HOMELAND SECURITY NETWORK, INC./ADVANTRA INTERNATIONAL NV. License and Exclusive Distribution Agreement
EXHIBIT
10.1
License
and Distribution Agreement between Homeland Security Network, Inc. and Advantra
International NV
HOMELAND
SECURITY NETWORK, INC./ADVANTRA INTERNATIONAL NV.
License
and Exclusive Distribution Agreement
This
License and Exclusive Distribution Agreement (“Agreement”) is entered into as of
the effective date set forth below as per the signatures of the parties hereto
(“Effective Date”), by and between Homeland Security Network Inc., a Nevada
corporation having its principal office at 0000 Xxxxxx Xxxxx, Xxxxxx, Xxxxx
00000 (“Homeland” or “Licensee”) and Advantra International NV, a Belgium
corporation having its principal office at Xxxxxxx 0, X 0000 Xxxxxx, Xxxxxxx
(“Advantra” or “Licensor”). For the purposes of this agreement, Licensee and
Licensor are described collectively as “The Parties”, or individually as a
“Party”.
WHEREAS,
Licensor has developed and owns the designs for selected Hardware and
Firmware as more
fully set forth in “Schedule
C”
(“Xxxxxx”);
WHEREAS,
Licensee wishes to license from Licensor during the Term (defined in Section 1
hereof), Xxxxxx and other Derivative GPS and Tracking Products for the purpose
of Exclusive Distribution in the Exclusive Territory (defined in Section 1
hereof);
WHEREAS,
Licensee wishes to distribute Xxxxxx and other Derivative GPS and Tracking
Products and new firmware functions developed by Licensee for the purpose of
Exclusive Distribution to third parties in the Exclusive Territory;
and
WHEREAS,
Licensee agrees not to produce directly or indirectly, nor to participate in,
nor to promote the copying, partially copying or the reverse engineering of
Xxxxxx or the Xxxxxx Derivative Products, and whereas, Licensee agrees to buy
the Xxxxxx and Derivative Products only and in all cases from Licensor. The
Xxxxxx and Xxxxxx Derivative Products Source Code will not be used, directly or
indirectly, nor partially, for other products than for the Licensor Products.
WHEREAS,
Parties agree that Licensor will have a right of first refusal for the
manufacturing and distribution of new products for Licensee. Licensor has a
period of 30 days to come with a determination whether Licensor is interested in
manufacturing, and a further 45 days to present a cost effective
plan.
WHEREAS,
concurrently with the execution of this Agreement, the Parties are executing a
Xxxxxx Purchase Agreement (the “Xxxxxx Purchase Agreement”) pursuant to which
the Licensee will purchase Xxxxxx Products from Licensor.
NOW
THEREFORE, in consideration of and subject to the premises and covenants
contained in the General Terms and Conditions and any Schedules and Amendments
to this Agreement, all attached hereto, which are made an integral part of this
Agreement, and intending to be legally bound, Licensee and Licensor have caused
this Agreement to be executed by their duly authorized representatives on the
Effective Date set forth below.
Licensee:
By: /s/s
Xxxxxxx Xxxxxx
Xxxxxxx
Xxxxxx
President
and CEO
Licensor:
Advantra
International NV
By: /s/
Xxxxxxxx Xxxx
Name:
Xxxxxxxx Xxxx
CTO
Effective
Date: April 14, 2005
________________
Certain
information on this page has been omitted and filed separately with the
Securities and Exchange Commission. Confidential treatment has been requested
with respect to the omitted portions.
LICENSE
AND EXCLUSIVE DISTRIBUTION AGREEMENT
BY
AND AMONGST
ADVANTRA
INTERNATIONAL NV
And
1.
Definitions. The
following defined terms are used in this Agreement.
| 1.1 |
“Agreement”
is defined in the preamble to this Agreement. |
1.2
“Confidential Information” means any information of a party, which is reduced to
or embodied in a tangible form and which is either marked as confidential or
designated in writing at the time of disclosure or within ten (10) Business Days
thereafter as being Confidential Information. Confidential Information does not
include information which: (i) was in the receiving party’s possession without
restrictions of confidentiality prior to receipt by the other party; (ii) is or
becomes public knowledge because of events other than an act or failure to act
by the receiving party or anyone under the receiving party’s direct or indirect
control; or (iii) is or has been independently developed by the receiving party,
provided that such development was accomplished by the receiving party or on its
behalf without the use of, or any reference to, Confidential
Information.
1.3
“Derivative Product” means a Product that is developed, producted and/or based
upon the Xxxxxx, iTrax or other pre-existing Product(s) of the Parties set forth
in Schedule
C.
1.4
“Designated Licensee Contacts” mean the employees, authorized consultants, and
other appropriately authorized designees of Licensee authorized to receive
Support Services. The initial Designated Contacts are identified on the Licensee
Information Schedule attached hereto as Schedule
D(1).
1.5
“Designated Licensor Contacts” mean the employees, authorized consultants, and
other appropriately authorized designees of Licensor authorized to provide
Support Services. The initial Designated Contacts are identified on the Licensor
Information Schedule attached hereto as Schedule
D(2).
1.6
“Distribute” means to market, promote, sell, distribute, appoint
sub-distributors to any Person, including a Subsidiary of the licensee. A
Distribution shall be deemed to have occurred at the earliest time that the item
Distributed is shipped or otherwise leaves the possession of the
Licensee.
1.7
“Effective Date” is defined in the preamble to this Agreement.
1.8
“Exclusive Territory” means the United States of America and
Canada.
________________
Certain
information on this page has been omitted and filed separately with the
Securities and Exchange Commission. Confidential treatment has been requested
with respect to the omitted portions.
1.9
“Firmware” means the executable code, source code and Object files embedded in
the XXXXXX and Derivative Products.
1.10
“Intellectual Property Rights” means all forms of intellectual property rights
and protections that may be obtained and may include, without limitation all
right, title and interest in and to: (i) all letters patent and all filed,
pending or potential applications for letters patent, including any reissue,
reexamination, division, continuation or continuation-in-part applications
throughout the world now or hereafter filed; any intellectual property unknown
to either party prior to disclosure by the disclosing party (iii) trade secrets,
and all trade secret rights and equivalent rights arising under the common law,
state law, federal law and laws of foreign countries; (iv) mask works,
copyrights, whether or not protected by copyright or as a mask work, under
common law, state law, federal law and laws of foreign countries; and (v)
Marks.
