PATENT LICENSE AND COVENANT NOT TO SUE
Exhibit
10.7
PATENT
LICENSE AND COVENANT NOT TO XXX
This
PATENT LICENSE AND COVENANT NOT TO XXX (this “Agreement”) is entered into among
XxXxxxxx’x Corporation, an Illinois corporation with its principal place of
business in Oak Brook, Illinois (hereinafter “McDonald’s”), and Card Activation
Technologies, Inc., a Delaware corporation with its principal place of business
at 00 Xxxx Xxxxxxx, Xxxxxxx, Xxxxxxxx 00000 (hereinafter “CAT”) and MedCom USA,
Incorporated with its principal place of business at 0000 X. Xxxxxx, Xxxxxxxxxx,
XX 00000 (hereinafter “MedCom”). CAT and MedCom, on the
one hand, and McDonald’s, on the other hand, are sometimes referred to herein
individually as a “Party” and collectively as the “Parties”.
I.
RECITALS
WHEREAS,
simultaneously with entering into this Agreement, McDonald’s and Card Activation
Technologies, Inc., together with their respective affiliates, are entering
into
a Settlement Agreement (the “Settlement Agreement”); and
WHEREAS,
CAT desires to grant to McDonald’s a license under the Licensed Patents (as
defined below);
WHEREAS,
CAT and MedCom desire to xxxxx XxXxxxxx’x a Covenant Not to Xxx;
WHEREAS,
McDonald’s agrees to pay the amount defined below to CAT, all on the terms and
conditions set forth herein;
NOW,
THEREFORE, in consideration of the mutual covenants and conditions set forth
herein, the Parties agree as follows:
II.
DEFINITIONS
A. The
Lawsuit. “The Lawsuit” shall mean Card Activation
Technologies x. XxXxxxxx’x Corporation, Case No. 06 CV 5578, pending in the
Northern District of Illinois before Judge Xxxxxxx Xxxxxxx.
B. The
Effective Date. The “Effective Date” shall mean February
27, 2007, or such other date as CAT, MedCom and McDonald’s may agree to in
writing.
C. Licensed
Patents. “Licensed Patents” shall mean the United States
Patent Number 6,032,859 (“’859 Patent”) and (i) all United States continuations,
continuations-in-part, divisionals and other patent rights claiming priority
(directly or indirectly) to any of the aforementioned patents and patent
applications; (ii) as well as all counterparts thereof in foreign countries
and
any patents and patent applications to which those patents claim priority (if
applicable); and (iii) all reissues, reexaminations, renewals and extensions
of
any of the foregoing.
X. XxXxxxxx’x
Payment System. “McDonald’s Payment System” shall mean
the payment system used at McDonald’s restaurants, affiliated restaurants and
franchised restaurants, including (but not limited to) the use of credit cards,
debit cards, the “ArchCard”Ò,
any other gift or
stored
value card or any other form of cashless payment.
E. CAT
Parties. “CAT Parties” shall mean CAT and MedCom and all
of their past and present successors, predecessors, beneficiaries, executors,
trustees, administrators, subrogees, officers, directors, employees, agents,
trustees, attorneys, heirs, administrators, assigns, partners, parent
corporations, subsidiaries and affiliates.
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X. XxXxxxxx’x
Parties. “McDonald’s Parties” shall mean McDonald’s and
all of its past, present and future predecessors, successors-in-interest,
assignees, nominees, subsidiaries, affiliates, authorized franchisees (including
the authorized franchisees of all subsidiaries and affiliates), divisions,
officers, directors, employees, agents, attorneys, representatives, servants,
partners and agents. A list of the current subsidiaries and
affiliates of McDonald’s is set forth in Exhibit 1 of this
Agreement.
III.
TERMS
OF AGREEMENT
A. License
Grant. CAT hereby grants, on behalf of itself and all of
the other CAT Parties, to the McDonald’s Parties, a worldwide, perpetual,
irrevocable, non-exclusive, fully paid-up right and license, under the Licensed
Patents, to practice the Licensed Patents to the fullest extent possible,
including to make, have made, use, sell, offer for sale, import, develop, have
developed, commercialize, export, market and promote products, including (but
not limited to) any product, software, process, method or device relating in
any
way to the McDonald’s Payment System.
B. Conditions
of License Grant. CAT shall retain all right, title, and
interest in, to and under the Licensed Patents except for the rights explicitly
granted to McDonald’s in accordance with this Agreement, including the right to
make, have made, use, sell, offer for sale, import and otherwise exploit any
products or processes covered by the Licensed Patents. CAT shall have
the sole right at its sole expense to prosecute, maintain, enforce and defend
any of the Licensed Patents.
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C. Covenant
Not to Xxx. The CAT Parties hereby covenant that none of
them shall xxx, assert any claim or counterclaim against, or otherwise
participate in any action or proceeding against any of the McDonald’s Parties
that relates in any way to (i) any act of the McDonald’s Parties occurring on or
before the Effective Date; (ii) the Licensed Patents; (iii) the Lawsuit, or
(iv)
the McDonald’s Payment System. The CAT Parties shall impose this
covenant on any third party to which CAT, MedCom or any of the other CAT Parties
may after the Effective Date assign, convey, sell, lease, encumber, license,
sublicense or otherwise transfer or grant any right in or to (collectively,
“transfer”) any such patent rights or any right or interest
therein.
D. Lump
Sum Payment. On or before March 2, 2007, and in full
consideration for this Agreement and the covenants and License Grant included
therein, and the Settlement Agreement, and the releases and dismissals included
therein, McDonald’s shall pay to CAT a one-time, lump-sum payment of $45,000
USD. The CAT Parties acknowledge and agree that this payment to CAT,
as represented by their signatures affixed hereto, is in full, complete and
total payment for this Agreement, and the covenants and License Grant included
therein, and the Settlement Agreement, and the releases and dismissals included
therein.
IV.
REPRESENTATIONS
AND WARRANTIES
A. Mutual
Representations and Warranties. Each Party represents
and warrants to the other Party as of the Effective Date: (a) that it
is an entity duly organized, validly existing and in good standing under the
laws of the state of its organization; (b) that it has the authority to enter
into this Agreement, extend the licenses and other rights granted to the other
Party under this Agreement, and undertake and fully perform its obligations
under this Agreement; (c) that this Agreement has been duly executed and
delivered by it and is a binding obligation of it, enforceable in accordance
with its terms, subject, as to enforcement of remedies, to applicable
bankruptcy, insolvency, moratorium, reorganization and similar laws affecting
creditors’ rights generally, and to general equitable principles; and (d) all
necessary consents, approvals and authorizations of all regulatory and
governmental authorities and other third parties required to be obtained by
it
in connection with the execution and delivery of this Agreement and the
performance of its obligations hereunder have been obtained.
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B. Representations
and Warranties by the CAT Parties. The CAT Parties
represent and warrant to the McDonald’s Parties that as of the Effective
Date: (a) CAT owns all right, title and interest in and to the
Licensed Patents; (b) none of the other CAT Parties, nor any other third party
from which CAT purchased, acquired, obtained or otherwise was granted any right,
title or interest in or to the Licensed Patents, has any right, title or
interest in or to any of the Licensed Patents (including the right to xxx or
recover for damages); (c) CAT has not transferred any right, title or interest
in or to the Licensed Patents; and (d) as of the date hereof, to the best of
their knowledge, the ‘859 Patent is valid and enforceable. The CAT
Parties hereby agree to defend, indemnify, and hold the McDonald’s Parties
harmless from and against any and all claims, counterclaims, suits, losses,
damages, liabilities and/or expenses (including reasonable attorneys’ fees) of
every kind whatsoever arising out of any breach of the foregoing representations
and warranties.
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V.
GENERAL
PROVISIONS
A. No
Assignment. The CAT Parties warrant and represent that
neither they nor any one of them has made any assignment or transfer of any
right, claim, demand, cause of action, or other matter covered by the License
and Covenant Not to Xxx set forth herein.
B. Attorneys’
and Experts’ Fees. Each of the Parties
shall bear all of its own costs and expenses, including, without limitation,
legal fees incurred in connection with the Lawsuit and the preparation,
negotiation, and/or review of this Agreement.
C. Mediation. Each
Party agrees that if a dispute arises between them regarding this Agreement
or
the Settlement Agreement, it will give the other party written notice of the
dispute. The Parties agree that if they are unable to resolve the
dispute, they will mediate the dispute for purposes of seeking resolution
through supplemental negotiations within thirty (30) days of the notice (or
later if mutually agreed to by the Parties involved in the
dispute).
D. Reimbursement
of Fees and Costs for Violation of Covenant Not to
Xxx. The CAT Parties
agree that if they, or any one of them, or anyone claiming through any one
of
them, sues any of the McDonald’s Parties, they shall reimburse the McDonald’s
Parties for all attorneys’ fees, costs, and expenses incurred by the McDonald’s
Parties in defending that subsequent lawsuit if it is ruled that this Agreement
or the Settlement Agreement bars the claims asserted in that subsequent
lawsuit. The parties agree that Exhibit 1 is a list of the current
subsidiaries and affiliates of McDonald’s that are covered by the Covenant Not
to Xxx set forth in this Agreement.
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E. Reimbursement
of Fees and Costs to Enforce Agreement. If any of
the McDonald’s Parties institutes any action at law or in equity
against any of the CAT Parties to secure or protect their rights under, or
to
enforce the terms of, or for breach of a representation or warranty in this
Agreement, in addition to any judgment entered in their favor, the McDonald’s
Parties shall be entitled to recover such attorneys’ fees together with court
costs and expenses of litigation. Likewise, if any of the CAT Parties
institutes any action at law or in equity against any of the McDonald’s Parties
to secure or protect their rights under, or to enforce the terms of, or for
breach of a representation or warranty in this Agreement, in addition to any
judgment entered in their favor, the CAT Parties shall be entitled to recover
such attorneys’ fees together with court costs and expenses of
litigation.
F. Drafting. This
Agreement was negotiated at arm’s-length, mutually drafted, and entered into
freely by the Parties with the advice of counsel. In the event an
ambiguity exists in any provision of this Agreement, such ambiguity is not
to be
construed by reference to any doctrine or statute calling for ambiguities to
be
construed against the drafter of the document.
G. Captions. The
captions or headings of the Sections or Paragraphs of this Agreement are for
convenience of reference only and in no way define, limit or affect the scope
or
substance of any Section or Paragraph of this Agreement.
H. Scope
of Promises, Representations, and
Inducements. The Parties acknowledge, warrant
and represent that no promises, representations or inducements, except as herein
set forth, have been offered or made by any of the Parties to secure the
execution of the License and Covenant Not to Xxx above or this Agreement, and
that the License and Covenant Not to Xxx above and this Agreement are executed
without reliance on any statements or any representations not contained
herein. Each of the Parties knowingly waives (1) any claim that this
Agreement was induced by any misrepresentation or nondisclosure, and (2) any
right to rescind or avoid this Agreement based upon presently existing facts,
known or unknown.
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I. Voluntary
Agreement. Each of the Parties certifies that it is
voluntarily entering into this Agreement in good faith based solely and
completely upon its own judgment and with the advice of counsel following its
good-faith assessment of the disputes at issue.
J. Survival. The
Parties hereby agree that the provisions of this Agreement, including, without
limitation, the representations, warranties, covenants and License Grant made
herein, shall survive the execution of this Agreement and the performance by
the
Parties of their respective obligations under this Agreement.
K. Severability. Any
part, provision, representation or warranty of this Agreement that is prohibited
or unenforceable, or is held by a court of competent jurisdiction to be void
or
unenforceable, in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining parts, provisions, representations or warranties
herein, and any such prohibition or unenforceability in any jurisdiction shall
not invalidate or render unenforceable such provision in any other
jurisdiction. To the extent permitted by applicable law, the Parties
hereby knowingly, voluntarily, and intelligently waive any provision of law
that
prohibits or renders void or unenforceable any part, provision, representation
or warranty hereof.
L. Entire
Agreement. This Agreement, together with the Settlement
Agreement (including Exhibits), constitutes the entire agreement of the Parties
hereto and supersedes all prior and contemporaneous agreements and
understandings of the Parties.
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M. Successors
and Assigns. This Agreement shall be binding upon and
inure to the benefit of the Parties’ successors and assigns. The CAT
Parties may not assign any rights, or delegate any obligations, under this
Agreement without the prior written consent of McDonald’s, and any purported
assignment or delegation will be void without McDonald’s prior written
consent. A Party assigning any right, or delegating any obligation,
will not be released of any liability under this Agreement. Except
for those persons benefited from the License Grant and the Covenant Not to
Xxx,
nothing contained in this Agreement shall in any fashion be construed to, or
inure to the benefit of, any person or entity not a party to this Agreement,
including, but not limited to, the creditors of any of the Parties.
N. Modifications. No
part or provision of this Agreement may be changed, modified, waived, discharged
or terminated except by an instrument in writing signed by the party against
whom enforcement of such change, modification, waiver, discharge or termination
is sought. The failure of a party to seek redress for violation of,
or to insist upon strict performance of, any provision of this Agreement shall
not be a waiver of that provision by that party or estop that party from
asserting fully any and all of its rights under this Agreement.
