TECHNOLOGY LICENSE AGREEMENT
This Technology License Agreement ("AGREEMENT") is made and entered into as of
the 19th day of October, 2000, between Applied Digital Solutions, Inc., a
Missouri corporation ("ADS") and MCY Music World, Inc., a Delaware corporation
("MCY").
In consideration of the mutual covenants and conditions contained in this
Agreement, the parties agree as follows:
1. LICENSE.
1.1 ADS hereby grants to MCY a perpetual (unless terminated as set forth
herein), non-exclusive, nontransferable, worldwide, paid-up license,
subject to the terms and conditions of this Agreement, to use all
proprietary software of ADS relating to ADS's Net-Vu(TM) software (the
"LICENSED MATERIALS").
1.2 The license granted to MCY hereunder shall entitle MCY to use the
Licensed Materials solely in connection with any entertainment or
sports activity.For purposes of this Agreement, any "ENTERTAINMENT OR
SPORTS ACTIVITY" shall mean any activity, business or enterprise
related to music, theatre, film, dance or other performing arts; any
type of gaming; interactive or video games or other form of
entertainment; books and magazines (including in either printed or
electronic form); any type of sporting event, (whether as a spectator
or participant); and any other leisure activity regardless of the
medium or mode of communication or distribution, whether now in
existence or hereafter created or conceived, including but not limited
to, live performances, print media, television, cable television,
audio, radio, satellite, compact disks, video disks, the Internet or
other electronic or digital platform or means of distribution.
1.3 Any computer programs included as part of the Licensed Materials shall
be provided in both source code and object code form, and MCY shall
have the right to receive related technical documentation for any such
software. The license granted hereunder shall entitle MCY to receive
any new releases, or other modifications or alterations to any of the
Licensed Materials, made at any time after delivery by ADS to MCY
hereunder and offered by ADS to its customers generally, where any such
releases or other modifications are not priced by ADS as separate new
products or options. MCY acknowledges that it shall be responsible for
making all necessary arrangements at its own expense for obtaining any
other modifications or alterations to the Licensed Materials or for
obtaining other products to be used with the Licensed Materials, that
may be necessary to ensure that the Licensed Materials have any
features or meet any standards that may be required by MCY or that are
required by MCY to enable it to use the Licensed Materials for the
purposes intended by MCY. Any modifications or alterations made solely
by or on behalf of MCY to any of the Licensed Materials supplied by ADS
shall belong to MCY, but shall be subject to the restrictions and
conditions set out in this Agreement.
1 of 11
1.4 MCY shall be entitled pursuant to the license granted hereunder to use
the Licensed Materials solely for its internal use and not to
sublicense the Licensed Materials to others, provided, however, that
MCY shall be entitled to grant sublicense for any plug-in or
downloadable module that any end user requires for access to or
interaction with any MCY platform on which the Licensed Materials are
installed. Except as otherwise expressly stated in this Agreement, MCY
shall not be entitled to rent, lease, loan or otherwise transfer or
grant any rights in or to the Licensed Materials to any other person,
and MCY shall not disassemble, decompile or reverse engineer the
Licensed Materials. MCY shall not use any of the Licensed Materials in
any way not expressly provided for in this Agreement. MCY acknowledges
that there are no implied licenses and that MCY shall not use the
Licensed Materials in any manner that would exceed the scope of the
license granted herein.
1.5 MCY shall not reproduce, duplicate, copy, sell, or otherwise disclose,
or disseminate the Licensed Materials, including operating
instructions, user manuals, and training materials, in any medium
except as authorized herein. MCY may make copies of the Licensed
Materials, in machine readable form, only as is reasonably necessary
for its use of the Licensed Materials as permitted herein and for
archival, testing and backup purposes.
1.6 The right to use the Licensed Materials granted to MCY hereunder shall
include use of the Licensed Materials by any Affiliate (as hereinafter
defined) of MCY and any successor of any Affiliate. For purposes of
this Agreement, "AFFILIATE" means any entity or person which, directly
or indirectly, controls, is controlled by or is under common control
with MCY. MCY shall cause any Affiliate or successor to comply with the
terms and conditions of this Agreement in the same manner as MCY, and
shall indemnify ADS for any loss, damage or expense incurred by ADS as
a result of any non-compliance with this Agreement by any Affiliate or
successor.
1.7 Except as expressly provided herein, the license granted to MCY with
respect to the Licensed Materials does not include the right to grant
sublicenses to any portion of the Licensed Materials without the prior
written authorization of ADS, which authorization may be withheld by
ADS at its sole discretion. In each case in which MCY is authorized
under this Agreement to grant such sublicenses, or in which ADS
expressly permits MCY to grant any such sublicenses, MCY shall require
each sublicensee, before it may use or install the sublicensed portion
of the Licensed Materials, to execute a written license agreement in
form and substance that is approved by ADS, and that at a minimum
contains the same restrictions and conditions that are applicable to
the use of the Licensed Materials by MCY, as set forth hereunder. MCY
shall indemnify ADS for all losses, costs, damages, expenses, and
liabilities caused by a sublicensee's failure to honor the terms of
such sublicense, or by MCY's failure to include the required terms in
its sublicense agreements with its sublicensees.
2 of 11
2. PAYMENT, PRICES.
2.1 In consideration of the rights and licenses granted by ADS to MCY
hereunder, MCY shall pay ADS a one-time license fee of U.S. $10,000,000
(the "LICENSE FEE"). The License Fee shall be paid in cash in the
amount of $9,000,000, and in shares of the common stock of MCY having a
value of $1,000,000, all in accordance with a certain agreement
entitled the "ADS Agreement" made between MCY, XXX.xxx, Inc. and ADS
dated even date herewith (the "ADS AGREEMENT").
2.2 The License Fee is exclusive of any federal, state, municipal, or other
governmental taxes, duties, fees, excises, or tariffs now or hereafter
imposed in connection with the production, storage, licensing, sale,
transportation, import, export, use or modification of the Licensed
Materials, or otherwise arising out of or in connection with this
Agreement. MCY shall be responsible for, and where ADS is required to
collect any such amounts, shall reimburse ADS for, all such taxes,
duties, fees, excises, or tariffs, but MCY shall not be liable for any
governmental or local taxes imposed on ADS's corporate income.
3. DELIVERY OF LICENSED MATERIALS
3.1 ADS shall deliver to MCY the Licensed Materials promptly upon the
execution hereof by MCY. All deliveries will be made to MCY at the
address of MCY set forth in this Agreement. MCY acknowledges that the
Licensed Materials may be provided in printed and/or electronic form.
3.2 MCY acknowledges that the Licensed Materials do not include any
software, specifications, designs, documentation or any other products
belonging to any third party, other than such as may be licensed to ADS
and that ADS is entitled to sublicense to MCY as part of the Licensed
Materials, and MCY shall be responsible at its own expense for
obtaining directly from any third party such licenses or other rights
to any software or other third party products that MCY will require
from time to time for use in conjunction with any of the Licensed
Materials and for installing configuring, maintaining and using any
such products. ADS does not warrant which software products that MCY
will require in order to use the Licensed Materials for its intended
purposes, nor does ADS make any representation or warranty to MCY as to
the availability or prices of any software or other products that MCY
will require for use with the Licensed Materials, provided, however,
that upon request by MCY and at MCY's expense, ADS will provide
reasonable information to assist MCY in obtaining such products. MCY
also acknowledges that it will be responsible at its own expense for
selecting, procuring, configuring and maintaining any hardware products
that will be required by MCY for use with the Licensed Materials,
provided that upon request by MCY and at MCY's expense, ADS will
provide reasonable information to assist MCY in selecting and
configuring hardware products to be used with the Licensed Materials.
4. SERVICES FOR MAINTENANCE AND/OR MODIFICATION OF LICENSED MATERIALS.
3 of 11
4.1 Except as provided in Section 1.3, ADS shall not be responsible for
providing or causing to provide any services or performing any work
that may be requested or required by MCY with respect to the use,
maintenance, support, modification, enhancement or alteration of any of
the Licensed Materials. MCY acknowledges that its ability to use any
software or any other components of the Licensed Materials for its
intended purposes may require MCY to enter into agreements with ADS or
the developers of the applicable components of the Licensed Materials,
or with other third parties, including agreements for the support and
maintenance of any software products forming part of the Licensed
Materials. MCY shall be solely responsible for entering into such
agreements or otherwise making any such arrangements, and for paying
any fees required in connection therewith.
5. TITLE TO LICENSED MATERIALS.
5.1 MCY acknowledges that ADS or its licensors own all right, title and
interest, including all copyright, patent rights, trademark rights,
trade secret rights and all other intellectual property rights, in and
to the Licensed Materials.
5.2 MCY shall include in any copies of the Licensed Materials or associated
documentation made by MCY, including any copies of any modified or
altered versions of the Licensed Materials made by MCY, such copyright
or other proprietary rights notices as may be contained on the copies
of the Licensed Materials originally provided by ADS to MCY, or as may
be reasonably requested by ADS from time to time.