1.11
“XXXXXX” and ‘iTrax” are defined in the preamble to this Agreement and means the
items listed in Schedule
C.
1.12
“Licensor” is defined in the preamble to this Agreement.
1.13
“Licensee” is defined in the preamble to this Agreement.
1.14
“Licensee Products” means those products described as iTrax, and/or products
which contain Licensee’s exclusive intellectual property, firmware provided by
Licensee to Licensor and other enhancements to the firmware exclusively by
Licensee defined within this agreement, or subsequently identified Products in
subsequent agreements as Exclusive Products of the Licensee.
1.15
“Licensor Products” means those products described as Xxxxxx, and/or products
which contain Licensor’s exclusive intellectual property, provided firmware and
other enhancements to the Licensor’s hardware or firmware defined within this
agreement, and subsequently identified Products in subsequent agreements as
Exclusive Products of the Licensor, except OEM Products.
1.16
“Marks” mean the proprietary indicia, trademarks, trade names, symbols, logos
and/or brand names under common law, state law, federal law and laws of foreign
countries owned or controlled by a party that are commercially identified or
associated with such party and/or one or more of the party’s products, which are
listed on the Marks Schedule attached hereto as Schedule
E and
which may be added to such Schedule by the parties from time to time during the
Term.
1.17
“Modification Error” means any problem introduced through modifications to
XXXXXX or Derivative Product made by a party other than Licensor, unless the
modification was made at Licensor’s specific written direction.
1.18
“Person” means any individual, sole proprietorship, partnership, joint venture,
trust, unincorporated organization, association, corporation, institution,
public benefit corporation, entity or government, including, without limitation,
any Subsidiary, instrumentality, division, agency, body or department
thereof.
1.19
“Severe Error” means when XXXXXX or Derivative Product fails to function
according to its published documentation and Licensee is unable to proceed
without a fix to the problem or a workaround solution provided by Licensor.
Modification Errors are not Severe Errors.
1.20
“Source Code” means machine- or human-readable program code expressed in a form
suitable for modification by humans.
________________
Certain
information on this page has been omitted and filed separately with the
Securities and Exchange Commission. Confidential treatment has been requested
with respect to the omitted portions.
1.21
“Subsidiary” means a Person in which the specified party owns a majority of the
outstanding shares, securities, or other ownership interests representing the
right to vote for the election of directors or other managing authority;
provided, however, that in any country where the local law does not permit
foreign equity participation of at least 50%, a “Subsidiary” shall include any
Person organized under the laws of such country in which the specified party
owns the maximum percentage of outstanding shares or other ownership interests
permitted by local law, so long as the specified party exercises actual control
over the Person’s operations. A Person will be deemed to be a Subsidiary only so
long as such ownership exists.
1.22
“Support Services” means the Support Services set forth in Schedule B attached
hereto.
1.23
“Term” means the initial term and any renewal terms as set forth in Section
13.
1.24
“Third Party Agreements” means agreements that The Parties may execute with a
person that is not a subsidiary or wholly owned entity of The
Parties.
1.25
“OEM” or ‘Original Equipment Manufacturer” means to develop and/or manufacture
Products, either on a standalone basis or as part of another company’s product,
where the product is branded under the other company’s name.
1.26
“Agreements” means both this Agreement and the Xxxxxx Purchase Agreement, both
to be signed and become effective as of the same signature date.
1.27
“Back-end” means those services that could include, but not limited to,
software, communications, or other technology required to operate the system,
but excluding the XXXXXX device itself and the attached
accessories.
1.28
“Change of Control” shall mean a bona-fide change in the majority voting control
of Licensor or Licensee.
1.29
“iTrax” shall mean any Xxxxxx or Derivative Product sold by Licensee
irrespective of the Xxxx or brand name used.
2.0
License
Grants, Source Code Escrow and Release and Exclusivity.
2.1
Grant
of License to Licensee.
Licensor grants a license, subject to the terms and conditions of this Agreement
and specifically subject to the exceptions carved out in Art. 2.9 and 2.11,
solely for the purposes of enabling Licensee to develop Firmware enhancements to
Licensee’s Products and support and maintain such products as described in
Schedule B on the terms and conditions set forth therein, Licensor hereby grants
Licensee, during the Term and subsequent renewal Terms, an exclusive,
non-transferable (except as set forth in Section 2.12 below) license in the
Exclusive Territory to:
(a)
install, store, read, copy, modify, use and create XXXXXX or Xxxxxx Derivative
Products Software Source Code;
(b)
compile into executable form the Software Source Code for the XXXXXX or Xxxxxx
Derivative Products;
(c)
execute and use the executable or Object Code resulting from such compilation;
and
________________
Certain
information on this page has been omitted and filed separately with the
Securities and Exchange Commission. Confidential treatment has been requested
with respect to the omitted portions.
(d)
install, store, read, modify, copy, use and create any related technical and
user documentation provided to Licensor by Licensee, that Licensee may need to
perform their necessary commercial obligations under this agreement, subject to
the confidentiality provisions of this agreement.
2.2
Grant
of License to Licensor.
Licensee grants a license, subject to the terms and conditions of this Agreement
and solely for the purposes of enabling Licensor to utilize Firmware
enhancements made by Licensee to Licensor’s Firmware or Products and support and
maintain their obligations to provide the Hardware of such products as described
in Schedule C on the terms and conditions set forth therein. Licensee hereby
grants Licensor, during the Term and subsequent renewal Terms, an exclusive,
free, non-transferable license, except in the Exclusive Territory and except as
set forth in Section 2.12 below, to:
(a)
install, store, read, copy, modify, use and create the Licensee’siTrax and
Derivative Products Software Source Code;
(b)
Compile into executable form the Licensee’s Software Source Code for the iTrax
and Derivative Products to execute their commercial obligations under this
agreement;
(c) Embed
the executable or Object Code on hardware produced for Licensee resulting from
such compilation; and
(d)
install, store, read, modify, copy, use and create any related technical and
user documentation provided to Licensor by Licensee, that Licensor may need to
perform their necessary commercial obligations under this agreement, subject to
the confidentiality provisions of this agreement.
