EXHIBIT 10.1
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LICENSE AGREEMENT
by and between
MOBILE REACH TECHNOLOGIES, INC.
and
SPECTRUM MOBILE, INC.
Dated as of
March 10, 2006
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LICENSE AGREEMENT
LICENSE AGREEMENT ("Agreement"), dated as of the 10th day of March,
2006 ("Effective Date"), by and between Mobile Reach Technologies, Inc., a North
Carolina corporation (the "Licensor"), and Spectrum Mobile, Inc. a North
Carolina corporation (the "Licensee"). Capitalized terms used in this Agreement
without definition have the meanings given to them in Exhibit A, unless the
context otherwise requires.
BACKGROUND
WHEREAS, the Licensor, a wholly-owned subsidiary of Mobile Reach
International, Inc. ("MRI"), wishes to license to the Licensee and the Licensee
wishes to license from the Licensor certain assets described in this Agreement
and as part of that license the Licensee is willing to assume certain
responsibilities of the Licensor related to the Business.
WHEREAS, the Licensor and the Licensee mutually agree that beginning
on the Effective Date, Licensor is willing to grant to Licensee an irrevocable,
license to the assets described in this Agreement.
AGREEMENT
In consideration of the foregoing and the mutual covenants in this
Agreement, the Licensor and the Licensee, intending to be legally bound, agree
as follows:
1.1 License Payment. On the terms of, and subject to the conditions in, this
Agreement and for a "License Payment" made up of the sum of the following:
(i) during the 1st month through the 24th month following the
Effective Date, five percent (5%) of license fees collected by Licensee for
licensing of Mobility Software Product,
(ii) during the 25th month through the 36th month following the
Effective Date, four percent (4%) of license fees collected by Licensee for
licensing of Mobility Software Product,
(iii) during the 37th month through the 48th month following the
Effective Date, two percent (2%) of license fees collected by Licensee for
licensing of Mobility Software Product,
(iv) if during the 1st month through the 3rd month following the
Effective Date, a single order from a customer is has a license fee greater than
$100,000, then in addition to the amount from (i) above, an additional twenty
percent (20%) of license fees collected by Licensee from such order for
licensing of Mobility Software Product,
(v) if during the 4th month through the 6th month following the
Effective Date, a single order from a customer is has a license fee greater than
$100,000, then in addition to the amount from (i) above, an additional ten
percent (10%) of license fees collected by Licensee from such order for
licensing of Mobility Software Product, Notwithstanding the foregoing, in no
event shall the cumulative total License Payments made to Licensor per this
Paragraph 1.1 plus total payments made to Licensor per Paragraph 1.2(i) exceed
two hundred and fifty thousand dollars ($250,000).
1.2 Proceeds upon a Sale.
(i) Subject to the provisions of Section 1.1 above, in the event of a
Transaction (as defined below), Licensee shall pay to Licensor within 10 days of
a closing of any Transaction a percentage of the Transaction Value of such
Transaction (such percentage of such net proceeds, the "Proceeds of
Transaction"), as determined by the following schedule: (i) 20% if the
Transaction occurs on or after the date hereof but before the first anniversary
thereof; (ii) 10% if the Transaction occurs on or after the first anniversary of
the date hereof but before the second anniversary thereof.
(ii) For the purposes of this Agreement, Transaction means the
acquisition, sale or other extraordinary corporate transaction involving the
businesses, assets or securities of the Licensee and/or a third party, whether
by way of a merger, consolidation or other business combination, negotiated
purchase, tender or exchange offer, option, leveraged buyout, minority
investment or partnership, joint or collaborative venture, divestiture,
recapitalization or restructuring. Not withstanding the foregoing, the sale of
securities for investment purposes by the Licensee shall not constitute a
Transaction.
(iii) For the purposes of this Agreement, Transaction Value means (i)
in the case of the sale, exchange or purchase of equity securities, the total
consideration paid or received or to be paid or received for such securities
(including amounts payable to holders of options, warrants and convertible
securities, and amounts in escrow), plus the principal amount of all
indebtedness for borrowed money (other than trade payables and other current
accruals) as set forth on the most recent consolidated balance sheet of the
acquired company prior to the consummation of such sale, exchange or purchase
(less the amount of cash and cash equivalents and short-term investments set for
on such balance sheet), plus, only when received, payments made in installments
and contingent payments; and (ii) in the case of a sale or disposition of
assets, the total consideration paid or received or to be paid or received for
such assets (including amounts in escrow and installment payments but only when
such payments are received), plus the net value of any current assets which
relate to the assets sold or acquired but which are not transferred in the
Transaction (including, without limitation, accounts receivables and proceeds
therefrom, inventory, cash and cash equivalents) and the principal amount of all
indebtedness for borrowed money (other than trade payables and other current
accruals) assumed by a purchaser, plus contingent payments but only when those
payments are received. In the case of recapitalization, all equity securities
retained by security holders of the acquired company upon consummation of the
Transaction will be deemed acquired in the Transaction.
(iv) Licensee may not consummate any Transaction prior to Licensor
obtaining the requisite vote of Licensor's shareholders if such a vote is
required under applicable law.
1.3 Licensed Assets. "Licensed Assets" means all of the business, properties,
assets, and rights of Licensor of whatever kind and nature, real or personal,
tangible or intangible, that are owned, leased or licensed by Licensor on the
Effective Date and used, held for use or intended to be used primarily (except
as provided below) in the operation or conduct of the Business, including:
(i) Intellectual Property Assets. Licensee is hereby granted an
irrevocable perpetual and, except as set forth in subsection (iii) below,
exclusive, license, including the right to sublicense, the technology, software
source code, software object code, flow charts, specifications, documentation
for "Mobility Software Products" which are defined as:
1) Splitware Server - nonexclusive irrevocable perpetual
license
2) Splitware Server Plug-In Modules - nonexclusive irrevocable
perpetual license
3) Splitware Client for BlackBerry - nonexclusive irrevocable
perpetual license
4) Splitware Client for Windows and PocketPC - exclusive
irrevocable perpetual license
5) SplitForms Wizard - exclusive irrevocable perpetual license
6) HelpReach, Asset Reach, ChangeReach & Service Pulse -
exclusive irrevocable perpetual license,
including but not limited to all copyrights, patents, trade secrets, know how
and other intellectual property associated therewith.
