LICENSE AGREEMENT
BETWEEN
XXXXXXXX RESONANCE ENTERPRISES, INC.
AND
XXXXXXX ENTERPRISES L.L.C.
LICENSE AGREEMENT
AGREEMENT ("Agreement"), made and entered into as of the 23 day of
February, 1999, in duplicate originals by and between XXXXXXXX RESONANCE
ENTERPRISES, INC., a Nevada corporation authorized to do business in the State
of Florida, having an office and place of business at 0000 Xxxxxxx Xxxx
Xxxxxxxxx, Xxxxx 000, Xxxx Xxxxx, Xxxxxxx 00000 ("Licensor"); and XXXXXXX
ENTERPRISES L.L.C., a Florida L.L.C. having an office and place of business at
0000 Xxxxx Xxxxx Xxxxxxxxx, Xxxx Xxxxx, Xxxxxxx 00000 ("Licensee").
WHEREAS, Licensor has expended considerable resources to researching,
developing, testing and treating pain by means of a device known as the
"Xxxxxxxx Resonator" (the "Licensed Property"); and,
WHEREAS, Licensee possesses the experience, contacts and expertise to
market, distribute and sell the Licensed Property; and,
WHEREAS, Licensee desires to market, distribute and sell the Licensed
Property in the Territory (hereinafter defined); and,
WHEREAS, Licensee agrees to comply with all provisions of the United
States Foreign Corrupt Practices Act.
NOW, THEREFORE, in consideration of the mutual covenants hereinafter
set forth, Licensor and Licensee do hereby respectively grant, covenant and
agree as follows:
1. DEFINITIONS.
1.1 Territory: The territories specified are Europe Continent
(excluding the countries that made up the former U.S.S.R.), Africa, and the
Middle East (excluding Israel). In the event Licensee seeks to expand the
countries of the Territory, approval shall not be unreasonably withheld or
delayed and if given, Licensor will attempt to register the Licensed Property in
such additional territories.
1.2 Licensed Property: The Xxxxxxxx Resonator and such other
products and services as the parties may agree in writing.
1.3 License Year: A twelve (12) month period beginning on January 1
and ending on December 31, except that the first License Year begins on the date
hereof and ends on December 31, 1999.
2. GRANT OF LICENSE.
2.1 Grant of License and Product Designations: Subject to the terms
of this Agreement, Licensor hereby grants to Licensee, during the term of this
Agreement, and upon the terms and conditions hereinafter set forth, the
exclusive and nonassignable right and license to market, distribute and sell the
Licensed Property within the Territory. Licensee shall have the right, upon
receipt of written approval of Licensor; to sublicense any of the rights and
licenses granted herein to third parties. Licensee shall have no rights with
respect to the Licensed Property outside the Territory.
All other rights specifically not granted to Licensee herein are
reserved for Licensor.
2.2 Licensee's Efforts: Licensee agrees to use its best efforts to
distribute, promote and sell the Licensed Property throughout the Territory.
2.3 Supply and/or Manufacture of Licensed Property: Licensor shall
execute a separate supply and/or manufacturing agreement with Licensee detailing
how the Licensee shall obtain Licensed Property for distribution. Supply and
Manufacturing agreements shall be executed within six months of the term of this
Agreement.
3. TERM.
The term of this Agreement shall commence on the date of execution
hereof and shall continue for a period of ten (10) License Years, and shall
automatically renew for two (2) succeeding five (5) License Year terms unless
earlier terminated by either party upon not less than 90 days' prior written
notice to the other. No termination of this Agreement shall relieve Licensee
from paying any obligation owed by it to Licensor up to the date of termination.
Upon termination of this Agreement, Licensee shall cease to use and/or market
the Licensed Property, and effective on the date of termination, Licensee shall
have no further right to the Licensed Property.
4. QUALITY CONTROL, STANDARDS, AND OWNERSHIP.
4.1 Quality Control: Licensee shall acquire the Licensed Property
only from Licensor. However, in the event Licensor grants Licensee, in writing,
the right to manufacture the Licensed Property, any Licensed Property
manufactured by Licensee shall meet all of the product designs and
specifications imposed by Licensor. Licensee's failure to adhere to the
foregoing requirements shall be grounds for the immediate termination of this
Agreement by Licensor.
4.2 Use of Licensed Property: Licensee agrees not to market, sell,
distribute or otherwise use the Licensed Property in any manner whatsoever
without first obtaining all required permits, licenses and approvals required by
the laws of any jurisdiction in which the Licensed Property is sold, distributed
or marketed by Licensee or its Sublicensees.
4.3 Ownership of Licensed Property: Nothing in this Agreement shall
confer upon Licensee any ownership interest in the Licensed Property, all such
indicia of ownership in the Licensed Property being retained by Licensor.
4.4 Certificate of Conformance: Licensee shall apply for the
Certificate of Conformance (hereinafter referred to as "CE Xxxx") in the
European Common Market for the Licensor's proprietary bioelectromagnetic medical
equipment (Licensed Property) during the first six months of this Agreement. The
CE Xxxx shall be in the name of the Licensor or its designee. The Licensor shall
retain all ownership of the CE Xxxx.
