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Exhibit 10.39
LICENSE AND DISTRIBUTION AGREEMENT
DATED as of, and effective from, the 30th day of July, 1998
between
THE GLOBAL TRACKER CORPORATION ("GT"), a corporation duly organized and
existing under the laws of the Province of Ontario, having offices at 00
Xxxxxxxxxx Xxxxxx Xxxx, Xxxxx 0000, Xxxxxxx Dominion Bank Tower, Toronto
Xxxxxxxx Xxxxxx, Xxxxxxx, Xxxxxxx, XXXXXX X0X 0X0
and
TRACKER CORPORATION OF AMERICA, INC. ("TCA"), a corporation duly organized
and existing under the laws of Delaware, having offices at 000 Xxxxxx
Xxxxxx Xxxx, Xxxxx 0000, Xxxxxxx, Xxxxxxx XXXXXX X0X 0X0.
GT owns and is engaged in the business of licensing two dimensional bar-code
technology used for the purposes of personal property identification and
recovery; and
TCA wishes to acquire a license to use GT's Technology (as defined below) for
its own use along with the right to distribute the Technology on an exclusive
world-wide basis in accordance with the terms and conditions set out in this
License and Distribution Agreement.
Intending to be legally bound, the parties agree as follows:
1. DEFINITIONS
1.1. "Confidential Information" means any information designated as
confidential or which ought to be considered confidential from the
circumstances surrounding its disclosure including without
limitation any information related to the Technology, but does not
include information which:
(a) is known to the receiving party before receipt thereof from
the other party, as evidenced by the receiving party's written
records;
(b) is disclosed to the receiving party in good faith by a third
party who had a right to make such disclosure;
(c) is made public by the originating party, or is established to
be a part of the public domain otherwise than as a consequence
of a breach by the receiving party of its obligations
hereunder;
(d) is required by law to be disclosed; and
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(e) can be demonstrably proven to have been independently
developed by the receiving party.
1.2. "Technology" means the executable object code of GT's proprietary
two dimensional bar-code technology which provides its end-use
customers with a highly secured and cost effective service to aid in
the recovery of lost or stolen possessions.
1.3. "Territory" means the world.
2. GRANT OF RIGHTS AND APPOINTMENT OF DISTRIBUTOR
2.1. Subject only to the conditions set out in this Agreement, GT:
(a) appoints TCA as its authorized distributor of the Technology
in the Territory for the term set out in Article 12 below; and
(b) grants to TCA an exclusive, worldwide right and license to the
Technology for its use, and its license or sub-license to
third parties, directly, or indirectly, through sales agents,
distributors or otherwise.
3. OWNERSHIP OF THE TECHNOLOGY
3.1. All right, title and interest in and to the Technology including,
without limitation, all industrial and intellectual property rights,
shall be and remain vested in GT or GT's affiliated companies or
licensors. These rights are protected by United States and Canadian
intellectual property right laws, international treaty provisions
and other applicable national laws.
4. COMPENSATION AND PAYMENT
4.1. TCA will pay no royalties or other fees on revenue received by TCA
under contracts between TCA and any third party in which the
Technology is a component in the first year of the Initial Term (as
defined below);
4.2. After the first year, TCA will pay to GT royalties of twelve percent
(12%) of the gross revenues payable to TCA under contracts between
TCA and any other third party in which the Technology is a
component;
4.3. Royalties shall be payable monthly in arrears in accordance with the
following procedure: TCA shall deliver to GT an amount equal to the
Royalties payable with respect to revenue received by TCA under
contracts between TCA and any third party in which the Technology is
a component during a monthly period within thirty (30) days after
the end of each month during the term of this Agreement (the
"Royalty Deposit Day"), together with a written report showing its
computation of Royalties actually due under this Agreement during
the respective calendar month just completed.