(ii) Employees and Consultants. Licensee shall have the right, but not
the obligation, to hire/engage any and all of the following employees and
consultants without the encumbrances of non-compete and confidentiality
agreements:
1) Xxxx Xxxxx
2) Xxxxx Xxxxxxxxx
3) Xxxx XxXxx
4) Xxxxxx Xxxxxxxx
5) Xxx Xxxxxxxx
6) Xxxxxx Xxxxxx
7) Xxxxxx Xxxxxxxx
8) Xxxxx Xxxxxxxxx
9) Xxxxxxx Xxxxx
(iii) Customers and Prospects. Licensee is hereby granted the license
and right to make, to use and to sell licenses to Mobility Software Products and
related products/services to all current customers and all known current and
prospective customers, as well as to all unknown prospective customers for the
Mobility Software Products. Licensee acknowledges that Licensor has entered a
separate agreement with a separate entity and that agreement grants rights sell
a subset of the Mobility Software Products to customers and prospects.
(iv) Assigned Agreements. Licensee is hereby assigned and Licensee
hereby assumes (subject to all licenses hereunder remaining in full force and
effect) all obligations under the following agreements ("Assigned Agreements")
signed by Licensor with the following companies:
1) All customer license contracts
2) All customer support contracts
3) All customer professional services contracts
4) BMC/Remedy
5) RIM/Blackberry
6) Column Technologies
7) IT Prophets
8) EMS
9) RIGID
10) Fusion
11) IT Apps
12) SMI
13) Xerion
14) Delos
15) Barcodata
16) Shamrock IP Holdings
(v) Physical Property Assets, Licensee is hereby granted an exclusive
irrevocable perpetual license to use of the following physical property assets:
1) Computer servers for sales, marketing, development,
services, operations
2) Computer workstations/laptops for sales, marketing,
development, services, operations
3) Development & testing tools including but not limited to
MSDN subscription and BMC/Remedy Technology Alliance
4) Communications equipment including but not limited to desk
phones, data routers/switches, and cell phones
5) Test equipment including but not limited to PDA devices and
test servers
6) Desks, Chairs, Storage for the Business (but expressly not
those items associated with the storage of historical
records for Mobile Reach International, Inc. and
subsidiaries).
(vi) Brand Assets. Licensee is hereby granted an exclusive irrevocable
perpetual license for use of the following brand assets, trade names,
trademarks, service marks and goodwill associated therewith:
1) Mobile Reach
2) Mobile Reach Technologies
3) Mobile Reach Suite
4) Harmony
5) Harmony Suite
6) Splitware
7) SplitForms
8) HelpReach
9) AssetReach
10) ChangeReach
11) ServicePulse
12) EventReach
13) MRT Logo(s)
14) Website content
15) Marketing materials
16) White Papers
17) Phone Numbers
18) Mailing Address
(vii) Accounts Receivable and Proceeds Therefrom. Beginning on the
Effective Date, all accounts receivable and proceeds therefrom and all unbilled
work in process of Licensor, including but not limited to all currently
outstanding/uncollected invoices, and all invoices newly generated or unbilled
invoices on new or existing customer contracts, shall be the property of the
Licensee. With respect to each of the Agreements listed in Section 1.3 (iv)
above, as well as with respect to all Support Agreements, Licensee and its
executive officers individually shall have the authority to act as agent and
attorney in fact of Licensor to render invoices in the name of Mobile Reach
Technologies, Inc. and to endorse or assign to the account of Licensee, any
checks or payments received in the name of Mobile Reach Technologies, Inc. with
respect to such Agreements.
(viii) Domain Name. Licensee is hereby granted the exclusive right to
use the domain name and to control the content on the web site located at the
domain name XXX.XXXXXXXXXXX.XXX.
1.4 Assumed Responsibilities.
The term "Assumed Responsibilities" means all the following
responsibilities, obligations and commitments of Licensor. On the Effective
Date, the Licensee shall assume full responsibility for any and all Assigned
Agreements and Support Agreements currently in effect. Licensee shall receive no
monies previously collected from customers for the assumed Support Agreements.
1.5 License.
(i) Grant of License. Subject to the terms and conditions contained in
this Agreement and from the Effective Date, Licensor hereby grants to Licensee
an irrevocable perpetual license (except as described in Section 6.0(a)(iii)
below) (the "License") to the Licensed Assets as listed in Section 1.3 including
the exclusivity provisions as follows:
1) To use, reproduce, modify, enhance, add-to, integrate, and/or
bundle Mobile Software Products with Licensee products;
2) To sublicense and distribute Mobile Software Products to
Customers worldwide through Licensee's distribution channels subject to
licensing terms which are substantially similar to those Licensee uses for its
own products;
3) For use by Licensee, its Distribution Channels, consultants,
and contractors: (i) internally, including without limitation, development and
quality assurance tests; (ii) for demonstrations and benchmarks for potential
sales; (iii) to provide support to customers; and (iv) for consulting and design
development services.
