Exhibit 10.2
LICENSE AGREEMENT
This Agreement (the "Agreement") is made and entered into as of July
30, 1999 (the "Effective Date") by and between Vidikron Technologies Group,
Inc., a Delaware corporation (the "Licensor") and Vidikron of America, Inc., a
Delaware corporation, (the "Licensee").
WHEREAS, Licensor is the exclusive owner of the "Vidikron" trademark
as more fully described in Exhibit A, tradename and any and all other
intellectual property rights of any nature whatsoever related directly thereto
now or hereafter owned by Licensor (such trademark, tradename and other
intellectual property rights collectively, the "Trademark"); and
WHEREAS, in order to induce the Licensee to enter into this
Agreement, simultaneously herewith, Licensor is entering into a license
agreement with Vidikron S.p.A. ("VSPA"), in the form attached hereto as Exhibit
A; and
WHEREAS, Licensee wishes to use the Trademark in connection with the
distribution and/or sale by Licensee of audio, video and audio-video products
developed, manufactured and marketed by the Licensee ("VOA Products") and
developed, manufactured and marketed by VSPA ("VSPA Products"; together with the
VOA Products, the "Products") throughout the Territories (as defined herein);
and
WHEREAS, for the purposes hereof, Licensor is willing to grant, and
Licensee is willing to accept, a trademark license upon the terms and conditions
herein set forth.
NOW, THEREFORE, in consideration of the mutual consents and promises
herein contained, the parties hereto agree as follows:
1. GRANT OF LICENSE.
(a) Grant of License. Licensor hereby grants Licensee a
license to use Licensor's Trademark, listed in Exhibit A hereto in connection
with the distribution and sale of the Products, subject to the terms and
conditions set forth in this Agreement. This license shall be irrevocable, to
the extent set forth herein, and, to the extent set forth in Section 3,
exclusive. Licensee acknowledges and agrees that this Agreement does not give
Licensee any right, title and interest in Licensor's Trademarks, any rights to
file for, apply for, or make any filings in any jurisdictions, nor any right to
use Licensor's Trademarks, except as provided by the express terms of this
Agreement. Licensee further acknowledges and agrees that this Agreement does not
give Licensee any right to sublicense the right to sublicense Licensor's
Trademarks without prior approval of Licensor, which approval shall not be
unreasonably withheld; provided, however that Licensee shall have the right to
grant a sublicense to an affiliate of Licensee, without prior approval of
Licensor as long as such affiliate agrees to be bound by the terms of this
Agreement, and, in particular, to continue to make royalty payments as provided
for herein. For purposes
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herein, affiliate shall have the meaning set forth in Rule 405 of the Securities
Act of 1933 (the "Act").
(b) Fee. Upon execution of this Agreement, Licensee shall pay
Licensor a one time payment of $50,000.
(c) Royalty. Licensee agrees to pay to Licensor a royalty
("Royalty") equal to two percent (2%) of Net Sales (as defined below) actually
received by Licensee in connection with Licensee's distribution and/or sale of
the Products using the Trademark, which royalty shall be paid on a quarterly
basis, in arrears, thirty (30) days after the end of each calendar quarter. "Net
Sales" shall mean gross sales less refunds, applicable sales and use taxes,
shipping and handling fees, discounts, credits and returns.
(d) Negative Covenant. Except for the rights granted pursuant
to this Agreement and the license agreement attached hereto as Exhibit A,
Licensor shall not grant any rights whatsoever with respect to the Trademark.
2. TERM
(a) Duration. The term of this Agreement shall commence on the
date hereof and unless terminated earlier pursuant to subparagraphs (b) or (c)
below, shall remain in full force and effect until the tenth anniversary hereof
(the "Initial Term"). Upon the expiration of the Initial Term, this Agreement
shall automatically renew for an additional ten (10) year period, provided that
Licensee shall have paid to Licensor an aggregate amount of no less than
$150,000 pursuant to Section 1 above. Thereafter, this Agreement shall
automatically renew for successive ten (10) year periods, provided that during
each such successive ten (10) year period, Licensee shall have paid to Licensor
an aggregate Royalty of no less than the aggregate Royalty paid by Licensee to
Licensor in the immediately preceding ten (10) year period.
