LICENSE AGREEMENT
by and between
FONIX/ASI CORPORATION ("LICENSOR")
and
LERNOUT & HAUSPIE SPEECH PRODUCTS, N.V. ("LICENSEE")
Effective Date: May 19, 1999
LICENSOR Corporate Name: Fonix/ASI Corporation
Incorporated under the Laws of: State of Utah
Address: 0000 Xxxxx Xxxx Xxxxx,
00 Xxxx Xxxxx Xxxxxx Xxxxxx
Xxxx Xxxx Xxxx, Xxxx 00000
Attention: Xxxxxx X. Xxxxxxx, President
Phone: (000) 000-0000 Fax: (000) 000-0000
LICENSOR Notices Address: Same as above.
LICENSEE Name: Lernout & Hauspie Speech Products N.V.
Incorporated under the Laws of: Belgium
Address: Flanders Language Valley 50
X-0000 Xxxxx - Xxxxxxx
Phone: x00.00.00.00.00. Fax: x00.00.00.00.00.
LICENSEE Notices Address: Same as above, Attn. Legal Department
AND COPY TO:
Lernout & Hauspie Speech Products USA, Inc.
00 Xxxxx Xxxxxx, Xxxxxxxxxx, XX 00000
Attention: Contracts Manager
Phone: (000) 000-0000 Fax: (000) 000-0000
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THIS AGREEMENT IS GOVERNED BY THE ATTACHED TERMS AND CONDITIONS. LICENSEE AND
LICENSOR ACKNOWLEDGE THAT THEY HAVE READ AND AGREE TO BE BOUND BY THE ATTACHED
TERMS AND CONDITIONS. IN WITNESS WHEREOF, THIS AGREEMENT HAS BEEN DULY EXECUTED
BY THE PARTIES HERETO, AS OF THE EFFECTIVE DATE.
LICENSEE: LICENSOR:
LERNOUT & HAUSPIE SPEECH FONIX/ASI CORPORATION
PRODUCTS N.V.
By: By:
Name: Xxxxxx Xxxxxxxxx Name: Xxxxxx X. Xxxxxxx
Title: President and Chief Executive Title: President
Officer
Whereas, LICENSOR and LICENSEE have negotiated an Asset Purchase Agreement (the
"Asset Purchase Agreement"),
Whereas, LICENSEE desires to license LICENSOR's technology and software as of
the Effective Date of this Agreement,
Whereas, LICENSOR is willing to grant such license on its technology and
software as of the Effective Date,
IT HAS BEEN AGREED AS FOLLOWS:
ARTICLE I: DEFINITIONS
The following terms shall have the meanings ascribed to them herein whenever
they are used in this Agreement, unless otherwise clearly indicated by the
context.
1.1. "Corrections" shall mean changes made in the Development Software and/or
Documentation by LICENSOR to correct errors or defects in the Development
Software and/or Documentation.
1.2. "Designated Application" shall mean all existing and future
application(s) made and all existing and future services provided by
LICENSEE as identified in Addendum B and the Amendments to this
Agreement.
1.3. "Development Software" shall mean all existing and future software of
LICENSOR or other items listed in Addendum A, in source code, object
code, and linguistic tools, API's and technical interface to source code
as outlined in Addendum A, to be adapted to work with the Designated
Application; Documentation, which is customarily provided by LICENSOR as
a part of the software or other items listed in Addendum A; and all
Corrections. This shall include any enhancements or upgrades of the
software or other items listed in Addendum A.
1.4. "Documentation" shall mean those visually-readable materials, in English,
developed by or for LICENSOR for use in connection with the Development
Software. Documentation includes operating instructions, input
information and format specifications.
1.5. "End User" shall mean the customers of LICENSEE or of Third Parties, who
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will only be granted the right to use the Run-Time Software in connection
with the Designated Application.
1.6. "Run-Time Software" shall mean an object code/executable copy of software
derived from the Development Software (or any portion thereof) which is
integrated by LICENSEE within the Designated Application and executable
only in association with the Designated Application.
1.7. "Third Party" shall include original equipment manufacturers, system
houses, value added resellers and other such entities engaged in doing
business with LICENSEE, and who acquire the Designated Application,
incorporating the Run-Time Software, for distribution purposes only.