4) To temporarily sublicense Mobile Software Products to
prospective customers for evaluation or development purposes under Licensee's
standard processes;
5) To sublicense Mobile Software Products to Licensee's third
party marketing or development partners for purposes including without
limitation, integration, interoperability, development of interfaces, and joint
marketing efforts, subject to licensing terms which are substantially similar to
those Licensee uses for its own products.
6) To create "Derivative Works" which are the Mobile Software
Products as modified, enhanced, added to, or otherwise altered after the
Effective Date of this Agreement, including documentation.
1.6 Termination of Agreement.
(i) Licensor shall have the right to terminate this Agreement, upon
occurrence of any of the events set forth below ("Events of Default"): (i) any
material breach by the Licensee of this Agreement which remains uncured thirty
(30) days after having received written notice of such default; (ii) the
Licensee files any petition or action for relief under any bankruptcy or
insolvency law or an involuntary petition for bankruptcy is filed against the
Licensee, which petition is not dismissed with ninety (90) days after the filing
thereof; or (iii) the dissolution or cessation of operations by the Licensee.
(ii) Effect of License Termination. In the event of a termination pursuant
to Section 1.6 (i) above, the Licensor's right to grant new sublicenses for the
Licensed Assets shall immediately expire and cease, provided that all of the
Assigned Agreements and any license entered into during the course of this
Agreement shall continue to be honored by Licensor and Licensee and shall remain
in full force and effect.
2.0 Representations and Warranties of the Licensor. The Licensor represents and
warrants to the Licensee as follows:
a. Organization, Good Standing and Power. The Licensor is duly organized,
validly existing and in good standing under the laws of the State of North
Carolina and has full corporate authority to conduct its business as it is now
being conducted, to own or use the properties and assets that it purports to own
or use.
b. Enforceability. This Agreement has been duly authorized, executed and
delivered by the Licensor and constitutes the legal, valid, and binding
obligation of the Licensor, enforceable against it in accordance with its terms,
subject to the Enforceability Exceptions.
c. Title To Licensed Assets. The Licensor has good and valid title to all
the Licensed Assets, in each case free and clear of all Liens except (i)
mechanics', carriers', workmen's, repairmen's or other like Liens arising or
incurred in the ordinary course of business, Liens arising under original
purchase price conditional sales contracts and equipment, leases with third
parties entered into in the ordinary course of business and liens for Taxes that
are not due and payable or that may thereafter be paid without penalty, and (ii)
other imperfections of title or encumbrances, if any, that could not reasonably
be expected to have a material adverse effect on the current use of the asset to
which they relate (the Liens described in clauses (i) and (ii) above are
referred to collectively as "Permitted Liens"). The Licensee will acquire the
Licensed Assets free and clear of all Liens other than Permitted Liens.
d. Taxes. None of the Licensed Assets is "tax exempt use property" within
the meaning of Section 168(h) of the Code. None of the Licensed Assets is a
lease made pursuant to Section 168(f) of the Code. The Licensor is not a
"foreign person" within the meaning of Section 168(f) of the Code.
e. Assigned Contracts. All Assigned Contracts are valid, binding and in
full force and effect and are enforceable by Licensor in accordance with their
respective terms, except for the Enforceability Exceptions. The Licensor has
performed all obligations required to be performed by it to date under each of
the Assigned Contracts, and it is not (with or without the lapse of time or the
giving of notice, or both) in breach or default in any respect thereunder. To
the knowledge of the Licensor, no other party to any Assigned Contract is (with
or without the lapse of time or the giving of notice, or both) in material
breach or default in any respect under such Assigned Contract. The Licensor has
not within the last six months, received any written notice of the intention of
any party to terminate any Assigned Contract. Complete and correct copies of all
Assigned Contracts, together with all modifications and amendments thereto, have
been made available to the Licensee.
f. Intellectual Property. (a) There is no Assigned Intellectual Property
that is registered or subject to an application for registration. (i) Licensor
is the sole and exclusive owner of or has the right to use, execute, reproduce,
display, perform, modify, enhance, distribute, prepare derivative works of or
sublicense, without payment to any other person, all of the Assigned
Intellectual Property, except where the failure to have such rights would not
reasonably be expected to have a material adverse effect on the current use of
such Assigned Intellectual Property, and (ii) the Licensor has the right to
grant the Licensee a license in and to the Intellectual Property.
(b) Licensor has not granted any written license of any kind
relating to any Assigned Intellectual Property or the marketing or distribution
thereof. Licensor is not bound by or a party to any license for the use of such
Assigned Intellectual Property in the conduct of Licensor's business, and except
for "shrink-wrap" license agreements relating to computer software licensed in
the ordinary course of Licensor's business. The Licensor's current use of the
Assigned Intellectual Property does not materially violate, conflict with or
infringe the Assigned Intellectual Property of any other person. No claims are
pending or, to the knowledge of the Licensor, Threatened, against the Licensor
or any of its affiliates by any Person with respect to the irrevocable perpetual
license, validity, enforceability, or use in the Licensor's business of any
Assigned Intellectual Property.
g. Personal Property. The tangible Licensed Assets are in good working
order (ordinary wear and tear excepted), are free from any material defect and
have been maintained in all material respects in accordance with the past
practice of Licensor's business and generally accepted industry practice, and no
material repairs, replacements or regularly scheduled maintenance relating to
any such item has been deferred.
h. Compliance with Applicable Laws. The Licensor's business is in
compliance with all Applicable Laws, including those relating to occupational
health and safety, except where such failure to comply would not have a material
adverse effect on the Licensee after the Effective Date. The Licensor has not
received any written notice that any investigation or review by any Governmental
Entity with respect to any Acquired Asset or Licensor's business is pending or
that any such investigation or review is contemplated the outcome of which would
have a material adverse effect on the Licensee after the Effective Date.
i. Licensed Assets. The Licensed Assets comprise all the assets that are
owned, leased or licensed by Licensor and are used, held for use or intended to
be used primarily in the conduct of the Business, other than the Excluded Assets
and except as otherwise provided in Section 1.2.
j. Disclaimer. Except as set forth in this Article 2, the Licensor makes no
warranty or merchantability, suitability or fitness for a particular purpose, or
quality, with respect to any of the tangible assets being so transferred, or as
to the condition or workmanship thereof or the absence of any defect therein,
whether latent or patent.
