Exhibit 6.01
LICENSE AGREEMENT
THIS AGREEMENT is made effective as of the 1st day of October 1999 (the
"Effective Date"), by and between ID Technologies Corporation, a North Carolina
corporation, having a place of business and address of 0000 Xxxx Xxxx Xxxxxx,
Xxxxx X, Xxxxxx, Xxxxx Xxxxxxxx 00000 (the "Licensor"), and BrentScott
Associates, LLC, having a place of business and address of 0000 Xxxxxx Xxxx,
Xxxxx X, Xxxxxxxx Xxxx, XX 00000 (the "Licensee") (together, the "Parties").
WHEREAS, Licensor owns all right, title and interest in United States
Patent No. 5,623,552 (the '552 Patent), dated April 22, 1997, and entitled
"Self-Authenticating Identification Card With Fingerprint Identification".
WHEREAS, Licensor has obtained from Technical Partners (defined below)
a license to practice and use Technical Partners' inventions and patent(s)
(hereinafter referred to as "Technical Partners' Technology") in the Field of
License (defined below), to the extent to which they pertain to the subject
matter described and claimed in the '552 Patent and has further obtained from
Technical Partners' the right to sublicense such Technical Partners' Technology
in said Field of License to Licensee.
WHEREAS, Licensor desires to grant to Licensee an exclusive and
transferable license (subject to the provisions of 2.1) to the '552 Patent and
also the Technical Partners Technology to facilitate Licensee's application of
the '552 Patent technology, and Licensee desires to receive such license and
technology pursuant to the terms of this Agreement.
NOW, THEREFORE, the Parties agree that for and in consideration of the
mutual obligations contained herein, the receipt and sufficiency of which is
acknowledged, the Parties do hereby agree as follows:
1.0 DEFINITIONS
1.1 "SYSTEM" means Licensor's fingerprint identification technology
described and claimed in the '552 Patent and the Licensor Technology
(defined below).
1.2 "LICENSED PATENTS" means the '552 Patent and other patents licensed to
Licensee hereunder.
1.3 "SUBSIDIARY" means a corporation, company or other entity more than
fifty percent of whose outstanding shares or securities (representing
the right, other than as affected by events of default, to vote for the
election of directors or other managing authority) are, now or
hereafter, owned or controlled directly by a corporation, company or
other entity which is a party to this Agreement (either by Licensee or
the Licensor), so long as such ownership or control exists.
1.4 "LICENSEE TECHNOLOGY" means presently existing or future developed
inventions, patents, and technology of Licensee relating to the subject
matter of the '552 patent and licensed or otherwise transferred to
Licensor pursuant to this Agreement.
1.5 "TECHNICAL PARTNERS" Licensor's partners that develop and apply
technology covered by or related to the subject matter described and
claimed in the '552 Patent.
1.6 "LICENSOR AFFILIATE" shall mean a Subsidiary of Licensor.
1.7 "LICENSOR TECHNOLOGY" means and includes the Licensed Patents as well
as all present and future intellectual property including rights in
inventions, patents, trade secrets, copyrights and other technology,
and any portion thereof, associated with or supportive of use of the
System, which Licensor owns or is authorized to license or otherwise
transfer to Licensee under this Agreement and which Licensor receives
either from Licensee or Technical Partners, and includes present and
future Licensee and Technical Partners' Technology, as well as other
technology acquired by Licensor with respect to which Licensor has the
right to license.
1.8 "FIELD OF LICENSE" means identification, access, and security cards,
associated systems and equipment of whatever type used for all fields,
except for the Excluded Fields of License, which are not part or
otherwise encompassed by "Field of License," unless one or more of
Excluded Fields of License (defined below) are acquired pursuant to
Article 9 of this Agreement.
1.9 "EXCLUDED FIELDS OF LICENSE" means the several Fields of License and
described in Schedule A attached hereto.
1.10 "LICENSED PRODUCT" means any product or component of a product which
incorporates some or all of Licensor's Technology, or whose
manufacture, sale or use would infringe directly, contributorily, or by
inducement any claim of the '552 Patent or any other patent licensed
hereunder.
1.11 "AUTHORIZED SOURCE" means a company selected by Licensor to manufacture
the Licensed Product or a company selected by Licensee with Licensor's
written approval pursuant to Article 3.0 below.
1.12 "THE RECITALS AND ATTACHED SCHEDULE" set forth in the "Whereas"
provisions on page 1 of this Agreement and the Schedule(s) attached
hereto are incorporated herein by reference and are made a part of this
Agreement herein.
