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EXHIBIT 10.5
TECHNOLOGY LICENSE AGREEMENT
This TECHNOLOGY LICENSE AGREEMENT (the "Agreement") is made as of July 9,
1998, between Xxxxxxx X. Xxxxx, an individual residing at 000 Xxxxxxxxx Xxxxx,
Xxxxxxxx, Xxxxxxxxxxx 00000 ("Xxxxx"), PC Flowers & Gifts, Inc., a Delaware
corporation, the principal office of which is located at 000 Xxxxxxxxx Xxxxx,
Xxxxxxxx, Xxxxxxxxxxx 00000 ("PCF&G"), and Fingerhut Companies, Inc., a
Minnesota corporation, the principal office of which is located at 0000 Xxxxx
Xxxx, Xxxxxxxxxx, Xxxxxxxxx 00000 ("Fingerhut").
R E C I T A L S
WHEREAS, Xxxxx and PCF&G have entered into an Employment Agreement, dated
as of the date hereof (the "Employment Agreement"), Xxxxx, PCF&G and Fingerhut
have entered into an Investor Subscription Agreement, dated as of the date
hereof (the "Investment Agreement"), and Xxxxx, PCF&G and Fingerhut have entered
into a Stockholders Agreement, dated as of the date hereof (the "Stockholders
Agreement"); and
WHEREAS, as an inducement to Fingerhut to enter into the Employment
Agreement and the Investment Agreement, Xxxxx and PCF&G have agreed to enter
into this Technology License Agreement.
NOW, THEREFORE, in consideration of the agreements, grants and obligations
set forth herein and for other good and valuable consideration, the parties
hereby agree as follows:
ARTICLE I
DEFINED TERMS
Section 1.1 Definitions
As used in this Agreement:
"Affiliate" means with respect to a specified legal entity, any other
legal entity that directly or indirectly controls, is controlled by, or is under
common control with, the specified legal entity. As used in this definition, the
term "control" means the possession, directly or indirectly, of the power to
direct or cause the direction of the management and policies of a legal entity,
whether through ownership of voting securities, by contract or otherwise.
"Employment Termination Date" means that date under the Employment
Agreement on which PCF&G's payment obligations to Xxxxx terminate.
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"Field of Use" shall have the meaning ascribed thereto in Exhibit A
attached hereto and made a part hereof.
"Fingerhut Field of Use" shall have the meaning ascribed thereto in
Exhibit B attached hereto and made a part hereof.
"Know-How" means any and all inventions, discoveries, concepts, ideas,
techniques, developments, designs, works, information, know-how, trade secrets,
data, formulae, codes, processes, instructions, software, methods, mask works
and improvements.
"Licensed Patents" means (1) U.S. patent application 08/785,321 filed
January 21, 1997 naming Xxxxxxx X. Xxxxx as the sole inventor, as well as
continuations and divisionals of such U.S. patent application, and any and all
U.S. patents issuing on any of the foregoing, and (2) Patent Cooperation Treaty
application PCT/US98/00975, filed January 20, 1998, applicant: Xxxxxxx X. Xxxxx,
and any and all national phase and regional phase applications of such Patent
Cooperation Treaty application, and any and all patents granted on any of such
national and regional phase applications.
"Non-Competition Termination Date" means that date under the Employment
Agreement on which Xxxxx'x non-competition obligations to PCF&G terminate.
"Other Intellectual Property Rights" shall mean patents, copyrights,
trademarks, service marks, trade names, trade secrets and any applications for
or registrations of any thereof, and all other forms of intellectual property
rights that (1) are related to the past, present or future (as contemplated at
the Employment Termination Date) business of PCF&G if made or acquired by Xxxxx
prior to the Non-Competition Termination Date, or (2) are made using the
equipment, supplies, facilities, intellectual property rights or Know-How of
PCF&G.
"Technology" means any and all inventions, discoveries, concepts, ideas,
techniques, developments, designs, works, information, know-how, trade secrets,
data, formulae, code, processes, instructions, software, methods, mask works and
improvements that (1) are related to the past, present or future (as
contemplated at the Employment Termination Date) business of PCF&G if made or
acquired by Xxxxx prior to the Non-Competition Termination Date, or (2) are made
using the equipment, supplies, facilities, intellectual property rights or
Know-How of PCF&G.