2.3
Grant
of Source License to Licensor. Subject
to the terms and conditions of this Agreement and solely for the purposes of
enabling Licensor to embed modified firmware supplied by Licensee in the XXXXXX
or Derivative Products in Object Code form in Licensee’s Products and to support
and maintain such products, Licensee grants to Licensor, during the Term and
subsequent Terms thereafter an exclusive, free, non-transferable (except as
otherwise set forth herein) worldwide license to:
(a)
install, store, read, copy, modify, use and create versions of the Licensee’s
iTrax and Derivative Product Source Code;
(b)
compile into executable or Object Code form the Licensee’s iTrax and Derivative
Products Source Code thereof;
(c) use
the executable or Object Code resulting from such compilation; and
(d)
install, store, read, modify, copy, use and create any related technical and
user documentation provided by Licensee to Licensor.
2.4
Licenses
to Licensee. In the
event Licensor desires to market, distribute and/or sell the Xxxxxx or other
Derivative products that contain, utilize or otherwise would commercially
benefit from Licensee’s intellectual property, Firmware, Marks, or other as yet
defined, but exclusive intellectual or commercial property of the Licensee, the
Licensor agrees to pay the Licensee a royalty for each Xxxxxx or Derivative
Product that utilizes Licensee’s intellectual property, Firmware, Marks, or
other as yet undefined, but exclusive intellectual property of the Licensee.
Such Royalty shall be determined and agreed upon by the parties and set forth in
a separate agreement, at reasonable commercial terms. Derivative
products, modifications, corrections, and enhancements on Xxxxxx or the Xxxxxx
Derivative Products, as developed by licensee, but excluding Licensee’s
pre-existing intellectual
property, Firmware, Marks, or other
as yet defined, but exclusive intellectual or commercial property of the
Licensee, will be
the co-ownership of Licensor and Licensee and and each will have the right
to use such modifications, corrections and enhancements.
________________
Certain
information on this page has been omitted and filed separately with the
Securities and Exchange Commission. Confidential treatment has been requested
with respect to the omitted portions.
2.5
Grant
of License to Use Marks. Subject
to the terms and conditions of this Agreement, Licensor hereby grants to
Licensee, during the Term and continuing indefinitely thereafter, a license to
use Licensor’s Marks in accordance with Section 6 of this
Agreement.
2.6
Distribution
Conditions. The
licenses granted under Sections 2.1 and 2.2 are conditioned upon and subject to
the following restrictions:
(a)
Licensee, Licensee’s customers and Licensee’s Distributors shall not publish in
any manner the knowledge developed in XXXXXX and/or XXXXXX and any Derivative
Work thereof for use with non-Licensee Products and/or on any non-Licensee
supplied client viewer.
(b)
Licensee may distribute and may permit a distributor to distribute Licensor’s
Products under Section 2.2 only if such distribution is subject to a written
license agreement with the Licensee customer, or at Licensee’s option, a
“shrinkwrap” or Internet “click” form of agreement. All such license agreements
must contain provisions that:
(i)
provide that the Licensee customer may only use the Licensee Product for its own
internal business purposes and prohibit the Licensee customer from
sub-licensing, transferring or otherwise disclosing the Licensee Product or any
portion thereof to any other Person;
(ii)
require the Licensee customer to retain and/or affix to any copies of the
Licensee Product those Marks or other proprietary notices that appear on or in
the original or as designated by Licensor;
(iii)
contain the agreement of the Licensee customer not to reverse engineer or
reverse compile or disassemble the Licensee Product to attempt to gain access to
the underlying Source Code; and
(iv) Each
Distributor must enter into a written agreement with its supplier of Licensee
Products (i.e., Licensee or another Distributor) before any such Licensee
Product is furnished to that Distributor. Such agreement must include provisions
consistent with this Section and containing the relevant substance of this
Section and which are not contradicted by or in conflict with other provisions
in such agreement or any other agreement relating to the Licensee
Products.
(c)
Licensee shall use its best efforts to enforce all such license agreements with
Distributors and Licensee customers to the extent Licensee does so with its own
products, but at a minimum, Licensee shall use no less than commercially
reasonable efforts in enforcing such license agreements.
(d)
Licensor, when distributing Licensees Products, as defined under this Agreement,
shall also abide by and comply with the terms and conditions set forth in this
Section.
(e)
Licensee shall send a copy of each sub-distribution contract entered into by
Licensee pursuant to this license to Licensor within 3 (three) business days of
execution of such agreement.
________________
Certain
information on this page has been omitted and filed separately with the
Securities and Exchange Commission. Confidential treatment has been requested
with respect to the omitted portions.
2.7
Source
Code Escrow and Release to End-Users.
(a)
Source Code Escrow with a Third Party Escrow Agent, only when required as a
condition of a large commercial and/or governmental contract and only after
written approval from Licensor.
(i) To
satisfy potential escrow requirements of Licensee’s major customers, Licensee
may escrow a copy of the XXXXXX Source Code with a single third party escrow
agent located in the United States that is mutually acceptable to Licensor and
Licensee. The terms of the escrow with the escrow agent shall be mutually
acceptable to Licensor, Licensee and the escrow agent.
(ii)
Licensee shall promptly notify Licensor of the identity of any Licensee
customers for which it wants to escrow a Source Code copy of the Licensee
Products,
(b)
Release of Source Code to End-Users.
(i) If
Licensee becomes insolvent, or Licensor becomes insolvent, is unwilling or
unable, itself or through a designated third party, to provide support services
to Licensee customers, then those Licensee customers who (1) currently have a
fully-paid support agreement with Licensee for Licensee Products, and (2) upon
licensing the Licensee Products, required Licensee to escrow the Source Code of
Licensee Products, may request that the escrow agent release a copy of the
Source Code of the Licensee Products, including XXXXXX and/or Derivative
Products (as the case may be), to such Licensee customer.
(ii) Upon
receipt of such request, the escrow agent will promptly notify Licensor of such
request. Licensor will have twenty (20) Business Days from the receipt of such
request to, in good faith, contest the release of the Source Code of the
Licensee Products, including XXXXXX and/or Derivative products (as the case may
be), to the Licensee Customer. If Licensor contests such release, then the
Source Code of the Licensee Products, including XXXXXX and/or XXXXXX (as the
case may be), shall not be released to the Licensee Customer until such dispute
is resolved.
