Finder's Agreement
This agreement ("Agreement"), effective January 1, 2000, executed
September 20, 2000, is between a North Carolina corporation, ID Technologies
Corporation ("the Company"), and Xxxx Xxxxx Xxxxxxx ("Finder").
Recitals
Whereas Finder represents that he will endeavor to introduce the
Company to one or more Targets (as defined in section 2(b) below) who may be
interested in engaging in a financing arrangement or a business combination with
the Company which may include a loan, merger or purchase of some or all of the
stock or assets of the Company; or a licensing agreement, joint venture,
distribution agreement or product purchase arrangement involving the Company and
a Target (singularly and in combination, a "Transaction"); and
WHEREAS, the Company desires to engage the services of Finder to
provide an introduction to such Targets in accordance with the terms and
conditions set forth in this Agreement.
AGREEMENT
NOW, THEREFORE, in consideration of the premises and mutual covenants
hereinafter contained, and for other good and valuable consideration the receipt
and sufficiency of which are hereby acknowledged, the parties agree as follows:
1. The Company engages Finder as one of the Company's non-exclusive
finders, to find Targets interested in effecting a Transaction. Finder
will endeavor to introduce the Company to such Targets.
2. (a) In order to coordinate the Company's and Finder's respective
efforts during the period of engagement hereunder, Finder will from
time to time notify the Company of potential Targets he is contacting.
The Company will promptly inform Finder whether it is interested in
being introduced to such potential Targets. If so, Finder will
introduce representatives of the Company to representatives of such
Targets.
(b) For the purposes of this Agreement, "Targets" shall mean
individuals or entities introduced to the Company by Finder.
3. In the event of a consummated Transaction, the Company shall pay to
Finder a cash fee equal to 5% (five percent) of the consideration paid
in such Transaction. "Consideration paid in such Transaction" for the
purposes of this Agreement shall mean the value of: (a) all
consideration paid to the Company and the stockholders of the Company
in connection with a Transaction, including cash, securities or other
consideration exchanged or paid at closing; assumption of debt; and any
deferred payments including without limitation notes, contingent
payments, license fees or royalty payments; and (b) the aggregate
amount of any loan made
FINDER'S AGREEMENT
ID Technologies Corporation & Xxxx X. Xxxxxxx
Effective January 1, 2000
Page 2 of 4
by the Target to the Company, investment in the Company by the Target,
or by the Company and the Target in a joint venture. Payment of the
applicable fee set forth above will be made at the closing of the
related Transaction. The fee shall be payable in cash and any
consideration other than cash which is paid in the consummated
Transaction shall be valued at its fair market value.
In the event that a Transaction or other business arrangement between
the Company and a Target includes: a) licensing of the Company's
intellectual property or technology and agreement by the Target to make
future royalty payments which are variable in amount depending on
sales, or, b) purchase of the Company's products by a Target, the
Company shall pay to Finder, promptly upon receipt of all such royalty
or product purchase payments, a cash fee of 5% (five percent) of said
payments.
In the event that any fees due Finder are not paid when due, the
Company shall also be liable for interest on the amount due at the
annual rate of three percent over the prime rate, accruing on a daily
basis from the date of closing, plus all of Finder's reasonable legal
fees and expenses in connection with collection of said fees.
4. This Agreement shall remain in full force and effect, automatically
renewed for successive 12-month periods, until terminated in writing by
either party at least 30 days prior to the anniversary of the effective
date. Provided, however, that the Finder shall be entitled to receive
the full fee set forth in paragraph three (3) hereof in the event
discussions are held with a Target during the term of this Agreement
and a Transaction or other business arrangement is consummated with
such Target within two years from the termination of this Agreement.
5. The Company shall not be liable for any retainers, costs, expenses or
other charges incurred by Finder or third parties at the request of
Finder unless the Company has authorized such costs or expenses. Such
authorized costs shall be paid upon invoicing.
6. (a) Finder is an independent contractor and advisor and is not an
employee or agent of the Company and shall have no authority to bind
the Company in any manner whatsoever.
(b) The Company shall furnish Finder with such information
believed by the Company to be complete and up-to-date, as
Finder may request and believes appropriate to be disclosed
concerning the business of the Company.
(c) The Company acknowledges that Finder has not done any due
diligence with respect to any Target and that Finder makes no
representations whatsoever
FINDER'S AGREEMENT
ID Technologies Corporation & Xxxx X. Xxxxxxx
Effective January 1, 2000
Page 3 of 4
with respect to any Target (including without limitation its
financial condition or its ability to perform any obligations
to which it is or may become bound), and the Company expressly
agrees that Finder shall have no liability whatsoever in
connection with any Transaction it may enter into with at
Target.
(d) Because Finder will be acting on behalf of the Company, the
Company agrees to the following indemnification provisions. If
Finder becomes involved in any capacity in any action or legal
proceeding in connection with any Transaction subject to this
Agreement, the Company agrees to indemnify and hold harmless
Finder for any and all losses, claims, damages, liabilities
(including amounts paid in settlement approved in writing by
the Company of any action, suit, arbitration, proceeding,
demand or claim), joint or several, or actions or threatened
actions based upon or arising out of any Transaction or
Finder's services hereunder to which Finder may become subject
under the securities laws or otherwise; provided, however,
that the Company shall not be liable under the foregoing
indemnity agreement i) in respect to any loss, claim, damage
or liability to the extent that a court having jurisdiction
shall have determined by a final judgment that such loss,
claim, damage, or liability resulted from the willful
misfeasance or gross negligence of Finder, or ii) unless
Finder gives the Company prompt written notice of the claim or
action and control of the defense thereto.
7. This Agreement shall be governed by and construed in accordance with
the laws of the State of North Carolina.
8. This Agreement constitutes the entire agreement between the parties and
supersedes any prior agreements, whether written or oral, between the
parties. No modification, extension or change in the Agreement shall be
effective unless it is in writing and signed by both Finder and the
Company.
9. The provisions of this Agreement shall be binding upon and shall inure
to the benefit of the parties hereto, there heirs, legal
representatives, successors and assigns. This Agreement may not be
assigned except upon the prior written consent of the other party to
this Agreement.
10. Any notice hereunder shall be in writing and delivery thereof shall be
complete if delivered in person, by facsimile, or mailed by overnight
mail, or registered or certified mail, postage prepaid to the following
addresses (unless changed by written notice).
FINDER'S AGREEMENT
ID Technologies Corporation & Xxxx X. Xxxxxxx
Effective January 1, 2000
Page 3 of 4
Finder: Xxxx X. Xxxxxxx
000 Xxxxx Xxxxxx Xxxxx
Xxxx, XX 00000
Company: ID Technologies Corporation
NCSU Centennial Campus
000 Xxxx Xxxxxx Xxxxx, Xxx. 000
Xxxxxxx, XX 00000
IN WITNESS WHEREOF, this Agreement has been executed this the 20th day
of September 2000 by the parties hereto, effective as of the date first above
written.
By: By:
-------------------- ------------------
X. Xxxxxxxx X. Xxxxxxxx Xxxx X. Xxxxxxx
President & CEO
ID Technologies Corporation
PATENT & TRADEMARK
ASSIGNMENT AGREEMENT
THIS AGREEMENT made and entered into this 8th day of November 2001 by
and between ID Technologies Corporation, a North Carolina corporation whose
principal address is NCSU Centennial Campus, 000 Xxxx Xxxxxx Xxx0xx, Xxxxx 000,
Xxxxxxx, Xxxxx Xxxxxxxx 00000 (hereinafter referred to as "IDTEK"), and Xxxx
Xxxxx Xxxxxxx, 000 Xxxxx Xxxxxx Xxxxx, Xxxx, XX 00000 (hereinafter referred to
as "XXXXXXX").
W I T N E S S E T H
WHEREAS, IDTEK has expended considerable effort and funds developing
fingerprint identification technologies, and has applied for patent protection
therefor, and
WHEREAS, XXXXXXX has since October 2000 served as IDTEK's Secretary,
advised its Board of Directors, developed familiarity with IDTEK's technologies,
and has invented additional related technologies, and
WHEREAS, IDTEK and XXXXXXX are interested in applying for patent
protection for XXXXXXX'x additional related technologies, and
WHEREAS, IDTEK is interested in licensing, developing, producing and
selling products and/or rights in such fingerprint identification technologies;
and
WHEREAS, XXXXXXX is willing to assign any rights in XXXXXXX'x
additional related technologies to IDTEK under the conditions hereinafter set
forth;
WHEREAS, the parties are desirous of recording their agreement
concerning such an assignment of intellectual property in XXXXXXX'x related
technologies and IDTEK's development and marketing thereof.
NOW, THEREFORE, for good and valuable consideration, the receipt
sufficiency of which is hereby acknowledged, it is agreed as follows:
ARTICLE 1 - DEFINITIONS
Terms in this Agreement (other than names of parties and Article
headings) which are set forth in upper case letters have the meanings
established in the succeeding paragraphs of this Article 1.
A. "BIOMETRIC AUTHENTICATION TECHNOLOGY" means the technology relating
to self-authenticating card/panel systems that provides for the biometric
identification of individuals/users independently and by positive match of
fingerprint characteristics encrypted and stored onboard the self-authenticating
card/panel systems with the issuer's database containing the fingerprint
characteristics of each person registered by whatever means, providing the
appropriate account information, authorizing and recording the transaction,
updating status, applying and confirming appropriate charges for database
searches and account updates, and alerting the issuer to any duplicate
fingerprint characteristics found in the database.
B. "XXXXXXX TRADEMARK" means any improvements made by XXXXXXX or a
third party to XXXXXXX TECHNOLOGY, including the patent, trade secret and other
proprietary rights associated therewith that XXXXXXX owns, or in which XXXXXXX
has an interest.
C. "XXXXXXX TECHNOLOGY" means all patents, copyright, trade secret and
other proprietary rights associated with BIOMETRIC AUTHENTICATION TECHNOLOGY
that XXXXXXX owns, including, without limitation, the XXXXXXX PATENTS.
D. "IDTEK IMPROVEMENTS" means any improvements made by IDTEK or a third
party on behalf of IDTEK to XXXXXXX TECHNOLOGY, including the patent, trade
secret and other proprietary rights associated therewith that IDTEK owns, or in
which IDTEK has an interest.
E. "XXXXXXX TRADEMARK" means any trademark, tradename, or trade dress
associated with XXXXXXX TECHNOLOGY or XXXXXXX TRADEMARK.
F. "NET RECEIPTS" of a UNIT means the total of the gross amount billed
or invoiced, and received, on the first sale or other disposition of a UNIT by
IDTEK to a third party less:
1. trade, quantity or cash discounts and rebates actually given;
2. rebates, refunds and credits taken by reason of rejection or
return of such UNIT or retroactive reductions in the price of
such UNIT;
3. actual freight and insurance costs of transporting such UNIT
to a third party if separately stated on a xxxx or invoice and
paid by the third party;
4. sales, value-added, excise and other direct taxes, customs
duties and other government charges incurred and paid if
separately stated on a xxxx or invoice and paid by the third
party.
The "gross amount billed or invoiced" for calculating NET RECEIPTS of any UNIT
means:
(a) if a UNIT is sold by IDTEK to a third party other
than a SPECIAL PARTY, IDTEK's actual billing or
invoice amount for such UNIT;
(b) if a UNIT is sold by IDTEK's licensee to a third
party, the greater of IDTEK's actual billing or
invoice amount or the licensee's actual billing or
invoice amount for such UNIT;
(c) if a UNIT is sold to a SPECIAL PARTY for subsequent
resale by or for such SPECIAL PARTY, the greater of
IDTEK's actual billing or invoice amount or the
SPECIAL PARTY's actual billing or invoice amount for
such UNIT; or
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(d) if the UNIT is sold to a SPECIAL PARTY for use by
such SPECIAL PARTY, the billing or invoice amount
that would have resulted from a hypothetical
arm's-length sale by IDTEK to a third party if such
third party were not a SPECIAL PARTY.
G. "LICENSE, ROYALTY AND INCREMENTAL RECEIPTS" means the total of the
gross amount billed or invoiced by IDTEK in consideration for any license of the
XXXXXXX TECHNOLOGY, in royalty under such a license or sublicense on first sale
or other disposition of a UNIT, or any other incremental payment or value IDTEK
receives from any third party related to the disposition or use of a UNIT or to
any other aspect of the XXXXXXX TECHNOLOGY.
H. "XXXXXXX PATENTS" means (i) any patents and patent applications now
or hereafter owned by XXXXXXX, or in which XXXXXXX has any interest claiming
XXXXXXX TECHNOLOGY, (ii) any patents and patent applications now or hereafter
owned by XXXXXXX, or in which XXXXXXX has any interest, claiming XXXXXXX
TRADEMARK, and (iii) any reissues, renewals, extensions, divisionals,
continuations, continuations-in-part and foreign counterparts of the foregoing
and any Patent Cooperation Treaty international applications claiming the
priority of the foregoing.
I. "SPECIAL PARTY" means (i) any corporation, company, or other entity
in which IDTEK owns or controls at least fifty percent (50%) of the stock
entitled to vote in election of members of the Board of Directors, or (ii) any
corporation, company, or other entity which owns or controls at least fifty
percent (50%) of IDTEK's voting stock.
J. "UNIT" means a commercial product that embodies any XXXXXXX
TECHNOLOGY.
ARTICLE 2 - ASSIGNMENT
XXXXXXX hereby assigns to IDTEK his rights in the XXXXXXX TECHNOLOGY
and any XXXXXXX TRADEMARK thereof in accordance with the terms of this
Agreement.
ARTICLE 3 - PAYMENTS AND STATEMENTS
A. In consideration for XXXXXXX entering in this Agreement, IDTEK
agrees to pay XXXXXXX in United States dollars, as follows:
1. RUNNING ROYALTIES. IDTEK shall pay to XXXXXXX a royalty of
three percent (3%) of NET RECEIPTS for each UNIT sold or otherwise
distributed by IDTEK and ten percent (10%) of LICENSE, ROYALTY AND
INCREMENTAL RECEIPTS.
2. PAYMENT SCHEDULE. For the calendar year in which the first
sale of a UNIT occurs, such royalty shall be payable within thirty (30)
days
Page 3 of 10
after the end of such year. Thereafter, such royalty shall be payable
on a quarterly basis thirty (30) days after the end of each calendar
quarter; provided however, that if such quarterly payments exceed
$50,000 for two (2) successive quarters, payments shall be required
monthly thereafter, and shall be due within thirty (30) days of the end
of each month. IDTEK shall provide XXXXXXX with reports certified by
IDTEK's chief accounting officer detailing its calculations of NET
RECEIPTS and LICENSE, ROYALTY AND INCREMENTAL RECEIPTS in a form and
containing such information as XXXXXXX may reasonably require
accompanying the appropriate royalty payments as set forth in this
Agreement.
B. IDTEK's royalty payments to XXXXXXX shall equal at least $150,000
for at least one year within the first five (5) years of the life of the patent.
If that minimum royalty payment to XXXXXXX of $150,000 for at least one year
within the first five (5) years is not satisfied, then IDTEK's rights in XXXXXXX
TECHNOLOGY, XXXXXXX TRADEMARK, and XXXXXXX PATENT will revert to XXXXXXX,
provided IDTEK does not exercise its option under Article 3, clause C.
C. If within the first five (5) years of the life of the patent IDTEK's
royalty payments to XXXXXXX do not equal at least $150,000 during at least one
calendar year, then IDTEK, at its option, has the right to make direct payment
to XXXXXXX in order to meet the minimum royalty payment amount of $150,000
within thirty (30) days of the royalty period.
