*CERTAIN MATERIAL DEEMED CONFIDENTIAL BY THE COMPANY HAS BEEN OMITTED FROM
THIS DOCUMENT AND FILED SEPARATELY WITH THE COMMISSION.
PATENT PURCHASE AGREEMENT
This Patent Purchase Agreement (the "Agreement") made this
22nd day of May, 1998 (the "Effective Date"), is by and among INTER*ACT SYSTEMS,
INCORPORATED, a North Carolina corporation, having offices at 00 Xxxxxxxx
Xxxxxx, Xxxxxxx, Xxxxxxxxxxx 00000 ("Inter*Act"), CREDIT VERIFICATION
CORPORATION, a Texas corporation, having offices at 000 X. Xxxx 000, Xxxxxxx,
Xxxxx 00000 ("CVC") and Xxxxx X. Xxxxxx, residing at 0000 Xxxxx Xxxxx Xxxxx,
Xxxxxxx, Xxxxx 00000 ("Xxxxxx") (each a "Party" collectively, the "Parties"). As
used in this Agreement, the term "Closing Date" shall refer to the first date as
of which all of the Parties have duly executed this Agreement.
W I T N E S S E T H:
WHEREAS, CVC and Xxxxxx warrant and represent that CVC is the
sole owner of all rights, title and interests in and to certain patents; and
WHEREAS, CVC wishes to assign to Inter*Act all rights, title
and interests in and to such patents in exchange for valuable consideration.
NOW, THEREFORE, for and in consideration of the promises and
covenants herein contained and other good and valuable consideration as set
forth herein, the receipt of which is hereby acknowledged, the Parties hereby
agree as follows:
1. ASSIGNMENT OF PATENTS.
1.1. Assignment of Sale Patents to Inter*Act. CVC hereby sells, assigns,
transfers and sets over to Inter*Act and to Inter*Act's successors and assigns
all rights, title and interests in and to: (i) the patents * identified or
described on Schedule A attached hereto; and (ii) * and foreign counterpart
patents and patent applications, whether or not identified or described on
Schedule A attached hereto, *((i) and (ii) above in this Section 1.1 shall
hereinafter be collectively referred to as the "Sale
Patents"). CVC also hereby sells, assigns, transfers and sets over to Inter*Act
and to Inter*Act's successors and assigns, all causes of action, claims,
judgments, and/or other legal and equitable rights and remedies arising out of
or in connection with the Sale Patents which have accrued or taken place prior
to and including the Closing Date, including without limitation, the right to
xxx any third party for infringement of any or all of the Sale Patents and to
collect and retain any damages resulting from the infringement of any of the
Sale Patents, the same to be held and enjoyed by Inter*Act, for its own use and
benefit and for the use and benefit of its successors and assigns, as fully and
entirely as if the same would have been held and enjoyed by CVC in the absence
of this Agreement. CVC and Xxxxxx covenant and agree to execute all additional
instruments and to do all things necessary to carry out the purposes of this
Section 1.1.
1.2. *
1.3. Release of Claims. As additional consideration for this Agreement,
CVC, Xxxxxx and Inter*Act hereby release one another and the other's affiliates,
subsidiaries, shareholders, officers, and directors, from and against any and
all actions, causes of actions, claims, judgments, liabilities and damages which
have or may have accrued from the beginning of the world up through and
including the Closing Date, including without limitation, any and all actions,
causes of actions, claims, judgments, liabilities and damages arising from or in
connection with the Sale Patents * and any patents owned by Inter*Act as of the
Closing Date.
-2-
1.4. Form of Assignment. On the Closing Date, CVC shall execute an
assignment document in the form of the assignment document attached hereto as
Exhibit 1, to be filed by Inter*Act in the United States Patent and Trademark
Office ("PTO") or other appropriate authority, which conveys to Inter*Act all
rights, title and interests in and to the Sale Patents in accordance with
Section 1.1 hereof. CVC further agrees to execute such other forms as may be
requested by Inter*Act, to evidence CVC's assignment of the Sale Patents to
Inter*Act in accordance with this Agreement, necessary in any jurisdiction.
2. CONSIDERATION.
2.1. * Consideration. On the Closing Date, Inter*Act shall pay to CVC *
payable by wire transfer as designated by CVC.
2.2. Promissory Note. On the Closing Date, Inter*Act shall issue to CVC a *
promissory note in the form attached hereto as Exhibit 2 (the "Note").
