3
TECHNOLOGY LICENSE AGREEMENT
by and between
PATH 1 NETWORK TECHNOLOGIES INC.
("Licensor")
and
VISIONARY SOLUTIONS, INC.
("Licensee")
Dated as of December 11, 2001
TABLE OF CONTENTS
1. Definitions................................................1
2. License Grants and Restrictions............................3
3. Compensation...............................................5
4. Update Responsibilities....................................6
5. Support....................................................7
6. Marketing and Publicity....................................7
7. Proprietary Rights.........................................8
8. Representations and Warranties.............................9
9. Indemnification............................................9
10. Confidentiality...........................................11
11. Liability.................................................12
12. Term and Termination......................................12
13. General Provisions........................................13
TECHNOLOGY LICENSE AGREEMENT
THIS TECHNOLOGY LICENSE AGREEMENT (this "Agreement") is made as of December
11, 2001 (the "Effective Date"), between Path 1 Network Technologies Inc., a
Delaware corporation with a place of business at ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇,
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ("Licensor"), and Visionary Solutions, Inc., a
California corporation with its principal place of business at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ("Licensee") (each a "party" and
together the "parties").
RECITALS
WHEREAS, Licensor is the owner of certain Technology, as defined herein;
and
WHEREAS, Licensee desires to license the Technology from Licensor on the
terms and conditions set forth in this Agreement; and
WHEREAS, Licensor is willing to license the Technology to Licensee for such
development and use, upon the terms and subject to the conditions set forth in
this Agreement.
NOW, THEREFORE, in consideration of these premises and of the mutual
promises and conditions contained in this Agreement, Licensor and Licensee agree
as follows:
1. Definitions
1.1......"Affiliate" of a party shall mean an entity directly or indirectly
controlling, controlled by or under common control with that party where control
means the ownership or control, directly or indirectly, of more than fifty
percent (50%) of all of the voting power of the shares (or other securities or
rights) entitled to vote for the election of directors or other governing
authority; provided that such entity shall be considered an Affiliate only for
the time during which such control exists.
1.2......"Change of Control" shall mean the occurrence of any of the
following events:
(a) Any "person" or "group of persons" (as such terms are used in Sections
13(d) and 14(d) of the Securities Exchange Act of 1934, as amended) is or
becomes the "beneficial owner" (as defined in Rule 13d-3 under said Act),
directly or indirectly, of securities of the Company representing 50% or more of
the total voting power represented by the Company's then-outstanding voting
securities; or
(b) A change in the composition of the Company's Board of Directors
occurring within a two-year period as a result of which fewer than a majority of
the directors are Incumbent Directors. "Incumbent Directors" shall mean
directors who either (i) are directors of the Company as of the date hereof or
(ii) are elected, or nominated for election, to the Board with the affirmative
votes of at least a majority of the Incumbent Directors at the time of such
election or nomination (but shall not include an individual whose election or
nomination is in connection with an actual or threatened proxy contest relating
to the election of directors of the Company); or
(c) The shareholders of the Company approve a merger or consolidation of
the Company with any other corporation, other than a merger or consolidation
that would result in the voting securities of the Company outstanding
immediately prior thereto continuing to represent (either by remaining
outstanding or by being converted into voting securities of the surviving
entity) at least 50% of the total voting power represented by the voting
securities of the Company or such surviving entity outstanding immediately after
such merger or consolidation, or the shareholders of the Company approve a plan
of complete liquidation of the Company or an agreement for the sale or
disposition by the Company of all or substantially all of the Company's assets.
1.3......"Contract Quarter" shall mean each calendar quarter period
(March 31, June 30, September 30 and December 31) following the Effective Date
during the Term.
1.4......"Claims" shall have the meaning set forth in Section 9.1.
1.5......"Documentation" means the data sheet, specifications, test
procedure and methodology, and instructions for the Technology.
1.6......"Emulation/Simulation Device" shall mean a combination of one
or more modules using the Technology, together with supporting software, the
principal function of which is as a development and/or diagnostic tool.
1.7......"Enhancements" shall mean improvements, modifications,
refinements, upgrades, updates, new features, new functions, new versions, and
new applications, in any form or medium whatsoever, and all Intellectual
Property Rights therein.
1.8......"Entity" shall mean any general partnership, limited
partnership, limited liability company, corporation, joint venture, trust,
business trust, cooperative or association, or any foreign trust or foreign
business organization.
1.9......"Equipment" shall mean data processing and similar equipment,
including options, accessories and attachments for more basic equipment.
Equipment includes, as a component thereof, any media fixed or embedded therein
that is not normally replaced except for maintenance and repair. Equipment may
include in its meaning, depending upon context, a system or systems consisting
of tangible Equipment and intangible Software.
1.10 .... "Intellectual Property Right" and "Intellectual Property
Rights" shall mean all worldwide right, title and interest of a Person in, to
and under any and all: (a) United States or foreign patents and pending patent
applications therefor, including the right to file new and additional patent
applications based thereon, including provisionals, divisionals, continuations,
continuations-in-part, reissues and reexaminations; (b) copyrights; and (c)
trade secrets, know-how, processes, methods, engineering data and technical
information.
1.11 ...."Information" shall mean any idea, program, technical,
business or other intangible information, however conveyed.
1.12 ...."Know-How" shall mean experience, skills and expertise in
non-tangible form, relating to Technology and consulting and advisory services
relating to such experience, skills and expertise.
1.13....."Licensee Product" shall mean products or Software produced
and marketed by Licensee, which contain Path 1 DotCAM(R) Technology, in whole or
part.
1.14 ...."Licensor Intellectual Property Rights" shall mean one or more
Intellectual Property Rights owned by Licensor or licensed to Licensor by a
Third Party with the right to sublicense at no cost. Licensor is not under an
obligation to seek such Third Party licenses.
