LICENSE AGREEMENT
Exhibit
10.1
THIS
LICENSE AGREEMENT (the “Agreement”) is entered into as of May 21, 2008 (the
“Effective Date”) by and between Material Technologies, Inc., a Delaware
corporation (“Licensor”), and Fatigue Solutions Corp., a California corporation
(“Licensee”) (individually, a “Party”; collectively, the
“Parties”).
RECITALS
WHEREAS, Licensor is the owner
of all right, title, and interest in the (i) Fatigue Fuse, and (ii)
Borescope intellectual property (collectively, the “Intellectual
Property”); and
WHEREAS, Licensor desires to
grant to Licensee, and Licensee desires to receive from Licensor, a
non-exclusive license to use, distribute, and sell the Intellectual Property in
accordance with the terms and conditions contained in this Agreement (the
“License”).
NOW THEREFORE, in
consideration of the foregoing recitals and mutual covenants contained herein,
the Parties agree as follows:
ARTICLE
1
GRANT
OF LICENSE
1.1
Grant of
License. Subject to the terms and conditions herein, and on
the basis of the representations, warranties and agreements herein contained,
Licensee agrees to receive from Licensor, and Licensor agrees to grant to
Licensee, a non-exclusive License to make, have made, use and sell use,
distribute, and sell the Intellectual Property.
1.2
Time and
Place. The closing of the transactions contemplated by this
Agreement shall take place at the offices of Licensor, located at 00000 Xxx
Xxxxxxx Xxxxxxxxx, Xxxxx 000, Xxx Xxxxxxx, Xxxxxxxxxx 00000, immediately upon
the full execution of this Agreement, the satisfaction of all conditions, and
the delivery of all required documents, or at such other time and place as the
Parties mutually agree upon (which time and place are hereinafter referred to as
the “Closing”).
1.3
Royalty. In
consideration for the License, Licensee shall pay to Licensor a royalty of 10%
of all “Net Sales.” Royalties payable under this Agreement shall be
paid within 90 days following the last calendar quarter in which the royalties
accrue. For purposes of this Agreement, “Net Sales” shall mean
Licensee’s gross receipts for the sale, use and transfer of Intellectual
Property, as well as Licensee’s gross receipts for services performed by using
the Intellectual Property, less the sum of (a) discounts allowed in amounts
customary in the trade; (b) sales, tariff duties, or use taxes directly
imposed and with reference to particular sales; (c) outbound transportation
prepaid or allowed; and (d) amounts allowed or credited on
returns.
1.4
Sub-License. Licensee
may sublicense the rights granted pursuant to this Agreement without Licensor’s
prior written consent.
ARTICLE
2
LICENSOR’S
REPRESENTATIONS AND WARRANTIES
2.1
Representations and
Warranties of the Licensor. The Licensor represents and
warrant to the Licensee, as of the Closing, that:
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2.1.1
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Licensor
has full right, power and authority to enter into this Agreement and to
perform all of its obligations
hereunder;
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2.1.2
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Licensor
has full power and authority to license all of the rights, title and
interests contained in this Agreement;
and
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2.1.3
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no
provision of law and no contract to which Licensor is a party prevents
Licensor from performing the obligations
hereunder.
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2.2
Disclosure. No
representation or warranty made by the Licensor in this Agreement, nor any
document, written information, statement, financial statement, certificate, or
exhibit prepared and furnished or to be prepared and furnished by the Licensor
or its representatives pursuant hereto or in connection with the transactions
contemplated hereby, when taken together, contains any untrue statement of a
material fact, or omits to state a material fact necessary to make the
statements or facts contained herein or therein not misleading in light of the
circumstances under which they were furnished, to the best of Licensor’s
knowledge and belief.
2.3
Reliance. The
foregoing representations and warranties are made by the Licensor with the
knowledge and expectation that the Licensee is placing reliance
thereon.
