EXHIBIT 99.5
CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION. ASTERISKS DENOTE OMISSIONS.
LICENSE AGREEMENT
This License Agreement is made and entered into as of August
17, 1996, by and between XXXXXXXX X. XXXXX, XX. ("XXXXX") of Boca Raton,
Florida, THE PANDA PROJECT, INC., a corporation existing under the laws of
Florida, which has its principal place of business in Boca Raton, Florida
("PANDA"), and SUN PRECISION WORKS, PVT. LTD., ("SUN" or "Licensee") a
corporation existing under the laws of India, which has its principal place of
business at Bangalore, India. CRANE and PANDA are referred to collectively as
"Licensors" and individually as "Licensor".
WHEREAS, Licensors possess certain valuable intellectual and
industrial property rights; and
WHEREAS, Licensors are willing to grant, and Licensee desires
to acquire, rights to use such rights on a worldwide basis in accordance with
the terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the premises and mutual
promises, terms and conditions of this License Agreement, and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties agree as follows:
I. DEFINITIONS
A. "Licensed Product" shall mean a high-density interconnect
system as described in the patent applications identified in Appendix A of this
License Agreement, and any improvements, modifications, and derivations thereof
and know-how related thereto owned, developed, or acquired (except in a grant
back from another CRANE or PANDA licensee) by CRANE or PANDA, and which CRANE or
PANDA has the right to license, during the term of this License Agreement.
B. "Licensed Process" shall mean any process or method
pertaining to the use, manufacture, or testing of Licensed Product and all
know-how related thereto.
C. "Licensed Product Sold" or "Sale" of a Licensed Product
shall mean the sale, lease, or other transfer of a Licensed Product or a product
incorporating a Licensed Product by SUN or the use of a Licensed Product, by
SUN. A product shall be considered sold at the time of invoicing or shipment,
whichever is earlier, or if there is no such invoicing or shipment, in the case
of internal use, at the time of such use.
D. "Patent Rights" shall mean any United States or foreign
applications or patents, owned, controlled, or acquired by CRANE in whole or in
part, during the term of this License Agreement, relating to Licensed Product or
Licensed Process, and which CRANE has the right to license, which disclose and
claim Licensed Process or Licensed Product, including, but not limited to, the
construction thereof, methods for the manufacture and use thereof, and
improvements thereto, and to any reissues or extensions of such patents and all
divisions, continuations, and continuations-in-part. Such "Patent Rights" shall
not include licenses or sublicenses related to Licensed Products or Licensed
Process granted to CRANE or PANDA by either of their other licensees.
E. "Proprietary Information" shall mean all information or
trade secrets of any description relating to Licensed Product or Licensed
Process developed by, owned, or controlled by a Licensor at any time prior to
the termination or expiration of this License Agreement, including, but not
limited to, the development, selling, marketing, use, properties, structures,
compositions, manufacture or quality control of Licensed Product or Licensed
Process, and including, but not limited in form, to samples, prototypes, data
books, manufacturing instructions, drawings, formulae, and customer lists. Any
information which is orally or visually disclosed to SUN or which is not
designated in writing as confidential, proprietary or secret at the time of
disclosure shall constitute Proprietary Information if within thirty (30) days
after such disclosure, a Licensor delivers to SUN a written document describing
such information and designating it as Proprietary Information. In addition, any
information which SUN has reason to know is considered by a Licensor to be
proprietary, confidential, or secret shall be considered Proprietary
Information. Proprietary Information does not include: (i) information which was
known by SUN prior to receipt from a Licensor; (ii) information lawfully
disclosed to SUN by a third party which did not derive the information from a
Licensor; and (iii) information which is or
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becomes a matter of public knowledge or part of the public domain other than
through a breach of this License Agreement.
F. "SUN Affiliate" shall mean any corporation, firm,
partnership, proprietorship, or other form of business organization as to which
control of the business is exercised by SUN, and any corporation, firm,
partnership, proprietorship, or other form of business organization in which SUN
has at least a fifty-one percent (51%) ownership interest, or the maximum
ownership interest SUN is permitted to have in the country where such business
organization exists.
G. "Effective Date" shall mean the latest of the date of
signature of this License Agreement by authorized representatives of SUN and
PANDA and by CRANE.
II. GRANT OF LICENSES
Subject to the terms of this License Agreement, Licensors
agree to grant and do grant to SUN a non-exclusive, worldwide license during the
term of this License Agreement to make, have made for it, use, sell, or
otherwise dispose of Licensed Products and to use and have used the Licensed
Process under Patent Rights and Proprietary Information. Such license does not
include the right to grant sublicenses or assign this license.
III. CONFIDENTIALITY CLAUSE BY SUN
Except as may be required by law or by a governmental agency,
SUN agrees that it will not, directly or indirectly, disseminate, disclose or
otherwise make available to any third party whatsoever, or reverse engineer, any
Proprietary Information. Employees of SUN shall be provided access to
Proprietary Information by SUN only on a "need to know" basis and shall be
advised of the confidential nature thereof, and shall be bound to protect the
confidentiality of such information by written agreement substantially
equivalent to this Agreement. The provisions hereof shall survive expiration or
termination of this License Agreement for a period of ten (10) years.
IV. ROYALTY CLAUSE
A. The licenses granted under Section II, above, shall be
subject to a Royalty as provided for in Appendix C to this License Agreement for
Licensed Product Sold by SUN.
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B. The Royalties provided herein are in consideration of the
trade secrets, know-how, Patent Rights, and Proprietary Information provided by
Licensors hereunder, and the ability of SUN to achieve a significant competitive
advantage by its early entry into the marketplace due to its access to such
intellectual property rights.
V. PAYMENTS, RECORDS AND REPORTS
A. Within sixty (60) days after the end of each calendar
quarter in which Royalties are earned or otherwise become due under this License
Agreement, SUN shall furnish Licensors with a written report setting forth the
computation of the Royalties payable during the preceding calendar quarter, and
shall make such payment. Royalties shall be paid to Licensors in U.S. dollars.
In case a conversion from one currency to another is involved in determining an
earned Royalty Payment, the exchange rate shall be the exchange rate in effect
at the Chase Manhattan Bank in New York City on the last day of the applicable
Calendar Quarter. Late payments shall bear interest at the rate of prime plus
two percent, as in effect at the Chase Manhattan Bank in New York City at the
time such payments originally became due.
B. SUN shall keep and maintain complete and accurate records
in sufficient detail to ascertain the Net Sales Prices of Licensed Products and
to enable Royalties payable to Licensors hereunder to be determined (including
records on all conversion of currency under Paragraph A above), and it shall
permit such records to be inspected once per year upon written notice by
Licensors during reasonable business hours by a certified public accountant or
firm of certified public accountants reasonably acceptable to SUN and appointed
by Licensors for this purpose; provided, however, that SUN shall have the right
to destroy or discard such records in accordance with SUN's record retention
policy, provided that such records shall be kept for a minimum of five (5) years
after the end of the Calendar Quarter to which they apply. Licensors shall bear
the cost and expense of such investigation by accountants, unless the
accountants determine that SUN's determination of the Royalties due and owing to
Licensors was incorrect (in SUN's favor) in an amount exceeding five percent
(5%) of the amount calculated by SUN, in which case SUN shall bear such cost and
expense.
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VI. GRANTBACK OF LICENSE TO LICENSORS
SUN grants to Licensors a perpetual license under information
and inventions, whether patentable or not, related to improvements,
modifications, and derivatives of Licensed Products or Licensed Process
originated or invented during the term of this License Agreement by employees,
agents, contractors, or suppliers of SUN having access to Licensed Product,
Licensed Process or Proprietary Information. Such license to Licensors shall be
non-exclusive, irrevocable, perpetual, worldwide, and royalty free to make, have
made, use, import, sell and otherwise transfer products covered by such
information and inventions.
VII. TRANSFER OF PROPRIETARY INFORMATION
Within thirty (30) days of execution of this Agreement,
Licensors shall provide two (2) copies of the materials identified in Appendix
B.
VIII. ASSIGNMENT BY LICENSOR
A Licensor may assign any of his or its rights, including
rights to payments of earned Royalties, to any corporation or individual.
IX. TERM AND TERMINATION
A. This License Agreement shall become effective as of the
Effective Date and, unless otherwise terminated as provided herein, shall
continue in full force and effect until the last to expire of the Licensed
Patents.
B. Termination for Cause. After the occurrence of any of the
following events, this License Agreement may be terminated by SUN, on the one
hand, or CRANE and PANDA, on the other hand (respectively, the "Terminating
Party") by giving written notice of Termination to the other Party, such
Termination being immediately effective upon the giving of such Notice of
Termination:
(a) A material breach or default as to any obligation
hereunder by the other Party and the failure of the
other Party to promptly pursue (within fifteen (15)
days after receiving written notice thereof from
the Terminating Party) a reasonable remedy
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designed to cure (in the reasonable judgment
of the Terminating party) such material breach
or default; or
(b) The filing of a petition in bankruptcy,
insolvency or reorganization against or by the
other Party, which petition shall not have
been dismissed within ninety (90) days of
filing thereof, or the other Party becoming
subject to a composition for Creditors,
whether by law or agreement, or the other
Party going into receivership or otherwise
becoming insolvent.
C. SUN shall have the right to terminate this License
Agreement at any time with or without cause upon six (6) months prior written
notice to Licensors. Termination of this License Agreement by SUN shall not
alter or affect the rights or obligations of either party arising prior to such
termination, nor shall termination pursuant to this Section relieve SUN of its
payment obligations hereunder. Any termination by SUN as provided in this
Paragraph shall not prejudice the right of Licensors to recover any earned
Royalty, or other sums owed or accrued at the time of such termination nor
prejudice the right of Licensors to maintain an action against SUN for
infringement of its patent or other intellectual property rights.
D. Licensee hereby undertakes to obtain all requisite
approvals from applicable governmental authorities and regulating bodies in
India relating to this Agreement, including without limitation any clearance
required for Licensee to pay the royalties called for by Article V above.
Licensors' obligations under this Agreement are subject to Licensee's receipt of
such approvals. Licensors shall have the right to terminate this Agreement if
such approvals are not obtained within 60 days after the Effective Date.
E. The parties agree that upon termination or expiration of
this License Agreement, Licensee shall immediately cease: (i) any use or
practice of the Licensed Product or the Licensed Process; and (ii), except as
provided in Section F below, any making, use, or sale of the Licensed Product,
including internal use within SUN or its Affiliates. Upon termination or
expiration of this License Agreement, SUN shall, at its own expense, return to
Licensors all Proprietary Information as soon as practicable after the date of
termination or expiration, but in no case more than fifteen (15) days after
termination or
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expiration, including, but not limited to, the materials identified in Appendix
B, original documents, drawings, computer diskettes, models, samples, notes,
reports, notebooks, letters, manuals, prints, memoranda and any copies of any of
the foregoing. SUN shall certify to Licensors in a signed statement under pains
of perjury that all such materials and Proprietary Information have been
returned. All Proprietary Information and Patent Rights shall remain the
exclusive property of Licensors during the term of this License Agreement and
thereafter.
F. Upon termination or expiration of this License Agreement,
nothing shall be construed to release Licensee from its obligations to pay
Licensors any and all Royalties, license fees or other amounts accrued but
unpaid hereunder prior to the date of such termination or expiration.
G. After termination or expiration of this License Agreement
for any reason by either party, SUN may sell all Licensed Product which it has
on hand upon the date of termination or expiration provided however, that the
sales shall be completed not later than three (3) months from the date of the
termination or expiration and that the termination or expiration shall not
relieve SUN from making the full earned Royalty payments herein provided on all
Licensed Product by it either before or after the date of the termination or
expiration.
X. INFRINGEMENT
In the event Licensee shall learn of the infringement of any
patent included in the Patent Rights, Licensee shall promptly call Licensors'
attention thereto in writing and shall provide Licensor with evidence of the
infringement. The parties shall use their best efforts in cooperation with each
other to terminate the infringement without litigation. If the efforts of the
parties are not successful in abating the infringement within ninety (90) days
after the infringer has been formally notified by Licensors of the infringement,
either Licensor shall have the right to: (a) commence suit on its own account;
and (b) join Licensee in such suit; and such Licensor shall give timely notice
in writing to Licensee of its election. Any proceeds of such suit shall be the
property of the Licensor whose Patent Rights were infringed.
XI. PATENT MARKING
Licensee agrees to xxxx all Licensed Products made, used, or
sold under the terms of this License Agreement, or their container with the
numbers of applicable patents of Licensor or other appropriate marking in
accordance with the patent marking
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laws of the country in which the Licensed Product is manufactured, used, or
sold.
XII. WAIVER OF DEFAULT
A waiver, express or implied, by either of the parties hereto
of any right hereunder or of any default, breach, or other failure to perform by
the other party hereto, shall not constitute or be deemed a future waiver of
that or any other right hereunder or of any default, breach or any other failure
to perform thereafter by such other party. All waivers to be effective must be
in writing and signed by the waiving party.
XIII. GOVERNING LAW
This License Agreement shall be governed, interpreted, and
construed in accordance with the laws of the State of Florida, USA, excluding
its conflict of law principles.
XIV. NO RIGHTS BY IMPLICATION
No rights or licenses with respect to Licensed Product or
Licensed Process are granted or deemed granted hereunder or in connection
herewith, other than those rights or licenses expressly granted in this License
Agreement.
XV. DEFENSIVE LITIGATION
Licensee shall defend and indemnify Licensors from and against
any damages, liabilities, costs, and expenses, including reasonable attorney's
fees and Court costs, either: (i) arising out of the manufacture, use, sale, or
other transfer of Licensed Product by Licensee or its customers; or (ii) arising
out of improvements, modifications, or derivatives of Licensed Product
introduced by Licensee or its customers; or (iii) arising out of injuries or
damages caused by Licensed Product.
XVI. DISPUTE RESOLUTION
A. Any dispute, controversy, or claim arising out of or
relating to this License Agreement, or to a breach thereof, including its
interpretation, performance, or termination shall be submitted to and finally
resolved by arbitration. The arbitration shall be conducted in the English
language in accordance with the Commercial Rules of the American Arbitration
Association (AAA) in Boca Raton, Florida, USA. The decision of the arbitrators
shall
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be final and binding upon the parties hereto, and the expense of the arbitration
(including without limitation the award of attorney's fees to the prevailing
party) shall be paid as the arbitrators determine. The arbitration shall be
conducted by three (3) arbitrators to be selected by the American Arbitration
Association in accordance with its normal procedures.
B. Notwithstanding anything contained in this Section,
Licensor shall have the right to institute judicial proceedings or proceedings
in the International Trade Commission against SUN or anyone acting by, through
or under SUN, including any purchaser from SUN, in order to enforce such
Licensor's rights hereunder through reformation of contract, specific
performance, temporary restraining order, exclusion order or cease and desist
order, preliminary injunction, final injunction, or similar relief.
C. The provisions of this Section shall survive termination of
this Agreement for a period of five (5) years.
XVII. NOTICES
Each notice required or permitted to be sent under this
License Agreement shall be given by Federal Express or comparable express
delivery service, by telecopy, or by Certified or Registered mail, to Licensors
and to Licensee at the address or telecopy number indicated below.
For CRANE: Xxxxxxxx X. Xxxxx, Xx.
0000 Xxxxxxxxx 00xx Xxxxxx
Xxxx Xxxxx, XX 00000
Telecopy Number: 407-
For PANDA: The Panda Project, Inc.
000 Xxxxxx Xxxx
Xxxx Xxxxx, XX 00000
Attention: President
Telecopy Number: 561/994-2300
For Licensee: Sun Precision Works, Pvt. Ltd.
0000 XX Xxxxx, X00 Xxxxxxxx,
Xxxxxxx Xxxx
Bangalore 560 027 - India
Attention: Mr. S.P. Satish
Telecopy Number: (91)(00) 000-0000
A party may change its address for purposes of this License Agreement by giving
the other parties written notice of its new address.
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XVIII. ENTIRE UNDERSTANDING
This License Agreement embodies the entire understanding
between the parties relating to the subject matter hereof, whether written or
oral, and there are no prior representations, warranties, or agreements that
relate to Licensed Product, Licensed Process, Proprietary Information, and
Patent Rights.
XIX. INVALIDITY
If any provision of this License Agreement is declared invalid
or unenforceable by an arbitration panel or by a court having competent
jurisdiction, it is mutually agreed that this License Agreement shall endure
except for the part declared invalid or unenforceable. The parties shall consult
and use their best efforts to agree upon a valid and enforceable provision,
which shall be a reasonable substitute for such invalid or unenforceable
provision, in light of the intent of this License Agreement.
XX. AMENDMENTS
Any amendment or modification of any provision of this License
Agreement must be in writing, dated and signed by both SUN and Licensors.
XXI. RESPONSIBILITY FOR TAXES
If Licensee is required to withhold taxes from any amount
payable by Licensee hereunder, then Licensee shall pay to Licensors an
additional amount as may be necessary so that each Licensor will receive, after
deduction of the withholding tax, the amount that such Licensor would have
received in the absence of the withholding tax.
XXII. COUNTERPARTS
This License Agreement may be executed in any number of
counterparts and each such counterpart shall be deemed to be an original.
XXIII. BINDING EFFECT
This License Agreement shall be binding upon, and inure to the
benefit of, the parties hereto and their successors, assigns, estates,
beneficiaries, representatives, and heirs.
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XXIV. WARRANTY AND DISCLAIMER
A. Licensors and Licensee represent that they have full
corporate or other power and authority to enter into and perform this Agreement.
This Agreement has been duly authorized and duly executed and delivered by each
party, and it is valid, binding and enforceable against each party in accordance
with its terms.
B. In no event shall the aggregate liability or cost to CRANE
for any action or claim arising out of this License Agreement, including without
limitation the provisions of Appendix C or any of the warranties herein,
regardless of the form of such action or claim, exceed an amount equal to
$250,000.
C. EXCEPT AS SET FORTH IN THIS SECTION, THE PARTIES
ACKNOWLEDGE AND AGREE THAT THERE ARE NO WARRANTIES, COVENANTS, REPRESENTATIONS,
OR AGREEMENTS BY CRANE OR PANDA AS TO MARKETABILITY, MERCHANTABILITY, FITNESS
FOR A PARTICULAR PURPOSE OR OTHER ATTRIBUTES, TITLE, OR NON-INFRINGEMENT WHETHER
EXPRESS OR IMPLIED (IN LAW OR IN FACT), ORAL OR WRITTEN.
IN WITNESS WHEREOF, CRANE, PANDA and SUN have signed this
License Agreement.
XXXXXXXX X. XXXXX, XX.
/s/ XXXXXXXX X. XXXXX, XX.
--------------------------------------------
Date: August 17 , 1996
THE PANDA PROJECT, INC.
By: XXXXXXXX X. XXXXX, XX.
--------------------------------------------
Name: Xxxxxxxx X. Xxxxx
--------------------------------------------
Title: President
--------------------------------------------
Date: August 17 , 1996
--------------------------------------------
SUN PRECISION WORKS, PVT. LTD.
By: /s/ S.P. SATISH
--------------------------------------------
Name: S.P. Satish
--------------------------------------------
Title: Vice President Business Development
--------------------------------------------
Date: August 17 , 1996
--------------------------------------------
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CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION. ASTERISKS DENOTE OMISSIONS.
APPENDIX A
CRANE PATENTS
APPLICATION
COUNTRY NUMBER ISSUE DATE
TW 81109972 11-Jan-1995
TW 83102272 11-May-1995
CRANE PATENT APPLICATIONS
APPLICATION
COUNTRY NUMBER FILING DATE
***** ********** **********
***** ********** **********
***** ********** **********
***** ********** **********
***** ********** **********
***** ********** **********
***** ********** **********
***** ********** **********
***** ********** **********
PANDA PATENT APPLICATIONS
APPLICATION
COUNTRY NUMBER FILING DATE
***** ********** **********
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APPENDIX B
Proprietary Information Transferred to SUN may include the following:
(1) Drawings of relevant components
(2) Technical specifications for components
(3) Test results
(4) Manufacturing process information
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CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION. ASTERISKS DENOTE OMISSIONS.
APPENDIX C
Licensee agrees to pay to Licensors an earned Royalty of
**** ************ of its Net Sales Price on each Licensed Product Sold. Payments
shall be made 50% to Crane and 50% to Panda or as otherwise directed by
Licensors.
"Net Sales Price" shall mean the price for Licensed Product
Sold by SUN to third parties less the following:
(a) Reasonable shipping, installation and packing
charges or allowances, if any, included in such amounts;
(b) Reasonable trade, quantity, or cash discounts and
Brokers' or agents' commissions, but with respect to any of
the preceding adjustments, only insofar as actually allowed
or paid in connection with the sale in question;
(c) Credits or allowances, if any, given or made on
account of rejection or return of defective Licensed
Product Sold; and
(d) Sales taxes and manufactured goods duties actually paid
by Licensee with respect to any Licensed Product not
exceeding, in aggregate, **** of the price of such Licensed
Product.
If a "Licensed Product Sold" is leased, used, or transferred
other than by sale, the Net Sales Price attributable to such lease, use, or
transfer other than by sale shall be an amount corresponding to the most recent
bona fide invoiced sale for the same or a comparable product, less the
deductions in subparagraphs (a) through (c) above, to an unrelated third party,
or should there be no such bona fide invoiced sale within six (6) months of the
transaction in question, then ******************************** of the actual
manufacturing costs.
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