1.15....."Net Receipts" shall mean the gross amount recognized as
income on Licensee's books (pursuant to generally accepted accounting principles
consistently applied) in connection with the sale of a Product, less deductions
for discounts, commissions, value added or any similar taxes, and shipping and
insurance charges, with respect to such Product.
1.16 .... "Person" shall mean any individual or Entity, and the heirs,
executors, administrators, legal representatives, successors and assigns of the
"Person" when the context so permits.
1.17....."Product" shall mean any integrated circuit, or any device
developed by Licensee pursuant to this Agreement containing several integrated
circuits, designed with or utilizing, in whole or in part, the Technology.
1.18 ...."Software" shall mean intangible information in object code
form constituting one or more computer or apparatus programs and the
informational content of such programs, together with any documentation supplied
in conjunction with and supplementing such programs.
1.19....."Software Source Material" shall mean information consisting
of all intangible source programs, technical documentation and other information
required for maintenance, modification or correction of the most current version
of Software.
1.20....."Specifications" shall mean the specifications for the Technology
set forth in Exhibit A, or if not so set forth, shall mean Licensor's current
published specifications, user documentation and other information for the
Technology as of the date of order and any additional specifications furnished
by Licensee.
1.21....."Technology" or "Path 1 DotCAM(R) Technology" shall mean
Licensor's Path 1 DotCAM(R) Technology as specified on Exhibit A, including all
Software and hardware components thereof, including, collectively, each of the
source code for certain Software, the designs, specifications, data, circuit and
logic elements, libraries, algorithms, rule base and technical information,
modules and any logic functions, I/O cells, memories, or analog cells and other
information or technology relating to the Path 1 DotCAM(R) Technology.
1.22 ...."Term" shall mean the term of this Agreement as provided in
Article 12.
1.23 ...."Third party" shall mean, with respect to a party, any Person that
is not an Affiliate of such party.
1.24....."Update" shall mean a change to the data file or an editing
process made available to Licensee by Licensor because of design flaws,
discrepancies, or defects ("bugs") in the Software or in order to bring the
Technology into compliance with the Specifications.
1.25 ...."Use" shall mean operate, reproduce, distribute, transmit (by
electronic means or otherwise), make available, perform and display.
2. License Grants and Restrictions
2.1 .....Grant Of License. Subject to the terms of this Agreement, Licensor
hereby grants to Licensee under all Intellectual Property Rights of Licensor,
now owned or, to the extent it is not prohibited from licensing such right,
hereafter acquired a non-exclusive, non-transferable, worldwide license (i) to
develop, make, use, reproduce and distribute the Technology solely for use in
Licensee Products, and (ii) to adapt, modify, customize, or otherwise transform
the Technology solely for use with Licensee Products; provided that no
adaptations, customizations, modifications or transformations alter, change,
modify or otherwise affect the operation of the functioning of the Technology,
unless Licensee agrees to make such adaptations, customizations, modifications
and transformations available to Licensor as provided in this Section 2.1 (such
licenses shall be hereinafter referred to, collectively, as the "License").
Licensee agrees that it shall, within ten (10) business days after Licensee's
internal releases or production releases, deliver to Licensor such information,
including, on an "as is" basis, copies of source code for all adaptations,
customization, modifications, transformations, or derivative works of the
Technology developed by Licensee in reasonable detail as is necessary to permit
Licensor to incorporate said adaptations, customization, modifications,
transformations, or derivative works. Subject to the terms of this Agreement,
Licensee hereby grants Licensor a nonexclusive, nontransferable, license to use,
copy, modify, distribute and make derivative works from any adaptations,
modifications, or other changes to the Technology made by Licensee. If said
adaptations, customization, modifications, transformations or derivative works
constitute material changes to Path 1 DotCAM(R) Technology, including but not
limited to the addition of VSI technology, Licensee agrees to cross-license its
technology with Licensor. Licensor and Licensee shall negotiate in good faith a
license fee or royalty for re-use and re-sale by Licensor. Licensee's ownership
of any adaptations, customization, modifications, transformations, or derivative
works of the Technology shall be subject to Licensor's ownership of the
underlying Technology.
2.2 .....Compliance with Specifications. If Licensor makes any Updates
to any of the Technology in order to bring the Technology into compliance with
the Specifications, Licensor shall promptly thereafter (so long as the License
is in effect) provide to Licensee such information, in reasonable detail, with
respect to such Updates as is reasonably necessary to permit Licensee to
incorporate such Updates in the Technology.
2.3......Restriction on Sublicensing. The License granted hereby may
not be transferred or sublicensed by Licensee, but shall extend to any
wholly-owned subsidiaries and divisions or Affiliates of Licensee (collectively,
"Affiliates"). Licensee shall be responsible for the compliance by each such
Affiliate with the terms and provisions of this Agreement, and agrees to report
and pay Royalties to Licensor in accordance with Section 3 hereof with respect
to production of Products by each such Affiliates, except as otherwise provided
in Exhibit B. Any such affiliate shall agree in advance in writing to be bound
by all the terms of this Agreement, and Licensee shall agree to guarantee the
obligations of such Affiliate hereunder.
2.4......No Reverse Engineering. Licensee shall not reverse engineer,
reverse compile or disassemble the Technology, or otherwise attempt to derive
the source code to any Software licensed under this Agreement without the
express written consent of the Licensor; provided, however, that in no event
shall any written consent of any single action under this Section 2.4 be deemed
a written consent of any other such action theretofore or thereafter occurring.
The foregoing shall not apply to such activities conducted in the ordinary
course of technical support of Licensee Products such as may occur through the
use of debugging tools.
2.5......Restriction on Outside Production. Licensee shall not have
Products manufactured for it by any Third Party without the prior written
consent of Licensor, except where such Third Party has been licensed by Licensor
to manufacture the Products or otherwise approved by Licensor. All distribution
of Source Code shall be accompanied by an executed copy of the Visionary
Solutions Intellectual Property License Agreement (a copy of which will be
provided to Licensor within thirty (30) days of the execution of such
agreement).
2.6......Audits and Inspection Rights.