O. Confidentiality. The
CAT Parties agree, and shall instruct their employees, attorneys and accountants
to keep the terms and conditions of this Agreement strictly
confidential. The McDonald’s Parties agree, and shall instruct their
employees, accountants, and outside attorneys involved in the resolution of
this
matter to keep the terms and conditions of this Agreement strictly
confidential. The Parties further agree not to provide originals or
copies of, or disclose any or all of the contents of, this Agreement to any
third-party; provided, however, that (1) originals or copies of this Agreement
may be produced and its contents shall be admissible in any dispute between
or
among any of the Parties, (2) originals or copies of this Agreement may be
produced, and the contents of this Agreement may be disclosed, in accordance
with an Order entered by a court of competent jurisdiction, (3) originals or
copies of this Agreement may be produced, and the contents of this Agreement
may
be disclosed, by McDonald’s where such production or disclosure is required by
statute or regulation, such as regulations governing Uniform Franchise Offering
Circular disclosures; (4) originals or copies of this Agreement may be produced,
and the contents of this Agreement may be disclosed, to attorneys, accountants,
and other persons for the purpose of facilitating accounting or tax advice
or
services, provided, however, that any disclosure (other than as set forth above)
of the terms and conditions of this Agreement by said attorneys, accountants,
or
other persons shall be deemed a breach of this Agreement by the party who
disclosed the information to said attorneys, accountants, or other persons
and
(5) McDonald’s may disclose the combined amount of its attorneys’ fees, defense
costs and settlement payment solely for the limited purpose of obtaining
indemnification. In the event that any Party reasonably believes that
production or disclosure of the contents of this Agreement is required by a
subpoena or other valid legal process, it shall provide written notice to the
other Parties at least five (5) business days prior to the date such production
or disclosure is required and shall cooperate fully with the other Parties
in
seeking a protective order to preserve the confidentiality of this Agreement
and
its contents.
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P. Further
Assurances. Each of the Parties hereby agrees to execute
such other and further documents, and to take such other and further actions,
as
may be reasonably requested by the other Party for the sole purpose of
effectuating the agreements herein within ten (10) business days following
written request.
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Q. Notices. Notices
or requests required or permitted to be given hereunder shall be deemed given
three (3) business days after being sent via both (a) certified or registered
United States mail, postage prepaid, or personal delivery and (b) facsimile,
as
follows:
If
to
McDonald’s:
XxXxxxxx’x
Corporation
Legal
Department
Litigation
Practice Group
0000
Xxxxx Xxxxxxxxx
Xxx
Xxxxx,
XX 00000
Attn: Xxxxxxx
Xxxx,
Esq.
Fax
No. (000) 000-0000
And
copy to:
Xxxxx
X. Xxxxxxxx, Esq.
Mayer,
Brown, Xxxx & Maw
LLP
00
Xxxxx Xxxxxx Xxxxx
Xxxxxxx,
XX 00000-0000
Fax
No. (000) 000-0000
If
to
CAT:
Card
Activation Technologies, Inc.
00
Xxxx
Xxxxxxx Xxxx.
Xxxxx
0000
Xxxxxxx,
XX 00000
If
to
MedCom:
Orum
& Xxxx LLC
00
Xxxx
Xxxxxxx Xxxx.
Xxxxx
0000
Xxxxxxx,
XX 00000
R. Authorization
to Sign. Each of the Parties hereby represents and
warrants that the individual signing this Agreement on its behalf is duly
authorized to enter into this Agreement and to execute and legally bind such
Party to it.
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S. Counterparts. This
Agreement may be executed in counterparts, each of which shall constitute an
original and all of which when taken together shall constitute one and the
same
instrument.
T. Governing
Law. Illinois law shall govern the interpretation,
construction, and enforcement of this Agreement.
IN
WITNESS WHEREOF, the Parties have caused their duly authorized representatives
to execute and deliver this Agreement as of the dates set forth
below.
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CARD
ACTIVATION
|
|
|
TECHNOLOGIES,
INC.
|
XxXXXXXX’X
CORPORATION
|
|
By:
______________________________
|
By:_________________________________
|
|
Name:
|
Name:
|
|
Title:
|
Title:
|
|
Date: ______________
____, 2007
|
Date: _______________
____, 2007
|
MEDCOM
USA, INC.
By:_______________________________
Name:
Title:
Date:_________________
___, 2007
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