EXHIBIT 10.3
LICENSE AGREEMENT
CONFIDENTIAL MATERIAL DELETED ("CMD")
I. INTRODUCTION
1.1 Parties. This License Agreement, dated as of August 1, 1995, is
between Technovation Computer Lab, Inc. ("Licensor"), a Nevada corporation with
a place of business at 180 Victory Circle, San Ramon, CA 94583, and Dynasys
Systems Corporation ("Licensee"), a Delaware corporation with a principal place
of business at 300 West Main Street, Northborough, Massachusetts 01532.
1.2 Licensed Technology and Know-How. Licensor is the owner of certain
technology and possesses certain proprietary information and know-how
(collectively, the "Licensed Technology and Know-How") set forth on EXHIBIT 1 to
this Agreement.
1.3 Purpose. Licensee wishes to obtain, and Licensor is willing to
grant to Licensee, on the terms and conditions set forth herein, a license to
use the Licensed Technology and Know-How for the purpose of using, having used,
developing, having developed, producing, having produced, manufacturing and
having manufactured, marketing, having marketed, selling, having sold, reselling
and otherwise distributing and having distributed, worldwide, products of any
description which incorporate the Licensed Patent Rights.
1.4 Consideration. In consideration of the mutual promises contained in
this Agreement, the parties agree as follows:
II. DEFINITIONS
Capitalized terms used in this Agreement shall have the meanings
specified in EXHIBIT 2 to this Agreement.
III. LICENSE GRANTS
3.1 Grants of Licenses. Licensor hereby grants to Licensee, and
Licensee hereby accepts, the Licenses set forth on EXHIBIT 3 to this Agreement.
3.2 Ownership of Licensed Technology and Know-How. Licensor owns
sufficient rights to the intellectual property rights associated with the
Licensed Technology and Know- How to enter into this Agreement and grants the
Licenses hereunder and has full corporate right and authority to enter into this
Agreement and perform its obligations hereunder.
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IV. REPRESENTATIONS, WARRANTIES AND OBLIGATIONS OF LICENSOR
4.1 Representations and Warranties of Licensor. Licensor represents and
warrants to Licensee as follows:
4.1.1 The execution and delivery of this Agreement, and the
performance by Licensor of its obligations hereunder, including the grant of the
Licenses, have been duly authorized by all necessary corporate and other action
on the part of Licensor, and no consents, waivers or permissions that have not
already been granted are required for such actions. This Agreement constitutes
the valid and binding obligation of Licensor, enforceable against it in
accordance with its terms.
4.1.2 Licensor is the sole owner of the Licensed Technology
and Know-How and all of the intellectual property rights contained therein, free
and clear of the claims, liens and demands of any other person or entity.
4.1.3 To the best of Licensor's knowledge after due inquiry,
Licensor has full power, authority and right to grant to Licensee all of the
rights and Licenses granted by this Agreement, including all rights under
copyrights, trade secrets, tradenames, patents, patent applications, trademarks
and other intellectual property and proprietary rights, and the grant of such
rights and Licenses does not violate the intellectual property rights of any
other person or entity.
4.1.4 To the best of Licensor's knowledge after due inquiry,
the grant of the rights and Licenses to Licensee under this Agreement do not and
will not constitute a default, breach or violation of the charter or by-laws of
Licensor, any statute, law, rule, regulation, or any order or decree of any
court or legislative or governmental agency applicable to Licensor or the
Licensed Technology and Know-How, or under any contract, agreement, instrument,
document or indenture binding on or applicable to Licensor or the Licensed
Technology and Know-How.
4.1.5 Except as set forth in EXHIBIT 4.1 to this Agreement,
Licensor has not granted to any other person the right to use the Licensed
Technology and Know-How.
4.1.6 A true, complete and correct copy of the U.S. Patent
Application, together with any assignments thereof and documents filed with the
U.S. Patent and Trademark Office in connection therewith, is attached as part of
EXHIBIT 4.1 to this Agreement.
4.1.7 EXCEPT AS OTHERWISE EXPRESSLY SET FORTH IN THIS
AGREEMENT, LICENSOR AND ITS DIRECTORS, OFFICERS AND EMPLOYEES EACH MAKE NO
REPRESENTATION AND EXTEND NO WARRANTIES OF ANY KIND, EITHER EXPRESS OR IMPLED,
INCLUDING BUT NOT LIMITED TO WARRANTIES OF MERCHANTABILITY, FITNESS FOR A
PARTICULAR PURPOSE
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AND THE ABSENCE OF LATENT OF OTHER DEFECTS, WHETHER OR NOT DISCOVERABLE WITH
RESPECT TO THE LICENSED TECHNOLOGY AND KNOW- HOW.
4.2 Other Rights and Obligations of Licensor. In addition to the other
covenants and agreements of Licensor set forth in this Agreement, during the
term of this Agreement, Licensor shall have the rights and obligations set forth
in EXHIBIT 4.2 to this Agreement.
V. REPRESENTATIONS AND WARRANTIES AND OBLIGATIONS OF LICENSEE
5.1 Representations and Warranties of Licensee. Licensee represents and
warrants to Licensor as follows:
5.1.1 The execution and delivery of this Agreement, and the
performance by Licensee of its obligations hereunder have been duly authorized
by all necessary corporate and other action on the part of Licensee, and no
consents, waivers or permissions that have not already been granted are required
for such actions. This Agreement constitutes the valid and binding obligation of
Licensee, enforceable against it in accordance with its terms.
