November 13, 1996
LICENSE AGREEMENT
This agreement, effective the I with day of November, 1996, is made and
entered into by and among XXXX X. XXXXXXX ("Xxxxxxx"), a natural person
residing at 0000 Xxxxxxx #0, Xxxxxxx, Xxxxx 00000, XXXXXX X. XXXXXXXXX, XX.
("Xxxxxxxxx"), a natural person residing at 00000 Xxxxxxxxxx Xx., Xxxxxx,
Xxxxx, and MSP TECHNOLOGIES INC ("MSP"). a Texas corporation having an office
at 0000 Xxxxxxx, Xxxxx #0, Xxxxxxx, Xxxxx 00000.
Premises
WHEREAS, XXXXXXX and XXXXXXXXX own certain patent rights and confidential
information and have the right to grant licenses of the scope granted in this
Agreement under those rights; and
WHEREAS, MSP is desirous of acquiring certain exclusive rights and licenses
to use said patent rights and confidential information to provide and sell
Licensed Services (hereinafter defined);
NOW, THEREFORE, in consideration of the premises and of the mutual covenants,
terms and conditions hereinafter expressed, JACKSON, ARISMENDI, and MSP agree
as follows:
Section 1. Definitions
1.1 "Effective Date" means the date entered in the first paragraph of this
Agreement.
1.2 "Field of the Agreement" or the Field" is for geophysical exploration of
oil, gas and valuable minerals using the method and/or apparatus of the
Licensed Patent and the Licensed Technology.
1.3 "Letters Patent" or "Patent" means a patent, US or foreign, including
patents of importation improvement patents, patents and certificates of
addition, and utility models, as @'ell as divisions. reissues, continuations,
renewals and extensions of any of the Foregoing, and applications therefor
(including patents which may issue on such applications)
1.4 "Licensed Technology" means Xxxxxxx'x and XXXXXXXXX'x technical material
and information in the Field of the Agreement, including trade secrets,
relating to the Licensed Patents and the Licensed Instruments, including
their
manufacture and design, and the Licensed Services, including the use of the
Licensed Instruments and marketing of the Licensed Services.
1.5 "Basic Patent" means any U.S. patent maturing from XXXXXXX'x and
XXXXXXXXX'x pending U S. Patent Application, entitled "Passive Geophysical
Prospecting Apparatus and ,Method Based on the Detection of Discontinuities
Associated with Extremely Low Frequency Electromagnetic Fields" filed August
27, 1996, having Application No.08/703,485, including are, continuation,
division, and reissue applications thereof.
1.6 "Licensed Patents" means the Letters Patent(s) listed in Appendix A and
Letters Patent(s) maturing from the Applications for Letters Patent listed in
Appendix A, and any improvement patents, continuations, decisions,
continuations-in-part, substitutes, reissues, renewals, and/or extensions of
any such Letters Patent. A Letters Patent will cease to be a Licensed Patent
when its term expires, or all its claims are held to be invalid, or ad] its
claims are held to be unenforceable
1.7 "Licensed Service" means any service in the Field of the Agreement (I )
covered by any valid and enforceable claim of a Licensed Patent in the
country where the service is provided and/or (2) using the Licensed
Technology.
1.8 "Licensed Instrument" means any apparatus for use in the Field of the
Agreement I covered by any valid and enforceable claim of a Licensed Patent
in the country of manufacture and/or use and/or (2) using the Licensed
Technology. Licensed Instruments "III not be sold by MSP or LICENSOR.
1.9 "Net Sales" means the net selling price invoiced or otherwise charged by
MSP for performance of Licensed Services, excluding only the following items
to the extent they are included in the net selling price:
(a) sales or excise taxes, and
(b) expenses associated with the provision of the Licensed
Services (travel, room and board, and supplies).
1.10 "Subsidiary(ies)" means a corporation, Company or other entity in which
more than fifty percent (50%) of whose outstanding shares or securities
(representing the night to vote for the election of directors or other
managing
authority) are, now or hereafter, owned or controlled, directly or
indirectly.
by a party hereto, but such corporation, Company or other entity shall be
deemed to be a Subsidiary only so long as such ownership or control exists.