(iii) If
Licensor does not contest such release within twenty (20) Business Days of the
receipt of the request to release the Source Code of the Licensee Products,
including XXXXXX and/or Derivative products (as the case may be), then the
Source Code of the Licensee Products, including XXXXXX and/or Derivative
products (as the case may be), shall be released to the Licensee customer, and,
upon such release, the Licensee customer is hereby granted a limited,
non-exclusive, non-transferable perpetual license to use the Source Code of the
Licensee Products, including XXXXXX and/or Derivative products (as the case may
be), solely for the maintenance and support of its use of the Licensee Products
as specified in its license agreement with Licensee. The Licensee customer may
not distribute to any third party in any manner the Source Code of the Licensee
Products, including XXXXXX and/or Derivative products (as the case may be), or
any portion thereof.
2.8
No
Restrictions on Future Development. Neither
party shall be restricted from developing products or functions for XXXXXX or
Derivative products.
________________
Certain
information on this page has been omitted and filed separately with the
Securities and Exchange Commission. Confidential treatment has been requested
with respect to the omitted portions.
2.9
Exclusivity. Except
upon the prior written consent of Licensee, Licensor agrees that it shall not
license the XXXXXX and/or Derivative products to any third party in the
Exclusive Territory, other than to (a) customers of Licensor who have
pre-existing contracts with Licensor that cannot be cancelled or (b) new
customers that have a back-end and only wish to buy the Xxxxxx or (c) to OEM
clients. Licensor will not
directly sell the Xxxxxx with a competing “back-end” solution that is provided
to the customer by Licensor. Licensor, at their sole discretion will make a
“best efforts” attempt to direct all their qualifying customers without a
“back-end” solution, to Licensee, as long as Licensor and Licensee, in both of
their opinions, believe that Licensee’s “back-end” software would provide an
appropriate commercial solution for the potential customer or opportunity.
Licensee will not promote the use of their software that would, in any way,
restrict the sale of Licensor’s Products. In the event that Licensor has
provided visibility to Licensee of such an opportunity, and Licensee, working in
conjunction with Licensor, have determined that a good commercial fit does not
exist, Licensee will notify Licensor of this circumstance in a timely manner and
will rescind their opportunity. Licensee
may withhold or decline to grant such request in its reasonable business
judgment. Licensee acknowledges that Licensor has existing relationships with
competitors of Licensee for such parties to market Xxxxxx and nothing in this
Agreement shall restrict Licensor from fulfilling its obligations under such
relationships. Licensee will not sell or distribute products, until six months
after the termination of the Agreements, which are competing with Xxxxxx or
Xxxxxx Derivative Products.
2.10
Right
To Maintain Exclusivity Through New Products Or Conceptual
Products.
Licensor and Licensee further agree that any new products that should be
developed under this Section shall be deemed to fall under the Exclusivity and
other accompanying provisions of this Agreement.
2.11.
OEM
accounts. OEM
accounts are specifically excluded from this Agreement (i.e. Licensor keeps its
full rights to Distribute or license the Licensor Products to OEM parties in the
Exclusive Territory.
2.12
Third
Party License Agreements.
Licensee understands that Licensor cannot provide the Source Code for Firmware
contained in the Xxxxxx or Derivative Products provided to Licensor under Third
Party Agreements, except as allowed by Licensor’s negotiated rights to
distribute same. Licensee further agrees that it must comply as a sub-licensee
to the terms of those Third Party Agreements, a complete list of which shall be
presented to Licensee, if such Third Party agreements for Source Code apply. If
either party knows of or recognizes the need of such Third Party License
agreements or Sub-licensing requirements that the other should require to
execute any of its obligations under this Agreement, they will duly inform the
other party and make all appropriate arrangements for such licensing to be
performed within a reasonable period of time.
2.13
Conditions
for Transfer of the XXXXXX, iTrax and Derivative products
Licenses. Either
Party may transfer its license rights granted pursuant to this Agreement to a
Subsidiary or a third party only upon the prior written consent of the other
party, which consent may not be unreasonably withheld or declined to grant. Upon
the occurrence of a change in control of the ownership of either party, whether
by sale of assets, merger, consolidation or otherwise, the effected party shall
promptly notify the other of such event.
2.14
Production
priority rights for Licensee towards Licensor.
Licensor agrees to prioritize its production in favor of the Licensee. In the
event that product orders, component availability, or other unforeseen
complications should arise that do not allow the Licensor to fulfill all orders
placed to the Licensor for Product, Licensor shall produce and provide all
available production of product to fulfill the product requirements of
Licensee.
________________
Certain
information on this page has been omitted and filed separately with the
Securities and Exchange Commission. Confidential treatment has been requested
with respect to the omitted portions.
2.15
Circumvention
Protection. Each
Party agrees not to circumvent the commercial or market relationships of the
other, and each party further agrees to notify the other if such a circumvention
should inadvertently occur and will take all necessary care to remediate as soon
as reasonably practical.
2.16
Licensor
Distribution.
Licensee recognizes that Licensor has existing Distributor agreements that it
must fulfill, but Licensor agrees not to expand or otherwise alter its
distribution in the Exclusive Territory of the Licensee, with regard to XXXXXX
or XXXXXX Derivative Products.
2.17
Distribution
Subsidiary. Upon
finalization and execution of the Exclusivity, as per the payment terms
contained in Section 3.1, each Party agrees to jointly pursue the development of
a subsidiary called “Advantra USA”, for the purposes of managing the
distribution of Licensor Products to existing customers and customers who have
their own back-end and customers that are not currently considered under the
Exclusivity arrangements of this Agreement. Upon termination of Exclusivity, as
per the terms contained in Section 13.2. and 13.3., Licensee will cease to use
the Advantra name or any reference to Advantra for this purpose and will also
immediately change the name of this subsidiary. Licensee will stop using any
reference to Licensor This subsidiary could provide call center support,
warranty support and aftermarket warranty remediation among other possible
commercial activites that both parties agree should be managed within the new
subsidiary and the terms and conditions of such new venture would be detailed
and form a new agreement which the parties might sign in the
future..