2.0 GRANT OF EXCLUSIVE TECHNOLOGY LICENSE
AND LICENSEE'S INTENDED INDUSTRIES
2.1 GRANT. Licensor hereby grants and conveys to Licensee, subject to the
express limitations of this Agreement and to the extent that it
lawfully may issue an exclusive license to: (a) make and sell the
System or any component thereof only in the Field of License (b) to use
such certification xxxx(s), trademark(s) and/or other marking(s) on
Licensed Products pursuant to Article 14; and (c) to disclose the
System to its Authorized Sources and others necessary for its practice
by Licensee, subject, however, to the confidentiality duty set forth in
Article 22 within the member States of the Gulf Cooperation Counsel
(GCC) States in the Middle East consisting of the Kingdom of Saudi
Arabia, Kuwait, Bahrain, U.A.E., Oman and Qatar. Due to the unique
business rules for the conduct of business in the Middle East, it is
understood by the Licensor that
it is operationally essential that the Licensee be able to grant a
"sub-license" to selected business partners and that it is not possible
for the Licensee to independently operate in the GCC target market area
as defined above without a partner and the ability to a "sub-license".
2.2 LICENSEE'S INTENDED INDUSTRIES. Simultaneous with execution of this
Agreement, Licensee shall indicate in writing on attached Schedule C,
the industries within the Field of License that Licensee intends to
pursue under this Agreement. It is understood that Schedule C is merely
for Licensor to determine the identity of those industries to which its
System may be sold or otherwise transferred by the exclusive Licensee,
and is not binding on the Licensee.
3.0 LICENSEE CERTIFICATE OF LICENSE AND
AUTHORIZED SOURCE OF LICENSED PRODUCT
3.1 AUTHORIZED SOURCE LIST. Licensor shall provide Licensee, in a writing,
the name and address of at least one company, to be designated as an
Authorized Source, with the expertise, skill, and knowledge to
manufacture and produce Licensee's designated ones of the Licensed
Products within Licensee's Field of License according to Licensee's
specifications and which Licensee is prepared to develop and market.
The date of the writing required by this Article 3.1 shall determine
the date upon which the Term of this Agreement, specified in Article
12.0, begins.
3.2 ADDITIONAL AUTHORIZED SOURCES. At any time during the term of this
Agreement, the Licensee may request adding to the list of Authorized
Sources one or more manufacturers of Licensed Products within
Licensee's Field of License. Such request shall affirmatively state
that the Licensee has investigated the proposed source and has an
adequate basis for believing that the proposed source can manufacture
the particular Licensed Product of interest to the Licensee to such
standards of quality and grade at least equal to and in all respects
not less reliable than the Authorized Sources identified by Licensor
pursuant to Article 3.1. Licensor, not more than thirty (30) days after
it receives the proposed Additional Authorized Sources from Licensee,
shall advise Licensee with respect to such request, and shall not
unreasonably reject such proposed source.
3.3 LICENSEE CERTIFICATE OF LICENSE. Simultaneous with the execution of
this Agreement, Licensor shall complete a Licensee Certificate of
License, a blank copy of which is attached hereto as Schedule B. The
completed Licensee Certificate of License shall include Licensee's
corporate name, business address, telephone number, and shall include a
licensee number assigned by Licensor. Each Authorized Source will have
a list of valid licensee numbers. An Authorized Source is not
authorized by Licensor to manufacture and/or transfer Licensed Products
to Licensee, unless Licensee first presents to the Authorized Source a
Licensee Certificate of License containing a valid licensee number.
3.4 PROCUREMENT. Licensee shall procure the Licensed Product only from an
Authorized Source, and only by presenting to the Authorized Source the
Licensee Certification of License.
3.5 LICENSEE NOT OBLIGATED TO PURCHASE FROM PERSONS SELECTED BY LICENSOR.
The Licensee acknowledges that it is not required to obtain the product
from any person affiliated with the Licensor, and that it has a full
and sufficient opportunity to seek out alternative sources of the
product and will take such advantage of that opportunity as it
independently elects, relying exclusively on its own business judgment
and not on the recommendation of the Licensor for that purpose. The
Licensee further warrants that it will conduct its own inspection of
any Authorized Source whose identity is provided to the Licensee by the
Licensor and will independently determine the capability and quality of
such Authorized Source to meet the requirements of the Licensee, and
will not rely on the judgment of the Licensor for that purpose. The
Licensor makes no warranty or representation whatsoever as to the
capabilities or performance of any Authorized Source, and expressly
disclaims all such warranties and representations.
4.0 LICENSEE'S RIGHT TO PROPOSE SPECIFICATIONS
The Licensee shall have the right to propose modifying Licensed Product
specifications in a manner that would permit the Licensed Product to better
service customers in the Field of License. Licensor has the right to reject such
modifications, if such modified specifications call for a Licensed Product of a
lesser grade or quality than desired by Licensor or a Licensed Product likely to
impair consumer acceptance of the Licensed Products.
5.0 DEVELOPMENT OF PROTOTYPES OF LICENSED PRODUCTS
5.1 Upon selection of an Authorized Source for the first selected Licensed
Product within Licensee's Field of License which Licensee stands ready
to procure, develop and market in commercial quantities at reasonable
prices, Licensee shall promptly and forthwith proceed to procure such
selected Licensed Product in prototype form from such Authorized
Source, and upon procurement thereof provide Licensor with a sample
thereof.