ARTICLE II
ASSIGNMENT
Section 2.1 Assignment of Existing Rights
Xxxxx hereby assigns to PCF&G all of his right, title and interest in and
to all Technology and Other Intellectual Property Rights (together with the
goodwill of the business symbolized thereby), but not including the Licensed
Patents, whether or not patentable or copyrightable, and whether made,
controlled or owned solely by Xxxxx or jointly by Xxxxx with others, free and
clear of all liens, claims, encumbrances, restrictions and retained rights of
any kind.
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Section 2.2 Assignment of Future Rights
Xxxxx agrees to assign to PCF&G all of his right, title and interest in
and to all Technology and Other Intellectual Property Rights (including the
goodwill of the business symbolized thereby), made or acquired by Xxxxx prior to
the Non-Competition Termination Date, whether or not patentable or
copyrightable, and whether made, controlled or owned solely by Xxxxx or jointly
by Xxxxx with others, free and clear of all liens, claims, encumbrances,
restrictions and retained rights of any kind.
Section 2.3 Further Assurances
Xxxxx hereby agrees to perform any and all acts as reasonably requested by
PCF&G to assure that the Technology and Other Intellectual Property rights shall
be held and enjoyed by PCF&G as well as to enable PCF&G to protect and enforce
same to the fullest extent possible, including but not limited to executing and
delivering to PCF&G all appropriate applications, declarations, oaths,
petitions, assignments, and disclaimers in form and substance as may be
reasonably requested by PCF&G, communicating to PCF&G or its designee all facts
known to Xxxxx relating to the Technology and the Other Intellectual Property,
and furnishing PCF&G with any and all documents, photographs, prototypes,
models, samples and other physical exhibits, devices and records relating to the
Technology and the Other Intellectual Property. PCF&G will reimburse Xxxxx for
all reasonable third party costs and expenses incurred in connection with this
Section 2.3.
ARTICLE III
LICENSE
Section 3.1 Grants
(a) Xxxxx hereby grants to PCF&G and its subsidiaries a fully paid-up,
royalty-free, worldwide, perpetual, non-terminable, unrestricted, non-exclusive
right and license under the Licensed Patents to carry out all lawful activities
within the Field of Use (the PCF&G License"). Xxxxx hereby grants to PCF&G a
non-terminable right to sublicense the rights licensed hereunder to Fingerhut
and to its Affiliates for any and all uses within the Fingerhut Field of Use
under such terms and conditions as PCF&G may determine in its sole discretion.
(b) PCF&G hereby grants to Fingerhut and its Affiliates (i) a fully
paid-up royalty-free, worldwide, perpetual, non-terminable, unrestricted,
non-exclusive right and license under the Licensed Patents during the term of
this Agreement, and thereafter at a royalty rate to be determined by the parties
hereto at such time, and failing an agreement by the parties within 90 days, at
a royalty rate determined to be commercially reasonable at such time for the
Licensed Patents by an expert appointed by the parties or, failing an agreement
of the parties as to the expert, by an expert appointed pursuant to the rules of
the American Arbitration Association and (ii) a fully paid-up, royalty-free,
worldwide, perpetual, non-terminable, unrestricted, non-exclusive right and
license under the Technology and Other Intellectual Property Rights, in each
case for use within the Fingerhut Field of Use (the "Fingerhut License").
Neither Fingerhut nor any of its Affiliates shall be deemed to assume or be
bound by any obligation to refrain from competing with PCF&G or anyone else
whether as a result of any such sublicense or otherwise.
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Section 3.2 Further Assurances
(a) Xxxxx hereby agrees to perform any and all acts as reasonably
requested by PCF&G to assure that PCF&G shall enjoy the full benefits of its
licenses and rights hereunder, as well as to enable PCF&G to protect and enforce
such licenses and rights to the fullest extent possible, including but not
limited to communicating to PCF&G or its designee all facts known to Xxxxx
relating to the Licensed Patents, and furnishing PCF&G with any and all
documents, photographs, prototypes, models, samples and other physical exhibits,
devices and records relating to the Licensed Patents.
(b) PCF&G hereby agrees to perform any and all acts as reasonably
requested by Fingerhut to assure that Fingerhut shall enjoy the full benefits of
its sublicenses, licenses and rights hereunder.
