Exhibit 10.22
LICENSE AGREEMENT
This LICENSE AGREEMENT (this "Agreement") is made as of October 1, 2002
(the "Effective Date"), between Alpha Virtual, Inc., a Delaware corporation (the
"Licensor"), and Global Alpha Corporation, a British Virgin Islands Company (the
"Licensee").
WHEREAS, the Licensor owns the System (as defined below) and desires to
expand the use of the System through the granting of a worldwide, exclusive
license to Licensee, and
WHEREAS, the Licensee desires to acquire a worldwide, exclusive license
to use the System.
NOW, THEREFORE, in consideration of good and valuable consideration,
the receipt and sufficiency of which is hereby acknowledged, the parties hereto
agree as follows:
1. Exclusive License. The Licensor hereby grants to the Licensee the
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exclusive right and license to enjoy, commercialize, and exploit the System,
including, without limitation, the right to grant sublicenses, and to make, use,
sell, distribute or dispose of any services or products related to the System
worldwide (this "License"). As used herein, the "System" means the software and
systems commonly referred to as the "OneView Technology" that provide support
for multi-user online collaborative interactivity in a broad variety of
applications employing a variety of virtual media over a number of networks, and
all patents, copyrights, works of authorship, trademarks, and related
intellectual property rights associated therewith, including, without
limitation, the patents, trademarks, service marks, tradenames and copyrights
specifically set forth on Schedule A attached hereto and incorporated herein by
this reference. This License shall include all processes, software inventions,
upgrades and improvements which the Licensor now owns and controls or hereafter
owns or controls related to the System.
2. License of the Marks. Licensor hereby grants to Licensee a worldwide,
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exclusive and royalty free license to use the Marks solely in connection with
this License and in accordance with the guidelines for such use established by
Licensor from time to time. Licensor is aware of the current level of quality in
service and advertising maintained by Licensee and Licensee agrees to maintain
that level of quality throughout the term of this Agreement. As used herein,
"Marks" shall mean those trademarks, service marks and/or tradenames set forth
on Schedule A attached hereto, as well as any goodwill pertinent to and
symbolized by the above.
3. License of Equipment. Licensor hereby grants Licensee and its
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employees, agents and independent contractors the right to access and use
Licensor's hardware, equipment, facilities and all other items necessary to use,
research and develop the System pursuant to this License.
4. Representations by Licensor. The Licensor hereby represents and
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warrants the following to Licensee:
10.22-1
(a) Licensor is the legal and beneficial owner of all right, title
and interest in and to the System and it has the right to
grant the License; Licensor has not made any previous
assignments, transfers, conveyances or encumbrances of any
right, title or interest in the System and has not granted to
any third party any right, security interest, license,
shop-right or privilege to use the System in any manner except
for those existing licenses granted prior to the date of this
Agreement as set forth on Schedule B attached hereto. Licensor
has not agreed to any covenant not to xxx for any use of the
System by a third party. Except as set forth on Schedule B,
Licensor has not executed any agreements in conflict herewith.
(b) Licensor has taken proper steps to protect intellectual
property rights in the System, including, without limitation,
filing for and/or obtaining patents, trademark and service
xxxx registrations, copyright registrations, requiring
execution of the appropriate confidentiality agreements and
taking reasonable steps to protect the confidentiality of
trade secrets.
(c) To the knowledge of Licensor, neither the System, nor the
disclosing, copying, making, using or selling of the System
violates, infringes or otherwise conflicts with any trademark,
service xxxx, trade secret, copyright, patent or any other
intellectual or proprietary right of any third party. There
are no claims, judgments or settlements related to the System
to be paid by Licensor and no claims of infringement,
violation, or interference with someone else's rights have
been made or threatened.
(d) No past, present or future employees own any right, title or
interest in and to the System.