5.2 Licensor shall within forty (40) days after receipt of a sample of
Licensee's first selected Licensed Product in a prototype form suitable
for reproduction in commercial quantities promptly notify Licensee of
its approval or disapproval thereof. In the event that the Licensor
shall fail to reply within said forty (40) days, the proposed prototype
form shall be deemed to be approved by Licensor. In the event of
approval, which shall not be unreasonably withheld, Licensee shall use
its best efforts to commence production, marketing, and sale of such
first selected Licensed Product in the Field of License. In the event
of disapproval, Licensor shall inform Licensee of the reasons therefore
and Licensee shall promptly take steps to improve such prototype of the
first selected Licensed Product and shall again submit such prototype
to Licensor for approval in accordance with the terms of this Article
5.2.
5.3 After introduction and marketing of the first selected Licensed Product
as referred to above, Licensee shall proceed to select the next and
subsequent Licensed Products in the same manner as set forth above and
shall again submit such prototype to Licensor for approval in
accordance with the terms of Article 5.2.
6.0 WARRANTIES AND REPRESENTATIONS OF THE PARTIES
6.1 LICENSORS WARRANTIES AND REPRESENTATIONS
6.1.1 LICENSOR TECHNOLOGY.
(a) The Licensor warrants that it is the owner of all
right, title and interest in Letters Patent of the
United States, No. 5,623,552 dated April 22, 1997,
and entitled Self Authenticating Identification Card
With Fingerprint Identification," and has the right
to grant licenses to others to manufacture, use, and
sell, products covered by the patent, and further
warrants that it has the right to license the System
to Licensee pursuant to the terms of this Agreement.
(b) Licensor also warrants that it has obtained from
Technical Partners a license in the Field of License
to receive certain of Technical Partners' Technology
to the full extent to which such technology pertains
to the subject matter described and claimed in the
'552 Patent and has further obtained from Technical
Partners the right to sublicense such Technical
Partners' Technology in said Field of License to
Licensee.
(c) Licensor fully warrants and shall warrant throughout
the term of this Agreement that it has full,
unrestricted right to grant to Licensee the rights
granted in Article 2.0.
6.1.2 PROSECUTION OF LICENSOR PATENTS. Licensor shall maintain the
'552 Patent and any other presently or future existing United
States or foreign patents owned by Licensor and relating to
the System.
6.1.3 LICENSOR BEST EFFORTS. Licensor shall use its best efforts to
develop, improve, enhance and commercialize the System through
its dealings with its Technical Partners, Subsidiaries and
Licensees.
6.1.4 LICENSOR EMPLOYEES. Licensor represents and warrants that it
shall require its employees to assign to Licensor all
intellectual property rights to the inventions developed by
its employees relating to the System.
6.1.5 DUE ORGANIZATION, GOOD STANDING, AUTHORITY OF LICENSOR.
Licensor is a corporation duly organized, validly existing,
and in good standing under the laws of North Carolina.
Licensor has full right, power, and authority to own its
properties and assets, and to carry on its business. To the
best of Licensor's knowledge, Licensor is duly licensed,
qualified and authorized to do business, and is in good
standing in each jurisdiction in which the properties and
assets owned by it or the nature of the business conducted by
it makes such licensing, qualification and authorization
legally necessary.
6.1.6 LICENSE NOT IN CONFLICT WITH OTHER INSTRUMENTS; REQUIRED
APPROVALS OBTAINED.
6.1.6.1 To the best of Licensor's knowledge, the execution,
delivery, and performance of this License by Licensor
will not (a) violate or require any registration,
qualification, or filing under, (i) any law, statute,
ordinance, rule or regulation ("Laws") of any
federal, state or local government ("Governments") or
any agency, bureau, commission or instrumentality of
any Governments, or (ii) any judgment, injunction,
order, writ or decree or any court, arbitrator, or
Government.
6.1.6.2 To the best of Licensors knowledge, the execution,
delivery, and performance of this License by Licensor
will not conflict with, require any consent,
approval, or filing under, result in the breach or
termination of any provision of, or constitute a
default under (i) any indenture, mortgage, deed of
trust, license, permit, approval, consent, franchise,
lease, contract, or any instrument or agreement to
which the Licensor is a party or is bound, or (iii)
any judgment, injunction, order, writ, or decree of
any court, arbitrator, or government by which the
Licensor or any of its assets or properties is bound.
6.1.7 LEGAL PROCEEDINGS-LICENSOR. To the best of Licensor's
knowledge, there is no action, suit, proceeding, claim,
arbitration, or investigation by any Government or any other
person (i) pending to which the Licensor is a party, (ii)
threatened against or relating to the Licensor or any of the
Licensor's assets or businesses, (iii) challenging the
Licensor's right to execute, deliver, or perform under this
License, or (iv) asserting any right against Licensor with
respect to the System and there is no basis for any such
action, suite, proceeding, claim, arbitration, or
investigation.