6. WARRANTY.
6.1 ADS does not provide any representation or warranty that the Licensed
Materials will have any features or meet any standards that may be
requested by MCY, or will otherwise meet MCY's requirements.
6.2 ADS represents and warrants to MCY that it is the owner of the Licensed
Materials or otherwise has the right to grant to MCY the licenses set
forth in this Agreement without violating any rights of any third
party, and that there is currently no actual or threatened suit or
claim by any such third party based on an alleged violation of such
right by ADS provided, however, that MCY's sole and exclusive remedy,
and ADS's sole and exclusive obligation to MCY, for breach of this
warranty shall be to provide the Intellectual Property Indemnification
set forth in Section 8 below.
6.3 THE WARRANTIES CONTAINED IN THIS SECTION 6 ARE IN LIEU OF ALL OTHER
WARRANTIES AND CONDITIONS, EXPRESSED OR IMPLIED, AND ADS EXPRESSLY
DISCLAIMS ANY IMPLIED WARRANTIES OR CONDITIONS OF MERCHANTABILITY,
FITNESS FOR A PARTICULAR PURPOSE, TITLE, OR
4 of 11
NON-INFRINGEMENT WITH RESPECT TO THE LICENSED MATERIALS OR THE
PERFORMANCE OF ANY OBLIGATIONS HEREUNDER.
7. LIMITATION OF LIABILITY.
7.1 ADS's aggregate liability to ADS under this Agreement or for any other
reason relating to the products and services provided under this
Agreement, including claims for contribution or indemnity, and whether
the claim is in contract, breach of warranty, strict liability, tort
(including negligence) or otherwise, shall be limited to not more than
$250,000. NEITHER PARTY SHALL BE LIABLE TO THE OTHER FOR SPECIAL,
INCIDENTAL, OR CONSEQUENTIAL DAMAGES, INCLUDING BUT NOT LIMITED TO
DAMAGES FOR LOST PROFITS OR LOSS OF USE, OR FOR ANY LOSS OF DATA, FOR
ANY CLAIM ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT, EVEN IF
THE PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.
8. INTELLECTUAL PROPERTY RIGHTS INDEMNITY.
8.1 If notified promptly in writing of any action brought against MCY based
on a claim that the Licensed Materials infringe any valid United States
patent, copyright, trademark or trade secret of a third party, ADS
shall indemnify, defend and hold harmless MCY and its officers,
directors and employees against such action at ADS's expense and pay
all damages finally awarded in such action or settlement and any
expenses (including reasonable attorneys' fees) which are attributable
to such claim. ADS shall have sole control of the defense of any such
action and all negotiations for its settlement or compromise. MCY shall
cooperate reasonably with ADS in the defense, settlement or compromise
of any such action. Such cooperation shall be at ADS's expense. In the
event that a final injunction is obtained against MCY's use of the
Licensed Materials, or if ADS reasonably believes that MCY's use of the
Licensed Materials could be so enjoined, or if in ADS's opinion any of
the Licensed Materials is likely to become the subject of a successful
claim of such infringement, ADS shall, at its expense, (i) procure for
MCY the right to continue using the Licensed Materials as provided in
this Agreement, (ii) replace or modify the Licensed Materials so that
they become non-infringing (so long as the functionality of the
Licensed Materials is essentially unchanged) or, in the event neither
of the previous two options can be effected by ADS, (iii) terminate
this Agreement with respect to the applicable portion of the Licensed
Materials and the rights granted hereunder, and refund to MCY a
reasonable amount on account of that portion of the License Fee paid to
ADS for the applicable portion of the Licensed Materials. This Section
states ADS's entire liability and MCY's exclusive remedy for
infringement.
8.2 Notwithstanding the foregoing, ADS shall have no liability to MCY under
this Section 8 to the extent that any infringement or claim thereof is
based upon (i) the operation or use of any of the Licensed Materials in
combination with any equipment or software not
5 of 11
supplied by ADS where the Licensed Materials would not itself be
infringing, (ii) compliance with designs, specifications or
instructions provided by MCY, (iii) use of any of Licensed Materials in
an application or environment for which it was not designed or (iv)
modifications of any of the Licensed Materials by anyone other than ADS
where the unmodified version of the Licensed Materials would not be
infringing.
8.3 THE FOREGOING INDEMNIFICATION PROVISIONS STATE THE ENTIRE LIABILITY OF
ADS WITH RESPECT TO INFRINGEMENT OR ALLEGED INFRINGEMENT OF PATENTS,
COPYRIGHTS, TRADEMARKS, TRADE SECRETS AND OTHER INTELLECTUAL OR
PROPRIETARY RIGHTS BY THE LICENSED MATERIALS OR THEIR USE.
