LICENSE AGREEMENT
This Agreement, effective as of the date of last execution, by and between
Ultra-Scan Corporation, having its principal place of business at 0000 Xxxxx Xxx
Xxxx, Xxxxx 00, Xxxxxxx, Xxx Xxxx 00000 ("Ultra-Scan"), and Infinite Group,
Inc., having a place of business at 000 Xxxxxxx Xxxx, Xxxxx 000, Xxxxxxxxx, Xxx
Xxxx 00000 (IGI).
RECITALS:
Ultra-Scan has developed unique technology related to the capture, mapping and
matching of ultrasonic images of human fingerprints for biometric identification
purposes.
Ultra-Scan possesses valuable proprietary information pertaining to the design,
operation, integration and manufacture of ultrasonic imaging devices and
systems.
Ultra-Scan has obtained patent coverage for ultrasonic biometric imaging
devices, fingerprint image matching software, related hardware, software and
other technology, and owns additional patent applications in the U.S. and other
countries.
Ultra-Scan, as part of its business, wishes to grant to IGI a license in
accordance with and subject to the terms of this Agreement.
IGI is a systems integrator and developer of secure communication and other
electronic systems for commercial and governmental operations.
IGI wishes to promote and provide Ultra-Scan's unique ultrasonic biometric
technology to IGI's present and future customers for live-scan identification
purposes.
IGI wishes to perform certain systems integration services for its current and
potential future customers in relation to Ultra-Scan Technology.
For these reasons IGI wishes to obtain from Ultra-Scan license rights in
accordance with and subject to the terms of this Agreement.
Therefore, Ultra-Scan and IGI agree follows:
1.0 DEFINITIONS:
As used in this Agreement:
1.1 "Licensed Patents" means U.S. Patents Numbers 5,524,174; 5,456,256;
5,587,533; 5,647,364; 5,689,576; 5,935,071 and 6,296,610 ("174 Patent", "256
Patent", "533 Patent", "364 Patent", "576 Patent", "071 Patent" and "610
Patent") relating to ultrasonic biometric imaging and identification, any patent
anywhere in the world that relies on the `174 Patent, `256 Patent, `533 Patent,
`364 Patent, `576 Patent, `071 Patent or the `610 Patent for priority, any
patent issuing on any such application, and any reissue, reexamination, or
extension of any such patent.
1.2 "Licensed Trademarks" means the trademarks and servicemarks Ultra-Scan(R),
ID ExpressTM, ID Express DeveloperTM, and True Identity BiometricsTM, which are
Page 1 of 8 Pages
used on or in connection with products embodying Ultra-Scan Technology, as well
as any additional U.S. or foreign trademarks or servicemarks obtained by
Ultra-Scan.
1.3 "AFIS" means an Automated Fingerprint Identification System.
1.4 "DLL" (Dynamic Link Library) means software for processing plain impression
fingerprint images. They are primary level software routines, which are a
separate but embedded component of an AFIS. DLLs do not include source code.
1.5 "ID Express Developer" means an Automated Fingerprint Identification System
that is proprietary to Ultra-Scan. It consists of a plurality of DLLs and
application software, but does not include source code.
1.6 "IV & V" means independent verification and validation, a process of
analyzing actual performance data for a Licensed System to assess the
fingerprint identification process performance, determine error rates and causes
and identify potential measures available to improve system efficiency and/or
accuracy.
1.7 "Licensed System," means Ultra-Scan biometric components comprising
ultrasonic imaging stations and associated hardware and fingerprint processing
and matching software.
1.8 "End User" means any bona fide customer of IGI who purchases, rents, leases,
or otherwise obtains any Licensed System.
1.9 "Third Party System Integrators" means those entities, if any, who have been
selected by IGI and trained and approved by Ultra-Scan, that IGI utilizes for
the integration, installation and/or service and support of Licensed Systems.
1.10 "Ultra-Scan Technology" means all information possessed by Ultra-Scan
including trade secrets and know-how relating to the design and/or production of
ultrasonic scanning devices, fingerprint image capture, processing and matching
software and associated DLLs.