ARTICLE
3
LICENSEE’S
REPRESENTATIONS AND WARRANTIES
3.1
Representations and
Warranties of the Licensee. The Licensee represents and
warrant to the Licensor, as of the Closing, that:
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3.1.1
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Licensee
has full right, power and authority to enter into this Agreement and to
perform all of its obligations hereunder;
and
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3.1.2
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no
provision of law and no contract to which Licensee is a party prevents
Licensee from performing the obligations
hereunder.
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3.2
Disclosure. No
representation or warranty made by the Licensee in this Agreement, nor any
document, written information, statement, financial statement, certificate, or
exhibit prepared and furnished or to be prepared and furnished by the Licensee
or its representatives pursuant hereto or in connection with the transactions
contemplated hereby, when taken together, contains any untrue statement of a
material fact, or omits to state a material fact necessary to make the
statements or facts contained herein or therein not misleading in light of the
circumstances under which they were furnished, to the best of Licensee’s
knowledge and belief.
3.3
Reliance. The
foregoing representations and warranties are made by the Licensee with the
knowledge and expectation that the Licensor is placing reliance
thereon.
ARTICLE
4
CONFIDENTIALITY
& NONDISCLOSURE
4.1
Obligations. Each
Party (the “Receiving Party”) acknowledges and agrees that any business and
technical information provided to the Receiving Party by the other Party (the
“Disclosing Party”) hereunder constitutes the confidential and proprietary
information of the Disclosing Party, and that the Receiving Party's protection
thereof is essential to this Agreement and a condition to the Receiving Party's
use and possession thereof. The Receiving Party shall retain in
strict confidence and not disclose to any third party (except as authorized by
this Agreement) without the Disclosing Party's express written consent, any and
all such information. Licensee acknowledges and agrees that the
Intellectual Property is confidential and proprietary information of
Licensor.
4.2
Exceptions. The
receiving Party shall be relieved of this obligation of confidentiality to the
extent any such information:
(i) was in the public domain at the time it was disclosed
or has become in the public domain through no fault of the Receiving
Party;
(ii) the Receiving Party can prove was known to the
Receiving Party, without restriction, at the time of disclosure as shown by the
files of the Receiving Party in existence at the time of
disclosure;
(iii) is disclosed by the Receiving Party with the prior written
approval of the Disclosing Party;
(iv) the Receiving Party can prove was independently
developed by the Receiving Party without any use of the Disclosing Party's
confidential information and by employees or other agents of the Receiving Party
who have not had access to any of the Disclosing Party's confidential
information; or
(v) becomes known to the Receiving Party, without restriction,
from a source other than the Disclosing Party without breach of this Agreement
by the Receiving Party and otherwise not in violation of the Disclosing Party's
rights.
4.3
Notification of
Security Breach. The Receiving Party agrees to notify the
Disclosing Party promptly in the event of any breach of its security under
conditions in which it would appear that the trade secrets contained in the
Intellectual Property were prejudiced or exposed to loss. The
Receiving Party shall, upon request of the Disclosing Party, take all other
reasonable steps necessary to recover any compromised trade secrets disclosed to
or placed in the possession of the Receiving Party by virtue of this
Agreement. The cost of taking such steps shall be borne solely by the
Receiving Party.
4.4
Injunctive
Relief. Each Receiving Party acknowledges that any breach of
any of
its
obligations with respect to confidentiality or use of the Disclosing Party's
confidential information hereunder is likely to cause or threaten irreparable
harm to the Disclosing Party, and, accordingly, the Receiving Party agrees that
in the event of such breach the Disclosing Party shall be entitled to seek
equitable relief to protect its interest therein, including but not limited to
preliminary and permanent injunctive relief, as well as money
damages.
ARTICLE
5
INDEMNIFICATION
Each Party (the “Indemnifying Party”)
agrees to indemnify, defend, and hold harmless the other Party (the “Indemnified
Party”) from and against any and all claims, damages, and liabilities, including
any and all expense and costs, legal or otherwise, caused by the negligent act
or omission of the Indemnifying Party, its subcontractors, agents, or employees,
incurred by the Indemnified Party in the investigation and defense of any claim,
demand, or action arising out of the work performed under this Agreement;
including breach of the Indemnifying Party of this Agreement. The
Indemnifying Party shall not be liable for any claims, damages, or liabilities
caused by the sole negligence of the Indemnified Party, its subcontractors,
agents, or employees.
