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EXHIBIT 10(w)
LICENSE AGREEMENT
This agreement, which is to become effective February 18, 1997 is made
between BodyBilt Seating, Inc. a Texas corporation having a principal office in
Navasota, Texas, ("Licensee"), and Computer Translation Systems & Support,
Inc. (CTSS), Xxxxxxxx Xxxx Melquiond and Xxxxxx X. Xxxxxx, (collectively called
"Licensors"); and that, in consideration of the mutual promises made in this
agreement, the parties agree as follows:
ARTICLE 1. DEFINITIONS
Certain terms used in this agreement shall be defined as follows:
SECTION. 1.01 "Licensed Product" shall mean the Impact Unit hardware, the
software used to design, build, manufacture, operate and control the operation
of the Impact Unit together with all designs, schematics, drawings, layouts,
parts lists, source code, object code, enhancements and modifications, and all
files, including input and output materials relating to the Impact Unit and its
software.
SECTION 1.02 "User Documentation": shall mean any and all installation
instructions, user manuals, supporting materials, training manuals and
materials, workbooks, product descriptions and technical manuals relating to
the Licensed Product.
SECTION 1.03 "Purchase order" shall mean a written purchase order or any
other written confirmation obligating a person, business, or other entity to
purchase goods.
ARTICLE 2. ASSIGNMENT OF IMPACT TRADEMARK
SECTION 2.01 OWNERSHIP. CTSS represents and warrants that it owns and has
the exclusive right to use the trademark Impact for keyboards and represents
and warrant that it owns U. S. Trademark Application Serial No. 74-584,649 for
Impact and Design in Class 9.
SECTION 2.02 ASSIGNMENT. CTSS agrees to assign its interest in the Impact
trademark and U.S. Trademark Application Serial No. 74-584,649 for Impact and
Design in class 9, together with the associated good will of the business to
BodyBilt. CTSS agrees to effect that assignment by executing and returning to
BodyBilt the form of assignment attached hereto as Exhibit "A".
ARTICLE 3. WARRANTY OF TITLE AND AUTHORITY
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SECTION 3.01 WARRANTY. Licensors warrant and represent that they own, have
title to, and have the fully authority and right to the Licensed Product and
User Documentation, and to enter into this agreement.
ARTICLE 4. LICENSE AND WARRANTY
SECTION 4.01 Subject to the terms and conditions of this Agreement,
Licensor hereby grants to Licensee and Licensee hereby accepts an exclusive
perpetual license under any and all intellectual property rights owned or
otherwise assertable by Licensor relation to the Licensed Product and User
Documentation, including but not limited to Licensor's rights under any
patents, copyrights or trademarks. The license includes, but is not limited
to, the right to manufacture, make, have made, use, copy, reproduce,
distribute, prepare derivatives, perform, display, market, sell, offer for
sale, import or export the Licensed Product or User Documentation and includes
the right to sublicense others.
SECTION 4.02 SCOPE OF LICENSE GRANT. The License is non-exclusive and
extends through out the world including the United States and its territories.
Licensor acknowledges that under this License Agreement it does not retain any
right to or under the Licensed Product and User Documentation.
SECTION 4.03 OTHER RIGHTS GRANTED. In addition to the License enumerated
in the Agreement, the License includes a grant by Licensor to Licensee of the
right to engage in any activity relating to the manufacture, use, copying ,
distribution, performance, display, marketing, sale, or offer of sale of the
Impact Unit, and all ownership rights, title and interest, in any intellectual
property rights relating to the Licensed Product and User Documentation or in
any copy or any part of the Licensed Product of User Documentation.
SECTION 4.04 IMPROVEMENTS. Licensors agree to tender in writing for
incorporation into the Licensed Product and User Documentation a like license
under any U.S. or Foreign patents or patent application or copyrights now or
hereafter owned or enjoyed in any patent or patent application or copyright
included in the Licensed Product and User Documentation, or any method or
process for manufacturing any such invention. Licensee at its option may
accept such written tender by a written instrument mailed within six months
after receipt of tender. Such additional licenses shall be upon the same terms
as this license and shall terminate upon any termination or cancellation of
this agreement.
ARTICLE 5. LUMP SUM AND ROYALTIES
SECTION 5.01 LUMP SUM. Licensee shall pay to Licensors a lump sum of
Nineteen Thousand And No Cents Dollars ($19,000), which shall not be creditable
against royalties earned on the marketing of Licensed Product and User
Documentation
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Payment of the lump sum shall be made contemporaneously with the
execution of this agreement.
SECTION 5.02 EARNED ROYALTIES. In addition to the lump sum payment
mentioned in Section 5.01 of this agreement, Licensee shall pay to Licensors
within a reasonable times an earned royalty equal to 5% of the gross revenue
received from the sales of the Licensed Product and User Documentation
marketed by Licensee for which payment has been received. Such royalty shall be
earned at the time payment for the relevant Licensed Product and User
Documentation is received by Licensee. Royalty shall be directly reduced by
any advances paid under Section 7.02.5.
SECTION 5.03 ONE ROYALTY. Only one royalty shall be due for any one
Licensed Product and User Documentation made or marketed anywhere in the world.
ARTICLE 6. REPORTING AND AUDIT
SECTION 6.01 Licensee shall keep accurate books of account containing all
information necessary to establish the amount payable as royalty under this
agreement. Such books of account shall be kept at one of Licensee's principal
places of business and shall be open, for three years following the close of
the calendar year to which they pertain, to inspection and audit by an
independent certified public accountant who is nominated by Licensors and to
whom Licensee has no reasonable objection. Such inspection and audit shall take
place no more than once each year and shall be confined to verification of the
royalties due, and the accountant shall disclose to Licensors only whether the
Licensee's reports and payments are accurate or not, and if not accurate shall
specify the inaccuracies therein. Each payment of royalties shall be
accompanied by a written report signed by the individual who prepared the
report and by an officer of Licensee, showing the computation of royalties.
ARTICLE 7. WARRANTIES AND PERFORMANCE
SECTION 7.01 LICENSORS' WARRANTIES.
7.01.1 WARRANTY PERIOD. The "Warranty Period" begins on the date of
execution of this Agreement and terminates one year thereafter.
7.01.2 AS--DOCUMENTED WARRANTY. Licensor warrants to Licensee, during the
Warranty Period, that the Licensed Product will function and perform in
accordance with the User Documentation and in the same manner that the Licensed
Product performed on behalf of Licensor immediately prior to the date hereof.
Upon receipt of a breach of this Warranty, Licensor shall have thirty (30)
business days to attempt to correct the breach, after which Licensee may
attempt to correct the breach itself utilizing the source code provided to
License under this Agreement.
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7.01.3 NO SURREPTITIOUS CODE WARRANTY. Licensor warrants to
Licensee that no copy of the software provided to Licensee contains or will
contain any surreptitious code, including but not limited to any backdoor,
timebomb, drop dead device, any other software routine designed to disable a
computer program automatically with the passage of time or under the positive
control of a person other than a licensee of the program, any virus, Trojan
horse, worm or other software routine or hardware components designed to permit
unauthorized access, to disable, erase or other harm software, hardware or data,
or to perform any other such actions.
SECTION 7.02. PERFORMANCE.
7.02.1 PURCHASE ORDERS. Upon Licensors delivering all sales
contacts, customer lists, part requests, Licensee shall immediately proceed to
order parts, assemble, and sell units. Licensee shall use best efforts to sell
a minimum of 250 units in sixty (60) days, but in no event is Licensee obligated
to expend more than $600,000, or incur any additional obligation, to achieve
these sales.
7.02.2 DELIVERY OF LICENSE MATERIALS. Licensor will deliver
the Licensed Product (including all drawings, schematics, source code or other
materials to configure and manufacture the Impact Unit as provided herein) and
User Documentation to Licensee, at Licensee's address set forth above, upon
execution of this Agreement.
7.02.3 INSTALLATION OF MATERIALS BY LICENSEE. All
installation of the Licensed Product for use by Licensee will be by, and at the
sole expense of Licensee.
7.02.4 DELIVERY OF SOURCE CODE. Licensor shall deliver one
copy of the source code of the Licensed Product to Licensee together with all
comments and programmers notes. Licensee may also use the source code for any
purpose consistent with Licensee's license to the Licensed Product.
7.02.5 CONSULTATION. Licensors shall make themselves
available, upon request of the Licensee, at the earliest opportunity to consult
with Licensee at one of the Licensee's places of business at no charge to
Licensee except that the latter shall reimburse Licensors for travel expenses
and reasonable expenditures for food and lodging. From February 18, 1997 to
March 31, 1997, Licensee shall advance Licensors $2,000 a week against future
royalties.
ARTICLE 8. INFRINGEMENT
SECTION 8.01 WHO SHALL XXX. Upon learning of any infringement by any third
party of any claim of any issue patent included within the Licensed Product and
the User Documentation, licensee shall promptly notify Licensors in writing of
such infringement, giving details of the infringement. Licensors and Licensee
both shall have the option
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either alone or jointly to take such measures as may be required to terminate
any infringement. When either party brings an infringement suit, the other
party may join as plaintiff and shall cooperate and assist in the preparation
and prosecution of the suit.
SECTION 8.02 EXPENSES AND RECOVERIES. In the case of mutual agreement on
the institution of an infringement suit, Licensee shall bear one half and
Licensors collectively shall bear one half of all expenses unless one party
declines to participate financially in the prosecution of such infringement
suit, in which case the party declining to participate shall be excluded from
bearing a part of such expenses. In the case of such mutual agreement on the
institution of an infringement suit, Licensee shall have one half and Licensors
collectively shall have one half of all damages and penalties recovered that
remain after first reimbursing Licensee and then Licensors for any amounts
expended by them in prosecuting such infringement suit and next reimbursing
Licensors for royalties that they would have earned but for the suspension of
royalty payments during the period of infringement. If one party declines to
timely participate financially (pay litigation on time) in the prosecution of
such infringement suit, the party shall be excluded from any share of the
damages and penalties recovered.
ARTICLE 9. ADVERSE DECISIONS
SECTION 9.01 EFFECT. If any claim of any right to the License Product and
User Documentation is held invalid, awarded to another, or held not infringed,
by a decision of any tribunal of competent jurisdiction, which decision is not
or cannot be thereafter reversed, then with respect to any such claim so held
not infringed, the construction placed upon such claim by such tribunal shall
be followed from the date of entry of the opinion on such question of
infringement, and with respect to any claim that is not infringed, not valid,
or not the property of Licensors under such decision, Licensee shall thereafter
be relieved from the payment of royalties solely with respect to such claim,
and from including in its reports hereunder any equipment covered solely by
such claim; provided, however, that if there are conflicting final decisions by
courts of equal jurisdiction, the one of latest date shall be controlling.
SECTION 9.02 CONTRARY DECISION. In the event of a decision of a tribunal
terminating royalty liability followed by a decision of a tribunal that revives
royalty liability, no royalty shall be payable for the period between the two
decisions.
ARTICLE 10. BEST EFFORTS
SECTION 10.01 Licensee shall use its best efforts to maximize the number
of licensed products sold and to maximize the selling price of each unit sold,
subject to the limitations of Section 7.02.1
ARTICLE 11. SUCCESSORS AND ASSIGNS
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SECTION 11.01 BINDING. This agreement shall bind, and inure to the benefit
of, each of the parties, and their respective successors in interest and
assigns.
SECTION 11.02 ASSIGNMENT. BodyBilt may assign part of all of its interest
in this agreement to any of its affiliate companies.
ARTICLE 12. INFORMATION CONCERNING LICENSED PATENT RIGHTS
SECTION 12.01 INSPECTION. Licensors hereby grant, and agree to grant, to
Licensee and its duly authorized agents, under 37 CFR Section 1.14(a) and
comparable rules of foreign patent practice, a power of inspection of all U.S.
and foreign patent applications and copyrights included in the License Product
and User Documentation and Licensors further agree to execute and deliver to
Licensee such further documents as may be requested to carry out the intent of
this provision.
SECTION 12.02 INFORMATION. The parties agree to keep each other fully
informed of the progress of the prosecution of all U.S. and foreign
applications that are included in the Licensed Product and User Documentation.
SECTION 12.03 NOTIFICATION. Licensee shall not be liable for any royalty
under any claim of any patent or application in any country until after having
actual notice of the filing, issuance or acquisition of such patent or
application.
ARTICLE 13. NOTICES, COMMUNICATIONS, PAYMENTS
SECTION 13.01 Licensee may send all notices and reports and other
communications and may make all payments under this license to CTSS, 000 Xxxxxx
Xxxxxx Xxxx, Xxxxxxx, Xxxxx 00000, Fax (000) 000-0000. Licensors may send all
notices, tenders, and other communications to Xxx X. Xxxx, 0000 Xxxxxx Xxxxx,
Xxxxx, Xxxxx, 00000 (409) 268-0102. All notices and other communications
mentioned in this agreement, including royalty payments, may be mailed postpaid
to the last known address of the designated individual. All notice periods and
other times for taking any action mentioned in this license shall start on the
day that such notice or other communication is actually mailed.
ARTICLE 14. CHOICE OF LAW AND ARBITRATION
SECTION 14.01 This agreement and any disputes arising under it shall be
governed by the law of the State of Texas.
SECTION 14.02 ARBITRATION. The parties agree that any and all claims or
disputes between the parties that arise in the future shall be settled by
mediation and, if necessary, binding arbitration according to the Rules of the
Institute of Christian Conciliation and judgment upon an arbitration award may
be entered by any court of competent jurisdiction. In addition to the normal
authority of an Arbitrator, the parties agree that the Arbitrator shall
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have the authority to determine the fair and just resolution of any dispute,
as well as the authority to order exact remedies to move the defaulting party
back into compliance. "Any claim or dispute" means any and all claims and
disputes in contract or tort or statutory, and without limitation or
restriction general to the foregoing:
A. any and all disputes which may arise between
the parties relating to the negotiation, drafting, formation,
execution, and performance of this Agreement,
B. any dispute or claim that arises between the
parties outside of this Agreement, and
C. any dispute regarding the wording of the of the
clauses, covenants, modifications, clarifications of any
additional documents which are needed to effectuate the
purpose of this Agreement.
ARTICLE 15. ALTERATIONS
SECTION 15.01 This agreement cannot be altered except by an instrument in
writing signed by an authorized officer of the Licensee and an authorized
representative of the Licensors. Licensors reserve the right to increase the
earned royalty to $860.00 per unit on April 2, 1997.
ARTICLE 16. TERM AND TERMINATION
SECTION 16.01 TERM. This agreement and the license granted by it is
perpetual and it shall terminate only upon by written agreement of the
Licensors and Licensee.
SECTION 16.02 INVENTORY. Following any cancellation or other termination
of this agreement, Licensee at its option shall be entitled to a license
limited to all Licensed Product and User Documentation then on hand and that
Licensee can manufacture with materials then on hand that were specifically
purchased for the purpose of manufacturing the Licensed Product and User
Documentation and may pay the same royalty rate with respect to such articles
as that which would have been due if this agreement had remained in effect, but
no other royalties shall be earned after cancellation or termination.
SECTION 16.03 REVERSION. After any cancellation or termination of this
license agreement, the Licensed Product and User Documentation shall revert to
Licensors.
In witness whereof, the parties have executed this agreement by affixing
respectively their individual signatures and the signature of a duly authorized
Officer of Licensee, as of the effective date mentioned above.
COMPUTER TRANSLATION SYSTEMS & SUPPORT, INC.
By: /s/ Xxxxxx X. Xxxxxx ,
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Chairman of the Board of CTSS
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/s/ Xxxxxx X. Xxxxxx ,
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Xxxxxx X. Xxxxxx, individually, and as a
Shareholder of CTSS.
/s/ Xxxxxxxx Xxxx Melquiond ,
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Xxxxxxxx Xxxx Melquiond, individually,
and as Shareholder of CTSS
BODYBILT SEATING, INC.
By: /s/ Xxxxxx Xxxxx ,
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Xxxxxx Xxxxx,
CEO and President
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