6.2 LICENSEE'S WARRANTIES AND REPRESENTATIONS
6.2.1 Licensee's Best Efforts. Licensee represents and warrants to
use its best efforts to proceed diligently with its
manufacture, marketing, distribution, and sale of the Licensed
Products and System in the Field of License in accordance with
the terms of this Agreement. Licensee shall at its cost and
expense use its best efforts and all due diligence to
energetically and aggressively develop the market for the
Licensed Products in the Field of License, to promote the
sale, and use of the Licensed Products and to enhance the
reputation and goodwill associated with the Licensed Products.
In connection with its obligations under this Article 6.2.1,
Licensee shall through its partners in the target market area
maintain facilities of a nature and style suitable in the
Field of License to facilitate the marketing, distribution,
and sale of the Licensed Products; shall, through its
sub-licensee partners provide aggressive, dedicated,
continuous representation in the Field of License by means of
sales and support staff sufficient in number, qualifications,
and training to aggressively and effectively promote, market,
and service the Licensed Products.
6.2.2 LICENSEE TECHNOLOGY. Licensee represents and warrants in
recognition of mutual benefits to be derived by Licensee, that
it shall grant to Licensor a nonexclusive, royalty free
license, with the right to sublicense, to make, use, and sell
any Licensee made improvement or enhancement, or improvement
or enhancement made on behalf of Licensee, to the Licensed
Product (Licensee Technology). With regard to technology
developed by Licensee, Licensee represents and warrants that
it shall have the sole and exclusive right to grant the
license to manufacture, use, sell, and otherwise transfer
Licensee's Technology relating to the System to Licensor
6.2.3 QUALITY OF LICENSED PRODUCTS. Licensee represents, warrants
and covenants that it shall diligently inspect goods delivered
by Authorized Sources to assure conformity with
specifications, grade and quality satisfactory to Licensor,
and shall not procure goods from any unauthorized source.
Furthermore, Licensee shall not induce any Authorized Source
to engage in adulteration, substitution or other practices
that would constitute a variance from such specifications,
grade and quality and shall not knowingly countenance any such
practices.
6.2.4 LICENSE NOT IN CONFLICT WITH OTHER INSTRUMENTS; REQUIRED
APPROVALS OBTAINED.
6.2.4.1 To the best of Licensee's knowledge, the execution
delivery, and performance of this License by Licensee
will not (a) violate or require any registration,
qualification, or filing under, (i) any law, statute,
ordinance, rule or regulation ("Laws") of any
federal, state or local government ("Governments") or
any agency, bureau, commission or instrumentality of
any Governments, or (ii) any judgment, injunction,
order, writ or decree or any court, arbitrator, or
Government.
6.2.4.2 To the best of Licensee's knowledge, the execution
delivery and performance of this License by Licensee
will not conflict with, require any consent,
approval, or filing under, result in the breach or
termination of any provision of, or constitute a
default under (i) any indenture, mortgage, deed of
trust, license, permit, approval, consent, franchise,
lease, contract, or any instrument or agreement to
which the Licensee is a party or is bound, or (iii)
any judgment, injunction, order, writ, or decree of
any court, arbitrator, or government by which the
Licensee or any of its assets or properties is bound.
6.2.5 LEGAL PROCEEDINGS-LICENSEE. To the best of Licensee's
knowledge, there is no action, suit, proceeding, claim,
arbitration, or investigation by any Government or any other
person (i) pending to which the Licensee is a party, (ii)
threatened against or relating to the Licensee or any of the
Licensee's assets or businesses, (iii) challenging the
Licensee's right to execute, deliver, or perform under this
License, or (iv) asserting any right against Licensee with
respect to the System and there is no basis for any such
action, suite, proceeding, claim, arbitration, or
investigation.
6.2.6 DUE ORGANIZATION, GOOD STANDING, AUTHORITY OF LICENSEE.
Licensee is a Limited Liability Corporation duly organized,
validly existing, and in good standing under the laws of
Michigan. Licensee has full right, power, and authority to own
its properties and assets, and to carry on its business. To
the best of Licensee's knowledge, Licensee is duly licensed,
qualified and authorized to do business, and is in good
standing in each jurisdiction in which the properties and
assets owned by it or the nature of the business conducted by
it makes such licensing, qualification and authorization
legally necessary.
7.0 ASSIGNMENT
ASSIGNMENT. This Agreement may not be assigned by Licensee without the written
consent of Licensor, such consent not to be unreasonably withheld. Furthermore,
Licensee may not transfer this Agreement along with the sale or transfer of
Licensee's business to a third party without first obtaining the written consent
of Licensor, such consent not to be unreasonably withheld. Except as otherwise
provided under this Article 7.0, it is expressly understood and agreed that
Licensee shall not license, sublicense, or otherwise dispose of the System or
rights provided under this Agreement to any third party.
8.0 LICENSE FEE
8.1 LICENSE FEE. The Licensee shall pay to the Licensor a License Fee in
the amount of Twenty Five Thousand Dollars ($25,000) payable as
follows:
(a) INITIAL LICENSE FEE PAYMENT. Licensee shall pay to Licensor an
initial payment of Two Thousand Dollars ($2,000) upon the
Effective Date of this Agreement.
