EXHIBIT 10.2
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LICENSE AGREEMENT
This Agreement is made effective and entered into as of November 16,
1990, by and between Scanner Technologies Corporation, a Minnesota Corporation,
having its corporate offices located at 00000 00xx Xxxxxx Xxxxx, Xxxxx 000,
Xxxxxxxxxxx, Xxxxxxxxx 00000 (hereinafter "SCANNER") and Xxxxx X. and Xxxxxx X.
Xxxxx, residents of the state of Minnesota residing at 00000 Xxxxxx Xxxxxx,
Xxxxxxxxxx, Xxxxxxxxx, 00000 (hereinafter called "LICENSOR").
WITNESSETH
WHEREAS, LICENSOR owns all right, title and interest in and to certain
Know How, Copyrights, and Trademarks, as hereinafter defined related to
Electronic Vision Products (herein defined as "SCANNER PRODUCTS"); and
NOW, THEREFORE, in consideration of the mutual promises hereinbelow and
for other good and valuable consideration, the parties agree as follows:
1. Definitions.
(a) "Licensed Know How" shall mean all trade secrets and
proprietary Know How including Software Source Code owned by
LICENSOR related to the operation, manufacturing, testing and
selling of SCANNER PRODUCTS.
(b) "SCANNER PRODUCTS" shall mean and include any equipment,
device, or apparatus intended for applications which, upon
manufacture includes, or the manufacture of which employs, any
future invention or inventions resulting from the use of any
of the Licensed Know How or the Intellectual Property or which
includes when sold, leased, or put into use, or the use of
which employs when put
into use, any invention or future inventions of the Licensed
Know How, and any future products developed by SCANNER during
the term of this agreement.
(c) "Licensed Trademarks" shall be those trademarks designated
hereinbelow in Section 7.
(d) "Licensed Copyrights" shall be all copyrights owned by
LICENSOR in SCANNER PRODUCTS' software.
(e) "Gross Sales" shall mean the gross selling price or gross
leasing price, as the case may be, of SCANNER PRODUCTS in the
form in which such products are sold or leased.
(g) "TERRITORY" shall mean world wide.
2. Grant of License.
Subject to the terms and conditions of this Agreement and in
consideration of the royalty and license fee to be paid by SCANNER and the
issuance of stock as set out hereinbelow, LICENSOR hereby grants, and SCANNER
hereby accepts, a full exclusive, royalty-bearing license under the Licensed
Know How, Copyrights, Trademarks and Computer Source Code and patents if any
(hereinafter THE LICENSED INTELLECTUAL PROPERTY) to make, use, lease, and sell
SCANNER PRODUCTS worldwide
3. Royalty.
(a) SCANNER shall pay to LICENSOR a royalty in the amount of five
percent (5%) of SCANNER'S Gross Sales until such time as the
stock of SCANNER shall be registered and becomes freely
tradeable.
(b) Within sixty (60) days after the end of each calendar quarter
during the term of this Agreement, SCANNER will report to
LICENSOR in writing whether or not
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any royalties have been earned under paragraph 3(a) of this
Agreement during such calendar quarter, and the total amount
of any royalties so earned during such calendar quarter. Such
royalties will be paid to LICENSOR contemporaneously with the
rendering of this statement. SCANNER will continue to render
statements following the termination of this Agreement, until
all sales made pursuant to this Agreement have been accounted
for.
(c) For the purpose of computing royalties, the SCANNER PRODUCTS
will be considered sold when billed, shipped, or paid for,
whichever comes first and whether the products are purchased
or leased by SCANNER'S customers.
(d) SCANNER shall keep full, clear, and accurate records with
respect to sales of SCANNER PRODUCTS. LICENSOR shall have the
right through its accredited representatives to examine and
audit during usual business hours all such records and such
other records and accounts as may, under recognized accounting
practices, contain information bearing upon the amount of
royalty payable to LICENSOR under this Agreement. Prompt
adjustment shall be made by the proper party to compensate for
any errors or omissions disclosed by such examination and
audit. Neither such right to examine and audit, nor the right
to receive such adjustment shall be affected by any statement
to the contrary appearing on check or otherwise, unless such
statement appears in a letter, signed by the party having such
right and delivered to the other party, expressly waiving such
right.
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4. Rights in Inventions.
If any inventions or discoveries which are or may be patentable or
otherwise protectable under title 35 of the United States Code are
conceived of or first actually reduced to practice by SCANNER while
under this Agreement, then title to such inventions or discovery and
any resulting patents shall be owned by LICENSOR, and LICENSOR shall
grant to SCANNER a license in accordance with paragraph 2 and paragraph
3 of this Agreement. Such inventions or discoveries include, but are
not limited to, all subsequent improvements and/or revisions of
hardware and/or software relating to the manufacture of, or integration
into the SCANNER PRODUCTS. In no case shall any royalties be earned and
payable beyond the term of this Agreement. All costs of securing such
patents shall be the responsibility of LICENSOR.
5. Infringement
If LICENSEE becomes aware of any information that others are infringing
or are alleged to be infringing on any of the rights granted pursuant
to this Agreement, LICENSEE shall promptly notify LICENSOR. LICENSEE
may at its own cost and expense prosecute any such infringer or
infringers, through litigation or other appropriate means. If LICENSEE
undertakes such prosecution, LICENSOR shall at the expense and at the
request of LICENSEE provide such evidence and execute such documents as
LICENSEE may reasonably request. LICENSOR may but shall not be required
to participate in such prosecution. LICENSOR may at LICENSOR'S expense
be represented in such participation by counsel of LICENSOR'S choice.
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6. Indemnification for Torts.
SCANNER will hold LICENSOR harmless against all liabilities, demands,
damages, expenses, or losses arising:
(a) out of the use by SCANNER or its transferees of information
furnished under this Agreement; or
(b) out of any use, sale, or other disposition by SCANNER or its
transferees of products made by use of such information.
7. Termination.
If SCANNER shall default in any of the terms, conditions, and covenants
undertaken by it under this Agreement and such default shall continue for a
period of sixty (60) days after receipt of written notice of such default or if
SCANNER shall make a general assignment for the benefit of creditors or shall
become or be adjudicated a bankrupt, or shall voluntarily file a petition in
bankruptcy, or file an answer admitting the material allegations of a petition
filed against it for an adjudication and bankruptcy, or shall, by reason of its
insolvency, apply for or suffer the appointment of a receiver of its property
and assets and such receiver so appointed shall not be discharged within sixty
(60) days after his appointment, then in any such event, LICENSOR shall have the
right to terminate this Agreement by written notice to SCANNER. This agreement
shall terminate upon the receipt of such notice, except with respect to all
accrued and unpaid royalties which shall immediately be deemed due and payable
upon termination of this Agreement.
8. Trademarks.
(a) The trademark Cyclops 2000-3D and any derivatives thereof
shall be included in the License Grant under Section 2
hereinabove.
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(b) SCANNER agrees that it will not misuse or disparage, or fail
to maintain the quality of the products and services it offers
under the licensed trademark.
9. Employee Assignments.
SCANNER agrees to secure any necessary assignments, releases, and other
documents which may be necessary to protect LICENSOR's interest in and to any
discoveries and inventions arising out of this Agreement. SCANNER agrees and
will insure that all relevant employees are required to execute and will execute
such agreements including suitable nondisclosure agreements covering the trade
secret Know How of LICENSOR made available to SCANNER under this Agreement.
10. License Fee and Stock Issue.
WHEREAS, it appears that the fair and reasonable value of the "Licensed
Know How" is Five Hundred and Fifty Thousand Dollars, ($550,000.00), SCANNER
will pay to LICENSOR an initial fee of Five Hundred Thousand Dollars,
($500,000.00) and issue 1,550,000 shares of it's common stock, due upon
acceptance of this agreement.
11. Security Interest.
A security interest is granted to LICENSOR in all tangible and
intangible assets of SCANNER equal to amounts due pursuant to this Agreement.
The security interest shall include, but is not limited to, all equipment,
receivables, inventory, cash on hand, and any other interests or assets owned by
SCANNER. The security interests may be protected by LICENSOR through the filing
of the attached security interest document affixed hereto as APPENDIX A and made
a part hereof.
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12. Term.
This Agreement shall take effect as of the date first written
hereinabove and shall continue in full force and effect until such time as the
stock of SCANNER shall be registered, or SCANNER is a party to a merger or
similar agreement in which a "Change in Control" of SCANNER occurs, and all
monies due under this agreement are paid in full. At that time, LICENSOR shall
sell all patents and interests granted during the period of this agreement to
SCANNER for the sum of $1.00 plus all accrued expenses for securing such patents
and interests.
13. Notices and Payments.
Payments, reports, and notices made pursuant to this Agreement, if made
to
LICENSOR,
shall be sent to: Xxxxx X. Xxxxx
00000 Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxxx 00000
if to SCANNER: Scanner Technologies Corporation
00000 00xx Xxxxxx Xxxxx, Xxxxx 000
Xxxxxxxxxxx, Xxxxxxxxx 00000
Attention: President
14. Miscellaneous.
(a) The delay or failure of a party to exercise any right
hereunder or to insist upon strict adherence to any term of
this Agreement on any occasion shall not be considered a
waiver or deprive that party of a right hereunder or to insist
upon strict adherence to that term or any other terms of this
Agreement.
(b) The provisions, terms, and conditions of this Agreement
represent the entire agreement between the parties with
respect to the subject matter hereof and supersede all prior
or contemporaneous oral or written communications. This
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Agreement may be amended only by a writing signed by duly
authorized representatives of both parties.
(c) This Agreement shall be binding upon and shall inure to the
benefit of the parties hereto and their respective successors
and permitted assigns. This Agreement may not be assigned by
SCANNER except upon the sale of all of the business related to
the Licensed Know How and Licensed Intellectual Property, and
then only on the written assurance that the other party agrees
to be licensed by the terms and conditions herein. SCANNER
shall promptly give written notice of any such event to
LICENSOR.
(d) If any provision of this Agreement is determined to be invalid
or unenforceable, the remaining portions hereof shall not be
affected thereby and shall be binding upon the parties hereto
as if the unenforceable provision were not contained herein.
(e) The headings of this Agreement are intended for convenience of
reference only and shall not affect its interpretation.
(f) The parties each represent and warrant to the other that it
has the full right, power, and authority to enter into and
carry out this Agreement and has been and is on the date of
this Agreement duly authorized by all necessary and
appropriate corporate or other action to execute this
Agreement.
(g) The interpretation, construction and validity of this
Agreement shall be governed by the laws of the State of
Minnesota.
(h) The parties agree that each is acting independently of the
other, that they are not joint ventures, and neither is an
agent of the other. Accordingly, each party shall
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be responsible for the acts or omissions of its own employees,
representatives, and agents for which it is legally liable.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized representatives as of the date written above.
LICENSOR:
/s/ Xxxxx X. Xxxxx
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Xxxxx X. Xxxxx
/s/ Xxxxxx X. Xxxxx
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Xxxxxx X. Xxxxx
SCANNER TECHNOLOGIES
CORPORATION
By /s/ Xxxxx X. Xxxxx
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Xxxxx X. Xxxxx
Its President
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APPENDIX A
SECURITY AGREEMENT
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November 16, 1990
The undersigned, SCANNER TECHNOLOGIES CORPORATION, a Minnesota
corporation, (hereinafter called "Debtor") hereby grants to Xxxxx X. and Xxxxxx
X. Xxxxx (the "Secured Parties"), being all of the holders of the License
Agreement, a Security Interest in all personal property now owned or hereafter
at any time acquired by Debtor (hereinafter called "Collateral"), including,
without limitation, any property that is (i) held for sale or lease, or (ii)
furnished or to be furnished under contracts of service, or (iii) held as raw
materials, work in process or materials used or consumed or to be used or
consumed in Debtor's business, and (iv) all returned or repossessed goods,
including, without limitation the generality of the foregoing:
(1) All equipment (as the term is defined in the Uniform Commercial
Code as enacted in Minnesota) of Debtor, whether now owned or hereinafter
acquired;
(2) Each and every right of Debtor to the payment of money, either now
existing or hereafter arising, whether such right to payment arises out of a
sale, lease or other disposition of goods or other property by Debtor, out of a
rendering of services by Debtor, out of a loan by Debtor, out of the overpayment
of taxes or other liabilities of Debtor or otherwise arises under any contract
or agreement, whether such right to payment is or is not already earned by
performance, and howsoever such rights and interest (including all liens and
security interests) which Debtor may at any time have by law or agreement
against any account debtor (as defined in the Uniform Commercial Code as enacted
in Minnesota) or other obligor obligated to make any such payment or against any
of the property of such account debtor or other obligor; all including, but not
limited to all present and future debt instruments, chattel papers and accounts
of Debtor;
(3) All general intangibles of Debtor (as defined in the Uniform
Commercial Code as enacted in Minnesota), whether now owned or hereafter
acquired, including but not limited to, applications for patents, patents,
copyrights, trademarks and any other rights related to the ability of the
Company to manufacture and sell its products;
To secure payment to the Secured Parties of all liabilities and
indebtedness of Debtor to such Secured Parties arising under the License
Agreement, Debtor warrants, represents, and agrees that:
(1) Debtor has or will acquire title to the Collateral. Debtor will
warrant and defend the title to all Collateral against all other persons having
claims thereon.
(2) Debtor will at any time or times hereafter execute such financing
statements and other instruments and perform such other acts as the Secured
Parties may request to establish, maintain and perfect the Secured Parties
security interest in the Collateral.
(3) Debtor will keep the Collateral in good condition and repair.
The occurrence of any of the following events shall constitute a
Default: (i) The Debtor fails to make any payment under the License Agreement,
together with all extensions or renewals thereof, on same or different terms
when any such payment is due; (ii) Debtor fails to perform or observe any
agreement of Debtor herein; (iii) there shall have been filed or commenced
against Debtor an involuntary case under any applicable bankruptcy, insolvency
or other similar law now or hereafter in effect or an action shall have been
commenced to appoint a receiver, liquidator, assignee, custodian, trustee,
sequestrator (or similar official) of Debtor or for any substantial part of
Debtor's property or for the winding-up or liquidation of Debtor's affairs and
such action or proceeding shall not have been dismissed within sixty (60) days;
or (iv) Debtor shall commence a voluntary case under any applicable bankruptcy,
insolvency or other similar law now or hereafter in effect; or shall consent to
the entry of an order for relief in an involuntary case under any such law; or
shall consent to the appointment of or taking possession by a receiver,
liquidator, assignee, trustee, custodian, sequestrator (or other similar
official) of Debtor or of any substantial part of Debtor's property; or shall
make any general assignment for the benefit of creditors; or shall take any
action in furtherance of any of the foregoing.
Whenever a Default shall exist, the Secured Parties may, at their
option and without demand or notice, declare all or any part of the indebtedness
secured hereby to be immediately due and payable, and may exercise, in addition
to the rights and remedies granted hereby, all rights and remedies of a secured
party under the Uniform Commercial Code or any other applicable law.
In the event of Default, Debtor shall, if requested by the Secured
Parties, make the Collateral available to the Secured Parties at a location
designated by such Parties and shall pay all costs of collection, including
reasonable attorney's fees. Debtor hereby waives any rights it may have to
notice or hearing as a condition precedent to the enforcement of the Secured
Parties' rights; provided, however, that if any notification of intended
disposition of Collateral is nonetheless required by law, such notification
shall be deemed reasonably and properly given if mailed at least ten (10) days
before such disposition, postage prepaid, addressed to the Debtor.
No delay or failure by the Secured Parties in the exercise of any right
or remedy hereunder shall constitute a waiver thereof or preclude any other or
further exercise thereof of any other right or remedy. The interpretation and
enforcement of the rights and remedies available to the Secured Parties by
reason of this Agreement shall be governed by the laws of the State of
Minnesota, in which State this Agreement has been executed by the Undersigned.
Executed and delivered as of the date first set forth above.
SCANNER TECHNOLOGIES CORPORATION
By /s/ Xxxxx X. Xxxxx
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Xxxxx X. Xxxxx, President
Chief Executive Officer
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