ARTICLE IV
PATENTS AND COPYRIGHTS
Section 4.1 Cooperation
Xxxxx shall assist PCF&G fully at any and all times and at its reasonable
request and expense in pursuing and obtaining patents, copyright registrations
and other legal rights relating to the Technology and Other Intellectual
Property Rights, including but not limited to:
(a) promptly and fully disclosing to PCF&G in writing any and all
developments, concepts and ideas relating to the Technology or Other
Intellectual Property Rights; and
(b) assisting and participating with PCF&G in the preparation, filing and
prosecution of any and all applications for patents, copyright registrations and
other legal rights relating to the Technology and Other Intellectual Property
Rights, including but not limited to executing and delivering to PCF&G all
appropriate applications, declarations, oaths, petitions, assignments, and
disclaimers in form and substance as may be requested by PCF&G.
Section 4.2 Control of Prosecution
(a) Prior to the Employment Termination Date, PCF&G shall have the sole
right in its discretion to control the preparation, filing and prosecution of
any and all applications within the Licensed Patents, and Xxxxx shall execute
and deliver such papers and do such acts as PCF&G may reasonably request in its
sole discretion to enable it to exercise such control. Notwithstanding any other
provision of this Agreement, PCF&G shall have no obligation (i) to prepare or
prosecute any application for patent, copyright registration or other legal
right, (ii) to accept instructions or directions from Xxxxx or any other entity
regarding such preparation or prosecution, (iii) to continue the preparation or
prosecution of any such application, or (iv) to maintain any such application,
or any patent or other legal right based thereon.
(b) PCF&G shall keep Xxxxx timely informed of application filings, office
actions and responses in the case of applications within the Licensed Patents,
and shall give reasonable consideration of any written recommendations regarding
the prosecution of such applications
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received from Xxxxx, provided that such applications are under the control of
PCF&G pursuant to Section 4.2 hereof. In the event that PCF&G determines not to
pursue or to continue to pursue the prosecution of any patent application under
its control pursuant to Section 4.2 hereof, then PCF&G shall give notice to
Xxxxx sufficiently prior to any deadline for taking action in the prosecution of
such patent application so that Xxxxx may choose, in his sole discretion,
whether to pursue such prosecution at his sole expense.
(c) Following the Employment Termination Date, within sixty days of such
date, Xxxxx shall have the right, upon notice given to PCF&G, to choose, in his
sole discretion, to control the preparation, filing and prosecution of any and
all applications within the Licensed Patents, and PCF&G shall execute and
deliver such papers and do such acts as PCF&G may reasonably request in its sole
discretion to enable it to exercise such control. If Xxxxx does not timely
exercise such right, then PCF&G may, in its sole discretion, continue to
prosecute such applications.
ARTICLE V
INFRINGEMENT
Section 5.1 Notice to PCF&G
Xxxxx shall give PCF&G and Fingerhut prompt notice of any known or
presumed infringement of any of the rights licensed hereunder of which he has
knowledge.
Section 5.2 Prosecution of Infringers
(a) Prior to the Employment Termination Date, PCF&G shall have the sole
right, but not the obligation, to pursue any and all infringements and
violations of the rights under the PCF&G License at its sole discretion and
expense, including but not limited to the rights to discontinue, settle or
compromise any claim, controversy or cause of action on such terms and
conditions as it may determine in its sole discretion. PCF&G shall have the sole
right, but not the obligation, to commence and control any and all lawsuits,
arbitrations, and other legal proceedings related to any such infringements or
violations through all levels of appeal and review, as well as to discontinue,
dismiss, settle or compromise same in its sole discretion.
(b) Following the Employment Termination Date, Xxxxx shall have the sole
right, but not the obligation, to pursue any and all infringements and
violations under the Licensed Patents, except for infringements for which
litigation has not been instituted by PCF&G, under Section 5.2(i) at his sole
discretion and expense.
(c) If Xxxxx does not timely exercise such right under Section 5.2(b),
then PCF&G may, in its sole discretion, continue to pursue any or all of such
infringements.
Section 5.3 Cooperation by Xxxxx
Xxxxx agrees to assist fully in any and all enforcement efforts pursued by
PCF&G at PCF&G's expense, including but not limited to providing such facts,
documents and physical exhibits, devices and records as PCF&G may reasonably
request and attending such proceedings as PCF&G may reasonably request to
provide testimony. Xxxxx agrees that he shall, at PCF&G's
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reasonably request, participate as a party, either solely or jointly with PCF&G
in any suit, arbitration or other legal proceeding at any time and in any
jurisdiction in furtherance of PCF&G's enforcement efforts, provided that PCF&G
shall pay Xxxxx'x out of pocket expenses in connection therewith.