4.4.1 Cost of CE Xxxx: Licensor shall pay Licensee fifty
thousand dollars ($50,000.) during the first four months of this Agreement to
off set expenses in procuring the CE Xxxx. Licensor shall also provide function
generators; attenuators and accessories as required by European authorities on
any devices submitted for approval for attainment of the CE Xxxx during the
first four months of this Agreement or as new devices are submitted.
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5. CONFIDENTIAL INFORMATION.
5.1 Confidential Information: Licensee acknowledges that Licensor's
trade secrets, private or secret processes, methods and ideas, as they exist
from time to time, contracts, customer lists and other information concerning
the Xxxxxxxx Resonator and Licensor's other products, services, business records
and plans, product design information, price structure, price methods, price
programs, pricing, product suppliers, discounts, costs, computer programs and
listings, copyright, trademark, proprietary information, formulae, protocols,
forms, procedures, training methods, development, technical information,
know-how, show-how, new product and service development, advertising budgets,
past, present and future marketing, activities and procedures, method for
operating its business, credit and financial data concerning Licensor and
Licensor's clients and client lists, sales presentations, research information,
revenues, acquisitions, practices and plans and information which is embodied in
written or otherwise recorded form, and other information of a confidential
nature not known publicly or by other companies selling to the same markets and
specifically including information which is mental, not physical (collectively,
the "Confidential Information") are proprietary, valuable, special and unique
assets of Licensor, access to and knowledge of which have been or will be
provided to Licensor by virtue of Licensor's association with Licensee.
5.2 Applicability: Licensee agrees and covenants that, during the
term of this Agreement and at all times thereafter, Licensee and each of its
officers, directors, managers, employees, agents and representatives shall (a)
hold in confidence and not disclose or make available to any third party any
Confidential Information obtained directly or constructively from Licensor;
unless such disclosure is authorized in writing by the Chairman of Licensor; (b)
exercise all reasonable efforts to prevent third parties from gaining access to
the Confidential Information; (c) not use, directly or indirectly, the
Confidential Information in any respect of its business, except as necessary to
evaluate the information as contemplated by this Agreement; (d) restrict the
disclosure or availability of the Confidential Information to those who have
read and understand this Agreement and who have a need to know the information
in order to achieve the purposes of this Agreement without the prior consent of
Licensor; (e) not modify any Confidential Information without the prior written
consent of Licensor; (f) take such other protective measures as may be
reasonably necessary to preserve the confidentiality of the Confidential
Information; and (g) relinquish and require all of its employees, officers, and
agents, to relinquish all rights it may have in any matter, such as drawings,
documents, models, samples, photographs, patterns, templates, molds, tools or
prototypes, which may contain, embody or make use of the Confidential
Information; promptly deliver to Licensor any such matter as Licensor may direct
at any time; and not retain any copies or other reproductions thereof.
5.3 Exclusions: Confidential Information does not include the
following: (a) information already known or independently developed by Licensee,
provided that the burden shall be upon Licensee to establish that this exclusion
is applicable; (b) information in the public domain through no wrongful act of
Licensee; or (c) information received by Licensee from a third party who was
free to disclose it, provided that the burden shall be upon Licensee to
establish that this exclusion is applicable.
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5.4 Remedies: Licensee acknowledges and agrees that Licensor's
remedy at law for a breach or threatened breach of any of the provisions of this
Section 5 would be inadequate and the breach shall be per se deemed as causing
irreparable harm to Licensor. In recognition of this fact, in the event of a
breach by Licensee of any of the provisions of this Section 5, Licensee agrees
that, in addition to any remedy at law available to Licensor, including, but not
limited to monetary damages, without posting any bond, shall be entitled to
obtain equitable relief in the form of specific performance, temporary
restraining order, temporary or permanent injunction or any other equitable
remedy which may then be available to Licensor.
In the event that, despite the express agreement of the parties, any
provision stated herein shall be determined by any court or other tribunal of
competent jurisdiction to be unenforceable for any reason whatsoever, the
parties agree that the provision shall be interpreted to extend only to the
maximum extent in any and all other respects as to which it may be enforceable,
all as determined by such court or tribunal.
Nothing herein contained shall be construed as prohibiting Licensor
from pursuing any other remedies available to it for such breach or threatened
breach.
5.5 Execution of Agreement By Licensee's Personnel: Licensee agrees
that Licensee's assigned personnel, including Sublicensees engaged by Licensee,
will, prior to commencement of their activities relating to the Licensed
Property, acknowledge, in writing, (a) that they agree to be bound by the
provisions of this Section 5, and (b) that their services constitute work made
for hire and ownership of the Custom Work made for hire and ownership of the
Custom Work Product belongs to Licensor. Licensee further agrees that Licensee's
assigned personnel, including Sublicensees engaged by Licensee, will prior to
commencement of their activities relating to the Licensed Property, acknowledge,
in writing, that they understand the provisions of the United States Foreign
Corrupt Practices Act, and agree to comply with its terms as well as any
provisions of local law or Licensor's corporate policy and procedure.
6. NON-COMPETITION.
6.1 Restriction: During the term of this Agreement, and for a period
of one year following completion of all services rendered by Licensee pursuant
to this Agreement, Licensee agrees that it will not, directly or indirectly,
either for itself or on behalf of any third party, develop, engineer,
manufacture, produce or consult to do any of the foregoing, relating to any
device employing magnetic technology, whose purpose is the alleviation of pain.
6.2 Remedies: Licensee acknowledges and agrees that Licensor's
remedy at law for a breach or threatened breach of the provisions of this
Section 6 would be inadequate and the breach shall be per se deemed as causing
irreparable harm to Licensor. In recognition of this fact, in the event of a
breach by Licensee of any of the provisions of this Section 6, Licensee agrees
that, in addition to any remedy at law available to Licensor, including, but not
limited to monetary damages, without posting any bond, shall be entitled to
obtain equitable relief in the form of specific performance, temporary
restraining order, temporary or permanent injunction or any other equitable
remedy which may then be available to Licensor.
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In the event that, despite the express agreement of the parties, any
provision stated herein shall be determined by any court or other tribunal of
competent jurisdiction to be unenforceable for any reason whatsoever, the
parties agree that the provision shall be interpreted to extend only to the
maximum extent in any and all other respects as to which it may be enforceable,
all as determined by such court or tribunal.
Nothing herein contained shall be construed as prohibiting Licensor
from pursuing any other remedies available to it for such breach or threatened
breach.
7. ADVERTISING AND ADVERTISING MATERIALS.
7.1 Advertising Approval: A copy of all materials that Licensee
proposes to use in connection with its marketing of the Licensed Property shall
be provided to Licensor prior to use. No such advertisement may be utilized by
Licensee prior to Licensee's receipt of the prior written approval of Licensor.
8. ROYALTIES.
8.1 Sales Royalty:
8.1.1 Sales Royalty Requirement: In consideration for the
License granted hereunder, Licensee shall pay to Licensor a Sales Royalty equal
to sixteen percent (16%) of the gross business volume payable in US$ or agreed
individual currency.
8.1.2 Manufacturing License Override Fee: In addition to the
Sales Royalty provided for above, Licensee will pay Licensor one thousand
dollars ($1,000) US$ for each eighteen inch (18") and (22") resonator and one
thousand five hundred dollars ($1,500) US$ or equivalent for each seven foot
(7") resonator ordered by and delivered to Licensee. The Manufacturing License
Override Fee shall be fixed for two years (2), with annual inflation adjustments
based on the CPI European Inflation Index.
8.1.3 Payment of Sales Royalty: The Sales Royalty payments
hereunder shall be accounted for and paid quarterly within thirty (30) days
after the close of each three (3) month period during each License Year,
provided the first report will be due on or before December 31, 1999. Payment of
the Manufacturing License Override Fee for each resonator shall be due within
forty-five (45) days of initial shipment from the manufacturing facility. The
Royalty and Sales Royalty payable for each such accounting period during each
License Year shall be computed on the basis of gross business volume from the
beginning of each License Year through the last day of the most recent
accounting period during such year.
8.2 Statements:
8.2.1 Sales Statements: Licensee shall deliver to Licensor, at
the time each Sales Royalty payment is due, a statement signed by a duly
authorized officer of Licensee certifying (a) the amount of Gross Sales made
during the period covered by such Sales Royalty payment; and, (b) the basis for
computation of the amount of Sales Royalty included in such statement. Such
statement shall be furnished to Licensor whether or not any Licensed Property
has been sold during the period for which such statement is due. Upon Licensor's
request, Licensee shall also provide together with said statements, to assist in
verification thereof, copies of Licensee's price lists for Licensed Property.
8.2.2 Annual Statements: Licensee shall deliver to Licensor, not
later than ninety (90) days after the close of each fiscal year during the term
of this
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Agreement (or portion thereof in the event of prior termination for any reason),
a statement signed by a financial officer of Licensee relating to said entire
fiscal year, setting forth the same information required to be submitted by
Licensee in accordance with Section 8.2.1 above and also the information setting
forth the total amount expended by Licensee during such fiscal year (including
and stating separately shipping, custom, duty and importation costs), as well as
a letter from the certified public accountants then regularly engaged by
Licensee certifying the accuracy of those amounts of sales.
9. BOOKS AND RECORDS; AUDITS.
9.1 Books and Records; Right to Audit: Licensee shall prepare and
maintain complete and accurate books of account and records (specifically
including without limitation the originals or copies of documents supporting
entries in the books of account) covering all transactions required to be
reported to Licensor under this Agreement. Subject to the provisions of Section
9.2 herein, at Licensor's sole cost, Licensor and its duly authorized
representatives have the right, upon reasonable notice, during regular business
hours at Licensee's principal offices in Florida, for the duration of this
Agreement and for five (5) years thereafter, to audit said books of account and
records of Licensee and examine all other documents and material in the
possession or under the control of Licensee with respect to matters which are
required to be reported to Licensor under this Agreement within three (3) years
after the end of each License Year, and to make extracts and copies thereof.
Licensee's accounting records of sales and shall be maintained separately from
Licensee's accounting records relating to other items manufactured or sold by
Licensee. All such books of account, records and documents shall be kept
available by Licensee for at least five (5) years after the end of each year to
which they relate. In connection with any audit or examination pursuant to this
paragraph, Licensor and its duly authorized representatives shall have the right
to examine and inspect Licensee's physical inventory of Licensed Property,
wherever same is kept. Licensor shall have a period of time of six months
following the close of any audit to assert any claims for discrepancies. Any
claims not asserted within the six-month period following the close of any audit
will be barred.