2.3. Consulting Services by Xxxxxx. Xxxxxx shall provide consulting
services to Inter*Act as reasonably requested by Inter*Act and agreed to by
Xxxxxx, with respect to any technical, legal and/or business issues involving
the Sale Patents for a period of three (3) years commencing upon the Closing
Date. In exchange for such consulting services, Inter*Act shall pay to Xxxxxx
one hundred thousand dollars (U.S.) ($100,000) for each calendar year, plus
reasonable pre-approved expenses incurred. The foregoing annual consulting fees
shall be payable in arrears in four equal installments of twenty five thousand
dollars (U.S.) ($25,000) per calendar quarter within thirty (30) days following
the close of each such calendar quarter.
3. DELIVERY OF RECORDS. Within five (5) days after the Closing Date, CVC and
Xxxxxx shall, and shall cause their counsel to, deliver to Inter*Act's counsel,
all originals and copies of all prosecution histories and documents which relate
or refer to the Sale Patents, including without limitation, all correspondence
to and from, and all memoranda, notes, and drafts authored by, the PTO, the
inventor(s) of the Sale Patents, CVC, and their respective
-3-
counsel (including foreign associate counsel), and all prior art of which the
inventor(s), CVC and their respective counsel (including foreign associate
counsel) are aware (collectively, the "Records"). CVC and Xxxxxx shall also
provide copies of documents relating to Xxxxxx'x conception and reduction to
practice of the Sale Patents, and Xxxxxx and CVC shall maintain custody of the
originals of such documents. CVC and Xxxxxx (and their counsel) shall provide
their reasonable assistance, at Inter*Act's expense, with respect to the
transition and interpretation of the Records.
4. OTHER OBLIGATIONS CONCERNING PATENTS.
4.1. *
4.2. Covenant Not to Xxx CVC and Xxxxxx. Inter*Act hereby covenants that
neither Inter*Act, nor Inter*Act's affiliates, subsidiaries, successors,
assignees, licensees or transferees, shall bring any legal action or proceeding
against CVC and/or Xxxxxx with respect to any alleged infringement of the Sale
Patents or any of the patents owned by or licensed by Inter*Act as of the
Closing Date, provided that CVC's and Xxxxxx'x activities are identical or
substantially similar
-4-
to those activities in which CVC has commercially engaged up to and including
the Closing Date or as expressly set forth or described on Schedule C hereto and
further provided that such activities do not include or involve: (i) interactive
multimedia kiosk-based applications; or (ii) any system or method where a
manufacturer reimburses or subsidizes the cost of the incentive, discount and/or
coupon or otherwise compensates CVC, Xxxxxx or (except for side agreements
between manufacturers and retailers) the retailer for offering such incentive,
discount and/or coupon (collectively, the "Prohibited Activities"). Inter*Act
shall require any purchaser, assignee or licensee of any of the Sale Patents to
agree in writing to the provisions of this Section 4.2.
4.3. *
4.4. *
-5-
5. DISPUTE RESOLUTION.
5.1. Communication Among the Parties. The Parties hereby acknowledge and
agree that it is in their mutual best interest not to become involved in
disputes with one another in connection with any of the Sale Patents, * and/or
any patents owned or licensed by Inter*Act. In furtherance of maintaining
positive and open relations among the Parties, Inter*Act shall keep CVC and
Xxxxxx reasonably informed regarding Inter*Act's activities, and CVC and Xxxxxx
shall keep Inter*Act reasonably informed regarding CVC's and Xxxxxx'x
activities.