2.6.1 Licensor shall have the right, upon reasonable advance notice, to
inspect Licensee's records and facilities, and the records and facilities of
Affiliates of Licensee, with respect to the manufacture of Licensee Products
hereunder and to receive sample units thereof in order to verify that such
manufacturing is within the scope of this Agreement, and that there are
appropriate security procedures to protect Licensor's Confidential Information,
as that term is defined in Section 10.1 hereof.
2.6.2 If the payment of Royalties is required as provided in Section 3.2,
during the term of this Agreement and for a period of one (1) year thereafter,
Licensor shall have the right, at its expense, and upon reasonable notice to
Licensee, to have examined by an independent auditor with a national reputation,
reasonably acceptable to Licensee, Licensee's books and records in order to
determine or verify the Net Receipts and sales of the Products. Licensor shall
not make any such examination more than twice in any calendar year. If an error
in the reported Net Receipts or the reported number of Products sold by Licensee
is discovered as a result of such an examination and the reported Net Receipts
or the reported number of Products sold by Licensee during the period(s)
examined were in excess of 5% less than the actual net receipts or number of
Products sold by Licensee, as the case may be, during such period(s), Licensee
(i) shall pay all of Licensor's out-of-pocket expenses related to such
examination, and (ii) shall pay Licensor interest on the amount of such
underpayment, at the rate of 10% per annum, from the date such amount was due
and payable until such amount is actually paid.
2.6.3 Licensee shall keep adequate records to verify all
reports and payments made to Licensor pursuant to this Agreement for a period of
two (2) years following the date of such reports and payments.
2.7......No Other Licenses. The License granted under this Agreement is
specifically set forth herein, and no licenses are granted by Licensor to
Licensee by implication or estoppel.
2.8.....Reservation Of Rights. All rights not specifically granted to
Licensee hereunder are reserved by Licensor.
2.9 .....Restrictions on Export. Licensee acknowledges and agrees that
it shall not import, export, or re-export the Products or related Documentation
to any country in violation of the laws and regulations of any applicable
jurisdiction. Licensee further agrees to defend, indemnify, and hold Licensor
harmless for any losses, costs, claims, or other liabilities arising out of
Licensee's breach of this Section.
2.10 ....Delivery. Unless otherwise provided for herein or agreed to by
the parties, following the Licensor's receipt of the fee payment provided for in
Section 3.1, Licensor will ship the Technology to Licensee in CD-ROM format.
2.11 ....Acceptance. The Technology, any Updates and Documentation will
be deemed accepted by Licensee unless it gives notice to Licensor of
non-conformity within fourteen (14) days of date of its receipt. The parties
agree that such acceptance shall not limit any of the remedies or rights
otherwise provided to Licensee hereunder.
3. Compensation
3.1 .....Initial Payments for License. In consideration for the grant
of the License, Licensee shall pay to Licensor each of the payments set forth in
Exhibit B in accordance with the schedule provided therein, each of which shall
be nonrefundable.
3.2......Royalties. Licensee shall pay to Licensor royalties on its Net
Receipts ("Royalties") as specified in Exhibit B (Royalties and Fees). Such
Royalties shall be due and payable to Licensor regardless of whether Licensee
collects payments for the Products from its consumers.
3.3 .....Maintenance and Support Fees. Licensee shall pay Licensor fees
as specified in Exhibit B (Royalties and Fees) for maintenance, support, updates
and upgrades provided by Licensor to Licensee pursuant to Sections 4 and 5. Such
fees shall be due and payable to Licensor in advance beginning one (1) year
after the date of execution of this Agreement, regardless of whether Licensee
collects payments for the Products sold or their maintenance and support from
Licensee's customers.
3.4 .....Taxes and Assessments.
3.4.1 In addition to any other payments due under this Agreement, Licensee
agrees to pay, indemnify and hold Licensor harmless from any sales, use, excise,
import or export, value-added or similar tax or duty, and any other tax not
based upon Licensor's net income, including any penalties and interest, and all
government permit or license fees and all customs and similar fees, levied upon
the use or distribution of the Products which Licensor may incur in respect of
this Agreement, and any costs associated with the collection or withholding of
any of the foregoing items ("Taxes").
3.4.2 If Licensee fails to pay any Taxes as of the original due date for
such Taxes and Licensor receives any assessment or other notice (collectively
the "Assessment") from any governmental taxing authority providing that such
Taxes are due from Licensor, Licensor shall give Licensee written notice of the
Assessment and Licensee shall pay to Licensor or the taxing authority the amount
set forth as due in the Assessment within thirty (30) days of receipt of such
written notice from Licensor.
3.5....Payment Terms. Royalties shall accrue upon shipment to a customer
of Products by Licensee and shall be payable within thirty (30) days after the
end of each Contract Quarter. Each Royalty payment shall be accompanied by a
statement setting forth in sufficient detail the basis upon which Royalties were
calculated. Payments and statements shall be sent to Licensor at the address set
forth in Sections 14.3 of this Agreement or such other address as Licensor may
designate in writing.
3.6......Royalty-Free Products. Licensee shall have the right to
manufacture and distribute a commercially reasonable number of Products,
provided that it does not receive any revenue therefrom, for the following
purposes without incurring a Royalty obligation to Licensor: units for testing,
units with limited functionality for reseller point of purchase and
demonstration, units provided to Licensor, units used internally by employees or
contractors of Licensee, and units given to press and analysts.
4. Update Responsibilities.
4.1 .....Updates. During the Term of this Agreement, Licensor shall deliver
to Licensee all Updates to the Technology within ten (10) business days after
Licensor's internal releases or production releases. Upon such delivery, the
Licenses granted to Licensee pursuant to Section 2 above shall be deemed to
include the items delivered pursuant to this Section 4.1., unless Licensee
returns such Updates to the Technology to Licensor along with written
notification of non-acceptance. If Licensee does not provide Licensor with such
notification, Licensee acknowledges that during the term of this Agreement, in
addition to delivering to Licensee the Updates referred to above, Licensor
expects to release separate modules and components for the Technology, including
upgrades, modifications, enhancements or new versions not designed solely to
meet the Specifications, for which Licensor may elect to require that licensees
pay separate consideration and enter into separate agreements or amendments in
order to have any rights to such modules or components. Licensee may elect not
to accept such Updates, in which case, Licensee shall not be required to pay
separate consideration and not be required to enter into separate agreements or
amendments with Licensor.
4.2 .....Requested Enhancements.
4.2.1 In the event that Licensee requests in writing that Licensor add new
functionality to the Technology, Licensee will consider such request in good
faith and will respond to Licensee in writing within thirty (30) days of its
receipt of such request (or within such longer time period as may be reasonably
agreed by the parties) with whether Licensor intends to implement such request
and, if so, with an estimate of additional costs to Licensee and a proposed
schedule for implementation. In the event Licensor approves such request under a
proposed schedule reasonably acceptable to Licensee ("Approved Enhancements"),
Licensor will use its reasonable commercial efforts to implement such
enhancements within the proposed schedule, whereupon such Approved Enhancements
will be deemed additional Technology for all purposes of this Agreement. Upon
delivery to Licensee, the License granted to Licensee pursuant to Section 2
above shall be deemed to include such Approved Enhancements. Licensee shall
execute all assignments and other documents as may be requested by Licensor to
evidence and perfect Licensor's ownership of the Approved Enhancements and the
Intellectual Property Rights therein.
4.2.2 To the extent Licensor rejects Licensee's request for Enhancements,
or if Licensor's estimated costs or proposed schedule is not reasonably
acceptable to Licensee, then Licensee may notify Licensor in writing that
Licensee wishes to implement such Enhancements itself, whereupon the parties
will negotiate in good faith the terms under which Licensee will develop the
Enhancements, including: (i) which source code and tools Licensee will require;
(ii) the limitations that will be placed on Licensee's (and any contractor's)
use of such source code and tools; (iii) the parties' respective Intellectual
Property Rights in such Enhancements; (iv) Licensor's responsibility, if any,
for support and maintenance of such Enhancement; and (v) Licensee's
responsibility for any costs and expenses that Licensor may incur in connection
with such implementation, support and maintenance.
4.2.3 The parties hereby agree that all Approved Enhancements shall be
subject to the terms and conditions of this Agreement as though they were part
of the original Technology.
5. Support
Licensor shall provide Licensee with the following support during the term
of this Agreement in accordance with Licensor's established support terms set
forth in Exhibit B.
6. Marketing and Publicity
6.1 .....Marketing. Except as provided in Section 6.2 below, the parties
agree to work together to identify areas where joint marketing efforts would
benefit both parties, and upon mutual agreement shall implement such efforts.
6.2 .....Publicity. Both parties will periodically promote the Path
1/Visionary Solutions relationship through mutually agreed upon (as to timing
and content) press releases and other announcements. Prior to the initial public
announcement about the relationship under this Agreement, the disclosing party
will obtain consent of the other party, which consent shall not be unreasonably
withheld. Neither party shall otherwise disclose the terms of this Agreement to
any third party, other than its financial or legal advisors and current or
potential Non-Corporate Investors, or make any announcements regarding the
nature of the relationship between the parties without the prior approval of the
other party, except that a party may disclose the terms of this Agreement where
required by law, provided that such party uses reasonable effort to obtain
confidential treatment or similar protection to the fullest extent available to
avoid public disclosure of the terms of this Agreement. A party required by law
to make disclosure of the terms of this Agreement will promptly notify the other
party and permit the other party to review and participate in the application
process seeking confidential treatment. "Non-Corporate Investors" shall mean
venture capital investors/funds and investment banking investors/funds.
6.3 .....Branding. Licensee and its Affiliates shall use the Licensor
trademarks in conjunction with the distribution of the Products and in their
advertising, promotional and printed materials for the Products and on the
Products. Licensor and Licensee shall use their best efforts to agree upon the
size, placement and prominence of Licensor trademarks on Licensee's Products. In
addition, Licensee shall use its best efforts to promote the "Path 1 DotCAM(R)
technology" name on the external chassis of any third party finished product.
7. Proprietary Rights
7.1......Title. Licensor acknowledges that the Technology represents the
valuable trade secrets of Licensor. Licensor shall be the sole and exclusive
owner of the Technology. Subject always to Licensor's ownership of the
Technology, Licensee shall be the sole and exclusive owner of the Products.
Applications for the Products shall belong solely and exclusively to the party
developing such applications.
7.2......Proprietary Rights Notices. Licensee agrees that it will not
remove, alter or otherwise obscure any proprietary rights notices appearing in
the Technology. Further, Licensee agrees that it will cause to appear on the
container or label for each unit of the Licensee Products manufactured hereunder
appropriate patent and copyright notices and proprietary data legends as
contained in the Technology delivered by Licensor or as otherwise reasonably
required by Licensor.
7.3......Nonsolicitation. Licensee agrees that during the Term of this
Agreement and for a period of one (1) year thereafter, Licensee will not
directly or indirectly, either for itself or any other person or entity, solicit
any individual who is engaged as an employee, agent or independent contractor,
by Licensor or Licensor's to terminate his or her employment or engagement with
Licensor or such subsidiary and/or to become an employee, agent or independent
contractor of Licensee or such other person or entity. During the term of this
Agreement, and for a period of one (1) year thereafter, Licensee agrees that it
will not take any action either on behalf of itself or any other person or
entity which action is designed to disrupt Licensor's business relationships
with Licensor's strategic partners or to directly solicit, or allow any of its
subsidiaries or affiliates to solicit, any of Licensor's strategic partners for
the purpose of persuading them to cease doing business with Licensor.
7.4......U.S. Government Restricted Legend. All Licensor technical data and
computer software is commercial in nature and developed solely at private
expense. Software is delivered as Commercial Computer Software as defined in
DFARS 252.227-7014 (June 1995) or as a commercial item as defined in FAR
2.101(a) and as such is provided with only such rights as are provided in
Licensor's standard commercial license for such software. Technical data is
provided with limited rights only as provided in DFARS 252.227-7015 (Nov. 1995)
or FAR 52.227-14 (June 1987), whichever is applicable. Licensee will: (a)
identify and license the software developed by Licensee hereunder in all
proposals and agreements with the United States Government or any contractor
therefor; and (b) legend or ▇▇▇▇ such software provided pursuant to any
agreement with the United States Government or any contractor therefor in a form
sufficient to obtain for Licensor and its suppliers the protection intended by
this Section 10.3 (U.S. Government Restricted Rights Legend). Licensee agrees
not to remove or deface any portion of any legend on any software or
documentation delivered to it under this Agreement.
8. Representations and Warranties
8.1......Licensor and Licensee each represents and warrants to the other
that:
(i) it is organized, validly existing and in good standing under the laws
of the country or state in which it is incorporated;
(ii) its execution and delivery of this Agreement, and the performance of
its obligations under this Agreement, have been duly authorized by all necessary
corporate action on its part, and it has full corporate power, right and
authority to enter into this Agreement, to grant the license it has granted
hereunder and to perform its obligations hereunder;
(iii) neither the execution and delivery of this Agreement by it, nor the
performance by it of any of its obligations under this Agreement, violates any
applicable law or regulation of any country, state or other governmental unit,
or its Articles or Certificates of Incorporation or Bylaws or other charter
documents, or constitutes a violation of, or a breach or default under, any
agreement or instrument, or judgment or order of any court or governmental
authority, to which it is a party or to which it is subject or to which any of
the Technology is subject;
(iv) this Agreement is a valid and binding obligation of it, enforceable
against it in accordance with its terms, except as such enforceability may be
limited by equitable principles or by bankruptcy or other laws affecting
creditors' rights generally; and
(v) no consent, approval, order or authorization of any person, entity,
court or governmental authority is required on its part in connection with the
execution and delivery of this Agreement or the performance by it of its
obligations hereunder.
8.2 .....Licensor represents and warrants to Licensee that it has title to,
or a license with a right to sublicense, the Technology, in the form in which it
is delivered to Licensee, free and clear of any liens, claims or encumbrances or
interests of any third party or any license which is in conflict with the
License. As of date hereof, no part of the Technology has been licensed to
Licensor and Licensor has not granted any license with respect to any part of
the Technology.
8.3......Licensor represents and warrants to Licensee that it will not make
offers to sell or license Path 1 DotCAM(R) technology to Pelco for the lesser of
five (5) years or as long as this Agreement generates Licensor a minimum of
US$100,000 in license, product or royalty revenue or f fixed fee in the first
year, US$300,000 per year in the second and third years and US$500,000 per year
in the fourth and fifth years.
9. Indemnification
9.1......By Licensor. Licensor shall, at its own expense, defend and
indemnify Licensee for damages and reasonable costs incurred in any suit, claim
or proceeding brought against Licensee alleging that the Technology licensed
pursuant to this Agreement infringe (i) any patents in the United States, (ii)
any copyrights worldwide, or (iii) any trademarks in any countries in which
Licensor markets the Technology, or misappropriate any trade secrets, provided
that Licensor is promptly notified, rendered reasonable assistance by Licensee
as required, and permitted to direct the defense or settlement negotiations.
Licensor shall have no liability for any infringement arising from: (a) the
integration or combination of the Technology together with other software,
materials or products not integrated or combined by Licensor, if the
infringement would have been avoided in the absence of such integration or
combination; (b) the use of other than a current unaltered release of the
software available from Licensor, if the infringement would have been avoided by
the use of the then-current release, and if Licensor has provided such current
release to Licensee; or (c) modifications to the Technology requested by
Licensee.
9.2......Remedies. In the event Licensor reasonably believes that the use
or distribution of the Technology is likely to be enjoined, Licensor may, at its
option, either: (i) substitute functionally equivalent non-infringing
Technology, as the case may be; (ii) modify the infringing item so that it no
longer infringes but remains functionally equivalent; (iii) obtain for Licensee,
at Licensor's expense, the right to continue use of such item; or (iv) if none
of the foregoing is feasible, Licensor may take back such infringing item or
items and terminate only that portion of the license associated with respect to
such item or items, subject to a mutually satisfactory equitable reduction in
the Royalty and fees payable under this Agreement. Should the use or
distribution of the Technology be enjoined, Licensor shall, at its option,
either: (i) substitute functionally equivalent non-infringing Technology, as the
case may be; (ii) modify the infringing item so that it no longer infringes but
remains functionally equivalent; (iii) obtain for Licensee, at Licensor's
expense, the right to continue use of such item; or (iv) if none of the
foregoing is feasible, Licensor may take back such infringing item or items and
terminate only that portion of the license associated with respect to such item
or items, subject to a mutually satisfactory equitable reduction in the Royalty
and fees payable under this Agreement. Notwithstanding the foregoing, Licensee
acknowledges that Licensor may undertake to obtain patent licenses from third
parties relating to the Technology, and in such event the royalty obligation for
the Licensee Products arising from such patent licenses shall be passed through
to, and paid at the direction of Licensor by Licensee; provided, however, that
the per-unit royalty obligation payable by Licensee shall not exceed the
per-unit or percentage royalty obligation (whichever is less) payable by
Licensor for products similar to the Licensee Products, and shall not in any
event exceed Licensee's Royalty Obligations for Licensee Products under this
Agreement. SECTIONS 12.1 and 12.2 STATE LICENSEE'S SOLE AND EXCLUSIVE REMEDY
WITH RESPECT TO CLAIMS OF INFRINGEMENT OF PROPRIETARY RIGHTS OF ANY KIND, AND
ALL WARRANTIES OF NON-INFRINGEMENT, EXPRESS OR IMPLIED, ARE SPECIFICALLY
DISCLAIMED AND EXCLUDED.
9.3......By Licensee. Licensee shall, at its own expense, defend and
indemnify Licensor for damages and reasonable costs incurred in any suit, claim
or proceeding brought against Licensor or its Affiliates that the Licensee
Products and/or related materials infringe (i) any patents in the United States,
(ii) any copyrights worldwide, or (iii) any trademarks in any countries in which
Licensee markets products in connection with the Technology, or misappropriate
any trade secrets, provided that Licensee is promptly notified, rendered
reasonable assistance by Licensor as required, and permitted to direct the
defense or settlement negotiations. Licensee shall have no liability for any
infringement arising from: (a) the integration or combination of the Licensee
Products together with other software, materials or products not integrated or
combined by Licensee, if the infringement would have been avoided in the absence
of such integration or combination; or (b) use or distribution of Technology.
SECTION 12.3 STATES LICENSOR'S SOLE AND EXCLUSIVE REMEDY WITH RESPECT TO CLAIMS
OF INFRINGEMENT OF PROPRIETARY RIGHTS OF ANY KIND, AND ALL WARRANTIES OF
NONINFRINGEMENT, EXPRESS OR IMPLIED, ARE SPECIFICALLY DISCLAIMED AND EXCLUDED.
9.4......Procedure for Indemnification.
9.4.1 In the event that any legal proceedings are instituted, or any claim
or demand is asserted, by any third party which may give rise to any damage,
liability, loss, or cost or expense in respect of which either party has
indemnified the other party under this Section 9 above, the indemnified party
shall give the indemnifying party written notice of the institution of such
proceeding, or the assertion of such claim or demand, promptly after the
indemnified party first becomes aware thereof; provided, however, that any
failure by the indemnified party to give such notice on such prompt basis shall
not affect any of its rights to indemnification hereunder unless such failure
materially and adversely affects the ability of the indemnifying party to defend
such proceeding.
9.4.2 The indemnifying party shall have the right, at its option and at its
own expense, to be represented by counsel of its choice, subject to the approval
of the indemnified party, which approval shall not be unreasonably withheld or
delayed, and to defend against, negotiate with respect to, settle or otherwise
deal with such proceeding, claim or demand; provided, however, that no
settlement of such proceeding, claim or demand shall be made without the prior
written consent of the indemnified party, which consent shall not be
unreasonably withheld or delayed, unless, pursuant to the terms and conditions
of such settlement, the indemnified party shall be released from any liability
or other exposure with respect to such proceeding, claim or demand; and
provided, further, that the indemnified party may participate in any such
proceeding with counsel of its choice and at its own expense. In the event, or
to the extent, the indemnifying party elects not to, or fails to, defend such
proceeding, claim or demand and the indemnified party defends against, settles
or otherwise deals with any such proceeding, claim or demand, any settlement
thereof may be made without the consent of the indemnifying party if it is given
written notice of the material terms and conditions of such settlement at least
ten (10) business days prior to a binding agreement with respect to such
settlement being reached. Each of the parties agrees to cooperate fully with
each other in connection with the defense, negotiation or settlement of any such
proceeding, claim or demand.
10. Confidentiality
10.1 ....Confidential Information. For the purposes of this Agreement,
"Confidential Information" shall mean any information delivered by one party to
another which the receiving party ("Receiving party") knows or has reason to
know is considered confidential by disclosing party ("Disclosing party").
Without limiting the foregoing, the Technology and Documentation shall be deemed
Confidential Information. The Receiving party agrees to take precautions to
prevent any unauthorized disclosure or use of Confidential Information of the
Disclosing party consistent with precautions used to protect the Receiving
party's own confidential information, but in no event less than reasonable care.
Except as provided below, the Receiving party agrees to treat the Confidential
Information as confidential and shall not disclose the Confidential Information
to any person or Entity without the Disclosing party's prior written consent.
The Receiving party may only disclose the Confidential Information to its
Affiliates, employees and agents who reasonably require access to such
Confidential Information to perform obligations under this Agreement. The
Receiving party shall take all appropriate steps to ensure that its employees
and contractors who are permitted access to the Confidential Information of the
Disclosing party agree to act in accordance with the obligations of
confidentiality imposed by this Agreement. Should any party be faced with legal
action to disclose Confidential Information under this Agreement, the Receiving
party shall promptly notify the Disclosing party and upon the Disclosing party's
request, shall reasonably cooperate with the Disclosing party in contesting such
disclosures. The obligations imposed by this Section shall survive any
termination of this Agreement.
10.2 Non-Confidential Information. The obligations set forth in Section
10.1 shall not apply to any particular portion of any Confidential Information
to the extent that: (i) now or subsequently becomes generally known or available
through no act or omission of Receiving party; (ii) was or is known at the time
of receipt of same from Disclosing party; (iii) is provided by the Disclosing
party to a third party without restriction on disclosure; (iv) is subsequently
rightfully provided to Receiving party by a third party without restriction on
disclosure; or (v) is independently developed by Receiving party and as can be
demonstrated from Receiving party's business records and documentation, provided
the person or persons developing same had not had access to the Confidential
Information of the Disclosing party prior to such independent development.
11. Liability
11.1 ....EXCEPT FOR LIABILITY FOR BREACH OF SECTION 12 (CONFIDENTIALITY)
AND EXCEPT AS SPECIFICALLY PROVIDED IN SECTION 9 (INDEMNIFICATION): (A) NEITHER
PARTY SHALL HAVE ANY LIABILITY FOR INCIDENTAL, CONSEQUENTIAL, INDIRECT, SPECIAL
OR PUNITIVE DAMAGES OF ANY KIND OR FOR LOSS OF REVENUE OR LOSS OF BUSINESS
ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT, REGARDLESS OF THE FORM OF
THE ACTION, WHETHER IN CONTRACT, TORT (INCLUDING NEGLIGENCE), STRICT PRODUCT
LIABILITY OR OTHERWISE, EVEN IF ANY REPRESENTATIVE OF A PARTY HERETO HAS BEEN
ADVISED OF THE POSSIBILITY OF SUCH DAMANGES; AND (B) IN NO EVENT SHALL
LICENSOR'S LIABILITY UNDER THIS AGREEMENT EXCEED THE AMOUNTS PAID BY LICENSEE TO
LICENSOR UNDER THIS AGREEMENT.