10. OWNERSHIP AND PROTECTION OF THE LICENSED PROPERTY.
10.1 Restrictions on Use as Name: Licensee shall NOT have the right
to use the Licensor's name in the name of its corporation its or as an assumed
name and the trademarks, logos, etc. of its corporation without Licensors prior
permission.
10.2 Ownership of Licensed Property: Licensee acknowledges that
Licensor is the owner of all rights, title and interest in and to the Licensed
Property and is also the owner of the goodwill attached or which shall become
attached to the Licensed Property in connection with the business and goods in
relation to which the same has been, is or shall be used. Sales by Licensee
shall be deemed to have been made by Licensor for purposes of trademark
registration and, subject to this Agreement, all uses of the Licensed Property
by Licensee shall inure to the benefit of Licensor. Licensee shall not, at any
time, do or suffer to be done any act or thing which may in any way adversely
affect any rights of Licensor in and to the Licensed Property or any
registrations thereof or which, directly or
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indirectly, may reduce the value of the Licensed Property or detract from its
reputation. To the extent that any use of the Licensed Property by Licensee
confers rights to the Licensed Property on Licensee, Licensee hereby assigns its
entire right, title and interest in and to such rights to the Licensed Property
to Licensor subject to all of the terms hereof.
10.3 Licensee's Cooperation: At Licensor's request, Licensee shall
execute any documents reasonably required by Licensor to confirm Licensor's
ownership of all rights in and to the Licensed Property in the Territory and the
respective rights of Licensor and Licensee pursuant to this Agreement. Licensee
shall cooperate with Licensor in connection with the filing and prosecution of
applications to register the Licensed Property in the Territory and the
maintenance and renewal of such registrations as may issue at no cost to
Licensee.
10.4 Legal Requirements: Licensee shall use the Licensed Property
in the Territory strictly in compliance with the legal requirements pertaining
thereto in connection therewith as may be required by applicable legal
provisions. Licensee shall cause to appear on all Licensed Property and on all
materials on or in connection with which the Licensed Property is used, such
legends, markings and notices as may be reasonably necessary in order to give
appropriate notice of any trademark, trade name or other rights therein or
pertaining thereto.
10.5 Prohibition Against Challenges by Licensee: Licensee never
shall challenge Licensor's ownership of or the validity of the Licensed Property
or any application for registration thereof, or any trademark registration
thereof, or any rights of Licensor therein.
10.6 Infringement Actions: In the event that either Licensor or
Licensee learns of any infringement or imitation of the Licensed Property or of
any use by any person of a Patent similar to the Licensed Property, they
promptly shall notify the other party. Licensor thereupon shall take such action
as it deems advisable for the protection of its rights in and to the Licensed
Property and, if requested to do so by Licensor, Licensee shall cooperate with
Licensor in all reasonable respects, at Licensor's sole expense. In no event,
however, shall Licensor be required to take any action if it deems it
inadvisable to do so. If Licensor deems it inadvisable to take any action,
Licensee may then take such action at its own expense provided it first obtains
the written approval of Licensor which shall not be unreasonably withheld.
Licensor recognizes that in regard to any counterfeiting of the Licensed
Property, Licensee may take immediate legal action, at its own expense, upon
prior notification and approval by Licensor. Such approval shall be deemed to
have been granted unless within four (4) business days after the receipt of such
a request Licensor notifies Licensee in writing of its disapproval. Licensor
shall cooperate with Licensee in taking such legal action, at no cost to
Licensor. Any award or recovery obtained by Licensor commenced by Licensor shall
be solely retained by Licensor. Any award or recovery obtained by Licensee in a
permitted action commenced by Licensee may be solely retained by Licensee.
Licensee shall not defend any action brought against it challenging its right to
use the Licensed Property unless it shall first make written demand upon
Licensor to do so and Licensor fails to defend such action on behalf of
Licensee.
11. INDEMNITY: INSURANCE.
11.1 Indemnity: Excepting in regard to trademark infringement
actions
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(which is governed by Section 16 hereof), Licensee does hereby save and hold
Licensor harmless (except where Licensor's equipment or inventions are
determined to be at fault) of and from and indemnity them against any and all
losses, liability, damages and expenses (including reasonable attorneys' fees,
costs and expenses through appeal) which they may incur or may be obligated to
pay, or for which they may become liable or be compelled to pay in any action,
claim or proceeding against them, for or by reason of any acts, whether of
omission or commission, that may be claimed to be or are actually committed or
suffered by Licensee or any of its contractors, servants, agents or employees in
connection with Licensee's performance of this Agreement. Licensor shall give
prompt notice to Licensee of any claim, action or suit that may give rise to
liability hereunder. Licensee shall defend any such claim, action or suit and
shall have the right to select counsel, control the defense, assert
counterclaims and crossclaims, bond any lien or judgment, take any appeal and to
settle on such terms as Licensee deems advisable. Licensee will take no such
action without first consulting with Licensor (and where a settlement of such
claim, action or suit relates to Licensor's ownership of or the validity or
value of the Licensed Property without first obtaining Licensor's approval), and
will keep Licensor apprised of all ongoing actions as they occur and, where
practicable, in advance of any action to be taken by Licensee.