(b) Early Termination by Licensor. If any one or more of the
following events occurs:
(i) Licensee shall become insolvent, or shall take the
benefit of any present or future insolvency statute, or shall make a general
assignment for the benefit of creditors, or file a voluntary petition in
bankruptcy or a petition or answer seeking an arrangement for its
reorganization, or the readjustment of its indebtedness under the Federal
bankruptcy laws, or under any other law or statute of the United States or any
state thereof, or shall consent to the appointment of a receiver, trustee or
liquidator of all or substantially all of its property;
(ii) A petition under any part of the Federal bankruptcy
laws, or an action under any present or future insolvency laws or statute, shall
be filed against Licensee and shall not be dismissed within thirty (30) days
after the filing thereof; or
(iii) Licensee shall materially fail to keep, perform
and observe each and every promise, covenant and agreement set forth in this
Agreement on its part
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to be kept, performed or observed, and such breach or default shall continue for
a period of more than thirty (30) days after receipt by Licensee of written
notice of such breach or default, except where fulfillment of its obligations
requires activity over a period of time and Licensee shall have commenced in
good faith to perform whatever may be required for fulfillment of its
obligations and continued such performance without interruption except for
causes beyond its control;
(iv.) Licensee is in violation of any statute, ordinance
or regulation of any Federal, State or Municipal authority with reference to the
operation of its business and the same has not been remedied within ten (10)
days after notice from the authorities to the Licensee of the violation.
then in its discretion Licensor shall have the right to terminate this
Agreement.
(c) Early Termination by Licensee. If any one or more of the
following events occurs:
(i) Licensor shall become insolvent, or shall take the
benefit of any present or future insolvency statute, or shall make a general
assignment for the benefit of creditors, or file a voluntary petition in
bankruptcy or a petition or answer seeking an arrangement for its
reorganization, or the readjustment of its indebtedness under the Federal
bankruptcy laws, or under any other law or statute of the United States or any
state thereof, or shall consent to the appointment of a receiver, trustee or
liquidator of all or substantially all of its property;
(ii) A petition under any part of the Federal bankruptcy
laws, or an action under any present or future insolvency laws or statute, shall
be filed against Licensor and shall not be dismissed within thirty (30) days
after the filing thereof; or
(iii) Licensor shall materially fail to keep, perform
and observe each and every promise, covenant and agreement set forth in this
Agreement on its part to be kept, performed or observed, and such breach or
default shall continue for a period of more than thirty (30) days after receipt
by Licensee of written notice of such breach or default, except where
fulfillment of its obligations requires activity over a period of time and
Licensee shall have commenced in good faith to perform whatever may be required
for fulfillment of its obligations and continued such performance without
interruption except for causes beyond its control;
then in its discretion Licensee shall have the right to terminate this
Agreement.
(d) Effect of Termination. Upon and after the termination of
this Agreement (the "Termination Date"), Licensee shall refrain from further use
of the Trademark in the Territory (as defined in Section 3 hereof) with respect
to the Products and all trademark rights, goodwill and other rights in or to the
Trademark granted to Licensee hereunder shall immediately cease and
automatically revert to the Licensor; provided, however, Products sold prior to
the Termination Date do not have to be recalled. In addition, Licensor shall be
entitled to recover from the Licensee all accounts or debts of Licensee that
Licensor pays in order to protect
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the goodwill and reputation of Licensor, all damages incurred as a result of the
events that gave rise to the termination and/or the termination itself.
3. TERRITORIES.
The use of the Trademark granted by this Agreement shall be
limited to the sale of Products and the rights granted in the geographic areas
set forth below (the "Territories") and the Licensee agrees and covenants not to
use the Trademark outside of the Territory or for any purpose other than the
sale of products as specified:
===============================================================================
Geographic Area Applicable Products Rights Granted
===============================================================================
North America Products Exclusive
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South America Products Exclusive
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Europe VOA Products Non-Exclusive
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Worldwide (excluding VOA Products Exclusive
Italy and Europe)
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For purposes of this Agreement, VOA Products and VSPA Products
shall be as set forth in Exhibit B.