ARTICLE II: GRANT OF SOFTWARE LICENSE
2.1. Subject to all applicable terms and conditions hereof, LICENSOR hereby
grants to LICENSEE and LICENSEE accepts from LICENSOR, a world-wide,
perpetual, non-exclusive, non-transferable (except as described in
Article 14.9) license to:
a) use, copy and modify the Development Software in connection with
LICENSEE's development, distribution and provision of technical
support for Designated Applications incorporating Run-Time Software;
b) make Run-Time Software copies based on the Development Software with
the purpose to incorporate into the Designated Application;
c) distribute to End Users directly or through Third Parties, copies of
the Run-Time Software incorporated into the Designated Application;
each copy of the Run-Time Software shall be distributed pursuant to
and together with an end user license agreement, in a form reasonably
acceptable to LICENSOR, which shall contain standard software
licensing provisions, and which may be in on-line or in written form;
and
d) incorporate all or part of the Documentation into LICENSEE's
Designated Application documentation, provided LICENSEE properly
incorporates and references LICENSOR's trademarks and copyrights in
the documentation.
2.2. All distributions by Third Parties in accordance with Article 2.1.c shall
be pursuant to written agreements that incorporate applicable terms and
conditions hereof, including appropriate methods of calculation,
reporting and payment of applicable royalties (as described in Article
III hereof).
2.3. It is furthermore expressly agreed that the only right granted to Third
Parties is the right to distribute the Designated Application
incorporating the Run-Time Software.
2.4. LICENSOR hereby grants to LICENSEE a nonexclusive, non-transferable,
royalty-free license to use and to authorize Third Parties to use, in
those ways in which LICENSOR uses the Licensed Marks, the following
trademarks associated with the Run-Time Software: PowerScribe,
PowerScribe Radiology, PowerScribe for Radiology, PowerScribe EM,
PowerScribe for Emergency Medicine, PowerCare, and the ASI logo (the
"Licensed Marks"). LICENSEE shall comply with LICENSOR policies and
guidelines for use of its Licensed Marks, as they may be revised and
issued from time to time, and shall comply with proper legal
standards. LICENSEE acknowledges that as between the parties, LICENSOR
shall own all interest in the Licensed Marks and all valid trademark
registrations throughout the world which are obtained in LICENSOR's
name. LICENSEE agrees not to attack the validity of the Licensed Marks
or LICENSOR's title thereto. All goodwill accrued through use of the
Licensed Marks by LICENSEE and its Distributors shall inure to the
benefit of LICENSOR. LICENSEE acknowledges that nothing in this
Agreement shall give LICENSEE any right, title or interest in the
Licensed Marks other than the right to use the Licensed Marks in
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accordance with this Agreement.
2.4.1. LICENSEE acknowledges that the good will and value of the Licensed Marks
may be adversely affected unless the Software meets the compatibility and
quality standards of LICENSOR. LICENSOR shall have the right from time to
time during the term of this Agreement to review any manufacturing
facility used by LICENSEE to produce goods hereunder and to determine, in
its reasonable discretion, whether the quality of goods produced by
LICENSEE are so adequate; such review may occur from time to time upon
reasonable notice and during regular business hours. If the Run-Time
Software reproduced and distributed by LICENSEE fails at any time to meet
LICENSOR's standards, LICENSOR may notify LICENSEE in writing and
LICENSEE shall promptly cure the sub-standard quality and/or
compatibility.
2.4.2. LICENSEE shall give LICENSOR at least 60 days prior written notice of
LICENSEE's intent to distribute the Run-Time Software in any country
other than the U.S. If LICENSOR determines that registration of a
Licensed Xxxx or filing or recording of a license or a registered user
agreement is required or advisable, the parties shall cooperate in
preparing and executing all necessary documents. Registration of any
LICENSOR trademark shall be in LICENSOR's name and at its expense.
LICENSEE shall pay all costs of filing or recording of a license or
registered user agreement.
2.5. LICENSOR grants LICENSEE a license under all present or future patent
rights held by LICENSOR that would be infringed upon the use of the
Development Software or Run-Time Software as contemplated by this
Agreement.
ARTICLE III: ROYALTIES/PAYMENTS
3.1. Royalties
In consideration for the rights granted under Article II, except as
provided in Article VI hereof, LICENSEE shall make royalty payments to
LICENSOR for the Run-Time Software, pursuant to Addendum C.
3.2. Other Fees
Any training provided by LICENSOR under this Agreement will be invoiced
at the end of each month in which said services are provided at the then
current fees. Unless otherwise provided in writing, all invoices are
payable within thirty (30) days after invoice date.
ARTICLE IV: WARRANTY
4.1. LICENSOR warrants that it has the right to grant the licenses contained in
this Agreement.
4.2. LICENSOR warrants that the Development Software will perform in
accordance with the specifications as mentioned in the Documentation.
LICENSOR agrees that if any material deviations from the Documentation
exist, LICENSOR shall use commercially reasonable and diligent efforts to
eliminate promptly any deviations reported to it by LICENSEE in writing.
This warranty for a given item of the Development Software shall expire
twelve (12) months after the supply of such item to LICENSEE (the
"Warranty Period").
4.3. LICENSOR warrants and represents that the Development Software and
Run-Time Software is capable of processing, recording, storing and
presenting data containing four-digit years in substantially the same
manner and with substantially the same functionality as it performed
before January 1, 2000. In the event of breach of this warranty, LICENSOR
shall use reasonable efforts to correct or provide a work around for
reproducible errors what cause this breach of warranty. If LICENSOR is
unable to make the Development Software and Run-Time Software operate as
warranted herein within a reasonable period of time, LICENSEE shall be
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entitled to recover all royalties paid under this Agreement.
4.4. EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT, LICENSOR MAKES, AND
LICENSEE RECEIVES, NO WARRANTIES, EXPRESS OR IMPLIED, INCLUDING, WITHOUT
LIMITATION, WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR
PURPOSE. LICENSOR DOES NOT WARRANT THAT THE FUNCTIONS CONTAINED IN THE
DEVELOPMENT SOFTWARE WILL MEET CUSTOMER'S REQUIREMENTS. LICENSEE
ACKNOWLEDGES THAT LICENSOR HAS MADE NO REPRESENTATIONS REGARDING WARRANTY
OR LIABILITY OTHER THAN AS STATED IN THIS AGREEMENT. LICENSEE is not
authorized to make any warranty commitment on LICENSOR's behalf to any
end user or other third party, whether written or oral, other than those
provided or approved by an authorized representative of LICENSOR.
ARTICLE V: SUPPORT
5.1. During the term of the Warranty Period as defined above in Article IV,
LICENSOR shall, upon request of LICENSEE, provide the following support
to LICENSEE, free of charge:
a) Telephone Support
LICENSOR shall provide telephone consulting services to LICENSEE's
designated personnel to assist such personnel in resolving problems,
obtaining clarification relative to the Development Software and
Documentation and providing assistance regarding suspected defects or
errors in the Development Software or Documentation. Said services
shall be provided during normal business hours (Eastern Time),
Mondays through Fridays (excluding US legal holidays). The names,
telephone, fax numbers of LICENSOR's support personnel, as well as a
list of the current holidays, are specified in Addendum D.
b) Written Support
LICENSOR agrees to diligently work for the resolution of defects and
errors in the Development Software and/or Documentation.
c)Corrections
LICENSOR shall keep LICENSEE advised of the status of all Corrections
done by LICENSOR for the Development Software and Documentation
during the term of the support. At the request of LICENSEE, LICENSOR
shall provide one (1) copy of the current release of the Development
Software incorporating such Corrections.
d) Training
Training can be given to LICENSEE by LICENSOR as an additional
service which will be invoiced at the applicable training fees.
5.2. After the term of the Warranty Period, LICENSEE may purchase additional
support and training from LICENSOR by entering into a maintenance and
support agreement.
5.3. LICENSEE shall be responsible for first-line customer support for the
Run-Time Software as contained in the Designated Application. LICENSEE
shall provide, to end users who receive copies of the Run-Time Software
through LICENSEE, telephonic advice by knowledgeable personnel on
installation, operation and other questions with respect to the Run-Time
Software and the Designated Application.
ARTICLE VI: TERM
6.1. The Term of this Agreement shall commence on the Effective Date herein
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and shall continue for a period of twenty (20) years, unless otherwise
terminated by LICENSEE or unless terminated or canceled as provided in
Article 6.2 or 6.5.
6.2. This Agreement may be terminated for cause, as follows:
a) by LICENSOR, if LICENSEE fails to make timely payments or provide
royalty reports as required hereunder, and any such failure is not
remedied within thirty (30) days after receipt of written notice from
LICENSOR;
b) by LICENSOR, if LICENSEE expressly or impliedly repudiates this
license by refusing to observe the restricted use or confidentiality
requirements as mentioned in this Agreement, or otherwise commits a
material breach of this Agreement, and any such failure is not
remedied within thirty (30) days after receipt of written notice; or
c) by either party, if a party ceases its business activities as a
result of bankruptcy, dissolution, liquidation, or other causes, the
other party may immediately terminate this Agreement by providing
written notice to that party.
6.3. Any termination or cancellation of this Agreement shall not terminate or
affect sublicenses previously and properly granted to End Users and Third
Parties, who have purchased sublicenses.