1.11 "Licensed Territory" means the continental United States.
1.12 "Licensed Field" means those governmental and/or commercial entities
requiring live-scan biometric identification of individuals for various purposes
relating to airports.
1.13 "Information" means: (a) information previously or subsequently shared
between the Parties that derives independent economic value from not being
generally known to others who could gain economic benefit from its use or
disclosure, and (b) any such information, whether by electronic transfer or
physical embodiment, of specifications, drawings, engineering materials, work
papers, analyses, compilations, projections, studies or documents. It does not
include any information which (a) is already known to the public prior to
disclosure; or (b) is subsequently made known to the public without any
violation of this Agreement; or (c) is rightfully received by a Party from a
third party without similar restriction and without breach of this Agreement; or
(d) is independently developed; or (e) is required to be disclosed pursuant to a
court order; or (f) is subject to disclosure in accordance with applicable
securities laws, as reasonably determined by either party on advice of counsel.
Page 2 of 8 Pages
2.0 WARRANTIES:
2.1 Each Party warrants that it has the right to enter into this Agreement, and
further warrants that the making of this Agreement does not violate any
agreement existing between it and any other person or entity.
2.2 Ultra-Scan warrants that it has the right to license the Licensed Systems,
Licensed Patents and Licensed Trademarks.
2.3 Ultra-Scan warrants that the Licensed Systems supplied by Ultra-Scan will be
free from defects in workmanship and material, and will meet the required
product specifications at the time of delivery.
2.4 Ultra-Scan Corporation warrants its products to be free from defects in
materials and workmanship under normal use for a period of ninety (90) days for
software and one (1) year for hardware, beginning on the original date of
installation. Service including replacement or repair of hardware items at the
discretion of Ultra-Scan will be performed during this warranty period by
Ultra-Scan, directly or indirectly, at Ultra-Scan's expense.
2.5 THE WARRANTIES SET FORTH ABOVE ARE IN LIEU OF ALL OTHER WARRANTIES, EXPRESS
OR IMPLIED, INCLUDING THE WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A
PARTICULAR PURPOSE.
3.0 GRANT:
Subject to the terms set forth in this Agreement, Ultra-Scan hereby grants to
IGI:
3.1 A non-exclusive, royalty bearing license, without the right to sublicense,
to use, sell and offer to sell the Licensed Systems, within the Licensed Field,
in the Licensed Territory for the term of this Agreement.
3.2 A non-exclusive license to obtain and use Ultra-Scan Technology.
3.3 A non-exclusive license to use the Licensed Trademarks in relation to the
Licensed Systems in accordance with the guidelines provided by Ultra-Scan.
3.4 This Agreement does not transfer to IGI any rights of, or claims to,
ownership in the Licensed Patents, Licensed Trademarks or Ultra-Scan Technology.
4.0 PAYMENTS:
4.1 IGI agrees to pay to Ultra-Scan a nonrefundable license fee of ten thousand
dollars ($10,000USD) for the license granted by this Agreement and for a
software developer's kit which shall include one (1) ultrasonic fingerprint
reader. Additional readers may be purchased by IGI at a price to be determined.
4.2 IGI agrees to pay to Ultra-Scan a recurring fee to be negotiated in good
faith by the parties in response to the specific conditions provided by each
potential project. Nothing in this Agreement shall require IGI to enter into a
transaction-based compensation arrangement with any End User.
Page 3 of 8 Pages
4.3 Notwithstanding paragraph 4.2 above, the Parties agree to negotiate in good
faith a fee structure for any projects requiring a Licensed System, but for
which the fees in paragraph 4.2 are not appropriate. Such negotiations will
include initial and/or recurring fees for that project, and will be memorialized
in an addendum to this Agreement and signed by both Parties.
4.4 In the event that negotiations are undertaken in accordance with paragraph
4.3 above and the resultant fee structure does not include provisions for
maintenance of software and hardware beyond the warranty period, the Parties
agree that Ultra-Scan will require an annual fee for extended warranty support,
and that such an extended warranty may be offered by Ultra-Scan directly to the
End User.
