LICENSE AND DISTRIBUTION AGREEMENT
This
License and Distribution Agreement (this “Agreement”)
is
entered into as of this 27th day of June, 2007 (the “Effective
Date”)
by and
between Document Security Systems, Inc., a corporation organized and existing
under the laws of the State of New York (“DSS”),
and
Cultura Interactiva S.A. de C.V., a company organized and existing under the
laws of Mexico (“Licensee”).
RECITALS:
WHEREAS,
DSS is engaged in the business of, among other things, developing and licensing
anti-counterfeiting technology, processes and products providing protection
against a wide range of document security threats, including forgery,
counterfeiting and unauthorized copying, scanning and photo imaging;
WHEREAS,
Licensee is engaged in the business of, among other things, manufacturing,
marketing, selling and distributing safety paper, security identification cards,
labels, certificates, packaging and other secure printed documents;
and
WHEREAS,
Licensee wishes to acquire, and DSS is willing to grant, an exclusive, limited
license and right to represent DSS’ products (including, without limitation,
safety/security paper, plastic cards, certificates and documents incorporating
anti-counterfeiting features) and anti-counterfeiting and anti-forgery
technology and solutions in the country of Mexico.
NOW,
THEREFORE, for good and valuable consideration, the receipt and sufficiency
of
which is hereby acknowledged, the parties agree as follows:
1. Definitions.
For
purposes of this Agreement, the following capitalized terms shall have the
meanings set forth below.
“Decertified
Technologies”
shall
mean all Technologies
(as hereinafter defined) identified by DSS to Licensee in writing as being
no
longer effective when used for security printing and document
anti-counterfeiting.
“DSS
Products”
shall
mean those products specified on Schedule
1
hereto.
“DSS
Safety Paper”
shall
mean all Safety Paper (as hereinafter defined) manufactured by DSS.
“Force
Majeure”
means
circumstances or events which: (i) could not be normally reasonably anticipated
by the parties, (ii) are external to the parties, and (iii) could not be
mitigated through commercially reasonable efforts. Such circumstances or events
shall include, without limitation, strikes, lockouts, riots, insurrections,
acts
of terrorism, civil disturbances, sabotage, embargoes, blockades, acts of war,
acts or failures to act of any governmental or regulatory body (whether civil
or
military, domestic or foreign), governmental regulations superimposed after
the
fact, power failures, fires, explosions, floods, accidents, epidemics,
earthquakes or other natural or man-made disasters, and all occurrences similar
to the foregoing.
“Intellectual
Property”
shall
mean, but shall not be limited to, (i) all patents, trademarks, trade names,
service marks, designs, logos, and copyrights, and all pending applications
for
registration thereof; (ii) know-how, inventions, improvements, methods,
operation manuals and procedures, trade secrets, technical information,
formulas; (iii) computer software and programs, and related documentation,
updates, and data, whether in object or source code form, and (vi) all other
similar proprietary and intellectual rights, whether or not
registered.
“Licensee
Products”
shall
mean those products specified on Schedule
1
hereto.
“Person”
shall
mean any
individual, corporation, partnership, limited liability company, association,
trust or any other entity or organization of any kind or character, including
a
governmental authority or agency.
“Safety
Paper”
shall
mean paper
that is larger than 8 inches by 10 inches printed in a flat or graduated tint
with or without patterns and containing hidden alert words or symbols such
as
"VOID," "COPY" or "UNAUTHORIZED COPY," or bar codes, logos or other images
embedded in the background tint that appear when a handheld verifier is placed
on the paper or when the document is copied, scanned, faxed or reproduced in
any
form utilizing industry standard copiers, desktop scanners or facsimile
machines. The appearance of the hidden words after reproduction of the document
is intended to alert document recipients that they are looking at a non-original
document.
“Technologies”
shall
mean those certain DSS patent and/or patent-pending technologies specified
on
Schedule
1
hereto.
“Technology
Marks”
shall
mean DSS’ trademark and service marks (including, without limitation, the
AuthentiGuard™ logo) that identify DSS as the source of the Technologies.
“Term”
shall
mean have the meaning set forth in Section 4.1 hereof.
“Territory”
shall
mean the geographical area specified on Schedule
1
hereto.
2. License.
2.1. License
Grant.
Subject
to the terms and conditions set forth herein, DSS hereby grants to Licensee,
and
Licensee accepts from DSS, for the Term, (i) an exclusive, limited, and
non-transferable (except as otherwise expressly set forth herein), license
to
use, install and otherwise incorporate the Technologies into the Licensee
Products to be manufactured, processed, prepared, displayed, offered for sale
and sold by Licensee in the Territory; and (ii) a limited and non-transferable
(except as otherwise expressly set forth herein) license to use the Technology
Marks in accordance with the terms and conditions set forth herein or as
otherwise approved in writing by DSS.
2.2. License
Fees and Payment Terms.
In
consideration of the license granted herein and services to be rendered by
DSS,
Licensee shall pay to DSS those fees (the “License
Fees”)
as set
forth on Schedule
1
hereto.
All such License Fees shall be payable by Licensee to DSS as determined by
DSS
on a project-by-project basis. The specifics of any particular project shall
be
agreed upon by the parties provided, however, that any such project will be
governed by the terms and conditions agreed upon by the parties herein.