1.11 "Parties" means XXXXXXX, XXXXXXXXX and MSP
1.12 "Licensor" means XXXXXXX and XXXXXXXXX
1.13 "Third Party" means a party other than XXXXXXX, XXXXXXXXX and MSP
Therefore, any Subsidiary of MSP or entity to which MSP is a Subsidiary is a
Third Party for purposes of this Agreement.
Section 2. Grant of Right
2.1 LICENSOR grants to MSP a worldwide exclusive right and license under the
Licensed Patents and Licensed Technology in the Field (1) to make, have made
and use, but not sell, Licensed Instruments for use in providing Licensed
Services and (2) to provide and sell Licensed Services
2.2 LICENSOR grants to MSP a worldwide exclusive license to use the Licensed
Technology in the Field.
2.3 MSP shall not grant sublicenses under the Licensed Patents nor under the
Licensed Technology.
2.4 The licenses granted in Paragraphs 2.1 and 2.2 of this Agreement are
subject to a reserved nonexclusive license in the LICENSOR to make and use
the
Licensed Instruments to personally perform Licensed Services and to make
improvements to same.
2.5 LICENSOR herein agrees that MSP shall have the first right of refuse to
purchase the Licensed Patents in the event of a sale of the Licensed Patents
on
terms as may be offered in writing by a bona fide Third Party purchaser.
Section 3. Royalty and Service Income
3.1 Subject to Paragraph 3,3 below, MSP agrees to pay LICENSOR as a royalty
a
percentage of the Net Sales of any Licensed Service which it sells to Third
Parties so long as a Licensed Patent is in force or a patent application is
pending. Any Licensed Service provided for a Subsidiary of MSP or for any
entity of which MSP is a Subsidiary shall be sold or otherwise accounted for
as
a sale at the same rates as any other Third Party. The royalty under this
Paragraph shall be 10% of such Net Sales of Licensed Services.
3.2 MSP shall pay to LICENSOR royalties stated in Paragraph 3 1, but in no
event shall the cumulative royalties paid to LICENSOR pursuant to Paragraph 3
1
for EACH CALENDAR MONTH of a calendar year be less than the following minimum
royalties per calendar month during each of the calendar years indicated:
Royalty Schedule
Minimum Royalty per
Calendar Year Calendar Month (US Dollars)
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1997 3,500 (Three Thousand Five Hundred)
1998 3,500 (Three Thousand Five Hundred)
1999 and each calendar
year thereafter during
the term of this Agreement 50,000 (Fifty Thousand)
3.3 In the event that the royalties payable under this Agreement for any
calendar month for the calendar year in question shall not at least equal the
corresponding minimum required in Paragraph 3 2, LICENSOR shall have the
eight to notify MSP of the amount of the deficiency MSP shall thereupon
within fifteen (15) days pay to LICENSOR the difference between the actual
royalties received by MSP for the calendar month in question and the
corresponding minimum royalty due. Since time is of the essence, following said
fifteen 15 day period, if the royalties paid by MSP, to LICENSOR for the
calendar month in question still do not satisfy the minimum royalties required
by Paragraph 3 2, LICENSOR at LICENSOR's sole option may terminate this
agreement and the licenses herein granted.
3.4 In connection with the minimum royalty, it is agreed that if in any
calendar month or months the royalty paid by MSP to LICENSOR exceeds the
minimum required for that calendar month or months, such excess WILL NOT be
taken into consideration and used by MSP for ]Its credit toward the minimum
required in any calendar month or months that the royalty called for by the
actual Net Sales of MSP has not equaled the minimum required by Paragraph
3.2.
Section 4. Royalty Payments and Reporting
4.1 Royalty payments from MSP to LICENSOR shall be made monthly within
fifteen (15) days after the end of each calendar month for which royalty
payments are due following the Effective Date with seventy-five (75) percent
of the respective royalty payment paid to XXXXXXX and twenty-five (25) percent
paid to XXXXXXXXX. Royalty payments for each calendar month period shall be
based on Net Sales of those Licensed Services invoiced by MSP during that
period. All such payments shall be accompanied by a full and complete report
detailing the computation of the royalty payment. Payments shall be made in U.
S. Dollars. For purposes of computing royalties payable hereunder, amounts in
currencies other than U.S. Dollars will be converted into U S Dollars using as
a rate of exchange for such payments the midpoint between the buying and
selling rate for U S Dollars as quoted by Texas Commerce Bank in Houston.
Texas (or any other bank agreeable to the parties should this bank cease
operations) at the close of business on the last business day of the calendar
month for which royalties are due.
4.2 During the term of this Agreement, MSP shall maintain for a period of
three (3) years following the date of each royalty report and payment
accurate and complete books and records which support the determination of Net
Sales in such detail as to enable a determination of the royalty payment which
was due under this Agreement on the date of that report and payment. Such
books and records shall be kept in accordance with generally accepted
accounting principles.
4.3 Upon twenty (20) days' written notice. MSP shall permit the examination
of such records, using general]y accepted auditing standards, by LICENSOR or
its designated representation e, at any time during normal business hours
throughout the term of this Agreement and for one (1) year following its
termination, for the purpose of verifying the payments due hereunder. Such
examinations shall be at LICENSOR's expense so long as such records are
located in the United States of America (U.S.A.). If such records are outside
the U.S.A., LICENSOR shall be reimbursed its reasonable expenses by MSP Such
examination shall not be made more than once each calendar year. Any error in
royalty payments, whether in favor of LICENSOR or MSP, shall be corrected by
payment of the amount in error within sixty (60) days of receipt by the party
which would be required to make such payment of written notice of such error.
4.4 MSP, as exclusive licensee, shall have power to institute and prosecute
at its own expense suits for infringement of the Licensed Patents, and, if
required by law, LICENSOR will join as a party plaintiff in such suits All
expenses in such suits shall be borne entirely by MSP, and MSP will pay to
LICENSOR twenty-five percent (25%) of any excess of recoveries over the
expenses in such suits.
Section 5. Confidentially of Licensed Technology
5.1 "Technology" under this Agreement means any information that is (a)
disclosed in writing by the disclosing party which is marked as being
confidential at the time it is provided to the receiving party, or that is (b)
disclosed by the disclosing party in any other manner and is indicated to be
confidential at the time of disclosure. The receiving party shall employ all
reasonable efforts to maintain the confidentiality of such information, such
efforts to represent no less than the degree of care employed by the
receiving
party to protect its own confidential information. Information supplied
under this Agreement shall not be considered Technology if (i) at the time of
disclosure to the receiving party the information was in the public knowledge,
or (ii) after disclosure to the receiving party the information became part of
the public knowledge through no fault of the receiving, party, or (iii) at the
time of disclosure to the receiving party the information was already in the
possession of the receiving party without an obligation of confidentiality, or
(iv) after disclosure @o the receiving party, the receiving party acquired the
information from a third party without an obligation of confidentiality and
without a direct or indirect Misappropriation or breach of an obligation of
confidentiality.
5.2 MSP shall use Licensed Technology solely for the design and manufacture
of
Licensed Instruments and in the use of the Licensed Instruments to provide
Licensed Services during the term of this Agreement. To the extent MSP must
disclose Licensed Technology in connection with its marketing of the Licensed
Services, MSP shall first obtain in writing the agreement of the recipient to
maintain the confidentiality of the Licensed Technology to be disclosed.
5.3 For purposes of the provisions of this Section 5, disclosures made under
this Agreement which are specific, such as engineering and design practices
and techniques, equipment, products, operating conditions, and the like, shall
not be deemed to be within the foregoing exceptions of Paragraph 5.1 merely
because they are embraced by general disclosures which are in the receiving
party's possession or are generally available to the public. In addition, any
combination of features shall not be deemed to be within the foregoing
exceptions merely because individual features of the combination are
separately within such exceptions, but only if the combination itself is
within such
exceptions.
Section 6. Research and Development
6.1 In order to maintain the Licensed Technology which is the subject of this
Agreement in the most advanced possible state of development, LICENSOR and MSP
agree to Jointly, or independently perform research and development directed
to improving the Licensed Instruments. Licensed Services, Licensed Technology
and Licensed Patents.
Section 7. Term and Termination
7.1 Subject to Paragraph 7.2, the term of this Agreement shall be from the
Effective Date until there are no remaining valid and enforceable Licensed
Patents and there is no Licensed Technology.
7.2 Should either LICENSOR or MSP breach this Agreement and fail to remedy
such breach, the other party thereafter shall have the right to terminate
this Agreement, at any time after thirty (30) days, written notice to the
breaching party. Subject to Paragraph 7.5 and Section 10, upon termination of
this Agreement pursuant to this Paragraph, all rights granted herein to the
breaching party shall terminate immediately.
7.3 Termination of this Agreement shall be in addition to and not exclusive
of
any other rights or remedies at law or in equity of the nondefaulting party.
7.4 Termination or expiration of this Agreement shall not: (i) relieve
LICENSOR or MSP of any obligation or liability accrued hereunder prior to
such termination or expiration or (ii) give rise to any right to rescind
anything done or any payments made or other consideration given hereunder
prior to the time of such termination or expiration.
7.5 Upon any termination of this Agreement, other than according to
Paragraph 7.1 or to Paragraph 7.2 for breach by LICENSOR, MSP shall have the
right to complete all orders for Licensed Services which result from bids or
quotations transmitted prior to the termination date and pay to LICENSOR the
corresponding royalty due therefor. Following such completion, MSP shall
deliver to LICENSOR all Licensed Instruments and all copies of Licensed
Technology and any other documents prepared by MSP containing Licensed
Technology obtained directly or indirectly from LICENSOR.
Section 8. Warranties
8.1 LICENSOR warrants that it has the right and power to enter into this
Agreement and the power to grant to MSP the rights contemplated by this
Agreement under the Licensed Patents and the Licensed Technology.
8.2 MSP warrants that it has the right and power to enter into this
Agreement.
8.3 LICENSOR DOES NOT WARRANT THE VALIDITY NOR ENFORCEABILITY OF THE
LICENSED PATENT RIGHTS, LICENSOR DOES NOT WARRANT THAT THE USE OF THE
LICENSED TECHNOLOGY DOES NOT INFRINGE THE RIGHTS OF ANY THIRD PARTY,
INCLUDING PATENT RIGHTS. LICENSOR DOES NOT WARRANT THAT THE MAKING OR USING
OF THE LICENSED INSTRUMENTS DOES NOT INFRINGE THE RIGHTS OF ANY THIRD PARTY,
INCLUDING PATENT RIGHTS LICENSOR DOES NOT WARRANT THAT THE PROVISION OF
LICENSED SERVICES DOES NOT INFRINGE THE RIGHTS OF ANY THIRD PARTY, INCLUDING
PATENT RIGHTS.
Section 9. Product Marking
Where required by law, MSP shall place a legend or notice (a) on each Licensed
Instrument manufactured by or for MSP identifying that such Licensed
Instrument is covered by The Licensed Patents and (b) on sales brochures
regarding the Licensed Service and the reports providing the results of the
Licensed Service.
Section 10, Improvements
10.1 LICENSOR and MSP agree to keep each other regularly and fully
informed about the designs, applications and other developments relating
to the Licensed Patents and the Licensed Technology in the Field of the
Agreement and the Licensed Instruments and Licensed Service, which become
available to them and which they are not legally prevented from
communicating to the other party.
10.2 If MSP, independent of LICENSOR, develops improvements to the
Licensed Instruments and/or Licensed Services, whether or not patentable
or patented, MSP agrees that LICENSOR shall have a royalty-free,
nonexclusive license to such improvements and provide LICENSOR with an
instrument embodying the improvement(s) to the Licensed Instrument. Any
patent applications filed and resulting Letters Patent(s) relating to
such improvements shall be the property of MSP, and shall be prosecuted
and maintained at MSP's expense, unless the parties agree that the
invention shall be assigned to LICENSOR, in which event such patent
applications and resulting Letters Patent(s) shall be treated as Licensed
Patents and treated consistently with all the terms and conditions of the
license grant in this Agreement.
10.3 If patentable improvements result from the collaboration between
LICENSOR (either, or both of XXXXXXX and XXXXXXXXX) and agents or
employees of MSP (wherein if XXXXXXX is employed by MSP, XXXXXXX shall
still be deemed part of LICENSOR), MSP hereby assigns such improvements
to LICENSOR and such improvements will be the property of LICENSOR. If
LICENSOR decides not to file a patent application thereon, such
improvements shall be included in Licensed Technology. If a patent
application is filed thereon and the costs of filing, processing and
maintaining same are borne by MSP, such improvements shall be included in
the Licensed Patents. If a patent application is filed thereon and the
costs of filing, processing and maintaining same are not borne by MSP,
such improvements will be excluded from the Licensed Technology and from
the Licensed Patents. If a patent application is filed on such
Improvements, whether or not MSP bears the costs therefor, MSP agrees to
fully cooperate in such efforts to obtain patent protection.
Section 11. Indemnification and Release.
11.1 LICENSOR shall not be liable to MSP or any Third Party for any
injuries, losses, damages (including incidental, special, punitive and
consequential damages) or other liabilities incurred by MSP or any Third
Party, arising out of the manufacture and use of Licensed Instrument or
performance and sale of Licensed Services by MSP to the extent such
liability arises from patent infringement and/or from errors, defects or
omissions by MSP in the manufacture and/or use of such Licensed
Instruments, and MSP hereby releases LICENSOR and agrees to indemnify,
defend and hold LICENSOR harmless from any such liability.
11.2 Any obligation of indemnification under Paragraph 11.1 shall
be conditioned upon prompt written notice by the party seeking
indemnification to the other party of any claim for which indemnification
is sought, and allowing the indemnification party to control the defense
and settlement of any such claim. However, failure to provide prompt
written notice shall not relieve either party of its obligations, except
to the extent the other party has been materially prejudiced by such
failure.
Section 12, Patent Rights.
12.1 MSP shall bear the costs and expenses of obtaining and
maintaining the Licensed Patents MSP agrees that it will not permit the
Licensed Patents to lapse due to nonpayment of any applicable annuity or
maintenance fee.
12.2 LICENSOR shall be under no obligation to MSP to defend
against challenges to the scope, enforceability or validity of the
Licensed Patents.
Section 13 Assignability.
13.1 LICENSOR can assign its interests in this Agreement to a Third
Party, provided that:
(i) LICENSOR also assigns the Licensed Patents and Licensed
Technology to such Third Party; and
(ii) the Third Party enters into an agreement with MSP assuming all
obligations of LICENSOR hereunder.
13.2 MSP cannot assign its interest in this Agreement.
Section 14, Waiver.
The failure of any party at any time to require performance by any
party of any provision in this Agreement shall in no way affect the full
right to require such performance at any time thereafter. The waiver by
any party of a breach of any provision in this Agreement shall not
constitute a waiver of any succeeding breach of the same provision or any
other provision and shall not constitute a waiver of the provision
itself. The failure of any party to exercise any, of its rights provided
under this Agreement shall not constitute a waiver of such rights.
Section 15, Severability.
If for any reason any pro of this Agreement shall be invalid,
illegal or unenforceable, then such provision shall be to be severable
from the other provisions of this Agreement, all of which shall remain in
full force and effect and be binding on the parties hereto.
Xxxxxxx 00, Xxxxx Xxxxxxx.
Neither party to this Agreement shall be liable for any default or
delay in performance of any obligation under this Agreement caused by any
event that is beyond the reasonable control of and not the result of
willful or negligent co conduct of such party ("Force Majeure event").