9. CONFIDENTIALITY AND NONDISCLOSURE.
9.1 Each party may have access to Confidential Information (as defined
below) of the other party (the "DISCLOSING PARTY"), during the term of
this Agreement. Each party agrees that it will not use or disclose to
any third party any Confidential Information except as permitted by
this Agreement or as authorized by the Disclosing Party's prior written
consent. Each party that is a recipient of Confidential Information
(the "RECIPIENT") shall employ the same degree of care in preventing
the disclosure of the Confidential Information to a third party (or
parties) as it uses with regard to its own confidential information of
similar importance, provided that in no event shall the Recipient
employ less than a reasonable degree of care. The Recipient shall
disclose Confidential Information only to those of its employees who
have a need to know the Confidential Information for purposes of
performing or exercising rights granted under this Agreement and shall
not use the Confidential Information of the other except for purposes
of performing or exercising rights granted under this Agreement. The
Recipient may disclose Confidential Information to regulatory
authorities with jurisdiction over the Recipient provided it gives the
other party prior notice of such disclosure. Neither party will use the
other party's name or otherwise refer to the other party in any written
materials without the prior written consent of the other party in each
instance.
9.2 For purposes of this Agreement, "CONFIDENTIAL INFORMATION" means
non-public information. Confidential Information may include (but is
not limited to) business methods, data, information, records, plans,
and concepts. MCY agrees to treat the Licensed Materials as ADS's
Confidential Information. Confidential Information does not include
information that: (i) is or becomes publicly available through no act
or omission of the Recipient of the Confidential Information; (ii) is
intentionally disclosed to a third party by the party owning the
Confidential Information without restrictions on disclosure; (iii) is
rightfully acquired by the Recipient from a third party not under a
confidentiality restriction; (iv) is independently developed, which
independent development can be shown by written evidence; or (v) is
required to be disclosed under operation of law or court order.
6 of 11
9.3 On ADS's reasonable request, MCY will furnish ADS with a written
statement, certified by an officer of MCY, confirming that the Licensed
Materials are being used by MCY in accordance with this Agreement.
10. AUDIT RIGHTS.
10.1 At ADS's request, MCY shall provide ADS with a report detailing its use
of the Licensed Materials. Upon reasonable notice provided by ADS to
MCY, ADS may audit MCY's records to ensure compliance by MCY with this
Agreement. Any such audit will be conducted during regular business
hours at MCY's offices, shall not interfere unreasonably with MCY's
business activities and shall be subject to the confidentiality
provisions of this Agreement.
11. TERM/TERMINATION.
11.1 This Agreement is effective as at the date set forth above, and
continues until terminated as provided herein, or by agreement of both
parties. Either ADS or MCY may terminate this Agreement if the other
party is in material breach of any material obligation under this
Agreement (including the obligation to pay amounts due hereunder) and
fails to cure such nonperformance within thirty (30) days following
written notice of such failure. This Agreement may also be terminated
in the manner and on the terms set out in section 3 of the Escrow
Agreement (the "Escrow Agreement") which is incorporated in and forms
part of the ADS Agreement, in which case the rights and obligations of
the parties upon termination shall be as set forth in the Escrow
Agreement.
11.2 Upon termination of this Agreement for any of the above reasons, all
licenses granted hereunder shall terminate and if the Licensed
Materials have not been delivered to MCY at the time of termination,
ADS shall have no obligation to effect such delivery and if the
Licensed Materials have been delivered, MCY will immediately destroy
the Licensed Materials and all copies in any form,provided, however,
that except in the case of termination in accordance with the Escrow
Agreement, if MCY has paid all amounts owing to ADS as of the
termination date, and MCY is in compliance with and remains subject to
the provisions of Articles 1, 5 , 6, 7, 8, 9, 10, and 12, the licenses
granted hereunder shall survive following the termination of this
Agreement. However, ADS may terminate MCY's use of any of the Licensed
Materials upon a material breach of any of the surviving sections.
12. GENERAL.
12.1 WAIVER/AMENDMENT. No waiver, amendment, or modification of any
provision of this Agreement shall be effective unless in writing and
signed by the party against whom such waiver, amendment, or
modification is sought to be enforced. No failure or delay by either
party in exercising any right, power or remedy under this Agreement,
except as
7 of 11
specifically provided herein, shall be deemed as a waiver of any such
right, power, or remedy.
12.2 ASSIGNMENT. Either party may assign this Agreement to an entity
acquiring substantially all of its assets or merging with it, provided
that such assignee agree in writing to assume all obligations under
this Agreement. Except as set forth above, neither party may assign any
of its rights or delegate any of its obligations under this Agreement
to any third party without the express written consent of the other.