5.1.2 Licensee's use of the Licensed Technology and Know-How
as contemplated by this Agreement does not and will not constitute a default,
breach or violation of the charter or by-laws of Licensee, any statute, law,
rule, regulation, or any order or decree of any court or legislative or
governmental agency applicable to Licensee, or under any contract, agreement,
instrument, document or indenture binding on or applicable to Licensee.
5.2 Obligations of Licensee. During the term of this Agreement,
Licensee shall have the following obligations:
5.2.1 Licensee shall have the obligation to pay to Licensor
the royalties set forth on EXHIBIT 6 to this Agreement, subject to the terms and
conditions set forth on EXHIBIT 6.
5.2.2 Prior to the issuance of U.S. patents covering the
Licensed Patent Rights, Licensee agrees to mark Licensed Products made, sold or
otherwise disposed of by it with the words "Patent Pending," and following the
issuance of one or more patents, with the serial numbers of the U.S. and foreign
patents, as appropriate.
5.3 Other Rights and Obligations of Licensee. In addition to the other
covenants and agreements of Licensee set forth in this Agreement, during the
term of this Agreement, Licensor shall have the rights and obligations set forth
in EXHIBIT 5.3 to this Agreement.
VI. ROYALTIES AND PAYMENTS
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6.1 Licensee's Royalty Obligations.
(a) Royalties. In consideration of the Licenses granted
hereunder, Licensee agrees to pay to Licensor the Royalties set forth on EXHIBIT
6 to this Agreement.
(b) Payments. Royalties shall be paid by Licensee to Licensor
in accordance with the payment terms set forth on EXHIBIT 6 to this Agreement.
(c) Audit Rights. Licensor shall have the audit rights set
forth on EXHIBIT 6 to this Agreement.
VII. DOMESTIC AND FOREIGN PATENT MATTERS; AUTHORIZATIONS
7.1 Patent Prosecution. Licensor agrees to take responsibility for the
preparation, filing, prosecution and maintenance of any and all domestic and
foreign patent applications or patents included in the Licensed Patent Rights
and shall furnish copies of relevant patent- related documents to Licensee.
Licensor may permit Licensee to handle the prosecution of some or all of the
Licensed Patent Rights. In the event that Licensor decides not to prepare, file,
prosecute and maintain any and all domestic and foreign patent applications or
patents included in the Licensed Patent Rights, Licensee shall have the right,
but not the obligation, to handle such preparation, filing, prosecution and
maintenance to prevent loss of Licensed Patent Rights. Any costs reasonably and
necessarily incurred by Licensee in connection with the prosecution of any
Licensed Patent Rights shall be credited against earned royalties. Licensor
agrees to cooperate with Licensee and perform all acts necessary and proper in
order to timely process any Licensed Patent Rights and obtain the issuance of
patent(s) thereunder. Each party shall provide to the other prompt notice as to
all matters that come to its attention that may affect the preparation, filing,
prosecution or maintenance of the Licensed Patent Rights.
7.2 Authorizations. Licensee shall have the right, but not the
obligation, to obtain any licenses, permits, consents, approvals, authorizations
and orders of U.S. and foreign governmental authorities, including without
limitation the FCC, which may be required in connection with the manufacture or
distribution of products utilizing the Invention (collectively, the
"Authorizations"), and to handle the preparation, filing, prosecution and
maintenance of any Authorizations. Any costs reasonably and necessarily incurred
by Licensee in connection with obtaining any Authorizations shall be credited
against earned royalties. Licensor agrees to cooperate with Licensee and perform
all acts necessary and proper in order to timely process any applications for
Authorizations. Each party shall provide to the other prompt notice as to all
matters that come to its attention that may affect the preparation, filing,
prosecution or maintenance of Authorizations.
VIII. IMPROVEMENTS
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8.1 During the term of this Agreement, Licensor shall give written
notice (each, an "Improvement Notice") to the Licensee within thirty (30) days
of any actual or constructive reduction to practice of any Improvement made to
the Licensed Technology and Know-How by Licensor's employees, agents, and
officers. The Improvement Notice shall set forth the particulars of the nature
of the Improvement and any test data obtained by Licensor; and in the case of
Improvements to an Invention, Licensor shall state in such notice whether it
intends to prepare, file, prosecute and maintain domestic and/or foreign patent
applications related thereto.
8.2 Any Improvement shall, at the option of Licensee, be deemed to be
included within the Licensed Technology and Know-How under this Agreement,
without the payment of any additional royalties; and, without limiting the
generality of the foregoing, any Improvement to an Invention, any patent
application filed by Licensor or any patent application to which Licensor
acquires rights and any patent issuing therefrom, including any counterpart
foreign patent application or patent therefrom and any U.S. patent and patent
application resulting from the Improvement and any divisionals, continuations,
and continuations-in-part for these applications in addition to any reissues,
reexaminations and extensions of patents issued therefrom, shall, at the option
of Licensee, be deemed to be a Licensed Patent Right hereunder.
8.3 If in the Improvement Notice Licensor advises Licensee that
Licensor declines to prepare, file, prosecute and maintain any domestic and/or
foreign patent applications related thereto, then Licensee shall have the right,
but not the obligation, to handle such preparation, filing, prosecution and
maintenance, in Licensee's own name and at Licensee's own cost, to prevent loss
of Licensed Patent Rights. Any costs incurred by Licensee in connection with
such preparation, filing, prosecution and maintenance shall be credited against
earned royalties. Licensor agrees to cooperate with the Licensee and perform all
acts necessary and proper in order to timely process any patent application and
obtain the issuance of a patent in the name of Licensee.
8.4 Any Improvements made to the Licensed Technology and Know-How by
Licensee's or its Affiliates' employees, agents and officers (other than Babar
Hamirani and Liaqat Khan) (but in the case of such Improvement to an Invention,
only those Improvements which do not themselves infringe on any allowed claims
of any patent issued in respect of such Invention) shall be the sole property of
Licensee, subject only to Licensor's allowed claims in the Invention.
IX. PROTECTION OF INTELLECTUAL PROPERTY RIGHTS
9.1 Intellectual Property Infringement of Licensed Technology and
Know-How.
9.1.1 Licensor at its own expense will defend any action
brought against Licensee based on a claim that the Licensed Technology and
Know-How infringes on any patents, copyrights, trade names, trademarks, trade
secret, moral right, license or other
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proprietary or intellectual property right of any third party, provided that
Licensor is immediately notified in writing of such claim. Licensor shall have
the right to control the defense of all such claims, lawsuits and other
proceedings with counsel reasonably satisfactory to Licensee. In no event shall
Licensor settle any such claim, lawsuit or proceeding which may involve any
affirmative or negative obligation on the part of Licensee without Licensee's
prior written approval, which shall not be unreasonably withheld or delayed.
Licensor will pay any costs and damages finally awarded by a court of competent
jurisdiction against Licensee in such action which are attributable to the
claims set forth above.
9.1.2 Licensor shall have no liability or obligations under
this Section 9.1 if the claimed infringement arises out of the use of the
Licensed Technology and Know-How or any Improvements thereto if such
infringement does not derive from the Licensed Technology and Know-How or any
Improvements thereto in the original form furnished by Licensor to Licensee.
9.2 Actions for Infringement of Licensed Technology and Know-How by
Third Parties.
9.2.1 Licensee and Licensor shall promptly give notice to each
other of any actual or potential infringement of the Licensed Technology and
Know-How by a third party. If, in Licensee's reasonable opinion, Licensor does
not take appropriate action to cease or prevent an actual or potential
infringement of the Licensed Technology and Know-How within sixty (60) days
after receiving such notice, or otherwise does not diligently pursue such
infringement action, Licensee has the right to request of Licensor that it take
appropriate action to cease or prevent the infringement. If, in Licensee's
reasonable opinion, Licensor does not take appropriate action within thirty (30)
days after delivery of such request, Licensee shall have the right, but not the
obligation, to take such action as it deems appropriate in its sole discretion,
including the right to file suit to the extent provided by applicable laws,
rules and regulations. Licensee may proceed with such action immediately upon
notice to Licensor. In the event that Licensee proceeds with such action,
Licensor hereby agrees to being named and joined as a party plaintiff to such
actions to the extent required by law.
9.2.2 All non-reimbursed costs incurred by Licensee in
proceeding with any action undertaken reasonably and prudently against any third
party infringer may be credited by Licensee against earned royalties.
9.2.3 In the event Licensee secures a judgment or settlement
against any third party infringer, after accounting for and paying all of
Licensee's costs associated with prosecution of such actions, Licensee shall pay
Licensor royalties, as set forth in EXHIBIT 6 to this Agreement, on any balance
of proceeds actually received by Licensee, and Licensee shall retain any such
remaining balance of proceeds.
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X. CONFIDENTIALITY
10.1 Mutual Obligations. All know-how, data and other information,
including the Licensed Technology and Know-How and all other trade secrets,
developments and processes, which is disclosed by one party to another during
the term of this Agreement shall be maintained in confidence by the receiving
party and shall not be disclosed by the receiving party to any parties not a
party hereunder, or used other than as contemplated by this Agreement, in each
case, without the prior written consent of the disclosing party except to the
extent that the information:
(a) is known at the time of its receipt as documented in written
records;
(b) is properly in the public domain;
(c) is subsequently disclosed to the receiving party without any
obligations to keep such information confidential, by a third party who may
lawfully do so;
(d) is required to be disclosed to governmental agencies in order to
gain approval to for the uses of such information permitted by this Agreement or
to gain patent or copyright protection; or
(e) is necessary to be disclosed and is disclosed only on a
need-to-know basis to agents, consultants, sublicensees or other third parties,
who have entered into a confidentiality undertaking substantially similar to
that contained herein, for the purposes permitted by Section 1.3 of this
Agreement.
XI. INDEMNIFICATION
11.1 Licensor agrees to indemnify Licensee and hold it harmless against
and in respect of any and all Losses which arise or result from or are related
to any breach or inaccuracy of any of the representations and warranties of
Licensor, or the failure of Licensor to perform any of its obligations or
covenants hereunder, including without limitation, any Losses which arise or
result from or are related to (i) any infringement by the Licensed Technology
and Know-How and any Improvements, in the original form furnished by Licensor to
Licensee, on any patents, copyrights, trade names, trademarks, trade secret,
moral right, license or other proprietary or intellectual property right of any
third party and (ii) any costs or expenses incurred by Licensee under Articles
VII or IX of this Agreement. Any Losses may, at Licensor's option, be recovered
by Licensor by set-off against earned royalties. The obligations of Licensee
under this Section 11.1 shall survive the termination of this Agreement.
11.2 Licensee agrees to indemnify Licensor and hold it harmless against
and in respect of any and all Losses which arise or result from or are related
to any breach or inaccuracy of any of the representations and warranties of
Licensee, or the failure of
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Licensee to perform any of its obligations or covenants hereunder, including
without limitation, any Losses which arise or result from or are related to any
infringement by any Improvements made by Licensee, on any patents, copyrights,
trade names, trademarks, trade secret, moral right, license or other proprietary
or intellectual property right of any third party. The obligations of Licensee
under this Section 11.2 shall survive the termination of this Agreement.