5. CONDITIONS OF TECHNOLOGY USE
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5.1. TCA will:
(a) not modify the Technology in any manner whatsoever, without
the prior written consent of GT;
(b) to the extent permitted by law, not attempt to reverse
engineer or otherwise render the Technology to a
human-readable form in order to understand the Technology
structure or details in any way, or to produce any work
derived from the Technology;
(c) not attempt to defeat any mechanisms that control the number
of copies of the Technology allowed to operate simultaneously
during any particular time period; and
(d) allow the Technology only to be used and accessed by TCA's
employees, agents or customers for the purposes of this
Agreement who have a legitimate need and right to use the
Technology, provided that such employees, agents or customers
have entered into GT's standard form of license agreement
which provides for the same or greater level of protection for
Confidential Information as set out herein. TCA hereby accepts
full responsibility and liability for the actions or omissions
of its employees, agents or customers.
6. DUTIES OF TCA
6.1. TCA shall:
(a) use its best efforts to diligently promote and sell the
Technology throughout the Territory.
(b) at its own cost and expense:
(i) display, operate and demonstrate the Technology in
accordance with the instructions set forth in the
then current user's manual provided for such
Technology by GT;
(ii) conduct such sales promotion activities as are
necessary to stimulate and promote the sale of the
Technology in the Territory;
(iii) develop all necessary sales and marketing literature
to promote and positions the Technology in each
unique area of the Territory, including but not
limited to translation and production of local
language variants of said materials. TCA agrees to
maintain the prominent display of GT's logo and
proprietary rights in the Technology on all
literature, brochures and other promotional
materials;
(iv) maintain sales office facilities and a staff of
trained sales personnel throughout the Territory;
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(v) maintain a staff of trained technical and
administrative personnel to provide training and
customer support services consistent with
establishing and maintaining a high degree of
customer proficiency and satisfaction with the
Technology.
(vi) comply with all applicable laws and regulations
within the Territory and/or each region of the
Territory;
(vii) provide GT, within seven (7) days of the end of every
calendar month, with a written report showing a list
of all end-user customers who have purchased the
Technology and who have executed GT's standard
Software License and Software Support Agreements
during the month;
(viii) provide GT, upon request, with information relating
to potential end-user customers of the Technology,
activities of competitors and such other information
as GT may require from time to time about the
Territory;
(ix) promptly notify GT of any complaints or problems
reported or encountered, in connection with the
design or operation of the Technology; and
(x) cause all end-user customers to execute GT's standard
Software License and Software Support Agreements, and
return same to GT in a timely manner.
7. COMMERCIAL TERMS
7.1. All monetary amounts in this Agreement, including but not limited to
list prices and discounts, shall be in US dollars, unless expressly
stated to the contrary.
7.2. Prices for the Technology shall be as described in GT's applicable
international price list as published and updated from time to time
by GT. GT may at its sole discretion change the prices and such
changed prices shall become effective ninety (90) days after written
notification to TCA.
7.3. Prices do not include sales tax or similar taxes. TCA shall pay such
taxes either directly or when invoiced by GT, or shall supply
appropriate tax exemption certificates in a form satisfactory to GT.
7.4. TCA shall be responsible, at its own expense, for obtaining all
necessary import permits and for the payment of any and all taxes
and duties imposed on the delivery, importation, sale or license of
the Technology in the Territory or other destination designated by
TCA.
7.5. TCA shall be free to determine its own resale prices to end-user
customers. Any list prices published or provided by GT are
suggestions only.
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8. LEGAL RISK MANAGEMENT
(a) THE OBLIGATIONS OF THE PARTIES EXPRESSLY STATED IN THIS
AGREEMENT ARE IN LIEU OF ALL OTHER WARRANTIES OR CONDITIONS
EXPRESSED OR IMPLIED. WITHOUT LIMITATION, TO THE FULLEST
EXTENT ALLOWABLE BY LAW, THIS EXCLUSION OF ALL OTHER
WARRANTIES AND CONDITIONS EXTENDS TO IMPLIED WARRANTIES OR
CONDITIONS OF SATISFACTORY QUALITY, MERCHANTABLE QUALITY AND
FITNESS FOR A PARTICULAR PURPOSE, AND THOSE ARISING BY STATUTE
OR OTHERWISE IN LAW, OR FROM A COURSE OF DEALING OR USAGE OF
TRADE.
