Page 1 of 13
License Agreement
THIS AGREEMENT is made as of and effective from the 28th day of August
2000.
SHAJU CHACKO, an individual named Shaju Chacko, the entity known as Divine
Software Developing Center, the entity known as DSDC, India, any proprietorship
owned, managed, operated or under the control of Shaju Chacko, any partnership
owned in conjunction with Shaju Chacko, any corporate entity authorized under
the laws of the sovereign country of India owned, managed, operated or under
the control of Shaju Chacko, any affiliation owned, managed, operated or under
the control of Shaju Chacko, any alliance owned, managed, operated or under the
control of Shaju Chacko, and/or any joint venture with any person or entity
owned, managed, operated or under the control of Shaju Chacko, (hereinafter
referred to as the "LICENSOR").
- -and-
REDOX TECHNOLOGY CORPORATION, a valid and subsisting Delaware corporation and
authorized and registered to do business in the State of Texas, United States of
America, having its principal office at 340 North Sam Houston Parkway East,
Suite 250 Houston, Texas 77060, (hereinafter referred to as the "LICENSEE").
WHEREAS:
A. The Licensor is the inventor and owner of certain confidential information
and technology, which was developed by the Licensor;
B. The Licensor desires to protect said confidential information and technology
through the registration of any patents, trademarks and/or copyright,
C. The Licensee desires to acquire from the Licensor certain exclusive worldwide
rights to the confidential information and technology and to apply, prosecute,
register and maintain and exploit any said proprietary rights in the
confidential information and technology; and
D. The parties wish to document their intentions.
NOW THEREFORE in consideration of the mutual covenants and agreements contained
herein and for good and valuable consideration (the adequacy and sufficiency of
which are hereby acknowledged by the parties), the parties covenant and agree as
follows:
ARTICLE I
DEFINITIONS AND INTERPRETATION
1.1 Definitions In this Agreement, including the recitals, the following terms
shall have the following meanings:
"Affiliate/Subsidiary" shall mean in relation to an entity any other entity
directly or indirectly under common ownership with, owning or owned by the first
entity. Ownership means holding 50% or more of the voting securities of the
owned entity.
"Confidential Information" shall mean any information of the Licensor relating
to the Intellectual Property or Software, including without limitation, any
specifications, trade secrets, know-how, data, software, technology,
methodology, prototypes, models, whether or not reduced to physical form,
patterns and other physical and written descriptions and embodiments relating to
the Software including the Source Code but, Confidential Information shall
not include any information which:
(a) was available to the Licensee on a non-confidential basis from a source
other than the Licensor, provided that, such source, to the knowledge of
the Licensee is not and was not bound by obligations of confidence to hold
or retain such information confidential;
(b) was previously known to the Licensee and not subject to any obligation of
confidence;
(c) has been independently acquired, developed or is known by the Licensee
without violating any obligations under this or any other agreement with
any person; or
(d) is required to be disclosed by operation of law.
"Effective Date" means the date first written above;
"Gross Revenue" means the total revenue received by Licensee from the sale of
the Licensed Product and/or derivatives/modified/upgraded form of the licensed
product received by the Licensee, its Affiliates and/or Subsidiaries.
"Intellectual Property" shall mean any and all patents, trade marks and/or
copyright and applications and registrations therefor (whether or not coming
into existence after the Effective Date), as well as any and all Confidential
Information, know how, disclosures, and any other information or matter capable
of proprietary rights throughout the world which relate, o the Software in any
way or manner including its methods, concept, use or process.
"License Period" shall mean for so long as there is any proprietary rights or
interest in the Confidential Information or the Intellectual Property, starting
on the Effective Date.
"Licensed Product" shall mean all products and software that are based upon or
derived from any aspect of any portion of the Intellectual Property of the
Licensor.
"License Territory" shall mean the world;
"Royalty" means the royalty payable by the Licensee, its Affiliates and/or
Subsidiaries hereunder.
"Software" shall mean the software program developed by Licensor known as the
"Divine Logic Program Immune Virus" which defeats and negates the ability to
pirate, copy or otherwise duplicate any computer program disseminated via
CD-ROM, CD, Internet download or otherwise and any corrections, updates,
revisions, derivatives, or enhancements thereto, regardless of the physical
medium in or on which such software may be embodied;
"Source Code" shall mean program listings of the Software in human-readable
form.
ARTICLE II LICENSE, INTELLECTUAL PROPERTY RIGHTS AND
OTHER INTANGIBLES
Exclusive License
The Licensor hereby grants, and the Licensee hereby accepts, subject to the
terms and conditions of this Agreement, an exclusive, transferable and
assignable license within the Licensed Territory during the License Period by
any method or on any medium to fully:
(a) use, manufacture, license, market, distribute and sell the Licensed
Product;
(b) sub-license any and all rights granted to Licensee under this Agreement;
modify the Licensed Product to create one or more derivative products; and
(c) modify any or all documentation.
2.2 Reserved Rights
The Licensor shall have the riaht to use the Intellectual Property and Software
for internal non-comrnercial research purposes only, but this shall not include
any right to commercial1y use, manufacture, market or sell the Intellectual
Property or Software in ariv manner ,vhatso ever.
2.3 Sub-License
Licensee shall also have the right to grant to its Subsidiaries
or other sublicenses, exclusive or non-exclusive sublicenses under the License
during the License Period; provided, however, and Licensee agrees that:
(a) The terms and conditions of any and all such licenses shall be consistent
with the terms and conditions as set out in this Agreement;
(b) In the event of a proposed exclusive or sole license to any party, Licensee
shall not enter into any said agreement until Licensor has been informed in
writing and has given consent, in writing, for Licensee to enter into said
proposal. Licensor shall not withhold consent unreasonably; and
(c) Licensee shall provide Licensor with one copy of any and all such licenses,
including any amendments thereto.
(d) No subsidiary or other sublicensee shall have the right to fin-ther
license, sublicense or assign its rights without the approval of Shaju
Chacko, as defined above; and
(e) No sublicensee shall relieve Licensee of any of its obligations hereunder,
and Licensee shall be responsible for the acts or omissions of the
subsidiaries and sublicensees and for compliance by them of their
obligations, and Licensee shall take all steps necessan? to enforce that
compliance to the extent required to all Licensee to fully comply,Aith all
of its obligations under this Agreement.
2.5 Sale
Notwithstanding Articles 2.1 and 2.33, if a third party wishes to purchase the
software outright, Redox aarees that it shall not enter into any such sale
without the written consent of the Licensor, who shall not withhold such consent
unreasonably. Licensee agrees to provide to Licensor the sum of Twenty Seven and
One Half percent (27 1/2%) of the Gross Revenue from any sale of the software to
a third party.
2.6 Covenant of Licensor
The Licensor shall not, under any circumstance license, assim transfer, sell or
grant any rights in the Confidential Information or Intellectual Property to any
third party. Nor shall the Licensor grant any mortgage. pledge, lien,
hypothentication, security interests, charges, or encumbrances in any part of
the Confidential Information or Intellectual Property.
ARTICLE III
PAYMENT OF ROYALTY
3.1 Royalties
In consideration of the rights granted by the Licensor to the Licensee herein,
the Licensee agrees to pay Royalties in the sum of Twenty Seven and One Half
percent (27 1/2%) of the Gross Revenue to the Licensor commencing on the
Effective Date and ending on the date in which this License Agreement is
terminated. All payments shall be paid in U.S. dollars. Should any conversion to
U.S. dollars be necessary. the rate of exchange as posted in The Wall Street
Journal shall be utilized and shall be the rate in effect on the last day of the
period for which payment is due.
3.2 Statements/Payment Dates of Royalties
Licensee shall within thirty (30 days) after the last days of March, June,
September and December in each year or portion thereof during the license
Period, and within thirty (30) days after the end of the License Period,
provide Shaju Chacko, as defined above, with a statement accounting for the
Gross Sales of Licensed Products by Redox, its Subsidiaries and its sublicensees
(and with copies of the corresponding statements to Licensee from its
Subsidiaries and sublicensees), for the immediately preceding thirty (30) days
period or portion thereof. The Chief Financial Officer shall certify each such
statement or Secretary/Treasury of Licensee as being true, correct and complete.
Royalties with respect to sales made by the Licensee, its Affiliates and/or
Subsidiaries for each calendar month will be paid to the Licensor by the
Licensee within thirty (30) days after the end of each calendar month. Royalties
xvill be paid by cheque or bank draft sent by air mail
to the address for notices set out in Article IX or any of the addresses advised
by the Licensor to the Licensee from time to time.
Record of Sales
(a) The Licensee shall keep full, complete and accurate records of sales, the
Gross Revenue received therefrom and any other information appropriate to
the determination of Royalties payable to the Licensor hereunder. Such
records shall be open to inspection and audit by the Licensor or the
Licensor's duly authorized representatives, by appointment. during reguular
business hours; not more than once per year during the term of this
Agreement and for one year after its termination. No record shall be
subject to more than one audit and no audit shall be conducted on any
records of the Licensee three (3) years after the close of any calendar
quarter-year; and
(b) In the eNent that the Licensee has underpaid the Licensor any Royalty, as
determined by such audit, the Licensee shall immediately pay the Licensor
the total of the underpayment, plus interest at a rate of 1% per month from
the time such payment should have been made. Additionally, the Licensee
shall pay the Licensor a sum not exceeding the lesser of Twenty-five
percent of the underpayment or the actual cost of the audit at which zn
underpayment is deten-nined.
ARTICLE IV
INTELLECTUAL PROPERTY RIGHTS
4.1 Intellectual Property Applications, Prosecutions and Registrations
The Licensee shall have the exclusive right throughout the License Territory, in
the name of Shaiu Chacko, to apply for, prosecute, register, maintain and defend
any and all patents. trademarks and/or copyright applications or registraiions
relating to the Intellectual Property. Licensee shall apply for, in the name
of Shaju Chacko, seek prompt issuance of. and maintain while the license is in
effect, the Patents, Trademarks, and /or Copyrights in the United States and in
the foreign jurisdictions now in existence or which may be created during the
lifetime of the Agreement. The Licensee shall be responsible for and have full
control over any and all expenses assoclaied Aith the preparation, filing,
prosecution, maintenance and defense of any patents, trade =ks or copyright
applications filed and registered.
In all such applications the Licensor shall be the owner and the inventor.
Licensor shall provide all necessary information, materials and assistance to
enable Licensee to proceed with the filing and prosecution of an), applications
for registration of any Intellectual Property and to grant to Licensee formal
documents in respect of any such 1ntellectual Property in a form that complies
with the requirements of law and public authorities in each jurisdiction that
registration is sought. to enable Licensee, at its expense. to register the
right, title and interest in and to subbliellectual Property as provided
hereunder.
Licensor agrees, at the expense of Licensee, to do all things and to execute
such documents as may be required by Licensee to obtain and maintain all rights,
title, benefit
and interest in and to the Intellectual Property as contemplated hereunder,
exclusively in the sole name of Mr. Shaju Chacko.
Both parties shall promptly notify the other whenever it becomes aware of any
actual or apparent infringement or unauthorized use of the Intellectual Property
in the License Territory
4.2 Improvements and Additional Intellectual Property Rights Developed by the
Licensor
For greater certainty, the Licensor agrees that if it improves and/or
develops any Intellectual Property relating to the Software developed and named
as Divine Logic Program Immune Virus after the Effective Date, such Intellectual
Property shall be covered by the terms of this Agreement and the licenses
granted herein. The Licensor shall disclose same as soon as same is conceived or
developed.
ARTICLE V
CONFIDENTIALITY
5.1 Limitations on Disclosure by Licensee
The Licensee hereby acknowledges that pursuant to this Agreement, it
will receive Confidential Information of the Licensor, which Licensee agrees to
treat (and take all reasonable precautions to ensure that its employees treat)
as confidential in accordance with the requirements and conditions set forth
below:
(a) The Licensee shall not disclose, either directly or indirectly any
Confidential Information- or part thereof, to any person except as
specifically contemplated in this Agreement and
(b) The, Licensee shall not use any Confidential Information, or part thereof,
for any purpose other than that specifically contemplated in this
Agreement.
5.2 Limitations on Disclosure by Licensor
The Licensor hereby acknowledges that certain Confidential Information covered
hereunder is valuable only while kept in confidence and therefore the Licensor
agrees to treat (and take all reasonable precautions to ensure that its
employees treat) as confidential in accordance with the requirements and
conditions set forth below:
(a) The Licensor shall not disclose, either directly or indirectly any
Confidential Information, or part thereof. to any person except as
specifically contemplated in this Agreement; and
(b) The Licensee shall not use any Confidential Information, or part thereof,
for any purpose other than that specifically contemplated in this
Agreement;
5.3 Relief
Nothing in this Agreement precludes either party from obtaining injunctive or
similar relief from any court of competent jurisdiction which such party deems
most expedient to address a breach or threatened breach of any of the provisions
of this Agreement. Specifically, and without limiting the foregoing, the parties
acknowledge that the Confidential Information and Intellectual Property contain
valuable proprietary information and is a valuable asset, the unauthorized
(other than as contemplated hereunder) disclosure, use or transfer of which
would cause irreparable harm to the other party's rights under this Agreement
and which harm may not be adequately compensated with damages. Each party
expressly agrees that the other shall be entitled to apply for and obtain
equitable or similar relief (including without limitation injunctive relief and
specific performance) without any requirements to post a bond or prove actual
damage in any court of competent jurisdiction to prevent a breach of this
Agreement or any part thereof, and to secure its enforcement, without limitation
as to any other or further remedies which may be available to such party.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
6.1 Representations and Warranties of the Licensor
The Licensor represents and warrants to the Licensee that:
(a) The Licensor is the true owner of the Intellectual Property and that it has
good and valid le2al and beneficial title to all of the Intellectual
Property, free and clear of any encumbrances or claims of any nature;
(b) The technology encompassed in the Intellectual Property has not been
disclosed, offered for sale, sold, conveyed, transferred or otherwise
encumbered to or by any third party except the Licensee;
(c) The Intellectual Property has not been the subject of any patent, trade
mark or copyright application or registrations in the Licensed Territory:
(d) The Licensor has no knowledge or information of any facts which would
affect the application, registration, validity, enforceability or scope of
any of the Intellectual Property;
(e) The Licensor has not entered into any other agreements or contracts
authorizing the use of the Intellectual Property;
(f) To the best of the Licensor's knowledge, the use of the Intellectual
Property and the license to the Software will not constitute infringement
of any other party's intellectual property rights;
(g) No claims have been asserted by any third party with respect to, or
challenging or questioning the ownership, validity, enforceability or use
of the Intellectual Property and the Licensor has no knowledge of any
valid basis for any such claim;
(h) The Intellectual Property does not incorporate the intellectual property
rights of any other person or entity, which the Licensor has acquired by
license or otherwise;
(i) The Licensor has nof received any notice, complaiM threat or claim alleging
infringement of any of the Intellectual Property of the Licensor and to
the knowledge of the Licensor no third party is infringing the rights of
the Licensor with respect to the Intellectual Property; and
j) All of the right, title and interest in and to the Intellectual Property
acquired by the Licensee under this Agreement are free and clear of any
claims by third parties or any other encumbrances of any nature whatsoever.
6.2 Representations and Warranties of Licensee
The Licensee represents and warrants to the Licensor as follows:
(a) That the Licensee is a corporation duly organized and validly subsisting
under the laws of Delaware and has the power and authority to enter into this
agreement.
(b) That it has taken all necessary action to authorize the execution, delivery
and performance of this Agreement;
That this Agreement- when executed by the Licensee will be a binding obligation
of the Licensee Qorceable in accordance with its terms; and
(d) That. the execution and delivery of this Agreement and its performance will
not result in any breach or violation of, or constitute a default under any
agreement, instrument judgment or order to which the Licensee is a part or
by which it is bound.
ART1CLE VII
INDEMNITY
7.1 Warranties
Other than as set out in Article 6. 1, the Licensor does not warrant the
Intellectual Property or the Software in any way and no warranties of the
Licensor shall be implied or otherwise created, including any warranty of
merchantability or fitness for a particular purpose. Notwithstanding the
forgoing, the Software shall provide prompt response to users of the Software.
The Licensor shall, however, not be responsible for any service problems which
are not caused by itself, its systems or its Internet network access provider.
7.2 Indemnity
The Licensor agrees to defend, hold harmless and indemnify the Licensee from and
ainst any and all claims, suits, actions and proceedings and any and all
liabilities, judgments, damages, interest, costs, expenses and fees including
legal fees resulting from any such suits, actions and proceedings (the "Claims")
brought by any person or entity with respect to the Confidential Information or
Intellectual Property. Each party agrees that it shall inform the other in
writing of any and all alleged Claims of infringements of
any patent, trademark or copyright by any third party. The Licensee hereby
agrees to the assumption by the Licensor of sole control over the prosecution or
defense of said Claims, together with the right to settle or compromise them,
provided Licensor first obtains written permission from the Licensee; and the
Licensee agrees to make available to the Licensor, such information, assistance
and authority as may reasonably be requested by the Licensor in order to enable
the Licensor to adequately prosecute, defend, settle or compromise such Claims.
In addition, any monetary recovery or benefit given for the successful
prosecution or defense of any Claim shall accrue to the sole benefit of the
Licensor.
ARTICLE VIII
TERM AND TERMINATION
8.1 Term
This Agreement, and the license granted herein, shall commence on the date first
above written and continue in full force and effect during the License Period.
8.2 Termination
(a) Either party may terminate this Agreement upon thirty (30) days written
notice to the other party without any liability whatsoever or compensation as
the result of such termination, in the event that:
(i) the other party shall fail to perform any material term, provision or
obligation under this Agreement provided that the party seeking termination
shall have first given written notice to the other party specifying such failure
and the other party shall not have remedied such failure within thirty (30) days
after receipt of such notice; or
(ii) the other party materially breaches or defaults with respect to any
representation or warranty. provided that the party seeking termination shall
have given the other party written notice of such default or breach and it has
not been remedied within thirty (30) days of receipt of such notice.
(b) The Licensor may terminate this Agreement upon ten (10) days
written notice to the Licensee without any liability whatsoever or compensation
as the result of such termination, in the event that the Licensee:
(i) becomes bankrupt or files a proposal under the Bankruptcy and Insolvency Act
or the Companies Creditors Arrangement Act;
(ii) becomes subject to an order for liquidation, winding up or dissolution or
voluntarily liquidates, winds-up or dissolves;
(iii) defaults for a period of thirty (30) days in the payment of the Royalty
hereunder after thirty (30) days written notice of such default has been given
by the Licensor to the Licensee: or
(iv) ceases to carry on business for a period of ninety (90) days consecutively,
either on its own or through its Affiliates and/or Subsidiaries or
sub-licensees.
8.3 Effect of Termination
Upon termination of this Agreement for any reason:
(c) the Licensee shall:
(i) cease to use the Licensor's Confidential Information, Intellectual Property
and Software;
(ii) forthwith transfer to the Licensor all rights which it may have to the
Licensor's Intellectual Property and Software together with any patents, trade
marks, and/or copyright registrations relating thereto;
(iii) promptly return to the Licensor all of the Licensor's Confidential
Information and other documents, data or any other information or thing related
to the Software including all copies thereof;
(iv) cancel or assign any applications, registrations or other filing made or
placed by it with respect to the Licensor's Intellectual Property, Confidential
Information or the Software: and
(v) regardless of the foregoing, the Licensee shall have the right to complete
manufacturing of any Licensed Product then in the process of manufacture, as
well as the sale of said Licensed Product in addition to any other Licensed
Product in stock at the date of termination, provided all Royalties due thereon
are paid forthwith.
ARTICLE IX
NOTICES
9.1 Notices
Any notices and other communications required or permitted by this
Agreement to be provided or given to either party shall be so provided or given
if delivered at the addresses set out below or, if given by telecommunication
facsimile, at the number indicated below:
If to the Licensor:
Shaju Chacko
Divine Software Developing Centre,
Mavalathukuzhyil,
Peruva P.O., Kottayamy
Kerala, INDIA.
Pin: 686 610.
shaju.chacko@eudoramail.com mailto:shaju.chacko@eudoramail.com
shaju.shiju@eudoramail.com
If to the Licensee:
Richard A. Szymanski,
President and Chairman,
Redox Technology Corporation,
340 North Sam Houston Parkway East,
Suite 250. Houston,
TEXAS 77060 mailto:redox1@pdq.nev
Texas shall have the exclusive jurisdiction and the parties hereby irrevocably
attorn to the exclusive jurisdiction of the Courts of the State of Texas.
10.6 Successors
This Agreement and all rights and obligations are fully assignable by either
party. This Agreement shall endure to the benefit of and be binding upon the
parties hereto and their respective successors and assigns.
10.7 Severability
If any provision of this Agreement is held invalid or unenforceable for any
reason, such provision is fully separable and shall thereupon be separated from
the remaining provisions of this Agreement, and the remaining provisions are
nevertheless validated and enforceable as if such of the provisions held invalid
or unenforceable were not a part of this Agreement.
10.8 Entire Agreement
This Agreement supersedes all previous agreements, if any, between the parties
hereto and constitutes the sole and entire agreement between them with respect
to the subject matter hereof. Each party hereto agrees that there are no oral
representations, warranties or conditions and that all terms are embodied in
this Agreement. No change, modification or amendment of this Agreement shall be
effective unless in writing and signed by both parties hereto.
10.9 Headings
The use of Headings in this Agreement are for ease of reference only and do not
constitute a part hereof and are not to be considered as an aid in the
interpretation hereof.
10.10 Waiver
The waiver by either party of any default by the other party under this
Agreement shall not operate as a waiver of any future default, whether of a like
or different nature.
10.11 Force Majeure
Each of the patties hereto shall be excused from the performance of any of its
obligations herein from time to time, but only so long as it is prevented from
performance by any cause beyond its reasonable control including, but not
limited to, acts of God or of the Queen's enemies, strike, walkout, fire or
explosion; provided however, that the lack of funds shall never be considered a
cause beyond the reasonable control of either party.
SHAJU M. CHACKO
Per: /s/ Shaju M. Chacko
-------------------
Shaju M. Chacko
Date: 8-28-2000
Redox Technology Corporation:
/s/ Richard A. Szymanski
- -------------------------------------------
Richard A. Szymanski
Date: 8-28-2000
Page 13 of 13