Any attempted assignment in violation of the foregoing shall be void
and of no effect. Subject to the above, this Agreement shall be binding
upon and inure to the benefit of the successors and assigns of the
parties hereto.
12.3 GOVERNING LAW. The rights of the parties hereunder shall be governed by
the laws of the State of Florida without giving effect to principles of
conflicts of laws. The parties expressly exclude the application of the
United Nations Convention on Contracts for the International Sale of
Goods, if applicable. The parties hereby submit to the exclusive
jurisdiction of the federal or state courts located in Palm Beach
County, Florida in any action or proceeding that may be brought in
connection with this Agreement.
12.4 EQUITABLE RELIEF. The parties acknowledge that Confidential Information
contains trade secrets, the disclosure of which would cause substantial
harm to Disclosing Party (as defined in Section 9 hereof) that could
not be remedied by the payment of damages alone. Accordingly, said
Disclosing Party will be entitled to preliminary and permanent
injunctive relief and other equitable relief for any breach
confidentiality.
12.5 SEVERABILITY. If any provision of this Agreement shall be held by a
court of competent jurisdiction to be contrary to law, the remaining
provisions of this Agreement shall remain in full force and effect.
12.6 EXPORT. MCY acknowledges that the laws and regulations of the United
States may restrict the export of the Software. MCY agrees that it will
not export or re-export any of the Licensed Materials in any form
without first obtaining the appropriate United States and foreign
government approvals.
12.7 NOTICE. Any notice, consent, or other communication hereunder shall be
in writing, and shall be given personally, by confirmed fax or express
delivery to either party at their respective addresses:
(i) to ADS at:
Applied Digital Solutions, Inc.
Xxxxx 000
000 Xxxxx Xxxx Xxx
Xxxx Xxxxx, Xxxxxxx 00000
Attention: Xxxxx X Xxxxxxx, General Counsel
8 of 11
with a copy to:
Xxxxx Xxxx LLP
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxx
(ii) to MCY at:
MCY Music World, Inc.
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Legal Department
with a copy to:
Xxxxx Raysman Xxxxxxxxx Xxxxxx & Xxxxxxx LLP
0000 Xxxxxxx Xxxx Xxxx
Xxxxx 000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxx Xxxxxxxxxx
or such other address as may be designated by written notice of either
party. Notices shall be deemed given when delivered or transmitted, or
seven days after deposit in the mail.
12.8 INDEPENDENT CONTRACTORS. The parties' relationship shall be solely that
of independent contractor and nothing contained in this Agreement shall
be construed to make either party an agent, partner, joint venturer, or
representative of the other for any purpose.
12.9 FORCE MAJEURE. If the performance of this Agreement, or any obligation
hereunder, except the making of payments, is prevented, restricted, or
interfered with by reason of any act or condition beyond the reasonable
control of the affected party, the party so affected will be excused
from performance to the extent of such prevention, restriction, or
interference.
12.10 DUPLICATE ORIGINALS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original and all of
which, when taken together, shall constitute but one document.
12.11 ENTIRE AGREEMENT. This Agreement, together with the ADS Agreement
referred to in Section 2.1 above and the exhibits and attachments to
the ADS Agreement and the other documents referred to therein,
constitute the complete and exclusive agreement between the parties
with respect to the subject matter hereof and supersedes all proposals,
oral, or written, all previous negotiations, and all other
communications between the parties with respect to the subject matter
hereof. The terms of this Agreement shall prevail
9 of 11
notwithstanding any different, conflicting, or additional terms that
may appear in any purchase order or other unsigned license agreement
included in any equipment or software package. All products and
services delivered by ADS to MCY are subject to the terms of this
Agreement, unless specifically addressed in a separate agreement. No
modification of this Agreement will be effective unless contained in a
writing executed by an authorized representative of each party.
10 of 11
IN WITNESS WHEREOF, THE PARTIES HAVE CAUSED THIS AGREEMENT TO BE
EXECUTED BY THEIR DULY AUTHORIZED REPRESENTATIVES.
APPLIED DIGITAL SOLUTIONS, INC.
/s/ Xxxxxxx X. Xxxxxxxx
--------------------------------------------
Signature
Xxxxxxx X. Xxxxxxxx
President
MCY MUSIC WORLD, INC.
/s/ Xxxxxxxx Xxxxxxx
--------------------------------------------
Signature
Xxxxxxxx Xxxxxxx
------------------------------------
Printed Name
President
--------------------------------------------
Title
11 of 11