(b) THE PARTIES AGREE THAT EACH PARTY'S LIABILITY TO THE OTHER,
UNDER ANY THEORY OF LAW OR EQUITY, INCLUDING WITHOUT
LIMITATION, FOR BREACH OF CONTRACT, NEGLIGENCE OR OTHERWISE,
ARISING OUT OF OR IN ANY WAY RELATED TO THIS AGREEMENT OR THE
INTENDED FULFILLMENT OF EACH PARTY'S OBLIGATIONS UNDER THIS
AGREEMENT, IS LIMITED TO THE AMOUNT REQUIRED TO REIMBURSE THE
OTHER PARTY FOR DIRECT MONEY DAMAGES NOT TO EXCEED THE TOTAL
AMOUNT PREVIOUSLY PAID BY TCA TO GT FOR THE SIX MONTH PERIOD
IMMEDIATELY PRECEDING THE OCCURRENCE OF THE ERROR, OMISSION OR
ACTION GIVING RISE TO THE LIABILITY CLAIM.
(c) NEITHER PARTY WILL HAVE ANY LIABILITY WHATSOEVER FOR ANY
SPECIAL, PUNITIVE OR CONSEQUENTIAL DAMAGES, LOSS OF PROFITS,
ANTICIPATED REVENUE, SAVINGS OR GOODWILL OR OTHER ECONOMIC
LOSS OF THE OTHER PARTY.
9. PATENT, COPYRIGHT AND TRADE SECRET INDEMNITIES
9.1. GT will indemnify and hold harmless TCA from any losses, damages,
expenses (including legal fees), costs, penalties and liabilities
whatsoever that are reasonable and that arise out of or in
connection with any action or claim that the Technology provided by
GT hereunder infringes or violates any patents, copyrights or trade
secrets of any third party.
9.2. GT will, at its own expense, defend any such action or claim and TCA
will, at its own expense, assist in the defense, provided that, so
long as GT can demonstrate sufficient financial resources, GT will
control the defense and all negotiations related to the settlement
of any such claim and further provided that any settlement intended
to bind TCA will not be final without TCA's written consent, which
will not be unreasonably withheld.
9.3. TCA will promptly provide GT with written notice of any information
that comes to its attention and that might lead to a claim that TCA
may assert under this indemnity provision. Failure by TCA to notify
GT of such information (or of any actual third
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party claim), which results in GT being materially prejudiced, will
relieve GT of its liability under this indemnity provision.
9.4. If the Technology or any portion thereof are held to constitute an
infringement and their use are enjoined by a final non-appealable
decree, GT will have the obligation, at its own expense, to:
(a) modify the infringing portion of the Technology without
impairing in any material respect its functionality or
performance, so that it is non-infringing;
(b) procure for TCA the right to continue to exercise its rights
under this Agreement, or
(c) replace the technology with equally suitable, non-infringing
software, provided that any replacement or modification does
not prejudice TCA's right to market, sell and use the
Technology and that the replacement or modification will be
carried out in a manner intended to limit interruptions in
TCA's use of the Technology and its marketing activities.
9.5. Notwithstanding the foregoing, GT will have no liability to TCA with
respect to any claim of patent or copyright infringement to the
extent that the claim is based upon (i) the combination of the
Technology with machines, systems or devices not approved by GT; and
(ii) the modification by TCA of the Technology; or (iii) the use of
the Technology not in accordance with user's manual.
10. CONFIDENTIALITY
10.1. TCA shall have a fiduciary level of care to hold GT's Confidential
Information in strict confidence.