XII. TERM AND TERMINATION
12.1 Termination. This Agreement and the Licenses granted hereunder
shall commence on the date set forth above and shall continue until the
expiration of the Term unless earlier terminated upon the first to occur of the
following events (unless termination is waived in writing by the non-breaching
party):
12.1.1 in the event that either party has committed a material
breach of this Agreement (including without limitation a breach of Section VI or
Section IX of this Agreement), and such breach is not cured within sixty (60)
days after notice thereof has been given by the non-breaching party to the
breaching party; or
12.1.2 on the written agreement of the parties to terminate
this Agreement; or
12.1.3 by the non-insolvent or non-breaching party in the
event of the liquidation or dissolution of the other party, the filing by or
against the other party of a petition in bankruptcy or insolvency, the
assignment by the other party of its assets for the benefit of its creditors,
the admission by the other party of its inability to pay its debts as they come
due, the appointment of a receiver or trustee for the assets of the other, or
the making of any voluntary arrangement by the other party with its creditors,
which event is not discharged, waived or cured within sixty (60) days after the
occurrence thereof; or
12.1.4 by Licensee, upon thirty (30) days notice to Licensor,
if letters patent do not issue within three (3) years from the date of this
Agreement with a claim or claims covering an Invention utilized in the Licensed
Products, and none of the enumerated applications, including without limitation
the U.S. Patent Application (or continuations or divisions of any of them),
pending at the end of such three (3) year period contains an allowed claim
having such coverage.
12.2 Effect of Termination. In the event of the termination of this
Agreement pursuant to Sections 12.1.1, 12.1.2 or 12.1.3:
12.2.1 Licensee may continue to sell any inventory of Licensed
Products in its possession which were manufactured prior to the effective date
of termination using the Licensed Technology and Know-How, subject to the
payment and Royalty provisions of this Agreement; and
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12.2.2 Any amounts owed by a party to the other party as of
the termination date shall immediately be due and payable.
12.3 Effect of Termination Pursuant to Section 12.1.4. In the event of
the termination of this Agreement pursuant to Section 12.1.4, any amounts owed
by a party to the other party as of the termination date shall immediately be
due and payable; and this obligation shall be the sole obligation of any party
to the other.
XIII. MISCELLANEOUS PROVISIONS
13.1 Assignment. No party may assign this Agreement (by operation of
law or otherwise), except that Licensee may assign this Agreement to any
Affiliate or to any purchaser of all or substantially all of the capital stock
or assets of Licensor, whether by merger or otherwise.
13.2 Complete Agreement. Each party acknowledges that it has read and
understands this Agreement and agrees to be bound by its terms. The parties
further agree that this Agreement, including the Exhibits hereto, is the
complete and exclusive statement of the Agreement between the parties with
respect to its subject matter, and supersedes and merges all prior proposals,
understandings and all other agreements, oral or written, between the parties.
13.3 Amendments. This Agreement may not be modified or altered except
by a written instrument duly executed by both parties.
13.4 Notices. All notices required or permitted under this Agreement
shall be in writing and delivered personally or mailed, registered or certified
mail, return receipt requested, or sent by reputable overnight carrier with
receipt confirmed, to the address of the parties set forth in Section 1.1 of
this Agreement, in each case to the attention of the President. Either party may
change the addresses or addressees hereunder upon written notice to the other.
All notices shall be deemed given on the earlier of the date actually received
and, if delivery is refused, the date of such refusal.
13.5 Governing Law and Jurisdiction. This Agreement and performance
hereunder shall be governed by and construed under the laws of The Commonwealth
of Massachusetts, as though made between two parties, each resident and
domiciled in The Commonwealth of Massachusetts.
13.6 Dispute Resolution; Consent to Venue and Jurisdiction.
13.6.1. General. In the event that any dispute should arise
among the parties hereto with respect to any matter covered by this Agreement,
the parties hereto shall resolve such dispute in accordance with the procedures
set forth in this Section 13.6.
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13.6.2. Consent of the Parties. In the event of any dispute
among the parties with respect to any matter covered by this Agreement, the
parties shall first use their best efforts to resolve such dispute among
themselves. If the parties are unable to resolve the dispute within 30 calendar
days after the commencement of efforts to resolve the dispute, the dispute will
be submitted to arbitration in accordance with Section 13.6.3 hereof.
13.6.3. Arbitration. (i) Either Licensor or Licensee may
submit any matter referred to in Section 13.6.1 hereof to arbitration by
notifying the other, in writing, of such dispute. Within 20 days after receipt
of such notice, Licensor and Licensee shall designate in writing one arbitrator
to resolve the dispute; provided, that if the parties hereto cannot agree on an
arbitrator within such 20-day period, the arbitrator shall be selected by the
American Arbitration Association. The arbitrator so designated shall not be an
employee, consultant, officer, director or stockholder of any party hereto of
any Affiliate of any party hereto.
(ii) Within 15 days after the designation of the
arbitrator, the arbitrator, Licensor and Licensee shall meet, at which time
Licensor and Licensee shall be required to set forth in writing all disputed
issues and a proposed ruling on each such issue.
(iii) The arbitrator shall set a date for a hearing,
which shall be no later than 30 days after the submission of written proposals
pursuant to paragraph (ii) above, to discuss each of the issues identified by
Licensor and Licensee. Each such party shall have the right to be represented by
counsel. The arbitration shall be governed by the rules of the American
Arbitration Association; provided, that the arbitrator shall have sole
discretion with regard to the admissibility of evidence.