The
Indemnified Party shall notify promptly the Indemnifying Party of the existence
of any claim, demand, or other matter to which the Indemnifying Party’s
indemnification obligations would apply, and shall give them a reasonable
opportunity to settle or defend the same at their own expense and with counsel
of their own selection, provided that the Indemnified Party shall at all times
also have the right to fully participate in the defense. If the
Indemnifying Party, within a reasonable time after this notice, fails to take
appropriate steps to settle or defend the claim, demand, or the matter, the
Indemnified Party shall, upon written notice, have the right, but not the
obligation, to undertake such settlement or defense and to compromise or settle
the claim, demand, or other matter on behalf, for the account, and at the risk,
of the Indemnifying Party.
The
rights and obligations of the Parties under this Article shall be binding upon
and inure to the benefit of any successors, assigns, and heirs of the
Parties.
ARTICLE
5
TERM
AND TERMINATION
6.1
Term. Unless
this Agreement is terminated pursuant to Article 6.2 hereof or a Party gives at
least 60 days written notice to the other Party of its intent to terminate, the
License granted hereunder shall remain in effect for a term of three years
beginning on the date hereof. Moreover, this Agreement shall
automatically renew for succeeding terms of one year each unless either Party
gives notice to the other of its intention not to renew no later than 30 days
prior to the end of the then current term. Licensee understands that
after the termination of this Agreement for any reason, it shall have no right
whatsoever to continue as a Licensee regardless of any undocumented continuation
of the relationship with Licensor.
6.2
Cause. This
Agreement may be terminated by either Party for cause immediately upon the
occurrence of any of the following events:
(i) If
the other Party ceases to do business, or otherwise terminates its business
operations;
(ii) If
the other Party shall fail to promptly secure or renew any license,
registration, permit, authorization or approval necessary for the conduct of its
business in the manner contemplated by this Agreement, or if any such license,
registration, permit, authorization or approval is revoked or suspended and not
reinstated within 60 days;
(iii) If
the other Party materially breaches any material provision of this Agreement
(including, but not limited to, Article 2 hereof) and fails to cure such breach
within 30 days (ten days in the case of a failure to pay and immediately in the
case of a breach of Article 3 hereof) of written notice describing the breach;
or
(iv) If
the other Party shall seek protection under any bankruptcy, receivership, trust
deed, creditors arrangement, composition or comparable proceeding, or if any
such proceeding is instituted against the other (and not dismissed within 120
days).
6.3
Absolute Rights
of Termination. Each Party understands that the rights of
termination hereunder are absolute. Neither Party shall incur any
liability or compensation obligation whatsoever for any damage (including,
without limitation, damage to or loss of goodwill or investment), loss or
expenses of any kind suffered or incurred by the other (or for any compensation
to the other) arising from or incident to any termination of this Agreement by
such Party that complies with the terms of the Agreement whether or not such
Party is aware of any such damage, loss or expenses.
6.4
Disposition of
Property. Upon termination of this Agreement by either Party
or naturally at the end of the term, all rights of Licensee hereunder shall
terminate, and Licensee shall immediately return to Licensor, or destroy, at
Licensor's option, all confidential information and any other related materials
in its possession, custody or control, in whichever form held (including all
copies or embodiments thereof), and will cease using any trademarks, service
marks and other designations of Licensor. Licensee shall certify to
Licensor that the return or destruction of information has been completed within
15 days of termination.
6.5
Survival. The
provisions of Articles 4, 5, and 8 shall survive expiration or termination of
this Agreement for any reason.
