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Exhibit 10.6
LICENSE AGREEMENT
This LICENSE AGREEMENT (the "Agreement") is entered into as of the 29th
day of December, 1999, by and between ABM MANUFACTURING, INC., an Ohio
corporation ("ABM Manufacturing") and XXXXXXXX RESONANCE ENTERPRISES, INC., a
Nevada corporation ("JRSE").
WITNESSETH, That:
WHEREAS, JRSE has developed and has an exclusive license with respect
to certain technologies, as more specifically described in Section 1 hereof, for
use in the production of magnetic resonance machines; and
WHEREAS, JRSE and Akron Bio-Medical Corp. ("ABMC") have entered into a
certain Distribution Agreement of even date herewith (the "Distribution
Agreement") whereby JRSE has granted to ABMC a non-exclusive license to
distribute said magnetic resonance machines; and
WHEREAS, JRSE has agreed to grant to ABM Manufacturing a non-exclusive
license to use the Technology (as such term is hereinafter defined) for the
purposes herein specified, upon the terms and subject to the conditions set
forth in this Agreement; and
WHEREAS, JRSE has further agreed to grant to ABM Manufacturing a
non-exclusive license to use the Proprietary Marks (as such term is hereinafter
defined) for the purposes herein specified, upon the terms and subject to the
conditions set forth in this Agreement.
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NOW, THEREFORE, in consideration of the foregoing and for other good
and valuable consideration, the receipt and sufficiency of which are hereby
expressly acknowledged, the parties hereto do hereby agree as follows:
1. Description of Technology and Proprietary Marks.
(a) The parties agree and acknowledge that JRSE has developed and
has an exclusive license with respect to certain technologies used in the
production of a portable magnetic resonance machine (the "Portable Unit") and
non-portable magnetic resonance machines (collectively, the "Other Units"). For
purposes hereof, the terms "Portable Units" and "Other Units" shall be deemed to
include any improvements, upgrades or modifications made to the Portable Units
or the Other Units, as the same exist as of the date of this Agreement, and any
future models thereof. In addition, JRSE has an exclusive license with respect
to certain design and engineering drawings, tooling and fixture data,
specifications, written descriptions, procedure documentation, operating and
maintenance manuals and like materials associated with the Portable Units and
the Other Units (the "Technological Data"). The technologies described
hereinabove and the Technological Data are sometimes collectively referred to in
this Agreement as the "Technology".
(b) The parties further agree and acknowledge that JRSE has
obtained or may during the term of this Agreement obtain rights to various trade
names, trademarks, service marks and related logos associated with the Portable
Units and the Other Units (collectively, the "Proprietary Marks"). For purposes
of this Agreement, the term Proprietary Marks shall be deemed to include any
trade names, trademarks, service marks and logos associated with the Portable
Units or the Other Units, including but not limited to those names, marks and
logos which are registered with the U.S. Patent and Trademark Office or any
state agency.
2. Grant of License.
(a) Upon the terms and subject to the conditions set forth in
this Agreement including, but not limited to, the right of termination set forth
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in Section 3 hereof, JRSE hereby grants to ABM Manufacturing, and ABM
Manufacturing hereby accepts from JRSE, the following:
(i) A non-exclusive license to manufacture the Portable
Units and the Other Units (and to perform all testing and related activities
associated therewith) and to sell the Portable Units and the Other Units to
third-party distributors, provided that ABM Manufacturing shall only be entitled
to sell and/or ship the Portable Units and the Other Units to those other
distributors who have entered into distributorship arrangements with JRSE; and
(ii) A non-exclusive license to use the Proprietary Marks in
connection with the activities described in the preceding Section 2(a)(i).
(b) The parties agree that, subject to the terms of this Agreement, ABM
Manufacturing shall have the right and ability to determine the exact manner in
which it performs the activities described in Section 2(a)(i) hereof and shall
have the right to subcontract with third parties to perform any function or
process associated with the manufacturing and testing of the Portable Units or
the Other Units, subject to JRSE's oversight and quality controls.
Notwithstanding the foregoing, the parties hereto contemplate that ABM
Manufacturing shall enter into an agreement with Xxxxxxx whereby Xxxxxxx will be
responsible for instituting and overseeing all of ABM Manufacturing's quality
control procedures and processes.
3. Term and Termination.
(a) Term of Agreement. Subject to the terms of this Section 3,
the initial term of this Agreement shall commence as of the date first written
above and shall continue for a period of eight (8) years thereafter (the
"Initial Term"). This Agreement shall be automatically renewed for two (2)
additional terms of eight (8) years each (the "Renewal Terms") following the
expiration of the Initial Term unless ABM Manufacturing provides JRSE with
written notice of its desire not to renew this Agreement at least ninety (90)
days prior to the expiration thereof. For purposes of this Agreement, the terms
"Initial Term" and "Renewal Terms" are sometimes collectively referred to as
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the "Term". If this Agreement has been renewed for both Renewal Terms and has
not been earlier terminated, then, during the last ninety (90) days of the
second of the Renewal Terms, JRSE and ABM Manufacturing shall negotiate in good
faith to reach a mutually acceptable agreement for the further extension of this
Agreement. If JRSE and ABM Manufacturing are unable to reach such an agreement
within that period of time, then this Agreement shall automatically terminate at
the end of the second of the Renewal Terms.