6.4. No termination or cancellation of this Agreement shall affect the
obligation of LICENSEE to collect and distribute to LICENSOR all
payments, which have become or will be due from Third Parties and End
Users and any other payments which have become due hereunder.
6.5. Should LICENSOR and LICENSEE effect the Closing, as defined in the Asset
Purchase Agreement, all licenses granted under this License Agreement
shall terminate, except as provided under Article 6.3 hereof. Should
LICENSOR and LICENSEE not effect Closing, this License Agreement shall
remain fully in force, subject to the following terms:
a) Breach by Seller (LICENSOR) In the event of the termination of the
Asset Purchase Agreement under conditions that require the Seller to pay
the Buyer Documented Expenses pursuant to Section 9.5(b) of the Asset
Purchase Agreement, then (1) LICENSOR grants LICENSEE a perpetual,
non-exclusive license in accordance with Articles 2.1, 2.2, 2.3 and 2.5
hereof for LICENSOR's software as specified in Addendum E, effective upon
the termination of the Asset Purchase Agreement, and subject to all terms
of this Agreement, including royalty payments to LICENSOR pursuant to
Addendum F; and (2) LICENSEE shall owe no royalties under Article 3.1 and
Addendum F of this Agreement for distribution of royalty-bearing copies
up to an aggregate sum of five million U.S. dollars ($5,000,000)
effective commencing with the termination of the Asset Purchase
Agreement. Subsequent royalty payments shall continue thereafter under
Article 3.1 and Addendum F of this Agreement.
Notwithstanding the foregoing, in the event that on or before the date on
which the outstanding principal balance under each of (a) Promissory Note
executed by Fonix Corporation and Fonix/ASI Corporation dated as of April
22, 1999, as amended pursuant to Amendment to Promissory Note dated May
12, 1999, in the principal amount of one million one hundred thousand
U.S. dollars ($1,100,000) (the "April 22 Note"), and (b) Promissory Note
executed by Fonix/ASI Corporation dated as of May 19, 1999, as amended,
in the original principal amount of four million nine hundred thousand
U.S. dollars ($4,900,000) (the "May 19 Note") becomes due and payable,
LICENSOR pays LICENSEE the following: (1) all amounts including without
limitation, all principal, interest, fees, and charges due under the
April 22 Note and the May 19 Note; (2) all Buyer Documented Expenses
pursuant to Section 9.5(b) of the Asset Purchase Agreement; and (3) an
additional license agreement termination fee of five million U.S. dollars
($5,000,000), then all licenses granted under this License Agreement
shall terminate, except as provided in Article 6.3 hereof.
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b) Breach by Buyer (LICENSEE) In the event of the termination of the
Asset Purchase Agreement under conditions that require the Buyer to pay
the Seller Documented Expenses pursuant to Section 9.5(c) of the Asset
Purchase Agreement, then all licenses granted under this License
Agreement shall terminate, except as provided under Article 6.3 hereof.
c) Mutual Agreement or Court Order If the Buyer and Seller mutually agree
to terminate the Asset Purchase Agreement, or either party terminates
under conditions pursuant to Section 9.1(b) of the Asset Purchase
Agreement, then this agreement shall remain in full force and effect and
LICENSEE shall owe royalties under Article 3.1 of this License Agreement.
ARTICLE VII: INDEMNITY
7.1. LICENSOR shall indemnify and defend LICENSEE and Third Parties
against any claim that the Development Software or Run-Time Software
infringes any third party patent, copyright, trademark, trade secret
or other intellectual property right when used in accordance with the
terms of this Agreement, provided however that LICENSEE shall give
LICENSOR prompt notice of any such claim and shall give information,
reasonable assistance and authority to defend or settle the claim.
LICENSOR shall have the right, at its option, either to obtain for
LICENSEE the right to continue using the Development Software and
Run-Time Software, substitute other software with equivalent
functional capabilities, or modify the Development Software and
Run-Time Software so that it is no longer infringing while retaining
equivalent functions. LICENSOR shall have no liability for
infringement based on (A) use of other than the current release of the
Development Software or Run-Time Software, (B) modification of the
Development Software or Run-Time Software by any party other than
LICENSOR, or (C) the combination or use of the Development Software or
Run-Time Software with the Designated Application or any other
software, equipment, product or process not furnished or approved
(which approval will not be unreasonably withheld or delayed) by
LICENSOR to the extent such combination or use relates to such
infringement. IN NO EVENT SHALL LICENSOR'S LIABILITY WITH REGARD TO
THIRD PARTY PATENT INFRINGEMENT UNDER THIS SECTION EXCEED THE GREATER
OF (1) LICENSEE'S REASONABLE LEGAL FEES, PLUS: THE AGGREGATE SUM OF
ROYALTIES PAID TO LICENSOR UNDER ARTICLE 3.1 (IF THE PATENT
INFRINGEMENT RELATES TO DEVELOPMENT SOFTWARE AND RUN-TIME SOFTWARE
UNDER ADDENDUM A), OR UNDER ADDENDUM F (IF THE PATENT INFRINGEMENT
RELATES TO DEVELOPMENT SOFTWARE AND RUN-TIME SOFTWARE UNDER ADDENDUM
E) OR (2) FIVE MILLION U.S. DOLLARS ($5,000,000).
7.2. Except as provided above, LICENSOR shall have no liability to LICENSEE,
Third Parties and End Users in the event infringement of any intellectual
property right arises from components of a Designated Application which
are not derived directly from the Development Software or Run-Time
Software operating on the Designated Application.
7.3. Except to the extent LICENSOR is responsible for a claim under Section
7.1 above, LICENSEE shall indemnify and defend LICENSOR from and against
any and all claims, liabilities, damages and expenses (including
reasonable attorneys' fees) arising out of or in connection with
LICENSEE's use, reproduction, marketing, distribution or sublicensing of
the Development Software or Run-Time Software, to the extent that such
claim or liability arose from LICENSEE's breach of this Agreement.
ARTICLE VIII: LIABILITY
8.1. Limitation on Damages
IN NO EVENT SHALL LICENSOR BE LIABLE FOR ANY LOSS OF OR DAMAGE TO
REVENUES, PROFITS OR GOODWILL OR OTHER SPECIAL, INCIDENTAL, INDIRECT OR
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CONSEQUENTIAL DAMAGES OF ANY KIND, RESULTING FROM ITS PERFORMANCE OR
FAILURE TO PERFORM PURSUANT TO THE TERMS OF THIS AGREEMENT OR ANY OF THE
ATTACHMENTS HERETO, OR RESULTING FROM THE FURNISHING, PERFORMANCE, OR USE
OR LOSS OF USE OF ANY DEVELOPMENT SOFTWARE, RUN-TIME SOFTWARE OR OTHER
MATERIALS DELIVERED TO LICENSEE HEREUNDER, INCLUDING, WITHOUT LIMITATION,
ANY LOSS OF DATA OR INTERRUPTION OF BUSINESS, WHETHER RESULTING FROM
BREACH OF CONTRACT, BREACH OF WARRANTY, OR ANY OTHER CAUSE (INCLUDING
NEGLIGENCE), EVEN IF LICENSOR HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH
DAMAGES.
ARTICLE IX: CONFIDENTIAL INFORMATION
9.1. "Confidential Information" shall mean (a) all source code for the
Development Software; (b) any information conveyed in written,
graphic, machine-readable or other tangible form, provided that such
information is conspicuously marked and/or considered by a party as
confidential or proprietary; or (c) any information conveyed orally
where such information is designated as confidential or proprietary at
the time of such oral disclosure, and confirmed in writing within
thirty (30) days. Notwithstanding the above, information shall not be
deemed Confidential Information to the extent that it (i) was
generally known and available in the public domain at the time it was
disclosed or subsequently becomes generally known and available in the
public domain through no fault of the recipient; (ii) was known to the
recipient at the time of disclosure; (iii) is disclosed with the prior
written approval of the disclosing party; (iv) was independently
developed by the recipient without any use of the Confidential
Information of the disclosing party, as evidenced by contemporaneous
written documentation; or (v) becomes known to the recipient from a
source other than the disclosing party without breach of this
Agreement. The obligation not to use or disclose said Confidential
Information will remain in effect until one of these exceptions
occurs.
9.2. Both parties agree not to disclose any trade secrets or Confidential
Information transferred to it by the other party or by third parties
which are identified in writing and/or are considered by a party as
confidential. Each party shall protect the other's Confidential
Information from unauthorized dissemination and use with the same
degree of care that such party uses to protect its own like
information, but not less than a reasonable degree of care. Neither
party will use the other's Confidential Information for purposes other
than necessary to directly further the purposes of this Agreement.
Neither party will disclose to third parties the other's Confidential
Information without the prior written consent of the other party.
Except as expressly provided in this Agreement, no ownership or
license rights is granted in any Confidential Information.
9.3. Since unauthorized transfer of one party's Confidential Information may
substantially diminish their value and injure that party in ways that
cannot be remedied fully by money, the other party's breach of these
Article IX obligations will entitle first party to equitable relief
(including orders for specific performance and injunctions), as well as
monetary damages.
9.4. Both parties agree that the terms and conditions, and this Agreement
itself shall be considered as Confidential Information, except as
expressly otherwise stated in this Agreement.
ARTICLE X: RESTRICTED USE
10.1. LICENSEE shall not distribute or have distributed the Development
Software as such, nor shall LICENSEE distribute or have distributed any
Run-Time Software in connection with or on any application other than the
Designated Application.
10.2. LICENSEE acknowledges that unauthorized reproduction or use of the
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Development Software and/or Run-Time Software as provided in this Article
X is a breach of a material obligation of this Agreement and is subject
to any available remedies for such breach.
ARTICLE XI: TITLE AND RIGHTS TO SOFTWARE AND MODIFICATIONS
11.1. The grant of license and distribution rights by LICENSOR to LICENSEE
under Article II hereof is LICENSEE's only right to the Development
Software and the Run-Time Software. Title, interests and rights to the
Development Software, the Run-Time Software, and Documentation in all
language versions delivered or to be delivered hereunder shall always
remain in LICENSOR. Furthermore, the grant of such license shall not
restrict licensing by LICENSOR in any manner.
11.2. LICENSEE shall grant to LICENSOR a non-exclusive, non-transferable,
royalty-free, perpetual license for the right to make, use, sell, and
sublicense end users to use, technology which is the subject of any
patents obtained by LICENSEE for derivative works or improvements made by
LICENSEE to the Development Software and the Run-Time Software.
ARTICLE XII: TAXES
12.1. The Run-Time Software licensed hereunder is intended principally for
use by End Users and therefore should be exempt from sales, use, excise
and other similar taxes. However, if such tax, or any import duty, or
export duty, should be imposed on LICENSOR, LICENSEE shall either bear
such tax or duty by a direct payment to the taxing authority or shall
reimburse LICENSOR for such tax or duty paid by LICENSOR.
ARTICLE XIII: MOST FAVORED NATIONS
13.1. In the event that LICENSOR provides royalty pricing with terms and
conditions similar to this Agreement to any other person or party more
favorable than these provided to LICENSEE, and for similar volumes of
distributed Run-Time Software, LICENSEE's royalty pricing shall be
automatically amended and revised without further action of the parties,
commensurate with such royalty pricing, and effective as of the effective
date of such royalty pricing.
ARTICLE XIV: MISCELLANEOUS
14.1. This Agreement shall be deemed to have been entered into and shall be
construed, governed and interpreted in accordance with the laws of the
Commonwealth of Massachusetts, without giving effect to principles of
conflict of law.
14.2. The invalidity or unenforceability of any particular provision of this
Agreement shall not affect the other provisions, and this Agreement shall
be construed in all respects as if such invalid or unenforceable
provisions were omitted.
14.3. The failure of either party to insist, in any one or more instances, upon
the performance of any of the terms of this Agreement or to exercise any
right hereunder, shall not be construed as a waiver of the future
performance of any such term or the future exercise of such right.
14.4. Whenever any occurrence (e.g. an event of force majeure) is delaying or
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threatens to delay either party's timely performance under this
Agreement, such party will promptly give notice thereof, including all
relevant information with respect thereto, to the other party.
14.5. It is hereby agreed that the rights and obligations of the parties hereto
contained in Articles VII, VIII, IX, XI and the Addenda referenced
therein, shall survive and continue after any termination or cancellation
of this Agreement and shall bind the parties, their successors, their
assigns and their legal representatives.
14.6 LICENSEE shall not export or transfer, whether directly or indirectly,
any part of the Software to any country without first complying strictly
and fully with all export controls that may be imposed on such products
by the United States government or any other applicable country or
organization of nations. LICENSEE shall obtain all necessary governmental
consents before distributing any Run-Time Software. LICENSEE will comply,
at its own expense, with all statutes, regulations, rules, ordinances,
and orders of any governmental body, department or agency which apply to
or result from LICENSEE's obligations under the Agreement.
14.7. This Agreement sets forth and shall constitute the entire agreement
between LICENSEE and LICENSOR with respect to the subject matter thereof,
and shall supersede any and all prior agreements, understandings,
promises and representations made by one party to the other concerning
the subject matter herein and the terms and conditions applicable
thereto. This Agreement may not be released, discharged, supplemented,
interpreted, amended or modified in any manner except by an instrument in
writing signed by a duly authorized officer or representative of each of
the parties hereto as is specially provided elsewhere in this Agreement.
