EXHIBIT 10.5
LICENSE AGREEMENT
This Agreement is made and entered into this 15th day of November,
2003, by and between American Powerhouse, Inc., a Delaware corporation (the
"Licensor") and Sign Media Systems Acquisition Company, Inc., a Florida
corporation (the "Licensee").
WHEREAS, the Licensor had acquired certain proprietary technology for
the manufacture of a water cooler which manufactures distilled water from
ambient air (the "Water Machine"); and
WHEREAS, the Licensor is the owner of trade secrets, confidential
information, proprietary information, intellectual property, trademarks,
copyrights and know-how relating to the Water Machine; and
WHEREAS, the Licensee is interested in entering into the business of
manufacturing, and selling the Water Machine; and
WHEREAS, the Licensor and the Licensee are interested in cooperating to
manufacture and sell within the Territory the Water Machine.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants hereinafter set forth, the parties agree as follows:
1. DEFINITIONS
1.1. Whenever used in this Agreement in upper case letters (other than
the name of the parties and article headings), the terms set forth in this
Agreement shall have the meanings set forth in the following subparagraphs.
1.2. The term "Agreement" shall mean this license agreement between the
Licensor and the Licensee and any future written amendments or supplements
thereto.
1.3. The term "Encumbrance" shall mean any charge, claim, community
property interest, condition, equitable interest, lien, mortgage, option (put or
call), pledge, security interest, right of first refusal, covenant, or
restriction of any kind, including any restriction on use, transfer, receipt of
income or any other attribute of, or restriction on, ownership of property.
1.4. The term "Non-Exclusive" shall mean that any other person or
entity, including the Licensor, will be allowed to license or sell the Water
Machine, other applications relating or similar to the Water Machine, or the
Technology, Trade Secrets, Confidential Information, Proprietary Information, or
Intellectual Property in the Territory.
1.5. The term "Improvement" or "Improvements" shall mean any
advancement, enhancement or improvement to the Technology, whether patentable or
not.
1.6. The term "Licenses" shall mean the licenses granted by the
Licensor to the Licensee in paragraph two (2) herein.
1.7. The term "Water Machine" means certain proprietary technology for
the manufacture of a water cooler which manufactures distilled water from
ambient air which is comprised of the Trade Secrets, the Confidential
Information, the Proprietary Information, and the Intellectual Property.
1.8. The term "Technology" shall mean all Trade Secrets, Confidential
Information, Proprietary Information, and Intellectual Property, including any
and all patented or unpatented technical knowledge, drawings, formulae,
documents, data and other proprietary information concerning the manufacture,
process, design, creation, sale or use of the Water Machine that are currently
owned or will be owned by Licensor through the successful development or
acquisition thereof by Licensor. This term further includes any and all
components, modifications, improvements and Improvements of such Technology
currently owned or will be owned by Licensor.
1.9. The term "Term" or "Term of this Agreement" shall mean in
perpetuity.
1.10. The term "Territory" shall mean all countries in the world.
1.11. The terms "Trade Secret(s)", "Confidential Information"
"Proprietary Information" and "Intellectual Property" shall mean information of
any nature in any form relating to the Water Machine or the Technology that
gives the Licensor an opportunity to obtain an advantage over competitors who do
not know or use it, but it is understood that these terms do not include
information that is in the public domain, becomes part of the public domain
through no fault of Licensee, or is obtained in good faith by Licensee from a
third party having bona fide rights to furnish such information without a binder
of secrecy.
2. LICENSES GRANTED
2.1. Licensor grants to Licensee the Non-Exclusive right and license to
use, modify, and enhance the Technology in the Territory for the Term of this
Agreement in connection with the Licensee's business endeavors.
2.2. Licensor grants to Licensee the Non-Exclusive right and license to
the Trade Secret(s), Confidential Information, Proprietary Information, and
Intellectual Property in the Territory for the Term of this Agreement in
connection with the Licensee's business endeavors.
3. DISCLOSURE AND CONTINUED ASSISTANCE
3.1. Within ten (10) days after the date of this Agreement, Licensor
shall disclose and provide to Licensee the Technology, the Trade Secret(s), the
Confidential Information, the Proprietary Information and the Intellectual
Property in such tangible form or forms reasonably acceptable to Licensee, as
would be necessary to allow their use in the Licensee's business.
3.2 During the Term of this Agreement, Licensor shall provide Licensee
with reasonable and adequate technical assistance to enable the Licensee to
utilize the Technology, the Trade Secret(s), the Confidential Information, the
Proprietary Information, and the Intellectual Property and any Improvements in
connection with the Licensee's business. Licensee shall reimburse Licensor for
reasonable travel and lodging expenses relating to Licensee's technical
assistance. The general nature and amount of such travel and lodging and
reimbursements relating thereto shall be approved by Licensee in writing prior
to being incurred by Licensor.
4. IMPROVEMENTS
4.1. In the event the Licensor develops or discovers an Improvement and
proves the same commercially feasible during the Term of this Agreement,
Licensor shall promptly give the Licensee the necessary information to enable
the Licensee to practice the Improvement.
4.2. Licensor shall grant to Licensee an Exclusive right and license to
all Improvements in the Territory for the Term of this Agreement in connection
with the Licensee's business endeavors without requiring additional compensation
and payment to Licensor.
5. COMPENSATION
Simultaneously with the execution of this Agreement, Licensee shall pay
to Licensor One Thousand (1,000) shares of the Licensee's common capital stock
as full and complete compensation to Licensor for granting Licensee the
Licenses. No further payment shall be due or payable to Licensee for the
granting of the Licenses contained herein.
6. SUBLICENSES AND ASSIGNMENTS
Licensee shall not sublicense others the Licenses granted to Licensee by this
Agreement without prior written notice to or approval of the Licensor.
7. LICENSOR'S WARRANTIES
The Licensor hereby represents, warrants and agrees, to and with
Licensee that:
7.1 Licensor is a corporation duly organized, validly existing, and in
good standing under the laws of the state of Delaware. Licensor has full right,
power and authority to execute and deliver this Agreement and perform its
obligations hereunder. The execution and delivery by Licensor of this Agreement
has been authorized by all necessary corporate action. When this Agreement is
executed by Licensor, this Agreement will constitute the valid and binding
agreement of Licensor enforceable against Licensor in accordance with its terms.
7.2 The execution, delivery, and consummation of the transaction
contemplated by this Agreement will not (a) violate, conflict with or result in
the breach or termination of, or otherwise give any other contracting party the
right to terminate, or constitute a default (by way of substitution, novation or
otherwise) under the terms of, any contract to which the Licensor is a party,
(b) violate any judgment against, or binding upon, the Licensor, or (c) violate
any provision in the charter documents, bylaws or any other agreement affecting
the governance and control of Digital.
7.3 No consent from, or other approval of, any governmental entity or
any other person, which has not been obtained, is necessary in connection with
the execution, delivery, or performance of this Agreement by Licensor.
7.4 There is no action, suit, proceeding, or claim pending or, to the
knowledge of the Licensor, threatened against the Licensor wherein an
unfavorable decision, ruling, or finding would render unlawful or otherwise
adversely affect the consummation of the transaction contemplated by this
Agreement.
7.5 The Licensor has the legal right to license Technology, Trade
Secret(s), Confidential Information, Proprietary Information, and Intellectual
Property to the Licensee in accordance with the terms of this Agreement.
7.6. To the Licensor's knowledge, the use of the Licenses by Licensee
will not infringe upon any patents issued, trademarks registered or used,
copyrights owned by and trade secrets owned by third persons within the
Territory.
7.7. There are no Encumbrances against the Technology, Trade Secret(s),
Confidential Information, Proprietary Information, or Intellectual Property
whether absolute, contingent or otherwise.
8. LICENSEE'S WARRANTIES
Licensee hereby represents, warrants, and agrees to and with the
Licensor that:
8.1 Licensee has full right, power and authority to execute and deliver
this Agreement and perform its obligations hereunder. The execution and delivery
by Licensee of this Agreement has been authorized by all necessary corporate
action by Licensee. When this Agreement is executed by Licensee and delivered to
the Licensor, this Agreement will constitute the valid and binding agreement of
Licensor enforceable against Licensor in accordance with its terms.
8.2 The execution, delivery, and consummation of the transaction
contemplated by this Agreement will not (a) violate, conflict with or result in
the breach or termination of, or otherwise give any other contracting party the
right to terminate, or constitute a default (by way of substitution, novation or
otherwise) under the terms of, any contract to which Licensee is a party or by
which Licensee is bound, (b) violate any judgment against, or binding upon,
Licensee or (c) violate any provision in the charter documents and any other
agreement affecting the governance and control of Licensee.
8.3 No consent from, or other approval of, any governmental entity or
any other person, which has not been obtained, is necessary in connection with
the execution, delivery, or performance of this Agreement by Licensee.
8.4 There is no action, suit, proceeding, or claim pending or, to the
knowledge of Licensee, threatened against Licensee wherein an unfavorable
decision, ruling, or finding would render unlawful or otherwise adversely affect
the consummation of the transaction contemplated by this Agreement.
9. MAINTENANCE OF PROPERTY RIGHTS
During the Term of this Agreement, either the Licensor or the Licensee
may, but is not required to take such actions as are necessary to maintain the
Technology, the Trade Secret(s), the Confidential Information, the Proprietary
Information, and the Intellectual Property at their own expense.
10. DEFENSE OF LICENSES AND PROSECUTION OF INFRINGERS
10.1. During the Term, the Licensor and the Licensee will jointly
defend each of the Technology, Trade Secret(s), Confidential Information,
Proprietary Information, and Intellectual Property in the Territory against any
legal attack and share equally in the costs of such defense including reasonable
legal fees. In the event that either party becomes aware of any claim or lawsuit
alleging that any of the Technology, Trade Secret(s), Confidential Information,
Proprietary Information, and Intellectual Property in the Territory are invalid
or void, that party will promptly inform the other party of such claim or
lawsuit.
10.2. In the event that either party becomes aware of any device used
or manufactured in the Territory by a third party which infringes in the
Territory or may reasonably be alleged to infringe upon any of the Confidential
Information, Proprietary Information, or Intellectual Property, that party shall
promptly inform the other party of such. The Licensor and the Licensee shall
each have the right to institute an action at law or in equity against any third
party who infringes upon or misappropriates any of the Technology, Trade
Secret(s), Confidential Information, Proprietary Information, or Intellectual
Property. The Licensor and the Licensee shall share equally the costs incurred
in such a lawsuit and any award of judgments obtained there from. In the event
that either party desires not to participate in any action against an infringing
third party, that party (the "notifying party") shall promptly inform the other
party and the other party shall have the right to proceed with the action at its
own expense and shall be solely entitled to any award or judgment which results
from that lawsuit. The notifying party shall nevertheless cooperate fully with
the other party in any action against a third party infringer or misappropriator
and will assign to the other party whatever rights are necessary for the other
party to bring and maintain such a lawsuit provided, however, that such
cooperation and assignments shall be at no cost to the notifying party. In the
event that the third party infringer asserts a counterclaim alleging that the
subject Technology, Trade Secret(s), Confidential Information, Proprietary
Information, or Intellectual Property is void or invalid, the party asserting
the claim of infringement or misappropriation shall be solely responsible for
defending against the counterclaim at its sole cost and expense. In the event
such a counterclaim is asserted, the notifying party may elect to participate in
the defense of the counterclaim at its expense.
11. CONFIDENTIALITY
Both parties agree that the Technology, Trade Secret(s), Confidential
Information, Proprietary Information, or Intellectual Property disclosed
pursuant to this Agreement (the "confidential information") is confidential and
proprietary and acknowledge that the unauthorized disclosure of any of the
confidential information will result in immediate and irreparable competitive
injury to both parties. Each party agrees to disclose the confidential
information only to those of its employees, sublicensees and agents to whom such
disclosure is necessary to permit the implementation of the transactions
contemplated by this Agreement, and then only after such employees, sublicensees
and agents have entered into an appropriate nondisclosure agreement. Each party
further agrees not to disclose any of the confidential information to any other
person or entity without prior written approval of the other party.
12. FORCE MAJEURE
Neither party shall be in default of this Agreement or liable to the
other party for any delay or default in performance where occasioned by any
cause of any kind or extent beyond its control, including, but not limited to:
acts of God; armed conflict or economic dislocation there from; embargoes or
shortages of labor, raw materials, fuel, energy, production facilities or
transportation; labor difficulties; civil disorders of any kind; action of any
civil or military authorities (including priorities and allocations); fires;
floods; accidents; and other natural or man-made disasters or problems.
13. TERMINATION
This Agreement may, by written notice be terminated by either party if
a material breach of any provision of this Agreement has been committed by the
other party and such breach has not been cured within thirty (30) days after
written notice thereof has been delivered to the party alleged to be in breach.
In addition to the foregoing, in the event of a breach of any provision of this
Agreement by any party, then the other party shall have all of the remedies
provided by law or equity including specific performance.
14. FUTURE PATENTS
14.1. At the option of the Licensor, Licensor shall prosecute an
application or applications to patent any portion or all of the Technology or
any Improvement. Licensor and Licensee shall cooperate and promptly and fully
assist each other in every lawful way to obtain such patent or patents.
14.2. Licensor and Licensee agree to sign any and all lawful papers,
take all lawful oaths and do all lawful acts, including giving testimony in
connection with any patent application or applications and patents of the
Technology or any Improvement, including the filing or prosecution of any such
patent applications, and the grant of any such patents.
14.3. With respect to any patents obtained pursuant to this Agreement,
the Licensor shall grant to Licensee a Non-Exclusive right and license under
such patents and any divisions, continuations, continuation-in-parts, reissues,
re-examinations or extensions thereof, with the same scope and Territory as
granted to Licensee under paragraph 2 hereof without requiring additional
compensation and payment to Licensor.
15. MISCELLANEOUS
15.1 Any notices, requests, demands, or other communications herein
required or permitted to be given shall be in writing and may be personally
served or sent by United States mail and shall be deemed to have been given if
personally served, when served, or if mailed, when deposited in the mail and
shall be deemed to have been received if personally served, when served, or if
mailed on the third business day after deposit in the United States mail with
postage pre-paid by certified or registered mail and properly addressed. As used
in this Agreement, the term "business day" means days other than Saturdays,
Sundays, and holidays recognized by Federal banks. For purposes of this
Agreement, the addresses of the parties hereto shall be the addresses as set
hereafter until a party subsequently notifies all other parties in writing of a
change of address.
If to the Licensor:
American Powerhouse, Inc.
00000 Xxxxxxxx Xxxxx Xx.
Xxxxxxxx XX 00000
If to Licensee:
Sign Media Systems Acquisition Company, Inc.
0000 00xx Xxxxxx
Xxxxxxxx, XX 00000
15.2 This Agreement may be executed in any number of counterparts and
each such counterpart shall be deemed to be an original instrument, but all such
counterparts together shall constitute but one and the same instrument.
15.3 This Agreement may be amended, modified, or superseded only by
written instrument executed by all parties hereto. Any waiver of the terms,
provisions, covenants, representations, warranties, or conditions hereof shall
be made only by a written instrument executed and delivered by the party waiving
compliance. Any waiver granted by a corporate party hereto shall be effective
only if executed and delivered by the chief executive officer, president, or any
vice president of such party. The failure of any party at any time or times to
require performance of any provision hereof shall in no manner affect the right
to enforce the same. No waiver by any party of any condition, or of the breach
of any term, provision, covenant, representation, or warranty contained in this
Agreement in one or more instances shall be deemed to be or construed as a
further or continuing waiver of any such condition or breach or a waiver of any
other condition or the breach of any other term, provision, covenant,
representation, or warranty.
15.4 Time is of the essence in the performance of this Agreement.
15.5 The captions contained in this Agreement are solely for convenient
reference and shall not be deemed to affect the meaning or interpretation of any
Article, Section, or paragraph hereof.
15.6 This Agreement sets forth the entire agreement and understanding
of the parties with respect to the transactions contemplated hereby, and
supersedes all prior agreements, arrangements, and understandings relating to
the subject matter hereof.
15.7 All of the terms, provisions, covenants, representations,
warranties, and conditions of this Agreement shall be binding upon and shall
inure to the benefit of and be enforceable by the parties hereto and their
respective heirs, legal representatives, assigns, and successors.
15.8 A representation or statement made herein to the knowledge of any
corporate party refers to the knowledge or belief of the companies' directors,
officers, and attorneys, regardless of whether the knowledge of such person was
obtained outside of the course and scope of his corporate employment or duties,
and regardless of whether any such person's interests are adverse to such entity
in respect of the matters as to which his knowledge is attributed. Whenever from
the context it appears appropriate, each term stated in either the singular or
the plural shall include both the singular and the plural, and pronouns stated
in the masculine or the neuter gender shall include the masculine, the feminine
and the neuter gender. The terms "hereof," "herein," or "hereunder" shall refer
to this Agreement as a whole and not to any particular Article, Section, or
paragraph hereof.
15.9 This agreement shall be governed exclusively by its terms and by
the local, internal laws of the state of Florida. The parties agree that the
appropriate venue for any litigation arising hereunder is in Sarasota County,
Florida.
15.10 If any term, provision, covenant, or restriction of this
Agreement is held by a court of competent jurisdiction to be invalid, void, or
unenforceable, the remainder of the terms, provisions, covenants and
restrictions shall remain in full force and effect and shall in no way be
affected, impaired, or invalidated.
15.11 In the event of any litigation arising out of this Agreement, the
losing party shall pay the prevailing party's attorneys' fees and court costs,
including attorneys' fees and court costs on appeal.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
AMERICAN POWERHOUSE, INC:
By: /S/ Densi X. Xxxxxxxxx (SEAL)
Xxxxx X. Xxxxxxxxx
President
SIGN MEDIA SYSTEMS ACQUISITION COMPANY, INC:
By: /S/ Xxxxx X. Xxxxxxxxx (SEAL)
Xxxxx X. Xxxxxxxxx
President