D. If no royalties are payable, IDTEK's statements shall so state.
E. IDTEK shall keep full and accurate books of account and records
consistent with sound business and accounting principles and practices and in
such form and detail as to enable a determination of the amounts payable by
IDTEK to XXXXXXX hereunder. IDTEK shall make available such books of account and
records to XXXXXXX upon XXXXXXX'x request for inspection by independent
certified public accountants retained by XXXXXXX during normal business hours
and upon reasonable notice no more than once each calendar year for the purpose
of verifying IDTEK's reports and payments under this Agreement. All cost
associated with such inspection by XXXXXXX shall be borne by XXXXXXX. Books of
account and records shall be kept for at least three (3) years following the end
of the calendar year to which they pertain. IDTEK shall make prompt adjustments
to reflect the results of such audits and, when the audit results reveal that
IDTEK has understated and underpaid the royalties or other payments due XXXXXXX
by at least five percent (5%), IDTEK shall reimburse XXXXXXX for the reasonable
expenses of such audit along with the shortfall in payments and interest on such
shortfall as set forth in Article 4.
ARTICLE 4 - LATE PAYMENT & TAXES
A. If IDTEK fails to pay any royalty or other payment required under
this Agreement on or before the date thirty (30) days after such royalty or
other payment is due, IDTEK shall pay interest on such amount at the rate of one
percent (1%) per month, which interest shall accrue from the date the payment is
due until the date such payment is made in full.
B. Any payments received by XXXXXXX shall be applied first to the
satisfaction of any unpaid, accrued interest and second to the satisfaction of
any unpaid principal.
Page 4 of 10
C. If any law or regulation requires the withholding of any taxes
levied on the transfer of any royalties or other payments payable under this
Agreement, such taxes shall be deducted by IDTEK from the amount otherwise
payable to XXXXXXX and paid by IDTEK to the proper taxing authority. IDTEK shall
secure proof of any such tax payment, and send such proof to XXXXXXX as evidence
of such payment together with such other documents as XXXXXXX may reasonably
require in order to secure a refund of or credit for the amount of such payment.
Except for the foregoing, each Party shall be responsible for any taxes that are
levied on it in connection with its obligations under this Agreement.
D. No part of any amount owed XXXXXXX hereunder may be reduced due to
any counterclaim, set-off, adjustment, or other right that IDTEK may have
against XXXXXXX.
ARTICLE 5 - GENERAL PATENT MATTERS
A. PROSECUTION AND MAINTENANCE OF PATENTS. IDTEK shall, at IDTEK's sole
cost and expense, immediately prepare and file the application for the XXXXXXX
PATENT upon receipt of disclosure documents and all reasonably necessary
information to be supplied by XXXXXXX and shall diligently prosecute the
application to final approval and thereafter, for so long as IDTEK remains the
assignee, shall maintain and defend the patent from any and all claims lodged
against it or in any venue and against any infringement
B. NOTICE OF INFRINGEMENT. Each party shall act in good faith to inform
the other party of any infringement of which it becomes aware by any third party
of any of the XXXXXXX TECHNOLOGY and, for so long as it remains an assignee,
IDTEK shall take all appropriate steps to prevent such infringement.
C. ENFORCEMENT AND DEFENSE BY IDTEK
1. IDTEK shall at its sole cost and expense enforce
any of the XXXXXXX TECHNOLOGY or XXXXXXX PATENTS against
infringement by a third party.
2. If a third party commences an action challenging
any of the XXXXXXX TECHNOLOGY or XXXXXXX PATENTS, IDTEK shall
at its sole cost and expense defend the XXXXXXX TECHNOLOGY or
XXXXXXX PATENTS against such challenge.
3. XXXXXXX shall reasonably cooperate with IDTEK in
the settlement or defense of any suit or dispute involving
infringement or asserted infringement by a third party of any
of the XXXXXXX TECHNOLOGY or by IDTEK of a third party's
patent or other proprietary rights, and XXXXXXX shall supply
all assistance reasonably requested by IDTEK in connection
with such suit or dispute, including by making available to
IDTEK all relevant personnel, records, information, samples,
seeds, specimens and the like.
4. IDTEK shall be entitled to keep any amounts
awarded in connection with any enforcement action commenced
and maintained by IDTEK, except that
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XXXXXXX shall be entitled to receive royalties pursuant to
Article 3 on all royalty amounts awarded to IDTEK. Such
royalties shall be determined by deducting from the amounts
awarded to IDTEK all reasonable out-of-pocket and internal
costs and expenses (including attorneys' fees) incurred by
IDTEK in connection with such enforcement action, with the
balance being treated as NET RECEIPTS of UNITs or LICENSE,
ROYALTY AND INCREMENTAL RECEIPTS, as appropriate, for purposes
of calculating the royalties payable to XXXXXXX.
D. INFRINGEMENT OF THIRD PARTY RIGHTS. XXXXXXX shall promptly notify
IDTEK in writing of any known infringement, or claim of infringement, by IDTEK
of any third party's patent or other proprietary rights.
E. RECORDATION. IDTEK may record a copy of this Agreement in any
country that permits or requires such recordation.
ARTICLE 6 - TECHNICAL ASSISTANCE TO BE PROVIDED TO IDTEK
XXXXXXX shall assist IDTEK'S efforts by making available to IDTEK
technical consultation as deemed reasonable and necessary by both parties and at
fees mutually agreed to by the parties.
ARTICLE 7 - BEST EFFORTS
IDTEK shall use its best efforts to develop, seek out, establish and
fill the demand for licensing, developing, producing, and/or selling products
that will generate revenues for IDTEK and corresponding royalties for XXXXXXX.
ARTICLE 8 - USE OF TRADEMARKS
A. IDTEK shall develop at its expense all signs, labels, packaging
material, advertising, or the like bearing any XXXXXXX Trademark necessary for
IDTEK'S commercial operations.
B. IDTEK is entitled to the use of all graphics, artwork, logos, etc.
developed by XXXXXXX in connection with the XXXXXXX TECHNOLOGY or XXXXXXX
TRADEMARK.
ARTICLE 9 - IMPROVEMENTS
A. Any improvements made or acquired by XXXXXXX related to BIOMETRIC
AUTHENTICATION TECHNOLOGY shall be included hereunder as part of the XXXXXXX
TECHNOLOGY and XXXXXXX TRADEMARK and are assignable to IDTEK, including the
right and license to manufacture, use and sell such improvements without the
payment of any royalty in addition to that required by Article 3 of this
Agreement.
B. Any improvements made or acquired solely by IDTEK shall remain the
property of IDTEK.
Page 6 of 10
C. From time to time, there may be specific improvements by XXXXXXX for
which IDTEK wishes XXXXXXX to have additional patent applications prepared and
filed. XXXXXXX agrees to sign all papers and drawings, take all rightful oaths,
and do all acts necessary or required to be done for the procurement of valid
Letters Patent for such inventions, or for the reissue of the same without
charge to IDTEK. However, the preparation of suitable patent applications on
such improvements shall be at IDTEK's expense, except as otherwise provided for
in this Agreement.
ARTICLE 10 - RELATIONSHIP OF THE PARTIES
This Agreement establishes the relations of the parties as
ASSIGNOR-ASSIGNEE.
ARTICLE 11 - CONFIDENTIALITY
The confidentiality/non-disclosure agreement established between the
parties on or about January 25, 2001 remains in full force and effect and is
incorporated herein by reference in its entirety.
ARTICLE 12 - REPRESENTATIONS & WARRANTIES
A. REPRESENTATIONS AND WARRANTIES OF XXXXXXX. XXXXXXX hereby represents
and warrants to IDTEK that:
1. XXXXXXX has not granted any conflicting rights in the
XXXXXXX TECHNOLOGY, XXXXXXX TRADEMARK, or the XXXXXXX Trademark to
third parties;
2. This Agreement, when executed and delivered by XXXXXXX in
accordance with the provisions hereof, will be a legal, valid and
binding obligation of XXXXXXX, enforceable against XXXXXXX in
accordance with its terms;
3. To XXXXXXX'x knowledge, IDTEK's practice of any of the
XXXXXXX TECHNOLOGY as contemplated in this Agreement will not infringe
any patent or other proprietary rights of a third person.
B. REPRESENTATIONS AND WARRANTIES OF IDTEK. IDTEK hereby represents and
warrants to XXXXXXX that:
1. The execution, delivery and performance of this Agreement
by IDTEK has been duly authorized by all necessary action on the part
of IDTEK;
2. This Agreement, when executed and delivered by IDTEK in
accordance with the provisions hereof, will be a legal, valid and
binding obligation of IDTEK, enforceable against IDTEK in accordance
with its terms; and
3. IDTEK's execution and performance of this Agreement shall
not constitute a breach or default under any contract, instrument or
agreement to which IDTEK is a party or by which IDTEK is bound.
Page 7 of 10
ARTICLE 13 - PATENT VALIDITY
XXXXXXX shall not contest the validity of any U.S. patents coming
within IDTEK's patent rights in court or in arbitration on any grounds which the
U.S. Patent and Trademark Office would be likely to grant reexamination, without
first requesting such reexamination and providing the Patent and Trademark
Office an opportunity to consider the asserted grounds.
ARTICLE 14 - TERMINATION
This Agreement may be terminated prior to the termination of the patent
life on the occurrence of any of the following events:
A. Any material breach by one party of the terms of this Agreement,
provided the other party is the one seeking termination and the other party
gives written notice thereof in accordance with Article 19 herein, which notice
shall state the fault or breach on which that party relies. Termination shall
become effective ninety (90) days following receipt of the notice by the party
against whom termination is sought, if such breach is not rectified to the
reasonable satisfaction of the aggrieved party within that time; or
B. Default by IDTEK in payment of any amount due herein, provided
XXXXXXX is the party seeking termination and gives written notice thereof in
accordance with Article 19 herein. The termination shall become effective thirty
(30) days following receipt of the notice, unless the amount due and unpaid is
paid in full before the expiration of the 30-day period.
C. The mutual written consent of the parties.
D. Upon the early termination of this Agreement as provided herein, all
rights in and to the XXXXXXX TECHNOLOGY, XXXXXXX PATENTS, and XXXXXXX TRADEMARK
revert to XXXXXXX and IDTEK hereby assigns all such rights in and to the XXXXXXX
TECHNOLOGY, XXXXXXX PATENTS, and XXXXXXX TRADEMARK to XXXXXXX upon such
termination.
ARTICLE 15 - EFFECT OF EARLY TERMINATION
A. The termination of any right or assignment granted hereby shall not
release either party from the obligation to pay the other party any accrued sums
owed to the other party or from fulfilling any accrued obligation. Additionally,
such termination shall be without prejudice to any right or remedy that either
party may have against the other party.
B. In no case, shall either party have any claims for repayment of any
sum or sums that shall have been paid as provided under the terms of this
Agreement.
C. In the event of termination of this Agreement for any reason
whatsoever, IDTEK shall cease to exploit in any manner the rights granted in
this Agreement, whether by the further manufacture and sale of products or
otherwise, except that IDTEK may, subject to payment of appropriate royalties,
use or dispose of any products on hand or for which components have been
purchased in the normal course of business prior to the date of termination of
this Agreement;
Page 8 of 10
also, any license(s) or sublicense(s) made by IDTEK or its licensee(s) will
continue to be honored as legally binding and valid on XXXXXXX.
ARTICLE 16 - FURTHER ASSIGNMENT
This Agreement shall inure to the benefit of and be binding upon the
parties, their successors and legal representatives, and shall be assignable as
follows: IDTEK may without need for approval from XXXXXXX license and/or assign
its rights under this Agreement to any other individual or business entity.
ARTICLE 17 - CONTROLLING LAW
This Agreement and all terms and conditions hereof and all questions
arising hereunder shall be construed according to the laws of the State of North
Carolina.
ARTICLE 18 - ARBITRATION
Any claim or controversy arising out or relating to this Agreement, or
the breach thereof, including any dispute relating to patent validity or
infringement arising under this Agreement shall be solely and finally settled by
arbitration in Raleigh, North Carolina in accordance with the Patent Arbitration
Rules of the American Arbitration Association. Judgment on the award rendered by
the Arbitrator may be entered in any court having jurisdiction or application
may be made to such court for judicial acceptance of the award and an order of
enforcement, as the case may be.
ARTICLE 19 - NOTIFICATION
Any notice hereunder must be in writing and may be personally
delivered, delivered by overnight courier, telexed or telefaxed or may be given
by certified letter and shall be deemed to have been given when such certified
letter, properly addressed, is mailed return receipt requested, and receipt
acknowledged. If given otherwise than by certified letter, it shall be deemed to
have been given when delivered, if contemporaneously documented. If such notice
is to be given to XXXXXXX, it shall be addressed to XXXXXXX at the address given
above; if given to IDTEK, it shall be addressed to IDTEK at its address given
above. Either party hereto may at any time by thirty (30) days notice to the
other designate any other address for itself in place of those above given.
ARTICLE 20- ENTIRE AGREEMENT
This instrument contains the entire Agreement between XXXXXXX and IDTEK
and no modification hereof shall be binding on the parties unless it is in
writing and signed by a duly authorized officer of the parties to be bound.
ARTICLE 21 - INVALIDITY
If a court of competent jurisdiction shall declare any provision of
this Agreement invalid, such determination shall not affect the remaining
provisions of this Agreement.
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ARTICLE 22 - FURTHER DOCUMENTS
Each of the parties hereto agree to execute and deliver all such
documents and to do any and all acts, matters and things as may be necessary or
proper in order to carry out the intent and purposes of this Agreement.
ARTICLE 23 - BANKRUPTCY
Each party must inform the other party of any intentions on its part to
file a voluntary petition of bankruptcy or another intention to file an
involuntary petition of bankruptcy to be received at least thirty (30) days
prior to filing such a petition. A party's filing without conforming to this
requirement, and IDTEK's notice of such intentions, shall each be deemed to be a
material, pre-petition incurable breach which shall automatically terminate this
Agreement as of the date of such failure to inform or of such notice.
ARTICLE 24 - WAIVER
Failure of the parties to enforce at any time any of the provisions of
this Agreement shall in no way be considered a waiver of such provisions or of
any provisions or any other provisions or in any way affect the validity of this
Agreement.
IN WITNESS WHEREOF, the parties hereto have affixed their names and
seals, by the executive officers thereto duly authorized, effective as of the
day and year first above written.
By: ________________________
Xxxx Xxxxx Xxxxxxx
ATTEST:
-------------------
FOR IDTEK:
By: ________________________
X. Xxxxxxxx X. Xxxxxxxx
President & CEO
ATTEST:
-------------------
Page 10 of 10
Xxxx X. Xxxxxxx
ATTORNEY AT LAW
000 XXXXX XXXXXX XXXXX TELEPHONE: (000) 000-0000
XXXX, XXXXX XXXXXXXX 00000 xxxxxxxxxxxx@xx.xxx
January 16, 2002
Xx. X. Xxxxxxxx X. Xxxxxxxx
President & CEO
ID Technologies Corporation
000 Xxxx Xxxxxx Xxxxx, Xxxxx 000
Xxxxxxx, Xxxxx Xxxxxxxx 00000
Dear Phil:
For the time being, I propose to continue working for ID Technologies
Corporation (IDTEK) during 2002 under terms similar to our 2001 arrangement.
Until we raise money, I am prepared to accept payment for services rendered this
year on a monthly basis in the form of an acknowledgement of indebtedness
convertible at my option to payment in the common voting stock of IDTEK in lieu
of cash. Either party can terminate this agreement upon 90 days' written notice.
Under the proposed arrangement, IDTEK would pay me at a rate $70 per hour
multiplied by 15 hours per week. With each month containing 4.33 weeks, the
monthly rate would be $4,546. The shares would be valued at the average closing
price of the stock during the first week of each calendar quarter, but never at
a rate less than $0.26 per share. Calculated at $0.26 per share, the Company
would issue 3.846153846153846153846153846153 shares to the dollar, amounting to
17,484 shares per month, if I request payment in that form.
Thank you for giving me the opportunity to serve IDTEK. I look forward to a
great 2002!
Sincerely,