4. COVENANTS OF LICENSEE REGARDING TRADEMARK.
(a) Acts in Derogation of the TrademarksLicensee shall not do
or permit any act or thing to be done (i) in derogation of any of the rights of
Licensor in connection with the Trademark or (ii) to diminish the value or
reputation of the Trademark, and Licensee shall use the Trademark only for the
uses and in the manner as provided in this Agreement.
(b) Prohibition Against Disputing Licensor's Rights. During or
after the term of this Agreement, Licensee shall not in any way dispute or
impugn the validity of the Trademark, or the rights of Licensor to it, or the
rights of Licensor to use it.
5. RECORDS
The Licensee shall deliver to Licensor a quarterly accounting
statement specifying the volume and pricing of sales of the Products for that
quarter, as well as the credits, returns, refunds, and cost of goods incurred by
Licensee with respect to the Products. Such accounting statements shall be due,
together with applicable royalty fees, thirty (30) days after the end of each
calendar quarter. Upon reasonable written notice and during normal business
hours, Licensor shall have the right, not more than twice during any twelve (12)
month period, to review and audit Licensee's books and records with respect to
royalties. Licensor shall have sixty (60) days from the receipt of each report
to assert a claim with respect to such report.
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6. CLAIMS MADE AGAINST LICENSEE.
(a) Claims made against Licensee. If Licensee receives notice
or is informed or learns of any claim, suit or demand against Licensee on
account of any alleged infringement, unfair competition, or similar matter
relating to Licensee's use of the Trademark, Licensee shall promptly notify
Licensor of such claim, suit or demand. Licensor shall have the right to defend,
compromise or settle any such claim at Licensor's sole cost and expense, using
attorneys mutually agreed upon by Licensor and Licensee, and Licensee agrees to
cooperate fully with Licensor in connection with the defense of any such claim.
Licensee may participate at Licensee's own expense in such defense or
settlement.
(b) Infringers. If Licensee receives notice or is informed or
learns that any third party, which Licensee believes to be unauthorized to use
the Trademark, is using the Trademark or any variant of it, Licensee promptly
shall notify Licensor of the facts relating to such possible infringing use.
Thereupon, Licensor shall promptly take any action as may be necessary to
protect the trademark from dilution or infringement. Licensee may participate at
Licensee's own expense in any prosecution of or action against any potential
unauthorized user.
(c) Notice. Licensee shall notify Licensor of any and all
infringements, imitations, illegal use or misuse of Licensor's trademarks which
come to Licensee's attention. Licensee shall notify Licensor of such acts and
furnish Licensor with all evidence concerning these acts within seven (7) days
of Licensee's receiving information thereof. Licensor shall take all appropriate
action in the Courts, administrative agencies or otherwise to prevent such
infringement, imitation, illegal use or misuse of the trademarks, after prior
consultation with Licensee.
In the event that Licensee should be notified of claims
and/or assertions of rights adverse to those of Licensor in Licensor's
Trademarks, Licensee shall forthwith notify Licensor of such claims and/or
assertions and furnish Licensor with all information and evidence concerning
such claims and/or assertions.
(d) Assistance. Licensee undertakes to render Licensor all
assistance reasonably requested in connection with any matter pertaining to the
protection of Licensor's trademarks in the Subject Territory whether in the
Courts, administrative agencies or otherwise, and to make promptly available to
Licensor, its representatives, agents and attorneys all of the Licensee's files,
records and other information and materials pertaining to the distribution and
sale of the Goods and Services as may be reasonably requested, including all
persons reasonably required by Licensor to assist Licensor in connection with
any matter pertaining to the protection of Licensor's trademarks.