(b) FINAL LICENSE FEE PAYMENT. The balance of the license fee
Twenty Three Thousand Dollars ($23,000) shall be due and
payable by the Licensee to the Licensor within ten (10) days
of the receipt of a functioning/demonstrable and stand alone
operational product by the Licensee in accordance with Article
12 of this Agreement coinciding with the start of the initial
term of the Agreement
8.2 SURCHARGE. It is understood that Licensor collects a surcharge from
Authorized Source(s) that is To Be Determine percent of the final
price, before applicable sales tax, that Licensee pays to such
Authorized Source(s) for Licensed Product.
9.0 ACQUIRING RIGHTS TO EXCLUDED FIELDS OF LICENSE
It is understood that Licensor is without the right to grant a license to make,
use, sell, sublicense or otherwise transfer the System in any of the Excluded
Fields of License in the United States listed and described in Schedule A of
this Agreement. Should Licensee desire to acquire an exclusive license to make,
use, and sell the System or any component thereof in one or more of the Excluded
Fields of License, Licensee shall contact Licensor in writing requesting a
grant(s) of such license(s). Licensor shall submit the request to the owner of
the Field(s) of License that Licensee wishes to acquire. The owner of the
Field(s) of License may grant Licensee, at its sole discretion, an exclusive
license in owner's Field of License. The terms and conditions of any such
exclusive license shall be negotiated on a case by case basis. Once Licensee
acquires one or
more of the Excluded Fields of License, such acquired Excluded Fields of License
shall be deemed as part of Licensee's Field of License for purposes of this
Agreement.
10.0 INFRINGEMENT AND INDEMNIFICATION
10.1 INFRINGEMENT CLAIMED BY THIRD PARTIES.
10.1.1 If the Licensee shall be sued for infringement by reason of
the Licensee's activities under the license granted in this
Agreement, the Licensee shall immediately notify the Licensor
and the Licensor shall defend, indemnify, and hold the
Licensee harmless against any such claims, which, if proven,
would constitute a breach of any of the Licensor's
representations or warranties of Article 6.1 above. Provided,
however, that the Licensor shall not have a duty to defend if
the claim of infringement is based upon acts of the Licensee
which go beyond the scope of the Licenses granted, such as by
reason of combination of practice under the license and
authorized practices, with additional unlicensed activity,
which combined licensed and unlicensed activity shall be the
subject matter of the infringement action. Without limiting
the foregoing, the Licensor shall have the control of any such
defense and the right to enter into any settlement and/or
compromise of any such claim. The Licensee shall, if requested
by Licensor, make such reasonable modifications in the
practice of the license granted under this Agreement such as
would enable the parties to avoid or mitigate any third-party
claims of infringement or misappropriation.
10.1.2 If Licensor shall be sued for infringement by reason of the
Licensor's activities under any cross-license as anticipated
by Article 6.2.2, the Licensor shall immediately notify the
Licensee and the Licensee shall defend, indemnify, and hold
the Licensor harmless against any such claims, which, if
proven, would constitute a breach of any of the Licensee's
representations or warranties of Article 6.2 above. Provided,
however, that the Licensee shall not have a duty to defend if
the claim of infringement is based upon acts of the Licensor
which go beyond the scope of the Licenses granted, such as by
reason of combination of practice under the license and
authorized practices, with additional unlicensed activity,
which combined licensed and unlicensed activity shall be the
subject matter of the infringement action. Without limiting
the foregoing, the Licensee shall have the control of any such
defense and the right to enter into any settlement and
compromise of any such claim or action. The Licensor shall, if
requested by Licensee, make such reasonable modifications in
the practice of the license granted under this Agreement such
as would enable the parties to avoid or mitigate any
third-party claims of infringement or misappropriation.
10.2 INFRINGEMENT BY THIRD PARTIES. Licensor shall have the right, but not
the obligation, to institute and prosecute any and all suits to enjoin
any and all infringers of the '552 Patent where such infringement
affects Licensor's use, sale, or rights to the System, and from time to
time during the continuance of this Agreement, and at its own expense,
may institute any suit or suits it may deem necessary. The Licensor
shall have the right to institute and prosecute such suits, and to
employ its own counsel for such suits; and
Licensor shall pay for all services rendered by counsel so retained,
and for all incidental costs and expenses. Licensor agrees that
Licensee may join as a party plaintiff in any suit initiated by
Licensor pertaining to infringement in the Field of License regarding
the System, at Licensee's sole expense, where Licensee deems that
joining as a party plaintiff is necessary and in Licensee's best
interests.
