licensed Technology"; In addition to the technical information contained
in the referenced patent applications, other related technical and business
information have also been developed by Licensor generally relating to the
inventions described in the above-referenced patent applications and
prototypes and subsequent designs developed for the filing of such patent
applications. Exclusive rights under the laws of trade secrets and know-how
protect all or substantially all of such proprietary information. The
Licensed Inventions, Licensed Patents, and Licensed Patent Rights which may
be granted thereon, and related trade secrets, know-how, production tooling,
and other proprietary information to be licensed under this Agreement are
hereinafter referred to for convenience and brevity as "Licensed Technology".
3.4 "Licensed Copyright Works"; Additionally, Licensor may provide works
having copyrights (herein referred to as the "Copyrights") in certain
writings, including computer software, business plans. technical
descriptions, and related drawings, writings and other works produced by or
for Licensor which relate specifically to the Licensed Technology. Such works
are also being licensed under this Agreement and are hereinafter referred to
as the "Licensed Copyright Works". The subject matter of such Licensed
Copyright Works may include proprietary, trade secret or know-how information
within the definition of Licensed Technology.
3.5 "Licensed Technology Rights"; Licensor has exclusive property rights
under the laws of the United States and foreign countries in such Licensed
Technology including potential patent rights, copyrights, trade secret
rights, know-how rights and technical information rights. Such exclusive
rights shall herein be referred to as the "Licensed Technology Rights".
Additionally, there are rights in the Licensed Copyright Works which exist
for the written. graphic or other expression which is legally and
conceptually separable from the technological content being expressed. Such
60
expressions are protected under the Copyrights associated with such Licensed
copyright Works and the Copyrights associated therewith may outlive any
exclusive rights in the Licensed Technology.
3.6 "Licensed Trademarks" and "Licensed Trademark Rights"; Licensor further
desires to license certain trademarks which may be created for use in
connection with the Licensed Technology. Any such trademarks agreed to be
licensed hereunder by the parties are herein referred to as "Licensed
Trademarks". The rights associated with such Licensed Trademarks are herein
referred to as "Licensed Trademark Rights".
3.7 "Licensed Products"; Products which use the Licensed Technology and/or
Licensed Copyright Works and/or Licensed Trademarks are herein referred to as
"Licensed Products". Use of the Licensed Technology and/or Licensed Copyright
Works and/or Licensed Trademarks for purposes of this definition shall
include products which incorporate designs which are based on the Licensed
Technology and/or Licensed Copyright Works and/or Licensed Trademarks,
products which use any products included in the Licensed Technology and/or
Licensed Copyright Works and/or Licensed Trademarks, and products which are
produced using any new production processes included in the Licensed
Technology and/or Licensed Copyright Works and/or Licensed Trademarks.
4. PURPOSE OF AGREEMENT
4.1 Licensee wishes to gain access to the proprietary information embodying
and describing the Licensed Technology and to obtain exclusive licenses under
the Licensed Technology Rights, Licensed Copyrights and Licensed Trademark
Rights for purposes of conducting business using such Licensed Technology,
Licensed Copyrights and Licensed Trademarks.
5. GRANT OF EXCLUSIVE TECHNOLOGY AND PATENT LICENSE
5.1 Licensor hereby grants to Licensee exclusive licenses under the Licensed
Technology to:
(a) Distribute, sell, lease, use, service and promote products or practice
methods under the Licensed Patents;
(b) Distribute, sell, lease, use, service and promote products which
incorporate or use the Licensed Technology;
(c) Practice methods contained in the Licensed Technology; and,
(d) Practice methods or processes contained in the Licensed Technology.
5.2 The rights provided in this part include an exclusive license under the
Licensed Patent Rights obtained by Licensor on the Licensed Technology,
except as otherwise provided in this
Agreement.
6. GEOGRAPHICAL SCOPE OF THE EXCLUSIVE TECHNOLOGY AND PATENT RIGHTS
6.1 The geographical scope of the technology licenses granted shall be the
United States of America and all foreign countries.
7. GRANT OF TRADEMARK LICENSE
7.1 Licensor hereby grants to Licensee a exclusive license to use the
Licensed Trademarks, in connection with the sale, distribution, promotion or
use of the Licensed Products except as otherwise provided in this Agreement.
8. GEOGRAPHICAL SCOPE OF TRADEMARK LICENSE
8.1 The geographical scope of the trademark license granted above shall be
the United States of America and all foreign countries.
9. GRANT OF COPYRIGHT WORKS LICENSE
9.1 Licensor hereby grants to Licensee a exclusive license to exercise any
rights available under copyrights in the United States and all foreign
countries in which there are rights in the Licensed Copyright Works, in
connection with the sale, distribution, promotion or use the Licensed
Products except as otherwise provided in this Agreement.
10. GEOGRAPHICAL SCOPE OF COPYRIGHT WORKS LICENSE
10.1 The geographical scope of the Copyright Works License above shall be the
United States of America and all foreign countries.
11. MANUFACTURE OF LICENSED PRODUCTS
11.1 Licensee may either manufacture the Licensed Products directly or have
such manufactured by others, on it's behalf.
61
12. LICENSE ACQUISITION PAYMENTS
12.1 To acquire this license agreement and in consideration for the rights
and license granted hereunder, Licensee agrees to pay or transfer to Licensor
upon signing of this Agreement;
(a) A Promissory Note Secured by assets of Licensee, payable to Licensor, for
Fifty Thousand Dollars ($50,000) payable in 5 monthly installments of Ten
Thousand Dollars ($10,000) each, first payment due on November 14, 1997.
(b) A Promissory Note Secured by assets of Licensee, payable to Licensor, for
Fifty Thousand Dollars ($50,000) payable in 12 equal monthly installments
plus simple interest at ten (10) percent per year, first payment and interest
due on April 15, 1998.
12.2 All payments, notes and payments on notes as set forth in this section
are non refundable.
13. ROYALTIES
13.1 Licensee shall pay to Licensor Seven Dollars and Fifty Cents ($7.50) per
each Licensed Product sold, rented, leased, or otherwise used for profit, by
Licensee, provided that the Licensee receives a net compensation in excess of
$7.50 for each Licensed Product sold, rented, leased or otherwise used for
profit.
13.2 Licensee shall be entitled to a credit against the amount of any
future royalties payable to Licensor for any:
(a) Licensed Product sold by Licensee under this Agreement but for which full
credit is granted to a customer due to defect in the Licensed Product, and;
(b) Licensed Product that are lost or damaged in transit and for which
Licensee is not reimbursed by insurance payments or otherwise.
(c) Licensed Product sold by Licensee under this Agreement for which Licensee
cannot collect payment.
(d) Licensed Product sold by Licensee under this Agreement but for which full
credit is granted to a customer due to returned items.
13.3 Royalties owed under this Agreement will be paid quarterly, with each
quarterly payment payable within thirty (30) days after the expiration of
each calendar quarter.
13.4 All monetary amounts specified in this Agreement are in United States
Dollars.
13.5 All payments made by Licensee hereunder shall be made payable to
Licensor, Technology Development Center, LLC., at Licensor's address
indicated herein or to Licensor's assignee at such place as shall be
designated in writing by Licensor from time to time.
13.6 Any royalties, payments or other compensation not paid by the due date
shall bear simple interest at the rate of one and one-half percent (l 1/2%)
per month or any part of a month overdue, unless a smaller rate applies by
law in which case the legal rate nearest thereto shall apply.
13.7 Licensor shall have the right to terminate this agreement, with proper
notice, if any royalties, payments, or other compensation is not paid within
6 months of the due date, unless such failure to make payment is the result
of any breach of this agreement by Licensor.
13.8 All royalty payments as set forth in this section are non refundable.
14. PERFORMANCE BY LICENSEE
14.1 Licensee shall sell or lease Licensed Product in minimum quantities to
meet the following minimum royalty payments, or in the alternative, pay to
Licensor minimum royalties according to the following schedule. Failure by
Licensee to achieve the specified minimum sale or lease of Licensed Products,
or in the alternative, pay to Licensor minimum royalties according to the
following schedule shall be deemed a material breach of this Agreement.;
(a) Starting from the date of the signing of this agreement to the last day
of June, 1998, minimum royalties totaling Twenty Five Thousand Dollars
($25,000) shall have been paid to Licensor;
(b) Starting from July 1, 1998 to the last day of the year 1998, minimum
royalties totaling Twenty Five Thousand Dollars ($25,000) shall have been
paid to Licensor;
(c) Starting from January 1, 1999 to the last day of June, 1999, minimum
royalties totaling Sixty Three Thousand Dollars ($63,000) shall have been
paid to Licensor;
62
(d) Starting from July 1, 1999 to the last day of the year 1999, minimum
royalties totaling Sixty Three Thousand Dollars ($63,000) shall have been
paid to Licensor;
(e) Starting from January 1, 2000, and continuing in perpetuity every six (6)
months thereafter, minimum royalties totaling Seventy Five Thousand Dollars
($75,000) shall have been paid to Licensor for each six (6) month period
provided this Agreement is in full force and effect.
14.2 The Licensee shall be under no obligation to sell or lease the Licensed
Products and pay the minimum royalties described herein above in Section 14.1
during the time that any of the following events are in existence and
materially impair the ability of the Licensee to sell or lease the licensed
products;
(a) Patent, copyrights or trademark infringement claims are made by a third
party that materially impair the ability of the Licensee to sell or lease the
licensed products.
(b) The existence of any law, rule or regulation pertaining to the Licensed
Products which substantially impairs or impedes the ability of the Licensor
to sell or lease the Licensed Products.
(c) Delays in the sale or lease of Licensed Products due to fire, flood, the
elements, strikes, labor disputes or shortages, utility curtailments, acts of
God or public enemy, war, law, orders or actions of governmental, civil or
military authorities, government requisitions, shortages of equipment or
supplies, unavailability of transportation, acts or omission of third parties
or any other cause beyond the licensee's control.
15. TRANSFER OF DOCUMENTATION
15.1 Licensor shall disclose to Licensee at its chosen location, equipment
and documentation, including without limitation, drawings, lab books,
sketches, design layouts, software, hardware, source codes, copies of
patents, copies of patent applications, and related matters currently held by
Licensor, that are reasonably needed by Licensee to sell, lease and service
the Licensed Product. Licensee shall notify Licensor within thirty (30) days
of receipt of said information if more information is required, after which
time Licensor's obligation under this paragraph is thereby considered
fulfilled and that licensee has obtained all documentation required under
this section.