4.5 Payment terms are net thirty (30) days from invoice date, subject to late
fees of 1.5% per month
5.0 REQUIREMENTS:
5.1 In order to assure prompt resolution of End User business process issues,
IGI agrees to act as primary system service and support provider and first point
of contact for End Users for all requests for service or maintenance, and to
provide on site or call center service to:
a) Identify the type of failure and determine whether the source of the
reported failure in the system is related to the Licensed System hardware
or software, or elsewhere in the applications system, a telecom
deficiency, operator error or other; and/or
b) Take direct action to correct the deficiency or recommend End User
action to correct the deficiency; and/or
c) Coordinate directly with Ultra-Scan or in conference with both the End
User and Ultra-Scan to identify symptom(s) and source(s) of malfunction or
anomaly and develop a plan for necessary corrective action, including
execution of Ultra-Scan's depot level warranty and product service support
support.
5.2 IGI agrees to send appropriate employees to Ultra-Scan's Amherst, NY,
facilities to receive Ultra-Scan systems training. Ultra-Scan agrees to provide
training and documentation to IGI personnel to assist IGI in the integration and
installation of Licensed Systems and IGI's direct service and support for End
Users.
5.3 Ultra-Scan agrees to provide direct, on site support to IGI and/or End Users
for purposes of installation, training, IV&V service and troubleshooting and
maintenance support only as specified in an individual project quotation and/or
separately agreed to in writing.
5.4 The Parties agree that for purposes of quality control and proper operation,
Licensed Systems may only be proposed, sold or installed as complete ultrasound
biometric systems. No elements or components may be added to, or deleted from,
any Licensed System without prior written approval by Ultra-Scan.
5.5 The Parties agree that for purposes of quality control and proper operation,
Ultra-Scan shall retain the right to approve or disapprove the integration of
Licensed Systems with any other biometric system or components. Such approval
will not be unreasonably withheld. This right of approval shall include systems
that are to be installed for demonstration or promotional purposes.
Page 4 of 8 Pages
5.6 IGI agrees to include in each contract between IGI and an End User for a
Licensed System, provisions granting Ultra-Scan the right to inspect and test
each installed Licensed System at the expense and discretion of Ultra-Scan. Both
parties agree that exceptions will be granted where certain customers may have
special security requirements that inhibit or prevent such access.
5.7 The Parties agree that Ultra-Scan shall perform IV & V services after each
system has been operational for a length of time to be determined. These
services will be provided at a rate to be negotiated in good faith by the
Parties. Said negotiated rates will be recorded in a signed addendum and
incorporated herein by this reference.
5.8 IGI is authorized and required to grant each End-User the license attached
hereto as Appendix A, with no additions or deletions thereto, and obtain
affirmative acceptance of said license's terms and conditions.
5.9 The parties agree that any or all of the requirements set forth in
paragraphs 5.1 through 5.8 above may be replaced by such other agreed-upon terms
as may be appropriate to the special needs, status and/or security circumstances
of some projects.
6.0 TERM AND TERMINATION:
6.1 The term of this Agreement is two (2) years beginning on the date of last
execution. This Agreement will be renewed for successive two (2) year periods at
the end of this term unless either Party provides written notice to the other
Party of intent not to renew. Such notice must be given at least ninety (90)
days prior to the then-current termination date. Duties and obligations that
survive such termination are detailed in paragraph 6.2 below.
6.2 Upon any termination of this Agreement becoming effective, IGI will be
relieved of all duties and obligations hereunder except for the obligation to
pay to Ultra-Scan any fees accrued and unpaid up to that time, or that
subsequently become due. Any fees as required by paragraphs 4.2 through 4.4
above shall be due for each installed Licensed System so long as it remains
installed, and the need to pay such fees shall survive this Agreement.