5.2. *
-6-
5.3. Obligations of Inter*Act. In the event that Inter*Act believes that
CVC is infringing any of the Sale Patents, or any of the patents owned or
licensed by Inter*Act, then Inter*Act's sole and exclusive remedy with respect
to any such alleged infringement, both in
-7-
equity and in law, shall be the commencement of a binding arbitration proceeding
in Wilmington, Delaware in accordance with the rules and procedures of the
American Arbitration Association, which proceeding shall determine all issues
with respect to the subject Sale Patent(s) (and/or other patent(s) owned or
licensed by Inter*Act) including without limitation, the validity and
enforceability of such Sale Patent(s) (and/or other patent(s) owned or licensed
by Inter*Act), whether or not infringement of the Sale Patent(s) (and/or other
patent(s) owned or licensed by Inter*Act) has occurred, and if appropriate, the
award of damages and/or injunctive relief, provided however, that prior to the
commencement of any such arbitration proceeding, Inter*Act shall be required to:
(i) make a good faith, documented determination supported by a written opinion
from legal counsel (and provide a copy of same to CVC) setting forth (a) the
manner in which CVC is infringing the Sale Patent(s) (and/or other patent(s)
owned or licensed by Inter*Act) and (b) an express conclusion that the allegedly
infringing activities of CVC are not identical or substantially similar to the
activities in which CVC and/or Xxxxxx was engaged as of the Closing Date or as
set forth in Schedule C, or the allegedly infringing activities of CVC
constitute Prohibited Activities; (ii) provide CVC with written notice that CVC
is infringing one or more claims in the Sale Patent(s) (and/or other patent(s)
owned or licensed by Inter*Act); (iii) enter into and participate, in good
faith, in a dialogue with CVC, for a minimum of seventy five (75) days following
CVC's receipt of written notice from Inter*Act that CVC is infringing one or
more claims in the Sale Patent(s) (and/or other patent(s) owned or licensed by
Inter*Act) with the goal of resolving such conflict; (iv) at the end of such
seventy five (75) day period, provide CVC with written notice of CVC and
Inter*Act's failure to resolve the conflict; and (v) provide CVC with written
notice of Inter*Act's intent to bring an arbitration proceeding followed by a
two (2) week period after CVC's receipt of such written notice. In the event
that Inter*Act (or its successors, assignees and/or licensees) commences an
arbitration proceeding against CVC in connection with any of the Sale Patents
(and/or other patent(s) owned or licensed by Inter*Act)
-8-
following the satisfaction of the aforementioned conditions, then it shall be a
complete defense to such action that the accused CVC activities are identical or
substantially similar to the activities in which CVC was engaged as of the
Closing Date or as set forth on Schedule C attached hereto, and such activities
are not Prohibited Activities. In the event Inter*Act enters into any sale,
transfer, assignment, set over or license with any third party with respect to
the Sale Patents (and/or other patents owned or licensed by Inter*Act) then
Inter*Act shall be required to impose written, contractual obligations on such
third party requiring such third party to comply in all respects with the terms
and conditions of this Section 5.3; and in the event that Inter*Act fails to
impose such written contractual obligations, Inter*Act shall indemnify and
defend and hold CVC harmless from and against any and all actions brought in a
manner contrary to this Section 5.3 by such third party who had not been
contractually bound to comply with the terms and conditions in this Section 5.3.
CVC and Xxxxxx agree that with respect to the Sale Patents (and/or other patents
owned or licensed by Inter*Act) they shall not file any declaratory judgment
action seeking a declaration of invalidity, unenforceability or non-infringement
of any of the Sale Patents (and/or other patents owned or licensed by Inter*Act)
and/or seeking to declare that Inter*Act is not infringing one or more of the
Sale Patents (and/or other patents owned or licensed by Inter*Act), provided
however, that in the event that Inter*Act does not commence the binding
arbitration proceeding within sixty (60) days following the two (2) week period
after CVC's receipt of Inter*Act's written notice of the intention to commence
such binding arbitration proceeding against CVC, CVC and Xxxxxx shall then have
the right to commence a binding arbitration proceeding for a declaratory
judgment in Wilmington, Delaware in accordance with the rules and procedures of
the American Arbitration Association. In no event shall CVC or Xxxxxx or their
successors, assignees and/or licensees contest the validity or enforceability of
any of the Sale Patents. Inter*Act further agrees that under no circumstances
shall Inter*Act initiate any legal action, or threaten to take any legal action,
against any customer
-9-
or supplier of CVC for infringement of any of the Sale Patents (and/or patents
owned or licensed by Inter*Act) to the extent that such alleged infringement
arises out of activities engaged in by such customer or supplier in conjunction
with, or in connection with, CVC.
6. *
6.1. *
6.2. *
7. LICENSE GRANT AND RESTRICTIONS.
7.1. License to CVC. Inter*Act hereby grants to CVC a non-exclusive,
non-transferable (except as expressly provided in this Agreement) non-assignable
(except as expressly provided in this Agreement), royalty-free, personal license
under the Sale Patents solely to operate, strictly for CVC's and its retail
establishment customers' own benefit, a system
-10-
or method identical to or substantially similar to that commercially practiced
by CVC before or on the Closing Date or as set forth in Schedule C attached
hereto (the "License Back"); provided that CVC shall not be permitted under the
License Back to, and shall not, engage in any activities not expressly described
in the immediately preceding sentence, including without limitation, the
Prohibited Activities. Inter*Act hereby reserves any and all rights in and to
the Sale Patents not expressly granted to CVC in this Section 7.1 as part of the
License Back. Inter*Act agrees that in any assignment or transfer by Inter*Act
of the Sale Patents, it shall include a provision requiring said assignee or
transferee to honor the License Back.