3.0 The Licensee's Representations and Warranties. The Licensee represents and
warrants to the Licensor as follows:
a. Organization and Good Standing. The Licensee is duly organized, validly
existing, and in good standing under the laws of the State of Delaware and has
full corporate authority to conduct its business as it is now being conducted,
to own or use the properties and assets that it purports to own or use.
b. Enforceability. This Agreement has been duly authorized, executed and
delivered by the Licensee and constitutes the legal, valid, and binding
obligation of the Licensee, enforceable against it in accordance with its terms,
subject to the Enforceability Exceptions. The Licensee has the corporate power
and authority to execute and deliver, and perform its obligations under, this
Agreement.
c. Title to Licensee Derivative Works. Licensor agrees that Licensee has and
will retain all rights of ownership in any modifications, enhancements, add-ons,
etc. made by or for Licensee, including Licensee Derivative Works, and including
but not limited to, associated Intellectual Property rights and Licensor shall
not obtain, assert, or claim any right or license except as otherwise agreed in
writing between the parties.
d. No Conflicts; Consent. Neither the execution and delivery of this Agreement
by the Licensee nor the consummation or performance of any of the Transactions
by the Licensee will (with or without notice or lapse of time) (i) Conflict with
its certificate of incorporation or bylaws; (ii) Conflict with or give any
Governmental Entity or other Person the right to prevent, delay or otherwise
interfere with any of the Transactions or to exercise any remedy or obtain any
relief under, any Law or any Order to which the Licensee is subject; or (iii)
Conflict with any provision of, or give any Person the right to declare a
default or exercise any remedy under, or to accelerate the maturity or
performance of, or to cancel, terminate, or modify, any material Contract to
which the Licensee is bound. The Licensee is not and will not be required to
give any notice to or obtain any Consent from any Person in connection with the
execution or delivery of, or the performance of its obligations under, this
Agreement or the consummation of the Transactions.
4.0 Covenants.
a. Expenses. Except as otherwise expressly provided in this Agreement, each
party will bear its respective expenses incurred in connection with the
preparation of, and performance of its obligations under, this Agreement and the
consummation of the Transactions, including all fees and expenses of its
Representatives. If this Agreement is terminated, the obligation of each party
to pay its own expenses will be subject to any rights of that party arising from
a Breach by the other party.
b. No Negotiation. Until this Agreement is terminated under Article 6, the
Licensor will not, and will cause its Representatives not to, solicit, initiate,
or encourage any inquiries or proposals from, discuss or negotiate with, provide
any non-public information to (other than stating that the Licensor is
prohibited from entering into negotiations by virtue of an agreement with
another Person), or consider the merits of any inquiries or proposals from, any
Person (other than the Licensee) relating to any transaction involving the sale
of any Licensed Assets (other than sales of non-material assets in the Ordinary
Course).
c. Books and Records. After the Effective Date, each of the Licensor and
the Licensee will provide reasonable access to each others' Books and Records
for purposes related to this Agreement and the Transactions and the preparation
of tax returns and other filings with Governmental Entities.
d. Consents. The Licensor shall use commercially reasonable efforts to
obtain all Consents under any of the Assigned Contracts or other agreements as
may be required in connection with the Transactions so as to preserve, for the
benefit of the Licensee, all rights of and benefits of the Licensor under the
Assigned Contract. The Licensee shall provide the Licensor with such assistance
and information as is reasonably required to obtain such Consents.
e. Notification of Certain Matters. The Licensor shall give prompt notice
to the Licensee, and the Licensee shall give prompt notice to the Licensor, of
(a) the occurrence or non-occurrence of any event, the occurrence or
non-occurrence of which is likely to cause any representation or warranty of the
Licensor or the Licensee, as the case may be, in this Agreement to be untrue or
inaccurate at or prior to the Effective Date and (b) any failure of the Licensor
or the Licensee, as the case may be, to comply with or satisfy any covenant,
condition or agreement to be complied with or satisfied by it under this
Agreement; but the delivery of any notice pursuant to this Section 4.9 shall not
limit or otherwise affect any remedies available to the party receiving such
notice.
f. Additional Documents and Further Assurances; Cooperation. Each of the
Licensee and the Licensor shall, at the request of the other party, shall
execute and deliver such other instruments and do and perform such other acts
and things (including all action reasonably necessary to seek and obtain any and
all Consents of any Governmental Entity or Person required in connection with
the Transactions; but the Licensee shall not be obligated to consent to any
divestitures or operational limitations or activities and no party shall be
obligated to make a payment of money as a condition to obtaining any such
Consent) as may be necessary for the consummation of the Transactions.
g. Noncompete. From the time of Effective Date through the second
anniversary of the Effective Date, Licensor and its Affiliates shall refrain
from, without the express written consent of Buyer, directly or indirectly,
anywhere in the World, engaging in the business relating to the Licensed Assets,
or owning, managing, operating, financing, controlling, investing, or
participating in the irrevocable perpetual license, management, operation,
finance or control of, or acting as a sales or marketing representative or
consultant with respect to matters relating to or lending its name or any
similar name to any Person whose business, activities, products or services are
directly competitive with any of the business activities conducted or offered by
in connection with the Genomics Business. Notwithstanding anything herein to the
contrary, Licensor and its Affiliates may make passive investments in any
enterprise the shares of which are publicly traded if such investment
constitutes less than five percent (5%) of the equity of such enterprise.
h. Transition Period. During the three (3) month period following the
Effective Date, the Licensor shall continue to have the right to use (i) the
company name Mobile Reach International, Inc., (ii) its current email addresses,
telephone and facsimile numbers, and mailing address.