12. Term and Termination
12.1.....Term. The Term of this Agreement shall begin on the Effective Date
and shall continue unless and until terminated pursuant to this Section 12.
12.2.....Termination Due to Bankruptcy. In the event a party: (i) becomes
insolvent; (ii) voluntarily files or has filed against it a petition under
applicable bankruptcy or insolvency laws which such party fails to have released
within thirty (30) days after filing; (iii) proposes any dissolution,
composition or financial reorganization with creditors or if a receiver,
trustee, custodian or similar agent is appointed or takes possession with
respect to all or substantially all property or business of such party; or (iv)
such party makes a general assignment for the benefit of creditors, the other
party may terminate this Agreement by giving a termination notice, which
termination shall become effective ten (10) days after mailing.
12.3.....Right to Terminate; Early Termination.
12.3.1 Either party shall have the right to terminate this Agreement if the
other party is in material breach of any term or condition of this Agreement and
fails to remedy such breach within thirty (30) days after receipt of a written
notice of such breach given by the non-breaching party; or
12.3.2 Licensee may terminate this Agreement upon thirty (30) days written
notice to Licensor:
(a) if that Licensor is unable to satisfactorily correct a critical error
and/or material error that materially impairs significant functionality of the
Technology within six (6) months, provided, however, that Licensee shall not
have the right to terminate if Licensor can reinstate the previous version of
the Technology (which shall be at Licensor's expense) and that version does not
manifest such error at the time of reinstatement;
(b) if remedies provided in Section 9.1 are insufficient to provide
Licensee with the right to continue using any part of the Technology subject to
a Claim of patent infringement or alleged patent infringement, provided that
Licensee shall not have the right to terminate if to the extent that Licensor is
able to avoid infringement or alleged infringement of the patent rights of a
Third party by having Licensee revert to the prior version of a part of the
Technology at Licensor's expense; and
(c) provided further that Licensee's right to terminate pursuant to the
foregoing subsections (a) and/or (b) shall not limit Licensee's rights and
remedies otherwise available in this Agreement or at law.
12.3.3 Either party may terminate this Agreement if the other party:
(a) makes an assignment for the benefit of creditors;
(b) admits in writing its inability to pay its debts as they become due;
(c) distributes to its creditors any composition, extension or similar kind
of agreement which purpose is to reach an out of court settlement with its
creditors;
(d) causes or consents to the appointment of a receiver, trustee,
liquidator or similar officer for all or any material portion of its property;
(e) shall be dissolved or fails to maintain its corporate existence;
(f) has its ability to conduct business suspended or terminated;
(g) becomes insolvent;
(h) makes or consents to a notice of intended bulk transfer of its assets;
(i) convenes a meeting of creditors to restructure its debts;
(j) takes any corporate or other action for the purpose of
effectuating any of the foregoing; or
(k) if any proceeding, a receiver, trustee, liquidator or similar
officer is appointed to administer and/or liquidate all or any portion of
the property of the other party and such appointment is not vacated or set
aside within 45 days after the appointment of such receiver, trustee,
liquidator or similar officer.
12.4 ....Effect Of Termination. In the event of any termination of this
Agreement, each party shall be entitled to the rights and remedies afforded
pursuant to Section 365(n) of the Bankruptcy Code, and to any and all other
legal and equitable remedies to which such party may be entitled under the law.
Upon the termination or expiration of this Agreement, Licensee shall terminate
further use and distribution of the Technology and, return or destroy all copies
of the Technology.
12.5 ....Survival. The defined terms contained herein and the rights and
obligations in the following Sections shall survive any termination of this
Agreement: 3 ("Compensation"), 8 ("Representations and Warranties"), 9
("Indemnification"), 10 ("Confidentiality"), 11 ("Liability"), 12
("Termination"), 13 ("Applicability of Bankruptcy Code"), and 14 ("General
Provisions").
13. General Provisions
13.1 ....Allocation Of Risk. The Sections on limitation of liability,
limitation of warranties and limited warranties allocate the risks of this
Agreement between the parties. This allocation is reflected in the pricing of
the license fees and is an essential element of the basis of the bargain between
the parties.
13.2 ....Amendment. This Agreement may be amended or supplemented only by a
writing that is signed by duly authorized representatives of both parties.
13.3 ....Assignment. Licensor may assign this Agreement to any person to
who it transfers all or substantially all of its rights in the Technology or to
any subsidiary or affiliate. Except as provided in the preceding sentence,
neither party may assign, voluntarily, by operation of law, or otherwise, any
rights or delegate any duties under this Agreement (other than the right to
receive payments) without the other party's prior written consent. Any attempt
to do so without that consent will be void. This Agreement will bind and inure
to the benefit of the parties and their representative successors and permitted
assigns.
13.4 ....Choice Of Law. This Agreement will be governed by and construed in
accordance with the laws of the United States and the State of California as
applied to agreements entered into and to be performed entirely within
California between California residents. The parties agree that the United
Nations Convention on Contracts for the International Sale of Goods (1980) is
specifically excluded from application to this Agreement.
13.5.....Choice of Forum. The parties hereby submit to the jurisdiction of
and waive any venue, objections against, the United States District Court for
the Southern District of California, San Diego Branch, and the Superior Courts
of the State of California, San Diego County, in any litigation arising out of
this Agreement.
13.6.....Warranties.