11.0 LIMITATIONS OF LIABILITY AND CONSEQUENTIAL DAMAGES
IN NO EVENT, WHETHER BASED ON CONTRACT, INDEMNITY, WARRANTY, TORT (INCLUDING
NEGLIGENCE), STRICT LIABILITY OR OTHERWISE, SHALL LICENSOR OR ITS SUBCONTRACTORS
OR SUPPLIERS, OR ANY OF ITS RESPECTIVE DIRECTORS, OFFICERS, EMPLOYEES OR AGENTS,
BE LIABLE FOR (I) SPECIAL, EXEMPLARY, OR PUNITIVE DAMAGES; OR (II) ANY LOSSES OR
DAMAGES ARISING OUT OF, CONNECTED WITH, OR RESULTING FROM (A) THE PERFORMANCE OF
ANY THIRD PARTY NOT HIRED BY LICENSOR, (B) ANY SOFTWARE, HARDWARE OR OTHER
PRODUCT OR COMPONENT PROVIDED BY ANY OTHER PARTY, (C) THE RELIANCE BY LICENSOR
ON ANY STATEMENT OR REPRESENTATION MADE BY LICENSEE REGARDING A THIRD PARTY
VENDOR; OR (D) ANY FAILURES STEMMING FROM PROBLEMS RELATING TO THE YEAR 2000.
12.0 TERM OF AGREEMENT AND RENEWAL
12.1 INITIAL TERM OF AGREEMENT. The initial term of this Agreement shall be
three (3) years from the date that Licensor provides Licensee with
(a) The name of an Authorized Source pursuant to Article 3.1 of
this Agreement.
(b) The Licensee is in receipt of a fully operational stand-alone
product that can be marketed/demonstrated to potential
clients.
(c) A product that is "reasonably" priced in accordance with
Article 5.1 of this Agreement.
12.2 LICENSEE RENEWAL OPTION. This Exclusive Agreement shall automatically
renew for sequential one (1) year periods at a cost of ten thousand
dollars ($10,000.00) per year beginning in year four (4) at Licensee
option.
13.0 TERMINATION
13.1 This Agreement may be terminated as follows:
(a) By mutual Agreement of the Parties.
(b) If the Licensee shall (i) commence a voluntary case under the
federal or state bankruptcy laws, (ii) file a petition seeking
to take advantage of any other laws, domestic or foreign,
relating to bankruptcy, insolvency, reorganization, winding up
or composition for adjustment of debts, (iii)
consent to or fail to contest in a timely and appropriate manner any
petition filed against it in an involuntary case under such bankruptcy
laws or other laws, (iv) apply for or consent to, or fail to contest in
a timely and appropriate manner, the appointment of, or the taking of
possession by, a receiver, custodian, trustee, or liquidator of itself
or of a substantial part of its property, domestic or foreign, (v)
admit in writing its inability to pay its debts as they become due,
(vi) make a general assignment for the benefit of creditors, (vii) take
any corporate action authorizing any of the foregoing, (viii) become
the subject of a case or other proceeding in any court of competent
jurisdiction seeking relief under the federal bankruptcy laws or under
any other laws, domestic or foreign, relating to bankruptcy,
insolvency, reorganization, winding up or adjustment of debts, which
proceeding shall continue undismissed or unstayed for a period of sixty
consecutive calendar days, or an order granting the relief requested
shall be entered, or (ix) become the subject of the appointment of a
trustee, receiver, custodian, liquidator or the like, which appointment
shall continue undismissed or unstayed for a period of sixty
consecutive calendar days.
(c) If Licensee, without having first terminated this Agreement
and ceased obtaining any of the benefits of this Agreement
challenges the validity of any patent purported to be licensed
by the Licensee under this Agreement.
(d) If Licensee does not procure Licensed Product from an
Authorized Source pursuant to Article 3.4.
(e) By either party due to the other party's material breach of
its obligations under this Agreement, upon giving written
notice.
13.2 Upon termination of this Agreement, any and all rights which the
Licensee shall have or possess under this Agreement shall permanently
cease and be by it relinquished and surrendered to the Licensor. If
such termination is not due to a Licensee breach of this Agreement,
Licensee shall have the right to sell all Licensed Products already
manufactured and in its possession for a period of three (3) months
following the termination date. Should termination of this Agreement be
due to a Licensee breach, then Licensee shall, upon termination,
transfer all Licensed Products to Licensor (unless otherwise agreed to
in writing by Licensor).
14.0 MARKING
The Licensee shall use such certification xxxx(s), trademark(s), and/or
other marking(s) as may from time to time be adopted by the Licensor to indicate
to the public that the Licensed Products are genuine licensed products, and/or
to indicate the patent protection applicable thereto (Licensor Xxxx(s)). The
Licensee shall in any event when requested by Licensor xxxx the patent number of
each patent covering the Licensed Products, on each Licensed Product
manufactured, sold or otherwise distributed by the Licensee in a manner
satisfactory to Licensor; and shall use the trademark registration symbol
adjacent any registered trademark to the extent permitted by
law. However, it is agreed and understood that Licensee may use its own
certification xxxx(s), trademarks, and/or other marking(s) (Licensee Xxxx(s)) as
Licensee may from time to time adopt, on Licensed Products. It is further agreed
and understood that Licensee may use Licensee Xxxx(s) conspicuously on Licensed
Products, and may use Licensor Xxxx(s) less conspicuously. By way of example,
Licensee may apply Licensee Xxxx(s) in large bold type or design on the primary
display surface of Licensed Product and apply Licensor Xxxx(s) on a secondary
surface of Licensed Product in small, but readable, type or design.