7.2. Restrictions. CVC shall have no right to sublicense, assign, or
transfer the License Back or any of its rights under the License Back to any
entity or person or other third party and any such attempted sublicense,
assignment or transfer shall cause the License Back to automatically terminate
and become null and void, provided however, that CVC shall have the right to
permit its retail establishment customers to use for their own internal purposes
CVC's systems or methods authorized under the License Back on a
non-transferable, non-exclusive basis solely in their geographic community, and
provided further that CVC shall have the right to transfer and/or assign the
License Back in connection with a sale of CVC or any portion thereof or any
control or indicia of control thereof, subject to and solely as permitted by the
provisions of Article 6 hereof, and further provided that the License Back shall
not be, and CVC shall use its best efforts (including the imposition of written
contractual obligations) to ensure that, the License Back shall not be further
transferred or assigned by such permitted purchaser of CVC or any portion
thereof or any control or indicia of control thereof or by any such retail
establishment.
7.3. CVC Bankruptcy Or Insolvency. The License Back shall automatically
terminate and shall become null and void in the event that CVC: (i) ceases doing
business; or (ii) becomes or is declared insolvent, (i.e., unable to pay debts
as they become due in the ordinary course) or
-11-
bankrupt and such insolvency or bankruptcy continues for a period of thirty
(30) days or more; or (iii) becomes the subject of any proceedings relating to
its liquidation, insolvency or for the appointment of a receiver or similar
officer for it and such proceeding continues for a period of thirty (30) days or
more; or (iv) makes an assignment for the benefit of all or substantially all of
its creditors; or (v) enters into an agreement for the composition, extension,
or readjustment of all or substantially all of its obligations.
7.4. Nature of License Back. CVC and Xxxxxx hereby acknowledge and agree
that the License Back is personal in nature to CVC and is granted to CVC
hereunder strictly in accordance with the terms hereof. CVC and Xxxxxx further
acknowledge and agree that Inter*Act would be irreparably harmed in the event
that the License Back or any right thereunder is transferred, sublicensed, or
assigned to any entity or person in contravention of this Agreement.
7.5. Inter*Act Bankruptcy or Insolvency. The provisions of Sections 4.4,
and 6.1 shall automatically terminate and shall become null and void in the
event that Inter*Act (i) ceases doing business; or (ii) becomes or is insolvent
(i.e., unable to pay debts as they become due in the ordinary course) or
bankrupt and such insolvency or bankruptcy continues for a period of thirty (30)
days or more; or (iii) becomes the subject of any proceedings relating to its
liquidation, insolvency or for the appointment of a receiver or similar officer
for it and such proceeding continues for a period of thirty (30) days or more;
or (iv) makes an assignment for the benefit of all or substantially all of its
creditors; or (v) enters into an agreement for the composition, extension, or
readjustment of all or substantially all of its obligations; provided, however,
that, in such events, the License Back shall survive in full force and effect;
and further provided that the provisions of Sections 6.2 and 7.2 shall not so
terminate, but Sections 6.2 and 7.2 instead shall terminate only if Inter*Act
commences a Chapter 7 liquidation proceeding or otherwise liquidates all or
substantially all of its assets.
-12-
8. LITIGATION ASSISTANCE. In the event Inter*Act becomes involved in any legal
action or proceeding with any third party involving any of the Sale Patents, CVC
and Xxxxxx shall provide, and shall cause its counsel to provide, reasonable
assistance, at Inter*Act's expense, in any such legal action or proceeding,
including without limitation, appearing and testifying at depositions, hearings
and trials. To the extent CVC and/or Xxxxxx become involved in any such legal
action or proceeding, CVC and Xxxxxx hereby agree to be represented by counsel
selected by Inter*Act, and reasonably acceptable to Xxxxxx, at Inter*Act's
reasonable expense. At CVC's and Xxxxxx'x expense, CVC and/or Xxxxxx shall be
permitted to retain additional counsel which counsel shall cooperate with
counsel of Inter*Act's choice.