(b) Right to Terminate - Performance Criteria. JRSE and ABM
Manufacturing agree that notwithstanding anything to the contrary contained
herein, JRSE shall have no right to terminate this Agreement during the first
one (1) year period of the Initial Term, except for breach of this Agreement by
ABM Manufacturing or JRSE's right to terminate this Agreement pursuant to
Section 3(d) hereof. At the end of said initial one (1) year period, JRSE and
ABM Manufacturing shall mutually determine reasonable performance criteria with
respect to ABM Manufacturing's manufacture of the Portable Units and the Other
Units based upon the results of ABMC's test marketing and realistic business
growth patterns. If JRSE and ABM Manufacturing are unable to reach an agreement
on reasonable performance criteria within thirty (30) days after the end of the
initial one (1) year period, then either party may terminate this Agreement by
written notice of termination to the other party delivered within forty-five
(45) days after the end of the initial one (1) year period. For purposes hereof,
"reasonable performance criteria" is defined as that which is logically
attainable in terms related to the empirical data gleaned from market analyses
established during the course of the first year of this Agreement from the date
of execution based upon mutual and independent inquiry by both parties hereto.
If ABM Manufacturing fails to adhere to said performance criteria at any time
following the end of said initial one (1) year period, JRSE agrees to provide
ABM
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Manufacturing with written notice of ABM Manufacturing's failure to perform. ABM
Manufacturing shall have one (1) month following the date on which it receives
the written notice from JRSE to begin taking reasonable steps to cure its
failure to perform and shall have three (3) months from the date of notice to
cure said failure to JRSE's reasonable satisfaction. If it fails to do so, JRSE
shall have the right to terminate this Agreement upon five (5) days written
notice to ABM Manufacturing.
(c) Right to Terminate - Failure to Pay Fee. If ABM Manufacturing
fails to make any payment due hereunder within thirty (30) days of the date on
which said payment is due, the following shall apply: (i) ABM Manufacturing
shall pay interest thereon from and including the thirty-first (31st) day after
date such payment becomes due until the date the entire amount is paid in full
at a rate equal to one percent (1%) per annum over the prime rate being charged
by CitiBank, N.A., in New York as of the close of the business on the date the
payment first becomes due, but in no event greater than the highest rate
permitted by law; and (ii) if such default shall continue uncured for a period
of forty-five (45) days after said payment is due, JRSE shall have the right to
terminate this Agreement upon written notice of termination to ABM
Manufacturing. ABM Manufacturing shall have the option of preventing the
termination of this Agreement by taking corrective action that cures the
default, if such corrective action is taken prior to the end of the time period
stated in the previous sentence and if there are no other defaults during such
time period.
(d) Right to Terminate - ABM Manufacturing's Loss of Xxxxxxx'x
Services. Except as otherwise provided herein, if ABM Manufacturing fails to
enter into the agreement with Xxxxxxx contemplated by Section 2(b) of this
Agreement within ninety (90) days of the date of this Agreement or, if at any
time thereafter, Xxxxxxx is no longer responsible for the institution
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and oversight of all of ABM Manufacturing's quality control procedures and
processes without the prior written consent of JRSE, which consent shall not be
unreasonably withheld, JRSE may terminate this Agreement upon five (5) days
written notice to ABM Manufacturing. Notwithstanding the foregoing, JRSE shall
not have the right to terminate this Agreement pursuant to the preceding
sentence (i)(A) if ABM Manufacturing's inability to enter into an agreement with
Xxxxxxx is due to Xxxxxxx'x decision not to enter into such an agreement or (B)
if said agreement subsequently terminates as a result of Xxxxxxx'x breach
thereof and (ii) in either case specified in Section 3(d)(i), ABM Manufacturing
has secured the services of a substitute person or firm to institute and
oversee, as appropriate, its quality control procedures and processes who is
reasonably satisfactory to JRSE (the "Substitute"). In the case specified in
Section 3(d)(i)(A), ABM Manufacturing must have engaged the services of the
Substitute within ninety (90) days of the date of this Agreement. In the case
specified in Section 3(d)(i)(B), ABM Manufacturing must have engaged the
services of the Substitute within five (5) days after the termination of the
agreement with Xxxxxxx and begun receiving such services within fifteen (15)
days after such termination.
(e) Other Material Breach. If ABM Manufacturing or JRSE otherwise
fails to perform any of the material terms, conditions, agreements or covenants
in this Agreement on its part to be performed (hereinafter referred to as "Other
Default") and such Other Default is not curable, or if such default is curable
but continues uncured for a period of thirty (30) days after notice thereof has
been given to the defaulting party in writing by the other party or all
reasonable steps necessary to cure such Other Default have not been taken by the
defaulting party within said thirty (30) day period, the other party, at its
sole election, may terminate this Agreement forthwith by written notice.
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(f) Bankruptcy, Insolvency and Related Occurrences.
(i) Automatic Termination. In the event that ABM
Manufacturing files a petition in bankruptcy, is adjudicated as bankrupt or
files a petition or otherwise seeks relief under or pursuant to any bankruptcy,
insolvency or reorganization statute or proceeding, or if a petition in
bankruptcy is filed against it, which is not vacated within sixty (60) days, or
it becomes insolvent or makes an assignment for the benefit of its creditors or
a custodian, receiver or trustee is appointed for it or a substantial portion of
its business or assets, which custodian, receiver or trustee is not discharged
within ninety (90) days, this Agreement shall terminate automatically and
forthwith.
