EXHIBIT 10.1
Licensing Agreement
Agreement made this 30th day of May, 2007, by and between Xxxxx Systems,
Inc., a Texas Corporation, with a principal place of business at 0 Xxxx Xxxxxx
Xxxxxxxxx, Xxx. 000, Xxxxxxxxx, Xxxxx Xxxxxxxx 00000 ("Licensee" or "Xxxxx
Systems") and Childwatch, Inc., a Not for profit Corporation, with a principal
place of business at X.X. Xxx 000000, Xxxxxxx, Xxxxxxx 00000 ("Licensor" or
"Child Watch").
RECITALS
WHEREAS, Child Watch is the sole owner of certain trademarks, service
marks, and trade names;
WHEREAS, Child Watch is in the business of assisting parents of missing
children and working with law enforcement in the search for a missing child by
organizing volunteers and distributing posters; and
WHEREAS, Xxxxx Systems is desirous of obtaining a license to utilize
certain trademarks and service marks of Child Watch in connection with the
development of a Child Watch Alert Network on a digital signage network for the
purpose of displaying pictures of missing persons to the public; and:
WHEREAS, Child Watch is agreeable to such use by Evan Systems of certain
trademarks and service marks subject to the provisions of this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants hereinafter set
forth, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:
1. (a) Licensor grants to Licensee a License to the exclusive right to
market the Product and Service and brand name world wide for a period commencing
on June 1, 2007 (the "Effective Date") and ending five (5) years from the
Effective Date (the "Initial Term") unless sooner terminated pursuant to the
provisions of this Agreement. The term "License" as used herein shall mean the
exclusive non-transferable right of Licensee to reproduce, market and distribute
to end-users the Product and Service, Child Watch brand name and pictures of
missing persons subject to the provisions of this Agreement. "Exclusive" shall
mean that Licensor shall not engage in any similar promotions with other
competing companies of Licensee during the term of this Agreement.
(b) Grant. Subject to the provisions of this Agreement, including
without limitation all Child Watch approval rights described herein, Child Watch
hereby grants to Evan Systems, and Evan Systems hereby accepts the grant by
Child Watch of, the exclusive, nontransferable right and license during the Term
of this Agreement to use the Licensed Rights solely in connection with the
development and operation of the Child Watch Network ("Network") in the
Territory in accordance with the Terms set forth herein. "Licensed Rights" shall
mean the right to develop and operate the Child Watch Network in the Territory,
the right to offer the programs ("Licensed Services") subject to Child Watch's
approval rights. The network will be named "Child Watch Network" and Child Watch
will be the exclusive organization.
(c) Reservation of Rights. No license or right is granted for the use of
any trademark, service xxxx, trade dress, logo or similar identifying design
other than the Licensed Marks and no right is granted for the offering of
License Services or the sale of Branded Merchandise by any means or method other
than as set forth in this Agreement and the attached Schedules; and Xxxxx
Systems shall exercise Licensed Rights and use the Licensed Marks only for the
purposes of this Agreement and as prescribed herein, only with respect to the
Licensed Rights, and only to offer such Licensed Services and/or sell such
Branded Merchandise pursuant to the terms of this Agreement. Except as expressly
set forth in this Agreement, no right of renewal or option to extend is granted
and Xxxxx Systems shall have no right to exercise the Licensed Rights; no right
to use the Licensed Marks; and no right to continue marketing, distributing or
selling Licensed Services and/or Branded Merchandise or to continue holding
itself out as a licensee of Child Watch after the expiration or termination of
this Agreement. Evan Systems shall have the right to a "Sell-Off" period as
described in this agreement. All rights not specifically granted in this
Agreement are expressly reserved by Child Watch.
(d) It is mutually agreed that either party may terminate this Agreement
at the end of the Initial Term by giving the other party written notice thereof
at least Three (3) months prior to the expiration of the Initial Term. Should
either party fail to give such notice, this Agreement shall continue upon the
same terms and conditions in force and effective immediately prior to the
expiration of the Initial Term, for an additional period of four (4) year
periods. After the Initial Term, either party may terminate the renewal of this
Agreement by giving ninety (90) days' written notice of its intention to
terminate at any time prior to the expiration of the then current term.
2. Licensee hereby accepts the right to market the Product and Service and brand
name and agrees to do so in accordance with the provisions of this Agreement.
3. Licensee is an independent contractor and nothing contained herein shall be
deemed or interpreted to constitute Licensee to be the agent or legal
representative of Licensor for any purpose whatsoever. Licensee is not granted
any right or authority to assume or create any obligation or responsibility,
express or implied, on behalf of or in the name of Licensor, or to bind Licensor
in any manner or fashion whatsoever.
4. Licensee shall pay to Licensor a royalty of fifteen (15%) percent on net
sales of advertising revenue of generated through the digital signage network
(the "Royalty Fee"). Net sales shall not include sales commissions or any
customer deductions (such as discounts, sales and rebates). All expenses and
disbursements incurred by Licensee shall be the sole responsibility of Licensee
and Licensor shall not be obligated for those expenses or disbursements in any
manner whatsoever.
5. Discharge of Responsibilities. Pursuant to the license granted in Section 1
(A) above, Evan Systems shall exercise the Licensed Rights and shall provide
reports and information to Child Watch as herein required. Evan Systems shall
expend all necessary capital toward the development of the Child Watch Network
to fully exploit the rights granted by Child Watch herein, secure all employees,
agents and technical skills necessary therefore and shall be responsible for all
costs and expenses incurred by Evan Systems in the discharge of its obligations
under this Agreement. Child Watch shall be under no obligation to provide any
services or any other acts in regard to this Agreement, other than described
herein. (These expenses should include the costs to operate the digital network
and make all updates required by Child Watch for displaying pictures and info.)
6. Statement and Payments. By the fifteenth (15th) day following the end of each
month, Evan Systems shall furnish full and accurate statements, certified by an
officer of Evan Systems, showing all information relating to the calculation of
Gross Revenue for such month. No Withholding. All payments made by Evan Systems
under this Agreement shall be made free and clear of, and without deduction or
withholding for or on account of, any income, stamp or other taxes, charges,
fees, deductions or withholdings.
7. Audits. Evan Systems shall keep accurate books of account and records
covering all transactions relating to the license granted in this Agreement.
Child Watch and its authorized representatives shall have the right, at all
reasonable times and upon reasonable prior notice, to examine and audit such
books of account and records and all other documents and materials in Evan
Systems possession or under its control (including records of Evan Systems
parents, subsidiaries, affiliates and third parties, if such exist and are
involved in activities which relate to this Agreement) relating to this
Agreement. Child Watch shall have free and full access for such purposes and
shall have the right to make extracts and copies of and from such records and
documents. Should an audit by Child Watch establish a deficiency between the
amount found to be due Child Watch and the amount Evan Systems actually paid or
reported, Evan Systems shall promptly pay the amount of such deficiency. Should
such audit establish a deficiency of more than three percent (3%), Evan Systems
shall also pay for the cost of the audit. All such books of account and records
shall be kept available for at least three (3) years after the expiration or
termination of this Agreement, or five (5) years after the end of the Contract
Year, to which they relate, whichever is longer.
8. Annual Reports. Within ninety (90) days following the end of each Contract
Year of this Agreement, Evan Systems shall deliver to Child Watch a written
statement setting forth the Annual Gross Revenue for such Contract Year,
including sufficient information and detail to confirm the calculation of all
revenue generated from the operation of the Network, which statement shall be
signed and certified as true and correct by an independent certified public
accounting firm chosen by Evan Systems and acceptable to Child Watch, which
acceptance shall not be withheld unreasonably. If this statement discloses that
the amount of Royalty Fees paid during any period to which the report relates
was less than the amount required to be paid or that any other amount is due
Child Watch, Evan Systems shall immediately pay such amounts within 10 days.
9. Licensee shall pay Licensor within 15 days of the end of each month the
Royalty. Payment from Licensee to Licensor shall be included with the written
report described above. All payments will be made in United States dollars, at
the address designated above by Licensor.
10. The provisions of Paragraph 1(a) and (b) notwithstanding, in the event that
Licensee shall default in the terms and conditions of this Agreement on
Licensee's part to be kept, performed and observed, including without limiting
the generality of the foregoing, prompt payment of all royalties and other
obligations incurred under the terms of this Agreement, this Agreement shall be
subject to cancellation by Licensor upon thirty (30) days written notice by
Certified Mail return receipt requested, to Licensee, during which period of
fourteen (14) days Licensee shall have the right to remedy such default. Upon
the remedying of such default the cancellation notice shall have no further
force or effect.