2.3. Exclusivity.
During
the Term, DSS shall not grant to any third party, directly or indirectly, any
license to use, install, market and/or distribute the Technologies in the
Territory, other than Technologies using, used by or incorporated into
AuthentiGuard™ On-Demand. DSS shall pay to Licensee an amount equal to 5% of the
total revenue generated from any third party licensee who is prohibited from
licensing the Technology pursuant to this Section 2.3 and which Licensee grants
a waiver to such prohibition.
2.4. Exclusions
and Restrictions.
2.4.1. Licensee
shall have no right to any software, technology, know-how or other Intellectual
Property related to the Technologies or production of the Technologies, implied
or express, and, except as otherwise expressly provided herein, Licensee shall
have no right to sub-license, assign or otherwise transfer the right to use
the
Technologies.
2.4.2. The
license right granted pursuant hereto shall be subject to any restrictions
with
respect to Licensee Products or volume that are set forth on Schedule
1.
Without
limiting the foregoing, Licensee shall have no right to manufacture, print,
market or sell, directly or indirectly, and no right or power to license or
sub-license to any other Person the right to manufacture, market or sell,
directly or indirectly, Safety Paper other than DSS Safety Paper marketed using
the “AuthentiGuard™”
trademark. DSS hereby acknowledges and agrees that the foregoing restriction
shall not in any way prohibit Licensee from manufacturing, printing, marketing
or selling paper with a pantograph background in which words, symbols, borders,
artwork or similar features are printed in a secondary visible color, which
color is different and distinct from the color of the pantograph background.
2.4.3. The
license right granted pursuant hereto does not include, and Licensee shall
have
no right hereunder, under any circumstances, to receive, use or make copies
of
the source/object code for the Technologies. Further, the license right granted
pursuant hereto does not include the right to, and Licensee shall
not
(directly
or indirectly),
and
shall not knowingly assist any third party to
(i)
copy, adapt, alter, modify, translate or create derivative works of the
Technologies or other Intellectual Property owned by or under license to DSS;
(ii) reverse engineer, decompile, disassemble, or otherwise attempt to
reconstruct the source code for the Technologies or other Intellectual Property
owned by or under license to DSS; (iii) reverse engineer, reconstruct or
otherwise attempt to ascertain, or adapt, alter or modify, the proprietary
protocols, programming interfaces, algorithms, internal instructions, and
command sets used in the operation of the Technologies or other Intellectual
Property owned by or under license to DSS; or (iv) produce,
use, license, sell or otherwise distribute or exploit the Technologies or
Intellectual Property derived therefrom or bypass or defeat protection methods
for preventing unauthorized access to the Technologies.
2.4.4. Without
limiting anything herein, Licensee may only sell Licensee Products incorporating
the Technologies in the Territory. Licensee shall have no right or license,
express or implied, to sell Licensee Products incorporating the Technologies
outside of the Territory. The
Licensee Products listed on Schedule
1
hereto
represent the scope of products in which the Technologies may be incorporated
by
Licensee under this Agreement. Production or manufacture by Licensee of any
products incorporating the Technologies not specifically identified on
Schedule
1
is
prohibited, except with the express written consent of DSS, to be given or
withheld in DSS’ sole and absolute discretion. All requests to incorporate the
Technologies into products other than those specified on Schedule
1
must be
in writing.
2.5. The
Licensee Products represent the scope of products on which the Technology may
be
incorporated under this Agreement. The marketing, sale, production or
manufacture of any products not specifically included as a Licensee Product
is
prohibited (“Other Products”), except with the express written consent of DSS,
to be given or withheld in DSS’ sole and absolute discretion. All requests by
Licensee to incorporate the Technology in Other Products must be in writing.
Without limiting the foregoing, all inquires received by Licensee regarding
incorporation of the Technology in connection with plastic cards, whether such
inquiries are received verbally or in writing, shall be referred in writing
by
Licensee to DSS’ subsidiary Plastic Printing Professionals (“P3”) at the
following address: Plastic Printing Professionals, 0000 Xxxxxxx Xxxxxx, Xxxx
Xxxx, XX 00000, Attention: President). DSS or P3 and Licensee shall then
negotiate a price at which DSS or P3 would incorporate the Technology on the
Other Products for Licensee. If DSS or P3 and Licensee are unable to agree
upon
a price at which DSS or P3 would incorporate the Technology on the Other
Products for Licensee, Licensee may withdraw from such negotiations without
obligation or liability but, in such event, Licensee shall not be permitted
to
incorporate the Technology on the Other Products either directly or with the
assistance of a third party. Without limiting the foregoing, all plastic cards
sold, directly or indirectly, by Licensee shall be manufactured by P3 at a
mutually agreed upon price.
3. Sales
and Distribution of DSS Products.
3.1. Sales
and Distribution.
In
addition to the right to license and sublicense the Technologies pursuant to
Section 2 above, subject to the terms and conditions set forth herein, DSS
hereby grants to Licensee, and Licensee accepts from DSS, for the Term, an
exclusive, non-transferable right to market, sell and distribute the DSS
Products in the Territory through direct sales efforts, retail store outlets,
office products wholesalers, on Licensee’s websites, and through such other
venues or distribution outlets as Licensee deems necessary or desirable from
time to time; provided, however, that any reference to the DSS Products on
Licensee’s websites shall be pre-approved by DSS and in no event shall such
website list or otherwise refer to pricing of the DSS Products.
3.2. Pricing
and Payment.
The
prices to be paid by Licensee to DSS for the DSS Products and the payment terms
with respect thereto shall be as set forth on Schedule
1.
3.3. Packaging
Terms.
The
parties shall, on a case by case basic, mutually agree upon packaging standards
for the DSS Products. No changes in the packaging terms shall be made by
Licensee without the prior written consent of DSS.
4. Term
and Termination.
4.1. Term.
The
Initial Term of this Agreement (the “Initial
Term”)
shall
commence on the Effective Date, and shall continue for the period of time set
forth on Schedule
1
hereto,
unless earlier terminated pursuant to Section 4.2. For purposes hereof, the
Initial Term, together with any extension or renewal terms, shall hereinafter
be
collectively referred to as the “Term”.
4.2. Termination.
4.2.1. Either
party may terminate this Agreement: (i) upon thirty (30) days prior written
notice of a material breach of the other party, if the breach has not been
cured
within such thirty (30) day period; or (ii) immediately upon written notice
to
the other party if: (a) the other party declares or a petition is filed in
any
court for insolvency or bankruptcy and such petition is not dismissed in sixty
(60) days; (b) the other party reorganizes under the relevant bankruptcy act
or
any similar statute in such party’s jurisdiction of incorporation; (c) the other
party consents to the appointment of a trustee in bankruptcy or a receiver
or
similar entity; or (d) if either party breaches the Intellectual Property rights
contained herein of the other party. A material breach by Licensee shall
include, but not be limited to, the failure by Licensee to pay when due any
amount owed to DSS under this Agreement. In addition, and notwithstanding
anything herein to the contrary, in the event that, as of the day preceding
the
six-month anniversary of the Effective Date and each six-month period
thereafter, the total revenue generated by DSS from Licensee (with respect
to
both License Fees and payment for DSS Products) is less than Six Hundred and
Twenty-Five Thousand and No/100 U.S. Dollars (U.S. $625,000) during each such
six-month period, DSS may terminate this Agreement upon written notice to
Licensee, and this Agreement will terminate immediately upon the date such
notice is deemed effectively given pursuant to Section 13.9; provided, however,
that Licensee shall be given 30 days to cure such material default.
4.2.2. Upon
the
expiration or termination of this Agreement (i) all licenses granted hereunder
shall cease; (ii) Licensee shall cease all use of Technology Marks and
promotional materials and return all sales, promotional and display or
advertising materials that were furnished by DSS; and (iii) all amounts due
to
DSS by Licensee under the terms of this Agreement shall become immediately
due
and payable. Notwithstanding the foregoing, upon termination of this Agreement
for the reasons specified in Sections 4.2.1(ii)(a) through (c) and for the
reason specified in the last sentence in Section 4.2.1, Licensee shall be
permitted a reasonable opportunity, not to exceed ninety (90) days, to sell
its
remaining inventory of finished Licensee Products, subject to the terms of
this
Agreement.
4.2.3. The
provisions of Sections 4.2, 6, 9, 11, 12 and 13 shall survive the termination
or
expiration of this Agreement.
5. Payment.
5.1. Payment.
All
License Fees and other amounts payable hereunder shall be in U.S. Dollars,
shall
be non-refundable, and shall be made in full, without set-off or deduction
of
any kind, into an account or accounts of DSS, for which DSS shall provide wire
transfer instructions to Licensee.
5.2. Late
Fees.
In the
event Licensee shall fail to pay any amount owed to DSS under this Agreement
when such amount is due and payable, Licensee shall pay to DSS interest on
the
amount of such under-payment or non-payment at the rate equal to three quarters
of one percent (0.75%) per month, from the date due until paid. Any payments
received from Licensee, when there is any amount overdue, shall be applied
first
to discharge any such accrued late charges.
5.3. Foreign
Exchange.
If
applicable, all License Fees and other amounts payable hereunder shall be based
on the exchange rate described on Schedule
1
on the
date on which payment is due, and Licensee shall provide detailed conversion
calculations with every payment submitted hereunder. If, by reason of any
governmental or fiscal restrictions affecting convertibility, payment cannot
be
made in U.S. funds, then Licensee shall take such reasonable actions with
respect to such payments as DSS directs.
6. Proprietary
Rights.
6.1. Subject
to Licensee’s expressly granted rights under this Agreement, Licensee
acknowledges and agrees that DSS shall own all right, title, and interest in
and
to the Technologies (including any Improvements), Technology Marks, or other
Intellectual Property of DSS. Licensee agrees that it will not at any time
(i)
do or cause to be done any act or thing contesting or in any way impairing
any
part of such right, title and interest or (ii) represent, expressly or by
implication that it has any right, title or interest in or to any of the
foregoing other than as expressly set forth herein.
6.2. Licensee
acknowledges DSS’ claim of sole ownership of the Technology Marks and all
associated goodwill. Nothing in this Agreement or in the performance thereof,
or
that might otherwise be implied by law, shall operate to grant Licensee any
right, title, or interest in or to the Technology Marks, other than as specified
in the limited license grant set forth herein. Licensee’s use of the Technology
Marks shall inure solely to the benefit of DSS. Licensee hereby assigns and
shall assign in the future to DSS all rights it may acquire by operation of
law
or otherwise in the Technology Marks, along with the goodwill associated
therewith. DSS shall have the sole right to, and in its sole discretion may,
commence, prosecute or defend, and control any action concerning the Technology
Marks. Licensee shall not contest the validity of, by act or omission
jeopardize, or take any action inconsistent with, DSS’ rights or goodwill in the
Technology Marks, including attempted registration of the Technology Marks,
or
use or attempted registration of any xxxx similar thereto.
7. Licensee
Obligations.
7.1. Exclusivity.
During
the Term, Licensee shall not (i) manufacture, distribute, sell, promote, license
or sub-license any products manufactured using a technology that competes in
any
way, directly or indirectly, with the Intellectual Property of DSS, and/or
(ii)
enter into any marketing or distribution agreement or relationship with any
other provider of products or services whereby Licensee will market, sell or
distribute any products which are either directly or indirectly competitive
to
the DSS Products.
7.2. Decertified
Technologies.
During
the Term, Licensee shall not use, install or otherwise incorporate any
Decertified Technologies in connection with Licensee Products to be
manufactured, processed, prepared, displayed, offered for sale and sold by
Licensee.
7.3. Technology
Marks.
During
the Term, Licensee agrees to use DSS’ Technology Marks in accordance with the
usage guidelines attached hereto as Exhibit
A.
Licensee shall promptly, upon notice from DSS, correct and remedy any
deficiencies in its use of the Technology Marks.
7.4. Advertising.
During
the Term, Licensee shall use its best efforts to promote and market the sale
of
both Licensee Products containing the Technologies and DSS Products, which
promotional efforts shall include, without limitation, attending and presenting
at industry trade shows, preparing customer mailings and presentations,
brochures or other promotional material, and including references to the
Technologies on Licensee’s websites. During the Term, Licensee shall confer with
DSS on a regular basis to review and plan joint promotional activities. Licensee
may appoint sub-distributors, agents, or other representatives to market the
DSS
Products without the prior written consent of DSS provided Licensee shall ensure
that such persons do not sell or market the DSS Products outside of the
Territory or otherwise violate the terms of this Agreement.
7.5. Quality
Control.
Throughout the Term, Licensee shall use commercially reasonable efforts, and
cooperate with DSS, to ensure that the Technologies embedded in the Licensee
Products are reliable, effective and in compliance with all minimum quality
and
output standards as determined in DSS’ reasonable discretion and that Licensee’s
application thereof conforms with all applicable guidelines with respect
thereto. To this end, Licensee shall, upon DSS’ reasonable request, make
available to DSS samples of Licensee Products incorporating the Technologies.
In
the event DSS determines, in its reasonable discretion, that Licensee’s
application of the Technologies fails to meet minimum quality and output
standards, DSS may initiate troubleshooting procedures and request that Licensee
make specific adjustments. Licensee’s failure to comply with DSS’ request shall
be deemed a material breach under this Agreement.
8. Technical
Support; Training and Technology Services.
8.1. General
Support Services.
DSS
shall make available to Licensee, during DSS’ regular business hours, via
telephone and electronic mail, trained personnel to assist Licensee with
technical support related to the Technologies. If
Licensee desires to obtain on-site support from DSS’ authorized, trained
personnel, Licensee shall send a written request to DSS and the parties shall
mutually agree on the date and scope of the services to be provided. Licensee
shall pay to DSS an additional fee in the amount set forth on Schedule
1
for each
authorized person provided on-site to perform the agreed upon services. Licensee
shall also reimburse DSS for all such assigned service personnel’s reasonable
out-of-pocket expenses incurred in providing support to Licensee, including
expenses incurred for travel, lodging and meals. All amounts due by Licensee
hereunder shall be paid by Licensee within thirty (30) days of the date of
the
invoice thereof. If Licensee disputes the amount of an invoice submitted by
DSS
hereunder, Licensee shall notify DSS in writing within fifteen (15) days after
Licensee’s receipt of the invoice.
8.2. Limitation
on Liability for Support Services.
Except
in the event of gross negligence or willful misconduct, in no event shall DSS,
or the technicians, employees or agents of DSS, be liable to Licensee for any
damages or claims for damages that may occur as a result of the action or
inaction of the technicians, employees or agents of DSS during the provision
of
support services.
9. Confidentiality;
Non-Disclosure.
The
parties acknowledge that they have entered into that certain Mutual
Non-Disclosure dated as of November 6, 2006 (the “NDA”),
a
copy of which is attached hereto as Exhibit
B.
During
the term of this Agreement and at all times thereafter, the parties shall be
bound by all of the terms and conditions set forth in the NDA.
10. Maintenance
of Books and Records; Sales Reports; Audit.
10.1. Maintenance
of Books and Records; Sales Reports.
During
the Term, and for a period of three (3) years thereafter, Licensee agrees to
keep and maintain proper records and books of account in accordance with
generally accepted accounting practices, showing the sales upon which the
License Fees are based, and all other information necessary to determine
accurate payment thereof. Together with any License Fee payment, Licensee will
deliver to DSS a detailed report showing the information on which the License
Fee calculation was based.
10.2. Audit.
10.2.1. During
the Term, and for one (1) year thereafter, DSS, together with its agents,
consultants, accountants, attorneys and representatives, shall have access
to
Licensee’s and Licensee’s agents’ records, databases, and premises for the
purposes of conducting an audit concerning Licensee’s compliance with Licensee’s
obligations hereunder. All such audits shall be conducted during Licensee’s
normal business hours, and on reasonable advance notice to Licensee,
and
at
DSS’ expense, subject to Section 10.2.2.
10.2.2. If
an
audit reveals an underpayment by Licensee, Licensee shall promptly pay the
amounts owing, plus interest thereon at the rate of three quarters of a percent
(0.75%) per month until all underpaid amounts are paid in full. If such audit
reveals an underpayment by an amount in excess of ten percent (10%) for the
period covered by the audit report then, without prejudice to any other rights
or remedies of DSS, Licensee shall pay to DSS the out-of pocket costs of such
audit, including, without limitation, attorneys fees, the amount underpaid,
interest due thereon, and an additional payment of fifteen percent (15%) of
the
total amount due for the audited period.
11. Indemnification.
11.1. By
DSS.
11.1.1. DSS
shall
indemnify, defend and hold Licensee and each of its shareholders, directors,
officers, employees, agents, independent contractors, and representatives
(“Licensee
Indemnified Parties”)
harmless for, from and against, any and all suits, actions and proceedings,
claims, demands, liabilities, losses, damages, judgments, fines, expenses
(including, without limitation, attorneys’ fees and expert witness fees) and
costs (individually and collectively, “Infringement
Claims”),
made
against a Licensee Indemnified Party by a third party arising from or in
connection with any actual or alleged claims that marketing, manufacture or
sale
of DSS Products and/or Licensee Products incorporating the Technologies infringe
any patent, trademark, copyright, trade secret or other property right of a
third party. The indemnification provided by this Section 11.1 is contingent
upon: (i) the Licensee Indemnified Parties promptly notifying DSS in writing
of
any known claim which may give rise to an Infringement Claim; (ii) DSS’ sole
control of the defense and settlement of such Infringement Claims at DSS’
expense (provided,
however,
that
any settlement shall be made only with the consent of Licensee or include,
as an
unconditional part thereof, a full release of the Licensee Indemnified Parties);
and (iii) the Licensee Indemnified Parties’ cooperation with all reasonable
requests of DSS (at DSS' sole expense) in defending or settling an Infringement
Claim.
11.1.2. In
addition to the rights and obligations of the parties set forth in Section
11.1.1, if an Infringement Claim is made or threatened, DSS, at its own expense
and in its sole discretion, may exercise any of the following remedies: (i)
obtain for Licensee the right to continue to use market, manufacture or sell
the
DSS Products and/or Licensee Products consistent with this Agreement; (ii)
modify the Technologies incorporated into the Licensee Products and/or the
DSS
Products so they are non-infringing and comply in all material respects with
this Agreement; (iii) replace the Technologies with non-infringing technology
or
information and/or materials, as the case may be, that comply in all material
respects with this Agreement; or (iv) terminate this Agreement, in its sole
discretion, immediately without further liability to Licensee or DSS provided
that in such event DSS shall be required to promptly refund to Licensee, on
a
pro-rata basis, any prepaid License Fees or payments on behalf of DSS Products.
DSS will have no obligation to indemnify Licensee Indemnified Parties for claims
that the Technologies infringe the intellectual property rights of a third
party
to the extent such claims arise as a result of Licensee's modification of the
Technologies by anyone other than DSS’ agents or subcontractors or any Person
authorized in writing by DSS.
11.1.3. The
foregoing represents DSS’ entire obligation, and Licensee’s entire remedy, with
respect to Infringement Claims.
11.2. By
Licensee.
Licensee shall, at its own expense, indemnify, defend and hold harmless DSS,
its
shareholders, directors, officers, employees, agents, independent contractors
and representatives (each a “DSS
Indemnified Party”)
from
and against
all suits, actions and proceedings, claims, demands, liabilities, losses,
damages, judgments, fines, expenses (including, without limitation, attorneys’
fees and expert witness fees) and costs, made against a DSS Indemnified Party
by
a third party to the extent arising from Licensee’s (or its officers, directors,
employees, agents, independent contractors and representatives’) improper or
unauthorized use of the Technologies, the Technology Marks and/or the DSS
Products. Licensee
shall have the right to control the defense of all such claims, lawsuits and
other proceedings. In no event shall DSS settle any such claim, lawsuit or
proceeding without Licensee's prior written approval.
12. Limited
Warranties; Limitation of Liability.
12.1. Power
and Authority.
Each
party represents and warrants that it has the right, power and authority to
enter into this Agreement and that the signatory on behalf of such party to
this
Agreement has full authority to enter into and bind the party to the obligations
set forth in this Agreement.
12.2. Right
to Technology.
DSS
represents and warrants to Licensee that (i) the Technologies and the Technology
Marks are the sole and exclusive property of DSS; (ii) DSS has all right, title
and interest in the Technologies and the Technology Marks to grant to Licensee
the rights provided in this Agreement; (iii) nothing contained in this Agreement
conflicts with any other obligation or agreement of DSS; and (iv), to DSS’
knowledge, no liens, claims or other obligations exist that will affect
Licensee’s use or rights to any Technologies and/or Technology Marks granted
under this Agreement.
12.3. DISCLAIMER
OF WARRANTIES.
EXCEPT
AS OTHERWISE EXPRESSLY PROVIDED HEREIN, THE TECHNOLOGIES IS PROVIDED STRICTLY
“AS IS” AND DSS MAKES NO WARRANTIES HEREUNDER, EXPRESS OR IMPLIED, AND ALL OTHER
WARRANTIES, INCLUDING, WITHOUT LIMITATION, WARRANTIES OF MERCHANTABILITY AND
FITNESS FOR A PARTICULAR PURPOSE ARE HEREBY DISCLAIMED.
12.4. LIMITATION
OF LIABILITY.
EXCEPT
FOR CLAIMS ARISING OUT OF A BREACH BY ONE PARTY OF THE OTHER PARTY’S
INTELLECTUAL PROPERTY RIGHTS OR CLAIMS ARISING UNDER A PARTY’S INDEMNIFICATION
OBLIGATIONS HEREUNDER, IN NO EVENT SHALL EITHER PARTY BE LIABLE TO THE OTHER
PARTY FOR ANY INDIRECT, CONSEQUENTIAL, INCIDENTAL, SPECIAL OR PUNITIVE DAMAGES
WHATSOEVER, INCLUDING WITHOUT LIMITATION, DAMAGES FOR LOSS OF BUSINESS PROFITS,
BUSINESS INTERRUPTION, LOSS OF BUSINESS INFORMATION AND THE LIKE, ARISING OUT
OF
THE USE OF OR INABILITY TO USE THE TECHNOLOGIES OR ANY PRODUCTS OR SERVICES
PROVIDED HEREUNDER, REGARDLESS OF THE FORM OF ACTION, WHETHER IN CONTRACT,
TORT,
STRICT LIABILITY OR OTHERWISE, EVEN IF THE OTHER PARTY HAS BEEN ADVISED OF
THE
POSSIBILITY OF SUCH DAMAGES. BECAUSE SOME JURISDICTIONS DO NOT ALLOW THE
EXCLUSION OR LIMITATION OF LIABILITY FOR CONSEQUENTIAL OR INCIDENTAL DAMAGES,
THE ABOVE LIMITATION MAY NOT APPLY. IN NO EVENT SHALL DSS’ LIABILITY UNDER THIS
AGREEMENT EXCEED THE TOTAL AMOUNT PAID BY LICENSEE TO DSS UNDER THIS AGREEMENT.
12.5. Nothing
contained herein shall be deemed to require that DSS shall be under any
obligation to maintain any of its patents. The parties hereby agree that the
grant of rights under this Agreement does not imply any warranty concerning the
validity or scope of the patents or any rights held by a third party or any
warranty against unauthorized use of the patents and/or know-how. Further,
this
Agreement imposes no obligation for DSS to enforce any of its patents against
third party infringers and imposes no obligation on the Licensee should a patent
be so enforced by DSS.
13. Miscellaneous.
13.1. Applicable
Taxes:
Licensee shall be responsible for all local, state, sales, use, service, excise,
or other similar taxes or duties, and any other taxes payable on any amounts
payable pursuant to this Agreement.
13.2. Assignment.
Neither
party may assign this Agreement, nor its rights and obligations hereunder,
to
any third party without the prior express written approval of the other party.
Any purported assignment without the consent of such other party shall be void.
The provisions of this Agreement shall be binding upon, and shall inure to,
the
benefit of the parties, their legal representatives, permitted successors and
permitted assigns.
13.3. Remedies
Cumulative; Waiver.
The
rights and remedies provided in this Agreement, and all other rights and
remedies available to either party at law or in equity, are, to the extent
permitted by law, cumulative and not exclusive of any other right or remedy
now
or hereafter available at law or in equity. A party’s failure to assert any
right or remedy shall not constitute a waiver of that right or remedy. No waiver
by either party of any default shall be deemed as a waiver of prior or
subsequent default of the same or other provisions of this
Agreement.
13.4. Severability.
In the
event that a court of competent jurisdiction finds any provision of this
Agreement to be illegal, invalid or unenforceable, it is the intention of the
parties that such court shall modify such provision as necessary so that it
shall be legal, valid and enforceable. The illegality, invalidity or
unenforceability of any provision of this Agreement shall not affect the
legality, validity or enforceability of any other provision of this
Agreement.
13.5. Relationship
of the Parties.
Nothing
in this Agreement shall be construed as creating a partnership, joint venture
or
agency relationship between the parties, or as authorizing either party to
act
as agent for the other.
13.6. Amendments.
No
modifications or amendments may be made to this Agreement except as expressed
in
writing and signed by both parties.
13.7. Irreparable
Damage.