(iv) The arbitrator shall use his best efforts to
rule on each disputed issue within 30 days after the completion of the hearings
described in paragraph (iii) above. The determination of the arbitrator as to
the resolution of any dispute shall be binding and conclusive upon all parties
hereto. All rulings of the arbitrator shall be in writing and shall be delivered
to the parties hereto.
(v) The arbitrator may, in his discretion, award
reasonable attorneys fees and expenses in connection with the arbitration
determination.
(vi) Any arbitration pursuant to this Section 13.6
shall be conducted in Boston, Massachusetts, United States of America. Any
arbitration award may be entered in and enforced by any court having
jurisdiction thereover.
(vii) WITHOUT LIMITING THE GENERALITY OF THE
PRECEDING PARAGRAPH (vi), EACH OF LICENSOR AND LICENSEE HEREBY CONSENTS TO
SERVICE OF PROCESS, AND TO BE SUED, IN THE COMMONWEALTH OF MASSACHUSETTS OR THE
STATE OF CALIFORNIA AND CONSENTS TO THE JURISDICTION OF THE COURTS OF THE
COMMONWEALTH
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OF MASSACHUSETTS OR THE STATE OF CALIFORNIA AND THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MASSACHUSETTS OR THE STATE OF CALIFORNIA, AS WELL AS TO THE
JURISDICTION OF ALL COURTS TO WHICH AN APPEAL MAY BE TAKEN FROM SUCH COURTS, FOR
THE PURPOSE OF THE ENFORCEMENT OF ANY ARBITRATION AWARD, AND EACH OF LICENSOR
AND LICENSEE EXPRESSLY WAIVES ANY AND ALL OBJECTIONS IT MAY HAVE AS TO VENUE IN
ANY SUCH COURTS. EACH OF LICENSOR AND LICENSEE FURTHER AGREES THAT A SUMMONS AND
COMPLAINT COMMENCING A PROCEEDING IN ANY OF SUCH COURTS SHALL BE PROPERLY SERVED
AND SHALL CONFER PERSONAL JURISDICTION IF SERVED PERSONALLY OR BY CERTIFIED MAIL
OR REPUTABLE OVERNIGHT COURIER TO IT AT ITS ADDRESS PROVIDED IN SECTION 1.1 OR
AS OTHERWISE PROVIDED UNDER THE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS OR THE
STATE OF CALIFORNIA. EACH OF LICENSOR AND LICENSEE IRREVOCABLY WAIVES ALL RIGHT
TO A TRIAL BY JURY IN ANY PROCEEDING HEREAFTER INSTITUTED IN RESPECT OF THIS
AGREEMENT.
13.7 Waiver. Any waiver by any party of any right provided for herein
shall not be effective unless consented to in writing by the party waiving such
right. The waiver or failure of either party to exercise in any respect any
right provided for herein shall not be deemed a waiver of any further right
hereunder.
13.8 Severability. If any provision of this Agreement is or is held to
be invalid, illegal or unenforceable under any applicable statute or rule of
law, it shall be deemed to be amended to the extent necessary to be valid, legal
or enforceable under applicable law, and the remaining provisions shall not be
affected in any way.
13.9 Headings; Counterparts. The headings contained in this Agreement
are intended for convenience or reference only and shall not control or affect
the meaning or construction of any provisions of this Agreement. This Agreement
may be executed in multiple counterparts, each of which shall be considered an
original but all of which shall constitute one and the same agreement. One or
more counterparts may be delivered via telecopier; any such telecopied
counterpart shall have the same force and effect as an original counterpart
hereof.
13.10 Independent Contractors. Under the terms of this Agreement,
Licensor and Licensee are independent contractors. Neither party is an employee,
agent, partner or representative of the other party. Nothing contained herein
shall be deemed to create a joint venture relationship between the parties. Each
party specifically acknowledges that it does not have authority to incur any
obligations or responsibilities on behalf of the other party.
13.11 Force Majeure. No failure or omission by the parties hereto in
the performance of any obligation of this Agreement shall be deemed a breach of
this Agreement or create any liability if the same shall arise from any cause or
causes beyond the control of
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the parties, including without limitation the following: acts of God; fire;
storm; flood; earthquake; accident; war; rebellion; insurrection; riot;
invasion; strikes and lockouts; provided that any failure or omission resulting
from any of such causes is cured as soon as practicable after the cessation
thereof.
13.12 Exhibits. The following Exhibits are attached to, made a part of
and incorporated by reference in this Agreement:
Exhibit 1 The Licensed Technology and Know-How
Exhibit 2 Definitions
Exhibit 3 License Grants
Exhibit 4.1 Ownership and Grants of Rights to Others; U.S. Patent
Application
Exhibit 4.2 Rights and Obligations of Licensor
Exhibit 5.3 Rights and Obligations of Licensee
Exhibit 6 Royalties
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the date and year first above written.
TECHNOVATION COMPUTER DYNASYS SYSTEMS
LAB, INC. CORPORATION
By: /s/ Babar Hamirani By: /s/ Albert J. Agbay
------------------ ----------------------
Name: Babar Hamirani Name: Albert J. Abgay
---------------- --------------------
(Type or Print) (Type or Print)
Title: CEO & President Title: President & CEO
---------------- -------------------
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ASSENT
Babar Hamirani, whose address is set forth below, warrants that he has
assigned to Licensor his entire right, title, and interest in and to the
Licensed Technology and Know- How identified as such in the foregoing License
Agreement and Exhibits thereto, including the right to recover for and to grant
releases for past infringement. Babar Hamirani hereby acknowledges that Licensor
has the right and license to grant the rights, releases, and sublicenses granted
to License in the License Agreement, and to the extent that any of his rights
are or may be affected, agrees to be bound by the terms and conditions of the
said agreement, and further agrees that he will look to Licensor, and not to
Licensee, for any and all royalty payments and other remunerations, if any, due
or which might become due him by virtue of the licenses, rights, and releases
granted to Licensee under the License Agreement. Babar Hamirani further agrees
that if the assignment which he has granted to Licensor and which is now in
effect and under the authority of which the License Agreement has been entered
into between Licensor and Licensee is cancelled, terminated or disputed for
whatever reason, the rights, licenses, and releases granted under the License
Agreement shall continue in full force and effect, the same as if he, Babar
Hamirani, had been the original Licensor thereunder. Babar Hamirani further
agrees that the terms, conditions, and obligations of this Assent shall be
binding upon himself and his heirs, assigns and legal representatives.