5.0 Conditions.
a. The Licensee's Conditions. The Licensee's obligation to consummate the
Transactions at the Effective Date is subject to the satisfaction, of each of
the following conditions (any of which may be waived by the Licensee, in its
sole discretion, in whole or in part):
(i) The Licensor's representations and warranties in this Agreement
must be accurate in all material respects as of the Effective Date as if made on
the Effective Date.
(ii) The covenants and obligations that Licensor is required to
perform or to comply with pursuant to this Agreement at or prior to the
Effective Date must have been performed and complied with in all material
respects.
(iii) There must not be in effect any Law or Order that (a) prohibits
the consummation of the Transactions, and (b) has been adopted or issued, or has
otherwise become effective, since the date of this Agreement.
(iv) The Licensee must have received a certificate from Licensor, in
form reasonably satisfactory to the Licensee, certifying as to the completion of
all necessary corporate proceedings and the incumbency of the persons executing
this Agreement on behalf of Licensor.
(v) After the Effective Date, Licensor will not offer competing
Mobility Software Products.
(vi) With monies received from Licensee, Licensor will pay off debts
and liabilities associated with Mobile Reach Technologies, Inc., including but
not limited to amount owed for taxes to governmental agencies, amounts owed to
employees for salaries/wages/bonuses/commissions, amounts owed to employee
benefits, and amounts owed to vendors.
(vii) After the Effective Date, Licensee will not be prevented from
entering other markets with technology and software.
b. The Licensor's Conditions. The Licensor's obligation to consummate the
Transactions at the Effective Date is subject to the satisfaction, at or prior
to the Effective Date, of each of the following conditions (any of which can be
waived by Licensor, in its sole discretion, in whole or in part):
(i) The Licensee's representations and warranties in this Agreement,
must have been accurate in all material respects as of the Effective Date as if
made on the Effective Date.
(ii) The covenants and obligations that the Licensee is required to
perform or to comply with pursuant to this Agreement at or prior to the
Effective Date, must have been performed and complied with in all material
respects.
(iii) There must not be in effect any Law or Order that (a) prohibits
the consummation of the Transactions, and (b) has been adopted or issued, or has
otherwise become effective, since the date of this Agreement.
(iv) The Licensor must have received a certificate from the Licensee,
in form reasonably satisfactory to Licensor, certifying as to the completion of
all necessary corporate proceedings and the incumbency of the person executing
this Agreement on behalf of the Licensee.
6.0 Termination.
a. Termination Events. This Agreement can be terminated:
(i) by mutual consent of the Licensee and Licensor;
(ii) by either party, if the other has committed a material Breach,
and the Breach has not been waived and the terminating party was not in material
Breach prior to the Breach that is forming the basis for the proposed
termination; but the party that has committed a material Breach will have thirty
(30) Business Days after receipt of notice from the other party of its intention
to terminate this Agreement pursuant to this Section 6.0 to cure such Breach
before the other party may so terminate this Agreement; or
(iii) by the Licensor if the approval of Licensor's shareholders is
required under applicable law to effect this Agreement and the requisite
approval is not obtained after reasonable and diligent efforts on the part of
the Licensor to obtain such approval. If termination is to occur per this
provision 6.0(a)(iii), then Licensor shall give Licensee ninety (90) days notice
before such termination is to be effective.
6.1 Effect of Termination. If this Agreement is terminated pursuant to Section
6.0, all further obligations of the Parties under this Agreement will terminate;
but if this Agreement is terminated by a party because of one or more willful
material Breaches by the other party or because one or more of the conditions to
the terminating party's obligations under this Agreement is not satisfied as a
result of the other party's willful material failure to comply with its
obligations under this Agreement, the terminating party's right to pursue all
legal remedies will survive such termination unimpaired. If this Agreement is
terminated pursuant to Section 6.0, all Derivative Works shall remain the sole
property of Licensee. Notwithstanding the foregoing, in the event of
termination, all Assigned Agreements and any license agreement with third
parties entered into by Licensee during the term of this Agreement shall
continue to be honored by Licensor and Licensee.
7.0 Indemnification; Remedies.
a. Indemnification by the Licensor. The Licensor shall indemnify the
Licensee against, and hold it harmless from, any Losses arising from, relating
to or otherwise in respect of a Breach by Licensor of its representations and
warranties under Article 2. Indemnification under this Article 7 shall be the
Licensee's sole and exclusive remedy for any Losses arising from, relating to or
otherwise in respect of this Agreement or the Transactions.
b. Time Limitations on the Licensor's Obligations. The Licensor's
obligations to indemnify and hold harmless the Licensee shall terminate upon the
first anniversary of the Effective Date.
c. Indemnification by the Licensee. The Licensee shall indemnify the
Licensor against, and hold it harmless from, any Losses arising from, relating
to or otherwise in respect of (x) the use of the Licensed Assets after the
Effective Date or (y) any Assumed Responsibility.
d. Time Limitations on the Licensee's Obligations. The Licensee's
obligations to indemnify and hold harmless the Licensor shall terminate upon the
first anniversary of the Effective Date.
e. Procedures.