(ii) No Right of ABM Manufacturing Representatives to
Continue Agreement. The rights granted herein are personal to ABM Manufacturing
and no assignee for the benefit of creditors, custodian, receiver, trustee in
bankruptcy, sheriff or any other officer of the court or official charged with
taking over custody of ABM Manufacturing's assets or business shall have any
right to continue this Agreement or to exploit or in any way use the Technology
or the Proprietary Marks if this Agreement terminates pursuant to this
subsection 3(f).
(iii) JRSE Right of First Refusal. Notwithstanding the
provisions of subsection 3(f)(ii) above, in the event that, pursuant to local
bankruptcy law, a trustee in bankruptcy of ABM Manufacturing or ABM
Manufacturing, as debtor, is permitted to assume this Agreement and does so and,
thereafter, desires to assign this Agreement to a third party, which assignment
satisfies the requirements of that bankruptcy law, the trustee or ABM
Manufacturing, as the case may be, shall notify JRSE of same in writing. Said
notice shall set forth the name and address of the proposed assignee, the
proposed consideration of the assignment and all other relevant details
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thereof. The giving of such notice shall be deemed to constitute an offer to
JRSE to have this Agreement assigned to it or to its designee for such
consideration, or its equivalent in money, and upon such terms as are specified
in the notice. The aforesaid offer may be accepted only by written notice given
to the trustee or ABM Manufacturing, as the case may be, by JRSE within fifteen
(15) days after JRSE's receipt of the notice from such party. If JRSE fails to
give its notice to such party within the said fifteen (15) days, such party may
complete the assignment referred to in its notice, but only if such assignment
is to the entity named in said notice and for the consideration and upon the
terms specified herein. Nothing contained herein shall be deemed to preclude or
impair any rights which JRSE may have as a creditor in any bankruptcy
proceeding.
4. Licensing Fee.
(a) In consideration of the rights granted to it hereunder, ABM
Manufacturing hereby agrees to pay the following to JRSE:
(i) Fifty Dollars ($50.00) for each Portable Unit sold to
distributors by ABM Manufacturing (as determined in accordance with Section 4(b)
hereof), payable no later than thirty (30) days following the end of each (A)
calendar quarter during the first year of the Term and (B) month thereafter for
the rest of the Term;
(ii) One Thousand Dollars ($1,000.00) for each Other Unit
measuring eighteen (18) inches or twenty-two (22) inches (including twenty-two
inch expandable models) sold to distributors by ABM Manufacturing (as determined
in accordance with Section 4(b) hereof), payable no later than thirty (30) days
following the end of each (A) calendar quarter during the first year of the Term
and (B) month thereafter for the rest of the Term; and
(iii) One Thousand Five Hundred Dollars ($1,500.00) for each
Other Unit measuring four (4) feet or seven (7) feet sold to distributors by ABM
Manufacturing (as
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determined in accordance with Section 4(b) hereof), payable no
later than thirty (30) days following the end of each (A) calendar quarter
during the first year of the Term and (B) month thereafter for the rest of the
Term.
(b) For purposes of subsections 4(a)(i), 4(a)(ii) and 4(a)(iii)
hereinabove, the number of Portable Units and Other Units sold by ABM
Manufacturing to distributors hereunder shall be calculated by determining the
total revenue received by ABM Manufacturing with respect to each type of
Portable Unit and Other Unit sold, then dividing said amount by the
manufacturer's retail list price for the type of Portable Unit or Other Unit in
question. The amount of the licensing fee payable to JRSE with respect to each
Portable Unit and Other Unit shall equal the number of Portable Units and Other
Units sold during the quarter in question, times the amount of the licensing fee
for each Portable Unit or Other Unit as set forth in subsections 4(a)(i),
4(a)(ii) and 4(a)(iii) hereinabove. For example, if ABM Manufacturing received
total revenue of Eight Hundred Dollars ($800.00) for Portable Units that it sold
during the quarterly period in question and the manufacturer's retail list price
for each Portable Unit sold was Two Hundred Dollars ($200.00), the number of
Portable Units sold for purposes of subsection 4(a)(i) hereinabove would be four
(4) and the fee payable to JRSE would be Two Hundred Dollars ($200.00).
(c) Within thirty (30) days following the end of each (A)
calendar quarter during the first year of the Term and (B) month thereafter
during the rest of the Term, ABM Manufacturing shall furnish to JRSE a report
regarding the Portable Units and the Other Units that it sold to distributors
during the preceding period prepared in accordance with the terms hereof. Each
report that ABM Manufacturing furnishes to JRSE shall contain the following
information: (i) a description of each Portable Unit and Other Unit sold or
leased during the
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period in question; (ii) the amount of total revenue received during the period
in question with respect to Portable Units and Other Units; (iii) the amount of
the royalty payment being paid to JRSE on each sale pursuant to the terms
hereof; and (iv) such additional information as JRSE may reasonably request.
5. Additional Covenants of JRSE.
(a) JRSE agrees that it will supply, as soon as practically
possible following the execution of this Agreement and the execution of the
agreement between ABM Manufacturing and Xxxxxxx or the Substitute contemplated
by Section 2(b) of this Agreement, copies of the Technological Data to ABM
Manufacturing in order to allow ABM Manufacturing to pursue the activities
described in Section 2(a)(i) hereof. JRSE further agrees to supply to ABM
Manufacturing, on a timely basis, copies of any additional Technological Data,
including but not limited to that pertaining to any improvements to the Portable
Units or the Other Units, created during the Term which become available during
the Term.
(b) JRSE agrees to use its reasonable best efforts during the
Term to develop a market for the Portable Units and the Other Units and to enter
into arrangements with third parties for the distribution of the Portable Units
and the Other Units on such terms as JRSE reasonably believes will benefit the
interests of both parties hereto.
(c) The parties contemplate that Xxxxx X. Xxxxxxxx, D.D.S.
("Xxxxxxxx"), the owner of the Technology, or JRSE has applied or may in the
future apply with the U.S. Patent and Trademark Office for a patent or patents
with respect to the Portable Units and/or the Other Units. The parties further
contemplate that Xxxxxxxx or JRSE has applied or may in the future apply with
the U.S. Patent and Trademark Office and/or appropriate state agencies for the
registration of one or more of the Proprietary Marks. The parties agree that
Xxxxxxxx and/or JRSE, as said parties shall
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determine, shall be solely responsible for any and all costs and fees associated
with any such registrations and the maintenance and protection thereof.
6. Ownership and Use of Technology and Proprietary Marks.
(a) ABM Manufacturing hereby acknowledges that Xxxxxxxx is and
shall at all times remain the owner, and that JRSE is and shall at all times
remain the sole and exclusive licensor, of all right, title and interest in and
to the Technology and the Proprietary Marks and that its manufacture of the
Portable Units and Other Units and use of the Proprietary Marks hereunder shall
not create in ABM Manufacturing's favor any right, title or interest in or to
the Technology or the Proprietary Marks or any goodwill associated therewith.
During the Term and at all times thereafter, ABM Manufacturing shall not
knowingly do or cause to be done any act or thing which may in any way impair or
tend to impair the rights, title and interest of JRSE in and to the Technology
or the Proprietary Marks or any registrations with respect thereto, or which may
in any way reduce the value of the Technology or detract from its reputation,
nor shall ABM Manufacturing in any manner represent that it has any interest
therein except as set forth herein. ABM Manufacturing further acknowledges and
agrees that as the sole and exclusive licensee of the Technology and the
Proprietary Marks, JRSE shall have the sole and exclusive right to use, license
or otherwise transfer any and all of its rights, title and interest in and to
the Technology and the Proprietary Marks, subject only to the terms of this
Agreement, the Distribution Agreement and any other agreement affecting JRSE's
right, title and interest in and to the Technology or the Proprietary Marks that
JRSE may be a party to or may enter into at a later date. Upon the termination
of this Agreement for any reason, all rights to distribute the Units and to use
the Proprietary Marks granted to ABM Manufacturing hereunder shall terminate and
revert to JRSE, except to the extent that said rights are sublicensed, assigned
or transferred to a third party with the consent of JRSE in
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accordance with Section 9 hereof. To the extent that any use of the Technology
or Proprietary Marks by ABM Manufacturing confers rights therein to ABM
Manufacturing other than those granted herein, ABM Manufacturing hereby assigns
said rights to JRSE, subject to all of the terms hereof.
(b) Notwithstanding the terms of the preceding Section 6(a), the
parties agree that, during the existence of this Agreement, ABM Manufacturing
shall be the sole and exclusive user of any methods or procedures that ABM
Manufacturing may develop in connection with the manufacturing and/or testing of
the Units and all technical data or other documentation related thereto. Upon
the termination of this Agreement for any reason, ABM Manufacturing's rights to
use the foregoing methods, procedures, technical data and other documentation
related thereto shall terminate and revert to JRSE, except to the extent that
said rights are sublicensed, assigned or transferred to a third party with the
consent of JRSE in accordance with Section 9 hereof.
(c) With respect to ABM Manufacturing's use of the Proprietary
Marks hereunder, the parties hereby agree as follows:
(i) No use of the Proprietary Marks shall state that the
owner of the Proprietary Marks is any party other than Xxxxxxxx.
(ii) All uses of the Proprietary Marks shall at all times
be in accordance with applicable laws and regulations.
(iii) ABM Manufacturing shall at no time make the
Proprietary Marks available for use by any third party except as authorized by
JRSE in writing.
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7. Warranties and Representations of Parties.
(a) Warranties and Representations of JRSE. JRSE represents and
warrants to ABM Manufacturing the following:
(i) JRSE is a corporation duly organized and existing under
the laws of the State of Nevada and has the full corporate power and authority
to enter into and perform this Agreement and has taken all necessary corporate
action to authorize and approve the execution, delivery and performance hereof;
(ii) This Agreement constitutes a legal, valid and binding
obligation of JRSE, enforceable in accordance with the terms hereof;
(iii) Xxxxxxxx owns all rights to and interest in the
Technology and has granted to JRSE an exclusive license in the Technology
pursuant to which JRSE has the right and the ability to grant to ABM
Manufacturing a sublicense to use the same as set forth herein;
(iv) Xxxxxxxx owns all rights to and interest in the
Proprietary Marks and has granted to JRSE an exclusive license in the
Proprietary Marks pursuant to which JRSE has the right and ability to grant to
ABM Manufacturing a sublicense to use the same as set forth herein; and
(v) Xxxxxxxx and/or JRSE, as appropriate, have taken all
necessary actions and has obtained all necessary governmental approvals,
opinions, certifications, licenses and permits that may be required in
connection with the manufacture and sale and leasing of the Portable Units and
the Other Units, including but not limited to those actions and approvals which
are required for the retail sale of the Portable Units to the general public.
(b) JRSE shall defend and hereby indemnifies and otherwise holds
ABM Manufacturing harmless from and against any and all losses, liability,
claims, damages and expenses (including reasonable attorneys' fees and expenses)
which ABM Manufacturing may sustain by reason of a third party action or claim
arising out of or resulting from a breach by Xxxxxxxx or JRSE of their
representations and warranties hereunder. ABM Manufacturing must
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give JRSE prompt written notice of any such action, claim or proceeding and
JRSE, in its sole discretion, then may take such action as it deems advisable to
defend such action, claim or proceeding on behalf of ABM Manufacturing. In the
event appropriate action is not taken by JRSE within thirty (30) days after its
receipt of notice from ABM Manufacturing, ABM Manufacturing shall have the right
to defend such action, claim or proceeding, but no settlement thereof may be
made without the approval of JRSE, which approval shall not be unreasonably
withheld. In either case, ABM Manufacturing and JRSE shall keep each other fully
advised of all developments, shall provide each other with copies of all
documents exchanged in court, and shall cooperate fully with each other in all
respects in connection with any such defense as is made. Such indemnification
shall be deemed to apply solely to (a) the amount of the judgment, if any,
against ABM Manufacturing, (b) any sums paid by ABM Manufacturing in settlement,
and (c) the expenses incurred by ABM Manufacturing in connection with its
defense. Such indemnification by JRSE shall not apply to any damages sustained
by ABM Manufacturing by reason of such infringement other than those specified
above, and in no event shall apply to consequential damages, unless those
consequential damages are included in the amount of the judgment against ABM
Manufacturing. The provisions of this subsection (7)(b) and JRSE's obligations
hereunder shall survive the expiration or termination of this Agreement.
(c) Warranties and Representations of ABM Manufacturing. ABM
Manufacturing represents and warrants to JRSE the following:
(i) ABM Manufacturing is a corporation duly organized and
existing under the laws of the State of Ohio and has the full corporate power
and authority to enter into and perform this Agreement and has taken all
necessary corporate action to authorize and approve the execution, delivery and
performance hereof;
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(ii) This Agreement constitutes a legal, valid and binding
obligation of ABM Manufacturing, enforceable in accordance with the terms
hereof; and
(iii) ABM Manufacturing shall at all times use the
Proprietary Marks in accordance with the terms of this Agreement.
(d) Owner's Assurance. Xxxxxxxx acknowledges that he is the owner
of the Technology and the Proprietary Marks and that he has granted a license
therein to JRSE that enables JRSE to grant a license therein to ABM
Manufacturing.
8. Indemnification.
(a) ABM Manufacturing agrees to indemnify and hold harmless JRSE
and its officers, directors, shareholders, employees, agents, successors and
assigns from and against any and all claims, demands, defenses, injuries,
set-offs, counterclaims, damages, losses, judgments, liabilities, penalties or
fines of any nature whatsoever (including any damage to person or property), and
any reasonable costs and expenses related thereto, including reasonable
attorneys' fees, arising out of or relating to ABM Manufacturing's breach of any
of its covenants, obligations, warranties or representations arising under the
terms of this Agreement, including but not limited to those warranties and
representations set forth in Section 7 hereof.
(b) JRSE agrees to indemnify and hold harmless ABM Manufacturing
and its officers, directors, shareholders, employees, agents, successors and
assigns from and against any and all claims, demands, defenses, injuries,
set-offs, counterclaims, damages, losses, judgments, liabilities, penalties or
fines of any nature whatsoever (including any damage to person or property), and
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any reasonable costs and expenses related thereto, including reasonable
attorneys' fees, arising out of or relating to the following:
(i) JRSE's breach of any of its covenants, obligations,
warranties or representations arising under the terms this Agreement, including
but not limited to those warranties and representations set forth in Section 7
hereof; or
(ii) Any failure of the Portable Units or the Other Units to
perform in a reasonably satisfactory manner according to specifications, if such
failure is attributable to any act or omission of JRSE or its employees or
agents.
9. Assignment, Sublicense or Transfer. The rights and benefits
conferred upon ABM Manufacturing hereunder shall inure to the sole benefit of
ABM Manufacturing, shall not be deemed to be coupled with an interest and shall
not, in whole or in part, be assigned, sublicensed or otherwise transferred by
ABM Manufacturing to any third party without the prior written consent of JRSE.
Notwithstanding the foregoing, the parties hereto agree that ABM Manufacturing
shall be entitled, with JRSE's written consent (which consent may not be
unreasonably withheld), to sublicense all or a portion of its rights hereunder
to manufacture and/or distribute the Portable Units and/or the Other Units if,
after considering the manufacturing and distribution capabilities (including
quality control procedures and processes) of the potential sublicensee, it may
reasonably be concluded that said licensee could perform such activities in a
manner that is reasonably consistent with ABM Manufacturing's performance
thereof.
10. Agency. Both parties agree and acknowledge that ABM Manufacturing
and its employees and agents shall not, at any time for any reason, be deemed to
be employees or agents of JRSE.
11. Non-Disclosure. Neither party shall release, or cause or permit to
be released, any press notices, publicity (oral or written) or advertising, or
otherwise announce or disclose, or cause or permit to be announced or disclosed,
in any manner whatsoever, the existence of this Agreement
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and its contents without first obtaining the express written consent of the
other party hereto. Notwithstanding the foregoing, nothing set forth in the
preceding sentence shall be deemed to: (a) prevent either party from discussing
this Agreement and its contents with said parties' legal counsel and
accountants, or any employees and agents who, in the normal course of the
parties' business, have a need to know such information; (b) prevent ABM
Manufacturing from selling the Portable Units to third party distributors in the
manner it deems appropriate and without the prior consent of JRSE, subject to
the terms of this Agreement; or (c) prevent JRSE from making any public
disclosure or filing of this Agreement without ABM Manufacturing's consent if
JRSE's legal counsel deems such disclosure and/or filing necessary or advisable
to comply with applicable federal and/or state laws.
12. Books and Records; Right to Audit. ABM Manufacturing shall prepare
and maintain complete and accurate books of account and records (specifically
including without limitation the originals or copies of documents supporting
entries in the books of account) covering all transactions required to be
reported to JRSE under this Agreement. JRSE and its duly authorized
representatives shall have the right at JRSE's sole cost, upon no less than five
(5) days prior notice, during regular business hours at ABM Manufacturing's
principal offices, for the duration of this Agreement and for six (6) months
thereafter, to audit said books of account and records of ABM Manufacturing and
examine all other documents and material in the possession or under the control
of ABM Manufacturing with respect to matters which are required to be reported
to JRSE under this Agreement and to make extracts and copies thereof. ABM
Manufacturing's accounting records of sales shall be maintained separately from
ABM Manufacturing's accounting records relating to other items manufactured or
sold by ABM Manufacturing. All such books of account, records and documents
shall be kept available by ABM Manufacturing for at least five (5) years after
the end of
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each year to which they relate. In connection with any audit or examination
pursuant to this Section 12, JRSE and its duly authorized representatives shall
have the right to examine and inspect ABM Manufacturing's physical inventory of
Portable Units and Other Units, wherever same is kept. JRSE shall have a period
of time of six (6) months following the close of any audit to assert any claims
for discrepancies. Any claims not asserted within the six (6) month period
following the close of any audit will be barred.
13. Restrictions on Use of Name. ABM Manufacturing shall not have the
right to use the name "Xxxxxxxx Resonance Enterprises" in the name of its
corporation, as an assumed name or in connection with any of its trademarks,
logos, etc. without JRSE's prior written permission.
14. ABM Manufacturing's Cooperation. At JRSE's request, ABM
Manufacturing shall execute any documents reasonably required by JRSE to confirm
Xxxxxxxx'x ownership of all rights in and to the Technology and the Proprietary
Marks and the respective rights of JRSE and ABM Manufacturing pursuant to this
Agreement. Subject to Section 5(c) hereof, ABM Manufacturing shall cooperate
with JRSE in connection with the filing and prosecution of applications to
register the Technology and the Proprietary Marks and the maintenance and
renewal of such registrations as may issue, at no cost to ABM Manufacturing.
15. Legal Requirements. ABM Manufacturing shall use the Technology and
the Proprietary Marks strictly in compliance with the legal requirements
pertaining thereto in connection therewith as may be required by applicable
legal provisions. ABM Manufacturing shall cause to appear on all Portable Units
and Other Units that it manufactures hereunder, and on all materials on or in
connection therewith, such legends, markings and notices as may be reasonably
necessary in order to give appropriate notice of any trademark, trade name or
other rights therein or pertaining thereto.
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16. Prohibition Against Challenges by ABM Manufacturing. ABM
Manufacturing never shall challenge Xxxxxxxx'x ownership of or the validity of
the Technology or the Proprietary Marks, or any application for registration
thereof, or any trademark registration thereof, or any rights of JRSE therein.
17. Infringement Actions. In the event that either JRSE or ABM
Manufacturing learns of any infringement or imitation of the Technology or
Proprietary Marks, or of any use by any person of a Patent similar to the
Technology, they promptly shall notify the other party. JRSE thereupon shall
take such action as it deems advisable for the protection of its rights in and
to the Technology or Proprietary Marks and, if requested to do so by JRSE, ABM
Manufacturing shall cooperate with JRSE in all reasonable respects, at JRSE's
sole expense. In no event, however, shall JRSE be required to take any action if
it deems it inadvisable to do so. If JRSE deems it inadvisable to take any
action, ABM Manufacturing may then take such action at its own expense provided
it first obtains the written approval of JRSE, which approval shall not be
unreasonably withheld. JRSE recognizes that in regard to any counterfeiting of
the Technology, ABM Manufacturing may take immediate legal action, at its own
expense, upon prior notification and approval by JRSE. Such approval shall be
deemed to have been granted unless within four (4) business days after the
receipt of such a request, JRSE notifies ABM Manufacturing in writing of its
disapproval. JRSE shall cooperate with ABM Manufacturing in taking such legal
action, at no cost to JRSE. Any award or recovery obtained by JRSE in an action
commenced by JRSE shall be solely retained by JRSE. Any award or recovery
obtained by ABM Manufacturing in a permitted action commenced by ABM
Manufacturing may be solely retained by ABM Manufacturing. ABM Manufacturing
shall not defend any action brought against it challenging its right to use the
Technology or the Proprietary Marks unless it
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shall first make written demand upon JRSE to do so and JRSE fails to defend such
action on behalf of ABM Manufacturing.
18. Insurance.
(a) Liability Insurance. ABM Manufacturing shall procure and
maintain at its own expense in full force and effect at all times during the
Term with a responsible insurance carrier reasonably acceptable to JRSE, a
products liability insurance policy with respect to Licensed Property with a
limit of liability of not less than One Million Dollars ($1,000,000). Such
insurance policy shall name JRSE as an additional insured and shall provide for
at least thirty (30) days prior written notice to said parties of the
cancellation or substantial modification thereof. Such insurance may be obtained
by ABM Manufacturing in conjunction with a policy of products liability
insurance which covers products other than the Portable Units or the Other
Units. ABM Manufacturing shall deliver a certificate of such insurance to JRSE
promptly upon issuance of said insurance policy and, from time to time, promptly
shall furnish to JRSE evidence of the maintenance of said insurance policy.
Nothing contained in this Section 18 shall be deemed to limit in any way the
indemnification provisions of Section 8 hereof.
(b) Relationship of the Parties. ABM Manufacturing is not granted
any right or authority to assume or create any obligation or responsibility,
express or implied, on behalf of or in the name of JRSE or to bind JRSE in any
manner or thing whatsoever. ABM Manufacturing shall obtain all required workers'
compensation and employer's liability insurance covering all employees. ABM
Manufacturing accepts full and exclusive liability for the payment of any and
all taxes, contributions or other sums payable for unemployment compensation
insurance and retirement benefits, as well as all of the payroll taxes payable
by reason of employment of sales persons or other employees. ABM Manufacturing
shall be responsible for and hold XXXX
00
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harmless for all claims, demands and suits resulting from any misconduct or
negligence of ABM Manufacturing's employees.
19. Rights on Expiration or Termination.
(a) Injunctive Relief with Respect to Licensed Property. ABM
Manufacturing hereby acknowledges the irreparable harm that JRSE will incur from
any unauthorized use of the Technology and the Proprietary Marks.
Notwithstanding any termination or expiration of this Agreement, JRSE shall have
and hereby reserves all rights and remedies which it has, or which are granted
to it by operation of law or equity, to prohibit the unlawful or unauthorized
use of the Technology and the Proprietary Marks, including but not limited to,
seeking a temporary restraining order, preliminary and/or permanent injunction.
The provisions of Section 21 hereof requiring a cooling off period and
compulsory arbitration shall not apply to this section.
(b) Inventory. Upon the expiration or termination of this
Agreement, ABM Manufacturing immediately shall deliver to JRSE a complete and
accurate schedule of ABM Manufacturing's inventory of Portable Units and Other
Units and of related work in process then on hand ("Inventory").
(c) Sale of Inventory by ABM Manufacturing. If this Agreements
expires or is terminated, ABM Manufacturing shall be entitled, for an additional
period of six (6) monthly only on a non-exclusive basis to sell and dispose of
its Inventory. Such sales shall be made subject to all of the provisions of this
Agreement and to an accounting for and the payment of license fees thereon
pursuant to Section 4 of this Agreement. Such accounting and payment shall be
due within thirty (30) days after the close of the said six (6) month period.
JRSE shall have the right for a period of fifteen (15) days following such
expiration or termination to purchase all of ABM Manufacturing's Inventory at
ABM Manufacturing's cost plus twenty percent (20%).
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(d) Reversion of Rights to JRSE, Appointment of Attorney-In-Fact,
Return of Materials. Except as specifically provided in subsection 19(c) above,
on the expiration or termination of this Agreement, all of the rights of ABM
Manufacturing under this Agreement shall terminate forthwith and shall revert
immediately to JRSE, all royalties on sales theretofore made shall become
immediately due and payable and ABM Manufacturing shall discontinue forthwith
all use of the Technology and the Proprietary Marks, no longer shall have the
right to use the Technology and the Proprietary Marks or any variation or
simulation thereof, and shall promptly transfer to JRSE, free of charge, all
registrations, filings, and rights with regard to the Technology and the
Proprietary Marks which it may have possessed at any time.
ABM Manufacturing hereby irrevocably appoints JRSE as ABM
Manufacturing's attorney-in-fact, effective upon the termination or expiration
of this Agreement, to take any necessary steps on ABM Manufacturing's behalf to
cancel any recordation of the license granted hereunder and to execute any
instruments necessary or desirable to confirm termination of ABM Manufacturing's
rights under this Agreement.
20. Brokerage Indemnity. Each of the parties represents that a broker
was not used in connection with the introduction of the parties and the
consummation of this Agreement. Both JRSE and ABM Manufacturing hereby
indemnifies the other and holds it harmless from any and all liabilities
(including, without limitation, reasonable attorneys' fees and disbursements
paid or incurred in connection with any such liabilities) for any brokerage
commissions or finders' fees in connection with this Agreement or the
transactions contemplated hereby insofar as such liabilities shall be based on
arrangements or agreements made by it or on its behalf.
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21. Resolution of Disputes.
(a) Jurisdiction. The parties hereby irrevocably submit to the
personal jurisdiction of the federal and state courts of the State of Florida,
in the venue of Palm Beach County (the "Courts"), in any action or proceeding
arising out of or relating to this Agreement. In any court proceeding, the
Courts shall have exclusive jurisdiction over the subject matter of this
Agreement. JRSE agrees that service may be made upon it by serving Broad and
Xxxxxx in the manner provided for the giving of notice. ABM Manufacturing agrees
that it may be served process in the manner provided for the giving of notice.
The parties hereby irrevocably waive, to the fullest extent they may effectively
do so, the defense of an inconvenient forum to the maintenance of such action or
proceeding.
(b) Waiver of Immunity. To the extent that the parties have or
hereafter may acquire any immunity from jurisdiction of any court or from any
legal process with respect to itself or its property, the parties hereby
irrevocably waive such immunity with respect to their obligations under this
Agreement.