The provisions of Paragraph 1(a) and (b) notwithstanding, in the event that
Licensor shall default in the terms and conditions of this Agreement on
Licensor's part to be kept, performed and observed, including without limiting
the generality of the foregoing, and other obligations incurred under the terms
of this Agreement, this Agreement shall be subject to cancellation by Licensee
upon thirty (30) days written notice by Certified Mail return receipt requested,
to Licensor, during which period of fourteen (14) days Licensor shall have the
right to remedy such default. Upon the remedying of such default the
cancellation notice shall have no further force or effect.
11. Ownership Rights.
(a) Ownership of Technology. Each party shall retain ownership of all their
Technology owned by it as of the Effective Date or first developed or reduced to
practice thereafter by employees or consultants of either party or acquired from
third parties. Further, both parties acknowledge that their Technology is their
sole property, and that this Agreement only grants Licensee limited right to
market and distribute the Product and Service.
(b) Trademark Use During Agreement. During the term of this Agreement, both
parties are authorized to use each others trademarks and logos. Both parties'
uses of the trademarks and logos in connection with the advertisement, promotion
and distribution of Licensee and Licensor products are subject to any and all
restrictions to which either party is subject to. Either party's authorization
to use the other party's trademarks and logos shall at all times be subject to
review and the parties agree that it will alter its use of such trademarks and
logos promptly upon written notification by the other party.
(c) No Rights in Either Parties' Technology, Patents, Trademarks or
Copyrights. Both Parties agree that it will not at any time during or after this
Agreement, with the exception of what is covered in this agreement, assert or
claim any interest to the other's Technology, Products, Service, patent,
trademark, copyright, or any other intellectual property right relating to their
Product, Service or Technology.
(d) The trademarks and trade names under which Licensee markets Licensor
Product and Service are the property of Licensor. This Agreement gives Licensee
no rights therein, except the restricted license to reproduce such trademarks
and trade names in connection with the purposes of this Agreement. Licensee may
not market the Licensor Product and Service under any other or different name
than those specified by Licensor.
(f) Licensee agrees to maintain and respect the trademark, trade name and
copyright notices of any Licensor products and services in connection with its
advertisement and distribution of the Product and Service. Licensee hereby
agrees to include a reference to Licensor in any advertisement for the Licensed
Product and Service. Licensor shall use reasonable commercial efforts to ensure
compliance hereto. Licensee shall not take any action relating to the Licensor
Product and Service that reflects unfavorably on the Licensor or upon Licensor's
good name, goodwill or reputation. Licensee shall include appropriate legal
notices of Licensor trademarks and shall not make any representations or
warranties regarding the Product and Service, except as authorized by Licensor.
12. During the term of this Agreement, Licensee agrees to administer and
maintain xxx.xxxxxxxxxxx.xxx. However, the administration and maintenance of
said website shall in no way be deemed or interpreted to constitute Licensor as
owner of said site. Said website shall at all times be owned by Licensee.
Further, Licensee shall be permitted to utilize and market the Service and
brandname on Licensee's website, but any references to and Service listed on the
website shall be removed when the agreement ends.
13. Both parties agree to use their best efforts to market and promote the
Product and Service and the services of each party during the term of this
Agreement.
14. In the event of termination of this Agreement, whether voluntary or
involuntary, Licensee agrees that Licensee will not, for a period of ninety (90)
days from the effective date of termination, engage in the manufacture, sale or
distribution of the Product and Service similar to the exact items Licensed to
Licensee hereunder. However, any pending sales or outstanding quotes as of the
effective date of termination will be completed by both Licensor and Licensee
and each party shall be entitled to the monies owed under the provisions hereof.
15. It is agreed between the parties hereto that there are no oral or other
agreements or understandings between the parties relating to the selling or
servicing of Product. This agreement supersedes all prior agreements between the
parties and is intended to be a complete and exclusive statement of the full
agreement of the parties.
16. The provisions of this Agreement shall be deemed to obligate, extend to and
inure to the benefit of the successors, assigns, transferees, grantees, and
indemnities of each of the parties to this Agreement.
17. This Agreement and the interpretation and enforcement of the terms of this
Agreement shall be governed under and subject to the laws of the State of
Florida. Jurisdiction for court action, court and authorities in the State of
Florida or the Federal District Court having venue for the State of Florida
should have jurisdiction over all controversies that may arise with respect to
this agreement. Company hereby waives any other venue to which it might be
entitled to by virtue of domicile or otherwise and expressly consents and
acknowledges that the courts and authorities in the State of Florida shall have
jurisdiction.