16. PATENT APPLICATION
16.1 Rights to File - Licensee shall have the right to have applications for
patents, utility models, design patents and similar forms of legal protection
(hereinafter collectively referred to as "patents") filed in Licensor's name,
or assigned to Licensor on all patentable inventions or otherwise protectible
interests contained within the Licensed Technology with written approval from
Licensor. Licensee shall have primary responsibility but not the obligation
for preparing, filing and prosecuting any such patent applications, and that
all such work shall be done and paid for at Licensee's cost and expense. If
Licensee elects in writing not to pay or pursue efforts to secure patent
protection, or elects to terminate efforts to secure patent protection in any
country, then Licensor may proceed at it's own cost and expense.
16.2 Licensee shall proceed in good faith to timely file and pursue foreign
patents within a six month period from the signing of this Agreement.
16.3 Licensee shall provide to Licensor a list of Countries that Licensee
will proceed to secure patent protection in within a 3 month period from the
signing of this Agreement.
17. QUALITY CONTROL INVOLVING LICENSED PRODUCTS
17.1 Licensee shall notify Licensor in writing prior to the initial
distribution of any new Licensed Products as defined in this Agreement, or
the initial distribution of Licensed Products into any country. The
notification shall explain the products to be distributed and the planned
date of first distribution.
17.2 Licensee agrees that Licensor shall have the right during normal
business hours, to enter upon or have its representatives enter upon the
premises of Licensee or any subcontractors to inspect the quality of Licensed
Products being sold, services rendered based on Licensed Products, facilities
for manufacturing and packaging of Licensed Products or services which
otherwise use or are related to the Licensed Technology.
18. LICENSOR INSOLVENCY
18.1 In the event that Licensor becomes insolvent, bankrupt or unable to
conduct business, or appointment
of any trustee, receiver or liquidator for substantially all of the assets of
Licensor, or institution of any proceedings of the same, or the attachment or
seizure of substantially all of the assets of Licensor, this Agreement will
remain in full force and effect.
63
19. CERTIFICATION OF LICENSED PRODUCTS
19.1 Licensee is responsible for timely obtaining any and all licensing, or
other certification as required or deemed desirable from state gaming
commissions or other government entities as required by law before selling or
offering for sale any Licensed Product. Licensee shall bear all costs related
to obtaining such licensing, or other certification.
20. PRODUCTION TOOLING
20.1 Upon termination of this Agreement, Licensor shall have the right but
shall not be obligated to purchase production tooling at a reasonable price
not to exceed the initial costs incurred by Licensee plus (10) ten percent.
21. DISCLOSURE OF TECHNOLOGY
21.1 The Licensed Technology communicated to Licensee hereunder shall remain
the exclusive property of Licensor subject to the licenses granted herein.
Except as otherwise expressly contemplated, both Licensor and Licensee agree
to use its best efforts to prevent the disclosure of the Licensed Technology
insofar as it is proprietary to Licensor to any third party not affiliated
with Licensee or Licensor.
22. CONFIDENTIALITY OF DISCLOSURE AND LICENSED TECHNOLOGY
22.1 Licensor and Licensee agree that disclosure from Licensor to Licensee
under this Agreement is done in confidence except for the information
contained in any issued Licensed Patent. All materials embodying Licensed
Technology shall be maintained in confidence as a trade secret and not
disclosed except as expressly allowed in this Agreement. Incidental writings
and information included in the materials describing and disclosing Licensed
Technology are not bound to secrecy and nondisclosure if such writings and
information are generally known in the trade or if such writings or
information later become generally known in the trade or to the public
through no fault of Licensee or Licensor, and such writings and information
do not contain confidential information concerning the Licensed Technology.
22.2 Licensor and Licensee agree to xxxx all materials which include
confidential information relating to the Licensed Technology and that said
materials shall be marked "Proprietary", "Confidential", "Secret". or with
words of similar meaning. All materials embodying confidential Licensed
Technology shall remain the property of Licensor.
22.3 Nothing herein shall be implied as restricting Licensee's ability to
market Licensed Products.
22.4 Licensor and Licensee agree to keep each others business affairs
strictly confidential, except for that which is already publicly known.
23. REGISTRATION OF LICENSE
23.1 If under the law of any jurisdiction other than the United States of
America the execution or registration of any registered user or similar
agreement in respect of any of the Patents or Licensed Technology is required
or permitted in order for Licensee to obtain the full benefit of this
Agreement, Licensee may, at its own cost and expense register this Agreement
or execute or register the appropriate registered user or similar agreement
in order that Licensee shall obtain such full benefit as aforesaid.
24. REIMBURSEMENT FOR EXPENSES
24.1 Licensor agrees to make available reasonable technical assistance free
of charge as may be necessary for the employees of Licensee, skilled in the
fabrication and design of the Licensed Products, to utilize the technical
information licensed hereunder. Such free technical assistance shall be
limited to a maximum of (80) eighty hours, as permitted by Licensor's
schedule and manpower, and at times specified by Licensor, as may be
reasonably requested by Licensee. Travel and other expenses incurred in
providing such services shall be paid by Licensee.
24.2 Licensor in its sole discretion may make available to Licensee
additional technical assistance at Licensee's request. Licensee agrees to
reimburse Licensor for any such services at Licensor's then prevailing rates,
which is currently $200 per hour. Travel and other expenses incurred in
providing such services shall be paid by Licensee.
