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EXHIBIT 10.16
EXCLUSIVE PATENT AND TRADE SECRET LICENSE AGREEMENT
This Exclusive Patent and
Trade Secret License Agreement (this “Agreement”)
is made effective as of April 2, 2008 by and between: Visual
Management Systems, Inc, a Nevada corporation ("Licensee"),
having its principal place of business at 1000 Industrial Way
North Suite C, Toms River, NJ 08755; and IDS Patent Holding,
LLC, a New York limited liability company ("the Licensor"),
with a principal place of business at 543 Broadway,
Massapequa, New York 11758 (each individually a
“Party” to this Agreement or jointly the
“Parties”).
WITNESSETH :
WHEREAS, the Licensor
desires to license to the Licensee and the Licensee desires
to obtain a license from the Licensor to use
the intellectual property owned or controlled by
the Licensor as described in U.S. Patent Application Serial
Numbers: 10/145,058 and 10/279,279 (the “Patent
Applications”) filed by the Licensor, and any related
Trade Secrets or know how (collectively, the “Licensed
Technology”), and to maintain said license as regards
any issued patents included in the Licensed Technology for
the entire unexpired term of such patents, and as regards any
Trade Secret, perpetually.
WHEREAS, the Licensee
desires to make exclusive use of the Licensed Technology only
in the business of the manufacture, distribution, integration
and installation of digital video surveillance devices for
the security industry (the “Licensed Use”), which
security industry (the “Industry”) is the
Licensee’s normal line of business, and Licensor
desires to grant to Licensee an exclusive license for the
Licensed Use within the Industry, excepting that upon certain
conditions as set forth herein Licensor may grant third party
licenses for the Licensed Use within the
Industry.
NOW, THEREFORE, in
consideration of the mutual covenants and promises contained
herein and for good and valuable other consideration the
receipt and sufficiency of which is hereby acknowledged, the
parties hereto do hereby agree as follows:
ARTICLE I — GRANTS OF LICENSES
1.01 Grant
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(a)
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Subject
to Section 1.01(b), Licensor grants to the Licensee and its
Related Companies an exclusive (subject to the terms of this
Agreement) license to the Licensed Technology to make, have
made, use and sell products utilizing the Licensed Technology
and to practice the Licensed Technology worldwide during the
term of this Agreement, for the Licensed Use in the
Industry.
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(b)
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The
license granted in Section 1.01(a) shall be exclusive to
Licensee for the Licensed Use in the Industry, subject to
Section 1.01(c)
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(c)
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The
Licensor shall not retain the right to use the Licensed
Technology for the Licensed Use in the Industry for any
purpose whatsoever, except in the case of settlement of any or
all claims made by Licensor against third-parties for
infringement of any kind of the Licensed
Technology. Licensor retains the right, in such
situations to, in its reasonable business judgment, enter into
one or more further licenses of the Licensed Technology in the
Industry, except where use of any such Licensed Technology
would compete in any material respect with the then current
business of Licensee.
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1.02 Duration
All
licenses granted herein for any Licensed Patent component of
the Licensed Technology and any Licensed Use shall continue
until expiration of any issued patents that form a part of the
Licensed Technology, subject in all respects to Article II,
below. All licenses granted herein for any Trade
Secret component of the Licensed Technology, for the lesser of
(i) in perpetuity or (ii) until the Trade Secret is no longer
protectable as a trade secret, subject in all respects to
Article II, below.
1.03 Scope
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(a)
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The
licenses granted herein are licenses to (i) make, have made,
use, lease, sell, export and import digital video surveillance
devices or other Industry products utilizing the Licensed
Technology (the “Licensed Products”); (ii) make,
have made, use, export and import machines, tools, materials
and other instrumentalities, insofar as such machines, tools,
materials and other instrumentalities are involved in,
incidental to or otherwise desirable for the development,
manufacture, testing or repair of Licensed Products which are
or have been made, used, leased, owned, sold, exported or
imported by the grantee of such license; and (iii) convey to
any customer, with respect to any Licensed Product which is
sold or leased to such customer, rights to use and resell such
Licensed Product as sold or leased (whether or not as part of
a larger combination), (iv) combine and/or bundle such
Licensed Products (as sold or leased) with any other product
utilized in the Industry, (v) a method or process which is
other than the inherent use of such Licensed Product itself
(as sold or leased), (vi) a method or process involving the
use of a Licensed Product to manufacture (including associated
testing) any other product utilized in the Industry, and (vii)
all other rights in respect of the Licensed Product held by
the Licensor with respect to Industry
applications.
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(b)
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The
grant of each license hereunder includes the right to grant
sublicenses within the scope of such license. Any
such sublicense may be made effective retroactively, but not
prior to the effective date hereof.
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(c)
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Notwithstanding
anything to the contrary contained herein, the licenses
granted hereunder and all other terms and conditions hereof
shall be subject to all restrictions imposed by all other
agreements between the Parties and any restrictions imposed on
the Licensor by law.