18. Indemnifications.
(a) By Evan Systems. Evan Systems shall be solely responsible for, and
shall defend, hold harmless and indemnify Child Watch, and its affiliates,
directors, officers, employees and agents (collectively "Child Watch Parties")
against, any claims, demands, causes of action or damages, including attorney's
fees (collectively "Claims") arising out of: (i) any act or omission of Evan
Systems hereunder, (ii) any breach of this Agreement by Evan Systems, (iii) any
breach of the terms of this Agreement by Evan Systems (iv) the manufacture,
distribution, advertisement, marketing, promotion, sale, possession or use of
any Licensed Product or Services including, but not limited to, Claims relating
to any defect (whether obvious or hidden and whether or not present in any
sample approved by Child Watch) in a Licensed Product or in any packaging or
other materials (including advertising or promotional materials), or any
injuries to persons or property, or to Evan Systems failure to comply with any
and all applicable Laws including, without limitation, laws relating to use of
any patent, process, method, or device by Evan Systems in connection with the
Licensed Products; or (vi) any Claim that the use of any design or graphic
component of any Licensed Product violates or infringes upon the trademark,
copyright, patent, trade secret, trade dress or other intellectual property
rights of Child Watch or a third party.
(b) Child Watch. Child Watch shall be solely responsible for, and shall
defend, hold harmless and indemnify Evan Systems, its directors, officers,
employees and agents against any Claims arising out of a claim that the use of a
Licensed Xxxx which is used as authorized by this Agreement violates or
infringes upon the trademark, copyright or other intellectual property rights
(including trade dress) of a third party;
(c) Conditions of Indemnification. As a condition of indemnification under
this Section, the party seeking indemnification (for purposes of this Section
called the "Indemnitee") shall give the other party (for purposes of this
Section called the "Indemnifying Party") prompt written notice of any third
party Claim. The Indemnifying Party shall have the right (but not the
obligation) to assume the defense or settlement of any such Claim at its
expense, by counsel of its choice. If the Indemnifying Party assumes such
defense, the Indemnitee shall cooperate fully with and assist the Indemnifying
Party in defense of the Claim and the Indemnifying Party shall reimburse the
Indemnitee for all reasonable out-of-pocket expenses actually incurred by the
Indemnitee in connection with such cooperation and assistance. The Indemnifying
Party shall not enter into a settlement of such Claim or admit liability or
fault without the Indemnitee's prior written approval.
(d) Insurance. Evan Systems shall obtain and maintain, at its sole expense,
product liability insurance and comprehensive general liability insurance
providing protection for Child Watch and its Affiliates, as additional insured's
on Evan Systems insurance policies or otherwise, against any Claims arising out
of this Agreement, including without limitation, any alleged defects in the
Licensed Products or Services or any use of the Licensed Products or Services,
in an amount of no less than two million dollars combined single limit or bodily
injuries and/or property damage without any deductible, uninsured amount. Such
insurance shall be carried by an insurer with a rating by A.M. Best & Co. of A-7
or other rating satisfactory to Child Watch. Such insurance policy shall also
provide that Child Watch receive written notice within thirty (30) days prior to
the effective date of the cancellation, non-renewal or any material change in
coverage. Evan Systems shall deliver to Child Watch a certificate of such
insurance evidencing satisfactory coverage prior to conducting its first
installation. Such insurance obligations shall not limit Evan Systems indemnity
obligations, except to the extent that Evan Systems insurance company actually
pays Child Watch amounts which Evan Systems would otherwise be obligated to pay
Child Watch.
19. Nondisclosure and Confidentiality Requirements.
(a) Nondisclosure Requirements. During the Term of this Agreement, either
Child Watch or XXXXX SYSTEMS (the "Provider") may provide Confidential
Information to the other party (the "Recipient"). The Recipient shall not
publish, reproduce, disclose or release the Confidential Information of the
Provider, in whole or in part, to any third party (including without limitation
to any contractor, agent, government agency, or customer) without the prior
written consent of the Provider in its sole discretion. Notwithstanding anything
stated to the contrary, the Recipient may publish such information to its
accountants, auditors and pursuant to any appropriate and required court or
administrative order. The Recipient shall not disclose Confidential Information
to any subsidiary or other Affiliate of the Recipient unless that company has a
need to know and agrees to be bound by the provisions of this Agreement.
(b) Degree of Care. The Recipient shall employ at least the same degree of
care in protecting the Confidential Information as it employs in protecting its
own Confidential Information, but not less than a reasonable degree of care.