Section 5.4 Recoveries
(a) Any and all monies, judgments, awards and settlements obtained either
by Xxxxx or PCF&G, pursuant to actions under Section 5.2(a) or 5.2(c), as a
result of any enforcement of the rights under the PCF&G License, shall be
applied first to reimburse any and all costs of enforcing such licensed rights
(including reasonable attorneys' fees), and any amount recovered as royalties in
addition to such enforcement costs shall be distributed fifty percent (50%) to
Xxxxx and fifty percent (50%) to PCF&G.
(b) Any and all monies, judgments, awards and settlements obtained either
by Xxxxx or PCF&G, pursuant to actions under Section 5.2(b), as a result of any
enforcement of rights to the Licensed Patents shall be applied first to
reimburse any and all costs of enforcing such rights (including reasonable
attorneys' fees), and any amount recovered as royalties in addition to such
enforcement costs shall be solely for the benefit of Xxxxx.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
Section 6.1 Representations and Warranties
Xxxxx represents and warrants to PCF&G and Fingerhut as follows:
(a) The execution and performance of this Agreement by Xxxxx will not
violate any order, judgment, contract or other obligation binding him.
(b) The Licensed Patents and all rights assignable hereunder are owned
solely by Xxxxx free and clear of any and all claims, liens, encumbrances,
licenses, restrictions, reservations or other rights of any third party.
(c) Xxxxx has no personal knowledge of any patent, copyright, trade secret
or any other intellectual property right which would be infringed by the
business of PCF&G as conducted using the Licensed Patents, the Technology or the
Other Intellectual Property as of the date hereof. Xxxxx makes no representation
with respect to U.S. Patent No. 5,712,979 issued January 27, 1998 entitled:
METHOD AND APPARATUS FOR ATTACHING NAVIGATIONAL HISTORY INFORMATION TO UNIVERSAL
RESOURCE LOCATOR LINKS ON A WORLD WIDE WEB PAGE; Inventors: Xxxxxx et al., and
U.S. Patent No. 5,717,860 issued February 10, 1998 entitled: METHOD AND
APPARATUS FOR TRACKING THE NAVIGATION PATH OF A USER ON THE WORLD WIDE WEB;
Inventors: Xxxxxx et al.
(d) Xxxxx has fully disclosed in writing to PCF&G and Fingerhut each and
all of the Licensed Patents and all rights assignable hereunder.
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(e) Xxxxx makes no representations as to the patentability of the Licensed
Patents, copyrightability of any software within the Technology, or
merchantability of the Licensed Patents, the Technology or the Other
Intellectual Property. Xxxxx is personally unaware of any fact, circumstance or
combination of facts or circumstances which would (1) render any claim of the
Licensed Patents unpatentable in any jurisdiction designated therein, or (2)
prevent the successful assertion of a valid copyright in any software within the
Technology.
Section 6.2 Incorporated Representations and Warranties
The representations and warranties made by Xxxxx in the Investment
Agreement are expressly repeated and incorporated herein by reference in their
entirety.
ARTICLE VII
TERMINATION
Section 7.1 Termination by Xxxxx
Xxxxx may terminate this Agreement and the rights and licenses granted
hereunder only upon the dissolution of PCF&G, provided, however, that the rights
and licenses granted hereunder shall continue thereafter to the extent necessary
to liquidate the assets of PCF&G and to carry out any and all other obligations
of any party under the Investment Agreement. Neither the termination of this
Agreement, or of the license or rights granted hereby, nor any amendment
thereof, shall terminate or otherwise affect any sublicense granted hereunder to
Fingerhut or any Affiliate thereof, including under the Fingerhut License, which
shall, despite any such termination or amendment, continue in full force and
effect in accordance with its terms. Upon the dissolution of PCF&G, the
sublicense granted hereunder to Fingerhut shall terminate.
ARTICLE VIII
MISCELLANEOUS
Section 8.1 Notices
All notices, requests, other communications and distributions to any party
hereunder shall be in writing (including prepaid overnight courier, telex,
facsimile transmission or similar writing) and shall be given to such party at
its address or telecopy number set forth below or at such other address or
telecopy number as such party may hereafter specify for the purpose by notice to
the other parties.
If to PCF&G:
PC Flowers & Gifts, Inc.