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(d)
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If
the scope of the license provided for in this Agreement is
found by any court having jurisdiction to be too broad or too
restrictive, then the license shall nevertheless remain
effective, but shall be considered amended to a point
considered by said court as reasonable and, as so amended,
shall be fully enforceable.
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1.04 Future
Licensor Patents and Trade Secrets
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(a)
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Licensor
shall give Licensee prompt written notice of all material
developments in the Patent Applications. Licensor
shall, at Licensee’s expense, provided Licensee with
such additional information and documents with regard to any
Licensor Patents and Trade Secrets which Licensee may
reasonably request from time to time.
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(b)
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Licensor
hereby grants and agrees to grant to Licensee and its Related
Companies and their duly authorized agents, under 37 CFR
§ 1.14(a) and comparable rules of foreign patent
practice, a power of inspection of all U.S. and foreign patent
applications included in the Licensed Patents and Licensor
further agrees to execute and deliver to Licensee and its
Related Companies such further documents and take such further
action as may be requested to carry out the intent of this
provision. Licensor shall keep Licensee fully
informed of the progress of the prosecution of all such
Licensed Patents.
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1.05 Confidentiality
of Trade Secrets
The
parties hereto shall hold the Trade Secrets in confidence,
shall reproduce the Trade Secrets only to the extent necessary
or desirable for the exercise of its rights hereunder or for
further research and development related to the Trade Secrets
and shall restrict disclosure of such Trade Secrets to those
individuals who have a reasonable need to know, provided,
however, that confidentiality obligations hereunder shall not
apply to any Trade Secrets which (a) have been or become
published or otherwise known to the public or in the industry
through no breach of this Agreement on the part of a party,
(b) are independently developed by the Licensee or its Related
Companies without the use of or reference to any Trade
Secrets provided by Licensor, or (c) are required to be
disclosed pursuant to a valid and proper requirement of a
governmental agency or court of competent
jurisdiction. The parties shall use reasonable
efforts to provide each other with prompt written notice of
any requirement of a governmental agency or court to disclose
such Trade Secrets after receipt of written notice thereof and
shall use reasonable efforts to assist the other party in
preventing such disclosure or limiting the disclosure, if
prevention is not possible.
1.06 Ability
to Provide Licenses
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(a)
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Licensor
warrants that, upon execution hereof by it and as of the
effective date hereof, there are no commitments or
restrictions which will limit the licenses and rights which
are purported to be granted hereunder by it, except, as
otherwise imposed upon the Licensor by law.
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(b)
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Licensor’s
failure to meet any obligation hereunder, due to the
assignment of title to any Licensed Patent, or the granting of
any licenses, to the United States Government or any agency or
designee thereof pursuant to a statute or regulation of, or
contract with, such Government or agency, shall not constitute
a breach of this Agreement.
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1.07 Representations
of Licensor
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(a)
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Licensee
acknowledges and understands that the Patent Applications as
filed with the United States Patent and Trademark Office (the
“USPTO”) were finally rejected by the USPTO
examiner, and that such rejections are currently the subject
of an appeal by the Licensor. As such, Licensor
gives no assurances that a patent will be issued with respect
to one or both of the Patent Applications. The
Licensee agrees that the use of the Licensed Technology is at
Licensee’s risk. The Licensed Technology is
provided “AS IS” “WITH ALL FAULTS” and
without warranty of any kind.
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(b)
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LICENSOR MAKES NO WARRANTY OF ANY KIND TO LICENSEE OR ANY THIRD
PARTY, EXPRESS, IMPLIED OR STATUTORY, WITH RESPECT TO THE LICENSED
TECHNOLOGY, OR OUTPUT OF OR RESULTS OBTAINED FROM THE LICENSED
TECHNOLOGY, INCLUDING, WITHOUT LIMITATION, ANY IMPLIED WARRANTY OF
MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, ACCURACY,
OPERABILITY OR NON-INFRINGEMENT AND ALL SUCH WARRANTIES ARE HEREBY
EXCLUDED BY LICENSOR AND WAIVED BY LICENSEE.
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1.08 Patent
Maintenance and Other Fees
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(a)
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Licensor
shall pay all sums required and necessary for payment of all
fees, including, without limitation, governmental and
attorneys’, and other amounts payable and/or owing to
any entity relating to prosecution of the Licensed Technology
and for maintenance fees for all of the Licensed Technology,
including without limitation any and all fees related to
Licensed Patent maintenance, provided, however, that such
obligation is subject to the Licensor receiving capital
contributions from its members sufficient for such purposes.
Licensor shall provide Licensee with a list of all United
States and foreign patents now or hereafter included within
the Licensed Technology that are issued by the USPTO or any
foreign patent office and the dates upon which maintenance
f
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