15.0 NO BUSINESS OPPORTUNITY OR FRANCHISE
This Agreement is not intended to be, and shall not be construed to be,
the granting of a business opportunity or of a franchise under the laws of the
United States or any state or territory thereof. The Licensee warrants to the
Licensor that the Licensee possesses business expertise relevant to the field in
which it will engage pursuant to the license granted herein. The Licensee
acknowledges that the Licensor is not obligated by this Agreement to provide any
business advice or business assistance of any kind or nature whatsoever,
including but not limited to the provision of a prescribed marketing plan or
system, and warrants that the Licensee has not received, and does not expect to
receive, any business advice or assistance from Licensor on which it has relied
or intends to rely in any manner whatsoever. The Licensee further acknowledges
that the Licensee, in evaluating the propriety of entering into this Agreement,
has relied exclusively on its own advisors and not on any representations made
by the Licensor except such representations as are expressly stated in the words
of this Agreement.
16.0 NO INVESTMENT OR SECURITIES OFFERING
The Licensee represents and warrants that the Licensor shall not, by
reason of entering into this license with the Licensee, be or become obligated
to file a registration statement with the Securities and Exchange Commission to
qualify the License to fall under the blue sky laws of any state. Furthermore,
notwithstanding any other provision of this Agreement, the Licensee shall not
enter into any transaction regarding the License that would require the Licensor
to file a registration statement with the Securities and Exchange Commission to
qualify the License to fall under the blue sky laws of any state. Any violation
of this Article 16.0 is a material default that shall entitle the Licensor to
terminate this Agreement.
17.0 CONSENT TO ADVERTISING AND PUBLICITY
The Licensor may issue and disseminate to the public information
describing the license entered into with the Licensee, including the name and
address of the Licensee, the general terms of the agreement, and a general
description of the Licensee's business.
18.0 GOVERNING LAW
This Agreement shall be interpreted and construed in accordance with
the laws of the United States and the laws of the State of North Carolina.
19.0 INDEPENDENT CONTRACTORS
The Parties to this Agreement are independent contractors. Nothing in
this Agreement is to be construed as making either party an agent of or joint
venturer with the other.
20.0 UNSERVED AND/OR UNDERSERVED FIELD OR LICENSE
20.1 At any time after the first year during the term of this License (or
any extensions thereof) should Licensor determine that some area or
areas within the "Field of License" are not being served or are being
underserved by Licensee, Licensor may notify Licensee in writing of
such determination. This notification shall clearly reference Article
20.0 of this Agreement as its basis and give reasonable evidence in
support of Licensor's determination of such unserved and/or underserved
areas.
20.2 Licensee shall acknowledge this notice in writing within ten (10)
business days and respond to this same notice in writing within ninety
(90) days setting forth Licensee's plans to serve or better serve the
subject area. Should Licensor and Licensee agree on plan(s) proposed by
Licensee or Licensor, no further action under this provision of Article
20.0 will be necessary. Should Licensor and Licensee fail to agree on
such plan(s) within thirty (30) days of Licensor's receipt of such
plan(s), and should Licensor believe the subject area to be materially
unserved or underserved to the detriment of all parties, then the
matter will be submitted to arbitration under Article 24 of this
Agreement.
20.3 Should such arbitration process result in the determination that
Licensor's position is correct, Licensee shall 1) sublicense the
unserved area(s) to parties reasonably capable of and willing to
deliver such services and or 2) allow the re-licensing of these areas,
splitting all revenues therefrom between Licensor and Licensee on a
fifty/fifty (50/50) basis.
21.0 COMPLETE AGREEMENT AND MODIFICATION
This Agreement represents the entire agreement, both written and oral
of the Parties, and supersedes and replaces any prior written or oral agreements
between Licensee and Licensor. This Agreement may be amended only in a writing
stating that it is an amendment or modification of this Agreement, and signed by
an authorized representative of each of the Parties hereto.
22.0 NOTICES
Any notice required to be given under this Agreement shall be properly
given if delivered by first-class mail as follows:
ID Technologies Corporation BrentScott Associates, LLC
0000 Xxxx Xxxx Xxxxxx, Xxxxx X 0000 Xxxxxx Xxxx, Xxxxx X
Xxxxxx, Xxxxx Xxxxxxxx 00000 Xxxxxxxx Xxxx, XX 00000
Attention: President Attention: Xxxxx X. Xxxxxxx, General Partner
23.0 CONFIDENTIALITY
The Parties acknowledge that in order to carry out the License granted
hereunder, it may be necessary for either Parties to transfer or disclose
certain trade secrets that have been developed by Licensor and/or Licensee, or
on their behalf at great expense and that have required considerable effort of
skilled professionals. The Parties acknowledge and agree that in no event shall
either Party disclose any such trade secrets to any third party. In the event
that it is necessary to transfer or otherwise disclose such trade secret and
confidential information to either Party, or an Authorized Source, then the
party disclosing such trade secrets or confidential information shall require
the party to which the information is being disclosed to sign a confidentiality
agreement, requiring that in no event shall the receiving party disclose any
such trade secrets and confidential information to a third party. Confidential
information shall be that information disclosed or transferred to either Party
that is marked "Confidential," or information disclosed or transferred to either
party that at the time of such disclosure or transfer the party receiving such
disclosure was informed that the information must be treated by the receiving
Party as confidential.