During any default or delay resulting from a Force Majeure event, the
affected obligations shall be suspended, except that any obligation of
either party to pay money then due or accrued under this Agreement shall
not be affected. At the conclusion of any Force Majeure event, the
previously affected obligations shall resume. The party invoking this
Section shall give the other party notice of the full particulars of the
Force Majeure event as soon as possible after the event occurs. The
affected party shall use all reasonable efforts to overcome the effect of
the Force Majeure event as promptly as possible and shall allow the other
party such access and information as may be reasonably necessary to
evaluate such event.
Section 17, Entire Agreement.
The terms and conditions contained in this Agreement constitute the
entire agreement between the parties and supersede all previous
communications, whether oral or written, between the parties to this
Agreement with respect agreement or understanding varying or extending
the same shall be binding upon each party.
Section 18, Modification and Amendment.
This Agreement may be amended or modified only by a written instrument
which is signed by duly authorized representatives of the parties hereto
and which expressly states that its is an amendment to, or modification
of this Agreement.
Section 19, Notice.
Any notice, request or other communication with reference to this
Agreement shall be deemed given on the date personally delivered or
mailed if sent to the receiving party by hand delivery, facsimile
(receipt verified), overnight courier (receipt verified), or certified or
registered mail postage prepaid, at its respective following address or
at such other address as either of the parties may notify the other in
writing:
Xxxx X. Xxxxxxx
0000 Xxxxxxx, #0
Xxxxxxx, Xxxxx 00000
Xxxxxx X. Xxxxxxxxx, Xx.
00000 Xxxxxxxxxx Xx.
Xxxxxx, Xxxxx 00000
MSP Technologies, Inc.
0000 Xxxxxxx, Xxxxx #0
Xxxxxxx, Xxxxx 00000
Attention: Xx. Xxxx X. Xxxxxxx, President
Section 20, Headings
The titles and headings herein are used for convenience of reference only
and shall not be deemed part of this Agreement for purpose of
interpretation.
Section 21, Applicable Law
The law applicable to this Agreement shall be the laws of the State of
Texas, United States of America, without regard to conflict of laws
principles of that State.
Section 22, Relationship of the Parties.
22.1 Nothing in this Agreement shall be deemed to constitute a
partnership or agency relationship among ARISMENDI, JACKSON, and MSP,
except to the extent XXXXXXX may be an officer of MSP.
22.2 Neither LICENSOR nor MSP is granted an express or implied right
or
authority to assume or create any obligation or responsibility on behalf
of or in the name of the other or to bind the other in any manner or
thing whatsoever.
Section 23, Successors and Assigns.
This Agreement shall inure to the benefit of and be binding upon the
parties hereto and their respective permitted successors and assigns, to
the extent permitted herein.
Section 24, Counterparts.
This Agreement may be in more than one counterpart, each of which shall
be deemed to be an original and all which together shall be deemed a
single document.
Section 25, Further Assurances.
The parties agree to execute and deliver any instrument, or perform any
acts, that may be necessary or reasonably requested in order to give full
effect to this Agreement.
Section 26, Survival.
All representations, warranties and indemnities contained in this in this
Agreement and the covenants of Paragraphs 4.2, 4.3 and 7.5 and Sections
5, 11, 15, 17, 18, 19, 21, 22, 23, 24, 25 and 26 of this Agreement shall
continue in full force and effect and shall survive notwithstanding the
full payment of all amounts due hereunder or the termination or
expiration of this Agreement in any manner whatsoever.
IN WITNESS WHEREOF XXXXXXX, XXXXXXXXX and MSP caused this Agreement to be
executed in multiple counterparts by their duly authorized
representatives, to be effective as of the Effective Date.
WITNESS: XXXX X. XXXXXXX
/S/ Xxxxxxx X. Xxxxxxx /s/ Xxxx X. Xxxxxxx
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11/13/96
XXXXXX X. XXXXXXXXX
/S/ Xxxxxxx X. Xxxxxxx /s/ Xxxxxx X. Xxxxxxxxx
------------------------ -------------------------
11/13/96
MSP TECHNOLOGIES, INC.
/S/ Xxxxxxx X. Xxxxxxx /s/ Xxxx X. Xxxxxxx
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Title: President
-------------------------
11/13/96