(i) In order for the Indemnified Party to be entitled to any
indemnification provided for under this Agreement in respect of, arising out of
or involving a Third Party Claim, the Indemnified Party must notify the
Indemnifying Party in writing of the Third Party Claim (a "Claim Notice"), which
must be accompanied by a copy of the written notice of the Third Party Claimant
asserting the Third Party Claim; but the failure to give such notification
promptly (so long as a valid Claim Notice is given before the expiration of the
applicable period) shall not affect the Indemnified Party's right to
indemnification except to the extent the Indemnifying Party shall have been
prejudiced as a result of such failure. Thereafter, the Indemnified Party shall
deliver to the Indemnifying Party copies of all other notices and documents
(including court papers) received by the Indemnified Party relating to the Third
Party Claim.
(ii) If a Third Party Claim is made against an Indemnified Party, the
Indemnifying Party shall be entitled to participate in the defense thereof and,
if its so chooses, to assume the defense thereof with counsel selected by the
Indemnifying Party. Should the Indemnifying Party so elect to assume the defense
of a Third Party Claim, the Indemnifying Party shall not be liable to the
Indemnified Party for any legal expenses incurred by the Indemnified Party in
connection with the defense thereof, except as provided below. If the
Indemnifying Party assumes such defense, the Indemnified Party shall have the
right to participate in the defense thereof and to employ counsel, at its own
expense, separate from the counsel employed by the Indemnified Party.
Additionally, the Indemnifying Party shall be responsible for the reasonable
fees and expenses of counsel incurred by the Indemnified Party as was reasonably
necessary to respond timely to legal process for any period after the Claim
Notice is given during which the Indemnifying Party has not assumed the defense
thereof, if and to the extent that the Indemnifying Party is responsible to
indemnify for such Third Party Claim. If the Indemnifying Party does not assume
the defense of a Third Party Claim within twenty days after the giving by the
Indemnified Party to the Indemnifying Party of a valid Claim Notice with respect
to a Third Party Claim, the Indemnifying Party shall be liable to the
Indemnified Party for the reasonable fees and expenses of counsel employed by
the Indemnified Party if and to the extent that the Indemnified Party is
responsible to indemnify for such Third Party Claim. If the Indemnifying Party
chooses to defend any Third Party Claim, the Indemnified Party shall cooperate
in the defense thereof. Such cooperation shall include the retention and (upon
the Indemnifying Party's request) the provision to the Indemnifying Party of
records and information which are relevant to such Third Party Claim, and making
employees available, at no cost, on a mutually convenient basis to provide
additional information, an explanation of any material provided and to act as a
witness or respond to legal process. Whether or not the Indemnified Party
assumes the defense of a Third Party Claim, the Indemnified Party shall not
admit any liability with respect to, or settle, compromise or discharge, such
Third Party Claim without the Indemnifying Party's prior written consent (which
consent shall not be unreasonably withheld). If the Indemnifying Party assumes
the defense of the Third Party Claim, the Indemnified Party shall agree to any
settlement, compromise or discharge of a Third Party Claim that the Indemnifying
Party may recommend and that by its terms obligates the Indemnifying Party to
pay the full amount of the liability in connection with such Third Party Claim,
which releases the Indemnified Party completely in connection with such Third
Party Claim.
f. Dollar Limitation on the Licensor's Indemnification Obligations. The
Licensee shall not be entitled to recover any amount for indemnification claims
unless and until the amount which the Licensee and its affiliates are entitled
to recover in respect of such claims exceeds, in the aggregate, $50,000 (the
"Deductible"), in which event the entire amount which the Licensee is entitled
to recover in respect of such claims less the Deductible shall be payable; and
the maximum amount recoverable by the Licensee and its Affiliates for
indemnification claims shall in the aggregate be equal to $200,000.
g. No Consequential Damages. All amounts payable by Licensor in
indemnification of the Licensee shall be considered an adjustment to the
Purchase Price. IN NO EVENT SHALL THE LICENSOR BE LIABLE FOR LOSS OF PROFITS OR
CONSEQUENTIAL DAMAGES BY REASON OF A BREACH OF ANY OF ITS REPRESENTATIONS,
WARRANTIES OR COVENANTS IN THIS AGREEMENT.
h. Subrogation. Upon making any payment to Indemnified Party for an
indemnification claim pursuant to this Article 7, the Indemnifying Party shall
be subrogated, to the extent of such payment, to any rights which the
Indemnified Party may have against any other parties with respect to the subject
matter underlying such indemnification claim.
8.0 General Provisions.
a. Press Releases and Public Announcements. No party shall issue any press
release or make any public announcement relating to the subject matter of this
Agreement prior to the Effective Date without the prior written approval of the
other party; provided, however, that any party may make any public disclosure it
believes in good faith is required by applicable law or any listing or trading
agreement concerning its publicly-traded securities; provided, further, that in
no event shall any such press release or public announcement disclose any of the
terms or conditions of this Agreement unless, in the opinion of counsel, such
disclosure is advisable in order to satisfy any law, regulation or any listing
or trading agreement concerning its publicly-traded securities
b. Notices. All notices and other communications hereunder shall be in
writing and shall be deemed given if delivered personally, telecopied (which is
confirmed) or sent by an internationally recognized overnight courier service,
such as Federal Express, to the parties at the following addresses (or at such
other address for a party as shall be specified by like notice):
if to Licensor, to:
Mobile Reach International, Inc.
0000 Xxxxxxxx Xxxx Xxxx, #000
Xxxx, Xxxxx Xxxxxxxx 00000
Attn: Xxxx Xxxxxxxxxxx Xxxxxxx, CEO
Fax: (000) 000-0000
with a copy (which shall not constitute notice) to:
Xxxxxxx X. Quick, Esq.
Quick Law Group P.C.
0000 Xxxxx Xxxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxxx 00000
Fax: (000) 000-0000
and, if to the Licensee, to:
Spectrum Mobile, Inc.
