EXHIBIT 10.13
LICENSE AGREEMENT BETWEEN
INTACTA TECHNOLOGIES, INC.
AND
SYSTEMS NAKASHIMA CO., LTD
This LICENSE AGREEMENT (the "Agreement") is entered into on this 17
th day of April, 2000 ("Effective Date") by and between
INTACTA TECHNOLOGIES, INC. ("ITI"), a Delaware corporation, with
offices located at 235 Peachtree Street N.E. 2215 North Tower, Atlanta, GA
30303, USA, and Systems Nakashima Co., Ltd. ("SNC"), a Japanese
corporation, having its principal place of business at Eisen Iwamoto-cho Bldg.,
2-8-8, Iwamoto-cho, Chiyoda-ku, Tokyo 101-0032, Japan.
RECITALS
Whereas, ITI owns certain Patented and Proprietary Technology and has
developed Know-How (herein defined), related to Compression, Encoding, Decoding,
Encryption and,
Whereas, ITI has developed products (Products) based on such technology,
that ITI wishes to market, and,
Whereas, SNC wishes to use these Technologies and Products for
applications and products for document and media industries, one of the first of
which is the Newspaper Industry within Japan, and,
Whereas, SNC wishes to obtain, and ITI wishes to grant to SNC, a
non-exclusive, non-assignable and non-transferable royalty license to use the
Licensed Technologies hereinafter described, in the manufacture and distribution
of the Licensed Products, and,
Whereas, SNC is engaged, among others, in the sale and marketing of
electronic and software components for the document management industry, which
the parties hereto wish to use to develop new applications and markets in
Japan.
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NOW, THEREFORE, SNC and ITI agree as follows:
1. Definition
As used in this Agreement, the
following terms shall have the meaning set forth below:
1.1 Licensed
Technologies" are defined in A as Technologies along with all
Improvements
except for Improvements provided by ITI subsequent to the
expiration of
the one (1) year warranty period defined as expiring on February 28,
2001. The
Licensed Technology also
called "INTACTA CODE DLL for
Newspaper Companies", is defined in
Annex A and includes:
* IntactaCode;
* DLL IntactaCode;
* DLL IntactaCode for Windows CE
applications;
1.2 "
Know-How" means all information and data now possessed, owned, acquired
or developed by ITI which relates to the design, engineering,
development,
manufacturing, or use of equipment for and related to
document management,
compression, encoding, decoding,
encryption technologies and communication of
documents for Newspaper and related industries and similar
applications in the
telecommunications industry, as of the Effective Date, or at
any time during the
term of this Agreement, including without limitation:
i. all information, data and experience of
ITI relating to the development, design
manufacture, promotion,
marketing and sale of systems
and components
designed to compress, encode,
decode and encrypt documents;
ii. methods, algorithms and procedures (and related
test results and design data)
for the design, development
or manufacture of the components
and systems
used in the development of
software tools related to the applications mentioned
above;
iii. methods, algorithms and procedures used in the
design, development, creation,
modification, manufacture,
production, processing, storage,
testing and
evaluation of the applications
mentioned above including without limitation, all
electronic testing and
evaluation (and results thereof) together with all
correspondence, notes,
memoranda, and other information or data provided to,
or received from all testing,
troubleshooting,
evaluation or certification entities,
organizations, individuals or
governmental authorities.
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1.3
"Improvements" means and includes all modifications and improvements
of any
kind (whether or not patentable or commercially
useable) to the Patented and
Proprietary Technology, Information or Know-How
related to the Technologies
and Products.
1.4
"Products" means products, which ITI has developed, develops and will
develop,
including, but not limited to the IntactaCode,
MobileCE, Bridgeway, Courier,
etc., which may originate from the Technologies
of compressing, encoding and
decoding, encryption andtransmission of files
and documents.
1.5
"Proprietary Information" means, whether in human or machine readable
form, all
Know-How, documentation or data, related to
document management
compression, encoding, decoding and encryption
of documents as well as
document communications
using fax or e-mail, provided to SNC by ITI, whether
orally or in writing,
now owned or hereafter
acquired, which is marked with a
legend indicating that it is confidential or which
is orally designated as
confidential.
In the event SNC is unclear as to the proprietary
nature of any element of
information disclosed,
ITI shall, upon request, confirm whether or not such
information is deemed confidential.
1.6
"Technologies" means in a general manner, the various product and
software
modules and applications of ITI's Patented and
Proprietary Technologies and
Information, and Know-How including
Improvements.
1.7
"Licensed Product" means any SNC or Fujitsu products incorporating in
full, or in
part, the Licensed Technologies that is not a
Product as defined in
paragraph 1.4.
The INTACTA CODE Read System Fujitsu intends to
develop, falls under the
definition of Licensed Products.
1.8
"Intacta Code" means a patented and proprietary technology for
creating a
graphic form representing binary information on
paper and on CPUs.
1.9
"Subsidiaries" means all and any corporations, companies or other
entities,
organized under the laws of any nation, more than
50% of the shares of
ownership
of which are owned by one of the parties to the Agreement.
1.10
"Newspaper Companies" means Japanese Companies that were publishing at
least one Newspaper as of December 15, 1999. This
Agreement is restricted to
publications published by these companies as of
December 15, 1999.
2. Grant of License
2.1
ITI hereby grants SNC, or its designated subsidiary, a non-exclusive,
irrevocable,
license to use, incorporate and sell the Licensed
Technologies, in fun or in part its
Licensed Products for use by Newspaper Companies
only, to manufacture,
distribute and sell Licensed Products which may
carry the ITI brand name,
to Newspaper Companies. This grant of
license is limited to applications used,
printed, marketed and sold in Japan
only and to customers incorporated in Japan
who use and incorporate the Licensed
Technology for use by
Newspaper Companies only.
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2.2
SNC warrants that the Licensed Technology and the Licensed Products will
not
be
sold, either directly or indirectly, outside of Japan for any purpose under
this
Agreement.
2.3
Should any SNC customer wish to license the Technology and/or Products for
use
outside of Japan, SNC must negotiate a new
license agreement with ITI.
2.4
For a period of [*] years from the Effective Date, ITI will not grant any
license
to a Japanese entity for ITI's Technology, Product
and Know-How for the utilization
of ITI's technologies for Japanese Newspaper
companies.
2.5
Nothing contained in this Agreement shall be construed as restricting SNC's
right
to make Improvements to the Licensed Technology.
If such Improvements use or
relate to the Licensed Technologies, then such
products, which may be derived
from the Licensed
Products, shall also be subject to the royalty payment under
Section 5. SNC agrees that ITI shall
exclusively own all such Improvements,
patentable or otherwise.
2.6
ITI is entitled to license its Technologies on a non-exclusive basis to any
other
third party, except as defined in Section
2.4.
2.7
Except as otherwise provided herein, SNC shall only make copies of the
Licensed
Technologies for the purpose of incorporating it in its Licensed
Products. Unauthorized copying of the Licensed
Technologies
and Proprietary Information directly or indirectly
by SNC or by any of its
employees or independent contractors, will
constitute a fundamental and material
breach of this Agreement.
2.8
SNC shall have an unrestricted right to make copies of the Licensed
Technologies for internal use, for the purposes
of demonstration and evaluation as
well as for inclusion into its own Licensed
Products.
3. Transfer of Licensed
Technologies
3.1
ITI shall transfer to SNC a customized version of the Licensed Technologies in
the form of DLL's of Intacta Code (defined as
"DLL" for the purposes
of this
section only) that meets the requirements
detailed below as well as the design
materials in accordance with
the following schedule:
(i)
DLL for Windows CE
January 31, 2000
* Confidential portion omitted pursuant to a request for confidential
treatment and filed separately with the Commission.
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(ii)
DLL adapted to various printing resolutions
January 31, 2000
(iii)
DLL for decreased margin to 3mm
February 29,
2000
(iv) DLL for decreased
width to 6mm
February 29, 2000
(v) DLL with
a pre-defined CRC
February 29, 2000
(vi) DLL for print
without defining width
February 29, 2000
(vii) DLL for read without
setting the printing scanning resolutions February 29,
2000
(viii) DLL for print and read with
scaling of
"X" and "Y"
March 15, 2000
(ix) DLL for reduced
size of the Intacta Code
pixels
March 31, 2000
3.2
SNC agrees to pay to ITI the sum of [*] for delivery by ITI of the
customized
Licensed Technology to SNC. SNC agrees to make
such payments not later than
sixty (60) days after ITI has delivered the
last item.
3.3
Within six (6) weeks of the deliverables listed in Section 3.1 SNC will
perform
compatability tests with printers specifically
used for printing newspapers in
Japan. SNC will provide to ITI an outline of all
tests conducted and the results of
those tests, including a detailed description of
failures, if any, or any
inconsistencies in performance. Should SNC not
complete the tests and makes its
report within six (6) weeks, ITI will bill and
SNC will be obligated to pay for the
final adaptations of the DLL's.
4. Representations, Warranties and
Technical Support
4.1
ITI warrants and represents:
4.1.1 that it owns
by itself through the work of its employees and consultants the entire
right, title and interest in and to the Licensed
Technologies worldwide which does
not infringe on any third party's patent rights,
mask work rights, copyrights, utility
models and/or other intellectual property
rights;
4.1.2 that it has
the right to enter into this Agreement;
4.1.3 that there are
no liens, conveyances, mortgages, assignments, encumbrances, or
other agreements which would prevent or impair
the exercise of all rights
granted to SNC pursuant to this Agreement and
that it
* Confidential portion omitted pursuant to a request for confidential
treatment and filed separately with the Commission.
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has not and will not enter into any agreements
which would interfere with the
licenses granted to SNC during the full term of
this Agreement except as to other
grants of non-exclusive licenses to other
licensees.
4.2
During a period of twelve months starting with the delivery to SNC of the
last
deliverable as defined in section 3.1, ITI will
provide to SNC, free of any charge
technical support related to bug fixing. During
this period, ITT agrees to provide
to SNC updated versions of the Intacta Code DLL
that include bug fixes.
4.3
ITT agrees to negotiate in good faith a Service Agreement under which ITT
shall
provide Software Maintenance Support to SNC.
4.4
ITI agrees to provide SNC with R&D support to help SNC develop
Licensed
Products and/or Modifications and Improvements to
the Licensed Technologies.
SNC agrees that any such Improvements or
Modifications to the Licensed
Technologies will remain the exclusive and sole
ownership of ITI.
4.5
ITI agrees to negotiate in good faith, the conditions of any technical and/or
R&D
support requested by SNC.
4.6
There are no other warranties of ITT expressed or implied, including
warranties
of merchantability and fitness for a particular
purpose.
5. Royalties
In full
consideration of the license granted and Licensed Technologies provided and
ITI's
expertise rendered to SNC by ITI herein, SNC shall pay to ITT the following
royalties:
5.1
Royalty: SNC shall pay to ITI royalty equal to [*] for the use of the
Licensed
Technology for up to a maximum of [*] Japanese
Newspaper Companies.
5.2
For the sale of Licensed Technology to the [*] Newspaper Company and to any
Newspaper Company thereafter, SNC acknowledges
and agrees that it will
negotiate a new royalty payment schedule with
ITI. It is anticipated that the
subsequent royalties will be higher than those in
Section 5.1.
5.3
All taxes imposed as a result of the existence of this License Agreement shall
be
borne and paid by the party required to comply
with such applicable tax laws. If
required by the laws of Japan, SNC shall withhold
from its payment to ITI, and
SNC may directly offset its royalty payment
obligations to ITI by, the amount
equal to taxes and levies on such payment. SNC
shall make payment thereof to
the appropriate tax authorities and shall furnish
ITI with a copy of an official tax
receipt or certificate of such payment.
* Confidential portion omitted pursuant to a request for Confidential
treatment and filed separately with the Commmission.
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5.4
Record and Payment: SNC shall keep an accurate record of all Licensed
Products, and Products, which are subject to
Royalty under this License
Agreement. Within thirty (30) days of the end
of each calendar quarter period,
SNC shall make a report of the Licensed Products
and the Products sold and
subject to Royalty statements. If Royalties are
payable, payment will be made to
ITI within sixty (60) days of the end of the
calendar quarter.
5.5
ITI shall have the right during normal business hours, to have SNC's records,
with
respect to the sales of the Licensed Products and
Products, examined by
independent chartered or certified accountants for
the purpose of verifying such
Royalty statements. ITI shall provide notice in
writing to a duly authorized
representative of SNC no less than fifteen (15)
business days prior to any such
examination of SNCs records. Such examinations
shall be limited to a maximum
of two (2) per year.
6. Customization of Licensed
Technologies
6.1
In consideration of ITI's work to have customize and delivered as per article
3.1
of this Agreement its Intacta Code to the
requirements to SNC's first customer,
SNC agrees to pay to ITI by May 15, 2000, the
amount of [*].
7. Commission
7.1
ITI agrees to pay to SNC a one time commission of [*] for having sold and
continue to selling the Intacta Code to
companies incorporated in Japan that will
use the Intacta Code for applications only in
Japan and only for Newspaper
Companies.
7.2
SNC will deduct the commission payable by ITI to SNC from the royalties
payable by SNC to ITI as per article 5.1 of
this Agreement. The commission
payable by ITI to SNC will be deducted by SNC on
a pre-tax basis.
8. Confidentiality
8.1
SNC and ITI agree that certain information which either party may receive
from
the other party under this Agreement will be
proprietary and confidential
* Confidential portion omitted pursuant to a request for confidential
treatment and filed separately with the Commission.
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information of the disclosing party. Such
information includes, but is not limited to:
8.1.1 the fact that the disclosing party
intends to develop or market any particular
hardware or software products;
8.1.2 the designs, specifications,
development schedule, pricing and all other
technical and business information concerning the Licensed products,
the
Products and any Improvements;
8.1.3 any non-public information concerning
the business or finance of the
disclosing party;
8.1.4 any other information the disclosure
of which might harm or destroy a
competitive advantage enjoyed by the disclosing party (all of the
above
8.1.1 through 8.1.4 hereafter called Proprietary and Confidential
Information).
8.2
The receiving party shall not disclose the Proprietary and Confidential
Information
to any other person or entity, other than its own
employees, its Subsidiaries and
sub-contractors and consultants who participate
directly in the performance of the
receiving party's obligations under this License
Agreement and its attorneys.
8.3
SNC affirms and acknowledges that the unauthorized disclosure of the
Technologies, the Licensed Technology and
privileged commercial
information provided by ITI pursuant to this
Agreement may cause irreparable
harm to ITI. SNC affirms and acknowledges that
in the event of a breach of this
Agreement by SNC, ITI will be entitled to seek
appropriate and available relief
under applicable laws.
8.4
The parties hereto agree that they will keep the terms and conditions of
this
Agreement confidential and neither of the
parties shall disclose its terms to any
third party without the prior written consent
of the other party except as required
by federal or state securities law or court
order.
8.5
The obligations set forth in Sections 8.1 through 8.3 above shall not be
applicable
to any information which:
8.5.1 the receiving party is authorized by
the disclosing party in writing to
disclose, or
8.5.2 becomes public knowledge through no
breach of this License Agreement or
the Development Agreement which enters into effect at the same date as
this License Agreement by the receiving party, or
8.5.3 has been legally obtained from a
bona fide third party, or
8.5.4 was in possession of the receiving
party prior to the receipt there of, or
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8.5.5 is required to be disclosed by in the
context of administrative or judicial
proceedings or otherwise pursuant to applicable laws or regulations.
9. Indemnity
9.1
If Licensed Products and Products sold in accordance with this Agreement,
are
alleged to infringe or misappropriate partially
or totally any patent, copyright or
intellectual property right belonging to a third
party which is not listed in A hereto,
and if the third party makes a claim or institutes
a legal action or commences a
proceeding against SNC because such infringement
or misappropriation is caused
by the use of the licensed Technologies, SNC shall
promptly notify ITI thereof.
Upon receipt of such notice, ITI shall, at its own
expense, promptly take over the
defense of such claim, action or proceeding or
may pursue settlement with the
third party or may require SNC to modify the
design of the Licensed Products to
avoid the infringement or misappropriation,
provided that such modification
preserves the essential functioning of the
Licensed Products. ITI shall bear all
charges and expenses incurred by SNC including,
but riot limited to, its attorneys
fees for such case or cases.
9.2
The maximum amount of liability for charges and additional development fees
that
ITI shall bear shall not exceed One hundred
thousand dollars ($100,000) in total.
9.3
ITI shall not be liable or responsible for indirect and incidental damages
resulting
from the application or use of the Licensed
Technologies by SNC other than as
indicated in Section 2.1 above.
10. Term and Termination
This Agreement
shall become effective on its Effective Date and shall remain in effect
until June 1, 2003.
If either party wishes to renew this agreement notice must be given
to the other at
least six (6) months prior to the expiration of this Agreement. The
parties may then,
by mutual consent, renegotiate or renew this Agreement for a period
to be agreed
upon.
11. Termination
11.1
Either party may terminate this Agreement by giving written notice to the
other
party, in the event of a breach or default
under this Agreement and the party in
default having failed to remedy such breach or
default within forty-five (45) days
from the date of a written notice given by the
other party specifying the nature of
the breach or default.
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11.2
Either party may terminate this Agreement by giving written notice in the
event
the other party should become insolvent or make
an assignment for the benefit of
its creditors or voluntarily file for or be
placed in bankruptcy written notice to
such other party and is not withdrawn within sixty
(60) days from the date of
filing.
11.3
Upon termination of this Agreement, SNC shall pay all Royalties due to ITI
with
respect to all the Licensed Technologies,
Products, and Products sold and
subject to the Royalty for which payment has not
yet been made, within thirty
(30) days following the termination of this
Agreement.
11.4
Upon termination of this Agreement, SNC shall cease to use the Licensed
Technologies and Products, to manufacture and
sell the Licensed Products and at
SNC's expense, return to ITI all Licensed
Technologies Evaluation Software and
any other Confidential and Proprietary
Information.
11.5
In the event, however, this Agreement is terminated without a breach or
default
by SNC, SNC shall have the right to manufacture,
to have manufactured, use,
lease, sell or otherwise dispose of the Licensed
ITI Products, development of
which has been completed by SNC before the
termination of this Agreement, for
the full marketable lifetime of such Licensed
Products by paying the Royalty as
described in section 5.
11.6
No termination of this Agreement, by expiration or otherwise, shall release
either
party from any of its obligations under
Section 8.
12. Notices
All notices required or permitted to be given hereunder (except for routine
communications to be addressed to the persons in charge of its subject business)
shall be in writing and shall be valid and sufficient if dispatched by a
reputable express delivery service by air or registered airmail, and addressed
as follows:
If to SNC:
Systems Nakashima Co., Ltd.
Eisen Iwamoto-cho Bldg., 2-8-8,
Iwamoto-cho, Chiyoda-ku,
Tokyo 101-0032, Japan.
Attn. Mr. Yukio Hashimoto
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If to Intacta:
Intacta Technologies Inc.
235 Peachtree Street N.E.
2215 North Tower
Atlanta, GA 30303, USA
Attn. Mr. Marco Genoni
Either party may change its address by a notice given to the other party in
the manner set forth above. Notices given as herein provided shall be
considered to have been given seven (7) days after the dispatch thereof.
13. Applicable Law
This Agreement shall
be governed by and construed in accordance with the laws, of
the State of
Georgia, U.S.A.
14. Miscellaneous
14.1
This Agreement is written in the English language only. The English language
shall
be controlling this agreement and its
interpretation. No translation of this
Agreement into any other language, including in
Japanese, shall be of force or
affect in the interpretation of this
Agreement.
14.2
This Agreement and its Appendices embody the entire understanding of the
parties with respect to the subject matter
contained herein and shall supersede all
previous communications, representations or
understandings, either oral or
written, between the parties relating to the
subject matter hereof. No amendment
or modification of this Agreement shall be valid
or binding upon the parties unless
signed by their respective, duly authorized
officers.
14.3
This Agreement shall not be assignable by any party without the prior
written
consent of the other party.
14.4
If any term, clause, or provision of this Agreement shall be judged to be
invalid,
the validity of any other term, clause, or
provision, shall not be affected, and such
invalid term, clause, or provision shall be
deemed deleted from this Agreement.
14.5
This License Agreement precedes, for any purpose of interpretation, any
other
agreement that may have been signed between the
two parties.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized representatives on the day and year first
above written.
INTACTA TECHNOLOGIES, INC. SYSTEMS NAKASHIMA
CO., LTD
By: /s/ Noel R. Bambrough
By: /s/ Yukio Hashimoto
Noel R. Bambrough
Yukio Hashimoto
Title: Vice President
Title: Director and General Manager
Date: April 17, 2000
Date: April 17, 2000
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"Annex A"
LICENSED TECHNOLOGIES
The 32-bit Intacta Code Library contains the following:
1) Master Library (SCWR32N.DLL) for Compressing,
Encrypting and Creating and/or
printing Intacta Code. Master
Library is using the following DLLs: SCWR32N.DLL are
ZLIB.DLL, DEL.DLL and
SCCRC32.DLL.
2) Master Library (SCRD32N.DLL) for Reading,
Decompressing and Decrypting
Intacta Code. Master Library
is using the following DLLs: ZLIB.DLL, DEL.DLL,
SCCRC32.DLL and
FRAMING.DLL.
3) Source Code and executables of a Demo program
for both 1) and 2) above.
4) Manual-Microsoft Word (IC_VER3.DOC) file
describing the programming rules and
requirements to implement the 1)
and 2) above.
All Libraries work under WIN 95, WIN 98, WIN NT and Windows CE.