25. IMPROVEMENTS AND DEVELOPMENTS IN LICENSED TECHNOLOGY
25.1 Improvements by Licensor - Improvements, enhancements, trademarks,
copyrights or additional inventions that specifically apply and fit within
the scope of the Licensed Technology, that are developed by or acquired by
Licensor, shall be disclosed to Licensee within one, (1) month of discovery
and Licensee shall have the same rights and obligations with respect to such
Improvements, enhancements, trademarks, copyrights and additional inventions,
starting with disclosure to Licensee, as applies to Licensed Technology in
general under this Agreement. Patent applications on any Licensor
Improvements shall be handled as indicated in this agreement. Further
64
trademarks created by Licensor may be added to the subject matter of Licensed
Trademarks through written trademark addenda submitted by Licensor to
Licensee.
25.2 Improvements by Licensee - Improvements, enhancements, trademarks,
copyrights or additional inventions that specifically apply and fit within
the scope of the Licensed Technology, that are developed by or acquired by
Licensee or it's employees, shall be disclosed to Licensor within one, (1)
month of discovery and Rights in any improvements, enhancements, trademarks,
copyrights or additional inventions shall revert to or be assigned to
Licensor. Licensee shall be responsible for any and all costs of obtaining
patent protection on any Licensee improvements. If necessary, Licensee shall
provide Licensor such reasonable assistance as is necessary to allow Licensor
to file any patent applications on Licensee developed improvements.
26. EMPLOYEE INVENTION AGREEMENTS
26.1 Licensee agrees that all Licensee employees, agents and consultants
given access to the Licensed Technology shall sign a confidentiality
agreement and invention assignment agreement whereby any improvements,
enhancements and new inventions relating to the Licensed Technology are
required to be disclosed and assigned to the Licensee and then the Licensor.
27. REPORTS AND ACCOUNTING
27.1 Records - Licensee shall keep accurate and timely records of all
transactions related to this agreement, including but not limited to;
quantity of Licensed Product sold, rented, leased, manufactured, destroyed or
otherwise used, by Licensee.
27.2 Reports - Licensee shall provide to Licensor quarterly reports
indicating the total quantity of Licensed Product sold, rented, leased,
manufactured, destroyed or otherwise used, by Licensee. Such reports shall
indicate the total number of such Licensed Product categorized by each
organization and the total value of royalties and any other payments owed by
Licensee. The reports shall be sent to Licensor by the same due date as any
royalty payments which are due or would be due. Reports shall be made even if
no royalties are believed owed.
27.3 Accounting - Licensor shall have the right to inspect the records of
Licensee and subcontractors which are relevant to the Licensed Technology to
indicate the amount of royalties or other compensation owed or paid in
connection with this Agreement. Licensor shall also have the right to inspect
the records of Licensee and all Subcontractors which are relevant to the
quality of Licensed Products so produced by or for Licensee. The rights to
inspect indicated herein include the right to have an audit conducted by an
appropriate auditing or accounting firm. If an audit indicates that an
amount in excess of Five Thousand Dollars is owed to Licensor which should
have been previously paid under the provisions of this Agreement, then the
cost of the audit shall be fully paid by Licensee.
28. MARKING OF PRODUCTS EMBODYING PATENT RIGHTS, TRADEMARKS AND COPYRIGHTS
28.1 Licensee agrees to xxxx all labels, advertising, packaging and other
instances of use of the Licensed Trademarks with the notification (TM) or
with the symbol consisting of an R within a circle to indicate such
trademarks are registered, if and when such trademarks do become registered
by the United States Patent and Trademark Office. Usage of the Licensed
Trademarks by Licensee in the U.S. and/or any foreign country shall comply
with all established practices of such Countries for notifying or indicating
that the Licensed Trademarks are claimed as exclusive.
28.2 Licensee agrees that all Licensed Products sold, leased or distributed
hereunder which is within the scope of any claim issued in a U.S. or foreign
patent shall be marked with one or more patent numbers or other notices in a
manner consistent with and as required by the laws of the jurisdiction in
which the Licensed Products are to be sold or otherwise used or distributed.
Failure to so xxxx all patented products and equipment will subject Licensee
to liability to Licensor for losses associated with such failure to xxxx.
28.3 Licensee also agrees to xxxx all reproductions, copies and derivative
works based on Licensed Copyright Works with notice of the claim to
copyrights as required to fully protect such Licensed Copyright Works under
the laws of the jurisdiction in which the reproductions, copies or derivative
works are to be sold or distributed. Failure to so xxxx all patented products
and equipment will subject Licensee to liability
to Licensor for losses associated with such failure to xxxx.
29. ASSIGNMENT OF RIGHTS AND OBLIGATIONS AND SUBLICENSE
29.1 Because of the nature of Rights and obligation granted hereunder,
Licensee can not assign any rights or obligations under this Agreement unless
the Licensee has received written authorization from the Licensor.
29.2 Licensee has the right to issue sublicenses only upon written
authorization from the Licensor, such authorization shall not be unreasonably
withheld. Each sublicense authorization will be issued on a case by case
basis through a separate agreement between Licensee, Licensor and third-party
sublicensee.
65
30. LIABILITY RISK AND INDEMNIFICATION
30.1 Licensee agrees to assume all risk of legal liability which may arise
from Licensee activities, including but not limited to, providing services,
designing, manufacturing, transporting, distributing and selling products
licensed under this Agreement. Licensee further warrants and agrees to hold
harmless, defend and indemnify Licensor against claims arising from
Licensee's activities, including but not limited to, providing services,
designing, manufacturing, transporting, distributing and selling products
licensed under this Agreement, including any patent, copyright or trademark
infringement claims made by third-parties.