7. INDEMNIFICATION
(a) Licensor's Indemnification of Licensee. Licensor shall
indemnify and hold Licensee harmless from and against any and all claims,
actions, expenses, losses, liabilities, damages, fines, fees and expenses,
including counsel fees and expenses, arising
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out of, concerning or affecting, in whole or in part, this Agreement or the
business conducted by Licensee, its agents or employees.
(b) Licensee's Indemnification of Licensor. Licensee shall
indemnify and hold Licensor harmless from and against any and all claims,
actions, expenses, losses, liabilities, damages, fines, fees and expenses,
arising out of, concerning or affecting, in whole or in part, this Agreement or
the business conducted by Licensor, its agents or employees.
8. ASSIGNMENT.
Licensor has the right to assign this Agreement, and all of
its rights and privileges, to any other person, firm or corporation; provided
that the Trademark has been assigned to such person, firm or corporation and
such person, firm or corporation agrees to be bound by the terms of this
Agreement. Licensee may not assign its rights and privileges in this Agreement
to any other person, firm or corporation without the express written consent of
Licensor, which consent shall not be unreasonably withheld. Licensor hereby
consents to the pledge of this license and the grant of a security interest in
this license and the rights hereunder to Market LLC, as a lender to Licensee.
9. MISCELLANEOUS.
(a) Entire Agreement. This Agreement constitutes the entire
agreement between the parties with reference to the subject matter of this
Agreement and supersede all prior negotiations, understandings, representations
and agreements. Licensor and Licensee each expressly acknowledge that no oral
promises or declarations were made by either to the other and that the
obligation of both Licensor and Licensee are confined exclusively to the terms
in this Agreement.
(b) No Franchise. Licensee and Licensor agree that this
Agreement is not a franchise agreement, as such agreements are defined under the
statutes and regulations of the United States and the State of New Jersey, and
therefore that this Agreement is not subject to those statutes and regulations.
Licensee and Licensor further agree that each will execute any documents and
give any testimony which is necessary to avoid having this Agreement construed
as a franchise agreement.
(c) Amendment. This Agreement, including but not limited to
this provision, may not be amended orally, but may be amended only by a written
instrument signed by the parties.
(d) Governing Law. This Agreement is to be governed by, and
construed and enforced in accordance with, the laws of the State of New York
without regard to its choice of law principles.
(e) Severability. If any part, article, paragraph, sentence or
clause of this Agreement is held to be indefinite, invalid or otherwise
unenforceable, the entire Agreement
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shall not fail on account of such holding, and the balance of this Agreement
shall continue in full force and effect.
(f) Waiver. The failure of Licensor at any time to enforce any
of the provisions of this Agreement shall not be deemed or construed to be a
waiver of any such provision, nor to in any way affect the validity of this
Agreement or any provision hereof or the right of Licensor to thereafter enforce
each and every provision of this agreement. No waiver of any breach of any of
the provisions of this Agreement shall be effective unless set forth in a
written instrument executed by the party or parties against whom or which
enforcement of such waiver is sought; and no waiver of any such breach shall be
construed or deemed to be a waiver of any other or subsequent breach.
(g) Execution in Counterparts. This Agreement may be executed
in one or more counterparts, each of which shall be deemed to be an original but
all of which taken together shall constitute one and the same agreement.
(h) Notice.
Any notice required or permitted to be given under this
Agreement shall be in writing and shall be served upon the other party
personally, by overnight courier or by return receipt requested, postage
prepaid, and shall be deemed given when received. Notices shall be addressed as
follows:
(i) Notice to Licensor:
Vidikron Technologies Group, Inc.
150 Bay Street
Jersey City, New Jersey
Attention: President
(ii) Notice to Licensee:
Vidikron of America, Inc.
150 Bay Street
Jersey City, New Jersey
Attention: President
[SIGNATURE PAGE TO FOLLOW]
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement
the day and year first above written.
VIDIKRON TECHNOLOGIES GROUP, INC.
By: /s/ Phillip Siegel
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Name: Phillip Siegel
Title: Chairman
VIDIKRON OF AMERICA, INC.
By: /s/ Phillip Siegel
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Name: Phillip Siegel
Title: