EXHIBIT 10.1(a)
TECHNOLOGY LICENSE AGREEMENT
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THIS TECHNOLOGY LICENSE AGREEMENT made and entered into at Austin,
Texas, effective this 30th day of April, 2001, by and between Direct Wireless
Corporation, a corporation organized under the laws of the State of Texas with
its principal place business at 000 X. 0xx Xxxxxx, Xxxxx 000, Xxxxxx, Xxxxx
00000 (hereafter referred to as "Licensor") and the Direct Wireless
Communications, Inc., a Texas corporation with its principal place of business
at 000 X. 0xx Xxxxxx, Xxxxx 000, Xxxxxx, Xxxxx 00000 (hereafter referred to as
"Licensee").
WHEREAS, LICENSOR is the owner of all right, title and interest in and
to certain wireless communications technology more fully described herein
(hereafter the Technology), and
WHEREAS, LICENSOR intends to further develop the Technology, including
(but not be limited to) additions, modifications and enhancements of the
Technology, trade secrets, know-how, technical information and expertise, and
WHEREAS, LICENSEE desires to license directly from LICENSOR the
Technology in and for the continental United States.
NOW, THEREFORE, for and in consideration of the faithful performance of
the covenants, and obligations contained herein by the parties hereto, and other
good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties, intending to be legally bound, agree as follows:
ARTICLE 1
General Definitions and Relationships among Definitions
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The terms contained in this Agreement shall have the meaning set forth in this
Article 1.
1.01 LICENSOR and LICENSEE are hereunder commonly referred to as
"parties" (in singular and plural usage, as required by the context).
1.02 LICENSED TECHNOLOGY shall mean and include all licensed KNOW-HOW,
TRADE SECRETS, LICENSED PATENTS, PATENT RIGHTS, IMPROVEMENTS, LICENSED PRODUCTS,
LICENSED COMMUNICATIONS PROTOCOLS AND LICENSED METHODS.
1.03 KNOW-HOW shall mean the engineering, design, and operational
techniques possessed by LICENSOR relating to the engineering specifications,
manufacture, and operational performance of the LICENSED TECHNOLOGY, which are
applicable within the LICENSED FIELD.
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1.04 LICENSED FIELD shall mean the field of wireless communication
systems, wireless communication products, wireless communications protocols and
wireless communication methods.
1.05 LICENSED PATENTS means PATENTS and PATENT RIGHTS which relate to
inventions in or applicable to the LICENSED PRODUCT OR LICENSED METHOD within
the LICENSED FIELD and which are owned or controlled by LICENSOR during the term
of this Agreement, or in respect to which LICENSOR has or may acquire during the
term of this Agreement the right to grant licenses of the scope to be granted in
this Agreement.
1.06 PATENT RIGHTS shall mean U. S. Patent No 5,995,849, filed November
26, 1997 and granted on November 30, 1999, U.S. Patent No. 6,141,531, filed
April 17, 1998 and granted on October 31, 2000, U.S. Patent Application No.
800416 filed on June 1, 2000, International Application No. PCT/US98/13972,
filed July 6, and any applications on inventions or IMPROVEMENTS based upon the
LICENSED TECHNOLGY as well as any related application(s), more specifically, any
continuation, divisional, continuation-in-part of substitution applications, and
any foreign or domestic applications, corresponding to or based in whole or in
part, on any of the above within the LICENSED FIELD.
1.07 IMPROVEMENTS shall mean improvements to and/or of LICENSED
TECHNOLOGY, whether or not patentable, which during the continuance of this
Agreement are made, conceived or acquired by either party or to which either
party obtains rights which it can provide to the other without obligation to
third parties, including changes made for the purpose of improving the
operation, efficiency, manufacturability or deployment of the LICENSED PRODUCT
or LICENSED METHOD within the LICENSED FIELD.
1.08 LICENSED PRODUCT shall mean any and all products which employ or
are produced by the practice of inventions claimed in the LICENSED PATENTS or by
the LICENSED TECHNOLOGY or any and all products that are used to carry out the
LICENSED METHOD including but not limited to fixed base units known as Network
Extenders and mobile units (also known as transmitter, transceivers, receivers
or wireless handsets), repeaters (also known as signal extenders), wireless
communications operational protocols, batteries, battery recharge units,
specialized antennae, firmware and software.
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1.09 LICENSED METHOD shall mean any method, process or wireless
communications operational protocol covered by the LICENSED TECHNOLOGY and
includes, but is not limited to, any method process or wireless communications
operational protocol covered by a LICENSED PATENT.
1.10 AFFILIATES of LICENSEE shall mean any corporation, partnership,
joint venture or other entity that LICENSEE owns or controls, directly or
indirectly.
1.11 DESIGNATED TERRITORIES shall mean the territory of United States.
1.12 EFFECTIVE DATE shall mean the date first above written.
1.13 MARKET SYSTEM shall mean a complete and fully operational
telecommunications system using the LICENSED TECHNOLOGY and shall include all
equipment used thereon and other ancillary devices, equipment and materials,
including without limitation, the LICENSED PRODUCTS.
1.14 EXHIBITS are those attachments referenced in this Technology
License Agreement and are incorporated into this Technology License Agreement by
reference.
1.15 EXHIBIT A is a license from LICENSOR to LICENSEE for any current
or future licensed TRADEMARKS of the Direct Wireless Communication System.
1.16 EXHIBIT B is a map of the continental United States.
ARTICLE 2
Warranties
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2.01 LICENSOR represents and warrants that, to the best of its
knowledge and belief that it is the owner of the entire right, title and
interest in and to the LICENSED TECHNOLOGY, and that it has the sole right to
grant licenses there under, and that it has not knowingly granted licenses there
under to any other entity within the DESIGNATED TERRITORIES that would restrict
rights granted hereunder except as stated herein.
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2.02 Nothing in this Agreement shall be construed as:
(a) A warranty or representation by LICENSOR as to the validity or
scope of any LICENSED PATENTS or PATENT RIGHTS except as is
specifically granted to LICENSOR within patents already issued
within the United States and as granted by such statutes as are
applicable to the issued patents; or
(b) A warranty or representation that anything used, sold or otherwise
disposed of under any licenses granted in this Agreement, is or
will be free from infringement of patents of third parties; or
(c) An obligation to bring or prosecute actions or suits against third
parties for infringement.
2.03 LICENSOR expressly disclaims any and all implied or express
warranties and makes no express or implied warranties of merchantability or
fitness for any particular purpose of the technology, licensed processes or
licensed products contemplated by this agreement. Further LICENSOR has made no
investigation and makes no representation that the related Technology supplied
by it or the methods used in making or using such materials are free from
liability for patent infringement.
ARTICLE 3
License Grant
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3.01 During the term hereof, LICENSOR hereby grants to LICENSEE an
exclusive license to use, sell and sub-license under the terms hereof, the
LICENSED PRODUCTS and LICENSED METHODS embodying, made or used in accordance
with the LICENSED TECHNOLOGY in the DESIGNATED TERRITORY which territory shall
be limited to and extend only to the territory of the United States.
3.02 LICENSOR further agrees to grant to LICENSEE licenses of the scope
specified herein with respect to patents on any IMPROVMENTS as to which LICENSOR
shall have the right to grant such licenses on IMPROVEMENTS without additional
payment to LICENSOR.
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3.03 LICENSOR further agrees to share with LICENSEE under commercially
appropriate terms and conditions, KNOW-HOW, trade secrets and other developments
which LICENSOR, at any time during the term hereof comes to believe or has
reason to believe may enhance LICENSEE's realization of the fullest potential
application of the exclusive license created hereby, whether or not such
technology is patentable.
3.04 LICENSEE agrees to direct its sales, marketing and sub-licensing
activities in the continental United States and agrees not to knowingly sell,
use or employ the LICENSED TECHNOLOGY outside of such Territory.
ARTICLE 4
Consideration/Royalty Rate
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4.01 LICENSEE agrees to pay to LICENSOR as the Initial License Fee the
following:
(a) Shares of common stock of Licensee in the amount of 1,489,633
shares transferred upon execution hereof
(b) The sum of $10,000,000, to be paid in such amounts and at such
times over the course of the term of this LICENSE AGREEMENT as
Direct Wireless Communications, Inc. receives money from the sale
or sales of a SUB-LICENSE or SUB-LICENSES for the United States or
from any sale or sales of equity in Direct Wireless Communications,
Inc. made expressly for that purpose.
4.02. The LICENSE FEE shall be paid from the gross revenues generated
by LICENSEE from the implementation of the LICENSED TECHNOLOGY and from
SUB-LICENSES sold for the DESIGNATED TERRITORY. The LICENSE FEE shall be paid on
a quarterly basis commencing in the first quarter in which funds are earned by
LICENSEE in an amount equal to sixty percent (60%) of the total funds by
LICENSEE until the LICENSE FEE is paid in full.
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4.03 LICENSEE further agrees to pay to LICENSOR a royalty amount of 30%
on all fees collected for all LICENSED PRODUCTS sold by, placed into commerce or
otherwise disposed of by LICENSEE.
4.04 Royalties due under Paragraph 4.02 above shall accrue when an
apparatus comprising the LICENSED PRODUCT has been shipped or invoiced by
LICENSEE, whichever occurs first.
4.05 LICENSEE shall be entitled to a credit against future royalties
due under this Technology License Agreement for bona fide returns of the
LICENSED PRODUCTS, which return would decrease the total number of LICENSED
PRODUCTS in commerce. LICENSEE shall provide reasonable documentation supporting
the credit deduction.
ARTICLE 5
Royalty Reports and Payments
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5.01 LICENSEE shall report to LICENSOR at the address to which notice
is to be given specified in Article XI, in writing, on or before the 20th day of
each month the number of LICENSED PRODUCTS in commerce for the preceding month.
If royalties shall have accrued hereunder in such month, each such report shall
include a computation of the royalties so accrued, including the model number
and serial number of each apparatus incorporating LICENSED PRODUCTS that have
been sold or otherwise put into service during such month and a computation of
the total royalties for such month at the rate set forth in Paragraph 4.02
hereof; and the credit due LICENSEE for returns, if any, against such royalties.
An officer of LICENSEE shall certify that such report is computed in compliance
with the contractual requirements of this agreement and that LICENSEE is not in
default under the terms and conditions.
5.02 Royalties set forth in Paragraph 4.02 on LICENSED PRODUCTS shall
be due and payable on or before the 20th day of each month for the preceding
month at the address to which notice is to be given specified in Article IX.
Each report required under Paragraph 5.01 hereof shall be accompanied by payment
in full for all royalty therein shown to be due. LICENSEE shall pay LICENSOR
interest at the rate of fifteen percent
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(15%) per annum on all royalties not paid when due provided however, such
interest, in no event, shall exceed the Maximum Legal Rate and shall be
automatically reduced to the Maximum Legal Rate and, if any sums which exceed
the Maximum Legal Rate are paid, LICENSOR at LICENSOR' s option, shall refund
such over payment or apply the same to the principal royalties due hereunder In
the event past due royalties are collected through bankruptcy or through
judicial proceedings by an attorney or placed in the hands of an attorney for
collection, LICENSEE agrees to pay a reasonable attorney's fee for collection
5.03 All Payments made by LICENSEE to LICENSOR under this Technology
License Agreement shall be paid to LICENSOR free and clear of all taxes,
including income, withholding, sales, turnover or other taxes applicable to the
operations of LICENSEE.
ARTICLE 6
BOOKS AND RECORDS
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6.01 LICENSEE shall maintain true and accurate books and records in
sufficient detail to determine all payments due LICENSOR.
6.02 LICENSOR shall, upon written request to LICENSEE be entitled to
inspect pertinent books and records of LICENSEE once each calendar quarter
following thirty (30) days from end of the respective quarter to determine the
accuracy and completeness of any report made to LICENSOR or to be rendered
pursuant to Article V of this Technology License Agreement. In the event such
examination reveals a discrepancy of more than five percent (5%) of the
royalties actually paid by LICENSEE during the period covered by the
examination, the cost of examining the books will be borne by LICENSEE. LICENSEE
shall not be required to retain any such books, records and accounts for a
period of more than three (3) years after the close of the period to which such
books, records and accounts relate.
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ARTICLE 7
CONFIDENTIAL INFORMATION
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7.01 LICENSEE shall safeguard the LICENSED TECHNOLOGY obtained
heretofore or hereafter against unauthorized disclosure and shall reveal such
information only to its employees having a need to know and only pursuant to an
agreement with its employees to maintain such information confidential. In this
regard, LICENSEE agrees not to disclose, either during or after the term of this
Technology License Agreement, any confidential information of LICENSOR obtained
by LICENSEE during the term hereof, and further agrees not to use any
confidential information to the detriment of LICENSOR in any way other than as
authorized by LICENSOR.
7.02 LICENSOR agrees not to disclose, either during or after the term
of this Technology License Agreement any confidential information of LICENSEE,
which LICENSEE has obtained during the term hereof, and further agrees not to
use any such confidential information to the detriment of LICENSEE in any way
other than as authorized by LICENSEE.
7.03 Neither LICENSOR and its Affiliates nor LICENSEE and its
sub-licensees shall be obligated to maintain the confidence of:
(a) Information which is, or subsequently has been introduced into the
public domain through no act or omission of the receiving party,
its employees, agents, successors or assigns.
(b) Information, which was lawfully disclosed to the receiving party by
a third party having the right to disclose such information.
(c) Information which was already known by the receiving party at the
time of the disclosure or was independently developed by the
receiving party.
(d) Information that is required to be disclosed to a government
agency.
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ARTICLE 8
Term of Agreement and Termination
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8.01 The term of this Agreement shall extend from the Effective Date
and shall continue in force for a period of ten (10) years unless otherwise
terminated as herein provided (the "Initial Term"). To the extent that LICENSOR
is not in default under the terms hereof, LICENSOR shall have the option of
extending or renewing this LICENSE for a second term of ten (10) years (the
"First Renewal Term") under the same terms and conditions as set forth herein
provided that LICENSOR shall have provided notice to LICENSEE of its intent to
renew this LICENCE not less than 180 days prior to the expiration of the Initial
Term. To the extent LICENSOR is not in default during the First Renewal Term,
LICENSOR shall have the further option of extending this LICENSE for an
additional term of ten (10) years (the "Second Renewal Term") under terms and
conditions as set forth herein provided that LICENSOR shall have provided notice
to LICENSEE of its intent to renew this LICENCE not less than 180 days prior to
the expiration of the First Renewal Term. All notices of renewal shall be in
writing and provided to LICENSEE at the address for notices further set forth
herein.
8.02 At the end of the Term of this LICENSE and any renewals thereof,
the parties may renegotiate the terms and conditions of the LICENSE and extend
same on terms and conditions as may be mutually agreeable.
8.03 LICENSOR may at its option terminate this Agreement by written
notice to LICENSEE upon the occurrence of any of the following events:
(a) LICENSEE fails to make timely payment of any amount due (including,
but not limited to the supplemental royalty payments described in
Article VI above or the royalties described in Article V) or shall
fail to perform any other obligation under this Agreement and said
failure shall continue for a period of thirty (30) days after
written notice from LICENSOR to LICENSEE of such failure;
(b) In the event that LICENSEE shall dissolve, cease active business
operations, or liquidate; provided, however that this provision
shall not be applicable to any such occurrence which is incident to
any merger or consolidation by LICENSEE with or into, or a sale or
other transfer by LICENSEE of substantially all of its assets to, a
person firm or corporation, if such person, firm or corporation
expressly assumes and agrees to perform all of Licensee's
obligations under this Agreement and LICENSOR agrees to this
arrangement in writing.
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(c) This Agreement shall terminate automatically if LICENSEE shall
become bankrupt or insolvent and/or if the business of LICENSEE
shall be placed in the hands of a receiver, assignee, or trustee,
whether by voluntary act of LICENSEE or otherwise.
(d) In the event that management of LICENSEE changes from the
management currently managing the operations of the LICENSEE.
8.04 This Agreement shall terminate at the option of the non-breaching
party if either party fails to perform or fulfill any obligation or condition
required to be performed or fulfilled by it, in the time and manner herein
provided, or materially breaches this agreement in any manner, and, if such
default or breach shall continue for thirty (30) days after written notice
thereof the non-breaching or defaulting party shall have the right to terminate
this Agreement. If such breach is of a nature that it cannot be cured within
said thirty (30) day period but can be cured within a reasonable time
thereafter, then the non-breaching or defaulting party may terminate this
Agreement if efforts to cure such breach have not commenced or such efforts are
not proceeding and being continued diligently both during and after such thirty
day period prior to the breach being cured. Such rights to terminate the license
granted by this Technology License Agreement shall be in addition to and shall
not be prejudicial to any right or remedies, at law or in equity that said other
party may have on account of such default.
8.05 Upon termination of this Agreement for any cause, nothing herein
shall be construed to release either party of any obligation matured prior to
the effective date of such termination. LICENSEE may, after the effective date
of such termination, sell all LICENSED PRODUCTS that it may have on hand at the
date of termination, provided that it pays earned royalties thereon as provided
in this Agreement.
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8.06 Waiver by either party hereto of a particular instance of any of
its rights hereunder shall not be considered as a continuing waiver of the
rights or of any other rights hereunder.
ARTICLE 9
Sub-License
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9.01 Subject to the reasonable approval of LICENSOR, LICENSEE shall,
subject to the terms and conditions set forth herein including the Royalty
Provisions and the Termination Provisions, have the right to sub-license the
rights granted to LICENSEE hereunder to a qualified third party. Such Sublicense
may cover all or a part of the territory covered under this LICENSE AGREEMENT.
ARTICLE 10
Assignment
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10.01 This Agreement nor any part thereof shall not be assigned by
LICENSEE without the prior written consent of LICENSOR.
ARTICLE 11
Miscellaneous
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11.01 LICENSEE shall not distribute or release the LICENSED PRODUCTS or
the LICENSED TECHNOLOGY to others except to further the purposes of this
Technology License Agreement.
11.02 During the term of this Agreement, LICENSOR will pay for all
government fees associated with the procurement and maintenance of the PATENT
RIGHTS.
11.03 LICENSEE shall indemnify and hold LICENSOR harmless against any
and all claims for loss, damage, or injuries in connection with or arising out
of (1) use by LICENSEE, its directors, employees, contractors, subcontractors1
or agents or by third
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parties of the LICENSED PRODUCTS or the LICENSED TECHNOLOGY, or (2) the design,
manufacture, distribution or use of any licensed processes or Licensed Devices
or other products developed in connection with or arising out of the Related
Technology. Such indemnity shall include all costs and expenses, including
attorney's fees and any costs of settlement. LICENSEE shall name LICENSOR as an
additional named insured on its product liability insurance that shall be
maintained at a level deemed by LICENSEE to be reasonable.
11.04 LICENSEE and/or subsequent sub-licensees through Agreements and
Contracts agree not to seek, secure or engage in the sale, transfer or shipping
of the LICENSED PRODUCTS or the LICENSED TECHNOLOGY outside the continental
United States, and further understanding that such practices constitute a breach
of this AGREEEMENT and the immediate forfeiture of all rights and privileges
extended to the LICENSEE under this AGREEMENT. The LICENSEE will defend and hold
LICENSOR harmless in the event of any legal action of any nature occasioned by
such violation of United States Department of Commerce export and shipping
statutes either by the actions of the LICENSEE or that of their sub-licensee.
11.05 Should a court of competent jurisdiction later consider any
provision of this Technology License Agreement to be invalid, illegal, or
unenforceable, it shall be considered severed from this Technology License
Agreement. All other provisions, rights and obligations shall continue without
regard to the severed provision, provided that the remaining provisions of this
Technology License Agreement are in accordance with the intention of the
parties.
11.06 During the term of this Technology License Agreement, should
either LICENSOR or LICENSEE hereto become aware of any infringement by others
upon the Patent Rights that LICENSOR has licensed to LICENSEE herein:
(a) It shall make the other party hereto aware of such infringement;
and
(b) Only at the discretion of the LICENSOR may the LICENSEE also have
the right to initiate litigation for the purpose of terminating
such infringement. Sub-licensees are excluded from this right under
this Agreement. In doing so, the initiating party has the right to
join the other party claiming an interest in the Patents or Patent
Rights as a party to such litigation. If both parties elect to
share equally in the costs of the litigation, proceeds from such
litigation shall be shared equally.
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(c) In the event that the other party does not elect to share in the
costs of the litigation, after receipt of such notice of such
infringement from the initiating party, then the initiating party,
subject to clause (b) above, shall have the right, at its
discretion, to terminate such infringement, at its sole cost and
expense and, in such event, all proceeds of such litigation shall
be retained by the initiating party.
11.07 This Technology License Agreement shall be binding upon and inure
to the benefit of the successors, legal representatives and assignees of
LICENSOR and LICENSEE, provided, however, that LICENSOR shall not assign this
Technology License Agreement to another party without prior written approval of
LICENSEE, which approval shall not be unreasonably withheld.
11.08 This Technology License Agreement (including all exhibits
attached hereto), together with all other writings executed and delivered
contemporaneously herewith, constitute the entire Agreement of the undersigned
Parties with respect to the subject matter hereof. No prior written or
contemporaneous oral
Agreements, promises, or representations shall be binding upon the Parties
hereto. This Technology License Agreement shall not be amended, supplemented,
replaced or otherwise modified in any respect except by written instrument
signed by the authorized representatives of the Parties. Sub-licensee have no
standing in this Agreement except as specifically prescribed within such
Agreements as have been executed with the LICENSEE and subsequently approved by
the LICENSOR.
11.09 Notice Address: Any notice hereunder shall be deemed to have been
sufficiently given or served if sent by Certified Mail, Return Receipt
Requested, at the address of LICENSOR and LICENSEE as first set forth above.
Either party may, at any time and from time to time, change the address to which
notice shall be given hereunder to the other party given by notice under this
paragraph. The date of giving such notice shall be the date of the posting of
the mail.
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IN WITNESS WHEREOF, the parties hereto have caused this document to be
executed in their respective corporate name by their officers duly authorized
thereunto on the day and year first above set forth.
DIRECT WIRELESS CORPORATION
/s/ Xxxxxx X. Xxxxxxxx XX
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By: Xxxxxx X. Xxxxxxxx XX
Title: President
DIRECT WIRELESS COMMUNICATIONS, INC.
/s/ Xxxx X. Xxxxxxxx
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By: Xxxx X. Xxxxxxxx
Title: Chief Executive Officer
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