6.3 Either Party may terminate this Agreement for a material breach by the other
Party of the provisions hereof. Termination shall be effective thirty (30) days
after written notice to the other Party, if the breach has not been remedied
during that period. Failure to make timely payments of any fees due to
Ultra-Scan will constitute a material breach. The right of Ultra-Scan or IGI to
terminate under the provisions of this Article shall not be an exclusive remedy.
7. 0 MARKINGS & USAGE:
7.1 IGI agrees to use the Licensed Trademarks in relation to all products and
systems utilizing Ultra-Scan Technology in a manner that acknowledges the
participation and contribution by Ultra-Scan. Such use shall be in accordance
with standards, specifications, and instructions approved by Ultra-Scan.
7.2 Each Party agrees not to do or fail to do anything that will impair the
rights of the other Party in that Party's trademarks or trade names. Each Party
Page 5 of 8 Pages
acknowledges that it does not acquire any ownership rights or title to the
trademarks or trade names of the other Party through this license.
8.0 ASSIGNMENT
8.1 This Agreement has been entered into by Ultra-Scan in reliance on the
particular qualifications of IGI and is personal to IGI. IGI may not assign this
Agreement or any of the licenses or rights granted herein. Any attempt by IGI to
assign this Agreement shall be considered an express condition subsequent that
will result in the immediate revocation of this Agreement. Notwithstanding the
foregoing, this Agreement and any of the licenses or rights granted herein may
be assigned to any entity that controls, is controlled by or is under common
control with IGI.
8.2 The license granted in this Agreement shall be binding upon any IGI
successor.
8.3 The license granted in this Agreement shall be binding upon any successor of
Ultra-Scan who holds ownership or control of the Licensed Patents and Licensed
Trademarks.
8.4 Ultra-Scan may assign, pledge, or encumber its monetary rights under this
Agreement.
9.0 INFRINGEMENT AND INDEMNIFICATION:
9.1 IGI agrees to notify Ultra-Scan of any third party that IGI believes may be
infringing a Licensed Patent and/or a Licensed Trademark and agrees to provide
to Ultra-Scan any information IGI has in support of such belief. Ultra-Scan
shall have the right, but not the obligation, to use such information in an
infringement action against such third party. IGI agrees to cooperate with
Ultra-Scan in any action for infringement of a Licensed Patent and/or a Licensed
Trademark brought by Ultra-Scan, and Ultra-Scan agrees to reimburse IGI for all
reasonable costs incurred by providing such requested cooperation.
9.2 The Parties agree to each indemnify, defend and hold harmless the other
Party, its directors, shareholders, officers, agents employees, successors and
assigns from and against any and all liabilities, obligations and costs of
whatever nature arising from or related in any way to any negligent act or
omission by a Party, or to any breach of this Agreement.
9.3 In no event will either Party be responsible for any incidental,
consequential, indirect, special punitive or exemplary damages of any kind,
including, without limitation, any damages for lost goodwill, lost profits, lost
business or other indirect economic damages including injury to property,
whether such claim is based on contract, tort or other legal theory, as a result
of a breach of any warranty or any other term of this Agreement, and regardless
of whether a Party was advised or had reason to know the possibility of such
damages in advance.
10.0 CONFIDENTIALITY/NONCIRCUMVENTION:
10.1 The Parties agree that all terms and conditions of this Agreement and any
other business agreements of the Parties are proprietary and confidential.
Page 6 of 8 Pages
10.2 The Parties agree to keep the Information they receive from each other
confidential at all times and agree not to disclose the Information, in whole or
in part, to any third party without the prior written consent of the other
Party. The Parties agree to inform their respective employees of the
confidential nature of the Information and to obtain their agreement to be bound
by the terms of this Agreement.
10.3 The obligation to protect any confidential information that may have been
received during the term of this Agreement shall survive the Agreement.