/s/ Babar Hamirani
- ---------------------
Babar Hamirani
Dated: July 31, 1995
-------------
Address:
180 Victory Circle
San Ramon, CA 94583
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ASSENT
Liaqat Y. Khan, whose address is set forth below, warrants that he has
assigned to Licensor his entire right, title, and interest, if any, in and to
the Licensed Technology and Know-How identified as such in the foregoing License
Agreement and Exhibits thereto, including the right to recover for and to grant
releases for past infringement. Liaqat Khan hereby acknowledges that Licensor
has the right and license to grant the rights, releases, and sublicenses granted
to License in the License Agreement, and to the extent that any of his rights
are or may be affected, agrees to be bound by the terms and conditions of the
said agreement, and further agrees that he will look to Licensor, and not to
Licensee, for any and all royalty payments and other remunerations, if any, due
or which might become due him by virtue of the licenses, rights, and releases
granted to Licensee under the License Agreement. Liaqat Khan further agrees that
if the assignment which he has granted to Licensor and which is now in effect
and under the authority of which the License Agreement has been entered into
between Licensor and Licensee is cancelled, terminated or disputed for whatever
reason, the rights, licenses, and releases granted under the License Agreement
shall continue in full force and effect, the same as if he, Liaqat Khan, had
been the original Licensor thereunder. Liaqat Khan further agrees that the
terms, conditions, and obligations of this Assent shall be binding upon himself
and his heirs, assigns and legal representatives.
/s/ Liaqat Khan
- -----------------------
Liaqat Y. Khan
Dated: July 31, 1995
----------------
Address:
164 Victory Circle
San Ramon, CA 94583
DS1:311152
14
EXHIBIT 1
---------
Licensed Technology and Know-How
--------------------------------
1.1.1 The Invention is described as follows: "A System Permitting the
External Replacement of the CPU and/or DRAM SIMMs Microchip Boards"
1.1.2 The Licensed Technology and Know-How, in addition to the
Invention, consists of the following: None.
1.1.3 The Licensed Technology and Know-How includes the following
Technical Information and/or Documentation: None.
1.1.4 The Licensed Technology and Know-How includes the following
patents, patent applications, trademarks, trademark applications and trade
names:
(a) The Licensed Patent Rights, including without limitation the U.S.
Patent Application.
DS1:311152
15
EXHIBIT 2
---------
Definitions
-----------
Capitalized terms used in this Agreement shall have the meanings set forth in
this EXHIBIT 2:
"Affiliate" means any entity controlling, controlled by or under common
control with another entity. For purposes of this definition, "control" means
the power, whether or not normally exercised, to direct the management and
affairs of another corporation or other legal entity, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise. In
the case of a corporation, the direct or indirect ownership of 50% of more of
its outstanding voting shares shall in any case be deemed to confer control,
provided that the direct or indirect ownership of a lower percentage of such
securities shall not necessarily preclude the existence of control.
"Authorizations" has the meaning set forth in Section 7.2 of this
Agreement.
"Documentation" means all manuals, workbooks and other supporting
materials furnished together with or intended to be used in connection with the
Licensed Technology and Know-How including without limitation the documentation
described on EXHIBIT 1 to this Agreement.
"FCC" means the U.S. Federal Communications Commission.
"Improvement" means any modification of an Invention described in the
Licensed Patent Rights, provided such modification, if unlicensed, would
infringe one or more claims of the Licensed Patent Rights.
"Improvement Notice" has the meaning set forth in Section 8.1 of this
Agreement.
"Invention" means the invention described on EXHIBIT 1 to this
Agreement.
"Licensed Patent Rights" refer collectively to the specific patent
claim subject matter of the Invention, as identified in EXHIBIT 1 to this
Agreement, as contained in:
(1) any U.S. patent and patent application, including without
limitation the U.S. Patent Application, which may result from
the Invention and any divisionals, continuations and
continuations-in-part for these applications;
(2) any counterpart foreign patents and foreign patent
applications and any counterpart divisionals and continuations
of these applications described in (1) above; and
DS1:311152
16
(3) any reissues, reexamination and extensions of the aforesaid
U.S. and foreign patent applications described in (1) and (2)
above.
"Licensed Products" means personal computer motherboards and cases (1)
whose manufacture utilizes Licensed Patent Rights or (2) whose manufacture or
sale in any country would, but for this Agreement, comprise an infringement of
one or more valid patent claims in such country or (3) which are manufactured
using a process which is covered in whole or in part in an active pending patent
application included in the Licensed Patent Rights.
"Licensed Technology and Know-How" means the proprietary technology and
know- how of Licensee described on EXHIBIT 1, including the Invention, Technical
Information, Documentation and Licensed Patent Rights (including without
limitation the U.S. Patent Application).
"Licensee" means the entity identified as such in Section 1.1 of this
Agreement, and Licensee's Affiliates.