5. Necessary Documents. The Licensor agrees to furnish to the Licensee, or
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to its nominees, all information and documents regarding the System in order to
enable the Licensee to operate thereunder. At the request of the Licensee, the
Licensor shall render consulting services to the Licensee as may be necessary in
order to instruct and train the Licensee, or its appointed representatives, in
all operations pertaining to the industrial and commercial exploitation of the
System (the "Consulting Services"), to the extent that Licensor's has the
capability to provide such Consulting Services. Licensee shall reimburse
Licensor for all reasonable travel expenses incurred in providing the Consulting
Services upon receipt of satisfactory written documentation of such expenses;
provided, however, that Licensor shall receive prior written consent from
Licensee for any expenses greater than $1000. Licensor shall not receive any
other amounts or fees in connection with the Consulting Services.
6. License Fees. In exchange for the License, the Licensee agrees to pay
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as an annual license fee to the Licensor (the "License Fee") according to the
following schedule:
10.22-2
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Revenue (as defined below) Percentage
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up to $1,000,000 10%
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$1,000,001 to $2,000,000 9%
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$2,000,001 to $3,000,000 8%
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greater than $3,000,0000 7%
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;provided, however, that in the event the License Fee is less than
$25,000 during the first two calendar years of this Agreement, 2002 and 2003,
Licensee agrees to pay the greater of the License Fee or $25,000 for those two
years. As used herein, "Revenue" shall mean gross revenues received by Licensee
from sales of sublicenses of the System pursuant to this License.
7. Payment of License Fee. The Licensee shall at all times keep an
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accurate account of the operations coming under the scope of the License and
shall render a written statement of the same to the Licensor within fifteen (15)
days after the end of each calendar quarter during the life of this Agreement,
and at the same time shall pay to the Licensor the amount of earned License Fees
accrued during the corresponding quarter with the understanding that the
Licensor shall have the right, at its own expense and not more often than once
in each calendar year to have a certified public accountant examine the books of
the Licensee for the purpose of verifying License Fee statements of the
operations coming under the scope of this Agreement. Within 60 days after the
end of each calendar year, Licensee shall calculate the actual License Fee based
on Revenue for the preceding calendar year and the License Fee shall be adjusted
accordingly. During the calendar years of 2002 and 2003, if the annual License
Fee equals less than $25,000, then Licensee shall pay the minimum license fee of
$25,000 to Licensor within 60 after the expiration of such year, but only to the
extent as the earned and previously paid License Fee for such year is less than
$25,000.
8. Term. The term of this Agreement shall commence upon the Effective Date
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and shall expire on the 20th anniversary of the Effective Date, subject to
earlier termination pursuant to the terms of this Agreement.
(a) Renewal. If Licensee is not then in default, and has not been
repeatedly (as defined in subparagraph 8(b)(1)(iv)) in default
under this Agreement during the 12 months immediately
preceding notice of renewal, Licensee shall have the option to
continue this License for three separate additional terms of
five years each under the conditions specified below. For
purposes of this paragraph only, any default which has been
waived by Licensor shall not be considered a default
hereunder. Whenever references are made to the terms of this
Agreement in this Agreement, such references shall also apply
to any renewals hereunder.
10.22-3
(b) Renewal Agreement. Licensee and Licensor agree to be bound by
the terms contained in this Agreement upon renewal, unless
Licensee and Licensor elect to accept another agreement, which
agreement shall be modified to comply with any applicable laws
then in effect of the state in which the Licensee is located.
9. Assignment. Licensee shall not sell, transfer or assign this License
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without the prior written consent of Licensor which shall not be unreasonably
withheld; provided, however, that upon providing prior written notice to the
Licensor, Licensee shall have the right to assign, delegate or otherwise
transfer any of its rights or obligations hereunder without the Licensor's
written consent: (i) to any corporation or other business entity that directly
or indirectly controls, is controlled by, or is under common control with
Licensee; or (ii) in connection with any merger, consolidation, sale of all or
substantially all of Licensee's assets, or any other transaction in which more
than fifty percent (50%) of Licensee's voting securities are transferred. Any
unauthorized transfer by Licensee shall be voidable by Licensor. This Agreement
may be assigned by Licensor without Licensee's prior consent upon providing
written notice to Licensee; provided, however, that in such event, this
Agreement shall inure to the benefit of Licensor's assignee and such assignee
shall agree to be bound by all of the obligations, covenants, and duties of
Licensor herein.
10. Breach of Agreement.
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(a) Breach by Licensor. Licensee may terminate this Agreement for
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a material default or breach by Licensor 30 days after giving
Licensor written notice of termination, specifying the default
or breach, if the breach remains uncured at the end of 30 days
after such notice, provided, however, that if the nature of
Licensor's obligations are such that more than 30 days are
required for performance, then Licensor shall not be in
default if it commences performance within the 30-day period
and thereafter diligently attempts to cure same to completion
of performance. If Licensor breaches or defaults under any
provision of this Agreement, Licensee shall have all rights
and remedies permitted by law or equity, including but not
limited to, the right of termination.
(b) Breach by Licensee. If Licensee materially breaches or
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defaults under any provision of this Agreement, Licensor shall
have all rights and remedies permitted by law or equity,
including, but not limited to, the right of termination.
Licensor will not terminate this Agreement unless it has good
cause to do so. Good cause shall include, but not be limited
to, the reasons specified.
i. After Notice. Licensor may terminate this Agreement 90
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days after giving Licensee written notice specifying the
defaults or breaches by Licensee if same remains uncured
for 30 days after notice of default or breach (or such
10.22-4
longer period as may be required by law); provided,
however, that if the nature of Licensee's obligations are
such that more than 30 days are required for performance,
then Licensee shall not be in default if it commences
performance within the 30-day period and thereafter
diligently attempts to cure same to completion of
performance. The cure period shall, if permitted by law,
be ten days instead of 30 days if the breach or default
is pursuant to (1) below. For purposes of this Agreement,
a default or breach shall include, but not be limited to,
the following:
(1) Nonpayment. Failure to pay when due any sum owed to
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Licensor under this Agreement.
(2) Reports. Failure to provide Licensor with any
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completed report in the form specified under this
Agreement.
(3) Continuous Operation. Failure to continuously
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operate the License for a period longer than 6
months.
(4) Repeated Breaches. Any breach or default of this
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Agreement, which is repeated three or more times
(whether of the same or different kind) within the
then preceding 12 months for which Licensee shall
have received notice thereof, regardless of whether
or not the breach or default was cured within the
time permitted.
(5) Jeopardizing the Franchise Name or System. Any
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misuse of the Marks or conduct which reflects
unfavorably upon the operation and reputation of the
System.
(6) Others. Failure to comply with any other requirement
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of this Agreement or failure to comply with any
material obligations which Licensee has to Licensor.
ii. Waiver. Neither Licensee's or Licensor's waiver of a
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breach or default by the other, nor delay or failure to
exercise any right upon breach or default, nor acceptance
of any payment, shall be deemed a waiver nor shall same
impair rights for other breaches or defaults of the same
or a different kind. The description of any breach or
default in any notice shall not preclude the later
assertion of other additional defaults or breaches.
10.22-5
11. Option to Purchase; Termination. Licensee shall have an option to
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purchase the System from Licensor, subject to approval of the majority of
Licensor's shareholders. In the event that a majority of Licensor's shareholders
approve the sale to Licensee, the sale shall occur within 180 days after
shareholder approval; provided that such period may be extended by mutual
agreement of the parties in writing. In the event that a majority of the
shareholders of Licensor do not approve the sale to Licensee, two (2) years
after the date on which shareholder approval is sought and not obtained by
Licensor, this License shall become a non-exclusive license at the option of
Licensor by providing written notice to Licensee; provided, however, that if
Licensor elects to make this License non-exclusive, Licensee shall have the
right to terminate this Agreement at any time thereafter by providing written
notice to Licensor. In the event that a majority of Licensor's shareholders
approve the sale to Licensee, this Agreement and License shall terminate as of
the effective date of any such sale.
12. Xxxxx.xxx Agreement. Licensee hereby acknowledges that Licensor has
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entered into that certain Value Added Distribution Agreement with Xxxxx.xxx,
Inc. effective as of October 1, 2002 ("Xxxxx.xxx Agreement"). Licensor hereby
agrees to assign all its rights and delegate all of its duties under the
Xxxxx.xxx Agreement and Licensee agrees to assume the same, including the right
to receive license fees, all subject to receiving the written consent of
Xxxxx.xxx.
13. Rights and Duties upon Transfer or Termination. In addition to the
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rights and duties specified elsewhere in this Agreement, immediately upon the
expiration, transfer, or termination of this Agreement for any reason, the
following provisions shall apply:
(a) Acceleration of Payments. All money owed by Licensee to
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Licensor shall be due and payable.
(b) License Revoked. All rights and licenses granted to Licensee
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under this Agreement shall terminate.
(c) Use of Marks. Licensee shall cease using the Marks and/or
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doing business and advertising as a Licensee of Licensor.
(d) Supplies/Confidential Materials. Licensee shall cease using
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and deliver to Licensor all supplies and items pertaining to
the System, the Marks and all copyrighted or confidential
materials including any operating manuals, software and any
and all copies made thereof, as well as other materials,
forms, manuals and memoranda supplied by Licensor to Licensee.
(e) Applicability to Others. The foregoing restrictions shall also
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apply to the Licensee, any of its officers, partners, or
shareholders, and their spouses, and to managerial or
supervisory employees of Licensee.
10.22-6
(f) Other Rights. Licensor shall have all other rights and
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remedies permitted by law and equity in addition to the rights
set forth in this Agreement. Any rights shall be considered
cumulative and not exclusive.
14. Confidentiality.
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(a) Licensee acknowledges that the System, including all trade
secrets, software, information, ideas, research, methods,
recipes, manuals, procedures, systems, improvements, and
copyrighted and other materials owned or developed by or
licensed to Licensor, whether or not published, confidential,
or suitable for registration or copyright, and the goodwill
associated with them, are and shall remain the sole and
exclusive property of Licensor. They are provided or revealed
to Licensee in trust and confidence. Any and all information,
knowledge, and know-how not generally known, about the System
and Licensor's products, services, standards, specifications,
systems, procedures and techniques, and such other information
or material as Licensor may designate as confidential in
writing, shall be deemed confidential for purposes of this
Agreement.
(b) Licensee agrees to keep the aforesaid information confidential
and to use it only for the purposes and in the manner
authorized in writing by Licensor. Licensee agrees that during
and after the termination of this Agreement for any reason,
neither Licensee, nor any of its agents, employees, owners, or
representatives shall at any time copy or disclose to any
other person or use for any purpose other than in connection
with this License or to sublicensee's under this License that
likewise agreed to be bound by an obligation of confidence,
any secret, confidential, or other information received from
Licensor. Licensee agrees to use reasonable efforts to enforce
the terms of this provision as to its agents, employees,
representatives, and owners.
(c) The obligations set forth herein shall not apply to: (i)
information which, at the time of disclosure to Licensee, is
in the public domain; (ii) information which, after
disclosure, becomes part of the public domain, except by
breach of this Agreement; (iii) information which was in
Licensee's possession at the time of disclosure by the
Licensor, and which was not acquired, directly or indirectly,
from the Licensor; (iv) information which Licensee can
demonstrate resulted from its own research and development,
independent of disclosure from the Licensor; (v) information
which Licensee receives from third parties, provided such
information was not obtained by such third parties from the
Licensor on a confidential basis; or (vi) information which is
disclosed in compliance with applicable law or a court order,
provided the Licensor is given reasonable notice of such law
or order and an opportunity to attempt to seek a protective
order or otherwise preclude or limit such production.
10.22-7
15. Notices. All notices, requests, demands, and reports to be given under
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this Agreement are to be in writing, delivered by hand, telegram, certified or
registered mail, or courier service guaranteeing overnight delivery to the
following address (which may be changed by written notice):
Licensor:
Alpha Virtual, Inc.
00000 Xxxx Xxxxxxx Xxxxxxxxx
Xxxxx 000
Xxx Xxxxxxx, XX 00000
Attention: Xxxx Xxxxxxx, President
Licensee:
Global Alpha Corporation
0000 Xxxxxx Xxxxxx
Top of the World
Xxxxxx Xxxxx, XX 00000 XXX
Attention: Xxxxx Xxxxxx, Authorized Signatory
Notice by mail shall be deemed received on the third business day after
mailing or upon actual receipt, whichever is earlier.
16. Further Assurances. Licensor agrees to take such actions and execute
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such additional instruments, certificates and documents as may be necessary, in
the reasonable opinion of Licensee, to give further assurances of any of the
rights granted or provided for herein.
17. Amendments. This Agreement constitutes the entire agreement between the
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parties and may not be changed except by a written document signed by both
parties.
18. Choice of Law; Venue. This Agreement shall be governed by the laws of
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the State of California, without regard to its conflicts of law provisions. Any
action or proceeding brought upon or arising out of this Agreement or its
termination shall be brought in a forum located within the City and County of
Los Angeles, California.
19. Construction of Language. The language of this Agreement shall be
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construed according to its fair meaning and not strictly for or against either
party. All words in this Agreement refer to whatever number or gender the
context requires. Headings are for reference purposes and do not control
interpretation. All the terms and words used in this Agreement, regardless of
the number and gender in which they are used, shall be deemed and construed to
include any other number (singular and plural) or any other gender (masculine,
feminine, or neuter) as the context or sense of this Agreement, or any section
or clause hereof may require.
10.22-8
20. Successors. References to Licensor or Licensee include such successors,
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assigns, or transferees as are permitted in accordance with this Agreement.
21. Severability. If any provision of this Agreement is deemed to be
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invalid or inoperative for any reason, that provision shall be severed from this
Agreement, and the remainder of the Agreement shall continue in full force and
effect as if the Agreement had been signed with the invalid portion so
eliminated.
22. Exhibits. All exhibits or schedules attached hereto are incorporated by
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reference in the appropriate paragraph and form a part of this Agreement.
23. Attorneys' Fees. Should either party institute legal proceedings to
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enforce the terms or conditions of this Agreement, the prevailing party shall be
entitled to recover all its reasonable expenses, including attorneys' fees,
costs, and other expenses reasonably and necessarily incurred.
24. Survival of Covenants and Conditions. It is expressly agreed that all
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covenants and conditions relating to the rights and obligations of Licensee and
Licensor subsequent to the termination of this Agreement shall survive the
termination and shall continue in full force and effect in accordance with the
terms of the specific provision.
25. Caveat of Licensee. Licensee hereby acknowledges that the success of
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the License is speculative and depends upon various factors beyond Licensor's
control, such as the ability and efforts of Licensee as an independent business
person and the ongoing cooperation of Licensor. Licensor does not make any
representation or warranty as to the potential success of the business
contemplated.
26. Counterparts. This Agreement may be signed in any number of
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counterparts with the same effect as if the signatures thereto and hereto were
upon the same instrument.
[SIGNATURE PAGE FOLLOWS]
10.22-9
IN WITNESS WHEREOF the parties have signed this License Agreement on
the date first set forth above:
Licensor: Licensee:
ALPHA VIRTUAL, INC. GLOBAL ALPHA CORORATION
By: ________________________________ By: ______________________________
Xxxx Xxxxxxx Xxxxx X. Chlach
President Authorized Signatory
10.22-10
SCHEDULE A
Patents, Trademarks, Tradenames and Copyrights
Patents:
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Title Application/Reg. No. Dates Notes
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Method of and System 60/201,207 Filed Provisional Patent
for Collaborative 05/02/2000 application
Interaction over
a Communication Network
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Trademarks:
Federal Registrations: None
Common Law Marks:
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Xxxx Date of First Goods/Services Notes
Use
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IC3D App. filed with PTO but final
refusal issued after specimen
rejection
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WyTH Technologies
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OneView
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OneMind
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OneView Media Room
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OneView Forms
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OneView Cruising
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Perceptronics
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Tradenames:
Alpha Virtual, Inc.
Copyrights:
Federal Registrations: None.
Unregistered Copyrights: In the source code, software and other works
of authorship incorporated in or related to the System.
10.22-11
SCHEDULE B
Existing Licenses/Agreements
Value Added Distribution Agreement with Xxxxx.xxx, Inc. effective as of October
1, 2002.
10.22-12