10.4 Information deemed confidential may be disclosed by either Party in
response to an order by a court or other regulatory agency having jurisdiction
over either Party as may be required the rules or regulations of said agency, or
upon advice of counsel. Disclosure may also be made in any legal proceeding
brought to enforce the rights of either Party under this Agreement. In the event
any such disclosure is required, the disclosing Party will provide the other
Party with adequate advance notice to allow such Party sufficient time to seek
court protection for such Information. 10.5 Ultra-Scan agrees that it will not,
directly or indirectly, solicit or accept any business from any source
(including any subsidiary or affiliate of such source) that is first made
available to Ultra-Scan by IGI without the express written consent of IGI, and
that it will follow the reasonable directions of IGI with respect to any contact
and/or communication with any such source. IGI agrees that Ultra-Scan shall have
the right to participate in the preparation of any proposals or bids to End
Users, to include input on pricing methods and levels for each project.
11.0 INTELLECTUAL PROPERTY:
11.1 The Parties agree that Ultra-Scan will have sole and exclusive ownership of
all rights in the Ultra-Scan Technology, including, without limitation, the
Ultra-Scan hardware and software products and all enhancements thereto. In the
event IGI or any of its agents creates, develops or suggests any enhancements to
the Ultra-Scan Technology, IGI hereby assigns and agrees to assign such
enhancements to Ultra-Scan; provided that Ultra-Scan grants to IGI a
nonexclusive license to use such enhancements. Any proprietary application
software developed by IGI in accordance with the terms of this license is
excluded from the requirements of this paragraph.
11.2 The parties agree that the xxxx-scale images of fingerprints, as stored in
the applicable database, but without any identifying data, shall be the property
of Ultra-Scan, to be used for IV & V analysis and other internal uses within
Ultra-Scan.
12.0 MISCELLANEOUS:
12.1 This Agreement constitutes the entire agreement and understanding of the
parties with regard to the subject matter hereof and merges and supersedes all
prior discussions, negotiations, understandings, and agreements between the
Parties.
12.2 Notices and other communications between the Parties shall be deemed to be
validly given when transmitted by certified or registered mail, overnight
delivery service, facsimile or personal delivery to the other Party.
Page 7 of 8 Pages
12.3 Ultra-Scan agrees to provide IGI employees and Third Party System
Integrators appropriate training on Ultra-Scan systems and application at the
Ultra-Scan facilities in Amherst, NY, at no charge to IGI. IGI will be
responsible for all travel and incidental expenses incurred by IGI or Third
Party personnel in connection with such training.
12.4 The Parties agree that any controversies arising under this Agreement shall
be presented before the State Courts for the State of New York, or the Federal
District Court for the Western District of New York. Ultra-Scan and IGI hereby
submit themselves to the personal jurisdiction of such courts in connection with
any such proceedings, and agree to accept service of process by mail. This
clause shall not prevent either Party from seeking remedies from the
International Trade Council in Washington, D.C.
12.5 The Parties agree that this Agreement shall be governed by the laws of the
State of New York exclusively, both substantive and procedural (without regard
to its choice of laws provisions) and of the United States.
12.6 The Parties agree that this Agreement is severable as to any word or
provision that is held to be unenforceable, but not the provisions in paragraphs
4.2 through 4.5, which are so fundamental to this Agreement that the severance
of either of them will automatically terminate this Agreement.
12.7 This Agreement may not be modified, discharged or amended except by a
writing signed by both Parties, however, the Parties agree to make such
modifications or amendments in response to reasonable End User requirements that
are acceptable to both Parties. Such acceptance shall not be unreasonably
withheld.
12.8 All shipments from Ultra-Scan, whether shipped as new products, warranty
replacements or service, or software upgrades shall be made FOB Buffalo, NY per
U.C.C. 2-319.
12.9 Ultra-Scan and IGI will prepare a press release to be released jointly as
soon as practicable after the execution of this Agreement. No other press
releases relating to this Agreement or the subject matter herein will be made by
either Party without the prior written consent of the other Party.
In witness whereof, the parties have executed this Agreement in duplicate:
Ultra-Scan Corporation Infinite Group, Inc.
By: _______________________________ By: ________________________________
R. Xxxxxx Xxxxxx, CEO Xxxxxxx X. Xxxxx, President and CEO
Date: _____________________________ Date: _____________________________
Page 8 of 8 Pages