14.8. In making and performing this Agreement, the parties act and shall act at
all times as independent contractors and nothing contained in this
Agreement shall be construed or implied to create the relationship of
partner or of employer and employees between the parties. At no time
shall either party act as an agent for or make commitments for or in the
name of the other party.
14.9. LICENSEE may assign or sublicense the license rights granted hereunder to
LICENSEE's affiliates. LICENSEE is not allowed to assign the license
rights granted hereunder to any other party without LICENSOR's prior
written consent, which shall not be unreasonably withheld or delayed.
14.10. All notices under this Agreement shall be sent to the address here above
mentioned. All such notices shall be deemed to be received by the other
party three (3) days after the postal date or on the date of signature of
the receipt of delivery by a courier mail company.
14.11. The Addenda referenced in this Agreement, and the specifications
referenced therein, as well as other documentation referenced in this
Agreement which define the obligations of the parties, are a part of this
Agreement with the same force and effect as if fully set forth herein.
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ADDENDUM A
SOFTWARE
1. Software.
1.1. The Development Software, having the following reference:
Software and/or tools used to develop PowerScribe.
1.2. Both parties agree that LICENSOR shall deliver on a regular basis
all available updates and upgrades of the Development Software to
LICENSEE, being at least once every six (6) months.
2. Interface to LICENSOR's Source Code and Tools.
2.1. LICENSOR will provide LICENSEE with linguistic tools to modify
rules in the lexicons and build subject specific dictionaries.
Additionally, LICENSOR will provide LICENSEE with all existing and
future API's, required to interface LICENSEE's technology with
LICENSOR's technology. LICENSOR will provide any necessary
technical support requiring interface with LICENSOR's source code.
2.2. LICENSOR shall provide LICENSEE with necessary assistance,
training and support by its technical staff, to enable LICENSEE to
use the above mentioned interfaces, API's and tools to incorporate
the Run-Time Software in its applications.
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ADDENDUM B
DESIGNATED APPLICATION
Designated Application
The Run-Time Software will be incorporated into the following application(s):
Applications using Powerscribe within the healthcare market.
Both parties agree that if future applications incorporating the Run-Time
Software are developed by LICENSEE, such applications will be added to this
Agreement.
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ADDENDUM C
POWERSCRIBE ROYALTY PRICING
1. Royalties
a) LICENSEE shall pay to LICENSOR royalties as follows:
Four Hundred U.S. dollars ($400), or amount as adjusted under
Article 13.1 (Most Favored Nations), per station.
b) LICENSEE will provide LICENSOR with calendar quarterly reports
showing the quantity of royalty-bearing copies of the Designated
Application shipped and/or distributed hereunder, commencing three
(3) months after first shipment. These quarterly reports shall be
provided to LICENSOR within thirty (30) days after each quarter.
LICENSEE shall at the same time pay the amount of royalties due to
LICENSOR for all such royalties due. All amounts are payable in U.S.
dollars.
c) LICENSEE shall keep a separate register in which it shall record the
exact number of royalty- bearing copies, as well as the type of the
Designated Application incorporating the Run-Time Software and any
other information relevant for determining the amounts of royalties
payable.
LICENSOR shall have the right, at LICENSOR's expense (except as noted
below), to conduct an audit of LICENSEE's records relative to the
performance of this Agreement during normal business hours upon
reasonable notice to LICENSEE, no more than once yearly. Such audit
shall be conducted by a mutually acceptable auditing firm,
independent from the parties.
In the event such audit reveals an underpayment to LICENSOR, LICENSEE
shall pay LICENSOR such underpayment within thirty (30) days, as well
as the audit costs. Those audit costs shall only be paid by LICENSEE
if the underpayment is greater than ten percent (10%) of the annual
royalties for the relevant year.
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ADDENDUM D
SUPPORT DURING WARRANTY PERIOD
1. LICENSOR's contact information for technical support during the warranty
period will be:
tel: fax:
e-mail address:
2. LICENSOR's normal business hours are as follows (Eastern Time):
Monday: 8.30 - 5.30
Tuesday: 8.30 - 5.30
Wednesday: 8.30 - 5.30
Thursday: 8.30 - 5.30
Friday: 8.30 - 5.30
3. The current legal holidays are as follows:
U.S.A.:
Date Holiday
Thursday, January 1 New Year's Day
Monday, February 16 President's Day
Monday, April 20 Patriot's Day
Monday, May 25 Memorial Day
Friday, July 3 Independence Day
Monday, September 7 Labor Day
Monday, October 12 Columbus Day
Thursday, November 26 Thanksgiving Day
Friday, November 27 Day after Thanksgiving
Friday, December 25 Christmas
4. LICENSEE shall contact the above mentioned persons of LICENSOR's personnel
via the telephone and fax numbers mentioned here above or as otherwise
provided, to request for the technical support services as described in
Article V of this Agreement. LICENSOR's technical support personnel will
provide LICENSEE with a resolution within a reasonable period of time
according to the request and the difficulty of the problem.
