Systems development and license agreement. This Agreement made as of the _________[date], by and between _________ Technology, Inc., a Delaware corporation ("T"), with its principal place of business at _________, _________, _________, and T R&D Partners (LP), a _________ limited partnership (the "Partnership"), with its principal place of business at the address in Section 10.5 for notices under this Agreement. Recitals: T is engaged in the design, development, integration and marketing of image systems utilizing laser optical, computer and other technologies. The Partnership proposes to conduct a research and development business for the purpose of researching, designing and developing the "Partnership Systems" (as defined below) with a view to their commercial exploitation. The Partnership wishes to engage T to perform, for the account, risk and benefit and in behalf of the Partnership, research, design and development services with respect to the Partnership Systems and T is willing to be so engaged. The Partnership will own all rights in and to the Partnership Systems and, by reason of conducting a research and development business, will bear all risks of the outcome of the research and development activities under this Agreement and of the commercial exploitation of them. Therefore, in consideration of the premises and the terms set forth below, the parties agree as follows: Section 1. Definitions Defined terms used herein shall have the following meanings: 1.1. T shall mean _________ Technology, Inc. and any corporation, company, partnership, joint venture, firm, individual or other entity (other than the Partnership) which, directly or indirectly, controls or is controlled by, or is under common control with, _________ Technology, Inc. "Control" shall mean the power to direct or cause the direction of the management and policies of such entity, whether through the ownership of voting securities, by contract or otherwise. Any corporation, company, partnership, joint venture, firm, individual, or other entity which does not come within this definition of "T" shall be a "Non-affiliate". 1.2. Combination Product shall mean a single product (including a process or an application) which is made by combining one or more Primary Products, Other Products, Similar Products, and products which are not Primary Products, Other Products or Similar Products. 1.3. Confidential Information shall mean all know-how, ideas, trade secrets, processes, designs, drawings, data, research, notes, memoranda, confidential records, specifications, inventions, and technical and similar confidential information resulting from research, design and development work under this Agreement, except such information which is (a) known to a party under this Agreement otherwise than as a result of disclosure by the other party under this Agreement, (b) disclosed in published literature (other than by publication by a party to this Agreement, or by its employee or any consultant or independent contractor retained by it), (c) generally known to the industry without breach
of this Agreement, or (d) lawfully obtained by a party hereunder from a third party without binder of secrecy. 1.4. Contract Price shall mean the aggregate amount to be paid by the Partnership to T for the Phases of Section 2 services covered by this Agreement upon its execution and delivery. 1.5. Investment Recovery Phase shall mean that period beginning with the date of this Agreement and ending on that date when the Partnership shall have received aggregate Royalties hereunder equivalent to 100% of the general and limited partners' aggregate initial capital contributions of cash and notes to the Partnership. 1.6. Net Other Royalty Income shall mean Net Royalty Income relating to Other Products. 1.7. Net Other Sales shall mean Net Sales relating to Other Products. 1.8. Net Royalty Income shall mean all revenues recognized in accordance with generally accepted accounting principles by T from licensing the right to exploit or utilize in any way any part or all of the Partnership Systems or to produce Primary Products, Other Products or Similar Products to Nonaffiliates, reduced by the following items (to the extent amounts attributable to such items are included in revenue and are directly related to such licensing): (a) all reasonable legal costs incurred by T with respect to (i) such licensing and (ii) actions or proceedings to enforce or defend the validity of or T's rights to, or to preclude the unauthorized use by others of, any of the Confidential Information included within the Partnership Systems and (b) all royalties, license fees or similar payments paid to third parties under other agreements. Where T is a party to a joint venture, partnership or similar arrangement, Royalties under this Agreement shall be payable only with respect to T's underlying interest in the total revenue of the joint venture, partnership or similar arrangement, notwithstanding that T may be indemnified or the liability otherwise borne by T's joint venturer, partner or other party for any of the Royalties payable under this Agreement. 1.9. Net Sales shall mean all revenues recognized in accordance with generally accepted accounting principles by T in respect of sales, rentals or other transactions with Non-affiliates relating to Primary Products, Other Products or Similar Products, reduced by the following items (to the extent amounts attributable to such items are included in revenue and are directly related to such transactions): (a) all cash, prompt payment, trade and quantity discounts allowed and payable, including without limitation dealer volume bonuses used, allowed and payable, (b) reasonable allowance or credit for returns, (c) sales commissions paid to third parties, (d) sales, purchase or turnover taxes borne by T and (e) all royalty payments or similar fees payable to third parties pursuant to contract for the use of copyright, trade secret or other rights required to manufacture such products. Where T is a party to a joint venture, partnership or similar arrangement, Royalties under this Agreement shall be payable only with respect to T's underlying interest in the total revenue of the joint venture, partnership or similar arrangement, notwithstanding that T may be indemnified or the liability otherwise borne by T's joint venturer, partner or other party for any of the Royalties payable under this Agreement. 1.10. Net Similar Sales shall mean Net Sales relating to Similar Products. 1.11. Net Similar Royalty Income shall mean Net Royalty Income relating to Similar Products. 1.12. Other Product shall mean a product other than a Primary Product which is integrated with or otherwise relates to a Primary Product or which otherwise uses or embodies any part or all of the Partnership Systems in any material way. 1.13. Partnership shall mean T R&D PARTNERS (L.P.), a _________ limited partnership.
1.14. Partnership Systems shall mean all Confidential Information and, to the extent not included in that term, all related technology, general and specific knowledge, experience and information, including without limitation all inventions, discoveries, methods, plans, processes, specifications, software, knowhow, experience and trade secrets and any contract rights, in each case now owned or possessed or to be discovered, developed or acquired by or on behalf of the Partnership as a result of the research, design and development work under this Agreement. 1.15. Primary Product shall mean the combination of a microcomputer, laser optical memory (video disc) player and cathode ray tube substantially integrated by any one or more of the Partnership Systems. 1.16. Risk Recovery Phase shall mean that period beginning with the end of the Investment Recovery Phase and ending on that date when the Partnership shall have received additional aggregate royalties hereunder equivalent to 50% of the general and limited partners' aggregate initial capital contributions of cash and notes to the Partnership. 1.17. Royalty shall mean any payment to the Partnership pursuant to Section 3.1 of this Agreement. 1.18. Similar Product shall mean a product (i) the use of which is substantially similar to, or which functionally substitutes for or precludes, the use of a Primary Product and (ii) which is not a Primary Product or an Other Product. Section 2. Partnership Systems 2.1. Appointment of and Payment to T. The Partnership hereby appoints and retains T to perform, for the account and benefit and in behalf of the Partnership, such of the research, design and development tasks described in Attachment 1 [omitted] for the development of the Partnership Systems, for which the Partnership shall deliver to T the aggregate price (the "Contract Price") for the Phases covered by this Agreement in accordance with Attachment 4 [omitted]. The Contract Price is for the complete scope of services for the indicated tasks, as more fully described in Attachment 1 [omitted]. T agrees to absorb any and all costs which it may experience in completing such work. If the minimum _________ Units in the Partnership's private placement are sold, then this Agreement shall be for Phases _________ and _________ only. Additional Phases _________ and _________ will be added successively and the respective prices pursuant to Attachment 4 [omitted], paid to T to the extent additional Units are sold in the private placement. T warrants that the Attachment 4 prices are fair and reasonable for the services to be provided under this Agreement. The Partnership shall pay to T on the date of execution and delivery of this Agreement, by check subject to collection, the full Contract Price for the Phases covered by this Agreement. 2.2. Time of Completion. T agrees to use its best efforts to complete the tasks covered by this Agreement at the earliest possible time and within one year after the date of this Agreement. T shall not be responsible or liable, however, for delays occasioned by circumstances beyond its reasonable control. It is understood that T may use subcontracting to assure completion of its tasks under this Agreement. Attachment 3 [omitted] represents only T's present intentions concerning the time for completion of various tasks under this Agreement and T shall be free to alter such schedule to the extent deemed by it to be in the best interests of the Partnership. 2.3. Ownership of Partnership Systems. Subject to the rights granted pursuant to this Agreement, the Partnership shall own all right, title and interest in and to the knowledge, design and technology resulting from the tasks to be performed by T under this Agreement in the development of the Partnership Systems, as well as all drawings, specifications, software and similar materials. T shall deliver to the Partnership full
documentation for all tasks performed under this Agreement, including without limitation fully documented computer software, instructions and coding. 2.4. Copyright Registration of Partnership Software. The Partnership shall have the sole right, in its name, at its expense and in the sole discretion of the General Partners, to: (a) file applications for copyright registration of any aspect of the computer software which is part of the Partnership Systems for which such protection is or may be available; (b) upon and after any copyright registration, maintain and enforce such copyright registration in full force and effect and pay all fees and file all documents required under applicable laws or treaties; provided, however, that if, in the sole judgment of the Partnership, the foregoing expenses are not justified based upon its assessment of the value of such copyright registration, the Partnership may discontinue all further expenditures in connection therewith; and (c) incorporate any Confidential Information disclosed to it by T in applications for copyright registration. T shall have full access to all information relating to the status of applications for copyright registration and any administrative or judicial proceedings in connection therewith. T will, at the Partnership's request, use its best efforts to provide data and assistance necessary for the Partnership to file and prosecute applications for copyright registration and to prosecute, maintain and enforce copyright registration. 2.5. Use and Disclosure of Partnership Systems. The Partnership will make the Partnership Systems available to third parties only on terms, including appropriate restrictions on the use of the Partnership Systems and disclosure of the Confidential Information, consistent with the provisions of this Agreement relating to them. The Partnership may disclose and use, and may grant to others the right to use, Confidential Information disclosed to it by T, consistent with the other provisions of this Agreement. The Partnership shall use the Partnership Systems in compliance with the provisions of this Agreement and shall use its best efforts not to use the Partnership Systems in any manner which will preclude the copyright registration of computer software constituting part of the Partnership Systems. 2.6. Protection of Confidential Information. The Partnership and T shall at all times take all steps which are necessary and reasonable to safeguard the confidentiality of the Partnership Systems and all Confidential Information included within the Partnership Systems, provided, however, that information which is disclosed in an application for copyright registration and other documents in connection with it or which through no fault or omission of either party is disclosed in published literature, or which becomes generally known to the industry, or is received from a third party without binder of secrecy or breach of this Agreement shall not be deemed to be subject to the use and confidentiality restrictions applicable to Confidential Information and the Partnership Systems, except to the extent that the use of such information would be subject to copyright registration protection. 2.7. Disclosure of Developments and Improvements. Subject to the terms and conditions of this Agreement, the Partnership and T each shall promptly disclose to the other all Confidential Information and other technical information relating to the Partnership Systems which is discovered, developed or acquired by it, including when permitted by the terms of the acquisition, Confidential Information purchased, licensed or otherwise acquired from third parties, which permission such party shall use its best efforts to obtain. 2.8. License of New Technology. Subject to the terms and conditions of this Agreement, T agrees that it will promptly disclose to the Partnership, and will grant to the Partnership, for the term that T is performing services for the Partnership pursuant to Section 2 of this Agreement, non-exclusive, royalty-free licenses,
with the right to grant sublicenses, to use any technology which T learns or develops during the time of its research, design and development services to the Partnership under this Section 2 which is necessary or useful to the Partnership in its research and development business under this Agreement. Such licenses will only permit the use of such technology in connection with Primary Products. 2.9. No Assurance of Results; No Refund. T cannot and does not guarantee the results (including without limitation their nature and/or economic or commercial value or utility) of the research, design and development services to be performed by T for the Partnership under this Agreement; the parties agree that all of the risks of it shall be and remain the Partnership's. Except in the event of a material breach by T of its obligations pursuant to this Section 2, none of the contract price to be paid by the Partnership to T upon execution of this Agreement shall be refunded to the Partnership. 2.10. No Infringement; Indemnity; Duty To Defend. T covenants and agrees that it will not infringe or otherwise violate the rights of any other person by reason of, arising out of, under or in connection with T's performance of research, design or development services and tasks under this Agreement. T further covenants and agrees to hold the Partnership harmless from and against, and to pay to the Partnership the full amount of, any loss, claim, damage, liability or expense (including attorneys' fees and expenses) resulting to the Partnership, either directly or indirectly, by reason of, arising out of, under or in connection with T's performance of research, design or development services and tasks under this Agreement, including without limitation (i) infringement actions brought by any third parties against the Partnership and/or T by reason of or in connection with such actions or (ii) actions to recover for any damage to person (as a result of injury or death or otherwise) or to property whether as a result of injury or death or otherwise or to property whether as a result of negligence or otherwise. 2.11. Certain Tax Matters. T acknowledges that the Partnership intends to deduct on its federal income tax report all of the contract price to be paid by the Partnership to T pursuant to this Agreement as a "research or experimental expenditure" (as such term is defined for purposes of Section 174 of the Internal Revenue Code) and T will cooperate with the Partnership, in the event of a dispute with the Internal Revenue Service with respect to such deduction, in the Partnership's reasonable efforts to sustain such deduction (though T shall have no responsibility as to the outcome of such dispute, except as same may be affected by a material breach by T of the terms of this Agreement). T shall supply all hardware and other depreciable property to be used in the performance of T's services pursuant to this Agreement and the Partnership shall not acquire any ownership or other right or interest in such depreciable property. T warrants that none of the Contract Price is for, and T is not performing under this Agreement, any testing or inspection of materials or products for quality control, efficiency surveys, management or marketing studies, consumer surveys, advertising or promotional services, start-up manufacturing activities or similar sales or commercial activities. Section 3. License to T and Related Provisions 3.1. License of Partnership Systems. The Partnership grants to T an exclusive worldwide license, with the right to grant sublicenses, for a period of 15 years, to enjoy, commercialize, use and exploit in every way the Partnership Systems and the Confidential Information, including without limitation to make, use, assemble, sell or dispose of products and systems of every kind which use, incorporate or rely in any way upon the Partnership Systems, provided, however, that this exclusive grant shall be subject to the retained right of the Partnership to use the Partnership Systems and Confidential Information to conduct its research and development business and, provided, further, that this exclusive grant shall include all inventions, enhancements or improvements which the Partnership may own or control in respect of the subject matter of this Agreement. T shall pay to the Partnership ("Royalties" or "Royalty Payments") in respect of such license as follows:
(a) During the term of the Investment Recovery Phase: (1) 15% of Net Primary Product Sales; (2) 50% of Net Primary Product Royalty Income; (3) 10% of Net Other Product Sales; and (4) 331/3% of Net Other Product Royalty Income. (b) During the term of the Risk Recovery Phase: (1) 7% of Net Primary Product Sales; (2) 23% of Net Primary Product Royalty Income; (3) 4% of Net Other Product Sales; and (4) 15% of Net Other Product Royalty Income. (c) After the end of the Risk Recovery Phase: (1) 3% of Net Primary Product Sales; (2) 10% of Net Primary Product Royalty Income; (3) 11/2% of Net Other Product Sales; and (4) 7% of Net Other Product Royalty Income. Such royalties shall be subject to the adjustments set forth in Section 4 of this Agreement and shall be payable in the manner set forth in Section 5 of this Agreement. 3.2. Payments Respecting Similar Products. In order to protect the investments of the Partnership's general and limited partners, during the term of the Investment Recovery Phase T shall make payments to the Partnership equal to the following: (a) 15% of Net Similar Sales and (b) 50% of Net Similar Royalty Income, provided, however, that the obligation of T to make such payments shall cease at the end of the Investment Recovery Phase. Such payments shall be deemed to be Royalties for purposes of this Agreement. 3.3. Use of Partnership Software. T shall use the Partnership Systems in compliance with this Agreement and shall use its best efforts not to use the Partnership Systems in any manner which would preclude copyright registration of any aspect of the computer software constituting part of the Partnership Systems. In addition T agrees that the Partnership shall have the right to participate in the decision-making process (including, where appropriate, initiating such process) with respect to the exploitation of the
Partnership Systems, although T ultimately will control the use and exploitation of the Partnership Systems, and that T shall regularly consult with the Partnership in such decision-making process. 3.4. Duty To Exploit. T shall use its best efforts to promote and create a demand for Primary Products, and to supply the demand of such products, and shall use its best efforts, to the extent consistent with the prudent management of its business, to promote and create a demand for Other Products and to supply the demand for such products; provided, however, that T shall not be bound to market any such products which, in its reasonable commercial judgment, have become obsolete or do not meet market requirements or preferences. 3.5. Duty To Prosecute. The Partnership shall not be obligated to prosecute any claim of infringement of the Partnership Systems and T undertakes and agrees to use all reasonable measures, whether by action, suit, proceeding or otherwise, to prevent the infringement of any part or all of the Partnership Systems by others and to take and diligently maintain any action, suit or proceeding against any person, firm, corporation or other entity infringing on any part or all of the Partnership Systems, as may be necessary to prevent such infringement and to recover any resulting damages. T further agrees to take any and all such action, including such legal proceedings as the Partnership reasonably may require, as may be necessary to protect the secrecy and value, if any, of Confidential Information. T shall not take any such action, make any claim or institute any such legal proceedings without first obtaining the written consent of the Partnership to do so, which consent shall not be unreasonably withheld. All costs, expenses and disbursements (including attorneys' fees and expenses) arising out of, under or in connection with such measures, actions, suits or proceedings referred to in this paragraph 3.5, unless collected from the person against whom such measures are brought, shall be borne by T, and any damages or recoveries recovered as a result of any such measures shall first be applied to the reasonable expenses incurred by T in prosecuting same and the remainder, if any, shall be treated as Net Royalty Income under this Agreement and the Partnership shall be entitled to receive royalties based on them in accordance with the terms of this Agreement. The Partnership shall have the right to approve the terms of any settlement of any action, proceeding or other claim, before such settlement shall be made, and such approval shall not be unreasonably withheld. 3.6. Indemnity; Duty To Defend. T covenants and agrees to hold the Partnership harmless from and against, and to pay to the Partnership the full amount of, any loss, claim, damage, liability or expense (including attorneys' fees and expenses) resulting to the Partnership, either directly or indirectly, by reason of, arising out of, under, or in connection with T's enjoyment, commercialization, use or exploitation of any part or all of the Partnership Systems, including without limitation (i) infringement actions brought by any third parties against the Partnership and/or T by reason of or in connection with such actions or (ii) actions to recover for any damage to person (as a result of injury or death or otherwise) or to property, whether as a result of negligence, strict product liability or otherwise, which may in any way result from or be in connection with the manufacture, sale, use, lease or distribution of any product incorporating or in any other way relating to any part or all of the Partnership Systems. Section 4. Adjustments to Royalties 4.1. Adjustments to Combination Products. If T shall sell or otherwise dispose of or license the right to produce Combination Products, for purposes of determining the Royalty Payments or other payments to be made in respect of Net Sales or Net Royalty Income relating to the Primary Products, Other Products and Similar Products included in such Combination Products, revenues from such sales, other dispositions or licenses shall be derived by reference to an imputed price for such Primary Products, Other Products and Similar Products. If all of the products included in a Combination Product are also sold separately, then such imputed price shall be the invoice price that is separately stated for each such Primary Product, Other Product or Similar Product, multiplied by the percentage obtained by dividing the sum of the separately
stated invoice prices for all products included in the Combination Product by the price of the Combination Product. If the Combination Product is sold for a single price, and there shall exist at that time no price separately stated for each such Primary Product, Other Product, Similar Product and any other product included therein, then for purposes of computing Royalties, an imputed price for each such Primary Product, Other Product and Similar Product included in such Combination Product shall be determined by agreement of T and the Partnership or, failing such agreement, by a special panel of three independent experts, selected by T and the Partnership, who shall each be knowledgeable in the marketing aspects of the products under consideration. In the event that the three experts do not agree as to an imputed price for such products, then for purposes of computing Royalties or other payments, the concurrence of two such experts respecting an imputed price shall be determinative. 4.2. Adjustment of Royalties Respecting Use of Information in Public Domain. If any Primary Product or Other Product uses in substantial part Confidential Information included within the Partnership Software, and such Confidential Information shall have become generally known in the industry or shall otherwise have entered the public domain through no fault of the parties, T and the Partnership agree to reduce the amount of the Royalty Payment payable in respect of such Primary Product or Other Product if and to the extent required by applicable law, provided that no such reduction shall be made without the consent of the Partnership. Section 5. Payments 5.1. Schedule of Payments. The aggregate amount of Royalty Payments accruing during each calendar quarter pursuant to this Agreement is referred to below as the "Quarterly Royalty Payment." Each Quarterly Royalty Payment shall be made by T to the Partnership within 45 days following the last day of each calendar quarter in which there shall have been a sale by T of a Primary Product, Other Product or Similar Product or in which T has recognized revenues from licensees of the Partnership Systems or of Confidential Information, at which time there shall be delivered to the Partnership an accounting of the operations upon which such Quarterly Royalty Payment is based, certified by an officer of T. All Royalty Payments not paid when due under this Agreement shall bear interest at the rate of 18% per annum from the date due until the date paid. 5.2. Place of Payment and Currency. All payments under this Agreement shall be made in United States dollars to the Partnership's account at _________. 5.3. Taxation of Payments. To the extent not inconsistent with its other obligations under this Agreement or with requirements of law, T shall make reasonable efforts to provide that withholding or other taxes imposed by any taxing authority other than the United States (or any state or subdivision of it) will not be applicable to the payment of Royalties by T to the Partnership. Section 6. Records and Accounting 6.1. Records and Reports. T at all times shall keep adequate, accurate and complete accounts and records covering operations within the scope of this Agreement and showing in reasonable detail work performed, Royalties due to the Partnership and other information pertinent under this Agreement. All such records shall be available, on reasonable notice, for inspection by the Partnership or an auditor or other agent selected by the Partnership. All such records shall be maintained by T for six years, except that, in the event of a dispute, records relating to the matter under dispute shall be maintained until the dispute is resolved.
6.2. Accounting Changes. T shall make no change in its accounting methods which will have an adverse effect on the Royalties to be received by the Partnership without the prior written consent of the Partnership. T shall notify the Partnership in advance of any proposed change in its accounting methods that could have a significant effect on the computation of Royalties under this Agreement. Section 7. Disclaimers 7.1. No Warranty. The Partnership does not warrant the accuracy or confidentiality of any information included within the Partnership Systems, nor does the Partnership warrant that the Partnership Systems will be free from claims of infringement of the rights of any third party, nor does the Partnership make any other representation or warranty with respect to the Partnership Systems. The Partnership makes no warranty, express or implied, and T expressly agrees that the Partnership shall not be liable, or in any way responsible, for the operation, performance, quality of performance or material of any Primary Product, Other Product or Similar Product. Under no circumstance shall the Partnership be liable to T or any third party for actual, special or consequential damages of T or any third party. Section 8. Events of Reversion 8.1. Events of Reversion. To secure the discharge and fulfillment by T of its obligations under this Agreement and to protect the value of the investment of the Partnership in the Partnership Systems, an "Event of Reversion" shall be deemed to have occurred if T (i) discontinues business (other than by reason of a sale of all or substantially all of its assets, merger, consolidation or similar transfer of its business in connection with which the obligations of T under this Agreement are assumed), (ii) applies for or consents to appointment of a receiver, trustee or liquidator for it or all or substantially all of its assets, (iii) has filed against it an involuntary petition in bankruptcy which is not dismissed within 180 days of filing, (iv) files a voluntary petition in bankruptcy or a petition or answer seeking reorganization or an arrangement with creditors or seeking to take advantage of any other law relating to relief of debtors, or (v) fails to pay any Royalties due and payable pursuant to this Agreement in full when due and payable, which failure shall continue for a period of 30 days after the date on which such Royalty Payment becomes due and payable; provided, however, that if there is a good faith dispute or disagreement as to whether an event constitutes an Event of Reversion under this Agreement, such event shall not constitute an Event of Reversion during the period of the dispute or disagreement and (i) the General Partner shall promptly send notice to each Limited Partner of such dispute or disagreement and (ii) if the dispute relates to payment of Royalties, an independent auditor qualified in the area of the products in question ("Qualified Auditor") shall promptly be selected and retained by the Partnership to examine the books and records of T and to determine the Royalties properly due and payable, and such books and records shall also be made available to any Qualified Auditor selected by any Limited Partner of the Partnership at the expense of such Limited Partner. If such dispute or disagreement shall not have been resolved to the satisfaction of the General Partner and T (which resolution shall be made on the basis of the determination of the independent auditor retained by the Partnership if the dispute involves payment of Royalties) within 90 days from the date notice of the dispute or disagreement was given as provided in this Agreement, the dispute or disagreement shall be resolved by a final unappealable decision of arbitrators pursuant to the rules of the American Arbitration Association (and prior to such event shall not be deemed to be an Event of Reversion under this Agreement). 8.2. Reversion. During the period commencing upon the occurrence of an Event of Reversion and ending 90 days later, the Partnership and T will make all reasonable efforts to cure such Event. If, at the end of such 90-day period, the Event of Reversion has not been cured to the reasonable satisfaction of the
General Partners, this Agreement and the license granted to T in Section 3 of this Agreement shall terminate and T shall (to the extent permissible by applicable law), (i) cease using and exploiting the Partnership Systems and Confidential Information, (ii) be obligated to safeguard the confidentiality of Confidential Information; and (iii) return to the Partnership all documents or copies or other tangible expressions or manifestations within its possession or control with respect to the Partnership Systems and Confidential Information; provided, however, that (i) T shall be permitted to sell existing inventory and to complete the manufacture or production of Primary Products and Other Products for which orders have been received and to sell such products and (ii) that Royalties payable on such sales shall remain due and payable as provided in this Agreement. 8.3. Other Remedies. The occurrence of an Event of Reversion shall not impair or prejudice any right or remedy which the Partnership or T may have against the other at law or in equity by reason of a breach of this Agreement, nor shall any such occurrence relieve T of its obligation to pay to the Partnership any monies due to the Partnership as and when due under this Agreement. Section 9. Sublicenses and Licenses 9.1. Sublicenses and Licenses. Any sublicenses and licenses of any of the Partnership Systems or of the rights to manufacture or sell Primary Products or Other Products granted by T shall be in writing and shall include provisions to the effect that: (a). The licensee shall keep adequate and complete records showing all Primary Products or Other Products sold pursuant to its sublicense or license; allow such records to be inspected during reasonable business hours by an independent auditor selected by T (or, after a Reversion of the Partnership Systems pursuant to Section 8, by the Partnership); and furnish T (or, after a Reversion of the Partnership Systems pursuant to Section 8, the Partnership) on or before the last day of each January, April, July and October with a report showing the amount of Primary Products or Other Products sold by the licensee during the preceding calendar quarter and the amount of the royalty due on them. (b). To protect the value of the Partnership Systems, the licensee shall agree to treat as confidential all Confidential Information furnished to it by T, to use the Partnership Systems only as authorized and to exercise every reasonable precaution to prevent the unauthorized disclosure of any aspect of the Partnership Systems and to protect the copyright registrability of every aspect of the computer software constituting part of the Partnership Systems. (c). A reversion of Partnership Systems pursuant to Section 8 shall terminate any sublicenses or licenses of Partnership Systems or Confidential Information which may have been granted by T under this Agreement, except that (i) the licensee, upon direct payment to the Partnership of the Royalties provided in Section 3 of this Agreement may sell existing inventory and complete the manufacture or production of Primary Products or Other Products for which orders have been received and to sell such products and (ii) any sublicense or license may continue, in accordance with its terms, for so long as the licensee shall make the royalty payments required by such sublicense or license directly to the Partnership. Any sublicense or license granted by T respecting Primary Products or Other Products shall contain provisions corresponding to those of this Agreement respecting an Event of Reversion. In the event that the licensee does not continue to make royalty payments directly to the Partnership, T will use its best efforts to promptly seek from such licensee, and return to the Partnership, all documents or copies of documents relating to any of the Partnership Systems and all other tangible manifestations or copies of them. 9.2. Notice to the Partnership. T will promptly notify the Partnership of each sublicense and license granted by T respecting any of the Partnership Systems.
Section 10. General 10.1. Other Activities of T. The Partnership acknowledges that T is and will be engaged in business activities other than providing the research, design and development services for the Partnership and marketing the products for which Royalties are payable pursuant to this Agreement. Such other activities may include, without limitation, providing research, design and development services for other partnerships or other entities (as well as doing such work for T's own account), including without limitation with respect to the development of other merged image systems, and providing applications engineering, consulting and operations management and support services to customers. Except as otherwise provided in this Agreement, the Partnership shall have no claim against T in respect of such other activities of T. 10.2. Use of Proceeds. T warrants, represents and covenants that none of the funds being delivered by the Partnership in payment of the Contract Price under this Agreement does, or will be used to, fund or secure in any way, directly or indirectly, any borrowing by or loan, advance, payment or contribution to _________, Inc., a _________ corporation, _________, Inc., a _________ corporation, or any of their officers, directors or employees. The parties agree that the Partnership shall not do any lending to or for the benefit of the foregoing persons nor permit the Partnership's credit or other assets to be used for them. 10.3. Non-Assignability. The rights and duties of each party under this Agreement shall be assignable by that party only with the consent of the other party (which consent shall not be unreasonably withheld), provided, however, that the rights and duties of a party may be transferred and assigned to and assumed by a third person, without the consent of the other party to this Agreement, as part of a consolidation, merger or sale of all or substantially all the assets of a party or similar transaction. 10.4. No Further Waiver. No waiver of any term, condition or right under this Agreement shall be deemed effective unless set forth in a writing signed by the party to be charged and no such waiver shall be deemed to be or constitute a waiver of any other matter or a continuing waiver. 10.5. Notices. All notices and other communications under this Agreement shall be in writing and shall be deemed given (a) when delivered personally or (b) on the fifth succeeding business day after being mailed, postage prepaid, by registered or certified mail, return receipt requested, to the appropriate party at the following address (or such other address of which notice under this Agreement shall have been given to the other party): If to T, to it at: _________ If to the Partnership, to it at: _________ 10.6. Binding Effect. This Agreement shall be binding upon and inure to the benefit of the parties and their heirs, executors, administrators, legal representatives, successors and assigns of every kind. 10.7. Headings. The headings in this Agreement are intended solely for convenience of reference and shall be given no effect in the construction or interpretation of this Agreement. 10.8. Severability. The parties intend that this Agreement shall be enforced to the greatest extent permitted by law. If, for any reason, any one or more of the provisions of this Agreement shall be found to
be inoperative, unenforceable or invalid by a court of competent jurisdiction in a particular case or cases, such finding shall not have the effect of rendering such provision invalid in any other circumstance or jurisdiction or of rendering any of the other provisions of this Agreement inoperative, unenforceable or invalid. 10.9. Relationship. Nothing in this Agreement is intended to or shall (i) establish any agency, partnership or joint venture relationship between the parties to this Agreement or (ii), except as specifically provided, confer on any person other than the parties (or their permitted successors or assigns) any rights, remedies, obligations or liabilities under or by reason of this Agreement. 10.10. Arbitration. The parties agree that any claim or dispute with respect to the matters covered by this Agreement shall be submitted to arbitration in _________ under the rules of the American Arbitration Association. 10.11. Governing Law. This Agreement shall be governed by, and it and the rights and duties of the parties be construed and determined in accordance with, the law of the State of New York as in effect for contracts made and to be performed in the State of _________. 10.12. Entire Agreement. This Agreement constitutes the entire agreement between the parties and supersedes any and all prior or other agreements and understandings, whether oral or written, between the parties with respect to the subject matter of this Agreement. This Agreement may be amended only by a writing signed by both parties. 10.13. Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original and all of which shall constitute one and the same agreement. In Witness, the parties have executed this Agreement as of the date first above written. _________ Technology, Inc. T R&D Partners (L.P.) By _________ By _________