Without limiting the foregoing, the Recipient shall not copy any Confidential
Information, except as may be required to perform its duties under this
Agreement, and shall store the Confidential Information in a secure place. The
Recipient shall ensure that Confidential Information is disclosed only to those
of its employees or third parties who require access to such information and who
have been advised of the confidentiality provisions of this Agreement.
(c) Use and Ownership of Confidential Information. The Recipient may
receive and use Confidential Information pursuant to this Agreement solely for
the purposes of this: Agreement. The Recipient shall not use the Confidential
Information for the benefit of third parties. The Recipient understands and
acknowledges that the Provider has a proprietary interest in and shall retain
all rights to and ownership of Confidential Information. Upon request by the
Provider, or upon the termination or expiration of this Agreement, Recipient
will return to Provider all Confidential Information, including all copies,
derivatives, or summaries thereof.
20. Goodwill. XXXXX SYSTEMS and Child Watch recognize that (i) a portion of the
value of the Licensed Marks is attributable to goodwill, (ii) the goodwill
attached to the Licensed Marks belongs exclusively to Child Watch, and (iii)
that the Licensed Marks have secondary meanings in the minds of the public.
21. Ownership and Protection of Rights.
(a) Unauthorized Activities. XXXXX SYSTEMS shall promptly notify Child
Watch in writing of any potential infringement of the Intellectual Property, and
of the existence or sale of any Unauthorized Goods which comes to XXXXX
SYSTEMS's attention. Child Watch shall have the sole right to determine whether
or not any action shall be taken on account of any such infringement. XXXXX
SYSTEMS agrees not to contact any third party, not to make any demands for
claims and not to institute any suit or action on account of any infringement of
Child Watch's rights or the Licensed Marks without obtaining the express prior
written permission of Child Watch in each instance.
(b) Assistance in Protecting Marks. XXXXX SYSTEMS shall cooperate to the
fullest extent necessary to assist Child Watch in the protection of the Licensed
Rights in the Territory in and to the Intellectual Property, including, without
limitation, being named by Child Watch as a complainant in any action brought
within the Territory against an infringer, and shall protect the rights of XXXXX
SYSTEMS in the Territory in and to the Intellectual Property. Child Watch and
XXXXX SYSTEMS shall share equally in the costs of protecting the rights of Child
Watch in and to the Licensed Marks and all intellectual property rights in, to
or arising from the Licensed Rights and/or Branded Merchandise.
If XXXXX SYSTEMS becomes aware of any infringement of any Licensed
Marks that are not included in the Intellectual Property, it will use reasonable
efforts to advise Child Watch of such infringement and, at Child Watch's
request, shall provide reasonable cooperation and assistance to Child Watch in
Child Watch's protection of those other Child Watch Marks.
(c) Ownership of Marks. XXXXX SYSTEMS acknowledges that Child Watch is the
exclusive owner of all right, title, and interest in and to the Child Watch
Licensed Marks (as described in this agreement) and is also the owner of the
goodwill attached or which shall become attached to the Licensed Marks in
connection with the business and goods in relation to which the same has been,
is or shall be used. Sales of Child Watch Branded Merchandise by XXXXX SYSTEMS
shall be deemed to have been made by Child Watch for purposes of trademark
registration or the accrual of common law trademark rights in and to the Child
Watch Licensed Marks and any use of the Child Watch Licensed Marks by XXXXX
SYSTEMS shall inure to the benefit of Child Watch XXXXX SYSTEMS shall not at any
time, knowingly do or suffer to be done any act or thing which may in any way
adversely affect any rights of Child Watch in and to any of the Child Watch
Licensed Marks or any registration thereof or which, directly or indirectly, may
reduce the value of the Child Watch Licensed Marks or detract from Child Watch's
reputation. XXXXX SYSTEMS shall not, at any time, do or suffer to be done any
act or thing which may in any way adversely affect any rights of Child Watch in
and to any Child Watch Licensed Xxxx or any registration thereof or which,
directly or indirectly, may reduce the value of the Child Watch Licensed Marks.
Any intellectual property rights in the Child Watch Licensed Marks which may
arise out of their use with the Licensed Rights and Branded Merchandise and any
associated goodwill which may accrue to XXXXX SYSTEMS shall inure for the
benefit of Child Watch.
(d) Trade Dress. With respect to any legally protectible configuration,
design, and trade dress of the Licensed Rights and/or Branded Merchandise (the
"Product Trade Dress") developed in conjunction with the terms of this
Agreement, XXXXX SYSTEMS acknowledges that Child Watch is the exclusive owner of
all right, title and interest in and to the Product Trade Dress, together with
all the goodwill attached thereto. Sales of services and Branded Merchandise in
the exercise of the Licensed Rights by XXXXX SYSTEMS shall be deemed to have
been made by Child Watch solely for purposes of accrual of rights in the
Licensed Marks. Section 1 notwithstanding, nothing herein shall prevent Child
Watch, upon the termination or expiration of this Agreement, from using the
Licensed Marks in connection with products similar or identical to the Licensed
Services and/or Branded Merchandise.
(e) Document Records. At Child Watch's request, XXXXX SYSTEMS shall execute
any documents reasonably required by Child Watch to confirm (i) Child Watch's
ownership of all rights in and to the Licensed Marks and (ii) the respective
rights of Child Watch and XXXXX SYSTEMS pursuant to this Agreement. XXXXX
SYSTEMS shall cooperate with Child Watch in connection with the filing and
prosecution by Child Watch of (i) applications in Child Watch's name to register
the Licensed Marks and the maintenance or renewal of such registrations as may
issue; and (ii) such applications, agreements, or other documents as may be
necessary to register XXXXX SYSTEMS as a permitted or registered user of the
Licensed Marks or is required to record this Agreement.
(f) Markings; Notices. XXXXX SYSTEMS shall use all marks, trade dress, and
copyrights arising out of this Agreement strictly in compliance with the legal
rights obtaining therein and shall use such markings in connection therewith as
may be required by applicable law. Without limitation to the foregoing, Child
Watch may from time-to-time designate such copyright, trademark or service xxxx
notices (including the form, location and content of such notices) that XXXXX
SYSTEMS shall cause to appear on the Branded Merchandise and that XXXXX SYSTEMS
shall cause to appear on or within each Licensed Product.
(g) Cross-Licensing; Co-Branding. XXXXX SYSTEMS shall not cross-license or
otherwise use any other licensed properties or marks with the Licensed Services,
Branded Merchandise, Product Trade Dress, Product Copyrights, or Licensed Marks
without first obtaining Child Watch's written approval.
(h) Derivative Marks. XXXXX SYSTEMS shall not during the Term, (i) use any
form of the Licensed Marks or any logos or designs relating thereto except in
the form and as expressly provided in this Agreement; or, during or after the
Term, (ii) use any trademarks, trade names, service marks, logos or designs
confusingly similar to the Licensed Marks.
22. Compliance with Standards.
(a) Unauthorized Goods. XXXXX SYSTEMS understands and acknowledges the
meanings of "Unauthorized Goods or Services" as used in this Agreement and XXXXX
SYSTEMS shall use all commercially reasonable means to prevent the creation of
any such goods by its employees, agents, representatives or any others operating
under its direction, supervision or control and involving the Child Watch Marks.
(b) Compliance with Laws: Governmental Approvals. XXXXX SYSTEMS shall at
all times conduct all aspects of its business in a reasonable and professional
manner and in compliance with all applicable Laws and highest standard of
business ethics then prevailing in the industry. It shall be XXXXX SYSTEMS's
sole responsibility, at its sole expense, to obtain all approvals (including,
but not limited to, approvals of advertising materials) of all Governmental
Authorities which maybe necessary in connection with XXXXX SYSTEMS's performance
under this Agreement. Child Watch's approval of any promotional or advertising
materials shall not imply a representation or belief that Child Watch believes
such materials are sufficient to meet applicable Laws, nor shall it imply that
Child Watch agrees with or supports any claims made by XXXXX SYSTEMS in any
advertising materials relating to the Licensed Services or Branded Merchandise.
(c) Customer Complaints. Both parties agree that if either party receives
any written customer complaints and/or comments with respect to the Licensed
Services and/or Branded Merchandise that party will forward the complaints
and/or comments to the other party within ten (10) days of receipt. Each party
shall provide the other with copies of all written responses to complaints.
XXXXX SYSTEMS shall not make any warranties or representations related to the
Licensed Services and/or Branded Merchandise or establish any return or exchange
policy without submitting in writing to Child Watch the proposed language of the
such warranty, policy or representation and obtaining the prior written approval
of Child Watch, in its sole discretion.
23. Termination.
(a) Child Watch Termination Events. Without prejudice to any other rights
Child Watch may have pursuant to this Agreement or otherwise, Child Watch shall
have the right to terminate this Agreement at any time if:
XXXXX SYSTEMS fails to pay the Royalty when due.
XXXXX SYSTEMS fails to timely remit a payment when due and shall fail
to cure such non-payment within thirty (30) days of its receipt of written
notice from Child Watch.
XXXXX SYSTEMS institutes voluntary proceedings in bankruptcy or permits
the institution of such proceedings against it.
XXXXX SYSTEMS shall fail to perform any term or undertaking in this
Agreement, the failure of which shall have a material adverse effect on Child
Watch, unless XXXXX SYSTEMS has promptly commenced and continues diligent
efforts to remedy the default within thirty (30) days following written notice
thereof XXXXX SYSTEMS commits any act or omission resulting in fraud, willful
misconduct or gross negligence.
In CHILD WATCH's reasonable good faith discretion, CHILD WATCH
determines that XXXXX SYSTEMS, undermines the integrity or otherwise xxxxx CHILD
WATCH by any act or agreement not previously approved by CHILD WATCH, CHILD
WATCH may terminate this agreement upon thirty (30) days written notice to XXXXX
SYSTEMS. If during such thirty day notice period, XXXXX SYSTEMS cures the harm
on Child Watch and its brands (in CHILD WATCH's reasonable good faith
discretion), Child Watch shall rescind the termination notice.
A termination pursuant to this Subsection 21 shall take effect (i)
thirty (30) days after written notice of such failure to perform, default or
breach is sent by Child Watch if such failure to perform, default or breach can
be Completely Cured (as defined below) and such failure to perform, default or
breach has not been Completely Cured during such thirty (30) day period, or (ii)
immediately after written notice of such failure to perform, default or breach
is sent by Child Watch if such failure to perform, default or breach cannot be
Completely Cured. For purposes of this paragraph, "Completely Cured" means that
such failure to perform, default or breach is cured so that, in the reasonable
judgment of Child Watch, such failure to perform, default or breach will have
had no effect on or caused no damage to Child Watch.
(b) XXXXX SYSTEMS Termination Events. Without prejudice to any other rights
XXXXX SYSTEMS may have pursuant to this Agreement or otherwise, XXXXX SYSTEMS
shall have the right to terminate this Agreement at any time if:
(1) Child Watch shall be in breach of any material term or condition of
this Agreement. A termination pursuant to this clause shall take effect (i)
thirty (30) days after written notice of such failure to perform or breach is
sent by XXXXX SYSTEMS if such failure to perform or breach can be Completely
Cured (as defined below) and such failure to perform or breach has not been
Completely Cured during such thirty (30) day period, or (ii) immediately after
written notice of such failure to perform or breach is sent by XXXXX SYSTEMS if
such failure to perform or breach cannot be Completely Cured. For purposes of
this paragraph, "Completely Cured" means that such failure to perform or breach
is cured so that, in the reasonable judgment of XXXXX SYSTEMS, such failure to
perform or breach will have had no effect on or caused no damage to XXXXX
SYSTEMS.
(c) Rights upon Termination. On any termination or expiration of this
Agreement XXXXX SYSTEMS shall immediately pay to Child Watch all amounts due and
owing hereunder, including but not limited to all Minimum Guarantees, as
prorated to the effective date of termination not already paid by XXXXX SYSTEMS.
XXXXX SYSTEMS will be deemed to have automatically and irrevocably
assigned, transferred, and conveyed to Child Watch any rights, equities, good
will, titles or other rights in and to the Licensed Marks developed during the
Term which may have been obtained by XXXXX SYSTEMS or which may have vested in
XXXXX SYSTEMS in pursuance of any endeavors covered hereby, and XXXXX SYSTEMS
will execute any instruments requested by Child Watch to accomplish or confirm
the foregoing. Any such assignment, transfer or conveyance shall be without
other consideration than the mutual covenants and considerations of this
Agreement.
XXXXX SYSTEMS shall immediately discontinue the use of all Child Watch
Branded Merchandise, Licensed Services and Licensed Marks, including
advertising, promotional materials, packaging and other objects bearing any
Licensed Marks. XXXXX SYSTEMS shall have the right to sell the remaining
Licensed Article(s) within the licensed territory for a period of one hundred
and eighty (180) days following expiration of the License Term ("Sell-off
Period) provided that: (i) the provisions of this Agreement, including those
concerning the calculation and payment of Royalties, shall remain in force and
effect during the Sell-off Period, (ii) within sixty (60) days from the
expiration of the Sell-off Period, XXXXX SYSTEMS shall furnish to Child Watch a
statement showing the quantity, type, class, category, sku number and condition
of Licensed Article(s) and/or Advertising and Promotion materials then on hand
or held for XXXXX SYSTEMS's inventory ("Final Inventory").
(d) Child Watch may immediately license others to use the Child Watch
Licensed Marks to produce, sell, market and advertise products or services
similar or identical to the Licensed Products or Services by any means and
methods throughout the Territory.
24. Wherever the context so requires, the singular number shall include the
plural and the plural shall include the singular.
25. If any provision of this Agreement is held to be illegal or invalid by a
court of competent jurisdiction, such provision shall be deemed to be severed
and deleted and neither such provision, nor its severance and deletion, shall
affect the validity of the remaining provisions.
26. Neither Company, nor Consultant, shall have the right to assign or delegate
this Agreement or any rights or obligations created hereby unless the
non-assigning party expressly approves the assignment in writing.
27. All notices must be in writing and sent to the appropriate address listed
above, or to such other address as either party may designate in writing, by
first class mail and either certified mail return receipt requested or overnight
courier service. In the case of certified mail notice shall be deemed given as
of the date of deposit with the United States Postal Service, and in case of
overnight courier service notice shall be deemed given as of the date of deposit
with such overnight courier service.
28. All documentation and information which is designated by the Delivering
Party (herein so called) as proprietary or confidential, including without
limitation drawings, Source Code, computer program listings, techniques,
algorithms and processes and technical and marketing information ("Confidential
Information") which is supplied by the Delivering Party to the Receiving Party
(herein so called) in connection with this Agreement (other than documentation
and information intended for distribution to third parties) shall be treated
confidentially by the Receiving Party and its employees and shall not be
disclosed by the Receiving Party without the Delivering Party's prior written
consent. Information shall not be considered to be Confidential Information if
it (1) is already or otherwise becomes publicly known through no act of the
Receiving Party; (2) is lawfully received from third parties subject to no
restriction of confidentiality; (3) can be shown by the Receiving Party to have
been independently developed by it prior to such disclosure; or (4) is lawfully
required to be disclosed to any governmental agency or is otherwise required to
be disclosed by law or by court or administrative order, provided that the
Receiving Party shall send notice of such proposed disclosure to the Delivering
Party and shall allow the Delivering Party to seek a protective order or take
other reasonable steps to protect the confidentiality thereof. The Receiving
Party agrees to protect the Confidential Information of the Delivering Party
with the same standard of care and procedures which it uses to protect its own
trade secrets and proprietary information. The Receiving Party agrees to be
responsible for its directors, officers, employees, contractors and consultants
maintaining the confidentiality of the Confidential Information in accordance
with the terms of this Section. Notwithstanding any provision of this Agreement
to the contrary, the Receiving Party may only use the Confidential Information
of the Delivering Party in order to perform its obligations under or in
connection with this Agreement unless otherwise authorized by the Receiving
Party.
29. Liable.
(a) In no event shall Licensee be liable for any loss of profits, loss of
business, loss of use or of data, interruption of business, or for indirect,
special, incidental or consequential damages of any kind whether under this
Agreement or otherwise, even if Licensee has been advised of the possibility of
such damages, or for any claim against Licensor by any other party. In no case
will Licensee be liable for any representation or warranty made to any third
party by Licensor.
(b) In no event shall Licensor be liable for any loss of profits, loss of
business, loss of use or of data, interruption of business, or for indirect,
special, incidental or consequential damages of any kind whether under this
Agreement or otherwise, even if Licensor has been advised of the possibility of
such damages, or for any claim against Licensee by any other party. In no case
will Licensor be liable for any representation or warranty made to any third
party by Licensee.
(c) Notwithstanding anything in this Agreement to the contrary, either
party's entire liability to the other party for damages concerning performance
or nonperformance by the other party or in any way related to the subject matter
of this Agreement and regardless of whether the claim for such damages is based
in contract or in tort, shall not exceed the amount of the payments made
hereunder by either party to the other party in the six months prior to such
claim.
(d) Notwithstanding the above, each party shall be responsible to the other
for any and all damages of any kind in an award or settlement of (a) a breach of
the confidentiality provisions of this Agreement. The limitations in this
Section shall apply notwithstanding any failure of essential purpose of any
limited remedy.
In witness hereof, the parties have executed this Agreement the date first above
written.
Licensor:
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Child Watch of North America, Inc.
By:
Licensee:
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Xxxxx Systems, Inc.
By: Xxxxx Xxxxx, President