"Licenses" means the rights granted pursuant to Article 3 of this
Agreement and set forth on EXHIBIT 3 to this Agreement.
"Licensor" means the entity identified as such in Section 1.1 of this
Agreement.
"Loss" means any and all direct or indirect payments, obligations,
damages, claims, liabilities, costs and expenses (including without limitation
reasonable attorneys' fees) paid or incurred, or reasonably likely to be paid or
incurred, in connection with investigating or defending any demands, claims,
actions or causes of action, that if adversely determined could reasonably be
expected to result in losses, and all amounts paid in settlement of claims or
actions.
"Royalties" means the payments to be made by Licensee to Licensor and
set forth on EXHIBIT 6.
"Sales" means the sale or other disposition of a Licensed Product by
Licensee or its Affiliates or other Sublicensees to an unaffiliated third party.
A Licensed Product shall be deemed to have been Sold upon receipt of payment (or
royalties, in the case of Sales by Sublicensees) therefor by Licensee or its
Affiliates.
"Sublicensee" means any person or entity sublicensed by Licensee or any
Affiliate of Licensee.
"Technical Information" means all recorded information, regardless of
form or the media on which it may be recorded, which is of a scientific or
technical nature, such as by way of example and not of limitation, data,
computer software, drawings, photographs,
DS1:311152
17
process information, sample equipment, specifications and the like, including
without limitation the technical information described on EXHIBIT 1 to this
Agreement.
"Term" means the period commencing on the date of this Agreement and
ending on the earlier of (i) five (5) years thereafter or (ii) the expiration or
abandonment of the last of all of the Licensed Patent rights; unless this
Agreement is sooner terminated in accordance with its provisions; provided, that
Licensee, by written notice to Licensor, may extend the Term for one additional
five-year period.
"U.S. Patent Application" means application no. 08/409,317, filed by
Babar Hamirani with the U.S. Patent and Trademark Office on 3/23/95, and
assigned on the date of this Agreement to Licensor.
DS1:311152
18
EXHIBIT 3
---------
License Grants
--------------
During the Term of this Agreement, Licensor grants to Licensee and
Licensee's Affiliates the following Licenses:
3.1.1 An exclusive (for an initial term of three (3) years from the
date of this Agreement; and non-exclusive for the remainder of the Term of this
Agreement thereafter), worldwide, transferable, royalty-bearing License to use
the Licensed Technology and Know- How; to develop, have developed, produce, have
produced, manufacture, have manufactured, market, have marketed, sell, resell
and otherwise distribute or dispose of products utilizing the Licensed
Technology and Know-How and any Improvements thereto; and without limiting the
foregoing, to make, use and sell products embodying the Invention (and any
Improvements) thereof.
3.1.2 The License, subject to the terms and conditions of this
Agreement, to grant sub-licenses. Licensee shall notify Licensor of every
sublicense agreement and amendment thereto, within forty-five (45) days after
execution, and indicate the name of the Sublicensee, territory of the
sublicense, scope of the sublicense, and the nature, timing and amounts of all
royalties to be paid thereunder. Any sublicense granted by Licensee shall
provide for its termination upon termination of this Agreement, provided,
however, that a sublicense granted to any Sublicensee may permit such
Sublicensee by written notice to Licensor within ninety (90) days of the
Sublicensee's receipt of written notice of such termination, to elect to
continue its sublicense. No such election shall be valid unless such Sublicensee
agrees in writing at the time of election to assume in respect to Licensor all
of the obligations (including obligations for payment) contained in its
sublicense agreement with Licensee.
3.1.3 The License to use in connection with the purposes set forth in
this EXHIBIT 3, all trademarks and tradenames associated with the Licensed
Technology and Know-How, including, without limitation, those set forth on
EXHIBIT 1 to this Agreement.
3.1.4 To the extent not heretofore set forth specifically, the License
to use all intellectual property and proprietary rights, including moral rights,
inherent in the Licensed Technology and Know-How for the purposes set forth in
this EXHIBIT 3.
DS1:311152
19
EXHIBIT 4.1
-----------
Ownership and Grants of Rights to Others; U.S. Patent Application
-----------------------------------------------------------------
None.
DS1:311152
20
EXHIBIT 4.2
-----------
Rights and Obligations of Licensor
----------------------------------
In addition to its other obligations set forth in the Agreement,
Licensor shall have the following rights and obligations:
4.2.1 Access to Licensor. Licensor shall make available to Licensee
those of Licensor's personnel as were involved in the development or production
of the Licensed Technology and Know-How and any Improvements to consult with
Licensee to the extent that such personnel continue to be employed or otherwise
affiliated with Licensor.
4.2.2 Source Materials and Documentation. Licensor shall furnish a
current copy of all Technical Information and/or Documentation, and any
amendments thereto as the same may be developed or produced, used to produce the
Licensed Technology and Know-How and any Improvements.
DS1:311152
21
EXHIBIT 5.3
-----------
Rights and Obligations of Licensee
----------------------------------
In addition to its other obligations set forth in the Agreement, during
the period that the Licenses granted by this Agreement are exclusive, Licensor
shall have the following rights and obligations:
5.3.1 Distribution. Licensee shall (provided that any required
Authorizations have been obtained) use its commercially reasonable efforts to
market, sell and otherwise distribute Licensed Products in the licensed
territory, and to collect payments due from purchasers and Sublicensees.
5.3.2 Production Capacity. Licensee shall use its commercially
reasonable efforts to achieve and maintain production capacity sufficient to
fill customer orders for Licensed Products in a commercially reasonable manner.