ARTICLE
7
INFRINGEMENT
AGAINST THIRD PARTIES
In the
event that either Party learns of imitations or infringements of the
Intellectual Property, that Party shall notify the other in writing of the
infringements or imitations. Licensor shall have the right to
commence lawsuits against third persons arising from infringement of the
Intellectual Property. In the event that Licensor does not commence a
lawsuit against an alleged infringer within 60 days of notification by Licensee,
Licensee may commence a lawsuit against the third party. Before
filing suit, Licensee shall obtain the written consent of Licensor to do so and
such consent shall not be unreasonably withheld. Licensor will
cooperate fully and in good faith with Licensee for the purpose of securing and
preserving Licensee’s rights to the Intellectual Property. Any
recovery (including, but not limited to, a judgment, settlement or licensing
agreement included as a resolution of an infringement dispute) shall be divided
equally between
the
Parties after deduction and payment of reasonable attorneys’ fees to the party
bringing the lawsuit.
ARTICLE
8
GENERAL
PROVISIONS
8.1
Incorporation by
Reference. The recitals, schedules, exhibits, and all
documents (including, without limitation, all financial statements) delivered as
part hereof or incident hereto are incorporated as a part of this Agreement by
reference.
8.2
Relationship of the
Parties. The sole relationship between the Parties shall be
that of independent contractors. Nothing herein shall be construed to
constitute the Parties as legal partners, joint ventures, franchisees, or agents
of each other, or impute any obligations, fiduciary or otherwise, express or
implied, in any way whatsoever, on either of the Parties. Neither
Party shall make any warranties or representations, or assume or create any
obligations on the other Party's behalf except as may be expressly permitted
hereby and none have been made except as set forth herein. Each Party
shall be solely responsible for the actions of its respective employees, agents,
and representatives.
8.3
Third
Party Beneficiaries. Nothing expressed or implied herein is
intended to confer, nor shall anything herein confer, upon any entity other than
the Parties and their respective successors and assigns any rights, remedies,
obligations or liabilities whatsoever.
8.4
Assignment. The
benefits and obligations of this Agreement shall inure to and be binding upon
the Parties and their respective successors and permitted
assigns. Neither Party shall transfer or assign any of its rights or
delegate any of its obligations hereunder, in whole or in part, whether
voluntarily or by operation of law, without the prior written consent of the
other Party. Any assignment or purported assignment in violation of
this Article shall be null and void.
8.5
Choice of
Law. This Agreement and the rights of the Parties hereunder
shall be governed by and construed in accordance with the laws of the State of
California including all matters of construction, validity, performance, and
enforcement and without giving effect to the principles of conflict of
laws.
8.6
Exclusive Jurisdiction and
Venue. The parties agree that the Courts of the County of
Orange, State of California shall have sole and exclusive jurisdiction and venue
for the resolution of all disputes arising under the terms of this Agreement and
the transactions contemplated herein.
8.7
Attorneys’
Fees. In the event any Party hereto shall commence legal
proceedings against the other to enforce the terms hereof, or to declare rights
hereunder, as the result of a breach of any covenant or condition of this
Agreement, the prevailing Party in any such proceeding shall be entitled to
recover from the losing Party its costs of suit, including reasonable attorneys'
fees, as may be fixed by the court.
8.8
Notices. Any
notice, request, instruction, or other document required by the terms of this
Agreement, or deemed by any of the Parties hereto to be desirable, to be given
to any other Party hereto shall be in writing and shall be given by personal
delivery, overnight delivery, mailed by registered or certified mail, postage
prepaid, with return receipt requested, or sent by facsimile
transmission to the addresses of the Parties as follows:
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i.
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To
Licensor:
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Material
Technologies, Inc.
Attn:
Xxxxxx X. Xxxxxxxxx, Chief Executive Officer
00000
Xxx Xxxxxxx Xxxxxxxxx, Xxxxx 000
Xxx
Xxxxxxx, Xxxxxxxxxx 00000
Fax:
(000) 000-0000
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ii.
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To
Licensee:
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Fatigue
Solutions Corp.
Attn:
Xxxxxx X. Xxxxxxxxx, President
00000
Xxx Xxxxxxx Xxxxxxxxx, Xxxxx 000
Xxx
Xxxxxxx, Xxxxxxxxxx 00000
Fax:
(000) 000-0000
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iii.
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With
Copy To:
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Xxxxxx
& Xxx
Attn:
Xxxx Xxxxxx, Esq.
00000
Xxxx Xxxxxx Xxxxxx
Xxxxxx,
XX 00000
Fax:
(000) 000-0000
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The
persons and addresses set forth above may be changed from time to time by a
notice sent as aforesaid. If notice is given by personal delivery or
overnight delivery in accordance with the provisions of this Article, such
notice shall be conclusively deemed given at the time of such delivery provided
a receipt is obtained from the recipient. If notice is given by mail
in accordance with the provisions of this Article, such notice shall be
conclusively deemed given upon receipt and delivery or refusal. If
notice is given by facsimile transmission in accordance with the provisions of
this Article, such notice shall be conclusively deemed given at the time of
delivery if during business hours and if not during business hours, at the next
business day after delivery, provided a confirmation is obtained by the
sender.
8.9
Amendment. This
Agreement shall not be amended, modified, or supplemented by the Parties in any
manner, by course of conduct or otherwise, except by an instrument in writing
signed on behalf of each Party.
8.10
Waiver. Neither
Party shall be deemed, by any act or omission, course of conduct or otherwise,
to have waived any of its rights or remedies hereunder unless such waiver is in
writing and signed by the waiving Party, and then only to the extent
specifically set forth in such writing. A waiver with reference to
one event shall not be construed as continuing or as a bar to or waiver of any
right or remedy as to a subsequent event.
8.11
Headings. The
headings and captions used in this Agreement are used for convenience only and
are not to be considered in construing or interpreting this
Agreement.
8.12
Construction. This
Agreement has been negotiated by the Parties and their respective legal counsel
at arm’s length and thus shall be interpreted fairly in accordance with its
terms and without any strict construction in favor of or against either
Party.
8.13
Severability. In
the event that any of the covenants herein contained shall be held
unenforceable
or declared invalid for any reason whatsoever, such unenforceability or
invalidity shall not affect the enforceability or validity of the remaining
provisions of this Agreement and such unenforceable or invalid portion shall be
severable from the remainder of this Agreement.
8.14
Counterparts;
Facsimile Signatures. This Agreement may be executed
simultaneously in one or more counterparts, each of which shall be deemed
an original, but all of which together shall constitute one and the same
instrument. The Parties agree that facsimile signatures of this
Agreement shall be deemed a valid and binding execution of this
Agreement.
8.15
Basis of
Bargain. EACH PARTY RECOGNIZES AND AGREES THAT THE WARRANTY
DISCLAIMERS AND LIABILITY AND REMEDY LIMITATIONS IN THIS AGREEMENT ARE MATERIAL,
BARGAINED FOR BASES OF THIS AGREEMENT AND THAT THEY HAVE BEEN TAKEN INTO ACCOUNT
AND REFLECTED IN DETERMINING THE CONSIDERATION TO BE GIVEN BY EACH PARTY UNDER
THIS AGREEMENT AND IN THE DECISION BY EACH PARTY TO ENTER INTO THIS
AGREEMENT.
8.16
Complete
Agreement. This Agreement and all exhibits hereto, all of
which are hereby incorporated herein by reference, constitute the entire
Agreement between the Parties with respect to the subject matter hereof, and
hereby supersedes all prior and contemporaneous, written or oral agreements and
understandings between the Parties with respect to such subject
matter.
IN WITNESS WHEREOF, the
Parties hereto have executed this Agreement, as of the date first written
hereinabove.
LICENSOR:
MATERIAL
TECHNOLOGIES, INC.,
a
Delaware corporation
/s/ Xxxxxx X.
Xxxxxxxxx
By:
Xxxxxx X. Xxxxxxxxx
Its:
Chief Executive Officer
LICENSEE:
FATIGUE
SOLUTIONS CORP.,
a
California corporation
/s/ Xxxxxxx
Xxxxx
By:
Xxxxxxx Xxxxx
Its:
Secretary