31. INSURANCE POLICY FOR MANUFACTURING AND SALE OF PRODUCTS
31.1 If Licensee is engaged in the manufacture or sale of any services other
than technical consulting relating to the Licensed Technology, then Licensee
shall, throughout the term of this Agreement, obtain and maintain at its own
cost and expense, from a qualified insurance company, standard Product
Liability Insurance. Such policy shall provide protection against any and all
claims, demands, and cause of action arising out of any defects or failure to
perform, alleged or otherwise, of the Licensed Products, or any use thereof.
The amount of coverage shall be one million dollars ($1,000,000) or an amount
which Licensee and Licensor shall establish in writing from time to time. The
Licensee agrees to furnish the Licensor a certificate of insurance evidencing
same before beginning manufacture or sale of any product or beginning
services other than technical consulting services relating to the Licensed
Technology.
32. BEST EFFORTS AND DILIGENCE
Licensee shall use its best efforts to diligently market Licensed Products
and Licensed Services. A determination of best efforts and diligence under
this part may consider various relevant factors.
33. WARRANTIES OF LICENSOR
33.1 Licensor makes only the warranties expressly made below;
(a) To Licensor's knowledge, up to the date of this Agreement, Licensor has
no information indicating that the subject matter of the Licensed Patents
infringes any U.S. or foreign patents;
(b) Up to the date of this Agreement there are no actions, suits or
proceedings pending or, to the knowledge of Licensor threatened against
Licensor in any court or before any administrative agency which would prevent
Licensor from completing the transactions provided for herein; Licensor has
complied with all laws (including rules and regulations thereunder) of
federal, state, and local governments (and all agencies thereof), and no
charge, complaint, action, suit, proceeding, hearing, investigation, claim,
demand, or notice has been filed or commenced against Licensor alleging any
failure to comply with any such law or regulation;
(c) Licensor warrants that prior to this Agreement, no other licenses have
been granted to any other persons or entities for the Licensed Technology as
defined in this Agreement;
(d) To Licensor's knowledge, as of the date of this Agreement, the Licensed
Technology and Licensed Products do not violate any law, rule or regulation
of any government or governmental agency.
(e) Licensor makes no other warranties.
33.2 The Licensor shall indemnify and hold harmless the Licensee from any
and all damages or expenses incurred by the Licensee from a breach of the
warranties made herein, including the Licensee's attorney fees and costs.
34. DISCLAIMER OF WARRANTIES BY LICENSOR
34.1 Licensor hereby disclaims all warranties not expressly made herein and
further specifically disclaims as set forth below;
(a) No warranty or representation is made that practice of the Licensed
Technology by Licensee as allowed under this Agreement will not infringe upon
patent, trademark or other rights of a third party;
(b) No warranty or representation is made that additional patent protection
will necessarily be obtained or that a patent will issue on the Licensed
Technology;
(c) No warranty or representation is made to indemnify Licensee for any
claims arising from Licensee's activities under this Agreement;
(d) No warranty or representation is made as to the accuracy, sufficiency,
suitability or fitness for Licensee's use of the Licensed Technology nor for
the quality or quantity of any licensed item made hereunder and Licensor
assumes no responsibility or liability which might arise out of Licensee's
use thereof.
66
(e) No warranty or representation is made as to the application of Licensed
Technology to any particular use or market or is a economically viable
product;
(f) Forgoing warranties are in lieu of all other warranties, express or
implied, whether arising by law, custom or conduct; In no event shall
Licensor be liable for consequential damages.
35. ENFORCEMENT OF PATENT RIGHTS
35.1 Licensee shall have the right to enforce any Licensed Patents against
infringers thereof. Licensee, at its option and cost may institute legal
proceedings for infringement. If Licensee refuses to institute legal action,
then Licensor may at it's election xxx for infringement or other cause. Any
recovery under such legal actions shall be first used to pay attorney fees,
court costs and all other litigation expenses, and second be used to pay
Licensor for any payments which are due under this Agreement. The remainder
shall be divided between the parties based upon their relative payment of the
total litigation costs. Licensor agrees to allow Licensee to take legal
action solely in Licensee's name and to additionally include or join Licensor
as a party, if necessary.
36. NOTIFICATION OF INFRINGEMENT
36.1 Licensee and Licensor both agree to notify the other within ten (10)
days of becoming aware of any infringement of Licensed Technology by third
parties.
37. INTERCHANGE OF TECHNICAL AND MARKET INFORMATION
37.1 Licensor and Licensee agree to Interchange all technical and market
information which comes to the attention of Licensor or Licensee, and which
relates to the Licensed Technology in the marketing, sale, distribution,
design and other aspects of licensing development and marketing of the
Licensed Technology.
38. COMPLIANCE WITH EXPORT OF TECHNOLOGY AND OTHER LAWS
38.1 Licensee agrees to comply with all U.S. and foreign government statutes
governing import and export of technological information, taxes and other
applicable laws. Since the technological information licensed hereunder is
initially subject to the laws of the United States, no disclosure to
individuals or organizations which constitutes a violation of the export of
technology laws or other U.S. or state statute of similar nature or effect,
shall occur. The distribution of Licensed Products shall also similarly be
controlled by U.S. law or the law of any foreign nation in which such
inventions or improvements are created, or as otherwise made applicable under
such U.S. or foreign law.