13.6.1 Licensor warrants that for a period of sixty (60) days after receipt
by Licensee of the Technology (the "Warranty Period") the media on which
Licensor delivers the Technology to Licensee shall be free of defects in
material and workmanship, and the Technology will perform substantially in
accordance with the Documentation. As Licensee's sole and exclusive remedy for
any breach of such warranty, Licensor shall replace any such defective media
and/or correct any such performance problems in accordance with Sections 4 and
5.1 promptly following receipt of written notice from Licensee of such defects
during the Warrant Period. EXCEPT FOR THE LIMITED WARRANTY SET FORTH IN THIS
SECTION, LICENSOR MAKES NO WARRANTY WITH RESPECT TO ANY OF THE TECHNOLOGY.
LICENSOR MAKES NO IMPLIED WARRANTIES WITH RESPECT TO THE TECHNOLOGY, INCLUDING,
WITHOUT LIMITATION, ANY IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS FOR A
PARTICULAR PURPOSE.
13.6.2 Licensee shall be solely responsible for customer warranty of any
and all Products manufactured by Licensee pursuant to this Agreement.
13.7.....Injunctive Relief. The copying, disclosure or use of the
Technology in a manner inconsistent with any provision of this Agreement may
cause irreparable injury to Licensor for which Licensor may not have an adequate
remedy at law. Licensor may be entitled to equitable relief in court, including,
but not limited to, temporary restraining orders, preliminary injunctions and
permanent injunctions.
13.8 ....Compliance With Laws/Foreign Corrupt Practices Act. Licensee
agrees at all times to comply with applicable laws and regulations in its
performance of this Agreement, including, without limitation, the provisions of
the United States' Foreign Corrupt Practices Act ("FCPA"). Licensee will
indemnify, defend and hold harmless Licensor and its respective officers, agents
and employees from and against any and all losses, costs, claims and other
liabilities arising out of, relating to or resulting from Licensee's failure to
comply with the provisions of applicable laws or the FCPA.
13.9 ....Counterparts. This Agreement may be executed simultaneously in
two or more counterparts, each of which will be deemed an original, but all of
which together will constitute one and the same instrument.
13.10 ...Entire Agreement. This Agreement, including all exhibits to
this Agreement, constitutes the entire agreement between the parties relating to
this subject matter and supersedes all prior or simultaneous representations,
discussions, negotiations and agreements, whether written or oral. The headings
and captions are inserted for convenience of reference only and do not
constitute a part of or modify any of the terms of this Agreement.
13.11 ...Force Majeure. Neither party will be liable for any failure or
delay in performance under this Agreement which might be due, in whole or in
part, directly or indirectly, to any contingency, delay, failure, or cause of,
any nature beyond the reasonable control of such party, including, without in
any way limiting the generality of the foregoing, fire, explosion, earthquake,
storm, flood or other weather, unavailability of necessary utilities or raw
materials, strike, lockout, unavailability of components, activities of a
combination of workmen or other labor difficulties, war, insurrection, riot, act
of God or the public enemy, law, act, order, export control regulation,
proclamation, decree, regulation, ordinance, or instructions of Government or
other public authorities, or judgment or decree of a court of competent
jurisdiction (not arising out of breach by such party of this Agreement). In the
event of the happening of such a cause, the party whose performance is so
affected will give prompt written notice to the other party, stating the period
of time the same is expected to continue.
13.12 ...Licensee's Governmental Approval Obligations. Licensee shall,
at its own expense, obtain and arrange for the maintenance in full force and
effect of all governmental approvals, consents, licenses, authorizations,
declarations, filings, and registrations as may be necessary or advisable for
the performance of all the terms and conditions of this Agreement including, but
not limited to, distribution approval, foreign exchange approvals, import and
export licenses and all approvals which may be required to realize the purpose
of this Agreement.
13.13 ...Notices, Etc. All notices and other communications hereunder
shall be deemed given if given in writing and delivered by hand, prepaid express
or courier delivery service or by facsimile transmission or mailed by registered
or certified mail (return receipt requested), facsimile or postage fees prepaid,
to the party to receive the same at the respective addresses set forth below (or
at such other address as may from time to time be designated by such party in
accordance with this Section 14.11):
(a) If to Licensee:
Visionary Solutions, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇. ▇▇▇ ▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, VP of Sales and Marketing
(b) If to Licensor:
Path 1 Network Technologies Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Chief Financial Officer
All such notices and communications hereunder shall for all purposes of
this Agreement be treated as effective or having been given when delivered if
delivered personally, or, if sent by mail, at the earlier of its receipt or
seventy-two (72) hours after the same has been deposited in a regularly
maintained receptacle for the deposit of the United States mail, addressed and
postage prepaid as aforesaid.
13.14 ...Relationship of Parties. The parties to this Agreement are
independent contractors. Neither party has the authority to bind the other or to
incur any obligation on its behalf.
13.15 ...Severability. If any part of this Agreement is found invalid or
unenforceable, that part will be amended to achieve as nearly as possible the
same economic effect as the original provision and the remainder of this
Agreement will remain in full force.
13.16 ...Waiver. No term or provision hereof will be considered waived by
either party, and no breach excused by either party, unless such waiver or
consent is in writing signed by both parties. No consent by either party to, or
waiver of, a breach by either party, whether express or implied, will constitute
a consent to, waiver of, or excuse of any other, different, or subsequent breach
by either party.
13.17 ...Calendar Days. The references to "days" herein are to be calendar
days unless expressly designated as "business days."
13.18....Attorneys' Fees. In any action to enforce this Agreement, the
prevailing party shall be awarded all court costs and reasonable attorneys' fees
incurred, including such costs and attorneys' fees incurred in enforcing and
collecting any judgment.
[THIS SPACE INTENTIONALLY LEFT BLANK.]
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first set forth above.
LICENSOR
PATH 1 NETWORK TECHNOLOGIES INC.
By: ---------------------------------------------
Title: -------------------------------------------------------
Date: --------------------------------------------------------
LICENSEE
VISIONARY SOLUTIONS, INC.
By: ----------------------------------------------------------
Title: -------------------------------------------------------
Date: --------------------------------------------------------