(c) Sole Method of Dispute Resolution. In the event of a dispute
between the parties, including all events of default, except failure to pay any
licensing fee pursuant to Section 4 of this Agreement, neither party may
commence formal legal action or commence arbitration proceedings unless and
until the senior level executives (and their representatives, if they wish) of
both parties meet face to face in a meeting(s) in an attempt to settle the
dispute (the "Cooling Off Period"). This Cooling Off Period shall last for
fifteen (15) days from the first date one of the parties identifies to the other
party the existence of a dispute. In the event that the senior executives of the
parties are unable to work out a mutually agreeable resolution during the
Cooling Off period, the parties hereby agree to binding arbitration before a
single arbitrator mutually agreeable to both parties who shall follow the Rules
of the American Arbitration Association. The arbitrator shall be
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an attorney specializing in licensing at one of the intellectual property firms
in Florida and neither the attorney nor the firm have any prior or current
relationship with either party. The fees of the arbitrator shall be evenly
shared between the parties. If within thirty (30) days the parties cannot
mutually agree upon a single arbitrator, either party may file an arbitration in
accordance with the Rules of the American Arbitration Association in Florida. If
the breach is one which is not curable, the arbitrator's decision must include a
provision that this Agreement may not be terminated if ABM Manufacturing shall
pay to JRSE an amount which the arbitrator shall determine will compensate JRSE
for the breach. Notwithstanding the foregoing, JRSE shall have the right to seek
immediate relief in court, including but not limited to, a temporary restraining
order, a preliminary injunction and/or a permanent injunction if ABM
Manufacturing or any of its officers, agents and employees does anything to
damage the value of the Technology or the Proprietary Marks. ABM Manufacturing
shall have the right to seek equitable relief to enforce its rights hereunder in
the event ABM Manufacturing believes it is being irreparably harmed. In the
event either party is seeking equitable relief from a court in accordance
herewith, the party seeking such relief shall provide the other party with prior
written notice of the application for relief and a copy thereof. The Cooling Off
Period shall not apply in the event JRSE or ABM Manufacturing should decide to
seek immediate relief in court in accordance herewith.
22. Miscellaneous.
(a) Entire Agreement. This Agreement represents the entire
understanding of the parties with respect to the subject matter hereof.
(b) Amendment or Modification of this Agreement. This Agreement
may be amended or modified from time to time only by a written instrument
executed by both of the parties hereto.
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(c) Notice. All notices required or permitted by this Agreement
shall be in writing and shall be deemed to have been duly given if delivered in
person or sent by overnight delivery, confirmed telecopy or prepaid first class
registered or certified mail, return receipt requested, to the following
addresses, or such other addresses as are given to the other parties to this
Agreement in the manner set forth herein:
JRSE: Xxxxxxxx Resonance Enterprises, Inc.
00000 X.X. Xxxxxxx Xxx, Xxxxx 000
Xxxx Xxxxx, XX 00000
Attn: Xxxxx X. Xxxxxxxx, D.D.S.,
Chairman and CEO
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
Xxxxxxxx: Xxxxx X. Xxxxxxxx, D.D.S.
0000 Xxxxxxxx Xxxxxx
Xxxxxxx, XX 00000-0000
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
With a copy to: Xxxxx xxx Xxxxxx
Xxxxx 0000, Xxxxxxx Financial Centre
000 X. Xxxxxxx Xxxxxxxxx
Xx. Xxxxxxxxxx, XX 00000
Attn: Xxxxxxx X. Xxxxxxxxx, P.A.
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
ABM Manufacturing: 00 X. Xxxxxx Xxxx
Xxxxx, XX 00000
Attn: Xxxxxx Xxxxx
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
With a copy to: Xxxxx & Xxxxx Co., LPA
00 Xxxxx Xxxx Xxxxxx, Xxxxx 0000
Xxxxx, XX 00000-0000
Attn: Xxxxxx X. Xxxxx, Esq.
Telephone: (000) 000-0000
Telecopies: (000) 000-0000
Any such notices shall be effective when delivered in person or sent by
telecopy, one business day after being sent by overnight delivery or five
business days after being sent by registered or certified
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mail. Any of the foregoing addresses may be changed by giving notice of such
change in the foregoing manner, except that notices for changes of address shall
be effective only upon receipt.
(d) Florida Law Controlling. The laws of the state of Florida
shall govern the validity of this Agreement, the construction of its terms and
the interpretation of the rights and duties of the parties hereto.
(e) Binding Nature. Except as otherwise provided in Section 9
hereof, this Agreement shall be binding upon and shall inure to the benefit of
the parties hereto and their respective successors and assigns.
[THE NEXT PAGE IS THE SIGNATURE PAGE]
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IN WITNESS WHEREOF, the parties have executed this Agreement as of
the date first written above.
SIGNED IN THE PRESENCE OF: "JRSE"
XXXXXXXX RESONANCE ENTERPRISES, INC.
/s/ Xxxxx Xxxxxxxx By: /s/ Xx. Xxxxx X. Xxxxxxxx
---------------------------------- ----------------------------------
Xxxxx X. Xxxxxxxx, D.D.S.
Its Chairman and CEO
/s/ X.X. Xxxxxxxx
----------------------------------
"ABM Manufacturing"
ABM MANUFACTURING, INC.
/s/ Xxx. X. Xxxxxx By: /s/ Xxxx Xxxxxx
---------------------------------- ----------------------------------
Xxxx Xxxxxx, President
/s/ Xxx Xxxxxxxx
----------------------------------
As to Section 7(d) only:
/s/ Xxxxx Xxxxxxxx /s/ Xx. Xxxxx X. Xxxxxxxx
---------------------------------- --------------------------------------
XXXXX X. XXXXXXXX, D.D.S., individually
/s/ X. X. Xxxxxxxx
----------------------------------
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