10.2. TCA will use GT's Confidential Information strictly for the purposes
contemplated under this Agreement.
11. NON-COMPETITION
11.1. TCA hereby covenants and agrees that during the term of this
Agreement, and for a period of one (1) year following the
termination of this Agreement, TCA shall not, for whatever reason
and with or without cause, either individually or in partnership or
jointly or in conjunction with any person or persons, firm,
association, syndicate, company, corporation or entity as principal,
agent, employee, shareholder, owner, investor, partner or in any
other manner whatsoever, directly or indirectly, carry on or be
engaged in or be concerned with or interested in or advise, lend
money to, guarantee the debts or obligations of or permit its name
or any part thereof to be used or employed by any person or persons,
firm, association, syndicate, company, corporation or entity engaged
in or concerned with or interested in the business of manufacturing
producing, marketing, distributing or selling, for wholesale or
retail, any products similar to or competitive with the Technology.
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11.2. The parties agree that all of the restrictions contained herein are
reasonable and valid in these circumstances and will not
unreasonably restrain the trade of TCA and all defenses to the
strict enforcement thereby of GT are hereby waived by TCA.
12. TERM AND TERMINATION
12.1. The Initial Term of this Agreement will be seven (7) years commencing
from the date of execution of this Agreement and will be automatically
renewed for one (1) further seven (7) year Renewal Term unless either
of the parties gives notice to the other at east six (6) months prior
to the end of the Initial Term of its intent not to renew.
12.2. Either party may terminate this Agreement in its discretion if,
immediately upon written notice to the other party, the other party has
a winding up or bankruptcy order made against it (other than for the
purpose of a reconstruction or amalgamation not involving an insolvency
of that party) or if a Receiver or Manager over any of its assets is
appointed or if it becomes unable to pay its debts or if it enters into
any arrangement or composition with or for the benefit of its creditors
or if a resolution is passed for the voluntary winding up or
dissolution of that party or if an Administrator is appointed in
respect of that party or any of its assets or if it is dissolved or any
analogous occurrence under any other jurisdiction.
12.3. GT may terminate this Agreement immediately upon written notice to TCA
if TCA does not present to GT, within ninety (90) days of the end of
the first year of the Initial Term, a written statement by TCA's
auditors that TCA has entered into bona fide, arms-length license and
support agreements with end-user customers, in which the Technology is
a component and which, in the aggregate, will generate annual gross
revenues to TCA in the second year of the Initial Term of at least
$250,000.
13. GENERAL
13.1. This Agreement is to be governed by and construed in all respects in
accordance with the laws of the State of Georgia and the parties agree
to submit to the non-exclusive jurisdiction of the courts of the State
of Georgia as regards any claim or matter arising in relation to this
Agreement.
13.2. The parties expressly waive any right they may have to trial by jury
and agree that any proceeding shall be only to the court sitting
without a jury.
13.3. This Agreement constitutes the entire agreement between the parties
with respect to the subject matter hereof and merges all prior
communications.
13.4. If one or more of the provisions is found to be invalid or
unenforceable, that provision shall be deemed to be severed herefrom
tot he extent of the facts in dispute and the remaining provisions
shall remain valid and enforceable.
13.5. This Agreement shall not be assigned by TCA without the prior written
approval of GT, TCA shall not sub-license its rights under this
Agreement to any other person or
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entity and any such sub-license shall be null and void. GT shall
have the right to assign the agreement without notice or consent of
TCA.
13.6. The execution and delivery of the Agreement by either party hereto
by facsimile transmission will constitute valid execution and
delivery of this Agreement.
13.7. Articles 3, 8, 9, 10 and 11 will survive termination of this
Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first noted above.
THE GLOBAL TRACKER TRACKER CORPORATION OF AMERICA:
CORPORATION:
/s/ Xxx X. Xxxxxxxx /s/ Xxxxx X. Xxxxx
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Signature Signature
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Name Name
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Title Title
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