39. TERMINATION BY LICENSOR
39.1 Licensor shall have the right to terminate this Agreement for material
breaches by Licensee if Licensee fails to make payments under this Agreement,
or if Licensee becomes insolvent, bankrupt or unable to conduct business, or
appointment of any trustee, receiver or liquidator for substantially all of
the assets of Licensee, or institution of any proceedings of the same, or the
attachment or seizure of substantially all of the assets of Licensee, or if
Licensee otherwise materially breaches this Agreement, then Licensor may
terminate the licenses granted herein. Such termination shall be effectuated
by Licensor sending a certified letter, return receipt requested, containing
a notice indicating the breach and that termination pursuant to this
Agreement will be made if Licensee does not cure the breach. Licensee shall
then have a cure period with a duration of sixty (60) days (or if the breach
reasonably cannot be cured with the time period allowed within, the breaching
party will be allowed such time is reasonably necessary to cure such breach)
starting from the date the notification of breach is delivered or presented
at the last known notification address during which to cure the breach. If
Licensee fails to cure, then termination shall occur upon Licensor's mailing
of a notice by certified mail, of termination after the expiration of the
cure period.
40. EFFECT OF TERMINATION BY LICENSOR
40.1 If this Agreement is terminated, no Licensed Products may be sold or
distributed or any promotional material used, or any Licensed Technology
Rights, Trademark Rights or Copyrights by Licensee.
40.2 Upon termination of this Agreement, all payments then owed shall become
immediately due and payable, all amounts owed after termination shall be paid
within thirty (30) days of the invoiced sale, rental payment or other event
creating an obligation to pay.
40.3 Upon termination of this Agreement, all rights licensed herein shall
revert to the Licensor who may assign or license to others to use the
Licensed Technology, Licensed Trademarks and Licensed Copyrights.
40.4 Upon termination of this Agreement, any and all sublicenses will remain
in full force and effect, as stated in those individual sublicense agreements.
67
40.5 Upon termination of this Agreement, Licensee shall provide to Licensor
free of charge the following related materials;
a) Copies of all patents and patent applications related to Licensed
Technology.
b) Copies of all documentation related to the Licensed Technology, including
but not limited to, drawings, lab books, sketches, design layouts, source
codes.
40.6 Upon termination of this Agreement Licensor shall have the right, but
not the obligation to purchase all other materials relating to the Licensed
Technology, including but not limited to, equipment, software, hardware, ,
Licensed Products, all production tooling, and related matters currently held
by Licensee, that were needed by Licensee to sell, lease and service the
Licensed Product at a reasonable price not to exceed the initial costs
incurred by Licensee plus (10) ten percent.
40.7 Upon termination of this Agreement Licensee agrees to stop all further
use of the Licensed Technology. The Licensee shall be responsible for any
damages caused by the unauthorized use of such materials or reproduction
materials which are not turned over.
40.8 Following termination by Licensor, Licensor shall have no obligation to
repay to Licensee any monies paid by Licensee under this Agreement.
41. TERMINATION BY LICENSEE
41.1 Licensee shall have the right to terminate this Agreement for material
breaches by Licensor. Such termination shall he effectuated by Licensee
sending a certified letter, return receipt requested, containing a notice
indicating the breach and that termination pursuant to this Agreement will be
made if Licensor does not cure the breach. Licensor shall then have a cure
period with a duration of sixty (60) days starting from the date the
notification of breach is delivered or presented at the last known
notification address during which to cure the breach. If Licensor fails to
cure, then termination shall occur upon Licensee's mailing of a notice of
termination by certified mail, after the expiration of the cure period.
41.2 Notwithstanding anything in the agreement to the contrary, Licensee
shall also have the right to terminate this agreement upon sixty (60) days
written notice to the Licensor for any of the following reasons:
(a) The Licensee is unable, after reasonable efforts, to obtain a patent for
the protection of the Licensed Technology and Licensed Products.
(b) Patent, Copyright or Trademark infringement claims are made by a third
party that materially impair the ability of the Licensee to sell or lease the
Licensed Products.
(c) The Licensee determines that it is no longer economical to offer the
Product to the marketplace.
41.3 The termination of this Agreement under this section 41 shall terminate
its obligations to pay the minimum royalties and the balance owed on the
second Promissory Note issued in 12.1(b) , as of the date of termination. If
the Licensee is in default under the terms of the Promissory Notes at the
time of termination under this section 41 , the Licensee shall only be
relieved of the obligations under the Promissory Note for the amount that
would have been due had the Licensee been current under the terms of the
Promissory note and the current minimum royalties stated above. All rights
and obligations relating to termination will apply as defined in section 42
titled "EFFECT OF TERMINATION BY LICENSEE".
42. EFFECT OF TERMINATION BY LICENSEE
42.1 If this Agreement is terminated, no Licensed Products may be sold or
distributed or any promotional material used, or any Licensed Technology
Rights, Trademark Rights or Copyrights by Licensee.
42.2 Upon termination of this Agreement, all payments then owed shall become
immediately due and payable, all amounts owed after termination shall be paid
within thirty (30) days of the invoiced sale, rental payment or other event
creating an obligation to pay.
42.3 Upon termination of this Agreement, all rights licensed herein shall
revert to the Licensor who may assign or license to others to use the
Licensed Technology, Licensed Trademarks and Licensed Copyrights.
42.4 Upon termination of this Agreement, any and all sublicenses will remain
in full force and effect, as
stated in those individual sublicense agreements.
42.5 Upon termination of this Agreement, Licensee shall provide to Licensor
free of charge the following related materials;
a) Copies of all patents and patent applications related to Licensed
Technology.
68
b) Copies of all documentation related to the Licensed Technology, including
but not limited to, drawings, lab books, sketches, design layouts, source
codes.
42.6 Upon termination of this Agreement Licensor shall have the right, but
not the obligation to purchase all other materials relating to the Licensed
Technology, including but not limited to, equipment, software, hardware, ,
Licensed Products, all production tooling, and related matters currently held
by Licensee, that were needed by Licensee to sell, lease and service the
Licensed Product at a reasonable price not to exceed the initial costs
incurred by Licensee plus (10) ten percent.
42.7 Upon termination of this Agreement Licensee agrees to stop all further
use of the Licensed Technology. The Licensee shall be responsible for any
damages caused by the unauthorized use of Such materials or reproduction
materials which are not turned over.
42.8 Following termination by Licensee, Licensor shall have no obligation to
repay to Licensee any monies paid by Licensee under this Agreement.
43. MODIFICATION OF AGREEMENT
43.1 No modification of this Agreement shall be valid or binding unless the
modification is executed in writing and signed by all parties to this
Agreement.
44. NO WAIVER
44.1 No waiver by either party of a breach or a default hereunder shall be
deemed a waiver by such party of a subsequent breach or default of a like or
similar nature.
45. SEVERABILITY
45.1 In the event that any term or provision of this Agreement shall for any
reason be held to be invalid, illegal, or unenforceable in any respect, such
invalidity, illegality, or unenforceability shall not affect any other term
or provision of this Agreement and shall be interpreted and construed as if
such term or provision, to the extent the same shall have been held to be
invalid, Illegal, or unenforceable, had never been contained herein.
46. APPLICABLE LAW
46.1 This Agreement shall be construed and governed in accordance with the
laws of the State of Nevada.
47. JURISDICTION AND VENUE
47.1 The parties hereto agree that jurisdiction and venue shall be proper as
provided for under law.
48. HEADINGS
48.1 The headings, titles and subtitles in this Agreement are inserted for
convenience of reference only, and in no way define or limit the terms, scope
or interpretation of any provisions of this Agreement.
49. GENDER AND INTERPRETATION OF TERMS AND PROVISIONS
49.1 The reference to any Party and/or Parties, and/or any nouns, pronouns
and/or the like utilized to refer to any Party or Parties as the context may
suggest or require in this Agreement shall likewise include both the singular
and the plural, a corporation, co-partnership, individual or person acting in
any fiduciary capacity, as the intent, purpose and language of this Agreement
may imply, infer, state or suggest. All covenants and representations by any
Party or Parties to this Agreement shall be joint and several as the context
of this Agreement suggests or requires.
50. LEGAL NOTICES
50.1 All notices required to be sent to either party shall be in writing and
sent by registered or certified mail, postage prepaid, return receipt
requested, charges prepaid to the parties at the addresses given hereinabove,
or such future addresses as the parties shall designate in writing. Payments
and royalty reports can be sent by first class mail.
51. RELATIONSHIP OF THE PARTIES
51.1 This Agreement does not create a partnership or joint venture between
the parties and the Licensee shall have no power to obligate or bind the
Licensor in any manner whatsoever, except as specifically expressed in this
Agreement.
69
52. ATTORNEY'S FEES
52.1 If either of the parties to this Agreement institute arbitration or
legal proceedings to enforce the terms of this Agreement, to declare rights
hereunder or to dispute, question or raise any question of fact, law or issue
set forth in and resolved by the express terms of this Agreement, as the
result of a breach of any covenant, condition or representation of this
Agreement, or for any other reason, the parties agree that the unsuccessful
party to such arbitration or legal proceedings shall pay the reasonable
attorney's fees and legal costs of both parties, as the same may be approved
by the arbitrator or court having jurisdiction over such proceedings.
53. INTEGRATION, ENTIRE AGREEMENT
53.1 This Agreement constitutes the entire Agreement between the Parties
hereto pertaining to the subject matter hereof and supersedes all prior or
contemporaneous agreements, terms, conditions, offers, understandings,
warranties, statements, representations, negotiations or discussions, whether
oral or written, of the Parties in connection with the subject matter hereof,
except as specifically set forth herein. No supplements or modifications or
waivers of this Agreement shall be binding unless executed in writing by the
Party or Parties to be bound thereby. No waiver of any provisions of this
Agreement shall be deemed or shall constitute a waiver of any other provision
herein or therein (whether or not similar), nor shall any such waiver
constitute a continuing waiver unless otherwise expressly provided. Both
parties hereby acknowledge that the execution of this Agreement was not
induced or motivated by any promise or representation made by any other
party, other than the promises and representations expressly set forth in
this Agreement.
54. BINDING ON SUCCESSORS
54.1 All of the terms and provisions of this Agreement shall be binding upon
and shall inure to the benefit of the Parties hereto, their assigns if
permitted, heirs, administrators, executors, representatives, successors,
agents, servants and employees.
55. INTERPRETATION
55.1 The Parties hereto acknowledge and agree that each has been given the
opportunity to independently review this Agreement with legal counsel, and/or
has the requisite experience and sophistication to understand, interpret, and
agree to the particular language of the provisions hereof without benefit of
legal counsel. In the event of an ambiguity in or dispute regarding the
interpretation of any portion of this Agreement, the interpretation of this
Agreement shall not be resolved by any rule of interpretation providing for
interpretation against the Party who causes the uncertainty to exist or
against the draftsman. In the event of an ambiguity in or dispute over the
interpretation of, or conflict between the provisions, or rights and remedies
authorized in this Agreement, the provisions and terms of this Agreement
shall be superior and controlling on all Parties hereto.
56. GOOD FAITH AND FAIR DEALING
56.1 The covenant of good faith and fair dealing shall apply to each and
every term, covenant, condition and provision of this Agreement.
57. TIME OF ESSENCE
57.1 Time is of the essence of this Agreement.
58. AUTHORITY
58.1 The undersigned individuals and/or entities executing this Agreement on
behalf of themselves and/or their respective Parties represent and warrant
that said individuals or entities are authorized to enter into and execute
this Agreement on behalf of such Parties, the appropriate corporate
resolutions or other consents have been passed and/or obtained, and that this
Agreement shall be binding on the Party on whose behalf they are executing
this Agreement. Without limiting the generality of the foregoing, the board
of directors of the Licensee have duly authorized the execution, delivery,
and performance of this Agreement by the Licensee, all of which are intended
to be enforceable in accordance with the terms and conditions.
59. ACTIONS AND CLAIMS
59.1 There are no actions, suits or proceedings pending or, to the knowledge
of Licensee threatened against Licensee in any court or before any
administrative agency which would prevent Licensee from completing the
transactions provided for herein, or in the Promissory Notes. The Licensee
has complied with all laws (including rules and regulations thereunder) of
federal, state, and local governments (and all agencies thereof), and no
charge, complaint, action, suit, proceeding, hearing, investigation, claim,
demand, or notice has been filed or commenced against Licensee alleging any
failure to comply with any such law or regulation.
70
60. TITLE TO TECHNOLOGY
60.1 Licensor has good and marketable title to the Licensed Technology and
the related Patent applications and Licensee shall not do anything after the
date hereof which would render its title to the Licensed Technology and the
Patent applications unmarketable, or impair the return of a clear title to
Licensor in the event of Licensee's default. Provided, however, it is not the
intention of this provision to limit Licensee's ability to use and contract
for the use of the Licensed Technology in the ordinary course of its
business.
62. FACSIMILE EXECUTION OF AGREEMENT
62.1 For the convenience of the parties hereto, it is agreed that this
Agreement may be initially executed with facsimile signatures and in said
event such facsimile signatures shall have the same binding force and effect
as original signatures. In the event that facsimile signatures are utilized,
the parties further covenant and agree to immediately exchange and execute as
many original copies of this Agreement as are necessary, by mail or other
means as expeditiously as possible so that each party to the Agreement shall
have a copy of the Agreement fully executed with original signatures.
63. COUNTERPART ORIGINAL AGREEMENTS
63.1 This Agreement shall be executed in multiple original counterparts with
each party retaining one copy thereof.
64. EFFECTIVE DATE OF AGREEMENT AND TERM OF AGREEMENT
64.1 The effective date of this Agreement is the date as of which this
Agreement has been executed by all parties hereto.
64.2 This Agreement shall terminate when terminated by Licensor or Licensee
as provided in this Agreement. If neither party terminates this Agreement as
provided herein, then appropriate provisions of this Agreement shall be
applied until complete cessation of all use of the Licensed Trademarks,
Licensed Copyrights, and Licensed Technology by Licensee, or until no further
payments are due hereunder, whichever is longer.
65. ARBITRATION
65.1 Any controversy or claim arising out of or relating to this Agreement or
tile breach of any representation, warranty, covenant or agreement contained
herein, shall be decided by arbitration in accordance with the Commercial
Arbitration Rules (C.A.R.') of the American Arbitration Association (A.A.A.)
unless the parties otherwise mutually agree in writing, The dispute shall be
decided by a panel of three arbitrators (each an 'Arbitrator' and
collectively, the 'Arbitrators') one arbitrator chosen by each of the
Licensor and Licensee, and the third by the two selected arbitrators in
accordance with C.A.R. and A.A.A. The decision and the award of damages
rendered by a majority of the Arbitrators shall be final and in binding and
judgment may be entered upon it in any court having jurisdiction thereof.
65.2 The arbitration shall be held as promptly as practicable after actual
receipt of notice that the other party has filed a notice for arbitration
with the A.A.A. (the "Notice') on such date, and at such a place and time
convenient to the parties and to the Arbitrators, except that if the parties
cannot agree, the Arbitrators shall decide such date, place and time. The
Arbitrators shall make their decision promptly and any award of damages shall
be made, unless otherwise mutually agreed by the parties in writing, no later
than fifteen (15) days from the date of closing of the hearings or if oral
hearings have been waived. from the date of transmitting the final statements
and proofs to the Arbitrators.
66. EXECUTION BY LICENSEE - CASINOVATIONS INCORPORATED
Date: By:
State of Nevada )
) ss.
County of Xxxxx )
I certify that I know or have satisfactory evidence that signed this
instrument, and upon oath acknowledged that he had authority to act in behalf
of Casinovations, Incorporated and further acknowledged this instrument to be
the free and voluntary act of such party for the uses and purposes mentioned
in this instrument.
Dated:
Notary Public
Residing it
[SEAL] My appointment expires:
71
67. EXECUTION BY LICENSOR- TECHNOLOGY DEVELOPMENT CENTER, LLC
Date: By:
State of Nevada )
) ss.
County of Xxxxx )
I certify that I know or have satisfactory evidence that signed this
instrument, and upon oath acknowledged that he had authority to act in behalf
off Bitstream Technologies, Inc. manager of Technology Development Center,
LLC. and further acknowledged this instrument to be the free and voluntary
act of such party for the uses and purposes mentioned in this instrument.
Dated:
Notary Public
Residing at
[SEAL] My appointment expires:
