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LICENSE AGREEMENT
This License Agreement (this “ Agreement ”),
dated as of July 10, 2008 (the “Effective Date”), is
entered into by and between 4C Controls Inc., a corporation
organized under the laws of the State of Nevada and having its
principal place of business at Rockefeller Center, 1230 Avenue of
the Americas, 7th Floor, New York, NY 10020
(“Licensee”) and Riccardo Maggiora, an individual with
his address at Via Bologna n. 39, 15048 Valenza (AL), Italy
(“Licensor”) (Licensee and Licensor each a
“Party”, together the “Parties”).
WHEREAS, Licensor owns or controls sole dispositive power over all
rights with respect to the Licensor Technology and Licensor
Know-How as such terms are defined herein;
WHEREAS, Licensee desires to use Licensor Technology and Licensor
Know-How for the benefit of Licensee and desires to obtain a
license from Licensor for such use and to file and obtain any and
all additional patents which are derivative of Licensor Technology
and Licensor Know-How;
NOW, THEREFORE, in consideration of the foregoing premises and the
mutual covenants herein contained, the parties hereby agree as
follows:
1. Definitions
1.1 Affiliate: The term “Affiliate” means, with respect
to any person, entity, or any other person or entity that it
directly or indirectly controls, is under common control with, or
is controlled by that person or entity. For purposes of this
definition, “control” (including with correlative
meaning, the terms “controlled by” and under
“common control with”), as used with respect to any
person, or entity, means the possession, directly or indirectly, of
the power to direct or to cause the direction of the management and
policies of such person or entity, whether through the ownership of
voting securities, by contract, or otherwise.
1.2 Effective Date: The term “Effective Date” means the
date set forth in the preamble to this Agreement.
1.3 First Commercial Sale: The term “First Commercial
Sale” means, after all necessary marketing approvals have
been obtained in a relevant country, the initial transfer of a
“Product”, as such term is defined herein, in such
country to a third party customer in exchange for cash or some cash
equivalent to which a value can be assigned for the purpose of
determining “Net Sales”, as such term is defined
herein.
1.4 Improvements: The term “Improvements” means any and
all inventions, discoveries, processes, works of authorship, mask
works, designations, designs, know-how, ideas, copyrights, trade
secret rights, mask work rights, trademark rights, methods,
compositions, formulae, procedures, protocols, software, source
code, algorithms, developments and improvements, techniques,
results of experimentation and testing, information and data of any
and all nature or kind, in any form or media, which have been
conceived by Licensor or employees or others acting on behalf of
Licensor, either alone or jointly with others, as of the Effective
Date of the Agreement, and which constitute modifications,
enhancements or improvements to the Licensor Technology or Licensor
Know-How or are conceived, developed or reduced to practice using
the Licensor Technology or Licensor Know-How.
License Agreement
1.5 Net Sales: The term “Net Sales” means
gross sales of the Products invoiced by Licensee or any of its
Affiliates to a third party, and accepted by the third party, less
shipping costs, warranty reserves, returns, allowances, taxes,
provided, however, (i) the “Net Sales” shall be deemed
to occur on the later of (x) the date of legal recognition by the
Licensee of revenues derived from such sale as determined under
Generally Accepted Accounting Principals applicable to United
States public companies registered with the U.S. Securities &
Exchange Commission or (y) the date of actual receipt of proceeds
from such sale as received by the Licensee. Any and all amounts of
Product revenues which are deposits, escrows, warranty reserves,
third-party custody funds, or security interests, and all similar
types of payments to Licensee, shall not be deemed to be “Net
Sales” unless and until any and all such amounts are free and
clear of all obligations, claims or liabilities to customers or
third parties on the part of Licensee. Net Sales shall be
determined on a pro-forma basis by the chief financial officer of
Licensee and subject to audit by the Licensee’s independent
certified public accountants.
1.6 Person: The term “Person” means an individual, any
incorporated entity, limited liability company, partnership, trust,
unincorporated organization or association, government or any
agency, instrumentality or political subdivision of a government,
or any other entity or organization.
1.7 Product: The term “Product” means any composition
of matter, material, device, apparatus, or system developed or
commercialized by Licensee with respect to the Licensor Technology,
Licensor Patents or Licensor Know-How.
1.8 Licensor Know-How: The term “Licensor Know-How”
means all inventions, discoveries, processes, methods,
compositions, formulae, procedures, works of authorship, mask
works, designations, designs, know-how, ideas, copyrights, trade
secret rights, mask work rights, trademark rights, protocols,
software, source code, algorithms, developments and Improvements,
techniques, results of experimentation and testing, information and
data of any and all nature or kind, in any form or media, which are
known or not generally known, (i) embodying or produced through use
of Licensor Technology and associated know-how, or (ii) embodying
or produced through inventions conceived, discovered or reduced to
practice, whether alone or with others, by Licensor employees or
with facilities or equipment utilized by Licensor, (iii) otherwise
regarding the Licensor Technology, in which Licensor has an
ownership or other interest during the Term of this Agreement, (iv)
further inventions (whether or not patentable), discoveries,
processes, methods, compositions, formulae, processes, works of
authorship, mask works, designations, designs, formulated and
unformulated know-how, ideas, copyrights, trade secret rights, mask
work rights, trademark rights, procedures, protocols, software
developments, source code, algorithms, techniques, results of
experimentation and testing, information and data, works of
authorship, mask works, designations, designs, ancillary know-how,
ideas and information of any nature or kind, in any and all media,
made or conceived or reduced to practice, in whole or in part, by
Licensor or by Licensor employee or Licensor facilities which are
derivative from any and all of the foregoing clauses (i) through
(iii) hereinabove; and (v) any Improvements with respect to any and
all of the foregoing clauses (i) through (iv) hereinabove.
1.9 Licensor Patents: The term “Licensor Patents” means
(i) all patent applications hereafter filed, having legal force in
any country within the Territory, embodying or produced through
inventions conceived, discovered or reduced to practice, whether
alone or with others, by Licensor, or any of his employees, or any
of Licensor’s facilities or equipment, or any facilities or
equipment Licensor controls, regarding or related to the Licensor
Technology or Licensor Know-How, which claim an invention in which
Licensor has an ownership or other interest during the Term of this
Agreement, and (ii) all patents that in the future issue from the
applications described in Annex A hereto, and (iii) all divisions,
continuations, continuations-in-part which are directed to subject
matter specifically described in the applications described in
Annex A hereto, reissues, renewals, extensions or additions to any
such applications, and any Improvements thereto upon which a patent
application has been filed or a patent has issued.
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License Agreement
1.10 Licensor Technology: The term “Licensor
Technology” means any and all material, notes, records,
Improvements, developments, and trade secrets conceived, made by or
discovered by Licensor in any capacity related, directly or
indirectly, to the applications described in Annex A hereto. For
purposes of clarity, the Licensor Technology excludes any and all
intellectual property previously assigned, sold or transferred to a
third party prior to the date of this Agreement as evidenced by
license agreements made available to the Company for examination
thereof.
1.11 Territory: The term “Territory” means a territory
consisting of the entire world.
1.12 Royalty Year: The “Royalty Year” shall be a
twelve-month calendar year ending on December 31, except that the
first Royalty Year, if the First Commercial Sale of Product should
occur during the year, may be less than twelve months.
2. Representations and Warranties
Each Party hereby represents and warrants to the other Party as
follows:
2.1 Existence and Power. The Party hereto has the power and
authority and the legal right to own and operate its property and
assets, and to carry on its business as it is now being conducted.
If the Party is a corporate Person, such Party is duly organized,
validly existing and in good standing under the laws of the
jurisdiction in which it is incorporated.
2.2 Authorization and Enforcement of Obligations. Such Party (a)
has the power and authority and the legal right to enter into this
Agreement and to perform its obligations hereunder and (b) has
taken all necessary action on its part to authorize the execution
and delivery of this Agreement and the performance of its
obligations hereunder. This Agreement has been duly executed and
delivered on behalf of such Party and constitutes a legal, valid
and binding obligation of such Party, enforceable against such
Party in accordance with its terms.
2.3 No Consents. To the knowledge of such Party, all necessary
consents, approvals and authorizations of all governmental
authorities and other persons required to be obtained by such Party
in connection with this Agreement have been obtained.
2.4 No Conflict. The execution and delivery of this Agreement and
the performance of such Party's obligations hereunder do not
conflict with or violate any requirement of applicable laws or
regulations, and do not conflict with, or constitute a default
under, any contractual obligation of such Party.
2.5 Licensor Representations and Warranties. Licensor furthermore
hereby represents and warrants to Licensee as follows:
(a) Right, Title and Interest in the Licensor Technology and
Licensor Know-How. Licensor represents and warrants that (i)
Licensor is the sole owner of, or has exclusive and irrevocable
complete legal and equitable power of disposition over, the entire
right, title, and interest in the Licensor Technology and Licensor
Know-How, (ii) Licensor has the sole right to grant licenses
thereunder, and (iii) the Licensor has not granted licenses
thereunder to any other Person that would restrict rights granted
to Licensee.
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License Agreement
(b) Third Party Claims. No claim has been made by, and to
the knowledge of Licensor, no claim is available to, any third
party that any activity permitted by the licenses granted to
Licensee pursuant to this Agreement constitutes an infringement of
any right of any such third party anywhere in the world, including,
without limitation, any right under any copyright, trademark, trade
secret, patent, or other proprietary right of any such third party.
For the purposes of this section 2.5, third party shall mean any
person other than Licensor and Licensee and Licensee’s
Affiliates.
(c) Patent Documents. Licensor has provided Licensee with copies of
all documents relevant to the validity or enforceability of the
Licensor Patents, including, without limitation, copies of all
patent searches and legal opinion letters relating to any patents
included within the Licensor Patents and copies of all documents
relating to any potential infringement of the Licensor Patents.
3. License Grant
3.1 License Grant to Licensee. Licensor hereby grants to Licensee
an exclusive and irrevocable worldwide license, including, without
limitation, the right to grant any and all sublicenses at any time
for any person on such terms as determined at the sole discretion
of Licensee, under the Licensor Technology, Licensor Patents and
Licensor Know-How, and all Improvements to Licensor Technology,
Licensor Patents and Licensor Know-How, to develop, make, have
made, use, sell, license, market and otherwise exploit Products in
the Territory. For purposes of clarity, any and all revenues
derived by the Licensor from sublicenses shall be within the scope
of the Net Sales subject to payment of Royalties as provided
herein.
3.2 Technical Assistance. (a) Upon execution of this Agreement,
Licensor shall disclose and make available to Licensee all any and
all further information available to Licensor not previously
disclosed to Licensee regarding the use of the Licensor Technology,
Licensor Patents and Licensor Know-How.
(b) During the Term of the Agreement, upon reasonable notice,
Licensor without additional consideration (i) shall promptly
provide any and all technical assistance regarding the Licensor
Technology, Licensor Patents and Licensor Know-How as Licensee
reasonably requests, (ii) shall promptly train and advise Licensee
technical personnel as is deemed reasonably necessary by Licensee
to provide the foregoing technical assistance, (iii) shall promptly
disclose and make available to Licensee all information regarding
the Licensor Technology, Licensor Patents and Licensor Know-How and
(iv) shall promptly take any and all reasonable measures to
safeguard and protect the Licensor Technology, Licensor Patents and
Licensor Know-How, including, without limitation, to establish and
maintain duplicate secure offsite copies of all such Licensor
Technology, Licensor Patents and Licensor Know-How which may be
accessed by Licensee personnel under password and/or vault
protected facilities. 3.3 Copies of Sublicenses. Licensee
shall upon reasonable request furnish to Licensor a copy of each
sublicense agreement and each amendment thereto, provided, however,
Licensee may redact such information as Licensee deems proprietary
and confidential as determined at the sole and reasonable
discretion of Licensee. Each such sublicense agreement or amendment
shall constitute Confidential Information of Licensee.