2.18
Non-Exclusive
Customers of Licensor. Any
customers brought solely by Licensor or its existing relations, that result in
commercial sales for the Licensee, shall not form part of the agreed upon volume
detailed in the Xxxxxx Purchase Agreement.
2.19
Technology
Development Commitments. The
parties agree to make all reasonable efforts to complete the Technology
upgrades, Product Development and upgrades, and other significant enhancements
to the Products as detailed in Schedule
A
attached.
3.
Payments.
3.1
Payments. In
consideration of the Licenses and Exclusive Distribution granted hereunder,
Licensor shall, subject to satisfactory completion of due diligence by Licensor,
irrevocably receive [***] of the total issued and outstanding shares of common
stock of Licensee (“Shares”) existing at the date of Commencement of
Exclusivity. THIS PAYMENT IS FOR EXCLUSIVITY AND THOSE RIGHTS ATTACHED TO
EXCLUSIVITY ONLY, AND DOES NOT PRECLUDE OR MODIFY ANY PAYMENT OBLIGATIONS
LICENSEE INCURS RELATING TO THE PURCHASE OF XXXXXX, iTrax OR DERIVATIVE PRODUCTS
OF XXXXXX OR iTrax.
The
shares issued shall bear a restrictive legend stating that the shares so issued
shall not be sold except pursuant to an effective registration statement or
applicable exemption from registration, pursuant to SEC rule 144.
3.2
Share
Purchase Option.
Licensee further grants Licensor a [***] ([***]) year option to purchase
Treasury shares (“Treasury Shares”) up to [***] shares of common stock [***].
The exercise price for the Treasury Shares shall be [***] of the average
weighted price of HSNi’s shares of common stock for the last 20 days trading
prior to the Share option exercise.
4.0
Debt
Obligations of the Licensee. All
Debt Obligations of the Licensee will be paid in full in US currency, not
withstanding any US or International Law or applicable precedents to the
contrary. For the purposes of this agreement, the stock or other negotiable
securities of the Licensee shall not be considered to be currency or legal
tender for the purposes of meeting any Debt Obligations the Licensee may incur
with Licensor over the life of this agreement or the Xxxxxx Purchase agreement
being executed concurrently herewith.
________________
Certain
information on this page has been omitted and filed separately with the
Securities and Exchange Commission. Confidential treatment has been requested
with respect to the omitted portions.
5.0
Ownership,
Intellectual Property Rights, Confidential Information and
Copies.
5.1
Ownership
and Intellectual Property Rights.
Licensor retains all ownership rights in hardware design and supplied firmware
of XXXXXX and Derivative products , including any and all Intellectual Property
Rights in the same, except that Licensee shall own any (a) Derivative Products
it creates through the incorporation of its proprietary intellectual property or
firmware created by Licensee for the XXXXXX or Derivative products that
constitute original works of authorship by Licensee and (b) other Licensee
Technology that may be disclosed to the Licensor for incorporation in the Xxxxxx
or Derivative products.
5.2
Copies;
Preservation of Marks in Copies. Either
party may make copies of documentation it receives from the other, provided that
the use of all such copies is in accordance with the terms of Section 2 of this
Agreement, and does not conflict with any of the confidential information
provisions contained in this Agreement. Neither Party shall remove any Xxxx or
other proprietary notice that appears on the XXXXXX, iTrax or other products
sold, distributed, or otherwise delivered to a third party, except as otherwise
provided for herein.
5.3
Confidential
Information.
(a) Each
party (the receiving party) shall not, without the prior written consent of the
other party (the disclosing party) provide, disclose, transfer or otherwise make
available any Confidential Information of the disclosing party, or any portion
or copy thereof, to any person, including Subsidiaries, unless the receiving
party first obtains the express written approval of the disclosing party. The
receiving party shall give access to the disclosing party’s Confidential
Information solely to those employees and agents with a need to have access
thereto, and who have agreed to protect such Confidential Information in
accordance with this Agreement. The receiving party shall take the same security
precautions to protect against disclosure or unauthorized use of such
Confidential Information that it takes with its own confidential information of
a similar kind, which in no event shall be less than a reasonable standard of
care to prevent any such disclosure or unauthorized use. The receiving party
shall not be in breach of this provision if Confidential Information is
disclosed (i) with the disclosing party’s prior written approval or (ii)
pursuant to any order of a court of competent jurisdiction or duly authorized
regulatory agency, provided that reasonable steps are taken by the receiving
party to give the disclosing party sufficient prior notice in order to contest
such order. The receiving party agrees to provide the disclosing party (at no
expense to the disclosing party) all reasonable assistance and documents the
disclosing party may request in contesting such order.
(b) In
addition to any information provided by Licensor that is marked “confidential”,
the XXXXXX and XXXXXX Derivative Products and all terms and conditions related
to Licensor’s pricing of same to Licensee shall be the Confidential Information
of Licensor. The Licensor likewise agrees to maintain the confidentiality of the
terms and conditions and pricing of any of the Licensee’s products that the
Licensor should be made knowledgeable of, whether as a part of, or subsequent to
the signing of this Agreement.
(c) In
the case of disclosures required by U.S. regulatory agencies, the parties shall
make best efforts to keep confidential business terms from being made public,
and shall, at a minimum, redact as confidential business information the pricing
terms and other financial information contained herein, the names of the
Licensor products provided hereunder, other than that information that either
party may be required to disclose as required by law in their operating
jurisdictions.
________________
Certain
information on this page has been omitted and filed separately with the
Securities and Exchange Commission. Confidential treatment has been requested
with respect to the omitted portions.
5.4
Publicity.
Licensor and Licensee will not publicize in any news media, advertising or
promotional material, financial documents or otherwise disseminate, any
information regarding the terms of this Agreement without the prior express
written consent of each other. The obligations of Licensee and Licensor under
this Section 5.4 shall survive any termination of this Agreement.
