EXHIBIT 10.9
License Agreement with Hyperdyne, Inc. dated June 13, 2001
LICENSE AGREEMENT
THIS AGREEMENT, entered into this 13th day of June, 2001, by and between
Hyperdyne, Inc., a corporation organized under the laws of the State of
Virginia, USA [hereinafter referred to as the "Company") and, ECSI, Inc.,
organized under the laws of New Jersey, USA (hereinafter referred to as the
"Licensee").
1. APPOINTMENT
The Company hereby appoints Licensee as an authorized manufacturer and
distributor, with respect to the Company products listed in Annex A hereto
(hereinafter referred to as the "Products"). At any time during the term of this
Agreement and any extension thereof, the list of Products in Annex A may be
added to or deleted from by mutual consent of the Company and Licensee. Licensee
hereby accepts such appointment according to the terms end conditions set forth
in this Agreement.
2. RESPONSIBILITIES OF LICENSEE
During the term of this Agreement and any extension thereof, Licensee shall:
manufacture Products;
market, sell, ship, service and support Products;
maintain an office or suitable substitute to receive messages and transact other
business during normal local business hours;
serialize each unit of Products with a visible, unique, sequential serial
number;
maintain accurate records of Product sales including a record for each unit sold
including serial number, name, address and phone number of customer and date
sold. Such records shall be submitted quarterly to Company or, with 3 business
days notice, be made available to Company or it's designated agent for
inspection or copying.
be solely responsible for collection of amounts due from Licensee's customers.
Bad debts from customers shall not remove the requirement for royalty payments
to Company;
be responsible for collection of all sales, use or other local taxes or duties
in connection with sales;
assist in transmitting to customers technical information;
establish customer support and maintain a staff knowledgeable in the
installation, configuration, operation and uses of the Products;
abide by any copyright or letter of assurance conditions pertaining to Products
sold;
protect the intellectual property rights of Company, including, but not limited
to, marking all Company-originated copyrighted or trademarked material with the
appropriate copyright or trademark marking whenever such material is distributed
outside of Licensee's possession.
Obtain assurances from Licensee's customers, as Licensee deems appropriate, to
ensure that customers (1 ) do not use Products to violate any law of the United
States or elsewhere, and (2) agree to limitation of liability with respect to
failure of product or any defect in manufacture or design. In any case, Licensee
shall assume any and all liability for its actions or omissions and shall
indemnify, defend, and hold harmless Company from any actions resulting directly
or indirectly from Licensees actions or omissions.
3. RESPONSIBILITIES OF COMPANY
During the term of this agreement, the Company shall:
grant Licensee a 99-year, irrevocable, unlimited, non-exclusive license to
manufacture and sell the Products.
provide all manufacturing materials at no charge to Licensee. These include
schematics, diagrams, prints, assembly manuals, test procedure and programs,
parts lists, vendor info, etc.
maintain the firmware and software of Products. Bug fixes will be provided at no
charge, however enhancements or non-bug-related modifications will be billed at
the Company's then current usual and customary hourly labor rates.
provide training, technical support and product enhancements, as mutually
agreed, to Licensee at the Company's then current usual and customary hourly
labor rates.
4. COMPENSATION
(a) Compensation to the Company shall be in the form of royalties paid for each
unit of product sold and payments for Company consulting services provided in
accordance with paragraph 3 above. Licensee shall reimburse Company for travel,
lodging and other direct expenses incurred by Company in providing consulting
services. Royalties due shall be paid by the end of the calendar month following
the month in which the Product was shipped or invoiced, whichever is earlier.
Consulting charges shall be paid on Net 30 basis. Royalty amounts shall be in
accordance with the Schedule in Annex A.
(b) The Licensee is authorized to produce and sell technical handbooks,
applications guides or other documentation or software or services or products
which he originates, and which are not ordinarily provided by the Company. No
royalty shall be due
Company for sales of any materials that were designed and produced solely by
Licensee and were not derived from Company Products.
(d) Both parties shall be individually responsible for any taxes applicable to
their respective shares of all profits.
5. EXPENSES
It is agreed that the Licensee shall be solely responsible for all expenses
incurred by it in connection with the performance of its duties and
responsibilities under this Agreement, including but not limited to expenses for
payroll, cost of providing services required by this Agreement, travel, and all
taxes payable as a result of sale or license, packaging, shipping and handling
incurred in delivery of products from the Company to the Licensee or to the
customer unless the Company authorizes reimbursement for such expenses in
writing on a case-by-case basis.
6. COMPLIANCE WITH LAW
(a) Licensee agrees that in carrying out its duties and responsibilities under
this Agreement, it will neither undertake nor cause nor permit to be undertaken,
any activity which either (i) is illegal under any, laws, decrees, rules or
regulations in effect in the Territory, or (ii) would have the effect of causing
the Company to be in violation of any laws, decrees, rules or regulations in
effect in the United States or in the Territory.
(b) Licensee agrees that, in connection with this Agreement, it will not,
directly or indirectly, give, offer, promise, authorize, or tolerate to be
given, offered or promised, anything of value to an official or employee of the
government of the Territory or of any subdivision thereof with the intent to (i)
influence any official act or decision of such official or employee, or (ii)
induce such official or employee to use his influence to affect of influence any
act or decision of the government of the Territory or of any subdivision
thereof.
(c) If the Licensee breaches any of the covenants set forth in Article 6 above,
(i) this Agreement shall, at the Company's option, become void, (ii) Licensee
shall indemnify and hold harmless the Company for any penalty, loss or expenses
incurred by the Company as a result of Licensee's breach of its obligations
under Article 6. This obligation shall survive termination of this agreement.
7. COMPETITION
(a) Licensee agrees that the design of Products listed in Annex A were
originated by, are proprietary to, and are solely the property of the Company
unless otherwise agreed to in writing by the Company. Product improvement or
other suggestions made by the Licensee with respect to the Products shall become
the property of the Company and may, at the Company's discretion, be
incorporated into the product without compensation of any type to the Licensee.
(b) Licensee shall be permitted to manufacture and sell products which Licensee
wholly originates and is not derived from the Products. For the purposes of this
paragraph, a new product shall be considered to be derived from Products if the
new product consists of more than 50% of the identical circuitry of equivalent
licensed Products, where minor pinout changes, minor wiring changes or
substitution of equivalent components do not nullify the otherwise identical
nature of any particular circuit.
8. CONFIDENTIALITY.
(a) The Company agrees that all information received from the Licensee with
respect to marketing, bids, proposals, sales, pricing or identities of current
or potential customers will be treated as proprietary confidential information
and will not be divulged to any third party without prior written permission of
the Licensee.
(b) The Licensee agrees that all information obtained by Licensee in connection
with this Agreement, including technical and cost information furnished to
Licensee by the Company or by a customer in connection with the Company's
proposals, bids, quotations, or contracts, shall be treated by Licensee as
confidential proprietary information which Licensee shall not disclose to any
third party except with prior written approval of the Company.
(c) Nothing in this section shall be interpreted to prohibit release of
technical information by Licensee to its designated subcontractors of technical
design data, such as printed circuit board layouts, assembly information, test
instructions, or any other technical data necessary for subcontractor to perform
its duties. Information released shall be limited to the minimum necessary for
successful completion of subcontracted responsibilities.
(d) Licensee shall protect proprietary confidential information to a degree at
least as high as that of Licensee's most confidential information. If
confidential information is accessible to employees or agents of Licensee,
Licensee shall ensure that such parties are personally bound to protect such
information, in accordance with this Agreement, in writing, in the form of
non-disclosure agreement, employment contract or other equivalent legal
document.
9. RELATIONSHIP OF THE PARTIES
(a) This Is not a contract of employment or a partnership. Neither party shall
represent itself as a partner of the other. Neither party shall have the
authority to make any agreement or commitment, or incur any liability on behalf
of the other party, nor shall either party be liable for any acts, omissions to
act, contracts, commitments, promises or representations made by the other,
except as specifically authorized in this Agreement or as the parties may
hereafter agree in writing.
(b) Licensee hereby also agrees to be solely responsible for the performances of
its acts, duties, and responsibilities under this Agreement and for the acts,
duties, and responsibilities of its officers, employees, and agents; and
Licensee further agrees to indemnify the Company, its officers, employees, and
agents, and to hold harmless the Company, its officers, employees, and agents,
and, at Licensee's expense, to defend the Company, its officers, employees, and
agents from and against any claims, demands, causes of action, loss cost, and
expense, arising from in connection with or based upon the actions or omissions
of Licensee, its officers, employees or agents pursuant to or in contravention
of the provisions of the Agreement.
10. RIGHTS OF ASSIGNMENT
No portion of this Agreement or any right or obligation hereunder can be
assigned, in whole or in part, whether by operation of law or otherwise, by the
Licensee without the prior written consent of the Company.
11. ADDITIONAL TERMS AND CONDITIONS
Hyperdyne shall retain ownership of all intellectual property rights to
Products.
12. ENTIRE UNDERSTANDING
This Agreement, including Annex A as an integral part, contains the entire
understanding of the parties on this subject and supersedes all previous verbal
and written agreements; this Agreement cannot be amended, in whole or in part,
without a written instrument signed by both parties hereto.
If any part of this Agreement is deemed invalid or unenforceable, by act or law
or otherwise, the remaining provisions shall remain in full force.
Both parties to this Agreement agree to the language and wording of this
Agreement and any ambiguities shall not be deemed to be the fault of the drafter
nor shall ambiguities be resolved against the drafter. Minor typographical
errors which do not effect the meaning of the language herein shall not be
deemed to invalidate any part of this agreement.
13. WAIVER
No waiver of, no delay in the exercise of, and no omission to exercise any
rights or remedies by either party shall be construed as a waiver by such party
of any other rights or remedies that such party may have under this Agreement or
any agreement, or shall constitute an agreement to make any waiver in the
future.
14. NOTICE
Unless otherwise specified herein, any notice required or permitted to be given
under this Agreement shall be sufficient, if in writing, and shall be deemed to
be fully given if personally delivered, if sent by registered or certified mail,
or by telex with receipt acknowledged, to the following addresses:
Company: Hyperdyne, Inc.
0000 Xxxxxxxx Xxxx
Xxxxxxxxx, XX 00000, XXX
Attention: Mr. Xxxx Xxxxxx
Licensee: ECSI International Inc.
000 Xxxxxxxxxx Xxxxxx, Xxxx. X-0
Xxxxxxx, XX, XXX 00000
Attention: Xx. Xxxxxx Xxxxx
The foregoing addresses and individuals may be changed by either party by giving
to the other party prior written notice of any such change.
15 TERM AND TERMIMATION
(a) This Agreement shall become effective upon being signed by both parties, and
shall continue in full force for ninety nine (99) years from the date first
written above.
(b) Either party shall have the right to terminate this Agreement forthwith at
any time, by giving written notice to the other party in the event that the
other party:
(i) commits a non-curable default or violation of this Agreement.
(ii) Commits a curable default or violation of the Agreement which is not
remedied within thirty (30) days after written notice thereof, or
(iii) becomes insolvent, or has a petition filed against it as bankrupt or
insolvent, or executes an assignment for the benefit of creditors, or has a
receiver appointed for any reason, with termination in such cases being
effective as of the date of the happening of the contingency referred to.
(c) The Company shall have the right to terminate this Agreement forthwith at
any time, in the event that Licensee breaches any of the provisions of Article
6, hereof.
(d) Upon termination of this Agreement by either party for whatever reason, or
this Agreement's expiration, the parties agree that Licensee shall not be
entitled to receive, and the Company shall not be obligated to make, payments
for good will, promotional, or other similar services rendered pursuant to this
Agreement or any damages in connection with the termination or expiration of
this Agreement. Licensee hereby specifically waives any rights it may have with
respect to such payments which may be granted under local law.
16. ARBITRATION
This Agreement shall be construed and interpreted in accordance with the laws of
the State of Virginia, USA as pertaining to actions between residents of
Virginia. Any controversy or claim arising out of or relating to this Agreement,
or breach thereof, shall be settled by arbitration in accordance with the Rules
of the American Arbitration Association, and judgment upon the award rendered by
the Arbitrator(s) will be entered in the circuit Court of Fairfax County,
Virginia, USA. The contract hereof shall not be governed by the U.N. Convention
on Contracts for the International Sale of Goods. In the event a dispute is
submitted to arbitration, the Arbitrator shall award costs and a reasonable
attorney's fee to the prevailing party. All disputes shall be arbitrated, as
specified, in the county of Fairfax, State of Virginia, USA.
ACCEPTED AND APPROVE
FOR: HYPERDYNE. INC. FOR: ECSI International Inc.
BY: Xxxx Xxxxxx, President BY: Xxxxxx Xxxxx, President
/s/ Xxxx Xxxxxx /s/ Xxxxxx Xxxxx
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DATE: 6/13/01 DATE: 6/13/01
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Annex A
Products and Royalties
The products referenced: GuardStar / AVTrax / Base Modem
Qty./Month License Fee*
1-24 10% of sales price or $75, whichever is higher;
25-49 8% of sales price or $48, whichever is higher;
50-99 8% of sales price or $38, whichever is higher'
100+ 5% of sales price or $30, whichever is higher;
* There will also be a cost-of-materials charge of $4 for the protected CPU
chip, which company will supply.
ADDENDUM
This is an ADDENDUM ("Addendum") to LICENSE AGREEMENT ("Agreement") dated June
19, 2001. This Addendum is entered into this 10 day of September, 2001, by and
between Hyperdyne, Inc., a corporation organized under the laws of the State of
Virginia, U.S.A. (hereinafter referred to as the "Company") and, ECSI. Inc.,
organized under the laws of New Jersey, USA (hereinafter referred to as the
"Client").
1. APPLICABILITY . This Addendum supplements the above referenced Agreement. All
terms and conditions of the Agreement shall continue to apply as originally
written, except that where any conflicts arise, the terms of this Agreement
shall prevail.
3. DFFINITIONS
"Derivative Products are work products (1) which were developed after the date
of this Addendum, and (ii) which incorporate any designs, circuits, techniques
or computer algorithms developed by Company prior to the date of this addendum,
and (ii)) for whose development Company received compensation by Client.
2. ADDITIONS
The following item is hereby added to Appendix A of Agreement
The products referenced: Derivative Products
Qty License Fee
Any 3% of sales price or $20, whichever is higher
3 INTELLECTUAL PROPERTY RIGHTS
(a) All intellectual property fights to work products which were (i) produced by
Company before the date of this addendum, or (ii) were developed without
compensation from Client, shall be retained by Company.
(b) All intellectual property rights to work products: (i) which were developed
by Company after the date of this addendum, and (ii) for which Company received
compensation by Client, and (iii) do not incorporate any designs, circuits or
techniques developed by Company prior to the date of this addendum, shall be the
exclusive property of Client.
(C) All intellectual property rights to Derivative Products shall be jointly and
independently owned by Client and company. All licensing rights assigned to
others shall be by mutual consent and the licensing fees shall be shared equally
between client and company.
ACCEPTED AND APPROVED:
FOR: HYPERDYNE, INC. FOR: ECSI International, Inc.
BY: Xxxx Xxxxxx, President BY: Xxxxxx Xxxxx, President
/s/ Xxxx Xxxxxx /s/ Xxxxxx Xxxxx
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DATE: 9/16/01 DATE: 9/16/01
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