9. COOPERATION ON PATENT APPLICATIONS. The Parties hereby acknowledge and agree
that it is in their mutual best interest to keep one another reasonably informed
with respect to any potential continuation, continuation-in-part, divisional and
foreign counterparts patent applications in connection with the Sale Patents (to
be prosecuted by Inter*Act) * . Accordingly, the Parties shall keep one another
reasonably informed regarding such applications on a confidential basis and
shall use reasonable efforts to coordinate such applications in advance of
filing them with the appropriate authority to prevent any conflicts or
inconsistencies which may otherwise arise with respect thereto.
10. REPRESENTATIONS AND WARRANTIES.
10.1. Authority Relative to this Agreement. The Parties hereby represent
and warrant that each has the full power and complete authority to enter into
this Agreement and to carry out its respective obligations hereunder. CVC and
Inter*Act represent and warrant that the execution and delivery of this
Agreement and the consummation of the transactions contemplated hereby have been
duly authorized by their respective Board of Directors and the requisite vote of
their respective shareholders, if required under the law of their respective
jurisdictions. This Agreement constitutes a valid and binding obligation on each
of the Parties
-13-
enforceable in accordance with its terms except as enforcement may be limited by
bankruptcy, insolvency or other similar laws affecting the enforcement of
creditors' rights generally. CVC and Inter*Act represent and warrant that no
other corporate proceedings are necessary to respectively authorize this
Agreement and the transactions contemplated hereby.
10.2. Representations and Warranties of CVC and Xxxxxx. CVC and Xxxxxx
represent and warrant that: (i) CVC is the owner of all rights, title and
interests in and to the Sale Patents * and that, subject to the site licenses
set forth in Schedule E hereto, neither CVC nor Xxxxxx has granted to any third
party, any license rights or any other rights, title and/or interests in and to
the Sale Patents * (ii) other than the Sale Patents *, neither CVC, nor Xxxxxx,
has any ownership rights whatsoever in any other patents or patent applications
relating in any way to in store couponing, promotions or incentives or to the
subject matter of the Sale Patents *, in any jurisdiction; (iii) Inter*Act will,
as of the Closing Date, be the sole owner of the Sale Patents; (iv) subject to
the site licenses of Schedule E hereto, neither CVC nor Xxxxxx has entered nor
will they enter into any agreement or understanding with any third party that
would interfere with or impair CVC's or Xxxxxx'x right to enter into this
Agreement or Inter*Act's rights in and to the Sale Patents under this Agreement;
(v) subject to the correspondence contained in the files set forth in Schedule F
hereto, neither CVC nor Xxxxxx has received written notice of any claim or
demand of any person or entity pertaining to any prosecution, suit, action or
proceeding pending or threatened, that challenges the validity or enforceability
of any of the Sale Patents or Inter*Act's rights to purchase the Sale Patents,
other than attempts by Catalina Marketing Corporation and/or Catalina Marketing
International, Inc. to provoke interferences in the PTO (the "Interference
Attempts"), and other than those Interference Attempts, CVC and Xxxxxx know of
no fact that would cause any of the Sale Patents to be invalid or unenforceable;
(vi) other than actions taken by the U.S. or foreign patent offices, and
disclosed to Inter*Act, no aspect of any of the Sale
-14-
Patents is subject to any action or any outstanding order, ruling, decree,
judgment or stipulation by or with any court, arbitrator or administrative
agency; (vii) CVC is not engaged in any litigation, and, to the knowledge of CVC
and/or Xxxxxx, no litigation is threatened with respect to any of the Sale
Patents other than the Interference Attempts; (viii) CVC and Xxxxxx have
provided Inter*Act and its counsel, accountants and/or other representatives
with access to and copies of all books, records, documents, reports, contracts,
government filings, personnel and other information concerning the business of
CVC and the Sale Patents and requested by Inter*Act in connection with its due
diligence review of CVC, the Sale Patents* ; (ix) neither CVC nor Xxxxxx shall
take any action which would interfere with the enforceability, validity or
Inter*Act's quiet enjoyment of any of the Sale Patents; (x) CVC and Xxxxxx
shall, within five (5) business days following the Closing Date, terminate each
of the site licenses identified in Schedule E in all respects, * and not with
respect to the Sale Patents; and (xi) CVC and Xxxxxx, within five (5) business
days after the Closing Date, shall file, pursuant to 37 C.F.R. 'SS' 1.138, in
the PTO, a written declaration of abandonment of patent application number
08/096,921, filed July 23, 1993. CVC further represents and warrants and Xxxxxx,
to his current knowledge, represents and warrants, that: (a) all the Sale
Patents have been duly filed in the PTO or in the appropriate foreign patent
office in other jurisdictions, and all communications from CVC to the PTO and
appropriate foreign patent office have been accurate and truthful, all the Sale
Patents have been properly maintained in accordance with all applicable laws,
rules, and regulations and all fees associated therewith have been paid; and (b)
other than those documents reviewed by Inter*Act during its due diligence
review, neither CVC nor Xxxxxx, based on their best recollections as of the
Closing Date, is aware of any documents that would reveal any material fact with
respect to the title, validity and/or enforceability of the Sale Patents * .
-15-
10.3. LIMITATION ON WARRANTIES BY CVC AND XXXXXX. OTHER THAN THE EXPRESS
WARRANTIES SET FORTH IN THIS AGREEMENT, CVC AND XXXXXX DO NOT WARRANT AND MAKE
NO REPRESENTATIONS REGARDING THE VALIDITY, ENFORCEABILITY OR SCOPE OF ANY CLAIM
OR CLAIMS OF THE SALE PATENTS, NOR AS TO THE OUTCOME OF ANY INTERFERENCE
INVOLVING THE SALE PATENTS AND INSTITUTED BY THE U.S. OR ANY FOREIGN PATENT
OFFICE OR INSTITUTED AT THE REQUEST OF A THIRD PARTY, INCLUDING CATALINA
MARKETING CORPORATION.
10.4. Representations of Inter*Act. Inter*Act hereby acknowledges and
agrees that it has conducted due diligence relative to the Sale Patents, using
its attorneys, prior to execution of this Agreement and that CVC and Xxxxxx have
provided certain documents and information requested by Inter*Act during its due
diligence prior to execution of this Agreement. Inter*Act further acknowledges
that it has been made aware of attempts by Catalina Marketing Corporation
and/or Catalina Marketing International, Inc. to commence interference
proceedings with respect to one or more of the Sale Patents.
10.5. LIMITATION ON WARRANTIES BY INTER*ACT. OTHER THAN THE EXPRESS
WARRANTIES SET FORTH IN THIS AGREEMENT, INTER*ACT DISCLAIMS ALL OTHER
WARRANTIES, EXPRESS OR IMPLIED.
11. *
-16-
12. INDEMNIFICATION. CVC, at its sole expense, shall indemnify, defend and hold
harmless Inter*Act and Inter*Act's affiliates, subsidiaries, shareholders,
directors, officers and employees from and against any and all claims, causes of
actions, actions, judgments, liabilities and/or damages, including without
limitation, reasonable expenses and attorneys' fees, arising out of or in
connection with any allegation, fact or circumstance which, if true, would
constitute a breach of an express warranty or representation of CVC or Xxxxxx
under this Agreement.
13. NO CONSEQUENTIAL DAMAGES. EXCEPT WITH RESPECT TO THE PARTIES' EXPRESS
WARRANTY OBLIGATIONS, CVC'S INDEMNIFICATION OBLIGATIONS, AND CVC'S LICENSE BACK
RESTRICTIONS UNDER THIS AGREEMENT, NO PARTY SHALL BE LIABLE TO ANY OTHER PARTY
FOR ANY INDIRECT, SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES OR LOST PROFITS
ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE SUBJECT MATTER HEREOF EVEN
IF THE PARTY HAS BEEN INFORMED IN ADVANCE OF THE POSSIBILITY OF SUCH DAMAGES.
14. LIMITATION ON XXXXXX'X LIABILITY. XXXXXX'X AGGREGATE PERSONAL LIABILITY WITH
RESPECT TO ANY ACTION ARISING OUT OF OR RELATING TO THIS AGREEMENT SHALL NOT
EXCEED * RECEIVED BY CVC UNDER THIS AGREEMENT.
-17-
15. CONFIDENTIALITY.
15.1. Confidential Information. All Parties agree that in connection with
this Agreement, Confidential Information (as defined below) of one Party (the
"Disclosing Party") may be disclosed to another Party (the "Receiving Party").
"Confidential Information" shall mean all information, materials, and knowledge,
whether in written, oral or other form, furnished or made available by a
Disclosing Party to a Receiving Party, whether or not designated as Confidential
Information, constituting, containing, referring to or revealing: (i) the
payment terms of this Agreement; or (ii) proprietary and confidential financial
information of a Disclosing Party; or (iii) proprietary and confidential
business plans and strategies of a Disclosing Party; or (iv) trade secrets and
other proprietary ideas, concepts, know-how, technologies, inventions, and
methodologies of a Disclosing Party.
15.2. Non-Disclosure. All Parties agree to maintain the strict
confidentiality of the Confidential Information of the Disclosing Party and
shall not: (a) transfer or disclose any Confidential Information of the
Disclosing Party, directly or indirectly, to any third party; (b) copy the
Confidential Information of the Disclosing Party or remove any proprietary
notices from originals or copies without the prior written approval of the
Disclosing Party; or (c) take any other action with respect to the Confidential
Information of the Disclosing Party inconsistent with the confidential and
proprietary nature of such Confidential Information. The Parties further agree
to: (i) safeguard and protect the Confidential Information of the Disclosing
Party, using procedures no less rigorous than those procedures used to protect
its own confidential information; and (ii) return all Confidential Information
to the Disclosing Party (and all permitted copies thereof) to the Disclosing
Party, at the written request of such Disclosing Party. The Parties shall be
permitted to disclose the Confidential Information of any Disclosing Party to
their employees or legal or financial advisors having a need for access thereto
in connection with this Agreement who either: (i) have been instructed as to,
and have agreed to be
-18-
bound by, the confidentiality obligations hereunder prior to being given access
to the Confidential Information; or (ii) are subject to a written agreement that
protects the use and disclosure of the Confidential Information to the extent
protected by this Agreement. The Parties shall take steps, no less rigorous than
those they take to protect their own confidential information, to prevent their
employees, agents or subcontractors from acting in a manner inconsistent with
the terms of this Agreement.
15.3. Exclusions. Notwithstanding the foregoing, Confidential Information
of a Disclosing Party shall not include information: (a) required by law to be
disclosed; (b) that becomes part of the public domain other than as a result of
a violation of this Agreement; (c) that was in the possession of a Receiving
Party prior to the disclosure by a Disclosing Party from a source who was not
known by Receiving Party to be bound by a duty of confidentiality to Disclosing
Party; or (d) that was independently developed by a Receiving Party as
demonstrated by written documentation. Notwithstanding anything to the contrary
in this Article 15, Inter*Act shall have the right to disclose this Agreement
and its terms in its required filings with the Securities and Exchange
Commission and/or other governmental authorities.
16. MISCELLANEOUS
16.1. Force Majeure. No Party shall be in default if failure to perform any
obligation hereunder is caused solely by supervening conditions beyond that
Party's reasonable control, including acts of God, civil commotion, strikes,
labor disputes, and governmental demands or requirements.
16.2. Governing Law and Jurisdiction. This Agreement shall be governed by
and construed in accordance with the laws of the state of Delaware without
giving effect to conflict of laws principles. Except as otherwise provided in
Article 5 hereof, the sole and exclusive jurisdiction for any case or
controversy arising out of this Agreement shall be in the appropriate state or
federal court in Wilmington, Delaware.
-19-
16.3. Entire Agreement. The Parties acknowledge that this Agreement,
including the Exhibits and Schedules attached hereto and any documents
incorporated by reference herein constitute the complete and exclusive statement
of the terms and conditions among the Parties, which supersedes all prior
proposals, understandings and all other agreements, oral and written, between
the parties relating to the subject matter of this Agreement, provided however,
that the Confidential Disclosure Agreement, dated May 6, 1998, between CVC and
Inter*Act (the "Confidentiality Agreement") shall remain in full force and
effect provided however, that in the event of a conflict between the terms and
conditions of this Agreement and the Confidentiality Agreement, the terms and
conditions of this Agreement shall prevail. This Agreement may not be modified
or altered except by a written instrument duly executed by all the Parties.
16.4. Severability. In the event any provision hereof shall be deemed
invalid or unenforceable by any court or governmental agency, such provision
shall be deemed severed from this Agreement and replaced by a valid provision
which approximates as closely as possible the intent of the parties. All
remaining provisions shall be afforded full force and effect.
16.5. No Waiver. No delay or omission by any Party hereto to exercise any
right or power hereunder shall impair such right or power or be construed to be
a waiver thereof. A waiver by any of the Parties hereto of any of the covenants
to be performed by any other or any breach thereof shall not be construed to be
a waiver of any succeeding breach thereof or of any other covenant herein
contained.
16.6. Headings. The headings of the articles and sections used in this
Agreement are included for convenience only and are not to be used in construing
or interpreting this Agreement.
16.7. No Third Party Beneficiaries. The Parties agree that this Agreement
is for the benefit of the Parties hereto and is not intended to confer any
rights or benefits on any third
-20-
party, and that there are no third party beneficiaries as to this Agreement or
any part or specific provision of this Agreement.
16.8. Notice. Wherever under this Agreement a Party is required or
permitted to give notice to another Party, such notice shall be deemed given
when delivered in hand, when telecopied or faxed and receipt confirmed, when
sent by overnight courier service to the address specified below, or when mailed
by United States mail, registered or certified mail, return receipt requested,
postage prepaid, and addressed as follows:
In the case of Inter*Act:
Xx. Xxxxxxx X. Xxxxxxx
Inter*Act Systems, Incorporated
00 Xxxxxxxx Xxxxxx
Xxxxxxx, XX 00000
FAX #: 000-000-0000
with copies to:
Xxxxxxx X. Xxxxxxxx, Esq.
Xxxxx Raysman Xxxxxxxxx Xxxxxx & Xxxxxxx LLP
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
FAX #: 000-000-0000
In the case of CVC:
X.X. Xxx 000
Xxxxxxx, Xxxxx 00000
with copies to:
Xxxxx X. Xxxxx, Esq.
Xxxxx & Xxxxx, L.L.P.
0000 Xxxx Xxxxxx
Xxxxxx, Xxxxx 00000
In the case of Xxxxxx:
0000 Xxxxx Xxxxx Xxxxx
Xxxxxxx, Xxxxx 00000
-21-
with copies to:
Xxxxx X. Xxxxx, Esq.
Xxxxx & Xxxxx, L.L.P.
0000 Xxxx Xxxxxx
Xxxxxx, Xxxxx 00000
Any Party hereto may from time to time change its address for
notification purposes by giving the other written notice of the new address
and/or fax number and the date upon which it will become effective.
16.9. Independent Contractor. The Parties intend to create an independent
contractor relationship and nothing contained in this Agreement shall be
construed to make any of the Parties joint venturers, principals, agents or
employees of any other Party. No Party shall have any right, power or authority,
express or implied, to bind any other Party.
16.10. Counterparts. This Agreement may be executed in three counterparts,
each of which shall be an original; but such counterparts shall together
constitute but one and the same instrument.
16.11. Assignment. Neither CVC nor Xxxxxx may assign or transfer this
Agreement or any portion hereof or obligation or right herein to any person or
entity without the prior written consent of Inter*Act, and any attempt to do so
shall automatically render the License Back and Inter*Act's payment obligations
hereunder null and void.
16.12. Termination and Survival. Upon the occurrence of an Event of Default
under the Note (as the term "Event of Default" is defined in the Note), and such
Event of Default remains uncured for a period of thirty (30) days following
Inter*Act's receipt of written notice thereof from CVC, then this Agreement
shall terminate in all respects, except that Sections 1.1, 1.3, 1.4, 7.1, 7.2,
7.3, 7.4, 10.1, 10.2, 10.3, 10.4, 12, 13, 14, 15.1, 15.2, 15.3, and 16.2 hereof
shall survive such termination.
-22-
IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed
in their names as of the respective dates written below.
INTER*ACT SYSTEMS, INCORPORATED CREDIT VERIFICATION CORPORATION
By: /s/ Xxxxxxx X. Xxxxxxx By: /s/ Xxxxx X. Xxxxxx
----------------------------- -------------------------------
Name: Xxxxxxx X. Xxxxxxx Name: Xxxxx X. Xxxxxx
----------------------------- -------------------------------
Title: Chairman & CEO Title: President
----------------------------- -------------------------------
Date: May 22, 1998 Date: 5/22/98
---------------------------- -------------------------------
XXXXX X. XXXXXX
Signature: /s/ Xxxxx X. Xxxxxx
-----------------------
Date: 5/22/98
-----------------------
-23-
SCHEDULES AND EXHIBITS
Schedule A: Sale Patents
Schedule B: Other Rights
Schedule C: Activities of CVC and Xxxxxx
Schedule D: Competitors
Schedule E: Site Licenses
Schedule F: Files Relating to Sale Patents
Exhibit 1: Assignment
Exhibit 2: Note