3.4 Obligations of Sublicensees. Licensee agrees that any
sublicenses granted by it shall contain provisions comparable to
the provisions of this Agreement with respect to confidentiality
and all other material terms and conditions of this Agreement which
are reasonably necessary to protect the interests of Licensor under
this Agreement.
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License Agreement
3.5 Limitation on Rights. The license granted hereunder
shall not be construed to confer any rights upon Licensee by
implication, estoppel or otherwise as to any technology not
specifically licensed hereunder.
3.6 Patent and Registration Rights. Licensor expressly grants the
right to Licensee to file patent applications with respect to any
and all Licensor Know-How, Licensor Technology, and any and all
future applications for patent and future patents (all such
Licensor Know-How, Licensor Technology, and any and all patents
which are derivative of Licensor Patents, collectively, the “
Derivative Patents ”). Licensor hereby undertakes to
assign to Licensee any and all such Derivative Patents which are
under prosecution, application or issued in the name of Licensor as
inventor, which shall become the sole property of Licensee for the
duration of such patent. Licensor grants to Licensee the right to
register any and all copyrights, trademarks and service marks which
Licensee deems reasonable and necessary for purposes of
commercialization of any and all Licensor Know-How, Licensor
Technology, Improvements and Derivative Patents thereof. For
purposes of the foregoing, Licensor hereby grants a limited power
of attorney to Licensee for the purpose of taking any and all
reasonable actions necessary to cause the prosecution of any and
all such Derivative Patents and register any and all copyrights,
trademarks and service marks at Licensee’s sole discretion
and at Licensee’s sole cost and expense, in any and all
jurisdictions worldwide and to cause the assignment to Licensee of
any and all rights pertaining to derivative and ancillary Licensor
Know-How and Licensor Technology obtained or further derived in
connection with such Derivative Patents. The power of attorney is
expressly coupled with an interest duly acknowledged hereby and
shall survive for the duration of this Agreement. For purposes of
clarity, any and all Derivative Patent applications: (i) shall
mention Licensor as the inventor, (ii) shall ascribe ownership
rights to the Licensee, and (iii) shall ascribe economic rights to
the Licensee.
3.7 Scope of Exclusive Rights. The rights granted to Licensee
hereunder are exclusive and Licensee shall be the sole licensee of
such rights during the Term of this Agreement. So long as
Licensee’s rights remain effective under this Agreement,
Licensor undertakes and agrees that it shall not use any part of
the rights licensed to Licensee under this Agreement for commercial
use in the licensed Territory for any commercial purpose outside of
the scope of this Agreement or for the purpose of offering any
service directed at any third party located in the licensed
Territory, and in each case, shall not grant any license or
sublicense to any third party for any reason whatsoever.
4. Royalty
4.1 Amount of Royalty: Licensee shall pay to Licensor, on a
country-by-country, Product-by-Product basis, a royalty of five
per mil (0.5%) of Net Sales of Product per Royalty Year (the
“Royalties”).
4.2 Payment: Licensee shall submit a payment to Licensor annually
that is equal to the royalties due for that Royalty Year, less
applicable withholding taxes and credits, except that Licensee
shall reserve and hold back an amount equal to ten percent (10%) of
the Royalties payment each Royalty Year (the “ Royalty
Reserve ”) to account for warranties, returns,
allowances, and write-offs of customer accounts. The Royalty
Reserve, as adjusted for warranty costs, returns, allowances, and
write-offs of customer accounts, will be paid with the following
Royalty Year's Royalties payments. The Royalties payments to
Licensor shall be made within twenty (20) days after completion of
the audit of the consolidated financial statements of Licensee and
its subsidiaries with respect to the end of each Royalty Year in
which Net Sales occurred (the “ Payment Due Date R
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