5.5
Unauthorized
Use. The
Parties agree that, during the Term and or subsequent renewals of the term, the
parties shall not: (a) develop, acquire or market materials or products that
utilize or incorporate, without authorization, either party’s Intellectual
Property Rights and/or Confidential Information; or (b) except as otherwise set
forth herein, use any portion of XXXXXX or any Derivative Products thereof in a
form that would be considered to be commercially competitive to a product made
available to the other via this or subsequent agreements. Licensee will
exclusively use Licensor’s products, other than (i) in the event that the
Licensor has no product that can be marketed by the Licensee to bona fide
customer opportunities requiring a product other than that which Licensor can
supply; (ii) where Licensor informs Licensee of its unwillingness to supply such
a product; and (iii) where Licensor and Licensee agree that it is not in their
best commercial interests to have the Licensee market the product.
6.
Ownership
and Use of Marks.
All
Licensor and Licensee Marks included in XXXXXX, iTrax and respective Derivative
Products of Xxxxxx and iTrax are and shall remain the exclusive property of
Licensor or Licensee respectively, as detailed in Schedule
E. Except
as otherwise set forth herein or as agreed in advance and in writing by the
Parties, the Parties shall have no right hereunder to include any Marks of the
other Party without the prior express written consent of the Xxxx owner. All
proprietary rights and goodwill relating to the Marks in the XXXXXX or
Derivative Products shall remain the property of the Party owning the Marks and
any use thereof by such Party’s customers and Distributors will inure to the
benefit of the Party owning the Marks.
7.
Representations
and Warranties.
7.1
General
Representations and Warranties of the Parties. The
Parties warrant that they have all rights necessary to grant the licenses
granted to hereunder. Each party represents and warrants that it is authorized
to enter into this Agreement and that the representative of the party signing
this Agreement is duly authorized by the party to act therewith.
8.
Support
Services and Training
8.1
General
Terms. The
Parties shall provide Support Services as described in Schedule
B on the
terms and conditions set forth therein for their respective Products detailed in
Schedule C of this Agreement, distributed and sold by the other Party over term
or subsequent term renewals of this Agreement. After that time, subject to any
separately committed product warranties obligating the respective issuer to
provide product support, the respective party may continue the Support Services
to the other on an annual fee basis, subject to mutual agreement by the parties
on such annual fee.
8.2
No
Obligation. Neither
Party is under obligation to subscribe to the Support Services of the other
after the termination of this Agreement. The licenses granted in this Agreement
shall not be dependent upon the purchase of Support Services from the other or
the termination of Support Services to the other for any reason.
9.
Intellectual
Property Indemnification, Limits of Liability and Obligation to
Assist.
________________
Certain
information on this page has been omitted and filed separately with the
Securities and Exchange Commission. Confidential treatment has been requested
with respect to the omitted portions.
9.1
Indemnification
by Licensor.
Licensor, at its expense, shall defend, indemnify and hold harmless Licensee
from any claim or suit brought against Licensee alleging that the version of
XXXXXX or Derivative Products provided to Licensee by Licensor under this
Agreement infringes any third party Intellectual Property Right, provided that
Licensee gives Licensor (a) prompt written notice of such claim or suit, (b) the
sole authority to defend and settle the same, and (c) at no expense to Licensee,
any information or assistance requested by Licensor in connection with such
defense or settlement. Licensee may, at its option and at no expense to
Licensor, participate in and/or observe the defense of such claim or
suit.
9.2
Remedies. If the
use of the version of XXXXXX provided to Licensee by Licensor under this
Agreement is enjoined by an order of a court of competent jurisdiction because
of a claim of infringement of any third party’s Intellectual Property Rights,
or, if Licensor believes that such an order is likely, then Licensor, at no
expense to Licensee and at Licensor’s option, may use reasonable commercial
efforts to (a) procure for Licensee the right to continue using such version in
accordance with this Agreement or (b) modify such version so that it becomes
non-infringing while materially conforming to XXXXXX specifications (as the case
may be).
9.3
Exclusion
from Indemnification.
Licensor shall have no liability for any claim of infringement based on use of
the version of XXXXXX provided to Licensee by Licensor under this Agreement that
has been modified or combined with other software, if the infringement would
have been avoided by use of the unmodified or uncombined version.
9.4
Indemnification
by Licensee.
Licensee shall defend, indemnify and hold harmless Licensor from any claim or
suit brought against Licensor alleging that any Licensee Technology or any
Derivative Product containing the intellectual property created by Licensee
infringes any third party’s Intellectual Property Rights to the extent that such
claim or suit arises from the acts of Licensee, its employees, agents or
representatives, including, without limitation, such parties’ actions in
modifying, marketing, Distributing, exporting or supporting XXXXXX, Derivative
Products, iTrax or any part thereof or the Licensee Products.
9.5
LIMITATION
OF LIABILITY. THIS
SECTION 9 SETS FORTH THE ENTIRE LIABILITY OF EACH PARTY WITH RESPECT TO
INFRINGEMENT OF SAID PARTY’S INTELLECTUAL PROPERTY RIGHTS, AND EACH PARTY SHALL
HAVE NO ADDITIONAL LIABILITY OR DUTIES WHATSOEVER WITH RESPECT TO ANY CLAIMED OR
PROVEN INFRINGEMENT.
9.6
Obligation
to Inform and Assist. Each
Party shall promptly notify the other in writing upon its discovery of any
unauthorized use of XXXXXX, Derivative Products, iTrax or infringement of the
other Party’s Intellectual Property Rights with respect thereto by the other
Party, the other Party’s customers or any third party. Each Party shall have the
sole and exclusive right to bring an action or proceeding against any infringing
third party, and, in the event that a Party brings such an action or proceeding,
the other Party shall (at no expense to such other Party) cooperate and provide
all available information and reasonable assistance that said Party or its
counsel may request in connection with any such action or
proceeding.
10.
Limitation
of Liabilities
10.1
Limitation
of Liability. Except
for a claim or suit in which Licensor is indemnifying Licensee pursuant to and
in accordance with Section 9, in no event shall Licensor’s liability for any and
all claims, losses or damages arising out of or relating to, in whole or in
part, this Agreement, XXXXXX or any services provided hereunder, regardless of
the form of action or legal theory under which liability may be asserted, exceed
the amounts paid by Licensee to Licensor for exclusivity hereunder.
________________
Certain
information on this page has been omitted and filed separately with the
Securities and Exchange Commission. Confidential treatment has been requested
with respect to the omitted portions.