----------------------------
Xxxx, Xxxxx Xxxxxxxx 00000
Attention:
c. Counterparts. This Agreement may be executed in one or more counterparts
(whether delivered by facsimile or otherwise), each of which shall be considered
one and the same agreement and shall become effective when two or more
counterparts have been signed by each of the parties and delivered to the other
party.
d. Entire Agreement; No Third Party Beneficiary. This Agreement and the
Confidentiality Agreement (including the documents and the instruments referred
to in this Agreement): (a) constitute the entire agreement and supersede all
prior and contemporaneous agreements, negotiations, arrangements and
understandings, both written and oral, among the parties with respect to the
subject matter hereof and thereof, and (b) are not intended to confer upon any
Person, other than the Licensee and the Licensor, any rights or remedies.
e. Severability. Any term or provision of this Agreement that is held by a
court of competent jurisdiction or other authority to be invalid, void or
unenforceable in any situation in any jurisdiction shall not affect the validity
or enforceability of the remaining terms and provisions or the validity or
enforceability of the invalid, void or unenforceable term or provision in any
other situation or in any other jurisdiction. If the final judgment of a court
of competent jurisdiction or other authority declares that any term or provision
of this Agreement is invalid, void or unenforceable, the parties agree that the
court making such determination shall have the power to and shall, subject to
the discretion of such court, reduce the scope, duration, area or applicability
of the term or provision, to delete specific words or phrases, or to replace any
invalid, void or unenforceable term or provision with a term or provision that
is valid and enforceable and that comes closest to expressing the intention of
the invalid or unenforceable term or provision.
f. Choice of Law. All matters affecting the interpretation, validity, and
performance of this Agreement shall be governed by the laws of the State of
North Carolina. The parties hereto hereby submit to the jurisdiction of the
state and federal courts located in the State of North Carolina and agree that
North Carolina shall be the exclusive jurisdiction and venue for any disputes
arising from this Agreement and the related transactions.
g. Enforcement. The parties agree that irreparable damage would occur in
the event that any of the provisions of this Agreement were not performed in
accordance with their specific terms or were otherwise breached. It is
accordingly agreed that the parties shall be entitled to an injunction or
injunctions to prevent breaches of this Agreement and to enforce specifically
the terms and provisions of this Agreement in any court of the United States or
any North Carolina state court, this being in addition to any other remedy to
which they are entitled at law or in equity.
h. Waivers. At any time, each party to this Agreement may (a) extend the
time for the performance of any of the obligations or other acts of the other
party, (b) waive any inaccuracies in the representations and warranties of the
other party in this Agreement or in any document delivered pursuant to this
Agreement or (c) waive compliance by the other party with any of the agreements
or conditions in this Agreement. Any agreement on the part of a party to any
such extension or waiver shall be valid only if set forth in an instrument in
writing signed on behalf of such party. The failure of any party to this
Agreement to assert any of its rights under this Agreement or otherwise shall
not constitute a waiver of those rights.
8.1 Construction and Interpretation.
a. When a reference is made in this Agreement to a section or article, such
reference shall be to a section or article of this Agreement unless otherwise
clearly indicated to the contrary.
b. Whenever the words "include," "includes" or "including" are used in this
Agreement they shall be deemed to be followed by the words "without limitation."
c. The words "hereof," "herein" and "herewith" and words of similar import
shall, unless otherwise stated, be construed to refer to this Agreement as a
whole and not to any particular provision of this Agreement, and article,
section, paragraph, annex and schedule references are to the articles, sections,
paragraphs, annex and schedules of this Agreement unless otherwise specified.
d. The plural of any defined term shall have a meaning correlative to such
defined term, and words denoting any gender shall include all genders and the
neuter. Where a word or phrase is defined herein, each of its other grammatical
forms shall have a corresponding meaning.
e. A reference to any party to this Agreement or any other agreement or
document shall include such party's successors and permitted assigns.
f. A reference to any legislation or to any provision of any legislation
shall include any modification, amendment or re-enactment thereof, any
legislative provision substituted therefor and all regulations and statutory
instruments issued under or pursuant to such legislation.
g. The parties have participated jointly in the negotiation and drafting of
this Agreement. In the event an ambiguity or question of intent or
interpretation arises, this Agreement shall be construed as if drafted jointly
by the parties, and no presumption or burden of proof shall arise favoring or
disfavoring any party by virtue of the authorship of any provisions of this
Agreement.
h. No prior draft of this Agreement, prior agreements negotiations,
arrangements or understandings nor any course of performance or course of
dealing shall be used in the interpretation or construction this Agreement.
8.2 No Assignment. Neither this Agreement not any of the rights, interests or
obligations under this Agreement shall be assigned by either of the parties to
this Agreement (whether by operation of law or otherwise) without the prior
written content of the other party to this Agreement. Subject to the preceding
sentence, this Agreement will be binding upon, inure to the benefit of and be
enforceable by the parties and their respective successors and assigns.
[Signatures on Next Page]
The Licensor and the Licensee have each caused this Agreement to be
executed on their behalf as of the date first written above.
MOBILE REACH TECHNOLOGIES, INC.
By: /s/
--------------------------------
Name: A. Xxxxxxxxxxx Xxxxxxx
Title: Chief Executive Officer
On behalf of both Mobile
Reach International, Inc.
parent Company and for
fully owned subsidiary
Mobile Reach Technologies,
Inc.
SPECTRUM MOBILE, INC.
By:
--------------------------------
Name:
------------------------------
Title:
-----------------------------
EXHIBIT A - DEFINITIONS
For purposes of this Agreement, the following terms have the meanings given
or referred to in this Exhibit A:
"Breach" means (a) any inaccuracy in or breach of, or any failure to
perform or comply with, a representation, warranty, covenant, obligation, or
other provision of this Agreement, or (b) any claim (by any Person) or other
occurrence or circumstance that is or was inconsistent with the representation,
warranty, covenant, obligation, or other provision.
"Business Day" means any day other than a Saturday, a Sunday or a day when
commercial banks in the City of Los Angeles, California are authorized by law,
rule or regulation to be closed.
"Conflict" means any contravention, conflict, violation or breach.
"Consent" means any approval, consent, filing, ratification, waiver, or
other authorization.
"Contract" means any agreement, contract, obligation, promise, or
undertaking (whether written, oral or otherwise and whether express or implied)
that is legally binding.
"Copyrights" means U.S. and foreign registered and unregistered copyrights
(including those in computer software and databases), rights of publicity and
all registrations and applications to register the same.
"Derivative Works" means Mobile Software Products as modified, enhanced,
added to or otherwise altered after the Effective Date of the Agreement,
including documentation. If such Derivative Work is made by or for Licensee, it
will be referred to as "Licensee Derivative Work".
"Enforceability Exceptions" means bankruptcy, insolvency, reorganization,
moratorium or other similar laws now or later in effect relating to creditors'
rights generally and by general principles of equity and commercial
reasonableness, regardless of whether the proceeding is in equity or at law.
"Governmental Entity" means any: (a) nation, state, county, city, town,
village, district, or other jurisdiction of any nature; (b) federal, state,
local, municipal, foreign, or other government; (c) governmental or
quasi-governmental authority of any nature (including any governmental agency,
branch, department, official, or entity and any court or other tribunal); (d)
multi-national organization or body; or (e) body exercising, or entitled to
exercise, any administrative, executive, judicial, legislative, police,
regulatory, or taxing authority or power of any nature.
"Indemnified Party" means a Person entitled to indemnification under
Section 7.1 or 7.3.
"Indemnifying Party" means a Person obligated to provide indemnification
under Section 7.1 or 7.3.
A-1
"Intellectual Property" means all of the following: Trademarks, Patents,
Copyrights and Trade Secrets.
"Law" means any federal, state, local, municipal, foreign, international,
multinational, or other constitution, law, ordinance, principle of common law,
regulation, rule, statute, treaty, or administrative order.
"Liens" means all mortgages, liens, security interests, charges, easements,
leases, subleases, rights of way, options, claims or encumbrances of any kind.
"Losses" means any loss, liability, claim, damage or expense (including
reasonable legal fees and expenses).
"Order" means any award, decision, injunction, judgment, order, ruling,
subpoena, or verdict entered, issued, made, or rendered by any court,
administrative agency, or other Governmental Entity or by any arbitrator.
"Ordinary Course" means an action taken in connection with Licensor's
business that is (i) consistent with actions taken in the past by Licensor and
in the ordinary course of the normal day-to-day operations of Licensor's
business, and (ii) complies with applicable Law.
"Party" means either the Licensee or the Licensor, as the case may be.
"Patents" means all inventions, discoveries, processes, designs,
developments, technology and related improvements and know how, as well as all
issued U.S. and foreign patents and pending patent applications, patent
disclosures, and any and all divisions, continuations, continuations-in-part,
reissues, reexaminations, and extension thereof, any counterparts claiming
priority therefrom, utility models, patents of importation/confirmation,
certificates of invention and like statutory rights.
"Person" means any individual, corporation (including any non-profit
corporation), general or limited partnership, limited liability company, joint
venture, estate, trust, association, organization, labor union, or other entity
or any Governmental Entity.
"Proceeding" means any action, arbitration, audit, hearing, investigation,
litigation, or suit (whether civil, criminal, administrative, investigative, or
informal) commenced, brought, conducted, or heard by or before, or otherwise
involving, any Governmental Entity or arbitrator.
"Reasonable Efforts" means the efforts a prudent business Person who wanted
to achieve a result would use in similar circumstances to see that the result
was achieved as quickly as possible; but an obligation to use Reasonable Efforts
under this Agreement does not require the Person subject to that obligation to
take actions that would result in a materially adverse change in the expected
economic benefits to that Person of this Agreement and the Transactions.
"Representative" means with respect to a particular Person, any director,
officer, employee, agent, consultant, advisor, or other representative of the
Person, including legal counsel, accountants, and financial advisors.
A-2
"Tax" means (i) any income, gross receipts, ad valorem, premium, excises,
value-added, sales, use, transfer, franchise, license, severance, stamps,
occupation, service, lease, withholding, employment, payroll, property or
windfall profits tax, alternative or add-on minimum tax, or other tax fee or
assessment, together with any interest and any penalty, addition to tax or
additional amount imposed by any Governmental Entity responsible for the
imposition of any such tax, with respect to the Licensor and (ii) any liability
of the Licensor for the payment of any amount of the type described in clause
(i) as a result of the Licensor being a member of an affiliated or combined
group with, or a successor to, or transferee of, any other corporation.
"Threatened" means, with respect to a claim, Proceeding, dispute, action,
or other matter, that any written demand or statement has been made, any written
notice has been given, or that another event has occurred that would lead a
prudent Person to conclude that such a claim, Proceeding, dispute, action, or
other matter has a substantial possibility of being asserted, commenced, taken,
or otherwise pursued in the future.
"Trademarks" means U.S., state and foreign registered and unregistered
trademarks, trade dress, service marks, logos, trade names, corporate names,
Internet domain names and all registrations and applications to register the
same.
"Trade Secrets" means all categories of trade secrets as defined in the
Uniform Trade Secrets Act including business information and all other
proprietary information.
"Transactions" means all of the transactions contemplated by this
Agreement, including (a) the purchase and sale of the Licensed Assets and the
assumption of the Assumed Responsibilities; and (b) the performance by the
Licensee and the Licensor of their respective covenants and obligations under
this Agreement.
A-3