The
parties acknowledge and agree that any violation of this Agreement would subject
the other to irreparable injury for which monetary damages will not be an
adequate remedy. Therefore, in addition to any remedies otherwise available,
the
non-breaching party will be entitled to any injunctive relief and specific
performance to enforce the terms of this Agreement. The breaching party shall
pay all reasonable attorney's fees and court costs, arbitration cost, and/or
appeal costs incurred by the non-breaching party should it be necessary for
the
non-breaching party to enforce the terms of this Agreement.
13.8. No
Construction against the Drafter; Headings.
The
parties acknowledge that they have reviewed this Agreement, have either been
represented by counsel or had the opportunity to be represented by counsel,
and
have negotiated its terms. Accordingly, this Agreement shall be construed
without regard to the party or parties responsible for its preparation, and
shall be deemed to have been prepared jointly by the parties. Headings contained
in this Agreement are not intended to be full and accurate descriptions of
the
contents of this Agreement and shall not affect the meaning or interpretation
of
this Agreement.
13.9. Notice.
All
notices sent under this Agreement shall be in writing and shall be deemed
effectively given (i)
upon
personal delivery to the party to be notified; (ii) when sent by confirmed
facsimile if sent during normal business hours of the recipient, if not, then
on
the next business day; (iii) three (3) days after having been sent by registered
or certified mail, return receipt requested, postage prepaid; or (iv) two (2)
days after deposit with an internationally recognized overnight courier,
specifying two (2) day delivery, with written verification of
receipt.
Notices
shall be sent to the Parties at the following addresses or fax numbers or such
other addresses or fax numbers as the parties subsequently may provide in
accordance with this Section 13.9:
|
If
to DSS:
Document
Security Systems, Inc.
00
Xxxx Xxxxxx Xxxx, Xxxxx 0000
Xxxxxxxxx,
Xxx Xxxx 00000
XXX
Fax:
000-000-0000
Attention:
Chief Executive Officer
|
With
a copy to:
Document
Security Systems, Inc.
00
Xxxx Xxxxxx Xxxx, Xxxxx 0000
Xxxxxxxxx,
Xxx Xxxx 00000
XXX
Fax:
000-000-0000
Attn:
General Counsel
|
|
If
to Licensee:
Cultura
Interactiva, S.A. de X.X.
Xxxxxxx
de Ciruelos 000, X-000
Xxx.
Xxxxxxx xx xxx Xxxxx
Xxxxxx,
D.F. 11700
Phone
& Fax (00-00) 0000-0000
Attention:
President
|
With
a copy to:
Bosques
de Ciruelos 000, X-000
Xxx.
Xxxxxxx xx xxx Xxxxx
Xxxxxx,
D.F. 11700
Phone
& Fax (00-00) 0000-0000
Attention:
Xxxx Xxxxxx Xxxxxxx, Abogado
|
13.10. Force
Majeure.
Notwithstanding any provision herein, the parties may be discharged from all
liabilities if the failure to perform or improper performance of this Agreement
is the result of Force Majeure, provided that the party subject to the Force
Majeure provides notice of such Force Majeure, as soon as possible after such
party became subject to such Force Majeure.
13.11. Governing
Law; Jurisdiction.
This
Agreement shall be governed in accordance with the laws of the State of New
York
without regard to conflict of laws principles. Each of the parties hereby (i)
consents to the exclusive jurisdiction of and venue in the appropriate state
or
federal courts located in the City of Rochester, State of New York, (ii) agrees
to accept service of process by mail, and (iii) waives any jurisdictional,
lack
of venue, or forum defenses otherwise available to it with respect to actions
brought in such courts.
13.12. Foreign
Taxes and Governmental Approvals.
Licensee
agrees, at its sole cost and expense, to obtain all governmental approvals
and
registrations required under the laws of the Territory in connection with this
Agreement, and to pay any taxes or fees required (including withholding taxes)
that may be levied on the fees payable by Licensee under this Agreement.
Licensee agrees to provide DSS with certificates and receipts indicating that
such taxes have been duly paid.
13.13. Entire
Agreement.
This
Agreement and the Schedules and Exhibits hereto contain the entire agreement
between the parties with respect to the transactions described herein, and
supersede all prior agreements, written or oral, with respect thereto,
provided,
however,
that
notwithstanding any provision herein, the NDA shall
remain in full force and effect.
13.14. Counterparts;
Facsimile Signatures.
This
Agreement may be executed in counterparts, each of which shall be deemed to
be
original but all of which together shall constitute a single instrument. The
signatures required for execution may be transmitted to the other Party via
facsimile and such signatures shall be deemed a duplicate original.
[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK]
IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
by
their respective duly authorized officers as of the date first set forth
above.
|
DOCUMENT
SECURITY SYSTEMS, INC.
By:
/s/
Xxxxxxx Xxxxx
Name:
Xxxxxxx Xxxxx
Title:
Chief Executive Officer
|
CULTURA
INTERACTIVA S.A. DE C.V.
By:
/s/
Xxxxxxxx Xxxxxxx
Name:
Xxxxxxxx Xxxxxxx
Title:
President
|
SCHEDULE
1
SCHEDULE
OF TERMS AND CONDITIONS
| 1. |
Technologies:
AuthentiGuard™ Pantograph 4000, AuthentiGuard™ Prism, AuthentiGuard™ Block
Out, AuthentiGuard™ Phantom, and AuthentiGuard™ On-Demand as may be agreed
upon by the parties from time to time in writing. Notwithstanding
anything
in the Agreement to the contrary, DSS
reserves the right to restrict and limit use of one or more of the
Technologies with respect to specific applications by Licensee.
|
| 2. |
Licensee
Products:
Checks, labels, documents, brand packaging, government issued
identification cards, licenses, certificates, and such other products
as
may be agreed upon by the parties from time to time in writing.
|
| 3. |
License
Fees:
Such royalty fees and other fees as shall be agreed upon by the parties
in
writing on a project-by-project basis.
|
| 4. |
DSS
Products:
Safety/security paper (stock and custom), plastic cards, certificates
and
documents, labels, and other printed items incorporating the
Technology.
|
| 5. |
Prices
for DSS Products:
Such prices as shall be determined by DSS on a case by case basis
upon
Licensee’s written request, based on the requested product specifications
and quantity, the geographic area in which the DSS Products will
be sold,
and the customers to whom the DSS Products will be sold, discounted
so as
to allow for xxxx-ups by Licensee. All such prices shall be set forth
on a
price list and provided to Licensee within ten (10) days of written
request therefor.
|
| 6. |
Payment
Terms With Respect to DSS Products:
Payments to be made thirty (30) days after receipt of a written invoice
by
Licensee, subject to available credit by Licensee. For purposes hereof,
Licensee is granted an initial credit limit in the amount of Twenty
Five
Thousand and
No/100 U.S. Dollars (U.S. $25,000) subject to credit review.
Additional credit is subject to approval by DSS, in its sole and
absolute
discretion, using standard business credit verification terms.
|
| 7. |
Territory:
Country of Mexico
|
| 8. |
Applicable
Exchange Rate.
The exchange rate for conversion of the currency into U.S. Dollars
shall
be calculated on the day payment is made, or the preceding business
day if
payment is not made on a business day, according to the dollar exchange
rate for such currency published in the Wall Street Journal or such
other
exchange rate to which the parties
agree.
|
| 9. |
Rate
for Additional Support.
Such amounts as shall be agreed upon by the parties in writing on
a
project-by-project basis.
|
| 10. |
Term.
|
| a. |
Initial
Term:
Two (2) years (the “Initial
Term”).
|
| b. |
Renewal
Term:
Provided
(i) the Agreement shall be in full force and effect as of the expiration
date of the Initial Term, (ii) Licensee shall not then be in default
under
the terms of the Agreement, and (iii) the total revenue generated
by DSS
from Licensee under this Agreement during the Initial Term (with
respect
to both License Fees and payment for DSS Products) is equal to or
greater
than Two Million, Five Hundred Thousand and No/100 U.S. Dollars (U.S.
$2,500,000), the Agreement shall automatically renew for an additional
period of one (1) year (the “Renewal Term”). Such Renewal Term shall be
upon the same terms and conditions as the Initial Term, except that
Licensee shall have no option to renew at the end of the Renewal
Term. The
parties agree to mutually enter into good faith negotiations with
respect
to the terms and conditions of any extension of the Agreement beyond
the
Renewal Term.
|
EXHIBIT
A
USAGE
GUIDELINES FOR TECHNOLOGY MARKS
|
1.
|
Licensee
agrees to use the appropriate trademark, product descriptor and trademark
symbol (either “(TM)” or “(R)” in a superscript), and clearly indicate
DSS’ ownership of its trademark(s) whenever the Technology name is
mentioned in any advertisement, brochure or in any other manner in
connection with Licensee Products or DSS Products. Licensee further
agrees
to reproduce and include all copyright, patent and other confidential
or
proprietary rights notices on any copies of any DSS property it
makes.
|
|
2.
|
Licensee
shall, upon request, provide DSS with samples of all of Licensee’s
promotional, packaging and other written materials which use the
Technology name and the Technology Marks.
|
|
3.
|
Licensee
shall not adopt or use a product name, trademark or service xxxx
in
conjunction with the advertising, packaging, promotion or sale of
Licensed
Products or DSS Products which includes all or part of any Technology
Marks or any term that is similar to the Technology Marks.
|
|
4.
|
Licensee
agrees not to remove, obliterate or alter any Technology Marks or
any
copyright, patent, trademark or other confidential or proprietary
rights
notice of DSS which appear on any Intellectual Property provided
by DSS or
the DSS Products, nor shall it affix to the same any other notice
or xxxx.
|
|
5.
|
Licensee
may use Technology Marks on web pages, and in related advertising,
marketing, and collateral materials, solely as approved by DSS in
writing,
and insofar as the use is consistent with this
Agreement.
|
|
6.
|
Technology
Marks may not be altered in any manner and may never be used in a
sentence
or phrase, nor may it be joined or used as a design element with
any other
logo.
|
|
7.
|
Technology
Marks may only be presented in the form attached hereto, as previously
provided to Licensee.
|
EXHIBIT
B
CONFIDENTIALITY/NON-DISCLOSURE
AGREEMENT
Attached