If LICENSEE is willing to receive more and/or other technical support during
the warranty period, or wishes to expand the technical support after the
warranty period, LICENSEE has to enter into a separate maintenance and
support agreement with LICENSOR.
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ADDENDUM E
HANDWRITING SOFTWARE
1. Software
1.1. The Software, having the following reference:
Software and/or tools used to develop Allegro
handwriting software.
1.2. Both parties agree that LICENSOR shall deliver on a regular basis
all available updates and upgrades of the Allegro Software to
LICENSEE, being at least once every six (6) months.
2. Interface to LICENSOR's Source Code and Tools.
2.1. LICENSOR will provide LICENSEE with tools to modify and build
subject Designated Applications. Additionally, LICENSOR will
provide LICENSEE with all existing and future API's, required to
interface LICENSEE's technology with LICENSOR's technology.
LICENSOR will provide any necessary technical support requiring
interface with LICENSOR's source code.
2.2. LICENSOR shall provide LICENSEE with necessary assistance,
training and support by its technical staff, to enable LICENSEE to
use the above mentioned interfaces, API's and tools to incorporate
the Run-Time Software in its applications.
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ADDENDUM F
ALLEGRO ROYALTY PRICING
1. Royalties
a) For sales of Designated Applications including Development Software
pursuant to Addendum E, LICENSEE shall pay to LICENSOR royalties
according to the following schedule, or an amount as adjusted under
Article 13.1 (Most Favored Nations):
7% of cumulative Net Revenues for sales up to the first one million
U.S. dollars ($1,000,000).
6% of cumulative Net Revenues for sales between one million U.S.
dollars ($1,000,000) and two million U.S. dollars ($2,000,000).
5% of cumulative Net Revenues for sales between two million U.S.
dollars ($2,000,000) and three million U.S. dollars ($3,000,000).
4% of cumulative Net Revenues for sales between three million U.S.
dollars ($3,000,000) and four million U.S. dollars ($4,000,000).
3% of cumulative Net Revenues for sales in excess of four million U.S.
dollars ($4,000,000).
For purposes hereof "Net Revenues" means all revenue received from the
commercialization, license and distribution or other exploitation of the
Allegro Software, provided however, Net Revenues shall exclude (a) any
government taxes or levies collected from customers with respect to sales
which are to be paid over to any applicable governmental authority
(including without limitation excise, import and export taxes), (b) any
cost of packing, shipment and delivery, including without limitation, all
freight charges, freight forwarding fees, customs fees and insurance
premiums, (c) any amounts for maintenance and service of the technology
or service which are billed to customers separately from billing for sale
or licensing of the product or technology, (d) any amount received in
connection with the sale, license or other disposition of the product or
technology which is refunded to the customer, or which is treated by the
licensee as uncollectible on its financial statements, (e) usual trade
discounts or allowances actually allowed, including advertising
allowances, or (f) any other amounts agreed to in writing by the Parties.
b) LICENSEE will provide LICENSOR with calendar quarterly reports
showing the quantity of royalty-bearing copies of the Designated
Application shipped and/or distributed hereunder, commencing three
(3) months after first shipment. These quarterly reports shall be
provided to LICENSOR within thirty (30) days after each quarter.
LICENSEE shall at the same time pay the amount of royalties due to
LICENSOR for all such royalties due. All amounts are payable in U.S.
dollars.
c) LICENSEE shall keep a separate register in which it shall record the
exact number of royalty- bearing copies, as well as the type of the
Designated Application incorporating the Run-Time Software and any
other information relevant for determining the amounts of royalties
payable.
LICENSOR shall have the right, at LICENSOR's expense (except as noted
below), to conduct an audit of LICENSEE's records relative to the
performance of this Agreement during normal business hours upon
16
reasonable notice to LICENSEE, no more than once yearly. Such audit
shall be conducted by a mutually acceptable auditing firm,
independent from the parties.
In the event such audit reveals an underpayment to LICENSOR, LICENSEE
shall pay LICENSOR such underpayment within thirty (30) days, as well
as the audit costs. Those audit costs shall only be paid by LICENSEE
if the underpayment is greater than ten percent (10%) of the annual
royalties for the relevant year.