000 Xxxxxxxxx Xxxxx
Xxxxxxxx, XX 00000
If to Fingerhut:
Fingerhut Companies, Inc.
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0000 Xxxxx Xxxx
Xxxxxxxxxx, XX 00000
Attn: Xxxxxxx X. Xxxxxxx, Esq.
If to Xxxxx:
Xxxxxxx X. Xxxxx
000 Xxxxxxxxx Xxxxx
Xxxxxxxx, XX 00000
Each such notice, request or other communication shall be effective (i) if given
by telex or telecopy, when such telex or telecopy is transmitted to the telex or
telecopy number specified on the signature pages hereof and the appropriate
answerback is received (in the case of telex) or telephonic confirmation of
receipt thereof is obtained (in the case of telecopy) or (ii) if given by mail,
prepaid overnight courier or any other means, when received at the address
specified on the signature pages hereof or when delivery at such address is
refused.
Section 8.2 Failure to Pursue Remedies
The failure of any party to seek redress for violation of, or to insist
upon the strict performance of, any provision of this Agreement shall not
prevent a subsequent act, which would have originally constituted a violation,
from having the effect of an original violation.
Section 8.3 Cumulative Remedies
Except as expressly provided herein, the rights and remedies provided by
this Agreement are cumulative and the use of any one right or remedy by any
party shall not preclude or waive its right to use any or all other remedies and
such rights and remedies are given in addition to any other rights the parties
may have by law, statute, ordinance or otherwise.
Section 8.4 Binding Effect
This Agreement shall be binding upon and inure to the benefit of all of
the parties and, to the extent permitted by this Agreement, their successors,
legal representatives and permitted assigns. PCF&G may assign its rights under
this Agreement to any subsidiary, to any successor to its business or to the
transferee of substantially all of its assets. The obligations of Xxxxx shall
not be assignable.
Section 8.5 Interpretation
Throughout this Agreement, nouns, pronouns and verbs shall be construed as
masculine, feminine, neuter, singular or plural, whichever shall be applicable.
All references herein to "Articles," "Sections" and paragraphs shall refer to
corresponding provisions of this Agreement.
Section 8.6 Severability
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The validity or unenforceability of any particular provision of this
Agreement shall not affect the other provisions hereof, and this Agreement shall
be construed in all respects as if such invalid or unenforceable provision were
omitted.
Section 8.7 Counterparts
This Agreement may be executed in any number of counterparts with the same
effect as if all parties hereto had signed the same document. All counterparts
shall be construed together and shall constitute one instrument.
Section 8.8 Integration
This Agreement, the Investment Agreement and the other agreements
contemplated thereby constitute the entire agreement among the parties hereto
pertaining to the subject matter hereof and supersedes all prior agreements and
understandings pertaining thereto.
Section 8.9 Governing Law
This Agreement and the rights of the parties hereunder shall be
interpreted in accordance with the laws of the State of New York and all rights
and remedies shall be governed by such laws without regard to principles of
conflict of laws.
Section 8.10 Headings
The headings and subheadings in this Agreement are included for
convenience and identification only and are in no way intended to describe,
interpret, define or limit the scope, extent or intent of this Agreement or any
provision hereof.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above stated.
/s/ Xxxxxxx X. Xxxxx
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Xxxxxxx X. Xxxxx
PC FLOWERS & GIFTS, INC.
By: /s/ Xxxxxxx X. Xxxxx, President
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FINGERHUT COMPANIES, INC.
By: /s/ Xxxxxxx Xxxxxxx, Vice President
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EXHIBIT A
to
Technology License Agreement
between Xxxxxxx X. Xxxxx,
PC Flowers & Gifts, Inc. and
Fingerhut Companies, Inc.
FIELD OF USE
All activities relating to retail distribution of consumer goods and
services by means of server based communications systems, including but not
limited to (l) advertising, offering for sale, sale and distribution of such
goods and services, (2) the manufacture, assembly and supply of such systems,
and of hardware and software for use therein (solely in connection with carrying
out distribution of such goods and services), and (3) all services rendered in
connection therewith.
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EXHIBIT B
to
Technology License Agreement
between Xxxxxxx X. Xxxxx,
PC Flowers & Gifts, Inc., and
Fingerhut Companies, Inc.
FINGERHUT FIELD OF USE
All activities within the Field of Use except those activities with
respect to usage of Licensed Patents with PCF&G's marketing partners, as exist
now or may exist from time to time in the future.
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