10.2
Mutual Limitation of Liability. The Limitation of Liability of the Licensee
shall be the same as those extended to Licensor under the terms of this
Agreement.
10.3
NO
LIABILITY FOR SPECIAL, INCIDENTAL OR CONSEQUENTIAL
DAMAGES.
UNDER NO
CIRCUMSTANCES WHATSOEVER SHALL EITHER PARTY BE LIABLE HEREUNDER FOR SPECIAL,
INCIDENTAL OR CONSEQUENTIAL DAMAGES, INCLUDING, WITHOUT LIMITATION, LOST PROFITS
OR LOSSES RESULTING FROM BUSINESS INTERRUPTION, EVEN IF EITHER PARTY HAS BEEN
ADVISED OF THE POSSIBILITY OR LIKELIHOOD OF SUCH DAMAGES.
11.
Force
Majeure.
Neither
party shall be liable for delays in or failure of performance (other than the
obligation to make any payments due and payable under this Agreement) due to
causes beyond such party’s reasonable control, including, without limitation,
acts of God, acts of civil or military authority, fires and explosions. In the
event of any such delay or failure, the affected party shall immediately send
written notice of the same and the reason therefore to the other party. The
performance of the affected party shall be deemed suspended so long as, and to
the extent that, any such Force Majeure continues; provided, however, that after
one hundred eighty (180) consecutive or cumulative days of such suspension, the
other party may terminate its obligations hereunder without
liability.
12.
Export
Control.
Both
Parties hereby agree and acknowledge that any technology or technical data
obtained from the other, including XXXXXX and Derivative Products thereof, are
under the jurisdiction of the export control laws and regulations of the United
States of America and that any direct or indirect export, re-export, license,
sale or other transfer of such technology or technical data may require the
prior authorization of the United States government. Licensee expressly warrants
that it will comply with all applicable United States export control laws and
regulations. Both Parties hereby agree that they will indemnify the other and
hold them harmless from and against any loss, liability, cost, damage or expense
that either may incur or suffer resulting in any way from the others inadvertent
failure to comply with all applicable United States export control laws and
regulations.
13.
Term
and Termination.
13.1
Term. The
Term of this Agreement shall begin on the Effective Date and continue until the
second (2nd) anniversary thereof (the initial term) and upon the expiration of
the initial term, shall automatically renew for successive one (1) year renewal
terms unless either party notifies the other party of its desire not to renew
this Agreement after the initial term or at the conclusion of any renewal term
by providing the other party ninety (90) days written notice of its intention
not to renew prior to the expiration of the initial term or any renewal term as
the case may be. Further, this Agreement may be terminated at any time during
the term as set forth in Section 11 or Section 13.2 of this Agreement.
13.2
Termination
for Cause. In the
event of a breach by a party (the breaching party) of its material obligations
hereunder, the other party (the non-breaching party) may terminate this
Agreement upon written notice of such breach, provided the breaching party has
not cured such breach to the reasonable satisfaction of the non-breaching party
within thirty (30) days of the breaching party being notified of such breach,
or, if the breach consists solely of a failure to pay money when due, thirty
(30) days, after prior written notice to the breaching party of the existence
and nature of the breach and of the non-breaching party’s intention to terminate
if not cured.
________________
Certain
information on this page has been omitted and filed separately with the
Securities and Exchange Commission. Confidential treatment has been requested
with respect to the omitted portions.
Upon such
termination as a result of either Party having (a) breached the other’s
Intellectual Property Rights or the license rights granted in Section 2 above or
(b) failed to pay the owed party the amounts payable under this Agreement when
due, then the harmed party shall immediately deliver to the other original and
all whole and partial copies of any Confidential Information or, with the prior
written consent of the harmed party, destroy such original and all such copies
and certify to the harmed party in a writing signed by an officer of the harmed
party such return or destruction; and all of harmed party’s rights and licenses
and all of the offending party’s obligations hereunder shall
terminate.
13.3
Exclusivity. The
period of Exclusivity will start at the sooner of (i) the purchase of [***]
([***]) Xxxxxx units, or (ii) [***] after the Effective Date, with the condition
that [***] % of the forecasted orders for the period have been ordered and
pre-paid (“Commencement of Exclusivity”), in accordance with the applicable
provisions of the Xxxxxx Purchase Agreement. The Licensor shall have the right
to terminate Distribution Exclusivity if (i) the Licensee fails to achieve [***]
% of the volume commitments of commercial sales identified in the Xxxxxx
Purchase Agreement and in this Agreement and set at [***] ([***]) units of the
XXXXXX or Xxxxxx Derivative Products in the [***] year and [***] units of the
XXXXXX or Xxxxxx Derivative Products in the second year from signature of this
Agreement, subject to the qualifying terms and conditions contained in the
Xxxxxx Purchase Agreement, or (ii) the Licensee fails to achieve [***] % of the
volume commitments of commercial sales identified in the Xxxxxx Purchase
Agreement on a [***] months basis. Notwithstanding the forgoing condition,
Licensee shall have the right to make a payment of $[***] ([***] USD) for each
unit not purchased in order to satisfy the volume commitment for Exclusivity. If
the Licensor determines that it wishes to exercise its right to terminate
Exclusivity, then it will provide due notice of its intention as per Section
14.2 of this Agreement [***] days prior to such termination. As set in the
Xxxxxx Purchase Agreement, first evaluation of the exclusivity relation is set
at [***] ([***]) months
from Commencement of Exclusivity. Subsequent evaluations will be on a
[***]
([***]) months
basis starting after the first evaluation. In any case, Licensor will be
entitled to keep the shares and the option. Termination of Exclusivity shall not
entitle Licensee to receive any kind of termination compensation or
indemnification from Licensor. Termination of Exclusivity shall not alter
Licensees right to continue to distribute the Products on a non-exclusive basis.
All products containing the iTrax Xxxx shall continue
to be exclusively distributed by the Licensee.
13.4
Equitable
Relief. In
addition to any other remedies to which either party may be entitled, and
because unauthorized use or disclosure of either party’s Confidential
Information or a breach of either party’s Intellectual Property Rights will
create irreparable harm to the other, which cannot be remedied by money damages
alone, the harmed party shall be entitled to seek injunctive relief to prevent
the offending party from breaching or continuing such breach.