24.0 ARBITRATION
Any dispute under this Agreement not resolved within thirty (30) days
of notice to the other party shall be submitted to binding arbitration under the
rules of the American Arbitration Associated then in effect. There shall be no
appeal from the decision other than for gross violation of due process or fraud
in the conduct of the arbitration. Judgment upon the decision may be entered in
a state or federal court, as may be appropriate, selected by the party of whom
arbitration was requested, or, if that party declines to promptly select such a
court, in a court selected by the party who had requested arbitration. The
parties irrevocably agree, for this purpose only, to submit to the jurisdiction
of such a court, or application may be made to such court for confirmation of
the decision, for judicial acceptance thereof, for an order of enforcement, or
for any other legal remedies that may be necessary to effectuate the decision.
The expense of the arbitration and/or arbitrators shall be shared equally by the
Parties. Each of the Parties shall bear its own arbitration costs, including
without limitation its own costs of preparation, attorneys' fees, and witness
fees and expenses. In the event of litigation between the Parties, arbitration
may be so requested at any time prior to the beginning of a trial. Any required
arbitration shall be held at a site in North Carolina as determined by Licensor.
25.0 SEVERABILITY
If any provisions of this Agreement shall be construed to be illegal or
invalid, the legality of the validity of any other provisions hereof shall not
be affected hereby. Any illegal or invalid provision of this Agreement shall be
severable, and all provisions shall remain in full force and effect.
26.0 SURVIVAL OF REPRESENTATIONS AND WARRANTIES
All of the representations and warranties of the parties contained in
this Agreement, the indemnification provisions of Article 10, and the
Limitations of Liability and Consequential Damages provisions of Article 11
shall survive termination of this Agreement.
IN WITNESS WHEREOF, the parties hereto have through a duly authorized
officer thereof duly executed this Agreement on the dates indicated below to be
effective as of the day first indicated above.
ID Technologies Corporation (Licensor) BrentScott Associates, LLC (Licensee)
By: /s/ X. Xxxxxxxx X. Xxxxxxxx By: /s/ Xxxxx X. Xxxxxxx
------------------------------------- ----------------------------------
X. Xxxxxxxx X. Xxxxxxxx Xxxxx X. Xxxxxxx
Title: President Title: General Partner
Date: October 1, 1999 Date: October 1, 1999
---------------------------------- -------------------------------
THE FOLLOWING SCHEDULES, WHEN INITIALED BY BOTH PARTIES, ARE INCORPORATED HEREIN
BY REFERENCE:
LICENSOR LICENSEE
----------------------- ------------------------ Exhibit A
----------------------- ------------------------ Exhibit B
----------------------- ------------------------ Exhibit C
SCHEDULE A
EXCLUDED FIELDS OF LICENSE
The Excluded Fields of License are:
1. Use of the system for United States FAA approved airline and airport
facilities throughout the world, in particular, for airline and airport
personnel identification and security systems.
2. Use of the system for general purpose credit and debit cards (Visa,
MasterCard, American Express, Discover Card, Xxxxx Xxxxxxx, Diners Club,
etc.) or general purpose bank-issued cards of various forms.
3. Use of the System for Internet security.
4. Use of the system in computer security applications, including facilities
and computer access control and information security applications utilizing
computer networks including the Internet.
5. Use of the system in financial applications including government, treasury,
banking, credit and debit cards, and regulatory applications.
6. Use of the system in hotel security industry, including hotel door locking
devices, in-room safes, mini-bars, and all associated security systems.
SCHEDULE B
CERTIFICATE OF LICENSE
[NAME OF LICENSEE]
BrentScott Associates, LLC
0000 Xxxxxx Xxxx, Xxxxx X
Xxxxxxxx Xxxx, XX 00000
Licensee Number: _______________________________
Authorized by: _________________________________ Date: _________________
Officer of ID Technologies Corporation
SCHEDULE C
LICENSEE'S INTENDED INDUSTRIES
1. All government agencies and ministries within the member states of the Gulf
Cooperation Counsel (GCC) as defined in 2.1 including but not limited to
the Ministries of the Interior, Defense and Aviation, Finance, Oil,
Religion, Pilgrimage, Commerce and Industry, Tourism etc.
2. All commercial agencies and business applications within the member states
of the GCC as defined in 2. 1.
3. Initial specific applications may be male civil registration cards, male
identification cards, female identification cards, expatriate ID and work
permits, airport security systems, drivers licenses, passports, Hajj and
Umrah identification cards, residence permits, military identification,
high security and sensitive area access cards, vehicle identification and
ownership documentation, etc.
4. Security as pertains to the protection and filtration of materials and
information deemed not acceptable for public consumption by the Governments
of GCC member States.