DS1:311152
22
EXHIBIT 6
---------
Royalties to Licensor
---------------------
6.1.1 Base Royalty Rate. Licensee shall pay to Licensor as a royalty
the amount of [$CMD] per unit for each Licensed Product Sold by Licensee or its
Affiliates (other than to Sublicensees, as to which the provisions of Section
6.1.3 shall apply), subject to adjustment as set forth herein. All amounts shall
be paid in U.S. Dollars.
6.1.2 Escrow of Royalties Pending Issuance of Patent; Adjustment to
Royalty if No Patent Issued. (a) The royalties provided for in Section 6.1.1
shall be paid by Licensee for Licensed Products covered by any pending claim of
the U.S. Patent Application comprising the Licensed Patent Rights; provided,
however, until such time as letters patent containing a claim covering the
Invention utilized in the Licensed Products shall be allowed, [CMD%] of the
royalty amount set forth in Section 6.1.1 shall be accrued but not paid by
Licensee. Licensee shall deposit accrued royalties in one or more blocked
interest-bearing bank savings accounts. All interest in such account shall
accrue to the benefit of Licensor, unless payable to Licensee pursuant to
Section 6.1.2(b). In the event Licensee fails to pay any current installment of
royalties when due, Licensor shall be entitled to have access to the blocked
account and to set-off the amount of any such deficiency against amounts in such
account, in which case Licensee shall reimburse the account promptly for any
such amount paid out to Licensor.
(b) If no claim(s) covering an Invention utilized in the
Licensed Products shall be allowed on the U.S Patent Application within three
(3) years of the date of this Agreement, Licensee shall be entitled to retain
such accrued but unpaid royalties and interest thereon, and thereafter the
royalty amount set forth in Section 6.1.1 shall be reduced to [$CMD] per unit
for each Licensed Product Sold by Licensee or its Affiliates.
(c) Notwithstanding any other provision in this Agreement, no
royalty fee shall be payable by Licensee for Sales of Licensed Products or for
sublicenses in any given country on the earliest of the dates that (1) a patent
application, including without limitation the U.S. Patent Application, covering
the Licensed Patent Rights has been abandoned and not continued; (2) the patent,
including without limitation any patent(s) issued under the U.S. Patent
Application, covering the Licensed Patent Rights expires; (3) the patent,
including without limitation any patent(s) issued under the U.S. Patent
Application, covering the Licensed Patent Rights is no longer maintained by any
of the parties; or (4) the patent claim(s) in the Invention has been held to be
invalid by an unappealed or unappealable decision of a court of competent
jurisdiction.
6.1.3 Royalties on Sublicenses. In the event that Licensee or any of
its Affiliates sublicenses the Licensed Technology and Know-How to a third party
(other than an Affiliate of Licensee), Licensee will pay royalties to Licensor
in an amount equal to [CMD%] of the proceeds received by Licensee or its
Affiliates from Sublicensees.
DS1:311152
23
6.1.4 Quarterly Reporting and Payments. Licensee shall furnish a
statement to Licensor quarterly, within thirty (30) days after the end of each
calendar quarter, which shall show the Sales of Products, and the amount due and
payable to Licensor in respect of such quarter. Licensee shall pay to Licensor
the royalties due within forty-five (45) days after the end of each calendar
quarter.
6.1.5 Licensor's Audit Rights. For a period of at least two (2) years
following the applicable royalty payment, Licensee and its Affiliates shall keep
true and accurate records of all data necessary for determination of the royalty
fees payable hereunder, and upon request, shall permit Licensor, at Licensor's
sole expense, to examine such records no more than once a year through an
independent third party audit, such third party to be reasonably acceptable to
Licensee. Such audit shall be conducted during Licensee's business hours, and
shall be subject to Licensee's building security rules. If, as a result of such
examination, it is found that Licensee owes additional royalties in excess of
five percent (5%) of the amount previously paid for the period audited, Licensee
shall reimburse Licensor for the costs of such audit. If, as a result of such
examination, it is found that Licensee previously paid excess royalties for the
period audited, Licensor shall, at Licensee's option, either reimburse Licensee
in an amount of the excess or apply the excess as a credit against future
royalties due hereunder.
6.1.6 Offsets to Royalties for Costs Expended by Licensee. Royalties
payable hereunder shall be offset by any advances or costs expended by Licensee
for tooling and development for production of Licensed Products, and any other
advances or costs expended by Licensee under Sections VII and IX of this
Agreement.
6.1.7 No Multiple Royalties. No multiple royalties shall be payable
because any Licensed Products are covered by more than one of the Licensed
Patent Rights.
6.1.8 Deduction for Royalties Payable to Third Parties. If Licensee or
an Affiliate is required to pay an unrelated third party a royalty in a given
country in order to sell or use a Licensed Product in that country, then [CMD%]
of that royalty will be deducted from the royalty otherwise payable hereunder
for Sales of such Licensed Product in that country. Such reduction shall be
effective thirty (30) days after notice from Licensee to Licensor.
6.1.9 Reduction for Compulsory Licenses to Third Parties. If at any
time or from time to time, an unrelated third party in any country shall, under
right of a compulsory license granted or ordered to be granted by a competent
governmental authority, manufacture, use or sell any Licensed Product with
respect to which royalties shall be payable at a rate less than that set forth
in this EXHIBIT 6, then Licensee, upon notice to Licensor and during the period
such compulsory license shall be effective, shall have the right to reduce such
royalty to Licensor on each unit of Licensed Products sold in such country to an
amount no greater than the amount payable by said third party in consideration
of its compulsory license. ds1-311152.1
DS1:311152
24