13.5
Change
of control. In the
event of a change of control in the ownership of one party, as the case may, the
other party shall have the right to terminate this agreement on [***] days
written notice.
14.
General.
14.1.
Binding
Effect. This
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors, assigns and legal representatives.
________________
Certain
information on this page has been omitted and filed separately with the
Securities and Exchange Commission. Confidential treatment has been requested
with respect to the omitted portions.
14.2
Notices. All
notices, requests and demands given to or made upon the parties hereto shall be
in writing and delivered by hand reputable overnight courier, facsimile (with
confirmation of receipt provided by the recipient and a copy sent by first class
mail, postage prepaid) or electronic mail (with confirmation of receipt provided
by the recipient and a copy sent by first class mail, postage prepaid) to the
appropriate designated business liaisons at the following
addresses:
If to
Licensor:
Advantra
International NV
Xxxxxxx
0, X 0000
Xxxxxx,
Xxxxxxx
With a
copy to: Xxxx Xxxxxx, Esq.
Xxxxxxxx
Xxxx LLP
000
Xxxxxx Xxxxxx #0000
Xxxxxxxxxx,
XX 00000, XXX
If to
Licensee:
Homeland
Security Networks Inc.
0000
Xxxxxx Xxxxx
Xxxxxx,
Xxxxx 00000, XXX
With a
copy to: Xxxxxxxx
X. Xxxxxxx, Esq.
The
Galleria
0 Xxxxxx
Xxxxxx
Xxx Xxxx,
Xxx Xxxxxx 00000, XXX
Either
party may change the address to which notices must be sent by providing written
notice of the change to the other party in accordance with the provisions of
this Section 14.2. Any notice so given shall be deemed to have been given on the
second business day following the date it was sent.
14.3
Independent
Contractors. The
relationship between the parties established by this Agreement is that of
independent contractors, and nothing contained in this Agreement shall be
construed to: (a) give either party the power to direct or control the
day-to-day activities of the other, (b) constitute the parties as partners,
joint venturers, co-owners or otherwise as participants in a joint or common
undertaking, or (c) allow either party to create or assume any obligation of or
on behalf of the other party for any purpose whatsoever.
14.4
Assignment. Neither
this Agreement nor any rights, privileges, duties or obligations under this
Agreement may be assigned, sub-licensed, sold, mortgaged, pledged or otherwise
transferred or encumbered by Licensee without the prior written consent of the
other party, which consent may not be withheld unreasonably. Any attempt to
assign this Agreement without the consent of the other party shall be void.
Neither Party shall not assign its rights arising hereunder without the prior
written consent of the effected party, which consent may not be withheld or
declined, subject to reasonable business judgment. This Agreement shall be
binding on all permitted assignees and on all successors in interest to the
parties hereto and to such assignees.
________________
Certain
information on this page has been omitted and filed separately with the
Securities and Exchange Commission. Confidential treatment has been requested
with respect to the omitted portions.
14.5
Indulgences,
Etc. No
failure or delay on the part of any party in exercising any right hereunder,
irrespective of the length of time for which such failure or delay shall
continue, will operate as a waiver of, or impair, any such right. No single or
partial exercise of any right hereunder shall preclude any other or further
exercise thereof or the exercise of any other right. No waiver of any right
hereunder will be effective unless given in a signed writing.
14.6
Further
Assurances. Each
party to this Agreement will, at the request of the other party and without
charge (provided that the cost to the providing party is reasonable under the
circumstances), execute and deliver all such further instruments and documents
as may be reasonably requested to further confirm, carry out and otherwise
accomplish the intent and purpose of this Agreement.
14.7
Severability. If any
provision of this Agreement is held to be invalid or unenforceable under any
circumstances, its application in any other circumstances and the remaining
provisions of this Agreement shall not be affected thereby.
14.8
Headings. The
Article and Section headings in this Agreement and in any Schedules attached
hereto are for purposes of reference only and shall not restrict or affect the
meaning or application of any provision herein or therein
contained.
14.9
Counterparts. This
Agreement may be executed in any number of counterparts, each of which shall be
an original and all of which shall constitute together one and the same
document.
14.10
Governing
Law. The
rights and obligations of the parties under this Agreement shall not be governed
by the UN Convention on Contracts for the International Sale of Goods; rather,
such rigths and obligations shall be governed by the laws of the Kingdom of
Belgium.
14.11
Dispute
Resolution, Arbitration. In the
event of any dispute under this Agreement, the Parties will attempt to reach a
negotiated resolution. If any such dispute remains unresolved for a period of
thirty (30) days after one party has provided written notice to the other
setting forth in detail the nature of such dispute, then each party will
designate a senior executive to resolve the dispute. If the Parties continue to
be unable to resolve the dispute within thirty (30) days after such designation
of senior executives, then such dispute shall be resolved by final and binding
arbitration, to be held in Brussels,
Belgium,
in accordance with the rules of CEPANI (Belgian Center for Arbitration and
Mediation). There shall be one arbitrator, to be appointed in accordance with
such rules. The arbitration, and all correspondence under such arbitration,
shall be held in the English language only. Notwithstanding the previous, each
party shall have the right at any time to seek protection in court, through
injunctive relief or
otherwise, in order to protect its confidential information and/or its
intellectual property rights.
14.12
Entire
Agreement; Amendments. This
Agreement and any Schedules attached hereto, together with the Xxxxxx Purchase
Agreement between Parties signed concurrently, constitute the entire agreement
and understanding of the parties relating to the subject matter hereof, and no
representation, condition, understanding or agreement of any kind, oral or
written, shall be binding upon the parties unless expressly set forth herein or
therein. This Agreement supersedes all prior written and oral agreements and all
other communications between Licensee and Licensor relating to the subject
matter hereof, other than the Xxxxxx Purchase Agreement signed concurrent to
this agreement which constitutes part of the complete Agreement.
14.13
Future
Agreements. The
parties agree to negotiate in good faith at a future date mutually agreeable to
the parties’ agreements to sell additional products to their respective
customers.
________________
Certain
information on this page has been omitted and filed separately with the
Securities and Exchange Commission. Confidential treatment has been requested
with respect to the omitted portions.
