Exhibit 10(d)
ADLS/ADMS LICENSE AGREEMENT
THIS LICENSE AGREEMENT, dated as of this 1st day of December, 2001, is
entered into by and between BASE TEN SYSTEMS, INC., a New Jersey corporation
having its principal place of business at 000 Xxxx Xxxxxx Xxxx Xxxx, Xxxxx 00,
Xxxxxxxx, Xxx Xxxxxx 00000 ("Licensor"), and ALMEDICA ADVANCED TECHNOLOGY, LLC,
a Delaware limited liability company having its principal place of business at
00 Xxxxxxxx Xxxxx, Xxxxxxxxx, Xxx Xxxxxx 00000 ("Licensee").
W I T N E S S E T H:
WHEREAS, pursuant to that certain Limited Liability Company Agreement
of Licensee, dated as of March 29, 2001 (the "Operating Agreement"), by and
between Licensor and Almedica International Inc., a Delaware corporation
("Almedica"), Almedica is the owner of 80% of the common membership interests of
Licensee (the "Common Interests"), and Licensor is the owner of 20% of the
Common Interests, which Common Interests of Licensor are currently being held in
escrow pursuant to the terms and provisions of the Escrow Agreement (described
below);
WHEREAS, pursuant to the Operating Agreement, Almedica has contributed
to Licensee capital consisting of $75,000 (the "Funds"), which Funds are
currently being held in escrow pursuant to the terms and provisions of the
Escrow Agreement (described below);
WHEREAS, pursuant to the Operating Agreement, Licensor has agreed to
grant, transfer and assign to Licensee of all of Licensor's right, title and
interest in and to the ADLS and ADMS software systems (including all source code
and documentation associated with such software), hardware and items related
thereto, as reflected on Schedule A of the Operating Agreement and reproduced as
Schedule A hereto (collectively, the "Licensed System"), which Operating
Agreement and the grant, transfer and assignment, are subject to the approval of
Licensor's shareholders;
WHEREAS, Licensor and Almedica, among others, are parties to a certain
Escrow Agreement, dated as of March 29, 2001 (the "Escrow Agreement"), pursuant
to which the parties thereto have provided for, among other things, the delivery
of the Funds by Licensee from escrow (a) to Licensor, if Licensor's shareholders
have approved the Operating Agreement by August 31, 2001, or (b) to Licensee, if
Licensor's shareholders have not approved the Operating Agreement by August 31,
2001;
WHEREAS, upon the Licensor obtaining the shareholder approval for the
Operating Agreement and the grant, transfer and assignment of the Licensed
System, the parties have agreed to transfer out of escrow the Funds and
distribute the Common Interests, all as set forth above;
WHEREAS, Licensor acknowledges that Licensor's shareholders have not
approved the Operating Agreement as of the date of this Agreement;
WHEREAS, Licensee is desirous of obtaining from Licensor rights to use
the Licensed System, independent of any rights otherwise provided for or
contemplated by the Operating Agreement, until such time as the Operating
Agreement and the grant, transfer and assignment of the Licensed System are
approved by the Licensor's shareholders, pursuant to the terms and provisions
set forth herein, or if Licensor's shareholders are given the opportunity to
approve such grant, transfer and assignment of the Licensed System and fail to
do so, until 10 years after the date of this Agreement; and
WHEREAS, Licensor is desirous of licensing to Licensee such rights to
use the Licensed System.
NOW, THEREFORE, in consideration of the mutual covenants herein
contained and for other good and valuable consideration, the parties agree as
follows:
1. GRANT OF LICENSE
(a) Scope of License. Upon the terms and subject to the conditions
herein, Licensor hereby grants to Licensee a worldwide, unlimited user,
assignable and transferable right and license (the "License") to (1) use the
Licensed System, including without limitation the source code therefor; (2)
customize, enhance, modify and create derivative works from the Licensed System,
including without limitation the source code therefor; (3) market, promote,
sublicense, rent, lease, lend and otherwise distribute the Licensed System,
either directly or through resellers, under Licensee's proprietary brand names;
and (4) copy and reproduce the Licensed System, including without limitation the
source code therefor, in furtherance of the foregoing.
(b) Licensee's Right To Assign this Agreement. Licensee may sell,
assign, license, sublicense or transfer in any way Licensee's rights with
respect to the Licensed System or any part or portion thereof, in each case
subject to the provisions of Section 1(b)(2) hereof. Licensee shall have the
right to sell, assign, license, sublicense or transfer all or certain of its
rights under this Agreement with respect to the Licensed System in the sole and
absolute discretion of Licensee, provided that such sale, assignment, license,
sublicense or transfer is in compliance with Section 1(b)(2) hereof. Subject to
the foregoing, Licensee may, in its sole discretion, separately sell, assign,
license, sublicense or transfer its rights under this Agreement with respect to
each of the ADLS software and the ADMS software.
(1) The assignment of Licensee's interest herein shall terminate
all of Licensee's rights and obligations (except for Licensee's obligations with
respect to confidentiality) set forth in this Agreement to the extent of such
assignment.
-2-
(2) Any sale, assignment, license or transfer of Licensee's rights
under this Agreement with respect to the Licensed System by Licensee during the
Term shall be made subject to the following conditions:
(i) Licensee shall promptly notify Licensor of any sale or
assignment of Licensee's rights under this Agreement with respect to, or the
grant of an exclusive license of, the Licensed System and shall provide Licensor
with the name and address of any transferee of such sale or assignment or
grantee of such exclusive license within 5 days after the date of such sale,
assignment or grant.
(ii) Licensee shall advise any transferee of a sale,
assignment, license or transfer of the terms, including without limitation the
Term, of this Agreement.
(c) Trademarks and Trade Names. Licensee shall have the right to use
Licensor's trademarks, trade names, logos and other proprietary marks in
connection with the permitted use of the License.
(d) Limitation on Licensor's Ability to Assign. Licensor may not sell,
assign, license, sublicense or transfer the Licensed System, or any part or
portion thereof, until after the expiration of the Exclusivity Period (as
defined below). After the expiration of the Exclusivity Period, Licensor may
only Transfer the Licensed System, or any part or portion thereof, to a
transferee (a "Permitted Transferee") that is not a Prohibited Transferee (as
defined below) pursuant to the terms of this Agreement, provided, that such
Permitted Transferee expressly acknowledges in writing that this Agreement shall
be binding on it and all such Permitted Transferee's successors in interest and
such transferees. Any attempt by Licensor to sell, assign, license, sublicense
or transfer in any way the Licensed System or any part or portion thereof
without obtaining such written acknowledgement shall be null and void. Licensor
represents and warrants that it has not sold, assigned, licensed, sublicensed or
transferred the Licensed System or any part or portion thereof to any person on
or prior to the date hereof.
(e) Exclusivity of License. The License shall be exclusive until the
one year anniversary of the date of this Agreement (the "Exclusivity Period").
During the Exclusivity Period, Licensor shall not sell, assign, license,
sublicense or transfer or in any way use (whether for itself or on behalf of
others) the Licensed System or any part or portion thereof. Following the
Exclusivity Period and for the remainder of the Term (as defined below), the
License shall be non-exclusive, provided, however, that in no event shall
Licensor (or any assignee, licensee, sublicensee or transferee of Licensor other
than Licensee) sell, assign, license, sublicense or transfer the Licensed System
or any part or portion thereof to a Prohibited Transferee (as defined below).
For purposes of this Agreement, a "Prohibited Transferee" shall mean any of the
Licensee's customers or prospects regarding the use of the Licensed System as of
the date of this Agreement and/or the one-year anniversary of the date of this
Agreement whose names are set forth on Schedule B hereto, or any of the
respective affiliates or subsidiaries of such Licensee's customers or prospects.
The names of the Prohibited Transferees shall be provided by Licensee and set
forth on Schedule B and made a part of this Agreement within 5 business days
after the one-year anniversary of the date of this Agreement pursuant to Section
1(f) hereof and shall not be amended or supplemented further by Licensee after
such time; provided, however, that Schedule B may be deemed to be so amended or
supplemented by any decision of an independent arbitrator in accordance with and
pursuant to Section 1(f) hereof.
-3-
(f) Confidentiality of Prohibited Transferees. Notwithstanding anything
to the contrary contained herein, in order to maintain the confidentiality and
prevent any unnecessary disclosure to Licensor of the names to be set forth on
Schedule B hereto, Schedule B shall be delivered by Licensee to a single person
or entity (the "Intermediary") who shall hold such schedule in trust in
accordance with the following terms and provisions:
(1) Upon receipt of Schedule B by the Intermediary, the
Intermediary shall not be under any duty to give Schedule B held by it hereunder
any greater degree of care than it gives its own similar property.
(2) If, following the Exclusivity Period and during the remainder
of the Term, Licensor wishes to effect a Transfer of the Licensed System or any
part or portion thereof, Licensor shall submit in writing the name of each such
proposed transferee (the "Proposed Transferee") to each of the Licensee and the
Intermediary. Each such written submission made by the Licensor to the
Intermediary is referred to herein as a "Submission."
(3) Upon receipt from Licensor of the name of a Proposed
Transferee, the Intermediary shall determine, in its reasonable, good faith
judgment, whether such name, or a name substantially similar to or indicative of
such name, appears on Schedule B in its possession, and, subject to Section
1(f)(4) hereof, the affirmative determination of which by the Intermediary shall
constitute a binding determination on the parties hereto that such Proposed
Transferee is a Prohibited Transferee.
(4) Upon receipt from Licensor of the name of a Proposed
Transferee, Licensee shall determine whether a Proposed Transferee is a
Prohibited Transferee, and the determination by Licensee that such Proposed
Transferee is not a Prohibited Transferee shall constitute a binding
determination on the parties hereto that such Proposed Transferee is NOT a
Prohibited Transferee, notwithstanding any determination by the Intermediary to
the contrary.
(5) Within 5 days of the receipt of the Submission by Licensor of
the name of the Proposed Transferee, the Intermediary shall respond to Licensor
and Licensee in writing with its determination pursuant to Section 1(f)(3)
hereof.
(6) Within 5 days of the receipt of the determination by the
Intermediary pursuant to Section 1(f)(3) hereof, Licensee shall respond to
Licensor in writing with its determination pursuant to Section 1(f)(4) hereof.
-4-
(7) Arbitration.
(i) In the event the Intermediary determines pursuant to
Section 1(f)(3) hereof that the Proposed Transferee is not a Prohibited
Transferee, and Licensee determines pursuant to Section 1(f)(4) hereof that the
Proposed Transferee is a Prohibited Transferee, then the parties hereto agree to
attempt in good faith to resolve such dispute within 14 days of the date of
Licensor's receipt of Licensee's written determination, and if they fail to
reach an agreement within such 14-day period, the parties agree to submit the
question of whether the Proposed Transferee is or is not a Prohibited Transferee
to the American Arbitration Association in New York, New York, to be determined
by a single independent arbitrator.
(ii) The arbitrator's decision shall be in writing and shall be
limited to and consist of the adoption of one of the two possible
determinations.
(iii) The arbitrator's decision shall be final and binding upon
the parties hereto, and judgment upon such decision thus obtained may be entered
in any court having competent jurisdiction thereof.
(iv) If the arbitrator determines the Proposed Transferee is a
Prohibited Transferee, then Licensor shall be responsible for and liable to
Licensee for all fees and expenses of the arbitration; if the arbitrator
determines the Proposed Transferee is NOT a Prohibited Transferee, then Licensee
shall be responsible for and liable to Licensor for all fees and expenses of the
arbitration; provided, however, that in any case each party shall bear its own
fees and expenses and the fees and expenses of its attorneys and advisors.
(8) The initial Intermediary shall be Pitney, Xxxxxx, Xxxx & Xxxxx,
LLP ("PHKS"). In the event that PHKS (or any successor Intermediary pursuant to
the terms hereof) becomes unwilling or unable to hold and maintain Schedule B
and carry out the intent of the parties pursuant to the terms and provisions
hereof, Licensor shall select, with the consent of Licensee, such consent not to
be unreasonably withheld, an independent successor Intermediary.
2. PRICE AND PAYMENT
Licensee shall pay to Licensor a royalty payment in the amount of
$50,000, which shall be due and payable on the earlier of (i) the one year
anniversary of the date of this Agreement, and (ii) the date upon which Licensor
obtains shareholder approval of the Operating Agreement and the transactions
contemplated thereby. After the one year anniversary of the date of this
Agreement, Licensee shall pay to Licensor an annual royalty payment in the
amount of $2,777.78, which shall be due and payable on the anniversary date of
this Agreement at the conclusion of such year. In the event Licensor obtains
such shareholder approval before the Licensee has paid Licensor an aggregate of
$75,000, then, upon the certification of Licensor's secretary that such
shareholder approval has been obtained, Licensee shall make a final installment
payment (the "Final Installment") to Licensor in an amount equal to the greater
of (x) the difference between $75,000 and the aggregate royalties earned by
Licensor through such date and (y) $100. Such Final Installment shall be due and
owing upon the first day of the next calendar month of the month in which such
certification has been provided by Licensor to Licensee.
-5-
3. OWNERSHIP OF THE LICENSED SYSTEM
Licensor represents that it is the owner of the Licensed System and has
the right to grant the License to Licensee. Licensee acknowledges and agrees
that the Licensed System contains valuable trade secrets and/or proprietary and
confidential information of Licensor, and any title and right to the Licensed
System vested in Licensor including any patents, copyrights, trademarks and
trade secrets in the Licensed System vested in Licensor shall remain in
Licensor. All other aspects of the Licensed System, including, without
limitation, methods of processing, design and structure of individual programs
and their interaction and programming techniques employed therein shall remain
the sole and exclusive property of Licensor to the extent title to such aspects
of the Licensed System are vested in Licensor. Nothing in this Agreement shall
be construed to vest in Licensee any proprietary interest in the Licensed
System, except for the License and as set forth below. Notwithstanding anything
to the contrary contained herein, Licensee shall retain all ownership rights,
title and interest in and to any enhancement to the Licensed System (including
without limitation the source code therefor) and all other work product created,
conceived, originated, prepared, generated or developed by or on behalf of
Licensee with respect to the Licensed System. In the event Licensor produces any
such enhancements or work product at the request of or on behalf of Licensee,
such shall be considered a "work-made-for-hire" within the meaning of the
Copyright Act of 1976, as amended. If and to the extent such enhancements or
work product, or any part thereof, are found by a court of competent
jurisdiction not to be a "work-made-for-hire" within the meaning of the
Copyright Act of 1976, as amended, Licensor agrees that all exclusive right,
title and interest in and to those enhancements or work product, and all copies
thereof, are hereby expressly assigned automatically to Licensee without further
consideration. The terms of this Section 3 shall survive the expiration of any
term or termination of this Agreement.
4. TERM AND tERMINATION
(a) General. The License shall continue for a period of ten (10) years
from the date of this Agreement unless terminated earlier as provided herein
(the "Term"). This Agreement shall automatically terminate upon the delivery by
Licensor to Licensee of a Secretary's Certificate of Licensor certifying that
Licensor's shareholders have duly approved the Operating Agreement, which shall
be conclusive evidence of the completed grant, transfer and assignment of the
Licensed System by Licensor to Licensee.
(b) Continuation of Sublicenses. Notwithstanding any termination of
this Agreement for any reason, any person or entity to whom Licensee granted a
sublicense to the Licensed System prior to the effective date of such
termination shall be entitled to thereafter continue using the Licensed System
for the full term of such sublicense.
-6-
5. NOTICES
All notices or payments required or permitted to be given by one party
to the other under-this Agreement shall be sent (i) by hand; (ii) by certified
mail, return receipt requested, or overnight courier to the parties; or (iii) by
facsimile transmission with confirming copy sent to the other party by air mail;
in each case to the address set forth below or to such other address as the
party to receive the notice has designated by notice to the other party:
If to Licensor:
Base Ten Systems, Inc.
000 Xxxx Xxxxxx Xxxx Xxxx, Xxxxx 00
Xxxxxxxx, Xxx Xxxxxx 00000
Attn: Xxxxxxx X. Xxxxx, Chief Financial Officer
Facsimile: (000) 000-0000
with a copy to:
Pitney, Xxxxxx, Xxxx & Xxxxx LLP
If by Delivery:
000 Xxxxxx Xxxxx
Xxxxxxx Xxxx, Xxx Xxxxxx 00000
Attn: Xxxxxx Xxxxx
Facsimile: (000) 000-0000
If by Mail:
X.X. Xxx 0000
Xxxxxxxxxx, Xxx Xxxxxx 00000
Attn: Xxxxxx Xxxxx
Facsimile: (000) 000-0000
If to Licensee:
Almedica Advanced Technology, LLC
00 Xxxxxxxx Xxxxx
Xxxxxxxxx, Xxx Xxxxxx 00000
Attn: Xx. Xxxxxx Xxxxx
Facsimile: (000) 000-0000
with a copy to:
Xxxxx Xxxxxxx Xxxxxxx & Xxxxx LLP
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxxxx Xxxxx, Esq.
Facsimile: (000) 000-0000
-7-
6. GENERAL
(a) This Agreement is the complete and exclusive statement of the
agreement between the parties relating to the subject matter hereof and
supersedes and merges all prior proposals, understandings, letters of intent and
all other agreements, oral and written, between the parties relating to the
subject matter hereof. This Agreement may not be modified or altered except by
written instrument duly executed by both parties.
(b) Dates or times by which Licensor or Licensee is required to make
performance under this Agreement, other than the obligation to pay the license
fee provided in Section 2 hereof, shall be postponed automatically to the extent
that Licensor or Licensee is prevented from meeting them by causes beyond its
reasonable control.
(c) This Agreement and performance hereunder shall be governed by and
construed in accordance with the laws of the State of New Jersey (without giving
effect to principles of conflicts of law).
(d) If any provision of this Agreement is invalid under any applicable
statute or rule of law, it is to that extent to be deemed omitted.
(e) Licensor or Licensee shall have the right to collect from the other
its expenses incurred in enforcing this Agreement, including reasonable
attorneys' fees.
(f) Each party shall bear its own costs and expenses in the performance
of its obligations hereunder.
(g) The waiver or failure of Licensor or Licensee to exercise in any
respect any right provided for herein shall not be deemed a waiver of any
further right hereunder.
(h) Licensee consents and agrees that all legal proceedings relating to
the subject matter of this Agreement shall be maintained in courts sitting
within the State of New Jersey, and Licensee consents and agrees that personal
jurisdiction and venue for such proceedings shall lie exclusively with such
courts. Service of process in any such proceeding may be made by certified mail,
return receipt requested, directed to the respective party at the address at
which it is to receive notice as provided herein.
(i) This Agreement may be executed in counterparts, each of which shall
be deemed to be an original but all of which together shall constitute but one
and the same instrument.
-8-
(j) In the event Licensor voluntarily or involuntarily becomes subject
to the protection of the United States Bankruptcy Code, as amended ("Bankruptcy
Code"), and Licensor or the trustee in bankruptcy rejects this Agreement under
Section 365 of the Bankruptcy Code, Licensee shall have the right to: (a) treat
this Agreement as terminated; or (b) retain Licensee's rights under this
Agreement, specifically including, without limitation, the right to exercise its
rights granted under the License. Failure by Licensee to assert its right to
retain its benefits to the intellectual property embodied in the Licensed System
pursuant to Section 365(n)(1)(B) of the Bankruptcy Code with respect to an
executory contract rejected by Licensor or the trustee in bankruptcy shall not
be construed by the courts as a termination of such contract by Licensee under
Section 365(n)(1)(A) of the Bankruptcy Code.
[Remainder of this page intentionally left blank]
-9-
IN WITNESS WHEREOF, the parties have executed this Agreement by a duly
authorized officer thereof as of the date first set forth above.
ALMEDICA ADVANCED TECHNOLOGY, LLC
By:______________________________
Name:
Title:
BASE TEN SYSTEMS, INC.
By:______________________________
Name:
Title:
-10-
Schedule A
Licensed System
Schedule B
[to be provided]
