AGREEMENT FOR COOPERATIVE USE OF COMMUNICATION PATENTS
November 5, 1996
PURCHASE OF AN OPTION TO OBTAIN INTELLECTUAL PROPERTY RIGHTS
WHEREAS, Inline Connection Corporation (hereinafter "Inline") owns patents in the United States and Canada and has filed patent applications in various countries describing new techniques for, among other things, communicating video and high data rate digital signals over twisted pair wires, including wires actively conducting voice band communication (these patents and patent applications are listed in Appendix I) which patents and applications, together with all presently existing and hereafter created inventions, improvements or ideas related thereto and all subsequent modifications, divisions, continuations, re-issues, extensions, supplements and additions pertaining to or otherwise arising from such patents or applications being collectively referred to herein as the "twisted pair patents" or "TWP patents,"; and
WHEREAS, CAIS, Inc., a Virginia corporation and/or CAIS Limited Partnership, a Virginia limited partnership (hereinafter "CAIS",) is in the business of providing Internet and telephone services and conducting other telecommunications business worldwide; and
WHEREAS, CAIS or entities affiliated with either CAIS or certain of its principals (such entities being herein referred to as "CAIS Affiliates") desire to associate with Inline by reason of the ownership by Inline of the TWP patents; and
WHEREAS, Inline and CAIS have an interest in exploiting the TWP patents for the mutual benefit of both parties.
NOW, THEREFORE, in consideration of above premises and such other good and valuable consideration, the receipt and sufficiency of which being hereby acknowledged, the parties do hereby agree as follows:
1. GRANT OF OPTION
Inline hereby sells CAIS and CAIS hereby purchases from Inline an option (herein the "Option") under the terms defined below, to purchase rights to the TWP patents, under the terms that are set forth more fully below, for a total payment of FIFTY THOUSAND DOLLARS$50,000, which sum shall be payable to Inline concurrent upon execution hereof. Inline agrees promptly upon execution hereof to provide to CAIS without additional charge, both (i) complete copies of the patent applications, file histories and patents for each of the TWP patents, and (ii) reasonable assistance from Inline and its patent counsel in order to enable and facilitate the analysis by CAIS of the TWP patents.
The Terms of the Option:
1.1) The period of the Option (the "Option Period") shall be four (4) months, beginning as of the date that this agreement is fully executed, unless the Option is sooner exercised or terminated in accordance with the provisions of this section.
1.2) Inline agrees to retain ownership and usage rights of the TWP patents during the Option Period, and not to compromise such ownership and usage rights in any way during this period, except that Inline shall provide CAIS, for consideration of the sum of$10, the rights to use by itself or any CAIS Affiliate the TWP patents in up to three (3) different buildings during the Option Period.
1.3) It is further agreed that CAIS shall be afforded sole rights to build, market and develop the TWP patents during the Option Period, and, if the Option shall be exercised, at all times thereafter except to the extent expressly provided below to the contrary.
1.4) David D. Goodman, president of Inline, agrees to work under the direction of CAIS during the first three months of the Option Period. Mr. Goodman agrees, in good faith, to assist CAIS in determining the general value of the TWP patents, the specific value of the TWP patents to the business operations of CAIS, and assist CAIS in any other manner that is related to the TWP patents.
CAIS agrees to pay Inline$7500 per month (the "$7,500 Monthly Fee") during the first three months of the Option Period, in return for Mr. Goodman's services. The three$7500 payments are due 15, 45, aand 75 days after the date of purchase of the Option by CAIS, i. e., after execution of this Agreement.) There shall be no payment to Inline or other payment to Mr. Goodman during the fourth month of the Option Period.
In consideration of such payments, Mr. Goodman agrees to devote full time efforts during the first three months of the Option Period for the services described above on behalf of CAIS, on an exclusive basis, with the understanding, however, that during this three month period, Mr. Goodman shall be entitled to complete before 8:00 a. m. and after 5:30 p. m. on Mondays-Fridays and during all hours on Saturdays and Sundays a maximum of two weeks of programming for America Online. No services shall be required of Inline or Goodman during the fourth month; however, neither party shall provide services to any other person, firm or corporation during any portion of such four month period involving the TWP patents or any applications thereof described in this Agreement.
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