The provisions of these paragraph and Licensee's obligations
hereunder shall survive the expiration or termination of this Agreement.
11.2 Licensed Property Liability Insurance: Licensee shall procure
and maintain at its own expense in full force and effect at all times during
which Licensed Property is being sold and for so long as Licensee remains in
business, with a responsible insurance carrier reasonably acceptable to
Licensor, a products liability insurance policy with respect to Licensed
Property with a limit of liability of not less than (to be determined by
country). Such insurance policy shall name Licensor as additional insured and
shall provide for at least thirty (30) days prior written notice to said parties
of the cancellation or substantial modification thereof. Such insurance may be
obtained by Licensee in conjunction with a policy of products liability
insurance which covers products other than Licensed Property. Licensee shall
deliver a certificate of such insurance to Licensor promptly upon issuance of
said insurance policy and, from time to time upon reasonable request by Licensor
promptly shall furnish to Licensor evidence of the maintenance of said insurance
policy. Nothing contained in this Section 11.2 shall be deemed to limit in any
way the indemnification provisions of Section 11.1 above. The provisions of
these paragraph and Licensee's obligations hereunder shall survive the
expiration or termination of this Agreement.
11.3 Relationship of the Parties. The Licensee is not granted any
right or authority to assume or create any obligation or responsibility, express
or implied, on behalf of or in the name of the Licensor or to bind the Licensor
in any manner or thing whatsoever. The Licensee shall obtain all required
workers' compensation and employer's liability insurance covering all sales
persons and other employees. The Licensee accepts full and exclusive liability
for the payment of any and all taxes, contributions or other sums payable for
unemployment compensation insurance and retirement benefits, as well as all of
the payroll taxes payable by reason of employment of sales persons or other
employees. The Licensee shall be responsible for and hold the Licensor harmless
for all claims, demands
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and suits resulting from any misconduct or negligence of the Licensee's sales
persons and other employees.
12. PAYMENT DEFAULTS.
12.1 Right to Terminate Agreement: If Licensee fails to make any
payment due hereunder, (a) Licensee shall pay interest thereon from and
including the date such payment becomes due until the date the entire amount is
paid in full at a rate equal to one (1%) per annum over the prime rate being
charged by CitiBank, NA. in New York as of the close of the business on the date
the payment first becomes due, but in no event greater than the highest rate
permitted by law, and (b) if such default shall continue uncured for a period of
sixty (60) days after written notice is received by Licensee, Licensor shall
have the right, subject to the compliance with Section 18.3 to terminate this
Agreement thirty (30) days (or as determined by Country law) after a further
written notice is received by Licensee. Licensee shall have the option of
preventing the termination of this Agreement by taking corrective action that
cures the default, if such corrective action is taken prior to the end of the
time period stated in the previous sentence and if there are no other defaults
during such time period. Licensor shall not, however, be required to comply with
the provisions of Section 18.3 in the event of a default in the Minimum Royalty
Payment and may, following the cure period provided above, immediately terminate
this agreement for such default by providing the required notice in this Section
12.1.
12.2 Breach of Material Condition: If Licensee or Licensor
otherwise fails to perform any of the material terms, conditions, agreements or
covenants in this Agreement on its part to be performed (hereinafter referred to
as "Other Default") and such Other Default is not curable, or if such default is
curable but continues uncured for a period of thirty (30) days after notice
thereof has been given to the defaulting party in writing by the other party or
all reasonable steps necessary to cure such Other Default have not been taken by
the defaulting party within said thirty (30) day period, the other party, at its
sole election, may, subject to the compliance with the provisions of Section
19.3, terminate this Agreement forthwith by written notice.
12.3 Bankruptcy, Insolvency, and Related Occurrences:
12.3.1 Automatic Termination: In the event that Licensee,
files a petition in bankruptcy, is adjudicated as bankrupt or files a petition
or otherwise seeks relief under or pursuant to any bankruptcy, insolvency or
reorganization statute or proceeding, or if a petition in bankruptcy is filed
against it, which is not vacated within sixty (60) days, or it becomes insolvent
or makes an assignment for the benefit of its creditors or a custodian, receiver
or trustee is appointed for it or a substantial portion of its business or
assets, which custodian, receiver or trustee is not discharged within ninety
(90) days, this Agreement shall terminate automatically and forthwith.
12.3.2 No Right of Licensee Representatives to Continue
Agreement: The rights granted herein are personal to Licensee and no assignee
for the benefit of creditors, custodian, receiver, trustee in bankruptcy,
sheriff or any other officer of the court or official charged with taking over
custody of Licensee's assets or business shall have any right to continue this
Agreement or to exploit or in any way use the Licensed Property if this
Agreement terminates pursuant to Section 13.31 above.
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12.3.3 Licensor Right of First Refusal: Notwithstanding the
provisions of Section 13.3.2 above, in the event that, pursuant to local
bankruptcy law, a trustee in bankruptcy of Licensee or Licensee, as debtor, is
permitted to assume this Agreement and does so and, thereafter, desires to
assign this Agreement to a third party, which assignment satisfies the
requirements of that bankruptcy law, the trustee or Licensee, as the case may
be, shall notify Licensor of same in writing. Said notice shall set forth the
name and address of the proposed assignee, the proposed consideration of the
assignment and all other relevant details thereof. The giving of such notice
shall be deemed to constitute an offer to Licensor to have this Agreement
assigned to it or to its designee for such consideration, or its equivalent in
money, and upon such terms as are specified in the notice. The aforesaid offer
may be accepted only by written notice given to the trustee or Licensee, as the
case may be, by Licensor within fifteen (15) days after Licensor's receipt of
the notice from such party. If Licensor fails to give its notice to such party
within the said fifteen (15) days, such party may complete the assignment
referred to in its notice, but only if such assignment is to the entity named in
said notice and for the consideration and upon the terms specified herein.
Nothing contained herein shall be deemed to preclude or impair any rights which
Licensor may have as a creditor in any bankruptcy proceeding.
13. RIGHTS ON EXPIRATION OR TERMINATION.
13.1 Licensor Claims for Damages: In the event of termination in
accordance with Section 12 above, as the result of a breach by Licensee,
Licensor shall have the option of, subject to the compliance with Section 18.3,
(a) demanding, in writing, that Licensee pay to it, in addition to any Sales
Royalty then owed to it pursuant to Section 8 above or otherwise, and any monies
owed it for additional services provided to Licensee, as liquidated damages and
not as a penalty, a sum equal to the total annual Minimum Royalty payments
remaining unpaid for the balance of the then current term of this Agreement if
Licensor does not collect such amount from a new licensee in an arms length
transaction for the same period of time such Minimum Royalty covers, upon
reasonable efforts by Licensor to obtain a new licensee or unless Licensor
retains the license for itself or any affiliate, or (b) waiving its claim for
liquidated damages by asserting a claim for actual damages in a judicial or
other proceeding.
13.2 Injunctive Relief with Respect to Licensed Property: Licensee
hereby acknowledges the irreparable harm that Licensor will incur from any
unauthorized use of the Licensed Property. Notwithstanding any termination or
expiration of this Agreement, Licensor shall have and hereby reserves all rights
and remedies which it has, or which are granted to it by operation of law, or
equity to prohibit the unlawful or unauthorized use of the Licensed Property,
including but not limited to seeking a temporary restraining order, preliminary
and/or permanent injunction. The provisions of 19.3 requiring a cooling off
period and compulsory arbitration shall not apply to this section.
13.3 Inventory: Upon the expiration or termination of this
Agreement, Licensee immediately shall deliver to Licensor a complete and
accurate schedule of Licensee's inventory of Licensed Property and of related
work in process then on hand ("Inventory").
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13.4 Sale of Inventory by Licensee: If this Agreement expires or is
terminated other than by Licensor pursuant to Section 12.1 above, Licensee shall
be entitled, for an additional period of six (6) months only on a non-exclusive
basis to sell and dispose of its Inventory. Such sales shall be made subject to
all of the provisions of this Agreement and to an accounting for and the payment
of Sales Royalty thereon. Such accounting and payment shall be due within thirty
(30) days after the close of the said six (6) month period. Licensor shall have
the right for a period of fifteen (15) days following such expiration or
termination to purchase all of Licensee's Inventory at Licensee's cost plus
twenty percent (20%).
13.5 Reversion of Rights to Licensor; Appointment of
Attorney-in-Fact; Return of Materials: Except as specifically provided in
Section 10.1 above, on the expiration or termination of this Agreement, all of
the rights of Licensee under this Agreement shall terminate forthwith and shall
revert immediately to Licensor, all royalties on sales theretofore made shall
become immediately due and payable and Licensee shall discontinue forthwith all
use of the Licensed Property, no longer shall have the right to use the Licensed
Property or any variation or simulation thereof, and shall promptly transfer to
Licensor, free of charge, all registrations, filings, and rights with regard to
the Licensed Property which It may have possessed at any time.
Licensee hereby irrevocably appoints Licensor as Licensee's
attorney-in-fact, effective upon the termination or expiration of this
Agreement, to take any necessary steps on Licensee's behalf in the Territory to
cancel any recordation of the license granted hereunder and to execute any
instruments necessary or desirable to confirm termination of Licensee's rights
under this Agreement.
14. BROKERAGE INDEMNITY.
Each of the parties represents that a broker was not used in
connection with the introduction of the parties and the consummation of this
Agreement. Each of the Licensor and Licensee hereby indemnifies the other and
holds it harmless from any and all liabilities (including, without limitation,
reasonable attorneys' fees and disbursements paid or incurred in connection with
any such liabilities) for any brokerage commissions or finders' fees in
connection with this Agreement or the transactions contemplated hereby insofar
as such liabilities shall be based on arrangements or agreements made by it or
on its behalf.
15. REPRESENTATION AND WARRANTIES; INDEMNITY.
Licensor represents and warrants that Licensor has full right,
power and authority to enter into this Agreement and to perform all of its
obligations hereunder. Licensor further represents and warrants that it has
granted no other license to use the Licensed Property for the sale at wholesale
or distribution at wholesale of Licensed Property in the Territory, and will not
grant such a license prior to the termination hereof. Licensor shall defend and
hereby indemnifies and otherwise holds Licensee harmless from and against any
and all losses, liability, claims, damages, and expenses (including reasonable
attorneys' fees and expenses) which Licensee may sustain by reason of a third
party action or claim arising out of or resulting from a breach by Licensor of
Licensor's representations and warranties hereunder. Licensee must give Licensor
prompt written notice of any such action, claim or proceeding and Licensor, in
its sole discretion, then may
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take such action as it deems advisable to defend such action, claim or
proceeding on behalf of Licensee. In the event appropriate action is not taken
by Licensor within thirty (30) days after its receipt of notice from Licensee,
Licensee shall have the right to defend such action, claim or proceeding, but no
settlement thereof may be made without the approval of Licensor, which approval
shall not be unreasonably withheld. In either case, Licensee and Licensor shall
keep each other fully advised of all developments, shall provide each other with
copies of all documents exchanged in court, and shall cooperate fully with each
other in all respects in connection with any such defense as is made. Such
indemnification shall be deemed to apply solely to (a) the amount of the
judgment, if any, against Licensee, (b) any sums paid by Licensee in settlement,
and (c) the expenses incurred by Licensee in connection with its defense. Such
indemnification by Licensor shall not apply to any damages sustained by Licensee
by reason of such infringement other than those specified above, and in no event
shall apply to consequential damages, unless those consequential damages are
included in the amount of the judgment against Licensee. The provisions of this
paragraph and Licensor's obligations hereunder shall survive the expiration or
termination of this Agreement.
The current registrations of the Licensed Property throughout the
Territory are shown in the annexed Exhibit B.
15.1 United States Foreign Corrupt Practices Act: Licensee warrants
and represents that Licensee understands the provisions of the Foreign Corrupt
Practices Act (hereinafter referred to as "FCPA") and shall comply with its
terms as well as any provisions of local law or corporate policy and procedure.
Licensee further warrants and represents that none of Licensee's principals,
staff officers or key employees are government officials, candidates of
political parties, or other persons who might assert influence on the Licensor's
behalf. Licensee further warrants and represents that Licensee will make annual
certifications of its compliance with the FCPA, local law and the Licensor's
corporate policies and procedures.
15.1 Automatic Termination: This agreement will automatically
terminate in the event of an improper payment in violation of the FCPA or local
law.
16. NOTICE AND PAYMENT.
16.1 Notice Requirements: All reports, approvals, requests,
demands, and notices (collectively, "notices") required or permitted by this
Agreement to be given to a party shall be in writing and shall be deemed to be
duly given if personally delivered or if sent (by facsimile or overnight
courier) to the party concerned at its address set forth on page 1 above (or at
such other address as a party may specify by notice to the other). Copies of all
notices to Licensor and all payments required to be made to Licensor, shall be
sent to:
Xxxxxxxx Resonance Enterprises, Inc.
0000 Xxxxxxx Xxxx Xxxx., #000
Xxxx Xxxxx, XX 00000
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Copies of all notices to Licensee shall be sent to:
Xxxxxxx Enterprises L.L.C.
0000 Xxxxx Xxxxx Xxxx.
Xxxx Xxxxx, XX 00000
17. ASSIGNABILITY; BINDING EFFECT.
17.1 Assignability; Binding Effect: The performance of Licensee
hereunder is of a personal nature and, therefore, neither this Agreement nor the
license or other rights granted hereunder may be assigned, sublicensed or
transferred by Licensee unless Licensee receives prior written approval from
Licensor, which approval shall not be unreasonably withheld or delayed. Such
proposed sub-licensee shall agree in writing to be bound by the substantive
terms hereof. Except as otherwise provided herein, this Agreement shall inure to
the benefit of and shall be binding upon the parties, their respective
successors, Licensor's transferee and assigns and Licensee's permitted
transferee and assigns.
17.2 Sale or Transfer of Shares in Licensee's Corporation: No
transfer of any shares of Licensee's corporation shall be allowed unless
approved by Licensor, which approval shall not be unreasonably withheld. The
approval of any proposed private transfer shall take into account the proposed
transferee's: (i) financial security, (ii) market experience or access to market
experience for couture products; and, (iii) business character; and, (iv) the
type of products being sold by the proposed transferee and whether the proposed
transferee's products are competitive to products sold by Licensor.
Licensor, or its assignee, shall have the right of first refusal to
accept the bona fide terms of purchase being offered by the proposed transferee
of shares and if Licensor refuses to accept the offer to purchase such shares,
then Licensee may sell these shares to the proposed transferee on the same terms
and conditions such shares were offered to Licensor.
18. RESOLUTION OF DISPUTES.
18.1 Jurisdiction: Except as provided in paragraph 16.3 hereof, the
parties hereby irrevocably submit to the personal jurisdiction of the federal
and state courts of the State of Florida, in the venue of Palm Beach County (the
"Courts") in any action or proceeding arising out of or relating to this
Agreement. In any court proceeding, the Courts shall have exclusive jurisdiction
over the subject matter of this Agreement. Licensor agrees that service may be
made upon it by serving Atlas, Xxxxxxxx, Trop & Borkson, P.A. in the manner
provided for the giving of notice. Licensee agrees that it may be served process
in the manner provided for the giving of notice. The parties hereby irrevocably
waive, to the fullest extent they may effectively do so, the defense of an
inconvenient forum to the maintenance of such action or proceeding.
18.2 Waiver of Immunity: To the extent that the parties have or
hereafter may acquire any immunity from jurisdiction of any court or from any
legal process with respect to itself or its property, the parties hereby
irrevocably waive such immunity with respect to their obligations under this
Agreement.
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18.3 Sole Method of Dispute Resolution: In the event of a dispute
between the parties, including all events of default, except failure to pay the
Minimum Sales Royalty, neither party may commence formal legal action or
commence arbitration proceedings unless and until the senior level executives
(and their representatives, if they wish) of both parties meet face to face in
a meeting(s) in an attempt to settle the dispute (the "Cooling Off Period").
This Cooling Off Period shall last for fifteen (15) days from the first date one
of the parties identifies to the other party the existence of a dispute. In the
event that the senior executives of the parties are unable to work out a
mutually agreeable resolution during the Cooling Off Period, the parties hereby
agree to binding arbitration before a single arbitrator mutually agreeable to
both parties who shall follow the Rules of the American Arbitration Association.
The arbitrator shall be an attorney specializing in licensing at one or the
intellectual property firms in Florida and neither the attorney nor the firm
have any prior or current relationship with either party. The fees of the
arbitrator shall be evenly shared between the parties. If within thirty (30)
days, the parties cannot mutually agree upon a single arbitrator, either party
may file an arbitration in accordance with the Rules of the American Arbitration
Association in Florida. An arbitrator's decision that a breach has occurred
which would permit the Licensor to terminate this Agreement must provide that
the Licensee shall have a period of thirty (30) days from the date of the
decision to cure the breach before this Agreement may be terminated. If the
breach is one which is not curable, the arbitrator's decision must include a
provision that this Agreement may not be terminated if Licensee shall pay to
Licensor an amount which the arbitrator shall determine will compensate Licensor
for the breach. Notwithstanding the foregoing, Licensor shall have the right to
seek immediate relief in court, including but not limited to a temporary
restraining order, a preliminary injunction and/or a permanent injunction if
Licensee or any of its officers, agents and employees does anything to damage
the value of the Licensed Property. Licensee shall have the right to seek
equitable relief to enforce its rights hereunder in the event Licensee believes
it is being irreparably harmed. In the event either party is seeking equitable
relief from a court in accordance herewith, the party seeking such relief shall
provide the other party with prior written notice of the application for relief
and a copy thereof. The Cooling Off Period shall not apply in the event Licensor
or Licensee should decide to seek immediate relief in court in accordance
herewith.
19. MISCELLANEOUS.
19.1 Services: Unless otherwise provided, in the event Licensee
elects as evidenced by an agreement in writing to purchase any services from
Licensor, it shall pay for such services at Licensor's rates then currently in
effect for such services as set forth in such writing. Invoices for such
services shall be paid by Licensee within ten (10) business days after receipt
thereof.
19.2 Expenses: Licensee will be responsible for direct shipping
costs, customs, duties, and importation incidentals. Licensor will be
responsible for European Business Development Expenses. Licensee will be
responsible for Country Business Development Expenses. Shipments and payment
terms for the manufacture of resonators will be agreed to by individual order
terms as defined in a separate addendum to this Agreement. European development
expenses to be paid by Licensor to be defined and approved in writing by
Licensor in advance of any expenditure.
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19.3 Governing Law; Entire Agreement; Amendment; Termination: This
Agreement shall be construed and interpreted in accordance with the laws of the
State of Florida; contains the entire understanding and agreement between the
parties hereto with respect to the subject matter hereof, supersedes all prior
oral and written understandings and agreements relating thereto and may not be
amended, modified, discharged, or terminated orally except by a writing signed
by the party against whom the modification, discharge or termination is sought
to be enforced.
19.4 Warranties: Neither party makes any warranties with respect to
the use, sale of other transfer of the Licensed Property by the other party or
by any third party. In no event will Licensor be liable for direct, indirect,
special, incidental, or consequential damages, that are in any way related to
the Licensed Property.
19.5 Relationship Between Parties: Nothing herein contained shall
be construed to constitute the parties hereto as partners or as joint ventures,
or either as agent of the other, and no party shall have any power to obligate
or bind the other in any manner whatsoever.
19.6 Wavers: No waiver by either party, whether express or implied,
of any provision of this Agreement, or of any breach or default thereof, shall
constitute a continuing waiver of such provision or of any other provision of
this Agreement. Acceptance of payments by Licensor shall not be deemed a waiver
by Licensor of any violation of or default under any of the provisions of this
Agreement by Licensee.
19.7 Severability: If any provision or any portion of any provision
of this Agreement shall be held to be void or unenforceable, the remaining
provisions of this Agreement and the remaining portion of any provision held
void or unenforceable in part shall continue in full force and effect.
19.8 Descriptive Headings: The descriptive headings used and
inserted in this Agreement are for convenience only and shall not be deemed to
affect the meaning or construction of any provision of this Agreement.
IN WITNESS THEREOF, the parties hereto have duly executed this
Agreement as of the day and year first above written.
XXXXXXXX RESONANCE ENTERPRISES, INC.
By: /s/ Xxxxx X. Xxxxxxxx
----------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Chairman and C.E.O.
XXXXXXX ENTERPRISES, L.L.C.
By: /s/ Xxxxxxx Xxxxxxx
----------------------------------
Name: Xxxxxxx Xxxxxxx
Title: Chairman and C.E.O.
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